<PAGE>
===============================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                ----------------
                                    FORM 10-Q

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

                                       OR


    / /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                           COMMISSION FILE NO. 0-23928


                            PDS FINANCIAL CORPORATION
             (exact name of Registrant as specified in its charter)


         MINNESOTA                                            41-1605970
-------------------------------                           -------------------
(State or other Jurisdiction of                           (I.R.S. Employer
 Incorporation or Organization)                           Identification No.)

                   6171 MCLEOD DRIVE, LAS VEGAS, NEVADA 89120
                   ------------------------------------------
                    (Address of Principal Executive Offices)

                                 (702) 736-0700
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) 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
             -----                     -----

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

           CLASS                         OUTSTANDING AS OF MAY 3, 2000
           -----                         -----------------------------
 Common Stock, $.01 par value                  3,708,952 shares

===============================================================================

<PAGE>





                   PDS FINANCIAL CORPORATION AND SUBSIDIARIES

                                      INDEX

                         PART I     FINANCIAL INFORMATION
                         ------


<TABLE>
<CAPTION>


Item 1.       Financial Statements:                                                                            PAGE
                                                                                                               ----
<S>           <C>                                                                                              <C>
              Consolidated Balance Sheets - March 31, 2000 (unaudited) and December 31, 1999......................3

              Consolidated Statements of Income - Three Months Ended
              March 31, 2000 and 1999 (unaudited).................................................................4

              Consolidated Statements of Cash Flows - Three Months Ended
              March 31, 2000 and 1999 (unaudited).................................................................5

              Notes to Consolidated Financial Statements (unaudited)............................................6-7

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

Item 3.       Quantitative and Qualitative Disclosures About Market Risk.........................................10


                         PART II    OTHER INFORMATION
                         -------


Item 6.       Exhibits and Reports on Form 8-K...................................................................11
</TABLE>

                                       2

<PAGE>




                   PDS FINANCIAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                               March 31,            December 31,
                                                                                 2000                   1999
                                                                           ------------------    ------------------
                                                                              (unaudited)
<S>                                                                        <C>                   <C>
ASSETS
Cash and cash equivalents                                                         $2,460,000            $2,860,000
Restricted cash                                                                    2,864,000             2,831,000
Notes, accounts, and leases receivable, net                                       56,200,000            48,616,000
Equipment under operating leases, net                                             29,261,000            41,287,000
Equipment held for sale or lease                                                   6,920,000             6,616,000
Refundable income tax deposits                                                       403,000               403,000
Deferred income taxes                                                                877,000               976,000
Other assets, net                                                                  4,540,000             4,444,000
                                                                           ------------------    ------------------
                                                                                $103,525,000          $108,033,000
                                                                           ==================    ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable:
    Equipment vendors                                                             $1,786,000            $6,363,000
    Other                                                                          1,009,000               717,000
Customer deposits                                                                  7,657,000             7,141,000
Notes payable                                                                     67,556,000            66,549,000
Subordinated debt                                                                 13,363,000            13,323,000
Accrued expenses and other                                                         1,871,000             3,836,000
                                                                           ------------------    ------------------
                                                                                  93,242,000            97,929,000
                                                                           ------------------    ------------------

Stockholders' equity:
    Common stock, $.01 par value, 20,000,000 shares authorized,
    3,708,952 and 3,706,971 shares issued and outstanding
    at March 31, 2000 and December 31, 1999, respectively                             38,000                37,000
    Additional paid-in capital                                                    11,549,000            11,546,000
    Accumulated deficit                                                          (1,304,000)           (1,479,000)
                                                                           ------------------    ------------------
                                                                                  10,283,000            10,104,000
                                                                           ------------------    ------------------
                                                                                $103,525,000          $108,033,000
                                                                           ==================    ==================
</TABLE>


See notes to consolidated financial statements.

                                       3


<PAGE>



                   PDS FINANCIAL CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                          THREE MONTHS ENDED MARCH 31,
                                   (unaudited)

<TABLE>
<CAPTION>


                                                                                 2000                  1999
                                                                          ------------------    ------------------
<S>                                                                        <C>                   <C>
    REVENUES:
        Equipment sales                                                           $2,604,000            $1,286,000
        Revenue from sales-type leases                                             9,762,000             1,015,000
        Operating lease rentals                                                    3,913,000             2,545,000
        Finance income                                                             1,419,000               936,000
        Fee income                                                                   317,000             1,074,000
                                                                           ------------------    ------------------
                                                                                  18,015,000             6,856,000
                                                                           ------------------    ------------------
    COSTS AND EXPENSES:
        Equipment sales                                                            2,731,000             1,246,000
        Sales-type leases                                                          8,634,000               724,000
        Depreciation on leased equipment                                           2,810,000             1,801,000
        Interest                                                                   2,186,000             1,779,000
        Selling, general and administrative                                        1,380,000             1,090,000
                                                                           ------------------    ------------------
                                                                                  17,741,000             6,640,000
                                                                           ------------------    ------------------

        INCOME BEFORE INCOME TAXES                                                   274,000               216,000
        PROVISION FOR INCOME TAXES                                                    99,000                82,000
                                                                           ------------------    ------------------

        NET INCOME                                                                  $175,000              $134,000
                                                                           ==================    ==================

        NET INCOME PER SHARE:
           Basic                                                                       $0.05                 $0.04
           Diluted                                                                     $0.05                 $0.04

        WEIGHTED AVERAGE SHARES OUTSTANDING:
           Basic                                                                   3,709,000             3,648,000
           Diluted                                                                 3,709,000             3,657,000
</TABLE>


See notes to consolidated financial statements.

                                       4
<PAGE>



                            PDS FINANCIAL CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          THREE MONTHS ENDED MARCH 31,
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                                                   2000               1999
                                                                             ----------------    ---------------
<S>                                                                              <C>                  <C>
         OPERATING ACTIVITIES
             Net cash provided by (used in) operating activities                 $(2,777,000)         $1,143,000
                                                                             ----------------    ---------------

         INVESTING ACTIVITIES
             Purchase of equipment for leasing                                                      (13,918,000)
             Proceeds from sale of equipment under operating leases                 1,366,000
             Other                                                                                     (100,000)
                                                                             ----------------    ---------------
             Net cash provided by (used in) investing activities                    1,366,000       (14,018,000)
                                                                             ----------------    ---------------

         FINANCING ACTIVITIES
             Proceeds from borrowings                                               7,774,000         18,582,000
             Repayment of borrowings                                              (6,767,000)        (6,869,000)
             Proceeds from issuance of common stock                                     4,000
                                                                             ----------------    ---------------
             Net cash provided by financing activities                              1,011,000         11,713,000
                                                                             ----------------    ---------------

         CHANGE IN CASH AND CASH EQUIVALENTS
         Net decrease in cash and cash equivalents                                  (400,000)        (1,162,000)
         Cash and cash equivalents at beginning of period                           2,860,000          1,269,000
                                                                             ----------------    ---------------
         Cash and cash equivalents at end of period                                $2,460,000           $107,000
                                                                             ================    ===============
</TABLE>


See notes to consolidated financial statements.

                                       5


<PAGE>


                   PDS FINANCIAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.       BASIS OF PRESENTATION

                  The accompanying unaudited consolidated financial statements
         have been prepared in accordance with generally accepted accounting
         principles for interim financial information and the instructions to
         Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
         include all of the information and disclosures required by generally
         accepted accounting principles for annual financial statements. In the
         opinion of management, all adjustments (consisting only of normal
         recurring adjustments) 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 full year. For
         further information, please refer to the consolidated financial
         statements of PDS Financial Corporation (the "Company"), and the
         related notes, included within the Company's Annual Report on Form
         10-K for the fiscal year ended December 31, 1999 (the "1999 Form
         10-K"), previously filed with the Securities and Exchange Commission.

                  The balance sheet at December 31, 1999 was derived from the
         audited  financial  statements  included in the Company's 1999
         Form 10-K.

2.       NOTES PAYABLE

                  Recourse and non-recourse obligations consist of the
         following:

<TABLE>
<CAPTION>

                                                                             March 31,         December 31,
                                                                               2000                1999
                                                                          ----------------    ----------------
<S>                                                                           <C>                 <C>
Lines of credit with a maximum aggregate balance of $46,000,000 bearing
interest at rates from 7.3% to 10.3%, secured by related investment in
leases and equipment held for sale or lease                                   $24,399,000         $26,351,000


Equipment notes bearing interest at rates from 8.0% to 15%, secured by
related investment in leases:

      Recourse                                                                 17,877,000          18,472,000
      Non-recourse                                                             26,559,000          23,244,000
                                                                          ----------------    ----------------
                                                                               68,835,000          68,067,000
Unamortized loan discounts                                                     (1,279,000)         (1,518,000)
                                                                          ----------------    ----------------
                                                                              $67,556,000         $66,549,000
                                                                          ================    ================
</TABLE>

                                       6

<PAGE>


                   PDS FINANCIAL CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

3.       EARNINGS PER SHARE

                  Common stock options and warrants were not included in the
         computation of diluted earnings per share for the quarter ended March
         31, 2000, because the exercise price was greater than the average
         market price of the common stock. The weighted average exercise price
         for the options and warrants was $5.40 and $11.27 respectively, at
         March 31, 2000. Diluted weighted average shares outstanding at March
         31, 1999 includes the dilutive effect of the assumed exercise of
         options for 9,000 shares of common stock.

4.       SEGMENT INFORMATION

                  The Company conducts business with external customers through
         the operations of its PDS Slot Source ("Slot Source") and PDS Finance
         ("Finance") segments. In addition, employees of the Company provide
         certain legal, accounting and compliance, personnel and other
         administrative support services on behalf of Slot Source and Finance.
         Specifically identifiable costs are allocated to Slot Source and
         Finance. The other costs associated with these activities (SG & A) are
         not separately allocated to each business unit.

                  The accounting policies of each business unit are the same as
         those described in Note 1 of Notes to Consolidated Financial Statements
         included in the Company's 1999 Form 10-K. The Company evaluates the
         performance of its operating segments based on earnings before income
         taxes. On January 1, 2000, the Company began allocating interest and
         other specifically identifiable expenses to the Slot Source and Finance
         segments based on their identifiable assets. Amounts for 1999 have been
         reclassified to conform with this presentation. Financial performance
         measurements for Slot Source, Finance, and SG & A are set forth below.

<TABLE>
<CAPTION>

         THREE MONTHS ENDED              SLOT
         ------------------              ----
         MARCH 31, 2000                  SOURCE        FINANCE         SG & A            TOTAL
         --------------                  ------        -------         ------            -----
         <S>                            <C>           <C>             <C>               <C>
         Revenues                       $2,455,000    $15,560,000                       $18,015,000
         Income (loss) before
         income taxes                     (194,000)     1,509,000     ($1,041,000)          274,000
         Identifiable assets             8,441,000     90,059,000       5,025,000       103,525,000

         THREE MONTHS ENDED
         ------------------
         MARCH 31, 1999
         --------------
         Revenues                        $2,301,000     $4,555,000                       $6,856,000
         Income (loss) before
         income taxes                     (37,000)       1,111,000      ($858,000)          216,000
         Identifiable assets             8,624,000      64,723,000       4,742,000       78,238,000
</TABLE>

5.       SUBSEQENT EVENT

         On April 26, 2000, the Company announced that it had withdrawn its
offer for, and terminated the non-binding letter of intent to acquire the
capital stock of Four Queens, Inc. from Elsinore Corporations.

                                       7

<PAGE>

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

         The Company is engaged in the business of financing and leasing gaming
equipment and supplying reconditioned gaming devices to casino operators. The
gaming equipment financed by the Company consists primarily of slot machines,
video gaming machines and other gaming devices. In addition, the Company
finances furniture, fixtures and other gaming related equipment, including
gaming tables and chairs, restaurant and hotel furniture, vehicles, security and
surveillance equipment, computers and other office equipment. In 1996, the
Company introduced SlotLease, a specialized operating lease program for slot
machines and other electronic gaming devices. The Company believes it is
currently the only independent leasing company licensed in the states of Nevada,
New Jersey, Colorado, Illinois, Iowa, Indiana, Mississippi, Minnesota and New
Mexico to provide this financing alternative. In 1997, the Company established
PDS Slot Source, a reconditioned gaming device sales and distribution division,
to complement its leasing and financing activities and to generate equipment
sales to casino operators.

         The Company's strategy is to increase its portfolio of assets under
lease and reconditioned gaming device sales, and thereby increase revenues and
cash flows. In addition to its leasing activities, the Company also originates
note transactions, which it generally sells to institutional investors for fee
income. In some of its transactions, the Company holds the leases or notes for a
period of time after origination, or retains a partial ownership interest in the
leases or notes. The Company believes its ability to recondition and distribute
used gaming devices enhances the gaming devices' values at the end of an
operating lease and facilitates additional financing transactions. In the last
three years, the Company has significantly increased the amount of leases and
collateralized equipment loans ("financing transactions") held in its own
portfolio.

         The Company's quarterly operating results, including net income, have
historically fluctuated due to the timing of completion of large financing
transactions, as well as the timing of recognition of the resulting fee income
upon subsequent sale. These transactions can be in the negotiation and
documentation stage for several months, and recognition of the resulting fee
income by the Company may fluctuate greatly from quarter to quarter. Thus, the
results of any quarter are not necessarily indicative of the results which may
be expected for any other period.

         The Company's operating results are subject to quarterly fluctuations
resulting from a variety of factors, including variations in the mix of
financing transactions between operating leases, direct finance leases, and
notes receivable, changes in the gaming industry which effect the demand for
reconditioned gaming devices sold by the Company's Slot Source division,
economic conditions, in which a detrimental change can cause customers to delay
new investments and increase the Company's bad debt experience, and reduce the
level of fee income obtained through the sale of leases or financing
transactions.

RESULTS OF OPERATIONS

         Gross originations of financing transactions were $8.1 million and $8.6
million for the three months ended March 31, 2000 and 1999, respectively.
Revenues for the first quarter of 2000 totaled $18.0 million, a 160% increase
compared to $6.9 million in the year earlier quarter. The increase in revenues
is primarily attributable to sales-type lease revenue associated with the early
termination of certain equipment under operating lease and refinancing of such
equipment as sales-type leases.

         Revenues from equipment sales and sales-type leases totaled $12.4
million in the first quarter of 2000, a 439% increase from $2.3 million for the
comparable quarter in 1999. Such revenues include sales of both equipment which
had been under operating leases, and used gaming devices which the Company
reconditioned in its Slot Source division. Revenue from sales and sale-type
leases of Slot Source reconditioned gaming devices totaled $2.5 million in the
current quarter compared to $2.3 million in previous year. Gross margin from
such sales decreased from 14% in the quarter ended March 31, 1999 to 7% in the
current year. The decrease primarily reflects a more profitable sales mix in the
quarter ended March 31, 1999.

                                       8
<PAGE>

         Equipment under operating lease, net was $29.3 million at March 31,
2000 compared to $41.3 million at December 31, 1999. The decline in equipment
under operating lease, net, reflects equipment sold to original lessees at lease
termination and the early termination of certain operating leases and sales of
the underlying equipment to the original lessee under sales-type leases. The
average operating lease portfolio was approximately $40 million for the three
months ended March 31, 2000 compared to $28 million for the three months ended
March 31, 1999. Consequently, rental revenue from operating leases and related
depreciation expense were $3.9 million and $2.8 million, respectively, for the
three months ended March 31, 2000, compared to $2.5 million and $1.8 million,
respectively, for the three months ended March 31, 1999.

         Finance income totaled $1.4 million for the three months ended March
31, 2000, an increase compared to $936,000 in for the comparable quarter in
1999. The increase of $483,000 primarily reflects the larger portfolio of notes
receivable, leveraged leases and direct finance leases held by the Company
during the quarter compared the first quarter 1999.

         Fee income totaled $.3 million and $1.1 million, for the three months
ended March 31, 2000 and 1999, respectively. The decrease of $794,000 is
primarily attributable to the Company's strategy of holding more transactions
for its own account, and consequently fewer transactions were sold for fee
income.

         Interest expense totaled $2.2 million in the current quarter, compared
to $1.8 million for the comparable quarter in 1999. This increase is due to
higher levels of outstanding borrowings which were utilized to fund the
increased investment in the Company's leasing portfolio.

         Selling, general and administrative expenses totaled $1.4 million and
$1.1 million for the three months ended March 31, 2000 and 1999, respectively.
The increase of $300,000 is primarily attributable to an increase in legal fees
associated with licensing and bad debt recovery efforts. Additionally, the
Company incurred approximately $50,000 in due diligence costs related to the
possible acquisition of Four Queens. The Company had entered into a non-binding
letter of intent to acquire the capital stock of The Four Queens, Inc. in March
2000. However, the parties were not able to come to terms in negotiating a
definitive agreement. On April 24, 2000, PDS announced the termination of the
letter of intent.

         The effective income tax rate was 36% and 38% for the three months
ended March 31, 2000 and 1999, respectively. In both periods, the effective rate
was higher than the federal statutory tax rate of 34%, due primarily to state
income taxes. The decrease in the effective income tax rate reflects a larger
portion of the Company's business occurring in the state of Nevada.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's unrestricted cash and cash equivalents totaled $2.5
million at March 31, 2000, compared to $2.9 million at December 31, 1999. During
the first quarter of 2000, cash used in operating activities totaled $2.8
million, compared with cash provided by operating activities of $1.1 million in
the first quarter of 1999. The higher level of cash used in the first quarter of
2000 primarily reflects significant payments of accounts payable and other
accrued liabilities partially offset by proceeds from the sales of notes and
direct financing leases. Cash provided by investing activities totaled $1.4
million in the first quarter 2000, compared to cash used by investing activities
of $14.0 million in the comparable quarter 1999. In the first quarter of 1999,
investment in equipment for leasing totaled $13.9 million. No such investment
was made in the first quarter 2000. The $1.0 million provided by financing
activities in the first quarter of 2000 was generated from borrowings used
principally to fund financing transactions, offset by principal payments on
debt.

         The Company's lease portfolio declined $.9 million from year-end 1999
to the quarter ended March 31, 2000. This decline is primarily due to
depreciation exceeding leases originated for the Company's portfolio in the
current period.

                                       9

<PAGE>

         At March 31, 2000, total borrowings were $67.6 million, compared to
$66.6 million at December 31, 1999. At March 31, 2000, the Company's revolving
credit and working capital facilities aggregated approximately $71 million.
Advances under these agreements aggregated approximately $42 million at March
31, 2000. The Company's current financial resources, including the estimated
cash flows from operations and the revolving credit facilities are expected to
be sufficient to fund the Company's anticipated working capital needs. In
addition to the borrowing activities summarized above, the Company has developed
a network of financial institutions to which it sells transactions on a regular
basis. The Company is, from time to time, dependent upon the need to liquidate
or externally finance transactions originated and held in its investment
portfolio. In the future the Company may seek to raise capital to fund its
growth strategy through debt or financings, however we cannot predict when such
an event will occur, nor if such capital would be available at favorable terms,
if at all.

         Inflation has not had a significant impact on the Company's operations.


ITEM 3.  QUANTITATIVE AND QUALITATIVE FACTORS ABOUT MARKET RISK

INTEREST RATE RISK

         The Company generally provides financing (both leases and loans) to
customers at fixed rates of interest (either with stated interest rates or
implicit rates). The Company either sells the leases or loans to investors, or
holds such transactions in its portfolio. For larger transactions retained in
the portfolio, the Company obtains fixed rate commitments from financing sources
such as banks and financial institutions prior to providing such financing to
customers, which substantially reduces the interest rate risk during the
origination process. For smaller transactions, the Company may originate the
transaction using internally available funds, and shortly after origination use
the security as collateral for borrowing on one of several lines of credit. Such
lines of credit have floating rates of interest until a specific amount is
borrowed under the facility, at which time the amount borrowed will be assigned
a fixed rate of interest payable over its remaining term. Therefore changes in
interest rates have not historically had a direct impact on the Company's
earnings. The Company does not currently manage this interest rate risk with
derivative financial instruments and does not believe this risk is material.

       The Company's existing portfolio of fixed rate receivables and borrowings
will fluctuate in value based on changes in market rates of interest. However
the Company does not believe that the changes in the fair values are material.

CURRENCY RISK

         All of the Company's transactions are conducted and accounts are
denominated in United States Dollars and as such the Company does not currently
have exposure to foreign currency risk.

FORWARD-LOOKING STATEMENTS

         Certain statements contained herein which are not historical facts are
forward-looking statements with respect to events, the occurrence of which
involves risks and uncertainties, including without limitation strict regulation
by gaming authorities, competition the Company faces or may face in the future,
uncertainty of market acceptance of the SlotLease program and PDS Slot Source,
the ability of the Company to continue to obtain adequate financing, the ability
of the Company to recover its investment in gaming equipment leased under
operating leases as well as its investment in used gaming machines purchased for
refurbishment and resale to customers, the risk of default with respect to the
Company's financing transactions, the Company's dependence on key employees,
potential fluctuations in the Company's quarterly results, general economic and
business conditions, and other risk factors detailed from time to time in the
Company's reports filed with the Securities and Exchange Commission.

                                       10

<PAGE>


PART II- OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         a) The following exhibits are included with this quarterly report on
            Form 10-Q as required by Item 601 of Regulation S-K.

            EXHIBIT NUMBER       DESCRIPTION
            --------------       -----------
            10.26                Deferred Compensation Plan, adopted
                                 February 4, 2000 but first effective as of
                                 April 1, 2000
            27                   Financial Data Schedule for the period
                                 ended March 31, 2000

         b) Reports on Form 8-K. During the quarter ended March 31, 2000 the
            Company filed reports on Form 8-K dated January 11, 2000 regarding
            the engagement of new independent accountants, Piercy, Bowler,
            Taylor & Kern, Certified Public Accountants & Business Advisors, A
            Public Corporation, to audit the Company's financial statements as
            of, and for the year ending, December 31, 1999, and filed a report
            on form 8-K, dated March 11, 2000, regarding the signing of a
            non-binding letter of intent with Elsinore Corporation to acquire
            the capital stock of Four Queens, Inc.

SIGNATURE

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                         PDS FINANCIAL CORPORATION

Dated:   May 12, 2000                    By:/s/   Peter D. Cleary
                                         ------------------------
                                         President and Chief Operating Officer
                                         (a duly authorized officer)


                                       11