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 for the quarterly period ended: September 30, 2008.

____  Transition  Report  Under  Section 13 or 15(d) of the Exchange Act for the
transition period from ____ to ____

                         Commission file number: 0-24930

                               CTD HOLDINGS, INC.
        (Exact name of registrant as specified in its charter)

            Florida                                    59-3029743
  (State or other jurisdiction                      (IRS Employer
of incorporation or organization)                  Identification No.)

 27317 N.W. 78th Avenue, High Springs, Florida            32643
 (Address of principal executive offices)              (Zip Code)

          Registrant's telephone number, including area code: 386-454-0887

Former  name,  former  address and former  fiscal  year,  if changed  since last
report: N/A.

Check whether the registrant (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act of 1934  during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
(x)Yes  (_) No

Indicate  by  check  mark  whether  the  registrant  is a  large
accelerated filer, an accelerated  filer, a non-accelerated  filer, or a smaller
reporting   company.   See  the  definitions  of  'large   accelerated   filer,'
'accelerated  filer,'  and  'smaller  reporting  company'  in Rule  12b-2 of the
Exchange Act.

Large accelerated filer (_)                        Accelerated filer (_)
Non-accelerated filer (_)                          Smaller reporting company (X)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) (_)Yes (x)No

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

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

As of November 3, 2008,  the Company had  outstanding  20,930,764  shares of its
common stock.

<PAGE>

                         PART I. Financial Information

Item 1.  Financial Statements.

                              CTD HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
                                 (Unaudited)
<TABLE>
<CAPTION>

                                    ASSETS


                                           <c>               <c>
                                          September 30, 2008   December 31, 2007
                                              (Unaudited)

CURRENT ASSETS
 Cash and cash equivalents                    $     243,121     $      209,981
 Certificate of deposit                                   -            100,000
 Accounts receivable                                 47,059             85,434
 Inventory                                          224,292            107,624
 Deferred tax asset                                  75,000             75,000
 Investment due from related party                        -                853
 Other current assets                                 2,000              2,442
                                              -------------      -------------
     Total current assets                           591,472            581,334
                                              -------------      -------------
PROPERTY AND EQUIPMENT, NET                         446,415            437,435
                                              -------------      -------------
OTHER ASSETS
 Certificate of deposit                                   -            163,985
 Shareholder loan                                     4,344                  -
 Intangibles, net                                    89,816             40,967
 Deferred tax asset                                 391,000            375,000
                                              -------------      -------------
     Total other assets                             485,160            579,952
                                              -------------      -------------
TOTAL ASSETS                                  $   1,523,047      $   1,598,721
                                              =============      =============
</TABLE>


                                   (Continued)

                                       F-1

<PAGE>

                                CTD HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>


                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                           September 30, 2008  December 31, 2007
                                               (Unaudited)

                                            <c>            <c>
CURRENT LIABILITIES
 Accounts payable and accrued expenses         $      74,444   $      73,664
 Current portion of long-term debt                         -           3,942
                                               -------------   -------------
     Total current liabilities                        74,444          77,606
                                               -------------   -------------
LONG-TERM LIABILTIES
  Long-term debt, less current portion                     -         136,132
   Loan from officer                                       -          21,330
                                               -------------   -------------
        Total long-term liabilities                        -         157,462
                                               -------------   -------------

STOCKHOLDERS' EQUITY
Common  stock,  par value  $.0001 per  share,
100,000,000  shares  authorized, 24,612,263 and
20,824,291 shares issued and outstanding,
respectively                                            2,461           2,083
 Preferred stock, par value $.0001 per share,
  5,000,000 shares authorized; Series A, 1 share
  issued and outstanding                                    -               -
 Additional paid-in capital                         3,189,915       3,030,737
 Accumulated deficit                               (1,743,773)     (1,669,167)
                                                -------------   -------------
     Total stockholders' equity                     1,448,603       1,363,653
                                                -------------   -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $   1,523,047   $   1,598,721
                                                =============   =============
</TABLE>



                See Accompanying Notes to Financial Statements.

                                       F-2

<PAGE>
<TABLE>
                               CTD HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<S>                          <C>         <C>           <C>          <C>

                               Three Months Ended          Nine Months Ended
                                  September 30,              September 30,
                            ------------------------   ------------------------
                                2008         2007          2008         2007
                            -----------  -----------   -----------  -----------

PRODUCT SALES               $   142,105  $   226,710   $   371,230  $   557,633
                            -----------  -----------   -----------  -----------


EXPENSES
 Personnel                      114,301       74,606       276,120      200,920
 Cost of products sold
  (exclusive of
  depreciation and
  amortization,shown
  seperately below)               3,111       47,711        81,268       64,495
 Professional fees               13,154       15,254        71,383       92,884
 Office and other                 7,799       11,396        25,325       24,962
 Amortization and
  depreciation                    5,373        5,900        18,323       16,559
 Freight and shipping             6,671        7,721        12,473       13,248
                            -----------  -----------   -----------  -----------
                                150,409      162,588       484,892      413,068
                            -----------  -----------   -----------  -----------

Operating income (loss)          (8,304)      64,122      (113,662)     144,565
                            -----------  -----------   -----------  -----------


OTHER INCOME (EXPENSE)
 Investment and other
  income                         10,997        8,547        24,872       21,869
 Interest expense                  (100)      (2,636)       (1,816)      (7,979)
                            -----------  -----------   -----------  -----------
     Total other income          10,897        5,911        23,056       13,890
                            -----------  -----------   -----------  -----------

NET INCOME (LOSS) BEFORE
 INCOME TAXES                     2,593       70,033       (90,606)     158,455

 Income Taxes                    (1,000)           -        16,000            -
                            -----------  -----------   -----------  -----------
NET INCOME (LOSS)           $     1,593  $    70,033   $   (74,606)  $  158,455
                            ===========  ===========   ===========  ===========

NET INCOME (LOSS) PER COMMON
 SHARE                      $       .00  $       .00  $       (.00) $       .01
                            ===========  ===========   ===========  ===========
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING   26,626,745   17,533,666    26,626,745   18,383,406
                            ===========  ===========   ===========  ===========
</TABLE>

                See Accompanying Notes to Financial Statements
                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                                CTD HOLDINGS,INC.
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
                                   (Unaudited)
<S>                                                   <C>           <C>

                                                          Nine Months Ended
                                                            September 30,
                                                     --------------------------
                                                         2008          2007
                                                     ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income (loss)                                   $    (74,606) $    158,455
                                                     ------------  ------------
 Adjustments to reconcile net income
  to net cash provided by operating activities:

     Depreciation and amortization                         18,323        16,559
     Stock awarded to employees                           159,556       104,120
     Income tax benefit of deferred tax asset             (16,000)            -
     Increase or decrease in:
       Accounts receivable                                 38,375       (18,573)
       Inventory                                         (116,668)      (25,548)
       Prepaid expenses                                       442        22,113
       Accounts payable and accrued expenses                  780       (30,751)
                                                     ------------  ------------
        Total adjustments                                  84,808        67,920
                                                     ------------  ------------
    NET CASH PROVIDED BY OPERATING
         ACTIVITIES                                        10,202       226,375
                                                     ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of equipment and building improvements          (24,499)      (19,974)
 Patent database costs                                    (51,653)      (13,233)
 Redemption of certificate of deposit                     263,985             -
 Investment with related party                                853      (201,777)
                                                     ------------  ------------
    NET CASH PROVIDED BY (USED IN) INVESTING
         ACTIVITIES                                       188,686      (234,984)
                                                     ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Payments on long-term debt                              (140,074)       (5,187)
 Payments on stockholder loan                             (21,330)            -
 Loan to stockholder                                       (4,344)            -
 Received from stockholder                                      -        14,984
                                                     ------------  ------------
    NET CASH PROVIDED BY (USED IN)
     FINANCING ACTIVITIES                                (165,748)        9,797
                                                     ------------  ------------
    NET INCREASE (DECREASE) IN CASH AND
      CASH EQUIVALENTS                                     33,140         1,188
</TABLE>

                                       F-4
<PAGE>

<TABLE>
<CAPTION>

                                CTD HOLDING, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      Increase in Cash and Cash Equivalents
                                   (Unaudited)
                                   (Concluded)
<S>                                                   <C>           <C>
                                                          Nine Months Ended
                                                            September 30,
                                                     --------------------------
                                                         2008          2007
                                                     ------------  ------------

CASH AND CASH EQUIVALENTS, beginning of period            209,981        23,629
                                                     ------------   -----------
CASH AND CASH EQUIVALENTS, end of period             $    243,121   $    24,817
                                                     ============   ===========



SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 Cash paid for interest                              $      1,816   $     7,979
                                                     ============   ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
 AND FINANCING ACTIVITIES
  Common stock awarded to officers                   $    159,556   $   104,120
                                                     ============   ===========
</TABLE>


                See Accompanying Notes to Financial Statements

                                       F-5

<PAGE>

                               CTD HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2008
                                   (Unaudited)

The information presented herein as of September 30, 2008, and for the three and
nine month periods ended September 30, 2008, and 2007, is unaudited.

(1)  BASIS OF PRESENTATION:

The  accompanying  financial  statements  include  CTD  Holdings,  Inc.  and its
subsidiaries.

The  accompanying  financial  statements  have been prepared in accordance  with
generally accepted accounting  principles for interim financial  information and
with the  instructions  to Form  10-QSB  and  Rule  10-01  of  Regulations  S-X.
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.

Operating results for the three and nine month periods ended September 30, 2008,
are not necessarily  indicative of the results that may be expected for the year
ending  December  31,  2008.  For further  information,  refer to the  financial
statements and footnotes thereto included in the Company's annual report of Form
10-KSB for the year ended December 31, 2007.

(2)  NET INCOME (LOSS) PER COMMON SHARE:

Net  income  (loss)  per  common  share  is  computed  in  accordance  with  the
requirements of Statement of Financial  Accounting Standards No. 128 (SFAS 128).
SFAS 128 requires net income (loss) per share information to be computed using a
simple  weighted  average  of  common  shares  outstanding  during  the  periods
presented.  SFAS 128 eliminated the previous requirement that earnings per share
include the effect of any dilutive common stock equivalents in the calculation.

<PAGE>

(3)  INCOME TAXES

For the three month period  ended September 30, 2008, the Company reported net
income and reported income tax expense of $1,000 and reduced its deferred tax
asset.  For the  nine month  period  ended  September 30,  2008, the Company
reported a net loss and also realized a net operating tax loss and
recorded  the future  benefit by increasing its deferred  tax asset and
recognizing an income tax  benefit of $16,000.  This was based on management's
expectation that it is more  likely  than not the  Company  will  report  net
income and net taxable income for 2008 and future years sufficient to utilize
its net operating loss carry forwards.

For 2007, the Company reported net income and no income tax expense was reported
for the three and nine  month  periods  ended  september  30,  2007,  due to the
Company  utilizing the benefit of its net operating loss carry  forward.  In the
fourth  quarter of 2007,  the Company  reduced the  valuation  allowance  on the
deferred tax asset by $450,000.

(4)  CONCENTRATIONS

Sales to three major customers were 42% of total sales for the nine months ended
September 30, 2008.  Sales to four major customers were 67% of total sales for
the nine months ended September 30, 2007.

Substantially all 2007 and 2006 inventory purchases were from three vendors.

The  Company has only one source for certain  manufactured  inventory,  which is
located in Hungary.  However, the Company has manufactured these products in the
past and could do so again,  if  necessary.  There are multiple  sources for its
other inventory products.

(5)  COMMITMENTS AND CONTINGENCIES

For 2008,  the Company has  employment  agreements  with two  officers for total
monthly  salaries of $10,000.  In addition,  the officers are awarded  shares of
common stock each month. The number of shares due is equal to $13,500 divided by
eighty  percent of the closing price of the Company's  common stock on that last
day of each month. The Company  recognizes an expense equal to the fair value of
the stock determined using the average stock closing trading price for the month
multiplied by the number of shares awarded for that month.  The stock is subject
to trading  restrictions  under Rule 144. Also, the Company issued shares to one
of its  employees  through July 31,  2008.  The number of shares due is equal to
$500  divided by eighty  percent of the closing  price of the  Company's  common
stock  on the last day of each  month.  For the  three  and  nine  months  ended
September 30, 2008,  the Company  awarded  1,246,307  and  3,787,972  shares and
recognized an expense of $71,343 and $159,527,  respectively,  for stock awarded
under these agreements.


<PAGE>

For 2007,  the Company had  employment  agreements  with two  officers for total
monthly  salaries of $5,000.  In addition,  the  Company's  president is awarded
shares of common stock each month.  The number of shares due is equal to $11,500
divided by eighty  percent of the closing  price of the  Company's  common stock
price on the last day of each month.  The  $11,500  amount is a  combination  of
$6,500 under the  employment  agreement  and $5,000  awarded as a monthly  bonus
effective  July 1, 2007.  The Company  recognizes  an expense  equal to the fair
value of the stock  determined using the average stock closing trading price for
the month  multiplied by number of shares  awarded for that month.  The stock is
subject to trading  restrictions  under Rule 144.  For the three and nine months
ended September 30, 2007, the Company awarded 1,677,083 and 3,505,208 shares and
recognized an expense of $50,031 and $103,520,  respectively,  for stock awarded
under the  agreements.  Effective  July 1, 2007,  the Company also issued 29,166
shares of stock to an employee and  expensed  $870 for the three and nine months
ended September 30, 2007.

On February 7, 2007,  Registrant  and C.E. Rick  Strattan  filed suit in Circuit
Court in Palm Beach County,  Florida, (Case Number  2007CA001818XXXXMB)  seeking
the return of the Class A Preferred  Share and  damages  from  defendants  Eline
Entertainment  Group,  Inc., Eline Holding Group, Inc., Yucatan Holding Company,
Steven T. Dorrough,  Jayme Dorrough, and Barry Rothman, based on representations
made in connection  with the Share Exchange  Agreement dated August 11, 2005, as
amended and the enforcement of the agreement.

(6)  CHANGE IN ACCOUNTING ESTIMATE

In January 2007, the Company received a favorable price adjustment for inventory
acquired  and resold in 2006,  resulting  in reduction in cost of goods sold for
2007 of $7,700 for nine months ended September 30, 2007.

<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation.

Introduction

CTD Holdings,  Inc.  (referred to as the "Company," "CTD" or in the first person
notations of "we," "us," and "our") began  operations in 1990.  Our revenues are
principally   derived  from  retail  sales  of  cyclodextrins  and  cyclodextrin
complexes.  Our sales are primarily to major  chemical  supply houses around the
world, pharmaceutical companies, and food companies for research and development
and to diagnostics  companies.  We acquire our products principally from outside
the United States,  largely from Japan,  Germany and Hungary,  but are gradually
finding  satisfactory  supply  sources in the United States and China.  While we
enjoy better supply prices from outside the United States, rising shipping costs
are making  domestic  sources  more  competitively  priced.  To add value to our
products,  we maintain a  comprehensive  database of patented and patent pending
uses  of  cyclodextrins  from  the  United  States.  We  also  maintain  a  less
comprehensive  database that  includes  patents  issued in many other  countries
including  Japan,  Germany and others.  This  information  is  available  to our
customers.  We also offer our  customers  our  knowledge of the  properties  and
potential new uses of cyclodextrins and cyclodextrin complexes.

As most of our customers  use our  cyclodextrin  products in their  research and
development  activities,  their ordering from us is unpredictable with regard to
timing,  product mix and volume.  We also have four major  customers that have a
significant effect on our revenues when they increase or decrease their research
and development  activities that use cyclodextrins.  We keep in constant contact
with these  customers  as to their  cyclodextrin  needs so we can  maintain  the
proper  inventory  composition and quantity in anticipation of their needs.  The
sales to major  customers  and the product mix and volume of products sold has a
significant effect on our revenues and product margins. These factors contribute
to our significant revenue volatility from quarter to quarter and year to year.

<PAGE>

In 2004, we amended the Company's Articles of Incorporation authorizing a series
of "blank check"  preferred stock consisting of 5,000,000 shares; we created and
issued one share of Series A Preferred  Stock,  setting forth its  designations,
rights and preferences.  The more significant right is that the owner of the one
Series A Preferred  share votes with the holders of common  stock on all matters
submitted to a vote of our shareholders.  The owner of the one share of Series A
Preferred Stock is entitled to one vote more than one-half of all votes entitled
to be cast by all holders of voting  capital  stock of the Company on any matter
submitted to holders of common shares so as to ensure that the votes entitled to
be cast by the  holder of the Series A  Preferred  Stock are equal to at least a
majority of the total of all votes  entitled to be cast by the holders of common
shares.  In 2004,  we  issued  one  share of  Series A  Preferred  Stock to C.E.
Strattan,  our majority  shareholder in exchange for 1,029,412  shares of common
stock held by him,  which he  voluntarily  surrendered  to the  Company and were
cancelled.  Effective August 11, 2005, C.E. Strattan  contractually  transferred
the  right to the one  outstanding  share of Series A  Preferred  Stock to Eline
Entertainment  Group,  Inc.  (Eline).  The  agreement  with Eline  provides  for
advances to the Company of up to an aggregate of $1,500,000 to acquire CycloLab,
at Eline's sole discretion.  Eline is an SEC reporting  company currently not in
reporting compliance.  In September 2006, the company's President, Mr. Strattan,
demanded,  in accordance with the expired  contract,  the return of the Series A
Preferred  Stock in the form of a stock power  authorization  since the physical
share never left the possession of its original owner, Mr. Strattan.  The demand
letter was sent to the address given in the contract and was never  acknowledged
nor  responded to by Eline.  The Company has filed a legal action with regard to
its agreement with Eline. See "Legal Proceedings".

Liquidity and Capital Resources

Our cash,  short-term  investments  and  certificates  of deposits  decreased to
$243,000 as of September 30, 2008, compared to $474,000 as of December 31, 2007.
The decrease for the nine months ended  September 30, 2008, was due primarily to
increasing  inventory  by  $117,000,  retiring  the  mortgage on our property of
$140,000,  $52,000  to develop  our  patent  database  and  $24,000 to  purchase
equipment and improve our physical  facilities.  We have not  experienced and do
not  expect to have any  valuation  issues or  access  restrictions  to our cash
accounts and short-term investments.

As of September 30, 2008, our working capital was $517,000  compared to $504,000
at December 31, 2007.  Our cash flows from  operations for the first nine months
of 2008 were $10,000  compared  to $226,000  for the same  period in 2007.  This
decrease was primarily due to a $187,000 decrease in sales and a $117,000
increase in inventory in 2008.

We accumulated  almost  $500,000 in cash in January 2008,  which is in excess of
our requirements for normal operations and capital  projects.  We determined the
best use of our  additional  cash was to pay off the  $140,000  mortgage  on our
property,  which we did in February 2008. This reduces interest expense $850 per
month.  We also  signficantly  increased  our inventory for our two most popular
products.  In April 2008, we ordered  $80,000 of the product HPB from a Japanese
supplier,  and in July 2008 we ordered $46,000 of the product Methyl-Beta from a
German  supplier.  We increased our inventory of these two products based on our
estimate of future industry  purchase  trends and recent product  inquiries from
our larger  customers.  These  products  have a three month or more lead time to
acquire from our suppliers in the quantity purchased.  Because we now have these
products in stock, we have an increased  opportunity to fill any large orders we
may receive.  Due to increased shipping costs, it is also less costly to buy and
ship  larger  quantities  from our  suppliers.  If  these  large  orders  do not
materialize,  we can sell this  product in the normal  course of  business.  Our
current inventory of these two product represents approximately two years of our
historical sales volume of these products.

In October  2008,  we announced a plan to repurchase up to $150,000 of currently
outstanding common stock. We have not determined the exact timing of these share
repurchases.

We believe our working  capital is sufficient  to run our  operations at current
expected future operating levels into the near future. We do not require capital
in the next twelve months for normal operations.

<PAGE>

Controlling  cash expenses  continues to be  management's  primary  fiscal tool.
However,  growth  requires  increased  expenditures  and  we  feel  that  it  is
appropriate  during the current growth stage to engage consultants that can help
the Company in financial areas outside its expertise,  accepting that these fees
will act to reduce  profitability.  We are working hard to increase  revenues to
balance these new  expenses,  but cannot be sure that such effort will be enough
in the short term to sustain profitable financial performance.

Beginning in 2003, we began improvements and renovations of our corporate office
and have  invested  $123,000  through  December 31, 2007,  including  paving our
limerock driveway and completing part of our office renovation.  During the nine
months  ended  September  30,  2008,  we  capitalized  $24,000  of  improvements
including paving the first 300 feet of our driveway. Currently we are conducting
an  extensive  survey of our 40 acres of property  and  existing  facilities  in
preparation for developing a total site plan for our Research Park facility.  In
2009, we plan to renovate three existing structures to be an inventory warehouse
and an educational  auditorium at a estimated cost of $60,000.  These  buildings
have been  previously  idle.  Over the next five  years,  we plan to renovate or
construct at least six buildings for an estimated cost of $150,000.

Currently, we are developing a site plan for the research park including survey,
engineering  and  design.  The  progress of the site plan is  contingent  on the
Company's  ability to fund our  building  plan from  operating  profits and cash
flow. At the  conclusion of the site plan, we plan to sell  additional  stock to
finance the building construction of the research park.

During 2007, we began a major upgrade and update of our searchable  cyclodextrin
patent database. This database will be the only database dedicated to issued and
applied  for US  patents  regarding  cyclodextrins  capable  of  supporting  the
anticipated  deluge of  litigation  created by the sheer volume of  cyclodextrin
patenting  activities  that have occurred over the last five (5) years.  We have
capitalized  $85,000 for this database through September 30, 2008. We expect the
initial  project to cost  $125,000 and to be completed by June 30, 2009. We plan
to begin selling subscriptions to customers by the end of 2009. During the first
quarter  of  2008,  we  expanded  the  project  to  include   significant   data
verification  and customized  software to update the database  directly from the
U.S. Patent and Trademark Office and increased the budget by $30,000. We plan to
implement  phase II after revenue has been generated from Phase I. Phase II will
include  entering U.S.  patent  applications  into the  database.  On an ongoing
basis,   we  will  continue  to  enhance  the  database  for  ease  of  use  and
completeness.  We have not  budgeted  Phase II at this  time.  We expect  annual
database  enhancement  and  maintenance  costs  to be at least  $20,000  for the
foreseeable  future.  We have not completed the database or placed it in service
at September 30, 2008. We anticipate the patent database will have an indefinite
life  and  will not be  amortized.  However,  we will  amortize  the  internally
developed  software  component of database project over its expected useful life
and all future  maintenance  costs of updating the database  will be expensed as
incurred.

We have no off-balance sheet arrangements at September 30, 2008.

Results of Operations

Total  product  sales to date  declined  34% in 2008 to  $371,000,  compared  to
$558,000 for the same period in 2007. Sales for the quarter ending September 30,
2008 and 2007 were  $142,000 and  $227,000,  respectively.  Our decrease in 2008
sales from 2007 was due  primarily do a decrease in sales  volume,  primarily of
one product,  Trappsol HPB, of which we had higher than historical  volume sales
in 2007. Our major  customers  continue to follow  historical  product  ordering
trends and have  continued  to place  periodic  large  orders  that  represent a
significant share of our annual sales volume. For 2008 to date, our four largest
customers  accounted  for 49% of our sales;  the  largest  accounted  for 17% of
sales. In 2007, our four largest  customers  accounted for 67% of our sales; the
largest  accounted for 27% of sales.  The timing of when we receive and are able
to  complete  these  large  periodic  orders  has a  significant  effect  on our
quarterly sales and operating results.

Our cost of products  sold  (excluding  any  allocation  of direct and  indirect
overhead  and  handling  costs) for 2008 to date  increased  26% to $81,000 from
$64,000 for the same period in 2007.  This increase is the net result of changes
in the product mix sold  (increase  in cost)  offset by a lower  volume of sales
(decrease in cost). For 2007, our product sales of Trappsol HPB increased, which
has a high margin, so 2006 cost of sales did not increase at the same percentage
as sales.  Also during 2007, we received a favorable  price  adjustment for some
inventory  we acquired  and resold in 2006,  resulting  in reduction in our 2007
cost of goods sold of  $7,700.  Historically,  changes  in both sale  volume and
product mix has a significant  effect on our cost of sales and our margins.  Our
margins vary significantly among our products.  Our margins for the same product
vary based on quantity sold.

<PAGE>

The decrease in the value of the U.S. dollar during 2008 in relation to the Euro
and other  foreign  currencies  has  affected  our cost of  inventory,  and will
continue to do so. We buy most of our  products  from  outside the U.S. Our main
supplier of fine  chemicals and complexes has raised its prices 10-15% in Euros.
This increase  combined  with the decline in the U.S dollar,  has seen our costs
for these  products  increase  55-65%.  The cost of our bulk  inventory has also
increased  due to the decline of the U.S.  dollar.  These  products  represent a
significant  portion  of our  revenues.  We are not  able to  raise  our  prices
sufficient to maintain our historical  margins and therefore,  our product sales
margins have declined.

Personnel  costs  have  increased  37% to  $276,000  for the nine  months  ended
September  30,  2008,  from  $201,000 for same period in 2007.  Personnel  costs
increased  53% for the three months ended  September 30, 2008 compared the three
months ended  September 30, 2007.  This increase is due primarily to an increase
in the annual salary and monthly stock bonus awarded to our  president.  We also
added an  additional  office  employee  during the three months ended  September
2008.

Professional  fees decreased 23% to $71,000 for the nine months ended  September
30, 2008, from $93,000 for same period in 2007.  Professional fees decreased 14%
for the three months ended September 30, 2008 compared to the three months ended
September  30,  2007.  This  decrease is  primarily  due to a reduction in legal
expenses from 2007 to 2008 as the result of our lawsuit with Eline Entertainment
Group,  Inc. We continue to incur legal  expenses  and we may incur  significant
future legal fees related to this lawsuit.

Office and other expenses are comparable at $25,000 for 2008 and 2007.  Most of
our office related expenses do not vary significantly from quarter to quarter.

Amortization and depreciation increased 11% to $18,000 for the nine months ended
September 30, 2008, from $17,000 for the same period in 2007.  Amortization  and
depreciation  were  comparable  for the three  months ended  September  30, 2008
compared  to the three  months  ended  September  30,  2007.  We expect  similar
increases  in  future   periods  as  the  result  of  our  office   renovations,
improvements  and  additions,  as well as the addition of  internally  developed
software related to our patent database when completed.

Freight and shipping decreased 6% to $12,000 for the nine months ended September
30,  2008,  from  $13,000  for the same  period in 2007.  Freight  and  shipping
decreased  14% for the three months  ended  September  30, 2008  compared to the
three months  ended  September  30,  2007.  Freight and shipping is dependent on
frequency of ordering  products for inventory  and  frequency of sales.  We have
also  experienced  an increase in overall  shipping  costs due to  increases  in
energy costs during 2008.

Investment  and other income  increased 14% to $25,000 for the nine months ended
September  30, 2008,  from $22,000 for the same period in 2007.  Investment  and
other  income  increased  29% for the three  months  ended  September  30,  2008
compared  the three  months  ended  September  30,  2007.  This  increase is due
primarily to interest  income on increased  cash  balances in 2008,  although we
have experienced lower interest rates on our investments during 2008.

We recognized a $16,000  income tax benefit on our additional net operating loss
for the nine months ended  September 30, 2008. We recorded no income tax expense
for the nine months ended  September 30, 2007,  due to the  availability  of net
operating  loss  carryforwards  that offset our income tax  liability.  Prior to
December 31, 2007,  we recorded a 100%  valuation  allowance on our net deferred
tax asset.

We recognized a net loss of $(75,000) and net income of $2,000 for the nine and
three  month  periods  ending  September  30,  2008,  compared  to net income of
$158,000 and $70,000 for the nine and three months ended September 30, 2007.

We will continue to introduce new products that will increase  sales revenue and
implement  a strategy of creating or  acquiring  operational  affiliates  and/or
subsidiaries  that  will use  cyclodextrins  in  herbal  medicines,  waste-water
remediation,  pharmaceuticals,  and foods.  We also  intend to pursue  exclusive
relationships with major cyclodextrin manufacturer(s) and specialty cyclodextrin
labs to distribute their products.  We continue to be the exclusive  distributor
in North America of the cyclodextrin  products manufactured by CycloLab Research
Laboratories in Budapest, Hungary.

In keeping  with its  commitment  to use the  internet  as a major  promotional,
educational and public  relations  outlet,  the Company intends to apply greater
human  resources to the updating and  maintaining of its web site. This valuable
asset has been  instrumental in creating and maintaining a worldwide  leadership
role  for us in the  implementation  of  research  and  commercialization  of CD
applications.  We believe the maintenance and growth of our web site will return
that investment many times.

<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

<PAGE>

Items 4 and 4T. Controls and Procedures.

a. Management's quarterly report on internal control over financial reporting.

1. Our management is  responsible  for  establishing  and  maintaining  adequate
internal  control over  financial  reporting as defined in Rules  13a-15(f)  and
15d-15(f) under the Securities  Exchange Act of 1934. Our internal  control over
financial  reporting is a process designed to provide reasonable  assurance that
assets  are  safeguarded  against  loss from  unauthorized  use or  disposition,
transactions   are   executed  in   accordance   with   appropriate   management
authorization  and  accounting  records  are  reliable  for the  preparation  of
financial   statements  in  accordance   with  generally   accepted   accounting
principles.

2. Internal  control  over  financial  reporting  is a process  tailored to the
Company's unique circumstances,  designed under the supervision of the Company's
Chief Executive and Chief Operating Officer, and effected by the Company's Board
of Directors, its consultants and other personnel, taking into account the small
size of the  Company,  small  number of  employees  and others  involved  in the
Company's finances.  The process uses a system of checks and balances to provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation  of financial  statements for external  purposes in accordance  with
generally  accepted  accounting  principles  and  includes  those  policies  and
procedures that:

- pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the Company's assets and the
review  of those  transactions  and  dispositions  by the  Company's  compliance
officer;

- provide  reasonable  assurance that  transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that the Company's  receipts and  expenditures  are
being made only in accordance with authorizations of management or the Company's
Board of Directors; and

- provide  reasonable  assurance  regarding  prevention  or timely  detection of
unauthorized acquisition,  use or disposition of the Company's assets that could
have a material adverse effect on the Company's financial statements.

3. As required by Rule  13a-15(b)  and  15(d)-15(e)  under the Exchange Act, our
Chief Executive Officer who is also our Principal Accounting Officer carried out
an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report.  The
Company's  Chief  Executive  Officer has concluded  that the Company's  internal
control over financial reporting, as of September 30, 2008 was effective.

4. This quarterly report does not include an attestation report of the Company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public accounting firm pursuant to temporary rules of the Securities
and Exchange  Commission  that permit the Company to provide  only  management's
report in this quarterly report.

b.  Changes in internal  controls.

The Company made no changes in its internal  control  over  financial  reporting
that occurred  during the  Company's  third fiscal  quarter that has  materially
affected,  or which is  reasonably  likely to  materially  affect the  Company's
internal control over financial reporting.
<PAGE>

                           Part II. OTHER INFORMATION

Item 1.  Legal Proceedings.

NONE

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

NONE

Item 3.  Defaults Upon Senior Securities.

NONE

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

NONE

Item 5.  Other Information.

NONE


<PAGE>

Item 6.  Exhibits.

     (2)  Plan of purchase, sale, reorganization, arrangement,
          liquidation or succession                                       None

     (3)  Articles of Incorporation and By-Laws

          (i)   Articles of Incorporation filed August 9, 1990               *

          (ii)  By-Laws                                                      *

          (iii) Certificates of Amendment to the Articles of
                Incorporation  filed November 18, 1993 and
                September 24, 1993                                           *

     (4)  Instruments  defining  the  rights  of  security  holders,
          including indentures

          (a)  Specimen Share Certificate for Common Stock.                  *

     (10) Material contracts

          (10.1) Agreement of Shareholders  dated November 11, 1993
                 by and among C.E. Rick Strattan, Garrison Enterprises,
                 Inc. and the Company.                                       *

          (10.2) Lease Agreement dated July 7, 1994.                        **

          (10.3) Consulting  Agreement  dated July 29, 1994 between
                 the Company and Yellen Associates.                          *

          (10.4) License  Agreement  dated December 20, 1994 between
                 the Company and Herbe Wirkstoffe GmbH.                      *

          (10.5) Joint Venture  Agreement  between the Company and
                 Ocumed,  Inc. dated May 1, 1995,  incorporated  by
                 reference  to the  Company's Form 10-QSB for the
                 quarter ended June 30, 1995.                               **

          (10.6) Extension of Agreement between the Company and
                 Herbe Wirkstoffe GmbH.                                    ***

<PAGE>

          (10.7) Lease Extension                                             +

          (10.8) Loan Agreement with John Lindsay                            +

          (10.9) Small Potatoes Contract                                     +

         (10.10) Employment  Agreement  with C.E.  Rick Strattan
                 dated May 30, 2001                                         ++

         (10.11) Employment  Agreement of C.E. Rick Strattan
                 dated October 14, 2003                                    +++

         (10.12) Employment  Agreement  of George L. Fails
                 dated  October 14, 2003                                  ****

         (10.13) Addendum to Share Exchange Agreement with Eline
                 Entertainment Group                                      ++++

         (10.14) Share Exchange Agreement with Eline Entertainment
                 Groups                                                  +++++

     (11) Statement re: computation of per share earnings            Note 2 to
                                                                     Financial
                                                                    Statements

     (15) Letter on unaudited interim financial information               ****

     (18) Letter on change in accounting principles                       None

     (19) Reports furnished to security holders                           None

     (20) Other documents or statements to security holders or any
          document incorporated by reference                              None

     (22) Published  report regarding matters submitted to vote of
          security  holders                                               None

     (23) Consents of experts and counsel                                 None

     (24) Power of Attorney                                               None

<PAGE>

     (31) Rule 13a-14(a)/15d-14a(a) Certifications                        ****

     (32) Section 1350 Certifications                                     ****

     (99) Additional exhibits                                             None

     (100)XBRL-Related Documents                                          None

*    Incorporated  by  reference  to the  Company's  Form  10-SB  filed with the
     Securities and Exchange Commission on February 1, 1994.

**   Incorporated  by  reference  to the  Company's  Form 10-KSB  filed with the
     Securities and Exchange Commission on March 29, 1997.

***  Incorporated  by  reference  to the  Company's  Form 10-KSB  filed with the
     Securities and Exchange Commission on March 28, 2000.

**** Filed herewith.

+    Incorporated  by  reference  to the  Company's  Form 10-KSB  filed with the
     Securities and Exchange Commission on April 2, 2001.

++   Incorporated  by  reference  to the  Company's  Form 10-KSB  filed with the
     Securities and Exchange Commission on April 1, 2002.

+++  Incorporated by reference to Form S-8 filed December 1, 2003.

++++ Incorporated  by  reference  to the  Company's  Form  8-K  filed  with  the
     Securities and Exchange Commission on September 21, 2005.

+++++Incorporated  by  reference  to the  Company's  Form  8-K  filed  with  the
     Securities and Exchange Commission on August 15, 2005.

<PAGE>

                                   SIGNATURES

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

                                             CTD HOLDINGS, INC.



Date:  November 14, 2008                       /s/ C.E. Rick Strattan
                                             -----------------------------
                                             C.E. Rick Strattan
                                             Chief Executive Officer
                                             Chief Financial Officer