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

                                FORM 10-Q

(Mark one)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1998

                                   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 001-13875

                   ADVANCED COMMUNICATIONS GROUP, INC.
         (Exact name of registrant as specified in its charter)

           Delaware                                          76-0549396
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                         Identification Number)

     390 S. Woods Mill Rd, Suite 150                           63017
          St. Louis, Missouri                                (Zip Code)
(Address of principal executive offices)


                             (314) 205-8668
          (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 twelve months, and (2) has been subject to such
filing requirements for the past 90 days.  YES   X    NO
                                               -----     -----
As of May 10, 1998, the registrant had 19.6 million shares of common stock,
$.00001 par value, outstanding.


                                    1
<PAGE> 2

PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
          --------------------
<TABLE>
                         Advanced Communications Group, Inc. and Subsidiaries
                         ----------------------------------------------------
                                 Consolidated Statements of Operations
                                 -------------------------------------
                                              (Unaudited)
<CAPTION>
                                                              Pro Forma Three                          Actual Three
                                                              Months Ended<F1>                        Months Ended<F2>
                                                       -------------------------------           ----------------------------
                                                       March 31,             March 31,           March 31,          March 31,
(In thousands, except per share data)                    1998                  1997                1998               1997
                                                       ---------             ---------           ---------           --------
<S>                                                     <C>                   <C>                 <C>                 <C>
Revenues:
   Telecommunications                                   $13,766               $11,054             $ 6,551                --
   Directory                                             18,429                16,474               9,183                --
                                                        -------               -------             -------             -----
       Total revenue                                     32,195                27,528              15,734                --
Operating costs:
   Cost of services                                      16,951                14,054               7,647                --
   Selling, general and administrative expenses          10,304                 8,795               5,963               270
   Depreciation and amortization                          2,344                 2,293               1,202                --
   Stock-based compensation                               1,760                    --               1,760                --
                                                        -------               -------             -------             -----
       Income (loss) from operations                        836                 2,386                (838)             (270)
Other income (expense):
   Interest expense                                        (392)                 (352)               (282)               --
   Equity in earnings (loss) of KINNET                     (154)                 (253)                (68)               --
   Other                                                     58                    45                  30                --
                                                        -------               -------             -------             -----
Income (loss) before income taxes                           348                 1,826              (1,158)             (270)
Income tax expense                                          948                 1,565                 (34)               --
                                                        -------               -------             -------             -----

   Net income (loss)                                    $  (600)              $   261             $(1,124)            $(270)
                                                        =======               =======             =======             =====

Basic and diluted earnings (loss) per share             $  (.03)              $   .01             $  (.07)            $(.03)
                                                        =======               =======             =======             =====

<FN>
<F1> The Company completed its initial public offering on February 18, 1998,
     concurrently with the acquisition of 9 operating companies and a 49%
     interest in another company.  The pro forma results were prepared giving
     effect to the offering and the acquisitions as if they had occurred on
     January 1, 1997.

<F2> Actual results include the operations of the parent Company for the
     three-month period and the results of the acquired companies
     for the period February 18, 1998 to March 31, 1998.

See accompanying notes to consolidated financial statements.

</TABLE>


                                    2
<PAGE> 3

<TABLE>
                    Advanced Communications Group, Inc. and Subsidiaries
                    ----------------------------------------------------
                                 Consolidated Balance Sheets
                                 ---------------------------

<CAPTION>
(In thousands, except share data)                              (Unaudited)
                                                                March 31,                Dec. 31,
Assets                                                            1998                     1997
------                                                         -----------               --------
<S>                                                             <C>                      <C>
Current assets:
   Cash and cash equivalents                                    $ 11,472                 $    --
   Accounts receivable, net                                       23,509                      --
   Deferred costs                                                  2,638                      --
   Prepaid expenses and other current assets                         987                      --
                                                                --------                 -------
     Total current assets                                         38,606                      --
                                                                --------                 -------

Property, plant and equipment, net                                 4,099                       6
Intangible assets, net                                           110,674                      --
Equity investment in KINNET                                       17,887                      --
Other noncurrent assets                                              789                   2,689
                                                                --------                 -------
     Total other assets                                          133,449                   2,695
                                                                --------                 -------

                                                                $172,055                 $ 2,695
                                                                ========                 =======

Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
   Accounts payable and accrued liabilities                     $ 14,308                 $ 2,098
   Current maturities of long-term debt
    (related party)                                                1,378                   3,141
   Other current liabilities                                       2,401                      --
                                                                --------                 -------
     Total current liabilities                                    18,087                   5,239
Long-term obligations:
   Long-term debt (related party)                                 17,233                      --
   Other noncurrent liabilities                                      220                      --
                                                                --------                 -------
     Total liabilities                                            35,540                   5,239
                                                                --------                 -------
Stockholders' equity:
   Preferred Stock, Series A Redeemable Convertible                1,122                      --
   Common stock, $.0001 par value:  180,000,000 authorized;
     19,624,920 and 11,624,920 shares issued, respectively             2                      --
   Additional paid-in capital                                    140,374                   1,315
   Retained earnings (accumulated deficit)                        (4,983)                 (3,859)
                                                                --------                 -------
     Total stockholders' equity                                  136,515                  (2,544)
                                                                --------                 -------

                                                                $172,055                 $ 2,695
                                                                ========                 =======

See accompanying notes to consolidated financial statements.
</TABLE>


                                    3
<PAGE> 4
<TABLE>
                 Advanced Communications Group, Inc. and Subsidiaries
                 ----------------------------------------------------
                         Consolidated Statements of Cash Flows
                         -------------------------------------
                                      (Unaudited)
<CAPTION>
                                                                    Three Months Ended
                                                                         March 31,
                                                                --------------------------
(In thousands)                                                    1998               1997
                                                                --------             -----
<S>                                                             <C>                  <C>
Cash flows from operating activities:
   Net income (loss)                                            $  (1,124)           $(270)

   Adjustments to reconcile net earnings to net cash:

        Depreciation and amortization                              1,202                --
        Stock-based compensation expense                           1,760                --
        Equity in loss of KINNET                                      68                --
        Change in assets and liabilities:
           Decrease (increase) in:
             Accounts receivable, net                             (4,078)               --
             Deferred costs                                        1,988                --
             Prepaid expenses and other current assets               455                --
             Other assets, net                                      (239)               --
           Increase (decrease) in:
             Accounts payable and accrued liabilities             (1,270)               --
                                                                --------             -----
           Net cash used in operating activities                  (1,238)             (270)
                                                                --------             -----
Cash flows from investing activities:
     Cost of businesses acquired, net of $828 cash acquired      (83,277)               --
     Additions to property, plant and equipment, net                (276)               --
                                                                --------             -----
           Net cash used in investing activities                 (83,553)               --
                                                                --------             -----
Cash flows from financing activities:
     Borrowings (repayment) of long-term debt, net                (3,637)              270
     Proceeds from common stock offering, net of
       offering costs                                             99,900                --
                                                                --------             -----
           Net cash provided by financing activities              96,263               270
                                                                --------             -----
Net decrease in cash and cash equivalents                         11,472                --
Cash and cash equivalents-beginning of period                         --                --
                                                                --------             -----
Cash and cash equivalents-end of period                         $ 11,472             $  --
                                                                ========             =====

See accompanying notes to consolidated financial statements.
</TABLE>


                                    4
<PAGE> 5

          Advanced Communications Group, Inc. and Subsidiaries
          ----------------------------------------------------
               Notes to Consolidated Financial Statements
               ------------------------------------------
               Three Months Ended March 31, 1998 and 1997
               ------------------------------------------
                             (Unaudited)


1.  INTERIM RESULTS

      The financial statements contained herein are unaudited.  In the
opinion of management, these financial statements reflect all adjustments,
consisting only of normal recurring adjustments, which are necessary for fair
presentation of the results of the interim periods presented.  Reference is
made to the footnotes to the consolidated financial statements contained in
the Company's Annual Report on Form 10-K for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.

2.  BASIS OF PRESENTATION

       Advanced Communications Group, Inc. ("ACG" or "Company"), a Delaware
corporation, was founded to create a regional competitive local exchange
carrier that primarily provides a portfolio of telecommunications services
primarily to business customers in selected service areas of Southwestern Bell
and U S WEST and publishes yellow page directories in selected markets.

      ACG completed its initial public offering ("IPO") of its common stock,
par value $.0001 per share ("Common Stock") on February 18, 1998.  Cash proceeds
from the offering, net of offering costs, were $99.9 million.  Of this amount
$84.1 million was used to pay the cash portion of the acquired companies, $3.6
million was used to retire debt of the Company and the Acquired Companies, and
$1.75 million was paid to a stockholder for a five-year non-compete agreement.
In connection with the IPO, the Company simultaneously acquired all of the
outstanding capital stock of Great Western Directories, Inc. ("Great Western"),
Valu-Line of Longview, Inc. ("Valu-Line"), Feist Long Distance Service, Inc.
("Feist"), FirsTel, Inc. ("FirsTel") and Tele-Systems, Inc. ("Tele-Systems"),
substantially all of the assets of Long Distance Management II, Inc. ("LDM II"),
Long Distance Management of Kansas, Inc. ("LDM of Kansas"), The Switchboard of
Oklahoma City, Inc. ("Switchboard"), and National Telecom, a proprietorship, and
49% of the outstanding capital stock of KIN Network, Inc. ("KINNET")
(collectively "Acquisitions" or "Acquired Companies").

      Prior to February 1998, ACG had not conducted any operations other than
those relating to the IPO and the Acquisitions. Consequently, the actual
financial statements included herein relate only to the parent company prior
to February 18, 1998, but include the results of the Acquired Companies for
the period February 18, 1998 to March 31, 1998.  Certain pro forma operating
information is presented for comparative purposes as if the IPO and the
Acquisitions had occurred on January 1, 1997. The pro forma financial
information does not purport to represent the Company's results of operations
that would have actually occurred if the IPO and the Acquisitions had in fact
occurred on the date stated above.  Since the Acquired Companies were not
under common control or management, historical combined results of operations
may not be comparable to, or indicative of, future performance. The pro forma
financial statements reflect the financial position and results of operations
of the Acquired Companies and were derived from the respective Acquired
Companies' financial statements. All intercompany accounts have been
eliminated in consolidation.


                                    5
<PAGE> 6

3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Property, plant and equipment -- Property, plant and equipment are
stated at cost, less accumulated depreciation. Depreciation is computed using
the straight-line or an accelerated method over the respective lives of the
assets. The estimated useful lives of the assets range from 3 to 31 years.

     Intangible assets from business acquisitions -- Intangible assets
resulting from the cost of businesses acquired exceeding the fair value
of net assets acquired consist principally of the customer lists and goodwill.
The value of customer lists and their estimated useful lives were determined
using preliminary independent appraisals.  Customer lists and goodwill are
amortized on a straight-line basis over their estimated useful lives ranging
from 5 to 10 years and 25 to 40 years, respectively.

      Income taxes -- Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the carrying
amounts of existing assets and liabilities for financial reporting purposes
and for income tax purposes.  The Company's effective tax rate is substantially
higher than statutory tax rates principally because amortization of certain
intangible assets is not deductible for tax purposes.

        Revenue recognition -- Directory revenues are derived from the sale
of advertising space in telephone directories and are recognized on the date
that the directory is published and substantially delivered. If the estimate
of total directory costs exceeds advertising revenues for a specific region's
telephone directory, a provision is made for the entire amount of such
estimated loss. Directory costs are deferred until the date that the directory
is published and substantially delivered. Directory costs include all direct
costs related to the publishing of a regional telephone directory, such as
publishing and distribution expenses and commissions on sales, other sales
expenses and depreciation and amortization. General and administrative costs
are charged to expense as incurred.

         Costs incurred with the expansion into new markets include all
direct costs related to the publishing of a first-year telephone directory
(prototype directory). Advertising space in prototype directories is
generally provided to advertisers at no cost; therefore, no advertising
revenues are derived from prototype directories. Because the future economic
benefit of the direct costs related to prototype directories cannot be
determined, such direct costs are charged to expense as incurred. The Company
had no prototype directories for the periods ended March 31, 1998 and 1997.

         Telecommunications revenues are recognized when long-distance, local
and 800 services are provided.  Billings made in advance for local services
are deferred until earned.

        Net earnings (loss) per share -- The Company has adopted the provisions
of Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share", which replaces the presentation of primary earnings per share and
fully diluted earnings per share with a presentation of basic earnings per
share ("Basic EPS") and diluted earnings per share ("Diluted EPS"). Basic EPS
excludes dilution and is determined by dividing income available to common
stockholders by the weighted average number of common shares outstanding
during the period. Diluted EPS reflects the potential dilution that could
occur if securities and other contracts to issue common stock were exercised
or converted into common stock.


                                    6
<PAGE> 7

     Deferred line acquisition costs - Deferred line acquisition costs
include the direct costs incurred in connection with establishing local
access line service for customers and are being amortized on a straight-line
basis over the estimated life of the average customer local service contract.

     Use of estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.

     Comprehensive Income -- The Company has adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," as
of the first quarter of 1998. SFAS No. 130 establishes new rules for the
reporting and display of comprehensive income and its components, however it
has no impact on the Company's net income or stockholders' equity. For the
quarters ended March 31, 1998 and 1997, the Company did not incur items to be
reported in comprehensive income that were not already included in the
reported net earnings; therefore, comprehensive income (loss) and net income
(loss) were the same for these periods.

4. ACQUISITIONS

      Concurrent with and as a condition to the closing of the IPO, ACG
acquired all of the outstanding capital stock of Great Western, Valu-Line,
Feist Long Distance, FirsTel and Tele-Systems, substantially all of the
assets of LDM II and LDM of Kansas, Switchboard and National Telecom, and 49%
of the outstanding capital stock of KINNET pursuant to the terms of the
Acquisitions. The Acquisitions are accounted for using the purchase method of
accounting with ACG being treated as the accounting acquirer. The interest in
KINNET is accounted for under the equity method of accounting.

      The consideration paid for the Acquisitions included (i) cash, (ii)
Common Stock, (iii) promissory notes, (iv) a payable for reimbursement of cash
paid to purchase two companies in September 1997, and (v) options and warrants
to purchase shares of Common Stock. In determining the amount to be recorded for
accounting purposes for the component of the purchase price attributable to the
shares of Common Stock issued for the Acquisitions, the value of such shares was
determined to be $38.0 million, which represents a discount of twenty percent
due to restrictions on the sale and transferability of the shares issued.  The
following table sets forth for accounting purposes the fair value of
consideration paid with respect to the Acquisitions and the assets acquired:

<TABLE>
<CAPTION>
(In thousands)
<S>                                               <C>
      Consideration Paid for Acquired Companies:
             Cash                                 $ 84,135
             Common Stock                           37,896
             Notes Payable                          17,350
             Options and Warrants                      361
                                                  --------
             Total Purchase Price                 $139,742
                                                  ========
      Assets Acquired:
             Net working capital                     9,829
             Property and equipment                  3,941
             Customer Lists                         44,900
             Goodwill                               81,072
                                                  --------
             Total Assets Acquired                $139,742
                                                  ========
</TABLE>


                                    7
<PAGE> 8
      The promissory notes issued in the Acquisitions consist of (i) $15.0
million in notes payable two years from the closing of the Acquisitions and
bearing an annual rate of interest of five percent (5%), which notes may be
prepaid at any time and are subordinated to the Company's senior debt (ii)
$2.0 million in notes convertible into shares of Common Stock at the initial
public offering price, payable two years from the closing of the Acquisitions
and bearing an annual rate of interest of ten percent (10%), which notes may
be prepaid at any time and are subordinated to the Company's senior debt and
(iii) a $350,000 promissory note payable in three equal annual installments
and bearing an annual interest rate of seven percent (7%), which note may be
prepaid at any time.

5. NEW ACCOUNTING STANDARDS

     In 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information," which
establishes standards for reporting information about operating segments in
annual financial statements and requires that enterprises report selected
information about operating segments in interim financial reports issued to
shareholders. The Company will adopt the statement for its year end 1998
financial statements. The Company is currently evaluating the impact that
the statement will have on its reportable segments. Adoption of this statement
will have no impact on the Company's net income, financial position or cash
flows.

     In February 1998, the FASB issued Statement of Financial Accounting
Standards No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits", ("SFAS 132"). This statement requires additional
pension related disclosures. Adoption of this statement will have no impact
on the Company's net income, financial position or cash flows.

     In March 1998, the American Institute of Certified Public Accountants
(AICPA), issued Statement of Position 98-1 (SOP 98-1), "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use." This SOP
is effective for financial statements for fiscal years beginning after December
15, 1998, with earlier application encouraged. The Company currently accounts
for its software costs generally in accordance with this SOP.

     In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of
Start-Up Activities." This SOP provides guidance on the financial reporting of
start-up costs and organization costs. It requires costs of start-up activities
and organization costs to be expensed as incurred. The Company is in
compliance with this SOP.

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

      The information contained in this Item 2 includes statements regarding
matters which are not historical facts (including statements as to the Company's
plans, beliefs or expectations) that are forward-looking statements within the
meaning of the federal securities laws.  Because such forward-looking statements
involve certain risks and uncertainties, the Company's actual results and the
timing of certain events could differ materially from those discussed herein.
For a discussion of some of the factors that could cause actual results to
differ materially from the forward looking statements, see "Risk Factors" on
pages 11-24 in the Company's S-1 Registration Statement on Form S-1, Securities
Act File Number 333-37671 filed with the Securities and Exchange Commission
on February 12, 1998.

Results of Operations

General

      The following table sets forth, for the periods presented, certain pro
forma and actual information relating to the operations of the Company,
expressed as a percentage of revenues, excluding stock-based compensation
expense:

<TABLE>
<CAPTION>

                                                             Pro Forma
                                                      ------------------------    Actual Three
                                                         Three Months Ended       Months Ended
                                                      ------------------------    ------------
                                                      March 31,      March 31,     March 31,
                                                        1998           1997          1998
                                                      ---------      ---------     ---------
<S>                                                    <C>            <C>            <C>
Telecom revenues                                        42.8%          40.2%          41.6%
Directory revenues                                      57.2           59.8           58.4
                                                       -----          -----          -----
Total revenues                                         100.0          100.0          100.0
Cost of services                                        52.7           51.1           48.6
Selling, general and administrative expenses            32.0           31.9           37.9
Depreciation and amortization                            7.3            8.3            7.6
                                                       -----          -----          -----
Income from operations                                   8.0            8.7            5.9
Other income                                              .2             .1             .2
Interest expense                                        (1.2)          (1.3)          (1.8)
Equity in earnings (loss) of KINNET                      (.5)           (.9)           (.4)
                                                       -----          -----          -----
Net income (loss) before income taxes                    6.5            6.6            3.9
Income taxes                                             5.1            5.7            4.3
                                                       -----          -----          -----
Net income (loss)                                        1.4             .9            (.4)
                                                       =====          =====          =====
</TABLE>


                                    8
<PAGE> 9

Pro forma operating results for the three months ended March 31, 1998, compared
to the three months ended March 31, 1997

      Prior to February 1998, ACG had not conducted any operations other than
those relating to the IPO and the Acquisitions. Consequently, the actual
financial statements included herein relate only to the parent company prior
to February 18, 1998, but include the results of the Acquired Companies for
the period February 18, 1998 to March 31, 1998.  Certain pro forma operating
information is presented for comparative purposes as if the IPO and the
Acquisitions had occurred on January 1, 1997. The pro forma financial
information does not purport to represent the Company's results of operations
that would have actually occurred if the IPO and the Acquisitions had in fact
occurred on the date stated above.  Since the Acquired Companies were not
under common control or management, historical combined results of operations
may not be comparable to, or indicative of, future performance. The pro forma
financial statements reflect the financial position and results of operations
of the Acquired Companies and were derived from the respective Acquired
Companies' financial statements.

      Pro forma revenues for the three months ended March 31, 1998, increased
17.0% to $32.2 million from $27.5 in the first quarter of 1997.  Revenues
from telecommunication services were $13.7 million, or 42.8 % of total
revenues, compared to $11.1 million or 40.2% of total revenues in 1997.  The
increase in telecommunications revenues is due to increased local service
revenue as the Company implemented aggressive sales and marketing of local
services in addition to its traditional long-distance services.  The Company
did not provide any local service in the first quarter of 1997, compared to
first quarter 1998 pro forma local service revenue of $2.2 million on
approximately 27, 000 local access lines in service at March 31, 1998.  Pro
forma directory revenues increased 11.9% to $18.4 million from $16.5 million in
the 1997 first quarter. The Company distributed five directories in both the
first quarter of 1998 and 1997.  Approximately $1.0 million of the increase is
due to increased advertising revenue from recurring directories and
approximately $1.6 million of the increase is due to the net impact of a larger
directory distributed during the first quarter of 1998 which was partially
offset by another directory completed in the 1997 first quarter but not in the
first quarter of 1998.

      Pro forma cost of services for the three months ended March 31, 1998,
increased to $17.0 million from $14.1 million in 1997, an increase of 20.6%.
Pro forma cost of services as a percentage of total revenues was 52.7% in
1998 compared to 51.1% in 1997.  Telecommunication services gross margin was
30.0% in 1998 compared to 36.4% in 1997.  The lower gross margin percentage
of the telecommunication segment in 1998 is due to the aforementioned
increase in local service revenues.  Gross margin from local service is lower
than long distance gross margin.  The Company is currently a reseller of
local and other services, which substantially increases costs.  To improve
margins, the Company ultimately plans on becoming a facilities-based provider
of local service in selected markets as its customer base increases in those
markets to justify investment in facilities.  The lower pro forma gross margin
in the first quarter of 1998 is also attributable to higher costs associated
with directory publications.  The pro forma gross margin percentage from the
directory publishing division was 56.5% in 1998, a decrease of .9% from 57.4% in
1997.

      Pro forma selling, general and administrative expenses for the first
quarter ended March 31, 1998, increased to $10.3 million from $8.8 million in
1997.  As a percentage of total revenues, pro forma selling and administrative
costs were 32.0% in 1998, and 31.9% in 1997.  The increase is due primarily
to the direct costs associated with the higher sales volume.  The Company
expects that its selling, general and administrative costs as a percentage of
sales will increase as the Company undertakes more aggressive sales and
marketing programs to develop its businesses.

      Pro forma depreciation and amortization was approximately $2.3 in both
1998 and 1997.  Pro forma depreciation and amortization includes approximately
$2.0 million of amortization relating to intangible assets resulting from the
Acquisitions.

      Nonrecurring stock-based compensation of $1.8 million was expensed in
the three months ended March 31, 1998, relating to 300,000 stock options
issued in December 1997.  The options vested equally over a three-month
period beginning on the date of the grant. This amount represents the
remaining two


                                    9
<PAGE> 10

thirds of the total compensation expense expected to be realized based on the
estimated fair market value of the options on the date of the grant.  The
balance was recognized in the fourth quarter of 1997.

      Pro forma interest expense was approximately $.4 million in both 1998
and 1997.  The interest is primarily on debt to related parties issued as
consideration for certain of the Acquired Companies.

      Pro forma income tax expense was $.9 million in the first quarter of
1998 compared to $1.6 million in 1997. The decrease is due to lower taxable
income in 1998 than in 1997. In computing estimated income tax expense, the
Company used an estimated 40% income tax rate in both years. The Company's
effective income tax rate is substantially higher than statutory tax rates
principally because amortization of certain intangible assets is not
deductible for tax purposes.

      Pro forma net loss was $.6 million, or $.03 per share, in the three
months ended March 31, 1998, compared to pro forma net income of $.3 million,
or $.01 per share in 1997 first quarter. The decrease is due primarily to the
stock-based compensation expense of $1.8 million.  Excluding this item, net
income for the quarter ended March 31, 1998, would have been $.5 million, or
$.02 per share. The increase in net income excluding the stock-based
compensation expense is due to the increased income from the directory
publishing division offset partially by higher costs associated with local
service revenue.

     Pro forma earnings before interest, taxes, depreciation, amortization,
equity interest in Kinnet, and nonrecurring items (EBITDA) increased to $5.0
million for the three months ended March 31, 1998, from $4.7 million for the
three months ended March 31, 1997. The increase is primarily due to increases in
earnings from both the directory and telecommunications operations in 1998
offset partially by higher general and administrative costs associated with
the Company's new organization structure. EBITDA is a measure commonly used in
the telecommunications industry and is presented to assist in an understanding
of the Company's operating results and is not intended to represent cash
flow or results of operations in accordance with generally accepted accounting
principals.

Actual period ended March 31, 1998

      Actual results for the period ended March 31, 1998, include only activity
of the parent Company from January 1, 1998 to February 18, 1998. On February
18, the Company completed the Acquisitions and therefore, actual results include
only the activity of the Acquired Companies from February 18, 1998 to March 31,
1998. For the period ended March 31, 1998, actual loss from operations was
$.8 million. Excluding the stock-based compensation of $1.8 million, the Company
had net income from operations of $.9 million, or 5.9% of total revenues, and
a net loss of $.1 million, or (.4%) of total revenues. The decrease in income
from operations and net income, excluding the stock-based compensation
expressed as a percentage of revenues when compared to pro forma results is
due primarily to higher general and administrative costs associated with the
Company's new organization structure. The Company had no operating revenue in
1997 and was engaged principally in activities relating to the IPO.

Liquidity and Capital Resources

      The Company's working capital at March 31, 1998, was $20.5 million and
its ratio of current assets to current liabilities was 2.1 to 1.0.

      On February 18, 1998, the Company completed its initial public offering
and simultaneously acquired 9 operating companies and a 49% interest in
another company. Cash proceeds from the offering, net of offering costs, were
$99.9 million.  Of this amount $84.1 million was used to pay the cash portion
of the acquired companies, $3.6 million was used to retire debt of the Company
and the Acquired Companies, and $1.75 million was paid to a stockholder for a
five-year non-compete agreement. Stockholders of the Acquired Companies that
became executive officers or directors of the Company upon the consummation of
the Acquisitions received approximately $35.6 million of the cash purchase
price paid for the Acquisitions.

      The Company expects that it will meet its short-term working capital
and capital requirements from cash remaining from the initial public offering
and internally generated funds.  The Company intends on establishing a revolving
credit facility or other financing arrangement in order to finance its
investment in network facilities and other growth strategies.


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<PAGE> 11

PART II - OTHER INFORMATION


Item 1. - Legal Proceedings
          -----------------

      Prior to the closing of ACG's initial public offering (the "IPO")
and ACG's acquisition of Great Western Directories, Inc. ("Great Western"),
Richard O'Neal, the principal shareholder of Great Western and a current
director of ACG, expressed disagreement with the effect of the reverse stock
split involving ACG's predecessor (to be effected in connection with the
consummation of the IPO) on certain warrants that had been issued to the
stockholders of Great Western at the time of the execution of the initial
acquisition agreement between ACG and Great Western (the "Warrants").
Consolidated Partners Founding Fund ("CPFF"), a stockholder of ACG's
predecessor (as well as a stockholder of ACG after the consummation of the
IPO) and Mr. O'Neal executed a written agreement dated February 11, 1998
agreeing to engage in good faith negotiations after the Offering to determine
the type and amount of any consideration appropriately payable by CPFF to the
holders of the Warrants.  The written agreement further provided that if CFPP
and Mr. O'Neal could not reach a negotiated settlement within forty-five days
after the closing of the Offering, the matter would be referred to binding
arbitration and the cost of such arbitration would be borne by CPFF. CPFF
agreed not to effect any distribution of ACG common stock to its interest
owners prior to the resolution of these matters.  The resolution of these
matters is solely between CPFF and the principal shareholder of Great Western
and ACG shall have no liability with respect to the resolutions of such
matter.

      While any payment will be made solely by CPFF and will not involve the
assets of ACG or the issuance of additional ACG common stock or common stock
equivalents, such a payment may be construed for accounting purposes as a
capital contribution by CPFF and deemed a payment by ACG of additional
consideration for the Great Western acquisition.  This would increase the
goodwill associated with the Great Western Acquisition and the related
amortization charges.

      No resolution was reached between Mr. O'Neal and CPFF within 45 days
following the consummation of the IPO and ACG understands that this
matter has been referred to arbitration in accordance with the above
referenced agreement between Mr. O'Neal and CPFF.

      In early February 1998, Valu-Line of Longview, Inc. ("Valu-Line") was
served with a petition by four plaintiffs (including the lawyer filing the
suit) which alleged, among other things, that Valu-Line billed the plaintiffs
for services never provided and intentionally "bumped up" the actual time of
services used by the plaintiffs in order to increase Valu-Line's charges to
them.  The plaintiffs purported to bring the suit as a class action and
alleged violations of the Texas Deceptive Trade Practices Act, fraud, breach
of contract, negligence and gross negligence.  They sought damages in an
unspecified amount, further damages under the Deceptive Trade Practices Act,
interest, attorney's fees and such other relief to which they might have been
found to be entitled.  The petition contained no details with respect to
Valu-Line's alleged conduct.  While representatives of Valu-Line advised ACG
that they believed Valu-Line's billing practices have and do conform generally
to industry standards and FCC rate filings and that the plaintiffs' allegations
were without merit, during the first quarter of 1998, Valu-Line, in order to
avoid protracted litigation, entered into a settlement pursuant to which it
agreed to pay the plaintiffs a total of $35,000, a nominal portion of which was
paid by ACG, in exchange for an agreed


                                    11
<PAGE> 12

confidential dismissal with prejudice, with the four named plaintiffs, prior
to the certification of the suit as a class action.

      Valu-Line had been providing intrastate long distance services to
customers in Arkansas since 1992 without the requisite permit for such
activities.  Valu-Line initiated steps to secure the requisite permit for
such activities from the appropriate Arkansas regulatory authorities and in
connection therewith, Valu-Line reached a settlement with the Arkansas
regulatory authorities during the first quarter of 1998 for approximately
$120,000.

Item 2. - Changes in Securities and Use of Proceeds
          -----------------------------------------

      (a)   Omitted -- inapplicable

      (b)   Omitted - inapplicable

      (c)   ACG registered with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended, 8,000,000 shares
(the "Shares") of its common stock (par value $.0001 per share) (the "Common
Stock") on Registration Statement Form S-1 (the "Registration Statement").
The Securities Act file number assigned to the Registration Statement is
333-37671.  The Shares were offered and sold pursuant to ACG's initial public
offering (the "IPO") which was declared effective by the Commission on
February 12, 1998. The IPO, for which PaineWebber Incorporated and CIBC
Oppenheimer acted as managing underwriters, commenced on that date and has
terminated.

      Pursuant to the Registration Statement, the Company registered with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, the sale of $138,000,000 of Common Stock. In the IPO, the Company
sold 8,000,000 shares of Common Stock at an initial public offering price of
$14.00 per share, for an aggregate initial public offering price of
$112,000,000. The amount of expenses incurred for the Company's account in
connection with the IPO for (i) aggregate underwriting discounts and
commissions, (ii) estimated other expenses, and (iii) estimated total expenses
(including underwriting discounts and commissions) were, respectively,
$7,840,000, approximately $4,075,000 (including $500,000 of accounting fees
paid prior to the consummation of the IPO) and approximately $11,915,000
(including $500,000 of accounting fees paid prior to the consummation of the
IPO). The net proceeds to the Company from the sale of the shares of Common
Stock in the IPO, after deducting underwriting discounts and commissions and
estimated offering expenses payable by the Company, was $99.9 million. Of those
net proceeds, $74.1 million was used to pay the aggregate cash portion of the
purchase price for the Acquired Companies, $10.0 million was used to make a
direct cash investment in KIN Network, Inc., a fiber optic network company, and
the remaining net proceeds were used for (i) the repayment of outstanding
principal amount of indebtedness and certain other payables of the Acquired
Companies (approximately $2.3 million); (ii) the repayment of outstanding
principal amount of indebtedness of the Company to CPFF (which until it
distributes shares of Common Stock to its interest owners pursuant to its
regulations will be the largest holder of Common Stock) (approximately $3.6
million); (iii) a one-time payment to Rod K. Cutsinger, the founder and a
director of the Company, as consideration for a five-year non-competition
agreement ($1.75 million); and (iv) working capital and other general
corporate purposes. Shareholders of the Acquired Companies who became
executive


                                    12
<PAGE> 13

officers or directors of the Company upon the consummation of the Acquisitions
received approximately $35.6 million of the cash purchase price paid in the
Acquisitions.

      (d)   On January 15, 1998, the Company agreed to issue 142,857 shares
of Series A Redeemable Convertible Preferred Stock (the "Preferred Stock") to
Northwestern Growth Corporation ("NGC") in connection with the negotiation of
a strategic alliance. This transaction was completed without registration
under the Securities Act in reliance upon the exemption provided by Section 4(2)
thereof, no public offering being involved. In concluding that the 4(2)
exemption was appropriate, the Company obtained representations from NGC
that: (i) NGC is able to bear the economic risk of an investment in the
Preferred Stock and can afford to sustain a total loss of such investment;
(ii) NGC has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of NGC's investment in
the Company; (iii) NGC understands that an investment in the Preferred Stock
is very speculative and involves a high degree of risk; (iv) NGC received and
reviewed a copy of the Registration Statement and is generally familiar with
the transactions described therein; (v) NGC confirmed that it had access to
the books, records, plants, facilities, properties, personnel and officers
of the Company and the Acquired Companies for the purpose of conducting an
investigation of the financial condition, corporate status, business,
properties and assets of the Company and the Acquired Companies prior to its
execution of the Acquisition Agreement by which it acquired the Preferred
Stock; (vi) NGC had an adequate opportunity to ask questions and receive
answers from the officers of the Company and the Acquired Companies concerning
any and all matters relating to the transactions described in the acquisition
agreement, the acquisitions of the Acquired Companies and the Registration
Statement including, without limitation, the background and experience of
the current and proposed officers and directors of the Company and the
Acquired Companies, the plans for the operations of the business of the
Company and the Acquired Companies; (vii) NGC asked any and all questions in
the nature described in clause (vi) above and all questions were answered to
its satisfaction; and (viii) NGC indicated that it was acquiring the Preferred
Stock and the Common Stock issuable upon the conversion thereof for its own
account, for investment and not with a view to, or for offer or resale in
connection with, a distribution thereof, within the meaning of the Securities
Act or a distribution thereof in violation of any applicable state securities
laws.

      The Preferred Stock will become convertible into Common Stock at $14.00
per share (subject to customary adjustments to protect against dilution) after
August 18, 1999.

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

            (a)   Exhibits

                  Exhibit 11 - Computation of Earnings Per Share

                  Exhibit 27 - Financial Data Schedule

            (b)   Reports on Form 8-K

                  The Company filed a report on Form 8-K, dated March 5, 1998,
                  to address Item 2 thereto relating to the completion of its
                  IPO and the closing of the Acquisitions which occurred
                  February 18, 1998.


                                    13

<PAGE> 14

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.

                                            Advanced Communications Group, Inc.
                                            (Registrant)


Date:  May 14, 1998                             /s/ Richard Anthony
                                                -------------------
                                                Richard Anthony
                                                President and
                                                Chief Executive Officer


Date:  May 14, 1998                             /s/ William H. Zimmer III
                                                -------------------------
                                                William H. Zimmer
                                                Executive Vice President and
                                                Chief Financial Officer
                                                (Principal Financial and
                                                Accounting Officer)

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