<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(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
                               ------------------------------------

[ ] 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 1-10196
                        Dimensional Visions Incorporated
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


         Delaware                                      23-2517953
--------------------------------                   ------------------
(State or other jurisdiction of                      (IRS Employer
incorporation or organization)                     Identification No.)

               2301 W. Dunlap, Suite 207, Phoenix, Arizona, 85021
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (602) 997-1990
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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.
Yes _X_     No ___.

As of March 31, 1998, the number of shares of Common Stock issued and
outstanding was 3,005,261.


<PAGE>



                Dimensional Visions Incorporated And Subsidiaries

                                      INDEX

<TABLE>
<CAPTION>
                                                                                               Page
                                                                                              Number
                                                                                              ------
<S>                                                                                             <C>
PART I - FINANCIAL  INFORMATION
         Item 1. Financial Statements
         Consolidated Condensed Balance Sheets - March 31, 1998
         and June 30, 1997                                                                        1

         Consolidated Condensed Statements of Operations - For the three and nine
         months ended March 31, 1998 and 1997                                                     2

         Consolidated Condensed Statements of Cash Flows - For the nine
         months ended March 31, 1998 and 1997                                                     3

         Notes to Consolidated Condensed Financial Statements                                     4

         Item 2. Management's Discussion and Analysis of Financial Conditions
                 and Results of Operations                                                       12


PART II - OTHER INFORMATION

         Item 1.  Legal Proceedings                                                             N/A
         Item 2.  Changes in Securities                                                         N/A
         Item 3.  Defaults Upon Senior Securities                                               N/A
         Item 4.  Submission of Matters to a Vote of Security Holders                           N/A
         Item 5.  Other Information                                                             N/A
         Item 6.  Exhibits and Reports on Form 8-K                                               13

SIGNATURES                                                                                       13

</TABLE>

<PAGE>
PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

               DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)


                                     ASSETS


                                             March 31,      June 30,
                                               1998           1997
                                             ---------     ----------
                                            (Unaudited)
Current assets
 Cash and cash equivalents                   $ 31,771      $  109,566
 Current portion of note receivable           112,732              --
 Accounts receivable, trade net
  of allowances for bad debts
  of $215,743                                  91,742          82,301
 Inventory                                    137,375         179,127
 Prepaid supplies and expenses                 32,471          10,001
                                             --------      ----------
 Total current assets                         406,091         380,995
                                             --------      ----------

Equipment
 Equipment                                    313,722       1,527,776
 Furniture and fixtures                        44,343         125,035
                                             --------      ----------
                                              358,065       1,652,811
 Less accumulated depreciation
  and amortization                            304,070       1,562,421          
                                             --------      ----------
                                               53,995          90,390
                                             --------      ----------
Other assets
 Patent rights, and other assets               40,794          40,889
 Deferred costs                                 5,729          17,246
 Note receivable, net of current portion      262,728              --
 Deferred Offering Costs                       74,564              --
                                             --------      ----------
                                              383,815          58,135
                                             --------      ----------
Total assets                                 $843,901      $  529,520
                                             ========      ==========

<PAGE>

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)


                                            March 31,       June 30,
                                              1998            1997
                                          -----------      ----------
                                            (Unaudited)
Current liabilities                      
 Current portion of long-term debt        $    75,000     $    75,000
 Secured promissory notes                     350,000              --
 Unsecured promissory notes                    96,000              --
 Accounts payable, accrued
  expenses and other liabilities              370,689         413,947
                                          -----------     -----------
 Total current liabilities                    891,689         488,947
Long-term debt, net of current portion             --         125,000
                                          -----------     -----------
Total liabilities                             891,689         613,947
                                          -----------     -----------
Commitments and contingencies                      --              --

Stockholders' equity (deficiency)
 Preferred stock - $.001 par value,
 authorized 10,000,000 shares;
 issued and outstanding at March 31,
 1998, 137,321 shares and at June
 30, 1997, 218,878 shares                         137             219
 Additional paid-in capital                   713,273         923,209
                                          -----------     -----------
                                              713,410         923,428
 Common stock - $.001 par value,
 authorized 100,000,000 shares;
 issued and outstanding at March 31,
 1998, 3,005,261 shares and
 at June 30, 1997, 2,725,515 shares             3,005           2,726
 Additional paid-in capital                18,338,295      17,909,556
 Deficit                                  (19,102,498)    (18,920,137)
                                          -----------     -----------
Total stockholders'equity (deficiency)        (47,788)        (84,427)
                                          -----------     -----------
Total liabilities and stockholders'
 equity (deficiency)                      $   843,901     $   529,520
                                          ===========     ===========


           See notes to condensed consolidated financial statements.

                                      (1)
<PAGE>

               DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended          Nine Months Ended
                                                         March 31,                  March 31,                                  
                                                    ------------------          -----------------
                                                    1998          1997          1998         1997
                                                    ----          ----          ----         ----
<S>                                                 <C>           <C>           <C>           <C>
Operating revenue                                $208,526      $130,846      $380,777    $  351,792
Cost of Sales                                      72,036        38,615       236,879       150,772
                                                 --------      --------      --------    ----------
Gross profit                                      136,490        92,231       143,898       201,020
                                                 --------      --------      --------    ----------
Operating expenses            
 Engineering and development costs                 69,096       170,963       182,476       365,802
 Marketing expenses                                 7,935        63,002       122,014       259,649
 General and administrative expenses              161,193       264,568       463,082       735,124
                                                 --------      --------      --------    ----------
Total operating expenses                          238,224       498,533       767,572     1,360,575
                                                 --------      --------      --------    ----------
Loss before other income (expenses)              (101,734)     (406,302)     (623,674)   (1,159,555)
                                                 --------      --------      --------    ----------
Other income (expenses)
 Interest expense                                 (46,861)       (6,202)      (76,451)      (20,720)
 Interest income                                   13,284         1,103        20,496         6,124
 Forgiveness of accrued compensation                   --            --       106,148            --         
 Loss on sale of equipment                             --            --       (18,881)           --
 Sale of product line                                  --            --       410,000            --
 Amortization of goodwill                              --       (48,249)           --      (144,748)
                                                 --------      --------      --------    ----------
                                                  (33,577)      (53,348)      441,313      (159,344)
                                                 --------      --------      --------    ----------
Net loss                                        ($135,311)    ($459,650)    ($182,361)  ($1,318,899)
                                                 ========      ========      ========    ==========
Net loss per share of common stock                 ($0.05)       ($0.19)       ($0.06)       ($0.76)
                                                 ========      ========      ========    ==========
Weighted average shares of common stock
 outstanding after given effect to a 1 for 25
 reverse stock split on January 15, 1998        2,991,376     2,460,366     2,918,623     1,744,561
                                                =========     =========     =========     =========
</TABLE>
           See notes to condensed consolidated financial statements.

                                      (2)

<PAGE>
               DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)


                                                     Nine Months Ended March 31,
                                                       1998             1997
                                                     --------        ----------
Cash flows from operating activities
 Net loss                                           ($182,361)      ($1,318,899)
 Total adjustments to reconcile net loss to net
 cash used in operating activities                   (312,170)          497,098
                                                     --------        ----------
Net cash used in operating activities                (494,531)         (821,801)
                                                     --------        ----------
Cash flows from investing activities
 Purchase of property and equipment                   (10,200)           (2,730)
 Proceeds from sale of equipment                       10,000                --
                                                     --------        ----------
Net cash used in investing activities                    (200)           (2,730)
                                                     --------        ----------
Cash flows from financing activities
 Proceeds from long-term borrowing                         --           250,000
 Proceeds from secured promissory notes, net of
 financing costs of $24,500                           325,500                --
 Proceeds from unsecured promissory notes              96,000                --
 Sale of common stock, net of offering costs          135,000           489,000
 Exercise of warrants to purchase common stock         10,000                --
 Payment of long-term debt                            (75,000)               --
 Deferred offering costs                              (74,564)               --
                                                     --------        ----------
Net cash provided by financing activities             416,936           739,000
                                                     --------        ----------
Net change in cash and cash equivalents               (77,795)          (85,531)
Cash and cash equivalents, beginning                  109,566           203,073
                                                     --------        ----------
Cash and cash equivalents, ending                    $ 31,771        $  117,542 
                                                     ========        ==========
Supplemental disclosures of cash flow information:
 Cash paid during the period for interest                  --                --
                                                     ========        ==========
 Issuance of common stock in connection with
  Compensation                                       $  2,750        $   51,880
                                                     ========        ==========
  Consulting services                                $ 21,250        $  203,675
                                                     ========        ==========
  Payment of an advance from Individual              $     --        $   15,000
                                                     ========        ==========


                                      (3)


<PAGE>



                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
           CONDENSED CONSOLIDATE STATEMENTS OF CASH FLOWS (Continued)
                                   (Unaudited)

Supplemental disclosure of non-cash investing and financing activities for nine
months ended March 31, 1998 and 1997 (all common share amounts have been
adjusted to give retroactive effect to a 1 for 25 reverse stock split effected
on January 15, 1998):

For the nine months ended March 31, 1998, the Company issued 72,727 shares of
the Company's common stock in connection with the conversion of $50,000 of
convertible debentures to common stock.

On October 20, 1997, the Company issued 200 shares of the Company's common stock
in connection with the conversion of 500 shares of Series P Convertible
Preferred Stock.

During the nine months ended March 31, 1997, 56,000 shares of the Company's
stock was issued as a result of the conversion of 35,000 shares of Series A
Convertible Preferred Stock valued at $350,000.

During the nine months ended March 31, 1997, 62,606 shares of the Company's
Common Stock was issued as a result of the conversion of 156,515 shares of
Series P Convertible Preferred Stock valued at $391,288.

During the nine months ended March 1997, 891,360 shares of the Company's Common
Stock was issued as a result of the conversion of 185,700 shares of Series B
Convertible Preferred Stock valued at $1,857,000.

During the nine months ended March 31, 1997, 212,300 shares of the Company's
Common Stock was issued as a result of the conversion of $400,000 of Convertible
Debenture issued pursuant to a Regulation S offering.

During the nine months ended March 31, 1997, 1,896 shares of the Company's
Common Stock was issued as a result of the conversion of 4,739 shares of Series
C Convertible Preferred Stock valued at $47,390.

            See notes to condensed consolidated financial statements.


                                       (4)

<PAGE>



                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)


Note 1  Basis of Presentation of Interim Financial Statements

        The interim financial statements are prepared pursuant to the
        requirements for reporting on Form 10-QSB. The June 30, 1997 balance
        sheet data were derived from audited financial statements but does not
        include all disclosures required by generally accepted accounting
        principles. The interim financial statements and notes thereto should be
        read in conjunction with the financial statements and notes included in
        the Company's Annual Report on Form 10-KSB for the fiscal year ended
        June 30, 1997. In the opinion of management, the interim financial
        statements reflect all adjustments of a normal recurring nature
        necessary for a fair statement of the results for the interim periods
        presented. The current period results of operations are not necessarily
        indicative of results which ultimately will be reported for the full
        year ending June 30, 1998.

        In this report all common shares and per share amounts have been
        adjusted to give retroactive effect to a 1 for 25 reverse stock split
        effected on January 15, 1998.


Note 2  Accounts Payable, Accrued Expenses and Other Liabilities


                                  March 31, 1998              June 30,1997
                                  --------------              ------------
Accounts payable                     $235,444                   $260,942
Accrued expenses
  Interest                             86,144                     11,184
  Salaries                             44,043                    117,943
  Consulting fees                          --                     18,000
Payroll Taxes Payable                   5,058                      5,878
                                     --------                   --------
Total                                $370,689                   $413,947
                                     ========                   ========

Note 3  Secured Promissory Notes

        As of March 31, 1998, there were $350,000 of outstanding Secured
        Promissory Notes. Interest is calculated at 5% per month and is due and
        payable at maturity (February 28, 1998) unless extended by the note
        holders. As of March 31, 1998, accrued interest amounted to
        approximately $75,000. The Company borrowed $350,000 net of financing
        costs of $24,500. The Series A Convertible Secured Promissory Notes
        include warrants to purchase 420,000 shares of the Company's common
        stock at $1.00 per share. The warrants are exercisable over a 5 year
        period through the year 2002. The notes are secured by all the assets of
        the Company.

        The notes are convertible into one share for each $1.00 of outstanding
        debt and unpaid interest is also convertible to common stock at the rate
        of one share for each $1.00 of unpaid interest.

        On April 8, 1998, $325,000 of the outstanding obligation and $73,840 of
        accrued interest were converted to 398,840 shares of the Company's
        stock.



                                       (5)

<PAGE>


                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)

Note 4  Unsecured Promissory Notes

        During March 1998 the Company received loans of $96,000 from Capital
        West Investment Group. The notes are due June 30, 1998 and interest is
        at 12% per annum. The note holders will receive one warrant for every
        dollar invested to purchase the Company's common stock at $0.93, as
        adjusted, for a three year period with expires on February 28, 2001. The
        notes are automatically convertible into units of the private offering
        in the event that the Company receives subscriptions for an aggregate of
        at least $672,000 in gross proceeds. In the event that the notes convert
        to units, the accrued interest due to the note holder shall be applied
        towards the exercise price of the warrants on a pro rata basis. In such
        event the Company shall not be obligated to make any cash payment of the
        accrued interest. On April 8, 1998, these notes were converted to
        equity.

Note 5  Long-Term Debt

        Long-term debt consisted of the following:

<TABLE>
<CAPTION>
                                                        March 31, 1998            June 30, 1997
                                                        --------------            -------------
<S>                                                         <C>                       <C>
5% convertible debenture due August 1, 1998              $    --(1)                $125,000(1)
10% secured notes due in Jan. and Feb. 1998               75,000(2)(3)               75,000(2)(3)
                                                         -------                   --------      
                                                          75,000                    200,000
     Less current portion                                 75,000                     75,000
                                                         -------                   --------
     Long term portion                                   $    --                   $125,000
                                                         -------                   --------
</TABLE>

(1) During the year ended June 30,1997, $375,000 of the outstanding debentures
    were converted to 274,133 shares of the Company's common stock at an average
    price per share of $1.25. This debt is convertible into the Company's common
    stock at 50% of the price of the Company's stock on the day prior to
    conversion, but at no time shall the conversion price be greater than $3.625
    a share.

    During July 1997, $50,000 of the outstanding debentures were converted to
    72,727 shares of the Company's common stock at an average price of $.6875
    per share.

    The debentures were due on August 1, 1997, and the debenture holder on
    October 8, 1997 extended the due date to August 1, 1998.

    During December 1997 and January 1998, the outstanding debenture of $75,000
    was paid to the debenture holder.

(2) As collateral for the secured notes, the Company has given a security
    interest in all of the Company's tangible and intangible assets, including
    all patents and proprietary technology, which was evidenced by a Uniform
    Commercial Code filing on March 24, 1994.

(3) The Company has accrued interest on this obligation, but has not paid
    interest to the noteholders since January 1996. No demand for interest has
    been made by the noteholders, but the notes are in technical default by
    failure to pay accrued interest. As of February 15, 1998, the secured notes
    are past due.

                                       (6)

<PAGE>


                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)


Note 6  Commitments and Contingencies

        In January 1998 the Company entered into a consulting agreement with
        Capital West Investment Group, Inc. ("CWIG"). Pursuant to such
        agreement, CWIG will provide the Company with, among other things,
        strategic planning, advice with respect to the identification of
        potential business opportunities, recommendations regarding capital
        raising alternatives, and assistance in dealing with potential investors
        and strategic partners. Pursuant to such consulting agreement, CWIG and
        its assignees were granted warrants to acquire 1,500,000 shares of
        Common Stock at $0.50 per share.

        Pursuant to the terms of the letter agreement dated September 19, 1997,
        CWIG will use its "best efforts" to raise funds amounting to $3,000,000
        in net proceeds less expenses and commissions within six months of the
        date of the letter. As of March 31, 1998, CWIG has provided the short
        term financing of $446,000 (see Notes 3 and 4).

        On January 1, 1998, the Company relocated its offices and entered into a
        three year lease at a minimum rental of $44,950 per year.

        Effective January 24, 1997, the Company vacated its studio and
        production facilities in Philadelphia, Pennsylvania. There are several
        disputed invoices outstanding that amount to less than $2,000 that
        management expects to resolve in its favor.

        During 1996, the Company's former principal distributor of its print
        products refused to pay a certain sales invoice for goods shipped to,
        accepted and paid for by the distributor's customer. The Company had
        demanded payment and the distributor has refused to pay the invoice for
        $213,522. In July 1996, the Company filed for judgment on the $213,522
        invoice together with interest, costs and such other relief the court
        will deem just and proper. The distributor has filed a counterclaim.
        Management feels this matter will be resolved favorably and will not
        have a material adverse effect on its financial position. During 1996,
        the Company provided an allowance for possible bad debts for the full
        amount of this sales transaction. During 1997, this matter has moved to
        a deferred status while the parties engage in settlement negotiations.

        There are no other legal proceedings which the Company believes will
        have a material adverse effect on its financial position.

        The Company has not declared dividends on Series A or B Convertible
        Preferred Stock. The cumulative dividends in arrears through June 30,
        1997 was approximately $68,000.

Note 7  Common Stock

        The shareholders of record at the close of business on December 5, 1997,
        voted on January 15, 1998, to approve a 1 for 25 reverse stock split
        effective that date. In this report all common shares and per share
        calculations have been adjusted to give retroactive effect to a 1 for 25
        reverse stock split.

        As of March 31, 1998, there are outstanding 3,571,200 of non-public
        warrants to purchase the Company's common stock at prices ranging from
        $0.50 to $12.50 with a weighted average price of $1.07 per share.


                                       (7)

<PAGE>


                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)

        As of March 31, 1998, there were 137,321 shares of various classes of
        Convertible Preferred Stock outstanding which can be converted to
        108,928 shares of common stock.

        As of March 31, 1998, there are 7,500 Series B Warrants outstanding to
        purchase Series B Convertible Preferred Stock which can be converted
        into 30,000 shares of the Company's common stock.

        As of March 31, 1998, there were $350,000 of secured promissory notes
        which can be converted into 350,000 shares of the Company's common
        stock.

        The total number of shares of the Company's common stock that would have
        been issuable upon conversion of the outstanding debt, warrants and
        preferred stock equaled 4,060,128 shares as of March 31, 1998, and would
        be in addition to the 3,005,261 shares of common stock outstanding as of
        March 31, 1998.

        During the nine months ended March 31, 1998, 48,000 shares of the
        Company's common stock was sold to third parties in a private placement
        for $60,000 (at $1.25 per share).

        On September 30, 1997, the Company sold 66,667 shares of the Company's
        common stock to a third party for $75,000 under a Regulation S offering.

        During the nine months ended March 31, 1998, the Company issued 72,727
        shares of the Company's common stock in connection with the conversion
        of $50,000 of convertible debenture to common stock under a Regulation S
        offering.

        The Company issued 15,200 shares of the Company's common stock to
        consultants for services valued at $21,250 (average price per share
        $1.25).

        The Company issued 2,000 shares of the Company's common stock to an
        officer as a bonus valued at $1.375 per share.

        A warrant holder exercised his right to purchase 40,000 shares of the
        Company's common stock at $2.50 per share.

        The Company issued on October 20, 1997, 200 shares of its common stock
        as a result of a conversion of 500 shares of Series P convertible
        Preferred Stock.

        During January 1998, the Company issued 30,963 shares of the Company's
        common stock in connection with the conversion of 77,407 shares of
        Series P Convertible Preferred Stock.

        On March 30, 1998, the Company issued 4,000 shares of the Company's
        common stock in connection with the conversion of 3,500 shares of Series
        P Convertible Preferred Stock and 650 shares of Series S Convertible
        Preferred Stock.







                                       (8)

<PAGE>


                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)

Note 8  Preferred Stock

        The Company has authorized 10,000,000 shares of $.001 par value per
        share Preferred Stock, of which the following were issued and
        outstanding:

<TABLE>
<CAPTION>
                                        Allocated                               Outstanding
                                        ---------                               -----------
                                                                March 31, 1998               June 30, 1997
                                                                --------------               -------------
            <S>                             <C>                       <C>                         <C>
            Series A Preferred            100,000                   25,500                       25,500
            Series B Preferred            200,000                    5,000                        5,000
            Series C Preferred          1,000,000                   18,681                       18,681
            Series P Preferred            600,000                   86,640                      168,047
            Series S Preferred             50,000                    1,500                        2,150
                                        ---------                  -------                      -------

         Total Preferred Stock          1,950,000                  137,321                      219,378
                                        =========                  =======                      =======
</TABLE>

        The Company's Series A Convertible 5% Preferred Stock ("Series A
        Preferred"), 100,000 shares authorized, is convertible into common stock
        at the rate of 1.6 shares of common stock for each share of the Series A
        Preferred. Dividends from date of issue, are payable from retained
        earnings, and have been accumulated on June 30 each year, but have not
        been declared or paid.

        The Company's Series B Convertible 8% Preferred Stock ("Series B
        Preferred"), is convertible at the rate of 4 shares of common stock for
        each share of Series B Preferred. Dividends from date of issue are
        payable on June 30 from retained earnings at the rate of 8% per annum
        and have not been declared or paid.

        The Company's Series C Convertible Preferred Stock ("Series C
        Preferred"), is convertible at a rate of 0.4 shares of common stock per
        share of Series C Preferred.

        The Company's Series P Convertible Preferred Stock ("Series P
        Preferred"), is convertible at a rate of 0.4 shares of common stock for
        each share of Series P Preferred.

        The Company's Series S Convertible Preferred Stock ("Series S
        Preferred"), is convertible at the rate of 4 shares of common stock for
        each share of Series S Preferred.

        The Company's Series A Preferred and Series B Preferred were issued for
        the purpose of raising operating funds. The Series C Preferred was
        issued to certain holders of the Company's 10% Secured Notes in lieu of
        accrued interest and also will be held for future investment purposes.
        The Series S Preferred was issued to certain stockholders consisting
        mainly of officers and directors of the Company in exchange for such
        stockholders' shares of common stock. After this exchange, common stock
        was sold on September 5, 1995 for the purpose of raising additional
        capital.

        The Series P Preferred was issued on September 12, 1995, to InfoPak
        shareholders in exchange for (1) all of the outstanding capital stock of
        InfoPak, (2) as signing bonuses for certain employees and a consultant
        of InfoPak, and (3) to satisfy InfoPak's outstanding debt obligations to
        certain shareholders.


                                       (9)

<PAGE>


                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)

        The 190,700 shares of Series B Preferred were issued to holders of
        warrants to purchase such preferred stock. The funding for the exercise
        of these warrants was the exchange of $1,907,000 of principal amount of
        secured and unsecured notes. On December 3, 1996, 185,700 shares of
        Series B Preferred were exchanged for 891,360 shares of the Company's
        common stock.

        The 26,275 shares of Series C Preferred were also issued in exchange for
        $262,750 of interest due under the secured and unsecured notes. Holders
        of 7,594 shares of Series C Preferred Stock have subsequently converted
        their shares into the Company's common stock.

Note 9  Gain on Sale of Product Line

        On September 25, 1997, the Company sold its real estate multiple listing
        data delivery system. The purchase price was $450,000 plus the
        assumption of a $59,247 liability to a third party. The transaction was
        funded by a down payment of $40,000 which was applied to the outstanding
        accounts receivable balance and the balance of $410,000 was payable in
        36 monthly installments of $13,229.55 including interest at 10% per
        annum commencing October 25, 1997. In February 1998 the payment terms of
        the note were altered by extending the payment period to a total of
        forty-eight months at 11%.

Note 10 Income Taxes

        There was no provision for current income taxes for the nine months
        ended March 31, 1998 and 1997.

        The federal net operating loss carry forwards of approximately
        $16,469,000 expire in varying amounts through 2012.

        The Company has had numerous transactions in its common stock. Such
        transactions may have resulted in a change in the Company's ownership,
        as defined in the Internal Revenue Code Section 382. Such change may
        result in an annual limitation on the amount of the Company's taxable
        income which may be offset with its net operating loss carry forwards.
        The Company has not evaluated the impact of Section 382, if any, on its
        ability to utilize its net operating loss carry forwards in future
        years.

Note 11 Events Subsequent to March 31, 1998

        During April 1998, the Company received additional short term financing
        of $153,000 from CWIG prior to the initial closing of the Private
        Placement on April 8, 1998.

        On April 8, 1998, the Company closed on the minimum of its Private
        Placement. A total of 35.3 units comprising of 564,840 common shares and
        282,417 warrants to purchase common stock at $1.50 per share were issued
        in exchange for $325,000 of Series A Convertible Secured Promissory
        Notes and the accrued interest thereon and $249,000 of the Company's
        Unsecured 12% Convertible Promissory Notes. The remaining $25,000 of
        Series A Convertible Secured Promissory Notes were paid in full on April
        8, 1998.

        Pursuant to the letter agreement dated September 19, 1997, CWIG will
        continue to use its "best efforts" to raise additional funding for the
        Company.



                                      (10)

<PAGE>


                DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                        NINE MONTHS ENDED MARCH 31, 1998
                                   (Unaudited)

        Below is the pro forma effect of the conversion of the $421,000 in short
        term borrowings and accrued interest of $63,910 as of March 31, 1998,
        into units described in the Private Placement. Each unit consists of
        16,000 shares of common stock and 8,000 three year warrants to purchase
        8,000 shares of common stock at $1.50 for the first year and at $2.00
        for the remaining two years.


Balance Sheet Data: (in thousands)        As of March 31, 1998       As Adjusted
                                          --------------------       -----------
   Total current assets                          $406                   $406
   Total assets                                   844                    769
   Total current liabilities                      892                    407
   Working capital (deficiency)                  (486)                    (1)
   Stockholder's equity (deficiency)              (48)                   362



                                      (11)

<PAGE>



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

        Three months ended March 31, 1998 and 1997

        Liquidity and Capital Resources

        As of March 31, 1998 the Company had a working capital deficiency of
        $485,598, compared with a working capital deficiency of $212,723 as of
        March 31, 1997. The current working capital deficiency as of March 31,
        1998, included short term financing and related interested of
        approximately $485,000 which was converted on April 8, 1998, as part of
        the Private Placement to equity of the Company.

        During January 1998 the Company received $106,500 less financing charges
        of $7,455 pursuant to its agreement with Capital West Investment Group,
        Inc. ("CWIG") as short term bridge loan financing in the form of Series
        A Convertible Secured Promissory Notes. In addition, the Company
        received $96,000 in the form of Unsecured 12% Convertible Promissory
        Notes.

        Results of Operations

        The net loss for the quarter ended March 31, 1998, was $135,311 compared
        to a net loss of $459,650 for the quarter ended March 31, 1997. The
        decrease in the loss was caused primarily by a decrease in compensation
        and consulting expenses and increased gross profit. Revenues for the
        quarter ended March 31, 1998, were $208,526 compared to revenues of
        $130,846 for the quarter ended March 31, 1997. The increase in revenues
        was the result of substantial increases in the sales of the Company's
        print products. For the quarter ended March 31, 1998, the Company
        recorded sales totaling approximately $135,000 of its DV3D(R)
        AnimotionTM print products compared to sales of approximately $17,500
        for the quarter ended March 31, 1997.


        Nine months ended March 31, 1998 and 1997

        Liquidity and Capital Resources

        For the nine months ended March 31, 1998, the Company raised $145,000
        through private placement of its securities and the exercise of
        warrants. In addition $446,000 was lent to the Company through short
        term financing arrangements. In April 1998 an additional $153,000 of
        Unsecured 12% Convertible Promissory Notes were received by the Company.

        The Company needs additional funding in order to maintain current
        operations. The Company is not to the point of generating sufficient
        revenues from operations to cover its cost structure. The Company has
        been funding its operations by selling its securities in private
        placements, offshore transactions, short-term borrowing, and sale of its
        products. Although the Company was able to complete the minimum offering
        set forth in the Private Placement Memorandum, the Company is continuing
        to work to complete the raising of funds amounting to $3,000,000 from
        accredited investors. The Company was able to close on April 8, 1998,
        the mini portion of the Private Placement. On April 8, 1998, the Secured
        and Unsecured Note holders converted their notes and related accrued
        interest into units of the Private Placement comprising of 564,840
        shares of Common stock.

        In September 1997, the Company sold its real estate multiple listing
        data delivery system. The purchase price was $450,000 plus the
        assumption of a $59,427 liability. The purchase price was payable
        $40,000 at closing, which was applied against outstanding accounts
        receivable trade and the balance to be paid ratably over a thirty-six
        month period commencing October 25, 1997 at $13,229.55 per month
        including interest at 10%. In February 1998 the payment terms of the
        note were altered by extending the payment

                                      (12)

<PAGE>


        period to a total of forty-eight months at 11%. In connection with the
        sale the Company agreed to provide consulting services for a period of
        one hundred and twenty days at no cost and thereafter at certain
        prescribed rates.

        Results of Operations

        The net loss for the nine months ended March 31, 1998, was $182,300
        compared to $1,318,899 for the nine months ended March 31, 1997. The
        reduction of the net loss is the result of the gain recognized from the
        sale of the product line of $410,000, the elimination of the
        amortization of good will of approximately $144,750, the forgiveness of
        accrued compensation of $106,148, and the reductions in compensation,
        related travel expenses and outside consultants of approximately
        $300,000. Although operating revenues for the nine months ended March
        31, 1998, are comparable to the nine months ended March 31, 1997, the
        product mix is significantly different. Prior to the sale of the real
        estate product line the majority of the revenues was generated by
        InfoPak. Beginning in January 1998, the majority of the revenue was
        generated through the sale of the Company's print products.

        In December 1997 the Company sold all of its photographic equipment
        resulting in a loss of $18,881. Currently all DV3D(R) and Animotion(TM)
        print products are processed on a graphics work station to improve the
        quality, time to market, and repeatability of these images.

        The Company implemented a newly focused business plan which will
        concentrate on offering and delivering integrated and systematic
        Promotion Marketing Solutions to innovative business leaders to help
        them increase their sales by offering two primary products, namely
        MarketingLenses(TM) (a new trade name for all of the Company's print
        products) and InfoPak. In December 1997 the Company moved into its new
        office in Phoenix, Arizona and has begun to close sales from its
        concentrated marketing efforts.

        During the past six months, the Company has successfully implemented
        many new strategies to better position the Company to become profitable.
        A 1 for 25 reverse stock split was effected on January 15, 1998. All new
        corporate identity materials were designed and produced including a
        presence on the World Wide Web (www.dv3d.com). A completely new
        management team and Board of Directors has been installed. As a result
        of the new management marketing efforts, the sales of the Company's
        print products have significantly increased beginning in January 1998.

PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

        The following documents are filed as part of this report:

        1. The following Exhibits are filed herein: 27.0 Financial Data Schedule

        2. Reports on Form 8-K filed: None

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

                                            DIMENSIONAL VISIONS INCORPORATED

DATED: April 27, 1998                       By: /s/ John D. McPhilimy
                                               ---------------------------------
                                                John D. McPhilimy, Chairman,
                                                President and Chief Executive
                                                Officer

                                      (13)