SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-KSB

     [X]  Annual report under Section 13 or 15(d) of the
           Securities Exchange Act of 1934
               For the year ended December 31, 1998
                               OR
     [  ] Transition report under Section 13 or 15(d) of the
           Securities Exchange Act of 1934
                Commission File Number:  0-21394
               Developed Technology Resource, Inc.

          Minnesota                                41-1713474
    State of Incorporation             I.R.S. Employer Identification No.
                 7300 Metro Boulevard, Suite 550
                     Edina, Minnesota  55439
              Address of Principal Executive Office

                         (612) 820-0022
                    Issuer's Telephone Number

 Securities registered pursuant to Section 12(b) of the Exchange Act:
                              None

 Securities registered pursuant to Section 12(g) of the Exchange Act:
             Common Stock, $0.01 par value per share

Check whether the Issuer (1) has 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  ___   No  _X_

Check if no disclosure of delinquent filers pursuant to Item  405
of  Regulation S-B contained in this form, and no disclosure will
be  contained, to the best of the registrant's knowledge, in  the
definitive  proxy  or  information  statements  incorporated   by
reference  in  Part III of this Form 10-KSB or any  amendment  to
this Form 10-KSB  { X }

Issuer's revenues for its most recent year:  $1,750,623

As  of  August 9, 1999, 805,820 shares of the Registrant's Common
Stock were outstanding.  The aggregate market value of the Common
Stock  held  by  non-affiliates of the registrant on  such  date,
based  upon the closing bid price of the Common Stock as reported
by  the OTC Bulletin Board on August 9, 1999 was $1,218,458.  For
purposes  of  this computation, affiliates of the registrant  are
deemed  only  to  be  the  registrant's  executive  officers  and
directors.  See Item 11.


           DOCUMENTS INCORPORATED BY REFERENCE:  None

<PAGE>
                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS

General

     Developed Technology Resource, Inc. (the Company or DTR) was
incorporated  on November 13, 1991 in the State of  Minnesota  to
locate potentially viable technologies in the former Soviet Union
(fSU) for transfer and sale to companies in the West. During  the
first  two  years of operations, the Company experienced  limited
success in technology transfer and shifted its focus to the  sale
and  distribution of aviation security equipment in the  fSU.  In
1995,  the Company formed a 50/50 joint venture called FoodMaster
Corporation (hereinafter FoodMaster) with Ak-Bulak, a dairy  just
outside  Almaty, Kazakhstan to produce and sell yogurt and  other
dairy products.

     During  the  first  quarter of 1996, the  Company  sold  its
aviation security sales and service business to Gate Technologies
for $810,000 which included reimbursement of expenses of $45,000.
This transaction is more fully described in Item 6, "Discontinued
Operations."  The  financial statements and  related  information
reflect  the  sale  of this business as discontinued  operations.
Additionally,  overhead  was reduced to the  level  necessary  to
effectively support continuing operations.

     After  the  sale  of  the  aviation security  business,  the
Company  focused its attention almost exclusively on  development
of  the  dairy  business in the fSU. Effective August  1996,  the
Company  obtained  an option to purchase 80% of  Ak-Bulak,  which
went bankrupt subsequent to the establishment of FoodMaster.   In
January  1997, FoodMaster formed a joint venture in  Akmola  (now
called  Astana),  the  new  capital  of  Kazakhstan,  and   began
production of dairy products at this location in March 1997.

     On   March   3,   1997,   DTR   and  Agribusiness   Partners
International L.P. (API) established the FoodMaster International
LLC  (FMI)  joint venture to acquire and operate dairies  in  the
fSU. For a 40% interest in FMI, DTR contributed its 50% ownership
in  FoodMaster, the Ak-Bulak option, and its opportunities for  a
future  acquisition of a dairy in Moldova. Exercise  of  the  Ak-
Bulak  option  by  FMI in March 1997 increased the  ownership  in
FoodMaster  to 90%.  API agreed to contribute $6 million  dollars
which was paid to FMI between March 1997 and June 1998 to further
develop FMI's existing and future dairy operations in the fSU for
a  60%  interest  in  FMI.  On September 11, 1998,  DTR  and  API
amended  the  FMI  joint  venture  agreement  to  allow  API   to
contribute  up  to  an  additional  $6  million  dollars  for  an
additional 10% ownership.  This additional contribution was  paid
to FMI between September 1998 and April 1999.  As of December 31,
1998,  API  owned  67% and DTR owned 33% of FMI  based  on  API's
additional  investment  of  $3.8  million.  API  contributed  the
remaining $2.2 million of the additional investment by April 1999
which  reduced  DTR's ownership to 30%.  The investment  proceeds
received   by  FMI  were  used  to  fund  expansion  of  existing
facilities and to acquire four additional subsidiaries.  DTR  has
a  right to earn a greater ownership interest in FMI by achieving
certain  defined  performance targets based on  returns  to  API.
Additionally, DTR manages the day-to-day operations of FMI  under
a management contract which has no contractual termination date.

     As of December 31, 1998, DTR has a 33% interest in FMI.  All
of  FMI's  subsidiaries  are operating plants  for  manufacturing
dairy  products such as milk, yogurt, cheese, and  ice  cream  or
distribution  companies to facilitate the distribution  of  these
products.    The  following  table  sets  forth  FMI's  ownership
percentage  in its subsidiaries at December 31, 1998 and  October
31, 1997:

<PAGE>

                                                     December 31,  October 31,
Company Name                     Location               1998          1997
FoodMaster Corporation           Almaty, Kazakhstan      90.00%      90.00%
FoodMaster NC*                   Astana, Kazakhstan      20.00%       0.00%
Fabrica produse lactate Hincesti Hincesti, Moldova       80.50%      73.74%
Soroca Cheese Factory            Soroca, Moldova         60.11%       0.00%
JSC Bilosvit-Uman                Uman,    Ukraine        62.88%       0.00%
FoodMaster Kyiv**                Kyiv,    Ukraine       100.00%       0.00%

           * FoodMaster Corporation owns 60% of FoodMaster NC.
          ** Denotes distribution company only.

     In   November  1997,  DTR's  Board  of  Directors  voted  to
establish  a  wholly-owned subsidiary called SXD,  Inc.  with  an
investment  of $800,000 in cash and receivables.   SXD  owns  and
operates  DTR's  x-ray tube distribution business,  and  holds  a
minority interest in Phygen, Inc., a coating technology business.
In addition, SXD has royalty rights to any patents sold by Armed,
a  cancer detection business.  As of December 31, 1998, there  is
no reportable activity in either Phygen or Armed.

     In  April  1999, DTR purchased a 67% ownership  interest  in
Savory  Snacks  LLC for $123,305.  This Wisconsin  based  company
manages snack food companies in the former Soviet Union.


Ongoing Business Strategy

      The  Company's strategy is to provide management  services
and  invest  in  food businesses in the fSU  both  by  acquiring
additional dairies for FMI and having FMI and other subsidiaries
selling additional products including, but not limited to, dairy
products.  The  Company plans to invest in and manage  companies
that  are expected to eventually become market leaders  in  high
margin  products  in  the areas in which we choose  to  compete.
This   goal  will  be  accomplished  by  dedication   to   brand
development,  the  introduction of  "profit  products",  quality
control  and  standardization, control of the milk  supply,  and
training of Company and subsidiary personnel.


Business Operations

Dairy and Food Processing

      DTR  manages  all of the dairy operations and  distribution
companies  owned by FMI.  These dairy operations manufacture  and
sell  a  variety of different dairy products, including  but  not
limited to kefir, yogurt, cheese, ice cream, ice pops, butter and
sour cream.

     From  1995  through  February 1997,  FoodMaster  Corporation
operations  were  consolidated in   DTR's  financial  statements.
After  February  1997,  FoodMaster's operations  were  no  longer
reported on a consolidated basis with DTR due to the transfer  of
DTR's  ownership in FoodMaster to FMI.  Beginning in March  1997,
DTR  recognizes all of its ownership in dairy operations  in  its
Statement  of  Operations under the "Equity in (loss)earnings  of
FMI joint venture" and in its Balance Sheet under "Investment  in
FMI."   In  addition,  DTR receives management  fees  for  direct
expense  reimbursements  with the potential  to  earn  a  greater
ownership in FMI for reaching defined performance targets.  There
is  no  profit margin in the management fees received  and  these
fees  are  reimbursed  in accordance with a  pre-approved  budget
between DTR and FMI.

<PAGE>

X-ray Tubes

      The Company distributed x-ray tubes through SXD, Inc. under
an   exclusive   distribution  agreement  with   Svetlana-Rentgen
("Svetlana"),  a  company located in the fSU  until  March  1999.
Revenues from the sale of x-ray tubes accounted for 17.4%,  12.5%
and  8.0% of DTR's total revenues for the year ended December 31,
1998,  the two months ended December 31, 1997 and the year  ended
October 31, 1997, respectively. There are several companies  that
manufacture  and sell x-ray tubes in direct competition  to  DTR.
At  present, the Company does not have a measurable market  share
and is phasing this division out of its operations.

Food Packaging Equipment

      In  November  1994,  the Company signed  an  International
Distribution  Agreement with NiMCO Corporation of Crystal  Lake,
Illinois, granting the Company exclusive rights to sell  certain
NiMCO  food packaging products in most areas of the  fSU.   This
exclusivity   expired  on  December  31,  1996.   However,   DTR
continues  to  distribute NiMCO food packaging machines  out  of
Crystal  Lake, Illinois on a non-exclusive basis mainly  to  its
foreign  subsidiaries.   Sales  from  food  packaging  equipment
accounted for 7.8%, 51.9% and 13% of DTR's revenues for the year
ended December 31, 1998, the two months ended December 31,  1997
and the year ended October 31, 1997, respectively.


Competition

Dairy  and Food Processing  The FMI subsidiary operations compete
with  several  local companies, as well as foreign  importers  of
products, under the FMI local brand names of FoodMaster, Alba and
Bilosvit.  However, the Company believes that FMI's products  are
superior  to  local  competitors and  priced  competitively  with
imports.   The  FoodMaster name along with  the  local  specialty
brand  names  are  recognized as quality  products.   In  Almaty,
Kazakhstan,  FoodMaster's fluid milk products  are  estimated  to
hold a greater than 50% market share.

Food   Packaging  Equipment   Manufacturers  producing  competing
equipment  of similar performance to the NiMCO line of  equipment
include  Tetra-Laval of Sweden, Elo-Pak of Norway,  International
Paper  of  the United States, Pastu-Pack of the UK, and Galdi  of
Italy.   Some  of these companies have been selling equipment  in
the  fSU  for more than 20 years.  The Company does not currently
have  a  measurable  market share.  At  this  time,  DTR  is  not
focusing   on  selling  equipment  to  parties  other  than   FMI
subsidiaries on an "as needed" basis.


Principal Suppliers

Dairy  and  Food  Processing  Suppliers to the  dairy  operations
consist of numerous dairy farmers located in the vicinity of  the
dairies.  In addition, FMI receives packaging supplies from  many
suppliers throughout Europe and the United States.

Food  Packaging Equipment  NiMCO, based in Crystal Lake, IL,  was
the   sole  supplier  of  packaging  equipment  for  dairy  based
products.

X-ray  Tubes  Svetlana Rentgen (Svetlana), based in the  fSU,  is
the exclusive supplier of tubes.  In accordance with its plan  to
phase  out  this  operating  division,  the  Company  ended   its
relationship with Svetlana in March 1999.

<PAGE>

Major Customers

      For  the year ended December 31, 1998, the two months ended
December 31, 1997 and the fiscal year ended October 31, 1997, the
Company  recorded net equipment sales of $440,942,  $346,844  and
$2,467,790,  respectively.  The following table  sets  forth  the
name  and location of each customer who accounted for 10% or more
of  the  Company's  sales  for 1998  and  each  period  in  1997,
respectively:

                                                 Percentage of Sales
                                                     Two Months
                                        Year Ended      Ended      Year Ended
                                        December 31, December 31,  October 31,
Customer Name            Location          1998         1997          1997
EG&G Astrophysics        Long Beach, CA     47.1%        12.5%          9.0%
Control Screening        Fairfield, NJ      21.8%         6.9%          1.7%
FoodMaster Int'l LLC     Edina, MN          30.5%        40.3%          0.0%
Kostenay                 Astana, Kazakhstan  0.0%        40.3%          0.0%
Agro-Leasing             Almaty, Kazakhstan  0.0%         0.0%         12.9%


Governmental Regulations

     The Company's principal revenue-generating business activity
in 1998 and 1997 was managing the FMI subsidiaries' manufacturing
and  selling  of  dairy products in the fSU.   The  governmental,
political, social, and legal structures within countries  of  the
fSU  are evolving. In general, business must comply with decrees,
laws,  and  instructions  issued from a multitude  of  government
bodies at the national and local levels.

      The government regulations that most affect the Company are
in  the  areas  of  taxation, currency  and  customs  regulation,
business   registration,  and  labor  laws.   To  the   best   of
management's  knowledge, the Company is in full  compliance  with
the  laws  in  all the countries of the fSU in which business  is
conducted, and as necessary, may seek legal counsel in the United
States or from local counsel in the applicable fSU country.


Employees

      As  of  August  9,  1999, the Company  had  four  full-time
employees  in  its  offices  in Edina, Minnesota;  one  full-time
employee  in  Almaty,  Kazakhstan; three full-time  employees  in
Hincesti,  Moldova;  and  three  full-time  employees  in   Kyiv,
Ukraine.  All of the foreign-based employees are responsible  for
managing   the  dairy  and  financial  operations  of   the   FMI
subsidiaries.   The  Company is not a  party  to  any  collective
bargaining agreements and it considers its employee relations  to
be satisfactory.



ITEM 2.   DESCRIPTION OF PROPERTY

      During  1997, the Company moved its corporate  headquarters
from  Minnetonka,  Minnesota  to  Edina,  Minnesota.   This  move
allowed  the  Company  to reduce its space from  2,139  to  1,009
square  feet and its monthly base rent from approximately  $2,900
to $1,600. The lease has a term of 60 months and expires on April
30, 2002.

<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

     In 1996, the Company filed suit against a former officer for
breach of contract.  The employee filed a counterclaim for breach
of  the  severance agreement. In December 1996, the  lawsuit  was
settled  with the former officer relinquishing 48,190  shares  of
the  Company's Common Stock to satisfy a $29,035 receivable.  DTR
has no contingent or future liability.

      In 1996, a former employee filed a claim with the Minnesota
Department  of  Human  Rights  and concurrently  with  the  Equal
Employment  Opportunity Commission (EEOC), charging  the  Company
with  age  and  national  origin  discrimination.  In  1997,  the
Minnesota  Department  of  Human Rights  denied  the  claim.   No
further  action has been taken by the former employee  since  the
Department's decision.

      In  the opinion of management, there are no material  legal
proceedings  pending  or threatened against  the  Company  as  of
December  31, 1998 or as of the date of filing of this  Form  10-
KSB.



ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No  matters  were  submitted to a vote of the  shareholders
during the fourth quarter ended December 31, 1998.




                             PART II

ITEM  5.    MARKET  FOR  COMMON EQUITY  AND  RELATED  STOCKHOLDER
MATTERS

      The  Company's  Common  Stock was traded  on  the  National
Association  of  Securities  Dealer  Automated  Quotation  System
(NASDAQ)  from  April 23, 1993 until November 3, 1995,  when  the
Company  was de-listed as a result of noncompliance with  minimum
per-share price requirements. After a three-for-one reverse split
in  December  1995,  the  Company was re-listed.   In  the  first
quarter  of 1996, the Company fell below the listing requirements
and  was again de-listed.  Since then, the Company's Common Stock
has  been  quoted on the OTC Bulletin Board under the  symbol  of
DEVT.

      The  following  table sets forth the  high  and  low  daily
average  between  the bid and sales prices for  each  quarter  as
reported on the NASDAQ or the OTC Bulletin Board during the  year
ended  December 31, 1998, the two-month transition  period  ended
December 31, 1997 and the year ended October 31, 1997.

                                                  Average Price
          Calendar 1998                         Low            High
          First Quarter                    $   2 1/2       $  3 1/8
          Second Quarter                       2 1/2          6
          Third Quarter                        2 9/32         5 1/8
          Fourth Quarter                       3              6 7/8

          2 Months Ended December 31, 1997     1 5/8          2 7/8

<PAGE>

          Fiscal 1997
          First Quarter                    $   0 7/8       $  1 17/32
          Second Quarter                       1              1 29/32
          Third Quarter                        1 3/16         1 7/8
          Fourth Quarter                       1 7/8          2

      As  of  August 9, 1999, the Company had 56 shareholders  of
record of its Common Stock.  The Company estimates there are  660
beneficial  owners of its Common Stock.  The transfer  agent  for
the  Company's Common Stock is Norwest Bank Minnesota, N.A.,  161
North  Concord  Exchange, South St. Paul, Minnesota,  55075-0738,
telephone: (800) 468-9716 or (651) 450-4058.

     The Company has never declared nor paid any dividends on its
Common  Stock. The Board of Directors presently intends to retain
all  earnings, if any, for use in the Company's business  in  the
foreseeable  future.  Any future determination as to  declaration
and  payment of dividends will be made at the discretion  of  the
Board of Directors.

<PAGE>

ITEM  6.    MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

      Statements  other  than  current or historical  information
included  in  this  Management's  Discussion  and  Analysis   and
elsewhere  in  this Form 10-KSB, in future filings  by  Developed
Technology  Resource,  Inc.  (the  Company  or  DTR)   with   the
Securities  and  Exchange Commission and in DTR's press  releases
and   oral  statements  made  with  the  approval  of  authorized
executive   officers,   should  be  considered   "forward-looking
statements"  made pursuant to the safe harbor provisions  of  the
Private   Securities  Litigation  Reform  Act  of  1995.    These
statements  are  subject to certain risks and uncertainties  that
could  cause actual results to differ materially from  historical
earnings  and  those  presently anticipated  or  projected.   DTR
wishes  to caution the reader not to place undue reliance on  any
such forward-looking statements.

     On   March   3,   1997,   DTR   and  Agribusiness   Partners
International L.P. (API) established the FoodMaster International
LLC  (FMI)  joint venture to acquire and operate dairies  in  the
fSU. For a 40% interest in FMI, DTR contributed its 50% ownership
in  FoodMaster, the Ak-Bulak option, and its opportunities for  a
future  acquisition of a dairy in Moldova. Exercise  of  the  Ak-
Bulak  option  by  FMI in March 1997 increased the  ownership  in
FoodMaster  to 90%.  API agreed to contribute $6 million  dollars
which was paid to FMI between March 1997 and June 1998 to further
develop FMI's existing and future dairy operations in the fSU for
a  60%  interest  in  FMI.  On September 11, 1998,  DTR  and  API
amended  the  FMI  joint  venture  agreement  to  allow  API   to
contribute  up  to  an  additional  $6  million  dollars  for  an
additional 10% ownership. This additional contribution  was  paid
to FMI between September 1998 and April 1999.  As of December 31,
1998,  API  owned  67% and DTR owned 33% of FMI  based  on  API's
additional  investment  of  $3.8  million.  API  contributed  the
remaining $2.2 million of the additional investment by April 1999
which  reduced  DTR's ownership to 30%.  The investment  proceeds
received   by  FMI  were  used  to  fund  expansion  of  existing
facilities and to acquire four additional subsidiaries.  DTR  has
a  right to earn a greater ownership interest in FMI by achieving
certain defined performance targets based on returns to API.

     Effective  March  1997, DTR records its proportionate  share
(40% from March 1997 to September 1998 and 33% thereafter) of the
net  income  or  loss of FMI in the statement  of  operations  as
equity  in (loss) earnings of FMI joint venture under the  equity
method of accounting.

     DTR  also  entered into a management agreement on  March  3,
1997  with FMI, whereby DTR manages the day to day operations  of
FMI,  manages  the subsidiaries of FMI, and pursues future  dairy
acquisitions for FMI for a management fee.  The management fee is
a  direct  expense  reimbursement,  with  no  profit  margin,  in
accordance with a pre-approved budget between DTR and FMI.  Thus,
management  fees  will  increase or decrease  as  DTR's  expenses
incurred for management activities increase or decrease, with  no
effect  on income because there is no profit margin provided  for
in  the  agreement.   There is no stated contractual  termination
date in this agreement.

<PAGE>

                                                   Two Months   Two Months
                           Year Ended  Year Ended     Ended        Ended
                          December 31, October 31, December 31, December 31,
                              1998         1997        1997        1996
  Revenues:
  FM Kazakhstan            $        0   $1,774,870   $      0   $809,511
  Equipment                   137,042      428,890    279,644       (287)
  X-Ray Tube                  303,900      264,030     67,200     37,800
    Total Sales               440,942    2,467,790    346,844    847,024

  Management Fee Income     1,281,322      802,492    190,548          0
  Other Revenues               28,359       39,761      1,215      8,249
    Total Revenues         $1,750,623   $3,310,043   $538,607   $855,273

  Cost of Sales:
  FM Kazakhstan            $        0   $  871,937   $      0   $503,042
  Equipment                   100,499      298,067    216,762      1,684
  X-Ray Tube                  260,950      228,445     57,600     32,900
    Total Cost of Sales    $  361,499   $1,398,449   $274,362   $537,626


Results of Operations

Revenues

     The  Company  generated total revenues  of  $1,750,623  and
$3,310,043 for the years ended December 31, 1998 and October 31,
1997,  and  revenues of $538,607 and $855,273 for the two-months
ended  December 31, 1997 and 1996.  This 47% and 37%  respective
decrease in revenues is primarily the result of the change  from
the  consolidated method of reporting FoodMaster's  revenues  to
reporting  the  FMI  joint venture operating results  under  the
equity method as discussed above.  In addition, it reflects  the
new focus of DTR in managing the FMI joint venture.

     Sales for the years ended December 31, 1998 and October  31,
1997  totaled $440,942 and $2,467,790, respectively.   Sales  for
the  two months ended December 31, 1997 and 1996 totaled $346,844
and  $847,024,  respectively.  Sales resulted  from  three  areas
within DTR - dairy operations of FoodMaster (until February  1997
only), equipment sales, and x-ray tube sales.

     After February 1997, the dairy operations of FoodMaster  are
no  longer reported on a consolidated basis with DTR due  to  the
transfer   of  FoodMaster  to  FMI.   The  dairy  operations   of
FoodMaster are consolidated in the financial statements  of  FMI,
and DTR recognizes its share of FMI's income or loss as equity in
earnings  (loss)  of  FMI joint venture in  DTR's  Statements  of
Operations. FoodMaster sales from November 1996 through  February
1997  were $1,774,870 or 71.9% of DTR's total sales for the  year
ended  October  31,  1997.  FoodMaster sales from  November  1996
through December 1996 were $809,511 or 95.6% of DTR's total sales
for the two months ended December 31, 1996.

     For the years ended December 31, 1998 and October 31, 1997,
sales  of  food  packaging equipment were $137,042  (31.1%)  and
$428,890   (17.4%)  of  total  sales,  respectively.  Sales   of
equipment occur primarily to subsidiaries of FMI throughout each
year  depending on the amount of new customers and growth  among
existing  locations.  Sales  of food  packaging  equipment  were
$279,644 (80.6%) of total sales in the two months ended December
31,  1997.   There were no sales of equipment in the  final  two
months   of   1996.   Sales  of  equipment  occur   sporadically
throughout  the  year  and  are not  necessarily  comparable  by
periods shorter than one year.

<PAGE>

       Sales  of  x-ray  tubes by SXD, Inc.,  DTR's  100%  owned
subsidiary, increased 15% to $303,900 in the year ended December
31,  1998  compared  to sales of $264,030  for  the  year  ended
October  31,  1997.  The $39,870 increase  occurred  due  to  an
increase in the quantity of shipments to repeat customers during
1998.  In the two months ended December 31, 1997, sales of x-ray
tubes  were $67,200 compared to $37,800 in the two months  ended
December 31, 1996.   The 78% increase occurred due to the timing
and quantity of orders during this period in 1997.

     Management fee revenues (which have no profit margin) billed
to FMI for services was $1,281,322, $190,548 and $802,492 for the
year  ended December 31, 1998, the two months ended December  31,
1997  and  the  year  ended October 31,  1997,  respectively,  in
accordance   with  its  management  agreement  with   FMI.    The
management  fee began in March 1997.  Therefore, the  year  ended
October  31,  1997 only reflects eight months of  management  fee
revenues.  Management  fees (which have  no  profit  margin)  are
expected to increase with additional acquisitions by FMI.   These
acquisitions  require  additional management  personnel,  travel,
training, and other resources.

Cost of Sales

      Cost  of  sales for the years ended December 31,  1998  and
October  31,  1997  were  $361,449 and $1,398,449,  respectively.
Cost of sales for the two months ended December 31, 1997 and 1996
were  $274,362  and $537,626, respectively.   This  74%  and  49%
decrease in cost of sales is partly the result of the change from
the  consolidated  method of reporting FoodMaster's  revenues  to
reporting  the  FMI  joint venture operating  results  under  the
equity method as discussed above, as well as other reasons  noted
below.   Cost  of  sales reflects the cost of  manufacturing  the
dairy  products  of FoodMaster for the final two months  in  1996
through  February 1997, and the cost of purchasing food packaging
equipment and x-ray tubes.

     FoodMaster cost of sales was $871,937 or 49.1% of sales  for
the  four-month period from November 1996 through  February  1997
during  the  year  ended October 31, 1997.   FoodMaster  incurred
$503,042 of this cost during the final two months of 1996.

     Cost of sales on equipment sales was $100,499 resulting in a
gross  profit  of  26.7%  for the year ended  December  31,  1998
compared to a cost of $298,067 and gross profit of 30.5% for  the
year  ended October 31, 1997.  During the two-fiscal month period
ended December 31, 1997, the Company recorded cost of $216,762 on
sales  of  equipment resulting in a gross profit  of  $62,882  or
22.5%.

     X-ray tubes cost of sales were $260,950 and $228,445 for the
years ended December 31, 1998 and October 31, 1997, respectively,
and  $57,600  and  $32,900  during the  two-month  periods  ended
December  31, 1997 and 1996, respectively.  Gross profit remained
consistent with a 13% to 14% margin received on sales during  all
reported periods.

Selling, general and administrative

      Selling, general and administrative expenses for  the  year
ended  December 31, 1998 were $1,391,611 compared  to  $1,382,334
for  the  year  ended  October  31,  1997.  FoodMaster  comprised
$515,491  of  the SG&A expense in 1997. Therefore, the  Company's
other  SG&A  expenses in 1997 excluding the FoodMaster operations
were  $866,843.  The $524,768 increase in SG&A expenses excluding
FoodMaster  operations  is the result of  DTR  hiring  additional
employees  and consultants and increasing their travel to  manage
the dairy operations of FMI.  However, these costs are offset  by
the  management  fees  billed to FMI  as  discussed  above  under
Revenues.

<PAGE>

     Selling,  general and administrative expenses  for  the  two
months ended December 31, 1997 were $206,004 compared to $329,119
for the two months ended December 31, 1996. During the two months
of 1996, FoodMaster operations comprised $260,859 of the $329,119
SG&A  expenses. Therefore, the Company's other SG&A  expenses  in
1996  excluding  the  FoodMaster  operations  was  $68,260.   The
$137,744   increase   in   SG&A  expenses  excluding   FoodMaster
operations is the result of that mentioned above.


Discontinued Operations

      Effective December 31, 1995, DTR entered into an  agreement
to  sell  certain  assets and the rights to its airport  security
equipment in the fSU to Gate Technologies, Inc., a United Kingdom
company  owned by a former DTR employee.  DTR transferred assets,
inventory, customer lists, promotional materials, and other items
with  a  net  book  value on January 31, 1996  of  $143,293.   In
exchange for these items, DTR received a cash payment of  $45,000
to reimburse DTR for expenses related to this business during the
first  quarter  of  1996 and a note receivable totaling  $765,000
payable  over  30  months.   A  portion  of  these  payments   is
personally   guaranteed   by  the   former   employee,   and   is
collateralized  by 16,430 shares of DTR's common stock  owned  by
the former employee.  Additional contingent payments may also  be
received based on future performance.  DTR retained the right  to
pursue airport security management contracts.


      Due to the inherent risks associated with operating in  the
fSU,  including  credit  risk, the gain on  this  sale  has  been
deferred  and  will be recognized as payments are received.   DTR
received total payments of $200,000 during the year ended October
31,  1997.  As  a  result, DTR recorded a  gain  on  discontinued
operations of $200,000 for the year ended October 31, 1997.  This
gain  on the sale is presented as discontinued operations in  the
statements of operations.

     In  August 1997, the Board of Directors approved a  revision
in  the  sale agreement that increased the balance due to DTR  by
$40,000  representing  interest on the outstanding  balance.  The
increase  in  the  receivable balance was  accounted  for  as  an
increase  in deferred gain.  In addition, the payment terms  were
revised  to  require two payments in 1998 with the final  payment
due on January 1, 1999.

     No payments were received during the year ended December 31,
1998 or during the two-month transition period ended December 31,
1997.  Due  to the buyer's deliquency in payment and the  limited
success  of  the business that was sold, management  reduced  the
receivable and the related deferred gain recorded on its  balance
sheet by $280,000 at December 31, 1998.  The remaining receivable
balance  of  $200,000 is partially offset by a  current  deferred
gain of $181,707 at December 31, 1998.


Liquidity and Capital Resources

Operating Activities

      DTR  increased  its cash used in operating  activities  to
$181,069  during  the year ended December 31, 1998  compared  to
cash used of $137,571 for the year ended October 31, 1997.   The
increase  in  cash  used was primarily due  to  a  reduction  in
operating income by approximately $525,000 offset by cash  flows
from reducing operating assets.

      DTR  received  $473,520 from operating activities  in  the
final two months of 1997.  This was achieved by receiving a  net
$207,781  from  FMI  in payment for DTR's  management  fees  and
increasing payables by $180,168.

<PAGE>

Investing Activities

     In the two months ended December 31, 1997, DTR's 100% owned
subsidiary, SXD, Inc. used $500,000 of its cash to invest in  an
unsecured note receivable from an unaffiliated private  company.
This investment was returned in 1998 with approximately $199,000
in  interest income.  During the year ended December  31,  1998,
SXD,  Inc.  loaned  $600,000  to invest  in  an  unsecured  note
receivable  from  another  unaffiliated  private  company.   SXD
expects  to  receive  this  principal  plus  interest   on   its
investment  in  the fourth quarter of 1999.  DTR also  purchased
$21,945  in  new  software  and  equipment  for  its  office  in
Minneapolis,  MN in 1998.  In addition, the Company  received  a
$500,000 repayment on the note outstanding at December 31, 1997.
During  the year ended October 31, 1997, cash used in  investing
activities primarily related to purchases and sales of equipment
by FoodMaster in the beginning of the year.

Financing Activities

      In  the first quarter of 1998, options to purchase  15,000
shares of DTR's Common Stock were exercised for a purchase price
of  $1.50  per share. There were no financing activities  during
the  two-month transition period ended December 31, 1997. During
the  year  ended  October 31, 1997, DTR's FoodMaster  operations
made  principal  payments  of $8,900  on  a  $70,910  bank  loan
obtained  in 1996. After this period, the FoodMaster cash  flows
were  consolidated  with  FMI in accordance  with  the  transfer
discussed above.


Year 2000

     The  Company  has  been addressing Year 2000  (Y2k)  issues.
Since  the  Company is not a direct manufacturer of products  and
since all of its assets are less than six years old, most of  its
exposure  to  the Y2k issue falls in the area of  third  parties.
All  of  the  Company's information technology  systems  are  Y2k
compliant, but the Company is still determining the effect on non-
information  technology systems.  The Company  plans  to  be  Y2k
compliant by October 1999.

     The  Company does not believe that the costs related to  the
Y2k  issue will be greater than $25,000 due to the reasons stated
above.  The Company may use these funds for an outside consultant
to provide an evaluation of its entire system.

     The  most  risk that the Company faces in its operations  is
that  of  the failure of third party vendors to be ready for  the
Y2k.   The  most direct risk could be a failure on  the  part  of
telecommunication  companies,  which  would  impede   the   daily
communication   between   the  Company  and   its   subsidiaries.
Indirectly,  the  subsidiaries  could  experience  a  failure  to
receive timely shipments of supplies which would result in a loss
of an indeterminable amount of revenues.

     The Company is currently developing its contingency plan for
the  aforementioned risks.  It expects to have  this  plan  fully
created by October 1999.

     In   addition,   the  Company  is  currently  developing   a
contingency  plan  for  FMI  and its subsidiaries.   Based  on  a
preliminary   evaluation,  the  effects  on   the   manufacturing
operations   are   not   fully   determinable.    However,    the
manufacturing  subsidiaries  have  working  generators  that  can
support  the  operations in the event of power failures  and  all
subsidiary  computer operations are expected to be Y2k  compliant
by November 1999.

<PAGE>

Adverse Foreign Economic and Currency Conditions

     Since  August  1998, the countries of the fSU in  which  the
subsidiaries  of  FMI  operate have faced  a  series  of  adverse
economic  conditions.   Uncertainties  regarding  the  political,
legal, tax or regulatory environment, including the potential for
adverse  and  retroactive changes in any  of  these  areas  could
significantly affect the Company and the carrying  value  of  its
investment in the FMI joint venture.  The countries have  seen  a
significant  devaluation of their local currency against  the  US
dollar,  higher  interest  rates and  reduced  opportunities  for
financing.   DTR is committed to working with FMI's  subsidiaries
to focus production on profitable products and to address working
capital shortages as needed over the coming year.  In July  1999,
FMI  sold 10% of its consolidated Kazakhstan operations for  cash
of $1.8 million and it converted $1.8 million of its loans to the
Kazakhstan subsidiaries to equity so that its ownership would not
be  diluted.  This cash infusion was used to pay DTR's management
fees in 1999.

     Based  on management's current projections for FMI  and  the
receipt  of  the $6 million additional investment from  API  into
FMI,  the  Company  believes  that  the  carrying  value  of  its
investment  in  FMI  at  December 31,  1998  is  not  permanently
impaired  and  that  DTR  has  sufficient  working  capital   and
liquidity to fund its current operations through the coming year.
Management is continually looking for opportunities for growth.

<PAGE>

ITEM  7.    FINANCIAL STATEMENTS - DEVELOPED TECHNOLOGY RESOURCE,
INC.

                  INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
DEVELOPED TECHNOLOGY RESOURCE, INC.
Edina, Minnesota

We have audited the accompanying balance sheet of Developed
Technology Resource, Inc. (the Company) as of December 31, 1998,
and the related statements of operations, shareholders' equity
and cash flows for the year ended December 31, 1998, the two-
month transition period ended December 31, 1997 and the year
ended October 31, 1997.  These financial statements are the
responsibility of the Company's management.  We did not audit the
1998 financial statements of S.A. Fabrica de brinzeturi din
Soroca, S.A. Fabrica de produse lactate din Hancesti, and
FoodMaster Kyiv, three partially-owned subsidiaries of FoodMaster
International L.L.C. (FMI), a joint venture of the Company which
is accounted for by the equity method.  The Company's equity
interest in these three FMI subsidiaries' net assets of
approximately $650,000 at December 31, 1998 and net loss of
approximately $102,000 for the year ended December 31, 1998 are
included in the Company's accompanying financial statements.
Each of the financial statements of FMI's three partially-owned
subsidiaries were audited by other auditors whose reports dated
April 30, 1999, April 30, 1999 and April 16, 1999, respectively,
included explanatory paragraphs disclosing that such financial
statements were prepared assuming that each of the three
partially-owned subsidiaries would continue as going concerns
despite suffering losses, having accumulated deficits or current
liabilities which exceed current assets at December 31, 1998
combined with the uncertainty due to the Year 2000 issue and the
current economic environment in Moldova and Ukraine,
respectively, all of which raise substantial doubt about each of
their ability to continue as a going concern.   The financial
statements for each of the three partially-owned subsidiaries of
FMI which do not include any adjustments that might result from
the outcome of these uncertainties, have been furnished to us,
and our opinion, insofar as it relates to the amounts included
for such companies, is based solely on the reports of such other
auditors.

We conducted our audits in accordance with generally accepted
auditing standards.  These standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits and the reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other
auditors, the Company's financial statements present fairly, in
all material respects, the financial position of Developed
Technology Resource, Inc. as of December 31, 1998 and the results
of its operations and its cash flows for the year ended December
31, 1998, the two-month transition period ended December 31, 1997
and the year ended October 31, 1997 in conformity with generally
accepted accounting principles.

The Company's accompanying financial statements have been
prepared assuming that the Company will continue as a going
concern.  As discussed in Note 1 to the financial statements and
in the reports of the other auditors as described above, there
are significant uncertainties which raise substantial doubt about
the Company's ability to continue as a going concern.  The
financial statements of the Company do not include any
adjustments that might be necessary as a result of these
uncertainties.



/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
September 3, 1999

<PAGE>
<TABLE>
<CAPTION>
               DEVELOPED TECHNOLOGY RESOURCE, INC.
                          BALANCE SHEET
                        December 31, 1998

                             ASSETS
<S>                                                    <C>
Current Assets:
     Cash and cash equivalents                         $    5,412
     Receivables:
       Trade, net of allowance of $12,690                 129,169
       Sale of discontinued operations                    200,000
       FoodMaster International L.L.C. (FMI)              611,080
       Other                                                4,000
     Note receivable                                      600,000
     Prepaid and other current assets                     158,798
       Total current assets                             1,708,459

Furniture and Equipment, net                               43,794

Investment in FMI                                         991,699


                                                       $2,743,952

              LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable                                  $  241,458
     Accrued liabilities                                  163,761
     Deferred gain                                        187,065
       Total current liabilities                          592,284

Non-current Deferred Gain                                  33,627

Shareholders' Equity:
     Undesignated stock, $.01 par value, 1,666,667
       shares authorized, no shares issued or
       outstanding                                             --
     Common stock, $.01 par value, 3,333,334
       shares authorized, 805,820 shares issued
       and outstanding                                      8,058
     Additional paid-in capital                         5,956,323
     Accumulated deficit                               (3,846,340)
       Total shareholders' equity                       2,118,041

                                                       $2,743,952

</TABLE>





       See accompanying notes to the financial statements.

<PAGE>
<TABLE>
<CAPTION>
               DEVELOPED TECHNOLOGY RESOURCE, INC.
                    STATEMENTS OF OPERATIONS

                                                   Two Months
                                      Year Ended     Ended     Year Ended
                                     December 31, December 31, October 31,
                                        1998          1997        1997
<S>                                   <C>          <C>        <C>
Revenues:
  Sales                               $   440,942  $ 346,844  $ 2,467,790
  Management  fees from FMI
   joint venture                        1,281,322    190,548      802,492
  Commissions and other income             28,359      1,215       39,761
                                        1,750,623    538,607    3,310,043
Cost and expenses:
  Cost of sales                           361,449    274,362    1,398,449
  Selling, general and administrative   1,391,611    206,004    1,382,334
                                        1,753,060    480,366    2,780,783

Operating (loss) income                    (2,437)    58,241      529,260

Other income:
  Interest income, net                    202,027     17,194       12,059
  Equity in (loss) earnings of FMI
   joint venture                         (386,088)   (25,672)      62,650

(Loss) income from continuing operations before
  income taxes and minority inte         (186,498)    49,763      603,969

Income tax expense                             --         --           --

(Loss) income from continuing operations
  before minority interest               (186,498)    49,763      603,969

Minority interest in earnings of FoodMaster    --         --      (93,553)

(Loss) income from continuing operations (186,498)    49,763      510,416

  Gain from discontinued operations            --         --      200,000

Net (Loss) Income                     $  (186,498) $  49,763  $   710,416


Continuing (Loss) Income per Common Share:
    Basic                             $     (0.23) $    0.06  $      0.64
    Diluted                           $     (0.23) $    0.05  $      0.58

Discontinued (Loss) Income per Common Share:
    Basic                             $        --  $      --  $      0.25
    Diluted                           $        --  $      --  $      0.23

Net (Loss) Income per Common Share:
    Basic                             $     (0.23) $    0.06  $      0.89
    Diluted                           $     (0.23) $    0.05  $      0.81

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

<PAGE>
<TABLE>
<CAPTION>
               DEVELOPED TECHNOLOGY RESOURCE, INC.
               STATEMENTS OF SHAREHOLDERS' EQUITY
     Years Ended December 31, 1998 and October 31, 1997 and
       Two-Month Transition Period Ended December 31, 1997

                                                Additional
                               Common Stock       Paid-in    Accumulated
                             Shares     Amount    Capital      Deficit        Total
<S>                          <C>       <C>      <C>          <C>          <C>
Balance, October 31, 1996    839,010   $ 8,390  $ 5,347,851  $(4,420,021) $   936,220

     Redemption of shares
       in exchange for
       accounts receivable   (48,190)     (482)     (28,553)          --      (29,035)

     Net income                   --        --           --      710,416      710,416

Balance, October 31, 1997    790,820     7,908    5,319,298   (3,709,605)   1,617,601

     Net income                   --        --           --       49,763       49,763

Balance, December 31, 1997   790,820     7,908    5,319,298   (3,659,842)   1,667,364

     Exercise of options      15,000       150       22,350           --       22,500

     Sale of interest in FMI
       joint venture              --        --      614,675           --      614,675

     Net loss                     --        --           --     (186,498)    (186,498)

Balance, December 31, 1998   805,820  $  8,058  $ 5,956,323  $(3,846,340) $ 2,118,041


</TABLE>






















       See accompanying notes to the financial statements.

<PAGE>
<TABLE>
<CAPTION>
               DEVELOPED TECHNOLOGY RESOURCE, INC.
                    STATEMENTS OF CASH FLOWS

                                                     Two Months
                                        Year Ended      Ended     Year Ended
                                        December 31, December 31, October 31,
                                            1998        1997          1997
<S>                                     <C>          <C>          <C>
OPERATING ACTIVITIES:
   Net (Loss) Income                    $  (186,498) $    49,763  $   710,416
   Adjustments to Reconcile Net
    Income to Cash Provided/(Used)
    by Operating Activities:
    Depreciation                             14,915        4,432       39,390
    Provision for doubtful accounts           2,182           --     (224,492)
    (Gain)loss on sale of furniture and
     equipment                                1,217        2,088       (2,541)
    Gain on sale of discontinued operations      --           --     (200,000)
    Minority interest in earnings of
     joint venture                               --           --       93,553
    Equity in loss (earnings) of FMI
     joint venture                          386,088       25,672      (62,650)
   Changes in Operating Assets and Liabilities,
    net of transfers to joint venture:
    Receivables                             (53,768)         135      212,826
    Receivable from FMI joint venture      (239,279)     207,782     (625,727)
    Inventories                                  --           --     (226,517)
    Prepaid and other current assets       (100,511)       4,694       40,570
    Accounts payable and accrued liabilities    (56)     180,168      220,894
    Deferred gains                           (5,359)      (1,214)     (68,417)
    Customer deposits                            --           --      (44,876)
    Net cash (used) provided by
     operating activities                  (181,069)     473,520     (137,571)

INVESTING ACTIVITIES:
   Proceeds from sale of furniture
    and equipment                             1,400           --       81,438
   Purchases of furniture and equipment     (21,945)        (435)    (294,751)
   Proceeds from note receivable            500,000           --           --
   Issuance of note receivable             (600,000)    (500,000)          --
   Deferred acquisition costs                    --           --       35,616
    Net cash used by investing activities  (120,545)    (500,435)    (177,697)

FINANCING ACTIVITIES:
   Proceeds from exercise of stock options   22,500           --           --
   Principal payments on note payable            --           --       (8,900)
    Net cash provided (used) by financing
     activities                              22,500           --       (8,900)

DECREASE IN CASH AND CASH EQUIVALENTS      (279,114)     (26,915)    (324,168)

CASH AND CASH EQUIVALENTS,
   Beginning of period                      284,526      311,441      635,609

CASH  AND  CASH  EQUIVALENTS,
   End of  period                       $     5,412  $   284,526  $   311,441


</TABLE>





       See accompanying notes to the financial statements.

<PAGE>

               DEVELOPED TECHNOLOGY RESOURCE, INC.
                  NOTES TO FINANCIAL STATEMENTS
     Years Ended December 31, 1998 and October 31, 1997 and
       Two-Month Transition Period Ended December 31, 1997

1.   Summary of Significant Accounting Policies
  Business
  Developed  Technology  Resource,  Inc.  (DTR  or  the  Company)
  invests  in  and manages dairy and distribution  operations  in
  the   countries  of  the  former  Soviet  Union  (fSU)  through
  FoodMaster  International L.L.C. (FMI), its joint venture  with
  Agribusiness Partners International L.P. (API). In addition  to
  managing  FMI,  DTR sells packaging equipment and  manages  the
  operations of its 100% owned subsidiary, SXD, Inc.

  During  1998,  SXD,  Inc. distributed X-ray tubes  under  DTR's
  exclusive   agreement  with  a  Russian  manufacturer,   issued
  unsecured  short-term  loans, and held ownership  interests  in
  the  coatings  technology  business of  Phygen,  Inc.  and  the
  cancer  detection  business of Armed which  had  no  reportable
  business  activity  during  1998  or  1997.   The  x-ray   tube
  distribution  agreement expired in March 1999 and  the  company
  is phasing out this operation during 1999.

  Going Concern Considerations
  Since  August  1998, the countries of the  fSU,  in  which  the
  subsidiaries  of  FMI operate, have faced a series  of  adverse
  economic  conditions.  Uncertainties regarding  the  political,
  legal,  tax or regulatory environment, including the  potential
  for  adverse  and  retroactive changes in any  of  these  areas
  could  significantly affect the Company.   The  countries  have
  seen  a significant devaluation of their local currency against
  the  US dollar, higher interest rates and reduced opportunities
  for  financing.   As a result of these situations,  several  of
  the  subsidiaries have suffered significant losses in 1998  and
  carry  an  accumulated deficit at December 31,  1998.   DTR  is
  committed   to  working  with  FMI's  subsidiaries   to   focus
  production  on  profitable  products  and  to  address  working
  capital shortages as needed over the coming year.

  The  year  2000  (Y2k) issue arises because  many  computerized
  systems  use  two digits rather than four to identify  a  year.
  Date  sensitive systems may recognize the year 2000 as 1900  or
  some  other  date,  resulting in errors when information  using
  the  Y2k  date is processed.  The effects of the Y2k issue  may
  be  experienced before, on, or after January 1, 2000 and if not
  addressed,  the  impact on operations and  financial  reporting
  may  range  from  minor errors to significant  systems  failure
  which  could  affect  an  entity's ability  to  conduct  normal
  business  operations.  It is not possible to  be  certain  that
  all  aspects of the Y2k issue affecting the Company,  including
  those  relating  to  the  efforts of customers,  suppliers,  or
  other  third parties, will be fully resolved. Due to the nature
  of  the  subsidiaries' equipment and relative  compliance  with
  Y2k  in  its computerized systems, no serious interruptions  in
  production  or financial processing are expected.   The  direct
  risks   are   those   resulting  from  the   general   economic
  environment, and relationships with suppliers and customers.

  Change in Fiscal Year
  The  Company  changed its fiscal year end from  October  31  to
  December  31 in order to correspond with the calendar year  end
  of  its subsidiaries and FMI joint ventures.  As a result,  the
  accompanying   financial  statements   report   the   two-month
  transition  period results from November 1,  1997  to  December
  31,  1997 in addition to the years ended December 31, 1998  and
  October 31, 1997.

<PAGE>

  Basis of Presentation
  From  1995  through  February 1997,  the  financial  statements
  include  the  operations  of  DTR  and  FoodMaster  Corporation
  (FoodMaster),   DTR's   50%   owned   subsidiary   in   Almaty,
  Kazakhstan.   All  significant  intercompany  transactions  and
  balances  have been eliminated in consolidation.  On  March  3,
  1997,  DTR contributed its 50% ownership of FoodMaster  to  the
  FMI  joint venture for a 40% ownership in FMI.  Effective March
  1997, DTR records its proportionate share of the net income  or
  loss  of  FMI  in  the statements of operations  as  equity  in
  earnings  of  FMI  joint venture under  the  equity  method  of
  accounting.   The  excess  of DTR's underlying  equity  in  net
  assets  of  FMI  over  the  carrying value  of  its  investment
  ($2,873,726   at   December  31,  1998,  net   of   accumulated
  amortization) is being amortized to income over 15 years.

  Cash and Cash Equivalents
  Cash   and   cash   equivalents  include  all   highly   liquid
  investments  with original maturities of three months  or  less
  at the time of purchase.

  The  Company maintains its cash in bank deposit accounts, which
  at  times may exceed federally insured limits.  The Company has
  not experienced any losses in such accounts and believes it  is
  not exposed to any significant credit risk on cash.

  Furniture and Equipment
  Furniture and equipment are recorded at cost.  Depreciation  is
  calculated  on  the  straight-line  basis  over  the  estimated
  useful lives of the assets, primarily three to five years.

  Revenue Recognition
  Revenue  is  recognized upon shipment of products to  customers
  and  as  services  are  provided to FMI  under  the  management
  agreement.

  Net (Loss) Income per Common Share
  In  February  1997,  the Financial Accounting  Standards  Board
  (FASB)  issued  Statement  of  Financial  Accounting  Standards
  (FAS)  No.  128, Earnings Per Share, which was required  to  be
  adopted  by  DTR  in  1998.  This statement also  required  any
  prior periods to be restated.

  Net  (loss) income per common share is computed by dividing net
  (loss)  income  by the weighted average number  of  common  and
  common  equivalent shares outstanding during  the  year.  Under
  the  new  standard for calculating basic net income (loss)  per
  share,  the  dilutive effect of stock options and  warrants  is
  eliminated.   However, stock options and warrants are  included
  in  the  calculation of diluted net income per share  when  the
  result is dilutive.

  Segment Reporting
  In  June  1997, the FASB issued FAS No. 131, Disclosures  about
  Segments  of  an  Enterprise  and  Related  Information.   This
  statement  is effective for years beginning after December  15,
  1997.   The  Company  evaluated this statement  and  determined
  that  no  additional disclosures about segments were necessary.
  The Company does not manage based on operating segments.

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

<PAGE>

  Financial Instruments
  FAS   No.  107,  Disclosures  about  Fair  Value  of  Financial
  Instruments,  requires  disclosure of  fair  value  information
  about  financial  instruments.  Fair value estimates  discussed
  herein  are based upon certain market assumptions and pertinent
  information available to management as of December 31, 1998.

  The   respective   carrying  value  of  financial   instruments
  approximated  their  fair values.  These financial  instruments
  include  cash  and  cash equivalents, trade receivables,  notes
  receivable,  accounts  payable and accrued  liabilities.   Fair
  values  were assumed to approximate carrying values  for  these
  financial  instruments since they are short-term in nature  and
  their  carrying  amounts approximate fair values  or  they  are
  receivable or payable on demand.

  New Accounting Standards
  In   June   1997,  the  FASB  issued  FAS  No.  130,  Reporting
  Comprehensive   Income,   which   establishes   standards   for
  reporting   and  display  of  comprehensive  income   and   its
  components   in  a  full  set  of  general  purpose   financial
  statements.   Comprehensive  income  includes  all  changes  in
  shareholders'  equity except those resulting  from  investments
  by  and  distributions to owners.  FAS No. 130 is not currently
  applicable  for the Company because the Company  did  not  have
  any  items of other comprehensive income in any of the  periods
  presented.

  In  June  1998,  the  FASB issued FAS No. 133,  Accounting  for
  Derivative Instruments and Hedging Activities.  This  statement
  is  effective for fiscal quarters of all years beginning  after
  June  15,  2000.   The Company has not yet evaluated  the  full
  impact of adoption.

2.Ak-Bulak Option
  Effective  August  1996,  the Company  obtained  an  option  to
  purchase  80% of Ak-Bulak, an inactive company which owned  the
  other  50%  of  the FoodMaster joint venture. To  exercise  the
  option,   the   Company  agreed  to  pay  certain   pre-defined
  outstanding  debts of Ak-Bulak and to make capital improvements
  to  the  dairy owned by FoodMaster.  As of March 2,  1997,  DTR
  had  paid  $171,774  in connection with the  exercise  of  this
  option.   On  March 3, 1997, DTR contributed its 50%  ownership
  in  FoodMaster along with this option to the FMI joint venture.
  FMI  repaid  DTR for all but $14,045 of the costs paid  through
  March 2, 1997 to exercise the option (See Note 3).

3.Investment in FoodMaster International L.L.C. (FMI)
  On  March  3,  1997,  DTR  and API established  the  FMI  joint
  venture  to acquire and operate dairies in the fSU. For  a  40%
  interest   in  FMI,  DTR  contributed  its  50%  ownership   in
  FoodMaster,  the  Ak-Bulak  option  (See  Note  2),   and   its
  opportunities for a future acquisition of a dairy  in  Moldova.
  Exercise  of the Ak-Bulak option by FMI in March 1997 increased
  the  ownership in FoodMaster to 90%.  API agreed to  contribute
  $6  million  dollars which was paid to FMI between  March  1997
  and  June  1998  to further develop FMI's existing  and  future
  dairy  operations  in the fSU for a 60% interest  in  FMI.   On
  September  11, 1998, DTR and API amended the FMI joint  venture
  agreement  to  allow API to contribute up to an  additional  $6
  million   dollars   for  an  additional  10%  ownership.   This
  additional contribution was paid to FMI between September  1998
  and  April  1999.  As of December 31, 1998, API owned  67%  and
  DTR  owned  33% of FMI based on API's additional investment  of
  $3.8  million.  API contributed the remaining $2.2  million  of
  the  additional  investment by April 1999 which  reduced  DTR's
  ownership  to  30%.  The investment proceeds  received  by  FMI
  were  used  to  fund  expansion of existing facilities  and  to
  acquire four additional subsidiaries.  DTR has a right to  earn
  a  greater  ownership  interest in  FMI  by  achieving  certain
  defined performance targets based on returns to API.

<PAGE>

  Effective March 1997, DTR records its proportionate share  (40%
  from  March 1997 to September 1998 and 33% thereafter)  of  the
  net  loss  or  income of FMI in the statement of operations  as
  equity  in  (loss)  earnings of FMI  joint  venture  under  the
  equity method of accounting.

  DTR  also entered into a management agreement on March 3,  1997
  with FMI, whereby DTR manages the day to day operations of  FMI
  and  the  dairy  operations owned by FMI,  and  pursues  future
  dairy   acquisitions  for  FMI  for  a  management   fee.   The
  management  fee  is  a  direct expense reimbursement,  with  no
  profit   margin,  in  accordance  with  a  pre-approved  budget
  between  DTR  and FMI.  Thus, management fees will increase  or
  decrease  as DTR's expenses incurred for management  activities
  increase  or  decrease, with no effect on income because  there
  is  no  profit margin provided for in the agreement.  There  is
  no  stated contractual termination date in this agreement.  The
  Company   recorded  management  fee  revenue   of   $1,281,322,
  $190,548  and  $802,492 for the year ended December  31,  1998,
  the  two  months  ended December 31, 1997 and  the  year  ended
  October   31,  1997,  respectively,  in  accordance  with   its
  management agreement with FMI.

  Summarized  financial  information from the  audited  financial
  statements  of  FMI accounted for on the equity  method  is  as
  follows:


                                                       December 31, 1998
  Current assets                                           $5,991,784
  Total assets                                             17,289,249
  Current liabilities                                      4,212,351
  Noncurrent liabilities                                   1,363,486
  Joint-venture equity                                     11,713,412
  DTR's 33% share of FMI 's equity                         3,865,426
  DTR's negative goodwill                                  (2,873,727)
  DTR's carrying value of FMI's equity                      991,699
<TABLE>
<CAPTION>
                                                  Two Months   Eight Months
                                     Year Ended     Ended         Ended
                                     December 31, December 31,  October 31,
                                        1998         1997          1997
<S>                                  <C>          <C>          <C>
  Sales                              $20,366,221  $ 1,419,478  $ 6,784,384
  Gross profit                         5,271,770     (142,061)   2,504,523
  Net loss                            (1,724,330)    (155,121)    (207,138)
  DTR's share of FMI's loss before
   amortization of DTR's negative
   goodwill                             (604,345)     (62,048)     (82,855)
  DTR's share of equity in loss of
   FMI joint venture after
   amortization of negative goodwill    (386,088)     (25,672)      62,650
</TABLE>

4.Note Receivable
  On  December 3, 1998, SXD made a loan and received a  $600,000,
  unsecured, convertible promissory note with an unrelated  third
  party.  All principal together with accrued interest of 8%  per
  annum  was  due and payable on March 15, 1999.  This  note  has
  been  extended  to  November  30,  1999  to  allow  the  debtor
  additional time to raise funds and repay the note.

<PAGE>

5.Furniture and Equipment
  Furniture and equipment are summarized as follows:
                               Estimated
                              Useful Life
  Software                      5 years               $   10,512
  Furniture & equipment         5 years                  120,493
  Leasehold improvements        5 years                    4,982
                                                         135,987
  Less accumulated depreciation                           92,193
  Furniture and equipment, net                         $  43,794

6.Discontinued Operations
  Effective  December 31, 1995, DTR entered into an agreement  to
  sell  certain  assets  and the rights to its  airport  security
  equipment  in  the  fSU to Gate Technology,  a  United  Kingdom
  company  owned  by  a  former  DTR employee.   DTR  transferred
  assets,  inventory, customer lists, promotional materials,  and
  other  items  with  a  net book value on January  31,  1996  of
  $143,293.   In  exchange for these items, DTR received  a  cash
  payment  of  $45,000 to reimburse DTR for expenses  related  to
  this  business  during the first quarter of  1996  and  a  note
  receivable  totaling  $765,000  payable  over  30  months.    A
  portion  of  these  payments is personally  guaranteed  by  the
  former  employee,  and is collateralized by  his  ownership  of
  16,430  shares  of  DTR's common stock.  Additional  contingent
  payments  may  also  be received based on  future  performance.
  DTR  retained  the right to pursue airport security  management
  contracts.

  Due  to  the  inherent risks associated with operating  in  the
  fSU,  including  credit risk, the gain on this  sale  has  been
  deferred and will be recognized as payments are received.   DTR
  received  total  payments of $200,000  during  the  year  ended
  October  31,  1997.  As  a  result,  DTR  recorded  a  gain  on
  discontinued operations of $200,000 for the year ended  October
  31,  1997.  This gain on the sale is presented as  discontinued
  operations in the statements of operations.

  In  August 1997, the Board of Directors approved a revision  in
  the  sale  agreement that increased the balance due to  DTR  by
  $40,000  representing interest on the outstanding balance.  The
  increase  in  the receivable balance was accounted  for  as  an
  increase  in  deferred gain.  In addition,  the  payment  terms
  were  revised  to require two payments in 1998 with  the  final
  payment due on January 1, 1999.

  No  payments  were  received subsequent  to  January  1,  1999,
  during  the  year  ended December 31, 1998 or during  the  two-
  month  transition period ended December 31, 1997.  Due  to  the
  buyer's  deliquency in payment and the limited success  of  the
  business  that was sold, management reduced the receivable  and
  the  related  deferred gain recorded on its  balance  sheet  by
  $280,000  at  December  31,  1998.  The  remaining  balance  of
  $200,000 is still recorded as a receivable and is offset  by  a
  $181,707 deferred gain at December 31, 1998.

7.Commitments & Contingencies
  Leases
  The  Company  leases its office facilities  under  a  five-year
  operating  lease that expires on April 30, 2002.  The following
  schedule   sets  forth  the  future  minimum  rental   payments
  required under the operating lease:

  <PAGE>

                         Year Ending                    Operating
                         December 31,                     Leases
                             1999                         18,919
                             2000                         19,423
                             2001                         19,928
                             2002                         10,090
                                                        $ 86,774

  Rent  expense  was $66,911, $8,059, and $25,500  for  the  year
  ended  December 31, 1998, the two-month transition period ended
  December  31,  1997  and  the  year  ended  October  31,  1997,
  respectively.   Rent expense exceeds the amount  shown  in  the
  above operating lease commitments due to apartment rentals  for
  ex-pat employees on a month-to-month basis.  These rental  fees
  are charged back to FMI through the management fee each month.

8.Stock Options and Warrants
  Under  the  Company's 1992 Stock Option Plan  (the  Plan),  the
  Board  of Directors may grant qualified or nonqualified options
  for  up to 66,667 shares of common stock to employees and  non-
  employees.  Options granted to employees generally vest over  a
  five   year  period.   Certain  options  granted  to  employees
  contain provisions whereby vesting is accelerated in the  event
  the  employee  is terminated without cause as  defined  in  the
  option  agreements.   Options  granted  to  non-employees  vest
  equally  over  one  year  after  the  date  of  grant  and  are
  exercisable  for  ten years from the date of grant.   Effective
  September  30,  1996,  the  Plan was amended  to  increase  the
  shares available for granting to 600,000 shares.

  On  November 6, 1997, the Board of Directors adopted  the  1997
  Outside  Directors  Stock  Option Plan,  superseding  the  1993
  Outside  Directors Stock Option Plan. Under the terms  of  this
  plan,  the Company reserved 100,000 shares of common stock  for
  issuance  to  outside  directors  as  compensation  for   their
  services  as  board members. In exchange for the  surrender  of
  all  stock options previously granted to the outside directors,
  the  Board granted stock options under the new plan for  15,000
  shares of common stock at an exercise price of $1.50 per  share
  to  the current outside directors. Options for the purchase  of
  shares  are  issued  to  the directors  each  year  upon  their
  election  at the annual shareholders meeting and vest quarterly
  throughout the year.  The number of options granted  each  year
  is  determined by the Board of Directors and the  option  price
  will  be  set as the average between the bid and ask prices  of
  the Company's Common Stock on the date of issuance.

  The  Company  applies  APB  Opinion 25,  Accounting  for  Stock
  Issued  to Employees, and related interpretations in accounting
  for  the  above  employee plans.  Under the provisions  of  APB
  Opinion  25,  if  options are granted or extended  at  exercise
  prices  less  than fair market value, compensation  expense  is
  recorded  for  the difference between the grant price  and  the
  fair market value at the date of the grant.

  FAS  No. 123, Accounting for Stock Based Compensation, requires
  the  Company  to provide pro- forma information  regarding  net
  income  and per share amounts as if compensation cost  for  the
  Company's stock options had been determined in accordance  with
  the  fair  value based method prescribed by FAS No.  123.   The
  Company  estimates the fair value of each stock option  at  the
  grant date by using a Black-Scholes option-pricing model.   The
  following  assumptions were used for options issued during  the
  periods:

<PAGE>

                                                Two Months
                                 Year Ended        Ended        Year Ended
                                December 31,    December 31,    October 31,
                                   1998            1997            1997
  Dividend Yield                   None            None            None
  Volatility                  105.5 - 115.3%  119.4 - 132.8%  102.6 - 120.8%
  Risk Free Interest Rate      5.8% - 5.9%     5.6% - 5.7%          6%
  Expected Lives in Months       30 - 120         3 - 30         18 - 120

  Had  compensation costs been determined based on the fair value
  of  options  at their grant dates in accordance  with  FAS  No.
  123, the Company would have shown the following effect:

  Decrease in Net Income       $  122,000     $   33,150      $   98,567
  Decrease in EPS Basic              0.15           0.04            0.12
  Decrease in EPS Diluted            0.10           0.03            0.11

  The  following  table  summarizes  the  information  about  the
  Company's warrant and stock option activity for the year  ended
  December  31,  1998,  the  two-month  transition  period  ended
  December 31, 1997 and the year ended December 31, 1997:
<TABLE>
<CAPTION>
                                                  Outside            Weighted-
                          1992 Stock Option Plan Directors            Average
                                       Employee Stock Option          Exercise
                              Warrants  Options     Plan     Total  Price/Share
<S>                          <C>       <C>        <C>      <C>         <C>
  Balance, October 31, 1996    46,667   542,416    10,001   599,084    $ 2.90

  Cancelled/expired/
    or surrendered            (18,334)  (17,416)   (3,333)  (39,083)   $11.84

  Granted                          --    85,000     3,334    88,334    $ 1.23

  Balance, October 31, 1997    28,333   610,000    10,002   648,335    $ 2.22

  Surrendered                      --        --   (10,002)  (10,002)   $ 2.07

  Granted                          --        --    30,000    30,000    $ 1.50

  Balance, December 31, 1997   28,333   610,000    30,000   668,333    $ 2.19

  Expired                     (28,333)   (6,667)       --   (35,000)   $18.14

  Exercised                        --        --   (15,000)  (15,000)   $ 1.50

  Granted                          --    35,000    10,000    45,000    $ 2.85

  Balance, December 31, 1998       --   638,333    25,000   663,333    $ 1.41

  Exercisable, December 31, 1998   --   235,333    25,000   260,333    $ 1.50
</TABLE>
<PAGE>

  The following table summarizes information about the Company's
  stock plans at December 31, 1998:

                          Options Outstanding      Options Exercisable
                               Weighted-  Weighted-            Weighted-
                      Number    Average    Average   Number     Average
      Range of     Outstanding Remaining  Exercise Exercisable  Exercise
  Exercise Price   at 12/31/98 Life (years) Price  at 12/31/98   Price

  $1.19 to $1.50     600,000      7.33      $1.23     232,000       $1.24
  $2.75 to $3.125     58,333      5.04       2.88      23,333        3.00
  $6.75                5,000       .41       6.75       5,000        6.75
                     663,333                          260,333

9.Stock Redemption
  In  December 1996, 48,190 shares of common stock were  redeemed
  in   exchange  for  the  satisfaction  of  a  $29,035   account
  receivable owed by a former employee.

10.Income Taxes
  The Company utilizes the liability method of accounting for
  income taxes as set forth in FAS No. 109, Accounting for
  Income Taxes.  FAS No. 109 requires an asset and liability
  approach to financial accounting and reporting for income
  taxes.  Deferred income tax assets and liabilities are
  computed annually for differences between the financial
  statement and tax basis of assets and liabilities that will
  result in taxable or deductible amounts in the future based on
  enacted tax laws and rates applicable to the periods in which
  the differences are expected to affect taxable income.
  Valuation allowances are established when necessary to reduce
  deferred tax assets to the amount expected to be realized.
  Income tax expense is the tax payable or refundable for the
  period plus or minus the change during the period in deferred
  tax assets and liabilities.

  Deferred income tax assets and liabilities were as follows:

                                                                 December 31,
                                                                     1998
  Deferred tax asset                                             $1,060,000
  Deferred tax liabilities                                           (6,500)
  Valuation allowance                                            (1,053,500)
                                                                         --

  Deferred income tax assets and liabilities consist primarily
  of net operating loss (NOL) carryforwards and the allowance
  for doubtful accounts, and differences between the financial
  and tax basis of furniture and equipment, respectively.

  At December 31, 1998, the Company had NOL carryforwards of
  approximately $2,932,000 for income tax purposes.  The NOL
  carryforwards expire in years 2007 through 2011 if not
  previously utilized.  Utilization of the available NOL
  carryforward may be limited due to future significant changes
  in ownership under Internal Revenue Codes Section 382.  These
  potential future tax benefits are not recognized in the
  financial statements since realization is not reasonably
  assured.

  The Company intends to permanently reinvest the earnings of
  FMI.  Therefore, no U.S. deferred income taxes are provided on
  these earnings.

<PAGE>

11.Earnings Per Share
  In 1998, the Company adopted FAS No. 128, Earnings per Share.
  Earnings per share (EPS) amounts presented for 1997 have been
  restated for the adoption of FAS No. 128.  The following table
  reflects the calculation of basic and diluted earnings per
  share.
<TABLE>
<CAPTION>
                                                     Two Months
                                        Year Ended      Ended      Year Ended
                                       December 31,  December 31,  October 31,
                                           1998          1997         1997
<S>                                    <C>           <C>          <C>
  Basic Earnings Per Common Share:
  Income from continuing operations    $  (186,498)  $    49,763  $   510,416

  Gain from discontinued operations    $        --   $        --  $   200,000

  Net income                           $  (186,498)  $    49,763  $   710,416

  Average shares outstanding               805,615       790,820      795,969

  Basic EPS on continuing operations   $     (0.23)  $      0.06  $      0.64

  Basic EPS on discontinued operations $        --   $        --  $      0.25

  Basic EPS on net income              $     (0.23)  $      0.06  $      0.89


  Diluted Earnings Per Common Share:
  Income from continuing operations    $  (186,498)  $    49,763  $   510,416

  Gain from discontinued operations    $        --   $        --  $   200,000

  Net income                           $  (186,498)  $    49,763  $   710,416

  Average shares outstanding               805,615       790,820      795,969
  Shares issued from the assumed
    exercise of stock options                   --       615,000      588,334
  Shares assumed to be repurchased
    with proceeds from exercise                 --      (332,055)    (509,772)

     Total                                 805,615     1,073,765      874,531


  Diluted EPS on continuing operations            $   (0.23)     $    0.05 $    0.58

  Diluted EPS on discontinued operations               $    .--  $    .--  $    0.23

  Diluted EPS on net income             $   (0.23)     $    0.05 $    0.81

</TABLE>
  The assumed exercise of common stock equivalents (658,333
  shares) have not been included in the computation of diluted
  earnings per common share for the year ended December 31, 1998
  as their effect would be antidilutive.

<PAGE>

12.Related Party Transactions
  During 1998, DTR sold a packaging machine and inventory items
  to FMI for $118,130 and $16,294, respectively.  The cost of
  these items were $82,592 and $17,907 respectively.  During the
  two-month transition period ended December 31, 1997, DTR sold
  one packaging machine to FMI for $139,822 with a cost of
  $106,802.  There were no related party transactions in the
  year ended October 31, 1997.

13.Economic Dependence
  For the year ended December 31, 1998, the two-month transition
  period ended December 31, 1997 and the year ended October 31,
  1997, the Company had two customers which comprised 100% of
  its x-ray tube sales of $303,900, $67,200 and $264,030,
  respectively.  In addition, the Company had one supplier for
  these x-ray tubes.  Purchases from this supplier totaled
  $260,950, $57,600 and $228,445 for the year ended December 31,
  1998, the two-month transition period ended December 31, 1997
  and the year ended October 31, 1997, respectively.  Sales to
  related parties comprised 30.5% at $134,424 and 40.3% at
  $139,822 of total sales for the year ended December 31, 1998
  and the two-month transition period ended December 31, 1997,
  respectively.  There were no sales to related parties during
  the year ended October 31, 1997.  For the year ended December
  31, 1998 and the two-month transition period ended December
  31, 1997, the Company had two non-related customers which
  comprised 68.9% and 52.8% of total sales.  During the year
  ended October 31, 1997, there was only one non-related
  customer who accounted for total sales of greater than 10% at
  12.9%.  Sales to these non-related parties totaled $303,900,
  $183,022 and $318,125 during these respective periods.

14.Supplemental Disclosures of Cash Flow Information
  Non-cash operating and investing activities:
  For  the year ended December 31, 1998, the Company reduced  the
  deferred  gain and corresponding receivable from  the  sale  of
  discontinued  operations by $280,000 as discussed  in  Note  6.
  In  September 1998, API began its purchase of an additional 10%
  of  FMI  for $6 million dollars as discussed in Note 3.   As  a
  result,  DTR recorded a $614,675 increase in the value  of  its
  investment  for  the  cash contributed by API  to  FMI  through
  December  31,  1998 in order to recognize the  unrealized  gain
  from  the reduction in its ownership interest in FMI.  The  API
  capital  contribution  to  FMI also increased  DTR's   paid-in-
  capital in December 1998.

  For  the  year ended October 31, 1997, the Company  contributed
  $626,917  in  net  assets of its FoodMaster  joint  venture  to
  FoodMaster  International L.L.C. (FMI) for its 40% interest  as
  discussed in Note 3.  In addition, the Company redeemed  48,190
  shares  of common stock in exchange for the satisfaction  of  a
  $29,035  account  receivable as discussed in Note  9.  Finally,
  the  Company  increased the deferred gain and  a  corresponding
  receivable from the sale of discontinued operations by  $40,000
  for additional interest due to DTR as discussed in Note 6.

  The  non-cash  effects of these transactions have been  removed
  from  the appropriate categories in the operating and investing
  section of the Company's Statements of Cash Flows for the  year
  ended December 31, 1998 and 1997.
                                                   Two Months
                                      Year Ended      Ended      Year Ended
                                     December 31,  December 31,  October 31,
  Supplemental cash flow information:   1998          1997          1997
  Cash paid for:
  Interest                             $  2,110    $      --     $      --

<PAGE>

15. Subsequent Events
  In  April  1999,  DTR  purchased a 67%  ownership  interest  in
  Savory  Snacks LLC for $123,305.  This Wisconsin based  company
  manages snack food companies in the former Soviet Union.

  In   April  1999,  API  completed  its  additional  $6  million
  contribution to the FMI joint venture bringing DTR's  ownership
  in FMI to 30%.

  In  July  1999,  FMI  sold  10% of its consolidated  Kazakhstan
  operations  for  cash  of $1.8 million and  it  converted  $1.8
  million  of its loans to the Kazakhstan subsidiaries to  equity
  so  that  its  ownership  would  not  be  diluted.   This  cash
  infusion was used to pay DTR's management fees in 1999.

<PAGE>

ITEM  8.    CHANGES  IN  AND DISAGREEMENTS  WITH  ACCOUNTANTS  ON
ACCOUNTING AND FINANCIAL DISCLOSURE

     On  December  23, 1997, Developed Technology Resource,  Inc.
dismissed  Lurie,  Besikof, Lapidus &  Co.,  LLP,  the  principal
accountant previously engaged to audit the registrant's financial
statements  for  the  year  ended  October  31,  1996,   as   its
independent  accountant.  Lurie, Besikof, Lapidus  &  Co.,  LLP's
reports  on  the financial statements for the year ended  October
31,  1996  do  not  contain an adverse opinion or  disclaimer  of
opinion, and was not modified as to uncertainty, audit scope,  or
accounting principles.  In connection with the audit for the year
ended October 31, 1996 and through December 23, 1997, there  have
been no disagreements with Lurie, Besikof, Lapidus & Co., LLP  on
any  matter  of  accounting principles  or  practices,  financial
statement  disclosure,  or  auditing scope  or  procedure,  which
disagreements,  if  not  resolved to the satisfaction  of  Lurie,
Besikof,  Lapidus  &  Co., LLP would have  caused  them  to  make
reference thereto in their report on the financial statements for
such  period.   The  decision  to  change  accountants  has  been
approved by the Board of Directors of the registrant.

     On December 23, 1997, Deloitte & Touche LLP was appointed as
the   registrant's  new  independent  accountant  to  audit   the
registrant's financial statements.  The registrant did not, prior
to  engaging the new accountant, consult with the new  accountant
regarding the application of accounting principles to a  specific
or  contemplated  transaction  or regarding  the  type  of  audit
opinion  that  might  be  rendered on the registrant's  financial
statements.



                            PART III

ITEM 9    DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS  AND  CONTROL
          PERSONS;  COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
          ACT

The following table sets forth the current and proposed directors
and executive officers of the Company, their ages and positions
with the company as of  August 9, 1999:


          Name                Age            Position

 Peter L. Hauser(1)(2)        58       Director

 Roger W. Schnobrich(1)(2)    69       Director

 John P. Hupp                 40       Director, President

 LeAnn H. Davis               29       Chief Financial Officer,
                                       Corporate Secretary


(1)  Member of the Compensation Committee.

(2)  Member of the Audit Committee.


     Pursuant to an Underwriting Agreement dated April 23,  1993,
between  the  Company  and Equity Securities  Trading  Co.,  Inc.
("Equity  Securities") in connection with the  Company's  initial
public offering, the Company granted Equity Securities the  right
until  April  1998  to  nominate one  member  who  is  reasonably

<PAGE>

satisfactory  to the Company for election to the Company's  Board
of  Directors.  Equity Securities never exercised this  right  to
nominate a member to the board for this election.

      Each  nominee,  if  elected, will serve  until  the  Annual
Meeting  of  Shareholders in the year 2000 and until a  successor
has  been  elected  and  duly qualified or until  the  director's
earlier resignation or removal.

      Mr. Hauser has been a director of the Company since October
1993.  Since  1977,  he  has been employed by  Equity  Securities
Trading  Co.,  Inc., a Minneapolis-based brokerage firm,  and  is
currently a vice president and principal.

      Mr.  Schnobrich  has been a director of the  Company  since
October  1993.  He  is  a partner with Hinshaw  &  Culbertson,  a
Minneapolis  law  firm  which serves  as  legal  counsel  to  the
Company.   Until 1997, he was an owner and attorney with  Popham,
Haik,  Schnobrich & Kaufman, Ltd., a Minneapolis-based  law  firm
which  he  co-founded in 1960. He also serves as  a  director  of
Rochester   Medical   Corporation,  a  company   that   develops,
manufactures   and  markets  improved,  latex  free,   disposable
urological catheters.

     Mr.  Hupp has been the Company's President since June  1995,
and a director since April 1996.  He was Corporate Secretary from
July 1994 until September 1997, and was Director of Legal Affairs
from July 1993 to June 1995. From June 1992 until June 1993,  Mr.
Hupp was President of Magellan International Ltd., which marketed
on-line  and  hard  copy  information for a  Russian  information
company.   From March to June 1992, he served as Of  Counsel  for
the  law  firm  of  Hale & Dorr, establishing the  firm's  Moscow
office.  His  work  included negotiating and  establishing  joint
ventures  for clients. From September 1990 to January  1992,  Mr.
Hupp  was  Senior  Project  Manager and  Corporate  Counsel  with
Management  Partnership International, Ltd. (MPI). Prior  to  his
work  at  MPI,  Mr.  Hupp  was a trial lawyer  for  the  firm  of
Bollinger  &  Ruberry and Pretzel & Stouffer in Chicago  for  six
years.  Mr.  Hupp received a J.D. Degree from the  University  of
Illinois College of Law and B.A. degrees in Russian Area  Studies
and  Political Science. Mr. Hupp has intensive language  training
from the Leningrad State University in St. Petersburg, Russia.

      LeAnn  H.  Davis, CPA was employed by the  Company  as  the
Controller  on July 7, 1997 and on September 25, 1997  was  named
Chief Financial Officer and Corporate Secretary. Prior to joining
the  Company, Ms. Davis worked as CFO of Galaxy Foods Company  in
Orlando, Florida from December 1995 to June 1997.  From  1994  to
1995,  she  was a senior auditor for Coopers and Lybrand  LLP  in
Orlando, FL.  From 1992 to 1994, she worked for the local  public
accounting  firm of Pricher and Company in Orlando  as  a  senior
auditor and tax accountant.  Prior to 1992, Ms. Davis worked  for
Arthur Andersen LLP as a staff auditor.  Ms. Davis obtained a  BS
in Business Administration and a BS in Accounting from Palm Beach
Atlantic College in West Palm Beach, Florida in May 1990,  and  a
Masters in Accounting from Florida State University, Tallahassee,
Florida in August 1991.



ITEM 10.  EXECUTIVE COMPENSATION

      The  following  table  sets  forth  the  cash  and  noncash
compensation  for  year ended December 31,  1998,  the  two-month
transition  period ended December 31, 1997, and the  years  ended
October  31,  1997  and 1996 awarded to or earned  by  the  Chief
Executive Officer:

<PAGE>

                              Summary Compensation Table

                              Annual Compensation            Long-Term
                    Fiscal                  Other Annual   Compensation
                     Year  Salary   Bonus  Compensation   Awards/Options
Name and Principal  Ended    ($)     ($)        ($)            (#)
  Position
John P. Hupp,        1998   $95,000 $16,000    none            none
President(1)       2-month
                     1997   $15,000   none     none            none
                     1997   $87,500   none     none            none
                     1996   $75,000   none     none         250,000(2)



(1)Mr.  Hupp  became President on June 16, 1995.  Beginning  June
   15,  1993,  as  the Company's Director of Legal  Affairs,  Mr.
   Hupp  began to receive a full-time salary of $5,000 per month.
   Effective  June  16,  1995,  upon  assuming  the  position  of
   President,  his  salary was increased  to  $6,250  per  month.
   Effective  January  1997, his salary was increased  to  $7,500
   per   month;  and  effective  October  1998,  his  salary  was
   increased to $9,167 per month.

(2)Under  the  Amendment dated September 30,  1996  to  the  1992
   Stock  Option Plan, Mr. Hupp was issued an option to  purchase
   250,000  shares at an exercise price of $1.22.  This amendment
   was approved by the shareholders at the 1996 Annual Meeting.

Aggregated  Option  Exercises: Last Fiscal  Year  and  Fiscal  Year-End
Option Values

      The  following  table summarizes for  the  named  executive
officers  the number of stock options exercised during  the  year
ended December 31, 1998, the aggregate dollar value realized upon
exercise,  the  total  number  of  unexercised  options  held  at
December  31, 1998 and the aggregate dollar value of in-the-money
unexercised  options  held at December 31, 1998.  Value  realized
upon exercise is the difference between the fair market value  of
the  underlying stock on the exercise date and the exercise price
of the option. Value of Unexercised In-the-Money Options at year-
end  is  the difference between its exercise price and  the  fair
market  value of the underlying stock on December 31, 1998  which
was $3.34 per share.

Aggregated Option Exercises in Fiscal 1997 and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
                                          Number of            Value of Unexercised
                Shares                 Unexercised           In-the-Money Options
Name and       Acquired                 Options at                      at
Principal         on       Value     December 31, 1998(#)      December 31, 1998 ($)
Position       Exercise  Realized  Exercisable Unexercisable Exercisable Unexercisable
<S>             <C>       <C>       <C>          <C>         <C>           <C>
John P. Hupp(1), None      None      101,667      150,000     $212,000      $318,000
President

   (1)   Includes 250,000 options granted under September 30,1996
         employment agreement.

Employment Agreements

      Mr. Hupp's original employment agreement dated June 1, 1995
was  amended on September 30, 1996 and then amended and  restated
on  October  1, 1998.  The new employment agreement provides  for
compensation of $110,000 per year and standard employee  benefits
during  the  employment  term expiring September  30,  2001.   In
addition,  Mr.  Hupp  or his successors will receive  salary  and
benefits for a twelve month period upon total death or disability
of  Mr.  Hupp or if the Company terminates the Agreement  without
cause.   Under terms of the Agreement, Mr. Hupp will  devote  his
best  efforts  to the performance of his duties,  and  agrees  to
certain restrictions related to participation in activities  felt
to conflict with the best interests of the Company.

<PAGE>

Compensation of Directors

      No director who is also an employee of the Company received
any additional compensation for services as a director.

      The  non-employee directors of the Company include  Messrs.
Hauser   and  Schnobrich.  During  1998,  non-employee  directors
received no cash compensation for their services as a director or
committee  member. Mr. Schnobrich is an attorney with  Hinshaw  &
Culbertson,  which  serves as counsel for the Company  and  which
receives payment of legal fees for such services.

      It  is  the  Company's intention to issue to  each  outside
director an option for 5,000 shares of the Company's Common Stock
each year under terms of the 1997 Outside Director's Stock Option
Plan  upon  their  election to the Board at the Company's  annual
meeting.  The option will vest equally over the calendar year.

     Options  granted  under  the 1997  Outside  Directors  Stock
Option  Plan are not intended to and do not qualify as  incentive
stock options as described in Section 422 of the Internal Revenue
Code.



ITEM 11.  SECURITY  OWNERSHIP  OF CERTAIN BENEFICIAL  OWNERS  AND
          MANAGEMENT

           The  following table contains information as of August
9,  1999,  concerning the beneficial ownership of  the  Company's
Common Stock by persons known to the Company to beneficially  own
more  than  5%  of  the Common Stock, by each director,  by  each
executive officer named in the Summary Compensation Table, and by
all  current and nominated directors and executive officers as  a
group.  Shares reported as beneficially owned include  those  for
which  the  named persons may exercise voting power or investment
power,  and  all shares owned by persons having sole  voting  and
investment  power  over such shares unless otherwise  noted.  The
number of shares reported as beneficially owned by each person as
of August 9, 1999, includes the number of shares that such person
has  the  right to acquire within 60 days of that date,  such  as
through  the  exercise  of stock options  or  warrants  that  are
exercisable within that period.

     Name and Address of      Amount and Nature        Percentage
      Beneficial Owner        of Beneficial Owner       Owned(A)

 Vladimir Drits                   71,835 (1)               6.9%
 11901 Meadow Lane West
 Minnetonka, MN  55305

 Erlan Sagadiev                  103,000 (2)              10.0%
 7300 Metro Blvd, Suite 550
 Edina, MN  55439


 Roger W. Schnobrich (B)          35,700 (3)               3.5%
 222 South Ninth Street
 Suite 3200
 Minneapolis, MN  55402

<PAGE>

 John P. Hupp (B),(C)            104,300 (4)              10.1%
 7300 Metro Blvd, Suite 550
 Edina, MN  55439

 Peter L. Hauser (B)              41,000 (5)               4.0%
 2820 IDS Tower
 Minneapolis, MN  55402

 Beneficial Owners of 5% or      355,835                  34.5%
 more, Officers and
 Directors as a group

 All current directors and       181,000                  17.6%
 officers as a group
 (3 people)


(A)    The total number of shares outstanding assuming the exercise
 of  all  currently exercisable and vested options  and  warrants
 held  by  all executive officers, current directors, and holders
 of  5%  or  more of the Company's issued and outstanding  Common
 Stock is 1,030,820 shares.  Does not assume the exercise of  any
 other options or warrants.

(B)   Designates a Director of the Company.

(C)   Designates an Executive Officer of the Company.

(1)  Includes  23,335 shares of Common Stock gifted by Mr.  Drits
     to his spouse and children.

(2)  Includes  presently exercisable options for the purchase  of
     100,000 shares at $1.22 per share and 1,667 shares at  $6.75
     issued  under terms of the 1992 Stock Option Plan as Amended
     September 30, 1996.

(3)  Includes  presently exercisable options for the purchase  of
     15,000 shares at $1.50 per share and 5,000 shares at $3.00 issued
     under the terms of the 1997 Outside Directors Stock Option Plan.

(4)  Includes  presently exercisable options for the purchase  of
     100,000 shares at $1.22 per share and 1,667 shares at  $6.75
     issued  under terms of the 1992 Stock Option Plan as Amended
     September 30, 1996.

(5)  Includes  6,000  shares held in IRA for the benefit  of  Mr.
     Hauser.  Includes presently exercisable options for the purchase
     of  5,000 shares at $3.00 issued under the terms of the 1997
     Outside Directors Stock Option Plan.



ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None

<PAGE>


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

          The  following Exhibits are filed as part of this  Form
          10-KSB:

          No.  Exhibit Description
          3.1   Articles  of Incorporation of the  Company  dated
                November 11, 1991(1)

          3.2    Certificate   of  Amendment   of   Articles   of
                 Incorporation of the Company dated June 16, 1992(1)

          3.3    Bylaws of the Company(1)

          3.4    Certificate   of  Amendment   of   Articles   of
                 Incorporation  of  the  Company,  changing   registered
                 office address dated March 2, 1993(1)

          3.5    Certificate   of  Amendment   of   Articles   of
                 Incorporation of the Company dated November 30, 1995(3)

          4.1    Form  of  stock  certificate representing  Common
                 Stock, $.01 par value per share, of the Company, issued
                 by  Company  after  a 1 for 3 reverse  split  effective
                 December 12, 1995(3)

          4.2    Form  of  Subscription Agreement  and  Investment
                 Representations in connection with private placement of
                 300,000 shares of Common Stock(1)

          4.3    Amended  Incentive Stock  Option  Grant  -  Erlan
                 Sagadiev dated December 11, 1996(6)

          4.4    Amended Incentive Stock Option Grant - John  Hupp
                 dated December 11, 1996(6)

          10.1   Asset  Sale  Agreement  between  Company  and   a
                 corporation  to  be organized by Oleg Yermakov  selling
                 the  Company's security equipment distribution business
                 and  certain  assets  to Oleg Yermakov,  contingent  on
                 certain future events(5)

          10.2   Exclusive Distributor Agreement dated October 1995
                 between  Company  and SECTOR 6, Security   Division  of
                 N.V. COMAUTO S.A. effective until September 30, 1998(5)

          10.3   Contract for Fiduciary Management of State Shares
                 of  the  Open  Type Joint Stock Company, Ak-Bulak  with
                 their Subsequent Buy-out Option (4)

          10.4   1992  Stock Option Plan as amended  and  restated
                 effective September 30, 1996(8)

          10.5   Form of Stock Option Agreement(1)

          10.6   Limited Liability Company Agreement of FoodMaster
                 International L.L.C. as amended and restated  September
                 11, 1998(9)

          10.7   FoodMaster  International L.L.C.  Share  Transfer
                 Agreement dated March 3, 1997(6)

          10.8   FoodMaster  International L.L.C.  Bill  of  Sale,
                 Assignment  and  Assumption Agreement  dated  March  3,
                 1997(6)

          10.9   Management Agreement between DTR  and  FoodMaster
                 International L.L.C. as amended and restated  September
                 11, 1998(9)

<PAGE>

          10.12  Form  of  Assignment of  Financial  Advisory
                 Agreement  from the Company to FAI Limited  Partnership
                 effective January 31, 1993(1)

          10.13  Employment Agreement between DTR  and  Erlan
                 Sagadiev effective September 30, 1996(6)

          10.14  Employment Agreement between  DTR  and  John
                 Hupp   effective  October  1,  1998  as   amended   and
                 restated(9)

          10.15  Developed  Technology  Resource,  Inc.  1993
                 Outside  Directors Stock Option Plan effective December
                 17, 1993(2)

          10.16  Office  Lease between DTR  and  McNeil  Real
                 Estate  dated March 11, 1997 effective until April  30,
                 2002(8)

          10.20  Partnership Agreement dated January 16,  1992
                 among  the  Company, Armen P. Sarvazyan  and  Stanislav
                 Yemelyanov   concerning  the   formation   of   Medical
                 Biophysics  International, as  amended  by  Partnership
                 Agreement Amendment dated August 20, 1992(1)

          10.21  Letter of Understanding dated June 18,  1992
                 between  the Company and Armen P. Sarvazyan  concerning
                 Medical  Biophysics International,  and  May  22,  1992
                 letter  from  the  Company to Dr. Armen  P.  Sarvazyan,
                 Ph.D.(1)

          10.22  Assignment   of   rights   to   Intracavity
                 Ultrasonic Device for Elasticity Imaging from Armen  P.
                 Sarvazyan, Stanislav Emelianov and Andrei R.  Skovoroda
                 to  Medical Biophysics International dated December 19,
                 1992(1)

          10.23  Assignment of rights to Method and Apparatus
                 for  Elasticity  Imaging from Armen  P.  Sarvazyan  and
                 Stanislav Emelianov to Medical Biophysics International
                 dated December 19, 1992(1)

          10.24  Assignment of rights to Method and Device for
                 Mechanical Tomography of Tissue from Armen P. Sarvazyan
                 to  Medial  Biophysics International dated January  16,
                 1993(1)

          10.42  Form of Underwriter's Warrants dated May  5,
                 1993  between the Company and Equity Securities Trading
                 Co., Inc.(2)

          10.43  Form    of    Directors    and    Officers
                 Indemnification  Agreement  issued  to  each   of   the
                 Company's officers and directors on October 15, 1993 by
                 action of the Board of Directors(2)

          10.44  Developed  Technology  Resource,  Inc.  1997
                 Outside  Directors Stock Option Plan effective November
                 1, 1997(7)

          10.45  Amendment  to Asset Sale Agreement  (Exhibit
                 10.1) dated August 20, 1997 (7)

          21.1   Subsidiaries  of  Developed Technology  Resource,
                 Inc. as amended(10)

          23.1   Consent of KPMG Moldova(10)

          23.2   Consent of KPMG Moldova(10)

          23.3   Consent of KPMG Ukraine(10)

          27     Financial Data Schedule(10)

<PAGE>

          99.1   KPMG Auditors' Report on S.A. Fabrica de brinzeturi
                 din Soroca dated April 30, 1999(10)

          99.2   KPMG Auditors' Report on S.A. Fabrica de produse
                 lactate din Hancesti dated April 30, 1999(10)

          99.3   KPMG Auditors' Report on FoodMaster Kyiv dated
                 April 16, 1999(10)


(1)Incorporated by reference to the same exhibit number  included
   in  the  Company's  registration statement on  Form  SB-2,  as
   Amended,  filed  with the Commission as file number  33-58626C
   in 1993.

(2)Incorporated by reference to the same exhibit number  included
   in  the Company's Annual Report on Form 10-KSB filed with  the
   Commission for the fiscal year ended October 31, 1993.

(3)Incorporated  by  reference  to  exhibit  numbers  1A  and  3A
   included   in  the  Company's  Form  8-A/A  filed   with   the
   Commission on December 12, 1995.

(4)Incorporated  by reference to exhibit number  10  included  in
   the  Company's Quarterly Report on Form 10-QSB for  the  third
   fiscal quarter ended July 31, 1996.

(5)Incorporated by reference to the same exhibit number  included
   in  the Company's Annual Report on Form 10-KSB filed with  the
   Commission for the fiscal year ended October 31, 1995.

(6)Incorporated by reference to exhibit numbers 4.1,  4.2,  10.1,
   10.2,  10.3,  10.4, 10.5 and 10.6 included  in  the  Company's
   Quarterly Report on Form 10-QSB filed with the Commission  for
   the first fiscal quarter ended January 31, 1997.

(7)Incorporated by reference to the same exhibit number  included
   in  the Company's Annual Report on Form 10-KSB filed with  the
   Commission for the fiscal year ended October 31, 1997.

(8)Incorporated by reference to the same exhibit number  included
   in  the  Company's Quarterly Report on Form 10-QSB filed  with
   the  Commission for the first fiscal quarter ended January 31,
   1998.

(9)Incorporated by reference to the same exhibit number  included
   in  the  Company's Quarterly Report on Form 10-QSB filed  with
   the  Commission for the third calendar quarter ended September
   30, 1998.

(10)Filed herewith.

<PAGE>


                           SIGNATURES
      Pursuant to the requirements of Section 13 or 15(d) of  the
Securities  Exchange Act of 1934, the Registrant has caused  this
report  to  be signed on its behalf by the undersigned, thereunto
duly authorized.












                                   DEVELOPED TECHNOLOGY RESOURCE,
INC.

Date:          September 3, 1999   By        /s/ John P. Hupp
                                            ___________________________
                                   Name:      John P. Hupp
                                   Title:     President


Date:          September 3, 1999   By       /s/ LeAnn H. Davis
                                           ____________________________
                                   Name:     LeAnn H. Davis, CPA
                                   Title:    Chief  Financial Officer
                                            (Principal  Financial  &
                                             Accounting Officer)



</TABLE>