SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934 For the Quarterly Period ended September 30, 1998

                                       OR

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


               Commission File Number: 33-18099-NY and 33-23169-NY

                           QUEST PRODUCTS CORPORATION
        (Exact Name of small business issuer as specified in its charter)

         DELAWARE                                              11-2873662
State or other jurisdiction                              (IRS Employer I.D. No.)
Incorporation or organization)

                 6900 Jericho Turnpike, Syosset, New York 11791
                    (Address of principal executive offices)

Issuer's telephone number, including area code:                 (516) 364 - 3500
Securities registered pursuant to Section 12(b) of the Act:                 None
Securities registered pursuant to Section 12(g) of the Act:                 None

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15 (d) of the Securities  Exchange Act of 1934, during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                       YES _X_                 NO ___

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
Common Stock, as of the last practicable date.

       Class                                   Outstanding at September 30, 1998
Common Stock, par value                                 155,912,985
$.00003 per share


<PAGE>


PART 1 FINANCIAL INFORMATION
Item 1, financial statements


QUEST PRODUCTS CORPORATION
FINANCIAL STATEMENTS (Unaudited)
September 30, 1998



Financial Statements                                               Page
                                                                   ----


Balance Sheet                                                     3 - 4


Statements of Operations                                          5 - 6


Statement of Shareholders' (Deficit)                                  7


Statements of Cash Flows                                         8 - 10


Notes to Financial Statements                                   11 - 12


Management's Discussion and Analysis                            13 - 15


Other Information                                                    16


Signatures                                                           17

                                        2


<PAGE>


QUEST PRODUCTS CORPORATION
Balance Sheet
September 30, 1998

(Unaudited)



Assets
     Current Assets
         Cash                                                           $    643

         Accounts receivable - net of allowance for
              doubtful accounts of $1,000                                 54,843

         Inventory                                                       124,184

         Prepaid expenses                                                  1,496
                                                                        --------
                                                                         181,166

     Furniture and Equipment - at cost - net of accumulated
         depreciation of $21,371                                          27,044


     Patents - at cost - net of accumulated amortization
         of $12,093                                                       37,342


     Security Deposits                                                     4,137
                                                                        --------
                                                                        $249,689
                                                                        ========


See notes to financial statements.

                                        3

<PAGE>


QUEST PRODUCTS CORPORATION
Balance Sheet
September 30, 1998

(Unaudited)



Liabilities and Shareholders' (Deficit)
     Current Liabilities
         1992 convertible debentures - including accrued
              interest of $6,650                                    $    16,650

         Shareholder's loan                                             187,938

         Accounts payable                                               576,466

         Accrued officer and director's compensation                    386,493

         Loans from directors                                            33,952

         Accrued expenses                                                35,508
                                                                    -----------
                                                                      1,237,007
                                                                    -----------
     Shareholders' (Deficit)
         Series A Convertible Preferred Stock -
              par value $.001 - authorized 600,000 shares -
              no shares issued and outstanding

         Series B  Convertible  Preferred  Stock -
              par value  $.001 -  authorized 5,000,000 shares -
              no shares issued and outstanding

         Common Stock - par value $.00003 -
              authorized 200,000,000 shares -
              155,912,985 shares issued and outstanding                   4,677

         Capital in excess of par                                     3,506,075

         Accumulated (deficit)                                       (4,498,070)
                                                                    -----------
                                                                       (987,318)
                                                                    -----------
                                                                    $   249,689
                                                                    ===========


See notes to financial statements.

                                        4

<PAGE>


<TABLE>
<CAPTION>

QUEST PRODUCTS CORPORATION
Statements of Operations

(Unaudited)


                                                                       For the Nine Months Ended
                                                                              September 30,
                                                             ------------------------------------------
                                                                   1998                         1997
                                                             -------------                -------------

<S>                                                          <C>                          <C>
Sales - net                                                  $     454,278                $     281,084

Cost of Sales                                                       88,998                      111,042
                                                             -------------                -------------

                                                                   365,280                      170,042
                                                             -------------                -------------

Selling Expenses                                                   259,352                       59,899

General and Administrative Expenses                                419,419                      364,695
                                                             -------------                -------------

                                                                   678,771                      424,594
                                                             -------------                -------------

(Loss) Before Other Income (Expenses)                             (313,491)                    (254,552)
                                                             -------------                -------------


Other Income (Expenses)
     Interest income                                                    22                        3,953
     Interest (expense)                                            (12,486)                     (28,945)
     Settlement of trade payable claim                                --                         61,000
                                                             -------------                -------------
                                                                   (12,464)                      36,008
                                                             -------------                -------------

Net (Loss)                                                   $    (325,955)               $    (218,544)
                                                             =============                =============


(Loss) Per Share                                             $     NIL                    $     NIL
                                                             =============                =============


Weighted Average Number of Shares
     Outstanding (to nearest 1,000,000)                        155,000,000                  110,000,000
                                                             =============                =============
</TABLE>


See notes to financial statements.

                                        5

<PAGE>


<TABLE>
<CAPTION>

QUEST PRODUCTS CORPORATION
Statements of Operations

(Unaudited)


                                                                  For the Quarter Ended
                                                                       September 30,
                                                       ------------------------------------------
                                                           1998                         1997
                                                       -------------                -------------
<S>                                                    <C>                          <C>
Sales - net                                            $     117,330                $      94,843

Cost of Sales                                                 15,749                       38,273
                                                       -------------                -------------

                                                             101,581                       56,570
                                                       -------------                -------------

Selling Expenses                                              63,302                       13,960

General and Administrative Expenses                          138,509                       70,005
                                                       -------------                -------------

                                                             201,811                       83,965
                                                       -------------                -------------

(Loss) Before Other Income (Expenses)                       (100,230)                     (27,395)
                                                       -------------                -------------


Other Income (Expenses)
     Interest income                                               7                          217
     Interest (expense)                                       (4,162)                      (5,641)
                                                       -------------                -------------
                                                              (4,155)                      (5,424)
                                                       -------------                -------------

Net (Loss)                                             $    (104,385)               $     (32,819)
                                                       =============                =============


(Loss) Per Share                                       $    NIL                     $    NIL
                                                       =============                =============


Weighted Average Number of Shares
     Outstanding (to nearest 1,000,000)                  155,000,000                  113,000,000
                                                       =============                =============
</TABLE>


See notes to financial statements.

                                        6

<PAGE>


<TABLE>
<CAPTION>

QUEST PRODUCTS CORPORATION
Statement of Shareholders' (Deficit)
For the Nine Months Ended September 30, 1998

(Unaudited)



                                               Number of
                                              Common Stock            Amount            Capital in
                                                Shares               $.00003             Excess of           Accumulated
                                              (Post-Split)          Par Value            Par Value             Deficit
                                              -----------          -----------          -----------          -----------
<S>                                           <C>                  <C>                  <C>                  <C>
Balance - December 31, 1997                   138,083,713          $     4,142          $ 3,360,410          ($4,172,115)


Proceeds from sale of stock                    17,829,272                  535              145,665                 --


Net (Loss)                                           --                   --                   --               (325,955)
                                              -----------          -----------          -----------          -----------


Balance - September 30, 1998                  155,912,985          $     4,677          $ 3,506,075          ($4,498,070)
                                              ===========          ===========          ===========          ===========
</TABLE>


See notes to financial statements.

                                       7

<PAGE>


<TABLE>
<CAPTION>

QUEST PRODUCTS CORPORATION
Statements of Cash Flows                                             Page 1 of 2

(Unaudited)
                                                                                For the Nine Months Ended
                                                                                       September 30,
                                                                              -------------------------------
                                                                                1998                  1997
                                                                              ---------             ---------
<S>                                                                          <C>                   <C>
Cash Flows from Operating Activities
     Net (loss)                                                              $(325,955)            $(218,544)
     Adjustments to reconcile net (loss) to net cash
         (used for) operating activities:
              Depreciation and amortization                                      4,347                 4,215
              Expenses paid through the issuance of
                  restricted common stock                                         --                 108,750
              Accrued interest                                                  12,486                15,541
              (Increase) decrease in:
                  Accounts receivable                                          (52,131)               (6,171)
                  Inventories                                                  (55,723)               46,485
                  Advances to Automotive Marketing, Inc.                          --                 (85,909)
                  Deferred preoperating and developmental costs                   --                 (17,987)
              Increase (decrease) in:
                  Notes payable - vendor                                          --                 (20,940)
                  Accounts payable                                              (7,512)              (82,311)
                  Accrued officers' and directors' compensation                243,000                27,500
                  Taxes payable                                                   --                      90
                  Loans from directors and officers                             (1,863)                1,246
                  Accrued expenses                                              10,206               (47,952)
                                                                             ---------             ---------

                                                                              (173,145)             (275,987)
                                                                             ---------             ---------
Cash Flows from Investing Activities
     Acquisition of equipment                                                     --                  (5,500)
     Patent payments                                                              --                  (2,435)
                                                                             ---------             ---------
                                                                                  --                  (7,935)
                                                                             ---------             ---------
Cash Flows from Financing Activities

     Proceeds from sale of common stock                                        146,200                60,000

     Conversion/proceeds on senior subordinated debentures                        --                 (10,000)
                                                                             ---------             ---------

                                                                               146,200                50,000
                                                                             ---------             ---------

Net Decrease in Cash                                                           (26,945)             (233,922)

Cash - beginning                                                                27,588               260,372
                                                                             ---------             ---------

Cash - end                                                                   $     643             $  26,450
                                                                             =========             =========
</TABLE>


See notes to financial statements.

                                        8

<PAGE>


<TABLE>
<CAPTION>

QUEST PRODUCTS CORPORATION
Statements of Cash Flows                                             Page 2 of 2

(Unaudited)
                                                                   For the Nine Months Ended
                                                                           September 30,
                                                                 ------------------------------
                                                                   1998                  1997
                                                                 --------              --------
Supplemental Disclosures

<S>                                                              <C>                   <C>
     Conversion of accrued officer salary to common stock        $   --                $  8,750
                                                                 ========              ========

     Stock issued for accrued services rendered                  $   --                $100,000
                                                                 ========              ========
</TABLE>


See notes to financial statements.

                                        9

<PAGE>


<TABLE>
<CAPTION>

QUEST PRODUCTS CORPORATION
Statements of Cash Flows

(Unaudited)
                                                                           For the Quarter Ended
                                                                                 September 30,
                                                                      --------------------------------
                                                                         1998                  1997
                                                                      ---------              ---------
<S>                                                                  <C>                    <C>
Cash Flows from Operating Activities
     Net (loss)                                                      $(104,385)             $ (32,819)
     Adjustments to reconcile net (loss) to net cash
         (used for) operating activities:
              Depreciation and amortization                              1,449                  1,405
              Accrued interest                                           4,162                  5,016
     (Increase) decrease in:
              Accounts receivable                                       10,634                (10,458)
              Inventories                                              (38,302)                25,673
              Advances to Automotive Marketing, Inc.                      --                  (67,709)
              Deferred preoperating and developmental costs               --                    2,341
     Increase (decrease) in:
              Accounts payable                                          28,535                (68,695)
              Accrued officers' and directors' compensation             81,000                 42,500
              Taxes payable                                               --                      (18)
              Accrued expenses                                          10,095                  1,293
                                                                     ---------              ---------

                                                                        (6,812)              (101,471)
                                                                     ---------              ---------

Cash Flows from Financing Activities
     Proceeds from sale of common stock                                   --                   60,000
                                                                     ---------              ---------

                                                                          --                   60,000
                                                                     ---------              ---------

Net Decrease in Cash                                                    (6,812)               (41,471)

Cash - beginning                                                         7,455                 67,921
                                                                     ---------              ---------

Cash - end                                                           $     643              $  26,450
                                                                     =========              =========
</TABLE>


See notes to financial statements.

                                       10

<PAGE>


QUEST PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS (Unaudited)
September 30, 1998


1.   BACKGROUND AND BASIS OF PRESENTATION

     Quest  Products  Corporation  (the  "Company")  was organized as a Delaware
     Corporation  on July 17, 1987 and operated as a  development  stage company
     through  1993.  The  Company's  purpose  is to market  and  distribute  its
     patented phase-out system smoking cessation device (the "product").

     The Company had primarily marketed the product in the United States through
     direct  response   marketing   including   radio,   television   spots  and
     infomercials.  This  domestic  marketing  was  curtailed due to the ongoing
     negotiations  with the Federal Trade  Commission  ("FTC"),  which have been
     concluded. In March 1998, the Company reentered the domestic retail market.
     The Company also distributes the product overseas.

     The financial  statements have been prepared assuming that the Company will
     continue as a going concern. The Company has suffered recurring losses from
     operations  ($325,955  in 1998 and  $218,544 in 1997),  and has had limited
     liquidity  causing  difficulty  in meeting  its current  operating  expense
     obligations  and  debt  service  requirements.   The  Company  is  actively
     marketing  the product to help  improve  revenues  and may seek  additional
     financing through private  placement of debt and securities.  The financial
     statements  do not include any  adjustments  that might  result  should the
     continued existence of the Company be threatened by any continued losses or
     the failure of the above factors to influence  the  financial  viability of
     the Company.

     The interim  statements  were  prepared  pursuant to the  requirements  for
     reporting  on Form 10- QSB.  The  interim  financial  statements  and notes
     thereto  should be read in  conjunction  with the financial  statements and
     notes included in the Company's latest Annual Report on Form 10-KSB for the
     year ended  December 31, 1997.  In the opinion of  management,  the interim
     financial  statements  reflect all adjustments of a normal recurring nature
     necessary  for a fair  statement  of the results for interim  periods.  The
     current period results of operations are not necessarily  indicative of the
     results for the entire year ending December 31, 1998.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Changes  in  significant  accounting  policies  - There  were no changes in
     significant accounting policies during the current period.

3.   RELATED PARTY TRANSACTIONS

     Loans from  Director  and  Officer - A former  officer/shareholder,  who is
     still a director of the Company, is owed $33,952 by the Company. The amount
     is payable on demand with a stated interest rate of 11%. Effective June 30,
     1997, the former officer/shareholder agreed to no longer charge interest.


                                       11

<PAGE>


QUEST PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS (Unaudited)
September 30, 1998


     Officer's and  Director's  Compensation  - During 1996,  an investor  group
     brought in by two individuals which acquired an 18% ownership  interest for
     $500,000 was awarded two seats on the Board of Directors  and one officer's
     position.  The two  individuals  had  consulting  agreements  for which the
     Company accrued fees of $5,000 per month for each individual from July 1996
     through   November  1997.  In  December  1997,  the  Company  entered  into
     employment  contracts with each of these two  individuals  for $150,000 per
     year for five years from  December  1997 through  November  2002 and issued
     options to purchase  7,500,000 shares each at an exercise price of $.03 per
     share.  As of September 30, 1998,  the two  individuals  were owed $160,000
     each in accrued consulting fees and salaries.

     A director,  who was  previously  the Company's  chief  executive  officer,
     entered into a consulting  agreement  with the Company for $2,000 per month
     from October 1997 through  September  1998. As of September 30, 1998, he is
     owed $66,030 in accrued salary, consulting fees and expenses.

4.   SHAREHOLDER'S LOAN

     During 1996, the Company received  $200,000 from a shareholder as a loan in
     connection with the Company's  media  campaign.  Repayments of $35,000 were
     made in cash  and  $7,500  in  stock.  The  repayment  of the  $157,500  of
     remaining  principal  at September  30, 1998 and $30,438 of interest  which
     accrues at 10% will be negotiated.

5.   COMMITMENTS, CONTINGENCIES AND OTHER COMMENTS.

     Dependence  on Major  Customers  and  Suppliers  -  Domestic  retail  sales
     represent  approximately  90%  of  sales  with  only  one  retail  customer
     representing more than 10% of total sales.

     The Company is currently purchasing 100% of its products from one vendor.

     Regulatory Matters - There have been no changes in the status of regulatory
     inquiries by the Food and Drug  Administration  (FDA) and the Federal Trade
     Commission (FTC).

     Litigation - In July 1997, the Company's former attorney, who is a relative
     of a  Director,  brought an action  against  the  Company in New York State
     Supreme Court,  New York County for unpaid attorney fees and  disbursements
     of approximately  $18,000.  Legal counsel has not rendered an opinion as to
     the ultimate outcome of this matter.


                                       12

<PAGE>


QUEST PRODUCTS CORPORATION
Management's Discussion and Analysis


                              Results of Operations
                  Nine Months Ended September 30, 1998 Compared
                     to Nine Months Ended September 30, 1997


     The  Company  incurred a net loss of  $325,955  for the nine  months  ended
September 30, 1998 as compared to the loss of $218,544 for the nine months ended
September 30, 1997.  Nine-month sales increased $173,194.  The increase in sales
resulted from a retail sales program which began in March 1998.

     Selling  expenses  increased  from  $59,899 to  $259,352 as a result of the
additional  costs  associated  with the  distribution of the product into retail
chain drug stores.

     General and administrative  expenses increased from $364,695 to $419,419 as
a result of an increase in officer salaries ($195,117) and rent ($15,976) less a
decrease in office salaries and consulting fees  ($143,512),  professional  fees
($9,616) and telephone ($6,039).

     The gross profit margin  increased  from 60% to 80%, due to the high volume
of domestic retail sales.

     The Company maintains a $1,000,000 liability insurance policy.


                                       13

<PAGE>


QUEST PRODUCTS CORPORATION
Management's Discussion and Analysis


                         Liquidity and Capital Resources

Cash of $173,145 was used for  operations  for the 9 months ended  September 30,
1998 as  compared  to  $275,987  used in the  same  period  of last  year.  Cash
decreased during the 9 months ended September 30, 1998 by $26,945.

The Company's  working capital has deteriorated due to the use of current assets
for operations. Working capital and current ratios were:
<TABLE>
<CAPTION>

                             September 30,                December 31,                 September 30,
                                1998                         1997                          1997
                             -------------                ------------                --------------
<S>                           <C>                         <C>                         <C>
Working capital
(deficiency)                  ($1,055,841)                ($880,433)                  ($517,966)
Current ratios                     0.15:1                    0.10:1                      0.31:1
</TABLE>

In order to meet short-term  marketing  goals, in July 1997 certain officers and
directors  agreed to acquire an aggregate of 10,000,000  shares of the Company's
common  stock  (representing  8% of total shares  outstanding)  for an aggregate
purchase price of $100,000.  The Company is also seeking an additional  $240,000
of financing  under the same terms and conditions as offered to the officers and
directors. As of September 30, 1998, the Company has received $318,700. There is
no assurance that the Company will be able to obtain additional financing.

                           Distribution and Marketing

Marketing (Domestic)

     In March  1998,  the  Company  entered  the U.S.  retail  market  under the
category of smoke cessation products.

Marketing (International)

     On August 21, 1995,  the Company  entered  into an  agreement  with a South
Korean  trading  company  for the  distribution  and  manufacture  of a modified
(design)  PhaseOut  product in South Korea.  Because of the improved  design and
reduced size of this PhaseOut device, it will be utilized in the Japanese market
as well.  South Korea has 10 million  smokers and Japan has 35 million  smokers.
Distribution in South Korea is expected to begin in the 2nd quarter of 1999.


                                       14

<PAGE>


QUEST PRODUCTS CORPORATION
Management's Discussion and Analysis

                               Regulatory Matters

     There have been no material changes in the status of matters pending before
the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC).


                                       15

<PAGE>


                           PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

          The Company has been sued by a former attorney for fees it alleges are
          due but unpaid in the amount of approximately  $18,000.  Legal counsel
          has not rendered an opinion as to the ultimate outcome of this matter.

Item 2.   Changes in Securities

               None

Item 3.   Defaults Upon Senior Securities

               None

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

               None

Item 5.   Other Information

               See notes to the financial statements

Item 6.   Exhibits and Reports

               None


                                       16

<PAGE>


                                   SIGNATURES


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


                                                  QUEST PRODUCTS CORPORATION


Dated:  November 10, 1998

                                                  /S/: Herbert M. Reichlin
                                                  ------------------------------
                                                  Herbert M. Reichlin, President


                                       17