UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           FORM 10-QSB


[x]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996


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

For the transition period from                to                

Commission File Number: 0 - 21284

                 Saliva Diagnostic Systems, Inc.
(Exact name of small business issuer as specified in its charter)

          Delaware                               91-1549305
(State of other jurisdiction of               (I.R.S. Employer    
incorporation or organization)               Identification No.)

 11719 NE 95th Street Suite G, Vancouver WA             98682
(Address of Principal executive offices)             (Zip Code)

                          (360) 696-4800
       (Issuer's telephone number, including area code)


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

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

                                             Outstanding at
Class of Common Stock                        November 1, 1996  

    $.01 par value                           21,935,785 shares

            Page 1 of 12.  There is no Exhibit Index.



                  <PAGE>
SALIVA DIAGNOSTIC SYSTEMS, INC.


                              INDEX


                                                         Page No.

Part I.  FINANCIAL INFORMATION

     Item 1.   Financial Statements

               Consolidated Condensed Balance                3-4 
               Sheets - December 31, 1995 and 
               September 30, 1996 (Unaudited)

               Consolidated Condensed Statements of             5
               Operations - Three Months Ended September 30,
               1995 and 1996 (Unaudited)

               Consolidated Condensed Statements of             6
               Operations Nine Months Ended September 
               30, 1995 and 1996 (Unaudited)

               Consolidated Condensed Statement of            7-8
               Cash Flows - Nine Months Ended 
               September 30, 1995 and 1996 
               (Unaudited)

               Notes to Consolidated Condensed                  9
               Financial Statements (Unaudited)

     Item 2.   Management's Discussion and Analysis            10
               of Financial Condition and
               Results of Operations

PART II.  OTHER INFORMATION

     Item 1.   Legal Proceedings                               11

     Item 4.   Submission of Matters to a Vote of              11
               Security Holders

     Item 6.   Exhibits and Reports on Form 8-K                11

Signature                                                      12


<PAGE>
<TABLE>
<CAPTION>
       SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
        CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)


                                   December 31,       September 30,
                                   1995                1996   
                                   -----------         ----------

                             ASSETS
<S>                                  <C>                 <C>
CURRENT ASSETS
  Cash                             $  2,688,014        $  1,780,453
  Accounts receivable                    43,291             156,886
  Inventory                             300,161             353,793
  Prepaid expenses                       28,956              19,487
                                   ------------        ------------
TOTAL CURRENT ASSETS                  3,060,422           2,310,619

PROPERTY AND EQUIPMENT, NET             470,593             664,065

OTHER ASSETS                            827,443             739,138
                                   ------------        ------------
                                   $  4,358,458        $  3,713,822
                                   ============        ============


              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and other       
    accrued expenses               $    500,078        $    658,306
  Accrued interest payable               49,703              68,240
  Current portion of long-
   term debt and obligations
   under capital leases                  15,869              35,175
  Convertible debentures              2,785,000             -
                                    -----------        ------------
TOTAL CURRENT LIABILITIES             3,350,650             761,721 
   
                                       
LONG-TERM DEBT AND OBLIGATIONS 
 UNDER CAPITAL LEASES,
  net of current portion                 30,497             103,146
                                   ------------        ------------
TOTAL LIABILITIES                     3,381,147             864,867
                                   ------------        ------------


<PAGE>
<CAPTION>
         SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

                            (continued)


                                   December 31,         September 30,
                                   1995                 1996   
                                   -----------          ----------
<S>                                 <C>                  <C>
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY 
  Common stock - authorized 
    25,000,000 shares, $.01 
    par value, issued and outstanding 
    13,126,366 and 21,885,785 on 
    December 31, 1995 and September 30,
    1996, respectively                  131,264            218,860
  Additional paid-in capital         17,726,578         22,905,130
  Note receivable related
    to sale of stock                    (83,825)           (83,825)
  Cumulative foreign translation 
    adjustment                          (34,859)           (21,404)
    
  Accumulated deficit               (16,761,847)       (20,169,806)
                                   ------------        ------------
TOTAL STOCKHOLDERS' EQUITY              977,311          2,848,955
                                   ============        ===========
                                   $  4,358,458        $ 3,713,822
                                   ============        ===========

See accompanying Notes to Consolidated Condensed Financial Statements


<CAPTION>
         <PAGE>
SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
          CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 (UNAUDITED)


                                        1995           1996
                                       -------       --------
<S>                                    <C>            <C>
REVENUES
  Product sales                     $  272,836    $   183,749
  Other fees and interest income         5,636         12,382
                                      --------       --------
  TOTAL REVENUES                       278,472        196,131
                                      --------       --------
COSTS AND EXPENSES                 

   Cost of product sold                 31,806        124,934
   Research and development                           150,115
   Selling, general and admini-
   strative                            247,496      1,232,509
   Interest expense and loan fees          969         12,242
                                    ----------      ---------
   TOTAL COSTS AND EXPENSES            280,271      1,519,800
                                    ----------      ---------
 NET LOSS                          $    (1,799)   $(1,323,669)
                                    ==========     ==========
WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING               10,223,807     21,886,000
                                   ===========     ==========
LOSS PER COMMON SHARE              $     --       $      (.06)
                                   ===========     ==========









    See accompanying Notes to Consolidated Condensed Financial   
    Statements

<CAPTION>
         <PAGE>
SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
          CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 (UNAUDITED)


                                         1995          1996
                                         ----          ----
<S>                                    <C>            <C>
REVENUES
 Product sales                     $   490,718      $ 480,065
 Other fees and interest                
  income                                69,516         64,461
                                     ---------        -------
 TOTAL REVENUES                        560,234        544,526
                                     ---------        -------
COSTS AND EXPENSES
 Cost of product sold                   78,835        312,197
 Research and development               31,726        345,953
 Selling, general and admin-        
  istrative                          2,516,641      3,212,425
 Interest expense and loan fees          7,550         81,910
                                     ---------      ---------
 TOTAL COSTS AND EXPENSES            2,634,752      3,952,485
                                     ---------      ---------
NET LOSS                           $(2,074,518)   $(3,407,959)
                                     =========      =========
WEIGHTED AVERAGE NUMBER OF 
 COMMON SHARES OUTSTANDING           9,325,043     19,331,000
                                    ==========     ==========

LOSS PER COMMON SHARE              $     (.22)    $      (.18)
                                    =========      ==========




     See accompanying Notes to Consolidated Condensed Financial     
     Statements

<CAPTION>
         <PAGE>
SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
       FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996



                                   1995          1996
                                ----------   -----------
<S>                             <C>           <C>
CASH FLOWS FROM OPERATING       
ACTIVITIES                    
 Net loss                     $ (2,074,518)  $(3,407,959)

 Adjustment to reconcile net
 loss to net cash used in op-
 erating activities:
   Cumulative foreign trans-
     lation adjustment              78,919       (13,455)
   Depreciation and amort-
     ization                       231,172       263,707
   Expenses satisfied with 
     issuance of shares            568,750        65,251
   Changes in operating assets 
     and liabilities:
    (Increase) decrease in 
     receivables                  (153,424)     (113,595)
    (Increase) decrease in 
     inventory                    (614,098)      (53,632)
    (Increase) decrease in 
     prepaid expenses                              9,469
    Increase (decrease) in 
     accounts payable
     and accrued expenses          (43,295)      176,765
                                   --------    ---------
    NET CASH USED IN 
    OPERATING ACTIVITIES        (2,006,494)   (3,046,539)
                                 ---------     ---------
CASH FLOWS FROM INVESTING 
ACTIVITIES
 Increase in other assets          (11,439)       (9,086)
 Purchase of property and 
   equipment                      (134,802)     (359,788)
                                 ----------    ---------
   NET CASH USED IN INVESTING 
   ACTIVITIES                     (146,241)     (368,874)
                                 ---------     ---------

<CAPTION>
        <PAGE>
SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
       FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996

                            (continued)

                                   1995          1996
                                   ----          ----
<S>                                <C>           <C>
CASH FLOWS FROM FINANCING 
ACTIVITIES
 Notes payable and interim 
 financing                          37,576       109,476
 Repayment of obligations
 under capital leases                            (17,521)
 Repayment of convertible
 debentures                                      (25,000)
 Sale of stock - private 
 placement and exempt 
 offering                        2,239,193   
Stock warrants and options 
 exercised                                     2,440,897
                                 ---------     ---------
 NET CASH PROVIDED BY                                
 FINANCING ACTIVITIES            2,276,769     2,507,852
                                ----------     ---------
NET INCREASE (DECREASE) 
 IN CASH                       $   124,034   $  (907,561)
CASH BALANCE, Beginning of 
 period                             96,431     2,688,014 
                                ----------    ----------
CASH BALANCE, End of period    $   220,465   $ 1,780,453 
                                ==========    ==========
SUPPLEMENTAL SCHEDULE OF 
 NONCASH INVESTING AND 
 FINANCING ACTIVITIES
 Shares issued in lieu of
 fees and expenses             $   568,750   $    65,251
 Conversion of debentures
  into common shares                37,500     2,760,000




 See accompanying Notes to Consolidated Condensed Financial       
 Statements
</TABLE>

        <PAGE>
SALIVA DIAGNOSTIC SYSTEMS, INC. AND SUBSIDIARIES
       NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION

   The accompanying consolidated condensed financial statements are
   unaudited but, in the opinion of the management of the Company,
   contain all adjustments, consisting of only normal recurring
   accruals, necessary to present fairly the financial position at
   September 30, 1996, the results of operations for the three months
   and nine months ended September 30, 1995 and 1996, and the changes
   in cash flows for the nine months ended September 30, 1995 and
   1996.  The consolidated balance sheet as of December 31, 1995 is
   derived from the Company's audited financial statements.  Certain
   information and footnote disclosures normally included in
   financial statements that have been prepared in accordance with
   generally accepted accounting principles have been condensed or
   omitted pursuant to the rules and regulations of the Securities
   and Exchange Commission, although management of the Company
   believes that the disclosures in these financial statements are
   adequate to make the information presented therein not misleading. 
   For further information, refer to the financial statements and
   notes thereto included in the Company's 1995 Form 10-KSB filed
   with the Securities and Exchange Commission.  Operating results
   for the nine month period ended September 30, 1996, are not
   necessarily indicative of the results that may be expected for the
   year ending December 31, 1996.


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

 Results of Operations:  Nine Months Ended September 30, 1996 

 The Company had total revenues of $544,526 and $560,234 for the
nine months ended September 30, 1996 and 1995, respectively.  

 Costs and expenses increased to $3,952,485 from $2,634,752 for
the nine months ended September 30, 1996 and 1995, respectively.  

 The Company incurred a net loss of $3,407,959 or $.18 per share,
for the nine months ended September 30, 1996, compared with a loss
of $2,074,518 or $.22 per share, in the year ago period.  Average
common shares outstanding were 19,331,000 in 1996 and 9,325,043 in
1995.

 Financial Condition

 The Company's working capital at September 30, 1996 was
$1,548,898 It had a working capital deficit of $290,228 at December
31, 1995.  The Company's current ratio was 3.03 to 1 at September
30, 1996 as compared to .91 to 1 at December 31, 1995.

 During the nine months ended September 30, 1996, net cash used
from the Company's operating activities was $3,046,539 as compared
to $2,006,494 of cash used in operating activities in the nine
months ended September 30, 1995.  

 Cash used in investment activities for the first nine months of
1996 was $368,874 as compared to cash used of $146,241 in the year
ago period.  

 Cash provided by financing activities in the nine months ended
September 30, 1996 was $2,507,852 as compared to cash provided from
these activities in the first nine months of 1995 of $2,276,769. 
The largest portion of cash provided was from the Company's private
offering of securities in each of the first nine months of 1995 and
1996.

 The Company has significant requirements for capital to continue
to fund its activities.  As a result of the above-described
activities, management believes it has adequate resources to fund
only limited activities for the next several months.  After this
period, the Company will be required to obtain additional capital
to continue to fund its activities.  There is no assurance,
however, that such additional capital will be available, or if
available, whether it will be available on terms acceptable to the
Company.


<PAGE>
                   Part II OTHER INFORMATION

Item 3.    Legal Proceedings

 In September 1996, the Company settled its lawsuit with Home
Access Health Corporation ("HAHC") which had been commenced in
January 1996 in Washington Superior Court, Clark County.  The
lawsuit involved a dispute relating to a series of license
agreements between the Company and HAHC.  The Company and HAHC
entered into a new license agreement in September 1996 (the
"License Agreement"), which superceded all prior license
agreements.  Under the terms of the License Agreement, the Company
granted to HAHC a license, which is exclusive for two years for HIV
applications (except for certain limitations) to use Omni-SAL, one
of the Company's products, in kits.  The license does not apply to
rapid testing.  The Company will receive a royalty of $.25 per
product for the first 1,000,000 products, $.15 per product for the
next 1,000,000 products and $.10 per product for products sold in
excess of 2,000,000 products.  The Agreement also specifies rates
at which HAHC can purchase Omni-SAL devices from the Company.


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

 On July 17, 1996, the Company held its annual shareholder's
meeting to vote for directors and to vote on two proposals.  The
Company elected David Barnes, Ronald L. Lealos, Kenneth J.
McLachlan, M. Joel Scheinbaum and Hans R. Vauthier as directors.

 The Company proposed to amend its Certificate of Incorporation to
increase the authorized number of shares to 40,000,000 and to
provide for a class of Series A Preferred Stock.  The proposal was
not approved by a majority of the outstanding shares; 3,407,768
votes were cast in favor of the proposal and 2,933,451 were
against.  The second proposal, adoption of a stock option plan, was
rescinded since the first proposal failed.

<PAGE>
                           SIGNATURE

 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.

                                   SALIVA DIAGNOSTIC SYSTEMS, INC.



Date: November 12, 1996            By:  s/ Ronald L. Lealos
                                        Ronald L. Lealos, President




                                   By:  s/ Kenneth J. McLachlan   
                                        Kenneth J. McLachlan
                                        Chief Financial Officer



















SALIVA\1OQ-sep.96