U.S. 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 December 31, 1997

          COMMISSION FILE NUMBER   0-20468


                  ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                  (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
      (Exact name of small business issuer as specified in its charter)



           Delaware                                         68-0195770
   (State or other jurisdiction of           (IRS Employer Identification No.)
    incorporation or organization)




                    629 J Street, Sacramento, CA  95814
                 (Address of principal executive offices)
    
                              (916) 325-9370
                       (Issuer's telephone number)


             (Former address if changed since last report)


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

Number of shares of  common  stock  outstanding  as  of  January  31, 1998:
25,842,453




<PAGE>2

PART I. FINANCIAL INFORMATION
Item 1.   Financial Statements



                 ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                 (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                        CONDENSED BALANCE SHEET
                            DECEMBER 31, 1997
                              (UNAUDITED)

ASSETS

Current assets:
  Cash                                                         $     142,842
  Accounts receivable, net                                           298,461
  Other current assets                                                69,673
                                                               --------------
    Total current assets                                             510,976

PROPERTY AND EQUIPMENT:
  Equipment                                                           12,908
  Furniture and fixtures                                             148,445
                                                               --------------
                                                                     161,353
  Accumulated depreciation and amortization                         (155,437)
                                                               --------------
    Property and equipment, net                                        5,916


                                                               $     516,892
                                                               --------------
                                                               --------------


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Notes payable to stockholders                                $   3,592,565
  Accounts payable to stockholders                                   351,484
  Accounts payable                                                   107,989
  Accrued payroll and related expenses                               307,763
  Accrued preferred stock dividends                                  428,751
  Other current liabilities                                           57,881
                                                               --------------
     Total current liabilities                                     4,846,433

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
  Preferred stock, $6.00 par value - 1,200,000
    shares authorized, 204,167 Series D shares
    issued and outstanding; liquidation preference
    value of $1,653,753                                            1,225,002
  Common stock, $0.01 par value - 100,000,000 shares
    authorized, 25,842,453 shares issued and outstanding             258,425
Additional paid-in capital                                        28,754,134
  Accumulated deficit                                            (34,567,102)
                                                               --------------
    Total stockholders' deficit                                   (4,329,541)
                                                               --------------

                                                               $     516,892
                                                               --------------
                                                               --------------



SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.




<PAGE>3

PART I. FINANCIAL INFORMATION
Item 1.   Financial Statements



                   ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                   (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                     CONDENSED STATEMENTS OF OPERATIONS
                                (UNAUDITED)


                                   THREE MONTHS              SIX MONTHS
                                  ENDED DECEMBER 31,      ENDED DECEMBER 31,
                                  1997         1996         1997       1996

Contract programming:
 Contract programming
   revenue                 $ 1,107,947  $   406,330  $ 2,029,689  $   767,258
 Programmer costs             (723,009)    (431,320)  (1,432,934)    (729,566)
 Start-up and other costs     (238,968)     (77,786)    (396,457)    (124,264)
                            -----------  -----------  -----------  -----------
  Contract programming
    gross profit               145,970     (102,776)     200,298      (86,572)
                            -----------  -----------  -----------  -----------

SYSTEM SERVICE:
 Service revenue                  -          72,151         -         165,885
 Cost of service                  -         (62,225)        -        (125,312)
                            -----------  -----------  -----------  -----------
  System service gross
    profit                        -           9,926         -          40,573
                            -----------  -----------  -----------  -----------

SELLING, GENERAL AND
  ADMINISTRATIVE              (353,703)    (233,245)    (687,488)    (445,498)
                            -----------  -----------  -----------  -----------


LOSS FROM OPERATIONS          (207,733)    (326,095)    (487,190)    (491,497)

OTHER INCOME (EXPENSE):
 Interest expense             (140,362)     (75,740)    (224,026)    (122,971)
 Other,  net                      -          (8,348)        -          (3,685)
                              (140,362)     (84,088)    (224,026)    (126,656)
                            -----------  -----------  -----------  -----------

NET LOSS                   $  (348,095) $  (410,183) $  (711,216) $  (618,153)
                            -----------  -----------  -----------  -----------
                            -----------  -----------  -----------  -----------

PREFERRED STOCK DIVIDENDS
  IN ARREARS                   (30,625)     (30,625)     (61,250)     (61,250)
                            -----------  -----------  -----------  -----------
Net loss applicable to
  common stockholders      $  (378,720) $  (440,808) $  (772,466) $  (679,403)
                            -----------  -----------  -----------  -----------
                            -----------  -----------  -----------  -----------

NET LOSS PER SHARE         $     (0.01) $     (0.02) $     (0.03) $     (O.03)
                            -----------  -----------  -----------  -----------
                            -----------  -----------  -----------  -----------

SHARES USED IN PER SHARE
  CALCULATIONS              25,829,309   25,263,317   25,811,394   25,244,961
                            -----------  -----------  -----------  -----------
                            -----------  -----------  -----------  -----------


SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.




<PAGE>4

PART I. FINANCIAL INFORMATION
Item 1.   Financial Statements



                ALTERNATIVE TECHNOLOGY RESOURCES, INC.
                (FORMERLY KNOWN AS 3NET SYSTEMS, INC.)
                  CONDENSED STATEMENTS OF CASH FLOWS
                            (Unaudited)


                                                        Six Months Ended
                                                           DECEMBER 31,
                                                          1997       1996

Net cash used in operating activities               $ (747,789)    $ (518,521)

Cash flows from investing activities:
 Sale of property and equipment                          2,061          6,165
                                                     ----------     ----------
Net cash provided by investing activities                2,061          6,165
                                                     ----------     ----------

Cash flows from financing activities:
  Proceeds from exercise of options and warrants        47,063         16,702
  Proceeds from notes payable to stockholders          805,303        500,510
  Payments on notes payable and capital leases         (23,539)       (31,473)
                                                     ----------     ----------
Net cash provided by financing activities              828,827        485,739
                                                     ----------     ----------

Net increase (decrease) in cash                         83,099        (26,617)
Cash at beginning of period                             59,743         52,106
                                                     ----------     ----------

Cash at end of period                               $  142,842     $   25,489
                                                     ----------     ----------
                                                     ----------     ----------







SEE ACCOMPANYING NOTES TO CONDENSED FINANCIAL STATEMENTS.





<PAGE>5

PART I. FINANCIAL INFORMATION
Item 1.   Financial Statements


              ALTERNATIVE TECHNOLOGY RESOURCES, INC.
              (formerly known as 3Net Systems, Inc.)
              Notes to Condensed Financial Statements
                         December 31, 1997

                            (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The  accompanying  unaudited   condensed  financial  statements  have  been
prepared in accordance with generally  accepted  accounting  principles for
interim financial information and pursuant to the rules and regulations  of
the  Securities  and Exchange Commission.  Accordingly, they do not include
all  of  the information  and  footnotes  required  by  generally  accepted
accounting  principles  for  complete  financial  statements.   For further
information,  refer  to  the  financial  statements  and  footnotes thereto
included in the Company's annual report on Form 10-KSB for  the fiscal year
ended June 30, 1997.

In the opinion of management, the unaudited condensed financial  statements
contain   all  adjustments  considered  necessary  to  present  fairly  the
Company's financial  position  at  December 31, 1997, results of operations
for the three and six month periods  ended  December 31, 1997 and 1996, and
cash  flows  for the six months ended December  31,  1997  and  1996.   The
results  for the  period  ended  December  31,  1997  are  not  necessarily
indicative  of the results to be expected for the entire fiscal year ending
June 30, 1998.

The financial  statements  and  notes  thereto also include the effect of a
one-for-ten consolidation of the Company's  outstanding  Common  Stock, par
value  $0.01  per  share,  which became effective on December 2, 1996.   In
addition, effective on December  2, 1996, the Company changed its name from
3Net Systems, Inc., to Alternative  Technology  Resources,  Inc.,  and  the
number of authorized shares of Common Stock was reduced from 200,000,000 to
100,000,000.

Certain amounts for the three and six month periods ended December 31, 1996
have been reclassified to conform with the December 31, 1997 presentation.

The report of independent auditors on the Company's June 30, 1997 financial
statements   includes   an   explanatory   paragraph  indicating  there  is
substantial  doubt  about the Company's ability  to  continue  as  a  going
concern.  The financial  statements  do  not  include  any  adjustments  to
reflect  the uncertainties related to the recoverability and classification
of assets  or the amounts and classification of liabilities that may result
from the inability of the Company to continue as a going concern.  Based on
recent steps  the  Company has taken to reduce its expenses and refocus its
operations, the Company  believes  that  it  has developed a viable plan to
address the Company's ability to continue as a  going concern and that this
plan will enable the Company to continue as a going concern through the end
of  fiscal  year  1998.   However,  considering, among  other  things,  the
Company's historical operating losses and its short history in the contract
computer programming industry, there  can  be  no  assurance that this plan
will be successfully implemented.

NOTE 2 - FINANCING ARRANGEMENTS

See  Part I, Item 2 "Management's Discussion and Analysis  and  Results  of
Operations -- Liquidity and Capital Resources.




<PAGE>6

PART I.   FINANCIAL INFORMATION
Item 2.     Management's Discussion and Analysis and Results of Operations


Management's Discussion and Analysis

The  following   discussion   provides   information   to   facilitate  the
understanding  and assessment of significant changes in trends  related  to
the financial condition  of  the Company and its results of operations.  It
should be read in conjunction  with  the Company's financial statements and
the notes thereto and other financial information included elsewhere in the
10-KSB for the fiscal year ended June  30,  1997.   Dollar amounts reported
have been rounded to the nearest thousand.

Overview

The  Company  was  founded in 1989 to develop and sell computer  integrated
laboratory systems ("LIS").   The  Company  operated  under  the  name 3Net
Systems,  Inc.  and was never successful in the LIS market.  Therefore,  in
fiscal 1996, the  Company  stopped new system development and later decided
to exit LIS entirely.

During fiscal 1997, the Company  changed its name to Alternative Technology
Resources, Inc. ("ATR").  It has since  focused  its  efforts entirely upon
its   computer   programmer   placement   business,  whereby  it   recruits
experienced,  qualified  computer programmers  primarily  from  the  former
Soviet Union, obtains necessary  visas,  and  places them for assignment in
the United States.

THE YEAR 2000 ISSUE

ATR has made an assessment of its computer programs and has determined that
it has no Year 2000 impairment in its computer  systems  developed in-house
and is relying on vendor declarations that their accounting  program has no
impairment related to the Year 2000 issue.

Results of Operation

Contract programming

CONTRACT   PROGRAMMING   REVENUE.   Contract  programming  revenue  results
primarily from sales of  programmer services.

Revenue  for the three and  six  month  periods  ended  December  31,  1997
increased   $702,000 or 173% and $1,262,000 or 165%, respectively, over the
same periods  of  the  previous year.  The increased revenue is a result of
having more programming  personnel  working  at  customer  sites during the
first half of fiscal 1998 compared to the same period during  fiscal  1997.
For the six months ended December 31, 1997 and 1996 there was an average of
58  and  28 programmers, respectively.  For the three months ended December
31, 1997 and  1996  there  was  an  average  of 61 and 29, respectively. In
addition, revenue increased due to an increase in the average billing rates
during fiscal 1998 compared to fiscal 1997.

PROGRAMMER COSTS.  Programmer costs are the salary,  other wage and benefit
costs of ATR's programmer employees.  Costs increased  68% and 138% for the
three months and six months ended December 31, 1997, respectively, compared
to  the  same  periods in fiscal 1997.  This increase is due  primarily  to
increasing the average number of programmers and to increasing salaries for
more experienced programmers.


<PAGE>7

PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis and Results of Operations


START-UP AND OTHER  COSTS.   Start-up  and  other  costs  are  the costs of
recruiting,  training,  and travel for programmer employees coming  to  the
United States from the Former Soviet Union for the first time,
relocation costs within the  United  States,  and  legal  and  other  costs
related  to  obtaining  and  maintaining  compliance  with  required visas,
postings and notifications.

Included  in  this  category of costs is compensation paid by ATR  whenever
programmer employees are hired and enter the United States or are relocated
once in the United States  but  before these programmers begin working at a
customer's work site.  There are  sometimes  periods  of up to several days
when  under  immigration  law,  ATR,  as  employer, must pay  a  programmer
employee at least 95% of prevailing wages for  his  or  her  specialty even
when the programmer is not placed.

ATR expenses start-up and other costs as incurred, which results  in timing
differences  between  the incurring of expense and recognition of resulting
revenue.  Such differences  may  be  particularly  evident  in  ATR's  case
because  of its relatively small revenue base and rapid growth.  The affect
may  be  particularly  noticeable  whenever  the  timing  of  placement  of
employees is such that the major start-up costs occur late in one reporting
period and the revenues appear in subsequent periods.

Start-up and  other  costs increased  $161,000 or 207% and $272,000 or 219%
in the three and six month  periods  ended December 31, 1997, respectively,
as  compared to the same periods in fiscal  1997.   Increases  are  due  to
placing or relocating more programmers during the first half of fiscal 1998
compared  to  the  first  half of fiscal 1997.  For the six and three month
periods ended December 31,  1997  there were 23 and 7 programmers placed or
relocated, respectively.  This compares  to  11 and 3 programmers placed or
relocated during the same periods last year.

CONTRACT  PROGRAMMING  GROSS  PROFIT.   The  gross   profit   on   contract
programming  revenue  was  13%  and 10% for the three and six month periods
ended December 31, 1997, respectively,  compared  to  negative  margins  of
(25%)  and  (11%)  in  the  same  periods  of fiscal 1997.  These increased
margins  are  primarily  due  to  the  increase  in  the  total  number  of
programmers  generating  revenues at higher average  billing  rates  during
fiscal 1998 compared to fiscal 1997.

System Service

In  fiscal 1997, the Company  phased  out  all  LIS  software  support  and
hardware services.  As a result, there are no revenues or costs from system
service in fiscal 1998.

Selling, General and Administrative Expenses

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES  ("SG&A").   SG&A expenses
increased  $120,000 or  52% and $242,000 or 54% for the three and six month
periods ended December 31, 1997, respectively, compared to the same periods
of fiscal 1997.  This increase is due to increasing the average  number  of
employees  currently  assigned  to  administrative functions during the six
months ended December 31, 1997 to 11  compared  to 4 for the same period in
fiscal 1997.




<PAGE>8

PART I.   FINANCIAL INFORMATION
Item 2.     Management's Discussion and Analysis and Results of Operations


Other Income (Expense)

INTEREST EXPENSE.  Interest expense increased  $65,000  and $101,000 in the
three and six month periods ended December 31, 1997, respectively  compared
to  the  same periods in fiscal 1997 due to a net increase in notes payable
and other debt of  $1.3 million since December 31, 1996.

Income Taxes

As of June  30, 1997, the Company had a net operating loss carryforward for
federal and state  income  tax  purposes  of  $24  million and $12 million,
respectively.  The federal net operating loss carryforward  expires  in the
years  2006  through  2012  and  the  state net operating loss carryforward
expires in 1998 through 2002.  The Company  expects that annual limitations
on the use of loss carryforwards generated before  September  13, 1993 will
result in  $3.6 million of net operating loss carryovers which  may  not be
utilized prior to the expiration of the carryover period.

Net Loss

Net  loss  increased  $93,000  or 15% for the six months ended December 31,
1997  compared to the same period  in  fiscal  1997.   Net  loss  decreased
$62,000 or 15% for the quarter ended December 31, 1997 compared to the same
quarter in fiscal 1997.

Net Loss Per Share

The Company's  net  loss  per  share has been computed by dividing net loss
after deducting Preferred Stock  dividends  ($30,625  in  each of the three
months  ended December 31, 1997 and 1996, and $61,250 in each  of  the  six
months ended  December  31,  1997  and  1996, respectively) by the weighted
average number of shares of Common Stock  outstanding  during  the  periods
presented, including Common Stock to be issued, after giving effect to  the
Company's  one-for-ten  consolidation  of  Common  Stock  approved  by  the
stockholders on November 21, 1996, and effective December 2, 1996.

Liquidity and Capital Resources

Since  its inception, the Company has used a combination of equity and debt
financing  and  internal  cash flow to fund operations and finance accounts
receivable.   The Company expects  to  generate  positive  cash  flow  from
operations during  fiscal  1998,  but  not  at levels sufficient to pay off
current  obligations  and  fund  rapid  growth  of  its  contract  computer
programming  and  consulting services; therefore the  Company  contemplates
needing to raise additional financing during fiscal 1998.

The report of independent auditors on the Company's June 30, 1997 financial
statements  includes   an   explanatory   paragraph   indicating  there  is
substantial  doubt  about  the  Company's ability to continue  as  a  going
concern.   The financial statements  do  not  include  any  adjustments  to
reflect the  uncertainties related to the recoverability and classification
of assets or the  amounts and classification of liabilities that may result
from the inability of the Company to continue as a going concern.  Based on
the steps the Company  has  taken  to  reduce  its expenses and refocus its
operations, the Company believes that it has developed  a  viable  plan  to
address  the Company's ability to continue as a going concern and that this
plan will enable the Company to continue as a going concern through the end


<PAGE>9

PART I.  FINANCIAL INFORMATION
Item 2.  Management's Discussion and Analysis and Results of Operations



of fiscal  year  1998.   However,  considering,  among  other  things,  the
Company's historical operating losses and its short history in the contract
computer  programming  industry,  there  can be no assurance that this plan
will be successfully implemented.

The Company received short-term financing  in  the  form  of  notes payable
totaling  $1.0 million during fiscal 1997 and totaling $0.7 million  during
fiscal 1996  from  two  stockholders, James W. Cameron, Jr. ("Cameron") and
Dr. Max Negri ("Negri"),  to  fund  its  operations.   The Company borrowed
another $0.8 million from these stockholders during the  first  six  months
ended December 31, 1997.  These notes mature on December 31, 1998 and  bear
interest at 10.25%.  The Company must obtain additional funds during fiscal
1998 in order to meet its obligations while attempting to grow revenues  to
a  level  necessary to generate cash from operations.  Although the Company
has  not  entered  into  any  written  agreement  with  Cameron  or  Negri,
management  believes, based on discussions with these two individuals, that
these two stockholders  will  continue  to finance the Company's operations
during  fiscal  1998.  In December 1997, Cameron  and  Negri  extended  the
maturity date on  $2.6  million in notes payable from December 31, 1997, to
the earlier of December 31,  1998,  or  such  time  as  the Company obtains
equity  financing.  Although the Company has not entered into  any  written
agreement  with Cameron or Negri, management believes, based on discussions
with these two  individuals,  that  Cameron and Negri will continue to fund
operations and extend the maturity dates of the various notes payable until
such time as the Company can repay the  notes.   However,  there  can be no
assurance  that  events  may  arise  which  may  affect these stockholders'
ability  to  finance  the  Company  or  that  the  Company  may  experience
significant and unanticipated cash flow problems which  may cause these two
stockholders  to  reconsider  their  investment.  Further, if  the  Company
experiences significant cash flow problems,  the Company may be required to
reduce  the level of its operating activities or  be  forced  into  seeking
protection under federal bankruptcy laws.

On April  21, 1997, the Company issued a note payable (the "Straight Note")
to Cameron for  $1,000,000 in accordance with a Reimbursement Agreement the
Company signed  on  February  28,  1994.   Terms of the note provide for an
interest rate of 9.5% and monthly interest payments.   No  maturity date is
stated  in  the  note;  however,  under  the  terms  of  the  Reimbursement
Agreement,  upon  written  demand  by  Cameron,  the Straight Note will  be
replaced  by  a convertible note (the "Convertible Note")  in  a  principal
amount equal to  the  Straight  Note and bearing interest at the same rate.
The conversion ratio of the Convertible  Note is equal to 20% multiplied by
the average trading price of the Company's  Common Stock over the period of
ten  trading  days ending on the trading day next  preceding  the  date  of
issuance of such Convertible Note.

Effects of Inflation

The Company's most  significant cost is personnel.  To the extent personnel
costs increase, management  of  the  Company believes that customer billing
rates can be increased to cover such personnel cost increases.






<PAGE>10

PART II.    OTHER INFORMATION



Items 1, 2, 3

None

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

An  annual  meeting of shareholders was  held  November  18,  1997  at  the
Company's offices in Sacramento, California.  The shareholders voted on the
following matters and approved:

1)   The election  of  W.  Robert Keen, Edward L. Lammerding, and Thomas W.
O'Neil, Jr., as directors of  the Company:  25,224,142 shares were received
in favor of Mr. Keen and 18,242  shares  were  withheld;  25,223,142 shares
were received in favor of Mr. Lammerding and 19,242 shares  were  withheld;
and  25,224,542  shares  were  received  in  favor of Mr. O'Neil and 17,842
shares were withheld.

2)   The Alternative Technology Resources, Inc.  1997 Stock Option Plan was
approved by a vote of 20,470,280 shares in favor,  38,145  shares  opposed,
11,785 shares abstaining, and 4,722,174 shares not voting.

Item 5

None

Item 6     Exhibits and Reports on Form 8-K

Exhibit
NUMBER    DESCRIPTION OF DOCUMENT

10.32     Third Addendum to Lease between James W. Cameron, Jr., and the
          Registrant, dated January 5, 1998.



Reports on Form 8-K

There were no reports on Form 8-K filed during the last quarter of the
period covered by this report.




<PAGE>11





                            SIGNATURES



In accordance with 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.

ALTERNATIVE TECHNOLOGY RESOURCES, INC.
(formerly known as 3Net Systems, Inc.)
          (Registrant)




Dated:  February 5, 1998               W. ROBERT KEEN

                                        W. Robert Keen
                                        Chief Executive Officer
                                        (Principal Executive Officer)






Dated:  February 5, 1998               EDWARD L. LAMMERDING
                                        Edward L. Lammerding
                                        Chief Financial Officer
                                        (Principal Financial Officer)