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 MARCH 31, 2004.

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

          FOR THE TRANSITION PERIOD FROM ____________ TO _____________


                         Commission File Number 0-21931

                                 AMPLIDYNE, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


                DELAWARE                                22-3440510
     -------------------------------                 ----------------
     (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                 Identification No.)


                               59 LaGrange Street
                            Raritan, New Jersey 08869
                    (Address of principal executive offices)


                                 (908) 253-6870
                           ---------------------------
                           (Issuer's telephone number)


      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 ___

The number of shares outstanding of the Issuer's Common Stock, $.0001 Par Value,
as of May 17, 2004 was 10,376,500.


<PAGE>

                                 AMPLIDYNE, INC.
                                   FORM 10-QSB
                        THREE MONTHS ENDED MARCH 31, 2004

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1    FINANCIAL STATEMENTS (UNAUDITED):

          Balance Sheets..........................................1-2

          Statements of Operations..................................3

          Statement of Cash Flows...................................4

          Statement of Changes in Stockholder's Equity..............5

          Notes to Financial Statements..........................6-10

Item 2    Management's Discussion and Analysis of Financial
          Condition and Results of Operations...................11-13

Item 3.   Controls and Procedures..................................13


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.........................................14

Item 2.  Change in Securities......................................14

Signatures.........................................................15

Certification......................................................16

Exhibit 99.1.......................................................17


<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
ASSETS
                                                                          March 31    December 31
                                                                            2004          2003
                                                                          ---------    ---------
<S>                                                                       <C>          <C>
CURRENT ASSETS
         Cash and cash equivalents                                        $  20,116    $      --
         Accounts receivable, net of allowance for doubtful accounts of
           $275,000 and  $143,000 in 2004 and 2003, respectively            140,104       91,482
         Inventories                                                        378,403      407,709
         Loan receivable - officer                                            1,000           --
         Prepaid expenses and other                                              --       12,307
                                                                          ---------    ---------

                  Total current assets                                      539,623      511,498
                                                                          ---------    ---------

PROPERTY AND EQUIPMENT - AT COST
         Machinery and equipment                                            567,906      565,629
         Furniture and fixtures                                              43,750       43,750
         Autos and trucks                                                    66,183       66,183
         Leasehold improvements                                               8,141        8,141
                                                                          ---------    ---------
                                                                            685,980      683,703
         Less accumulated depreciation and amortization                    (656,627)    (646,627)
                                                                          ---------    ---------
                                                                             29,353       37,076
                                                                          ---------    ---------

SECURITY DEPOSITS AND OTHER NON-CURRENT ASSETS                               35,625       35,625
                                                                          ---------    ---------

                                                                          $ 604,601    $ 584,199
                                                                          =========    =========
</TABLE>

Note:  The balance  sheet at December 31, 2003 has been derived from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.


   The accompanying notes are an integral part of these financial statements

                                       -1-

<PAGE>

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS


<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY

                                                              March 31      December 31,
                                                                2004            2003
                                                            ------------    ------------
<S>                                                         <C>             <C>
CURRENT LIABILITIES
         Overdraft                                          $         --    $     17,855
         Advances pursuant to financing agreement                 99,220              --
         Customer advances                                        60,000          60,000
         Accounts payable                                        570,120         411,171
         Accrued expenses                                        107,645          81,486
         Accrued settlement of litigation                        140,000         170,000
         Loans payable - officers                                305,689         256,997
                                                            ------------    ------------
                         Total current liabilities             1,282,674         997,509

Notes payable, convertible into common
  stock at the holders' option                                    21,273          20,973
                                                            ------------    ------------

                         TOTAL LIABILITIES                     1,303,947       1,018,482
                                                            ------------    ------------

OTHER COMMENTS - NOTE I

STOCKHOLDERS' EQUITY
         Common stock - authorized, 25,000,000 shares
             of $.0001 par value; shares 10,376,500
             and 10,376,500 shares issued and outstanding
             at March 31, 2004 and December 31,
             2003, respectively                                    1,038           1,038
         Additional paid-in capital                           22,494,854      22,494,854
         Accumulated deficit                                 (23,195,238)    (22,930,175)
                                                            ------------    ------------
                                                                (699,346)       (434,283)
                                                            ------------    ------------

                                                            $    604,601    $    584,199
                                                            ============    ============
</TABLE>

Note:  The balance  sheet at December 31, 2003 has been derived from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.


    The accompanying notes are an integral part of these financial statements

                                       -2-

<PAGE>

                                 AMPLIDYNE, INC.
                            STATEMENTS OF OPERATIONS
                           THREE MONTHS ENDED MARCH 31

                                                       Three Months Ended
                                                            March 31

                                                      2004            2003
                                                  ------------    ------------
Net sales                                         $    315,367    $    509,608
Cost of goods sold                                     288,400         278,857
                                                  ------------    ------------

                  Gross profit                          26,967         230,751

Operating expenses
         Selling, general and administrative           213,004         193,731
         Research, engineering and development          79,526          97,142
                                                  ------------    ------------

                  Operating loss                      (265,563)        (60,122)

Nonoperating income (expenses)
         Interest income and other income                   --               2
         Interest expense                                 (300)            (69)
         Gain on sale of property and equipment          4,000              --
                                                  ------------    ------------

                  Loss before income taxes            (261,863)        (60,189)

Provision for income taxes                               3,200              --
                                                  ------------    ------------

                  NET LOSS                        $   (265,063)   $    (60,189)
                                                  ============    ============

Net loss per share - basic and diluted            $      (0.03)   $      (0.01)
                                                  ============    ============

Weighted average number of shares outstanding       10,376,500      10,143,167
                                                  ============    ============


    The accompanying notes are an integral part of these financial statements

                                       -3-

<PAGE>

                                 AMPLIDYNE, INC.
                            STATEMENTS OF CASH FLOWS
                           THREE MONTHS ENDED MARCH 31

<TABLE>
<CAPTION>

                                                                              Three Months Ended
                                                                                    March 31

                                                                               2004         2003
                                                                             ---------    ---------
<S>                                                                          <C>          <C>
Cash flows from operating activities:

Net Loss                                                                     $(265,063)   $ (60,189)
                                                                             ---------    ---------

Adjustments to reconcile net loss to net cash used in operating activities
                  Depreciation and amortization                                 10,000        7,400
                  Gain of sale of property & equipment                          (4,000)          --
                  Provision for doubtful accounts                               28,260
                  Interest accrued on convertible promissory note                  300
                  Salary deferred, added to officer loans                       30,692       20,500
                  Changes in assets and liabilities
                           Accounts receivable                                 (76,882)      34,096
                           Inventories                                          29,306        1,977
                           Prepaid expenses and other assets                    12,307       (4,243)
                           Customer advances                                        --      100,000
                           Accounts payable and accrued expense                155,108      (95,275)
                                                                             ---------    ---------

                                    Total adjustments                          185,091       64,455
                                                                             ---------    ---------

                   Net cash provided (used) for operating activities           (79,972)       4,266
                                                                             ---------    ---------

Cash flows from investing activities:
         Loans to officers                                                      (1,000)          --
         Proceeds on sale of property & equipment                                4,000           --
         Purchase of property and equipment                                     (2,277)          --
                                                                             ---------    ---------
                  Net cash provided by (used for) investing activities             723           --
                                                                             ---------    ---------

Cash flows from financing activities:
         Overdraft                                                             (17,855)     (11,939)
         Payment of lease obligations                                               --       (2,041)
         Officer loans                                                          18,000        9,500
         Proceeds from convertible promissory note                                  --       20,000
         Advances pursuant to financing agreement (Note C. 2.)                  99,220           --
                                                                             ---------    ---------

                  Net cash provided by financing activities                     99,365       15,520
                                                                             ---------    ---------

                  NET INCREASE (DECREASE) IN CASH                               20,116       19,786

Cash (overdraft) and cash equivalents beginning of period                           --           --
                                                                             ---------    ---------

Cash and cash equivalents at end of period                                   $  20,116    $  19,786
                                                                             =========    =========

Supplemental disclosures of cash flow information:

         Cash paid for: Interest                                             $      --    $      --
                        Income taxes                                         $      --    $      --
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -4-


<PAGE>

                                 AMPLIDYNE, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY
       YEAR ENDED DECEMBER 31, 2003 AND THREE MONTHS ENDED MARCH 31, 2004

<TABLE>
<CAPTION>
                                                                Preferred Stock                 Common Stock
                                                           -------------------------     -------------------------
                                                             SHARES       PAR VALUE        SHARES       PAR VALUE
                                                           ----------     ----------     ----------     ----------
<S>                                                        <C>            <C>             <C>           <C>
BALANCE AT DECEMBER 31, 2002                                       --     $       --      9,676,500     $      968

Net loss for the year ended December 31, 2003

Issuance of common stock in connection with
litigation settled in the year ended December 31, 2002                                      700,000             70
                                                           ----------     ----------     ----------     ----------

BALANCE AT DECEMBER 31, 2003                                       --             --     10,376,500          1,038

Net loss for the three months ended March 31, 2004
                                                           ----------     ----------     ----------     ----------

BALANCE AT MARCH 31, 2004                                          --     $       --     10,376,500     $    1,038
                                                           ==========     ==========     ==========     ==========
</TABLE>

<TABLE>
<CAPTION>
                                                           ADDITIONAL
                                                             PAID-IN          ACCUMULATED      SUBSCRIPTIONS
                                                             CAPITAL            DEFICIT          RECEIVABLE         TOTAL
                                                           ------------      ------------      ------------     ------------
<S>                                                        <C>               <C>               <C>              <C>
BALANCE AT DECEMBER 31, 2001                               $ 22,494,924      $(21,949,679)     $         --     $    546,213

Net loss for the year ended December 31, 2003                                    (980,496)                          (980,496)

Issuance of common stock in connection with
litigation settled in the year ended December 31, 2002              (70)                                                  --
                                                           ------------      ------------      ------------     ------------

BALANCE AT DECEMBER 31, 2003                                 22,494,854       (22,930,175)               --         (434,283)

Net loss for the three months ended March 31, 2004                               (265,063)                          (265,063)
                                                           ------------      ------------      ------------     ------------

BALANCE AT MARCH 31, 2004                                  $ 22,494,854      $(23,195,238)     $         --     $   (699,346)
                                                           ============      ============      ============     ============
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -5-

<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2004

NOTE A  - ADJUSTMENTS

      In the opinion of management,  all adjustments,  consisting only of normal
recurring  adjustments  necessary  for  a  fair  statement  of  (a)  results  of
operations for the six and three month periods ended March 31, 2004 and 2003 (b)
the  financial  position at March 31, 2004 (c) the  statements of cash flows for
the six and three  month  period  ended  March  31,  2004 and 2003 , and (d) the
changes in stockholders'  equity for the three month period ended March 31, 2004
have been made.  The results of operations  for the three months ended March 31,
2004 are not  necessarily  indicative of the results to be expected for the full
year.

NOTE B - UNAUDITED INTERIM FINANCIAL INFORMATION

      The  accompanying  unaudited  financial  statements  have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information.  Accordingly, they do not include all the information and footnotes
required by generally accepted accounting  principles for financial  statements.
For further  information,  refer to the audited  financial  statements and notes
thereto for the year ended  December  31, 2003  included in the  Company's  Form
10-KSB filed with the Securities and Exchange Commission on April 14, 2004.

      The Company's financial  statements have been presented on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the normal course of business.  The liquidity of the Company has
been adversely  affected in recent years by significant  losses from operations.
As further  discussed in Note F, the Company incurred losses of $265,063 for the
three months ended March 31,  2004,  has limited cash  reserves and has seen its
working  capital  decline by $257,040 to a deficiency  of  $(743,051)  since the
beginning of the fiscal year. Current liabilities exceed cash and receivables by
$1,122,454  indicating  that the  Company  will  have  difficulty  meetings  its
financial  obligations for the balance of this fiscal year.  These factors raise
substantial  doubt as to the Company's  ability to continue as a going  concern.
Recently,  operations have been funded by loans from the Chief Executive Officer
and costs have been cut through substantial reductions in labor and operations.

      As further discussed in Note F, management is seeking additional financing
and intends to  aggressively  market its products,  control  operating costs and
broaden its product base through enhancements of products.  The Company believes
that these  measures may provide  sufficient  liquidity  for it to continue as a
going concern in its present form. Accordingly,  the financial statements do not
include any adjustments  relating to the  recoverability  and  classification of
recorded  asset amounts or the amount and  classification  of liabilities or any
other  adjustments  that  might be  necessary  should  the  Company be unable to
continue as a going concern in its present form.


                                      -6-
<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2004


NOTE C - STOCKHOLDERS' EQUITY

1.    WARRANTS AND OPTIONS

      At March 31, 2004, the following 945,000 warrants, remained outstanding:

      (1)   20,000 exercisable at $1.00 through May 2010

      (2)   20,000 exercisable at $7.00 through December 2004

      (3)   30,000 exercisable at $6.00 through November 2004

      (4)   50,000 exercisable at $2.00 through December 2004

      (5)   50,000 exercisable at $4.00 through December 2004

      (6)   16,000 exercisable at $1.75 through December 2004

      (7)   41,500 exercisable at $1.80 through July 31, 2004

      (8)   207,500 exercisable at $3.00 through July 31, 2004

      (9)   55,000 exercisable at $1.20 through September 30, 2004

      (10)  300,000 exercisable at $2.00 through December 31, 2005

      (11)  75,000 exercisable at $.96 through March 2007

      (12)  80,000 exercisable at $1.50 through December 2004.

      At March 31, 2004, the Company had employee  stock options  outstanding to
acquire 2,221,000 shares of common stock at exercise prices of $0.15 to $3.25.

2.    SERIES C CONVERTIBLE PREFERRED STOCK

      On January 28,  2004,  the Company  closed a $0.1 million  financing  from
Phoenix  and Phoenix  Opportunity  Fund III,  L.P.  ("Phoenix  III"),  which are
managed by Phoenix Capital  Holdings.  Pursuant to the terms of the subscription
agreement  between the Company and Phoenix,  Phoenix agreed to make an aggregate
investment  of  approximately  $100,000 in the  Company in exchange  for 282,700
shares of Series C Convertible Preferred Stock,  representing  approximately 80%
of the outstanding stock of the Company on a fully diluted basis. As the Company
would need to amend its certificate of  incorporation  or effect a reverse stock
split in order to have  sufficient  authorized  shares to  complete  the  equity
financing,  Phoenix was to make an initial  investment of approximately  $20,000
intended to be in exchange for 54,325 shares of Series C  Convertible  Preferred
Stock of the Company,  with the remaining portion of the equity investment to be
completed  after the  recapitalization.  The  preferred  shares  were not issued
because the Company is not in good standing with the State of Delaware and could
not amend its certificate of incorporation to authorize the new shares.

      Phoenix also  entered into a stock  restriction  agreement  with  Devendar
Bains,  pursuant to which Mr. Bains issued an irrevocable proxy to Phoenix until
the recapitalization is completed,  which,  together with the shares received in
connection with the initial investment, gives Phoenix effective control over 53%
of the Company's  voting stock. In connection  with the investment,  Phoenix III
has  agreed to loan to the  Company up to $0.4  million.  The loan is secured by
substantially  all of the  assets of the  Company.  The  Company  has drawn down
approximately  $99,220 of the loan.  $50,000 of the original loan commitment had
been placed into an escrow fund to be made available at such time as the Company
completes its  recapitalization,  but Phoenix  allowed the draw down without the
recapitalization  having taken place.  The Company has been allowed to draw down
$99,220  (including  the $20,000  intended  to be in  exchange  for the Series C
Convertible Preferred Stock) without completing the recapitalization. Generally,
the remaining  portion of the  commitment  is reserved for specific,  enumerated
purposes,  and Phoenix III retains substantial  discretion over the availability
of the funds.

      The Company and Phoenix are presently in serious  negotiations  to rescind
the financing and stock purchase agreements. Pursuant to these negotiations, the
Phoenix  principals  intend to resign their board and officer positions with the
Company.  It is expected that to effectuate  the recision,  the Company will pay
back to Phoenix $100,000.  Phoenix is requesting that the Company be required to
pay for its efforts and expenses,  with such amount proposed to be approximately
$40,000, to be satisfied in the form of an interest bearing promissory note with
a tentative  maturity date in May 2005.  Phoenix has further requested that such
note be substantially secured by Company assets.

      The  Company  has   identified  a  potential   replacement   investor  and
discussions  are in  advanced  stages.  Under  the  terms of a  preliminary  and
unsigned  agreement,  the  potential  new investor  would advance the Company an
aggregate of $500,000 initially in the form of loans expected to be in three (3)
installments.  The first installment is expected to be $150,000 and is scheduled
to be received  upon  signing of the  agreement.  The  proposed  agreement  also
provides  for an advance of $50,000 to be  received  shortly  after the  initial
installment  and $300,000 to be received in October  2004.  The entire  $500,000
advance is  expected  to be payable  immediately  upon  written  demand for such
payment;  provided,  however, that a demand cannot be made prior to December 31,
2004,  unless the Company is in default of the Note Purchase  Agreement  between
the Holder and the Company.  The proposed agreement also provides for the amount
advanced to be converted into Series C Convertible  Preferred  Stock which would
be convertible into common stock  representing 80% of the issued and outstanding
capital stock of the Company.

                                      -7-
<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2004


NOTE D - LOSS PER SHARE

      The Company  complies with the  requirements  of the Financial  Accounting
Standards  Board issued  Statement of Financial  Accounting  Standards  No. 128,
"Earnings per Share" ("SFAS No. 128").  SFAS No. 128 specifies the  compilation,
presentation  and  disclosure  requirements  for earnings per share for entities
with publicly held common stock or potential  common stock.  Net loss per common
share - basic and diluted is determined by dividing the net loss by the weighted
average number of common stock outstanding.

      Net loss per common  share - diluted  does not  include  potential  common
shares  derived from stock  options and  warrants  (see Note C) because they are
antidilutive.

NOTE E - LITIGATION

      From time to time,  the Company is party to what it  believes  are routine
litigation and proceedings that may be considered as part of the ordinary course
of its  business.  Except for the  proceedings  noted below,  the Company is not
aware of any pending litigation or proceedings that could have a material effect
on the Company's results of operations or financial condition.

1. A customer filed a complaint in the Circuit Court of the Eighteenth  Judicial
District  of the  State of  Florida  on  January  23,  1997  alleging  breach of
contract.  During  2000,  the Company  settled  with that  customer at a cost of
$175,000;  $25,000  is to be paid  quarterly  over two years.  $95,000  remained
unpaid at March 31, 2004.

2. The  Company  (as well as an  officer  and  director  of the  Company)  was a
defendant  in a  complaint  brought in the  Superior  Court of New  Jersey,  Law
Division,  Somerset  County,  In  January  2003,  the  Company  entered  into  a
Stipulation of Settlement  and Release before the Court. A remaining  balance of
$45,000 as of March 31, 2004 is payable in full by May 28, 2004.  The Company is
delinquent  with $20,000 of the balance  and, as a result,  is in default of the
settelemnt  agreement.  Default of the  agreement  could result in an additional
cost to the  Company  of  $95,000  if it  remains  uncured,  which  would have a
material adverse financial impact if the default provisions are exercised.

3. In April 2004, a law firm filed a judgment  against the Company in the amount
of  approximately  $40,000 in connection with  non-payment of legal fees owed to
it.  Inasmuch  as  this  is a  perfection  of  an  already  recorded  liability,
management does not believe that the judgment will have a material impact on the
financial position of the Company.


                                      -8-
<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2004


NOTE F - LIQUIDITY

      The Company's financial  statements have been presented on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in the normal course of business.  The liquidity of the Company has
been adversely  affected in recent years by significant  losses from operations.
The Company has  incurred  losses of $265,063  and $60,189 for the three  months
ended March 31, 2004 and 2003, respectively.

      With  little  remaining  cash  and  no  near  term  prospects  of  private
placements,  options or  warrant  exercises  and  reduced  revenues,  management
believes that the Company will have great difficulty meeting its working capital
and litigation  settlement  obligations over the next 12 months.  The Company is
presently  dependent on cash flows  generated from sales and loans from officers
to meet our obligations.  Our failure to consummate a merger with an appropriate
partner or to  substantially  improve our  revenues  will have  serious  adverse
consequences  and,  accordingly,  there is  substantial  doubt in our ability to
remain in business over the next 12 months.  There can be no assurance  that any
financing  will be available to the Company on acceptable  terms,  or at all. If
adequate  funds are not available,  the Company may be required to delay,  scale
back or eliminate its research,  engineering  and  development or  manufacturing
programs or obtain funds through  arrangements  with partners or others that may
require  the  Company to  relinquish  rights to certain of its  technologies  or
potential  products or other assets.  Accordingly,  the inability to obtain such
financing  could  have a  material  adverse  effect on the  Company's  business,
financial condition and results of operations.

Management's plans for dealing with the foregoing matters include:

      o  Increasing  sales  of its high  speed  internet  connectivity  products
      through both individual customers, strategic alliances and mergers.

      o Decreasing  the  dependency on certain major  customers by  aggressively
      seeking other customers in the amplifier markets;

      o Partnering  with  significant  companies to jointly  develop  innovative
      products,  which has yielded orders with multinational  companies to date,
      and which are expected to further expand such relationships;

      o Reducing costs through a more  streamlined  operation by using automated
      machinery to produce components for our products;

      o Deferral of payments of officers' salaries, as needed;

      o Selling  remaining net operating  losses  applicable to the State of New
      Jersey, pursuant to a special government high-technology incentive program
      in order to provide working capital, if possible;

      o Reducing overhead costs and general expenditures.

      o Merging with another  company to provide  adequate  working  capital and
      jointly develop innovative products.

NOTE G - OFFICER LOANS

      As of March 31,  2004,  the Company owes  $244,908 to the Chief  Executive
Officer for loans and unpaid  salaries.  During the three months ended March 31,
2004, the Chief Executive Officer advanced $18,000 to the Company. Additionally,
salaries of $23,192 were deferred for this quarter


                                      -9-
<PAGE>


NOTE H - SEGMENT INFORMATION

      The Company commenced its wireless Internet  connectivity  business in the
summer of 2000.  The Company does not measure its operating  results,  assets or
liabilities by segment.  However,  the following limited segment  information is
available:

<TABLE>
<CAPTION>
                                Three Months      Three Months
                                    Ended            Ended        Year Ended
                                  March 31         March 31       December 31,
                                    2004             2003             2003
                                 ----------       ----------       ----------
<S>                              <C>                 <C>           <C>
Sales - external
         Amplifier               $  290,332          445,037       $1,128,453
         Internet business           25,035           64,571          222,772
                                 ----------       ----------       ----------

                                 $  315,367       $  509,608       $1,351,225
                                 ==========       ==========       ==========

Inventory                                --
         Amplifier               $  262,973       $  442,069       $  248,575
         Internet business          115,430          482,667          159,134
                                 ----------       ----------       ----------

                                 $  378,403       $  924,736       $  407,709
                                 ==========       ==========       ==========
</TABLE>


NOTE I -- OTHER COMMENTS

1.    IMPAIRMENT OF CORPORATE GOOD STANDING

      The Company is delinquent with certain franchise taxes and filing fees for
the State of Delaware.  Consequently,  this  delinquency  affects the  Company's
ability to amend its  certificate of  incorporation,  issue new classes of stock
and,  reorganize  its capital  structure  among other  potential  ramifications.
Additionally,  the Company is delinquent in paying its transfer agent, which may
limit transferability of shares.

2.    NOTICE OF OPPOSITION ON TRADEMARK

      The  Company's  registration  of the Ampwave  trademark was opposed at the
U.S. Patent Office.  The Company has settled with the opposing party by agreeing
to stop using the  Ampwave  name after a period of one (1) year from the date of
signing,  which has not as yet  occurred.  Sales  under the  Ampwave  label were
$25,035 for the three months ended March 31, 2004.  Management believes that the
settlement will have no material financial effect.

3.    PREMISES RENT DELINQUENCY

      On May 12, 2004, The Company and an officer entered into an agreement with
the landlord of its premises  whereby the landlord  agreed not to proceed with a
complaint for the possession of the property due to delinquent  rental  payments
of $25,200 in exchange  for: the payment of $10,000;  the personal  guarantee of
the officer and his wife and; full payment of the balance of the arrears by June
18, 2004.


                                      -10-
<PAGE>

                                 AMPLIDYNE, INC.
                                 MARCH 31, 2004


PART I - FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF  OPERATIONS - THE THREE MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE
MONTHS ENDED MARCH 31, 2003.

Revenues for the three months  ended March 31, 2004  decreased by $194,241  from
$509,608 to $315,367,  or 38% compared to the three months ended March 31, 2003.
Coupled  with  the  increased   production   costs,  the  first  quarter  losses
significantly increased compared with the first quarter of last year.

The  majority of the  amplifier  sales for the three months ended March 31, 2004
were  obtained  from the  Wireless  Local  Loop  amplifier  products  to a major
European customer.

The Company has continued to develop its IMT 2000  amplifiers  for the worldwide
3G market, however,  deployment of this technology has been delayed. The Company
has focused its sales and marketing  efforts in the more stable  United  States,
European and Canadian markets.

Cost of sales was  $288,400  or 91% of sales  compared  to 55%  during  the same
period for 2003.  The  decline in gross  margin was  principally  due to pricing
pressures and increased material costs. The Company is continuing to assess cost
reduction of its products and sales volume increases to improve gross margins in
2004.

Selling,   general   and   administrative   expenses   (excluding   stock  based
compensation)  increased in 2004 by $19,273 to $213,004 from $193,731,  in 2003.
Expressed as a percentage  of sales,  the  selling,  general and  administrative
(SG&A) expenses (excluding stock based compensation) were 68% in 2004 and 38% in
2003.  Most of the SG&A expenses are fixed and management has cut costs about as
low as  operations  can  sustain.  Increased  percentages  are due to the  sales
decline as the actual dollar increase in SG&A from the previous year was $19,273
or 10%. In the quarter  ended March 31, 2004, we continued to maintain the lower
staffing and overhead levels that we instituted in 2002.

Research,  engineering  and  development  expenses were 25% of net sales for the
three months ended March 31, 2004 compared to 19% in 2003. In 2004 and 2003, the
principal  activity  of the  business  related to the design and  production  of
product for OEM manufacturers,  particularly for the IMT 2000 and 3.5 GHz single
channel  products  and  refinements  to the High Speed  Internet  products.  The
research,  engineering and development  expenses  consist  principally of salary
cost for engineers and the expenses of equipment purchases  specifically for the
design  and  testing of the  prototype  products.  The  Company's  research  and
development  efforts are  influenced by available  funds and the level of effort
required by the engineering staff on customer specific projects.

We had no appreciable interest income in 2004 and 2003 because our cash balances
which we have  historically  temporarily  invested in interest  bearing accounts
have been fully depleted.

As a result of the  foregoing,  the Company  incurred  net losses of $265,063 or
$0.03 per share for the year ended  March 31, 2004  compared  with net losses of
$60,189 or $0.01 per share for the same period in 2003.


                                      -11-
<PAGE>

                                 AMPLIDYNE, INC.
                                 MARCH 31, 2004


LIQUIDITY AND CAPITAL RESOURCES

Liquidity refers to our ability to generate adequate amounts of cash to meet our
needs.  We have been  generating the cash necessary to fund our operations  from
continual loans from the President and Chief  Executive  Officer of the Company,
Devendar  Bains.  We have  incurred a loss in each year since  inception.  It is
possible that we will incur further losses,  that the losses may fluctuate,  and
that such  fluctuations  may be  substantial.  As of March 31,  2004,  we had an
accumulated deficit of $23,195,238. Potential immediate sources of liquidity are
loans from Mr.  Bains.  Another  potential  source of  liquidity  is the sale of
restricted shares of our common stock, but there are no immediate plans for such
sale.

As of March 31, 2004, our current liabilities  exceeded our cash and receivables
by  $1,122,454.  Our current  ratio was 0.42 to 1.00,  but our ratio of accounts
receivable to current  liabilities was only 0.11 to 1.00. This indicates that we
will have  difficulty  meeting our obligations as they come due. We are carrying
$378,403 in inventory,  of which $249,571 represents component parts. Because of
the lead times in our  manufacturing  process,  we will likely need to replenish
many items before we use everything we now have in stock.  Accordingly,  we will
need more cash to replenish our  component  parts  inventory  before we are able
realize cash from all of our existing inventories.

As of March 31, 2004, we had cash of $20,116 compared to an overdraft of $17,855
at December 31, 2003.  Overall our cash and cash equivalents  increased  $20,116
during 2004.  Our cash used for operating  actives was $79,972 We received loans
and deferred  salary  payments to  officer/stockholders  of $18,000 and advances
pursuant to the financing agreement of $99,220.

The allowance for doubtful accounts on trade receivables increased form $143,000
(61% of accounts  receivable  of $234,482) in 2003 to $275,000  (66% of accounts
receivable  of  $415,104)  in 2004.  Because of our  relatively  small number of
customers and low sales volume,  accounts receivable balances and allowances for
doubtful  accounts  do not  reflect  a  consistent  relationship  to  sales.  We
determine   our   allowance   for   doubtful   accounts   based  on  a  specific
customer-by-customer review of collectiblity.

Our inventories decreased by $29,306 to $378,403 in 2004 compared to $407,709 at
December 31, 2003, a decrease of 7%

Although the Company did not convert  salaries to officers  through the issuance
of Common Stock in 2003 or 2002, it may to do so in 2004. To help  alleviate the
cash flow  difficulties,  the Chief Executive  Officer and the Vice President of
Operations agreed to defer salaries of $23,192 and $6,538, respectively.

The Company continues to explore strategic  relationships with ISP's,  customers
and others,  which could involve  jointly  developed  products,  revenue-sharing
models, investments in or by the Company, or other arrangements. There can be no
assurance that a strategic relationship can be consummated.


                                      -12-
<PAGE>

                                 AMPLIDYNE, INC.
                                 MARCH 31, 2004


In the past,  the  officers  of the  Company  have  deferred  a portion of their
salaries  or  provided  loans  to  the  Company  to  meet  short-term  liquidity
requirements.  Where possible,  the Company has issued stock or granted warrants
to certain vendors in lieu of cash payments,  and may do so in the future. There
can be no  assurance  that any  additional  financing  will be  available to the
Company on acceptable terms, or at all. If adequate funds are not available, the
Company  may be  required  to  delay,  scale  back or  eliminate  its  research,
engineering  and development or  manufacturing  programs or obtain funds through
arrangements  with partners or others that may require the Company to relinquish
rights to certain of its  technologies  or potential  products or other  assets.
Accordingly,  the  inability  to obtain  such  financing  could  have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

With little  remaining  cash and no near term  prospects of private  placements,
options or warrant exercises and reduced revenues,  we believe that we will have
great  difficulty   meeting  our  working  capital  and  litigation   settlement
obligations  over the next 12 months.  We are presently  dependent on cash flows
generated  from  sales and loans  from  officers  to meet our  obligations.  Our
failure to consummate a merger. or substantially  improve our revenues will have
serious adverse consequences and, accordingly, there is substantial doubt in our
ability to remain in business over the next 12 months. There can be no assurance
that any financing will be available to the Company on acceptable  terms,  or at
all. If adequate funds are not available,  the Company may be required to delay,
scale  back  or  eliminate  its  research,   engineering   and   development  or
manufacturing  programs or obtain funds  through  arrangements  with partners or
others  that may  require  the  Company to  relinquish  rights to certain of its
technologies or potential products or other assets.  Accordingly,  the inability
to obtain such financing  could have a material  adverse effect on the Company's
business, financial condition and results of operations.

ITEM 3. CONTROLS AND PROCEDURES

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

Within the 90 days prior to the date of this report, Amplidyne, Inc. carried out
an evaluation, under the supervision and with the participation of the Company's
management,  including the Company's  Chief  Executive and Principal  Accounting
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure controls and procedures  pursuant to Exchange Act Rule 13a-14.  Based
upon that  evaluation,  the Chief  Executive  and Principal  Accounting  Officer
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting  him to  material  information  required  to be included in the
Company's periodic SEC filings relating to the Company.

(b) CHANGES IN INTERNAL CONTROLS.

There were no significant changes in the Company's internal controls or in other
factors that could  significantly  affect these internal controls  subsequent to
the date of my most recent evaluation.


                                      -13-
<PAGE>

                                 AMPLIDYNE, INC.
                                 MARCH 31, 2004


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The  Company's  registration  of the Ampwave  trademark  was opposed at the U.S.
Patent  Office.  The Company has settled with the opposing  party by agreeing to
stop using the Ampwave name after a period of one (1) year.  The  agreement  has
not been  finalized.  Management  believes  that  the  settlement  will  have no
material financial effect.

See Note E to the Company's financial statements set forth in Part I.

ITEM 2. CHANGE IN SECURITIES

During the first quarter ended March 31, 2004, the Company issued no securities.



                                      -14-
<PAGE>


                                   SIGNATURES

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

                                           AMPLIDYNE, INC.


Dated:  May 21, 2004                       By: /S/ DEVENDAR S. BAINS
                                               ----------------------------
                                               Name:  Devendar S. Bains
                                               Title: Chief Executive Officer,
                                                      Treasurer,
                                                      Principal Accounting
                                                      Officer and Director



                                      -15-