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 JUNE 30, 1998.


[ ]     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                                              2-3440510
            --------                                              ---------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                                144 Belmont Drive
                           SOMERSET, NEW JERSEY 08873
                           --------------------------
                    (Address of principal executive offices)

                                 (732) 271-8473
                                 --------------
                           (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 August 13, 1998 was 4,500,000.



<PAGE>






                                 AMPLIDYNE, INC.
                                   FORM 10-QSB
                         SIX MONTHS ENDED JUNE 30, 1998



                                TABLE OF CONTENTS


PART 1 - 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..................................     6-7

Item 2   Management's Discussion and Analysis of Financial
           Condition and Results of Operations..........................     8-9

PART II - OTHER INFORMATION

Item 1  Legal Proceedings...............................................      10

Item 2  Change in Securities............................................      10

Signatures..............................................................      11

Exhibit 27- Financial Data Schedule.....................................      12




<PAGE>






                         PART 1 - FINANCIAL INFORMATION

                          Item 1. Financial Statements

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

                                     ASSETS



                                                        December 31,   June 30,
                                                            1997*        1998
                                                         ----------   ----------
                                                                     (Unaudited)

CURRENT ASSETS
  Cash and cash equivalents                              $2,039,012   $1,612,061
  Accounts receivable, net of allowance
    for doubtful accounts of $40,510                        706,893      427,421
  Inventories                                               324,622      298,503
  Prepaid expenses and other current assets                   9,296       13,690
                                                         ----------   ----------

    Total current assets                                  3,079,823    2,351,675

PROPERTY AND EQUIPMENT - AT COST
  Machinery and equipment                                   538,214      538,214
  Furniture and fixtures                                     43,750       43,751
  Autos and trucks                                           19,923       19,923
  Leasehold improvements                                      4,162        4,162
                                                         ----------   ----------
                                                            606,049      606,050
    Less: Accumulated depreciation and amortization         237,494      288,646
                                                         ----------   ----------
      Net depreciated cost                                  368,555      317,404

OTHER ASSETS                                                 35,000       35,000
                                                         ----------   ----------

TOTAL ASSETS                                             $3,483,378   $2,704,079
                                                         ==========   ==========

* Derived from Company's audited Balance Sheet at December 31, 1997






    The accompanying notes are an integral part of these financial statements

                                       -1-

<PAGE>

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    December 31,       June 30,
                                                       1997*            1998
                                                   ------------    ------------
                                                                     (Unaudited)
CURRENT LIABILITIES
  Current maturities of lease obligations          $    136,396         125,307
  Accounts payable                                      194,572         176,413
  Accrued expenses                                      189,123         136,415
  Stockholders' loan                                    103,051          78,051
                                                   ------------    ------------

    Total current liabilities                           623,142         516,186

LONG-TERM LIABILITIES
  Lease obligations                                      67,875           9,541
  Deferred compensation                                 140,000         160,000

STOCKHOLDERS' EQUITY
  Preferred stock - authorized, 1,000,000 shares
    of no stated value; no shares issued and
    outstanding
  Common stock - authorized, 25,000,000 shares
   of $.0001 par value; 4,460,000
   shares and 4,500,000 shares issued and
   outstanding at December 31, 1997 and
   June 30, 1998, respectively                              446             450
  Additional paid-in-capital                         12,304,592      12,354,588
  Accumulated deficit                                (9,652,677)    (10,336,686)
                                                   ------------    ------------

    Total stockholders' equity                        2,652,361       2,018,352
                                                   ------------    ------------

TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                             $  3,483,378    $  2,704,079
                                                   ============    ============

* Derived from Company's audited Balance Sheet at December 31, 1997

    The accompanying notes are an integral part of these financial statements

                                       -2-
<PAGE>

                                 AMPLIDYNE, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                    Three            Three           Six           Six
                                                    Months          Months          Months        Months
                                                    Ended           Ended           Ended         Ended
                                                    June 30,        June 30,        June 30,      June 30,
                                                     1997             1998           1997          1998
                                                 -----------       ---------      -----------    ---------

<S>                                              <C>               <C>            <C>              <C>    
Net sales                                        $   348,249       $ 502,714      $   898,894      824,511
Cost of goods sold                                   318,488         375,670          836,758      746,974
                                                 -----------       ---------      -----------    ---------

   Gross profit (loss)                                29,761         127,044           62,136       77,537

Operating expenses
  Selling, general, and admin.                       310,111         261,255          620,154      535,330
  Research, engineering, and dev.                    212,508         142,004          477,028      264,165
                                                 -----------        --------      -----------    ---------

    Operating loss                                  (492,858)       (276,215)      (1,035,046)    (721,958)

Other nonoperating income and expenses
  Interest income                                     51,666          23,243           66,626       48,409
  Interest expense                                     8,905           4,462           27,886        9,785
  Stock compensation and financing                        --              --          324,540           --
                                                 -----------       ---------      -----------    ---------

    Loss before income taxes                        (450,097)       (257,434)      (1,320,846)    (683,334)

Provision for income taxes                                --             475              350          675
                                                 -----------       ---------      -----------    ---------

    NET LOSS                                     $  (450,097)      $(257,909)     $(1,321,196)   $(684,009)
                                                 ===========       =========      ===========    =========


Net loss per share - basic and diluted           $      (.08)      $    (.06)     $      (.25)   $    (.16)
                                                 ===========       =========      ============   =========

Weighted average number of shares
  outstanding                                      5,254,950       4,407,370        5,254,950    4,407,370
                                                 ===========       =========      ===========    =========


</TABLE>



    The accompanying notes are an integral part of these financial statements

                                       -3-




<PAGE>



                                 AMPLIDYNE, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                       Six Months          Six Months
                                                                         Ended               Ended
                                                                     June 30, 1997       June 30, 1998
                                                                     -------------       -------------
<S>                                                                  <C>                  <C> 
Cash flows from operating activities:
  Net Loss                                                           $ (1,321,196)        $  (684,009)
  Adjustments to reconcile net loss to net cash
    used in operating activities
      Depreciation and amortization                                        44,594              51,152
      Stock compensation expense                                          324,540                  --
      Changes in assets and liabilities
        Accounts receivable                                               (66,692)            279,472
        Inventories                                                        10,754              26,119
        Prepaid expenses and other current assets                          55,300              (4,394)
        Accounts payable and accrued expenses                            (518,530)            (50,868)
                                                                     ------------        ------------
    Total adjustments                                                    (150,034)            301,481
                                                                     ------------        ------------
      Net cash used for operating activities                           (1,471,230)           (382,528)
                                                                     ------------        ------------

Cash flows from investing activities:
  Purchase of fixed assets                                               (137,765)                 --
                                                                     ------------        ------------
     Net cash used for investing activities                              (137,765)                 --
                                                                     ------------        ------------

Cash flows from financing activities:
  Proceeds from (repayments of) bank line of credit                      (210,000)                 --
  Proceeds from (repayments of) notes payable                          (1,214,000)                 --
  Lease obligations                                                      (223,433)            (69,423)
  Proceeds from (repayments of) stockholders' loans                      (294,694)            (25,000)
  Prepaid registration costs                                              167,053                  --
  Stock issuance                                                        6,782,153              50,000
                                                                     ------------        ------------
    Net cash provided (used) by financing activities                    5,007,079             (44,423)
                                                                     ------------        ------------

      NET INCREASE (DECREASE) IN CASH                                   3,398,084            (426,951)

Cash at beginning of year                                                 104,310           2,039,012
                                                                     ------------        ------------
Cash and cash equivalents at end of year                             $  3,502,394        $  1,612,061
                                                                     ============        ============

Supplemental disclosures of cash flow information
Cash paid for:  Interest                                             $     97,403         $    10,339
                       Income taxes                                            --                 475

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -4-


<PAGE>



                                 AMPLIDYNE, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
                           FOR THE THREE MONTHS ENDED
                                  JUNE 30, 1998
                                   (UNAUDITED)
<TABLE>
<CAPTION>



                                       Common Stock          Additional       Accumulated
                                   Shares      Par Value   Paid-In-Capital     (Deficit)        Total
                                   ------      ---------   ---------------     ---------        -----


<S>                               <C>            <C>         <C>            <C>              <C>
Balance at December 31, 1997      4,460,000       $ 446      $ 12,304,592   $ (9,652,677)    $ 2,652,361

Issuance of Common Stock             40,000           4            49,996                         50,000

Net Loss                                                                        (684,009)       (684,009)
                                 ----------       -----       -----------   ------------      ----------

Balance at June 30, 1998          4,500,000       $ 450       $12,354,588   $(10,336,686)    $ 2,018,352
                                 ==========       =====       ===========   ============      ==========

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -5-

<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1998


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-month  periods ended June 30, 1997 and June 30, 1998,
    (b) the financial  position at December 31, 1997 and June 30, 1998,  (c) the
    statements of cash flows for the  six-month  periods ended June 30, 1997 and
    June 30, 1998, and (d) the changes in stockholders' equity for the six-month
    period ended June 30, 1998,  have been made.  The results of operations  for
    the six months  ended June 30, 1998 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, 1997,
    included in the Company's Form 10-KSB filed with the Securities and Exchange
    Commission on April 15, 1998.

NOTE C - PUBLIC OFFERING

    A  registration  statement  covering  an  underwritten  public  offering  of
    1,610,000  units at a price  of  $5.10  per  unit,  prior  to  underwriters'
    commissions,   was  declared   effective  by  the  Securities  and  Exchange
    Commission  on January 21, 1997.  Each unit  consists of one share of common
    stock,  par value $.0001 per share and one redeemable  common stock purchase
    warrant.  Each  warrant  entitles the holder to purchase one share for $6.00
    during the four-year  period ending January 21, 2002. The Company may redeem
    the  warrants  at a price of $.01 per warrant at any time with not less than
    thirty days' prior  written  notice if the average  closing  price equals or
    exceeds $9.00 per share for any twenty consecutive trading days.

    In January  1997 and March  1997,  the  Company  received  net  proceeds  of
    approximately $6,782,000, which included the overallotment of 210,000 units.
    The proceeds are net of legal fees, underwriter's fees and other expenses of
    the offering totaling approximately $1,429,000.

                                       -6-

<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1998


NOTE D - LOSS PER SHARE

    In February 1997, 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.  The  requirements  of this  statement are
    effective for interim and annual periods ending after December 15, 1997.

    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 because they are antidilutive.

NOTE E - LITIGATION

    The Company is a defendant to a complaint  filed in the Circuit Court of the
    Eighteenth  Judicial  District of the State of Florida on January 23,  1997,
    alleging   breach  of  contract  and  alleged   damages  in  the  amount  of
    approximately  $4,323,000,  plus interest,  costs and  attorney's  fees. The
    Company filed an answer to the complaint denying the allegations therein and
    a  counterclaim  on March  10,  1997.  The  counterclaim  alleges  breach of
    contract,  common law fraud,  conversion and unjust enrichment.  The Company
    further  asserts  damages  in the  amount of  approximately  $463,000,  plus
    interest,   costs  and  attorney's  fees.   Management   believes  that  the
    allegations in the complaint are without merit.

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


                                       -7-

<PAGE>

                         PART 1 - FINANCIAL INFORMATION

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

RESULTS OF OPERATIONS
         The following table sets forth certain operating data:

                                                    Total Net Sales
                                              Six Months ended June 30,
                                               1997              1998
                                            ----------       -----------
Net sales                                  $   898,894       $   824,511
Cost of goods sold                             836,758           746,974
                                            ----------       -----------
  Gross profit (Loss)                           62,136            77,537
                                            ----------       -----------
Selling, general, and
  administrative                               620,154           535,330
Research, engineering,
  and development                              477,028           264,165
                                            ----------       -----------
  Total operating expenses                   1,097,182           799,495
                                            ----------       -----------    
Stock compensation and
  financing costs                              324,540                --
Interest income                                 66,626            48,409
Other expenses                                  27,886             9,785
                                            ----------       -----------
  Loss before income taxes                  (1,320,846)         (683,334)
Provision for income taxes                         350               675
                                            ----------       -----------
  NET LOSS                                 $(1,321,196)       $ (684,009)
                                            ==========       ===========



          RESULTS OF OPERATIONS-SIX MONTHS ENDED JUNE 30, 1998 COMPARED
                     TO THE SIX MONTHS ENDED JUNE 30, 1997

Net sales for the six month  period  ended June 30,  1998 were  $824,511,  while
sales for the six months ended June 30, 1997 were $898,894.  Sales  increased in
the 2nd quarter of 1998 compared with the 1st quarter of 1998, due to continuing
orders from  customers and less orders  requiring  large amounts of research and
development time.

Gross profit for the six months ended June 30, 1998 amounted to $77,537 (9.4% of
sales),  compared to $62,136 (6.9% of sales) for the corresponding six months of
1997.  This increase in gross margin is principally  attributable to lower lease
expenses on equipment used to manufacture products and reduced material costs.


                                       -8-

<PAGE>

               PART 1 - FINANCIAL INFORMATION - ITEM 2 (CONTINUED)

Selling,  general, and administrative  expenses were $535,330 (65% of sales) for
the first six months of 1998,  compared to $620,154 (69% of sales) for the first
six months of 1997.  The 4% decrease  is due to reduced  overhead  costs.  These
expenses were higher in 1997 due to the Company's initial public offering.

Research,  engineering, and development costs decreased for the six months ended
June 30, 1998 compared with the  corresponding  period of 1997. This decrease is
due to a reduced level of staff performing research and development  activities.
This trend should  continue if  reoccurring  orders are received from  customers
utilizing the existing technology.

Interest  expense  was  lower in the  second  quarter  of 1998  compared  to the
corresponding  period of 1997. The decrease is due to lower lease  payments,  as
some of the leases on test  equipment have been paid off. This trend is expected
to continue.

As a result of the  foregoing,  the Company  incurred net losses of (684,009) or
(.16) per share for the six months ended June 30, 1998 compared to net losses of
(1,321,196) or (.25) per share for the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

At June 30,  1998,  the  Company  had cash and cash  equivalents  of  $1,612,061
principally  due to the  injection  of IPO funds in early 1997.  The Company had
accrued expenses of $136,415, consisting of payroll and commissions.

The Company  believes  that the net  proceeds of the  Company's  initial  public
offering  and  operations  will meet its working  capital  obligations  and fund
further development of its business for the next twelve months.  There can be no
assurance  that any  additional  financing  will be  available to the Company on
acceptable terms, or at all.


                                       -9-

<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

The Company is a defendant in a complaint  filed in the United  States  District
Court for the  District of New Jersey on May 13,  1998.  The  complaint  alleges
breach of contract  of a  representative  agreement  between the Company and ENS
Engineering of South Korea. The claim against  Amplidyne,  Inc. is for $135,000,
plus unspecified compensatory and punitive damages. The Company filed and answer
to the complaint denying allegations and a counterclaim against the plaintiff on
June 12, 1998.  The  counterclaim  alleges  breach of contract  for  unspecified
damages,  which in the opinion of  management  exceeds  $1,000,000.  The Company
intends to  aggressively  defend this action and to prosecute its  counterclaim.
Management believes that the breach of contract was caused by the plaintiff.

Item 2.  Change in Securities

On June 30, 1998,  the Company  issued 40,000 shares of common stock to Devendar
S. Bains, its Chief Executive  Officer and President.  The shares were issued in
consideration  of the  forgiveness  of $50,000 due to Mr. Bains,  representing a
portion of deferred  compensation  owed to him. The sale was made in reliance on
Section  4 (2) of the  Securities  Act of  1933,  as  amended.  No  underwriting
discounts or commissions were paid.

                                      -10-

<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 authorised.


                                        AMPLIDYNE, INC.


Dated:  August 13, 1998               By: /s/ DEVENDAR S. BAINS
                                          ---------------------
                                      Name:   Devendar S. Bains
                                      Title:  Chief Executive Officer,
                                              President, Treasurer,
                                              Principal Accounting
                                              Officer and Director




                                      -11-