UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 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)


      Indicate  by check  mark  whether  the  registrant  (1) filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the 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 November 19, 2004 was 10,376,500.


<PAGE>

                                 AMPLIDYNE, INC.
                                   FORM 10-QSB
                      NINE MONTHS ENDED September 30, 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 Deficiency......5

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

Item 2  Management's Discussion and Analysis of Financial
        Condition and Results of Operations...............11-14

Item 3. Controls and Procedures..............................15

Item 6. Exhibits.............................................14


PART II - OTHER INFORMATION

Item 1. Legal Proceedings....................................15

Signatures...................................................18


<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
 ASSETS                                                                           (UNAUDITED)
                                                                                  September 30       December 31
                                                                                      2004              2003
                                                                                    ---------        ---------
CURRENT ASSETS
<S>                                                                                 <C>              <C>
               Cash                                                                 $      --        $      --
               Accounts receivable, net of allowance for doubtful accounts of
                 $262,000 and  $143,000 in 2004 and 2003, respectively                 25,862           91,482
               Inventories                                                            321,637          407,709
               Prepaid expenses and other                                                  --           12,307
                                                                                    ---------        ---------

                             Total current assets                                     347,499          511,498

PROPERTY AND EQUIPMENT - AT COST
               Machinery and equipment                                                565,629          565,629
               Furniture and fixtures                                                  43,750           43,750
               Autos and trucks                                                        66,183           66,183
               Leasehold improvements                                                   8,141            8,141
                                                                                    ---------        ---------
                                                                                      683,703          683,703
               Less accumulated depreciation and amortization                        (676,627)        (646,627)
                                                                                    ---------        ---------
                                                                                        7,076           37,076
                                                                                    ---------        ---------

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

                                   TOTAL ASSETS                                     $ 354,575        $ 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 Unites
States for complete financial statements.


                                       1
<PAGE>

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                                   RECLASSIFIED FOR
                                                                                                           COMPARABILITY TO
                                                                                          (UNAUDITED)       CURRENT PERIOD
                                                                                         September 30        December 31,
                                                                                             2004                2003
                                                                                         ------------        ------------
CURRENT LIABILITIES
<S>                                                                                      <C>                 <C>
               Overdraft                                                                 $      4,315        $     17,855
               Note payable in connection with Phoenix investor recision agreement             40,000                  --
               Convertible notes payable pursuant to financing agreement                      350,000                  --
               Customer advances                                                               29,834              60,000
               Accounts payable                                                               468,832             411,169
               Accrued expenses and other current liabilities                                 139,268             251,486
               Accrued settlement of litigation                                                95,000                  --
               Loans payable - officers                                                       377,911             256,997
                                                                                         ------------        ------------

                             Total current liabilities                                      1,505,160             997,507

Other convertible  notes payable                                                               21,873              20,973
                                                                                         ------------        ------------
                                  TOTAL LIABILITIES                                         1,527,033           1,018,480


STOCKHOLDERS' DEFICIENCY
               Commonstock - authorized, 25,000,000 shares of $.0001 par value;
                     shares  10,376,500 and 10,376,500 shares issued and
                     outstanding at September 30, 2004 and December 31, 2003,
                     respectively                                                               1,038               1,038
               Additional paid-in capital                                                  22,503,014          22,494,854
               Accumulated deficit                                                        (23,676,510)        (22,930,173)
                                                                                         ------------        ------------
                                                                                           (1,172,458)           (434,281)
                                                                                         ------------        ------------

                                                                                         $    354,575        $    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 Unites
States for complete financial statements.


                                       2
<PAGE>

                                 AMPLIDYNE, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
                    THREE AND NINE MONTHS ENDED SEPTEMBER 30

<TABLE>
<CAPTION>
                                                          Three Months Ended                      Nine Months Ended
                                                             September 30                           September 30
                                                        2004               2003               2004               2003
                                                    ------------       ------------       ------------       ------------
<S>                                                 <C>                <C>                <C>                <C>
Net sales                                           $    114,899            356,834       $    670,492       $  1,230,344
Cost of goods sold (net of inventory
  write-down of $233,995 in 2002)                        154,532            183,730            666,299            741,512
                                                    ------------       ------------       ------------       ------------

              Gross profit (loss)                        (39,633)           173,104              4,193            488,832

Operating expenses
    Selling, general and administrative                  180,922            154,309            503,029            565,050
    Research, engineering and development                 11,159             93,114            174,338            287,629
    Litigation settlement costs                              300                 --             20,460                 --
                                                    ------------       ------------       ------------       ------------

              Operating loss                            (232,014)           (74,319)          (693,634)          (363,847)

Nonoperating income (expenses)
    Interest income and other income                       4,535                 --              4,535                  3
    Loss incurred on rescission  of prior year
      agreements with Phoenix to invest in the
      Company                                                 --                 --            (40,780)                --
    Interest expense                                        (300)                --               (900)                --
    Gain on sale of property and equipment                    --                 --              4,000                 --
                                                    ------------       ------------       ------------       ------------

              Loss before income taxes                  (227,779)           (74,319)          (726,779)          (363,844)

Provision for income taxes                                13,696                 --             19,558                698
                                                    ------------       ------------       ------------       ------------

              NET LOSS                              $   (241,475)      $    (74,319)      $   (746,337)      $   (364,542)
                                                    ============       ============       ============       ============

Net loss per share - basic and diluted              $      (0.02)      $      (0.01)      $      (0.07)      $      (0.04)
                                                    ============       ============       ============       ============

Weighted average number of shares outstanding         10,376,500         10,143,167         10,376,500         10,143,167
                                                    ============       ============       ============       ============
</TABLE>


                                       3
<PAGE>

                                 AMPLIDYNE, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                         NINE MONTHS ENDED SEPTEMBER 30

<TABLE>
<CAPTION>
                                                                                                      Nine Months Ended
                                                                                                        September 30

                                                                                                    2004             2003
                                                                                                  ---------        ---------
<S>                                                                                               <C>              <C>
Cash flows from operating activities:
Net Loss                                                                                          $(746,337)       $(364,542)
                                                                                                  ---------        ---------
Adjustments to reconcile net loss to net cash used in operating activities
                             Depreciation and amortization                                           30,000           22,200
                             Provision for doubtful accounts                                         15,260           74,702
                             Litigation settlement costs                                             20,460               --
                             Deferred officer compensation                                           85,925           51,416
                             Interest accrued on other convertible promissory note                      900               --
                             Issuance of secured promissory in connection with
                                            loss incurred on rescission of agreements with
                                                           Phoenix to invest in the Company          40,000               --
                             Changes in assets and liabilities
                                            Accounts receivable                                      50,360          133,568
                                            Inventories                                              86,072          (25,553)
                                            Prepaid expenses and other assets                        12,307           (2,088)
                                            Customer advances                                        30,166               --
                                            Accounts payable and accrued expense                    185,143          (61,824)
                                                                                                  ---------        ---------
                                                          Total adjustments                         496,261          192,421
                                                                                                  ---------        ---------
                              Net cash (used) for operating activities                             (250,076)        (172,121)
                                                                                                  ---------        ---------

Cash flows from investing activities:
               Change in security deposits                                                           35,625           11,086
                                                                                                  ---------        ---------
                             Net cash provided by (used for) investing activities                    35,625           11,086
                                                                                                  ---------        ---------

Cash flows from financing activities:
                Change in overdraft                                                                 (13,540)         (11,939)
               Payment of lease obligations                                                              --           (2,041)
               Officer loans                                                                         34,991          163,466
               Proceeds from convertible notes received directly in cash
                              pursuant to Lee financing agreement                                   193,000               --
               Proceeds from other convertible promissory note                                           --           20,000
                                                                                                  ---------        ---------
                             Net cash provided by financing activities                              214,451          169,486
                                                                                                  ---------        ---------

                             NET INCREASE (DECREASE) IN CASH                                                           8,451

Cash at beginning of period                                                                              --               --
                                                                                                  ---------        ---------
Cash at end of period                                                                             $      --        $   8,451
                                                                                                  =========        =========

Supplemental disclosures of cash flow information:
               Cash paid for: Interest                                                            $      --        $      --
                              Income taxes                                                        $  19,558        $     698

Noncash financing activities:
               Convertible notes issued by Company pursuant to Lee financing agreement            $ 350,000        $      --
               Less: Proceeds received directly in cash by Company                                  193,000               --
                                                                                                  ---------        ---------
               Payment of Company obligations by lender in connection with
                              financing agreement in exchange for convertible notes               $ 157,000        $      --
                                                                                                  =========        =========
</TABLE>


                                       4
<PAGE>

                                 AMPLIDYNE, INC.
                      STATEMENT OF STOCKHOLDERS' DEFICIENCY
      YEAR ENDED DECEMBER 31, 2003 AND NINE MONTHS ENDED SEPTEMBER 30, 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

THE FOLLOWING INFORMATION IS UNAUDITED:
Net loss for the nine months ended September 30, 2004
Litigation settlement to be paid through the
issuance of  common stock

                                                            ------------       ------------       ------------      ------------

BALANCE AT SEPTEMBER 30, 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, 2002                                $ 22,494,924       $(21,949,679)      $         --      $    546,213

Net loss for the year ended December 31, 2003                                      (980,494)                            (980,494)
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        (22,930,173)                --          (434,281)

THE FOLLOWING INFORMATION IS UNAUDITED:

Net loss for the nine months ended September 30, 2004                              (746,337)                             (746,337)
Litigation settlement to be paid through the
issuance of  common stock                                          8,160                                                   8,160
                                                            ------------       ------------       ------------      ------------

BALANCE AT SEPTEMBER 30, 2004                               $ 22,503,014       $(23,676,510)      $         --      $ (1,172,458)
                                                            ============       ============       ============      ============
</TABLE>


                                       5
<PAGE>


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 three and nine month  periods  ended  September 30, 2004 and
2003,  (b) the financial  position at September 30, 2004,  (c) the statements of
cash flows for the nine month period ended September 30, 2004 and 2003 , and (d)
the  changes  in  stockholders'  deficiency  for the  nine  month  period  ended
September 30, 2004 have been made.  The results of  operations  for the three or
nine months  ended  September  30, 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 $746,337 for the
nine months ended September 30, 2004, has limited cash reserves and has seen its
working capital  decline by $671,652 to a deficiency of  $(1,157,661)  since the
beginning of the fiscal year. Current liabilities exceed cash and receivables by
$1,479,298  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 John Lee, Hye Joung Lee and
Joong Bin Lee 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,  restructure  the Company and its
operations  and,  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.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any transactions,  agreements or other  contractual  arrangements
that constitute off balance sheet arrangements.


                                       6
<PAGE>


NOTE C - STOCKHOLDERS' EQUITY

1.    WARRANTS AND OPTIONS

      At  September  30,  2004,  the  following   696,000   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)   55,000 exercisable at $1.20 through September 30, 2004

      (8)   300,000 exercisable at $2.00 through December 31, 2005

      (9)   75,000 exercisable at $.96 through March 2007

      (10)  80,000 exercisable at $1.50 through December 2004.

      At September 30, 2004, the Company had employee stock options  outstanding
to  acquire  1,971,000  shares of common  stock at  exercise  prices of $0.15 to
$3.25.

2.    STOCK PURCHASE AND FINANCING AGREEMENTS

On January 28, 2004,  the Company  entered into a  Subscription  Agreement  (the
"Agreement")  with  Phoenix  Opportunity  Fund II, L.P.  ("Phoenix"),  a limited
partnership organized under the laws of the State of Delaware, pursuant to which
Phoenix  agreed to make an  aggregate  investment  of $100,000  in exchange  for
282,700 shares of a newly created class of Series C Convertible Preferred Stock,
representing  approximately  80% of the Company's  outstanding  stock on a fully
diluted  basis.  As the  Company  was  required  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  made an initial
investment  of $20,000 in  exchange  for 54,325  shares of Series C  Convertible
Preferred  Stock,  and  loaned  approximately  $80,000 to the  Company  with the
remaining   portion   of  the   equity   investment   to  be   completed   after
recapitalization.  Phoenix also entered into a stock restriction  agreement with
Devendar S. Bains,  our former Chairman of the Board,  Chief Executive  Officer,
and  Treasurer,  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,  would have given Phoenix
effective control over 53% of the Company's voting stock.

The  preferred  shares were never issued to Phoenix.  Due to a dispute among the
Parties  with  respect to the terms of the loan  transaction.  The  Company  and
Phoenix  agreed  to  rescind  their  agreement,  and the  Company  agreed to pay
Phoenix:  (i) $20,000 in cash for the funds  Phoenix  invested,  (ii) $80,000 in
cash for the funds which  Phoenix  lent to the  Company,  and (iii)  $40,000 for
expenses  incurred by Phoenix on behalf of the Company.  The $40,000 was paid by
delivery of a secured  promissory note due March 31, 2005, and bearing  interest
at the rate of eight percent per annum secured by  substantially  all the assets
of the Company.

In a separate  transaction,  John Lee of Piscataway,  NJ ("Lee")  entered into a
Note  Purchase  Agreement  with the  Company by which Lee has agreed to lend the
Company an initial  $200,000  and up to an  additional  $200,000  in one or more
installments on or before October 30, 2004. The Company has agreed to deliver to
John Lee convertible promissory notes which are convertible into Series C shares
representing  approximately  80% of the Company's  outstanding  stock on a fully
diluted basis.  Such  conversion  will take place at such time as the Company is
able to do so. Messrs. Devendar Bains and



                                       7
<PAGE>


Tarlochan Bains are required to devote their full business time and attention to
the business of the Company for eight (8) years from May 25, 2004.  In the event
that  either  Devendar  Bains or  Tarlochan  Bains  must leave the employ of the
Company for any reason, each agrees that, if requested by the Board of Directors
of the Company, he will use his best efforts to find a qualified replacement for
himself  acceptable to the Board of Directors,  and that he will not engage in a
business  competitive  with the Company for a period of eight (8) years.  On May
25,  2004,  Lee  loaned the  Company  $200,000,  and was issued two  convertible
promissory notes which will be convertible in the aggregate into Series C shares
representing  approximately  32% of the Company's  outstanding  stock on a fully
diluted basis, if and when converted. If not converted, the notes are payable on
demand, provided that demand cannot be made before December 31, 2004, unless the
Company is in default of the Note Purchase Agreement.  Of the $200,000 loaned to
the Company,  $100,000 was used to pay Phoenix in connection with the rescission
described  above,  $45,000  was used to make a final  payment in  resolution  of
litigation with High Gain Antenna Co. Ltd. of Korea,  and to pay associated bank
fees,  $12,000  was used to pay  legal  fees and  $43,000  was used for  working
capital purposes.

In August 2004,  an  additional  $50,000 was received from each of Hye Joung Lee
and  Joong  Bin Lee (an  aggregate  of  $100,000)  in  connection  with the same
agreement.  These  parties are business  associates  of John Lee, but  otherwise
unrelated.

In October 2004, an additional $150,000 was received from John Lee.

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. On June 29,  2004,  the  Company  filed a Motion to  Dismiss  the  lawsuit of
V-Link,  inc.  against  the  Company.  The  Company  (as well as an officer  and
director of the Company) is a defendant in a complaint  brought in November 2003
in the Circuit Court of the State of Florida (17th  Judicial  District,  Broward
County)  alleging  fraud and seeking  relief for  unspecified  damages and costs
associated with an aborted plan of merger.

2. In connection  with a Stipulation of Settlement  and Release  entered into in
January 2003 before the Superior Court of New Jersey,  the Company has fulfilled
its  obligations  and has received a warrant of  satisfaction  of judgment  from
opposing  counsel  dated June 6, 2004.  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



                                       8
<PAGE>


Jersey,  Law Division,  Somerset County, by High Gain Antenna Co., Ltd. of Korea
in November 2000.

3. In June 2004,  the Company  entered  into a Settlement  Agreement  with Wayne
Fogel,  et al, before the United states  District court in Tampa,  Florida.  The
settlement  provides for the following  obligations by the Company to Mr. Fogel:
(1)  payment of $12,000 by July 14,  2004;  (2)  issuance  of 250,000  shares of
restricted  common  stock by July 14, 2004 and;  (3) the  shipment of  specified
items of inventory valued at approximately  $22,000. The agreement further calls
for the  issuance  of common  stock of one share  for each $1 of  inventory  not
delivered  in lieu of the  inventory  in the event the company  cannot  deliver.
Since non-delivery of the specified items is definite,  the financial statements
provide for the issuance of 22,000 additional  shares.  All shares in connection
with this  transaction are valued at the publicly traded market value of $.05 on
the date of the transaction, less a discount of 40% for the restriction on sale.

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 $746,337  and  $364,542 for the nine months
ended September 30, 2004 and 2003, respectively.

      With  little  remaining  cash  and  no  near  term  prospects  of  private
placements,  options or warrant exercises (other than the Convertible Notes) and
reduced  revenues,  we believe  that we will have great  difficulty  meeting our
working  capital  needs  over the  next 12  months.  The  Company  is  presently
dependent  on cash  flows  generated  from  sales and  financing  under the Note
Purchase  Agreement  described in Note C.2.  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 amplifier  products by developing newer products
      for  the  Multimedia   Broadcast  market  place  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,  restructuring  the
      Company and its operations;

      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;


                                       9
<PAGE>


      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 September  30, 2004,  the Company owes  $309,284 to the former Chief
Executive Officer,  Devendar S. Bains for loans and unpaid salaries.  During the
three months ended  September 30, 2004,  the Chief  Executive  Officer  advanced
$19,491 to the Company and was repaid $2,000. Additionally,  salaries of $23,192
were deferred for this quarter

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>

                                 Nine Months Ended    Nine Months Ended     Year Ended
                                     September 30       September 30       December 31,
                                         2004               2003               2003
                                      ----------         ----------         ----------
<S>                                   <C>                 <C>               <C>

Sales - external
               Amplifier              $  582,463          1,013,262         $1,128,453
               Internet business          88,029            217,082            222,772
                                      ----------         ----------         ----------
                                      $  670,492         $1,230,344         $1,351,225
                                      ==========         ==========         ==========
Inventory                                     --
               Amplifier              $  281,254         $  454,946         $  248,575
               Internet business          40,383            497,320            159,134
                                      ----------         ----------         ----------
                                      $  321,637         $  952,266         $  407,709
                                      ==========         ==========         ==========
</TABLE>

NOTE I -- OTHER COMMENTS

1.    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.  Sales under the Ampwave  label were $88,029 for the three months ended
September  30,  2004.  Management  believes  that the  settlement  will  have no
material financial effect.

2.    Resignation of Chief Executive Officer

      Effective  August  19,  2004,  Devendar  S.  Bains  stepped  down from his
position as Chairman of the Board,  Chief Executive Officer and President and is
now the Chief Technology Officer. Tarlochan Bains has taken over the position of
Chairman of the Board and Chief Executive Officer.

3.    Acquisition of operating premises by Lee

      John Lee has entered  into a contract  with the  existing  landlord of the
operating  premises to purchase  the  building.  In  connection  therewith,  Lee
negotiated a return of the security deposit and accumulated  interest thereon to
the Company in the aggregate amount of $40,160. The Company is



                                       10
<PAGE>


currently leasing the premises on a month to month basis and is paying rent on a
semi-monthly  basis.  Although there is no lease or contract presently in effect
with Lee, it is anticipated that the Company will be able to continue  occupying
the premises under a lease with Lee at an as yet to be determined rent.

NOTE J -- SUBSEQUENT EVENTS

In October 2004, pursuant to the Stock Purchase and Financing  Agreements,  John
Lee loaned the Company an additional $150,000 (See Note C 2)


                                       11
<PAGE>


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  SEPTEMBER  30, 2004 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 2003.

Revenues for the three months ended September 30, 2004 declined by $241,935 from
$356,834 to $114,899,  or 68% compared to the three months ended  September  30,
2003.

The majority of the  amplifier  sales for the three months ended  September  30,
2004 were obtained from the Wireless  Local Loop  amplifier  products to a major
European  customer.  Sales of amplifiers were  approximately  87% of total sales
compared to 82% of total sales for the same period last year.  The Ampwave  high
speed  wireless  Internet  products  and  broadband   solutions   accounted  for
approximately 14% of total sales, against 18% of total sales for the same period
last year.

The Company has continued to develop and refine its  amplifier  products for the
wireless  communications  market.  The  Company has also  refined  its  wireless
internet amplifiers for the indoor market. Sales and marketing efforts have been
focused in the more stable United States, European and Canadian markets.

Cost of sales was  $154,532  or 134% of sales  compared  to 51%  during the same
period for 2003.  Gross  margin for the three months  ended  September  30, 2004
amounted to $(39,633)  ((34)%)  compared to $173,104 or 49%, for the same period
ended  September  30,  2003.  The decline in gross margin was largely due to the
significant  decline  in  sales.  We have  maintained  a  minimum  manufacturing
staffing,  but our sales have declined too low to support even that low staffing
level.  The Company is  continuing  to assess cost  reduction  and is  promoting
increased product demand to improve gross margins in 2004.

Selling,   general   and   administrative   expenses   (excluding   stock  based
compensation)  increased in 2004 by $26,613 to $180,922 from $154,309,  in 2003.
Expressed as a percentage  of sales,  the  selling,  general and  administrative
expenses (excluding stock based compensation) were 157% in 2004 and 43% in 2003.
The principal  factors  contributing to the dollar decrease in selling,  general
and  administrative  expenses  are  related to the  effects of our cost  cutting
program  implemented  in 2002.  In the quarter  ended  September  30,  2004,  we
continued to maintain the lower staffing and overhead  levels that we instituted
in 2002.

Research,  engineering  and  development  expenses were 10% of net sales for the
three months ended September 30, 2004 compared to 26% 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.

Interest  income was $4,535 in 2004 and $NIL in 2003  because  we  received  the
security  deposit  back  from  our  leased  facilities  from the  landlord  with
interest.  Otherwise,  our cash balances which we have historically  temporarily
invested in interest bearing accounts have been fully depleted.


                                       12
<PAGE>


Interest expense was $300 for the three months ended September 30, 2004 compared
to $300 the three months ended September 30, 2003 and was principally related to
other convertible notes.

As a result of the foregoing,  the Company  incurred net losses of $(241,475) or
$(0.02) per share for the quarter  ended  September  30, 2004  compared with net
losses of $(74,319) or $(0.01) per share for the same quarter in 2003.

RESULTS OF  OPERATIONS - THE NINE MONTHS ENDED  SEPTEMBER  30, 2004  COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 2003.

Revenues for the nine months ended  September 30, 2004 declined by $559,852 from
$1,230,344 to $670,492,  or 46% compared to the nine months ended  September 30,
2003.

The majority of the amplifier sales for the nine months ended September 30, 2004
were  obtained  from the  Wireless  Local  Loop  amplifier  products  to a major
European customer. The Company has also supplied 3.5GHz linear amplifiers to its
major North American customer.

The Company has continued to develop and refine its  amplifier  products for the
wireless  communications  market.  The  Company has also  refined  its  wireless
internet amplifiers for the indoor market. Sales and marketing efforts have been
focused in the more stable United States, European and Canadian markets.

Cost of sales was $666,299 or 99% of sales  compared to $741,512 or 60% of sales
during the same  period for 2003.  We have  maintained  a minimum  manufacturing
staffing,  but our sales have declined too low to support even that low staffing
level. The decline in gross margin was largely due to the significant decline in
sales.  The Company is  continuing  to assess cost  reduction  and is  promoting
increased product demand to improve gross margins in 2004.

Selling,   general   and   administrative   expenses   (excluding   stock  based
compensation)  decreased  in  September  30,  2004 by $62,021 to  $503,029  from
$565,050, in 2003. Expressed as a percentage of sales, the selling,  general and
administrative  expenses  (excluding stock based  compensation) were 75% in 2004
and 46% in 2003. The principal factors  contributing to the decrease in selling,
general  and  administrative  expenses  were  related to the effects of our cost
cutting program implemented in 2002. In the quarter ended September 30, 2004, we
continued to maintain the lower staffing and overhead  levels that we instituted
in 2002.

Research,  engineering  and  development  expenses were 26% of net sales for the
nine months ended  September 30, 2004 compared to 23% 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.

The Company had interest  income and other income in 2003 of $3. Interest income
was $4,535 in 2004 because we received the security deposit back form our leased
facilities from the landlord with interest.  Otherwise,  our cash balances which
we have historically temporarily invested in interest bearing accounts have been
fully depleted.

Interest  expense was $900 in 2004 compared to $673 in 2003 and was  principally
related to other convertible notes.


                                       13
<PAGE>


As a result of the  foregoing,  the Company  incurred  net losses of $746,337 or
$0.07 per share for the nine months ended  September  30, 2004 compared with net
losses of $364,542 or $0.04 per share for the same period in 2003.

ITEM 3. 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  with
loans from John Lee, Hye Joung Lee and Joong Bin Lee, We have incurred a loss in
each year since  inception.  We expect to incur further losses,  that the losses
may fluctuate,  and that such  fluctuations may be substantial.  As of September
30,  2004 we had an  accumulated  deficit of  $23,676,510.  Potential  immediate
sources of liquidity are loans in connection with the Convertible Notes.

As of  September  30,  2004,  our  current  liabilities  exceeded  our  cash and
receivables by $1,479,298.  Our current ratio was 0.23 to 1.00, but our ratio of
accounts receivable to current liabilities was only 0.02 to 1.00. This indicates
that we will have  difficulty  meeting our  obligations as they come due. We are
carrying $321,637 in inventory,  of which $287,641  represents  component parts.
Based on year to date usage, we are carrying 264 days worth of parts  inventory.
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 September 30, 2004, we had an overdraft of $4,315 compared to an overdraft
of $17,855 at December 31, 2003. Overall our overdraft  decreased $13,540 during
2004.  Our cash used for  operating  actives was $250,076  This year we received
loans of  $34,991  and  deferred  salary  payments  to  officer/stockholders  of
$85,925.  We also received proceeds from the issuance of convertible  promissory
notes of $193,000.

The allowance for doubtful accounts on trade receivables increased from $143,000
(61% of accounts  receivable  of $234,482) in 2003 to $262,000  (91% of accounts
receivable of $287,862) in 2004. Additionally, in 2003, we reserved an aggregate
of $31,702 against leases receivable that we believe are uncollectible.  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 $86,072 to $321,637 in 2004 compared to $407,709 at
December 31, 2003, a decrease of 21%.

The Company has several lease obligations for its premises and certain equipment
requiring  minimum  monthly  payments  of  approximately  $9,800  through  2005.
Although the Company did not convert  salaries to officers  through the issuance
of Common Stock in 2004 or 2003, 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  additional  salary  deferrals  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.


                                       14
<PAGE>


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  (other  than the  Convertible  Notes) and reduced
revenues,  we believe  that we will have great  difficulty  meeting  our working
capital needs over the next 12 months. We are presently  dependent on cash flows
generated from sales and loans in connection  with the  Convertible  Notes.  Our
failure  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
adequate  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.

CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of our management,  including
the former Chief Executive and Principal  Accounting  officer, we have evaluated
the  effectiveness  of the  design  and  operation  of our  disclosure  controls
pursuant to Exchange Act Rule  13a-14(c) as of the end of the period  covered by
this report.  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.
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.

Our management,  including the former Chief  Executive and Principal  Accounting
officer, does not expect that our disclosure controls and internal controls will
prevent all error and all fraud. A control system,  no matter how well conceived
and operated,  can provide only  reasonable,  not absolute,  assurance  that the
objectives  of the  control  system  are met.  Further,  the design of a control
system  must  reflect  the fact that  there are  resource  constraints,  and the
benefits of controls must be considered  relative to their cost.  Because of the
inherent  limitations  in all control  systems,  no  evaluation  of controls can
provide absolute assurance that all control issues and instances of fraud within
the Company,  if any, will be detected.  These inherent  limitations include the
realities that judgments in decision-making  can be faulty, and that a breakdown
can occur because of a simple error. Additionally,  controls can be circumvented
by the individual acts of some persons,  by collusion of two or more people,  or
by management override of the control.

ITEM 6. EXHIBITS

The following is a list of exhibits to this Form 10-QSB:

*     Certification  of the Company's Chief  Executive and Principal  Accounting
      Officer pursuant to 18 U.S.C.Section  1350, as adopted pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.

*     Certification  of the Company's Chief  Executive and Principal  Accounting
      Officer pursuant to 18 U.S.C.Section  1350, as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002.


                                       15
<PAGE>


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

*


                                       16

<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:  November 22, 2004               By: /S/ TARLOCHAN. BAINS
                                            --------------------
                                            Name: Tarlochan. Bains
                                            Title: Chief Executive Officer,
                                                   Treasurer,
                                                   Principal Accounting
                                                   Officer and Director


                                       17