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, 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                          22-3440510
                    --------                          ----------
          (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 May 15, 1998 was 4,460,000.


<PAGE>

                                 AMPLIDYNE, INC.
                                   FORM 10-QSB
                        THREE MONTHS ENDED MARCH 31, 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.........................8-10

PART II - OTHER INFORMATION

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

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


<PAGE>

                         PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                                 AMPLIDYNE, INC.
                                 BALANCE SHEETS

                                     ASSETS

                                                       December 31,   March 31,
                                                           1997*        1998
                                                           -----        ----
                                                                     (Unaudited)
 CURRENT ASSETS
  Cash and cash equivalents                             $2,039,012   $1,966,289
  Accounts receivable, net of allowance
    for doubtful accounts of $40,510                       706,893      270,241
  Inventories                                              324,622      288,374
  Prepaid expenses and other current assets                  9,296       13,177
                                                        ----------   ----------

    Total current assets                                 3,079,823    2,538,081

PROPERTY AND EQUIPMENT - AT COST
  Machinery and equipment                                  538,214      538,214
  Furniture and fixtures                                    43,750       43,750
  Autos and trucks                                          19,923       19,923
  Leasehold improvements                                     4,162        4,162
                                                        ----------   ----------
                                                           606,049      606,049
    Less: Accumulated depreciation and amortization        237,494      263,069
                                                        ----------   ----------
      Net depreciated cost                                 368,555      342,980

OTHER ASSETS                                                35,000       35,000
                                                        ----------   ----------
TOTAL ASSETS                                            $3,483,378   $2,916,061
                                                        ==========   ==========

* 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,      March 31,
                                                       1997*            1998
                                                       ----             ----
                                                                     (Unaudited)
CURRENT LIABILITIES
  Current maturities of lease obligations          $  136,396          130,073
  Accounts payable                                    194,572          133,772
  Accrued expenses                                    189,123          118,424
  Stockholders' loan                                  103,051           93,051
                                                   ----------      -----------
    Total current liabilities                         623,142          475,320

LONG-TERM LIABILITIES
  Lease obligations                                    67,875           34,480
  Deferred compensation                               140,000          180,000

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
    4,460,000 shares issued and outstanding at
    December 31, 1997 and March 31, 1998,
    respectively
                                                          446              446
  Additional paid-in-capital                       12,304,592       12,304,592
  Accumulated deficit                              (9,652,677)     (10,078,777)
                                                   ----------      -----------
    Total stockholders' equity                      2,652,361        2,226,261
                                                   ----------      -----------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                             $3,483,378      $ 2,916,061
                                                   ==========      ===========

 * 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)

                                                      Three            Three
                                                      Months           Months
                                                      Ended            Ended
                                                     March 31,        March 31,
                                                       1997             1998
                                                       ----             ----


Net sales                                          $ 550,645        $ 321,797
Cost of goods sold                                   518,270          371,304
                                                   ---------        ---------

   Gross profit (loss)                                32,375          (49,507)

Operating expenses
  Selling, general, and administrative               310,043          274,075
  Research, engineering, and development             264,520          122,161
                                                   ---------        ---------

    Operating loss                                  (542,188)        (445,743)

Other nonoperating income and expenses
  Interest income                                     14,960           25,166
  Interest expense
                                                      18,981            5,323
  Stock compensation and financing costs             324,540               --
                                                   ---------        ---------

    Loss before income taxes                        (870,749)        (425,900)

Provision for income taxes                               350              200
                                                   ---------        ---------

    NET LOSS                                       $(871,099)       $(426,100)
                                                   =========        =========

Net loss per share - basic and diluted             $    (.17)       $    (.10)
                                                   =========        =========

Weighted average number of shares
  outstanding                                      5,254,950        4,367,320
                                                   =========        =========



    The accompanying notes are an integral part of these financial statements

                                       -3-

<PAGE>

<TABLE>
<CAPTION>
                                    AMPLIDYNE, INC.
                               STATEMENTS OF CASH FLOWS
                                      (UNAUDITED)
                                                     Three Months       Three Months
                                                         Ended             Ended
                                                     March 31, 1997    March 31, 1998
                                                     --------------    --------------
<S>                                                     <C>              <C>         
Cash flows from operating activities:
  Net Loss                                              $  (871,099)     $  (426,100)
                                                        -----------      -----------
  Adjustments to reconcile net loss to net cash
    used in operating activities
      Depreciation and amortization                          25,690           25,575
      Stock compensation expense                            324,540               --
      Changes in assets and liabilities
        Accounts receivable                                (167,453)         436,652
        Inventories                                         121,994           36,248
        Prepaid expenses and other current assets            55,300           (3,881)
        Accounts payable and accrued Expenses              (560,264)         (91,499)
                                                        -----------      -----------
    Total adjustments                                      (200,193)         403,095
                                                        -----------      -----------
      Net cash used for operating activities             (1,710,292)         (23,005)
                                                        -----------      -----------

Cash flows from investing activities:
  Purchase of fixed assets                                  (64,280)              --
                                                        -----------      -----------
     Net cash used for investing activities                 (64,280)              --
                                                        -----------      -----------

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                                        (152,239)         (39,718)
  Proceeds from (repayments of) stockholders' loans         (24,694)         (10,000)
  Prepaid registration costs                                167,053               --
  Stock issuance                                          6,782,153               --
                                                        -----------      -----------
    Net cash provided by financing activities             5,348,273          (49,718)
                                                        -----------      -----------

      NET INCREASE (DECREASE) IN CASH                     4,212,701          (72,723)

Cash at beginning of year                                   104,310        2,039,012
                                                        -----------      -----------
Cash and cash equivalents at end of year                $ 4,317,011      $ 1,966,289
                                                        ===========      ===========

Supplemental disclosures of cash flow information
  Cash paid for:  Interest                              $    83,659      $     5,877
                  Income taxes                                   --               --

       The accompanying notes are an integral part of these financial statements
</TABLE>

                                          -4-

<PAGE>

<TABLE>
<CAPTION>
                                              AMPLIDYNE, INC.
                               STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
                                        FOR THE THREE MONTHS ENDED
                                              MARCH 31, 1998
                                                (UNAUDITED)


                                      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

Net Loss
                                                                                    (426,100)    (426,100)
                                ---------       -----          -----------      ------------   ----------

Balance at March 31, 1998       4,460,000       $ 446          $12,304,592      $(10,078,777)  $2,226,261
                                =========       =====          ===========      ============   ==========




                 The accompanying notes are an integral part of these financial statements
</TABLE>

                                                    -5-
<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 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  three-month  periods ended March 31, 1997 and March 31,
    1998,  (b) the  financial  position at December 31, 1997 and March 31, 1998,
    (c) the statements of cash flows for the three-month periods ended March 31,
    1997 and March 31, 1998, and (d) the changes in stockholders' equity for the
    three-month  period  ended March 31,  1998,  have been made.  The results of
    operations  for the three  months  ended March 31, 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 totalling approximately $1,429,000.

                                       -6-
<PAGE>

                                 AMPLIDYNE, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 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
                                           Three Months ended March 31,
                                                1997           1998
                                                ----           ----
Net sales                                    $ 550,645      $ 321,797
Cost of goods sold                             518,270        371,304
                                             ---------      ---------
  Gross profit (Loss)                           32,375        (49,507)
                                             ---------      ---------
Selling, general, and
  administrative                               310,043        274,075
Research, engineering,
  and development                              264,520        122,161
                                             ---------      ---------
  Total operating expenses                     574,563        396,236
Stock compensation and
  financing costs                              324,540             --
Interest income                                 14,960         25,166
Other expenses                                  18,981          5,323
                                             ---------      ---------
  Loss before income taxes                    (870,749)      (425,900)
Provision for income taxes                         350            200
                                             ---------      ---------
  NET LOSS                                   $(871,099)     $(426,100)
                                             =========      =========

    RESULTS OF OPERATIONS-THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE
                           MONTHS ENDED MARCH 31, 1997

Net  sales for the three  month  period  ended  March  31,  1998 were  $321,797,
representing a decrease of approximately  42% over the  corresponding  period in
1997.  This  decrease  is  principally  attributable  to  the  ongoing  economic
conditions in South Korea,  which resulted in a slowing of shipments of products
to South Korea. South Korean customers  comprised 42% and 66% of the total sales
for the quarter ended March 31, 1998 and March 31, 1997, respectively.  Sales to
the PCS Wireless Local Loop customers increased from less than 1% of total sales
for the quarter ended March 31, 1997 to 35% of total sales for the quarter ended
March 31,  1998.  This trend is expected to continue  throughout  the year.  The
Company's  sales to US and European  customers  comprised 20% of total sales for
the first  quarter of 1998  compared with less than 18% for the first quarter of
1997. The Company is continuing its sales and marketing efforts to diversify its
client base with its PCS single and multichannel products.

                                       -8-

<PAGE>

               PART 1 - FINANCIAL INFORMATION - ITEM 2 (CONTINUED)

Gross profit  (loss) for the three month period ended March 31, 1998 amounted to
$ (49,507)  (-15.4%  of sales),  compared  to $32,375  (5.8% of sales),  for the
corresponding  period  in  1997.  The  decrease  in the  gross  margin  from the
corresponding period of the prior year is principally attributable to key Korean
customers placing holds on purchase orders they placed in early 1997.

Selling,  general and  administrative  expenses were $274,075 (85% of sales) for
the period  ended  March 31, 1998  compared  to $310,043  (56% of sales) for the
corresponding  period in 1997. These expenses decreased from 1998 to 1997 due to
higher  consulting and professional  fees relating to the public offering during
the first quarter of 1997.

Research,  engineering and development decreased from 1997 to 1998. Research and
development  expenses for the period ended March 31, 1998 were $122,161 compared
to the  expenditures  for the period  ended March 31, 1997 which were  $264,520.
Research, engineering and development decreased in the first quarter of 1998
compared to the first  quarter of 1997 due to continuing  orders from  customers
involving less research and development expenses.  This trend should continue as
reoccurring orders are received.

Interest  income for the three months ended March 31, 1998 was $25,166  compared
to $14,960 for the  corresponding  period in 1997.  This  increase is due to the
injection  of IPO funds in January and March of 1997,  which were  invested in a
money market account.

Stock  compensation  expense  for the three  months  ended March 31, 1998 was $0
compared with $ 324,540 for the  corresponding  period in 1997, which relates to
the deferred  costs on warrants  issued in September and December 1996 at prices
substantially  lower than the initial public offering price. No future write off
are expected.

As a result of the foregoing,  the Company  incurred net losses of ($426,100) or
(.10) per share for the three  months  ended  March 31, 1998  compared  with net
losses of ($871,099) or (.17) per share for the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1998,  the Company had cash of  $1,966,289  principally  due to the
injection  of IPO  funds.  During  the  first  quarter  of 1998  $10,000  of the
outstanding  loan from a  principal  stockholder  was paid off . The Company had
accrued  expenses  of  $89,593  at March 31,  1998  consisting  of  payroll  and
commissions.

                                       -9-

<PAGE>

               PART 1 - FINANCIAL INFORMATION - ITEM 2 (CONTINUED

    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.




                                      -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:  May 19, 1998                    By: /s/ DEVENDAR S. BAINS
                                            ---------------------
                                        Name:   Devendar S. Bains
                                        Title:  Chief Executive Officer,
                                                President, Treasurer,
                                                Principal Accounting
                                                Officer and Director 



                                      -11-