<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-Q/A

                                AMENDMENT NO. 1

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1998
                                                            -------------


                          Commission File Number 1-9948
                                                 ------

                           AMERICAN REALTY TRUST, INC.
         -----------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


          Georgia                                           54-0697989
-------------------------------                          -------------------
(State or Other Jurisdiction of                           (I.R.S. Employer
Incorporation or Organization)                           Identification No.)


10670 North Central Expressway, Suite 300, Dallas, Texas         75231
-----------------------------------------------------------------------------
   (Address of Principal Executive Offices)                    (Zip Code)


                                 (214) 692-4700
                       -----------------------------------
                         (Registrant's Telephone Number,
                              Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
                                         ---        ---    

                      APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.


Common Stock, $.01 par value                   10,755,584
----------------------------         ------------------------------
         (Class)                     (Outstanding at July 31, 1998)


<PAGE>   2

This Form 10-Q/A amends the Registrant's quarterly report on Form 10-Q for the
quarter ended June 30, 1998 as follows:


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES - pages 23 and 28.





<PAGE>   3

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS


Introduction

American Realty Trust, Inc. (the "Company") was organized in 1961 to provide
investors with a professionally managed, diversified portfolio of equity real
estate and mortgage loan investments selected to provided opportunities for
capital appreciation as well as current income.

Liquidity and Capital Resources

General. Cash and cash equivalents at June 30, 1998 aggregated $4.6 million,
compared with $5.3 million at December 31, 1997. Although the Company
anticipates that during the remainder of 1998 it will generate excess cash flow
from property operations, as discussed below, such excess cash is not expected
to be sufficient to discharge all of the Company's debt obligations as they
mature. The Company will therefore continue to rely on externally generated
funds, including borrowings against its investments in various real estate
entities, the sale or refinancing of properties and, to the extent available or
necessary, borrowings from its advisor, which totaled $10.7 million at June 30,
1998, to meet its debt service obligations, pay taxes, interest and other
non-property related expenses.

At December 31, 1997, notes payable totaling $89.0 million had either scheduled
maturities or required principal reduction payments during 1998. The Company had
the option of extending the maturity dates of $18.3 million of that amount, but
in April 1998, the Company paid off $5.0 million of this amount, refinanced the
remaining $13.3 million with the same lender, increased the loan's principal
balance by $1.7 million and established a new maturity date of April 2000. The
lender on an additional $19.5 million has extended the loan's maturity date to
February 2000. In March 1998, the Company made a $10.2 million paydown on this
loan. In addition, through June 30, 1998 the Company has paid down or paid off a
total of $20.4 million of the remainder of such maturing debt. The Company
intends to either pay off, extend the maturity dates or obtain alternate
financing for the remaining $30.8 million of debt that matures during the
remainder of 1998. There can be no assurance, however, that these efforts to
obtain alternative financing or complete land sales will be successful.

Net cash used in operating activities increased from $2.9 million for the six
months ended June 30, 1997, to $9.1 million for the six months ended June 30,
1998. Fluctuations in the components of cash flow from operations are discussed
in the paragraphs that follow.

Net cash from pizza operations (sales less cost of sales) for the six months
ended June 30, 1998, were $248,000 as compared to $493,000 for the same period
in 1997. Pizza operations were consolidated effective May 1, 1997.

Net cash from property operations (rents collected less payments for expenses
applicable to rental income) increased to $5.1 million for the six months ended
March 31, 1998 from $4.5 million for the corresponding period in 1997. Of this
increase $1.7 million relates to the Company having acquired five hotels, two
shopping centers, and 34 apartment complexes subsequent to June 30, 1997. An
additional increase of $533,000 was due to increased rental income from the
Company's merchandise mart and two of its hotels. These increases were
partially offset by a decrease of $1.8 million due to costs relating to 30 land
parcels acquired subsequent to June 30, 1997.

The Company expects an increase in cash flow from property operations during the
remainder of 1998. Such increase is expected to be derived from operations of
the Inn at the Mart, Best Western Oceanside Hotel, Piccadilly Hotels,
Williamsburg Hospitality House and the twenty-nine apartment complexes acquired
by the Company in May 1998.

Interest collected decreased to $381,000 for the six months ended June 30, 1998,
from $2.1 million for the corresponding period in 1997. The decrease is
attributable to the foreclosure of the $22.7 million note receivable secured by
the Continental Hotel and Casino in April 1998.
The note had been performing in 1997.

Interest paid increased from $7.5 million for the six months ended June 30,
1997, to $16.5 million for the corresponding period in 1998. The increase is
primarily due to debt incurred or assumed relating to 30 land parcels, five
hotels, two shopping centers and 34 apartment complexes acquired subsequent to
June 30, 1997.

Advisory and servicing fees paid increased from $1.0 million for the six months
ended June 30, 1997, to $1.7 million for the corresponding period in 1998. The
increase was due to an increase in the Company's gross assets, the basis for
such fee.

General and administrative expenses paid increased from $2.4 million for the six
months ended June 30, 1997, to $4.2 million for the corresponding period in
1998. The increase is primarily attributable to $217,000 in legal fees incurred
in 1998 relating to pending acquisitions and refinancings, a $268,000 increase
in advisor cost reimbursements and $1.1 million of general and administrative
expenses related to pizza operations. Pizza operations were consolidated
effective May 1, 1997.

Distributions from equity investees' increased to $8.5 million for the six
months ended June 30, 1998, from $1.3 million for the corresponding period in
1997. Included in 1998 distributions were special distributions totaling $6.7
million from Transcontinental Realty Investors, Inc. ("TCI") and National
Realty, L.P. ("NRLP") that had been accrued at December 31, 1997.

In January 1998, the Company purchased the El Dorado Parkway land, a 8.5 acre
parcel of undeveloped land in McKinney, Texas, for $952,000. The Company paid
$307,000 in cash, assumed the existing mortgage of $164,000 and obtained seller
financing of the remaining $481,000 of the purchase price.


                                       23
<PAGE>   4

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

Equity Investments. During the fourth quarter of 1988, the Company began
purchasing shares of various real estate investment trusts having the same
advisor as the Company, and units of limited partner interest in NRLP. It is
anticipated that additional equity securities of NRLP and the REITs, Continental
Mortgage and Equity Trust ("CMET"), Income Opportunity Realty Investors, Inc.
("IORI") and TCI, will be acquired in the future through open-market and
negotiated transactions to the extent the Company's liquidity permits.

In August 1996, the Company consolidated its existing NRLP margin debt held by
various brokerage firms into a single margin loan. The Company has pledged
3,349,169 of its NRLP units as security for such margin loan which had a
principal balance of $24.0 million at July 31, 1998. The margin loan is due and
payable. The Company has received a commitment from a financial institution for
a new loan in a principal amount in excess of the current outstanding loan
balance. The Company has notified the existing margin lender that it intends to
pay such loan in full prior to August 31, 1998.

Equity securities of the REITs and NRLP held by the Company may be deemed to be
"restricted securities" under Rule 144 of the Securities Act of 1933
("Securities Act"). Accordingly, the Company may be unable to sell such equity
securities other than in a registered public offering or pursuant to an
exemption under the Securities Act for a period of one year after they are
acquired. Such restrictions may reduce the Company's ability to realize the full
fair market value of such investments if the Company attempted to dispose of
such securities in a short period of time.

The Company's cash flow from these investments is dependent on the ability of
each of the entities to make distributions. CMET and IORI have paid regular
quarterly distributions since the first quarter of 1993, NRLP since the fourth
quarter of 1993 and TCI since the fourth quarter of 1995. The Company received
distributions totaling $8.5 million in the first six months of 1998 from the
REITs and NRLP, including $6.7 million in distributions that were accrued at
December 31, 1997.

The Company has margin arrangements with various brokerage firms which provide
for borrowing up to 50% of the market value of the Company's marketable equity
securities. The borrowings under such margin arrangements are secured by equity
securities of the REITs, NRLP and the Company's trading portfolio and bear
interest rates ranging from 7.0% to 11.0%. Margin borrowing totaled $56.2
million at June 30, 1998.

The Company's management reviews the carrying values of the Company's properties
and mortgage notes receivable at least annually and whenever events or a change
in circumstances indicate that impairment may exist. Impairment is considered to
exist if, in the case of a property, the future cash flow from the property
(undiscounted and without interest) is less than the carrying amount of the
property. For notes receivable impairment is considered to exist if it is
probable that all amounts due under the terms of the note will not be collected.
In those instances where impairment is found to exist, a provision for loss is
recorded by a charge against earnings. The Company's mortgage note receivable
review includes an evaluation of the collateral property securing such note. The
property review generally includes selective property inspections, a review of
the property's current rents compared to market

                                       28
<PAGE>   5

                                 SIGNATURE PAGE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                             AMERICAN REALTY TRUST, INC.






Date:    January 26, 1999               By:  /s/ Karl L. Blaha
     ------------------------              --------------------------------
                                           Karl L. Blaha
                                           President



Date:    January 26, 1999               By:  /s/ Thomas A. Holland
     ------------------------              --------------------------------
                                           Thomas A. Holland
                                           Executive Vice President and
                                           Chief Financial Officer
                                           (Principal Financial and
                                           Accounting Officer)


                                       36