(FORTUNE Magazine) – If star wars scientists can create imaging technology that detects imperfections in bombs and missiles, why not the same for human tissue? Lawrence Livermore National Laboratory is doing just that: The longtime weapons lab has teamed with Fischer Imaging, a Denver company, to develop a digital mammography device that will produce pictures of women's breasts that are clearer and will use less radiation than conventional machines. Morgan Nields, Fischer's CEO, says the device will be ready for FDA consideration next year. Funding for the Livermore/ Fischer partnership comes from the Energy Department, which along with the Defense Department is scrambling to find commercial applications for military research. So far the two agencies have targeted 840 such projects, worth more than $1 billion. Beneficiaries, who generally put in matching funds, include Chrysler, Caterpillar, and Xerox. In turning its high-tech weaponry into plowshares, the U.S. military will soon cross swords with an old adversary. Since May, a U.S. company called East/West Technology Partners, a consortium with ties to the Russian Academy of Sciences, has been selling Soviet military technology with commercial potential to U.S. companies, including subsidiaries of Unisys and Amoco. Among the goodies in its grab bag are advanced algorithms that make computers run faster and a deodorizer than can mask 99% of the disagreeable smells in a room. Very little in the way of finished products has emerged from either country. One reason, says Jon Kutler, managing director of Quarterdeck Investment Partners in Los Angeles: ''Government bureaucracy. You can't get defense conversion until you convert the government. The only way to make military technology commercially viable is private capital.'' Enter Quarterdeck, a startup that hopes to provide that solution. In March 1993, just two months after forming his company, Kutler funded his first venture: He put nearly $2 million into a deal in which A&H International Products bought defense electronics technology to make a pager that beeps when a toddler wearing the high-tech gadget begins to stray. BeeperKid should be on the market later this year.