I am creating a directory. I would like the users to be able to select a category from a drop down list on a form(categories pulled from a field on the table), select the category, and have Access provide a report of the findings of the parameter query (address, phone ect).

All you need to do is put the form and control name as the criteria of the category field in your query. The syntax is
forms!YourFormName!YourCategoryDropdown

Access will even add the brackets for you.