UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


[ X ]    QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 1999

                                       or

[   ]    TRANSACTION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE    ACT   OF   1934   FOR   THE    TRANSITION    PERIOD    FROM
         _________to__________.

Commission File Number:  0-25055


                            Galaxy Enterprises, Inc.
                            ------------------------
        (Exact name of small business issue as specified in its charter)


           Nevada                                                88-031-5212
-------------------------------                              -------------------
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)


                  890 N. Industrial Park Road, Orem, Utah 84057
                  ---------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (801) 227-0004
                           --------------------------
                           (Issuer's telephone number)


         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act 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 [  ].


         State the number of shares  outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. As of August 13, 1999

  Classes of Common Stock                           Number of shares outstanding
-----------------------------                       ----------------------------
Common Stock, $.007 par value                                   5,705,444

Transitional Small Business Disclosures Forms
         (Check one):
         Yes [    ]  No [ X ]

<PAGE>

                            Galaxy Enterprises, Inc.

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

                               INDEX TO FORM 10-Q



                         PART I -- FINANCIAL INFORMATION


Item 1.  Financial Statements (unaudited)                                   Page

         Condensed Consolidated Balance Sheets --
         June 30, 1999 and March 31, 1999 .....................................1

         Condensed Consolidated Statements of Operations --
         Three months ended June 30, 1999 and 1998 ............................2

         Condensed Consolidated Statements of Cash Flows --
         Three months ended June 30, 1999 and 1998 ............................3

         Notes to Condensed Consolidated Financial Statements .................4

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations ........................4


                           PART II - OTHER INFORMATION


Item 4.  Submission of Matters for a Vote of Security Holders .................8

Item 6.  Exhibits and Reports on Form 8-K .....................................8

<PAGE>



                                          PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements
<TABLE>
<CAPTION>
                        Galaxy Enterprises, Inc. and Subsidiaries
                  Unaudited Condensed Consolidated Balance Sheet as of:

                                                       Unaudited             Audited
                                                      Jun 30, 1999         Dec 31, 1998
                                                    -----------------    -----------------
                      Assets
<S>                                                 <C>                  <C>
Current Assets:
  Cash                                                       337,226               24,718
  Accounts Receivable                                        297,039               81,620
  Inventory                                                   44,133
  Prepaid Expenses                                           208,630               18,549
  Deferred Income Taxes                                       14,200               14,200
  Credit Card Reserves                                       185,347              129,205
                                                    -----------------    -----------------
      Total Current Assets                                 1,086,575              268,292

Fixed Assets:
  Computer & Office Equipment                                236,401              190,508
  Computer Software                                           57,076               32,189
  Furniture & Fixtures                                         8,832                6,104
  Other                                                       30,354                2,840
  Less: Accumulated Depreciation                            (102,949)             (59,773)
                                                    -----------------    -----------------
      Net Book Value                                         229,714              171,868

Goodwill                                                     879,205              794,753
Organizational, Start-up, Offering Costs                                           67,127
Deferred Income Taxes                                        296,045
Other Assets                                                  29,582               32,815
                                                    -----------------    -----------------

        Total Assets                                       2,521,121            1,334,855
                                                    =================    =================


               Liabilities & Equity

Current Liabilities:
  Notes Payable - Short Term                                  37,443              115,000
  Accounts Payable                                           836,234              830,774
  Accrued Expenses                                           264,528              108,536
  Income Taxes Currently Payable                                                    7,900
  Unearned Income                                                                   6,060
                                                    -----------------    -----------------
      Total Current Liabilities                            1,138,205            1,068,270

Long Term Debt:
  Deferred Income Taxes                                       10,300               10,300
  Vendor Reserves Retained                                    89,860

Shareholder Equity:
  Common Stock                                                39,978               36,971
  Additional Paid-in Capital                               1,547,052               91,959
  Retained Earnings                                         (304,274)             127,355
                                                    -----------------    -----------------
     Total Shareholder Equity                              1,282,756              256,285

Total Liabilities & Shareholders Equity                    2,521,121            1,334,855
                                                    =================    =================
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                             Galaxy Enterprises, Inc. and Subsidiaries
                                     Unaudited Condensed Consolidated Statement of Operations


                                                      Three Months         Three Months         Six Months           Six Months
                                                          Ended               Ended               Ended                Ended
                                                      June 30, 1999       June 30, 1998       June 30, 1999        June 30, 1998
                                                     ----------------    -----------------   -----------------   -------------------
<S>                                                  <C>                 <C>                 <C>                 <C>
REVENUES
  Sales                                                    4,555,163            3,222,696           8,167,288             6,168,018
  Cost of sales                                            2,685,833            1,398,781           4,643,970             2,733,755
                                                     ----------------    -----------------   -----------------   -------------------
                                    GROSS PROFIT           1,869,330            1,823,915           3,523,318             3,434,263

OPERATING EXPENSES
  Selling                                                  1,727,463            1,208,912           3,009,021             2,241,851
  General and administrative                                 632,980              307,940           1,101,036               509,144
  Depreciation                                                17,451               12,858              43,175                24,994
  Amortization                                                14,650               11,863              29,100                23,727
                                                     ----------------    -----------------   -----------------   -------------------
                        TOTAL OPERATING EXPENSES           2,392,544            1,541,573           4,182,332             2,799,716

                                OPERATING INCOME            (523,214)             282,342            (659,014)              634,547

OTHER (INCOME) EXPENSES
  Interest income                                             (3,948)                                  (6,177)
  Other income
  Interest expense                                               928                  484               4,567                   780
  Other expense                                                1,072               13,658               7,241                10,486
                                                     ----------------    -----------------   -----------------   -------------------
                   TOTAL OTHER (INCOME) EXPENSES              (1,948)              14,142               5,631                11,266

                                                     ----------------    -----------------   -----------------   -------------------
Income before income taxes                                  (521,266)             268,200            (664,645)              623,281

Income tax expense (benefit)                                (232,805)              93,045            (277,997)              241,429
                                                     ----------------                        -----------------

Income before cumulative effect of a
      change in accounting principle                        (288,461)                                (386,648)

Cumulative effect on prior years of
     accounting change (less income taxes of
     $25,432)                                                 44,982                                   44,982

                             NET INCOME (LOSS)              (333,443)             175,155            (431,630)              381,852
                                                     ================    =================   =================   ===================



Weighted average shares outstanding:

  Basic                                                    5,705,444            5,271,652           5,705,444             5,271,652
  Diluted                                                  5,714,644            5,280,452           5,714,644             5,280,452

Net income per share:

  Basic                                                       (0.058)               0.033              (0.076)                0.072
  Diluted                                                     (0.058)               0.033              (0.076)                0.072
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                        Galaxy Enterprises, Inc. and Subsidiaries
                                Unaudited Condensed Consolidated Statement of Cash Flows
                                    For the six months ending June 30, 1999 and 1998

                                                                               1999                        1998
                                                                      ------------------------    ------------------------
<S>                                                                   <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)                                                                    (431,630)                    381,852
Adjustments to reconcile net earnings to net
cash flows from (used by)  operating activities:
  Depreciation                                                                         43,175                      27,152
  Amortization                                                                         29,100                      34,914
  Effect of accounting change                                                          67,127

  Changes in operating assets and liabilities:
    Increase in accounts receivable                                                  (215,419)                   (346,362)
    Increase in inventories                                                           (44,133)
    Increase in prepaid expenses                                                     (190,081)                     (5,859)
    (Increase) decrease in credit card reserves                                       (56,142)                     39,808
    Increase in deferred income taxes                                                (296,045)
    Decrease (increase) in other assets                                                 3,233                       3,001
    Increase in goodwill                                                             (113,352)
    (Decrease) increase in accounts payable                                             5,460                    (129,450)
    Increase (decrease) in accrued expenses                                           155,992                    (198,493)
    Increase in vendor reserves retained                                               89,860
    (Decrease) increase in accrued income taxes payable                                (7,900)                    241,166
    Increase (decrease) in other current liabilities                                   (6,258)                     (7,342)
                                                                      ------------------------    ------------------------
          Net cash flows (used by) operating activities                              (967,013)                     40,387
                                                                      ------------------------    ------------------------

CASH FLOWS FROM INVESTING ACTIVITIES

  Purchase of equipment                                                              (101,022)                    (37,425)
                                                                      ------------------------    ------------------------
          Net cash used by investing activities                                      (101,022)                    (37,425)
                                                                      ------------------------    ------------------------

CASH FLOWS FROM FINANCING ACTIVITIES

  Cash from notes payable
  Repayment of notes                                                                  (77,557)
  Common stock issued for cash                                                      1,458,100
                                                                      ------------------------    ------------------------
          Net cash flows from financing activities                                  1,380,543                           0
                                                                      ------------------------    ------------------------

NET INCREASE (DECREASE) IN CASH                                                       312,508                       2,962

CASH AT THE BEGINNING OF THE PERIOD                                                    24,718                     113,144

                                                                      ========================    ========================
CASH AT THE END OF THE PERIOD                                                         337,226                     116,106
                                                                      ========================    ========================
</TABLE>
<PAGE>

                            GALAXY ENTERPRISES, INC.

         NOTES TO UNAUDITED CONSENSED CONSOLIDATED FINANCIAL STATEMENTS


Basis of Presentation

In the opinion of management,  the accompanying  unaudited interim  consolidated
financial  statements  reflect all  adjustments,  consisting of normal recurring
adjustments,  necessary to present fairly the financial position, and results of
operations and cash flows of Galaxy  Enterprises,  Inc. ("the "Company") for the
respective  periods  presented.  The results of operations for an interim period
are not  necessarily  indicative  of the results,  which may be expected for any
other interim period, or for the year as a whole.

Certain  information  and footnote  disclosures  normally  included in financial
statements presented in accordance with generally accepted accounting principles
have been omitted.  The accompanying  unaudited interim  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements and notes in the Company's  Form 10-KSB for the year ending  December
31, 1998. All  inter-company  accounts and transactions  have been eliminated in
consolidation.

Change in Accounting Principle
In July 1998,  the AICPA issued  Statement of Position  98-5  "Reporting  on the
Costs of Start-up  Activities".  SOP 98-5 requires start-up costs to be expensed
as incurred and requires previously capitalized  organization and start-up costs
to be written-off  effective for fiscal years beginning after December 15, 1998.
Accordingly, the Company has reported a charge of $41,495 (net of tax benefit of
$25,432) or $.007 per share for write-off of previously capitalized organization
costs.


Item 2.  Management's Discussion and Analysis or Plan of Operation

The  following  discussion  and analysis of financial  condition  and results of
operations   should  be  read  in  conjunction  with  the  Unaudited   Condensed
Consolidated Financial Statements and Notes thereto included elsewhere herein.

Results of Operations

Six Months Ended June 30, 1999 and the second calendar  quarter of 1999 compared
to Six Months Ended June 30, 1998 and the second calendar quarter of 1998

Revenues. The Company's sales for the six-month period ending June 30, 1999 were
$8,167,288  as compared to  $6,168,018  for the similar  period  ending June 31,
1998, an increase of 32.4%. Sales for the second quarter of 1999 were $4,555,163
compared to 3,222,696 in 1998 an increase of 41.1%. The increase in both periods
was do to increased  attendance at the Company's  Internet  training  workshops.
During the first six months of 1999 the Company conducted 76 workshops  compared
with 55 for the similar  period in 1998.  Furthermore,  during the six months of
1999 the company's  telemarketing  revenue was $3,761,541 compared to $2,397,462
in 1998, an increase of 56.8%.

Cost of  Services/Products  Sold.  Cost of sales  during the first six months of
1999 totaled  $4,643.970,  which is equal to 56.9.8% of revenues.  Cost of sales
during the first six months of 1998 totaled $2,733,755,  which is equal to 44.3%
of revenues.  This  increase in the cost of sales as a percentage of revenues is
primarily  due to an increase in the cost of  conducting  the Internet  training
workshops and programming customer  storefronts.  Another factor contributing to
the lower gross profit was the increase in telemarketing sales, which have lower
margins.  The  Company is making  efforts  to bring more of these  telemarketing
sales  in-house,  as opposed to  contracting  the sales with outside  companies,
which will help increase these  margins.  During the second quarter of 1999 Cost
of sales were equal to 59.0% of revenues  compared to 43.4% for the same quarter
in 1998.  Cost of sales is made up of the cost of tangible  products  sold,  the
cost to  conduct  Internet  training  workshops,  the cost to  program  customer
storefront and contract telemarketing  services.  Cost of sales does not include
depreciation.

Selling,   General   and   Administrative   Expenses.   Selling,   General   and
Administrative  Expenses in the first six months of 1999 were $4,110,057 in 1999
compared to  $2,360,443  in 1998.  These  expenses,  as a  percentage  of sales,
increased in 1999 to 50.9% from 45.0% in 1998. The increase in the expenses as a
percentage  of  sales  is  attributable  to  the  Company's  development  of its
telemarketing channel,  increased customer service and programming staff, larger
facilities  to  accommodate   growth  and  increased  legal  fees.  The  Company
anticipates  that such expenses,  as a percentage of sales,  will improve in the
future, as increasing revenues will allow for economies of scale.

Depreciation.  Depreciation  expense in the first six months of 1999 was $43,175
compared  to  $24,994  in 1998.  This was the result of  purchases  of  computer
equipment,  software and other  long-term  assets during the latter part of 1998
and the first half of 1999.

Amortization.  During 1999  amortization  of Goodwill and  Deferred  Charges was
$96,027 compared to $23,727 in 1998. In July 1998, the AICPA issued Statement of
Position 98-5 "Reporting on the Costs of Start-up Activities". SOP 98-5 requires
start-up  costs to be expensed as incurred and requires  previously  capitalized
organization  and start-up  costs to be  written-off  effective for fiscal years
beginning  after  December  15,  1998.  Accordingly,  the Company has reported a
charge of $66,927  during this period for  previously  capitalized  organization
costs. The balance of the amortization, $29,100 results from the amortization of
Goodwill.  Total Goodwill at the end of the six-month  period was $879,205.  The
Goodwill  arose from the  purchase  by the  Company  of the assets and  business
interests of Profit Education Systems,  Inc., CO-OP Business Services,  Inc. and
Impact Media, LLC.

Income Taxes. Income tax benefit for 1999 was $233,015 compared to an expense of
$241,429 in 1998. Both amounts were calculated at the statutory rates and assume
that the Company will be profitable during the next twelve months.

Net Income/Loss.  The Company reported a Net Loss of $431,360 for the six months
June 30, 1999,  as compared to Net Income of $381,852 for the similar  period in
1998. On a per share basis this amounted to a loss of $.076 per share in 1999 as
compared to a profit of $.072 per share in 1998.

Capital Resources

New  Investments.  During the first  quarter  of 1999,  the  Company  (i) sold a
$500,000  convertible  note to the  Augustine  Fund  through  Augustine  Capital
Management, an institutional investor based in Chicago,  Illinois, and (ii) sold
250,000 shares of common stock to Invest Linc Emerging Growth Fund I, L.L.C. and
granted  the fund a warrant to purchase  up to 250,000  additional  shares at an
exercise  price of $2.84  per  share for a total  consideration  of  $1,000,000.
During  January and February  1999,  the Augustine  Fund converted the note into
169,192  shares of the  Company's  common stock at a weighted  average  price of
$2.96 per share. This capital infusion has significantly  improved the Company's
liquidity and its ability to meet ongoing working capital needs.

Cash.  Cash on hand at June 30, 1999 totaled  $337,226 as compared to $24,178 at
December  31, 1998 because of the cash  received by the sale of stock  described
above.  For the same reason,  total current  assets were 1,086,575 and $268,292,
respectively.

Prepaid  Expenses.  Prepaid  expense at June 30, 1999 were $208,630  compared to
18,549 at the end of last year.  The  increase is mainly the result of recording
certain  marketing  costs  ($141,130)  incurred in the second quarter of 1999 as
prepaid expenses since they apply directly to Internet training  workshops to be
held  during  the third  quarter  of 1999.  Revenues  to be  derived  from these
expenditures  will  occur in the third or  subsequent  quarters  of 1999.  These
marketing  costs consist of mailings to and newspaper  advertising for potential
customers for our Internet  training  workshops  that target dates in subsequent
quarters;  the salaries,  travel  costs,  meeting rooms and supplies used by our
employees to hold "preview sessions" which will secure attendees to workshops in
subsequent quarters;  and travel, hotel and other costs which must be prepaid to
support workshops in subsequent quarters.

Credit  Card  Reserves.  Credit card  reserves  at June 30,  1999 were  $185,347
compared to  $129,205  at December  31,  1998.  Credit card  reserves  represent
amounts of money due the Company from banks and credit card processing companies
who  have  handled  Visa,  Master  Card,  American  Express  and  Discover  Card
transactions for us. The accounting  policy used is to recognize  revenue at the
time  the  customer's   credit  card  is  charged  by  establishing  an  account
receivable.  Later  when the cash is  transferred  to one of our bank  operating
accounts the  receivable  is credited.  The cash arrives in our bank accounts at
various times  depending on the nature of the transaction and can be as early as
48 hours or as late as several weeks.

Accounts Payable. Accounts payable at June 30, 1999 totaled $836,234 as compared
to $830,774 at the end of 1998. Total current  liabilities at June 30, 1998 were
$842,160 compared to $1,068,270 at December 31, 1998.

Vendor Reserves  Retained.  These reserves represent amounts withheld from sales
commissions earned by contract telemarketing  companies.  It is anticipated that
some customer refunds will be made and the company retains a small percentage of
the commissions  earned to assure recovery of the sales commissions in the event
that the contract telemarketing company is no longer earning commissions.  There
is a  contractual  limit to the amount of reserve the Company is  authorized  to
retain.  Six months after termination of services by the  telemarketing  company
any unused reserve will be given to the contractor.

Equipment and Property.  Equipment increased during the first six months of 1999
from  $231,641 to  $332,633  before  depreciation.  This was due to the need for
additional  computer  and other  equipment  to conduct the  Company's  business.
Additional  capital equipment  purchases will be necessary as the Company grows.
The  Company  also  leases  equipment.  Leasing  allows the  Company  the use of
equipment  without the need to disburse the entire purchase price in cash at the
time of acquisition.

Stockholders'  Equity. Total Stockholders' Equity increased to $1,282,756 during
the first six months of 1999 from  $256,285 at December 31, 1998.  This resulted
from the sale of  Company  stock  as  explained  in New  Investment  above,  but
partially offset by the net loss for the period.

Liquidity

Ratios. At June 30, 1999 the Company's current ratio, current assets compared to
current  liabilities,  was a .96  to 1  compared  to a  negative  4.0 to 1 as of
December 31, 1998.  This  improvement  was  accomplished  by the sale of Company
stock.

Financing Arrangements.  On July 30, 1998 the Company was able to arrange a bank
line of credit  for  $100,000  with Far West Bank of Provo,  Utah.  This line is
intended to assist the Company through the seasonal slow periods it experiences.
From July 15 through Labor Day and again from  Thanksgiving Day until January 15
of the  following  year the  business is slower than at other  times.  It is the
result of fewer  attendees at the Company's  Internet  training  seminars during
these traditional vacation and holiday periods.

Cash flow.  Sale of Company  stock has  allowed  the Company to meet its current
obligations. During the first quarter of 1999 the Company sold 250,000 shares of
common stock and a convertible  note resulting in net proceeds to the company of
$1,450,000.  These cash inflows  enabled the Company to begin  implementing  its
strategic  plan for future  growth,  but they will not be sufficient to fund the
entire  business  plan.  Therefore,  it will be necessary  to obtain  additional
equity funding and long-term loans from banks or other financial institutions to
meet its long-term goals.  The Company  anticipates that it will sell additional
stock through either  private or registered  public  offerings  during 1999, and
will  continue its efforts to improve its  financial  condition so as to qualify
for long term loans from commercial banking institutions.

Business Development

         On June 25, 1999,  IMI, Inc., a wholly-owned  subsidiary of the Company
acquired substantially all of the assets of Impact Media, L.L.C., a Utah limited
liability  company  ("Impact  Media")  engaged in the  design,  manufacture  and
marketing of multimedia brochure kits, shaped compact discs and similar products
and services intended to facilitate  conducting business over the Internet.  The
assets acquired include, among other things,  equipment,  inventory and finished
goods,   intellectual   property,   computer  programs  and  cash  and  accounts
receivable,  the primary use of which  relates to the  design,  manufacture  and
marketing of Impact Media's  products and services.  It is the present intent of
the Company to continue to devote the assets to such purposes.  The  transaction
is more fully described in a Form 8-K filing dated July 9, 1999.



                           PART II - OTHER INFORMATION


Item 4.  Submission of Matters to a Vote of Security Holders

                  At the Company's  Annual Meeting of  Shareholders  held on May
         27,  1999,  the  stockholders  re-elected  the  following  persons to a
         one-year term to the Board of Directors:

                  NOMINEES                     FOR                  WITHHOLD
                  --------                     ---                  --------
         John J. Poelman                     2,901,071                4,015
         Brandon Lewis                       2,901,071                4,015
         Frank C. Heyman                     2,901,071                4,015
         Darral G. Clarks                    2,901,071                4,015
         B. Ray Anderson                     2,901,071                4,015


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

                  Exhibit 27 is attached.

         (b)  Reports on Form 8-K

                  A Report  on Form 8-K  dated  July 9,  1999,  was filed by the
         Registrant  during  the  three  months  ended  June 30,  1999.  The 8-K
         reported  that IMI,  Inc., a  wholly-owned  subsidiary  of the Company,
         acquired  substantially  all of the assets of Impact Media,  L.L.C.,  a
         Utah limited liability company. See Item 2 of Part I above.




                                   SIGNATURES


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


Date:  August 16, 1999                    GALAXY ENTERPRISES, INC.


                                              /S/
                                          ______________________________________
                                          Frank C. Heyman
                                          Chief Financial Officer
                                          (As a duly  authorized  officer of the
                                          Company and asprincipal financial
                                          officer of the Company)