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

                                 AMENDMENT NO. 1
                                       TO
                                   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 March 31, 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 May 12, 1999:

   Classes of Common Stock                          Number of shares outstanding
-----------------------------                       ----------------------------
Common Stock, $.007 par value                                  5,700,844

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 --
         March 31, 1999 and December 31, 1998 .................................1

         Condensed Consolidated Statements of Operations --
         Three months ended March 31, 1999 and 1998 ...........................2

         Condensed Consolidated Statements of Cash Flows --
         Three months ended March 31, 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 ........................5


                           PART II - OTHER INFORMATION

Item 1.  Changes in Securities and Use of Proceeds ............................8

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


<PAGE>
<TABLE>
<CAPTION>
                                          PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements

                                     Galaxy Enterprises, Inc. and Subsidiaries
                                  Unaudited Condensed Consolidated Balance Sheets
<S>                                                                      <C>                      <C>
                                                                          Unaudited                  Audited
                                                                          March 31,                December 31,
                                                                             1999                      1998
                              ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                             $     639,237            $    24,718
   Trade accounts receivable:                                                  250,401                 81,620
   Inventory                                                                    26,000
   Prepaid Expenses                                                            488,291                 18,549
   Deferred income taxes                                                        14,200                 14,200
   Credit card reserves                                                        184,163                129,205
         TOTAL CURRENT ASSETS                                                1,602,292                268,292

EQUIPMENT
   Computer and office equipment                                               209,512                190,508
   Computer software                                                            41,843                 32,189
   Furniture and fixtures                                                        6,401                  6,104
   Other                                                                        25,915                  2,840
   Less:  Accumulated depreciation                                             (79,904)               (59,773)
         NET BOOK VALUE                                                        203,767                171,868

OTHER ASSETS
   Deferred charges                                                             61,533                 67,127
   Goodwill                                                                    780,303                794,753
   Other                                                                        13,015                 32,815

         TOTAL ASSETS                                                        2,660,910              1,334,855
-------------------------------------------------------------------------=========================================

                      LIABILITIES AND EQUITY
CURRENT LIABILITIES:
   Trade accounts payable                                                $     788,364            $   830,774
   Accrued expenses                                                            145,380                108,536
   Income taxes currently payable                                              (37,292)                 7,900
   Notes payable                                                                90,000                115,000
   Unearned income                                                                                      6,060
                                                                         -----------------------------------------
         TOTAL CURRENT LIABILITIES                                             986,452              1,068,270

DEFERRED INCOME TAXES                                                           10,300                 10,300
VENDOR RESERVES RETAINED                                                        51,561

SHAREHOLDERS' EQUITY:
   Common stock                                                                 39,947                 36,971
   Additional paid in capital                                                1,543,483                 91,959
   Retained earnings                                                            29,167                127,355
     TOTAL STOCKHOLDER'S EQUITY                                              1,612,597                256,285

                                                                         -----------------------------------------
     TOTAL LIABILITIES AND EQUITY                                            2,660,910              1,334,855
                                                                         =========================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                     Galaxy Enterprises, Inc. and Subsidiaries
                             Unaudited Condensed Consolidated Statement of Operations

                                                                          Three Months Ended
                                                                               March 31,
                                                              ------------------------------------------
                                                                          1999              1998
                                                              ------------------------------------------
<S>                                                             <C>                 <C>
REVENUES
   Sales                                                        $      3,612,125    $      2,945,322
   Cost of sales                                                       1,944,500           1,328,807
                                                              ------------------------------------------
         GROSS PROFIT                                                  1,667,625           1,616,515

OPERATING EXPENSES
   Selling                                                             1,281,558           1,032,939
   General and administrative                                            481,693             208,113
   Depreciation                                                           25,724              11,394
   Amortization                                                           14,450              11,864
                                                              ------------------------------------------
         TOTAL OPERATING EXPENSES                                      1,803,425           1,264,310
                                                              ------------------------------------------

         OPERATING INCOME                                               (135,800)            352,205

OTHER (INCOME) EXPENSES
   Interest income                                                        (2,229)
   Other income                                                                               (3,172)
   Interest Expense                                                        3,639                 296
Other Expense                                                              6,169
                                                              ------------------------------------------
         TOTAL OTHER (INCOME) EXPENSES                                     7,579              (2,876)

                                                              ------------------------------------------
Income before income taxes                                              (143,379)            355,081

Income tax expense (benefit)                                             (45,192)            148,384

                                                              ------------------------------------------
         NET INCOME (LOSS)                                               (98,187)        $   206,697
                                                              ==========================================


Weighted average shares outstanding:
   Basic                                                               5,625,272           5,271,652

   Diluted                                                                                 5,280,452

Net income per share:
   Basic                                                                  (0.017)              0.039

   Diluted                                                                                     0.039
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                     Galaxy Enterprises, Inc. and Subsidiaries
                             Unaudited Condensed Consolidated Statement of Cash Flows

                                                                                 Three Months Ended
                                                                                      March 31,
                                                                         -----------------------------------
                                                                               1999              1998
                                                                         -----------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                           <C>              <C>
Net income (loss)                                                               (98,187)        206,697
Adjustments  to  reconcile  net  earnings to net cash flows from (used
by) operating activities::
     Depreciation                                                                25,724          11,394
     Amortization                                                                14,450          11,864

Changes in operating assets and liabilities:
     Increase in accounts receivables                                          (168,781)         (5,175)
     Increase in inventories                                                    (26,000)              0
     Increase in prepaid expenses                                              (469,742)              0
     (Increase) decrease in credit card reserves                                (54,958)         13,145
     Decrease (increase) in other assets                                         19,800          (6,999)
     Decrease in accounts payable                                               (42,410)       (158,034)
     Increase in vendor reserves retained                                        51,561               0
     (Decrease) increase in accrued income taxes payable                        (45,192)        148,384
     Increase (decrease) in other current liabilities                            30,784        (129,479)
                                                                         ----------------   ----------------
Net cash flows (used by) operating activities                                  (762,951)         91,797
                                                                         ----------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES

     Purchase of equipment                                                      (52,030)        (10,432)
                                                                         ----------------   ----------------
         Net cash used in investing activities                                  (52,030)        (10,432)
                                                                         ----------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES

     Cash from notes payable
     Repayment of notes                                                         (25,000)              0
     Common stock issued for cash                                             1,454,500               0
                                                                         ----------------   ----------------
         Net cash flows from financing activities                             1,429,500               0
                                                                         ----------------   ----------------

NET INCREASE (DECREASE) IN CASH                                                 614,519          81,365

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

CASH AT THE END OF THE PERIOD                                                   639,237         194,509
                                                                         ===================================

------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
<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.


<PAGE>



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

Three Months Ended March 31, 1999 compared to Three Months Ended March 31, 1998

Revenues.  The Company's sales for the three-month  period ending March 31, 1999
were  $3,612,125  as compared to $2,945,  322 for the quarter  ending  March 31,
1998, an increase of 22.6%.  The increase was do to increased  attendance at the
Company's  Internet  training  workshops.  During the first  quarter of 1999 the
Company conducted 38 workshops compared with 25 for the similar period in 1998.

Cost of  Services/Products  Sold. Cost of sales during 1999 totaled  $1,944,500,
which  is  equal  to  53.8% of  revenues.  Cost of  sales  during  1998  totaled
$1,328,807,  which is equal to 45.1% 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
while the sales price of the  products  remained  unchanged.  The  Company  will
increase sales prices in the second and subsequent  quarters to improve margins.
Another  factor  contributing  to the lower  gross  profit was the  increase  in
telemarketing  sales, which have lower margins.  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 and telemarketing services.
Cost of sales does not include any depreciation.

Selling,   General   and   Administrative   Expenses.   Selling,   General   and
Administrative  Expenses  plus  depreciation  were equal to  $1,763,251  in 1999
compared to  $1,241,052  in 1998.  These  expenses,  as a  percentage  of sales,
increased in 1999 to 48.8% from 42.2% in 1998. The increase in the expenses as a
percentage  of sales is  attributable  to increases in salary  expense,  royalty
payments,  legal expenses,  shareholder  relations and rent for larger quarters.
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 1999 was  $25,724  compared to 11,394 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 quarter of 1999.

Amortization.  During 1999  amortization  of Goodwill and  Deferred  Charges was
$14,450  compared to $11,864 in 1998.  Total  Goodwill at the end of the quarter
was  $780,303 and Deferred  Charges  were  $61,533  (net of  amortization).  The
Goodwill arose from the purchase by the Company of Profit  Education  System and
CO-OP Business Services, Inc.

Income Taxes.  Income tax benefit for 1999 was $45,192 compared to an expense of
$148,384 in 1998. Both amounts were calculated at the statutory rates and assume
that the Company will be profitable for the year ending December 31, 1999.

Net Income/Loss. The Company reported Net Loss of $98,187 for the Quarter ending
March 31, 1999, as compared to Net Income of $206,697 for the three-month period
ending March 31, 1998. On a per share basis this amounted to a loss of $.017 per
share in 1999 as compared to a profit of $.039 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 March 31, 1999 totaled  $639,237 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 1,602,292 and $268,292,
respectively.

Prepaid  Expenses.  Prepaid expense at March 31, 1999 were $488,291  compared to
18,549 at the end of last year.  The  increase is mainly the result of recording
certain  marketing  costs  ($420,790)  incurred in the first  quarter of 1999 as
prepaid expenses since they apply directly to Internet training  workshops to be
held  during  the  second  quarter of 1999.  Revenues  to be derived  from these
expenditures  will occur in the second 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 March 31, 1999 were  $184,163
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 March 31,  1999  totaled  $788,364  as
compared to $830,774 at the end of 1999. Total current  liabilities at March 31,
1998 were $986,452 compared to $1,068,270 at December 31, 1998. This improvement
occurred  because  proceeds  from the sale of  stock  were  used to pay past due
accounts payable invoices.

Equipment and  Property.  Equipment  increased  during the first quarter of 1999
from  $231,641 to  $283,671  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 $1,612,597 during
the first  quarter of 1999 from  $256,285 at December 31,  1998,  an increase of
$1,356,312.  This  resulted  from the sale of Company  stock as explained in New
Investment above, but partially offset by the net loss for the quarter.

LIQUIDITY

Ratios. At March 31, 1999 the Company's  current ratio,  current assets compared
to current  liabilities,  was a 1.6 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.  Current cash flow from operations plus cash from the sale of Company
stock will allow 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 February  25, 1999 the  Company  signed a letter of intent to acquire  Impact
Media, L.L.C.  ("Impact").  Impact is a product development company and produces
products  that can be sold to GMI customers  and others.  The Company  estimates
that one-half of these additional sales will occur via  telemarketing.  With the
acquisition  of Impact,  the Company  believes it will be able to  significantly
increase sales.



                           PART II - OTHER INFORMATION


Item 1.  Changes in Securities and Use of Proceeds

         (c)  During   January   1999,   the  Company  sold  to  an   accredited
institutional  investor a $500,000 convertible note. During January and February
1999 the purchaser  converted the note into 169,192 common shares of the Company
at a weighted  average price of $2.96per share. The Company relied upon SEC Rule
504 and Section 4(2) of the  Securities Act of 1933, in the sale of the note and
shares.

              During  February and March 1999,  the Company sold 250,000  common
shares  and  issued  a  two-year,   250,000   share  warrant  to  an  accredited
institutional  investor for $1,000,000.  The Company relied upon Section 4(2) of
the Securities Act of 1933, as amended.


Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

         (b)  Reports on Form 8-K

              A Report on Form 8-K dated  February  23,  1999,  was filed by the
         Registrant  during  the three  months  ended  March 31,  1999.  The 8-K
         reported at Item 5 the private sale of common  stock.  See Item 1 above
         and also Part I Item 2.


                                   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:  July 22, 1999                       GALAXY ENTERPRISES, INC.



                                           /s/ Frank C. Heyman
                                           -------------------------------------
                                           Frank C. Heyman
                                           Chief Financial Officer
                                          (As a duly  authorized  officer of the
                                           Company and as principal financial
                                           officer of the Company)