U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                   FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934 [FEE REQUIRED]
                   For the fiscal year ended December 31, 1996
                                        OR
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 [NO FEE REQUIRED]
         For the transition period from                to               

                          Commission File Number 1-8631

                          DOVER INVESTMENTS CORPORATION
                  (Name of small business issuer in its charter)

                    DELAWARE                      94-1712121
        (State or other jurisdiction of   (I.R.S. Employer Identification No.)
        incorporation or organization)

           350 California Street, Suite 1650, San Francisco, California 94104
           (Address of Principal Executive Offices)               (Zip Code)

                                  (415) 951-0200
                           (Issuer's telephone number)

          Securities registered under Section 12(b) of the Exchange Act:
          Title of each class      Name of each exchange on which registered
                    None                            None

          Securities registered under Section 12(g) of the Exchange Act:
                 Class A Common Stock, $.01 par value per share       
                                 (Title of class)
                 Class B Common Stock, $.01 par value per share       
                                 (Title of class)

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       

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [x]

The issuer's revenues for its most recent fiscal year, which is the year
ended December 31, 1996 were $10,159,443.

The aggregate market value of the voting stock held by non-affiliates,
computed by reference to the average bid and asked prices of the Class A
Common Stock and Class B Common Stock as of February 1, 1997, was $2,819,876. 
The average bid and asked prices of Class A Common Stock and Class B Common
Stock were $4.625 and $4.625 per share, respectively, on that date.

The number of shares outstanding of each of the issuer's classes of Common
Stock as of February 1, 1997, were as follows:

          Title                                     Shares Outstanding

     Class A Common Stock ..........................        650,198   
     Class B Common Stock ..........................        318,148   
                                   
           Transitional Small Business Disclosure Statement
                           Yes        No  X 

                  DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Proxy Statement relating to the registrant's 1997 
Annual Meeting of Stockholders are incorporated by reference into Part III of
this Report on Form 10-KSB.












                           TABLE OF CONTENTS
                                                               Page No.


                                PART I



   ITEM 1.   DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . .  1

   ITEM 2.   DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . .  3

   ITEM 3.   LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . .  3

   ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . .  4



                                PART II



   ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
             MATTERS . . . . . . . . . . . . . . . . . . . . . . . .  4

   ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF                
             OPERATIONS . . . . . . . . . . . .  . . . . . . . . .    5

   ITEM 7.   FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . .  8

   ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . .  8



                               PART III



   ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
             PERSONS; COMPLIANCE WITH SECTION 16(a)
             OF THE EXCHANGE ACT. . . . . . . . . . . . . . . . . . . 9

   ITEM 10.  EXECUTIVE COMPENSATION .. . . . . . . . . . . . . . . . .9

   ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
             MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . .  9

   ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . .9

   ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K. . . . . . . . . 10



APPENDIX A.   CONSOLIDATED FINANCIAL STATEMENTS OF DOVER INVESTMENTS
              CORPORATION AND SUBSIDIARIES, AND REPORT OF 
              INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS,
              DECEMBER 31, 1996 AND 1995







                              PART I


ITEM 1.   DESCRIPTION OF BUSINESS

Dover Investments Corporation as Thrift Holding Company

          Dover Investments Corporation (the "Company"), formerly Homestead
Financial Corporation, previously owned all of the outstanding stock of Home-
stead Savings, a Federal Savings and Loan Association (the "Association"). 
(The term "the Company", as used herein, includes the Company and all of its
wholly-owned subsidiaries.)  On August 6, 1991, the Association completed the
exchange of certain subordinated debentures for convertible voting preferred
stock of the Association.  The exchange reduced the Company's voting control
of the Association to 20.7%.

          On October 30, 1992, the Office of Thrift Supervision ("OTS")
placed the Association in receivership with the Resolution Trust Corporation
("RTC") as receiver. Certain assets and liabilities of the Association were
transferred to a newly created federal savings association.  The new
association was then placed in conservatorship and the RTC appointed as
conservator.  The Company retains no interest in the Association or in the new
institution.
          
Current Operations

          The Company engages primarily in land development and building of
single family homes. 

          Real Estate Development.  At December 31, 1996, the Company has
completed lot improvements on one hundred and fifty lots and partial improve-
ments on ninety nine additional lots. Of the one hundred and fifty lots with
completed lot improvements, ten are part of a model complex, one hundred and
one have been built, sold and closed, sixteen are under construction and pre-
sold, nineteen are presold with construction commencing in January, 1997 and
four are for sale with construction also commencing in January, 1997.  The
market for homes at Marina Vista improved substantially during the latter
part of 1996.  See "Management's Discussion and Analysis or Plan of
Operations" for a discussion of the financing of the Marina Vista property.  

          Land Development.  The Company continues to be part of a Joint
Venture (the "Glenbriar Joint Venture") with Westco Community Builders, Inc.
("Westco") in Tracy, California which owns one hundred and eight acres of
land comprising a portion of the Glenbriar Estates Project.  During 1996, the
Company also formed a limited liability company with Westco, known as
Glenbriar Venture #2 which holds options to purchase approximately one
hundred and thirty one acres of land also comprising a portion of the
Glenbriar Estates Project.  Glenbriar Joint Venture and Glenbriar Venture #2
have succeeded in rezoning the Glenbriar Estates property to Low Density
Residential and have obtained the approval of new tentative subdivision maps
which provide for up to three hundred and ninety five lots on the Glenbriar
Joint Venture property and up to five hundred lots on the Glenbriar Venture #2
property.  In December of 1996, Glenbriar Joint Venture filed final sub-
division maps and improvement plans with the city of Tracy covering certain
off tract improvements for one hundred and seventy two lots.  At December 31,
1996, Glenbriar Joint Venture is negotiating with various builders for the
sale of lots upon approval of the final subdivision maps.  The Company
anticipates selling lots to merchant builders first in the Glenbriar Joint
Venture property and thereafter in the Glenbriar Venture #2 property.
     
     The Company expects that the Marina Vista project and the Glenbriar
Estates Project will provide a profit from the sale of homes and lots.  The
Company expects to invest in other real estate projects when appropriate
opportunities occur and is not subject to any limitations on the percentage
of assets which may be invested in any single investment or type of invest-
ment. In order to maintain it's market share of new home sales, the Company
keeps home prices competitive with other builders of a similar product, in
the vicinity of the project.

Regulation

          Because the Company owned 100% of the outstanding common stock of
the Association, it was required to register as a savings and loan holding
company under the Home Owners' Loan Act of 1933, as amended, and the regu-
lations promulgated by the OTS at 12 CFR 584.  Although the Company does not
have an interest in and does not exercise control of the Association, the OTS
takes the position that the Company continues to be registered as a savings
and loan holding company.  As a result, the Company may be subject to the
examination, supervision and reporting requirements of the OTS and the
Federal Deposit Insurance Corporation (the "FDIC"). 

          The Company is evaluating the possibility of obtaining a release
from registration as a savings and loan holding company.  There can be no
assurance as to when, or if, the OTS will approve a release, or what
conditions might accompany such approval.

Employees

          The Company currently has four full-time employees, all of whom
work at the Company's executive offices in San Francisco.

Leases

          The Company entered into an agreement to sublease new premises from a
related party corporation for a term that commenced on April 1, 1993 and ends on
February 15, 1999.  The Company's share of the sublease equals 46% of the
total rent paid which approximates $2,876 per month for 1996.  The Company is
also responsible for a yearly operating cost payment equal to 1.256 percent
of the basic operating cost, which amounted to $1,877 for 1996.

ITEM 2.   DESCRIPTION OF PROPERTY

          Information required by this item is incorporated by reference to
the information included under "Item 1 -- Description of Business -- Current
Operations -- Real Estate Development" and " -- Leases" in this report.

ITEM 3.   LEGAL PROCEEDINGS
          
          The Company, as the parent company of a group of affiliated
corporations filing consolidated Federal income tax returns, was contingently
liable for any liabilities arising with respect to the Association from such
returns filed for tax years through August 6, 1991.  The Internal Revenue
Service ("IRS") has completed examinations of all such federal income tax
returns from 1985 through 1990; no examination of the 1991 return is
anticipated.  The resolution of such examinations involved settlements which
were approved by the Congressional Joint Tax Committee.  Pursuant to such
settlements, the Company received $3,987,918.66 from the IRS in July 1995,
$1,029,660.89 of which represents interest. Additionally, the Company has
been allowed a net operating loss carryforward from 1990 of approximately
$29,000,000 due to the worthlessness of the stock of the Association.

          The Company filed a lawsuit against the Resolution Trust
Corporation ("RTC") in 1994, based on the RTC's disallowance of certain
claims made against the RTC by the Company in its capacity as a creditor of
the Association.  This lawsuit has now been settled. 
A Final Judgment was entered on January 18, 1996.  Most of the claims made by
the Company against the RTC had to do with the Company's potential tax
liability to the IRS and the Franchise Tax Board of the State of California
("FTB").  All tax claims have now been resolved.

          The result of the above is that the contingent liabilities for
taxes and/or RTC matters as described above have been satisfied in full.

          The Company has an agreement to indemnify its directors who
formerly served as directors and/or officers of the Association and its
subsidiaries.  The RTC, in a letter dated March 10, 1993, advised the present
and former directors and officers of the Association and its subsidiaries of
potential claims that the RTC may assert against them for the recovery of
losses suffered by the Association and its subsidiaries in connection with
certain specified actions and loan transactions.  No action has been taken by
the RTC on this matter for quite some time and the RTC went out of existence
on December 31, 1995.  Counsel to the Company have advised the Company that
in light of these circumstances and the likelihood of the expiration of the
statute of limitations, they do not see any prospect of material liability to
the RTC.  Consequently, the Company has not provided for any further
contingencies on these matters.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          None.

                              PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS

Market Information

          Shares of the Class A Common Stock and the Class B Common Stock are
currently traded on the NASD OTC Bulletin Board under the symbols DOVR-A and
DOVR-B.

          The high and low bid information for 1996 and 1995 are as reported
on the National Quotation Bureau Pink Sheets.  Such bid quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission, and may
not represent actual transactions.

                       CLASS A COMMON STOCK

                                                     High              Low
Fiscal 1996 Quarter Ended:                                
       March 31                                      6.875             6.375 
       June 30                                       8.000             6.375
       September 30                                  6.000             5.875
       December 31                                   6.250             5.500
Fiscal 1995 Quarter Ended: 
      March 31                                       2.500             2.000 
      June 30                                        4.750             4.000 
      September 30                                   5.875             5.375 
      December 31                                    7.000             6.250

                       CLASS B COMMON STOCK
                                                        
                                                     High              Low
Fiscal 1996 Quarter Ended:                    
       March 31                                      6.875             6.375
       June 30                                       8.000             6.375 
       September 30                                  6.000             5.875
       December 31                                   6.250             5.500
Fiscal 1995 Quarter Ended:
       March 31                                      2.500             2.000
       June 30                                       4.750             4.000
       September 30                                  5.875             5.375
       December 31                                   7.000             6.250


Holders
                             
                As of February 1, 1997, there were 567 stockholders of record
of the Class A Common Stock and 171 stockholders of record of the Class B
Common Stock.


Dividends

               The Company has not paid dividends on the Class A Common Stock
and Class B Common Stock since June 30, 1989 and presently has no intention
to pay dividends in the foreseeable future.

             In June 1995, the Company's Board of Directors approved a
stock repurchase program under which the Company may, subject to certain
requirements, purchase up to 200,000 shares of its Common Stock in the open
market.  As of December 31, 1996, the Company had repurchased 159,010 shares
of Common Stock at an aggregate purchase price of $830,000.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN  OF
         OPERATIONS

Results of Operations for the Years Ended December 31, 1996 and 1995

             The Company had a net loss of $174,000 for the year ended
December 31, 1996, compared to net income of $452,000 for the year ended
December 31, 1995.  The net loss for 1996 was the result of increased gross
profit from a higher number of home sales offset by higher selling costs,
increased general administrative costs and a decrease in interest income.
Net income for 1995 was the result of interest income received as a result
of tax settlements and expense reimbursements with the IRS and RTC.    
                             
             In the year ended December 31, 1996, the Company closed the sale
of 33 homes, compared to 13 homes sold in the year ending December 31, 1995.
Total sales were $10,036,000 for 1996, resulting in a gross profit of
$880,000 and a gross profit margin of 8.77 percent, compared to total sales
of $4,615,000 for 1995, resulting in a gross profit of $612,000 for the year
and a gross profit margin of 13 percent.  The decrease in profit margin 
is attributable to the reduction in sales prices.  Selling expenses of
$697,000 include the costs of maintaining a sales office, the model homes,
commissions payable to outside brokers and fees payable to Westco.  General
and administrative expenses increased by $180,000 in 1996. The lower general
& administrative expenses for 1995 were attributable to reimbursements of
professional fees incurred in connection with the IRS settlement and prepa-
ration and filing of claims against the RTC and the receipt of Delaware
Franchise Tax refunds. The Company's cash requirements for the next twelve
months will be satisfied by proceeds from home sales.  

                                              
             Interest income in 1996 decreased to $124,000 compared to
$697,000 in 1995. The increased interest income in 1995 was attributable to
tax refunds from the IRS and settlements with the RTC discussed above
under "Item 3 -- Legal Proceedings".  Other interest income for 1996 was
attributable to the Company investing its funds in overnight investments
which are collateralized by mortgage-backed certificates and are held on
behalf of the Company by dealers who arranged the transaction.  At
December 31, 1996, such overnight investments, with a weighted average
interest rate of 5.35% and a market value of the underlying collateral
of $1,402,081, totalled $1,400,000, compared to $2,300,000 in 1995.

             The Company elected to wind up and dissolve its wholly-owned
subsidiary, H.F. Properties, Ltd. and its wholly-owned subsidiary, GIC
Investments Corporation, effective February 16, 1996.  All remaining assets
have been distributed to the Company as the sole shareholder.  

             Costs for the development of property and the building of homes
are capitalized during the construction period.  Such costs include expen-
ditures for land, land improvements, model homes, capitalized interest, and
construction in progress.  (See NOTE C to the Consolidated Financial
Statements).  When a home is sold, the cost of sale is recognized, which
includes land, site development, construction, management fees and financing
costs.

Liquidity and Capital Resources

             At December 31, 1996, the Company had total assets of
$26,725,000, as compared to total assets of $27,967,000 at December 31, 1995.
The cost of the Company's property being developed was $23,119,000 in 1996,
compared to $23,776,000 in 1995. 
Highly liquid assets were $2,963,000 at December 31, 1996, compared to
$3,403,000 at December 31, 1995.

               The Company's total liabilities decreased to $7,629,000 at
December 31, 1996, compared to $8,384,000 at December 31, 1995.  This
decrease was attributable primarily to a reduction in notes payable to
$5,999,000, in 1996, from $8,020,000, in 1995, and an increase in accrued
interest and other liabilities of $1,490,000 in 1996 from $313,000 in 1995.

             Additional paid-in capital for the year ended December 31, 1995,
increased due to the following: $3,465,000, of which $507,000 represented
interest from an IRS refund; $282,000 in interest from the RTC settlement;
and an adjustment of $394,000 for previously accrued liabilities.  These
increases, less related income taxes of $289,000, are related to the
period prior to the quasi-reorganization. 

             During 1992, the Company renegotiated several terms of a
$10,000,000 mortgage loan payable to the seller of the Marina Vista property.
The loan had been secured by a deed of trust which encumbered the entire
Marina Vista property and matured on March 21, 1994.  The loan has been
modified to mature on March 29, 1997, with interim payments of principal
as described below, and the seller released the first fifty-four lots
(Phase I) from the lien of its deed of trust without receiving any release
price in exchange.  The release price on the balance of the lots securing
the deed of trust was adjusted accordingly.  The Company has made the
required principal payment of $2,310,000, due on September 29, 1996, therefore
reducing the principal balance to $2,500,000.  The note requires a principal
payment of $2,500,000 on March 29, 1997.  The Company expects that proceeds
from the sale of the homes to be constructed will be sufficient to pay down
the principal balance of the loan by the required date, although no
assurances can be given in this regard.  Interest on the loan at 12%
per annum continues to be payable quarterly.

             During 1996, the Company's primary liquidity needs were related
to funding development costs of the Marina Vista and Glenbriar Joint Venture
projects, in addition to notes payable, principal payments of $2,021,000 and
interest payments of $812,009.
                             
             During 1996, the Company borrowed a total of $1,596,850 from a
private source to pay for home construction costs.  The loan is secured by
lots and homes under construction in the Marina Vista project and will be
paid from the proceeds of home sales. The loan bears interest at the rate of
prime plus 1.5 percent per annum and matures on September 30, 1997.  The
Company also obtained an $802,000 loan secured by four model homes.  The loan
bears interest at the rate of 11.25 percent per annum and matures on June
30, 1998.   

             The Company's primary source of liquidity during 1996, was from
the proceeds of home sales.  The Company may also borrow funds from time to
time to develop fully both the Marina Vista and the Glenbriar Joint Venture
projects.




















ITEM 7.  FINANCIAL STATEMENTS

             The following consolidated financial statements of the Company,
as set forth on the pages indicated, are filed as part of this report.


         Index to Financial Statements

           Report of Independent Certified Public Accountants . . . . . .A-1

           Consolidated Balance Sheets at December 31, 1996 and 1995. .  A-2

           Consolidated Statements of Operations for the Years Ended
             December 31, 1996 and 1995. . . . . . . . . . . . . . . . . A-3

           Consolidated Statement of Stockholders' Equity for the 
             Years Ended December 31, 1996 and 1995. . . . . . . . . .  .A-4

           Consolidated Statements of Cash Flows for the Years Ended
             December 31, 1996 and 1995. . . . . . . . . . . . . . . .  .A-5


           Notes to Consolidated Financial Statements for the Years
             Ended December 31, 1996 and 1995. . . . . . . . . . . . . . A-6


ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

          None.
















                             PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
          ACT

          The information required by this item is incorporated by reference
to the information set forth under the caption "Proposal 1 -- Election of
Directors" contained in the Proxy Statement to be used by the Company in
connection with its 1997 Annual Meeting of Stockholders.


ITEM 10.  EXECUTIVE COMPENSATION

          The information required by this item is incorporated by reference
to the information set forth under the caption "Compensation of Executive
Officers and Directors" contained in the Proxy Statement to be used by the
Company in connection with its 1997 Annual Meeting of Stockholders.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

          The information required by this item is incorporated by reference
to the information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" contained in the Proxy Statement to be used
by the Company in connection with its 1997 Annual Meeting of Stockholders.




ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          The information required by this item is incorporated by reference
to the information set forth under the caption "Certain Transactions"
contained in the Proxy Statement to be used by the Company in connection with
its 1997 Annual Meeting of Stockholders.


ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a)  The exhibits listed below are filed with this report.

              3.1   Restated Articles of Incorporation and Restated By-Laws
                    of the Company.(4)

             10.1   1982 Stock Option Plan.(1)

             10.2   Form of Nonqualified Incentive Stock Option Agreement.(1)

             10.3   $10,000,000 Promissory Note Secured by Deed of Trust
                    dated March 29, 1991.(1)

             10.4   Development Agreement dated November 15, 1991 between
                    H.F. Properties, Ltd. and Westco Marina, Inc., as
                    amended.(1)

             10.5   Tax Sharing Agreement dated November 20, 1989 among the
                    Company, the Association, Homestead Land Development
                    Corporation and Gramercy.(1)                               

             10.6   Stock Option Plan for Nonemployee Directors.(2)

             10.7   Sublease Agreement dated April 1, 1993 between the Company
                    and Wilfred, Inc.(2)

             10.8   Extension and Modification Agreement for Promissory Note
                    and Deed of Trust dated August 25, 1992.(2)

             10.9   Partnership Agreement, Glenbriar Joint Venture, dated
                    January 7, 1994 between GIC Investment Corporation and
                    Westco Community Builders.(3)

             10.10  Stock Option Plan for Nonemployee Directors.(5)          
             
             10.11  Form of Nonqualified Stock Option Agreement as of
                    November 16, 1994.(5)       
    
             10.12  1995 Stock Option Plan.(5)      

             10.13  Form of Incentive Stock Option Agreement.(5)

             10.14  Form of Nonqualified Stock Option Agreement.(5)

             22.1   Subsidiaries of the registrant.(3)                         

             24.1   Consent of Grant Thornton LLP

             27.1   Financial Data Schedule for the Year Ended
                    December 31, 1996.

___________________
                   
           (1) - Incorporated by reference to the Exhibit bearing the same
                 numerical description in the Company's Annual Report on
                 Form 10-K for the  Year Ended December 31, 1991.

           (2) - Incorporated by reference to the Exhibit bearing the same
                 numerical description in the Company's Annual Report on
                 Form 10-KSB for the Year Ended December 31, 1992.

           (3) - Incorporated by reference to the Exhibit bearing the same
                 numerical description in the Company's Annual Report on
                 Form 10-KSB for the Year Ended December 31, 1993.

           (4) - Incorporated by reference to the Exhibit bearing the same
                 numerical description in the Company's Annual Report on
                 Form 10-KSB for the Year Ended December 31, 1994.

           (5) - Incorporated by reference to the Exhibit bearing the same
                 numerical description in the Company's Quarterly Report on
                 Form 10-QSB for the Quarter Ended June 30, 1995.
       
     (b)  No reports on Form 8-K were filed with the Securities and Exchange
          Commission during the fourth quarter of the year ended
          December 31, 1996.


<PAGE>
                            SIGNATURES

          In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                              DOVER INVESTMENTS CORPORATION


Date: March 11 , 1997          By:  /s/ Lawrence Weissberg     
                                Lawrence Weissberg
                                Chairman of the Board,
                                President and Chief
                                Executive Officer


          In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

Signature                            Title                    Date     


/s/ Arnold Addison                   Director             March 11, 1997
(Arnold Addison)

/s/ John Gilbert                     Director             March 11, 1997
(John Gilbert)

/s/ Michael Raddie                   Director and Chief   March 11, 1997 
(Michael Raddie)                     Financial Officer

/s/ Lawrence Weissberg               Director, Chairman   March 11, 1997
(Lawrence Weissberg)                 of the Board,
                                     President and
                                     Chief Executive
                                     Officer (Principal                       
                                     Executive Officer and
                                     Principal Accounting
                                     Officer)

/s/ Will C. Wood                     Director             March 11, 1997
(Will C. Wood)

<PAGE>
                            APPENDIX A
                                 
                                 
                CONSOLIDATED FINANCIAL STATEMENTS
      AND REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                                 
                  DOVER INVESTMENTS CORPORATION
                         AND SUBSIDIARIES
                                 
                    December 31, 1996 and 1995
                                 
<PAGE>







               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Shareholders
Dover Investments Corporation and Subsidiaries

      We have audited the accompanying consolidated balance sheets of Dover
Investments Corporation and Subsidiaries and Joint Ventures as of December
31, 1996 and 1995, and the related consolidated statements of operations,
stockholders' equity and cash flows for the years then ended.  These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.  

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and signifi-
cant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Dover Investments Corporation and Subsidiaries and Joint Ventures as of
December 31, 1996 and 1995, and the consolidated results of their operations
and their consolidated cash flows for the years then ended in conformity
with generally accepted accounting principles.



GRANT THORNTON LLP

San Francisco, California
February 18, 1997
                                  
                                  
                                  
                                  
                                  
                                  
           DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES
                                  
                     CONSOLIDATED BALANCE SHEETS
                            December 31, 
                 (in thousands except share amounts)
                                                                     
ASSETS                                                 1996            1995
 Cash                                               $ 1,438         $   639    
 Restricted Cash                                        125             464
 Securities Purchased under Agreement to Resell       1,400           2,300 
 Income Taxes Receivable                                 17              79
 Homes Held for Sale                                  1,437           1,263
 Property Held for Development                       21,682          22,513
 Other Assets                                           626             616   
 Deferred Income Taxes                                   -               93 
    Total Assets                                    $26,725         $27,967 
                     
LIABILITIES AND STOCKHOLDERS' EQUITY
 Accrued Interest and Other Liabilities             $ 1,490         $   313
 Deferred Income Taxes                                    9              -     
 Notes Payable                                        5,999           8,020 
 Minority Interest in Joint Venture                     131              51
    Total Liabilities                                 7,629           8,384   
     
 Stockholders' Equity  
  Class A Common Stock, Par Value, $.01 Per
   Share-Authorized 2,000,000 Shares; Issued
   805,098 Shares at 12/31/96 and 801,778
   Shares at 12/31/95                                      8              8
  Class B Common Stock, Par Value, $.01 Per
   Share-Authorized 1,000,000 Shares; Issued
   322,708 Shares at 12/31/96 and 325,578
   Shares at 12/31/95                                      3              3
  Additional Paid-In Capital                          19,031         19,185  
  Retained Earnings from January 1, 1993                 884          1,058  
  Treasury Stock (154,450 in 1996 and 129,900 
   in 1995 of Class A Shares and 4,560 
   of Class B Shares)                                   (830)          (671)    
  
   Total Stockholders' Equity                         19,096         19,583 
                                   
   Total Liabilities and Stockholders' Equity        $26,725        $27,967  
                                                                      
        The accompanying notes are an integral part of these statements.
                                  
                                  
           DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES
                                  
                CONSOLIDATED STATEMENTS OF OPERATIONS
                      Year Ended December 31, 
               (in thousands except per share amounts)

                                                       1996            1995
                                                       
 Home Sales                                         $ 10,036       $  4,615    
 Cost of Sales                                         9,156          4,003 
                                                
   Gross Profit                                          880            612

 Selling Expenses                                        697            252 
 General and Administrative Expenses                     534            354 

                                                       1,231            606 

   Operating (Loss) Profit                              (351)             6 

 Other Income (Expense)                    
  Interest                                               124            697
  Other                                                   -              (3)  
                                                         124            694 

 (Loss) Income before Income Taxes                      (227)           700
     
 Benefit (Provision) for Income Taxes                     53           (248)   
     
 Net (Loss) Income                                  $   (174)      $    452 

 Net (Loss) Income per Share                        $  (0.18)      $   0.42 










        The accompanying notes are an integral part of these statements.



                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 
                           Two years ended December 31 
                                  (in thousands)

<TABLE>      
                                                 Additional               Treasury 
                               Common Stock      Paid-In      Retained     Stock
                               Class A Class B   Capital      Earnings     at Cost        Total    
<CAPTION>                                     
<S>                            <C>        <C>    <C>         <C>          <C>            <C>   
Balance at January 1, 1995      $   8      $  3   $14,715     $   606      $  (17)        $15,315 

Prequasi-reorganization tax 
 refund and related interest, 
 less income taxes of $289          -         -     3,852          -           -            3,852
Purchase of common stock            -         -       -            -         (654)           (654)
Realization of prequasi-
 reorganization net
 operating loss tax
 benefits                           -         -       618          -            -             618

Net income for the year             -         -        -          452           -             452 

Balance at December 31, 1995        8         3    19,185       1,058        (671)         19,583      
Reissuance of treasury stock        -         -        (2)         -            2              -
Purchase of common stock            -         -                    -         (161)           (161)
Adjustment for utilization of
 prior years prequasi-          
 reorganization net operating
 loss tax benefits                   -        -      (152)         -            -            (152)
Net loss for the year                -        -        -         (174)          -            (174) 

Balance at December 31, 1996     $   8     $  3   $19,031     $   884      $ (830)        $19,096      







<FN>
         The accompanying notes are an integral part of this statement.
</TABLE>                                        
                                        
                 DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES
                                        
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            Year ended December 31,
                                 (in thousands)
                                        
                                                          1996          1995    
Cash Flows from Operating Activities:
  Net (Loss) Income                                    $  (174)       $  452
  Reconciliation of Net Income to Net Cash        
   Provided by (Used in) Operating Activities:
      Minority Interest                                     80          (246)
      Deferred Taxes                                       (50)           93
      Tax Benefit of Utilizing Prequasi-                                       
          reorganization Net Operating Losses                -           329
      Changes in Assets and Liabilities:
        Restricted Cash                                    339          (372)
      Property Held for Development                        831          (514)
        Homes Held for Sale                               (174)           28
      Other Assets                                         (10)          121
      Income Taxes Receivable                               62          (230)
        Accrued Interest and Other Liabilities, Net      1.177        (3,110)
      Net Cash Provided by (Used in)
        by Operating Activities:                         2,081        (3,449)
Cash Flows from Investing Activities:
  Proceeds from Securities Purchased
   under Agreement to Resell                               900           100 
  Cash and Securities Held in Trust Account                 -          2,500 
      Net Cash Provided by Investing Activities            900         2,600 
Cash Flows from Financing Activities:                                          
  Repayment of Notes Payable                            (2,021)       (2,380)
  Proceeds from Tax Refunds and Related Interest 
   Prior to Prequasi-Reorganization                         -          4,141
Purchase of Common Stock                                  (161)         (654)   
      Net Cash (Used in) Provided by
        Financing Activities                            (2,182)        1,107   
Net Increase in Cash                                       799           258   
Cash at Beginning of Year                                  639           381    
Cash at End of Year                                    $ 1,438      $    639
Supplemental Cash Flow Activity:         
Income Tax Payments                                    $    -       $     12



         The accompanying notes are an integral part of these statements.
                 DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)


NOTE A - ORGANIZATION AND ACCOUNTING POLICIES

Dover Investments Corporation (the Company), formerly Homestead Financial
Corporation, is in the business of developing land and building single family
homes. The Company owns property in San Leandro, California and in
Tracy, California. 

The Company and Westco Community Builders, Inc. ("WCB") formed a joint
venture general partnership, Glenbriar Joint Venture ("Glenbriar"), for the
purpose of owning, subdividing and developing a tract of land comprising of
approximately 108 acres located in Tracy, California known as the Glenbriar
project.

On January 1, 1996, the Company formed Glenbriar Venture #2, a limited
liability company ("LLC"), with Westco Community Builders, Inc. ("Westco"),
its partner in the Glenbriar Joint Venture.  The LLC purchased from Westco
options to purchase land adjacent to the Glenbriar Joint Venture property. 
This adjacent land has exactly the same entitlement status as the Glenbriar
Joint Venture property.  The Company anticipates developing and selling lots
in both the Glenbriar Joint Venture property and the Glenbriar Venture #2
property.

The Company elected to wind up and dissolve its wholly-owned subsidiary, H.F.
Properties, Ltd., and its wholly-owned subsidiary, GIC Investment Corpor-
ation, effective February 16, 1996.  All remaining assets have been
distributed to the Company as the sole shareholder.  

     Principles of Consolidation

     The consolidated financial statements include the accounts of the
     Company and its subsidiaries and joint ventures.  All significant
     intercompany transactions are eliminated in consolidation.

     Property Held for Development

     Costs for the development of property and the building of homes are
     capitalized during the construction period.  Such costs include
     expenditures for land, land improvements, model homes, capitalized
     interest, various fees, and costs of construction-in-progress.
     (See Note C.)  

     Use of Estimates

     In preparing the financial statements in conformity with generally
     accepted accounting principles, management is required to make estimates
     that affect the reported amounts of assets and liabilities and the
     disclosure of contingent assets and liabilities at the date of the
     financial statements and revenues and expenses during the
     reporting period.  Actual results could differ from those estimates.

                                        
                 DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)


NOTE A - ORGANIZATION AND ACCOUNTING POLICIES (continued)
     
     Revenues From and Cost of Home Sales

     The Company recognizes income from home sales upon the closing and
     transfer of title to the buyer of the home.  When a home is sold, the
     cost of the sale is recognized, which includes land, site development,
     construction, management fees and financing costs.  For each home sold,
     a reserve equal to one percent of the selling price is established to
     cover warranty expense incurred subsequent to the home sale.  Warranty
     expenditures are charged to the reserve when paid.

     Income Taxes

     The Company follows the liability method in accounting for income taxes.
     Under this method, deferred tax assets and liabilities are determined
     based on differences between the financial reporting and tax basis of
     assets and liabilities and on the expected future tax benefit to be
     derived from tax loss carryforwards, if any.  Additionally, deferred
     tax items are measured using current tax rates. A valuation allowance
     is established to reflect the likelihood of realization of deferred
     tax assets. 
     
     Net Income Per Share

     Net income (loss) per share is computed based on the weighted average
     number of common and common equivalent shares on a combined basis for
     the two classes of common stock, Class A and Class B.  The weighted
     average number of Class A and Class B common share equivalents used to
     compute income (loss)  per share was 968,346 at December 31, 1996,
     and 1,071,917 at December 31, 1995. 

     Restricted Cash

     Restricted cash is to be used for certain infrastructure improvements
     relating to the Marina Vista Development.

     Reclassification

     Prior year financial statements have been reclassified to conform to
     current year presentation.





                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)


NOTE B - SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL

The Company purchased securities under agreements to resell (repurchase
agreements) with primary securities dealers.  Such repurchase agreements are
typically overnight investments and collateralized by mortgage-backed
certificates which are held on behalf of the Company by the dealers who
arrange the transaction.  At December 31, 1996 and 1995, the weighted average
interest rate of such repurchase agreements was 5.35% and 5.56%,
respectively.  The market value of the repurchase agreements approximates
cost and all such securities are held-to-maturity.

NOTE C - PROPERTY HELD FOR DEVELOPMENT

          Real Estate Development.  At December 31, 1996, the Company has
completed lot improvements on one hundred and fifty lots and partial
improvements on ninety nine additional lots. Of the one hundred and fifty lots
with completed lot improvements, ten are part of a model complex, one hundred
and one have been built, sold and closed, sixteen are under construction and
presold, nineteen are presold with construction commencing in January, 1997
and four are for sale with construction also commencing in January, 1997. 

          Land Development.  The Company continues to be part of a Joint
Venture (the "Glenbriar Joint Venture") with Westco Community Builders, Inc.
("Westco") in Tracy, California which owns one hundred and eight acres of
land comprising a portion of the Glenbriar Estates Project.  During 1996, the
Company also formed a limited liability company with Westco, known as
Glenbriar Venture #2 which holds options to purchase approximately one
hundred and thirty one acres of land also comprising a portion of the
Glenbriar Estates Project. Glenbriar Joint Venture and Glenbriar Venture #2
have succeeded in rezoning the Glenbriar Estates property to Low Density
Residential and have obtained the approval of new tentative subdivision maps
which provide for up to three hundred and ninety five lots on the Glenbriar
Joint Venture property and up to five hundred lots on the Glenbriar
Venture #2 property.  In December of 1996, Glenbriar Joint Venture filed
final subdivision maps and improvement plans with the city of Tracy covering
certain off tract improvements for one hundred and seventy two lots. 
At December 31, 1996, Glenbriar Joint Venture is negotiating with various
builders for the sale of lots upon approval of the final subdivision maps.
The Company anticipates selling lots to merchant builders first in the
Glenbriar Joint Venture property and thereafter in the Glenbriar
Venture #2 property.
     
     







                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)


NOTE C - PROPERTY HELD FOR DEVELOPMENT (continued)

The carrying value of the developments consist of:

     MARINA VISTA - SAN LEANDRO

                                               1996                 1995    

     Land                                    $ 8,408             $10,407
     Land improvements                         1,205               1,511
     Model homes                               1,437               1,263 
     Capitalized interest                      3,859               4,222
     Construction in progress                  2,328               2,733
     Developer's fee                             900                 900    
                                                          
     Subtotal                                $18,137             $21,036  


     GLENBRIAR ESTATES PROJECT - TRACY

                                               1996           1995    

     Land                                   $ 1,578        $ 1,526
     Land improvements                           24             13
     Capitalized interest                       308            176
     Construction in progress                 1,395            817
     Option Fees                              1,395             -
     Developer's fee                            282            208   

     Subtotal                                 4,982          2,740    

     TOTAL (Marina Vista and
      Glenbriar Estates Project)            $23,119        $23,776           





                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)  
     

NOTE D - NOTES PAYABLE

Notes payable at December 31, are comprised of the following:

                                                       1996             1995
     
     Notes Payable, maturing June 30, 1998, and
      bearing interest at 11.25% per annum
      secured by four model homes                       802              802

     Notes Payable, maturing March 29, 1997,
      payable in annual installments of
      $2,500 and bearing interest at 12%
      per annum, payable quarterly;
      secured by 99 lots                              2,500            4,811    

     Notes Payable, maturing September 30, 1997,
      and bearing interest at prime
      (8.25% at December 31, 1996) plus 1.5%;
      secured 
      by 19 lots                                      1,597            1,307

     Notes Payable, maturing September 30, 1997,
      and bearing interest at 12% per annum
      secured by the Deed of Trust                    1,100            1,100   

                                                    $ 5,999          $ 8,020    


Aggregate principal payments subsequent to December 31, 1996, are as follows:
                                             
                         1997                      $ 5,197
                         1998                          802

                                                   $ 5,999

Interest paid in 1996 and 1995, amounted to $812 and $1,070, respectively,
and was capitalized as part of property held for development.





                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)  
     

NOTE E - LEASE COMMITMENT

The Company has entered into an agreement with a related party to sublease
its office space.  The agreement requires monthly payments totaling $35 per
year from 1995 through 1998 and $4 in 1999.  The lease expires
February 15, 1999.

Rent expense for the years ended December 31, 1996 and 1995 totaled $35
per year.


NOTE F - INCOME TAXES

Income tax expenses (benefit) for the year ended December 31, consist of:

                                              1996                1995      

     Current                                 $ (3)               $ 341

     Deferred                                 (50)                 (93)        
     Total                                  $ (53)               $ 248


A tax benefit for 1995 of  $618, for prequasi-reorganization net operating
losses has been credited to paid-in capital. Additionally, the interest on
the IRS refund credited to paid-in capital has been reduced by income taxes
of $289. In 1996, an adjustment of $152 was made reducing paid-in capital
and increasing deferred taxes payable for the utilization of prior years'
prequasi-reorganization net operating loss tax benefits.












                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)  
     

NOTE F - INCOME TAXES (continued)

The following is a reconciliation between the federal statutory rate and the
effective rate used for the Company's provision for taxes:

                                                   1996               1995
     Tax expense at statutory federal 
      income tax rate (34%)                       $ (77)              $238  
     State franchise tax                            (14)               138
     Change in valuation allowance
      for deferred tax assets                         -               (126)
     Accrual adjustment                              36                 -
          Other                                       2                 (2) 

          Income tax expense                      $ (53)             $ 248  

Net deferred tax asset as of December 31, 1996, is as follows:

                                                   1996               1995
          Accrued warranty reserve                $  43              $  27
          AMT credit carry forward                   18                  - 
          Accrued expenses                           14                 15  
          State income taxes                          1                 51  
          Capital loss carryover                     30                 30
          Property held for development            (207)                 -
          Depreciation                               (5)                 -
          Net operating loss carry forward          127                  - 
                                                     21                123
          Valuation allowance                        30                 30
               
          Net deferred tax (liability) asset      $  (9)              $ 93    

Statement of Financial Accounting Standards ("SFAS") 109 requires the
establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets.  The Company has recorded a valuation
allowance for the capital loss carryforward in 1995 and 1996.  The deferred
tax asset schedule above does not give effect to any deferred tax asset
related to prequasi-reorganization tax loss carry forwards.  Tax benefits
resulting from such tax loss carryforwards of approximately $9,900 for
federal and $900 for state will be reflected in the financial statements as
credits to additional paid-in capital rather than as reductions in current
income tax expense, when and if recognized.  The change in the valuation
allowance was ($126) in 1995 with no change in 1996.

                                        
                 DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)


NOTE F - INCOME TAXES (continued)

The Company, as the parent company of a group of affiliated corporations
filing consolidated Federal income tax returns, was contingently liable for
any liabilities arising with respect to the Association from such returns
filed for tax years through August 6, 1991.  The Internal Revenue Service
("IRS") has completed examinations of all such federal income tax returns
from 1985 through 1990; no examination of the 1991 return is anticipated.
The resolution of such examinations involved settlements which were approved
by the Congressional Joint Tax Committee.  Pursuant to such settlements, the
Company received $3,988 from the IRS in July 1995, $1,030 of which represents
interest.  Additionally, the Company was allowed a loss carryforward from
1990 of approximately $29,000 due to the worthlessness of the stock of the
Association, which occurred in the taxable year ended December 31, 1990.
As of December 31, 1996, the Company has Federal and State net operating loss
carryforwards of approximately $29,500 and $9,600 expiring through 2011
and 2001, respectively.


NOTE G - CONTINGENCIES

The Company has an agreement to indemnify its directors who formerly served
as directors and/or officers of the Association and its subsidiaries.  The
RTC, in a letter dated March 10, 1993, advised the present and former
directors and officers of the Association and its subsidiaries of potential
claims that the RTC may assert against them for the recovery of losses
suffered by the Association and its subsidiaries in connection with certain
specified actions and loan transactions.  No action has been taken by the RTC
on this matter for quite some time and the RTC went out of existence on
December 31, 1995.  Counsel to the Company have advised the Company that in
light of these circumstances and the likelihood of the expiration of the
statute of limitations, they do not see any prospect of material liability
to the RTC.  Consequently, the Company has not provided for any further
contingencies on these matters.

NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No 107, "Disclosures about Fair
Value of Financial Instruments", requires disclosure of the estimated fair
value of an entity's financial instrument assets and liabilities.  These assets
and liabilities consist of cash, securities and long-term debt.  The balance
sheet carrying amounts of cash, securities and debt approximate the estimated
fair values.
   








                 DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                       (in thousands except share amounts)




NOTE I - STOCK OPTION PLANS

At December 31, 1996, the Company had three stock-based compensation plans. 
The Company applies APB Opinion 25 "Accounting for Stock Issued to Employees"
and related interpretations in accounting for the plans. No compensation
costs have been recognized for the plans.

Under the Amended and Restated 1982 Stock Option Plan, options granted in
1992 to purchase 500 shares Class A Common Stock at $1.50 per share are
outstanding at December 31, 1996. The options become exercisable over 5
years. The options terminate upon the earliest of (a) thirty days after the
date of cessation of employment, (b) one year after an optionee's death or
(c) ten years after the date such options were granted.  

Under the 1995 Stock Option Plan (the "Plan"),  200,000 shares of Class A
Common Stock and 200,000 shares of Class B Common Stock of the Corporation
have been reserved for issuance pursuant to the Plan.  The aggregate number
of shares  which may be issued under the Plan shall not exceed 200,000 shares
of any combination of shares of Class A Common Stock and Class B Common
Stock.  Awards may be made under the Plan until January 16, 2005.

The exercise price for shares subject to the options granted under the Plan
is the fair market value of the shares at the date of grant. The option price
per share of a stock option granted to a person who, on the date of such grant,
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company shall be not less than 110% of the fair
market value on the date that the option is granted.  Options granted under
the Plan are exercisable in 1/3 increments on each anniversary of the grant
date, with full vesting occurring on the third anniversary date. As of
December 31, 1996, options for 101,000 shares were outstanding.

The 1990 Stock Option Plan for Nonemployed Directors (the "Restated Plan"),
was restated and approved by stockholders on June 7, 1995.  The exercise
price for each option granted is the market price of the shares at the
date of grant.  Options granted under the Restated Plan are exercisable in
50% increments on each anniversary of the grant date, with full vesting
occurring on the second anniversary date.  All options terminate upon the
earliest of (a) thirty days after an optionee ceases to be a director of the
Company for any reason other than death, (b) six months after an optionees
death or (c) ten years after the date such options were granted.  The
aggregate number of shares which may be issued under the Restated Plan shall
not exceed 12,500 shares of Class A Common Stock. The compensation effect of
the nonemployed director options on the Company's results of operations and
per share results are immaterial.



                  DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995


NOTE I - STOCK OPTION PLANS (continued)

The Restated Plan provides that each director who is not an employee of the
Company and has not been an employee of the Company for all or any part of
the preceding fiscal year automatically receives options to purchase
1000 shares of Class A Common Stock upon their election or appointment as a
director of the Company. Thereafter, every year options to purchase 500
shares of Class A Common Stock (subject to adjustment for recapitalizations,
stock splits and similar events) will automatically be granted to such
director, provided, however, that such automatic option grants will be made
only if the director (a) has served on the Board of Directors for the
entire two preceding fiscal years, (b) is not otherwise an employee of the
Company or any subsidiaries on the date of grant and (c)  has not been an
employee of the Company or any subsidiaries for all or any part of the
preceding fiscal years. As of December 31, 1996, options for 7,250 shares
were outstanding.

Had compensation cost for the plans been determined based on the fair value
of the options at the grant dates consistent with the methodology prescribed
by FAS 123, the Company's net income (loss) and income (loss) per share would
be reduced to the pro forma amounts indicated below;

                                               1996       1995
     Net income (loss)   As reported         $ (174)     $ 452
                         Pro forma             (233)       394

     Net Income (loss)
         Per share       As reported        $ (0.18)    $ 0.42
                         Pro forma            (0.24)      0.37

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes options pricing model with the following weighted-average
assumptions used for grants in 1996 and 1995: no expected dividends;
expected volatility of 70%; risk-free interest rates ranging from 5.00%
to 7.76%; and expected lives of 5.4 years.












                 DOVER INVESTMENTS CORPORATION AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            December 31, 1996 and 1995
                                         

NOTE I - STOCK OPTION PLANS (continued)

A summary of the status of the Company's fixed stock plans as of
December 31, 1996 and 1995, and changes during the years ending on
those dates is presented below:

                                     1996                  1995
                                          Weighted              Weighted
                                          Average               Average
                                          Exercise              Exercise
                                  Shares  Price         Shares  Price

Outstanding at beginning of year  107,200  $ 5.72         4,100  $ 1.81
Granted                             2,000    6.82       103,500    5.86
Exercised                            (450)   2.36          (400)   2.73
Outstanding at ending of year     108,750    5.74       107,200    5.72

Options exercisable at year end    36,822  $ 5.63         1,950  $ 1.66

Weighted-average fair value of
 options granted during the year           $ 4.78                $ 2.82


The following information applies to options outstanding at December 31, 1996:


Range of exercise prices        $0.55 - $1.75  $2.00 - $5.875  $6.00 - $7.0125

Options outstanding                 2,700          53,050          53,000
Weighted average exercise price    $ 1.19          $ 4.74          $ 6.97
Weighted average remaining
 contractual life (years)            7.00            4.10            4.20

Options exercisable                 1,371          18,117          17,334  
Weighted average exercise price    $ 1.04          $ 4.68          $ 6.98