U.S. SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10-QSB
                                   (Mark One)


/X/  QUARTERLY  REPORT UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

For the quarterly period ended September 30, 1998

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______ to _______

Commission file number 0-5097

                           UNITED VANGUARD HOMES, INC.
--------------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)


          Delaware                                      11-2032899
--------------------------------------------------------------------------------
(State or Other Jurisdiction of            (IRS Employer Identification Number)
Incorporation or Organization)


                  4 Cedar Swamp Road, Glen Cove, New York 11542
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (516) 759-1188
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


                                      N/A
--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)

              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
/_/ No /X/

              State the  number of shares  outstanding  of each of the  issuer's
classes of common  equity,  as of the latest  practicable  date: At December 31,
1999, there were outstanding  3,324,265 shares of the Registrant's Common Stock,
$.01 par value.

              Transitional Small Business Disclosure Format:

                                 Yes / / No /X/
<PAGE>
                                                        FORM 10-QSB

                                                           INDEX

PART I.        Financial Information:                                   Page No.

               Unaudited Consolidated Balance Sheets - September 30,
                 1998 and March 31, 1998.......................................2

               Unaudited Consolidated Statement of Earnings
                 Three Months Ended September 30, 1998 and 1997 ...............4

               Unaudited Consolidated Statement of Stockholders' Deficiency
                 Six Months Ended September 30, 1998...........................5

               Unaudited Consolidated Statement of Cash Flows
                 For the Six Months Ended September  30, 1998 and 1997.........6

               Notes to Unaudited Consolidated Financial Statements............7

               Management's Discussion and Analysis of Plan of Operation.......9



PART II.       Other Information:

               Exhibits and Reports on Form 8-K...............................11

               Signatures.....................................................14
<PAGE>
                  UNITED VANGUARD HOMES, INC. AND SUBSIDIARIES

                      UNAUDITED CONSOLIDATED BALANCE SHEET

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                 September 30,           March 31,
                                                                                    1998                   1998
                                                                                    ----                   ----
<S>                                                                             <C>                        <C>
CURRENT ASSETS

      Cash                                                                      $    152,853               $256,188
      Accounts receivable, less allowance for doubtful
        accounts of $40,000                                                          347,938                620,627
      Development fees and advances                                                1,021,500                981,000
      Due from affiliates, net                                                       141,491                179,552
      Prepaid expenses and other                                                     210,124                177,123
                                                                                ------------             ----------

                 Total current assets                                              1,873,905              2,214,490


PROPERTY AND EQUIPMENT - NET                                                       2,004,372              2,110,610


OTHER ASSETS

      Restricted assets                                                               99,600                108,352
      Other assets                                                                   193,912                203,161
                                                                                ------------           ------------
                                                                                     293,512                311,513
                                                                                ------------           ------------

                                                                                $  4,171,789           $  4,636,613
                                                                                ============           ============
</TABLE>
                                        2
<PAGE>
                  UNITED VANGUARD HOMES, INC. AND SUBSIDIARIES

                      UNAUDITED CONSOLIDATED BALANCE SHEETS

                                 LIABILITIES AND
                            STOCKHOLDERS' DEFICIENCY

<TABLE>
<CAPTION>
                                                                                               September 30          March 31
                                                                                                 1998                 1998
                                                                                           ---------------         -----------
<S>                                                                                          <C>                     <C>
CURRENT LIABILITIES

      Current portion of long-term debt                                                      $  503,737              $661,466
      Accounts payable                                                                          235,149               350,244
      Accrued expenses                                                                          718,297               568,511
      Public Offering Costs                                                                     233,721               328,641
      Income taxes payable                                                                      138,894               156,316
                                                                                             ----------            ----------

                 Total Current Liabilities                                                    1,829,798             2,065,178

RESIDENT SECURITY DEPOSITS                                                                      276,643               282,400

LONG-TERM DEBT, less current portion                                                          5,739,217             5,946,281

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
      Preferred stock $.001 par value; 1,000,000
        shares authorized; none issued and outstanding
      Common stock, $.01 par value; authorized, 14,000,000 shares; issued and
        outstanding, 3,313,265 shares and 3,309,890 shares,
        September 30, 1998 and March 31, 1998, respectively                                     33,133                33,099
      Additional paid-in capital                                                             7,009,048             6,998,957
      Accumulated deficit                                                                  (10,716,050)          (10,689,302)
                                                                                           -----------           -----------
                                                                                           ( 3,673,869)           (3,657,246)
                                                                                           ------------            ---------

                                                                                         $   4,171,789         $   4,636,613
                                                                                         =============         =============
</TABLE>
                                        3
<PAGE>
                  UNITED VANGUARD HOMES, INC. AND SUBSIDIARIES

                  UNAUDITED CONSOLIDATED STATEMENT OF EARNINGS

<TABLE>
<CAPTION>
                                                               For the Three Months                    For the Six Months
                                                                Ended September  30,                   Ended September 30
                                                            1998                  1997            1998                   1997
                                                            ----                  ----            ----                   ----
<S>                                                        <C>                <C>                 <C>                 <C>
Operating Revenues:
     Resident Services                                     $1,230,973         $1,158,478          $2,416,369          $2,353,688
     Health care services                                     686,789            699,696           1,368,501           1,386,012
     Management Fees                                           30,000             30,000              60,000              60,000
     Development fees                                          21,060             38,000              40,500             123,000
                                                         ------------       ------------        ------------         -----------
                                                            1,968,822          1,926,174           3,885,370           3,922,700
Operating Expenses:
     Residence operating expenses                           1,584,217          1,495,771           3,108,670           3,030,074
     General and administrative                               239,952            277,209             484,390             542,969
     Depreciation and amortization                             68,380             68,946             136,224             136,176
     Provision for loss on (Recovery of)
      advances to affiliates                                (132,549)            (15,000)            (44,956)            (15,000)
                                                         -----------         -----------         -----------         -----------
                                                           1,760,000           1,826,926           3,684,328           3,694,219


       Income from operations                                208,822              99,248             201,042             228,481

Other Income (expense)
     Interest expense, net                                  (136,047)           (145,837)           (275,522)           (287,321)
     Other income                                             18,973              17,189              40,812              29,779
     Recovery of public offering costs                        42,920               4,000              42,920               4,000
                                                         -----------       -------------         -----------       -------------

       Income (Loss) before income taxes                     134,668             (25,400)              9,252             (25,061)

Income Taxes                                                  18,000              18,235              36,000              36,011
                                                          ----------        -------------        -----------        ------------

       NET INCOME (LOSS)                                   $  116,668       $    (43,635)        $   (26,748)        $   (61,072)
                                                           ==========        ============        ============        ============

Net Income (Loss) per share
     Basic                                                      $0.04             $(0.01)             $(0.01)             $(0.02)
     Diluted                                                    $0.03             $(0.01)             $(0.01)             $(0.02)

Weighted average common shares and common
  equivalent shares outstanding:
       Basic                                                3,309,927           3,308,932           3,310,851          3,305,161
       Diluted                                              3,344,127           3,337,012           3,345,051          3,333,241

</TABLE>
                                        4
<PAGE>
                  UNITED VANGUARD HOMES, INC. AND SUBSIDIARIES

          UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY

                   FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
<TABLE>
<CAPTION>

                                                                   Additional
                                                                    Paid-in          Accumulated
                                         Shares        Amount      Capital            Deficit                Total
                                         ------        ------      -------            -------                -----

<S>                                     <C>            <C>          <C>              <C>                <C>
Balance, March 31, 1998                 3,309,890      $33,099      $6,998,957       $(10,689,302)      $(3,657,246)

Shares Issued as
 Compensation                               3,375           34          10,091                               10,125

Net Loss                                                                                  (26,748)          (26,748)
                                        ---------      -------      ----------       ------------       -----------

Balance, September 30, 1998             3,313,265      $33,133      $7,009,048       $(10,716,050)      $(3,673,869)
                                        =========      =======      ==========       ============       ===========


</TABLE>
                                        5
<PAGE>

                  UNITED VANGUARD HOMES, INC. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

                     FOR THE SIX MONTHS ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
                                                                                         1998               1997
                                                                                         ----               ----
<S>                                                                                    <C>               <C>
Cash flows from operating activities:
  Net income                                                                           $(26,748)         $(61,071)
  Adjustments to reconcile net income to net cash provided
    by operating activities:
          Depreciation and amortization                                                 130,627           134,730
          Common stock issued for services                                               10,125            22,500

  Changes in operating assets and liabilities:
          Accounts receivable, advances and other receivables                           303,035           (85,781)
            Prepaid expenses and other                                                  (24,718)          288,995
            Other Assets                                                                  3,276             2,256
          Development fees                                                              (40,500)         (123,000)
          Increase (Decrease Due to Affiliates)                                                          (107,370)
            Accounts payable                                                           (115,095)           60,797
            Accrued expenses                                                             62,582           (55,262)
            Income taxes payable                                                        (17,422)          (16,036)
            Resident security deposits                                                  ( 5,757)            2,789
                                                                                  -------------             -----

Net cash provided by operating activities                                               279,405            63,547
                                                                                    -----------        ----------

Cash flows used in investing activities:
          Investment in VHNJ                                                                                 (100)
          Purchases of property and equipment                                           (18,418)          (52,592)
                                                                                   ------------        ----------
                                                                                       (118,418)          (52,692)
                                                                                    -----------        ----------
Cash flows from financing activities:
          Proceeds from borrowing on mortgages and notes
            payable                                                                           0            75,000

          Principal repayments of mortgages and Notes payable                          (373,076          (152,826)
          Common stock purchased and simultaneously
            retired                                                                           0           (70,000)

          Restricted cash financing                                                       8,752            (8,752)
                                                                                  -------------       ------------

Net cash used financing activities                                                     (364,324)         (156,578)
                                                                                    -----------        ----------

NET INCREASE (DECREASE) IN CASH                                                        (103,337)         (145,723)

Cash at beginning of period                                                             256,190           202,924
                                                                                    -----------        ----------
Cash at end of period                                                                 $ 152,853        $   57,201
                                                                                      =========        ==========

Cash paid during the period for
          Interest                                                                    $ 310,784         $ 262,763
                                                                                      =========         =========
          Income taxes                                                               $   53,422      $     43,077
                                                                                     ==========      ============

Schedule of noncash investing and financing activities:
  Capital leases for furniture and equipment                                                 $0                $0
  Debt converted to equity                                                                   $0                $0
                                                                                             --                --
                                                                                             $0                $0
                                                                                             ==                ==
</TABLE>
                                        6
<PAGE>

                  UNITED VANGUARD HOMES, INC. AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - BASIS OF PRESENTATION

          The accompanying  consolidated  balance sheet as of March 31, 1998 and
September 1998, the related  consolidated  statements of earnings and cash flows
for the six-month  periods ended  September 30, 1998 and 1997, and the statement
of  stockholders'  deficiency for the six-month  period ended September 30, 1998
have been  prepared  by the  management  of United  Vanguard  Homes,  Inc.  (the
"Company")  without audit. In the opinion of management,  all adjustments (which
include only normal recurring accrual  adjustments)  necessary to present fairly
the financial  position and results of operations as of and for the three months
ended September 30, 1998 have been made.

          Certain  information and footnote  disclosures,  normally  included in
financial  statements  prepared in accordance with generally accepted accounting
principles, have been condensed or omitted. These financial statements should be
read in conjunction with the financial  statements and notes thereto included in
the  Company's  Annual  Report on Form 10-KSB for the year ended March 31, 1998.
The  results of  operations  for the period  ended  September  30,  1998 are not
necessarily indicative of the operating results expected for a full year.

NOTE B - STOCKHOLDERS' EQUITY

     STOCK OPTION PLAN

     In June 1996, the Company adopted the 1996 Outside  Directors' Stock Option
Plan  (the  "Directors'  Plan"),  which  provides  for the grant of  options  to
purchase common stock of the Company to  non-employee  directors of the Company.
The  Directors'  Plan  authorizes  the issuance of a maximum of 90,000 shares of
common stock.

     The Directors' Plan is  administered  by the Board of Directors.  Under the
Directors'  Plan, each  non-employee  director  elected after April 1, 1996 will
receive  options for 3,000 shares of common stock upon  election.  To the extent
that shares of common stock remain  available for the grant of options under the
Directors'  Plan,  each  year  on  April  1,  commencing  April  1,  1997,  each
non-employee  director  will be granted an option to  purchase  1,800  shares of
common  stock.  The exercise  price per share for all options  granted under the
Directors' Plan will be equal to the fair market value of the common stock as of
the date  preceding  the date of grant.  All options  vest in three equal annual
installments,  beginning on the first anniversary on the date of the grant. Each
option will be for a ten-year term, subject to earlier  termination in the event
of death or permanent disability.

     Prior to the adoption of the  Directors'  Plan,  options had been issued to
outside  directors,  of which options to purchase 28,800 shares were outstanding
at September 30, 1998.



                                        7
<PAGE>
     EMPLOYMENT AGREEMENT

     As of April 1, 1996, the Company entered into an employment  agreement with
the Company's  President and Chief Operating Officer pursuant to which an annual
base salary  under the  employment  agreement  is  $100,000.  In June 1996,  The
President received a $25,000 cash bonus and 3,000 shares of the Company's common
stock fair valued at $.93 per share.  Mr.  Laird's  employment  with the Company
ended as of November 1, 1998.

NOTE C - CONTINGENCIES

     Whittier  Towers,  Inc., the owner of The Whittier,  an independent  living
facility  managed by The  Company,  was indebted  under a first  mortgage in the
principal amount of approximately  $4 million.  The mortgage  securing this loan
provides that a default under such loan is a default under each of the Company's
Hillside Terrace and Whitcomb Tower Mortgages.  Therefore,  a potential Whittier
Towers,  Inc.  default on this loan could result in the  foreclosure of Hillside
Terrace and Whitcomb Tower.

     Health  care and  senior  living  facilities  are  areas of  extensive  and
frequent  regulatory  change.  Changes  in the  laws or new  interpretations  of
existing laws can have a significant effect on methods of doing business,  costs
of doing  business and amounts of  reimbursement,  from  governmental  and other
payors.  The Company at all times attempts to comply with all  applicable  fraud
and abuse  laws;  however,  there can be no  assurance  that  administrative  or
judicial interpretation of existing laws or regulations will not have a material
adverse effect on the Company's operations or financial conditions.



                                        8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION

SIX MONTHS ENDED 1997 VS. 1998

REVENUES

     Net revenues of the Company represent its gross consolidated revenues, less
charitable and Supplementary Social Security Income discounts.

     Net revenues  decreased by $37,000,  or 1 percent,  from  $3,922,000 in the
1997  period  to  $3,885,000  in  the  1998  period.   The  decrease  is  mostly
attributable  to an  $83,000  decline in  development  fees.  Resident  services
revenues increased by $63,000, or 3 percent,  from $2,353,000 in the 1997 period
to $2,416,000 in the 1998 period. The increase was a result of rate increases.

     Healthcare  services  revenues  decreased  by $18,000,  or 1 percent,  from
$1,386,000 in the 1997 period to $1,368,000 in the 1998 period. The decrease was
a result of lower occupancy.

RESIDENCE OPERATING EXPENSES

     Residence  operating  expenses include all retirement and healthcare center
operating  expenses,  including,  among other  things,  payroll and  employments
costs, food, utilities, repairs and maintenance, insurance, and property taxes.

     Residence  operating  expenses  increased  by $79,000,  or 3 percent,  from
$3,030,000 in the 1997 period to $3,109,000 in the 1998 period.  The increase is
mainly attributable to salary increases.

GENERAL AND ADMINISTRATIVE EXPENSES

     General and administrative expenses include all marketing costs, as well as
the general and  administrative  expenses  incurred at the  Company's  principal
executive  offices.  General and  administrative  expenses include,  among other
things,  administrative  salaries,  rent,  utilities,   insurance,  and  related
expenses.

     General and administrative  expenses  decreased by $59,000,  or 11 percent,
from $543,000 in the 1997 period to $484,000 in the 1998 period. The decrease is
primarily attributable to a decrease in personnel costs.

PROVISION FOR LOSS ON ADVANCES TO AFFILIATES

     During the six months  ended  September  30, 1998,  the Company  recorded a
recovery on Advances to Affiliates  aggregating $45,000 as opposed to a recovery
of $15,000 in the 1997 period.  The variance is a function of net funds paid out
or received from the  Company's  parent  (Vanguard)  and  affiliated  companies.
Future recoveries are anticipated as Vanguard liquidates some of its assets.

                                        9
<PAGE>
INTEREST EXPENSE, NET

     Interest expense, net, decreased by $12,000, or 4 percent, from $287,000 in
the 1997 period to $275,000 in the 1998 period.

INCOME TAXES

     Income  taxes in the amount of $36,000  during the 1998 period was the same
amount as in the 1997 period.

THREE MONTHS 1998 VS. 1997

     The principal  reasons for the changes in  operations  for the three months
ended  September  30, 1998 and 1997 are  outlined in the  discussion  of the Six
Months  Results.  No material items which adversely  affected  liquidity and the
financial position occurred in the three-month period.

LIQUIDITY AND CAPITAL RESOURCES

     During the 1998 period operating  activities provided cash of approximately
$279,000  compared to requiring  cash of  approximately  $64,000 from  operating
activities  in the 1997  period.  The  increase  in cash  flows  from  operating
activities was principally due to collection on Accounts Receivable.

     As of September 30, 1998 the Company had a working capital of $44,000.  The
Company's inadequate working capital has limited the Company's ability to pursue
its development  projects.  The Company is presently pursuing various strategies
to increase  available  working  capital,  including  refinancing  a substantial
portion  of  the  Company's  mortgage  indebtedness.  Although  there  can be no
assurance that any of the strategies  will be successful,  the Company  believes
that  the  underlying  value  of  its  properties  will  allow  the  Company  to
successfully implement its strategies.

                                       10
<PAGE>
                          Part II -- OTHER INFORMATION

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

     None during the quarter ended September 30, 1998.



ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a)    Exhibits

                  Exhibit 11, Unaudited Computation of Earnings Per Share
                  Exhibit 27, Unaudited Financial Data Schedule

     (b)    Report on 8-K

                  No reports on Form 8-K were filed during this period.



                                       11
<PAGE>
                                   SIGNATURES

     In accordance  with the  requirements of the Securities and Exchange Act of
1934, as amended,  the Registrant  caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                         UNITED VANGUARD HOMES, INC.



                                      /s/ Carl G. Paffendorf
                                by:   -----------------------------------------
                                      Carl G. Paffendorf, Chairman of the Board



                                      /s/ Paul D'Andrea
                                by:   -----------------------------------------
                                      Paul D'Andrea, Vice President - Finance


Date:  January 11, 2000



                                       12