SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                           FORM 10-QSB
(Mark One)

[ X ] QUARTERLY REPORT UNDER SECTIONS 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
      ENDED MAY 31, 1997.

[   ] TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
      FROM ________________ TO _________________.

Commission File Number:  0-13041
                         -------

                ENVIRONMENTAL PLUS, INCORPORATED
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     (Exact name of registrant as specified in its charter)


          Texas                                  75-1939021
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(State or other jurisdiction of                (IRS Employer
incorporation or organization                Identification No.)


     Route 1, Box 41, Overton, Texas                75684
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(Address of principal executive offices)          (Zip Code)


                         (903)  834-6965
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      (Registrant's telephone number, including area code)


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      (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 Sections 13 or 15(d) of the Securities Exchange Act
during the preceding 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   [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

         40,329,136 shares of Common Stock, no par value
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    (The number of shares outstanding of each of the issuer's
    classes of common stock, as of the last practicable date)
                                
<PAGE>

                 PART I - FINANCIAL INFORMATION
                                
                                
Item 1.   Consolidated Financial Statements:

                         Balance Sheets

<TABLE>
<CAPTION>
                                                      Nine Months Ended
                                                         May 31, 1997      August 31, 1996
                                                      -----------------    ---------------
     <S>                                                    <C>               <C> 
     ASSETS
     CURRENT
          Cash                                              $  22,177         $  10,561
          Accounts receivable - trade                         216,430            47,250
          Note receivable                                     191,485           201,369
          Inventory                                            25,166            43,256
          Other                                                 3,997            16,833
                                                            ---------         ---------
     Total current assets                                     459,255           319,269
                                                                                       
     NOTE RECEIVABLE                                           76,000            76,000
                                                                                       
     PROPERTY, PLANT AND EQUIPMENT                            135,459           144,586
     Other                                                                             
          Goodwill and organization costs- net                 52,940            57,168
                                                            ---------         ---------
                                                            $ 723,654         $ 597,023
     LIABILITIES AND STOCKHOLDERS' EQUITY
     CURRENT LIABILITIES                                                               
          Accounts payable                                  $      --         $  31,771
          Accrued expenses                                      8,064               ---
          Line of Credit                                       30,000            33,000
          Notes payable                                       171,000            18,000
                                                            ---------         ---------
     Total current liabilities                              $ 209,064         $  82,771
                                                                                       
     COMMITMENTS AND CONTINGENCIES

     STOCKHOLDERS' EQUITY                                                              
     Preferred stock, (100,000,000 authorized;                                     
     $1.00 par value, 1,049,000 shares issued
     and outstanding)                                         466,600           466,600
     Common stock (100,000,000 shares authorized,                                     
     $.001 par value, 40,329,136 AND 37,735,285
     shares issued and outstanding respectively)               40,328            40,328
          Paid in capital                                     702,566           610,224
          Deficit                                            (694,904)         (602,900)
                                                            ---------         ---------
     Total Stockholders' Equity                             $ 514,590         $ 514,252
                                                            ---------         ---------
                                                            $ 723,654         $ 597,023

</TABLE>

<PAGE>
                         Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                            Three Months Ended              Nine Months Ended
                                           May 31,        May 31,         May 31,        May 31,
                                            1997           1996             1997           1996
                                         ----------     ----------       ----------     ----------
    <S>                                  <C>            <C>              <C>            <C>
    REVENUE
         Sales                           $  240,574     $      ---       $  482,381     $      ---
         Interest                             9,717            ---           25,828            ---
    Total                                   250,291                         508,209            ---

    COST OF SALES                           183,436                         389,296            ---


    GENERAL AND ADMINISTRATIVE
         Depreciation and Amortization        4,578            ---           13,732            ---
         Advertisement                          175            ---            1,075            ---
         Interest and bank charges            3,621            ---            6,764            ---
         Supplies                               241            ---              925            ---
         Accounting and auditing              9,040            ---           32,540            ---
         Legal                                2,244            ---           33,587            ---
         Utilities and Telephone              1,318            ---            3,158            ---
         Salaries - officers                 37,500            ---          112,500            ---
         Travel                               1,007            ---            1,690            ---
         Sales Tax                              980            ---            1,226            ---
         Other administrative expenses        3,720     $      ---            3,720          4,000
                                         ----------     ----------       ----------     ----------
    TOTAL GENERAL AND ADMINISTRATIVE     $   64,424     $      ---       $  210,917     $    4,000
                                                                         
    NET INCOME (LOSS) BEFORE INCOME           2,431            ---          (92,004)        (4,000)
    TAXES AND EXTRAORDINARY ITEM                                         
    INCOME TAXES                                ---            ---              ---            ---

    NET INCOME (LOSS)  BEFORE                 2,431            ---          (92,004)        (4,000)
      EXTRAORDINARY ITEM
    EXTRAORDINARY ITEM - FORGIVENESS            ---            ---              ---          4,603
      OF DEBT
    NET INCOME (LOSS)                         2,431            ---          (92,004)           603
    PER SHARE DATA
         Net income (loss) per share            ---            ---              ---            ---
         Weighted average shares
         outstanding                     40,329,136     38,247,785       40,329,136     38,247,785

</TABLE>

<PAGE>
                                        
                         Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>


                                                   Three Months Ended         Nine Months Ended
                                                   May 31,      May 31,       May 31,      May 31,
                                                    1997         1996          1997         1996
                                                 ----------   ----------    ----------   ----------
    <S>                                          <C>          <C>           <C>          <C>
    Cash Flows from Operating 
    Activities:
         Income (Loss) from operations           $    2,431   $      ---    $  (92,004)  $      603
         Adjustments to reconcile income
         (loss) from operations to cash
         used in operating activities:
              Depreciation and
                amortization                          4,578          ---        13,732          ---
              Imputed Officers' Salaries             35,679          ---        92,342          ---
              Change in assets and                                                                 
                liabilities:                                                                       
                   Increase in accounts                                                            
                     receivable - trade           (174,730)          ---      (169,180)         ---
                   Decrease (Increase) in
                     inventory                      (3,389)          ---        18,088          ---
                   Decrease (Increase) in
                     other assets                   (1,536)          ---        12,836          ---
                   Increase (Decrease) in
                     accounts payable and
                     accrued expenses              (25,167)          ---       (23,707)      (8,524)
                                                ----------    ----------    ----------   ----------
    Net Cash Flows used in
     Operating Activities                       $ (162,134)   $      ---    $ (147,893)  $   (7,921)

    CASH FLOWS FROM INVESTING ACTIVITIES                                                           
         Purchase of Capital Assets                   (375)                       (375)         ---

    CASH FLOWS FROM FINANCING                                                                      
    ACTIVITIES:                                                                                    
         Proceeds for use of credit
           and notes payable                       150,000                     150,000
         Sale of common shares                         ---           ---           ---        7,500
         Collection of note receivable              17,451           ---        19,884          ---
         Loan on note receivable                       ---           ---       (10,000)         ---
    Net Cash Flows Provided by Financing                                                           
      Activities                                   167,451           ---       159,884        7,500
    INCREASE (DECREASE) IN CASH                      4,942           ---        11,616         (421)
    Cash at beginning of period                     17,235           ---        10,561          421
    CASH AT END OF PERIOD                       $   22,177    $      ---    $   22,177   $      ---


</TABLE>

<PAGE>

                        ENVIRONMENTAL PLUS, INC.

                      Notes to Financial Statements
                              May 31, 1997

NOTE 1 - STATEMENT BY MANAGEMENT CONCERNING INTERIM FINANCIAL INFORMATION

The financial information for May 31, 1997, included herein is unaudited
and does not include all information and footnotes required by generally
accepted accounting principles for complete financial statements;
however, such information reflects all adjustments (consisting solely of
normal recurring adjustments), which are, in the opinion of management,
necessary to a fair statement of the results for the interim period.  It
is suggested, however, that the accompanying financial statements be read
in conjunction with the financial statements and notes thereto incorporated
by reference in the Company's August 31, 1996 Annual Report on Form 10-K.

NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION

During the nine months ended May 31, 1997, the Company used cash to pay
interest expense in the amount of $3,207.  No cash was paid for income 
taxes.

<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS:

GENERAL

     The Company's results of operations for the quarter ended
May 31, 1997 and the nine-month period ended May 31, 1997 were
significantly affected by the Company's acquisition in July 1996
of substantially all of the assets of Gulf Coast Cooling Tower
Services, Inc. ("GCCTS"), a company engaged in the industrial
cooling tower services business and to a lesser degree, the
acquisition on or about June 1, 1996 of all of the issued and
outstanding shares of common stock of Fire Zap, Inc. ("FZI"),
a company engaged in the business of developing and marketing
fire retardant products.  Virtually all of the Company's 
revenues for the quarter ended May 31, 1997 or the nine-month
period ended May 31, 1997 were derived from operations resulting
from the GCCTS acquisition.  Because Kinlaw Oil Corporation 
("KOC"), the main source of Company revenue during fiscal 1995,
ceased operations in June 1995, the Company had no revenue 
during the quarter ended May 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES

     Working capital at May 31, 1997 was $250,191 compared to 
$16,835 at May 31, 1996.  Cash and cash equivalent had increased
to $22,177.00 during the nine months ended May 31, 1997, 
reflecting the new course of the Company's business.  Cash and 
cash equivalent for the six month period ended May 31, 1996 were
-0-.  During the quarter ended May 31, 1997, cash was used to 
fund normal working capital requirements, including efforts to
market FZI products and GCCTS activities.  The trade accounts
receivable for the period ended May 31, 1997 were $216,430
compared to $0 for the quarter ended May 31, 1996.  The Company
had $25,166 in inventory during the quarter ended May 31, 1997
compared to $0 for the quarter ended May 31, 1996.  Trade 
accounts payable for the periods ended May 31, 1997 and May 31, 1996
was -0-.

     The Company made minimal capital acquisitions or improvement
expenditures during the three month period ended May 31, 1997.
While the Company is not anticipating any capital expenditures 
over the next quarter, any funding for unexpected capital 
expenditures or improvements will be paid from cash flows generated
through operating activities.  No significant disposition of 
equipment occurred during the three month period ended May 31, 1997
and none is planned during the next three month period.

     Based upon current operations and internally generated cash
flows, management believes that adequate resources will be
available to meet current and future requirements.

RESULTS OF OPERATIONS

     Gulf Coast Towers, Inc., a wholly owned subsidiary of the
Company ("GCT"), has utilized the assets from GCCTS to continue
with its business.  GCT is currently generating revenues pursuant
to a maintenance contract it entered into with a Texas public
utility company which continues through December 30, 1997.  FZI
experienced some activity in the nine months ending May 31, 1997
and contributed $20,690 in sales toward the Company's revenue
for the quarter.

     Revenue and sales from other sources for the quarter ended
May 31, 1997 was $240,574 and $9,717 respectively and $482,381
and $25,828, respectively for the nine-month period ended 
May 31, 1997 respectively compared to $0 for the same periods of 
the last fiscal year.

<PAGE>

     The Company received no revenue from management fees during
the third quarter of fiscal 1996 or the third quarter of fiscal 
1995.  The sales revenue for the quarter ended May 31, 1997 as 
well as the nine-month period ended May 31, 1997 reflects the 
Company's acquisition of the assets of GCCTS and FZI.

     The cost of sales for the quarter ended May 31, 1997 was 
$183,436, as compared to $0 for the third quarter of fiscal 1996.
The cost of sales for the nine-month period ended May 31, 1997 
was $389,296 as compared to $0 during the first nine months of 
fiscal 1996.

     During 1996 the officers of the Company determined that they
would not take a salary until cash flow from operations permitted
them to pay each of the three (3) officers $50,000.  Therefore no
salaries were paid in 1996 and none have been paid in 1997.
Salaries and benefits for the quarter ended May 31, 1997 were an 
imputed $37,500 compared to $0 in the same quarter of the last 
fiscal year, and for the nine-month period ended May 31, 1997 they 
are an imputed $112,500 as compared to $0 for the same nine-month
period for the last fiscal year.  The SEC staff has determined 
that the historical statement of operations should reflect all 
costs of doing business.  Accordingly, officers' salaries were 
imputed based upon the actual months in operation in fiscal 1997.

     The Company has no material commitments for capital expenditures
as of the end of its latest fiscal period.  The Company intends to
continue its efforts to engage in a merger or acquisition with 
another company.


PART II

     No "other" information required.





                           SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized, this 
9th day of July, 1997.


                              ENVIRONMENTAL PLUS, INCORPORATED



                              /s/ GEORGE DAVIS
                              --------------------------------
                              George Davis
                              Secretary, Treasurer and
                              Chief Financial Officer