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

                                    Form 10-Q

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


                        For Quarter Ended December 31, 1998

                          Commission File Number 1-8893


                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
             ----------------------------------------------------
          (Exact name of registrant as specified in its charter)


          DELAWARE                                      59-2501059
--------------------------------------------------------------------------------
(State of other jurisdiction             (I.R.S. Employer Identification Number)
of incorporation or organization)



                               2501 S. Ocean Drive
                            Hollywood, Florida 33019
                        --------------------------------
               (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code (954) 927-3080
                                                   --------------

                                      NONE
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


Indicate by checkmark  whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
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 [   ]


Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

           CLASS                  Outstanding at December 31, 1998
           -----                  --------------------------------

 Limited Partnership Units                 4,485,504 units
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP










                                      INDEX


                                                                      

PART I.  Financial Information

                           Balance sheets -
                             December 31, 1998 and
                             September 30, 1998                       

                           Statements of operations -
                             Three months ended
                             December 31, 1998 and 1997               

                           Statements of cash flows -
                             Three months ended
                             December 31, 1998 and 1997               

                           Notes to financial statements              

                           Management's discussion and analysis
                             of financial condition and results
                             of operations                            


Part II.  Other information and signatures                            

<PAGE>
<TABLE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                                 BALANCE SHEETS



                                                    December 31,     September 30,
                                                        1998             1998
                                                     ----------       ----------
                                                    (unaudited)

              ASSETS

<S>                                                  <C>              <C>       
Cash .........................................       $  222,723       $    6,553
Mortgage note and other receivables
  Mortgage note receivable, net of
   deferred profit of $264,593 ...............        1,033,907             --
  Other receivables ..........................          440,210          439,825
Property held for sale .......................        2,472,224        4,279,599
Other assets .................................           41,602           59,627
                                                     ----------       ----------
                                                     $4,210,666       $4,785,604
                                                     ==========       ==========




         LIABILITIES AND EQUITY


Liabilities:
  Mortgage notes payable, bank ...............       $  659,550       $1,321,750
  Accounts payable and other liabilities .....          816,308          917,795
  Deposit on land sales ......................           75,000             --
                                                     ----------       ----------

                                                      1,550,858        2,239,545


Partners' equity:
  4,485,504 units authorized
  and outstanding ............................        2,659,808        2,546,059
                                                     ----------       ----------
                                                     $4,210,666       $4,785,604
                                                     ==========       ==========

</TABLE>
                        See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
                               THREE MONTHS ENDED
                           DECEMBER 31, 1998 AND 1997
                                   (UNAUDITED)

                                                     1998               1997
                                                  -----------       -----------
<S>                                               <C>               <C>        
Land Revenues:
     Gross sales of land ..................       $ 2,766,500       $   484,500
     Less profit deferred until
      principal collections are
      received ............................           264,593              --
                                                  -----------       -----------
                                                    2,501,907           484,500
Interest income ...........................             1,312             2,882
Other Income ..............................            11,035             1,655
                                                  -----------       -----------
                                                    2,514,254           489,037



Cost and expenses:
     Cost of sales ........................         2,000,225           377,719
     Selling, general and
       administrative expenses ............           318,437           126,909
     Interest .............................            23,986              --
     Depreciation and property taxes ......            57,857            50,428
                                                  -----------       -----------

       Total costs and expenses ...........         2,400,505           555,056
                                                  -----------       -----------

Net income (loss) .........................       $   113,749       $   (66,019)
                                                  ===========       ===========

Net income (loss) per unit ................       $      0.03       $     (0.01)
                                                  ===========       ===========

Weighted average number of
  units outstanding .......................         4,485,504         4,485,504
                                                  ===========       ===========


</TABLE>


                        See notes to financial statements

<PAGE>
<TABLE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                  THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
                                   (UNAUDITED)


                                                      1998              1997
                                                   -----------      -----------
<S>                                                <C>              <C>        
Cash flows from operating activities:

     Cash was received from:
       Collections on sales
        and receivables ......................     $ 1,542,615      $   527,106
       Interest Income .......................           1,312            2,882
       Other cash received ...................          11,035            1,655
                                                   -----------      -----------
                                                     1,554,962          531,643
                                                   -----------      -----------

    Cash was expended for:
       Selling, general and administrative,
        property taxes and other expenses ....         516,094          122,395
       Interest paid (net of amounts
        capitalized) .........................          23,986             --
       Improvements to property
        held for sale ........................         136,512          470,837
                                                   -----------      -----------
                                                       676,592          593,232

Net cash provided by (used in)
 operating activities ........................         878,370          (61,589)
                                                   -----------      -----------

Cash flow from financing activities:
  Proceeds from mortgage notes payable
    Bank .....................................          17,800          382,781
  Payments on mortgage payable:
    Bank .....................................        (680,000)        (360,000)
                                                   -----------      -----------

Net cash provided by (used in)
 financing activities ........................        (662,200)          22,781
                                                   -----------      -----------

Net increase (decrease) in cash ..............         216,170          (38,808)
Cash at beginning of year ....................           6,553           48,738
                                                   -----------      -----------
Cash at end of year ..........................     $   222,723      $     9,930
                                                   ===========      ===========



</TABLE>
                                   (continued)

<PAGE>
<TABLE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                      STATEMENTS OF CASH FLOWS (CONTINUED)
                 Reconciliation of net income (loss) to net cash
                   provided by (used in) operating activities
                  THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997
                                   (UNAUDITED)




                                                       1998             1997
                                                   -----------      -----------
<S>                                                <C>              <C>         
Reconciliation of net income (loss)
  to cash provided by (used in)
  operating activities:

Net income (loss) ............................     $   113,749      $   (66,019)
                                                   -----------      -----------

Adjustments to reconcile net
  income (loss) to net cash
  used in operating activities

  Depreciation and amortization ..............             441              531

Change in assets and liabilities Increase in:
    Mortgage notes and other
      receivables ............................      (1,034,292)            --
    Property held for sale ...................            --            (66,216)
    Accounts payable and accrued
      liabilities ............................            --             26,574
    Deposits on land sales ...................          75,000             --
  Decrease in:
    Mortgage notes and other
      receivables ............................            --             42,606
    Property held for sale ...................       1,807,375             --
    Other assets .............................          17,584           20,751
    Accounts payable and accrued
      liabilities ............................        (101,487)            --
    Estimated cost of development
      of land sold ...........................            --            (19,816)
                                                   -----------      -----------

Total adjustments ............................         764,621            4,430
                                                   -----------      -----------

Net cash flow provided by (used in)
  operating activities .......................     $   878,370      $   (61,589)
                                                   ===========      ===========

</TABLE>
                        See notes to financial statements
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS
                               THREE MONTHS ENDED
                           DECEMBER 31, 1998 AND 1997
                                   (UNAUDITED)




1. Interim financial statements:

         The accompanying  unaudited financial  statements have been prepared in
accordance  with the  instructions  to Form 10-Q and do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating  results for the three months ended
December  31, 1998 are not  necessarily  indicative  of the results  that may be
expected for the fiscal year ending September 30, 1999. These statements  should
be read in conjunction with the financial  statements and notes thereto included
in the Company's  Annual Report on Form 10-K for the fiscal year ended September
30, 1998.


2. Income tax:

         The Partnership  has elected to continue its Partnership  status beyond
December  31,  1997,  by agreeing to pay an annual 3.5% Federal tax on its gross
income for Federal income tax purposes  (principally  revenues less cost of land
sold) and  estimates  that  Federal tax due, if any, on gross income for Federal
tax purposes for the tax year ending December 31, 1998 will not be material. The
partners are required to include in their income tax returns  their share of the
Partnership's taxable income or loss.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                               THREE MONTHS ENDED
                           DECEMBER 31, 1998 AND 1997
                                   (UNAUDITED)


Note An extract from the  Partnership's  Annual Report filed with the Securities
and Exchange Commission with respect to the fiscal year ended September 30, 1998
(the  "Incorporated  1998 10K")  containing  Items 1 and 2 thereof is annexed to
this report as an Exhibit and is incorporated herein by reference.

Results of Operations

         During the three month  periods ended  December 31, 1998 and 1997,  the
Partnership had net revenues totaling $2,514,254 and $489,037, respectively, and
net income of $113,749.  or $0.03 per unit and a net loss of ($66,019) or ($0.01
per unit), respectively.

         During the recent quarter,  revenues derived principally from two sales
aggregating 79 lots from phases 2 and 3 of the Crestwood Tract  development (see
item 2 of the Incorporated 1998 10-K).  These lot sales  aggregating  $2,416,500
(of which  $1,298,500 is represented by a  non-interest-bearing  promissory note
due in two installments  with a final payment on September 30, 1999. The Company
recognized  a profit of $597,482 on these  transactions,  of which  $264,593 has
been deferred until principal collections are received. In addition, $350,000 in
gross sales was  generated  from the cash sale 7.7 acres of  multi-family  zoned
land, as to which a profit of $168,793 was recognized.  Since the  Partnership's
activities consisting  principally of the sale of its remaining properties,  and
the timing of closing dates for such sales is usually  subject to  contingencies
which often result in changes to such closing  dates,  a comparison of sales and
income  results from  comparable  periods in different  years is not  considered
meaningful.

Cost of Sales

Cost of sales relates to the sales of land as discussed above.  This item varies
as a result of dissimilar profit margins and income  recognition  methods on the
various sales of land and buildings as discussed above.

Selling, Administrative and Other Expenses

Selling,  general and administrative expenses were $318,437 in the quarter ended
December 31, 1998,  compared with $126,909 in the corresponding  quarter of 1997
primarily as the result of an increase in brokerage  commissions  on higher real
estate sales. In 1997 no interest was charged to operations because Phases 2 and
3 of the Crestwood  tract were under  development;  interest was charged in 1998
because all development work had been completed.

Liquidity and Capital Resources

         Although  cash  proceeds  from  collections  on sales  and  receivables
totaled $1,542,615,  the Partnership  expended cash of $136,512 for improvements
to property held for sale and $516,094 for selling,  general and administrative,
property taxes and other expenses.  After payment of closing costs,  commissions
and  required  reductions  in bank  debt of  $20,000  per lot,  the  Partnership
realized net proceeds of approximately $650,000.
<PAGE>
Cash  increased  from $6,553 at  September  30, 1998 to $222,723 at December 31,
1998. See Financial Information Statements of Cash Flows. The Partnership's cash
balances at any particular  point depend primarily on the timing of sales of its
real estate,  which timing can be affected by numerous  factors.  See  Financial
Information Statements of Cash Flows.

During the  current  fiscal  year,  and based upon  management's  judgment  that
ordinary operating expenses will not increase, the Partnership  anticipates that
cash  flow and  liquidity  requirements  will be  satisfied  by land  sales  and
contingent utility receipts described under "Utility Contingent  Receivable," in
Item 2 the Incorporated 1998 10-K. Sales of land are subject to conditions which
might not be satisfied,  although the  Partnership  has no present  knowledge of
circumstances which would render likely the non-satisfaction of such conditions.

Affect of Land Sales on Future Cash Flow

The  development  and  marketing  status  of  the  Partnership's  properties  is
described under Item 2 of the Incorporated 1998 10-K. The  Partnership's  future
revenues  will  depend  solely  upon its  ability  to  develop  and/or  sell its
remaining  real estate,  and upon receipts from a prior sale of a utility plant.
At December 31, 1998, the  Partnership  retained and was holding for sale (1) 20
residential lots and commercial property in the "Crestwood tract in the Village,
(2)  multi-family  zoned  land in the  Crestwood  tract  presently  zoned  for a
remaining total of  approximately  359 units, (as to which land zoned for 290 of
such units is under contract) (3) a tract of 4.54 acres in the Village zoned for
approximately 100 multi-family residential units (4) 171 lots in the vicinity of
the  Village  zoned  for  single  family  homes but  presently  the  subject  of
litigation as to the  availability of building permits , (5) a 470-acre tract in
the  vicinity of the  Village,  and (6) 12 acres in the  vicinity of the Village
being jointly  developed with an unrelated  party - see "Acreage in the Vicinity
of the Village.

Total  net  cash  flow  which  might  become   available  for   distribution  is
unpredictable  due to  uncertain  conditions  in the South  Florida  real estate
market  in which  the  Partnership's  remaining  real  estate  is  located,  and
competition from other owners and developers of real estate in the South Florida
market.  These  conditions  will continue to affect the realizable  value of the
Partnership's  remaining land, including decisions by parties holding options on
the Partnership's land to exercise such options in whole or in part. The rate of
construction in the Village of Royal Palm Beach could also significantly  affect
future  payments  to the  Partnership  under the  contract  described  under the
caption "Utilities Contingent  Receivable" under Item 2 of the Incorporated 1998
10-K. As indicated under such caption, although the amount to be received by the
Partnership in respect of 1998  represents a substantial  increase from receipts
in the two preceding years, it is nevertheless considered unlikely that the rate
of new  construction  or water  consumption  in such area will be  sufficient to
enable the  Partnership to receive the full amount of such payments prior to the
expiration of the contingent payment term.

Environmental Matters

 There are no  environmental  contingencies in respect of the Partnership or its
properties.  Use of all of the Partnership's properties is subject to compliance
with state and county land use regulations  relating to  environmental  matters,
which the  Partnership  takes  into  account  in  considering  the values of its
properties.
<PAGE>
Income Taxes

The Partnership,  pursuant to the transitional grandfather rules of the Internal
Revenue Code dealing with publicly traded partnerships, reported its income as a
Partnership for taxable years through  December 31, 1997. The application of the
grandfather  rules  terminated for taxable years  commencing  after December 31,
1997. Under the Taxpayer Relief Act of 1997, a publicly traded  partnership that
is currently  governed by this  provision may elect to continue its  Partnership
tax status  beyond  December  31, 1997 by agreeing to pay an annual 3.5% Federal
Tax on its gross income for federal  income tax purposes  (principally  revenues
less tax cost of land  sold).  The  Partnership  has  elected  to  continue  its
Partnership status beyond December 31, 1997, and estimates that federal tax due,
if any,  on gross  income  for  federal  tax  purposes  for the tax year  ending
December 31, 1998 will not be material.  See Note 2 to the Financial  Statements
included with this report.
<PAGE>




                           PART II - OTHER INFORMATION


         (a)      Exhibits -

                  99- Copy of Items 1 and 2 from Annual Report of the Registrant
                  on Form 10-K for the fiscal year ended September 30, 1998.

         (b)      Reports on Form 8-K - None





<PAGE>



                                   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.


                            ROYAL PALM BEACH COLONY,
                               LIMITED PARTNERSHIP


                                              By: Stein Management Company, Inc.
                                                  Managing General Partner

DATE: February 16, 1999                       By: /s/David Simpson
                                                  ----------------
                                                  David Simpson
                                                  President