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


                                   FORM 10-Q



(Mark One)

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the quarterly period ended April 2, 2000

                                       OR

[  ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934


                        Commission File Number:  0-20716



                               TACO CABANA, INC.
             (Exact name of registrant as specified in its charter)

            DELAWARE                                74-2201241
(State or other jurisdiction of                  (I.R.S. Employer
 incorporation or organization)               Identification Number)

                          8918 Tesoro Drive, Suite 200
                           San Antonio, Texas   78217
                    (Address of principal executive offices)

                        Telephone Number (210) 804-0990
              (Registrant's telephone number, including area code)





          Indicate by check mark 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 of each of the issuer's classes of
     common stock, as of the latest practicable date:

                 Class          Outstanding at May 1, 2000
              Common Stock          11,601,375 shares





                               TACO CABANA, INC.

                                     INDEX


                                                          Page
                                                         Number

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements  (Unaudited)

  Condensed Consolidated Balance Sheets at
   April 2, 2000 and January 2, 2000                          3

  Condensed Consolidated Statements of Income for the
   Thirteen Weeks Ended April 2, 2000 and April 4,            4
   1999

  Condensed Consolidated Statements of Cash Flows for
   the Thirteen Weeks Ended April 2, 2000 and April 4,        5
   1999

  Notes to Condensed Consolidated Financial                   6
   Statements


  Item 2.  Management's Discussion and Analysis of
   Financial Condition and Results of Operations              8


PART II.  OTHER INFORMATION

Items 1 through 5 have been omitted since the registrant has no reportable
events in relation to the items

  Item 6.  Exhibits and Reports on Form 8-K                  14

  Signature                                                  15



                             2







                               TACO CABANA, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                                           January 2,     April 2,
                                              2000          2000
                                           ----------   ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .............. $  1,303,000  $   618,000
Receivables, net .......................      507,000      630,000
Inventory ..............................    2,413,000    2,310,000
Prepaid expenses .......................    3,237,000    3,380,000
Federal income taxes receivable ........      200,000            -
                                         ------------ ------------
Total current assets ...................    7,660,000    6,938,000

PROPERTY AND EQUIPMENT, net ............   82,616,000   85,664,000
NOTES RECEIVABLE .......................      278,000      272,000
INTANGIBLE ASSETS, net .................   10,139,000    9,992,000
OTHER ASSETS ...........................      312,000      206,000
                                         ------------ ------------
TOTAL .................................. $101,005,000 $103,072,000
                                         ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ....................... $  4,962,000 $  3,453,000
Accrued liabilities ....................    6,063,000    5,876,000
Current maturities of long-term debt and
  capital leases .......................    5,251,000    4,710,000
Line of credit .........................    1,000,000    2,535,000
Federal income taxes payable, net ......            -      181,000
                                         ------------ ------------
Total current liabilities ..............   17,276,000   16,755,000

LONG-TERM OBLIGATIONS, net of current maturities:

Capital leases .........................    1,901,000    1,838,000
Long-term debt .........................   31,756,000   35,743,000
                                         ------------ ------------
Total long-term obligations ............   33,657,000   37,581,000

ACQUISITION AND CLOSED RESTAURANT
LIABILITIES ............................    6,330,000    5,961,000
DEFERRED LEASE PAYMENTS ................      744,000      774,000
STOCKHOLDERS' EQUITY:
Common stock ...........................      134,000      135,000
Additional paid-in capital .............   84,731,000   84,901,000
Retained deficit .......................  (30,427,000) (28,057,000)
Treasury stock, at cost (1,354,600 shares
  at January 2, 2000 and 1,865,000 shares
  at April 2, 2000) ....................  (11,440,000) (14,978,000)
                                         ------------ ------------
  Total stockholders' equity............   42,998,000   42,001,000
                                         ------------ ------------
TOTAL .................................. $101,005,000 $103,072,000
                                         ============ ============


           See Notes to Condensed Consolidated Financial Statements.



                             3





                               TACO CABANA, INC.

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                  (UNAUDITED)


                                        For the Thirteen Weeks Ended
                                        ----------------------------
                                            April 4,    April 2,
                                              1999        2000
                                           ----------- -----------
REVENUES:
Restaurant sales ......................... $36,836,000 $40,033,000
Franchise fees and other income ..........      74,000      84,000
                                           ----------- -----------
  Total revenues..........................  36,910,000  40,117,000
                                           ----------- -----------

COSTS AND EXPENSES:
Restaurant cost of sales .................  10,927,000  11,691,000
Labor ....................................  10,127,000  11,044,000
Occupancy ................................   2,010,000   2,146,000
Other restaurant operating costs .........   6,251,000   6,769,000
General and administrative ...............   2,050,000   2,366,000
Depreciation and amortization  ...........   2,057,000   2,218,000
Restaurant opening costs .................     172,000     180,000
                                           ----------- -----------
  Total costs and expenses................  33,594,000  36,414,000
                                           ----------- -----------
INCOME FROM OPERATIONS ...................   3,316,000   3,703,000
                                           ----------- -----------
INTEREST EXPENSE, NET ....................    (552,000)   (813,000)
                                           ----------- -----------
INCOME BEFORE INCOME TAXES ...............   2,764,000   2,890,000

INCOME TAX EXPENSE .......................           -     520,000
                                           ----------- -----------
NET INCOME ............................... $ 2,764,000 $ 2,370,000
                                           =========== ===========
BASIC EARNINGS PER SHARE.................. $      0.21 $      0.20
                                           =========== ===========
BASIC WEIGHTED SHARES OUTSTANDING.........  13,350,840  11,753,606
                                           =========== ===========
DILUTED EARNINGS PER SHARE................ $      0.20 $      0.20
                                           =========== ===========
DILUTED WEIGHTED SHARES OUTSTANDING.......  13,714,176  11,932,120
                                           =========== ===========



           See Notes to Condensed Consolidated Financial Statements.



                             4





                               TACO CABANA, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  (UNAUDITED)

                                        For the Thirteen Weeks Ended
                                        ----------------------------
                                              April 4,    April 2,
                                                1999        2000
                                            ----------   ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...............................  $2,764,000   $2,370,000
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization.........   2,057,000    2,218,000
    Changes in operating working capital
     items ...............................    (755,000)  (1,704,000)
                                            ----------   ----------
Net cash provided by operating activities    4,066,000    2,884,000
                                            ----------   ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment .......  (5,984,000)  (5,120,000)
Proceeds from sales of property
  and equipment ..........................     459,000            -
                                            ----------   ----------
Net cash used for investing activities ...  (5,525,000)  (5,120,000)
                                            ----------   ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt     8,404,000    5,000,000
(Payments) proceeds on revolving line of
  credit .................................  (2,010,000)   1,535,000
Principal payments under long-term debt ..  (4,901,000)  (1,560,000)
Principal payments under capital leases ..     (52,000)     (57,000)
Purchase of treasury stock ...............           -   (3,538,000)
Exercise of stock options.................     196,000      171,000
                                            ----------   ----------
Net cash provided by financing activities    1,637,000    1,551,000
                                            ----------   ----------
NET INCREASE (DECREASE) IN CASH ..........     178,000     (685,000)

CASH AND CASH EQUIVALENTS, beginning of
 period ..................................     719,000    1,303,000
                                            ----------   ----------
CASH AND CASH EQUIVALENTS, end of period    $  897,000   $  618,000
                                            ==========   ==========



           See Notes to Condensed Consolidated Financial Statements.



                             5





                               TACO CABANA, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.  Basis of Presentation

Principles of  Consolidation - The consolidated financial statements  include
all  accounts of Taco  Cabana, Inc.  and its  wholly-owned subsidiaries  (the
Company).  All  significant intercompany balances and transactions have  been
eliminated.

The  unaudited  Condensed  Consolidated  Financial  Statements  include   all
adjustments, consisting of normal, recurring adjustments and accruals,  which
the Company considers  necessary for fair presentation of financial  position
and the results of operations for the periods presented. Certain  information
and footnote  disclosures normally included in financial statements  prepared
in  accordance  with  generally  accepted  accounting  principles  have  been
condensed  or omitted. The  interim financial  statements should  be read  in
conjunction with the Company's Annual Report on Form 10-K for the year  ended
January 2, 2000.

2.  Stockholders' Equity

The Company's Board of  Directors previously approved plans to repurchase  up
to a  total of 4,500,000 shares of the  Company's Common Stock.  Through  the
first quarter of 1999,  the Company had repurchased 2,585,000 shares with  an
aggregate  cost of $13.9  million.   During the  first quarter  of 1999,  the
Company  retired all shares  held as treasury  shares.  The  cost of  retired
shares  in  excess of  par  value has  been  charged to  additional  paid  in
capital.   Subsequent to the first quarter  of 1999, the Company  repurchased
an additional 1,865,000 shares  at an aggregate cost of $15.0 million,  which
as of April 2, 2000 were held as treasury stock.

3.  Earnings per Share

Basic earnings per share was computed by dividing income available to  common
stockholders by the weighted average number of common shares outstanding  for
the  reporting period.   Diluted earnings  per share  reflects the  potential
dilution that  could occur if securities or  other contracts to issue  common
stock  were exercised  or converted  into common  stock.   Outstanding  stock
options issued  by the Company represent  the only dilutive effect  reflected
in diluted weighted average shares.



                             6





The following table sets forth the computation of basic and diluted  earnings
per share:

                                                  Thirteen Weeks Ended
                                             -----------------------------
                                             April 4, 1999   April 2, 2000
                                             -------------   -------------
                                               (Unaudited)    (Unaudited)

Numerator for basic and diluted earnings per
share - net income                              $2,764,000    $2,370,000

Denominator:
     Denominator for basic earnings per share -
       weighted-average shares                  13,350,840    11,753,606
     Effect of dilutive securities -
       employee stock options                      363,336       178,514
                                                ----------    ----------
Denominator for diluted earnings per share -
     adjusted weighted-average and assumed
     conversions                                13,714,176    11,932,120
                                                ==========    ==========
Basic earnings per share                        $     0.21    $     0.20
                                                ==========    ==========
Diluted earnings per share                      $     0.20    $     0.20
                                                ==========    ==========

4.   Supplemental Disclosure of Cash Flow Information


                                           Thirteen Weeks Ended
                                           --------------------
                                            April 4,    April 2,
                                             1999         2000
                                          -----------  -----------
                                          (Unaudited)  (Unaudited)

    Cash paid for interest .............    $ 562,000    $607,000
    Interest capitalized on  construction
      costs ............................       62,000      59,000
    Cash paid for income taxes .........            -      43,000




                             7





                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Introduction

The Company  commenced operations in  1978 with the  opening of the  first Taco
Cabana restaurant  in San Antonio, Texas.  As  of May 1, 2000, the  Company had
111  Company-owned restaurants and  10 franchised  restaurants.   The Company's
revenues are  derived primarily from  sales by Company-owned  restaurants, with
franchise fees  and other income currently  contributing less than 1%  of total
revenues.

The  Company opened one  Company-owned restaurant during  the first  quarter of
2000  for  a  total  of   110  company-owned  and  10  franchised  restaurants.
Subsequent  to April 2,  2000, one  Company-owned restaurant  was opened for  a
current systemwide total of 121 restaurants.









                              8





The  following  table sets  forth  for  the periods  indicated  the  percentage
relationship to  total revenues, unless otherwise indicated, of  certain income
statement  data.  The  table also sets  forth certain  restaurant data  for the
periods indicated.


                                            Thirteen Weeks Ended
                                        --------------------------
                                          April 4,       April 2,
                                           1999            2000
                                          --------       --------
Income Statement Data:
REVENUES:
    Restaurant sales                       99.8%           99.8%
    Franchise fees and other income         0.2             0.2
                                          -----           -----
    Total revenues                        100.0%          100.0%
                                          =====           =====
COSTS AND EXPENSES:

    Restaurant cost of sales (1)           29.7%           29.2%
    Labor (1)                              27.5            27.6
    Occupancy (1)                           5.5             5.4
    Other restaurant operating costs (1)   17.0            16.9
    General and administrative costs        5.6             5.9
    Depreciation and amortization           5.6             5.5
    Restaurant opening costs                0.5             0.4
                                          -----           -----


INCOME FROM OPERATIONS                      9.0             9.2

INTEREST EXPENSE                           (1.5)           (2.0)
                                          -----           -----
INCOME  BEFORE INCOME TAXES                 7.5             7.2

INCOME TAX EXPENSE                            -             1.3
                                          -----           -----
NET INCOME                                  7.5%            5.9%
                                          =====           =====


Restaurant Data:

COMPANY OWNED RESTAURANTS:
    Beginning of period                     102             109
    Opened                                    2               1
    Closed                                   (1)              -
                                          -----           -----
    End of period                           103             110

FRANCHISED RESTAURANTS:                      10              10

TOTAL RESTAURANTS:                          113             120
                                          =====           =====


(1) Percentage is calculated based upon restaurant sales.



                              9



The Thirteen Weeks Ended April 2, 2000 Compared to the Thirteen Weeks Ended
April 4, 1999

Restaurant  Sales.  Restaurant  sales increased  by $3.2  million, or 8.7%,  to
$40.0 million  for the first quarter of 2000  from $36.8 million for  the first
quarter  in 1999.   The increase  is due to  an increase  in sales  at existing
restaurants  and  the opening  of  new restaurants.    Comparable store  sales,
defined as  Taco Cabana restaurants that  have been open  18 months or  more at
the  beginning  of the  quarter,  increased 2.3%.    Management attributes  the
increase  in  comparable  store  sales to  several  factors  including  a  more
consistent  marketing program,  a commitment  to increased  staffing levels  at
existing restaurants,  the ongoing reimage program  and a price  increase taken
in the  fourth quarter of 1999.  Sales  from restaurants opened after  April 4,
1999  accounted for an  increase of $2.6  million. This increase  was partially
offset  by sales from  restaurants which  were closed  after April  4, 1999  of
$291,000.

Restaurant  Cost  of  Sales.    Restaurant  cost  of  sales,  calculated  as  a
percentage  of restaurant sales,  decreased to  29.2% in  the first quarter  of
2000 from 29.7% for  the first quarter of 1999. The decrease  was due primarily
to  a price increase  implemented in  the last  quarter of  1999 and  continued
improvements in  the management of food costs through  operational controls and
strong purchasing  programs.  Management expects  this amount, as  a percentage
of  sales, to continue  to show improvement  on a year  over year  basis during
2000.

Labor.   Labor costs  increased by $917,000  during the  first quarter  of 2000
compared to  the first quarter  of 1999. As  a percentage of  restaurant sales,
labor costs increased to  27.6% in the first quarter of 2000 from  27.5% in the
first  quarter of  1999.   The  increase in  labor costs,  as  a percentage  of
restaurant  sales, is  due to  management's continued  commitment to  increased
staffing levels at the restaurant level in  order to provide a consistent guest
experience  as well as  higher than  normal labor  costs at newer  restaurants.
New  restaurants generally have  higher than normal  labor costs for  the first
four  to  six months  of  operations.   Management  expects  labor costs  as  a
percentage of  sales to increase on a year  over year basis during 2000  as the
Company  moves  into  new  markets  and   continues  to  invest  in  the  guest
experience.

Occupancy.  Occupancy  costs increased by $136,000 during the  first quarter of
2000  compared  to  the first  quarter  of  1999  due  to the  opening  of  new
restaurants.   As a percentage of  restaurant sales, occupancy  costs decreased
to 5.4% in the  first quarter of 2000 compared to 5.5% in the  first quarter of
1999.  The decrease  as a percentage of sales is due to an  increase in average
unit sales volumes during  the first quarter of 2000, which  is attributable to
increased sales at existing restaurants.   Management expects the dollar amount
to increase due to new restaurant openings  but continue to show improvement as
a percentage of sales during 2000.

Other Restaurant  Operating Costs.  Other restaurant operating  costs increased
to $6.8  million in the first quarter of  2000 compared to $6.3 million  in the
first quarter  of 1999. As a  percentage of restaurant sales,  other restaurant
operating costs  decreased to 16.9% for the  first quarter of 2000  compared to
17.0% for the first quarter of 1999.  The decrease  is due to the leverage from
higher average  sales as the dollar amount  of other operating costs  per store
open  remained  relatively  flat.     Management  expects  this  amount,  as  a
percentage of  sales, to be slightly  lower or remain  constant on a  year over
year basis during 2000.


                             10



General and  Administrative.  General and administrative expenses  increased to
$2.4 million for the first quarter of 2000  from $2.1 million in the comparable
period of 1999.  As a percentage of sales, general  and administrative expenses
increased  to 5.9%  for the  first quarter  of 2000  compared to  5.6% for  the
comparable  period in 1999.   The  increase is  primarily due  to an  increased
level  of  expenditures  to  support the  Company's  entry  into  new  markets.
Management expects  this amount, as a  percentage of sales, to  decrease during
2000.

Depreciation and Amortization.   Depreciation and amortization consisted of  the
following:

                                                Thirteen Weeks Ended
                                           ------------------------------
                                           April 4, 1999    April 2, 2000
                                           -------------    -------------
                                            (Unaudited)      (Unaudited)
    Depreciation of property and equipment   $ 1,911,000      $ 2,072,000
    Amortization of intangible assets            146,000          146,000

Depreciation expense increased by  approximately $161,000 for the quarter ended
April 2,  2000 compared to the quarter ended  April 4, 1999.  The  increase was
primarily due  to the addition  of new restaurants  since April 4,  1999, which
accounted  for  an  increase  of  $177,000,   offset  by  a  net  reduction  of
depreciation on existing assets.

Restaurant  Opening Costs. Restaurant  opening costs  remained constant  in the
first  quarter of 2000  compared to  the first  quarter of 1999.   The  Company
opened one restaurant   during the thirteen weeks ended April  2, 2000 compared
to  two restaurant openings  in the thirteen  weeks ended April  4, 1999.   The
increase in restaurant  opening costs is primarily due to  expenditures made in
preparation  of  restaurant  openings  in  new  markets.    Management  expects
restaurant opening costs  to increase during the remainder of  2000 compared to
1999.

Interest  Expense,  net.   Interest  expense, net  of  interest capitalized  on
construction  costs, increased to  $813,000 in the  first quarter of  2000 from
$552,000  in the first  quarter of 1999,  primarily as  a result  of additional
borrowings  under  the Company's  debt  facilities.  In addition,  the  Company
capitalized $59,000  of interest related to new restaurant  construction in the
most recent quarter compared to $62,000 during the first quarter of 1999.

Income Taxes.   Income tax expense was $520,000  for the first quarter  of 2000
compared to  zero in the first quarter of  1999.  The increase in  income taxes
is due to management's anticipation  of paying alternative minimum taxes during
2000.   During 2000, management anticipates the completion  of an audit  by the
Internal Revenue  Service of the  1994 through 1996  tax years with  a possible
refund  of $2.0 million.   No  benefit or  provision has been  recorded in  the
financial statements for the anticipated resolution of this examination.


                             11



Net Income and Earnings Per Share.  Net  income decreased to $2,370,000 for the
first quarter of 2000 from $2,764,000 for the same  period in 1999.  Net income
was 5.9%  of total revenues for the first  quarter in 2000 compared to  7.5% in
the first quarter of 1999. The decrease in  net income during the first quarter
of  2000 is  due primarily  to the  recognition of  income tax  expense and  an
increase  in interest expense,  offset by higher  sales.  Diluted  earnings per
share was  $0.20 for both the  first quarter of 2000  and the first  quarter of
1999.   Diluted earnings  per share was  impacted by a  lower number  of shares
outstanding in the thirteen weeks ended April  2, 2000 compared to the thirteen
weeks ended April 4, 1999.

Liquidity and Capital Resources

Historically,  the Company has  financed business  and expansion  activities by
using funds  generated from operating activities, build-to-suit  leases, equity
financing, short  and long-term debt and capital leases.  The Company maintains
credit facilities  totaling $50.0 million,  including a $5.0  million unsecured
revolving line of credit. As of May  1, 2000, the aggregate outstanding balance
under these commitments was $ 41.7 million.

Net  cash provided by  operating activities was  $2.9 million for  the thirteen
weeks ended April 2, 2000, and $4.1 million  for the thirteen weeks ended April
4,  1999.   Management  attributes  much of  the  decrease  to a  reduction  of
accounts payable and accrued liabilities during the first quarter of 2000.

Net cash used in  investing activities was $5.1 million for  the thirteen weeks
ended April 2, 2000, representing  capital expenditures for the construction of
new  restaurants and  improvements to  existing restaurants.  This compares  to
$5.5 million  in net cash used in  investing activities for the  thirteen weeks
ended  April  4, 1999,  representing  primarily  capital expenditures  for  the
construction  of  new restaurants  and  improvements to  existing  restaurants,
offset by the sale of assets generating $459,000 in proceeds.

Net  cash provided by  financing activities was  $1.6 million for  the thirteen
weeks  ended April 2,  2000, representing  primarily net  borrowings under  the
Company's debt facilities,  offset by the purchase of $3.5  million in treasury
stock.   This  compares  to $1.6  million  in net  cash  provided by  financing
activities for  the thirteen weeks ended April 4,  1999, representing primarily
net borrowings under the Company's debt facilities.

The special charges recorded in  prior years included accruals of approximately
$10.2 million to  record the estimated monthly lease payments,  net of expected
sublease receipts, associated with  certain restaurants which have been closed.
Cash  requirements for these  accruals were  approximately $208,000  during the
first  quarter  of 2000.    The Company  currently  has two  closed  restaurant
properties for sale which were covered by  the special charges.  Although there
can be no assurance  of the particular price at which  such  properties will be
sold,  the Company  expects  to receive  funds equal  to or  in  excess of  the
carrying value upon  the actual disposition of these properties.   In addition,
certain acquisition liabilities related to  a prior acquisition were reduced by
payments of approximately $241,000 during the first quarter of 2000.



                             12



The  Company  regularly  evaluates   the  operations  of  its  under-performing
restaurants. As part of the  evaluation, the Company considers alternative uses
for these  properties. The alternative uses  could include the  sale, sub-lease
or lease buy-out  of these properties. The Company is  currently evaluating two
leased  properties. At this  time, no definitive  agreements have  been reached
and  the  amount,  timing  and financial  statement  impact  of  any  potential
transaction cannot be determined.

The  Company  believes  that  existing  cash  balances,  funds  generated  from
operations,  its ability to  borrow, and  the possible  use of lease  financing
will  be sufficient to  meet the Company's  capital requirements  through 2000,
including  the planned opening  of fourteen  restaurants and  the reimaging  of
fourteen restaurants.   Total capital  expenditures related to  new restaurants
are  estimated to  be $15.0  to $17.0  million.   The total  for other  capital
expenditures, including the cost of the reimagings,  is estimated to be $5.0 to
$6.0 million.  Total capital expenditures  for 2000 are expected to approximate
$20.0 to $23.0 million.

Impact of Inflation

Although  increases in labor,  food or  other operating  costs could  adversely
affect  the Company's operations,  management does  not believe  that inflation
has had a material adverse effect on the Company's operations to date.

Seasonality and Quarterly Results

The Company's sales fluctuate  seasonally.  Historically, the Company's highest
sales  and earnings  occur in  the second  and  third quarters.   In  addition,
quarterly  results are affected  by the timing  of the  opening and  closing of
stores.  Therefore, quarterly results  cannot be used  to indicate  the results
for the entire year.



                             13





Forward-Looking Statements

Statements  in  this quarterly  report  concerning Taco  Cabana  which are  (a)
projections of  revenues, costs, including trends  in cost of  sales, operating
costs, labor, depreciation and  amortization, restaurant opening costs, general
and administrative costs and interest  or other financial items, (b) statements
of  plans  and  objectives   for  future  operations,  specifically  statements
regarding  planned  restaurant  openings,  closings and  reimages  as  well  as
projected  property sales, lease  buy-outs, sub-leases,  share repurchases  and
cash flows, (c)  statements of future economic performance, (d)   statements of
projected  tax rates,  refunds or  the utilization  of net  operating loss  tax
carryforwards,  or (e)  statements of  assumptions or  estimates underlying  or
supporting the  foregoing are forward-looking statements within the  meaning of
Section 27A  of the Securities Act  of 1933 and  Section 21E of  the Securities
Act of  1934.  The ultimate  accuracy of forward-looking statements  is subject
to  a wide range  of risks,  uncertainties and  other factors  which may  cause
actual  results and outcomes  to differ,  often materially,  from expectations.
Any  number  of  important  factors   could  cause  actual  results  to  differ
materially from  those in the forward-looking statements herein,  including the
following:   the timing  and extent  of changes  in prices  of commodities  and
supplies that the Company utilizes; cost  and availability of labor; actions of
our  customers and  competitors; changes  in state  and federal  environmental,
economic,  safety  and  other  policies   and  regulations  and  any  legal  or
regulatory  delays,  including  resolution  of income  tax  matters,  or  other
factors beyond  the Company's control;  execution of planned  capital projects;
weather  conditions  affecting  the  Company's  operations;  natural  disasters
affecting  operations;  and  adverse  rulings,  judgments,  or  settlements  in
litigations  or other legal  matters.  The  Company disclaims any  intention or
obligation to update or revise  any such forward-looking statements, whether as
a result of new information, future events or otherwise.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The Company has filed the following exhibits with this report:

    27.   Financial Data Schedules

No reports on Form 8-K were filed during the period covered by this report.



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Signature

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.


   Dated:  May 15, 2000      Taco Cabana, Inc.




                             /s/David G. Lloyd
                             --------------------------------------
                             David G. Lloyd
                             Senior Vice President, Chief Financial
                             Officer, Secretary and Treasurer




                             Signing on behalf of the registrant and as
                             the principal financial and accounting
                             officer



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