SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 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,  1996.

[ ]  Transition  report under Section 13 or 15(d) of the Exchange Act.

For  the  transition  period  from  ________________________  to
________________________.

Commission  file  number  0-26166


                          ATLAS ENVIRONMENTAL, INC.
            (Exact name of registrant as specified in its charter)

             Colorado                               84-1140790
(State  or  other  jurisdiction  of    (I.R.S. employee  Identification  No.)
   incorporation or organization)


 150  South  Pine  Island  Road,  Plantation,  Florida          33324
      (Address  of  principal  executive  offices)            (Zip Code)

                                   (954) 370-9011
               (Registrant'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      [X]        No  [ ]

  State  the number of shares outstanding of each of the issuer's classes of
            common  equity, as  of  the latest practicable  date:


       Title of Class                Date         Number of Shares Outstanding
     -----------------             ---------      ----------------------------
Common Stock, $.001 par value  November 12, 1996         4,591,063







                      This filing consists of 20 pages.


<PAGE>

PART  I  -  FINANCIAL  INFORMATION


ITEM  1:    FINANCIAL  STATEMENTS

THE  FOLLOWING  FINANCIAL  STATEMENTS  ARE  FILED  AS  PART  OF  THIS  REPORT:

         CONDENSED CONSOLIDATED BALANCE SHEETS, SEPTEMBER 30,
         1996 (UNAUDITED) AND DECEMBER 31, 1995. . . . . . . . . .    3-4

         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
         THE THREE  MONTHS AND NINE MONTHS ENDED SEPTEMBER 30,
         1996 AND SEPTEMBER 30, 1995 (UNAUDITED) . . . . . . . . .      5

         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
         THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER
                                              30, 1995 (UNAUDITED)    6-7

         NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.   8-16


ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . .  17-19


PART II -  OTHER INFORMATION

ITEM 6:
         A)  EXHIBITS FILED. . . . . . . . . . . . . . . . . . . .     20

         B)  REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . .     20


         SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . .     20




<PAGE>

<TABLE>
<CAPTION>

                                  Atlas Environmental, Inc.
                                      And Subsidiaries

                            Condensed Consolidated Balance Sheets
                    September 30, 1996  (Unaudited) and December 31, 1995

                                                     September 30, 1996   December  31, 1995
                                                    --------------------  -------------------
                                                        (Unaudited)
<S>                                                 <C>                   <C>
ASSETS
Current assets:
  Cash                                              $            220,177  $           467,942
  Accounts receivable, less allowance for doubtful
    doubtful accounts of $221,696 and $59,539
    as of September 30, 1996 and December 31,
    1995, respectively                                         2,813,275            1,675,970
  Notes and other receivables                                    150,000              159,700
  Inventories                                                     68,581               65,506
  Prepaid expenses and other                                     130,716              160,338
                                                    --------------------  -------------------
Total current assets                                           3,382,749            2,529,456

Property, plant and equipment, net                            40,155,285            9,963,264
Cost in excess of net assets acquired, net of
  accumulated amortization                                     4,385,508            3,894,296
Other assets, net                                                988,528              918,697
                                                    --------------------  -------------------
Total assets                                        $         48,912,070  $        17,305,713
                                                    ====================  ===================

</TABLE>






(Continued  on  the  following  page.)


<PAGE>

<TABLE>
<CAPTION>

                                    Atlas Environmental, Inc.
                                        And Subsidiaries

                        Condensed Consolidated Balance Sheets (continued)
                      September 30, 1996 (Unaudited) and December 31, 1995

                                                        September 30, 1996    December  31, 1995
                                                       --------------------  --------------------
                                                           (Unaudited)
<S>                                                    <C>                   <C>

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Trade accounts payable                               $         3,448,247   $         1,715,460 
  Accrued liabilities                                            2,166,892               585,244 
  Accrued environmental costs - current portion                    340,497                    -- 
  Deferred revenues                                                377,777               179,287 
  Line of credit                                                 1,849,235                    -- 
  Notes payable affiliate - current portion                      1,025,000                    -- 
  Notes payable other - current portion                          3,649,971             3,342,557 
                                                       --------------------  --------------------
Total current liabilities                                       12,857,619             5,822,548 

  Rent payable -  affiliate                                        228,939               245,476 
  Accrued environmental costs - long-term portion                  495,000                    -- 
  Notes payable - Subordinated debt                             10,000,000                    -- 
  Notes payable - Affiliate and accrued interest                 1,090,116             1,886,606 
  Notes payable - Other - long-term portion                     13,616,444             2,988,954 
  Deferred income taxes                                             16,400                    -- 

Commitments and contingencies

Stockholders' equity:
  Series A Redeemable Preferred Stock, $1 par value--
    15,000,000 shares authorized; 7,616,000 shares
    issued and outstanding                                       7,616,000             7,616,000 
  Common Stock, $.001 par value--15,000,000 shares
    authorized; 4,591,063 and 3,437,000 shares
    issued and outstanding                                           4,592                 3,437 
  Additional paid-in capital                                    11,882,915             2,669,080 
  Accumulated deficit                                           (8,895,955)           (3,926,388)
                                                       --------------------  --------------------
Total stockholders' equity                                      10,607,552             6,362,129 
                                                       --------------------  --------------------
Total liabilities and stockholders' equity             $        48,912,070   $        17,305,713 
                                                       ====================  ====================

</TABLE>






See  accompanying  notes.




<PAGE>

<TABLE>
<CAPTION>

                                     Atlas Environmental, Inc.
                                          And Subsidiaries

                          Condensed Consolidated Statements of Operations
        For the three months and nine months ended September 30, 1996 and September 30, 1995
                                            (Unaudited)


                                                Three  Months                    Nine  Months
                                             Ended  September  30            Ended  September  30
                                             1996              1995            1996         1995
                                       ----------------  ----------------  ------------  -----------
<S>                                    <C>               <C>               <C>           <C>
Revenues                               $     5,248,994   $     1,124,289   $16,887,579   $7,900,917 

Costs and expenses:
  Cost of sales                              3,888,141           898,937    13,379,434    4,498,890 
  Selling, general and administrative          779,604           721,912     2,442,612    3,181,540 
  Depreciation and amortization              1,075,058           233,852     3,162,994      663,819 
                                       ----------------  ----------------  ------------  -----------
Total costs and expenses                     5,742,803         1,854,701    18,985,040    8,344,249 
                                       ----------------  ----------------  ------------  -----------
Operating loss                                (493,809)         (730,412)   (2,097,461)    (443,332)
Interest expense - affiliate                    39,426            38,958       149,919      119,737 
Interest expense - other                       993,164           170,126     2,666,186      358,871 
                                       ----------------  ----------------  ------------  -----------
Loss before income taxes                    (1,526,399)         (939,496)   (4,913,566)    (921,940)

Income tax benefit                                  --             7,000            --           -- 
                                       ----------------  ----------------  ------------  -----------
Net loss                                    (1,526,399)         (932,496)   (4,913,566)    (921,940)

Required dividend payments on
     preferred stock                                --           (56,000)      (56,000)     163,022 
                                       ----------------  ----------------  ------------  -----------
Net loss applicable to common stock    $    (1,526,399)  $      (988,496)   (4,969,566)  $1,084,962 
                                       ================  ================  ============  ===========

Net loss per common share              $          (.34)  $          (.29)        (1.10)  $     (.32)
                                       ================  ================  ============  ===========

Weighted average common shares
outstanding                                  4,483,978         3,411,853     4,483,978    3,411,853 
                                       ================  ================  ============  ===========
</TABLE>





<PAGE>

<TABLE>
<CAPTION>

                                    Atlas Environmental, Inc.
                                        And Subsidiaries

                         Condensed Consolidated Statements of Cash Flows
               For the nine months ended September 30, 1996 and September 30, 1995
                                           (Unaudited)



                                                        September 30, 1996    September 30, 1995
                                                       --------------------  --------------------
<S>                                                    <C>                   <C>
OPERATING ACTIVITIES
Net loss                                               $        (4,913,566)  $          (921,940)

Adjustments to reconcile net income (loss) to
net cash used in operating activities:
  Depreciation and amortization                                  3,164,032               663,819 
  Compensation paid in stock                                            --                15,000 
  Loss on sale of assets                                             9,709                    -- 
  Discount accretion                                                59,394                    -- 
  Changes in operating assets and liabilities:
      Accounts receivable                                         (333,286)           (1,169,824)
      Note receivable                                                   --              (150,000)
      Insurance refund receivable                                       --               134,998 
      Inventories                                                    9,425                (3,612)
      Prepaid expenses                                              89,979              (139,251)
      Other assets                                                 305,414                89,310 
      Trade accounts payable                                       366,532               456,002 
      Accrued liabilities                                          953,326               249,313 
      Income taxes payable                                              --              (143,040)
      Deferred income tax benefit                                       --                54,587 
      Deferred revenue                                             198,490               (91,080)
      Deferred income tax payable                                       --               (46,147)
                                                       --------------------  --------------------
Net cash used in operating activities                              (90,551)           (1,001,865)

INVESTING ACTIVITIES
Purchase of property, plant and equipment                         (606,266)             (755,799)
Purchase of South Florida Recovery, Inc., net of cash                   --               (77,800)
Proceeds from sale of assets                                        47,400                12,000 
Purchase of subsidiaries, net of cash acquired                 (20,522,773)                   -- 
Deferred acquisition costs                                         (24,120)                   -- 
                                                       --------------------  --------------------
Net cash used in investing activities                          (21,105,759)             (821,599)
</TABLE>





(Continued  on  the  following  page.)


<PAGE>
<TABLE>
<CAPTION>

                              Atlas Environmental, Inc.
                                  And Subsidiaries

                   Condensed Consolidated Statements of Cash Flows
         For the nine months ended September 30, 1996 and September 30, 1995
                                     (Unaudited)


                                            September 30, 1996    September 30, 1995
                                           --------------------  --------------------
<S>                                        <C>                   <C>
FINANCING ACTIVITIES
Proceeds from issuance of:
  Line of credit                                     1,849,235                    -- 
  Notes payable - other                             15,300,000             2,954,116 
  Subordinated debt                                 10,000,000                    -- 
Payments on notes payable - affiliates                (750,000)                   -- 
Payments on notes payable - other                   (5,010,628)           (1,525,896)
Payments on loan costs                                (384,062)              (23,040)
Dividends on preferred stock                           (56,000)             (163,022)
                                           --------------------  --------------------
Net cash provided by financing activities           20,948,545             1,242,158 
                                           --------------------  --------------------
Net decrease in cash                                  (247,765)             (581,306)
Cash at beginning of period                            467,942               700,509 
                                           --------------------  --------------------
Cash at end of period                      $           220,177   $           119,203 
                                           ====================  ====================



SUPPLEMENTAL CASH FLOW INFORMATION


Cash paid during the period for interest   $         1,825,549   $           287,559 
                                           ====================  ====================

Common stock issued in connection with
purchase of South Florida Recovery, Inc.   $                --   $           120,000 
                                           ====================  ====================

Common stock issued in connection with
acquisition services under a consulting
agreement                                  $                --   $           120,000 
                                           ====================  ====================

Common stock issued in connection with
pending acquisition                        $            15,000   $                -- 
                                           ====================  ====================


Compensation paid in stock                 $                --   $            15,000 
                                           ====================  ====================

Common stock issued in connection with
the purchase of subsidiaries               $         9,212,500   $                -- 
                                           ====================  ====================
</TABLE>




See  accompanying  notes.



<PAGE>


                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                               September, 1996
                                 (Unaudited)


Note  1  --  Basis  of  Presentation
------------------------------------

Atlas  Environmental,  Inc.  ("Atlas")  and  Subsidiaries ("the Company")  was
principally  engaged  in providing petroleum soil decontamination and trucking
services,  excavation  and  restoration  of  petroleum-contaminated  sites,
petroleum  storage tank removal and general trucking services.  On January 25,
1996,  the  Company acquired six companies consisting of one C&D landfill, one
supplier  of  roll-off  containers,  and  four  construction,  demolition  and
land-clearing ("CDL") debris recycling facilities.  The consolidated financial
statements  include  the accounts of the six acquired companies since the date
of  acquisition,  and  TranSoil and KleenSoil for the entire period presented.

Accordingly,  the financial statements for the nine months ended September 30,
1995 include the historical financial position of KleenSoil and TranSoil only.
All  significant inter-company accounts have been eliminated in consolidation.

In  the  opinion  of  management,  the  accompanying  unaudited  condensed
consolidated  financial  statements  have  been  prepared  in  accordance with
generally  accepted  accounting principles for interim financial  information.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
All  adjustments  (consisting  of  normal  recurring  accruals)  considered
necessary  for  a fair presentation have been included.  Operating results for
the  nine-month period ended September 30, 1996 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1996.  For
further  information,  refer  to  the  consolidated  financial  statements and
footnotes  thereto  included in the Company's annual report on Form 10-KSB for
the  year  ended  December  31,  1995.

CONCENTRATIONS  OF  CREDIT  RISK

Financial  instruments which potentially subject the Company to concentrations
of  credit  risk  consist  principally  of  cash  in  banks and trade accounts
receivable.    The credit risk associated with cash in banks is considered low
due  to  the  credit quality of the issuer of the financial instrument.  Trade
accounts  receivable are due primarily from companies located in Florida.  The
Company  performs  ongoing  credit  evaluations  of  its  trade  customers and
generally  does  not  require collateral as it relies on lien rights available
resulting  from  improvements made to property.  Credit losses associated with
trade  receivables  are  provided for in the consolidated financial statements
and  have  historically  been  within  management's  expectations.

USE  OF  ESTIMATES

The  preparation  of  the  financial  statements  in conformity with generally
accepted  accounting  principles  requires  management  to  make estimates and
assumptions  that  affect  the  amounts reported in the consolidated financial
statements  and  accompanying  notes.   Actual results could differ from those
estimates.


                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)


Note  1  --  Basis  of  Presentation  (continued)
-------------------------------------------------

INVENTORIES

Inventories  are  valued  at  the  lower of cost or market under the first-in,
first-out  method.

REVENUE  RECOGNITION

Revenues  from the treatment of contaminated soil are recognized when the soil
is  processed.    Deferred  revenues  represent  estimated  amounts  billed to
customers  for  soil  received  but  not  processed.

INCOME  TAXES

The  Company  accounts for income taxes using the liability method.  Under the
liability  method,  deferred  income tax assets and liabilities are determined
based  on  differences between financial reporting and tax bases of assets and
liabilities,  and  are measured using the enacted tax rates and laws in effect
when  the  differences  are  expected  to reverse.  The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period  that  includes  the  enactment  date.

NET  LOSS  PER  COMMON  SHARE  AND  COMMON  STOCK

Net  loss  per common share is calculated based on the weighted average number
of  common  shares  outstanding  during  the  periods.

RECLASSIFICATIONS

Certain  amounts  in  the  1995 financial statements have been reclassified to
conform  to  the  1996  presentation.

<PAGE>
                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)




Note  2  --  Property,  Plant  and  Equipment
---------------------------------------------

At  September  30,  1996  and December 31, 1995, property, plant and equipment
consisted  of  the  following:

<TABLE>
<CAPTION>

                                          September  30, 1996    December  31, 1995
                                         ---------------------  --------------------
<S>                                      <C>                    <C>
Land, landfill and treatment facilities  $         22,102,183   $         1,152,375 
Building and improvements                           8,882,843             3,165,315 
Machinery and equipment                            13,754,705             4,059,166 
Office equipment                                      311,645               310,380 
Vehicles                                            2,086,927             2,150,520 
                                         ---------------------  --------------------
                                                   47,138,303            10,837,756 
Less accumulated depreciation                      (6,983,018)             (874,492)
                                         ---------------------  --------------------
                                         $         40,155,285   $         9,963,264 
                                         =====================  ====================
</TABLE>


Note  3  --  Long-Term  Debt  and  Notes  Payable  to  Affiliates
-----------------------------------------------------------------

At  September  30,  1996 and December 31, 1995, long-term debt consists of the
following:

<TABLE>
<CAPTION>

                                                          September 30, 1996   December 31, 1995
                                                          -------------------  ------------------
<S>                                                       <C>                  <C>

Convertible notes payable, bearing interest at 10%,
    with principal and interest due November 1, 1996,
    secured by a second mortgage on real property
    with a net book value of approximately
    $3,200,000 (a)                                        $         1,745,000  $        1,745,000

  $6 million bank line of credit, with interest payable
    monthly at prime plus 2%, principal due on
    demand, $336,000 available at December 31, 1995,
    collateralized by a blanket lien on all accounts
  receivable (b)                                                           --           1,252,097

     Notes payable, monthly principal and interest
    payments totaling $84,692, maturing on various
    dates through October 1999, interest varying
    from 6.49% to 10.05%, collateralized by vehicles
    and equipment with net book value approximating
    $2,550,000 (b)                                                         --  $        2,099,308
</TABLE>



                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)


Note  3  --  Long-Term  Debt  and  Notes  Payable  to Affiliates (continued)

<TABLE>
<CAPTION>


                                                        September  30, 1996  December 31, 1995
                                                        -------------------  -----------------
<S>                                                     <C>                  <C>


Notes payable, monthly principal and interest
  payments totaling $5,649, maturing July 1996,
  interest at 8% collateralized by equipment with
  net book value approximating $370,000 (b)                              --             70,116

Note payable bearing interest at 4%, payable based
  on a specific formula contingent upon the maker
  supplying contaminated soil to the Company for
  treatment, net of imputed interest at 10.5% of
  $125,604 and $185,000 as of September 30,
  1996 and December 31, 1995, respectively                        1,224,396          1,165,000

15 million term loan bearing interest at LIBOR or
  at the alternate base rate ("ABR"), the prime rate
  plus 1.25%, payable in monthly installments of
  $147,500, plus interest, commencing in March
  1996 with the remaining outstanding principal
  and interest due in full in January 2001. During
  any event of default, interest rates will increase
  by 2% (c)                                                      13,925,100                 --

Subordinated notes bearing interest at 13 1/2%,
  payable in five equal annual installments of
  $2,000,000 commencing in January of 1999,
  with interest payable quarterly commencing
  in April, 1996 (c)                                             10,000,000                 --
</TABLE>




<PAGE>

                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)


Note  3  --  Long-Term  Debt  and  Notes  Payable  to Affiliates (continued)
----------------------------------------------------------------------------

<TABLE>
<CAPTION>


                                                  September 30, 1996    December 31, 1995
                                                 --------------------  -------------------
<S>                                              <C>                   <C>


Note due to the former owner of Naples payable
  in 12 quarterly payments of $23,956 bearing
  interest at 10% (d)                                        262,475                   -- 

Other                                                        109,444                   -- 
                                                 --------------------  -------------------
                                                          27,266,415            6,331,511 
Less current portion                                      (3,649,971)          (3,342,557)
                                                 --------------------  -------------------
                                                 $        23,616,444)  $        2,988,954 
                                                 ====================  ===================
</TABLE>





(a)     During 1995, the Company issued convertible notes to certain investors
in  private  transactions  resulting  in  net  proceeds  to  the  Company  of
approximately  $1,720,000.    The  notes  are  convertible at maturity, at the
option  of  the  holder,  into  restricted shares of Atlas  common stock at  a
price of $5.50 per share.  If the conversion option is  not  exercised and the
holder elects to be paid in full at the maturity date, the holder will receive
2,500 warrants for each $100,000 of principal to purchase restricted shares of
Atlas common stock at a price of $8 per share for three years.  As of November
12,  1996,  the  Company  is in default of the principal and interest on these
notes.    The  Company  has accrued interest in the amount of $167,478 through
September  30, 1996.   Pursuant to an intercreditor agreement, payment of this
note  is  prohibited  at  this  time.

(b)     On January 25, 1996, these  obligations were refinanced on a long-term
basis  through  the  financing  arrangements  secured  in  connection with the
acquisitions  described  in footnote 7 to the condensed consolidated financial
statements  and,  accordingly, amounts have been classified as long-term, with
the  exception  of  amounts paid subsequent to December 31, 1995, but prior to
the  refinancing  and  amounts  due  within one year of the balance sheet date
under  the  new  financing  which  have  been  classified  as  current.

(c)     As  of  September  30,  1996  the  Company  was  in breach of its stop
loss,  interest  coverage,  cash  flow,  and  maximum leverage covenants.  The
Company  is in default on the interest payment due on the subordinated notes. 
The  Company  has accrued interest of approximately $613,600 which is included
in  accrued  liabilities.   Pursuant to an intercreditor agreement, payment of
this  note  is  prohibited  at  this  time.

<PAGE>
                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)


Note  3  --  Long-Term  Debt  and  Notes  Payable  to Affiliates (continued)
----------------------------------------------------------------------------

(d)      The Company has not made payments in accordance with the terms of the
note.    The  Company  has  accrued interest in the amount of $14,376 which is
included  in  accrued  liabilities.    Pursuant to an intercreditor agreement,
payment  of  this  note  is  prohibited  at  this  time.


At  September  30, 1996 and December 31, 1995, notes payable to affiliates and
accrued  interest  consist  of  the  following:

<TABLE>
<CAPTION>

                                                     September 30, 1996   December 31. 1995
                                                     -------------------  ------------------
<S>                                                  <C>                  <C>
Note payable to a company that is wholly owned
  by the principal stockholder of Atlas bearing
  interest at 8%, and secured by real property
  with a net book value of approximately
  $2,850,000 (a)                                     $           500,000  $        1,000,000

Note payable to the principal stockholder of Atlas
  for working capital advances, bearing interest
  at the prime rate plus 1%, secured by certain
  building improvements with a net book value
  of approximately $50,000 (a)                                    39,313              39,313

Accrued interest due to the principal stockholder
  of Atlas (a)                                                   246,215             212,293

Unsecured notes payable to stockholder with
  interest at 12% (a)                                            250,000             600,000

Accrued interest due to stockholders (a)                          54,588              35,000

Notes due to two former owners of Waste Magic
  to be paid in five quarterly payments of
  $150,000 and a final quarterly payment of
  $275,000 with the first payment due April
  19, 1996, and bearing interest at the prime
  rate to be paid quarterly (b)                                1,025,000                  --
                                                     -------------------  ------------------
                                                               2,115,116           1,886,606
 Less current portion                                          1,025,000                  --
                                                     -------------------  ------------------
                                                     $         1,090,116  $        1,886,606
                                                     ===================  ==================
</TABLE>




                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)


Note  3  --  Long-Term  Debt  and  Notes  Payable  to Affiliates (continued)
----------------------------------------------------------------------------

  (a)         Subsequent  to  December  31,  1995, a portion of obligation was
refinanced  on a long-term basis through the financing arrangements secured in
January 1996 and, accordingly, such amounts have been classified as long-term.
 Additionally,  pursuant  to an intercreditor agreement executed in connection
with  the  new  financing  arrangements,  the  ultimate maturity date of these
obligations  was  extended  to  1999.  Pursuant to an intercreditor agreement,
payment  of  interest  on  this  note  is  prohibited  at  this  time.

  (b)         Pending resolution of disputed amounts, the Company has not made
payments  in  accordance  with the terms of the note.  The Company has accrued
interest  in  the amount of $58,963 which is included in  accrued liabilities.
Pursuant  to an intercreditor agreement, payment of this note is prohibited at
this  time.

Note  4  --  Line  of  Credit
-----------------------------

As part of the acquisition financing described in footnote 7 to the condensed
consolidated  financial  statements,  the  Company  entered  into a $5 million
revolving  line of credit borrowing arrangement with BNY Financial.  Borrowing
availability  under  the  line is based on the amount of eligible receivables,
less reserves, and bear interest at LIBOR or at the alternate base rate (ABR),
the  prime  rate  plus  1.25%,  payable monthly, maturing in January 2001.  At
September  30,  1996, there was an approximate overdraft of $560,000 under the
credit  line.

The  agreement  contains  certain covenants related to the Company's financial
condition and operating results including minimum quarterly net  income tests.
During any event of default, interest rates will increase by 2%.  The Company,
at September 30, 1996, was in breach of its stop loss, interest coverage, cash
flow  coverage,  and  maximum leverage covenants.  The agreement also provides
for  a  0.50%  per  annum  unused  facility  fee  on the unused portion of the
Revolving  Credit  Line  payable  quarterly  in  arrears.

Note  5  --  Contingencies
--------------------------

The majority of the Company's underground storage tank remediation business is
performed  for  private clients through a state reimbursement program.  In the
State  of  Florida,  reimbursement  is  obtained through the Inland Protection
Trust  Fund  ("the  Fund").

On March 8, 1995, Florida Governor Lawton Chiles signed Executive Order Number
95-82  declaring a state of emergency due to the imminent possibility that the
increased  demands  placed  upon  the Fund will result in the inability of the
State  to  provide  for  the  clean-up  of sites at high risk of contaminating
ground  and  surface  waters.


<PAGE>

                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)


Note  5  --  Contingencies  (continued)
---------------------------------------

On  March  29,  1995, Florida Law Chapter 95-2, formerly known  as Senate Bill
1290,  was signed into law which superseded Executive Order Number 95-82.  The
law,  as  enacted,  states that after March 27, 1995, only  sites with ranking
scores    higher  than  50 can receive approval from the Florida Department of
Environmental  Protection  (FDEP)  concerning  the scope of work and the costs
and,  with  such  approval,  these  sites  may  continue  clean-up  work.  The
law    also  directs  that clean-up work must be stopped on sites with a score
ranking  of  49 or less.  Sites with a score of 25-49 may continue the program
task  they are working on after March 27, 1995, after receiving prior approval
for the cost of completing the task from the FDEP.  Work on sites with a score
ranking of 0-24 must cease immediately.   All payments for those program tasks
in  progress would be paid under the old reimbursement  program, 376-3071 FAC.
Florida  Law  Chapter  95-2  will  remain as the operative legislation for the
fiscal  year  1995  and  1996.

Because of the uncertainty created by the Governor's Executive Order, the pace
of  remediation activity in the State slowed significantly commencing in early
March  1995.  The  FDEP  allocated a significant portion of the annual revenue
base  generated  by  the  Fund to pay off the approximate $300 to $400 million
Fund  backlog.  This  resulted  in a slowdown in the number of sites where new
remediation  services  commenced  and  had  a cleansing effect on the clean-up
industry  in  Florida.    This  is  having  an adverse effect on the Company's
current  business  in  the short run as there is increased competition for the
fewer  approved  sites.

On  May  2,  1996,  the Florida Senate passed a revision to the State Program,
known as CS/HB- 1127.  Key provisions of this new bill include: bonding of the
existing  backlog  with  such  bonds  being repaid over approximately 7 years;
risk-based  assessment  of  existing  sites  in  the program; acceptance of an
estimated  4,000  new  sites  into the program; and an allowance for voluntary
clean-up  of  sites  with ultimate reimbursement by the Fund.  The anticipated
end  result  of  this  new  legislation  will be a significant increase in the
funding  of clean-up activities throughout the State commencing in early 1997.

Superfund  legislation enacted by Congress seeks recovery from anyone who ever
owned  or  operated  a  particular  contaminated  site or from anyone who ever
generated  or  transported  hazardous  materials to a site.  These parties are
commonly  referred  to as potentially responsible parties (PRP).  Potentially,
the  liability  can  extend to subsequent owners or to the parent company of a
PRP.

When  more than one PRP is associated with a contaminated site, each party may
be contingently liable for the full amount of clean-up costs and fines because
of  the  joint  and several nature of environmental laws.  Such exposure could
result  in  the  need for an entity to accrue for clean-up costs or disclose a
potential  contingency.


<PAGE>
                          Atlas Environmental, Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)



As  of  the  date  of  this  report,  the Company has not been designated as a
potentially  responsible  party  by  the  Environmental  Protection  Agency;
therefore, no accruals for potential  clean-up costs have been included in the
accompanying consolidated financial statements.  However, due to the nature of
the  Company's  business,  there  is  potential  for exposure to environmental
liabilities.

Note  6  --  Accrued  Environmental  Costs
------------------------------------------

On  February 28, 1995, the Florida Department of Environmental Protection (the
FDEP)  issued  a  Notice of Intent to deny Atlas' subsidiary, Waste Magic, its
permit  application  for  its  Davie, Florida site. Additionally, on March 31,
1995,  the  FDEP issued a Notice of Violation and Orders for Corrective Action
(NOV)  against  Waste  Magic.    The NOV alleged that Waste Magic had operated
without  a state permit, disposed of solid waste on the ground and disposed of
solid  waste  within  200  feet  of a water body.  On November 21, 1995, Waste
Magic  signed a consent order (the Consent Order) to settle these matters with
the  FDEP.    The  Consent  Order  provides for the continued operation of the
facility  during  the removal of solid waste from the site under the direction
of  the  FDEP  through October 1997.  In addition, Waste Magic was required to
provide  a  performance bond in the amount of $1,298,000 within 90 days of the
effective  date  of  the  Consent  Order which requirement was satisfied by an
insurance  policy  benefiting  the  FDEP.

In  connection  with  the  Consent  Order,  Waste  Magic  recorded  accrued
environmental  costs  totaling  $990,000.    Waste  Magic  estimated  accrued
environmental  costs  by applying historical processing costs, per cubic yard,
to  the  total  cubic yards requiring processing.  Accrued environmental costs
also  include anticipated engineering and legal costs that will be incurred in
complying  with  the  Consent  Order.

Note  7  --  Business  Acquisitions
-----------------------------------

On  January  25, 1996, in a series of transactions accounted for as purchases,
Atlas  acquired 100% of the issued and outstanding shares of six corporations:
Waste  Magic Recyclers, Inc.; Waste Magic Recyclers Central, Inc.; Waste Magic
Recyclers  Palm  Beach,  Inc.;  Homestead  Landfill  and  Recycling Management
Company;  Royal Crown Carting, Inc.; and Naples Recycling Resources, Inc.  The
total  purchase  price  for these six entities was approximately $28.7 million
and  was  paid  in  a  combination  of  approximately  $18.2  million in cash,
approximately  $1.3  million  in  notes,  and 1,151,563 newly issued shares of
Atlas  common  stock.

To  finance  these  acquisitions,  Atlas  secured  $30  million  in new credit
facilities including a $15 million term loan and a $5 million credit line from
BNY  Financial  Corporation, an affiliate of Bank of New York, and $10 million
in senior subordinated notes ("the Subordinated Notes") from Fiduciary Capital
and Hanifen Imhoff Capital Partners. Substantially all of the Company's assets
were  pledged  as  collateral  under the related agreements.  The term loan is
payable  in  monthly

<PAGE>
                                                      Atlas  Environmental,
Inc.
                               And Subsidiaries


             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                  (continued)



installments  of  $147,500,  plus interest, commencing in March 1996, with the
remaining outstanding principal and interest due in full in January 2001.  The
Subordinated Notes are payable in five equal annual installments of $2,000,000
commencing  in  January  1999,  with  interest payable quarterly commencing in
April  1996.

The  results of operations of the six acquired companies have been included in
the  Company's  consolidated  statements  of  operations from January 1, 1996,
forward.

Note  8  --  Subsequent  Event
------------------------------

The  Company  signed  a  Letter  of Intent on August 8, 1996, to sell the six
companies  comprising  its  construction  and  demolition debris recycling and
landfill  industry  segment.

The Letter of Intent contains various contingencies, including but not limited
to  the  completion  of  due  diligence  by  the  buyer  and Board of Director
approvals by both parties.  The Company expected to sign a definitive purchase
agreement in the near term with a targeted closing date of September 30, 1996;
however,  as  of  November 13, 1996, no definitive purchase agreement has been
signed.      Further,  as  of  November  13,  1996,  the Company believes that
negotiations  have  stalled  and  that  this  transaction will not occur.  The
Letter  of Intent contains a "no shop" provision which barred the Company from
responding  to  other offers for these six companies through October 31, 1996.


ITEM  2  -  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
----------------------------------------------------------------------------
RESULTS  OF  OPERATIONS
-----------------------

On January 25, 1996, the Company acquired six companies (see footnote 7 to the
consolidated  financial  statements).    The  results  of  operations  include
KleenSoil  and  TranSoil  operations  since  January  1,  1995, and KleenSoil,
TranSoil  and  the  acquired  companies  since  January  1,  1996.

The  Company's  revenues  increased  significantly  for  the nine months ended
September  30,  1996 to $16.8 million as compared to $7.9 million for the same
period  in  1995.    The  increases  are  attributable to the inclusion of the
acquired  companies  in  1996.

Cost  of sales for the nine months ended September 30, 1996 increased to $13.4
million  as  compared  to $4.5 million for the nine months ended September 30,
1995.  Cost  of  sales for the third quarter 1996 was $3.8 million compared to
$0.9  million  for the third quarter 1995.  The gross margin increased to $1.4
million  (26%  of  revenues)  for  the  third quarter 1996 as compared to $0.2
million  (20%  of  revenues)  for  the  third  quarter 1995.  The gross margin
increased  to  $3.5  million  (21%  of  revenues)  for  the  nine months ended
September  30, 1996 as compared to $3.4 million (43% of revenues) for the nine
months  ended  September  30, 1995.  The decrease in gross margin for the nine
months  ended  September 30, 1996 resulted from non-recurring costs associated
with  the acquired companies and the fact that a higher percentage of costs is
classified  as  cost  of  sales  for  the  acquired  companies.

<PAGE>
                          Atlas Environmental, Inc.
                               And Subsidiaries

             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                 (continued)



Selling,  general and administrative expenses increased slightly for the three
months  ended  September 30, 1996 compared to the prior year; however, for the
nine  months  ended  September  30,  1996, as compared to the prior year, they
decreased. The acquired companies have a higher percentage of costs classified
as  cost  of  sales, and a smaller percentage of costs attributable to general
and  administrative  expenses.

Depreciation  and  amortization  expense  increased significantly both for the
nine-month period and quarter ended September 30, 1996 as compared to the same
periods in 1995.  The acquired companies have large investments in depreciable
fixed  assets.

Interest  expense  increased dramatically both for the nine months and quarter
ended  September  30,  1996  as  compared  to  the same periods in 1995.  This
increase  is  a  direct  result of the financing of the acquired companies, as
more  fully  described  in  footnote 7 to the condensed consolidated financial
statements.

As a result of the various factors described above, the Company incurred a net
loss  of  $4.9 million for the nine months ended September 30, 1996, and a net
loss of $1.5 million for the quarter ended September 30, 1996 as compared to a
net  loss  of $1.0 million and $988,000 for the comparable period for the nine
months  and  quarter  ended  September  30,  1995.

LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------

At  September  30,  1996  the  Company  had  a  working  capital  deficit  of
approximately  $9.5  million,  and  a  ratio  of  current  assets  to  current
liabilities of approximately .26 to 1.  This compares with a December 31, 1995
working  capital  deficiency  of  approximately  $3.2  million  and a ratio of
current assets to current liabilities of approximately .43 to 1.  The Company,
on  January  25,  1996, acquired six companies engaged in landfill operations,
recycling  and  waste  hauling.

The  Company paid $28.6 million to acquire these companies in a combination of
cash  and  notes,  and  1,151,563  shares  of newly issued common stock of the
Company.    To  finance these acquisitions, the Company secured $30 million in
new  credit  facilities,  including  a  $15  million  term
loan  and a $5 million revolving credit line from a financial institution, and
$10  million  in  senior  subordinated  notes (see footnote 7 to the condensed
consolidated  financial  statements).

For the nine months ended September 30, 1996 the Company's liquidity decreased
by  approximately  $248,000 as cash decreased to  $220,000 for the nine months
ended  September  30, 1996.  The decrease in cash used in operating activities
of  $90,500  is  attributable  to  changes  in  accounts  receivable,  accrued
liabilities  and  the  net loss for the nine months ended September 30, 1996. 
Cash used in investing activities of $21,000,000 was comprised of purchases of
property  and  equipment,  and  the  purchase  of  six companies as more fully
described  above  and  in  footnote  7 to the condensed consolidated financial
statements.   This was offset by the cash provided by financing activities  to
purchase  the    six companies  (see footnote 7 to  the condensed consolidated
financial  statements).    The  Company paid $56,000 in dividends on preferred
stock  and  $384,000  of  loan  costs  during  the  nine-month  period.



                          Atlas Environmental, Inc.
                               And Subsidiaries

             Notes to Condensed Consolidated Financial Statements
                        September 30, 1996 (Unaudited)
                                 (continued)




The  Company's  results  of  operations  and  its  liquidity  is  still  being
negatively  affected  by  the  State  of  Florida's  Reimbursement Program for
underground  storage  tank  remediation  (see  footnote  5  to  the  condensed
consolidated  financial  statements)  and  the  absorption  of  the  acquired
companies  in which many operational changes have been instituted; however, to
date,  the  Company  has  not  benefited  from  the  impact  of these changes.

On  August  8,  1996  the  Company  signed  a Letter of Intent to sell the six
companies  comprising  its  construction  and  demolition debris recycling and
landfill  industry segment. To date, the transaction has not been consummated,
and  it  is  doubtful  that  this transaction will ever be consummated. If the
pending  sale is not consummated, it would have a materially adverse effect on
the  Company.

The  Company  has experienced a significant decline in its financial condition
during the past 18 months.  Atlas had a loss of approximately $2.5 million for
the  year ended December 31, 1995 and a net loss of approximately $4.9 million
for  the nine months ended September 30, 1996.  As a result, the Company is in
default  of  certain  of its covenants to BNY Financial Corporation, Fiduciary
Capital,  and  Hanifen  Imhoff  Capital  Partners  under  their  respective
agreements.   The Company is also in default of its obligations with the Waste
Magic  stockholders'  loans  and  the  Naples  Seller  Note.

The  Company  believes  that  four  primary  factors  have contributed to such
decline:    (i) the limitation on expenditures for site clean-up by the Inland
Trust  Fund  Program  for the State of Florida, which limitation resulted from
recent  legislation has produced a continuing negative impact on the Company's
Remediation  Business  due  to  increased competition for remediation services
among  fewer  sites approved for payment under such Inland Trust Fund Program;
(ii)  significant costs and expenses incurred to implement Atlas' acquisitions
of the CDL business; (iii) the financial performance of the CDL business being
adversely  affected  by  the  more-rapid-than-anticipated consolidation of the
Florida  solid  waste  market,  the  result of which produced a decline in the
revenue  and  the customer base of the CDL business; and (iv) competition from
companies  with financial resources significantly greater than the Company for
new  CDL  business.

The Company's financial statements have been prepared on a going concern basis
which  contemplates  continuity  of  operations,  realization  of  assets  and
liquidation  of liabilities in the ordinary course of business.  However, as a
result  of  the  default to various lenders and creditors, such realization of
assets  and liquidation of liabilities is subject to significant uncertainty. 
The  Company  believes if it is unable to successfully close the pending sale,
it raises substantial doubt about the Company's ability to continue as a going
concern.


<PAGE>

PART  II  -  OTHER  INFORMATION

ITEM  6  -  EXHIBITS  AND  REPORTS  ON  FORM  8-K

          (a)  Exhibits  filed:   None.

          (b)  Reports  on  Form  8-K:

               (i)  The  current  report  on  Form  8-K  dated  August 9, 1996
                    was filed reporting item (5),  the  execution  of  a
                    Letter  of  Intent.


                                 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.

ATLAS  ENVIRONMENTAL,  INC.
(Registrant)

By:       /s/  Gary  Kabot
          -----------------------------------------
          Gary  Kabot,  Chairman  and
          Chief  Executive  Officer

Date:     November  12,  1996


By:       /s/  Philip  Kabot
          -----------------------------------------
          Philip  Kabot,  Chief  Financial  Officer
          and  Principal  Accounting  Officer

Date:     November  12,  1996