SECURITIES EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                                
                           FORM 10-QSB
                                
        Quarterly Report Pursuant to Section 13 or 15(d)
             of the Securities Exchange Act of 1934
                                
                                
             For the quarterly period ended 08/31/97
                                
                 Commission file number 0-21210
                                
                                
                           NELX, INC.
                                
     (Exact name of registrant as specified in its charter)




     Kansas                                  84-0922335
(State or other jurisdiction                 (I.R.S.Employer
of incorporation or organization)            Identification No.)


         10200 W. 44th Ave. #400, Wheat Ridge, CO  80033
       (Address of principal executive offices) (Zip Code)
                                
Registrant's telephone number, including area code:(303) 422-9497


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  the  filing
requirements for at least the past 90 days.

                         Yes  X       No   ____

As  of  August 31, 1997, there were 25,477,000 outstanding shares
of common stock, par value $.0001.



<PAGE>

PART 1.   FINANCIAL INFORMATION

     ITEM 1.   Financial Statements

                   NELX, INC. AND SUBSIDIARY
                   Consolidated Balance Sheet
                          (Unaudited)

                                   August         May
ASSETS                             31, 1997       31, 1997
CURRENT ASSETS:
  Cash and Cash Equivalents          1,491        (8,533)
  Prepaid Expenses                       0              0
  Accounts Receivable                    0              0
  Accrued Interest Receivable            0              0
    Total Current Assets             1,491        (8,533)

FIXED ASSETS: (Note 1)
  Land                             950,000        950,000
  Gas Plant                        100,000        100,000
  Vehicles                               0              0
  Equipment                         12,479         12,479
  Apartment & Office Bldgs          82,000         82,000
                                 1,144,479      1,144,479

  Less Accumulated Depreciation  (106,154)      (106,154)
     Total Net Fixed Assets      1,038,325      1,038,325


OTHER ASSETS:
  Deposits                           3,950          3,950
  Lease & Royalty Interests              0              0
  Notes Receivable                       0              0
  Investments                            0              0
     Total Other Assets              3,950          3,950

   TOTAL ASSETS                  1,043,766      1,033,742



<PAGE>

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts Payable                  489,424        489,424
  Advance Payable                         0              0
  Accrued Expenses                  374,149        374,149
  Current Portion LTD               812,252        812,252
     Total Current Liabilities    1,675,825      1,675,825

LONG TERM DEBT
  Note Payable                       33,117         30,617

STOCKHOLDER'S EQUITY (DEFICIT):
  Common Stock, $.0001 par value
     - 500,000,000                    2,548          2,548
  shares authorized, 18,947,300
     and 19,648,723 issued and
     outstanding at August 31, 1996
     and May 31, 1996
  Additional Paid In Capital      7,441,162      7,441,162

  Retained Earnings             (8,108,886)    (8,116,410)

  Total Stockholder's Equity      (665,176)      (672,700)

  TOTAL LIABILITIES &
     STOCKHOLDER'S EQUITY         1,043,766      1,033,742

  The accompanying notes are considered an integral part of these
  financial statements.
 


<PAGE>

                  NELX, INC. AND SUBSIDIARY
              Consolidated Statement of Operations
                          (Unaudited)

                                          Three Months
                                         Ended August 31,
                                   1997           1996

OPERATING REVENUES
    Sale of ORRI                 25,000              0
    Misc. Income                 11,000              0
Cost of Sales                     1,944          1,800

Gross Profit                     34,056        (1,800)

OPERATING EXPENSES
   Salaries                           0              0
   Office Expense                 3,031         14,884
   Travel                             0              0
   Professional Fees             23,700         56,312
   Telephone & Utilities          (199)          5,279
   Depreciation & Depletion           0         12,425
   Miscellaneous                      0              0
   Interest Expense                   0              0
     Total Operating Costs       26,532         88,900

Other Revenues & (Expenses)
   Net Rental Expense                 0        (8,158)
   Interest Income                    0              0
   Miscellaneous Income               0              0
     Total Other Revenues 
     & Expenses                       0        (8,158)


NET INCOME (LOSS)                 7,524       (98,858)

Weighted average number of
 shares outstanding - see    25,477,000     19,648,723
 note

Net Loss Per Share                 0.00         (0.01)



<PAGE>

                   NELX, INC., AND SUBSIDIARY
              Consolidated Statement of Cash Flows
                          (Unaudited)

                                             Three Months
                                             Ended August 31,
                                     1997            1996

Cash Flows From
Operating Activities:

Net Profit (Loss)                   7,524        (98,859)

Depreciation                                       12,426
Stock issued for services                          51,435
(Increase) decrease in Accts 
 Receivable
(Increase) decrease in Prepaids
(Increase) decrease in Deposits
(Decrease) Increase in Accrued
 Expenses
(Decrease) Increase in Accts
 Payable                                           (1,000)
(Decrease) Increase in Accts
 Payable
 Related Parties
Net Cash Flows Used for              7,524        (35,998)

Operating Activities

Cash flows from investing 
 activities
 (Purchase) sale of fixed assets                   (5,476)
 (Purchase) Sale of Note receivable
 (Purchase) Sale of Investment
 (Purchase) Sale of Lease interests
Total cash used for investing             0        (5,476)

Cash flows from financing
 activities
 Increase (Decrease in Note payable   2,500         12,104
 Sale of common stock                     0         19,575
Total cash from financing
 activities                           2,500         31,679

Increase (Decrease) in cash          10,024        (9,795)

Cash and cash equivalents -
 beginning of period                (8,533)          8,701
Cash and cash equivalents
 end of period                        1,491        (1,094)



<PAGE>

ITEM 2.

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


Results of Operations for quarter ended August 31, 1997 compared
to same period in 1996.

      The  Company has experienced continuing operating  expenses
for  the three month period of $26,532 as compared to $88,900  in
the  same  period for 1996.  The revenues for the period  totaled
$34,056 from operations compared with $0 for same period in 1996.
The  Company  recorded a net loss of $(7,524) for the  period  as
compared  to a $(98,858) loss for the same period in fiscal  year
1996.  Other Revenues and Expenses (Real Estate Rental) showed  a
net  loss  for the period of $0 as compared to $(8,158) net  loss
for  the  same period in 1996.  The Company losses on  operations
will  continue until income from any operations can be  achieved.
While  the  Company  is seeking capital sources  for  investment,
there is no assurance that sources can be found.  The Company has
only minimal revenues and has no other income.

Liquidity and Capital Resources

      The  Company had inadequate cash capital at the end of  the
period.   The Company will be forced to either borrow against  or
sell  assets or make private placements of stock in order to fund
operations continuance.  No assurance exists as to the ability to
achieve  sales  of assets or loans against the  assets,  or  make
private placements of stock.



<PAGE>

PART II



                       OTHER INFORMATION




       Item 1. Legal  proceedings  -        There  are presently
               no  material pending legal  proceedings which 
               would  result  in any uninsured  liability,
               other  than routine litigation incidental  to  the
               business,  to  which  the Registrant  is  a  party
               except as follows:  The Company is Defendant in  a
               suit filed by Allan Pezoldt naming the Company  as
               a   co-defendant  in  El  Paso  County,  Colorado.
               Plaintiff's  counsel filed a Lis  Pendens  on  the
               Erie  property,  and  served a  complaint  on  the
               Company  in  February 1997.  The Company  believes
               any suit by Allan Pezoldt has no merit whatsoever,
               and is vigorously defending the suit.

       Item 2. Changes in securities - None.
       Item 3. Defaults upon senior securities - None.
       Item 4. Submission of matters  to  a  vote  of
               security holders - None.
       Item 5. Other information - None.
       Item 6. Exhibits and reports on Form 8-K
                      (a)  The following are filed as Exhibits
                      to this Quarterly Report.  The numbers refer
                      to the Exhibit Table of Item 601 of Regulation S-K:

                            None.
  
                      (b)   Reports on Form 8-K filed during the three
                      months ended August 31, 1997:

                            July 1, 1997
  
                                  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.

                              NELX, Inc.
Date:     March 2, 1998

                              by:/s/Charles L. Stout
                              Charles L. Stout, President