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 02/28/98
                 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.)


              Rt. #1, Box 4-J, Bridgeport, WV 26330
       (Address of principal executive offices) (Zip Code)
                                
Registrant's telephone number, including area code:(304) 622-9599


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 February 28, 1998, there were 46,352,042 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)

ASSETS                   February 28, 1998          May 31, 1997

 Current Assets:                                                

 Cash on Hand                          $35                     0

 Bank Accounts                       6,672                     0

 C.S. Inc. Acct.                       294                     0

Total Current Assets                 7,001                     0

Fixed Assets                                                    

 Equipment                           6,000                 6,000

 Shale Processing                  100,000               100,000
Equipment
 
 Land                              450,000               950,000

 Buildings                          31,000                31,000

                                   587,000             1,087,000

 Accumulated                     (106,154)             (106,154)
Depreciation

Total Fixed Assets                 480,845               980,846

Other Assets                                                    

 Boat & Motor                        3,825                 3,825

 Crystal Mountain                   51,000                51,000

 Misc. Equipment                     2,654                 2,654

 Deposits                                0                 3,950

 Investments                             0                10,000

 Stock Subscribed                    5,000                     0

Total Other Assets                  62,479                71,429

Total Assets                      $550,326            $1,052,275



<PAGE>

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

                         February 28, 1998         May 31, 1997
Current Liabilities                                            

 Bank Overdraft                         $0               $8,533

 Accounts Payable -                176,468              489,424
Trade

 Accrued Interest                  193,675              374,149
Payable

 Current Portion of                      0              812,252
Long-Term Debt

 Notes Payable                     463,132                     

Total Current                      833,275            1,684,358
Liabilities
                                                               

Long- Term                                                     
Liabilities

  Notes Payable                          0               30,617

Total Long-Term                          0               30,617
Liabilities
                                                               
Total Liabilities                 $833,275           $1,714,975
                                                               
Stockholders' Equity                                           

 Common Stock, $.0001                4,635                2,548
par value 500,000,000 
shares authorized,
46,352,042 and
25,477,042 issued and
outstanding at
February 28, 1998 and
May 31, 1997,
respectively

 Additional Paid-In              7,465,975            7,441,162
Capital

 Retained Earnings             (7,753,559)          (8,106,410)
(Deficit)
                                                               
Total Stockholders'              (282,949)            (662,700)
Equity
                                                               
Total Liabilities &               $550,326           $1,052,275
Capital



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


<PAGE>
[CAPTION]
<TABLE>
                   NELX, INC. AND SUBSIDIARY
          Consolidated Statement of Income and Expense
                          (Unaudited)

                         3 Months Ended      9 Months Ended
                            February 28         February 28               
                         1997      1998      1997      1998

<S>                    <C>      <C>      <C>        <C>

OPERATING REVENUES                                         

Oil & Gas Sales             0         0  (50,000)         0
 (net)

Real Estate Sales           0   176,474         0   176,474

Consulting Fees             0         0         0    11,000

Discounts                   0   125,720         0   221,499
 Negotiated

Misc. Income                0         0         0         0

Total Revenues              0   302,194  (50,000)   408,973

OPERATING EXPENSES                                         

Rent                        0       390         0       950

Bank Charge                 0        99         0        28

Office                 15,228         0    35,550     4,527

Commissions & Fees          0         0         0     2,300

Travel                      0     2,208         0     2,208

Consulting Fees             0         0         0    22,700

Lease Expenses              0         0         0     2,049

Dues &                      0     1,097         0     1,588
 Subscriptions

Professional Fees       7,137     3,000   126,279     3,000

Insurance                   0         0         0   (1,375)

Telephone &             6,027     1,035    13,320     5,631
Utilities

Postage                     0        67         0       703

Miscellaneous               0     1,307         0     1,307

Taxes & Licenses            0        48         0       218

Other Expenses              0         0         0       189

Depreciation           11,790         0    36,640         0

Wages                       0         0         0         0

Interest expense       22,858         0    22,858         0

Total Operating        63,040     9,251   234,647    46,122
 Expenses
</TABLE>

<PAGE>
[CAPTION]
<TABLE>

OTHER REVENUE &      3 Months    3 Months  9 Months    9 Months
(EXPENSES)              ended       ended     ended       ended
                     February    February  February    February
                     28, 1997    28, 1998  28, 1997    28, 1998
<S>                 <C>        <C>        <C>        <C>


Rental &               15,071           0     (685)           0
 Miscellaneous

Interest Income             0           0         0           0

Depreciation                0           0         0           0

Sale of Assets       (62,775)           0  (64,775)           0

Sale of Lease               0           0         0           0
 interests

Rental Expenses             0           0         0           0

Total Revenues &     (47,704)           0  (65,460)           0
 Expenses

NET INCOME (LOSS)   $(15,336)     292,943 (350,107)    $362,851                  

Net Income (loss)                   $.006                 $.009
 per share

Weighted Average               46,352,042            37,677,042
 Shares Outstanding                  
</TABLE>

<PAGE>
[CAPTION]
<TABLE>
       
                   NELX, Inc. AND SUBSIDIARY
              Consolidated Statement of Cash Flows
                           (Unaudited)

                             Three Months Ended     Nine Months Ended
                                    February 28           February 28

                               1997        1998        1997      1998
<S>                       <C>         <C>         <C>        <C>
                                 
Cash Flows From                                                
Operating Activities:

Net Profit (Loss)         (110,748)     292,943   (350,107)    362,851

Depreciation                  2,221           0      36,640          0

Stock issued for                  0           0     155,440          0
 services

(Increase) decrease in            0     (5,000)           0    (5,000)
 Accts Receivable

(Increase) decrease in            0           0           0          0
 Prepaids

(Increase) decrease in            0           0           0      3,950
 Deposits

(Decrease) increase in            0           0           0          0
 Accrued Expenses

(Decrease) increase in      (1,000)   (808,002)     (9,433)  (842,550)
 Accts Payable                            

(Decrease) increase in            0           0           0          0
 Accts Payable Related
 Parties

(Decrease) increase in            0           0           0          0
 advance payable

Net Cash Flows Used       (109,527)   (520,059)   (167,460)  (480,749)
 for Operating               
 Activities

Cash Flows from                                                
 investing activities

(Purchase) sale of          101,999     501,000    (45,017)    500,000
 Fixed Assets

(Purchase) sale of                1           0    (30,003)          0
 Note Receivable

(Purchase) sale of                0           0           0          0
 Lease Interests

Total cash used for         102,000     501,000    (75,020)    500,000
 investing
</TABLE>                                                               


<PAGE>
[CAPTION]
<TABLE>

<S>                         <C>      <C>          <C>      <C>

Cash flows from                                                
 financing activities

Increase (Decrease) in       19,912         0       8,643  (30,617)
 Note Payable

Sale of Common Stock         27,033         0     264,654    26,900

Total cash from              46,945         0     273,297   (3,717)
 financing activities
                                                               
Increase (Decrease) in       39,418  (19,059)      30,817    15,534
 cash
                                                               
Cash and cash               (4,221)    26,060       8,701   (8,533)
 equivalents -
 beginning of period
                                                               
Cash and cash                35,197     7,001      39,518     7,001
 equivalents -
 end of period
</TABLE>


<PAGE>

                           NELX, INC.
                  NOTES TO FINANCIAL STATEMENTS
                           (Unaudited)
                                

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     The following is a summary of NELX, Inc.'s (Company)
     significant accounting policies:

     Organization

     The Company was incorporated March 25, 1983 under the
     laws of Kansas for the purpose of acquiring, dealing in
     and, if warranted, developing oil and gas properties.
     The Company may also engage in other businesses or
     activities unrelated to natural resources which
     management believes hold potential for profit.  On
     October 25, 1983, the Company amended its Articles of
     Incorporation increasing its authorized shares of 0.0001
     par value common stock from 200,000,000 to 500,000,000
     shares.

     On October 30, 1993, a special meeting of Shareholders
     was held.  Stockholders approved a name change of the
     Company from Nelson Exploration, Inc., to NELX, Inc.

     On November 30, 1993 the Board approved a "reverse split"
     of the issued and outstanding shares of common stock
     based upon issuance of one (1) new common share in
     exchange for each 30 shares of (old) common stock issued
     and outstanding effective as of December 31, 1993.

     Cash and Cash Equivalents:

     For purposes of the statement of cash flows, cash and
     cash equivalents include cash in banks and money market
     accounts.

     Fixed Assets and Depreciation/Depletion:

     The useful lives of property, plant, equipment, and
     operating leases, for purposes of computing
     depreciation/depletion are:

     Buildings         31.5 - 39.5 years
     Machinery &               6.0 years
     equipment
     Plant                    27.5 years
                                        
     In 1997 and 1996, respectfully, depreciation and
     depletion expense of $19,103 and $75,207 was charged to
     operations.


<PAGE>

                           NELX, INC.
                  NOTES TO FINANCIAL STATEMENTS
                           (Unaudited)
                                
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CON'T:

     Income taxes:

     The Financial Accounting Standards Board (FASB) has issued
     Statement of Financial Accounting Standards Number 109
     ("SFAS 109"), "Accounting for Income Taxes", which requires
     a change from the deferred method to the asset and liability
     method of accounting for income taxes.  Under the asset and
     liability method, deferred income taxes are recognized for
     the tax consequences of "temporary differences" by applying
     enacted statutory tax rates applicable to future years to
     differences between the financial statement carrying amounts
     and the tax basis of existing assets and liabilities.

     At May 31, 1997, the Company had net operating loss
     carryforwards of approximately $8,091,780 for federal income
     tax purposes.  These carryforwards, if not utilized to
     offset taxable income will expire at the end of the
     indicated years:
                      2001       $   20,180
                      2002           -
                      2003           19,735
                      2004           22,537
                      2005            2,401
                      2006            6,447
                      2007            2,487
                      2008           67,274
                      2009           -
                      2010          964,067
                      2011        2,903,569
                      2011        4,083,083
                                           
                                 $8,091,780

     There was no provision or benefit for income taxes in fiscal 1997.

     Reclassifications:

     Certain amounts in the 1996 financial statements have been
     reclassified to conform to the 1997 presentation.

     Use of Estimates in the Preparation of Financial Statements:

     The preparation of financial statements in conformity with
     generally accepted accounting principles requires management
     to make estimates and assumptions that affect the reported
     amount of assets and liabilities and disclosures of
     contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues
     and expenses during the reporting period.  Actual results
     could differ from those estimates.
                                


<PAGE>

                           NELX, INC.
                  NOTES TO FINANCIAL STATEMENTS
                           (Unaudited)
                                
NOTE 2 - LONG-TERM DEBT:

Following is a summary of long-term debt at February 28, 1998
                                           
                                           
     7.6%    Note payable to               
             CNETCO, Inc., payable         
             at $359 per month, due                 $31,875
             10/05, secured by 4th        
             mortgage on property
                                           
     14%     Note payable to DBL           
             Mortgage Corp.,               
             payable at $2,800 per                 $240,000
             month secured by first      
             deed of trust on land
             in Weld County,
             Colorado.  Note is in
             default, interest
             escalates to 38% on
             unpaid balance.
                                           
    Various  Unsecured notes               
    %        payable to others, due        
             on various dates                        $70,994
             through 1998 at              
             interest rates from 
             8% - 10%

NOTE 3 - GOING CONCERN:

     The Company incurred a net loss of $4,083,083 for fiscal
     year 1997 and has retained earnings (losses) of ($7,753,559)
     at February 28, 1998.  At February 28, 1998, current
     liabilities exceed current assets by $826,274.  These
     factors indicate that the Company has substantial doubt
     about its ability to continue in existence.  The financial
     statements do not include any adjustments relating to the
     recoverability and classification of recorded assets, or the
     amounts and classification of liabilities that might be
     necessary in the event the company cannot continue in
     existence.

NOTE 4 - ASSET DISSOLUTION:

     In November of 1992 the company issued 7,400,000 shares of
     the company's common stock for a 3 unit apartment building,
     subject to a promissory note of $57,000 to Chrysler First
     Financial Services Corporation.  During the 1997 fiscal year
     the company was in default on this note and the property was
     foreclosed.



<PAGE>

                           NELX, INC.
                  NOTES TO FINANCIAL STATEMENTS
                           (Unaudited)

NOTE 4 - ASSET DISSOLUTION CON'T:

     In November 1993 the company exchanged 37,600,000 shares of
     common stock and acquired an industrial building and office
     facility in Provo, Utah subject to a promissory note and
     trust deed for $420,000.   During the 1997 fiscal year the
     company was in default on this note and the trust deed was
     foreclosed on the property and the note satisfied.
  
     In November 1993 the company issued 20,000,000 shares of
     common stock for two separate five acreage parcels of land
     subject to a $400,000 note and trust deed.  During the 1997
     fiscal year the company was in default on this note and the
     properties were relinquished and the debt was extinguished
     via a deed in lieu of foreclosure.

NOTE 5 - ASSET REVALUATION:

     In November of 1992 the company issued 60,000,000 shares of
     stock for 240 acres of land upon which the company borrowed
     $240,000 via a note and deed of trust.  The company is in
     default on this mortgage and it has been foreclosed.  The
     company believes it has reached an agreement to settle a
     lawsuit surrounding this property.  At year end the company
     has written the property down to $450,000, the amount of the
     outstanding mortgage accrued interest and penalties.
 
     In October of 1993, the company issued 6,200,000 shares of
     common stock in exchange for 320 acres of land subject to a
     promissory note and deed of trust in the amount of $500,000.
     The company was in default on this mortgage at year end and
     subsequently gave the deed in lieu of foreclosure to the
     note holder.

     In September of 1995 the company exchanged 350,000 shares of
     common stock for a mini mall located in Kansas subject to a
     note for $31,875.  The company is in default on this note
     and the company has revalued this property down to the
     amount of the outstanding mortgage of $31,000.
 
     In 1996 and 1997, the company wrote off certain costs
     associated with contracts to purchase land because the
     company could not perform upon the purchase contracts within
     the time requirements of the contracts.  The purchase
     contracts were for land in Central City, Colorado and Elbert
     County, Colorado.

NOTE 6 - CHANGE OF CONTROL - ISSUANCE OF STOCK

     On October 9, 1997, the Board of Directors accepted an offer
     from Charles Stout to acquire 20 million shares of common
     stock of NELX, Inc., in consideration for his agreement to
     contribute $20,000 in immediate cash and to contribute such
     additional funding up to $250,000 to settle accounts payable
     and commitments.  Subsequently, on October 17, 1997, the
     initial cash contribution of $20,000 was made.  The 20
     million shares represents 46% of the outstanding stock of
     NELX, Inc.  Mr. Charles Stout was appointed President on
     October 9, 1997.


<PAGE>

ITEM 2.

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

Results of Operations for nine month period ended February 28,
1998, compared to same period in 1997.

     The Company has experienced continuing operating expenses
for the nine month period of $46,122 compared to $234,647 in the
same period in 1997.  The revenues for the period totaled $0 from
oil and gas operations compared with $0 for same period in 1997.
Miscellaneous revenues from discounts and liquidations totalled
$408,973 in the period in 1998, due to which the Company recorded
net income of $362,851 for the period as compared to a ($350,107)
loss for the same period in fiscal year 1997.  Other Revenues and
Expenses (Real Estate Rental) showed no net income for the period
as compared to ($65,460) net loss for same period in 1997. While
the Company is seeking capital sources for investment, there is
no assurance that sources can be found.  The Company has no other
income, except income attributable to discounts and liquidation.

Results of Operations for the three month period ended February
28, 1998 compared to same period in 1997.

     The Company has experienced continuing operating expenses
for the three month period of $9,251 compared to $63,040 in the
same period in 1997.  The revenues for the period totaled $0 from
operations compared with $0 for same period in 1997.  In the
three month period in 1998, the Company had real estate sales
income of $176,474 and miscellaneous income of $125,720 totalling
$302,194 from liquidation and no miscellaneous income in 1997.
The Company recorded a net income of $292,943 for the period as
compared to a ($15,336) loss for the same period in fiscal year
1997.  Other Revenues and Expenses showed a net income (loss) for
the period of ($0) as compared to ($47,704) loss for same period
in 1997.  The Company losses on operations will continue until
income from any operations or real estate sales can be achieved.
While the Company is seeking capital sources for investment,
there is no assurance that sources can be found.  The Company has
no real estate revenues and has no other income.

Liquidity and Capital Resources

     The Company had cash capital at the end of the period of
$6,672 which was insufficient to cover current liabilities.  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>

Analysis of Financial Condition

     At February 28, 1998, there were trade accounts payable in
excess of $178,468.  The Company was also in default on all notes
payable and had no source of income.  The current portion of the
long term debt was $833,275.  The Company had, at period end,
$7,001 in current assets, and the deficit in current assets to
current debts and liabilities was ($826,274).


<PAGE>

PART II


                       OTHER INFORMATION


     Item 1.   Legal proceedings -

               NELX, Inc. has been named as a Defendant
               in a case captioned:

               Allan E. Pezoldt and the Allan E.Pezoldt Revocable 
               Living Trust vs. NELX, Inc., f/k/a Nelson Exploration, 
               Inc., a Kansas corporation, Goodnight/Lowery, Inc., a 
               Colorado corporation, Enviro Research Group, Inc., a
               Colorado corporation, William L. Goodnight,
               Individually, and Dennis H. Skelton, Individually.

               The case involves 240 acres of land owned by NELX, Inc. 
               in Weld County, Colorado.  A Lis Pendens has been filed 
               against the property.  Claims against NELX, Inc. include 
               breach of contract, interference with contractual relations,
               misrepresentation/fraud, and claims are made for rescission 
               and restitution.  NELX, Inc. has filed a counterclaim against 
               the Plaintiffs for slander of title.  NELX, Inc. believes it 
               has valid defenses to the claims in this case, and is having
               settlement discussions with the Plaintiff.  A trial date has 
               been set for June 1998.  Although NELX, Inc. believes it has 
               valid defenses, in the event a judgment were rendered against 
               the Company, it could result in loss of an asset on its books
               of up to $1,200,000, a very material loss (a write-down was 
               taken in prior reporting to $450,000).  Outcome of the 
               litigation cannot be predicted.  Settlement negotiations are 
               being conducted.

     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 -

               On October 9, 1997, Charles Stout purchased 20,000,000 shares
               of Restricted Stock for $20,000.00 cash and an agreement to 
               negotiate the settlement of up to $250,000.00 of the payables.

               Immediately after October 9, 1997, funds were deposited and 
               negotiations were commenced to decrease the trade accounts 
               payable.  As of February 28, 1998, trade accounts payable have
               been reduced by $313,000.00 and discounts negotiated of 
               $221,500.00.


<PAGE>

     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 
                    February 28, 1998: (incorporated by reference)


                         None



                           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.

                         (Registrant)


Date: May 22, 1998                      /s/Charles L. Stout
                                           Charles L. Stout, President