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 02/28/97
                         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 February  28, 1997,  there were  22,017,942  outstanding  shares of common
stock, par value $.0001 were outstanding.



<PAGE>



PART 1.           FINANCIAL INFORMATION

     ITEM 1. Financial Statements
             --------------------

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

                                                    February            May
ASSETS                                              28, 1997          31, 1996
                                                   ----------       ----------
CURRENT ASSETS:
     Cash and Cash Equivalents                        (10,949)            8,701
     Prepaid Expenses                                       0                 0
     Accounts Receivable                                  500               500
     Accrued Interest Receivable                            0                 0
     Intercompany Receivable                                0                 0
                                                   ----------        ----------
          Total Current Assets                        (10,449)            9,201

FIXED ASSETS: (Note 1)
     Land                                           3,816,952         3,716,801
     Gas Plant                                      1,000,000         1,000,000
     Vehicles                                               0                 0
     Equipment                                         12,479             8,654
     Real Estate                                      472,088           678,063
                                                   ----------        ----------
                                                    5,301,519         5,403,518
     Less Accumulated Depreciation                   (159,797)         (132,725)
                                                   ----------        ----------
          Total Net Fixed Assets                    5,141,722         5,270,793

OTHER ASSETS:
     Lease & Royalty Interests
     Note Receivable                                        3                 0
     Deposits                                           3,950             3,950
     Investments                                       10,000            10,000
     Common Stock Subscribed                                0                 0
          Total Other Assets                           13,953            13,950
                                                   ----------        ----------

       TOTAL ASSETS                                 5,145,227         5,293,944
                                                   ==========        ==========




<PAGE>



LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

CURRENT LIABILITIES:
     Accounts Payable                                  138,649          139,649
     Advance Payable                                    29,000           29,000
     Current Portion LTD                               368,214          368,214
                                                    ----------       ----------
          Total Current Liabilities                    535,863          536,863

LONG TERM DEBT
     Note Payable                                    1,614,645        1,594,733
                                                    ----------       ----------

STOCKHOLDER'S EQUITY (DEFICIT):
     Common Stock, $.0001 par value
         - 500,000,000                                   2,183            1,895
                                                    ----------       ----------
      shares authorized, 10,437,581
         and 15,894,300 issued and
         outstanding at May 31, 1996
         and February 28, 1997
     Additional Paid In Capital                      7,365,965        7,183,780

     Retained Earnings                              (4,373,430)      (4,023,327)
                                                    ----------       ----------

     Total Stockholder's Equity                      2,994,718        3,162,348
                                                    ----------       ----------

      TOTAL LIABILITIES &
         STOCKHOLDER'S EQUITY                        5,145,226        5,293,944
                                                    ==========       ==========

             The accompanying notes are considered an integral part
                           these financial statements


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

                                               3 Months                           9 Months
                                          Ended February 28                  Ended February 28
                                        1996             1997            1996                1997
                                      --------------------------      ------------------------------
OPERATING REVENUES
<S>                                     <C>                      <C>            <C>                      <C>
Oil & Gas Sales                         26,512                   0              57,428                   0
         Cost of Sales                  (3,028)                  0              27,436              50,000
                                      --------            --------            --------            --------
Gross Profit                            29,540                   0              29,992             (50,000)

OPERATING EXPENSES
Salaries                                16,174                   0              48,332                   0
Office                                  24,639              15,228              61,063              35,550
Travel                                   8,264                   0              17,312                   0
Professional fees                       98,166               7,137             356,034             126,279
Telephone & Utilities                    8,005               6,027              16,269              13,320
Depreciation                            25,042              11,790              57,271              36,640
Miscellaneous                           24,970                   0              24,970                   0
Interest expense                         1,491              22,858              35,580              22,858
                                      --------            --------            --------            --------

Total Operating Expenses               206,751              63,040             616,831             234,647

OTHER REVENUES & (EXPENSES)
Net Rental Income (Expense)                262              15,071             (14,740)               (685)
Interest income                            (98)                  0               4,653                   0
Sale of Assets                         (15,000)            (62,775)                  0                   0
Gain (Loss) on disposal                      0                   0                   0             (64,775)
Miscellaneous Income                         0                   0              16,057                   0
                                      --------            --------            --------            --------
Total Other Revenues & Expenses        (14,836)            (47,704)             (5,970)            (65,460)

NET INCOME (LOSS)                     (162,375)            (15,336)           (580,869)           (350,107)
                                      ========            ========            ========            ========
</TABLE>


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

                                                Three Months                        Nine months
                                                Ended February 28                   Ended February 28
                                                1996                  1997            1996              1997
                                                ---------           --------        ---------         --------
Cash Flows From
Operating Activities:                        

<S>                                               <C>               <C>              <C>              <C>      
Net Profit (Loss)                                 (85,262)          (110,744)        (637,963)        (350,107)

Depreciation                                       11,780              2,222           27,072           57,272
Stock issued for services                               0                  0          155,440          352,730
(Increase) decrease in Accts Receivable                 0                  0           55,600                0
(Increase) decrease in Prepaids                         0                  0                0                0
(Increase) decrease in Deposits                         0                  0                0                0
(Decrease) increase in Accrued Expenses             3,433                  0                0                0
(Decrease) increase in Accts Payable             (15,175)                  0          (25,357)          (1,000)
(Decrease) increase in advance payable             20,000                  0                0                0
                                                 --------           --------         --------         --------

Net Cash Flows Used for
Operating Activities                              (65,224)          (108,522)        (197,718)        (168,595)

Cash Flows from investing activities
(Purchase) sale of Fixed Assets                         0            100,478          (45,017)         101,999
(Purchase) sale of Note Receivable                      0                  1          (30,003)               1
(Purchase) Sale of Lease Interests                     (1)                 0                0                0
                                                 --------           --------         --------         --------
Total cash used for investing                          (1)           100,479          (75,020)         102,000

Cash flows from financing activities
Increase (Decrease) in Note Payable                11,965             (3,911)           8,643           19,912
Sale of Common Stock                               41,200                 (4)         264,654           27,033
                                                 --------           --------         --------         --------

Total cash from financing activities               53,165             (3,915)         273,297           46,945

Increase (Decrease) in cash                       (12,060)            11,958)             559          (19,650)
                                                 --------           --------         --------         --------

Cash and cash equivalents -
beginning of period                                (4,221)             1,009           11,104            8,701
                                                 --------           --------         --------         --------

Cash and cash equivalents -
end of period                                     (16,281)           (10,949)          11,663          (10,949)
                                                 ========           ========         ========         ========
</TABLE>


<PAGE>



ITEM 2.

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


Results of Operations
---------------------

     The Company has  experienced  continuing  operating  expenses for the three
month  period of $63,040  compared to  $118,481 in the same period in 1996.  The
revenues for the period  totaled $0 from oil and gas  operations  compared  with
$29,540 for same period in 1996.  The Company  recorded a net loss of  $(15,336)
for the period as  compared to a  $(162,375)  loss for the same period in fiscal
year 1996.  Other  Revenues and Expenses  (Real Estate Rental) showed a net loss
for the period of (47,704)  as compared to (14,836)  net loss for same period in
1996. The Company  losses on operations  will continue until income from oil and
gas operations and real estate sales and development can be achieved.  While the
Company is seeking  capital sources for investment in oil and gas wells and real
estate development, there is no assurance that sources can be found. The Company
has only minimal real estate 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 -

     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 not been set.  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. Outcome of the litigation cannot be predicted.

     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 -

     Three Unit apartment  building at 61-65 Quitman Ct.,  Denver,  Colorado was
lost in a  foreclosure  sale in January  1997.  Depreciated  asset book value to
NELX,  Inc.  was at $90,906  by virtue of the  foreclosure  a $57,000  loan from
Chrysler First Financial plus a second loan of $40,000 to Standard Financial was
retired.

     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, 1997: (incorporated by reference)

               February 14, 1997.


<PAGE>



                                   Signatures

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                            NELX, Inc.
                                            -----------------------------------
                                            (Registrant)


Date: May 14, 1997                          /S/  WESLEY F. WHITING
                                           ------------------------------------
                                            Wesley F. Whiting, President