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 11/30/98
                         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 November  30, 1998,  there were  46,352,042  outstanding  shares of common
stock, par value $.0001.



<PAGE>



PART 1.           FINANCIAL INFORMATION

         ITEM 1.           Financial Statements
<TABLE>
<CAPTION>

                                   NELX, INC.
                           Consolidated Balance Sheet
                                  (Unaudited)
<S>                                                  <C>                  <C>

                                                     November             May
                                                     30, 1998             31, 1997

ASSETS                                                          
                                                                
Current Assets                                              
     Cash & Cash Equivalents                           $4,091              $1,662

Property, Plant and Equipment                                                         
     Plant and Plant Equipment                        100,000             100,000
     Equipment                                          8,654               8,654
     Land                                                               
     Buildings                                         85,175              82,000
                                                      --------          -------------
                                                      193,829             190,654
     Less Accumulated Depreciation                    114,266             114,266
                                                      --------          -------------
          Net Fixed Assets                             79,563              76,388

TOTAL ASSETS                                          $83,654             $78,050
                                                      ========          =============

LIABILITIES AND STOCKHOLDERS' EQUITY                                                            

Current Liabilities                                                             
     Accounts Payable                                 $33,256             $78,765
     Accrued Expenses                                  10,036             100,366
     Note Payable - Stockholder                        57,950              
     Current Portion of Long-Term Debt                  6,034             158,984
                                                      --------          -------------
          Total Current Liabilities                   107,276             338,115

Long Term Liabilities                                                           
     Notes Payable                                     25,841              25,841

Total Liabilities                                     133,117             273,626


Stockholders' Equity                                                            
     Common Stock. $0.0001 par value, 500,000,000
     shares authorized 46,352,042 issued and
     outstanding at May 31, 1998 and November 30,
     1998, respectively                                 4,635               4,635
     Additional paid-in capital                     7,623,975           7,465,975
     Prior year adjustment                                                635,156
     Retained Deficit                             (7,678,072)         (8,301,342)
                                                  -----------         ------------
TOTAL STOCKHOLDERS' DEFICIT                          (49,463)           (195,576)
                                                  -----------         ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT           $83,654             $78,050
                                                  ===========         ============
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                   NELX, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     For the Six Months Ended November 30,
                                  (Unaudited)

<S>                                                   <C>               <C>

                                                      1998              1997
REVENUES                                                                
     Oil & gas sales                                                          - 
     Sale of ORRI
     Misc Income                                                         96,743
     Cost of Sales                                                      (2,049)
                                                                       -------- 
Gross Profit                                             -               94,694
                                                                
EXPENSES                                                                
     Interest                                        4,542                  226
     Office Expense                                  2,403                5,226
     Professional Fees                               4,450               38,137
     Telephone & Utilities                             491                4,596
Total Operating Expenses                            11,886               48,186
                                                  --------               ------
NET INCOME (LOSS)                                $(11,886)              $46,508
                                                  ========               ======
Loss per Common Share                               (0.00)                 0.00
                                                                        
Weighted average number of shares outstanding   46,352,042           25,477,000

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
 
                                  NELX, INC.
                      Consolidated Statement of Cash Flows
                                  (Unaudited)
<S>                                                              <C>             <C>

                                                                     Six Months              
                                                                 Ended November 30               
                                                                 1998            1997
Cash Flows from Operating Activities:                                                           
     Net Profit (Loss)                                          (11,886)        $46,508
     Depreciation                                                               
     (Decrease) Increase in Accounts Payable                    (45,510)      (126,702)
     (Decrease) Increase in Accrued Expenses                                     10,037
     (Increase) Decrease in Other Assets                                          3,950
     (Increase) Decrease in Accounts Receivable
                                                                 --------       --------
Net Cash Flows Used for Operating Activities                    (57,396)       (66,207)
                                                                
Cash Flows from Investing Activities
     (Purchase) Sale of Fixed Assets                             (3,175)        (1,000)
     (Purchase) Sale of Note Receivable
     (Purchase) Sale of Investment
                                                                 --------       --------
Net Cash (Used by) From Investing Activities                     (3,175)        (1,000)
                                                                
Cash Flows from Financing Activities                                                            
     Increase (Decrease) in Note Payable                        (95,000)         74,900
     Sale of Common Stock                                                        26,900
     Sale of Treasury Stock                                      158,000
                                                                 --------       --------
Total Cash from (Used by) Financing Activities                    63,000        101,800

Increase (Decrease) in Cash                                        2,429         34,593
                                                                                --------
Cash and Cash Equivalents - Beginning of Period                    1,662        (8,533)

Cash and Cash Equivalents - end of Period                          4,091         26,060
                                                                 ========       ========
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                   NELX, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    For the Three Months Ended November 30,
                                  (Unaudited)

<S>                                                              <C>             <C>
                                                                 1998            1997
REVENUES                                                                
     Oil & gas sales                                                                 - 
     Sale of ORRI                                                               
     Misc Income                                                                60,743
     Cost of Sales                                                               (105)
                                                                                -------
Gross Profit                                                           -        60,638

EXPENSES
     Interest                                                                      226
     Office Expense                                             1,468            2,195
     Professional Fees                                          3,400           14,437
     Telephone & Utilities                                        105            4,795
                                                            ---------           ------
Total Operating Expenses                                        4,973           21,654
                                                                
NET INCOME (LOSS)                                            $(4,973)          $38,984
                                                            =========           ======
Loss per Common Share                                          (0.00)             0.00

Weighted average number of shares outstanding              46,352,042       25,477,000

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                   NELX, INC.
                      Consolidated Statement of Cash Flows
                                  (Unaudited)

<S>                                                    <C>             <C>
                                                         Three Months            
                                                       Ended November 30               
                                                       1998            1997
Cash Flows from Operating Activities:
     Net Profit (Loss)                                (4,973)         $62,384
     Depreciation
     (Decrease) Increase in Accounts Payable          (7,000)        (34,548)
     (Decrease) Increase in Accrued Expenses
     (Increase) Decrease in Other Assets                                3,950
     (Increase) Decrease in Accounts Receivable
                                                       -------        --------
Net Cash Flows Used for Operating Activities         (11,973)          31,786
                                                                
Cash Flows from Investing Activities
     (Purchase) Sale of Fixed Assets                        1         (1,000)
     (Purchase) Sale of Note Receivable
     (Purchase) Sale of Investment
                                                       -------        --------
Net Cash (Used by) From Investing Activities                1         (1,000)

Cash Flows from Financing Activities
     Increase (Decrease) in Note Payable                1,000        (33,117)
     Sale of Common Stock                                              26,900
     Sale of Treasury Stock
                                                       -------        --------
Total Cash from (Used by) Financing Activities          1,000         (6,217)
                                                                
Increase (Decrease) in Cash                          (10,972)          24,569
                                                                      --------
Cash and Cash Equivalents - Beginning of Period        15,063           1,491
                                                                      --------
Cash and Cash Equivalents - end of Period               4,091          26,060
                                                       =======        ========
</TABLE>


<PAGE>



                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

         BASIS OF PRESENTATION

         The financial  information included herein is unaudited;  however, such
         information  reflects  all  adjustments  (consisting  solely  of normal
         recurring  adjustments)  which  are,  in  the  opinion  of  management,
         necessary for a fair statement of results for the interim periods.

         The results of  operations  for the three and  six-month  periods ended
         November 30, 1998 are not  necessarily  indicative of the results to be
         expected for the full year.

         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.



<PAGE>



                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CON'T:

         Income taxes:

         None.

         Reclassifications:

         None.

         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.

NOTE 2 - LONG-TERM DEBT:

Following is a summary of long-term debt at November 30, 1998
                                                                 1997
============================================================================
Various         Unsecured notes payable to
%               others on various dates through
                1998 at interest rates from 8% -
                10%
                                                                $83,797


NOTE 3 - GOING CONCERN:

         The Company  incurred a net loss of $184,932  for fiscal year ended May
         31, 1998 and has retained earnings (losses) of ($7,678,072) at November
         30, 1998.  At November 30, 1998,  current  liabilities  exceed  current
         assets  by  $49,463.  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.



<PAGE>



                                   NELX, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4 - ASSET REVALUATION:

         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.

NOTE 5 - 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.

NOTE 6 - PRIOR YEAR ADJUSTMENT

         During fiscal year ending May 31, 1997, NELX, Inc. wrote off $3,266,994
         of non-producing  assets. In 1998, NELX, Inc.'s new management returned
         assets and  restructured  debt  obligations.  NELX,  Inc. also received
         discounts from creditors on debts,  which allowed the Company to remain
         in business.  Management's prior year write-off of non-producing assets
         of $3,266,994,  due to debt  restructuring  and creditor  discounts was
         overstated by $635,156.



<PAGE>



ITEM 2.

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


Results of Operations  for six month period ended  November 30, 1998 compared to
same period in 1997.

         The Company has experienced  continuing  operating expenses for the six
month  period of $11,886  compared  to $48,186 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  totalled $0 in the period in
1998, but in the period in 1997  miscellaneous  income was $94,694.  The Company
recorded  net loss of ($4,973)  for the period as compared to $38,984 net income
for the same period in fiscal year 1997. 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 no revenues and has no other income.

Results of  Operations  for the three  month  period  ended  November  30,  1998
compared to same period in 1997.

         The Company has experienced continuing operating expenses for the three
month  period of $4,973  compared  to  $10,339 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 no
miscellaneous  income compared to $60,743 in  miscellaneous  income in 1997. The
Company  recorded a net loss of  ($4,973)  for the period as compared to $38,984
net  income  for the same  period in fiscal  year 1997.  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 no revenues and has no other income.

Liquidity and Capital Resources

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

Analysis of Financial Condition

         At  November  30,  1998,  there  were  current  liabilities  payable of
$107,276.  The Company had no source of income.  The current portion of the long
term debt was $6,034.  Long term debt was  $25,841.  The Company  had, at period
end,  $83,654 in current  assets,  and the deficit in current  assets to current
debts and liabilities was ($49,463).


<PAGE>



PART II

                                OTHER INFORMATION

         Item 1.  Legal proceedings - None.
         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 -
         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     November    30,    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:  February 12, 1999
                                            ------------------------------------
                                            Charles L. Stout, President