SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-Q

            Quarterly Report Pursuant to Section 13 or 15 (d) of the 
                     Securities and Exchange Act of 1934


                For the Quarter Ended           Commission File Number

                  November 30, 1997                0-12423                 
        

                       MERIT DIVERSIFIED INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

     Nevada                                                  94-2906927   
 (state or other jurisdiction of                           (I.R.S. Employer 
 incorporation or organization)                         Identification No.)
         


                        4570 Campus Dr # 307, Newport Beach, Ca 92660
                        (Address of principal executive offices)


   Registrants telephone number, including area code:    (714) 252-2121      

                                                                        

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 such filing requirements for the past 90 days.

        Yes     X                               No                              

The number of shares outstanding of each of the registrants classes of 
common stock, as of November 30, 1997 was 30,042,257 shares, all of one 
class of $.00 par value Common Stock.










                           MERIT DIVERSIFIED INTERNATIONAL, INC.
                                       FORM 10-Q
                               Quarter Ended November 30, 1997

                                                  TABLE OF CONTENTS


FINANCIAL INFORMATION                                                PAGE
Item 1-  Consolidated Financial Statements                                

                Consolidated Balance Sheets as of November 30, 1997 and
                 August 31, 1997                                        3

                Consolidated Statements of Operations for the three months
                ended November 30, 1997 and November 30, 1996           4

                Consolidated Statements of Cash Flows for the three months
                ended November 30, 1997 and November 30, 1996           5
                Notes to Consolidated Financial Statements              6,7

Item 2-         Managements Discussion and Analysis of Financial
                       Condition and Results of Operations              8,9

OTHER INFORMATION

Item 1-  Legal Proceedings                                              10

Item 2-  Changes in Securities                                          10
  
Item 3-  Defaults upon Senior Securities                                10

Item 4-  Submission of Matters to a Vote of Security Holders            10

Item 5-  Other Information                                              10

Item 6-  Exhibits and Reports on Form 8-K                               10


SIGNATURES                                                              11  























                            MERIT DIVERSIFIED INTERNATIONAL, INC.
                             (A Developmental Stage Company)
                               PART 1: FINANCIAL INFORMATION
                                CONSOLIDATED BALANCE SHEETS
                           AS OF NOVEMBER 30, 1997 AND AUGUST 31, 1997


                  November 30,                               August 31,
                    1997                                      1997            
                 (Unaudited)                                 (Note 1)

Assets                                                              
                                       $  -               $    -
                                                                            
Total Assets                           $   -              $    -
                                                                        

Liabilities and Shareholders Equity

Current liabilities

 Accounts and taxes payable              $    8,000        $    8,000

Total current liabilities                     8,000             8,000

Commitments

Shareholders Equity

Common Stock-no par value; 
50,000,000 shares authorized, 
16,209,316 issued and outstanding 
as of November 30, 1997 and
August 31, 1997                          1,332,349           1,332,349

Additional paid-in capital               1,122,215           1,122,215

Accumulated deficit-accumulated
during the developmental stage          (2,462,564)         (2,462,564)

Total shareholders equity             $     (8,000)         $   (8,000)
                                                                         
Total liabilities and 
shareholders equity                   $       -              $      -
                                                                     



See Notes to Consolidated Financial Statements


















                         MERIT DIVERSIFIED INTERNATIONAL, INC.
                          (A Developmental Stage Company)

                       CONSOLIDATED STATEMENTS OF OPERATIONS
                  THREE MONTHS ENDED NOVEMBER 31, 1997 AND 1996
                                     (UNAUDITED)
<TABLE>
<S>
<S>

                       Three Months           Three Months     Since Being
                       Ended                 Ended                 A
                       November 30,          November 30,     Developmental
                       1997                  1996              Stage Company
                                                              (Note 1)

Net revenue             $       -            $   -            $       -

Costs and expenses:

  General and administrative   -                  -              2,244,147
  Depreciation and amortization                   -                  6,200

Income (loss)from operations $ -                  -            $ (2,250,347)
                                                                        
Other income (expense):

  Interest expense             -                  -                 (22,518)
  Loss on sale of fixed assets -                  -                    (918)
  Loss on sale of investments  -                  -                (269,800)
  Income from debt adjustment  -                  -                  86,419

Total other income (expense)   -                  -                (206,817)

Income before taxes
 on income                     -                  -              (2,457,164)

Taxes on income                -                  -                   5,400

Net income (loss)              -                  -               (2,462,564)

Net income (loss) per share   nil                 nil             

Weighted average number of shares 
  and share equivalents 
  outstanding             30,042,257          16,209,316


</TABLE>


See Notes to Consolidated Financial Statements








                     MERIT DIVERSIFIED INTERNATIONAL, INC   
                      (A Developmental Stage Company)
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
              THREE MONTHS ENDED NOVEMBER 31, 1997 AND 1996
                                 (UNAUDITED)
<TABLE>
<S>
<S>

Increase (Decrease) in Cash and Cash Equivalents

                 Three Months            Three Months       Since Being
                    Ended                  Ended                 A
                   November 30,          November 30,       Developmental
                     1997                    1996           Stage Company
                                                               

Operating activities:

  Net income (loss) $       -            $     -           $  (2,462,564)
  Adjustments to reconcile net loss     
    to cash used in operating activities:
    Amortization expense    -                  -                   6,200
  Changes in operating assets and
    liabilities:
    Accounts payable        -                  -                   8,000  
Cash provided by (used in)
 operating activities       -                  -               (2,448,364)  
Investing activities:       -                  -                     -       
Financing activities:
Loan proceeds               -                  -                   66,364
  Issuance of capital stock -                  -                2,382,000      
Cash provided by financing 
activities                  -                  -                2,448,364  
Net increase (decrease) in 
 cash and cash equivalents  -                  -                      -       
Cash and cash equivalents,
 beginning of period        -                  -                      -       
Cash and cash equivalents,
 end of period      $       -             $    -              $       -       


</TABLE>


See Notes to Consolidated Financial Statements





                           MERIT DIVERSIFIED INTERNATIONAL, INC.
                           (A Developmental Stage Company)
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    NOVEMBER 30, 1997

Note 1 - Basis of Presentation
                                                      

The accompanying consolidated financial statements have been prepared in 
accordance with United States generally accepted accounting principles for 
interim financial information and with the instructions to Form 10-Q and Rule 
10-01 of Regulation S-X.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting 
principles for complete financial statements.  In the opinion of management, 
all adjustments considered necessary for a fair presentation have been 
included.  Operating results for the three months ended November 30, 1997 are 
not necessarily indicative of the results that may be expected for the year 
ended August 31, 1997.  For further information, refer to the consolidated 
financial statements and footnotes thereto included in the Companys Form 
10-K for the year ended August 31, 1997.        

Note 2 - Net Income (Loss) Per Share
                                                                   

Net income (loss) per share and common equivalent share is computed using the 
weighted average number of shares outstanding during each period.

During April, 1996, the Board of Directors declared a reverse stock split, 
reducing the number of common shares outstanding through the distribution of 
one common share in exchange for twenty (20) common shares held by shareholders 
of record as of April 30, 1996.  All references to common share and per share 
amounts in the accompanying financial statements have been retroactively 
adjusted to reflect the effect of this transaction.     

Note 3- Related Party Transactions
                                                                 

The Company has been able to continue in existence and reduce its debts and 
obligations through the assistance of certain major shareholders who continue 
to fund the Companys general and administrative expenses and to pay outstanding
obligations.  There can be no assurance that these shareholders will continue 
such funding in the future.

Note 4- Going Concern
                                                            

The Company has incurred significant losses since its inception and as of 
November 30, 1997, has no source of revenue.  The Company has no cash and has 
maintained its existence and paid ongoing expenses through the issuance of 
common stock.


















                        MERIT DIVERSIFIED INTERNATIONAL, INC.
                         (A Developmental Stage Company)
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                NOVEMBER 30, 1997

The Company has been able to continue because major shareholders have 
continued to invest in the Company to meet its expenses.  As of 
November 30, 1997, the Company has been successful in converting most of 
its debt to equity.

The Company is considered a development stage Company and will remain in this 
status until operations begin.  There can be no assurance that the Company 
will be able to merge with an operating company, acquire an ongoing business, 
or that the major shareholders will continue to pay the expenses of the 
Company.
































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                          MERIT DIVERSIFIED INTERNATIONAL, INC.
                             (A Developmental Stage Company)
                                   NOVEMBER 30, 1997


Item 2 - Managements Discussion and Analysis of Financial Condition and 
         Results of Operations or Plan of Operation
                                                                          

The following review concerns the three month period ended November 30, 1997 
and November 30, 1996, which should be read in conjunction with the financial 
statements and notes thereto presented in the Form 10-Q.

The information set forth in Managements Discussion and Analysis of Financial 
Condition and Results of Operations below includes forward looking statements 
within the meaning of Section 27A of the Securities Act, and is subject to the 
safe harbor created by that section.  Factors that could cause actual results to
differ materially from these contained in the forward looking statements are 
set forth in Managements Discussion and Analysis of Financial Condition and 
Results of Operations.

Plan of operation.

The Company has continued its efforts to acquire, merge with or enter into 
another form of business combination with another entity, and the Company plans 
to continue these efforts in the current fiscal year.  It is presently unknown 
whether any transaction will be concluded. The Company considers it current 
cash and cash equivalent balances inadequate to satisfy its cash requirements 
for the next twelve months.  Legal and accounting and other expenses required 
could increase significantly in connection with any contemplated business 
combination. The Company may not have the liquidity and capital resources to 
consummate such business combination.  Due to the nature of the Companys 
present activities, however the Company is unable to predict its likely 
expenditure for professional fees and other expenses.  The Company has no 
major capital commitments nor access to mechanisms to fund working or 
operating capital, and there can be no assurance that it will be successful 
in its efforts to raise additional capital to maintain its plan of operation.

Results of Operations Three Months Ended November 30, 1997 and November 30, 
1996

The Company has no assets and has not engaged in any operational activities 
during the past three years.  At present, the Company has no employees.   The 
Company does not expect any changes unless the Company concludes a merger or 
other business combination.

During the three months ended November 30, 1997, the Company had no 
operations. The Company maintained its existence through contributions from 
its shareholders to satisfy its general and administrative expenses.  As 
detailed on the accompanying consolidated statements of cash flows, there 
were no significant adjustments between the net loss and net change in cash.
















                           MERIT DIVERSIFIED INTERNATIONAL, INC.
                             (A Developmental Stage Company)
                                    NOVEMBER 30, 1997


Item 2 - Managements Discussion and Analysis of Financial Condition and 
         Results of Operations or Plan of Operation (Continued)
                                                                 

As stated above in the Plan of Operation, due to the nature of the Companys 
activities, the Companys prospects for the future are dependent on a number of 
variables which cannot be predicted.  Generally, after identifying a potential 
business opportunity, the Company could incur significant costs in evaluating 
the desirability of an acquisition or other form of business combination. 
Should the Company determine to proceed with the business combination, the 
transaction costs could be significant.  Thereafter, results of operation 
would likely be materially affected by the business acquired or merge with 
the Company.






















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                         MERIT DIVERSIFIED INTERNATIONAL, INC.
                            (A Developmental Stage Company)
                                 NOVEMBER 30, 1997



Item 1                  Legal Proceedings                         

                                None

Item 2                  Change 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              

                                None





































                      MERIT DIVERSIFIED INTERNATIONAL, INC.
                         (A Developmental Stage Company)

                                    SIGNATURES


Pursuant to the requirements of Section 13 of 15(d) of the Securities and 
Exchange Act of 1934, the Registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized.



                     MERIT DIVERSIFIED INTERNATIONAL, INC.
                                  (Registrant)




Date:  November 7, 1998         By: __________________/s/__________________

                                    Dwight Mallette, Secretary, Chief Accountant