UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549


                           FORM 10-Q

(Mark One)

[ X ]QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998

                               OR

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
     ACT
For the transition period from            to

Commission file number 0-12444


                     THE ROCKIES FUND, INC.
     (Exact Name of Registrant as Specified in its Charter)



         Nevada                                   84-0928022
(State or other jurisdiction of                (I.R.S. Employer 
in corporation or organization)                Identification No.)


4465 Northpark Drive, Colorado Springs, Colorado       80907
(Address of principal executive offices)             (Zip Code)


Registrant's telephone number, including area code: (719) 590-4900


        N/A
(Former name, former address and former fiscal year, if changed since 
last report)


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  [  ]

             APPLICABLE ONLY TO CORPORATE ISSUERS:

As of June 30, 1998, the Company had 640,256 shares of its $.01 par value 
common stock outstanding.
                                


                              INDEX

PART I.    FINANCIAL INFORMATION

      Item 1.  Financial Statements

               Statement of Assets and Liabilities at June 30,
               1998 (unaudited) and December 31, 1997 (audited)

               Schedule of Investments and Restricted Securities
               (unaudited)

               Statement of Operations for the Three Months Ended
               June 30, 1998 and June 30, 1997 (unaudited)

               Statement of Operations for the Six Months Ended
               June 30, 1998 and June 30, 1997 (unaudited)

               Statements of Stockholders' Equity  for the Six
               Months Ended March 31, 1998 (unaudited), June 30,
               1998 (unaudited), and Years Ended December 31, 1997
               and 1996 (audited)

               Statement of Changes in Net Assets as of June 30,
               1998 and June 30, 1997 (unaudited)

               Notes to Unaudited Financial Statements
      Item 2.  Management's Discussion and Analysis of
               Financial Conditions and Results of Operations


PART II.       OTHER INFORMATION

      Item 1.  Legal Proceedings

      Item 2.  Changes in Securities

      Item 3.  Defaults Upon Senior Securities

      Item 4.  Submission of Matters to a Vote of Security
               Holders

      Item 5.  Other Information

      Item 6.  Exhibits and Reports on Form 8-K


PART I.   FINANCIAL INFORMATION


      ITEM 1.  FINANCIAL STATEMENTS

       The interim unaudited financial statements have been
prepared by the Rockies Fund, Inc. (the "Fund" or the "Company")
and, in the opinion of management, reflect all material
adjustments which are necessary to a fair statement of results of
the interim periods presented.  Certain information and footnote
disclosure made in the last annual report on Form 10-K have been
condensed or omitted for the interim statements.  These
statements should be read in conjunction with the financial
statements and notes thereto included in Form 10-K for the year
ended December 31, 1997.  The results of the interim periods are
not necessarily indicative of results which may be expected for
any other interim period or for the full years.


                     THE ROCKIES FUND, INC.
              STATEMENT OF ASSETS AND LIABILITIES
              JUNE 30, 1998 AND DECEMBER 31, 1997


                               June 30,            December 31,
                               1998                1997
                               (unaudited)         (audited)
                                                   
ASSETS                                             
                                                   
Investments at value                               
(cost of $1,642,548,1998                      
and $1,813,369, 1997)
Restricted and unrestricted     $   1,623,570      $   1,725,831
securities
Notes receivable                      534,588            458,158
Real estate(cost of$621,358,1998      765,000            965,000 
and $821,358,1997)
                                                   
                                                   
                                    2,923,158          3,148,989
                                                   
Cash:                                              
Held by others                         30,311             21,890
Investment securities sold                  0             79,511
Accrued interest receivable            75,563             53,045
held by others
Receivables from investees              7,812                562
                                                   
                                                   
Total Current Assets                3,036,844          3,303,997
                                                   
Property & Equipment:                              
Land                                  390,000            390,000
Automobile                             15,162             15,162
Furniture and fixtures                  8,739              8,739
Constructions in progress             104,831            101,242
Deposit on Building                    10,000                  0
                                                   
                                                         515,143
                                      528,732
                                                   
Less Accumulated Depreciation          (8,375)            (5,474)
                                                   
                                      520,357            509,669
                                                   
                                                   
TOTAL ASSETS                        3,557,201          3,813,666

                                
                                
                     THE ROCKIES FUND, INC.
              STATEMENT OF ASSETS AND LIABILITIES
              JUNE 30, 1998 AND DECEMBER 31, 1997
                          (Continued)
                                                   
                                June 30,           December 31,
                                1998               1997
                                (unaudited)        (unaudited)
                                                   
LIABILITIES                                        
                                                   
Cash overdraft                  $           0      $       8,049
Payables:                                          
Trade                                 137,849            108,506
Construction                                0             55,762
Accrued liabilities:                               
Property taxes and other                    0             23,011
Interest payable                        5,330              8,565
Current  maturities  of  
long-term debt:
Related parties                        20,572            172,374
Others                                629,285            726,732
Deposits and deferred rent             15,958             41,334
Deferred tax liability,current              0             13,000

                                                   
                                                   
Total Current Liabilities:            808,994           1,157,333
                                                   
Long term debt, net current           249,703             259,531
liability
Deferred tax liability                 94,500               2,000
                                                   
Total Liabilities                   1,153,197           1,508,864
                                                   
NET ASSETS and STOCKHOLDER'S     $  2,404,004       $   2,304,802
EQUITY (Equivalent to $3.75 per 
share at June 30,1998 and $3.60 per 
share at Dec. 31, 1997)

COMPONENTS OF NET ASSETS                           
Common Stock, $.01 par value,                     
Authorized 5,000,000 shares;    
640,256 issued and outstanding
                                $       6,403      $        6,403
                                                   
Additional paid-in capital          2,901,243           2,901,243
                                                   
Accumulated (deficit):                             
Accumulated net investment loss    (2,098,488)         (1,919,099)
Accumulated net realized  gain      1,495,369           1,285,337
from sales  and permanent 
write-downs of securities
Unrealized net appreciation            99,477              30,918
(depreciation) of investments
                                                   
Total accumulated deficit            (503,642)           (602,844)
                                                   
NET ASSETS                      $   2,404,004      $    2,304,802
                                                   
                                                   
                                                   
<TABLE>
                                                   
<CAPTION>
                                                   
                                                    Initial     **Cost at   Fair Value at  Fair Value at
                                                    Investment  June 30,    June 30,       December 31,
     Company                 Position               Date        1998        1998           1997
                
                                                                                               
     Restricted Securities:                                                                    

     <S>                    <C>                     <C>      <C>         <C>          <C>
     American Educational   19,500 common stock     Sep-96    97,500.00   185,250.00   114,562.50
     Products, Inc.<F1>(2)   9,500 common stock     Sep-96           -          -       55,812.5          -           -
                             2,000 common stock     Sep-96           -          -       11,750.00
                             5,000 warrants         Sep-96         0.00    25,000.00     6,875.00
                            15,000 warrts           Sep-96           -          -       20,625.00
                             (ex.@ $4.50)                                                
                            20,000 warrant          Sep-96           -          -       27,500.00
                             (ex.@ $4.50)                                               
                            9,000 warrants          Jun-97         0.00    12,937.50     2,250.00
                             (ex.@ $10.00)
                            7,000 warrants          Jun-97           -          -        1,750.00
                             (ex.@ $10.00)                                           
                           15,000 warrants          Jun-97           -          -        3,750.00
                             (ex.@ $10.00)                                               
                                                              97,500.00   223,187.50    244,875.00
                                                                                               
     Eclipse (fka)          5% partnership interest Nov-94         0.00         0.00          0.00
     Bear Star, LLC
                            305,000 common stock    Jun-96       500.00         0.00          - 
                                                                                             
                                                                 500.00         0.00          0.00
                                                                                               
     COVA Technologies<F1>  917 common stock        Jul-96    20,035.00    20,035.00     20,035.00
                                                                                               
     Global Casinos,        3,800 common stock      Nov-93    76,000.00     8,787.50     13,300.00
     Inc.<F1> (1)
                            4,331 common stock      Jan-94    50,068.21    10,015.44     15,158.50
                            1,724 common stock      Jan-94    19,931.79     3,986.75      6,034.00
                            1,250 common stock      Feb-94    25,000.00     2,890.63      4,375.00
                            75 common stock         Mar-94         0.00       173.43        262.50
                            500 common stock        Oct-94    10,000.00     1,156.25      1,750.00
                            5,000 common stock      Feb-96    17,207.50    11,562.50     17,500.00
                            1,000 common stock      Mar-96     3,125.00     2,312.50      3,500.00
                            105,000 warrants        Nov-96         0.00         0.00          0.00
                                                             201,332.50    40,885.00     61,880.00
                                                                                               
     Guardian Technologies, 8,333 common stock      Feb-97     8,750.00    20,832.50     22,915.75
     Inc.<F1> (3)
                            90,533 common stock     Mar-97   126,450.00   226,335.00    248,965.75
                            5,000 common stock      Jun-97     6,260.00    12,500.00     13,750.00
                            20,000 common stock     Aug-97    29,005.00    50,000.00     55,000.00
                            2,500 common stock      Sep-97     8,061.25     6,250.00      6,875.00
                            137,000 warrants        Mar-97    26,255.00    29,968.75     42,812.50
                                                             204,781.20   345,886.25    390,319.00
                                                                                               
     Hampton Court          12,500 common stock     Sep-97    11,542.00    12,000.00     16,162.50
     Resources
                                                                                               
     Land Resource          10,000 common stock     Mar-97    10,000.00    10,000.00     10,000.00
     Corporation<F1>
                                                                                               
     Lone Oak Vineyards,    35,000 common stock     Feb-97    35,000.00    93,240.00     93,240.00
     Inc.<F1> (4)
                            7,000 common stock      Oct-97     7,000.00    18,648.00     18,648.00
                            7,000 common stock      Nov-97     7,000.00    18,648.00     18,648.00
                                                              49,000.00   130,536.00    130,536.00
                                                                                               
     Redwood Broadcasting,  5,000 common stock      Feb-97         0.00     8,750.00      8,750.00
     Inc.<F1> (5)
                            200,000 common stock    Dec-97   240,000.00   350,000.00    350,000.00
                            50,000 common stock     Dec-97    60,000.00    87,500.00     87,500.00
                                                             300,000.00   446,250.00    446,250.00
                                                                                                
     Training Devices, Inc. 20,000 common stock     Feb-97    25,000.00    40,000.00     40,000.00
                                                                                              
     Wilshire Technologies, 247 warrants            Dec-97         0.00         0.00          0.00
     Inc.
                                                                                                
     Total Restricted                                        919,690.75 1,268,779.63  1,360,057.50                           
     Securities

     Unrestricted Securities:
                                                                                                
     Astea International    10,000 common stock     Feb-97           -           -       18,750.00
                                                                                 
                            5,000 common stock      Jun-97    16,354.41    10,000.00      9,375.00

                                                              16,354.41    10,000.00     28,125.00                        

     Cable & Company        10,000 common stock     Mar-97     5,165.00       300.00      1,250.00
     Worldwide
                            40,000 common stock     Nov-97     8,965.00     1,200.00      5,000.00

                                                              14,130.00     1,500.00      6,250.00
                                                                                                
     Cusa Technologies,     30,000 common stock     Nov-97           -            -      30,937.50
     Inc.                                                                         
                                                                                                
     Exploration Company,   31,000 common stock     Oct-97    93,930.00    52,312.50     62,000.00
     The
                            5,000 common stock      Oct-97            -            -     10,000.00
                                                                                 
                                                              93,930.00    52,312.50     72,000.00
                                                                                                
     Full Tilt Sports       1,000 common stock      Jun-98     1,000.00     1,000.00         -  
                                                                                             
                                                                                                
     J2 Communications      20,000 common stock     May-98    20,312.50    18,750.00         - 
                                                                                             
                                                                                                
     Kinetiks.com           10,000 common stock     Sep-96    38,125.00       500.00         0.00
                            11,000 common stock     Oct-96    24,312.50       550.00         0.00
                            20,000 common stock     Nov-96    12,187.50     1,000.00         0.00
                            62,500 common stock     Dec-96    44,851.88     3,125.00         0.00
                            10,000 common stock     Jul-97     3,281.25       500.00         0.00
                            option to purchase      Feb-98     5,000.00     5,000.00           
                            2.9 million shares                                                    -
                            400,000 warrants        2/97 -9/97     0.00         0.00         0.00

                                                             127,758.13    10,675.00         0.00
                                                                                                
     Online System Services 1,000 common stock      Jun-98    13,000.00    10,875.00         - 
                                                                                             
                                                                                                
     Optimax Industries,    115,191 common stock    Jun-94   138,229.20    12,671.00    18,004.35   Inc.
                                                                                               
     Premium Cigars         5,000 common stock      Aug-97            -            -    12,812.50
     International, Inc.                                                         
                                                                                                
     Shiva Corporation      2,630 common stock      Dec-96         0.00    23,506.00    22,519.38
                                                                                                
     Southshore Corporation 15,000 common stock     Sep-97     7,715.00       938.00     3,750.00
                                                                                                
     TELS Corporation       20,000 common stock     Aug-96            -            -     6,250.00
                                                                                 
                            10,000 common stock     Sep-96            -            -     3,125.00

                                                                   0.00         0.00     9,375.00
                                                                                                
     Usasurance Group       12,000 common stock     Jul-96    75,620.00    24,000.00    24,000.00
                            3,000 common stock      Jul-96            -            -     6,000.00
                                                                                 
                            10,000 common stock     Sep-96    62,750.00    20,000.00    20,000.00
                            2,500 common stock      Oct-96    12,375.00     5,000.00     5,000.00
                            31,500 common stock     Dec-96    73,777.00    63,000.00    63,000.00
                            2,500 common stock      Jan-97     8,750.00     5,000.00     5,000.00
                            4,500 common stock      Jun-97     6,106.25     9,000.00     9,000.00
                            7,500 common stock      Dec-97     7,875.00    15,000.00    15,000.00
                                                             247,253.25   141,000.00   147,000.00
                                                                                                
     Whitewing Labs         15,000 common stock     Jan-97    23,175.00    17,812.50    11,250.00
                            5,000 common stock      Jan-97            -            -     3,750.00
                                                                                 
                                                              23,175.00    17,812.50    15,000.00
                                                                                                
     World Cyberlink        20,000 common stock     Jun-98    20,000.00    53,750.00         -  
                                                                                             
                                                                                                
     Total Unrestricted                                      722,857.49   354,790.00   334,836.23
     Securities
                                                                                                
     Notes Receivable:                                                                     
                                                                                                
     Columbine Home Sales,  Note Receivable, 10%    Dec-95         0.00     5,814.06     5,814.06
     LLC <F1>
                                                                                                
     Damach                 Note Receivable,12%,    Oct-96    32,500.00    32,500.00    32,500.00
                            due on demand
                                                                                                
     Phil Georgeson         Note Receivable,12%,    Aug-96     4,602.13     4,602.13     4,602.13
                            on demand
                            Note Receivable,12%,    Mar-98     2,000.00     2,000.00         -  
                            on demand                                                            
                                                               6,602.13     6,602.13     4,602.13
                                                                                                
     Global Casinos, Inc.   Note Receivable, 8%,    Nov-96   175,000.00   175,000.00   175,000.00
     <F1>                   due 11/1/98
                            Note Receivable, 9%     Mar-97   106,501.03   106,501.03    43,904.02 
                            Note Receivable, 24%    Aug-97    50,850.00    50,850.00    75,000.00
                            due 4/15/98
                            Note Receivable, 12%    Mar-98    35,000.00    35,000.00         -                         
                            due on demand                    367,351.03   367,351.03   293,904.02
                                                                                                
     Kinetiks.com           Note Receivable, 10%,   Feb-97    25,000.00    25,000.00    25,000.00
                            due 3/30/97
                            Note Receivable, 8%,              27,533.51    27,533.51         - 
                            due on demand                                                                 
                                                              52,533.51    52,533.51    25,000.00
                                                                                                
     Marco Foods, Inc.<F1>  Note Receivable, 12%    Jan-97   100,787.50   100,787.50   127,337.50
                            due on demand
                                                                                                
     Subotal Notes Receivable                                559,774.17   565,588.23   489,157.71
                                                                                                
     Allowance for Doubtful Notes                                  0.00   (31,000.00)  (31,000.00
                                                                                                
     Net Notes Receivable                                    559,774.17   534,588.23   458,157.71
                                                                                                
     Investments in Real Estate:
                                                                                                
     Chestnut Property      Land & Building at 3515 Sept-97  621,358.38   765,000.00   765,000.00
                            N. Chestnut
                                                                                                
     Thermopolis Property   Building at 116 E. Park Sep-97           -           -     200,000.00
                            St.                                                    
                                                                                                
     Total Real Estate                                       621,358.38   765,000.00   965,000.00
     Investments
                                                                                                
     Total Investments                                     2,823,680.79 2,923,157.98 3,148,988.94
                                                                                   
                                                                                                

     <FN>
                                                                                           

     <F1> These entities are considered to be affiliated companiesas a result of the
     Company's investment and/or position on the entity's Board of Directors
     during the last 90 days.
                                                                                               
     <F1> After permanent write-downs.
                                                                                               
     (1) After giving effect to a 1:5 reverse split
                           
     (2) After giving effect to a 1:10 reverse split
                           
     (3) After giving effect to a 1:3 reverse split
                           
     (4) The value of Loan Oak is based on our pro rata share of a 
         note receivable for the sale of the company's vineyard
         property less a 20% discount for tax consequences
     
     (5) The 50,000 shares are subject to FCC approval of the change
         in ownership of several radio stations
                           
                                                                                               
     See accompanying notes to financial statements.
     </FN>                           
                                                                                               
     Restricted                                          2,263,906.62   2,388,569.75 2,659,893.73
     Unrestricted and Real Estate                                 
     </TABLE>
     
                           
               



                     THE ROCKIES FUND, INC.
                    STATEMENT OF OPERATIONS

                               For the Three      For the Three
                               Months             Months
                               Ended June 30,     Ended June 30, 1997
                               1998
                               (Unaudited)        (Unaudited)
                                                  
INVESTMENT INCOME:                                
Rental income                  $       12,688     $              0
Consulting and other services             805                1,735
Interest and dividends                 26,250               10,377
                                                  
Total Income/Revenue                   39,743               12,112
                                                  
Expenses:                                         
Wages and salaries                     35,848               38,656
Professional fees & legal              27,014               19,770
Custodian fees                            916                    0
Directors fees                              0                2,000
Interest                               20,825                6,960
Travel and entertainment                3,544                6,202
Office                                 20,892               22,215
Building expenses                           0                   21
Investment expenses                    18,803                6,376
Donations                               2,825                4,000
                                                  
                                      130,667              106,200
                                                  
Net investment loss            $      (90,924)     $       (94,088)
                                                  
Net realized gain (loss) from         194,330              (59,010)
investments (net of income tax and                     
deferred tax adjustment)
                                                  
Net unrealized appreciation                     
(depreciation) of investments:                                   
Beginning of year                     179,346             (136,951)
End of period                          99,477             (398,502)
                                                  
Net unrealized depreciation           (79,869)            (261,551)
of investments
                                                  
Net gain (loss) from          $       114,461      $      (320,561)
investments
Net increase (decrease)                      
in net assets
resulting from operations     $      23,537        $      (414,649)
                                                  
                                                  
Per share amounts:                                
Net investment loss            $      (0.14)      $         (0.14)
Net realized gain from                 0.30                  0.09
investments
Net unrealized appreciation           (0.12)                (0.40)
(depreciation) of investments  $       0.04        $        (0.63)




                     THE ROCKIES FUND, INC.
                     STATEMENT OF OPERATIONS
                                
                               For the Six        For the Six
                               Months             Months
                               Ended June 30,     Ended June 30,
                               1998               1997
                               (Unaudited)        (Unaudited)
                                                  
INVESTMENT INCOME:                                
Rental income                  $      25,375      $        51,247
Consulting and other services          1,192                1,886
Interest and dividends                29,639               22,941
                                                  
Total Income/Revenue                  56,206               76,074
                                                  
Expenses:                                         
Wages and salaries                    67,038               74,827
Professional fees & legal             39,687               24,063
Custodian fees                         3,510                9,313
Directors fees                             0                4,000
Interest                              35,561               10,948
Travel and entertainment              10,712               17,594
Office                                43,080               53,654
Building expenses                     13,590               40,742
Investment expenses                   19,592                8,725
Donations                              2,825                6,425
                                                  
                                     235,595              250,291
                                                  
Net investment loss            $    (179,389)     $      (174,217)
                                                  
Net realized gain from               210,032              419,531
investments(net of income
tax and deferred tax adjustment)
                                                  
Net unrealized appreciation                     
(depreciation)
of investments:                                   
Beginning of year                     30,918              (20,322)
End of period                         99,477             (398,502)
                                                  
Net unrealized appreciation           68,559             (378,180)
(depreciation) of investments                     

Net gain from investments      $     278,591      $        41,351
Net increase (decrease)                      
in net assets
resulting from operations      $      99,202      $      (132,866)
                                                  
Per share amounts:                                
Net investment loss            $      (0.28)      $       (0.27)
Net realized gain from                 0.33                0.65
investments
Net unrealized appreciation            0.10               (0.58)
(depreciation) of investments  $       0.15       $       (0.20)



<TABLE>
                                
                              Statements of Stockholders' Equity
                              Six Months Ended June 30, 1998 and
                            Years Ended December 31, 1997 and 1996

<CAPTION>
                                                    Accumulated
                                                    Net Realized
                                                    Gain (Losses)   Unrealized Net
                                       Accumulated  From Sales      Appreciation
                          Additional   Net          And Permanent  (Depreciation)
                  Common  Paid-In      Investment   Write-Downs of  Net
                  Stock   Capital     (Loss)        Of Securities   Investments   Assets
<S>               <C>     <C>         <C>           <C>            <C>           <C>
BALANCES AT
DECEMBER 31, 1996 $6,403  $2,901,243  $(1,893,303)  $1,336,711     $(20,322)     $2,330,732

Net investment loss --         --         (25,796)       --            --           (25,796)
Net realized loss on
sale of investments --         --            --        (51,374)        --           (51,374)
Unrealized net appreciation
of investments      --         --            --          --          51,240          51,240
BALANCES AT
DECEMBER 31, 1997 $6,403  $2,901,243   $(1,919,099  $1,285,337      $30,918      $2,304,802

Net investment loss --          --         (88,465)      --             --          (88,465)
Net realized gain
on sale of investments          --            --        15,702          --           15,702
Unrealized net appreciation
of investments      --          --            --           --       148,428         148,428
BALANCES AT
MARCH 31, 1998    $6,403  $2,901,243   $(2,007,564) $1,301,039     $179,346      $2,380,467

Net investment loss --          --         (90,924)       --            --          (90,924)
Net realized gain
on sale of investments          --            --       194,330          --          194,330
Unrealized net appreciation
of investments      --          --            --          --        (79,869)        (79,869)
BALANCES AT
JUNE 30, 1998     $6,403  $2,901,243   $(2,098,488) $1,495,369      $99,477      $2,404,004
</TABLE>






                      THE ROCKIES FUND, INC.
               STATEMENT OF CHANGES IN NET ASSETS



                                 For the           For the
                                 Six Months Ended  Six Months Ended
                                 June 30, 1998     June 30, 1997
                                 (Unaudited)       (Unaudited)
                                                   
                                                   
Increase(decrease)in net assets                    
from investment activities:                       
Net investment loss              $     (179,389)   $     (174,238)
                                                   
Net realized gain from                  210,032           419,531
investments
                                                   
                                                   
Net unrealized appreciation              68,559          (378,180)
(depreciation)of investments                                     

Net increase(decrease)in net                    
assets from investment activities        99,202           (132,887)
                                                   
Net assets at beginning of year       2,304,802          2,330,732
                                                   
                                                   
Net asset at end of year         $    2,404,004     $    2,197,845
                                                   



                 NOTES TO FINANCIAL STATEMENTS
                          (Unaudited)


1.   Organization and Summary of Significant Accounting Policies

     (a)  Organization and Basis of Presentation.

          The Rockies Fund, Inc. (the "Fund" or the "Company")
was incorporated in Nevada on August 2, 1983, for the principal
purpose of making venture capital investments in developing
companies located primarily in the Rocky Mountain Region of the
United States.  The Fund is registered under the Investment Fund
Act of 1940 as a business development company.

          The interim unaudited financial statements have been
prepared by the Rockies Fund, Inc. and, in the opinion of
management, reflect all material adjustments which are necessary
to a fair statement of results of the interim periods presented.
Certain information and footnote disclosure made in the last
annual report on Form 10-K have been condensed or omitted for the
interim statements.  These statements should be read in
conjunction with the financial statements and notes thereto
included in Form 10-K for the year ended December 31, 1997.  The
results of the interim periods are not necessarily indicative of
results which may be expected for any other interim period or for
the full years.

     (b)  Investment Valuation and Transactions.

          Securities listed or traded on an exchange are valued
at their last sales price on the exchange where the securities
are principally traded.  Securities reported on the NASDAQ
National Market System are valued at the last sales price on the
valuation date or, absent a last sales price, at the closing bid
price on the valuation date.  Securities traded in the over-the-
counter market are valued at the last bid price, based upon
quotes furnished by independent market makers for such
securities.  Investments in notes receivable are valued at net
realizable value.  The Fund performs on-going evaluations
regarding collectability of receivables and provides allowances
for potential losses.

          In the absence of readily ascertainable market values,
investments in restricted securities without quoted market prices
are carried at estimated fair value as determined by the Fund's
Board of Directors.  Due to the inherent uncertainty of
valuation, those estimated values may differ significantly from
the values that would have been used had a ready market for the
investments existed, and the differences could be material.

          Securities transactions are accounted for on a trade
date basis.  Where possible, realized gains and losses on the
sales of investments are determined using the specific
identification method.  If the specific identification method
cannot be utilized, realized gains and losses are determined
using the first in-first out method.  Substantially all of the
Fund's investments are non-income producing.





     (c)  Income Taxes.

          As a business development Fund, the Fund is subject to
Federal and State income taxes at the applicable corporate rates.
Deferred income taxes are provided for timing differences between
the reporting of income for financial statement and tax return
purposes, principally realized and unrealized gains on investments.  
For Federal and State income tax purposes, the investments have 
the same cost basis as shown in the financial statements.

          A deferred tax liability is recognized for the future
tax consequences attributable to the sale proceeds of the Fund's
previous Northpark Building ownership utilized in a 1031 exchange.


2.   Portfolio Securities


     AMERICAN EDUCATIONAL PRODUCTS, INC.

     The Fund, at June 30, 1998, held 19,500 shares of American
Educational Products, Inc. common stock.  The stock is restricted
as to sale due to the company being an affiliate, non-income
producing and has been valued by the Board of Directors at its
quoted market value of $9.50 per share or $185,250.  The Fund
also held at June 30, 1998, common stock purchase warrants
exercisable to purchase 5,000 shares of common stock of American
Educational Products, Inc. at an exercise price of $4.50 per
share.  The Board of Directors valued these warrants at $5.00
each or $25,000, representing the difference between their
exercise price and the market value of the common stock.  The
Fund also held at June 30, 1998, common stock purchase warrants
exercisable to purchase 9,000 shares of common stock, at an
exercise price of $10.00 per share.  These warrants were valued
at their quoted market price of $1.4375 each or $12,937.50.

     ASTEA INTERNATIONAL

     The Fund, at June 30, 1998, held 15,000 shares of Astea
International common stock, which stock is unrestricted as to
sale, non-income producing, and has been valued at its quoted
market price of $2.00 per share or $10,000.

     BEAR STAR fka COLUMBINE HOME SALES, LLC

     The Fund has invested in Bear Star, which investment is
restricted as to sale, non-income producing, and has been valued
by the Board of Directors at $0.00.  The Fund also holds a note
receivable from Columbine Homes with remaining amounts due of
$5,814.  The note accrues interest at the rate of 10% per year,
and is due on demand.

     CABLE AND COMPANY WORLDWIDE

     The Fund, at June 30, 1998, held 50,000 shares of Cable and
Company Worldwide common stock, which stock is unrestricted as to
sale, non-income producing, and has been valued at its quoted
market price of $.03 per share or $1,500.

     CUSA TECHNOLOGIES, INC.

     The Fund, at June 30, 1998, held 30,000 shares of Cusa
Technologies, Inc. common stock, which stock is unrestricted as
to sale, non-income producing and has been valued at its quoted
market price of $1.09 per share or $32,812.50.

     DAMACH, INC.

     The Fund, at June 30, 1998, held a note receivable from
Damach in the amount of $32,500, which accrues interest at the
rate of 12% per year and was originally due on March 31, 1998.
An agreement was signed on March 4, 1997, to extend this
promissory note on a month to month basis or until the Fund makes
a written request for payment.

     EXPLORATION COMPANY, THE

     The Fund, at June 30, 1998, held 31,000 shares of The
Exploration Company common stock, which stock is unrestricted as
to sale, non-income producing, and has been valued at its quoted
market price of $1.69 per share or $52,312.50.

     GEORGESON, PHIL

     The Fund, at June 30, 1998, held notes receivable from Phil
Georgeson totaling $6,602.13.  The notes are unsecured, accrue
interest at the rate of 12% per year and are due on demand.

     GLOBAL CASINOS, INC.

     The Fund, at June 30, 1998, held 17,680 shares of Global
Casinos, Inc. common stock, after giving effect to a 1-for-10
reverse split.  The stock is restricted as to sale due to the
company being an affiliate, non-income producing, and has been
valued at its quoted market price of $2.31 per share, or $40,885.
The Fund, at June 30, 1998, also held a note receivable from
Global Casinos, Inc. in the amount of $175,000, which note is
unsecured, accrues interest at the rate of 8% per year, and is
due November 1, 1998.  Said note is convertible into shares of
Global Casinos, Inc. common stock at a conversion price of $5.00
per share.  The Fund holds a second note receivable from Global
Casinos in the amount of $106,501.03, which note is unsecured,
accrues interest at the rate of 9% per year, is due on demand,
and is convertible into Global Casinos common stock at $5.00 per
share.  The Fund holds a third note receivable from Global
Casinos in the amount of $50,850, which note is secured, accrues
interest at the rate of 24% per year and was due on Demand.  The
Fund holds a fourth note receivable from Global Casinos in the
amount of $35,000, which note is unsecured, accrues interest at
the rate of 12% per year and is due on demand.  The Fund also
owns 35,000 Global warrants exercisable at $6.00, 35,000 warrants
exercisable at $7.00 and 35,000 warrants exercisable at $8.00 per
share, all of which expire as of February 1, 1999, and have been
valued at $0 by the Board of Directors.

     GUARDIAN TECHNOLOGIES, INC.

     The Fund, at June 30, 1998, held 126,366 shares of Guardian
Technologies common stock, after giving effect to a one-for-three
(1:3) reverse split.  The stock is restricted due to the company
being an affiliate, non-income producing, and has been valued at
its quoted market price of $2.50 per share or $315,917.50.  The
Fund also held warrants exercisable to purchase an additional
137,000 shares of Guardian Technologies common stock, which warrants 
are also restricted due to the company being an affiliate, non-income 
producing, and have been valued at their quoted market price 
of $.22 each or $29,968.75.

     HAMPTON COURT RESOURCES

     The Fund, at June 30, 1998, held 12,500 shares of Hampton
Court Resources common stock, which stock is restricted as to
sale, non-income producing and has been valued at its quoted
market price of $.96 per share or $12,000.

     KINETIKS.COM

     The Fund, at June 30, 1998, held 113,500 shares of
Kinetiks.com common stock, which stock is unrestricted as to
sale, non-income producing, and has been valued at its quoted
market price of $.05 per share or $5,675.  The Fund also held
warrants to purchase and additional 400,000 shares of
Kinetiks.com common stock at an exercise price of $.25 per share.
The Board of Directors has valued the warrants at $0.  The Fund
also held an option to purchase the shares held by one of
Kinetiks officer's which option has been valued by the Board of
Directors at its cost of $5,000.  The Fund also held a note
receivable in the amount of $25,000 which note is unsecured,
accrues interest at the rate of 10% per year, and was due on
March 30, 1997.  The note provides for a default interest rate of
18% and an additional 50,000 warrants for each 30-day period that
it goes unpaid.  The Fund holds a second note receivable from
Kinetiks.com in the amount of $27,533.51 which note is unsecured,
accrues interest at the rate of 8% per year and is due on demand.

     LAND RESOURCE CORPORATION

     The fund, at June 30, 1998, held 10,000 shares of Land
Resource Corporation common stock, which stock is restricted as
to sale, non-income producing, and has been valued by the Board
of Directors at its cost of $1.00 each or $10,000.

     LONE OAK VINEYARDS, INC.

     The Fund, at June 30, 1998, held 49,000 shares of Loan Oak
Vineyards common stock, which stock is restricted as to sale, non-
income producing, and has been valued by the Board of Directors
at $2.66 per share or $130,536 representing our pro rata share of
a note receivable in favor of Lone Oak Vineyards received for the
sale of its vineyard property, less a 20% discount for tax
consequences.  The note is scheduled to be replaced by permanent
financing in May of 1998, at which time Lone Oak will distribute
the net proceeds pro rata among its shareholders.

     MARCO FOODS, INC.

     The Fund, at June 30, 1998, held a note receivable from
Marco Foods in the amount of $110,787.50, which note is
unsecured, accrues interest at the rate of 12% per year and is
due on demand.

     OPTIMAX INDUSTRIES, INC. (fka PLANTS FOR TOMORROW, INC.)

     At June 30, 1998, the Fund held 115,191 shares of Optimax
Industries, Inc. common stock, which stock is unrestricted as to
sale, non-income producing and has been valued at its quoted
market price of $.11 per share or $12,671. The shares of Optimax
are pledged as collateral securing the Fund's line of credit.

     REDWOOD BROADCASTING, INC.

     The Fund, at June 30, 1998, held 255,000 shares of Redwood
Broadcasting common stock, which stock is restricted as to sale,
non-income producing, and has been valued at its quoted market
price of  $1.75 per share or $446,250.  Of the above shares,
50,000 are pending FFC approval of the change in ownership of
several of Redwood's radio stations.  250,000 of the above shares
were purchased in exchange for assuming a $300,000 share of a 10
year 8% promissory note between the seller of the shares and a
third party.

     SHIVA CORPORATION

     The Fund, at June 30, 1998, held 2,630 shares of Shiva
Corporation common stock, which stock is unrestricted as to sale,
non-income producing and has been valued at its quoted market
price of $8.94 per share or $23,506.

     SOUTHSHORE CORPORATION

     At June 30, 1998, the Fund held 15,000 shares of Southshore
Corporation common stock, which stock is restricted as to sale,
non-income producing, and has been valued at its quoted market
price of $.06 per share or $938.

     TRAINING DEVICES, INC.

     The Fund, at June 30, 1998, held 20,000 shares of Training
Devices common stock, which stock is restricted as to sale, non-
income producing, and has been valued by the Board of Directors
at $2.00 per share or $40,000, based on the price of theCompany's 
most recent financing in October of 1997.

     USASURANCE GROUP

     The Fund, at June 30, 1998, held 73,500 shares of Usasurance
Group common stock, which stock is unrestricted as to sale, non-
income producing, and has been valued at its quoted market price
of $1.92 or $141,000.

     WHITEWING LABS

     The Fund, at June 30, 1998, held 20,000 share of Whitewing
Labs common stock, which stock is unrestricted as to sale, non-
income producing, and has been valued at its quoted market price
of $1.19 per share or $17,812.50.

     WILSHIRE TECHNOLOGIES, INC.

     The Fund, at June 30, 1998, held 247 Wilshire Technologies
warrants, which warrants are restricted as to sale, non-income
producing, and have been valued by the Board of Directors at $0
based on their exercise price being greater than the market price
of Wilshire Technologies common stock.

     WORLD CYBERLINK

     The Fund, at June 30, 1998, held 20,000 shares of World
Cyberlinks, which stock is restricted as to sale, non-income
producing, and have been valued at its quoted market price of
$2.6875 or $53,750.

3.   Real Estate Operations

     Effective March 31, 1997, the Rockies Fund, Inc. consummated
the sale of its 26,000 square foot commercial office building
located at 4465 Northpark Drive, Colorado Springs, Colorado  (the
"Northpark Building").  The sale price for the building was
$1,080,000, which was paid in cash at closing.  The proceeds
received were utilized in part to pay approximately $452,000 of
mortgage and other debt.  This transaction resulted in a net gain
of approximately $388,000.

     In a concurrent transaction structured to qualify as a tax-
free reorganization under Section 1031 of the Internal Revenue
Code of 1986, as amended, the Fund, on April 1, 1997 consummated
the purchase of 5 acres of undeveloped commercial real estate
located at 3210 Woodman Road, Colorado Springs, Colorado (the
"Woodman Property"). The purchase price for the Property was
$390,000, which was paid in cash on April 1, 1997 at the time of
closing utilizing a portion of the proceeds realized by the Fund
from the sale of the Northpark Building.  The Fund is considering
selling the Woodman Property, however no proposals have been
placed as of June 30, 1998.

     Effective September 4, 1997, The Fund purchased commercial
real estate located at 3515 North Chestnut, Colorado Springs,
(the "Chestnut Building") for a purchase price of $600,000 and
incurred approximately $20,000 of improvements as of December 31,
1997.  The Fund utilized $100,000 from the Northpark Building
sale proceeds towards the purchase of the new Chestnut Building
as a tax-free exchange under Section 1031 of the Code and
borrowed the remaining $500,000 from State Bank and Trust at an
initial interest rate of 9.75% with the assignment of all rents
as collateral.  The Fund as of December 31, 1997, had signed an
agreement to lease the Chestnut Building for 8 months and 9 days
expiring on September 1, 1998 for $35,000.  In addition, the
Fund agreed to sell and the tenant agreed to buy the Chestnut
Building for $775,000 upon the completion of the lease, September
1, 1998, for an approximate net gain of $155,000.  The tenant as
of December 23, 1997, paid to the Fund $35,000 prepaid rent
through September 1, 1998.  The tenant as of January 1998 paid to
the Fund $7,500 earnest and partial payment of the Chestnut
purchase price.

     In addition, as of June 30, 1997, the Fund sold its 20%
hotel investment which was also utilized a a tax-free exchange
under section 1031 of the Code.  The hotel, which was purchased
on September 24, 1997 was sold for its purchase price of$200,000,
of that $50,000 was paid in cash and the purchaserassumed a 
$150,000 note to Wyoming Resorts, LLC.

     The Fund is currently leasing executive office space in the
Northpark Building for $1,100 a month (on a month to month basis)
until the expiration of their lease in September of 1998.

     The commercial real estate market in Colorado Springs,
Colorado, although steadily improving over the last several
years, still remains very competitive.  While the Board does not
believe that a single firm or group dominates the commercial real
estate industry in Colorado Springs, many of the participants are
well-established and possess far greater financial and market
resources than the Fund.

4.     Contingencies

       None.




ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
       CONDITION AND RESULTS OF OPERATIONS.


       The following discussion and analysis should be read in
conjunction with the Financial Statements and Notes thereto
appearing elsewhere in this report.


LIQUIDITY AND CAPITAL RESOURCES - JUNE 30, 1998 COMPARED TO
DECEMBER 31, 1997

       During the three months ended June 30, 1998, the Fund
liquidated certain securities, including 9,500 shares and 22
warrants of American Education Products, 30,000 shares of CUSA
Technology, 53,000 shares of K-Tel, 6,000 shares of Online
Services, 5,000 shares of Premium Cigars and 30,000 shares of
Tels Corporation.

       During the three months ended June 30, 1998, The Fund
acquired 1,000 shares of Full Tilt Sports for a total investment
of $1,000; 13,000 shares of Online System Services for a total
investment of $13,000; and 20,000 shares of World Cyberlinks for
a total investment of $20,000.  During the same period, The Fund
purchased and subsequently sold securities resulting in a net
gain of approximately $83,000.

       The Fund's value in restricted and unrestricted securities
decreased from $1,725,831 as of December 31, 1997 to $1,623,570
as of June 30, 1998, a decrease of $102,261 or 5.9%.  Notes
receivable increased $76,430 from $458,158 as of December 31,
1997 to $534,588 as of June 30, 1998 due mainly to  a $61,000
increase in Global Casino's note and a new note to Kinetiks.Com
of approximately $27,500.  Global Casinos, an international
gaming Company, comprises approximately 66% and an affiliate,
Marco Foods approximately 18% of notes receivable.

       As of June 30, 1998, the Fund owns commercial real estate
purchased on September 4, 1997 for $621,358 with improvements,
and in contract to sell for $775,000 commencing on September 1,
1998.  As of December 31, 1997, the Fund owned a $200,000 hotel
investment which had been subsequently sold on March 17, 1998 for
the equal $200,000 cost.  Therefore total investments decreased
from $3,148,989 on December 31, 1997 to $2,923,158 on June 30,
1998, a decrease of  $225,831 or 7.1%.

       Cash held by others increased $8,421 or 38.4% and accrued
interest receivable increased $22,518 or 42.4% from December 31,
1997, concurrent with the increase in notes.  Investment
securities sold at $79,511 as of December 31, 1997 was 0.00 as of
June 30, 1998, due to December 31, 1997 trades pending collected
during the first three months of 1998.

       Total current assets therefore decreased from $3,303,997 at
December 31, 1997 to $3,036,844 at June 30, 1998, a decrease of
$267,153 or 8%.

       Property and Equipment remained unchanged from December
31, 1997 to June 30, 1998 with the exception of a $10,000 deposit
on the initial intent to purchase executive office space.P&E however, 
incurred $2,901 in additional accumulated depreciation.

       Based on the foregoing, total assets decreased from
$3,813,666 on December 31, 1997 to $3,557,201 on June 30, 1998, a
decrease of $256,465 or 6.7%.


       Total liabilities decreased from $1,508,864 as of December
31, 1997 to $1,153,197 as of June 30, 1998, a reduction of
355,667 or 23.5%.  Payables trade increased 27% from $108,506 as
of December 31, 1997 to 137,849 as of June 30, 1998, construction
payable form $55,762 as of December 31, 1997 to 0.00 as of June
30, 1998 as was paid during the second quarter, property taxes
and other decreased from $23,000 at December 31, 1997 to 0.00 at June 30,
1998, interest payable decreased from $8,565 to $5,330, note
payable related party decreased from $172,347 to $20,572 as notes
to Redwood Microcap were paid during the first quarter in
addition to the sale of the hotel investment with a note payable
of $150,000.  Notes payable other decreased from $726,732 as of
December 31, 1997 to $629,285 as of June 30, 1998 or 13.4% due to
the payments on margin account balances and a reduction to
deferred taxes based on the sale of the hotel investment as part
of the 1031 exchange.

       The Fund still holds a $75,000 line of credit with a
balance of $72,205 as of June 30, 1998 that accrues interest at
10.5% secured by the Fund's security holdings.

       Based on the foregoing, Net Asset Value increased during
the six months ended June 30, 1998, from $2,304,802 at December
31, 1997, to $2,404,004 at June 30, 1998, an increase of $99,202
or nearly 4.3%.  Net assets per common share increased from $3.60
per share at December 31, 1997, to $3.75 per share on June 30,
1998, an increase of $0.15.


       Management knows of no trends or demands, commitments,
events or uncertainties which will result in the Fund's liquidity
or capital resources materially increasing or decreasing.


RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 1998 COMPARED
TO THREE MONTHS ENDED JUNE 30, 1997.

       The Fund's income/revenue for the three months ended June
30, 1998, was $39,743, an increase of $27,631 or 228% compared
with the same period in 1997.  This increase in income/revenue
was due to the Fund receiving rental income from the Northpark
Building for only the first three months in 1997 and receiving
six months of rental income from the Chestnut Building as of June
30, 1998.  The Fund's Chestnut Building is under sales contract
for September 1, 1998 and is currently being leased to the
purchaser under contract.  Interest and dividends increased 153%
as the Fund incurred interest on additional notes.  Expenses
increased from $106,200 as of June 30, 1997 to $130,667 as of
June 30, 1998, an increase of $24,467 or 23%.  Contributing to
the increase in expenses were increases in professional and legal
expenses of $7,244, interest expense associated with the Chestnut
Building mortgage of $13,865 and investment expenses of $12,427
as the Fund incurred a larger trading activity in 1998.
Offsetting against increased expenses were a decrease in wages of
$2,808, travel and entertainment of $2,658 and office expenses of
$1,323.

       Based on the foregoing, the Fund reported a net investment
loss for the three months ended June 30, 1998, of $(90,924), a
decrease of  3.3% when compared to the net investment loss of
$(94,088) incurred during the same period in 1997.

       The Fund's net realized gain from sales of as of June 30,
1998 was $194,330, an increase of $253,340 or 429% compared to a
net realized loss of  $(59,010) as of June 30, 1997.  Unrealized
net depreciation relating to the current market value of
securities being held by the Fund increased $181,682 or 69.4%
from an unrealized net loss of $(261,551) as of June 30, 1997 to
an unrealized net loss of $(79,869) as of June 30, 1998.

       Management knows of no trends or demands, commitments,
events or uncertainties which will result in the Fund's liquidity
or capital resources materially increasing or decreasing.



RESULTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO
SIX MONTHS ENDED JUNE 30, 1997.

       The Fund's income/revenue for the six months ended June
30, 1998 was $56,206 a decrease of $19,868 or 26.1% compared with
the same period in 1997.  Rental income decreased $25,872 from
$51,247 as of June 30, 1997 to $25,375 as of June 30, 1998.
Interest and dividend revenue increased slightly from $22,941 as
of June 30, 1997 to $29,639 as of June 30 ,1998.  Expenses
decreased form $250,291 as of June 30, 1997 to $235,595 as of
June 30, 1998, a decrease of $14,696 or 5.8%.  Contributing to
the decrease in expenses were decreases in wages and salaries of
$7,789 as one employee began working part-time effective August
1, 1997, custodian fees of $5,803, directors fees of $4,000,
travel and entertainment of $6,882, office expenses of $10,574
and building expenses of $27,152.

       Based on the foregoing, The Fund reported a net investment
loss for the six months ended June 30, 1998 of $(179,389), an
increase of $5,172 or 2.9%, when compared to the net investment
loss of $(174,217) during the same period in 1997.

       The Fund's net realized gains from sale of investment as
of June 30, 1998 was $210,032, a decrease of $209,499 or
approximately 50% compared to a net realized gain of $419,531 as
of June 30, 1997.  Unrealized net depreciation relating to the
current market value of securities being held by the Fund
increased $446,739 or 118% from an unrealized net loss of
$(378,180) as of June 30, 1997 to an unrealized net gain of
$68,559 as of June 30, 1998.

       Management knows of no trends or demands, commitments,
events or uncertainties which will result in the Fund's liquidity
or capital resources materially increasing or decreasing.



                   PART 1.  OTHER INFORMATION


 Item 1.   Legal Proceedings

           The Fund received has requests for information from the 
United States Securities and Exchange Commission ("SEC") related 
to an investigation begun by the SEC during 1994 into various 
matters, including the administrative and record keeping practices 
of the Fund, its securities trading activities and those of its 
officers and directors.  In September 1996, the Fund was notified by the
Commission's Staff that it intended to request that the Commission
commence an administrative proceeding against the Fund and its
directors based upon certain transactions in securities formerly
included in the Fund's securities portfolio.  During the peroid,
the commission filed an administrative proceeding against the Fund 
and its directors alleging certain violations of the securities laws and
regulations.  The Fund intends to vigorously contest this action.  
There can be no assurance of the outcome of this matter or the ultimate 
effect on the Fund's financial position.

           Other than the foregoing, the Fund is not a party to
any material pending legal proceedings.

 Item 2.   Changes in Securities

           None.

 Item 3.   Default Upon Senior Securities

           There have been no defaults on any securities.  The
           Fund has no obligations with regard to dividends and no preferred
           stock is outstanding.

 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.


                           SIGNATURE

     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 hereunto duly authorized.


                              THE ROCKIES FUND, INC.



Dated:    May 15, 1997        By:  /s/ Stephen G. Calandrella
                                   Stephen G. Calandrella,President



Dated:    May 15, 1997        By:  /s/Barbara A. Hamstad
                                   Principal Accounting Officer