FORM 10-Q

                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.  20549



(Mark One)

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934


For the Quarterly Period Ended August 1, 1999

                                         OR


[ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934


For the transition period from                to

Commission file number 0-12145


                        AMARILLO MESQUITE GRILL, INC.
            Exact name of registrant as specified in its charter)

            Kansas                                       48-0936946
  (State or other jurisdiction                        (I.R.S. Employer
of incorporation or organization)                    Identification No.)


                                  Suite 200
                              302 North Rock Road
                            Wichita, Kansas  67206
                   (Address of principal executive offices)
                                  (Zip Code)


                                (316) 685-7286
             (Registrant's telephone number, including area code)




     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     .

     As of August 1, 1999, 7,783,895 shares of common stock $.01 par value
were outstanding.


<PAGE>


                        PART 1 - FINANCIAL INFORMATION

Item 1.  Financial Statements

                        AMARILLO MESQUITE GRILL, INC.
                              BALANCE SHEETS
                               (Unaudited)
<TABLE>
<CAPTION>
                                 ASSETS             August 1     January 31
                                                      1999          1999
<S>                                                <C>           <C>
Current assets:
   Cash                                            $  286,866    $  214,513
   Accounts receivable                                 26,233        16,912
   Inventories                                        112,239       140,414
   Prepaid expenses and other current assets          233,027       144,950
      Total current assets                            658,365       516,789

Property and equipment:
   Buildings                                        1,107,429     1,107,429
   Leasehold improvements                           2,640,426     2,559,658
   Equipment and fixtures                           4,807,664     4,737,724
   Leased property under capital lease              1,234,626     1,234,626
                                                    9,790,145     9,639,437
   Less: accumulated depreciation and amortization  2,577,777     2,172,730
                                                    7,212,368     7,466,707
Other assets:
   Cost in excess of net tangible assets of
    purchased business, net of amortization
    of $224,594 and $188,184                          722,417       758,827
   Deposits and other                                  40,727        39,187
                                                      763,144       798,014

                                                   $8,633,877    $8,781,510

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Current notes payable                            $  250,000    $  550,000
   Current portion of long term debt                1,127,579     1,020,795
   Current portion of obligation under capital
    lease                                              40,383        40,383
   Accounts payable                                   934,731       921,831
   Accrued payroll                                    171,717       140,551
   Other accrued liabilities                          578,730       782,746
      Total current liabilities                     3,103,140     3,456,306

Long-term debt, less current portion                5,207,150     5,164,077
Obligation under capital lease, less current
 portion                                              985,950     1,006,142
Advances from affiliate                                17,426        81,587

Stockholders' equity (deficit):
   Preferred stock, $.01 par value, authorized
      10,000,000 shares, none issued                     -             -
   Common stock, $.01 par value, authorized
      20,000,000 shares, issued 7,783,895 shares
      at August 1, 1999 and 7,705,895 at
      January 31, 1999                                 77,839        77,059
   Additional paid-in capital                       6,879,874     6,807,214
   Accumulated deficit                             (7,367,502)   (7,540,875)
   Treasury stock, 60,000 shares of common stock
      at cost                                      (  270,000)   (  270,000)
      Total stockholders' equity (deficit)         (  679,789)   (  926,602)

                                                   $8,633,877    $8,781,510

</TABLE>
[FN]

               See accompanying notes to financial statements.
                                      2


<PAGE>


                               AMARILLO MESQUITE GRILL, INC.
                                 STATEMENTS OF OPERATIONS
                                       (Unaudited)

 <TABLE>
 <CAPTION>
                                        Thirteen Weeks Ended     Twenty-Six Weeks Ended
                                       August 1      July 26      August 1      July 26
                                         1999         1998          1999         1998
<S>                                   <C>          <C>          <C>         <C>
Net sales                             $4,429,388   $5,080,117   $9,060,230  $10,511,158

Costs and expenses:
   Cost of goods sold                  1,525,247    1,988,353    3,118,047    4,049,032
   Operating expenses                  2,139,543    2,449,792    4,340,554    5,004,646
   Depreciation and amortization         220,729      204,114      441,457      416,209
   General and administrative            307,333      400,295      617,481      814,027
                                       4,192,852    5,042,554    8,517,539   10,283,914

Operating income                         236,536       37,563      542,691      227,244

Other income (expense)
   Interest expense                     (160,045)    (173,476)    (320,398)    (332,602)
   Related party transaction -
     noncash expense from issuance
     of stock options pursuant to
     debt guarantees                    ( 24,460)    ( 24,460)    ( 48,920)    ( 48,920)
                                        (184,505)    (197,936)    (369,318)    (381,522)


Earnings (loss) before
     income taxes                         52,031     (160,373)     173,373     (154,278)
Provision for income taxes                  -            -            -            -


Net Earnings (loss)                   $   52,031   $ (160,373)  $  173,373  $  (154,278)


Net earnings (loss) per common share-
   Basic and diluted                  $      .01   $     (.02)  $      .02  $      (.02)


Average shares outstanding-
   Basic and diluted                   7,723,895    7,576,895    7,711,040    7,507,203

</TABLE>


[FN]
                See accompanying notes to financial statements.
                                       3

<PAGE>

                         AMARILLO MESQUITE GRILL, INC.
                           STATEMENTS OF CASH FLOWS
                                 (Unaudited)
<TABLE>
<CAPTION>
                                                    Twenty-Six Weeks Ended
                                                     August 1      July 26
                                                       1999          1998
<S>                                                 <C>           <C>
Cash flows from operating activities:
   Net earnings (loss)                              $ 173,373     $(154,278)
   Adjustments to reconcile net earnings
      to net cash provided by operating activities:
      Depreciation and amortization                   441,457       416,209
      Changes in assets and liabilities
        (Increase) decrease in accounts receivable   (  9,321)       10,016
        (Increase) decrease in inventories             28,175        14,162
        (Increase) decrease in prepaid expenses and
           other current assets                      ( 88,077)     (124,895)
         Increase (decrease) in accounts payable       12,900       154,355
         Increase (decrease) in accrued expenses     (172,850)        8,245
      Noncash expense from issuance of stock
        options pursuant to debt guarantees            48,920        48,920
      Other net                                      (  1,540)     (  5,320)

            Cash provided by (used in) operating
              activities                              433,037       367,414
Cash flows from investing activities:
   Purchase of property and equipment                (150,708)     (819,322)
            Cash used in investing activities        (150,708)     (819,322)

Cash flows from financing activities:
   Sale of common stock                                24,520         6,590
   Short-term borrowings                                 -          560,000
   Long-term borrowings                                  -          200,000
   Repayment of long-term borrowings
      and capital lease obligations                  (234,496)     (305,171)
            Cash provided by financing activities    (209,976)      461,419

Increase in cash                                       72,353         9,511
Cash at beginning of period                           214,513       563,836

Cash at the end of period                           $ 286,866     $ 573,347

Supplemental disclosure of cash flow information:
   Cash paid for interest                           $ 320,398     $ 332,602

   Cash paid for income taxes                       $    -        $    -

</TABLE>



[FN]
               See accompanying notes to financial statements.
                                     4

<PAGE>

                       AMARILLO MESQUITE GRILL, INC.
                       Notes to Financial Statements
                               (Unaudited)


                              August 1, 1999


(1)  Basis of Presentation
     The accompanying unaudited consolidated financial statements have been
       prepared in accordance with 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 (consisting of normal recurring
       accruals) considered necessary for a fair presentation have been
       included.  Operating results for the six month period ended August 1,
       1999 are not necessarily indicative of the results that may be expected
       for the year ended January 30, 2000.  For further information, refer to
       the consolidated financial statements and footnotes thereto included in
       the Company's 10-K and Annual Report to Stockholders as filed on April
       23, 1999.

(2)  Net Earnings Per Share
     In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
       Earnings Per Share (Statement 128) which replaces the prior accounting
       standard regarding computation and presentation of earnings per share.
       Statement 128 requires a dual presentation of basic earnings per share
       (based on the weighted average number of common shares outstanding) and
       diluted earnings per share which reflects the potential dilution that
       could occur if contracts to issue securities (such as stock options)
       were exercised.  The Company adopted Statement 128 as of January 25,
       1998 and, accordingly, earnings per share data for all periods
       presented has been computed in accordance with Statement 128.  The
       adoption of Statement 128 had no impact on the Company's previously
       reported loss per share data.

     Options to purchase common stock were not included in the computation of
       diluted earnings (loss) per common share because the Company had a net
       loss available to common stockholders and the inclusion of such options
       would be antidilutive.  As of August 1, 1999, there are 1,194,675
       options outstanding at a weighted average exercise price of $2.59 which
       may become dilutive in the future.



                                        5


<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation.

Results of Operations

Three Months Ended August 1, 1999 Compared to Three Months Ended July 26,
1998.

      For the three months ended August 1, 1999, sales were $4,429,388 as
compared to sales of $5,080,117 for the second quarter of the prior year.  As
of August 1, 1999, the Company operated twelve Amarillo Mesquite Grills as
compared to eleven Amarillo Mesquite Grills and one Cotton Patch Cafe as of
July 26, 1998.  The decrease in sales can be attributed to several factors
including increased competition in most markets and due to comparing current
sales levels with high opening sales volumes of a year ago from new
restaurants.

      Cost of sales, as a percentage of total sales, was 34.4% and 39.1% for
the 1999 and 1998 periods respectively.  The decrease in cost of sales, as a
percentage of sales, was the result of implementing a new menu during the
third quarter of last year resulting in an improvement in cost of sales of
4.7%.

      Operating expenses, as a percentage of total sales, were 48.3% and 48.2%
for the 1999 and 1998 periods respectively.

      General and administrative expenses, as a percentage of sales, was 6.9%
for the quarter ended August 1, 1999, as compared to 7.9% for the second
quarter of the prior year.  The decrease in general and administrative, as a
percentage of total sales, is the result of reducing the dollar amount of
general and administrative expenses, principally, training labor and area
management expense.

      Depreciation and amortization is directly related to the acquisition and
disposition of fixed assets.  Fixed assets and the related depreciation
expense remained relatively constant during the current quarter as compared to
a year ago.

      Interest expense was $160,045 for the quarter ended August 1, 1999 as
compared to $173,476 for the same period a year ago.  Interest expense is a
function of the interest rate and the amount of debt.  While the interest rate
has remained relatively constant the amount of short and long-term debt has
decreased.  Accordingly interest expense is lower.

      The Company incurred noncash expenses of $24,460 for the 1999 and 1998
periods respectively, relating to the issuance of stock options pursuant to
debt guarantees.

Six Months Ended August 1, 1999 Compared to Six Months Ended July 26, 1998.

      For the six months ended August 1, 1999, sales were $9,060,230 as
compared to sales of $10,511,158 for the first six months of the prior year.
The Company operated twelve Amarillo Mesquite Grills as of August 1, 1999, as
compared to eleven Amarillo Mesquite Grills and one Cotton Patch Cafe as of
July 26, 1998.  The decrease in sales can be attributed to several factors
including increased competition in most markets and due to comparing current
sales levels with high opening sales volumes of a year ago from new
restaurants.

      Cost of sales, as a percentage of total sales, was 34.4% and 38.5% for
the 1999 and 1998 periods respectively.  The decrease in cost of sales, as a
percentage of total sales, was the result of implementing a new menu during
the third quarter of last year resulting in an improvement in cost of sales of
4.l%.


                                        6

<PAGE>

      Operating expense, as a percentage of total sales, was 47.9% and 47.6%
for the 1999 and 1998 periods respectively.

      General and administrative expense, as a percentage of total sales was
6.8% for the six months ended August 1, 1999, as compared to 7.7% for the
first six months of the prior year.  The decrease in general and administrative
expense is the result of reducing the dollar amount of certain expenses,
principally training labor and area management expense.

      Depreciation and amortization is directly related to the acquisition and
disposition of fixed assets.

      Interest expense was $320,398 for the six months ended August 1, 1999,
as compared to $332,602 for the same period a year ago.  Interest expense is a
function of the interest rate and the amount of debt.  While the interest rate
has remained relatively constant the amount of short and long-term debt has
decreased.  Accordingly interest expense is lower.

Liquidity and Capital Resources

      The Company's primary sources of funding to finance its business have
been its cash flow from operations, and proceeds principally from long term
debt.  On August 1, 1999 and January 31, 1999, the Company had an excess of
current liabilities over current assets of $2,444,775 and $2,939,517,
respectively.  Management anticipates being able to sustain the current level
of trade payable financing and higher cash flow from operations in fiscal 2000
and that such higher operating cash flow will enable the Company to meet its
financial obligations in fiscal 2000 as they come due.  Cash flow from
operations was $433,037 in the second quarter of fiscal 2000 compared to cash
flow of $367,414 in the second quarter of fiscal 1999.

      In June 1999, the Company negotiated with its bank to make interest-only
payments on approximately one-half of its long-term debt through September
1999.  Commencing on October 15, 1999, the Company will begin making
principal payments on all bank debt.

      On May 12, 1998, the President of the Company loaned the Company $250,000
to fund construction cost overages.  The note was an unsecured 10% demand
note due January 1, 1999 which has been renewed with a due date of January 1,
2000.  Although the Company's President has made loans to the Company in the
past, there is no assurance that he will make additional loans in the future.

      Substantially, all of the Company's revenues are derived from cash
sales.  The Company does not maintain significant receivables and inventories;
therefore, working capital requirements for operations are not significant.

      The Company plans to continue expansion of the Amarillo Mesquite Grill
concept in fiscal 2000.  The Company intends to lease existing restaurant
properties which are suitable for conversion to the Amarillo Mesquite Grill
concept.  It is expected that each conversion will require approximately
$300,000 to $700,000 for equipment and remodel costs.  A ground-up proto-type
restaurant will cost approximately $1.3 million for the land, building and
equipment.  The Company is holding discussions with an investment banking
firm regarding a private placement of convertible securities which would
enable the Company to open approximately eight to ten new Amarillo Grill
restaurants.  The Company has no commitments for financing at this time.
In order for the Company to meet its expansion goals for fiscal 2000, it will
need to raise additional funds through debt or equity instruments, the
availability and terms of which will depend upon market and other conditions.
There can be no assurance that such additional financing will be available on
terms acceptable to the Company.

Year 2000

       The "Year 2000 Issue" is the result of manufactured equipment and
computer programs using two digits rather than four to define the applicable
year.  If the Company's equipment and computer programs with date-sensitive
functions are not Year 2000 compliant, they may recognize a date using "00"
as the Year 1900 rather than the Year 2000.  This could result in a system
failure or miscalculations causing disruptions of operations, including,
but not limited to, a temporary inability to process transactions, generate
invoices or engage in similar normal business practices.

       The Company has almost completed its assessment of the Year 2000 impact
for both information technology ("IT") and Non-IT systems.  In regard to IT
systems, the Company has identified the following as the main areas of Year
2000 focus:  payroll systems, financial systems, and register systems.
Register systems are the point-of-sale systems used within each restaurant
to accumulate employee hours worked and as an order entry system from the
server to the kitchen.

       The Company does not rely heavily on internal computer technology.
While the Company believes it is taking all appropriate steps to assure
Year 2000 compliance, it is dependent on key vendor compliance.  The Company
maintains an outsourcing agreement for its payroll and financial systems
and has been advised that its outsourcer is capable of processing the Year
2000.  Three of the Company's restaurants operate on a different point of
sale system that has not been assessed.  The restaurants' point-of-sale
system for all remaining restaurants is believed to be 2000 compliant.  In
addition, as part of our normal operating procedure, each restaurant has been
supplied with a so called "crash kit" containing the tools necessary to do
manually what our point-of-sale system does electronically.

       In addition to the above IT systems, the Company has identified the
following as the primary Non-IT systems subject to the Year 2000 Issue:  ovens,
alarms, proofers, HVAC-Freezers, and safes.  The Company is currently in
contact with vendors in order to assess the potential impact.  Based on
initial review the Company believes the potential impact of the Year 2000
Issue pertaining to Non-IT systems to be minor.

       Since the Company does not rely heavily on internal computer technology
the cost of addressing the Year 2000 Issue has been nominal to date.


                                        7

<PAGE>

      This report contains certain forward-looking statements, including those
relating to the opening of additional restaurants and planned capital
expenditures.  Although the Company believes that the assumptions underlying
the forward-looking statements contained herein are reasonable, actual results
could differ materially from such forward-looking statements.  In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company that objectives and plans of the Company will be
achieved.


                                        8

<PAGE>

                         PART II - OTHER INFORMATION



Item 1.  Legal Proceedings

         Not applicable.

Item 2.  Changes in Securities.

         Not applicable.

Item 3.  Defaults Upon Senior Securities.

         Not applicable.

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

         On May 28, 1999, the Company held it's Annual Meeting of
         stockholders.  The only matter voted upon at such meeting was the
         election of directors.  The following Directors were re-elected to
         serve on the Board of Directors:

<TABLE>
<CAPTION>
                                        FOR        WITHHELD
<S>                                  <C>             <C>
         Chris F. Hotze              6,806,590       2,050
         Linn F. Hohl                6,808,590          50
         C. Howard Wilkins, Jr.      6,808,590          50
         Alan Bundy                  6,808,590          50
</TABLE>

Item 5.  Other Information.

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

         Not Applicable.



                                        9

<PAGE>

                                 SIGNATURES




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



                                      AMARILLO MESQUITE GRILL INC.
                                             (Registrant)




Date    August 20, 1999               /s/LINN F. HOHL
                                         Linn F. Hohl - Vice President
                                                         of Finance,
                                                         Secretary and
                                                         Treasurer



                                       10