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 September 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
incorporation or organization)             Identification No.)


5373 N. Union, Suite 100, Colorado Springs, Colorado     80918
(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 September 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 September 30, 1998
               (unaudited) and December 31, 1997 (audited)

               Schedule of Investments and Restricted Securities
               (unaudited)

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

               Statement of Operations for the Nine Months Ended
               September 30, 1998 and September 30, 1997 (unaudited)

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

               Statement of Changes in Net Assets as of September 30, 1998
               and September 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
            SEPTEMBER 30, 1998 AND DECEMBER 31, 1997


                                    September 30,       December 31,
                                    1998                1997
                                    (unaudited)         (audited)
                                                   
ASSETS                                             
                                                   
Investments at value                               
(cost of $1,618,809,
1998 and $1,813,369, 1997)
Restricted and unrestricted    
securities                          $ 1,790,572         $ 1,725,831
Notes receivable                        701,460             458,158
Real estate (cost of $621,358,
1998 and $821,358,
1997)                                   765,000             965,000
                                                   
                                                   
                                      3,257,032           3,148,989
                                                   
Cash:                                              
Held by others                           61,914              21,890
Investment securities sold                    0              79,511
Accrued interest receivable           
held by others                           93,053              53,045
Receivables from investees                4,909                 562
Prepaid Other                             7,280                   0
                                                   
Total Current Assets                  3,424,188           3,303,997
                                                   
Property & Equipment:                              
Land                                    390,000             390,000
Automobile                               15,162              15,162
Furniture and fixtures                    7,939               8,739
Development Cost                        104,831             101,242
Deposit on Building                       4,400                   0
                                                   
                                        522,332             515,143
                               
                                                   
Less Accumulated Depreciation           (9,010)             (5,474)
                                                   
                                        513,322             509,669
                                                   
                                                   
TOTAL ASSETS                          3,937,510           3,813,666



                     THE ROCKIES FUND, INC.
              STATEMENT OF ASSETS AND LIABILITIES
            SEPTEMBER 30,1998 AND DECEMBER 31,1997
                          (Continued)
                                                   
                                    September 30,       December 31,
                                    1998                1997
                                    (unaudited)         (unaudited)
                                                   
LIABILITIES                                        
                                                   
Cash overdraft                      $         0         $     8,049
Payables:                                          
Trade                                   218,216             108,506
Construction                                  0              55,762
Accrued liabilities:                               
Property taxes and other                      0              23,011
Interest payable                            882               8,565
Current maturities of
long-term debt:
Related parties                           6,500             172,374
Others                                  786,188             726,732
Deposits and deferred rent                7,500              41,334
Deferred tax liability,                       
current                                       0              13,000
                                                   
                                                   
Total Current Liabilities:            1,019,286           1,157,333
                                                   
Long term debt,net current      
liability                               243,230             259,531
Deferred tax liability                   94,500              92,000
                                                   
Total Liabilities                     1,357,016           1,508,864
                                                   
NET ASSETS and STOCKHOLDER'S 
EQUITY                              $ 2,580,494         $ 2,304,802
(Equivalent to $4.03 per                      
share at September 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                                (2,298,384)         (1,919,099)
Accumulated net realized gain      
from sales and permanent
write-downs of securities             1,681,012           1,285,337
Unrealized net appreciation            
(depreciation) of investments           290,220              30,918
                                                   
Total accumulated deficit             (327,152)           (602,844)
                                                   
NET ASSETS                          $ 2,580,494         $ 2,304,802


<TABLE>
                                     THE ROCKIES FUND, INC.
                                    Schedules of Investments
                            September 30, 1998 and December 31, 1997
<CAPTION>
<S>                  <C>                       <C>        <C>          <C>             <C>                          
Company               Position                 Initial    **Cost at     Fair Value at  Fair Value at
                                               Investment September 30, September 30,  December 31,
                                               Date       1998          1998           1997

Restricted Securities:
                                                                                        
American Educational  16,500 common stock      Sep-96     82,500.00     156,750.00     96,937.50
Products, Inc.<F1> (1) 3,000 common stock      Sep-96           -              -       17,625.00
                       9,500 common stock      Sep-96           -              -       55,812.50
                       2,000 common stock      Sep-96           -              -       11,750.00
                       5,000 warrants
                       (ex. @ $4.50)           Sep-96          0.00      25,000.00      6,875.00
                      15,000 warrants                              
                       (ex. @ $4.50)           Sep-96           -              -       20,625.00
                      20,000 warrants                         
                       (ex. @ $4.50)           Sep-96           -              -       27,500.00
                       5,000 warrants       
                       (ex. @ $10.00)          Jun-97          0.00       6,250.00      1,250.00
                       4,000 warrants                           
                       (ex. @ $10.00)          Jun-97           -              -        1,000.00
                       7,000 warrants                         
                       (ex. @ $10.00)          Jun-97           -              -        1,750.00
                      15,000 warrants                           
                       (ex. @ $10.00)          Jun-97           -              -        3,750.00

                                                          82,500.00     188,000.00    244,875.00
                                                                                        
Eclipse (fka) Bear    
Star, LLC             5% partnership interest  Nov-94          0.00           0.00          0.00
                      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, 
Inc.<F1>(2)           3,800 common stock       Nov-93     76,000.00       4,750.00     13,300.00
                      4,331 common stock       Jan-94     50,068.21       5,413.75     15,158.50
                      1,724 common stock       Jan-94     19,931.79       2,155.00      6,034.00
                      1,250 common stock       Feb-94     25,000.00       1,562.50      4,375.00
                         75 common stock       Mar-94          0.00          93.75        262.50
                        500 common stock       Oct-94     10,000.00         625.00      1,750.00
                      5,000 common stock       Feb-96     17,207.50       6,250.00     17,500.00
                      1,000 common stock       Mar-96      3,125.00       1,250.00      3,500.00

                                                         201,332.50      22,100.00     61,880.00
                                                                                         
Guardian
Technologies, 
Inc.<F1> (3)          8,333 common stock       Feb-97      8,750.00      20,832.50     22,915.75
                     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      12,843.75     42,812.50

                                                         204,781.25     328,761.25    390,319.00
                                                                                        
Hampton Court          
Resources            12,500 common stock       Sep-97     11,542.00      11,375.00     16,162.50

Kinetiks.Com        300,000 common stock       Sep-98     15,000.00      15,000.00           -

Land Resource        10,000 common stock       Mar-97     10,000.00      10,000.00     10,000.00
Corporation<F1>
                                                                                        
Lone Oak Vineyards,                               
Inc.<F1> (4)         35,000 common stock       Feb-97           -              -       93,240.00
                      7,000 common stock       Oct-97           -              -       18,648.00
                      7,000 common stock       Nov-97           -              -       18,648.00

                                                               0.00           0.00    130,536.00
                                                                                        
Redwood Broadcasting,  
Inc.<F1> (5)          5,000 common stock       Feb-97          0.00       6,875.00      8,750.00
                    200,000 common stock       Dec-97    240,000.00     275,000.00    350,000.00
                     50,000 common stock       Dec-97     60,000.00      68,750.00     87,500.00

                                                         300,000.00     350,625.00    446,250.00
                                                                                         
Training Devices,
Inc.                 20,000 common stock       Feb-97     25,000.00      40,000.00     40,000.00
                                                                                       
                                                                                         
Total Restricted                                         870,690.75     985,896.25  1,360,057.50
                                                                                         
Unrestrict 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
                                                                                         
Biosource                  
International         5,000 common stock       Sep-98    15,925.00       15,625.00          0.00
                      5,000 common stock       Sep-98    15,928.55       15,625.00          0.00

                                                         31,853.55       31,250.00          0.00
                                                                                         
Cable & Company       
Worldwide             10,000 common stock      Mar-97     5,165.00           70.00       1250.00
                      40,000 common stock      Nov-97     8,965.00          280.00      5,000.00

                                                         14,130.00          350.00      6,250.00
                                                                                         
Cusa Technologies, 
Inc.                  30,000 common stock      Nov-97          -                -      30,937.50
                                                                                         
Exploration Company,  
The                   30,600 common stock      Oct-97    92,718.00       35,381.25     61,200.00
                         400 common stock      Oct-97          -                -         800.00
                       5,000 common stock      Oct-97          -                -      10,000.00
                                                               
                                                         92,718.00       35,381.25     72,000.00
                                                                                         
Full Tilt Sports       1,000 common stock      Jun-98     1,000.00        1,000.00           -   
                                                                                         
Globex Minining       
Enterprises           33,000 common stock      Sep-98     6,535.00        8,580.00          0.00
                                                                                         
J2 Communications     20,000 common stock      May-98    20,312.50       12,500.00           - 
                      10,000 common stock      Sep-98     6,425.00        6,250.00           -

                                                         26,737.50       18,750.00          0.00
                                                                                         
Kinetiks.com          10,000 common stock      Sep-96    38,125.00          600.00          0.00
                      11,000 common stock      Oct-96    24,312.50          660.00          0.00
                      20,000 common stock      Nov-96    12,187.50        1,200.00          0.00
                      62,500 common stock      Dec-96    44,851.88        3,750.00          0.00
                      10,000 common stock      Jul-97     3,281.25          600.00          0.00
                      1 option                 Feb-98     5,000.00        5,000.00           -
                     400,000 warrants          2/97 -        
                                               9/97           0.00            0.00          0.00

                                                        127,758.13       11,810.00          0.00
                                                                                         
Online System
Services               1,000 common stock      Jun-98    13,000.00        4,937.50           -      
                       4,000 common stock      Sep-98    21,906.00       19,750.00           -
                       5,000 common stock      Sep-98    27,034.70       24,687.50           -
                      10,000 common stock      Sep-98    55,628.45       49,375.00           - 
                       5,000 common stock      Sep-98    27,659.70       24,687.50           -
                       5,000 common stock      Sep-98    25,003.45       24,687.50           -
                                                        
                                                        170,232.30      148,125.00          0.00
                                                                                         
Optimax Industries,   
Inc.                 115,191 common stock      Jun-94   138,229.20        2,879.78     18,004.35
                                                                                        
Premium Cigars        
International, Inc.    5,000 common stock      Aug-97          -               -       12,812.50
                                                                                         
Shiva Corporation      2,630 common stock      Dec-96         0.00       10,191.25     22,519.38
                                                                                         
Southshore
Corporation           15,000 common stock      Sep-97     7,715.00           937.50     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          -                -       24,000.00
                       3,000 common stock      Jul-96          -                -        6,000.00
                      10,000 common stock      Sep-96          -                -       20,000.00
                       2,500 common stock      Oct-96          -                -        5,000.00
                       6,250 common stock      Dec-96          -                -       12,500.00
                       3,750 common stock      Dec-96     8,746.87        46,875.00      7,500.00
                      20,000 common stock      Dec-96    46,602.00       250,000.00     40,000.00
                       1,500 common stock      Dec-96     3,850.00        18,750.00      3,000.00
                       2,500 common stock      Jan-97     8,750.00        31,250.00      5,000.00
                       4,500 common stock      Jun-97     6,106.25        56,250.00      9,000.00
                       7,500 common stock      Dec-97     7,875.00        93,750.00     15,000.00

                                                         81,930.12       496,875.00    147,000.00
                                                                                         
Whitewing Labs        15,000 common stock      Jan-97    23,175.00         8,437.50     11,250.00
                       5,000 common stock      Jan-97          -                -        3,750.00

                                                         23,175.00         8,437.50     15,000.00
                                                                                         
World Cyberlink        9,750 common stock      Jun-98     9,750.00        20,109.38           -
                                                                                         
Total Unrestricted
Securities                                              748,118.21       804,676.66    365,773.73
                                                                                         
Notes Receivable:                                                                        
                                                                                         
Columbine Home
Sales,LLC <F1>         Note Receivable, 10%    Dec-95         0.00         5,814.06      5,814.06
                                                                                         
Damach                 Note Receivable,12%,    
                       due on demand           Oct-96    32,500.00        32,500.00     32,500.00
                                                                                         
Phil Georgeson         Note Receivable,12%,   
                       due on demand           Aug-96     4,602.13         4,602.13      4,602.13
                       Note Receivable,12%,    
                       due on demand           Mar-98     2,000.00         2,000.00           -

                                                          6,602.13         6,602.13      4,602.13
                                                                                         
Global Casinos, Inc.   Note Receivable, 8%,    
<F1>                   due 11/1/98             Nov-96   175,000.00       175,000.00    175,000.00
                       Note Receivable, 9%    
                       due on demand           Mar-97   125,897.31       125,897.31     43,904.02
                       Note Receivable, 24%    
                       due 4/15/98             Aug-97    50,850.00        50,850.00     75,000.00
                       Note Receivable, 12%    
                       due on demand           Mar-98    35,000.00        35,000.00           -

                                                        386,747.31       386,747.31    293,904.02
                                                                                         
Kinetiks.com           Note Receivable, 10%,   Feb-97    
                       due 3/30/97                       25,000.00        25,000.00     25,000.00
                       Note Receivable, 8%, due          40,008.84        40,008.84            -  
                                                                                     
                                                         65,008.84        65,008.84     25,000.00
                                                                                         
Marco Foods, Inc.<F1>  Note Receivable, 12%    
                       due on demand           Jan-97   235,787.50       235,787.50    127,337.50
                                                                                         
Subotal Notes                                           726,645.78       732,459.84    489,157.71
Receivable

Allowances for 
Doubtful Notes                                                0.00      (31,000.00)   (31,000.00)  

Net Notes Receivable                                    726,645.78       701,459.84    458,157.71
                                                                                         
Investments in Real
Estate:
                                                                                         
Chestnut Property      Land & Building at      Sep-97   621,358.38       765,000.00    765,000.00
                       3515 N. Chestnut
                                                                                         
Thermopolis Property   Building at 116         Sep-97          -                -      200,000.00
                       E. Park St.                                        
                                                                                         
Total Real Estate                                       
Investments                                             621,358.38       765,000.00    965,000.00
                                                                                         
Total Investments                                     2,966,813.12     3,257,032.75  3,148,988.94
<FN>
 
<F1> These entities are considered to be affiliated companies as a result of the Company's investment
     and/or position on the entity's Board of Directors during the last 90 days.
                                                                                        
     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 of the change in ownership of several radio stations
                                                                                        
See accompanying notes to financial statements.
                                                                                        
 Restricted Unrestricted
 and Real Estate                                      2,240,167.34    2,555,572.91  2,690,831.23
</FN>                                                                                        
</TABLE>
                                                                              
                                   

                     THE ROCKIES FUND, INC.
                    STATEMENT OF OPERATIONS

                               For the Three       For the Three
                               Months              Months
                               Ended September     Ended September
                               30, 1998            30, 1997
                               (Unaudited)         (Unaudited)
                                                   
INVESTMENT INCOME:                                 
Rental income                  $      23,708       $          5,477
Consulting and other services            983                  2,280
Interest and dividends                17,490                 13,658
                                                   
Total Income/Revenue                  42,181                 21,415
                                                   
Expenses:                                          
Wages and salaries                    34,100                 32,748
Professional fees & legal            139,917                 13,597
Custodian fees                         2,463                      0
Directors fees                         2,000                  2,000
Interest                              18,383                 12,215
Travel and entertainment               7,147                  9,795
Office                                34,214                 27,901
Building expenses                          0                 15,070
Investment expenses                    2,143                  3,359
Donations                              1,710                  4,250
                                                   
                                     242,077                120,935

Income tax benefit                                       (  13,559)
                                                   
Net investment loss            $   (199,896)       $       (85,961)
                                                   
Net realized gain from      
investments (net of income
tax and deferred tax
adjustment)                          185,643                 73,277
                                                   
Net unrealized appreciation                      
(depreciation) of investments:                                    
Beginning of period                   99,477              (398,502)
End of period                        290,220             (  72,491)
                                                   
Net unrealized appreciation          190,743                326,011
of investments
                                                   
Net gain from investments      $     376,386       $        399,288
Net increase in net assets                         
resulting from operations      $     176,490       $        313,327
                                                   
                                                   
Per share amounts:                                 
Net investment loss            $      (0.31)       $         (0.13)
Net realized gain from               
investments                             0.29                   0.11
Net unrealized appreciation            
of investments                          0.30                   0.51

                               $        0.28       $           0.49



                     THE ROCKIES FUND, INC.
                     STATEMENT OF OPERATIONS
                                
                               For the Nine        For the Nine
                               Months              Months
                               Ended September     Ended September
                               30, 1998            30, 1997
                               (Unaudited)         (Unaudited)
                                                   
INVESTMENT INCOME:                                 
Rental income                  $      49,083       $        56,724
Consulting and other services          2,134                 4,166
Interest and dividends                47,170                36,599
                                                   
Total Income/Revenue                  98,387                97,489
                                                   
Expenses:                                          
Wages and salaries                   101,138               107,574
Professional fees & legal            179,604                34,588
Custodian fees                         5,973                 2,475
Directors fees                         2,000                 6,000
Interest                              53,944                23,164
Travel and entertainment              17,860                24,325
Office                                77,293                87,712
Building expenses                     13,590                55,813
Investment expenses                   21,734                18,921
Donations                              4,535                10,675
                                                   
                                     477,671               371,247
Income tax benefit                         0            (  13,559)
                                                   
Net investment loss            $   (379,284)       $     (260,199)
                                                   
Net realized gain from       
investments (net of
income tax and deferred
tax adjustment)                      395,674               492,807
                                                   
Net unrealized appreciation                      
(depreciation) of investments:                                    
Beginning of year                     30,918              (20,322)
End of period                        290,220              (72,491)
                                                   
Net unrealized appreciation          259,302              (52,169)
(depreciation) of investments                      

Net gain from investments      $     654,976       $       440,638
Net increase in net assets                         
resulting from operations      $     275,692       $       180,439
                                                   
Per share amounts:                                 
Net investment loss            $      (0.59)       $        (0.40)
Net realized gain from              
investments                             0.62                  0.76
Net unrealized appreciation             0.40                (0.08)
                                                 
(depreciation) of investments  $        0.43       $          0.28

<TABLE>
               Statements of Stockholders' Equity
            Nine Months Ended September 30, 1998 and
             Years Ended December 31, 1997 and 1996
<CAPTION>

<C>                    <C>       <C>         <C>             <C>               <C>             <C>
                                                             Accumulated Net
                                                             Realized          Unrealized
                                                             Gain (Losses)     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
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 depreciation
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

Net investment loss      --            --       (199,896)          --               --          (199,896)
Net realized gain
on sale of investments   --            --           --          185,643             --            185,643
Unrealized net appreciation
of investments           --            --           --             --            190,743          190,743

BALANCES AT
SEPTEMBER 30, 1998     $6,403    $2,901,243  $(2,298,384)    $1,681,012        $ 290,220       $2,580,494
</TABLE>


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



                               For the             For the
                               Nine Months Ended   Nine Months Ended
                               September 30, 1998  September 30, 1997
                               (Unaudited)         (Unaudited)
                                                   
                                                   
Increase (decrease) in net                      
assets from investment
activities:

Net investment loss            $     (379,284)     $     (260,199)
                                                   
Net realized gain from                
investments                            395,674             492,808       

Net unrealized appreciation          
(depreciation)of investments           259,302            (52,169)
                                 
Net increase in net assets                         
from investment activities             275,692             180,440
                                                   
Net assets at beginning
of year                              2,304,802           2,330,732

                                                                             
Net asset at end of year       $     2,580,494     $     2,511,172
                                                   
                                                   
                 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") 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, sold  March  31,  1997, ownership
utilized in a 1031 exchange.


2.   Portfolio Securities



     AMERICAN EDUCATIONAL PRODUCTS, INC.

      The  Fund, at September 30, 1998, held 16,500 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 $156,750.  The Fund
also  held at September 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  September 30, 1998, common stock purchase
warrants exercisable to purchase 5,000 shares of common stock, at
an  exercise  price of $10.00 per share.   These  warrants  were
valued at their quoted market price of $1.25 each or $6,250.

     ASTEA INTERNATIONAL

      The Fund, at September 30, 1998, held 5,000 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.

     BIOSOURCE INTERNATIONAL

      The  Fund, at September 30, 1998, held 10,000 shares of
Biosource International common stock which stock is unrestricted
as  to  sale, non-income producing, and has been valued at its
quoted market price of $3.13 per share or $31,250.

     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 September 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 $.007 per share or $350.

     COVA TECHNOLOGIES

     The Fund, at September 30, 1998, held 917 shares of COVA
Technologies 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 $20,035.

     DAMACH, INC.

     The Fund, at September 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 September 30, 1998, held 30,600 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 $1.16 per share or $35,381.25.

     GEORGESON, PHIL

      The Fund, at September 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  September 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 $1.25 per share, or $22,100.
The Fund, at September 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 $125,897.31, 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 is due on April 15,
1998.  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.


     GLOBEX MINING ENTERPRISES

      The  fund, at September 30,1998,held 33,000 shares of
Globex Mining Enterprises common stock, which stock is unrestricted
as to sale, non-income producing and has been valued at its quoted
market price of $.26 per share or $8,580.

     GUARDIAN TECHNOLOGIES, INC.

      The  Fund, at September 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 $.09 each or $12,843.75.


     HAMPTON COURT RESOURCES

      The Fund, at September 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 $.91 per share or $11,375.

     J2 COMMUNICATIONS

      The  Fund, at September 30, 1998, held 30,000 shares of J2
Communications common stock, which stock is unrestricted  as  to
sale, non-income producing and has been valued at its quoted
market price of $.63 per share or $18,750.

     KINETIKS.COM

      The  Fund, at September 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 $.06 per share or $6,810.  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 $15,000.  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 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 $40,008.84 which note is unsecured, accrues interest at
the rate of 8% per year and is due on demand.

     LAND RESOURCE CORPORATION

      The fund, at September 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.

     MARCO FOODS, INC.

     The Fund, at September 30, 1998, held a note receivable from
Marco  Foods in the amount of $235,787.50, which note  is unsecured,
accrues interest at the rate of 12% per year and is due on demand.


     ONLINE SYSTEM SERVICES

     At September 30, 1998, the Fund held 30,000 shares of Online
System Services common stock, which stock is unrestricted as to
sale, non-income producing and has been valued at its quoted
market price of $4.94 per share or $148,125.

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

      At  September  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 $.025 per share or $2,879.78.  The shares of Optimax
are pledged as collateral securing the  Fund's line of credit.

     REDWOOD BROADCASTING, INC.

      The  Fund, at September 30, 1998, held 255,000 shares of
Redwood Broadcasting common stock, which stock is partially
restricted as to sale, non-income producing, and has been valued
at its quoted market price and its book value of  $1.38 per share
or  $350,625.  Of the above shares, 50,000 are pending FFC approval
of the change in ownership of several of Redwood's radio stations.
200,000 of the above shares were purchased in exchange for  assuming
$300,000shares of a 10 year 8%  promissory note between the seller
of the shares and a third party.

     SHIVA CORPORATION

      The Fund, at September 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 $3.88 per share or $10,191.25.

     SOUTHSHORE CORPORATION

      At September  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 $.0625 per share or $937.50.

     TRAINING DEVICES, INC.

      The  Fund, at September 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
the Company's most recent financing in October of 1997.

     USASURANCE GROUP

      The  Fund, at September 30, 1998, held 39,750 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 $12.50 or $496,875.


     WHITEWING LABS

     The Fund, at September 30, 1998, held 15,000 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 $.56 per share or $8,437.50.

     WORLD CYBERLINK
     
     The Fund, at September 30, 1998, held 9,750 shares of World
Cyberlink common stock, which stock is unrestricted as to sale,
non-income producing, and has been valued at its quoted market
price of $2.06 per share or $20,109.38.
     


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 September 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.  As of September 1, 1998, the tenant was in default of the
business  lease agreement to purchase the Chestnut  Building and
was  therefore  charged $7,750, 1% of the  contract  fee, and a
monthly rent charge of $7,500 until closing.  The Fund has agreed
to extend the closing date.

     In addition, as of September 30, 1997, the Fund sold its 20%
hotel investment, which was also utilized as 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 purchaser
assumed a $150,000 note to Wyoming Resorts, LLC.

      As  of September 14, 1998, the Fund moved to a 3,720 square
foot  office  space located at 5373 North Union  Blvd., Colorado
Springs, CO with a three year contract through September, 2001 at
$9.50 per square foot lease and $4.60 cam (operating) charge per
year and paid a security deposit of $4,400.

      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 - SEPTEMBER 30, 1998 COMPARED  TO
DECEMBER 31, 1997

       During the three months ended September 30, 1998, the Fund
liquidated certain securities, including 400 shares of Exploration
Co., 49,000 shares of Lone Oak Vineyards, 30,750 shares of
USAsurance and 10,250 shares of World Cyberlink for total proceeds
of $142,816.

       During the three months ended September 30, 1998, The Fund
acquired  10,000  shares of Biosource for a total investment of
$31,854; 33,000 shares of Globex Mining for a total investment of
$6,535; 10,000 shares of J2 Communications for a total investment
of  $6,425; 300,000 shares of Kinetiks for a total investment of
$15,000; and 29,000  shares  of Online  Systems  for a total
investment  of  $157,232.   During the same period, the Fund
purchased  and subsequently sold securities resulting in a net
gain of approximately $16,600.

       The Fund's value in restricted and unrestricted securities
increased  from $1,725,831 as of December 31, 1997, to $1,790,572
as of September 30, 1998, an increase of $64,741 or 3%. Notes
receivable increased $243,302 from $458,158 as of December 31,
1997, to $701,460 as ofSeptember 30, 1998, mainly due to
increases in Global Casino's, Marco Foods and Kinetiks.Com notes.
Global   Casinos, an international gaming Company, comprises
approximately  55%, Marco Foods, an affiliate of the Fund
comprises  approximately 33% and Kinetiks.Com comprises 9% of
total notes receivable.

        As  of September 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.  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  and  real  estate
increased from $3,148,989 on December 31, 1997, to $3,257,032 on
September 30, 1998, an increase of $108,043 or 3.4%.

        Cash  held  by  others increased $40,024  or 182.8% and
accrued interest  receivable increased $40,008 or 75.4% from
December 31, 1997, concurrent with the increase in notes.
Investment securities sold at $79,511 as of December 31, 1997,
were  0.00  as of September 30,1998, due to December  31, 1997
trades pending collected during the first three months of 1998.
Prepaid other was $7,280 as of September 30, 1998, and was 0.00
as  of December 31, 1997, due to the Fund paying two  months of
advance payments on the Merit Broadcasting long term note payable.

       Total current assets, therefore, increased from $3,303,997
at  December 31, 1997, to $3,424,188 at September 30, 1998, an
increase of $120,191 or 3.5%.

         The Woodman property incurred architectural fees
increasing construction in progress by approximately $3,500.  The
Fund  also placed a $4,400 deposit on its current office space
location.   Therefore, property and equipment, less depreciation,
increased by approximately $3,600 or 7% from December 31, 1997.

        Based on the foregoing, total assets increased from
$3,813,666 on December 31, 1997, to $3,937,510 on September  30,
1998, an increase of $123,844 or 3.25%.

       Total liabilities decreased from $1,508,864 as of December
31, 1997, to $1,357,016 as of September 30, 1998, a reduction of
151,848  or 10%. Payables trade increased 101% from $108,506 as
of December 31, 1997, to 218,216 as of September 30, 1998, mainly
due to a large accrued payable to Skadden Arps legal firm of a
net  $85,000.  Construction payable decreased from $55,762 as of
December 31, 1997, to 0.00 as of September 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 September 30, 1998,
as was paid  during  the second quarter.  Interest payable
decreased from $8,565 at December 31, 1997,to $882 at September
30, 1998 as interest due to a related party was paid during third
quarter.  Note payable related parties decreased from  $172,347
to  $6,500 at September 30,1998, 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.  Other current
liabilities increased from $726,732 as of December 31,  1997,  to
$786,188 as of September 30, 1998 or 8%

        The Fund has a long-term debt to Merit Broadcasting,less
current portion, of $243,230 as of September 30, 1998, a decrease
of 6.2% from December 31, 1998.  Deferred tax liability decreased
$10,500 or 10% from December 31, 1997 due to the sale  of the
hotel investment utilized as part of the 1031 exchange.

        The  Fund  still holds a $75,000 line of credit with a
balance of $72,205 as of September 30, 1998, which accrues
interest at 10.5% secured by the Fund's security holdings. Total
liabilities, therefore, decreased from $1,508,864 as of December
31, 1997, to $1,357,016 as of September 30, 1998, a decrease of
$151,848 or approximately 10%.

        Based on the foregoing, Net Asset Value increased during
the  nine  months ended September 30, 1998, from  $2,304,802  at
December 31, 1997, to $2,580,494 at September 30, 1998, an
increase of $275,692 or nearly 12%  Net assets per common share
increased from $3.60 per share at December 31, 1997, to $4.03 per
share on September 30, 1998, an increase of $0.43.


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


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

        The  Fund's  income/revenue for the three months ended
September 30, 1998, was $42,181, an increase  of $20,766 or
approximately 97% 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 nine months of rental income from
the Chestnut Building as of September 30, 1998.  The Fund's
Chestnut Building is under sales contract and is currently being
leased to the purchaser under contract at $7,500 per month
beginning September 1, 1998.

       Expenses increased from $120,935 as of September 30, 1997,
to  $242,077 as of September 30, 1998, an increase of $121,142 or
approximately  100%  Contributing to the increase in  expenses
were increases in professional and legal expenses of $126,320 due
to  Skadden Arps legal fee.  Custodian fees were $2,463 for the
three  months ending September 30, 1998, as was 0.00  during the
same  period  in  1997.  Interest expense on  notes  and margins
increased $6,168 and office expense increased $6,313 due to the
office relocation during the three months ended September 30,
1998.  Offsetting against increased expenses were decreases in
travel and entertainment of $2,648, building expenses of $15,070,
investment expenses of $1,216 and donations of $2,540.

       Based on the foregoing, the Fund reported a net investment
loss for the three months ended September 30, 1998, of $(199,896),
an increase  of 132.5% when compared to the net investment loss of
$(85,961) incurred during the same period in 1997.

       The Fund's net realized gain from sales of as of September
30, 1998 was $185,643, an increase of $112,366 or 153% compared
to a net realized gain of $73,277 as of September  30, 1997.
Unrealized net depreciation relating to the current market value
of  securities being held by the Fund decreased $135,268 or 41.5%
from an unrealized net gain of $326,011 as of September 30, 1997,
to an unrealized net gain of $190,743 as of September 30, 1998.

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



RESULTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1998
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1997.

        The  Fund's income/revenue for the nine months ended
September 30, 1998, was $98,387 an increase  of $898 or .9%
compared with the same period in 1997.  Rental income decreased
$7,641 from $56,724 as of September 30, 1997, to $49,083 as of
September 30, 1998. Interest and dividend revenue increased from
$36,599 as of September 30, 1997 to $47,170 as of September 30,1998.

       Expenses increased from $371,247 as of September 30, 1997,
to  $477,671 as of September 30, 1998, an increase of $106,424 or
28.7%.  Contributing to the increase in expenses were increases
in  professional  and legal fees of $145,016, custodian fees of
$3,498  interest  expense of $30,780 and  investment  expense of
$2,813.  The Fund also incurred an income tax benefit in 1997 for
$13,559.

       Based on the foregoing, The Fund reported a net investment
loss for the nine months ended September 30, 1998, of $(379,284),
an  increase of $119,085 or 45.8%, when compared to the net
investment loss of $(260,199) during the same period in 1997.

        The Fund's net realized gains from sale of investment as
of September  30, 1998 was $395,674, a decrease  of $97,133 or
approximately 20% compared to a net realized gain of $492,807 as
of September 30, 1997.  Unrealized net depreciation relating to
the  current  market value of securities being held by the Fund
increased $311,471 or 597% from an unrealized net loss of $(52,169)
as of September 30, 1997 to an unrealized net gain of $259,302 as
of September 30, 1998.

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


                   PART 1.  OTHER INFORMATION


     Item 1.   Legal Proceedings

            The  Fund has received 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 period, the commission filed an administrative  proceeding
against the Fund and its directors alleging certain violation of
the securities laws and regulations.  The Fund intends to vigorously
contest the action.  Subsequently,in November 1998, an administrative
hearing was conducted.  No decision has been rendered as of the date of
this report.  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:                        By:  /s/ Stephen G. Calandrella
                                      Stephen G. Calandrella,President



Dated:                        By:  /s/Barbara A. Hamstad
                                   Principal Accounting Officer