SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A
                                 AMENDMENT NO. 1

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         Commission file number: 0-17232

                           CAPITAL RESERVE CORPORATION
                 (Name of small business issuer in its charter)

     COLORADO                                                 84-0888594
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                         Identification No.)

            7860 E. BERRY PLACE, SUITE 215, ENGLEWOOD, COLORADO 80111
           (Address of principal executive offices including zip code)

         Issuer's telephone number, including area code: (303) 220-5030

       Securities registered under Section 12(b) of the Exchange Act: NONE

         Securities registered under Section 12(g) of the Exchange Act:
               Title of class: CLASS A COMMON STOCK, NO PAR VALUE
                         COMMON STOCK PURCHASE WARRANTS

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to the filing requirements for the past 90 days. Yes _X_  No ___

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will not be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB.[ ]

            Issuer's revenues for its most recent fiscal year. $8,268

               Aggregate market value of the voting stock held by
  non-affiliates of the registrant as of March 26, 1997: $ 136,784 (See Item 5)

       Number of shares outstanding of registrant's Class A Common Stock,
                  no par value, as of March 24, 1997: 546,045

                    Documents incorporated by reference: NONE

    Transitional Small Business Disclosure Format (check one): Yes ___ No _X_

Exhibit index on consecutive page 3                          Page 1 of  21 Pages

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                                      NOTE

Capital Reserve Corporation (the "Company") is filing this amendment to its Form
10-KSB for the fiscal year ended  December 31, 1996,  to include the  Settlement
Agreement  which was  previously  omitted  pursuant to Reg. ss.  240.24b-2.  The
Company withdrew its request for confidential  treatment  relating to Settlement
Agreement on April 28, 1997.



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<PAGE>


<TABLE>
ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K.

<CAPTION>
         (a)      Exhibits:

    REGULATION                                                                                        CONSECUTIVE
    S-B NUMBER                                         EXHIBIT                                        PAGE NUMBER
       <S>          <C>                                                                                   <C>
       2.1          Stock Purchase Agreement dated July 29, 1994 (1)<F1>                                  N/A
       3.1          Articles of Incorporation, as amended (2)<F2>                                         N/A
       3.2          Amended Bylaws (9)<F9>                                                                N/A
       4.1          Form of Warrant Agreement (3)<F3>                                                     N/A
       10.1         Stock Exchange Agreement dated April 29, 1988, between the Company                    N/A
                    and the selling shareholders of First West Financial Services, Inc. and First
                    West Life Insurance Company (4)<F4>
       10.2         Supplemental Agreement dated June 17, 1988, between the Company and                   N/A
                    the selling shareholders of First West Financial Services, Inc. (4)<F4>
       10.3         Order of John Kezer, Insurance Commissioner of the State of Colorado                  N/A
                    dated June 29, 1988 (4)<F4>
       10.4         Supplemental Agreement (A) dated June 21, 1988, between the Company                   N/A
                    and the selling shareholders of First West Financial (4)<F4>
       10.5         Promissory Note payable to Joseph T. Flynn, Dennis G. Haley, and Donald               N/A
                    Yee (5)<F5>
       10.6         Promissory Note payable to the Company from Joseph T. Flynn and                       N/A
                    Jacqueline M. Flynn (5)<F5>
       10.7         Real estate conveyance documents for purchase of 7860 E. Berry Place (6)<F6>          N/A
       10.8         Stock Purchase Agreement with Philip A. Bates dated December 1, 1993                  N/A
                    (7)<F7>
       10.9         Settlement Agreement and Mutual General Release by and between Joseph                 N/A
                    T. Flynn, Jacqueline M. Flynn, Capital Reserve Corporation,  and Ralph
                    Newton (8)<F8>
       10.10        Contract to Buy and Sell Real Estate for sale of 7860 East Berry Place. (10)<F10>     N/A
       10.11        Office Lease (10)<F10>                                                                N/A
       10.12        Settlement Agreement                                                                   7
        27          Financial Data Schedule                                                                21
----------------------------
<FN>
<F1>
(1)      Incorporated by reference to the Exhibits filed with the Company's Form 8-K dated October 14, 1994.

<F2>
(2)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 1990.

<F3>
(3)      Incorporated by reference to the Exhibits filed with the Company's Registration Statement on Form S-18,
         Registration No. 33-21118-D.


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<PAGE>


<F4>
(4)      Incorporated by reference to the Exhibits filed with the Company's Form 8-K dated June 30, 1988.

<F5>
(5)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 1988, as amended by Form 8 Amendment No. 1, dated May 15, 1989.

<F6>
(6)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 1991.

<F7>
(7)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
         December 31, 1993.

<F8>
(8)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Quarterly  Report on Form 10- QSB for the quarter ended June
         30, 1996.

<F9>
(9)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
         December 31, 1994.

<F10>
(10)     Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Quarterly  Report  on Form  10- QSB  for the  quarter  ended
         September 30, 1996.

</FN>
<CAPTION>
         (b)      The following reports on Form 8-K were filed during the last quarter of the period covered by this
                  report: None

</TABLE>

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                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                          CAPITAL RESERVE CORPORATION



Dated: May 1, 1997                        By:/s/Ralph W. Newton, Jr.
                                                Ralph W. Newton, Jr., President

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.



/s/ Ralph W. Newton, Jr.                                      May 1, 1997
Ralph W. Newton, Jr., Chairman of the Board of
Directors and President (Principal Executive,
Financial and Accounting Officer)



/s/Linda M. Opfer                                             May 1, 1997
Linda M. Opfer, Director






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