SECURITIES AND EXCHANGE COMMISSION
      
                            Washington, D.C. 20549
      
                                 FORM 10-QSB
      
               QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
      
      
               For the quarterly period ended June 30, 1998
      
                      Commission file number 0-13642
      
      
                       HUDSON'S GRILL OF AMERICA, INC.
               (Name of small business issuer in its charter)
      
      
                              California
               (State or other jurisdiction of incorporation)
      
                              95-3477313
                   (IRS Employer Identification Number)
      
            16970 Dallas Parkway, Suite 402, Dallas, Texas  75248
                  (Address of Principal Executive Offices)
      
      
             Issuer's telephone number, including area code:
                           (972) 931-9237
      
      <PAGE>
      
           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 such filing
      requirements for the past 90 days.  Yes   X    No
      
              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS
      
           Check whether the registrant filed all documents and
      reports required to be filed by Section 12, 13 or 15(d) of
      the Exchange Act after the distribution of securities
      under a plan confirmed by a court.  Yes        No
      
      
                  APPLICABLE ONLY TO CORPORATE REGISTRANTS
      
           State the number of shares outstanding of each of the
      issuer's classes of common equity, as of the latest
      practicable date. 6,056,986
      
      
      <PAGE>
      Item 1.  Financial Statements.
      
                          HUDSON'S GRILL OF AMERICA, INC.

                     CONSOLIDATED BALANCE SHEETS 
                              (UNAUDITED)


                              ASSETS               
                         
                                          June 30,     December 28,
                                            1998           1997    
          

CURRENT ASSETS:
  Cash and cash equivalents             $    26,230     $    42,401
  Accounts receivable, net of allowance
    for doubtful accounts of $47,425
    and $49,000 respectively                 56,113          69,830
  Current portion of notes and leases
    receivable                              100,000         100,000
  Prepaid expenses and other
   receivables                              134,668          23,185
     

       Total current assets                 317,011         235,416

PROPERTY AND EQUIPMENT, at cost:
  Leasehold improvements                     13,150           2,969
  Restaurant equipment                       33,378          33,378    
  Furniture and fixtures                      5,851           5,851

       Total property and equipment          52,379          42,198

  Less accumulated depreciation
    and amortization                        (10,396)         (7,030)

       Property and equipment, net           41,983          35,168


LONG TERM PORTION OF NOTES
  AND LEASES RECEIVABLE, net of 
  allowance for doubtful accounts
  of $33,000 and $33,000 respectively       759,501         791,858 

LIQUOR LICENSES-net of 
  accumulated amortization
  of $24,750 at June 30, 1998    
  and $30,000 at December 28, 1997           20,250          30,815
     
OTHER ASSETS                                 16,683          23,463

      Total assets                      $ 1,155,428     $ 1,116,720


                    HUDSON'S GRILL OF AMERICA, INC.

                     CONSOLIDATED BALANCE SHEETS 
                              (UNAUDITED)


                  LIABILITIES AND SHAREHOLDERS' EQUITY
                  
                                              June 30,   December 28,
                                                1998          1997    


CURRENT LIABILITIES:
  Accounts payable                          $  144,205     $   40,886
  Accrued liabilities                          217,883        201,343

    Total current liabilities                  362,088        242,229

LONG-TERM DEBT

OTHER LONG-TERM LIABILITIES                    163,315        206,494

DEFERRED INCOME                                743,798        778,367

COMMITMENTS AND CONTINGENCIES
   (Note 4)

SHAREHOLDERS' EQUITY:
  Preferred stock, 5,000,000 
    shares authorized, none 
    issued or outstanding
  Common stock, no par value
     100,000,000 shares authorized
     6,056,986 shares issued and 
     outstanding                             4,456,457      4,456,457
  Accumulated deficit                       (4,570,230)    (4,566,827)
    Total shareholders' equity                (113,773)      (110,370)

    Total liabilities and
      and shareholders' equity              $1,155,428     $1,116,720












                    HUDSON'S GRILL OF AMERICA, INC.

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                       AND COMPREHENSIVE INCOME
                              (UNAUDITED)

                                           For the three months ended 
                                           June 30,         June 30,  
                                             1998            1997     

REVENUES:                          
  Net sales                              $    74,696      $          
  Franchising fees from restaurants
    under sales contracts                                       4,164
  Franchise revenues                          61,218          106,871
  Equipment lease income                      20,548           21,230
  Gain on sales of restaurants                20,945           20,041
  Other income                                17,499           17,792  
  
    Total revenues                           194,906          170,098

COSTS AND EXPENSES:
  Cost of sales                               74,882
  General and administrative                 116,187          143,192
  Depreciation and amortization                3,060            8,004
    Total costs and expenses                 194,129          151,196

    Income (loss) from operations                777           18,902 

OTHER INCOME (EXPENSE):
  Interest expense                              (251)            (106)
  Interest income                             16,160           20,822
    Total other income (expense)              15,909           20,716


INCOME (LOSS) BEFORE INCOME TAXES             16,686           39,618 

Provision for income taxes                                           

NET INCOME (LOSS) AND 
  COMPREHENSIVE INCOME (LOSS)            $    16,686      $    39,618 

INCOME (LOSS) PER SHARE
  Basic and diluted net 
    income (loss) and comprehensive
    income (loss) per share              $     .0017      $      .004 
             






                    HUDSON'S GRILL OF AMERICA, INC.

                 CONSOLIDATED STATEMENTS OF OPERATIONS
                       AND COMPREHENSIVE INCOME
                              (UNAUDITED)

                                            For the six months ended  
                                           June 30,         June 30,  
                                             1998            1997     

REVENUES:                          
  Net sales                              $   301,441      $          
  Franchising fees from restaurants
    under sales contracts                                      12,257
  Franchise revenues                         144,192          182,859
  Equipment lease income                      33,063           38,042
  Gain on sales of restaurants                32,368           36,144
  Other income                                33,829           34,263  
  
    Total revenues                           544,893          303,565

COSTS AND EXPENSES:
  Cost of sales                              310,431
  General and administrative                 255,201          277,426
  Depreciation and amortization                6,340           16,303
    Total costs and expenses                 571,972          293,729

    Income (loss) from operations            (27,079)           9,836 

OTHER INCOME (EXPENSE):
  Interest expense                              (251)            (672)
  Interest income                             23,927           41,179
    Total other income (expense)              23,676           40,507


INCOME (LOSS) BEFORE INCOME TAXES             (3,403)          50,343 

Provision for income taxes                                           

NET INCOME (LOSS)                        $    (3,403)     $    50,343 

INCOME (LOSS) PER SHARE
  Basic and diluted net 
    income (loss) and comprehensive
    income (loss) per share              $    (.0006)     $      .005 
             






                    HUDSON'S GRILL OF AMERICA, INC.

                 CONSOLIDATED STATEMENTS OF CASH FLOW

                                            For the six months ended  
                                            June 30,        June 30,  
                                             1998            1997      
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                       $   (3,403)    $   50,343 
  Adjustments to reconcile net income
   (loss) to net cash used by operating
   activities:
     Depreciation and amortization             6,218         16,303
     (Gain) loss on sales and closures
       of restaurants                        (28,443)       (36,144)
  Changes in assets and liabilities:
     Accounts receivable                    (100,549)        28,470 
     Prepaid expenses and other               (3,226)           574    
     Accounts payable                        103,319        (31,720)
     Accrued liabilities and other           (34,020)      (107,718)
       Net cash provided (used)
       by operating activities               (60,104)       (79,892)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net proceeds from sale of assets             9,000          4,634 
  Notes receivable principal payments         18,110         53,991
  Leases receivable principal payments        26,994         36,500
  Fixed assets and other                     (10,171)              
      Net cash provided (used) by  
      investing activities                    43,933         95,125

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of notes payable                               (35,542)
      Net cash provided (used) by  
      financing activities                                  (35,542)

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                           (16,171)       (20,309)

CASH AND CASH EQUIVALENTS, beginning
  of period                                   42,401         78,680

CASH AND CASH EQUIVALENTS, end 
  of period                               $   26,230     $   58,371 

SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid                        $      251     $      902
     Income taxes paid                    $              $         





                    HUDSON'S GRILL OF AMERICA, INC.

           CONSOLIDATED STATEMENTS OF CASH FLOWS,  continued

SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:


Period ended June 30, 1998
The Company sold the restaurant located in Carrollton, TX.  No note 
receivable or lease receivable was generated with this sale.

Period ended June 30, 1997
In connection with the sale of a restaurant and equipment, the Company
received a note receivable of $114,200 and a lease receivable of
$240,000.




                 HUDSON'S GRILL OF AMERICA, INC.

            Notes to Consolidated Financial Statements


A.   Basis of Presentation

     Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although
management believes the disclosures are adequate to make the
information presented not misleading.  These interim financial
statements should be read in conjunction with the Company's
annual report and most recent audited financial statements
included in the report on Form 10-KSB for the year ended 
December 28, 1997, filed with the Securities and Exchange
Commission.

     The interim financial information included hereto is
unaudited; however, such information reflects all the adjustments
(consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair statement of
results of operations and cash flows for the interim periods. 
The results of operations for the six months ended June 30, 1998
are not necessarily indicative of the results to be expected for
the full year.



      Item 2.  Management Discussion and Analysis.
      
     Material changes in the financial condition of the issuer and in the 
results of its operations since the end of its last fiscal year and its
results from the comparable period in its last fiscal year include the
following.

     The issuer's prepaid expenses and other receivables at June 30, 1998
("Q2") were $134,668 as compared to $23,185 at December 28, 1997 ("FYE"). 
Leasehold improvements at Q2 were $13,150, while at FYE they were $2,969.  The
increase in the prepaid expenses and other receivables was due mostly to
construction expenses incurred by a subsidiary of the issuer for a new
Hudson's Grill located in Richardson, Texas, and due to an increase in
interest receivables from the issuer's franchisees in Pomona, California, and
Lancaster, California.

     Current liabilities increased at Q2 to $362,088 from $242,229 at FYE. 
The increase was mostly attributed to an increase in accounts payable to
$144,205 for Q2 from $40,886 for FYE.  This occurred because of an actual 
increase in payables of $54,347, and costs related to the Richardson
construction of $48,972.  Other long term liabilities decreased to $163,315
for Q@ from $206,494 for FYE, due to the amortization of estimated
liabilities.

     Material changes in the results of operations of Q2 compared to the
second quarter of 1997 ("Q97") include the following.

     Net Sales increased to $74,696 in Q2 from $0 in Q97, and cost of sales
also increased to $74,882 in Q2 from $0 in Q97.  These are a result of the
operations of a subsidiary, and are essentially a wash.  Franchise revenues
dropped to $61,218 for Q2 from $106,871 in Q97, which drop reflects a decrease
in new franchise fees and a decrease in franchise fee collection.  On the
other hand, general and administrative expenses dropped to $116,187 for Q2
from $143,192 for Q97, reflecting the termination of a consulting agreement
with Dalms, Inc.  Overall, income from operations decreased to $777 for Q2
from $18,902 for Q97.

     After adding interest income and subtracting interest expense, the issuer
made a profit of $16,686 ($.0017 per share) in Q2 as compared to a profit of
$39,618 ($.004 per share) in Q97.



                         PART II - OTHER INFORMATION
      
      Item 1.  Legal Proceedings.
      
     The registrant incorporates by reference its response in its Form 10-KSB
filed with the Securities and Exchange Commission on May 15, 1998.  Currently
the only litigation against the registrant is the lawsuit involving the lease
at a former Hudson's Grill in Westlake, California, and a lawsuit by a
franchisee attempting to recover expenses incurred by them when they operated
a Hudson's Grill in Pomona, California.  The registrant is not aware of any
other material litigation in process.

      Item 2.  Changes in Securities.

     There have been no changes in securities or in the rights of the holders
of the registrant's securities during Q2 except for the adoption and
ratification at the annual shareholders meeting of a plan to incorporate a
subsidiary and the spin off the subsidiary to the current shareholders of the
registrant.

      Item 3.  Defaults Upon Senior Securities.

     The registrant does not currently have any senior securities. 
Consequently, there are no defaults on senior securities.

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

     Several matters were submitted to a vote of security holders during Q2.  
On May 29, 1998, at the annual shareholders meeting, shareholders voted
directly and through proxies on the election of three directors, the
appointment of the registrant's auditors, and to adopt and ratify a plan to
incorporate a subsidiary to which most of the registrant's assets were
transferred and then to distribute the shares of the subsidiary to the
registrant's shareholders.  As a result of the votes, David Osborn, Thomas
Sacco and Robert Fischer were elected as directors, Hein + Associates were
appointed as the Company's auditors, and the plan to incorporate and spin off
the subsidiary was adopted and ratified.

      Item 5.  Other Information.

     The registrant has been in "off and on" discussions with various
potential franchisees to develop restaurants.  At June 1, 1998, the registrant
sold its subsidiary that operated the Carrollton, Texas, Hudson's Grill to its
manager.  There was no gain on the sale and no notes were exchanged.


      Item 6.  Exhibits and Reports on Form 8-K.
      
(a)  Exhibit Index.  Following are the exhibits required under Item 601 of
Regulation S-B for Form 10-QSB:
      
      Item 601
      Exhibit No.   Description                      Page Number
      
      (2)           Plan of Acquisition, Reorgani-
                    zation, Arrangement, Liquida-
                    tion, or Succession              n/a
      
      (4)           Instruments Defining the Rights
                    of Holders Including Indentures  n/a
      
      (6)           No Exhibit Required.             n/a
      
      (11)          Statement Re: Computation of
                    Per Share Earnings               n/a <FN1>
      
      (12)          No Exhibit Required.             n/a
      
      (15)          Letter on Unaudited Interim
                    Financial Information            n/a <FN2>
      
      (18)          Letter on Change in Accounting
                    Principles                       n/a
      
      (19)          Previously Unfiled Documents     n/a
      
      (20)          Reports Furnished to Security
                    Holders                          n/a
      
      (23)          Published Report Regarding
                    Matters Submitted to Vote        n/a
      
      (24)          Consent of Experts and Counsel   n/a
      
      (25)          Power of Attorney                n/a
      
      (27)          Financial Data Schedule          attached
      
      (28)          Additional Exhibits              n/a
      
      <PAGE>
      
      <FN1>     No explanation of the computation of per share earnings on
      both the primary and fully diluted basis is necessary because the
      computation can be clearly determined from the financial statements and
      the notes to the financial statements.
      
      <FN2>     No reports on unaudited interim financial information have
      been  prepared by the Company's independent accountants, and therefore,
      no letter is required from the Company's independent accountants.
      
      (b)  Reports on Form 8-K.  The following reports on Form 8-K were filed
      during the quarter ending June 30, 1998:
      
         None


     <PAGE>

                                 SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
      
      
                (Registrant)     HUDSON'S GRILL OF AMERICA, INC.
      
      
                                 By: s/s David L. Osborn
                                     David L. Osborn, President
      
      
                                     Date:     August 17, 1998
      
      
      
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