10
                                 FORM 10-Q
                           SECURITIES AND EXCHANGE
                       COMMISSION WASHINGTOn, D.C. 20549
                          
                Quarterly Report Under Section 13 or 15(d) of the
                  Securities Exchange Act of 1934
                  
For Quarter Ended December 31, 1996

Commission File Number: 33-6738-D

                      Eldorado Artesian Springs, Inc.
  (Exact name of registrant as specified in its charter as amended)

         Colorado                                            84-0907853
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
      or organization)

                   PO Box 445, Eldorado Springs, Colorado  80025
                (Address of principal executive offices)   (Zip Code)
                
                          (303)499-1316
            (Registrant's telephone number, including area code)


  Indicate  by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject  to such filing requirements for the past 90 days.

Yes  X   No _____


Number  shares of common stock outstanding at the latest practicable
date, December 31, 1996: 32,344,948 with 56,045 shares in the treasury.





                      Eldorado Artesian Springs, Inc.
                      Form 10-Q, December 31, 1996
                                    
                            TABLE OF CONTENTS
                                    
                                    
Part I - Financial Information                                   Page

     Balance Sheet as of March 31, 1996 and
     December 31, 1996                                              3

     Statement of Operations for the nine months and 3 months
     ended December 31, 1996 and 1995                               4

     Statement of Cash Flow for the nine months and 3 months
     ended December 31, 1996 and December 31, 1995                  5

     Notes to Financial Statements                                  6

     Management's Discussion and Analysis of Financial
     Condition & Results of Operations                            7-8

Part II - Other Information                                         9

Signature Page                                                     10




                  ELDORADO ARTESIAN SPRINGS, INC.
                         Balance Sheet

<TABLE>                                December 31, 1996    March 31, 1996
<CAPTION>                                      <C>               <C>
<S>                     Assets

Current Assets
     Cash                                      115,260         89,289
     Accounts Receivable
          Trade Net                            267,119        234,543
          Other                                  4,888          4,809
     Inventories                               115,102         96,210
     Prepaid Expenses and Other                 55,858         16,783
     Deferred Income Taxes                      18,251         18,251
               Total Current Assets            576,478        459,885

Property, Plant & Equipment (net of          1,121,360      1,144,308
  depreciation)

Other Assets
     Water Rights - net                        120,227        123,593
     Other - net                                51,965         53,977
               Total Other Assets              172,192        177,570
Total                                        1,870,030      1,781,763

        Liabilities and Stockholders' Equity

Current Liabilities
     Accounts Payable                           56,798         53,598
     Accrued Expenses                           56,540         73,288
     Unearned Income                            16,588         23,863
     Current Maturities                         53,544         54,148
               Total Current                   183,470        204,897

Long Term Debt                               1,162,959      1,202,967
     Deferred Income Taxes                      30,359         30,359
               Total Liabilities             1,376,788      1,438,223
Equity
     Common Stock                               32,345         32,345
     Additional Paid-in Capital                265,225        265,225
     Retained Earnings                          45,970         45,970
     Net Earnings                              149,702
               Total Equity                    493,242        343,540
Total                                        1,870,030      1,781,763


</TABLE>


                       ELDORADO ARTESIAN SPRINGS, INC.
                          Statement of Operations
                      
<TABLE>
<CAPTION>
<S>
                                    
                               3 Months                  9 Months
                          Dec. 31,    Dec. 31,      Dec. 31,    Dec. 31,
                           1996        1995          1996        1995
                            <C>         <C>           <C>         <C>
Revenue                                                            
     Water and related    600,308     468,543       1,902,117   1,508,491
     Pool                       0         378          75,419      78,420
     Rentals               11,865      11,515          35,595      31,345
     Returns and         
      Allowances           (3,991)      7,304         (13,953)       (851)
         NET REVENUE      608,182     487,740       1,999,178   1,617,405
                                                                   
Cost of Goods Sold         76,224      66,388         317,802     235,384
                                                                    
Gross Profit              531,958     421,352       1,681,376   1,382,021
                                                                   
Operating Expenses                                                 
     Salaries and         248,619     190,722         750,877     627,734
      Related
     Administrative        87,015      60,583         252,797     184,211
      and General
     Selling and           82,708      71,753         283,279     211,549
      Delivery
     Depreciation and      57,819      43,973         161,468     131,921
      Amortization
TOTAL OTHER EXPENSE       476,161     367,031       1,448,421   1,155,415
Operating Income           55,797      54,321         232,955     226,606
                                                                   
Other Income (expense)
     Interest Income          275         651             819       2,313
     Interest Expense     (27,636)    (32,066)        (84,072)    (96,061)
                                                           
Net Income (loss)          28,436      22,906         149,702     132,858
                                                                   
Net Income Per Common Share     -           -               -           -
                                                                   
Weighted Average                                                   
Number of Shares      32,108,903   32,108,903       32,108,903  32,108,903
 Outstanding
                              
                              
</TABLE>                              
                              
                              
                              
                              
                              

                                     
                                     
                                     
                       ELDORADO ARTESIAN SPRINGS,INC.
                         Statement of Cash Flows
<TABLE>
<CAPTION>
<S>                       
                                                  
                                3 Months Ended          9 Months Ended                               Ended                  Ended
                                Dec. 31,   Dec. 31,    Dec. 31,   Dec. 31,
                                  1996       1995        1996       1995
                                  <C>        <C>         <C>        <C>
Cash Flows From Activities                                               
     Net Income                  28,436      22,906    149,702    132,858
     Adjustments to                                                      
Reconcile
          Depreciation and       57,819      43,973    161,468    131,921
           Amortization
     Changes in Assets and                                               
Liabilities
               Accounts          36,491      12,333   (32,655)   (15,975)
                Receivable
               Inventory        (7,564)     (6,927)   (18,892)      6,488
          Prepaid Expenses     (39,075)     (1,415)   (39,075)      8,387
           and Other
               Accounts         12,868     (33,342)     3,200       2,905
                Payable
               Accrued           8,184      (1,106)   (16,748)     (7,508)
                Expenses
               Unearned         (1,691)     (2,249)    (7,275)     (5,860)
                Income
 Net Cash From Operating        95,468      34,173    199,725     253,216
  Activities
                                                                         
Cash Flows From Investing                                                
     Purchase of Property      (33,538)  (176,106)  (135,154)  (333,876)
      and Equipment
     Increase in Note                0       (555)         0     (1,667)
      Receivable
                       Net     (33,538)  (176,661)  (135,154)  (335,543)
Cash Investing
                                                                         
Cash Flows From Financing                                                
 Activities
     Additions to Long-Term Debt     0   186,210          0    300,123
     Loan Fees and Other           671      (680)      2,012   (23,370)
      Assets
     Payments on Long-Term     (13,768)  (64,177)    (40,612) (143,751)
      Debt
 Net Cash Flows From           (13,097)  121,353     (38,600)  133,002
  Financing
                                                                         
Net Increase (Decrease) in       48,833  (21,135)     25,971    50,675
  Cash
                                                                         
Cash - beginning                 66,427  115,930      89,289    44,120
                                                                         
Cash - ending                   115,260   94,795     115,260    94,795

                                     
                                     
</TABLE>                                     
                                     
                                     
                                     
                       NOTES TO FINANCIAL STATEMENTS
                                     
OPINIONS OF MANAGEMENT

A. In  the  opinion of management, the accompanying financial statements
contain  all  adjustments  (consisting of only normal  recurring  accruals)
necessary to present fairly the financial position as of December 31, 1996,
the results of operations and cash flow for the period then ended.

B. In  the opinion of management, the results of operations for the nine
months  ended  December  31,  1996 are not necessarily  indicative  of  the
results to be expected for the full year.

C. Summary of the Company's significant accounting policies are
incorporated by reference to the Company's March 31, 1996 Annual Report
filed under cover of Form 10-K.

D. The  financial  statements  presented were  prepared  on  a  proforma
consolidated  basis.   This  gives effect to the  combination  of  Eldorado
Artesian  Springs, Inc. and Lexington Funding, Inc. as if it  had  occurred
April  1,  1986.  This business combination was accounted for as a  reverse
acquisition using the purchase method in a manner similar to a  pooling  of
interests.  The management of Eldorado Artesian Springs, Inc. has  retained
control of the combined entity.

E. Income per common share is computed by dividing the net income by the
weighted  average number of shares of common stock outstanding  during  the
period.

                                
                                     
                                   
                                     
                                     
                   MANAGEMENT'S DISCUSSION AND ANALYSIS
              OF FINANCIAL CONDITION AND RESULTS OF OPERATION
                                     
Revenues  for the three months ended December 31, 1996 increased  24.7%  to
$608,182, versus $487,740 for the same three month period in 1995.  For the
nine  months ended December 31, 1996 revenues increased 28.1% to $1,999,178
versus $1,617,405 for the same period in 1995.

Revenues for the water products and related items increased 28.1% for the three
months and 26.1% for the nine months ended December 31, 1996.  Consensus of
industry  growth rate nationwide is approximately 9%.  For the  nine  month
period sales of wholesale products (gallon and PET containers) increased by
78.4%  compared  to  the  same  nine months in  1995.   Furthermore,  these
products  increased as a percentage of total company revenue from  9.6%  in
1995 to 14.1% in 1996.  Management expects the contribution as a percent of
company  revenues to increase significantly in the years ahead as a  direct
result  of  more aggressive marketing and superior growth of the  category.
As  a  result of the improving scale of economies the cost of goods on  the
wholesale  products has declined by 28% from 1995 to 1996.  Also  affecting
cost of goods positively has been a drop in PET resin prices resulting from
significantly boosted capacities of production by the major manufacturers.

Operating expenses for the nine months end December 31, 1996 increased 25.3%
compared to the same nine month period in 1995.  This is slightly less than
but in the line with the increase in revenues during the same period.

Trade accounts receivable totaled $267,119 as of December 31, 1996 compared to
$234,543  on March 1, 1996.  This represents 39.5 days sales in receivables
down from the last reporting period ended September 30, 1996.  This drop is
due  to  a  charge off of bad debts totaling $11,734.30, or 0.58% of  sales
year   to  date.   Management  expects  additional  bad  debt  charges   of
approximately $10,000 for the year ending March 31, 1997, or an approximate
representation of 0.8% of sales.

For the nine months ended December 31, 1996 the company has invested $135,154 in
capital equipment and other capital expenditures.  The company does plan on
additional   acquisitions  for  the  fiscal  year  totaling   approximately
$140,000.  Restrictive covenants on the company's loan agreement  with  its
principal lender (Bank One, NA) limit the amount of capital expenditures to
$150,000  per  year  with  exceptions allowed by  written  approval.   Such
approval has been obtained to allow for the planned fourth quarter  capital
acquisitions.

Net  income for the three months increased 24.1% to $28,436 versus the same
quarter  one  year ago, and by 12.7% to $149,702 for the nine months  ended
December  31, 1996 compared to 1995.  Net income before taxes for the  year
ended  March  31,  1996  was $96,481, much lower than  the  reported  third
quarter results.
                                                          
                                     
                                                                   
                                     
                        PART II - OTHER INFORMATION
                                     
     Item 1 - Legal proceedings
                    
     No legal proceedings have been filed on behalf of or against the
     Company, nor have any claims been made.
     
     Item 2 - Change in Securities
     
     None
     
     Item 3 - Defaults Upon Senior Obligations
     
     There have been no defaults on any securities.  The Company has
     no obligations with regard to dividends and no preferred stock
     outstanding.
     
     Item 4 - Submission of Matters to a Vote of the Security Holders
     
     None
     
     Item 5 - Other Information
     
     None
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
                                Signatures
                                     
     Pursuant  to the requirements of the Securities Exchange  Act  of
     1934  the Registrant has duly caused this report to be signed  on
     its behalf by the undersigned thereunto duly authorized.
     
     
     
                          ELDORADO ARTESIAN SPRINGS, INC.
                          
                          By: /s/        Douglas Larson
                                         Douglas A. Larson, President
                          
                          By:     /s/           Kevin     M.    Sipple
                          Kevin M. Sipple, Secretary