1

                          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 September 30, 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, September 30,1996: 32,344,948 with  56,045
shares in the treasury.










               Eldorado Artesian Springs, Inc.
                Form 10-Q, September 30, 1996
                              
                      TABLE OF CONTENTS


Part I - Financial Information
Page

     Balance Sheet as of March 31, 1996 and
September 30, 1996
3

Statement of Operations for the six month and 3 month
ended September 30, 1996 and 1995
4

Statement of Cash Flow for the six month and 3 month
ended September 30, 1996 and September 30, 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>
<CAPTION>

                                        September 30, 1996       March 31, 1996
<S>                                         <C>                     <C>
Assets
Current Assets
     Cash                               66,427                        89,289
     Accounts Receivable
          Trade Net                     303,406                      234,543
          Other                         5,092                          4,809
     Inventories                        107,538                       96,210
     Prepaid Expenses and Other         16,783                        16,783
     Deferred Income Taxes              18,251                        18,251
               Total Current Assets     517,497                      459,885

Property, Plant & Equipment
  (net of depreciation)              1,144,519                    1,144,308

Other Assets
     Water Rights - net                121,349                      123,593
     Other - net                        52,636                       53,977
               Total Other Assets      173,985                      177,570
Total                                1,836,001                    1,781,763

Liabilities and Stockholders' Equity
Current Liabilities
     Accounts Payable                   43,930                       53,598
     Accrued Expenses                   48,356                       73,288
     Unearned Income                    18,279                       23,863
     Current Maturities                 53,546                       54,148
               Total Current 
                Liabilities            164,111                      204,897

Long Term Debt                       1,176,725                    1,202,967
     Deferred Income Taxes              30,359                       30,359
               Total Liabilities     1,371,195                    1,438,223
Equity
     Common Stock                       32,345                       32,345
     Additional Paid-in Capital        265,225                      265,225
     Retained Earnings                  45,970                           -
     Net Earnings                      121,266                       45,970
               Total Equity            464,806                      343,540
Total                                1,836,001                    1,781,763
</TABLE>

                              
ELDORADO ARTESIAN SPRINGS, INC.
Statement of Operations
<TABLE>
<CAPTION>
                            3 Months                        6 Months
                Sept. 30, 1996   Sept. 30,1995  Sept. 30, 1996   Sept. 30, 1995
<S>                   <C>              <C>           <C>               <C>
Revenue
 Water and
  Related           712,605           559,317        1,301,809        1,039,948
 Pool                55,165            65,335           75,419           78,042
 Rentals             11,865             9,915           23,730           19,830
 Returns and 
  Allowances         (5,578)           (4,284)          (9,962)          (8,155)
    NET REVENUE     774,057           630,283        1,390,996        1,129,665
Cost of Goods Sold  147,000            89,569          241,578          168,996

Gross Profit        627,057           540,714        1,149,418          960,669

Operating Expenses
 Salaries and
   Related         274,175            226,330          502,258          437,012
  Administrative 
   and General      79,861             59,749          165,782          123,628
  Selling and
    Delivery       120,937             71,041          200,571          139,796
  Depreciation and
   Amortization     53,654             43,974          103,649           87,948
TOTAL OTHER 
 EXPENSE           528,627            401,094          972,260          788,384
Operating Income    98,430            139,620          177,158          172,285

Other Income
 (expense)
 Interest Income       273                 836             544            1,662
 Interest Expense  (28,614)            (31,423)        (56,436)         (63,995)

Net Income (loss)   70,089             109,033         121,266          109,952

Net Income Per 
 Common Share         -                    -                -                 -

Weighted Average
Number of Shares 
 Outstanding    32,344,948          32,164,948       32,344,948      32,164,948
</TABLE>                              
                              
                              
                              
                              
                              
                              
                              
                              
                                     
                                     
ELDORADO ARTESIAN SPRINGS, INC.
Statement of Cash Flows

                        3 Months Ended                   6 Months Ended
                 Sept. 30, 1996  Sept. 30, 1995  Sept. 30, 1996  Sept. 30, 1995
Cash Flows From
 Activities
 Net Income          70,089          109,033        121,266           109,952
 Adjustments to 
  Reconcile
 Depreciation and 
  Amortization       53,654           43,974        103,649            87,948
 Changes in Assets
   and Liabilities
  Accounts 
   Receivable       (41,572)          (8,712)       (69,146)          (28,308)
  Inventory           8,891            7,432        (11,328)           13,415
  Prepaid Expenses
   and Other             0            (7,912)            0              9,802
   Accounts Payable (25,963)          12,641         (9,668)           36,247
  Accrued Expenses  (25,230)         (22,345)       (24,932)           (6,402)
   Unearned Income   (3,695)          (1,825)        (5,584)           (3,611)
 Net Cash From 
  Operating
  Activities         36,174          132,286        104,257           219,043

Cash Flows From Investing
 Purchase of
  Property and 
  Equipment         (38,874)        (52,970)       (101,616)         (157,770)
 Increase in
   Note Receivable        0            (556)             0             (1,122)
 Net Cash Investing (38,874)        (53,526)       (101,616)         (158,892)

Cash Flows From 
 Financing Activities
 Additions to 
  Long-Term Debt          0          15,273              0            113,913
 Loan Fees and 
  Other Assets          670          (1,322)         1,341            (22,690)
 Payments on 
  Long-Term Debt    (13,266)        (39,087)       (26,844)           (79,974)
 Net Cash Flows 
  From Financing    (12,596)        (25,136)       (25,503)            11,649

Net Increase 
 (Decrease) in 
  Cash              (15,296)         53,624        (22,862)             71,810

Cash - beginning     81,723          62,306         89,289              44,120

Cash - ending        66,427         115,930         66,427             115,930
                                     
                                     
                                     
                              
                              
                              
                              
                              
                              
                NOTES TO FINANCIAL STATEMENTS
                              
OPINIONS OF MANAGEMENT

     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  September  30,   1996,   the   results   of
operations and cash flow for the period then ended.

    In   the   opinion   of   management,   the   results   of   operations
for    the    six    months   ended   September,   30,   1996    are    not
necessarily   indicative   of  the  results  to   be   expected   for   the
full year.

  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.
     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.

    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  September  30,  1996   increased
22.8%   to   $774,057   versus   $630,283   for   the   same   period    in
1995.      Similarly,    revenues    for    the    six     months     ended
September    30,    1996    increased   23.1%    to    $1,390,996    versus
$1,129,665 for the same period in 1995.

Revenues  for  water  products  and  related  items  increased  27.4%   for
the    three    months    and   25.2%   for   the    six    months    ended
September   30,   1996   over  the  same  periods   one   year   ago.    By
comparison,    a    sampling    of   bottled    water    industry    growth
estimates    taken    from    trade   publications,    indicate    national
category   growth   rates   to   be  in   the   range   of   8%   to   12%.
Wholesale     products    sold    to    retail    chains     for     resale
increased   revenues   by   87.6%   in   the   six   month   period    when
compared   to   the  same  period  a  year  ago.   And  as   a   percentage
of    total    revenues,   wholesale   products   increased   from    10.1%
of   revenues  in  1995  up  to  15.3%  of  revenues  in  1996.    At   the
same    time,    cost    of   goods   sold   on   these    products    only
increased    by    46.5%,    reflecting    improved    purchasing    habits
and   quantity   discounts.    Overall,  the   cost   of   gods   sold   on
all   products   increased   64.1%  for  the   three   month   period   and
42.9%    for    the    six    month   period.     The    abnormally    high
increase    for   the   three   month   period   is   due   primarily    to
losses   incurred   in   liquidation   of   glass   bottle   inventory   at
prices    substantially    less    than    originally    booked    purchase
prices.     This    was    done    because   the    company    no    longer
packages its products in glass containers.

Operating   expenses  increased  at  rates  similar  to   the   growth   in
revenues,   increasing   31.7%  in  the   three   months   and   23.3%   in
the   six   months   when   compared  to  the   same   periods   in   1995.
The    six   month   increase   is   almost   identical   to   growth    in
revenues.     However,   the   most   recent   three   month    trend    is
somewhat   higher.    This   higher  rate   is   due   principally   to   a
wage   increase   for   all   employees   that   went   into   effect    on
June   30,   1996,   and   increased   seasonal   selling   expenses    for
the summer months.

Accounts   receivable   have  increased  from   $239,352   on   March   31,
1996   to   $266,926   on   June  30,  1996   and   to   $308,498   as   of
September   30,   1996.    While   the   level   of   accounts   receivable
as   of   June   30,   1996   was   up  it  still   represented   39   days
sales,   whereas   the  number  of  days  sales  in   receivables   as   of
September    30,   1996   has   risen   to   45   days.    This    is    an
alarming    trend    and    immediate   steps   have    been    taken    to
correct   this   reversal   of  the  trend   of   the   past   two   years.
With   these   funds   used   up  in  customer  credit   the   company   is
not    generating    the    full   useful   cash   flow    expected    from
restructuring   the  company  debt  in  March  of   this   year.    It   is
imperative    that    the   company   apply   its    resources    to    the
collection    of   these   accounts   and   additionally    reassess    its
credit   policies   and   billing   practices.    And   while   the    rise
in    receivables   may   be   in   lock-step   with   consumer   practices
recently   around   the   country,   it   does   not   mean   the   company
will   not   take   preventative  measures  to   control   its   level   of
receivables at a target level of 38 days sales.

Net   Income   for  the  three  months  ended  September   30,   1996   was
$70,089,   down   35.8%   from  $109,033  during   the   same   period   in
1995.    However,   for   the   six  months  ended   September   30,   1996
net   income   was   up  10.3%  to  121,266  compared   to   $109,952   for
the   same   period   one   year   ago.   Management   believes   this   is
reflective    of   more   consistent   earnings   patterns   that    should
occur    because   of   the   more   predictable   cash   flows   resulting
from restructuring company debt six months ago.




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
     
     The annual Shareholder's Meeting was held July 17,
     1996.  Two matters were subject to a vote.  The
     shareholders elected the Board members to serve an
     additional on year term.  Shareholders ratified
     Ehrhardt, Keefe, Steiner & Hottman as the
     independent auditor.
     
     Item 5 - Other Information
     
     None
     
     
     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