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, 1998

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               (IRS Employer Identification No.
 incorporation                                  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, 1998: 2,995,495.




<PAGE>




                    ELDORADO ARTESIAN SPRINGS, INC.




                                 INDEX

                                                                            Page
                                                                            ----
Part I - Financial Information

Item 1 - Financial Statements

    Balance Sheets September 30, 1998 (Unaudited) and
     March 31, 1998 .......................................................F - 1

    Unaudited  Statements of Operations  For the Three and
     Six Months Ended September 30, 1998 and September 30, 1997 ...........F - 2

    Unaudited Statements of Cash Flows For the Six Months Ended
     September 30, 1998 and September 30, 1997 ............................F - 3

    Notes to Unaudited Financial Statements ...............................F - 4

Item 2 - Management's Discussion and Analysis of Financial Condition
 and Results of Operations ................................................F - 6

Part II - Other Information ..............................................F - 10

Signature Page ...........................................................F - 11




<PAGE>


                    ELDORADO ARTESIAN SPRINGS, INC.
                            Balance Sheets


                                                     September 30,    March 31,
                                                         1998           1998
                                                      -----------    -----------
                                                      (Unaudited)
                                     Assets
Current assets
  Cash ...........................................     $  322,611     $   70,166
  Accounts receivable
   Trade, net ....................................        590,469        498,320
   Other .........................................          7,361          5,506
  Inventories ....................................        128,992        122,701
  Prepaid expenses and other .....................         16,080         48,313
  Deferred income taxes ..........................          4,633         16,829
                                                       ----------     ----------
       Total current assets ......................      1,070,146        761,835
                                                       ----------     ----------

Property, plant & equipment - net ................      1,802,353      1,525,370
                                                       ----------     ----------

Other assets
  Water rights - net .............................        112,374        114,618
  Restricted cash ................................        125,000           -
  Deferred offering costs ........................         25,499           --
  Other, net .....................................         54,898         54,898
                                                       ----------     ----------
       Total other assets .. .....................        317,771        169,516
                                                       ----------     ----------

                                                       $3,190,270     $2,456,721
                                                       ==========     ==========

                     Liabilities and Stockholders' Equity

Current liabilities
  Accounts payable ...............................     $  124,885     $  129,747
  Accrued expenses ...............................         67,760         79,130
  Line-of-credit ..................................           -           40,000
  Deposits .......................................         45,407         49,178
  Current maturities of long-term debt ...........        162,755        123,005
                                                       ----------     ----------
       Total current liabilities .................        400,807        421,060

Long-term liabilities
  Long-term debt .................................      1,439,908      1,431,820
  Deferred income taxes ..........................         47,011         52,921
                                                       ----------     ----------
       Total liabilities .........................      1,887,726      1,905,801
                                                       ----------     ----------

Stockholders' equity
  Common stock, par value $.001 per share;
   50,000,000 shares authorized; 2,995,495
   issued and outstanding ........................          2,995          2,695
  Additional paid-in capital .....................        984,656        294,875
  Retained earnings ..............................        314,893        253,350
                                                       ----------     ----------
                                                        1,302,544        550,920
                                                       ----------     ----------

                                                       $3,190,270     $2,456,721
                                                       ==========     ==========

              See notes to unaudited financial statements.

                                 F - 1


<PAGE>


                    ELDORADO ARTESIAN SPRINGS, INC.

                       Statements of Operations

<TABLE>
<CAPTION>

                                        Three Months Ended               Six Months Ended
                                           September 30,                    September 30,
                                  ------------     -----------     ------------     ------------
                                       1998             1997            1998             1997
                                            (Unaudited)                      (Unaudited)
  
<S>                                <C>              <C>              <C>              <C>
Revenue
 Waterand related ............     $ 1,034,959      $   852,644      $ 1,913,422      $ 1,587,893
 Pool ........................          59,701           46,648           83,030           68,388
 Rentals .....................          12,450           19,025           23,350           30,890
                                   -----------      -----------      -----------      -----------
  Net revenue ................       1,107,110          918,317        2,019,802        1,687,171

Cost of goods sold ...........         161,207          140,525          285,044          259,391
                                   -----------      -----------      -----------      -----------

Gross profit .................         945,903          777,792        1,734,758        1,427,780
                                   -----------      -----------      -----------      -----------

Operating expenses
 Salaries and related ........         440,966          362,677          788,242          658,655
 Administrative and general ..         202,520          142,886          365,706          229,806
 Selling and delivery ........         120,879           84,424          277,043          196,629
 Depreciation and amortization          96,068           56,863          160,377          113,956
                                   -----------      -----------      -----------      -----------
                                       860,433          646,850        1,591,368        1,199,046
                                   -----------      -----------      -----------      -----------

Operating Income .............          85,470          130,942          143,390          228,734
                                   -----------      -----------      -----------      -----------

Other Income (expense)
 Interest income .............           5,419            1,686            9,994            2,967
 Interest expense ............         (35,929)         (36,027)         (73,995)         (70,781)
                                   -----------      -----------      -----------      -----------
                                       (30,510)         (34,341)         (64,001)         (67,814)
                                   -----------      -----------      -----------      -----------

Net Income before Income
 taxes .......................          54,960           96,601           79,389          160,920

Provision for income taxes ...          10,702           19,958           17,846           32,548
                                   -----------      -----------      -----------      -----------

Net income and comprehensive
 income ......................     $    44,258      $    76,643      $    61,543      $   128,372
                                   ===========      ===========      ===========      ===========

Basic earnings per common
 share .......................     $      0.02      $      0.03      $      0.02       $     0.05
                                   ===========      ===========      ===========      ===========

Weighted average number of
 shares outstanding ..........       2,926,264        2,695,495        2,961,069        2,695,495
                                   ===========      ===========      ===========      ===========
</TABLE>


               See notes to unaudited financial statements.

                                 F - 2


<PAGE>


                    ELDORADO ARTESIAN SPRINGS, INC.

                       Statements of Cash Flows

<TABLE>
<CAPTION>

                                                        Six Months Ended
                                                           September 30,
                                                    ----------------------------
                                                       1998              1997
                                                    -----------     ------------

                                                            (Unaudited)
<S>                                                 <C>              <C>
Cash flows from activities
  Net income ..................................     $    61,543      $   128,372
                                                    -----------      -----------
  Adjustments  to reconcile net income
   to net cash provided by operating
   activities
   Depreciation and amortization ..............         160,377          113,956
   Deferred income taxes ......................           6,286             --
   Changes in certain assets and liabilities
    Accounts receivable .......................         (94,004)        (165,356)
    Inventories ...............................          (6,291)         (31,058)
    Prepaid expenses and other ................          32,233            1,126
    Accounts payable ..........................          (4,862)          34,073
    Accrued expenses ..........................         (11,370)         (27,347)
    Deposits ..................................          (3,771)          (2,524)
                                                    -----------      -----------
                                                         78,598          (77,130)
                                                    -----------      -----------
      Net cash provided by operating activities         140,141           51,242
                                                    -----------      -----------

Cash flows from investing activities
  Purchase of property and equipment ..........        (435,116)        (236,327)
                                                    -----------      -----------
      Net cash flows used in investing
       activities .............................        (435,116)        (236,327)
                                                    -----------      -----------

Cash flows from financing activities
  Proceeds from additions to long-term debt ...         146,125        1,500,000
  Payments on long-term debt ..................         (98,287)      (1,232,830)
  Payments on line-of-credit ..................         (40,000)            --
  Proceeds from sale of common stock ..........         825,000
  Loan fees and origination cost ..............            --            (18,196)
  Costs related to issuance of common stock ...        (134,919)            --
  Restricted cash .............................        (125,000)            --   
  Deferred offering cost ......................         (25,499)            --
                                                    -----------      -----------
      Net cash flows provided by financing
       activities .............................         547,420          248,974
                                                    -----------      -----------

Net increase in cash ..........................         252,445           63,889

Cash - beginning of period ....................          70,166          244,765
                                                    -----------      -----------

Cash - ending of period .......................     $   322,611      $   308,654
                                                    ===========      ===========
</TABLE>

Supplemental  disclosures of cash flow  information:  Cash paid for interest for
  the six months  ended  September  30, 1998 and 1997 was  $73,995 and  $70,781,
  respectively.  Cash paid for income taxes for the six months  ended  September
  30, 1998 and 1997 was $14,011 and $10,132, respectively.

                  See notes to unaudited financial statements.

                                 F - 3


<PAGE>


                    ELDORADO ARTESIAN SPRINGS, INC.

                Notes to Unaudited Financial Statements


Note 1 - Summary of Significant Accounting Policies
---------------------------------------------------

Interim Unaudited Financial Statements
--------------------------------------

The financial  statements are unaudited and reflect all adjustments  (consisting
only of normal recurring  adjustments)  which are, in the opinion of management,
necessary  for a fair  presentation  of the  financial  position  and  operating
results for the interim  periods.  The results of operations  for the six months
ended September 30, 1998 and 1997 are not necessarily  indicative of the results
of the entire year. The financial  statements  included  herein are presented in
accordance with the  requirements of Form 10-QSB and consequently do not include
all of the  disclosures  normally  made in the  registrant's  annual Form 10-KSB
filing.  These  financial  statements  should  be read in  conjunction  with the
financial  statements  and notes thereto  contained in the Company's Form 10-KSB
for the year ended March 31, 1998.

Certain  amounts for the periods ended June 30, 1997 and September 30, 1997 have
been reclassified to conform with the 1998 presentation.


Note 2 - Recently Issued Accounting Pronouncements
--------------------------------------------------

In June 1997, the FASB issued  Statement of Financial  Accounting  Standards No.
130, "Reporting  Comprehensive  Income" (SFAS 130), which establishes  standards
for  reporting  and  display  of  comprehensive   income,   its  components  and
accumulated balances.  Comprehensive income is defined to include all changes in
equity except those resulting from  investments by owners and  distributions  to
owners.  Among  other  disclosures,  SFAS 130  requires  that all items that are
required to be recognized  under current  accounting  standards as components of
comprehensive  income,  be reported in a financial  statement  that is displayed
with the same prominence as other financial statements.  Currently the Company's
only component,  which would comprise  comprehensive  income,  is its results of
operations. SFAS 130 is effective for financial statements for periods beginning
after  December  15,  1997,  and requires  comparative  information  for earlier
periods to be restated.


Note 3 - Stockholders' Equity
-----------------------------

Reverse Stock Split
-------------------

On April 1, 1998,  the  Company  filed with the state to amend its  articles  of
incorporation  to  reflect a 12 to 1 reverse  stock  split  that was  previously
approved by a vote of the shareholders. All prior period comparative information
has been restated to reflect the reverse stock split.

Private Placement
-----------------

On April 22, 1998, the Company  completed a private  placement of 300,000 shares
of  common  stock at $2.75 per  share.  The  Company  received  proceeds  net of
offering  costs of  approximately  $690,000 from the private  placement of which
$150,000 was placed in a joint account with the placement  agent for a potential
additional  private  placement,  of  which  $25,000  has  been  utilized  and is
reflected as deferred offering costs.

                                 F - 4


<PAGE>


                    ELDORADO ARTESIAN SPRINGS, INC.

                Notes to Unaudited Financial Statements


Note 3 - Stockholders' Equity (continued)
-----------------------------------------

Stock Option Plan
-----------------

On May 19, 1998,  the Company  registered  875,000 shares of common stock of the
Company pursuant to the 1997 stock option plan (the Plan). The Plan provides for
the grant of stock  options  to  employees,  directors  and  consultants  of the
Company.  From time to time, the board may grant options to advance  interest of
the Company.

Additionally, 346,500 options are outstanding that were issued to employees. All
of the options were issued with an option price of $2.75 per share,  fair market
value at the date of grant. Such options expire on September 10, 2007

Warrants
--------

In  connection  with the  private  placement,  the  Company  issued a warrant to
purchase  30,000  and  250,000  shares of common  stock at $3.30 and  $11.00 per
share, respectively. Both warrants expire on April 22, 2003.








                                 F - 5


<PAGE>


                    ELDORADO ARTESIAN SPRINGS, INC.


Item 2:  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION
AND RESULTS OF OPERATIONS

This filing contains certain  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act  of  1934  and  the  Company  intends  that  such  forward-looking
statements be subject to the safe harbors created thereby. These forward-looking
statements include the plans and objectives of management for future operations,
including  plans and  objectives  relating  to  services  offered  by and future
economic performance of the Company.

The forward-looking statements included herein are based on current expectations
that involve a number of risks and uncertainties that might adversely affect the
Company's  operating  results in the future in a  material  way.  Such risks and
uncertainties  include but are not limited to the  following:  ability to secure
debt and equity  financing,  interest  rate  fluctuations,  effects of  regional
economic and market  conditions,  labor and marketing  costs,  operating  costs,
packaging costs,  intensity of competition,  ability to obtain  additional water
rights, legal claims and the contingencies associated with year 2000 compliance.

Overview

Eldorado Artesian Springs,  Inc.  (Eldorado) is a Colorado based company that is
primarily  involved in the bottling and marketing of "natural"  artesian  spring
water.  The spring is located in the foothills of the Colorado  Rocky  Mountains
and is surrounded by thousands of acres of state and city park land,  assuring a
well protected source.  The artesian springs located on the Company's  property,
emanate from one of the most unique geologic  sources in the world. The water is
naturally purified as it rises up through many layers of sandstone under its own
artesian  pressure.  Eldorado  Artesian Spring water is bottled at the source in
its  natural  state  and is  not  chemically  treated  in  any  way.  Currently,
Eldorado's operations consist of its home/commercial delivery business (5 gallon
bottles)  and  the PET  (polyethylene  terephtalate,  a  premium  clear  plastic
container) consumer business.

Beverage  industry  analysts  reveal that bottled  water is the fastest  growing
major category in the entire industry.  The bottled water industry as whole is a
$3.9 billion business and is currently  growing at a rate of 9% to 10% per year.
The PET  segment of the bottled  water  industry  is  currently  a $600  million
business  and is growing at a much faster rate (at an  estimated  20% to 30% per
year) than the industry as a whole.  Analysts expect just the PET segment of the
industry to reach $3 billion in wholesale  sales over the next ten years,  which
is an indicated rate of growth of 17% annually.


                                 F - 6



<PAGE>



Results of Operations

Revenues  for the six  months  ended  September  30,  1998  increased  19.7%  to
$2,019,802 versus $1,687,171 for the same period in 1997. A substantial  portion
of the  increase in sales is due to  increased  volume to existing  customers as
well as from sales to new customers.  Sales of five gallon products increased by
18%, one gallon products  increased by 24% and sales of the smaller PET packages
increased by 48%. Five gallon products generated the majority of the increase in
overall revenues.  Revenues for the five gallon products  increased  $224,790 to
$1,524,377  for the period ending  September 30, 1998 versus  $1,299,587 for the
period ending September 30, 1997.

For the  first  six  months  of fiscal  1998,  cost of goods  sold was  $285,044
compared  to  $259,391  in  fiscal  year  1997  resulting  in gross  profits  of
$1,734,758, or 85.9% of sales, and $1,427,780, or 84.6% of sales,  respectively.
For the three months ended  September  1998,  Cost of Goods Sold was $161,207 in
1998  compared to $140,525 in 1997  resulting in gross  profits of $945,903,  or
85.4% of sales, and $777,792, or 84.7% of sales, respectively.  This increase in
gross  profit  for the  respective  six and three  month  periods  was due to an
increase in sales volume of five gallon  product which has a higher  margin.  In
addition, the Company's sales continue to increase in the higher margin home and
office sales.

For the first  six  months of fiscal  year 1998  compared  to the  corresponding
period in fiscal  year  1997,  total  operating  expenses  were  $1,591,368  and
$1,199,046, respectively, an increase of $392,322 or 32.7%. Salaries and related
expenses were $788,242 for the period ending  September 30, 1998, an increase of
19.7% over the same period of fiscal 1997 which was  primarily  attributable  to
the increase in sales. Selling, general and administrative expenses increased by
$216,314 or 50.7%. Advertising and promotional expenses increased by 46% the six
month  period in 1998  compared  to the  corresponding  period  of fiscal  1997.
Advertising and  promotional  expenses are associated with the both the home and
office delivery as well as the retail-size category. The increase in advertising
and  promotional  expenses was due to the  increased  expenses  associated  with
increased market penetration and brand awareness.  The Company plans to continue
to spend  significant  amounts in the future for  advertising  and promotions to
develop brand  recognition and increase market  penetration but no assurance can
be given that  increases  in  spending  will result in higher  sales.  Legal and
accounting  expenses  increased  $31,586 over the same period a year ago.  These
additional costs are associated with the private  placement on April 22, 1998 as
well as the proposed  secondary public  offering.  Depreciation and amortization
increased 68.9% and 40.7% for the six month and three months ended September 30,
1998, which was attributable to recent machinery and equipment purchases.

Net  interest  expense  increased  $3,214 for the first six months of 1998.  The
increase in  interest  expense was a result of  increased  borrowing  to finance
additional machinery and equipment.

The Company's  net income for the first six months of 1998 was $61,543  compared
to net income of $83,228 for the year ended March 31,  1998.  Net income for the
three months ended September 30, 1998 was $44,258.

                                 F - 7


<PAGE>




Liquidity and Capital Resources

On April 22, 1998, the Company  completed a private  placement of 300,000 shares
of  common  stock at $2.75 per  share.  The  Company  received  proceeds  net of
offering  costs of $688,750  from the private  placement  of which  $150,000 was
placed in a joint account with Mills Financial Services,  Inc. (the "Agent") for
a potential  additional  secondary stock offering.  The intention for the use of
proceeds of the private  placement include replacing a five gallon bottling line
to increase  capacity  from 160  bottles to 600 bottles per hour.  By the end of
September 1998, 100% of the bottling equipment was installed and being utilized.
Proceeds from the private  placement are being  utilized to expand the Company's
internal  sales and  distribution  capabilities.  In  addition,  the  Company is
actively looking to lease or construct a warehouse/distribution  facility in the
Denver, Colorado area in order to add additional warehouse space.

On May 19, 1998,  the company  registered  875,000 shares of common stock of the
Company  pursuant to the 1997 Stock Option Plan (the "Plan").  The Plan provides
for the grant of stock options to employees,  directors and  consultants  of the
Company.  As of September 30, 1998,  346,500 options are  outstanding  that were
issued to employees.

The  Company  has  traditionally   financed   operations  with  debt.  With  the
restructuring  of debt in June 1997,  the  Company  has been able to improve the
bottling/warehouse  facilities  by expanding  floor space and adding  additional
high  speed  bottling  equipment.  With the  proceeds  from a  secondary  public
offering as well as  additional  debt the  company  plans to continue to finance
capital expenditures.

Accounts  receivable  increased  18.7%  to  $597,830  for the six  months  ended
September  30,  1998.  This  represents  52.6 days  sales in  receivables.  This
increase is a concern for management and serious efforts have been made to bring
receivables  back to the targeted  level of 38 days.  Expenses for bad debts are
expected to be 0.07% of revenues for the year end March 31, 1999 and  management
has taken this into account for the six months ended September 30, 1998.

Management  has  implemented  a water  rights  augmentation  program  to acquire
additional  water rights in order to provide for a forecasted  increase in water
sales.  Management  is currently in  negotiations  to acquire  additional  water
rights.  The acquisition of these water rights will be at a significant  cost to
the Company.

The Company also plans to lease or purchase a plastics  molding facility and the
necessary  molds to  produce  their own  supply of PET  bottles  and to sell the
bottles to other  companies.  In order to handle the increase in  business,  the
Company will need to acquire additional off-site warehouse space. The Company is
looking to either lease or construct  space in order to store raw  materials and
finished goods. In addition, the Company will be improving the existing bottling
and office facilities.

                                 F - 8


<PAGE>



The Company is poised to achieve  significant  growth via the  expansion  of its
retail PET business into new geographic markets.  The PET segment of the bottled
water business is the fastest  growing  segment of the bottled water market.  In
order to accomplish broader  distribution of the PET products,  the Company will
need  additional  working  capital for marketing  investments for such things as
slotting  fees and  marketing  promotions.  As the Company grows and expands its
retail  distribution  there will be a need to add an additional  brand marketing
executive.


Year 2000 Compliance

The Company is in the process of developing and finalizing  plans to address the
Year 2000 computer  problem and to begin converting their computer systems to be
Year 2000  compliant.  The Year 2000 problem is the result of computer  programs
being written using two digits rather than four to define the  applicable  year.
The Company  presently  believes  that with  upgrades to existing  software  and
possibly  some  replacement,  the Year 2000  problem  will not pose  significant
operational  problems for their computer systems.  However, if such upgrades and
replacements are not completed timely or effectively implemented,  the Year 2000
problem  could have a material  impact on the  operations  of the  Company.  The
Company  expects to incur internal  staff costs and consulting  fees, as well as
the cost of the  software  upgrades  and  replacement  as a part of this effort.
However,  until the  Company's  plans are  finalized,  management is not able to
reasonably estimate the costs of achieving Year 2000 compliance.






                                 F - 9


<PAGE>



                    ELDORADO ARTESIAN SPRINGS, INC.



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.  Changes in Securities

None

Item 3.   Defaults Upon Senior Securities

There have been no defaults on any  securities.  The Company has no  obligations
with regard to dividends and no preferred stock.

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

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

None





                                F - 10


<PAGE>


                              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


                                F - 11