1


                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                  FORM 10-KSB
                                 ANNUAL REPORT


  PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT OF 1934
                 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997


                   FIRST NATIONS FINANCIAL SERVICES COMPANY
            (Exact name of registrant as specified in its charter)


                                   DELAWARE
        (State or other jurisdiction of incorporation or organization)

          333-1612                              76-0481583
     (Commission  File  Number)          (IRS  Employer Identification Number)

                      C/O MR. GARY N. PELEHATY, PRESIDENT
                   FIRST NATIONS FINANCIAL SERVICES COMPANY
                          CHRISTIANA EXECUTIVE CAMPUS
                        220 CONTINENTAL ROAD, SUITE 310
                          NEWARK, DELAWARE 19713-4314
                   (Address of principal executive offices)

                                (302) 292-2100
             (Registrant's telephone number, including area code)

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                         Common Stock $.001 par value

     Check  whether the issuer:  (1) filed all reports required to be filed by
Section  13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months,  and  (2) has been subject to such filing requirements for the past 90
days.
          X              Yes                                  No
          -

     Check  if there is no disclosure of delinquent filers in response to Item
405  of  Regulations  S-B  contained  in  this form, and no disclosure will 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  were  $88,377.

     The  aggregate market value of the voting stock held by non-affiliates of
the  Registrant  as  of  December 19, 1997 was zero.  The voting stock is 100%
owned  by  one  insider.

     The  number  of shares of the Registrant's common stock outstanding as of
December  19,  1997  was  1,000.


                                       2
                                       9
                                  FORM 10-KSB

                   FIRST NATIONS FINANCIAL SERVICES COMPANY
                   ========================================



                                    PART I

ITEM  1.          DESCRIPTION  OF  BUSINESS

     First  Nations  Financial  Services  Company  was organized as a Delaware
corporation  on  November  16,  1995.

OVERVIEW

     The  Company  has  identified  two interrelated segments of the financial
services  industry  to  which  it  is  committed  to  become  a  significant
participant.    The  first segment of the industry upon which the Company will
focus  and concentrate its resources is commercial and business lending, which
includes  real  estate  and  equipment financing.  The second component of the
Company's  overall strategy is the sale and securitization of loans originated
by  the  Company.

PRIMARY  BUSINESS

     The  Company's present focus is limited to commercial and business loans.
This  phase  will  expand to commercial and business lending that does require
licenses when, and only when, the necessary licenses are acquired.  Management
does not believe the present lack of licenses will materially adversely affect
the  Company's  ability  to do business and does not know of any impediment or
disqualification for the issuance of any licenses which may be required in the
future.

     The  Company  has received preliminary expressions of interest to finance
approximately  $5  Million  of projects ranging from $500,000 or more.  If the
Company  successfully  closes  one  or  more  of  the  possible  projects, the
anticipated  interest rate payable by the borrower will be 10% or more and the
borrower will pay to the Company a loan origination fee of not less than 1% of
the original principal, or in lieu of an origination fee a negotiated interest
rate,  as  well  as  the  costs of document preparation, appraisal cost, title
insurance  premiums,  attorneys  fees  and  other  third  party  expenses.

COMMERCIAL  AND  BUSINESS  LOANS

     The Company intends to make loans to owners of businesses who the Company
determines  has  the  business  purpose,  motivation, cash flow and collateral
required  to  repay  the  obligation.

     Collateral.    The  Company  intends  to  make  commercial  loans  to
corporations,  partnerships,  sole  proprietors and other entities.  All loans
may be collateralized by one or more of the following:  (i) a mortgage lien on
a  principal  residence  or  some other parcel of real property, (ii) a junior
mortgage  lien  on  a parcel of real property, (iii) marketable securities, or
(iv)  other  real  or personal property.  Commercial lending may also take the
form  of  the lease of equipment or a loan secured by other personal property.
Real  property  eligible  for  collateral  includes  single family residences,
office  and apartment buildings, mixed use buildings, unimproved land, motels,
hotels  and  restaurant  buildings  owned  by the borrower, a principal of the
borrower,  or  a  guarantor of the borrower.  The Company generally intends to
further  collateralize  its  loans by obtaining a lien on the borrower's other
tangible  and  intangible assets by filing appropriate Uniform Commercial Code
financing  statements  and,  if  possible, obtain personal guarantees from the
Borrower.   At September 30, 1997, the Company had unsecured outstanding notes
receivable  from  related  entities  in  the  amount  of  $858,813.

     The  Company  intends  to  make  loans  for  various  business  purposes
including,  but not limited to, working capital, business expansion, equipment
or  real  estate  acquisition  and  debt-consolidation.

     Strategy.    The  Company  markets  its  business  loans through existing
personal  relationships with management and members of the Board of Directors.

     Lending  Policies  and  Practices.    Summarized below are certain of the
lending  policies  and practices which the Company follows.  Such policies and
practices  will  be  altered,  amended and supplemented as conditions warrant.
The  Company  has  the  right  to make changes in its day to day practices and
policies  in  its  sole  discretion.

     The  Company  keeps  its  interest and other charges competitive with the
lending  rates of other lenders.  Generally, loans are made at fixed rates for
fixed  terms.    Generally, the Company intends to compute interest due on its
outstanding  loans  by  the  simple  interest  method.  Generally, the Company
intends  to  require  that  title insurance be obtained in connection with its
loans  and  to  permit  borrowers  to  prepay  such loans.  Where permitted by
applicable  law,  the  Company  may  impose  a  prepayment penalty.  Whether a
prepayment  penalty  is  imposed  and  the  amount of such penalty, if any, is
negotiated  between  the  Company  and  the  individual  borrower  prior  to
consummation  of  the  loan.

     Generally,  the  Company  will  make a loan collateralized by residential
real  estate  only  if  the  overall loan to value ratio (based on independent
appraised  fair  market  value) on the properties collateralizing the loans is
less  than  ninety  (90%)  percent.    Generally, the Company will make a loan
collateralized by commercial real estate where the overall loan to value ratio
(based  on  independent appraised fair market value) is less than ninety (90%)
percent.    Occasionally,  exceptions  to  these maximum levels may be made if
other  collateral  is  available  or  if there are other compensating factors.

     Servicing  of  Loans.  Generally, the Company will not be responsible for
servicing  loans.   The Company will subcontract servicing of the loans in its
portfolio  or  loans  which  will  be  securitized in accordance with specific
servicing  procedures.  In servicing its loans, the Company, itself or through
a  subcontractor,  initiates  the  collection process one day after a borrower
misses  a monthly due date.  When a loan becomes forty-five (45) to sixty (60)
days  delinquent,  it  will  be  transferred  to loan work-out personnel.  The
work-out  personnel  attempt to reinstate a delinquent loan, seek a payoff, or
occasionally  enter  into  a  loan modification agreement with the borrower to
avoid  foreclosure.    If  a  borrower declares bankruptcy, the matter will be
immediately  referred  to  counsel.

     Purchase  of  Existing  Loans.    In  the  normal course of business, the
Company  may  purchase  business/commercial  loan portfolios from individuals,
banks,  other  commercial  lenders and other sources of commercial loans.  Any
loans  so  purchased  would  be  collateralized  by real estate located in the
Company's  market  area.    Each  such individual loan would be reviewed by an
executive  officer  of the Company prior to acquisition to see if the loan and
all  related  matters  conform to the Company lending procedures and policies.

     Competition.    As a commercial lender, the Company competes against many
other  lenders,  many  of  which  have  larger  capitalization and better name
recognition.    The Company will have significant competition in the equipment
leasing  industry.    The  Company  competes with banks, leasing and financial
companies  with  greater  resources,  capitalization  and  name  recognition
throughout  its  market  area.  Other companies participating in the equipment
leasing  industry will have the ability to enter into leases which contemplate
the  payment  of  funds  sufficient  to recover the lessor's investment in the
equipment  plus  a  profit  over the term of the lease which does not give the
lessee  any  option  to  purchase  the  equipment.  Competitors may also lease
equipment under renewable leases which do not contemplate full recovery of the
lessor's  original  costs  during  their initial term.  Therefore, competitors
have  many  ways  in  which to compete which are not available to the Company.

     Leasing.   Generally, the Company's leases will be two types: (i) finance
leases  which have a term of twelve (12) months or more and provide a purchase
option  exercisable by the lessee at $1.00 at the termination of the lease and
(ii)  fair market value or true leases which have a similar term but provide a
purchase  option  exercisable  by  the  lessee at the fair market value of the
equipment  at  the  termination  of  the  lease.

     Strategy.    The Company primarily intends to obtain its business leasing
customers  through  equipment  manufacturers,  brokers  and  vendors with whom
directors  or  management  have  a  relationship.

     Leasing  Policies  and Practices.  Generally, the Company's interest rate
and  other  terms  and  conditions  of its leases will be competitive with the
leasing  terms  of other leasing companies in the area. The leases will be for
terms of twelve (12) to sixty (60) months and structured with purchase options
whose  exercise  prices  range  from  $1.00  to  the  fair market value of the
equipment  at  the  time  of  the  lease  termination.

     All  of  the  leases  will be secured by the leased equipment or, in some
cases,  other  or  additional  collateral.    However,  creditworthiness  and
financial  strength  of the lessee are an important criteria to be utilized by
the  Company  in determining to enter into a lease arrangement with a specific
lessee.    It  is  anticipated  that  in  the  future, the Company may develop
relationships with third party purchasers of leases and will sell a portion of
the  leases it makes to such third parties.  The sale of leases to third party
purchasers  may  or may not require the Company to retain the servicing rights
to  such  leases.

     The  above  policies  and  practices may and will be altered, amended and
supplemented  as  conditions  and  circumstances warrant.  The Company has the
right  to  make  changes  in its day to day practices and policies in its sole
discretion.

     Service  Area.    The  Company  intends  to market and originate business
equipment  leases  throughout the United States.  The Company will conduct its
business  operations  from  the Company's main offices.  As markets develop in
other  areas,  the  Company  may open additional offices within or outside its
present  service  area.

SECURITIZATION  OF  LOANS

     The  Company  anticipates  that  it will build portfolios of business and
commercial  loans  (which  include  business  leases)  and  enter  into
securitizations of all or part of these portfolios.  The Company believes that
a securitization program provides a number of benefits by allowing the Company
to  create  an  additional  profit center, diversify its funding base, provide
liquidity  and  lower  its  cost  of  funds.

     The  diversification  of  its  funding  base through securitization is an
objective  of  the Company.  Generally, a securitization involves the transfer
by  the  Company  of  loans representing a series of loans to a single purpose
trust  in  exchange  for  certificates  issued by the trust.  The certificates
represent  an  undivided  ownership  interest  in the loans transferred to the
trust.    Typically,  the  certificates  will  consist  of  a  class of senior
certificates,  a  class  of subordinated certificates and a residual interest.
In  connection  with  the  securitization, the senior certificates are sold to
investors and the subordinate certificates and residual interest are typically
retained  by the Company.  As a result of the sale of the senior certificates,
the  Company will receive a cash payment representing a substantial portion of
the principal balance of the loans held by the trust.  The senior certificates
will  entitle  the holder to be repaid the principal of its purchase price and
the  certificates will bear interest at a stated rate of interest.  The stated
rate  of  interest will typically be substantially less than the interest rate
required to be paid by the borrowers with respect to the underlying loans.  As
a  consequence,  the  Company  is  able  to  receive cash for a portion of its
portfolio  and  to  pay  the  principal  and  interest  required by the senior
certificate  with the cash flows from the underlying loans owned by the trust.
However,  since the interest in the loans held by the Company (the subordinate
certificate  and  the  residual  interest)  is  subordinate  to  the  senior
certificate,  the Company retains a portion of the risk that the full value of
the  underlying  loans  will not be realized.  Additionally, the holder of the
senior  certificates  will  receive  certain additional payments on account of
principal  in  order  to  reduce  the  balance  of  the senior certificates in
proportion to the subordinate certificate held by the Company.  The additional
payments of principal are designed to increase the senior certificate holder's
protection  against  loan  losses  by  preserving  the  availability  of  the
subordination  provided  by  the  subordinate  certificates.    In the typical
subordination  structure,  the Company, as the holder of the residual interest
in  the trust will be entitled to receive all of the remaining interest in the
loans  at  the  time  of  the  termination  of  the  trust.

     In  order  to  securitize pools of loans, the Company believes it will be
necessary  to  aggregate  similar  loans  into a common offering.  The Company
expects  that  the  minimum dollar amount necessary to effectively justify the
origination  and  offering costs is in the range of $7.5 million for a private
offering  and $25 million for a public offering.  The Company expects to enter
into  the  securitization  market  during  the  first  quarter  of 1999 and is
conditioned  on  the  Company's  ability  to  develop  the  necessary business
reputation  and  industry  relationships.

     In order to successfully securitize its loans, the Company must develop a
reputation  in the financial community and with the commercial rating agencies
as having the ability to acquire and service, or arrange for the servicing, of
loans  which  are  intended  to  become  a  part  of the securitized pool.  In
addition,  the  Company  must  develop relationships with one or more banks or
trust  companies  which  are  qualified  to act as owner trustee and indenture
trustee  in  order  to qualify for participation in the securitization market.
Any  successful  securitization  of  loans  is,  therefore,  dependent  upon
assembling the several necessary participants including the indenture trustee,
credit  enhancement  facility,  owner trustee and the underwriter or placement
agent  who  will  ultimately  sell the securitized instrument into the capital
markets.    The ability to demonstrate expertise in the necessary functions to
securitization  and  to  attract the necessary industry participants may be an
expensive  and  time consuming process for a Company whose management team has
no  experience  in these matters.  However, based upon preliminary discussions
by the Company with representatives of the several necessary participants, the
Company's  forecast  of  entry into the securitization market during the first
quarter  of  its  second  year  of  operations  is  reasonable.

GOVERNMENT  REGULATION  AND  LICENSING

     Rules and Regulations.  The Company's motor vehicle lending business will
be  subject to numerous federal and state consumer protection laws and related
regulations  which  impose substantial requirements upon lenders and servicers
involved  in  consumer  finance.

     Licensing.   The Company does not need any further government approval or
other  licenses  for  its present primary business, commercial lending, in the
states  in  which  it presently proposes to operate.  Furthermore, the Company
does  not  and  will not need federal or local government approval or licenses
for  the  purchase or securitization of the commercial loans.  However, as the
geographic  coverage of the Company's commercial lending business increases in
the future some states will require licensing for the Company to offer some of
its mortgage banking services.  In such event the Company will seek to acquire
such  licenses.

     As  of  the  date  of  this  annual  report, the Company is licensed as a
mortgage  lender  in the State of Florida and has not applied for any licenses
in  any  other  state.  Management of the Company does not believe the lack of
licenses will materially adversely affect the Company's ability to do business
because  there  are  ample  investment opportunities in unlicensed activities.
Management  does not know of any impediments, disqualification or other reason
why  the  Company will not qualify for any licenses it may need in the future.

EMPLOYEES

     The executive officers of the Company devote substantially all their time
to operations of the Company for no compensation until the Company's cash flow
is  adequate  to  cover  market level compensation.  Bookkeepers, secretaries,
administrative  assistants and support staff are presently employed by William
T.  Juliano,  or  one  of  his  affiliates,  and  he  will make their services
available  without  cost  to  the Company until cash flow from operations will
cover  their  costs,  or  in  lieu  fund,  these operations until cash flow is
sufficient.  The Company believes its relationship with the employees is good.


ITEM  2.          DESCRIPTION  OF  PROPERTY

     The  Company  presently  does  not  hold  title  to any real estate.  The
Company  currently receives the use of certain free office space funded by Mr.
William  T.  Juliano.    On  April 15, 1997, the Company entered into a twelve
month lease agreement with a third party for 1,333 square feet of office space
in Newark, Delaware. Rent expense for the fiscal year ended September 30, 1997
associated  with  this  lease  amounted to $12,230. Monthly rental charges are
approximately  $2,027.

     The  Company  has  filed  an application for registration of its name and
logo  as  a  service  mark  with  the  U.S.  Patent and Trademark Office.  The
application  is  pending.


ITEM  3.          LEGAL  PROCEEDINGS

     The  Company  is  currently  involved in trademark opposition litigation.
This  opposition  litigation  is  an  administrative proceeding concerning the
Company's  service  mark and federal registration thereof.  Management intends
to  vigorously  defend  this  opposition  litigation.


ITEM  4.          SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITIES HOLDERS

     No matters were submitted to a vote of the securityholders of the Company
during  the  year  ended  September  30,  1997.


ITEM  5.          MARKET  FOR  COMMON  EQUITY  AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock does not trade on any market, therefore, there
is  currently  no  public  trading  market  for shares of the Company's common
stock,  par  value  $.001 (the "Common Stock").  As of the date of this annual
report, Thomas E. Juliano is the owner of all the outstanding shares of Common
Stock.    The  Company  has  never  declared  a  dividend on the Common Stock.

     As  a  result  of  net  losses,  the  Company has a cumulative deficit of
$99,003  as  of September 30, 1997; accordingly, the Company may be prohibited
by  legal  restrictions  on  capital  from  paying  cash  dividends  for  the
foreseeable  future.    While  any  determination  as  to  the payment of cash
dividends  will  depend  upon  the  Company's  earnings,  general  financial
condition,  capital needs, and other factors, the Company presently intends to
retain  any earnings to finance working capital needs and expand its business,
and therefore does not expect to pay cash dividends in the foreseeable future.

     Since inception, the shareholders of the Company have contributed capital
amounting  to  $1,129,180 and certain operating space, furniture, fixtures and
equipment,  and services without cost to the Company.  See Item 2, Description
of  Property, Item 7., Financial Statements, Footnote F, and Item 12., Certain
Relationships  and  Related  Transactions.

ITEM  6.          MANAGEMENT'S  DISCUSSION  AND ANALYSIS OR PLAN OF OPERATIONS

CAUTIONARY  STATEMENTS  FOR  PURPOSES  OF  FORWARD-LOOKING  STATEMENTS

     Certain  information  contained  in  this  Annual  Report  on Form 10-KSB
(particularly that contained in this Part I., Item 6. "Management's Discussion
and  Analysis  or  Plan  of  Operation")  may  be deemed to be forward-looking
statements  within  the  meaning  of Section 21E of Securities Exchange Act of
1934  and  is  subject  to the "Safe Harbor" provisions of that section.  This
information  includes,  without  limitation,  statements  concerning  future
revenues,  future  earnings, future costs, future margins and future expenses;
anticipated  interest  rates  and yields, releases and technological advances;
the  future  mix  of  business and future asset recoveries; and future demand,
future  industry conditions, future capital expenditures, and future financial
condition.    These statements are based on current expectations and involve a
number  of  risks  and  uncertainties.  Although the Company believes that the
expectations  reflected  in such forward-looking statements are reasonable, it
can  give  no  assurance  that  such  expectations  will  prove to be correct.

     When  used  in this report, the words "anticipate," "estimate," "expect,"
"may,"  "project"  and  similar  expressions  are  intended  to  be  among the
statements  that identify forward-looking statements.  Important factors which
could  affect  the Company's actual results and cause actual results to differ
materially from those results which might be projected, forecast, estimated or
budgeted  by  the  Company in such forward-looking statements include, but are
not limited to, the following:  inability of the Company to sell its unsecured
senior  subordinate  notes  at  attractive  interest  rates;  inability of the
Company  to  loan  the  funds  at  attractive  interest  rates; fluctuation of
financial  performance due to the effect on gross profit margins by the yields
on  investments  and  borrowing  costs  in  any  period;  the  uncertainty  of
conditions  affecting  the  real estate industry; credit risks associated with
loans  to  customers;  retention  and  financial condition of major customers;
effects  of  future  costs;  collectibility  of  receivables;  effects  of
governmental  regulations;  future  levels and timing of capital expenditures;
the  risk  of  a disruption in credit markets; the level of competition in the
financial  services  industry;  risks associated with foreign sales; potential
challenges  to  the Company's intellectual property rights; and the dependence
on  and  retention  of  key  personnel.

     The  Company  undertakes  no obligation to publicly release the result of
any  revisions  to  any  such  forward-looking statements which may be made to
reflect  the  events  or circumstances after the date hereof or to reflect the
occurrence  of  unanticipated  events.

RESULTS  OF  OPERATION

     Fiscal  year  ended  September  30,  1997,  compared  to the period ended
October  8,  1996  the  Company's  revenues  from  related  parties  increased
approximately 26% to $88,377, compared to $70,000 for the period ended October
8,  1996.   This increase resulted for increased lending activity with related
parties.  Of the $88,377 in related party revenue, $27,942 remains uncollected
at September 30, 1997 and is reflected as interest receivable, related parties
on  the  Company's  balance sheet.  For the year ended September 30, 1997, the
Company  incurred  a net loss of $63,560 compared to a net loss of $35,443 for
the  period  ended  October  8,  1996.    The increase in the fiscal 1997 loss
resulted from increased advertising and other general and administrative costs
associated  with marketing the Company's subordinated debentures and operating
the  Company  for  a  full  year.

PLAN  OF  OPERATION  -  OVERVIEW

     The  Company's  objective  is to become a significance participant in two
interrelated  segments  of  the  financial  services  industry.    The Company
believes  that  it  can achieve its objective by its commitment to servicing a
market  niche  which  is  not  adequately  serviced  by  commercial  banks  or
traditional lending sources.  In servicing its market, the Company will stress
the  importance  of  identifying  profitable  lending  opportunities and quick
closing.

     The  income  generated  from the Company's loan portfolio will be used to
pay  principal and interest on the Notes, related operating costs and expenses
of  the  Company.  The  earnings  on  the  loans and other assets owned by the
Company  and  the  interest  cost  of  the  Notes will determine the Company's
results  of  operations  in  the  future.    The Company believes there are no
changes,  trends  or  anomalies  which  will  materially  adversely affect the
anticipated  delinquency  and  loss  experience  of  the  loans.

PLAN  OF  OPERATION  FOR  NEXT  12  MONTHS

     Until  the  Company receives proceeds from the sale of Notes, invests the
proceeds and receives a return on the investment, the Company's only source of
funds  for  advertising,  marketing  and  promotion will be its limited equity
capital  and the income derived from its investments in notes receivables with
related  parties.    Therefore,  the  Company will expend significant cash and
incur  additional losses in the early months of operation to cover its cost of
developing  and  operating  the  business.

     The  Company  anticipates that proceeds from the sale of Notes will begin
slowly and increase as the Company's marketing plan takes effect.  Although no
assurances  can  be  given,  the  Company's  first year forecast assumes total
proceeds  from  the sale of Notes in the range of $35,000,000.  Without regard
to  the  amount  of  Notes  sold,  management  believes  that  the Company has
sufficient  resources  to pay its operating expenses for the next 12 months of
operations  because  the  Company's  executive  office  and  the furniture and
equipment located in the space is furnished by Mr. Juliano without cost to the
Company.    On  April  15, 1997, the Company entered into a twelve month lease
agreement  with a third party for 1,333 square feet of office space in Newark,
Delaware. Rent expense for the fiscal year ended September 30, 1997 associated
with  this lease amounted to $12,230. Monthly rental charges are approximately
$2,027.    The executive officers of the Company will devote substantially all
their time to operations without compensation until the Company's cash flow is
adequate  to cover market level compensation and all other operating expenses.

     The  Company  will  initially  sell  Notes  only  through  its employees.
However,  the  Company  is  likely  to  engage  the  services  of  one or more
broker-dealers during the first year of operations.  In order to arrive at its
forecasted  Note  sales  for  the  first 12 months, management had preliminary
discussions  with  several  small  broker-dealers  and  examined the amount of
similar  debt  instruments sold by two comparable issuers.  The sales of other
issuers  was  discounted  substantially  to  account  for  the  differences in
experience  at raising funds.  Management believes its estimates are realistic
and  conservative.    A part of the Company's plan to sell the Notes is direct
personal contact with selected broker-dealers in the states where the offering
is registered.  The broker-dealers will be selected based upon their number of
registered  representatives and access to financial products comparable to the
Notes  offered  by  the Company.  Management believes that it will fill a need
for broker-dealers identified by its selection process because each have a few
clients  for whom the Notes are suitable investments and do not otherwise have
the  ability  to  participate  in  a  similar  offering.

     The  following  forward-looking  table  is  the  Company's  present  best
reasonable  estimate  of  the possible use of different increments of proceeds
from  the offering.  Numerous uncertainties exist in estimating the amount and
use  of  future  proceeds.    The  accuracy of any estimate is a result of the
quality  of  available  market  data, interpretation of the data, and business
judgment.   Actual results after the date of an estimate may indicate the need
to  revise  the  estimate.    The  quantity,  quality,  yield  and category of
available  loans  and other investments cannot be accurately predicted as well
as  changes  in  general economic conditions and interest rates.  Accordingly,
the  actual use of proceeds set forth in the following table may be materially
different  from  the  actual  use  of  proceeds.

<TABLE>
<CAPTION>

                       Time after date of Debt Issuance
                       --------------------------------



Type Investment              Three       Months       Six        Months
-------------------------  ----------  ----------  ----------  -----------
                            Case 11     Case 22      Case 1      Case 2
                           ----------  ----------  ----------  -----------
        <S>                        <C>         <C>         <C>         <C>
Commercial loans
   and leases3 . . . . . .  $2,600,000  $5,000,000  $5,000,000  $ 9,850,000

Securitization. . . . . .         -0-         -0-         -0-          -0-

General and
   Administrative Costs4            -0-         -0-         -0-       50,000

Offering expenses
   sales commissions 5%5     150,000     275,000     250,000      525,000

   other offering expense     138,000     138,000         -0-          -0-

Uninvested proceeds . . .     112,000      87,000      50,000       75,000
                           ----------  ----------  ----------  -----------

     Total Use of
         Proceeds . . . .  $3,000,000  $5,500,000  $5,300,000  $10,500,000
                           ==========  ==========  ==========  ===========
</TABLE>





Type  Investment          Nine          Months          One          Year
----------------          ----          ------          ---          ----
                          Case 1        Case 2         Case 1       Case 2
                          ------        ------         ------       ------

Commercial  loans
   and  leases     $9,350,000     $20,050,000     $16,050,000     $33,100,000

Securitization     -0-               -0-                -0-              -0-

General  and
   Administrative 
      Costs4         50,000          50,000          50,000          50,000

Offering  expenses
   sales  commissions
        5%5          500,000       1,075,000        850,000       1,750,000

   other  offering
       expense          -0-          -0-          -0-         -0-

 Uninvested proceeds     100,000     325,000     50,000     100,000
                          -------     -------     ------     -------

 Total  Use  of
     Proceeds      $10,000,000     $21,500,000   $17,000,000   $35,000,000
                   ===========     ===========   ===========   ===========



__________________________
1  Worst  case.
2  Most  likely  case.
3  This  category  includes commercial first and second mortgage loans ranging
from  $50,000  to  $3,500,000  or  more.
4  The  executive  officers  of  the  Company  will devote substantial time to
operations   without compensation until the Company's cash flow is adequate to
cover  market  level  compensation  and  all  other  operating  expenses.
5   Assumes  sale  by  broker-dealers  which  have  not  yet  been  identified.

     The Company presently has received preliminary expressions of interest to
finance  projects ranging from $500,000 or more.  The Company anticipates, but
is  not  assured, that the initial proceeds from the sale of Notes may be used
to  fund  the  commercial  real  estate  investment  opportunities  which  are
tentatively  available  or  other similar investments which do not require any
state  license.  In such event, the yield will be below the Company's expected
average  rate  of  interest income but the credit will be high quality and the
origination  cost  will  be  minimal.

     The  Company  forecasts  a  cost of funds in the range of 9.4% per annum,
after  offering  and selling expenses, and net investment yield from its total
portfolios  of  commercial  loans  after  a  reasonable  reserve  for  losses,
delinquencies  and  servicing costs, in the range of 15.75% [currently earning
12.75%  with  related  entities].   Thus, the positive spread on the Company's
loan portfolio is forecasted to be approximately 6.35%, or $2,222,000 per year
when  the  projected  first  year  Note  proceeds (before deductions for costs
reflected  above)  of  $35,000,000 are fully invested.  After allowing for the
time  to  market  the  Notes,  receive  and invest the proceeds, the Company's
financial  model  assumes average invested proceeds for the first 12 months of
$15,000,000  and  income  before operating expenses of approximately $970,000.
Because the Company's staffing needs are driven by the amount of Note proceeds
received  and  funds available for investment, additional operations personnel
will  be  hired  at  a  rate  to  match  receipt  and investment of Note sales
proceeds.    However,  the  Company  believes  that  salaries,  general  and
administrative,  and  other  operating  costs  for  the first 12 months at the
projected  level  of  business  should  not  exceed  $600,000.

     The  Company intends to maximize its interest and fee income to be earned
on  its  loan portfolio by selling loans from its portfolio to unrelated third
parties  and  by  securitizing  all  or  a  portion  of  its portfolio.  These
transactions  are  intended  to  provide an additional source of liquidity for
lending  activities.

YIELD  ASSUMPTIONS

     Annual  rates are expected to range from a low of 10% for higher quality,
low  risk  commercial  real  estate  and business loans.  The average yield on
commercial  loans  and  leases  is  assumed  to  be  10% or more.  Because the
Company's  initial  primary  business  will be limited to commercial loans and
leases,  the  positive  spread  on  the  Company's  loan  portfolio  will  be
substantially  lower  than  the  spread expected when the projected first year
note  proceeds (before deductions for costs reflected above) of $35,000,000 is
fully  invested.    Annual  investment yield includes reserves for loan losses
which have been calculated by examining the loan loss reserves and actual loss
experience of companies with loan portfolios similar to the loans contemplated
by the Company.  Because management of the Company has limited experience with
originating,  servicing and managing a loan portfolio similar to the portfolio
intended  by  the  Company,  management will continually monitor its loans for
delinquencies  and  potential losses in order to establish proper reserves and
predict  actual  losses.

SOURCES  OF  INCOME

     The  Company will derive income from four basic sources: (i) interest and
other  charges  paid on its loans, (ii) loan origination fees, (iii) a limited
amount of prepayment penalties, and (iv) securitization of loans.  The Company
does  not  anticipate  significant  income  from  prepayment  of  loans in its
portfolio  principally because of the fees payable upon prepayment.  Thus, the
Company  expects  the asset/liability maturity risk arising out of prepayments
to  be  minimal  even  in  periods  of declining interest rates because of the
substantial  prepayment penalties.  The Company anticipates that substantially
all  of its loans will be made at fixed rates.  However, the Company's cost of
funds  will  be  sensitive  to  changes in long and short term interest rates.
Therefore,  a  rise  or fall in the general interest rate market will have the
effect  of  increasing  or decreasing the spread which the Company anticipates
between  the cost of funds on its short and medium term Notes and the interest
earned  on  its  loan  portfolio.

     In  order  to  minimize  the  interest  rate risk, the Company intends to
match, to the extent possible, maturities of its loan portfolio and maturities
of  the  Notes.   There will be no interest rate risk in connection with Notes
which  mature  at  the  same time as the same dollar amount of portfolio loans
because the obligation to pay interest and the offsetting interest income will
terminate  at  the  same time.  Therefore, proceeds from newly issued Notes at
current  market  interest  rates  may  be used to fund new loans at comparable
market  interest  rates.    To  the  extent  that  the  loan maturities are of
significantly  longer  term  than  the Note maturities, the Company intends to
manage  the  interest  rate  risk by selling whole loans in the secondary loan
market  or  securitizing  pools  of  loans  for  sale in the public or private
capital  markets and reinvesting the funds in loans with maturities that match
maturities  of  the same dollar amount of Notes.  If the Company is successful
it  its  interest  rate  management  strategy,  interest  rate  risk  will  be
substantially  reduced  or  eliminated  entirely.

SOURCES  OF  CAPITAL  AND  LIQUIDITY

     The  proceeds  of the sale of the Notes is the primary source of funds to
meet  the  Company's  liquidity  requirements.  The proceeds of the Note sales
will  be used to fund general operating and lending activities.  After receipt
and  investment  of  the  Note  proceeds,  the  Company's  primary  sources of
liquidity  will  be payments on the loans and the secondary source will be the
equity  capital  of  the  Company  as  of  the  date  of  this  annual report.

     The  Company  intends  to meet its obligations to repay the Notes as they
mature with income generated from its lending activities, funds generated from
repayment  of  outstanding  loans,  extensions  of maturing Notes and new debt
financing.    There  can be no assurance that the Company will be able to sell
the  Notes  at  a  rate  that will permit growth and expansion at the expected
levels  or  to satisfy future debt obligations.  If all of the Notes are sold,
the Company will have debt in the amount of $50,000,000 and only $1,129,180 in
equity which has been provided by the shareholders of the Company.  Therefore,
substantially  all  the  risk of loss will be borne by the Noteholders because
for  approximately  every  $1.00  at  risk by the shareholders of the Company,
$50.00  is  at  risk  by  the  Noteholders.

     The Company will continue to invest its $1,129,180 of presently available
equity  capital without regard to the amount of Notes sold.  The proceeds from
the  sale  of  any amount of Notes will increase the Company's ability to make
investments.   It is anticipated that such additional investments will produce
yields  in excess of the interest payable under the terms of the Notes and the
maturities will be timed to coincide with maturities of the Notes.  Therefore,
the  Company  believes it will be able to timely pay interest and principal on
any  amount  of  Notes  sold.


ITEM  7.        FINANCIAL STATEMENTS -- SEPTEMBER 30, 1997 AND OCTOBER 8, 1996


                                      11





                         INDEPENDENT AUDITOR'S REPORT






To  the  Board  of  Directors
First  Nations  Financial  Services  Company
Newark,  Delaware


We  have  audited  the  accompanying balance sheets of First Nations Financial
Services  Company  (a  development stage company) as of September 30, 1997 and
October  8,  1996,  and  the  related  statements  of  operations,  changes in
shareholders'  equity,  and  cash  flows  for  the  periods  then ended. These
financial  statements  are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted auditing
standards.  Those  standards  require  that  we  plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material  misstatement. An audit includes examining, on a test basis, evidence
supporting  the  amounts and disclosures in the financial statements. An audit
also  includes  assessing  the  accounting  principles  used  and  significant
estimates  made  by  management,  as  well as evaluating the overall financial
statement  presentation. We believe that our audits provide a reasonable basis
for  our  opinion.

In  our opinion, the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of First Nations Financial
Services Company at September 30, 1997 and October 8, 1996, and the results of
its  operations  and  cash flows for the periods then ended in conformity with
generally  accepted  accounting  principles.




                         /s/HARPER  &  PEARSON  COMPANY


Houston,  Texas
December  19,  1997

See  accompanying  notes.
-------------------------
                                      13
                                      FIRST NATIONS FINANCIAL SERVICES COMPANY
                                      ----------------------------------------
                                                 (A DEVELOPMENT STAGE COMPANY)
                                                                BALANCE SHEETS
                                        SEPTEMBER 30, 1997 AND OCTOBER 8, 1996
<TABLE>
<CAPTION>




ASSETS
-------------------------------------------------------                         

                                                   September 30,    October 8,
                                                        1997            1996
                                                 ---------------  ------------
CURRENT ASSETS
<S>                                                   <C>              <C>
  Cash. . . . . . . . . . . . . . . . . . . . .  $       16,850   $ 1,001,930 
  Interest receivable, related parties.. . . .          27,942           -0- 
                                                ---------------  ------------
TOTAL CURRENT ASSETS. . . . . . . . . . . . . .          44,792     1,001,930 
                                                ---------------  ------------

PROPERTY AND EQUIPMENT
  Furniture, fixtures and equipment . . . . . .          24,964           -0- 
  Computer equipment. . . . . . . . . . . . . .          25,345         1,990 
                                                ---------------  ------------

                                                        50,309         1,990 
  Less accumulated depreciation .  . . . . . .          (5,711)          -0- 
                                                ---------------  ------------

                                                         44,598         1,990 
                                                ---------------  ------------

OTHER ASSETS
  Notes receivable, related parties  . . . . . .         858,813           -0- 
  Security deposit. . . . . . . . .  . . . . . .           2,898           -0- 
  Trademarks. . . . . . . . . . . .  . . . . . .           5,196           217 
  Organization costs. . . . . . . .  . . . . . .         169,006       107,923 
                                                ---------------  ------------

                                                      1,035,913       108,140 
                                                ---------------  ------------

                                                 $    1,125,303   $ 1,112,060 
                                                ===============  ============

LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------------------------                     

CURRENT LIABILITIES
  Note payable, shareholder .. . . . . . . . . .  $        3,000   $    87,503 
  Notes payable . . . . . . . . . . . . . . . .           5,000           -0- 
  Interest payable, shareholder . . . . . . . .             -0-        10,000 
  Accounts payable. . . . . . . . . . . . . . .          31,100           -0- 
  Accrued payroll taxes payable . . . . . . . .           1,026           -0- 
                                                ---------------  ------------

  TOTAL CURRENT LIABILITIES .. . . . . . . . . .          40,126        97,503 
                                                 ---------------  ------------

NOTE PAYABLE, RELATED PARTY . . . . . . . . . .          55,000           -0- 
                                                 ---------------  ------------

COMMITMENT

SHAREHOLDERS' EQUITY
  6% Series A, cumulative, nonvoting, preferred
    shares, $.001 par value, 1,000 shares authorized,
    issued and outstanding; liquidation preference
    of $1,000,000 . . . . . . . . . . . . . . .               1             1 
  Common stock, $.001 par value, 2,000 shares
    authorized, and 1,000 shares issued and outstanding       1             1 
  Additional paid-in capital. . . . . . . . . .  .    1,129,178     1,049,998 
  Deficit accumulated during the development stage.    (99,003)      (35,443)
                                                ---------------  ------------
                                                       1,030,177     1,014,557 
                                                   ------------  ------------

                                                  $    1,125,303   $ 1,112,060 
                                                 ===============  ============
</TABLE>



See  accompanying  notes.
                                      14
                                      FIRST NATIONS FINANCIAL SERVICES COMPANY
                                      ----------------------------------------
                                                 (A DEVELOPMENT STAGE COMPANY)
                                                      STATEMENTS OF OPERATIONS
                  FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND OCTOBER 8, 1996



<TABLE>
<CAPTION>


                                  Year Ended      Inception to    Inception to
                                September 30,     October 8,     September 30,
                                       1997             1996            1997
                              ---------------  --------------  ---------------
<S>                                 <C>              <C>             <C>
INTEREST INCOME,
  RELATED PARTIES. . . . . .  $       88,377   $      70,000   $      158,377 
                              ---------------  --------------  ---------------

EXPENSES
   Advertising . . .    . . .          44,625             -0-           44,625 
   Bank charges. . . .. . . .             972             409            1,381 
   Depreciation. . . .  . . .           5,711             -0-            5,711 
   Equipment rental. .  . . .           2,510             -0-            2,510 
   Insurance expense .  . . .           1,822             -0-            1,822 
   Interest expense, related party        170          10,000           10,170 
   Legal fees. . . . . . . . . . .      5,305             469            5,774 
   License and fees. . . . . . . .      3,026             -0-            3,026 
   Miscellaneous . . . . . . . . .        260             300              560 
   Payroll expense . . . . . . . .     10,662             -0-           10,662 
   Supplies. . . . . . . . . . . .      2,379             760            3,139 
   Payroll taxes . . . . . . . . .      1,178             -0-            1,178 
   Postage . . . . . . . . . . . .     10,231           1,828           12,059 
   Printing. . . . . . . . . . . .     15,843             235           16,078 
   Professional fees . . . . . . .     10,689             307           10,996 
   Recruitment . . . . . . . . . .      2,096             -0-            2,096 
   Rent, related party . . . . . .     30,195          90,000          120,195 
   Telephone expense . . . . . . .      3,917              58            3,975 
   Travel expense. . . . . . . . .        346           1,077            1,423 
                                  ------------  --------------  ---------------

                                      151,937         105,443          257,380 
                               ---------------  --------------  ---------------

NET LOSS . . . . . . . . . .  $      (63,560)  $     (35,443)  $      (99,003)
                               ===============  ==============  ===============


LOSS PER COMMON SHARE. . . .  $       (63.56)  $      (35.44)  $       (99.00)
                               ===============  ==============  ===============


SHARES USED IN COMPUTING
  LOSS PER COMMON SHARE. . .           1,000           1,000            1,000 
                               ===============  ==============  ===============
</TABLE>





See  accompanying  notes.
                                      15
                                      FIRST NATIONS FINANCIAL SERVICES COMPANY
                                      ----------------------------------------
                                                 (A DEVELOPMENT STAGE COMPANY)
                                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                  FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND OCTOBER 8, 1996




<TABLE>
<CAPTION>



                      Additional
                       Preferred    Common    Paid-In     Retained
                         Stock      Stock     Capital    (Deficit)      Total
                      -----------  --------  ----------  ----------  -----------

<S>                   <C>          <C>       <C>         <C>         <C>
SALE OF STOCK. . . .  $         1  $      1  $1,049,998  $     -0-   $1,050,000 

NET LOSS . . . . . .          -0-       -0-         -0-    (35,443)     (35,443)
                      -----------  --------  ----------  ----------  -----------

BALANCE -
  OCTOBER 8, 1996. .            1         1   1,049,998    (35,443)   1,014,557 


CONTRIBUTION OF
  ADDITIONAL PAID-IN
  CAPITAL. . . . . .          -0-       -0-      79,180        -0-       79,180 

NET LOSS . . . . . .          -0-       -0-         -0-    (63,560)     (63,560)
                      -----------  --------  ----------  ----------  -----------

BALANCE -
  SEPTEMBER 30, 1997  $         1  $      1  $1,129,178  $ (99,003)  $1,030,177 
                      ===========  ========  ==========  ==========  ===========


</TABLE>




See  accompanying  notes.
                                      17
                                      FIRST NATIONS FINANCIAL SERVICES COMPANY
                                      ----------------------------------------
                                                 (A DEVELOPMENT STAGE COMPANY)
                                                      STATEMENTS OF CASH FLOWS
                  FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND OCTOBER 8, 1996
<TABLE>
<CAPTION>


                                    Year Ended      Inception to    Inception to
                                September 30,     October 8,     September 30,
                                      1997             1996            1997
                            ---------------  --------------  ---------------
<S>                                  <C>              <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss . . . . . . . .  $      (63,560)  $     (35,443)  $      (99,003)
                            ---------------  --------------  ---------------
  Adjustments to reconcile net loss to
    net cash used by operating activities:
    Depreciation . .   . . .           5,711             -0-            5,711 
    Change in operating assets and liabilities:
      Interest receivable, related party (27,942)        -0-          (27,942)
      Accounts payable . . . . . . . .   31,100          -0-           31,100 
      Accrued payroll taxes payable. .  1,026             -0-            1,026 
      Interest payable, related party.(10,000)         10,000              -0- 
                                      ---------  --------------  ---------------

    Total Adjustments. . . .            (105)         10,000            9,895 
                             ---------------  --------------  ---------------

    Net Cash Used by Operating
          Activities. . . .         (63,665)        (25,443)         (89,108)
                              ---------------  --------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of furniture, fixtures
    and equipment. . .  . . .         (24,964)            -0-          (24,964)
  Purchase of computer equipment .    (23,355)         (1,990)         (25,345)
  Payment for security deposit . .    (2,898)            -0-           (2,898)
  Payments for organization costs.    (61,083)       (107,923)        (169,006)
  Payments for trademark . . . . .     (4,979)           (217)          (5,196)
  Sale of mortgage note receivable,
    related party. . . . . . . . .     -0-       1,000,000        1,000,000 
  Issuance of notes receivable,
    related parties. .   . .        (858,813)            -0-         (858,813)
                               ---------------  --------------  ---------------

    Net Cash (Used) Provided by
      Investing Activities .        (976,092)        889,870          (86,222)
                               ---------------  --------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable.        60,000             -0-           60,000 
  Proceeds from note payable,
         shareholder. . . .           3,000          87,503           90,503 
  Payment of note payable, 
         shareholder . . . .         (87,503)            -0-          (87,503)
  Issuance of stock. . .              -0-          50,000           50,000 
  Contribution of additional 
     paid-in capital . .          79,180             -0-           79,180 
                               ---------------  --------------  ---------------

    Net Cash Provided by
      Financing Activities .          54,677         137,503          192,180 
                              ---------------  --------------  ---------------

NET (DECREASE) INCREASE IN CASH.   (985,080)      1,001,930           16,850 

CASH AT BEGINNING OF PERIOD. . .   1,001,930             -0-              -0- 
                                  ----------  --------------  ---------------

CASH AT END OF PERIOD. . . .  $       16,850   $   1,001,930   $       16,850 
                             ===============  ==============  ===============

NONCASH INVESTING AND FINANCING ACTIVITIES
  Note receivable obtained from related
    party for additional 
        paid-in capital . . .  $          -0-   $   1,000,000   $    1,000,000 
                              ===============  ==============  ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
</TABLE>



                                      21
                                      16
                                      FIRST NATIONS FINANCIAL SERVICES COMPANY
                                      ----------------------------------------
                                                 (A DEVELOPMENT STAGE COMPANY)
                                                 NOTES TO FINANCIAL STATEMENTS
                                        SEPTEMBER 30, 1997 AND OCTOBER 8, 1996

NOTE  A          BASIS  OF  PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

Nature  of Operations - First Nations Financial Services Company (the Company)
---------------------
is a Delaware corporation with its principal objective to become a significant
participant  in the financial services industry. The Company believes that its
growth  will  be  sustained  by  its  commitment to servicing a segment of the
market,  which is not adequately serviced by commercial banks. The Company has
only  recently  completed  its  initial  capitalization  and has not commenced
significant  operations.  Because  the Company has only limited equity capital
with  which  to  operate, the Company will not commence significant operations
until  the  Company's offer to sell a substantial amount of the $50,000,000 in
subordinated  debt  is  successful.

Estimates  -  The  preparation  of  financial  statements  in  conformity with
---------
generally accepted accounting principles requires management to make estimates
-------
and assumptions that affect the reported amounts of assets and liabilities and
disclosure  of  contingent assets and liabilities at the date of the financial
statements  and  the  reported  amounts  of  revenues  and expenses during the
reporting  period.  Actual  results  could  differ  from  those  estimates.

Concentration  of  Credit  Risk  - At September 30, 1997, all of the Company's
-------------------------------
secured  notes  receivable  ($858,813)  are  from  companies related by common
---
ownership and controlled by Mr. Juliano, the Company's President. (See Note C)
---

Fair  Value  of  Financial Instruments - Management is of the opinion that the
--------------------------------------
carrying  value  of  all  financial instruments is substantially equal to fair
--
value  at  September  30,  1997  and  October  8,  1996.
--

Property  and  Equipment  -  Property  and  equipment  are  stated  at  cost.
------------------------
Depreciation  is  calculated  considering  the  estimated  useful lives of the
----------
respective  assets  on  the  straight-line  method. Property and equipment are
-----
depreciated  over  a  three  to  five  year  period.
----

Expenditures  for  additions  are capitalized and expenditures for maintenance
and  repairs  are  charged  to  earnings  as  incurred.

When properties are retired or otherwise disposed of, the cost thereof and the
applicable  accumulated  depreciation  and  amortization  are removed from the
respective  accounts  and the resulting gain or loss is reflected in earnings.

Organization  Costs  -  Organization  costs  include  filing  fees  with  the
-------------------
Securities  and  Exchange  Commission  ($17,991),  the National Association of
---------
Securities  Dealers,  Inc.  ($5,750),  Blue  Sky  registration fees in several
----
states  ($15,475),  legal  ($94,102),  accounting  ($23,508)  and  other costs
----
($12,180)  associated  with the organization and subordinated debt offering of
----
the  Company.

Of these costs, approximately $106,000 will be amortized over the average life
of  the  subordinated debt, if any, discussed in Note E. Remaining capitalized
costs  will  be  amortized  over  a  five  year  period.

Income  Taxes - Since inception, the Company has incurred net operating losses
-------------
amounting  to  $99,003.  These  net  operating  loss carryforwards will expire
through  the  year  2012,  if  not  previously  utilized.

No  tax  benefit for the loss carryforwards has been reported in the financial
statements.  Accordingly,  the  tax benefit of approximately $34,000 which may
result  from  the  utilization  of  the loss carryforward has been offset by a
valuation  allowance  of  the  same  amount.

Statement  of Cash Flows - For purposes of reporting cash flows, cash and cash
------------------------
equivalents  include  only  cash on hand and in demand deposit accounts with a
bank.

Loss  Per  Common Share - Loss per common share is computed using the weighted
-----------------------
average  number  of  shares  of  common  stock  outstanding during the period.

NOTE  B          MORTGAGE  NOTE  RECEIVABLE,  RELATED  PARTY

The  12%  $1,000,000  mortgage  note receivable assigned to the Company by Mr.
William  T.  Juliano  in  exchange  for  1,000  shares  of preferred stock was
receivable  from  Plaza  Investment  Corporation  (Plaza),  a  New  Jersey
corporation,  and  was  payable  to  Mr. William T. Juliano. Mr. Juliano is an
officer  and  stockholder  of both the Company and Plaza. Mr. Juliano acquired
the  mortgage  note  during  December  1992  in  exchange  for $1,000,000 cash
advanced  to  the  then  unrelated  company,  Plaza.

On October 8, 1996, the Company sold, for $1,000,000 cash, the $1,000,000 note
receivable  from  Plaza  Investment  Corporation  to  Mr.  Juliano.

NOTE  C          NOTES  RECEIVABLE,  RELATED  PARTIES

The  Company  entered  into  unsecured  demand  notes  receivable amounting to
$858,813  at  September  30,  1997, respectively, with entities related to Mr.
Juliano  by  common  ownership. These notes bear interest at 12.75% per annum.
The  proceeds  of  these  notes  were  used  to  fund and refinance commercial
construction  projects  in  New  Jersey  and  Delaware.  Because  it  is  not
anticipated  that  these  notes  will be called or paid within the next fiscal
year,  they  have  been  classified  as  long-term  at  September  30,  1997.

NOTE  D          NOTE  PAYABLE,  SHAREHOLDER

Note  payable,  shareholder  amounting  to  $87,503  plus  accrued interest of
$10,000  was  fully paid on October 9, 1996. During fiscal 1997, an additional
$3,000  was  loaned  to  the  Company.

NOTE  E          NOTES  PAYABLE

Notes  payable  at  September  30,  1997  consist  of  the  following:

     Note  payable  to  individual,  due  June  23,  1998,
     interest  at  8.5%,  unsecured                              $    1,000

     Note  payable  to  individual,  due  January  11,  1998,
     interest  at  7.15%,  unsecured                                  1,000

     Note  payable  to  individual,  due  July  7,  1998,
     interest  at  8.5%,  unsecured                                  2,000

     Note  payable  to  individual,  due  July  8,  1998,
     interest  at  8.5%,  unsecured                                  1,000
                                                                 ---------

                                                                 $    5,000
                                                                  =========


The Company also has a long-term note payable to Mrs. Juliano in the amount of
$55,000 with interest at 8.75% and principal due September 22, 1999. This note
is  unsecured.

The  Company  intends  to offer for sale up to $50,000,000 in unsecured senior
subordinated  notes  with  varying interest rates on a best-efforts basis with
maturities  ranging from three months to ten years. The notes may be extended,
at the option of the Company, for a term equal to the original term unless the
holder  requests  repayment  within  seven days prior to the original maturity
date.  There  is no minimum amount of the notes that must be sold. The Company
may  pay  commissions  of  up  to an approximate amount of 6% of the principal
amount  of  each  note  sold  plus  any  out-of-pocket  expenses  incurred  in
connection  with  the  offer  and  sale of the notes up to 1% of the principal
amount  of  each  note  sold.

The  Company  will utilize the net proceeds from the sale of the notes for its
general  corporate  purposes. Corporate general purposes may include financing
of  future  growth,  origination  or acquisition of a business loan portfolio,
origination or acquisition of loans secured by equipment, such as automobiles,
trucks,  golf carts, boats and other vehicles; origination or acquisition of a
portfolio  of  home  equity loans as well as other finance related activities;
and  possible  future acquisition of related businesses or assets. The precise
amounts  and  timing of the application of such proceeds will depend upon many
factors,  including,  but  not  limited  to,  the amount of any such proceeds,
actual  funding requirements and the availability of other sources of funding.
Until  such  time  as the proceeds are utilized, they may be invested in short
and  long-term  investments,  including  treasury  bills,  commercial  paper,
certificates  of deposit, securities issued by U.S. government agencies, money
market  funds  and repurchase agreements, depending on the Company's cash flow
requirements. The Company's investment policies permit significant flexibility
as  to  the  types  of  such  investments that may be made by the Company. The
Company  may  also  maintain  daily  unsettled  balances  with  certain
broker-dealers.  While  the  Company  may from time to time consider potential
acquisitions,  the Company as of the date of this report had no commitments or
agreements  with  respect  to  any  material  acquisitions.

NOTE  F          COMMITMENT  AND  CONTINGENCY

The  Company  formerly leased, from a company owned by Mr. William T. Juliano,
office  space  for  its  executive  offices as well as furniture, fixtures and
equipment  at  560  Fellowship Road, Mount Laurel, New Jersey 08054. Effective
October 1, 1996, the lease commitment was renegotiated for a period commencing
on  that  date  and  expiring  January  31, 1998 at a minimum annual rental of
$60,000.  This agreement was not the result of arm's length negotiation. Prior
to  its  cancellation,  the aggregate lease commitment for the remaining lease
term  was  approximately $65,000. During fiscal 1997, this lease was cancelled
with  the  understanding  that Mr. Juliano would provide substitute space, and
furniture, fixtures and equipment for the Company without cost until cash flow
from operations is adequate to cover these costs. Prior to the cancellation of
this  lease  agreement,  the  Company  paid  rent amounting to $17,965 to this
related  entity.

On  April  15,  1997,  the Company entered into a twelve month lease agreement
with  a third party for 1,333 square feet of office space in Newark, Delaware.
Rent expense for the fiscal year ended September 30, 1997 associated with this
lease  amounted  to  $12,230. Monthly rental charges are approximately $2,027.

The  Company  is  currently involved in trademark opposition litigation.  This
opposition litigation is an administrative proceeding concerning the Company's
service  mark  and  federal  registration  thereof.    Management  intends  to
vigorously  defend  this  opposition  litigation.



<PAGE>

ITEM  8.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE

     None


ITEM  9.         DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

EXECUTIVE  OFFICERS  AND  DIRECTORS

     The  number  of  directors  is  presently  fixed  at  five.   Each of the
directors  hold  office  for  the  current year and until their successors are
elected  and  qualify.  At each annual meeting of stockholders, directors will
be elected by the holders of the Common Stock to succeed those directors whose
terms are expiring.  As the Company grows and its level of activity increases,
additional  independent  directors,  executives,  management and support staff
will  be added.  The new hires will come from a large available pool of people
with  experience  in originating and servicing loans to the class of borrowers
intended  to  be  targeted  by  the Company.  Because of recent and continuing
consolidations  in  the  banking  industry, many executive and middle managers
with  extensive  operational  and lending experience are available.  Until the
Company  reaches  a  size  level  sufficient  to attract qualified independent
directors and provide director liability insurance coverage, management of the
Company  will  operate  without  outside oversight.  The Company has adopted a
policy not to enter into any transactions in which any of its security holders
or affiliates have a direct or indirect pecuniary interest without approval of
a  majority  of  the disinterested directors unless the Company is provided an
independent  appraisal  to  establish  the value of the transaction.  "Certain
Relationships  and  Related  Transactions."

     The  following  table sets forth certain information with respect to each
of  the  directors  and  executive  officers:
<TABLE>
<CAPTION>



  Name             Age                           Position
-----------------  ---  ----------------------------------------------------
<S>                <C>  <C>
Gary N. Pelehaty.   44  President, Chief Executive Officer and Director
Philip DeMena . .   57  Director
Thomas E. Juliano   25  Treasurer, Chief Financial Officer, Secretary and 
                        Director
Todd Beck . . . .   35  Director
</TABLE>



All  officers  serve  at  the  discretion  of  the  Board  of  Directors.

     Gary  N.  Pelehaty  has been an officer and director of the Company since
August  1997  and for the last five years has been President & Chief Executive
Officer, Chief Lending Officer and Compliance Officer of Peoples Savings Bank,
Bordentown,  New  Jersey.    Mr.  Pelehaty's  25 years in the banking industry
include  Executive  Vice  President  of  Mercer  Federal  Savings  Bank,  Vice
President  and Director of Corporate Planning and Development for Penn Federal
Savings  Bank,  Vice  President  and  Chief  Financial Officer for Old Borough
Savings  and Loan, and Senior Accountant and Auditor for Stephen P. Radics and
Company,  CPA.    Mr.  Pelehaty  holds  a  Bachelor  of  Arts  with a major in
accounting  from  LaSalle  University,  Philadelphia,  Pennsylvania.

     Philip  DeMena  has  been  an  officer  and director of the Company since
October  1997  and  has  served  as  Senior  Vice President of Real Estate and
Construction  of  HomeUSA,  Inc.  since  May  1997.  From 1995 until 1997, Mr.
DeMena  was Senior Vice President of Development for Papa John's U.S.A., Inc.,
a publicly traded restaurant company.  From 1994 to 1995, Mr. DeMena served as
Senior  Vice  President  of  Development  for  Kenny  Rogers Roasters, Inc., a
restaurant company.  Form 1988 through 1993, Mr. DeMena held various positions
with  Blockbusters,  including  Vice President - Real Estate and Construction.
Prior  to that, Mr. DeMena held various real estate development positions with
Kentucky Fried Chicken, a unit of Pepsico, Inc., Burger Chef System, Inc., and
British  Petroleum  Oil  Corporation.

     Thomas  E.  Juliano has been an officer and director of the Company since
its organization, November 16, 1995 and is a graduate of Rider University with
a Bachelor of Science in Business.  Since his graduation from college in 1994,
Thomas Juliano has been engaged in the real estate operations with his father,
William  T.  Juliano.    During  1995 he had management responsibility for all
aspects  connected  with the development of a retail shopping center and since
1994 has had management responsibility for the day-to-day operation of two (2)
hotels,  one  with  168  units  and  the  other  with  240  units.

     Todd  Beck has been a director of the Company since October, 1997 and has
been  a  practicing attorney since 1988.  Mr. Beck's law practice has included
banking,  environmental and toxic tort matters as well as corporate governance
and  real  estate  transactions.  Mr. Beck graduated from Cornnell Law School,
Cum  Laude  in  May  1988  and  from the University of Pennsylvania, Summa Cum
Laude.   Mr. Beck is presently enrolled in the law school of Temple University
pursuing  a  Masters  of  Laws  in  taxation.


ITEM  10.          EXECUTIVE  COMPENSATION

     No  executive  officers have received compensation from the Company since
its  incorporation  and no compensation will be paid to the executive officers
of  the  Company  until  the  Company  is  profitable.


ITEM  11.        SECURITY OWNESHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The Company's currently authorized equity securities are as follows:  (i)
1,000  shares  of  authorized,  issued and outstanding 6% Series A Cumulative,
non-voting,  $.001 par value preferred shares with a liquidation preference of
$1,000,000, and (ii) 2,000 shares of , $.001 par value Common Stock with 1,000
shares  issued  and  outstanding.

     The  following  table  sets  forth  certain  information  concerning  the
directors,  executive  officers  and  the  beneficial owners of all classes of
capital stock of five (5%) percent or more of the Common Stock of the Company.

<TABLE>
<CAPTION>


NAME AND POSITION                          NUMBER OF SHARES       PERCENTAGE
                                           BENEFICIALLY OWNED       OF CLASS
-------------------------------  ------------------------  ------------------

<S>                                     <C>                           <C>
William T. Juliano . . . . . . . . . .  1,000 Series A                  100%
    1235 Cherry Grove Road              Cumlative Preferred Shares
    Earleville, Maryland 21919

Thomas E. Juliano. . . . . . . . . . .  1,000 Common Shares              100%
    Chief Financial Officer,
    Secretary, Treasurer and Director
    Christiana Executive Campus
    220 Continental Drive, Suite 310
    Newark, Delaware 19713-4313

TOTAL (All executive officers and. . . 1,000 Common Shares               100%
    directors as a group (1 person))
</TABLE>




ITEM  12.          CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  Company  does  not  have  any formal policy concerning the direct or
indirect  pecuniary  interest  of  any  of  its  officers, directors, security
holders  or  affiliates in any investment to be acquired or disposed of by the
Company  or  in  any  transaction  to  which  the Company is a party or has an
interest.    However,  the  Company has adopted a policy not to enter into any
such  transactions  unless  approved  by  a  majority  of  the entire Board of
Directors,  not  including  any  interested  director.

     As of and for the year and period ended September 30, 1997 and October 8,
1996  respectively,  the Company borrowed $55,000 from Mrs. Juliano and funded
$858,813  to  entities  owned  and  controlled by Mr. William T. Juliano.  The
loans  to  the  related  entities  generated  interest  income  of $88,377 and
interest receivable of $27,942.  The Company has also incurred rental expenses
of $17,965 at September 30, 1997 and $90,000 at October 8, 1996 from an entity
owned  by  Mr.  William  T.  Juliano.


ITEM  13.          EXHIBITS  AND  REPORTS  ON  FORM  8-K

     On  May  15,  1997,  the  Company  filed  Form 8-K, stating the following
events:

(a)         On the 10th day of April, 1997 the State of Florida, Department of
Banking  and  Finance  issued  a  Mortgage  Lender  License  to  First Nations
Financial  Services  Company  (the  "Company").

(b)       On the 23rd day of April, 1997 the Company entered into an Indenture
with  Norwest  Bank  Minnesota,  National  Association for the benefit of each
other  and  for  the  equal  and  ratable benefit of the Holders of the Senior
Subordinated,  Fixed  Rate  Term  Notes  of the Company issued pursuant to the
Company's  registration  statement  on  Form  SB-2  declared  effective by the
Securities  and  Exchange  Commission  on  February  19,  1996.

(c)        On the 30th day of April, 1997 the State of Delaware, Department of
Justice  approved  the  individual's Issuer Agent registration and is allowing
the  Company  to  sell  its  own  securities.

(d)          On  the 14th day of May, 1997 the State of Florida, Department of
Banking  and  Finance  approved  the  Company  as  an  Issuer/Dealer.

     with  the  following  exhibits:

          1.         Indenture dated as of the 23rd day of April, 1997 between
First  Nations Financial Services Company and Norwest Bank Minnesota, National
Association.

<PAGE>
                                  SIGNATURES

     Pursuant  to  the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934, the Company has duly caused this report to be signed on
its  behalf  by  the  undersigned,  thereunto  duly  authorized.

FIRST  NATIONS  FINANCIAL  SERVICES  COMPANY


By:/s/Gary  N.  Pelehaty
   ---------------------
       Gary  N.  Pelehaty,  President  and
           Chief  Executive  Officer




     Pursuant  to  the requirements of the Securities Act of 1934, this report
has  been  signed by the following persons on behalf of the Company and in the
capacities  and  on  the  date  indicated.




/s/Philip  DeMena                    Director
-----------------
Philip  DeMena                                        December  19,  1997



/s/Thomas  E.  Juliano                Director, Treasurer, Principal Financial
----------------------
Thomas  E.  Juliano                   Officer and Principal Accounting Officer
December  19,  1997



/s/Todd  Beck                    Director                    December 19, 1997
-------------
Todd  Beck
                                Exhibit 27 - 1

                                  EXHIBIT 27
                            FINANCIAL DATA SCHEDULE


     This  schedule  contains summary financial information extracted from the
financial  statements  as of and for the year ended September 30, 1997, and is
qualified  in  its  entirety  by  reference to such financial statements.  (In
thousands,  except  EPS.)
<TABLE>
<CAPTION>



 ITEM NUMBER
-------------                                                                   
               ITEM DESCRIPTION                                      AMOUNT
               ---------------------------------------------------  --------
     <C>       <S>                                                      <C>

      5-02(1)    Cash and cash items.. . . . . . . . . . . .  . . .  $     17
      5-02(2)    Marketable securities . . . . . . . . . . .  . . .         0
5-02(3)(a)(1)    Notes and interest receivable-trade . . . .  . . .         0
      5-02(4)    Allowances for doubtful accounts. . . . . .  . . .         0
      5-02(6)    Inventory . . . . . . . . . . . . . . . . .  . . .         0
      5-02(9)    Total current assets. . . . . . . . . . . .  . . .        45
     5-02(13)    Property, plant and equipment . . . . . . .  . . .        50
     5-02(14)    Accumulated depreciation. . . . . . . . . .  . . .         6
     5-02(18)    Total assets. . . . . . . . . . . . . . . .  . . .     1,125
     5-02(21)    Total current liabilities . . . . . . . . .  . . .        40
     5-02(22)    Bonds, mortgages and similar debt . . . . .  . . .        55
     5-02(28)    Preferred stock-mandatory redemption. . . .  . . .         0
     5-02(29)    Preferred stock-no mandatory redemption . .  . . .         1
     5-02(30)    Common stock. . . . . . . . . . . . . . . .  . . .         1
     5-02(31)    Other stockholders' equity. . . . . . . . .  . . .     1,030
     5-02(32)    Total liabilities and stockholders' equity.  . . .     1,125
  5-03(b)1(a)    Net sales tangible products . . . . . . . .  . . .         0
    5-03(b)1     Total revenues. . . . . . . . . . . . . . .  . . .        88
  5-03(b)2(a)    Cost of tangible goods sold . . . . . . . .  . . .         0
    5-03(b)2     Total costs and expenses applicable to sales and
                      revenues. . . . . . . . . . . . . . . . . . .         0
    5-03(b)3     Other costs expenses. . . . . . . . .  . . . . . .       152
    5-03(b)5     Provision for doubtful accounts and notes .. . . .         0
   5-03(b)(8)    Interest and amortization of debt discount.  . . .         0
  5-03(b)(10)    Income before taxes and other items . . . . . . . .      <64>
  5-03(b)(11)    Income tax expense. . . . . . . . . . . . . .  . .         0
  5-03(b)(14)    Income/loss continuing operations . . . . . .  . .      <64>
  5-03(b)(15)    Discontinued operations . . . . . . . . . . .  . .         0
  5-03(b)(17)    Extraordinary items . . . . . . . . . . . . .  . .         0
  5-03(b)(18)    Cumulative effect-changes in accounting principles.        0
  5-03(b)(19)    Net income or loss. . . . . . . . . . . . .  . .. .      <64>
  5-03(b)(20)    Earnings per share-primary. . . . . . . . . . . . .   <63.56>
  5-03(b)(20)    Earnings per share-fully diluted. . . . . . . . . .        0

</TABLE>