U.S. SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549
                                
                                
                           FORM 10-KSB
                                
                                
[X]   Annual  report  pursuant to section  13  or  15(d)  of  the
Securities  Exchange  Act  of 1934  for  the  fiscal  year  ended
December 31, 1998, or

[ ]   Transition report pursuant to section 13 or 15(d)  of  the
Securities  Exchange act of 1934 for the transition  period  from
to


                  Commission File No.  0-23015


               RED HORSE ENTERTAINMENT CORPORATION
   (Name of Small Business Issuer as specified in its charter)

              Nevada                          87-0450232
  (State or Other Jurisdiction of           (IRS Employer
  Incorporation or Organization)         Identification No.)

         11828 La Grange Avenue, Los Angeles, CA  90025
      (Address of Principal Executive Offices and Zip Code)

Issuer's Telephone Number:  (310) 473-0213

Securities registered under Section 12(b) of the Act:  None

Securities registered under Section 12(g) of the Act:

                 Common Stock, Par Value $0.001

Check  whether  the issuer (1) filed all reports required  to  be
filed by sections 13 or 15(d) of the Exchange Act during the past
12 months (or such shorter period that the issuer was required to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes [X] No [ ]

Check  if there is no disclosure of delinquent filers in response
to  Item  405  of Regulation S-B 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.  [X]

The  issuer's revenues (consisting only of interest  income)  for
its most recent fiscal year:  $10,565.

The aggregate market value of voting stock held by non-affiliates
computed  on the basis of the last sale price on March  5,  1999,
was $198,124.

As  of  December 31, 1998, the Registrant had outstanding 455,073
shares of Common Stock, par value $0.001.

Documents incorporated by reference:  None.

<PAGE>


                        TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                     Page

Part I                                                           

1.   Description of Business                                    3

2.   Description of Properties                                  6

3.   Legal Proceedings                                          6

4.   Submission of Matters to a Vote of Security Holders        7
                                                                 
Part II                                                          

5.   Market  for  Common Equity and  Related  Stockholder       7
     Matters

6.   Management's  Discussion and Analysis  of  Financial       7
     Condition and Results of Operations

7.   Financial Statements                                       8

8.   Changes in and Disagreements with Accountants              8
     on Accounting and Financial Disclosure

Part III                                                         

9.   Directors, Executive Officers, Promoters and Control       8
     Persons;  Compliance  with  Section  16(a)  of  the
     Exchange Act

10.  Executive Compensation                                     9

11.  Security Ownership of Certain Beneficial Owners  and      10
     Management

12.  Certain Relationships and Related Transactions            12

13.  Exhibits and Reports on Form 8-K                          12

<PAGE>


                FORWARD-LOOKING STATEMENT NOTICE

     When used in this report, the words "may," "will," "expect,"
"anticipate,"  "continue," "estimate," "project,"  "intend,"  and
similar  expressions  are  intended to  identify  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 regarding events, conditions, and financial trends that  may
affect   the  Company's  future  plans  of  operations,  business
strategy,  operating  results, and financial  position.   Persons
reviewing  this  report  are cautioned that  any  forward-looking
statements  are  not  guarantees of future  performance  and  are
subject  to  risks and uncertainties and that actual results  may
differ  materially from those included within the forward-looking
statements  as  a  result of various factors.  Such  factors  are
discussed  under the headings "Item 1.  Description of Business,"
and  "Item  6.  Management's Discussion and Analysis of Financial
Condition  and  Results of Operations," and also include  general
economic  factors and conditions that may directly or  indirectly
impact   the   Company's  financial  condition  or   results   of
operations.
                                
                             PART I
                                
                ITEM 1.  DESCRIPTION OF BUSINESS

General

For  the  past three years the Company has had no active business
operations,  and  has been seeking to acquire an  interest  in  a
business  with long-term growth potential.  The Company currently
has no commitment or arrangement to participate in a business and
cannot  now  predict what type of business it may enter  into  or
acquire.  It is emphasized that the business objectives discussed
herein  are  extremely  general  and  are  not  intended  to   be
restrictive on the discretion of the Company's management.

There   are   no   plans  or  arrangements  proposed   or   under
consideration  for the issuance or sale of additional  securities
by  the  Company  prior to the identification of  an  acquisition
candidate.  Consequently, management anticipates that it  may  be
able  to participate in only one potential business venture,  due
primarily  to  the  Company's  limited  capital.   This  lack  of
diversification should be considered a substantial  risk  because
it  will  not permit the Company to offset potential losses  from
one venture against gains from another.

Selection of a Business

The  Company anticipates that businesses for possible acquisition
will  be referred by various sources, including its officers  and
directors,   professional  advisors,  securities  broker-dealers,
venture  capitalists,  members of the  financial  community,  and
others  who may present unsolicited proposals.  The Company  will
not  engage  in  any  general solicitation or advertising  for  a
business opportunity, and will rely on personal contacts  of  its
officers  and directors and their affiliates, as well as indirect
associations  between  them and other business  and  professional
people.   By  relying  on "word of mouth",  the  Company  may  be
limited  in the number of potential acquisitions it can identify.
While  it  is  not  presently anticipated that the  Company  will
engage  unaffiliated professional firms specializing in  business
acquisitions  or reorganizations, such firms may be  retained  if
management deems it in the best interest of the Company.

Compensation  to a finder or business acquisition firm  may  take
various  forms, including one-time cash payments, payments  based
on  a  percentage  of revenues or product sales volume,  payments
involving  issuance  of  securities  (including  those   of   the
Company),  or  any  combination of these  or  other  compensation
arrangements.  Consequently, the Company is currently  unable  to
predict the cost of utilizing such services.  Management  of  the
Company  will not receive a finder's fee for locating a  business
opportunity.

The  Company  will  not  restrict its search  to  any  particular
business,  industry,  or  geographical location,  and  management
reserves  the  right  to  evaluate and enter  into  any  type  of
business in any location.  The Company may participate in a newly
organized business venture or a more established company entering
a  new  phase  of  growth  or in need of  additional  capital  to
overcome  existing financial problems.  Participation  in  a  new
business  venture entails greater risks since in  many  instances
management  of such a venture will not have proved  its  ability,
the  eventual  market of such venture's product or services  will
likely  not be established, and the profitability of the  venture
will  be  unproved  and cannot be predicted accurately.   If  the
Company  participates in a more established  firm  with  existing
financial  problems,  it may be subjected  to  risk  because  the
financial  resources  of  the Company  may  not  be  adequate  to
eliminate  or reverse the circumstances leading to such financial
problems.

In  seeking  a business venture, the decision of management  will
not  be  controlled  by  an  attempt to  take  advantage  of  any
anticipated   or   perceived  appeal  of  a  specific   industry,
management group, product, or industry, but will be based on  the
business  objective of seeking long-term capital appreciation  in
the  real value of the Company.  The Company will not acquire  or
merge  with  a  business or corporation in  which  the  Company's
officers,  directors,  or  promoters,  or  their  affiliates   or
associates, have any direct or indirect ownership interest.

The analysis of new businesses will be undertaken by or under the
supervision   of  the  officers  and  directors.   In   analyzing
prospective businesses, management will consider, to  the  extent
applicable,  the available technical, financial,  and  managerial
resources;  working capital and other prospects for  the  future;
the  nature of present and expected competition; the quality  and
experience of management services which may be available and  the
depth  of  that  management; the potential for further  research,
development,  or  exploration;  the  potential  for  growth   and
expansion;  the  potential  for  profit;  the  perceived   public
recognition  or  acceptance of products, services,  or  trade  or
service marks; name identification; and other relevant factors.

The  decision to participate in a specific business may be  based
on  management's  analysis of the quality  of  the  other  firm's
management  and personnel, the anticipated acceptability  of  new
products  or  marketing  concepts,  the  merit  of  technological
changes,   and  other  factors  which  are  difficult,   if   not
impossible,  to  analyze through any objective criteria.   It  is
anticipated that the results of operations of a specific firm may
not  necessarily be indicative of the potential  for  the  future
because  of  the  requirement  to substantially  shift  marketing
approaches, expand significantly, change product emphasis, change
or substantially augment management, and other factors.

The  Company  will  analyze  all available  factors  and  make  a
determination  based on a composite of available  facts,  without
reliance  on  any  single factor.  The period  within  which  the
Company  may  participate in a business cannot be  predicted  and
will  depend  on  circumstances  beyond  the  Company's  control,
including  the availability of businesses, the time required  for
the  Company  to  complete  its  investigation  and  analysis  of
prospective  businesses, the time required to prepare appropriate
documents    and   agreements   providing   for   the   Company's
participation, and other circumstances.

Acquisition of a Business

In   implementing   a   structure  for  a   particular   business
acquisition,  the  Company  may  become  a  party  to  a  merger,
consolidation,  or other reorganization with another  corporation
or  entity; joint venture; license; purchase and sale of  assets;
or  purchase and sale of stock, the exact nature of which  cannot
now  be  predicted.  Notwithstanding the above, the Company  does
not  intend to participate in a business through the purchase  of
minority  stock positions.  On the consummation of a transaction,
it  is likely that the present management and shareholders of the
Company  will not be in control of the Company.  In  addition,  a
majority  or all of the Company's directors may, as part  of  the
terms  of the acquisition transaction, resign and be replaced  by
new directors without a vote of the Company's shareholders.

In  connection with the Company's acquisition of a business,  the
present  shareholders  of  the Company,  including  officers  and
directors, may, as a negotiated element of the acquisition,  sell
a  portion or all of the Company's Common Stock held by them at a
significant  premium  over  their  original  investment  in   the
Company.   As  a result of such sales, affiliates of  the  entity
participating  in  the business reorganization with  the  Company
would  acquire  a  higher percentage of equity ownership  in  the
Company.  Management does not intend to actively negotiate for or
otherwise require the purchase of all or any portion of its stock
as  a  condition to or in connection with any proposed merger  or
acquisition.  Although the Company's present shareholders did not
acquire  their  shares of Common Stock with a  view  towards  any
subsequent sale in connection with a business reorganization,  it
is  not unusual for affiliates of the entity participating in the
reorganization  to  negotiate  to purchase  shares  held  by  the
present shareholders in order to reduce the number of "restricted
securities" held by persons no longer affiliated with the Company
and  thereby  reduce the potential adverse impact on  the  public
market  in  the  Company's Common Stock that  could  result  from
substantial sales of such shares after the restrictions no longer
apply.   Public  investors will not receive any  portion  of  the
premium   that  may  be  paid  in  the  foregoing  circumstances.
Furthermore,  the Company's shareholders may not be  afforded  an
opportunity to approve or consent to any particular stock buy-out
transaction.

In  the  event  sales  of shares by present shareholders  of  the
Company,  including  officers  and  directors,  is  a  negotiated
element of a future acquisition, a conflict of interest may arise
because  directors  will be negotiating for  the  acquisition  on
behalf of the Company and for sale of their shares for their  own
respective accounts.  Where a business opportunity is well suited
for  acquisition by the Company, but affiliates of  the  business
opportunity impose a condition that management sell their  shares
at  a  price  which is unacceptable to them, management  may  not
sacrifice  their financial interest for the Company  to  complete
the  transaction.   Where the business opportunity  is  not  well
suited,  but  the  price offered management for their  shares  is
high,  Management  will be tempted to effect the  acquisition  to
realize  a  substantial  gain on their  shares  in  the  Company.
Management has not adopted any policy for resolving the foregoing
potential  conflicts, should they arise, and does not  intend  to
obtain  an  independent appraisal to determine whether any  price
that  may be offered for their shares is fair.  Stockholders must
rely,  instead,  on the obligation of management to  fulfill  its
fiduciary  duty under state law to act in the best  interests  of
the Company and its stockholders.

It  is  anticipated  that  any  securities  issued  in  any  such
reorganization  would be issued in reliance  on  exemptions  from
registration under applicable federal and state securities  laws.
In  some circumstances, however, as a negotiated element  of  the
transaction,  the Company may agree to register  such  securities
either  at the time the transaction is consummated, under certain
conditions, or at specified times thereafter.  Although the terms
of such registration rights and the number of securities, if any,
which  may be registered cannot be predicted, it may be  expected
that   registration  of  securities  by  the  Company  in   these
circumstances  would entail substantial expense to  the  Company.
The  issuance  of  substantial additional  securities  and  their
potential sale into any trading market which may develop  in  the
Company's securities may have a depressive effect on such market.

While the actual terms of a transaction to which the Company  may
be  a  party  cannot  be predicted, it may be expected  that  the
parties  to  the business transaction will find it  desirable  to
structure  the acquisition as a so-called "tax-free" event  under
sections 351 or 368(a) of the Internal Revenue Code of 1986, (the
"Code").  In order to obtain tax-free treatment under section 351
of the Code, it would be necessary for the owners of the acquired
business  to own 80% or more of the voting stock of the surviving
entity.   In  such event, the shareholders of the  Company  would
retain less than 20% of the issued and outstanding shares of  the
surviving entity.  Section 368(a)(1) of the Code provides for tax-
free   treatment  of  certain  business  reorganizations  between
corporate  entities  where  one corporation  is  merged  with  or
acquires   the  securities  or  assets  of  another  corporation.
Generally, the Company will be the acquiring corporation in  such
a  business  reorganization,  and  the  tax-free  status  of  the
transaction  will  not  depend on the issuance  of  any  specific
amount  of  the Company's voting securities.  It is not uncommon,
however,  that as a negotiated element of a transaction completed
in  reliance  on  section  368, the acquiring  corporation  issue
securities  in  such  an  amount that  the  shareholders  of  the
acquired corporation will hold 50% or more of the voting stock of
the  surviving  entity.   Consequently, there  is  a  substantial
possibility  that  the  shareholders of the  Company  immediately
prior to the transaction would retain less than 50% of the issued
and  outstanding  shares  of  the surviving  entity.   Therefore,
regardless  of the form of the business acquisition,  it  may  be
anticipated   that   stockholders  immediately   prior   to   the
transaction  will  experience a significant  reduction  in  their
percentage of ownership in the Company.

Notwithstanding  the  fact that the Company  is  technically  the
acquiring   entity  in  the  foregoing  circumstances,  generally
accepted accounting principles will ordinarily require that  such
transaction be accounted for as if the Company had been  acquired
by  the other entity owning the business and, therefore, will not
permit  a  write-up in the carrying value of the  assets  of  the
other company.

The  manner in which the Company participates in a business  will
depend  on  the nature of the business, the respective needs  and
desires of the Company and other parties, the management  of  the
business,  and the relative negotiating strength of  the  Company
and such other management.

The  Company  will  participate in  a  business  only  after  the
negotiation  and  execution  of appropriate  written  agreements.
Although  the  terms  of  such agreements  cannot  be  predicted,
generally  such  agreements will require specific representations
and  warranties  by  all  of the parties  thereto,  will  specify
certain  events of default, will detail the terms of closing  and
the  conditions  which must be satisfied by each of  the  parties
prior  to such closing, will outline the manner of bearing  costs
if  the  transaction is not closed, will set  forth  remedies  on
default, and will include miscellaneous other terms.

Operation of Business After Acquisition

The  Company's operation following its acquisition of a  business
will  be dependent on the nature of the business and the interest
acquired.   The Company is unable to predict whether the  Company
will  be in control of the business or whether present management
will be in control of the Company following the acquisition.   It
may  be  expected that the business will present  various  risks,
which cannot be predicted at the present time.

Governmental Regulation

It is impossible to predict the government regulation, if any, to
which  the  Company  may  be subject until  it  has  acquired  an
interest  in  a  business.  The use of assets and/or  conduct  of
businesses  which  the Company may acquire could  subject  it  to
environmental,  public health and safety,  land  use,  trade,  or
other  governmental regulations and state or local taxation.   In
selecting  a business in which to acquire an interest, management
will  endeavor  to  ascertain,  to  the  extent  of  the  limited
resources   of  the  Company,  the  effects  of  such  government
regulation  on  the  prospective business  of  the  Company.   In
certain  circumstances, however, such as the  acquisition  of  an
interest  in a new or start-up business activity, it may  not  be
possible  to  predict with any degree of accuracy the  impact  of
government regulation.  The inability to ascertain the effect  of
government  regulation  on a prospective business  activity  will
make  the  acquisition of an interest in such business  a  higher
risk.

Competition

The  Company will be involved in intense competition  with  other
business  entities,  many of which will have a  competitive  edge
over  the Company by virtue of their stronger financial resources
and prior experience in business.  There is no assurance that the
Company will be successful in obtaining suitable investments.

Employees

The  Company is a development stage company and currently has  no
employees.  Executive officers, who are not compensated for their
time  contributed to the Company, will devote only such  time  to
the  affairs  of the Company as they deem appropriate,  which  is
estimated  to  be  approximately 20 hours per month  per  person.
Management  of the Company expects to use consultants, attorneys,
and  accountants as necessary, and does not anticipate a need  to
engage  any  full-time employees so long as  it  is  seeking  and
evaluating  businesses.   The  need  for  employees   and   their
availability  will  be addressed in connection  with  a  decision
whether  or not to acquire or participate in a specific  business
industry.

               ITEM 2.  DESCRIPTION OF PROPERTIES

The  Company utilizes office space at 11828 La Grange Avenue, Los
Angeles, CA  90025, provided by a private company owned by  Wayne
M.  Rogers, an officer, director and principal shareholder of the
Company.   The  Company does not pay rent for this office  space.
The  Company  reimburses  Mr.  Rogers  for  clerical  and  office
expenses,  such  as  telephone charges, copy  charges,  overnight
courier  service, travel expenses, and similar costs incurred  on
Company matters.

                   ITEM 3.  LEGAL PROCEEDINGS

The  Company is not a party to any legal proceedings, and to  the
best  of  its  knowledge, no such proceedings by or  against  the
Company have been threatened.



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

No matter was submitted to a vote of security holders in the
fourth quarter of 1998.

                            PART III

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Although quotations for the Company's common stock appear on  the
OTC  Bulletin Board, there is no established trading  market  for
the  common  stock.  For the past two calendar years transactions
in   the   common  stock  can  only  be  described  as  sporadic.
Consequently,  the Company is of the opinion that  any  published
prices cannot be attributed to a liquid and active trading market
and,  therefore,  are  not indicative of  any  meaningful  market
value.

The  following  table  sets  forth  for  the  respective  periods
indicated  the prices of the Company's Common Stock in the  over-
the-counter  market,  as  reported  and  summarized  by  the  OTC
Bulletin  Board.  Such prices are based on inter-dealer  bid  and
asked   prices,   without  markup,  markdown,   commissions,   or
adjustments and may not represent actual transactions.

Calendar Quarter Ended      High Bid              Low Bid

March 31, 1997               $0.625                $0.625
June 30, 1997                $0.625                $0.625
September 30, 1997           $0.625                $0.375
December 31, 1997            $0.500                $0.375
                                                      
March 31, 1998               $0.625                $0.500
June 30, 1998                $0.625                $0.625
September 30, 1998           $0.625                $0.625
December 31, 1998            $0.625                $0.625

All  shares  of  common stock outstanding  may  be  sold  without
restriction  under Rule 144(k) promulgated under  the  Securities
Act  of  1933, except 241,808 shares which are held by  officers,
directors,  and  controlling  stockholders  ("Control   Shares").
Control Shares may be sold subject to complying with all  of  the
terms  and  conditions of Rule 144, except the  one-year  holding
period which has been satisfied.

Since its inception, no dividends have been paid on the Company's
common stock.  The Company intends to retain any earnings for use
in  its  business  activities, so it is  not  expected  that  any
dividends  on the common stock will be declared and paid  in  the
foreseeable future.

At March 19, 1999, there were approximately 153 holders of record
of the Company's Common Stock.

   ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                            CONDITION
                    AND RESULTS OF OPERATIONS

Results of Operations

Years Ended December 31, 1998 and 1997

The  Company  had no revenue from continuing operations  for  the
years ended December 31, 1998 and 1997.

General  and administrative expenses for the years ended December
31, 1998 and 1997, consisted of general corporate administration,
legal  and  professional  expenses, and accounting  and  auditing
costs.  These expenses were $7,812 and $12,298 for 1998 and 1997,
respectively.  General and administrative expenses in  1997  were
greater  than  in 1998 primarily due to increases in professional
fees  resulting from the Company's preparation and filing of  its
registration  statement  on  Form  10-SB  under  the   Securities
Exchange Act of 1934.
The  Company  had no interest expense in 1998 or 1997.   Interest
income  resulted  from  the investment of  funds  in  short-term,
liquid cash equivalents.  Interest income was $10,565 and $11,615
in 1998 and 1997, respectively.

As  a result of the foregoing factors, the Company realized a net
gain  of  $2,753 in 1998, as compared to a net loss of  $683  for
1997.

Liquidity and Capital Resources

At  December  31,  1998,  the  Company  had  working  capital  of
approximately $232,359, as compared to $229,758 at  December  31,
1997.   Working  capital as of both dates consisted substantially
of   short-term  investments,  and  cash  and  cash  equivalents.
Although the Company's most significant assets consist largely of
cash  and cash equivalents, the Company has no intent to  become,
or  hold  itself out to be, engaged primarily in the business  of
investing,  reinvesting, or trading in securities.   Accordingly,
the  Company  does  not intend to register under  the  Investment
Company Act of 1940.

Management  believes  that the Company has  sufficient  cash  and
short-term  investments  to meet the  anticipated  needs  of  the
Company's  operations  through  at  least  the  next  12  months.
However,  there  can  be no assurances to  that  effect,  as  the
Company  has no significant revenues and the Company's  need  for
capital may change dramatically if it acquires an interest  in  a
business  opportunity during that period.  The Company's  current
operating  plan is to (i) handle the administrative and reporting
requirements  of a public company; and (ii) search for  potential
businesses, products, technologies and companies for acquisition.
At  present,  the Company has no understandings,  commitments  or
agreements  with  respect  to  the acquisition  of  any  business
venture,  and  there can be no assurance that  the  Company  will
identify  a  business  venture suitable for  acquisition  in  the
future.   Further,  there can be no assurance  that  the  Company
would  be successful in consummating any acquisition on favorable
terms  or  that it will be able to profitably manage the business
venture it acquires.

                  ITEM 7.  FINANCIAL STATEMENTS

The financial statements of the Company appear at the end of this
report beginning with the Index to Financial Statements on page F-
1.

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

There have been no changes in or disagreements with accountants
in the past three years.

                            PART III

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

Directors and Officers

The  following  table sets forth the names, ages,  and  positions
with  the Company for each of the directors and officers  of  the
Company.


Name                Age  Positions                       Since

Wayne M. Rogers     64   President and Director           1992
                         
Bill Rogers         28   Vice President and Director      1994
                         
Jack M. Gertino     59   Director                         1992
                                                            
All  executive officers are elected by the Board and hold  office
until  the  next Annual Meeting of stockholders and  until  their
successors are elected and qualify.

The  following is information on the business experience of  each
director and officer.

Wayne  M. Rogers is a well-known professional actor who has  been
involved in investment activities for over 15 years.  Mr.  Rogers
has   been   a  director  of  several  privately-held  companies,
including Almaden Vineyards and the Pantry, Inc., since 1990.  He
has  also  been  a director of Global Intellicom,  P.H.C.,  Inc.,
Electronic  Data Controls, Inc., Extek Micro-Systems, and  Wadell
Equipment  Global.  Currently, Mr. Rogers is the general  partner
of  Balanced  Value Fund, LP, a limited partnership that  advises
and  invests in middle market companies.  Mr. Rogers is also  the
general partner of The Insight Fund, LP, and the sole stockholder
of  the  corporate general partner of The Pinnacle Fund, LP,  and
Triangle Bridge Group, LP.  The Insight Fund, LP is a stockholder
of the Company.  Wayne M. Rogers is the father of Bill Rogers.

Bill  Rogers has been a student and music composer for  the  past
five years.  He has composed the music for a number of television
shows,  a  commercial, and television movie, and is  involved  in
development  of musical scores and compositions for  those  uses.
Bill Rogers is the son of Wayne M. Rogers.

Jack  M  Gertino,  has  been  a  private  investor  and  business
consultant  in  Salt Lake City, Utah, for the  past  five  years.
From June 1995 through October 1996, Mr. Gertino was an owner  of
a  Tunex  Service Center franchise in Layton, Utah, which  offers
automotive Tune-up services.  He is currently pursuing  a  number
of  real  estate  projects, including  the  recent  purchase  and
operation of a commercial office building in Salt Lake City.

Other Shell Company Activities

Mr.  Gertino  is  currently  an officer  and  director  of  Comet
Technology,   Inc.,   a   non-reporting,  publicly   held   shell
corporation  seeking  a  business acquisition.   The  possibility
exists  that  one  or more of the officers and directors  of  the
Company  could  become officers and/or directors of  other  shell
companies in the future, although they have no intention of doing
so  at  the  present  time.  Certain conflicts  of  interest  are
inherent  in  the  participation of the  Company's  officers  and
directors  as management in other shell companies, which  may  be
difficult, if not impossible, to resolve in all cases in the best
interests  of the Company.  Failure by management to conduct  the
Company's  business in its best interests may result in liability
of management of the Company to the shareholders.

                ITEM 10.  EXECUTIVE COMPENSATION

The  Company  has  no  agreement  or  understanding,  express  or
implied, with any officer, director, or principal stockholder, or
their  affiliates  or associates, regarding employment  with  the
Company  or compensation for services.  The Company has no  plan,
agreement,  or  understanding,  express  or  implied,  with   any
officer,  director, or principal stockholder, or their affiliates
or  associates,  regarding the issuance to such  persons  of  any
shares  of  the  Company's authorized and unissued common  stock.
There  is  no understanding between the Company and  any  of  its
present  stockholders regarding the sale of a portion or  all  of
the  common stock currently held by them in connection  with  any
future participation by the Company in a business.  There are  no
other  plans, understandings, or arrangements whereby any of  the
Company's officers, directors, or principal stockholders, or  any
of their affiliates or associates, would receive funds, stock, or
other assets in connection with the Company's participation in  a
business.   No  advances have been made or  contemplated  by  the
Company   to  any  of  its  officers,  directors,  or   principal
stockholders, or any of their affiliates or associates.

There is no policy that prevents management from adopting a  plan
or  agreement in the future that would provide for cash or  stock
based compensation for services rendered to the Company.

On  acquisition  of  a  business, it  is  possible  that  current
management will resign and be replaced by persons associated with
the  business  acquired, particularly if the Company participates
in   a  business  by  effecting  a  stock  exchange,  merger,  or
consolidation.   In  the  event  that  any  member   of   current
management  remains after effecting a business acquisition,  that
member's time commitment and compensation will likely be adjusted
based  on  the  nature  and location of  such  business  and  the
services required, which cannot now be foreseen.
The  following table sets forth certain information with  respect
to unexercised options held by the Named Executive Officers as of
December  31,  1998.  No outstanding options held  by  the  Named
Executive  Officers  were  exercised in  1998,  and  all  options
expired in February 1999 without being exercised.

Name and         Number of Securities      Value of Unexercised
Principal       Underlying Unexercised     In-the-Money Options
Position         Options at FY End (#)       at FY End ($) (1)
                  
              Exerciseable/Unexerciseable  Exerciseable/Unexerciseable
                           
Wayne M. Rogers       25,000/ -0-                 -0-/ -0-
  President

Jack M. Gertino       25,000/ -0-                 -0-/ -0-
  Director


(1)   This  value  is determined on the basis of  the  difference
between  the  high  bid price during the calendar  quarter  ended
December  31, 1998, of the securities underlying the options  and
the exercise price.

  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                           MANAGEMENT

The  following table sets forth as of March 19, 1999, the  number
and  percentage of the outstanding shares of common stock  which,
according  to  the  information supplied  to  the  Company,  were
beneficially owned by (i) each person who is currently a director
of  the  Company, (ii) each executive officer, (iii) all  current
directors  and executive officers of the Company as a  group  and
(iv)  each  person who, to the knowledge of the Company,  is  the
beneficial owner of more than 5% of the outstanding common stock.
Except  as  otherwise indicated, the persons named in  the  table
have sole voting and dispositive power with respect to all shares
beneficially  owned,  subject to community  property  laws  where
applicable.

                                Common              Percent of
                                Shares                Class
                                
Name and Address                                      

Wayne M. Rogers (1)(2)          51,349                 11.3
11828 La Grange Avenue
Los Angeles, CA 90025

Jack M. Gertino (1)             24,485                 5.4
3374 Homestead Road
Park City, UT  84060

Bill Rogers (1)                  -0-                   -0-
916 N. Beverly Drive
Beverly  Hills, CA 90210

The Insight Fund, LP (3)        62,240                 13.7
c/o Wayne M Rogers & Co.
11828 La Grange Avenue
Los Angeles, CA 90025

Susan Harris Family Trust       51,867                 11.4
c/o Wayne M Rogers & Co.
11828 La Grange Avenue
Los Angeles, CA 90025

Daniel J. Sullivan, III         41,494                 9.1
16830 Ventura Blvd., #300
Encino, CA  91436

C. Anthony Thomas               41,494                 9.1
  and  Glenn Susan Thomas
1888 Century Park East, #400
Los Angeles, CA 90067

Paul Junger Witt Family Trust   51,867                 11.4
c/o Wayne M Rogers & Co.
11828 La Grange Avenue
Los Angeles, CA 90025

All Executive officers and     138,074                 30.3
  Directors as a Group (4)

(1)   Messrs. Rogers, Gertino and Rogers are all of the  officers
and directors of the Company.

(2)  The share figure includes 44,087 shares held by the Wayne M.
Rogers  Family  Trust, in which Mr. Rogers is  the  trustee,  and
3,631 shares held of record by Mr. Rogers' spouse.

(3)   Wayne M. Rogers is the general partner of The Insight  Fund
LP  and,  therefore, may be deemed to have voting and  investment
control over the shares of stock owned by it.

(4)  This figure includes the shares held by The Insight Fund LP,
because  Wayne  M.  Rogers  may be  deemed  to  have  voting  and
investment control over such shares.
    ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There are no proposed transactions and no transactions during the
past two years to which the Company was a party and in which  any
officer,  director, or principal stockholder, or their affiliates
or associates, was also a party.

                            ITEM 13.
                EXHIBITS AND REPORTS ON FORM 8-K

      Copies  of the following documents are included as exhibits
to this report pursuant to Item 601 of Regulation S-B.

Exhibits.

Exhibi    SEC    Title of Document                    Location*
  t       Ref.                                             
 No.      No.
   
  1      (3)(i)  Articles of Incorporation, as         Fm 10-SB
                 amended                               Page 37
                                                           
  2     (3)(ii)  By-Laws                               Fm 10-SB
                                                       Page 41
                                                           
  3       (27)   Financial Data Schedules                This
                                                        Filing
                                                       Page E-1

*   Exhibit  No.'s  1  and  2  are incorporated  herein  by  this
reference  to the Company's Registration Statement on Form  10-SB
filed  with the Securities and Exchange Commission on August  21,
1997.

FORM 8-K FILINGS

No reports on Form 8-K were filed in the last calendar quarter of
1998.


                           SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act,
the  registrant caused this report to be signed on its behalf  by
the undersigned thereunto duly authorized.

                                       RED HORSE ENTERTAINMENT CORPORATION

Date:   March  29, 1999                By: /s/ Wayne M. Rogers, President

      In  accordance with the Exchange Act, this report has  been
signed  by the following persons on behalf of the registrant  and
in the capacities and on the dates indicated.


Dated: March 29, 1999                   /s/ Wayne M. Rogers, Director
                                 
                                 
Dated: March 29, 1999                   /s/ Bill Rogers, Director
                                 
                                 
Dated: March 29, 1999                  /s/ Jack Gertino, Director
                                 
<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                  (A Development Stage Company)
                                
                      Financial Statements
                                
                   December 31, 1998 and 1997

                            CONTENTS


Independent Auditors' Report                                  F-2

Balance Sheet                                                 F-3

Statements of Operations                                      F-4

Statements of Stockholders' Equity                            F-5

Statements of Cash Flows                                      F-7

Notes to the Financial Statements                             F-9


<PAGE>


                INDEPENDENT AUDITORS' REPORT


The Board of Directors
Red Horse Entertainment Corporation
(A Development Stage Company)
Salt Lake City, Utah

We  have audited the accompanying balance sheets of Red Horse
Entertainment Corporation (a development stage company) as of
December  31, 1998 and the related statements of  operations,
stockholders'  equity, and cash flows  for  the  years  ended
December 31, 1998 and 1997 and from the date of inception  on
December  4, 1987 through December 31, 1998.  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   Red   Horse  Entertainment   Corporation   (a
development  stage company) as of December 31, 1998  and  the
results  of its operations and its cash flows for  the  years
ended  December  31,  1998 and 1997  and  from  the  date  of
inception  on December 4, 1987 through December 31,  1998  in
conformity with generally accepted accounting principles.

The  accompanying  financial statements  have  been  prepared
assuming  that the Company will continue as a going  concern.
As  discussed  in  Note  9 to the financial  statements,  the
Company  is  a development stage company with no  significant
operating  results  to  date which raises  substantial  doubt
about   its   ability  to  continue  as  a   going   concern.
Management's  plans  in  regard to  these  matters  are  also
described in Note 9.  The financial statements do not include
any  adjustments that might result from the outcome  of  this
uncertainty.


Jones, Jensen & Company
Salt Lake City, Utah
February 8, 1999

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                  (A Development Stage Company)
                          Balance Sheet
                                
                                
                             ASSETS

                                                     December 31,
                                                     1998

CURRENT ASSETS

 Cash                                               $  232,359

  Total Current Assets                                 232,359

PROPERTY AND EQUIPMENT (Note 3)                            152

  TOTAL ASSETS                                      $  232,511


              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

 Accounts payable                                   $        -

  Total Current Liabilities                                  -

STOCKHOLDERS' EQUITY

 Common stock; 50,000,000 shares authorized at 
  $0.001 par value;
   455,073 shares issued and outstanding                   455
 Additional paid-in capital                            423,353
 Deficit accumulated during the development stage     (191,297)

  Total Stockholders' Equity                           232,511
  
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $  232,511

<PAGE>

              RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
                    Statements of Operations
                                                     
                                                               From
                                                           Inception on
                                                           December 4,
                                  For the Years Ended        1987 to
                                    December 31,           December 31,
                                 1998          1997           1998

REVENUES                     $      -      $      -       $       -

EXPENSES

 Bad debt expense                   -             -          35,000
 Outside services                 740           752           8,657
 Professional fees              6,212        10,505          70,655
 Rent                               -             -           6,545
 Travel                             -             -          18,336
 Administrative expenses          726           907          25,436
 Depreciation                     134           134           1,394
 Amortization                       -             -             472
 Interest                           -             -             377

  Total Expenses                7,812        12,298         166,872

OTHER INCOME

 Interest income               10,565        11,615         110,699

  Total Other Income           10,565        11,615         110,699

NET INCOME (LOSS) BEFORE
 DISCONTINUED OPERATIONS        2,753          (683)        (56,173)

LOSS FROM DISCONTINUED
 OPERATIONS (Note 6)                -             -        (911,314)

GAIN ON DISPOSAL OF
 DISCONTINUED OPERATIONS
 (Note 6)                           -             -         776,190

NET INCOME (LOSS)           $   2,753     $    (683)    $  (191,297)

BASIC INCOME (LOSS) PER SHARE   $0.01     $   (0.00)

WEIGHTED AVERAGE
 SHARES OUTSTANDING           455,073       455,073

<PAGE>

              RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Statements of Stockholders' Equity

                                                                   Deficit
                                                                    Accumulated
                                                        Additional  During The
                                     Common Stock        Paid-in    Development
                                   Shares    Amount      Capital       Stage 

Balances, December 4, 1987             -   $      -     $      -     $      -

Shares issued to
 incorporators for cash
 $0.60 per share-restated         13,333         13        7,987            -

Net loss for period ended
 December 31, 1987                     -          -            -         (690)

Balances, December 31, 1987       13,333         13        7,987         (690)

Shares issued at public offering
 $7.50 per share restated         38,537         39      289,001            -

Cost of public offering                -          -      (84,056)           -

Sale of warrants                       -          -          100            -

Net loss for year ended
 December 31, 1988                     -          -            -       (4,538)

Balances, December 31, 1988       51,870         52      213,032       (5,228)

Net loss for year ended
 December 31, 1989                     -          -            -       (5,073)

Balances, December 31, 1989       51,870         52      213,032      (10,301)

Net loss for year ended
 December 31, 1990                     -          -            -      (46,921)

Balances, December 31, 1990       51,870         52       213,032     (57,222)

Net loss for year ended
 December 31, 1991                     -          -             -      (8,472)

Balances, December 31, 1991       51,870    $    52    $  213,032   $ (65,694)

<PAGE>

                 RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
            Statements of Stockholders' Equity (Continued)

                                                                Deficit
                                                              Accumulated
                                                 Additional    During the
                                 Common Stock     Paid-in     Development
                               Shares    Amount   Capital        Stage

Balances, December 31, 1991    51,870    $   52  $  213,032  $   (65,694)

Shares issued to acquire
 100% of 127 Main
 Street, Inc.                  51,869        52         (52)           -

Net loss for year ended
 December 31, 1992                  -         -           -   (1,877,973)

Balances, December 31, 1992   103,739       104     212,980   (1,943,667)

Adjustment for fractional
 shares in 30-for-1
 reverse split                    122         -           -            -

Exercise of warrants          351,212       351     210,373            -

Net income for year ended
 December 31, 1993                  -         -           -    1,731,675

Balances, December 31, 1993   455,073       455     423,353     (211,992)

Net income for year ended
 December 31, 1994                  -         -           -        2,917

Balances, December 31, 1994   455,073       455     423,353     (209,075)

Net income for year ended
 December 31, 1995                  -         -           -        8,222

Balances, December 31, 1995   455,073       455     423,353     (200,853)

Net income for the year ended
 December 31, 1996                  -         -           -        7,486

Balances, December 31, 1996   455,073       455     423,353     (193,367)

Net loss for the year ended
 December 31, 1997                  -         -           -         (683)

Balance, December 31, 1997    455,073   $   455   $ 423,353   $ (194,050)

               RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
            Statements of Stockholders' Equity (Continued)


                                                                  Deficit
                                                                Accumulated
                                                   Additional    During the
                                  Common Stock      Paid-in     Development
                                Shares    Amount    Capital        Stage

Balance, December 31, 1997     455,073   $   455   $ 423,353   $  (194,050)

Net income for the year ended
 December 31, 1998                   -         -           -         2,753

Balance, December 31, 1998     455,073   $   455   $ 423,353   $  (191,297)

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
                       Statements of Cash Flows

                                                                    From
                                                                Inception on
                                                                 December 4,
                                            For the Years Ended    1987 to
                                               December 31,      December 31,
                                             1998        1997       1998

CASH FLOWS FROM OPERATING ACTIVITIES

 Net income (loss)                          $  2,753    $ (683)  $ (191,297)
 Adjustments to reconcile net loss to net
  cash provided (used) by operating
  activities:
   Depreciation                                  134       134        1,395
   Amortization                                    -         -          472
   Loss on disposal of discontinued operations     -         -     (776,190)
 Changes in operating assets and liabilities:
  Increase (decrease) in accounts payable     (2,010)    2,010            -
  Increase in accrued expenses                     -         -      286,333

   Net Cash Provided (Used) by
    Operating Activities                         877     1,461     (679,287)

CASH FLOWS FROM INVESTING ACTIVITIES

 Organization expenses                             -         -      (10,925)
 Sale of fixed assets                              -         -        4,000
 Purchase of equipment and
  leasehold improvements                           -         -   (1,255,237)

   Net Cash (Used) by
    Investing Activities                           -         -   (1,262,162)

CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from debentures                          -         -    1,750,000
 Proceeds from stock issuance                      -         -      212,984
 Sale warrants                                     -         -          100
 Exercise of warrants                              -         -      210,724

   Net Cash Provided by
    Financing Activities                           -         -    2,173,808

INCREASE IN CASH AND CASH EQUIVALENTS            877     1,461      232,359

CASH AND CASH EQUIVALENTS AT BEGINNING
 OF PERIOD                                   231,482   230,021            -

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                $  232,359 $ 231,482   $  232,359


                 RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
                 Statements of Cash Flows (Continued)

   
                                                                      From
                                                                 Inception on
                                                                  December 4,
                                            For the Years Ended     1987 to
                                               December 31,       December 31,
                                             1998         1997       1998

SUPPLEMENTAL CASH FLOW INFORMATION

  Cash paid for interest                    $    -     $    -    $     2,133
  Cash paid for taxes                       $    -     $    -    $         -

NON CASH INVESTING ACTIVITIES

  Sale of subsidiary (Note 6)               $    -     $    -    $ 2,023,767

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                  (A Development Stage Company)
                Notes to the Financial Statements
                        December 31, 1998


NOTE 1 -  ORGANIZATION AND CORPORATE HISTORY

       The  Company  was incorporated in the State of  Nevada  on
       December 4, 1987, under the name of Quantus Capital,  Inc.
       Since  its  inception it has not engaged in a  significant
       business  activity and is considered to be  a  development
       stage  company.   The  articles of  incorporation  of  the
       Company  state  that  its purpose  is  to  engage  in  the
       business of making investments and acquisition of  assets,
       properties  and businesses and to engage in  any  and  all
       other lawful business.

       Pursuant  to  a  special meeting of shareholders  held  on
       March  9,  1992,  the Company made the following  changes:
       (1) To issue 1,556,000 shares of stock to acquire 100%  of
       the  outstanding  shares of 127 Main  Street  Corporation,
       (the  former  Subsidiary)  a  Delaware  Corporation.   (2)
       Adopted a plan of recapitalization whereby the issued  and
       outstanding shares of the Company were reverse split on  a
       one  for  five basis.  The shares outstanding were reduced
       from   7,780,000  to  1,556,000.   (3)  The  articles   of
       incorporation were amended changing the name to Red  Horse
       Entertainment Corporation.  All references  to  number  of
       shares  have  been retroactively restated to  reflect  the
       reverse stock split.

       During   September   1992  the  former  Subsidiary   began
       operating  a  casino  in Central City, Colorado,  however,
       two weeks later operations were terminated. (Note 6)

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       a.  Recognition of Income

       The  Company recognizes income and expenses on the accrual
       basis of accounting.  The fiscal year of the Company  ends
       on December 31.

       b.  Basic Loss Per Share

       The  computation of basic loss per share of  common  stock
       is   based  on  the  weighted  average  number  of  shares
       outstanding   during   the   period   of   the   financial
       statements.

 .      c.  Provision for Taxes

       No  provision for taxes has been recorded due to operating
       losses  at December 31, 1994, 1993 and 1992.  The  Company
       has  net  operating loss carryovers for both book and  tax
       purposes  of approximately $192,000 which expire  in  2007
       and   2008.   The  potential  tax  benefit  of  the   loss
       carryovers  has  been  offset  in  full  by  a   valuation
       allowance.





              RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Notes to the Financial Statements
                       December 31, 1998


NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

       d.  Cash and Cash Equivalents

       The  Company considers all highly liquid investments  with
       a  maturity of three months or less when purchased  to  be
       cash equivalents.

       e.  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.

NOTE 3 -  PROPERTY AND EQUIPMENT

       Property  and  equipment  consists  of  the  following  at
       December 31, 1998:

                                                    December 31,
                                                        1998

       Office equipment                            $     1,071

       Less accumulated depreciation                      (919)

            Total Property and Equipment           $       152

       Equipment is being depreciated over eight years using  the
       straight line method.  Depreciation expense for the  years
       ending  December  31, 1998 and 1997 was $  134  and  $134,
       respectively.

NOTE 4 -   PUBLIC OFFERING

       In  1988,  the  Company sold 38,537 units to  the  general
       public.  Each unit consisted of one share of common  stock
       and  one  "A"  warrant that could be used to purchase  one
       share  of  common  stock for $22.50 per share  within  two
       years  of the effective date of the offering, and one  "B"
       warrant  that could have been used to purchase  one  share
       of  common  stock  for  $37.50 per  share,  which  expired
       November  8, 1993.  The Company received cash of  $289,040
       as a result of this public offering.



               RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Notes to the Financial Statements
                       December 31, 1998


NOTE 5 -   WARRANTS OUTSTANDING

       As   a  result  of  the  Company's  public  offering   the
       underwriter  purchased  a warrant  that  entitles  him  to
       purchase 3,853 units at a price of $9.375 per unit.

       In  conjunction with the Company's acquisition of 127 Main
       Street  Corporation, the shareholders of 127  Main  Street
       Corporation  were granted warrants or options to  purchase
       an  aggregate  of 453,093 shares of common  stock  of  the
       parent  Company for a period of five years at a  price  of
       $9.00  per  share.   As  of  December  31,  1996,  351,212
       warrants  have  been  exercised wherein  the  Company  has
       received cash of $210,724.

NOTE 6 -   DISCONTINUED OPERATIONS

       On  September  17, 1993 the Company decided  to  terminate
       the  operations of its former subsidiary, 127 Main  Street
       Corporation,  and  the casino operations  located  at  127
       Main  Street,  Central  City, Colorado.   Cost  over  runs
       resulting   from  site  conditions  made  it  economically
       unfeasible  to  continue  operations.   Consequently,  the
       facility   was  abandoned  and  all  lease   options   and
       improvements  were lost.  The following is  a  summary  of
       income   (loss)  from  operations  of  127   Main   Street
       Corporation:

            Revenue - 1992                                 $    40,029
            Revenue - 1993                                       4,982

             Total Revenue                                      45,011

            Operating expenses - 1992                          670,363
            Operating expenses - 1993                          285,962

             Total Operating Expenses                          956,325

               Loss from Discontinued Operations            $ (911,314)

            Write off of assets - 1992                     $(1,246,097)
            Gain on assumption of debt - 1993                2,022,287

               Gain on Disposal of Discontinued Operations    $776,190

NOTE 7 -    DISPOSAL OF SUBSIDIARY - RELATED PARTY TRANSACTION

       On  March  19,  1994,  the Company entered  into  a  stock
       purchase  agreement whereby two officers  of  the  Company
       purchased  all of the outstanding shares of the  Company's
       former  subsidiary,  127  Main  Street  Corporation.   The
       shares were sold for the nominal amount of $500.





               RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Notes to the Financial Statements
                       December 31, 1998


NOTE 8 -    REVERSE STOCK SPLIT

       On  August  2,  1993,  the  shareholders  of  the  Company
       approved  a  30-for-1 reverse stock split.  The  financial
       statements  have  been  restated to  reflect  this  change
       retroactively to the beginning of the periods presented.

NOTE 9 - GOING CONCERN

       The   financial  statements  have  been  prepared  on  the
       assumption  that  the  Company is a  going  concern.   The
       Company  has no revenues from operations and its continued
       existence  depends  upon management's plans  to  locate  a
       company with which to merge.

NOTE 10 - STOCK OPTIONS

       On  February 1, 1994, the Company issued options to two of
       its  officers, for each one to purchase 25,000  shares  of
       common  stock at a price of $0.50 per share.   The  option
       is for a term of five years.

NOTE 11 - CONCENTRATIONS OF RISK

       The  Company  maintains a money market investment  account
       which  accounts for $232,217 of the balance of cash.   The
       account  is  not insured by the FDIC, nor is it guaranteed
       by  the  bank.   The investment is subject  to  investment
       risk, including potential principle loss.