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, 1997, 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:  $11,615.

The aggregate market value of voting stock held by non-affiliates
computed  on  the  basis of the average bid and asked  prices  on
March 27, 1998, was $260,554.

As  of  December 31, 1997, 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 Matters   7

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
     Management                                                10

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 1997.

                            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            High Bid               Low Bid
Ended

March 31, 1996               $0.500                $0.500
June 30, 1996                $0.500                $0.500
September 30, 1996           $1.000                $0.500
December 31, 1996            $1.000                $0.625

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

There are outstanding options to purchase 50,000 shares of common
stock at an exercise price of $0.50 per share, which expire in
February 1999.  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 20, 1998, 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, 1997 and 1996

The Company had no revenue from continuing operations for the
years ended December 31, 1997 and 1996.

General and administrative expenses for the years ended December
31, 1997 and 1996, consisted of general corporate administration,
legal and professional expenses, and accounting and auditing
costs.  These expenses were $12,298 and $3,240 for 1997 and 1996,
respectively.  General and administrative expenses in 1997 were
greater than in the prior year 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 made the filing to
become a reporting company based on management's belief that
reporting company status may help the Company to attract and
acquire a more substantial business venture.

The Company had no interest expense in 1997 or 1996.  Interest
income resulted from the investment of funds in short-term,
liquid cash equivalents.  Interest income was $11,615 and $10,726
1997 and 1996, respectively.  Interest income has increased from
period to period primarily because of the additional interest
earned on interest accumulated in prior periods.

As a result of the foregoing factors, the Company realized a net
loss of $683 in 1997, as compared to a net gain of $7,486 for
1996.

Liquidity and Capital Resources

At December 31, 1997, the Company had working capital of
approximately $229,758, as compared to $230,021 at December 31,
1996.  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 anticipate being required to register
pursuant to the Investment Company Act of 1940 and expects to be
limited in its ability to invest in securities, other than cash
equivalents and government securities, in the aggregate amount of
over 40% of its assets.  There can be no assurances that any
investment made by the Company will not result in losses.

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 (1)                   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, 1997.  No outstanding options held by the Named
Executive Officers were exercised in 1997.

Name and            Number of Securities          Value of Unexercised
Principal          Underlying Unexercised         In-the-Money Options
Position                   Options                  at FY End ($) (1)
                        at FY End (#)
                 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, 1997, 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 20, 1998, 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     Options(1)    Percent
                                 Shares                     of
                                                          Class(2)
Name and Address

Wayne M. Rogers (3)(4)           51,349      25,000         15.9
11828 La Grange Avenue
Los Angeles, CA  90025

Jack M. Gertino (3)              24,485      25,000         10.3
3374 Homestead Road
Park City, UT  84060

Bill Rogers (3)                    -0-         -0-           -0-
916 N. Beverly Drive
Beverly Hills, CA  90210

The Insight Fund, LP (5)         62,240        -0-          13.7
c/o Wayne M Rogers & Co.
11828 La Grange Avenue
Los Angeles, CA  90025

Susan Harris Family Trust        51,867        -0-          11.4
c/o Wayne M Rogers & Co.
11828 La Grange Avenue
Los Angeles, CA  90025

Daniel J. Sullivan, III          41,494        -0-           9.1
16830 Ventura Blvd., #300
Encino, CA  91436

C. Anthony Thomas                41,494        -0-           9.1
   and Glenn Susan Thomas
1888 Century Park East, #400
Los Angeles, CA  90067

Paul Junger Witt Family Trust    51,867        -0-          11.4
c/o Wayne M Rogers & Co.
11828 La Grange Avenue
Los Angeles, CA  90025

All Executive officers and       138,074     50,000         37.2
  Directors as a Group (6)

(1)  These figures represent options and warrants that are vested
or will vest within 60 days from the date as of which information
is presented in the table.

(2)  These figures represent the percentage of ownership of the
named individuals assuming each of them alone has exercised his
or her options, warrants, or conversion rights, and percentage
ownership of all officers and directors of a group assuming all
such purchase or conversion rights held by such individuals are
exercised.

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

(4)  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.

(5)  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.

(6)  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.

Exhibit    SEC Ref.    Title of Document                        Location*
  No.      No.

  1        (3)(i)      Articles of Incorporation, as amended    Fm 10-SB
                                                                Page 37

  2        (3)(ii)     By-Laws                                  Fm 10-SB
                                                                Page 41

  3        (27)        Financial Data Schedule                  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
1997.

                           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 27, 1998                 By: (Signature)
                                          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 27, 1998            (Signature)
                                 Wayne M. Rogers, Director

Dated: March 27, 1998            (Signature)
                                 Bill Rogers, Director

Dated: March 27, 1998            (Signature)
                                 Jack Gertino, Director

<PAGE>

                            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,  1997  and  the related statements  of  operations,
stockholders' equity, and cash flows for the years ended December
31, 1997 and 1996, and from the date of inception on December  4,
1987  through December 31, 1997.  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,  1997  and  the  results  of  its
operations  and its cash flows for the years ended  December  31,
1997  and 1996 and from the date of inception on December 4, 1987
through  December 31, 1997 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
March 3, 1998

<PAGE>

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


                              ASSETS

December 31,
                                                          1997
CURRENT ASSETS

 Cash                                                 $   231,482

    Total Current Assets                                  231,482

PROPERTY AND EQUIPMENT (Note 3)                               286

    TOTAL ASSETS                                      $   231,768

                 LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

 Accounts payable                                     $     2,010

    Total Current Liabilities                               2,010

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       (194,050)

    Total Stockholders' Equity                            229,758

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $   231,768

The accompanying notes are an integral part of the financial statements.

<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,
                                   1997           1996                1997

                                $       -      $        -        $          -

EXPENSES

  Bad debt expense                      -               -              35,000
  Outside services                    752             651               7,917
  Professional fees                10,505           1,438              64,443
  Rent                                  -               -               6,545
  Travel                                -               -              18,336
  Administrative expenses             907           1,017              24,710
  Depreciation                        134             134               1,260
  Amortization                          -               -                 472
  Interest                              -               -                 377

     Total Expenses                12,298           3,240             159,060

OTHER INCOME

  Interest income                  11,615          10,726             100,134

     Total Other Income            11,615          10,726             100,134

Net Income (Loss) Before
 Discontinued Operations             (683)          7,486             (58,926)

Loss From Discontinued
 Operations (Note 6)                    -               -            (911,314)

Gain on Disposal of
 Discontinued Operations (Note 6)       -               -             776,190

NET INCOME (LOSS)               $    (683)     $    7,486           $(194,050)

INCOME (LOSS) PER SHARE         $   (0.00)     $     0.02

WEIGHTED AVERAGE
 SHARES OUTSTANDING               455,073         455,073

The accompanying notes are an integral part of the financial statements.

<PAGE>

                 RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
                  Statements of Stockholders' Equity
                      December 31, 1997 and 1996


                                                                     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)

The accompanying notes are an integral part of the financial statements.

<PAGE>

                 RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
            Statements of Stockholders' Equity (Continued)
                      December 31, 1997 and 1996



                                                                     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)

The accompanying notes are an integral part of the financial statements.

<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,
                                                 1997     1996         1997

OPERATING ACTIVITIES

Net (Loss)                                      $ (683)  $7,486  $   (194,050)
 Adjustments to reconcile net loss to net cash
  provided (used) by operating activities:
    Depreciation                                   134      134         1,261
    Amortization                                     -        -           472
    Loss on disposal of discontinued operations      -        -      (776,190)
 Changes in operating assets and liabilities:
    Increase in accounts payable                 2,010        -         2,010
    Increase in accrued expenses                     -        -       286,333

    Net Cash Provided (Used)
     by Operating Activities                     1,461    7,620      (680,164)

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)

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

The accompanying notes are an integral part of the financial statements.

<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,
                                               1997     1996          1997


INCREASE IN CASH                           $   1,461  $  7,620    $   231,482

CASH AND CASH EQUIVALENTS AT BEGINNING
 OF PERIOD                                   230,021   222,401              -

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                 $ 231,482  $230,021    $   231,482

SUPPLEMENTAL CASH FLOW INFORMATION

  Cash paid for interest                   $       -  $      -    $     2,133
  Cash paid for taxes                      $     800  $      -    $       800

NON CASH INVESTING ACTIVITIES

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

The accompanying notes are an integral part of the financial statements.

<PAGE>

                  RED HORSE ENTERTAINMENT CORPORATION
                     (A Development Stage Company)
                   Notes to the Financial Statements
                      December 31, 1997 and 1996


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. Organization Costs
               The Company's organization costs were amortized over 60
          months using the straight-line method.

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

       D. 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 $194,000 which expire in 2007
          and  2008.  The potential tax benefit of the loss carryovers
          has been offset in full by a valuation allowance.

          E.  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.

<PAGE>

                 RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
                  Notes to the Financial Statements
                      December 31, 1997 and 1996


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          F.  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, 1997:

                                                 December 31,
                                                     1997

       Office equipment                          $    1,071

       Less accumulated depreciation                   (785)

           Total Property and Equipment          $      286

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

NOTE 4 - PUBLIC OFFERING

       In   1988,  the  Company  sold  38,557  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.

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.

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                    (A Development Stage Company)
                  Notes to the Financial Statements
                      December 31, 1997 and 1996


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.

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.

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                  (A Development Stage Company)
                Notes to the Financial Statements
                   December 31, 1997 and 1996


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.