UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                            -------------------------


                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended                       Commission file number
      June 16, 1998                                        000-22753
      -------------                                        ---------


                      TOTAL ENTERTAINMENT RESTAURANT CORP.
             (Exact name of registrant as specified in its charter)



             Delaware                                 52-2016614
             --------                                 ----------
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                     Identification Number)

                               300 Crescent Court
                             Building 300, Suite 850
                               Dallas, Texas 75201
               (Address of principal executive offices) (Zip code)

                                 (214) 754-0414
              (Registrant's telephone number, including area code)

            Indicate  by check mark  whether  the  registrant  (1) has filed all
documents  and  reports  required  to be  filed  by  Section  13 or 15(d) of the
Securities  Exchange  Act of 1934  during the  preceding  12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
                                                         /X/  YES     / /   NO

            Indicate  the number of shares  outstanding  of each of the issuer's
classes of common stock, as of the latest practicable date.

          Class                                      Outstanding at July 7, 1998
Common Stock, $.01 par value                             10,415,000 shares
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                                      Index

                                                                           Page
                                                                          Number
PART I.   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

      CONDENSED CONSOLIDATED BALANCE SHEETS
      AT JUNE 16, 1998 AND DECEMBER 30, 1997                                   2

      CONSOLIDATED STATEMENTS OF INCOME
      FOR THE TWELVE WEEKS ENDED
      JUNE 16, 1998 AND JUNE 17, 1997                                          3

      CONSOLIDATED STATEMENTS OF INCOME
      FOR THE TWENTY-FOUR WEEKS ENDED
      JUNE 16, 1998 AND PRO FORMA FOR THE
      TWENTY-FOUR WEEKS ENDED JUNE 17, 1997                                    4

      CONDENSED CONSOLIDATED STATEMENT OF
      CASH FLOWS FOR THE TWENTY-FOUR WEEKS ENDED
      JUNE 16, 1998 AND FOR THE PERIOD FROM
      FEBRUARY 7, 1997 (INCEPTION) THROUGH
      JUNE 17, 1997                                                            5

      NOTES TO CONDENSED CONSOLIDATED
      FINANCIAL STATEMENTS                                                     6

ITEM 2.  MANAGEMENT'S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS                                                    7

PART II.  OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                            12

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS                      13

ITEM 5.  OTHER INFORMATION                                                    13

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                     13


                                      -1-
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                         June 16, 1998        December 30, 1997
                                                                                         -------------        -----------------
                                         ASSETS
<S>                                                                                       <C>                    <C>        
Current assets:
    Cash and cash equivalents                                                             $ 2,988,026            $ 1,220,598
    Marketable securities, available for sale                                                    --                3,315,056
    Inventories                                                                               462,446                396,758
    Pre-opening costs - net                                                                   457,608                386,402
    Deferred income taxes                                                                     185,360                156,571
    Other current assets                                                                      412,743                350,324
                                                                                          -----------            -----------
         Total current assets                                                               4,506,183              5,825,709

Property and equipment, net                                                                15,496,227             12,582,081
Intangible and other assets, net (principally goodwill)                                     4,918,577              4,816,479
                                                                                          -----------            -----------
            Total assets                                                                  $24,920,987            $23,224,269
                                                                                          ===========            ===========
                          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                                      $ 1,143,141            $   823,765
    Other current liabilities                                                                 725,632                422,983
                                                                                          -----------            -----------
            Total current liabilities                                                       1,868,773              1,246,748


Deferred income taxes                                                                         381,264                312,450
Stockholders' Equity:
    Preferred stock                                                                              --                     --
    Common stock                                                                              104,150                104,150
    Additional paid-in capital                                                             20,580,764             20,580,764
    Retained earnings                                                                       1,986,036                980,157
                                                                                          -----------            -----------
            Total stockholders' equity                                                     22,670,950             21,665,071
                                                                                          -----------            -----------
            Total liabilities and stockholders' equity                                    $24,920,987            $23,224,269
                                                                                          ===========            ===========
</TABLE>
                             See accompanying notes.
                                      - 2 -
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                        Twelve weeks ended
                                                                             June 16, 1998               June 17, 1997
                                                                             -------------               -------------

<S>                                                                           <C>                         <C>         
Net sales:
    Food and beverage                                                         $  4,883,221                $  3,298,371
    Entertainment and other                                                        820,524                     694,389
                                                                                ----------                ------------
         Total net sales                                                         5,703,745                   3,992,760
Costs and expenses:
    Costs of sales                                                               1,524,743                   1,046,479
    Restaurant operating expenses                                                2,593,687                   1,856,381
    Depreciation and amortization                                                  489,867                     241,919
                                                                                ----------                ------------
Entertainment and restaurant costs and expenses                                  4,608,297                   3,144,779
                                                                                ----------                ------------
Entertainment and restaurant operating income                                    1,095,448                     847,981
General and administrative expenses                                                553,589                     505,898
Goodwill amortization                                                               56,345                      54,687
                                                                                ----------                ------------
Income from operations                                                             485,514                     287,396

Other income (expense):
    Other income, principally interest                                              33,259                         148
    Interest expense                                                                     -                    (216,538)
                                                                                ----------                ------------
Income before income taxes                                                         518,773                      71,006
Provision for income taxes                                                         191,735                      26,627
                                                                                ----------                ------------
Net income                                                                    $    327,038                $     44,379
                                                                                ==========                ============

Basic and diluted earnings per share                                          $       0.03                $       0.01
                                                                                ==========                ============
Average shares outstanding                                                      10,415,000                   8,000,000
                                                                                ==========                ============
</TABLE>

                             See accompanying notes.
                                      - 3 -
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                       Company
                                                                                      Pro Forma
                                                                                   -------------
                                                            Twenty-four              Twenty-four
                                                            weeks ended              weeks ended
                                                           June 16, 1998            June 17, 1997
                                                           -------------            -------------

<S>                                                       <C>                      <C>          
Net sales:
    Food and beverage                                     $  10,625,203            $   6,658,564
    Entertainment and other                                   1,853,125                1,419,027
                                                           ------------             ------------
         Total net sales                                     12,478,328                8,077,591
Costs and expenses:
    Costs of sales                                            3,310,056                2,130,176
    Restaurant operating expenses                             5,449,484                3,656,520
    Depreciation and amortization                               954,609                  464,588
                                                           ------------             ------------
Entertainment and restaurant costs and expenses               9,714,149                6,251,284
                                                           ------------             ------------
Entertainment and restaurant operating income                 2,764,179                1,826,307
General and administrative expenses                           1,120,445                  934,960
Goodwill amortization                                           112,690                  108,460
                                                           ------------             ------------
Income from operations                                        1,531,044                  782,887

Other income (expense):
    Other income, principally interest                           65,433                      148
    Interest expense                                               (178)                (407,257)
                                                           ------------             ------------
Income before income taxes                                    1,596,299                  375,778
Provision for income taxes                                      590,420                  140,917
                                                           ------------             ------------
Net income                                                $   1,005,879            $     234,861
                                                           ============             ============

Basic and diluted earnings per share                      $        0.10            $        0.03
                                                           ============             ============
Average shares outstanding                                   10,415,000                8,000,000
                                                           ============             ============
</TABLE>

                             See accompanying notes.
                                      - 4 -
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                                             Period from
                                                                                                           February 7, 1997
                                                                                     For the twenty-          (inception)
                                                                                    four weeks ended       through June 17,
                                                                                      June 16, 1998              1997
                                                                                    ----------------       -----------------

<S>                                                                                     <C>                         <C>         
 Cash flows from operating activities:
    Net income                                                                          $  1,005,879                $    133,826
    Adjustments to reconcile net income to net cash
       provided by operating activities:
          Depreciation and amortization                                                    1,084,031                     430,609
          Net change in operating assets and liabilities:
            Change in operating assets                                                      (748,820)                   (179,426)
            Change in operating liabilities                                                  690,839                     313,146
                                                                                        ------------                 -----------
              Net cash provided by operating activities                                    2,031,929                     698,155

 Cash flows from investing activities:
    Purchases of property and equipment                                                   (3,579,557)                   (503,120)
    Proceeds from sale of marketable securities                                            3,315,056                           -
    Cash of companies acquired in Exchange                                                         -                     733,804
                                                                                        ------------                 -----------
              Net cash (used) provided by investing activities                              (264,501)                    230,684

 Cash flows from financing activities:
    Net proceeds from sale of stock                                                                -                           -
    Proceeds from revolving note payable to bank                                                   -                  10,835,695
    Payment of dividends to certain stockholders                                                   -                  (1,675,332)
    Payment of notes payable to stockholders                                                       -                  (4,530,071)
    Payment of notes payable to affiliates                                                         -                    (233,000)
    Payment of notes payable to banks                                                              -                  (4,366,933)
                                                                                        ------------                 -----------
              Net cash provided by financing activities                                            -                      30,359
                                                                                        ------------                 -----------

              Net increase in cash and cash equivalents                                    1,767,428                     959,198

 Cash and cash equivalents at beginning of period                                          1,220,598                       1,000
                                                                                        ------------                 -----------
 Cash and cash equivalents at end of period                                             $  2,988,026                $    960,198
                                                                                        ============                 ===========

 Supplemental disclosure of cash flow information:
    Cash paid for interest                                                              $        178                $    290,148
    Cash paid for income taxes                                                               572,108                     109,603
</TABLE>

                             See accompanying notes.
                                      - 5 -
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

      Total  Entertainment  Restaurant  Corp. (the "Company") was organized as a
Delaware  corporation  on  February  7,  1997,  for the  purpose  of  developing
entertainment  restaurant  locations.  Effective  February 20, 1997, the Company
entered into simultaneous securities exchange transactions pursuant to which the
Company issued an aggregate 8,000,000 shares of its common stock, $.01 par value
per share (the "Common  Stock"),  in exchange for all of the outstanding  common
stock of each of Bailey's  Sports  Grille,  Inc., F&H  Restaurant  Corp.,  Fox &
Hound,  Inc. and Fox & Hound II, Inc. and the remaining 25% minority interest in
each of 505 Entertainment,  Ltd., F&H Dallas, L.P., Midway  Entertainment,  Ltd.
and N. Collins  Entertainment,  Ltd. (the "Exchange").  For further  information
regarding  the Exchange,  refer to the  Company's  Form 10-K for the fiscal year
ended  December 30, 1997.  The  unaudited pro forma  consolidated  statements of
income for the twenty-four weeks ended June 17, 1997 give effect to the Exchange
as if such transactions occurred on January 1, 1997.

      The  unaudited  condensed  consolidated  financial  statements  have  been
prepared by the Company, pursuant to the rules and regulations of the Securities
and  Exchange  Commission.   The  information   furnished  herein  reflects  all
adjustments (consisting of normal recurring accruals and adjustments) which are,
in the opinion of management,  necessary to fairly present the operating results
for  the  respective  periods.  Certain  information  and  footnote  disclosures
normally  presented in annual financial  statements  prepared in accordance with
generally  accepted  accounting  principles  have been omitted  pursuant to such
rules and regulations.  These financial statements should be read in conjunction
with the Company's audited  consolidated  financial  statements in its 1997 Form
10-K.  The  results  of the  twenty-four  weeks  ended  June  16,  1998  are not
necessarily  indicative  of the results to be expected  for the full year ending
December 29, 1998.

2.    STOCK OPTIONS

      During the  twenty-four  week  period  ended June 16,  1998,  the  Company
granted to certain key employees stock options for 73,150 shares of Common Stock
at exercise  prices  ranging from $4.75 to $7.00 per share  pursuant to its 1997
Incentive and Nonqualified Stock Option Plan.

3.     RECENTLY ISSUED ACCOUNTING STANDARDS

      As of December 31, 1997,  the Company  adopted  Statement  130,  Reporting
Comprehensive Income.  Statement 130 establishes new rules for the reporting and
display of  comprehensive  income and its components;  however,  the adoption of
this  Statement  had no  impact on the  Company's  net  income or  stockholders'
equity.  The  Company has no items of other  comprehensive  income in any period
presented.

      The Accounting  Standards Executive Committee recently issued Statement of
Position 98-5, Reporting on Costs of Start-Up Activities, which will require the
Company to expense start-up costs,  including  organizational costs, as incurred
and to  report  the  initial  adoption  as a  cumulative  effect  of a change in
accounting principle as described in APBO No. 20, Accounting Changes, during the
first quarter of its fiscal year 1999. The cumulative effect upon adoption would
result in a one-time  charge to income in an amount  equal to the net book value
of the  Company's  start-up  costs.  A  resulting  benefit of this change is the
discontinuance of amortization expense in subsequent periods.


                                       -6-
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

      The following  discussion and analysis should be read in conjunction  with
the Financial Statements and Notes thereto included elsewhere in this Form 10-Q.

      The Company began operations  February 20, 1997 with three Fox & Hound and
eight Bailey's entertainment  restaurant locations. The Company opened two Fox &
Hound locations during the twenty-four  weeks ended June 16, 1998, and currently
operates  ten  Bailey's  units and ten Fox & Hound  units  located  in  Alabama,
Arkansas,  Illinois,  Indiana,  Iowa,  Nebraska,  North  Carolina,  Ohio,  South
Carolina, Tennessee and Texas.

      The  components  of the  Company's  net sales  are food and  non-alcoholic
beverages, alcoholic beverages, and entertainment and other. For the twenty-four
weeks ended June 16, 1998, food and non-alcoholic  beverages were 28.9% of total
sales, alcoholic beverages were 56.2% of total sales and entertainment and other
were 14.9% of total sales.

      Components of restaurant  operating expenses include operating payroll and
fringe benefits, occupancy, advertising and promotion. These costs are generally
variable and will  fluctuate with changes in sales volume and sales mix. All but
one of the Company's locations are leased and provide for a minimum annual rent,
with some  leases  calling  for  additional  rent  based on sales  volume at the
particular location of specified minimum levels.

      Pre-opening  costs  include  labor  costs,  costs of hiring  and  training
personnel and certain other costs relating to opening new  restaurants,  and are
capitalized  and amortized  over a twelve month period,  beginning in the period
the restaurants open.

      General   and   administrative   expenses   include  all   corporate   and
administrative  functions  that  support  existing  operations  and  provide  an
infrastructure  to support  future  growth.  In  addition,  certain  expenses of
recruiting and training unit management personnel are also included. Management,
supervisory and staff salaries,  employee benefits, travel, information systems,
training, rent and office supplies as well as accounting services fees are major
items of costs in this category.


                                      -7-
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

      The  following  table  sets  forth  for  the  periods  indicated  (i)  the
percentages which certain items included in the Consolidated Statement of Income
bear to net sales, and (ii) other selected operating data:

<TABLE>
<CAPTION>

                                                                      HISTORICAL                     HISTORICAL      PRO FORMA (2)
                                                           -------------------------------           ----------      -------------
                                                                TWELVE WEEKS ENDED(1)                  TWENTY-FOUR WEEKS ENDED(1)
                                                                ---------------------                  --------------------------
                                                           JUNE 16,                JUNE 17,             JUNE 16,          JUNE 17,
                                                             1998                    1997                 1998              1997
                                                             ----                    ----                 ----              ----
                                                                                    (DOLLARS IN THOUSANDS)

<S>                                                         <C>                     <C>                  <C>               <C>   
INCOME STATEMENT DATA:
      Net sales..........................................   100.0%                  100.0%               100.0%            100.0%
      Costs and expenses:
            Costs of sales...............................    26.7                    26.2                 26.5              26.4
            Restaurant operating expenses................    45.5                    46.5                 43.6              45.3
            Depreciation and amortization................     8.6                     6.1                  7.7               5.7
                                                              ---                   -----                -----             -----

                 Restaurant costs and expenses...........    80.8                    78.8                 77.8             77.4
                                                            -----                   -----                -----             ----

      Restaurant operating income........................    19.2                    21.2                 22.2              22.6
      General and administrative expenses................     9.7                    12.6                  9.0              11.6
      Goodwill amortization..............................     1.0                     1.4                  0.9               1.3
                                                            -----                   -----                -----             -----
      Income from operations.............................     8.5                     7.2                 12.3               9.7
      Other income, principally interest.................     0.6                      --                  0.5                --
      Interest expense ..................................     --                      5.4                   --               5.0
                                                            -----                   -----                -----             -----

      Income before provision for income taxes...........     9.1                     1.8                 12.8               4.7
      Provision for income taxes.........................     3.4                     0.7                  4.7               1.8
                                                            -----                   -----                -----             -----

      Net income.........................................     5.7%                    1.1%                 8.1%              2.9%


RESTAURANT OPERATING DATA:
      Annualized average weekly sales per location (3)...  $1,433               $   1,437             $   1,594         $  1,502
      Number of restaurants at end of the period........       18                      12                    18               12
</TABLE>

(1)   The Company operates on a fifty-two or fifty-three week fiscal year ending
      the last Tuesday in December.  The fiscal quarters for the Company consist
      of accounting periods of twelve,  twelve,  twelve and sixteen or seventeen
      weeks, respectively.

(2)   The pro forma data  gives  effect to the  Exchange  as if it  occurred  on
      January 1, 1997.

(3)   Annualized  average weekly sales per location are computed by dividing net
      sales for full  weeks  open  during the period by the number of full weeks
      open and multiplying the result by fifty-two.

                                      -8-

<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.


TWELVE WEEKS ENDED JUNE 16, 1998 COMPARED TO TWELVE WEEKS ENDED JUNE 17, 1997

      Net sales increased $1,711,000 (42.9%) for the twelve weeks ended June 16,
1998 to  $5,704,000  from  $3,993,000  for the twelve weeks ended June 17, 1997,
which is  principally  attributable  to sales from the six new locations  opened
since June 1997.  Same store sales decreased 5.3% in the twelve weeks ended June
16, 1998 compared to the twelve weeks ended June 17, 1997.

      Costs of sales,  primarily food and beverages  increased  $478,000 (45.7%)
for the twelve weeks ended June 16, 1998 to  $1,524,000  from  $1,046,000 in the
twelve weeks ended June 17, 1997,  and  increased as a percentage  of sales from
26.2% to 26.7%.  This increase is  attributable to an increase in the food sales
mix, which has a higher cost of sales compared to beverages and entertainment.

      Restaurant  operating  expenses  increased $738,000 (39.7%) for the twelve
weeks ended June 16, 1998 to  $2,594,000  from  $1,856,000  in the twelve  weeks
ended June 17, 1997,  and  decreased as a percentage  of net sales from 46.5% to
45.5%.  Most of this  improvement is  attributable to improved labor controls at
the locations.

      Depreciation and amortization  increased  $248,000 (102.5%) for the twelve
weeks ended June 16, 1998 to $490,000  from  $242,000 in the twelve  weeks ended
June 17, 1997,  and increased as a percentage  of sales from 6.1% to 8.6%.  This
increase is due principally to the depreciation and amortization relating to the
opening of six new restaurants since June 1997.

      General  and  administrative  expenses  increased  $48,000  (9.4%) for the
twelve weeks ended June 16, 1998 to $554,000  from  $506,000 in the twelve weeks
ended June 17, 1997,  and decreased as a percentage of sales from 12.6% to 9.7%.
This increase reflects the additional corporate  infrastructure added during the
first and  second  quarter of 1997  enabling  the  Company  to  rapidly  develop
additional  units  and  operate  as a public  company.  Certain  accounting  and
administrative  services  are  contracted  from  Coulter  Enterprises,  Inc.,  a
restaurant  management  services company owned by the Company's  Chairman of the
Board.   The  service   agreement   provides  for   specified   accounting   and
administrative  services to be provided on a cost pass-through basis. For fiscal
1998,  the fixed annual charge is $194,500,  plus and an additional  fee of $466
per restaurant per 28-day accounting period.

      Other income, principally interest, was $33,000 for the twelve weeks ended
June 16, 1998 (none in 1997). The interest was earned from the investment of the
net proceeds of the initial public  offering of the Company,  which commenced on
July 17, 1997 (the "Initial Public Offering").

      Interest  expense  decreased  $217,000 for the twelve weeks ended June 16,
1998 to zero from  $217,000  in the  twelve  weeks  ended  June 17,  1997.  This
decrease  reflects the repayment of all debt outstanding  immediately  following
the Initial Public Offering.

      The effective income tax rate for the twelve weeks ended June 16, 1998 was
37.0% and the effective income tax rate for the twelve weeks ended June 17, 1997
was 37.5%.  This decrease was primarily due to the impact of tax exempt interest
income earned during the twelve weeks ended June 16, 1998.

                                      -9-
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.


TWENTY-FOUR  WEEKS ENDED JUNE 16, 1998 COMPARED TO TWENTY-FOUR  WEEKS ENDED JUNE
17, 1997

      Net sales increased  $4,400,000  (54.5%) for the  twenty-four  weeks ended
June 16, 1998 to $12,478,000  from  $8,078,000 for the  twenty-four  weeks ended
June 17,  1997,  which is  principally  attributable  to sales  from the six new
locations  opened  since  June  1997.  Same store  sales  decreased  1.0% in the
twenty-four  weeks ended June 16, 1998 compared to the  twenty-four  weeks ended
June 17, 1997.

      Costs of sales,  primarily food and beverages increased $1,180,000 (55.4%)
for the  twenty-four  weeks ended June 16, 1998 to $3,310,000 from $2,130,000 in
the  twenty-four  weeks ended June 17, 1997,  and  increased as a percentage  of
sales from 26.4% to 26.5%.  This increase is  attributable to an increase in the
food sales mix,  which has a higher  cost of sales  compared  to  beverages  and
entertainment.

      Restaurant   operating  expenses  increased  $1,792,000  (49.0%)  for  the
twenty-four  weeks  ended June 16, 1998 to  $5,449,000  from  $3,657,000  in the
twenty-four  weeks ended June 17, 1997,  and  decreased  as a percentage  of net
sales from 45.3% to 43.6%.  Most of this improvement is attributable to improved
labor  controls at the locations and leveraging the fixed portion of these costs
with higher sales volumes.

      Depreciation  and  amortization   increased   $490,000  (105.5%)  for  the
twenty-four  weeks  ended  June  16,  1998  to  $955,000  from  $465,000  in the
twenty-four  weeks ended June 17, 1997,  and  increased as a percentage of sales
from 5.7% to 7.7%.  This increase is due  principally  to the  depreciation  and
amortization relating to the opening of six new restaurants since June 1997.

      General and  administrative  expenses  increased  $185,000 (19.8%) for the
twenty-four  weeks  ended  June 16,  1998 to  $1,120,000  from  $935,000  in the
twenty-four  weeks ended June 17, 1997,  and  decreased as a percentage of sales
from  11.6%  to  9.0%.   This  increase   reflects  the   additional   corporate
infrastructure  added during the first and second  quarter of 1997  enabling the
Company to rapidly  develop  additional  units and operate as a public  company.
Certain  accounting  and  administrative  services are  contracted  from Coulter
Enterprises,  Inc.,  a  restaurant  management  services  company  owned  by the
Company's  Chairman of the Board. The service  agreement  provides for specified
accounting  and  administrative  services to be provided on a cost  pass-through
basis.  For  fiscal  1998,  the fixed  annual  charge is  $194,500,  plus and an
additional fee of $466 per restaurant per 28-day accounting period.

      Other income,  principally interest, was $65,000 for the twenty-four weeks
ended June 16, 1998 (none in 1997).  The interest was earned from the investment
of the net proceeds of the Initial Public Offering.

      Interest expense  decreased  $407,000 for the twenty-four weeks ended June
16, 1998 to zero from  $407,000 in the  twenty-four  weeks ended June 17,  1997.
This  decrease  reflects  the  repayment  of all  debt  outstanding  immediately
following the Initial Public Offering.

      The  effective  income tax rate for the  twenty-four  weeks ended June 16,
1998 was 37.0% and the effective income tax rate for the twenty-four weeks ended
June 17, 1997 was 37.5%.  This  decrease was  primarily due to the impact of tax
exempt interest income earned during the twenty-four weeks ended June 16, 1998.


                                      -10-

<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.


IMPACT OF INFLATION

      The  primary  inflationary  factors  affecting  the  Company's  operations
include food,  liquor and labor costs.  Although a large number of the Company's
restaurant personnel are paid at the federal minimum wage level, the majority of
personnel are tipped employees, and therefore,  recent as well as future minimum
wage changes will have very little  effect on labor costs.  As costs of food and
labor have  increased,  the Company has  historically  been able to offset these
increases through economies of scale and improved operating procedures. To date,
inflation has not had a material impact on operating margins.

LIQUIDITY AND CAPITAL RESOURCES

      Cash flows from  operations  were $2,032,000 and purchases of property and
equipment were $3,580,000 for the twenty-four week period ending June 16, 1998.

      At June 16, 1998, the Company had $2,988,000 in cash and cash equivalents.
The Company  intends to open twenty  locations in 1998 (two of which were opened
during the  twenty-four  week period  ending June 16, 1998 and two of which have
been opened since June 16, 1998).  Four  additional  units are  currently  under
construction,  and  leases  have been  signed on eleven  additional  sites.  The
Company  expects to expend  approximately  $19.0  million to open new  locations
through the remainder of fiscal 1998. In order to fund new unit development, the
Company has entered  into a  short-term  $6 million  line of credit with Intrust
Bank,  N.A. (the "Intrust  Line") and is currently  negotiating a $20-25 million
line of credit with several banks to replace the Intrust Line.

      The Company  believes the net proceeds from the Initial  Public  Offering,
its cash flow from  operations  and funds  anticipated  to be  available  from a
credit  facility will be  sufficient to satisfy its working  capital and capital
expenditure  requirements  for at least the next twelve months.  There can be no
assurance,   however,  that  changes  in  the  Company's  operating  plans,  the
availability of a credit facility,  the acceleration of the Company's  expansion
plans,  lower  than  anticipated   revenues,   increased   expenses,   potential
acquisitions  or other  events  will not cause the  Company  to seek  additional
financing  sooner  than  anticipated.  There  can  be  no  assurance  additional
financing will be available on terms acceptable to the Company or at all.

FORWARD LOOKING STATEMENTS

      This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Stockholders are cautioned that all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation,  the ability of the Company to open new restaurants,  general market
conditions,   competition  and  pricing.   Although  the  Company  believes  the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable,  any of the assumptions could be inaccurate,  and, therefore,  there
can be no assurance the forward-looking  statements contained in the report will
prove to be accurate.

                                      -11-
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.


YEAR 2000 COMPLIANCE

      The  Company  currently  believes  its  essential  processes,  systems and
business functions will be ready for the millennium transition and is taking the
necessary  steps  to  accomplish  this  objective.  The Year  2000  issue is not
anticipated  to have a material  impact on the Company's  results of operations,
financial position or its cash flows.

PART II.  OTHER INFORMATION

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS

SECURITIES SOLD

(c) The following unregistered  securities were issued by the Company during the
    twelve weeks ended June 16, 1998:

<TABLE>
<CAPTION>

                                                               Number of Shares
                                   Description of             Sold/Issued/Subject        Offering/Exercise
    Date of Sale/Issuance         Securities Issued         to Options or Warrants       Price Per Share
    ---------------------         -----------------         ----------------------       ---------------
<S>                             <C>                                  <C>                     <C>
    March 31, 1998              Common Stock Options                 7,143                   $ 7.00
    May 27, 1998                Common Stock Options                 8,696                   $ 5.75
</TABLE>

    All of the above  options  were  granted to certain key  employees
    pursuant to the 1997 Incentive and Nonqualified Stock Option Plan.
    These  options  have a vesting  period of five years and a life of
    ten years.

    The  issuance  of these  securities  is claimed to be exempt  from
    registration  pursuant to Section  4(2) of the  Securities  Act of
    1933,  as amended,  as  transactions  by an issuer not involving a
    public   offering.   There  were  no  underwriting   discounts  or
    commissions  paid in connection  with the issuance of any of these
    securities.

    USE OF PROCEEDS OF INITIAL PUBLIC OFFERING

    (4) (vii) Estimated  purchases and installation of furniture,
              fixtures and equipment                                   6,365,807

              Estimated  remaining net offering proceeds invested
              in various tax exempt securities and funds               1,894,069


                                 -12-
<PAGE>
                 TOTAL ENTERTAINMENT RESTAURANT CORP.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

      On May 26, 1998, the Company held its Annual  Meeting of  Stockholders(the
"Meeting").  At the Meeting,  the  stockholders  elected  Dennis L. Thompson and
Thomas A. Hager to the Board of Directors to serve until the 2001 Annual Meeting
of Stockholders and until their successors have been duly elected and qualified.
As to the new  elected  Directors,  there were  8,969,609  votes "For" and 1,000
votes  "Withheld"  for Dennis L. Thompson,  and 8,969,609  votes "For" and 1,000
votes "Withheld" for Thomas A. Hager. In addition, the stockholders ratified the
apointment of Ernst & Young as the Company's  independent  auditors for the year
ending  December  29,  1998.  As to the  ratification  of  auditors  there  were
8,970,049 votes "For", 0 votes "Against", and 560 votes "Abstained."

ITEM 5.  OTHER INFORMATION

      Pursuant to recent  amendments  to the proxy  rules  under the  Securities
Exchange Act of 1934, as amended,  the Company's  stockholders are notified that
the deadline for providing the Company timely notice of any stockholder proposal
to be  submitted  outside of the Rule 14a-8  process  for  consideration  at the
Company's 1999 Annual  Meeting of  Stockholders  (the "Annual  Meeting") will be
March 13, 1999. As to all such matters which the Company does not have notice on
or prior to March 13,  1999,  discretionary  authority  shall be  granted to the
designated persons in the Company's proxy statement for the Annual Meeting.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
The following exhibits are filed as part of this report:
         Exhibit No.
               10.1.....................Promissory  Note to Intrust  Bank,  N.A.
                                        issued by the  Company,  dated  June 24,
                                        1998.
               27.......................Financial Data Schedule

Reports on Form 8-K

               None


                                      -13-
<PAGE>
                      TOTAL ENTERTAINMENT RESTAURANT CORP.

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  in its  behalf by the
undersigned thereunto duly authorized.

                                            TOTAL ENTERTAINMENT RESTAURANT CORP.
                                            (Registrant)

      Date  JULY 31, 1998                   /s/  James K. Zielke
                                            ------------------------
                                            James K. Zielke
                                            Chief Financial Officer,
                                            Secretary and Treasurer
                                            (Duly Authorized Officer)


                                      -14-