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

                                   FORM 10-QSB

(Mark One)

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

    For the quarterly period ended: June 30, 1997

[ ]            TRANSITION REPORT PURSUANT SECTION 13 OF 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

    For the transition period from _________________ to ______________

                         Commission file number 0-17232

                           CAPITAL RESERVE CORPORATION
        (Exact name of small business issuer as specified in its charter)

           COLORADO                                            84-0888594
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                           Identification No.)

           7860 EAST BERRY PLACE, SUITE 215, ENGLEWOOD, COLORADO 80111
                    (Address of principal executive offices)

                                  (303)220-5030
                           (Issuer's telephone number)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report)

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

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the last practicable date:

           546,045 SHARES OF CLASS A COMMON STOCK, NO PAR VALUE, AS OF
                                  JUNE 30, 1997

    Transitional Small Business Disclosure Format (check one);  Yes___  No _X_
Exhibit index on page 7                                        Page 1 of 9 pages


<PAGE>



                           CAPITAL RESERVE CORPORATION

                           Consolidated Balance Sheet

                                  June 30, 1997

                                   (Unaudited)



ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                    $   55,638
  Accounts receivable                                                 351
  Marketable securities                                            95,447
                                                                 --------
   Total currents assets                                          151,436


EQUIPMENT - AT COST
  Furniture and equipment                                          34,701
  Less accumulated depreciation                               (    12,415)
                                                               ----------
                                                                   22,286
  OTHER ASSETS

  TOTAL ASSETS                                                 $  173,722
                                                                 ========



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                    $    90,386
                                                               ----------
      Total current liabilities                                    90,386
                                                               ----------

  STOCKHOLDERS' EQUITY
  Class A common stock                                          3,138,102
  Class B preferred stock                                          50,000
  Accumulated deficit                                          (3,104,766)
                                                                ---------



                                                                   83,336
                                                                 --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $  173,722
                                                                =========


See accountants report and notes to financial statements




                                        2

<PAGE>


<TABLE>
                           CAPITAL RESERVE CORPORATION

                      Consolidated statements of operations

                                   (Unaudited)
<CAPTION>

                                                     Three months ended                 Six months ended
                                                          JUNE 30,                          JUNE 30,


                                                      1997              1996            1997            1996
                                                      ----              ----            ----            ----
<S>                                                 <C>              <C>             <C>            <C> 
Revenues
  Insurance residuals                                $ 4,519           $ 4,370        $ 8,555         $ 9,116
  Consulting revenues                                      -                 -          2,500               -
  Interest and dividends                                 526             1,977          1,773           5,063
  Investment gains (Loss)                            (10,498)           42,132         69,358          49,616
  Loss on sales of vehicles                          (16,168)              126        (16,168)              -
  Other                                                2,000                 -         11,950             705
                                                      ------                 -        -------          ------

    Total revenues                                   (19,621)           48,605         77,968          64,500
                                                      ------            ------        -------         -------

Expenses
  General and administrative                          45,574            90,664        170,350         186,824
  Interest                                                 -             1,294              -           1,294
  Other                                                    -            12,462              -          12,462
                                                      ------           -------        -------         -------

    Total expenses                                    45,574           104,420        170,350         200,580
                                                      ------           -------        -------         -------

Net (loss) from continuing operation                 (65,195)          (55,815)       (92,382)       (136,080)

Loss  from discontinued rental
  operations                                               -           ( 1,571)             -         ( 1,871)
                                                      ------           -------         ------        --------

Net  (loss)                                         $(65,195)         $(57,386)      $(92,382)      $(137,951)
                                                      ======            ======         ======         =======


Net (loss) per common share
  Continuing operations                               $ (.12)          $ (.10)        $  (.17)        $ (.24)
  Discontinued operations                                  -                -               -              -
                                                       -----            -----          ------          -----

Net (loss) per common share                          $  (.12)        $ (.10)          $  (.17)        $ (.24)
                                                      ======          =====            ======          =====





</TABLE>








                                                    3

<PAGE>

<TABLE>

                                       CAPITAL RESERVE CORPORATION

                                  Consolidated Statements of Cash Flows

                                               (Unaudited)

<CAPTION>


Six Months Ended June 30,                                                      1997                  1996
<S>
Operations activities:                                                              <C>            <C>
  Net loss                                                                           $(92,382)     $  (137,951)
  Reconciling adjustments:
     Depreciation and amortization                                                      5,313           12,916
     Gain on Investment                                                               (69,358)         (49,616)
     Loss on sale of assets                                                            16,168                -
     Loss (gain) on extinguishment of debt                                                   -          12,462

Changes in assets and liabilities:
  Other current assets                                                                  8,927           15,815

  Accounts payable and accrued liabilities                                           (155,504)         (22,277)
                                                                                      -------       ----------

     Total adjustments                                                               (194,454)          30,700
                                                                                      -------       ----------

Net cash used for operating activities                                               (286,836)        (168,651)

Investing activities:
  Investments in common stock                                                           5,461         (103,004)
  Sales of investments in common stock                                                 91,138            97,241
  Proceeds from sale of assets                                                         16,500                 -
  Proceeds from other investments                                                           -             8,637


  Purchase of property                                                                      -           (23,973)
                                                                                    ---------        ----------

    Net  cash provided by investing activities                                        113,099           (21,099)
                                                                                      -------          --------

Financing activities:
  Payment on note payable - related party                                                   -           (73,000)
  Purchase of treasury stock                                                                -            (2,000)
                                                                                    ---------       -----------

    Net  cash used for financing activities                                                 -           (75,000)
                                                                                    ---------        ----------

Net change in cash and cash equivalents                                              (173,737)         (264,750)
Cash and cash equivalents at beginning of period                                      229,375           346,304
                                                                                      -------      ------------

Cash and cash equivalents at end of period                                           $ 55,638      $     81,554
                                                                                      =======       ===========

</TABLE>

                                        4

<PAGE>



                           CAPITAL RESERVE CORPORATION

                   Notes to Consolidated Financial Statements

                                  June 30, 1997

                                   (Unaudited)


NOTE A - MANAGEMENT'S STATEMENT

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain all  adjustments  (all of which are normal and  recurring in
nature)  necessary to present fairly the financial  position of Capital  Reserve
Corporation  as of June 30, 1997,  and the results of  operations  for the three
months and six months  ended June 30, 1997 and 1996,  and cash flows for the six
months  ended June 30, 1997 and 1996.  The Notes to the  Consolidated  Financial
Statements  which are  contained in the Form 10-K should be read in  conjunction
with these consolidated financial statements.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (ITEM 303)

LIQUIDITY AND CAPITAL RESOURCES

Working  capital at June 30,  1997,  was  $61,050,  as compared to $102,626  and
$99,254 at June 30, 1996, and December 31, 1996, respectively. Since the Company
has no  significant  source of  revenue,  working  capital  will  continue to be
depleted by operating expenses.  Furthermore,  if the Company should generate an
operating loss for the current year comparable to the loss incurred for the year
ended December 31, 1996, a substantial  portion of the Company's  remaining cash
and working capital will be depleted.

Current  liabilities  were  $90,386 at June 30, 1997 as compared to $148,584 and
$245,890 at June 30, 1996,  and December 31, 1996,  respectively.  The change in
current  liabilities  is  primarily  due to the  payment of a note  payable to a
shareholder,  expenses  incurred with the  settlement  of a lawsuit  regarding a
former  subsidiary of the Company and the  indemnification  expenses  associated
therewith.

RESULTS OF OPERATIONS

Due to the sale of the  Company's  rental  real  estate,  the  Company no longer
receives  rental  revenues.  Rental  operations  are  reflected as  discontinued
operations  in the statement of  operations.  While the Company has continued to
receive  income (and losses) from Insurance  residuals,  Interest and dividends,
and Investments,  these items are not a significant source of income compared to
the Company's operating expenses.

The Company had total  revenues of $77,968 and $64,500 for the six months  ended
June 30, 1997 and 1996, respectively.  For the three months ended June 30, 1997,
the Company's  revenues were ($19,621).  As the result of the sale of marketable
securities,  for the six  months  ended  June 30,  1997,  the  Company  recorded
Investment  Gains of $69,358,  as compared to $49,616 for the same period during
1996.  The Company also  experienced a $11,245  increase in Other  income.  This
increase  was largely due to the  recognition  of  partnership  income  received
during  1996 from the  Company's  2.25%  interest  in Andrews  Partners  I, Ltd.
("Andrews"),   a  Colorado   limited   partnership,   engaged  in  real   estate
transactions.

                                        5

<PAGE>



General and  administrative  expenses  for the six months  ended June 30,  1997,
include legal expenses of $56,646.02 which have been incurred in connection with
a lawsuit  regarding a former  subsidiary of the Company initiated in September,
1995, which was dismissed on April 10, 1997.

General and administrative expenses for the six months ended June 30, 1997, also
include  salaries of $49,500 and related  payroll tax  expenses of $4,344.  Also
included in general and  administrative  expenses  for the six months ended June
30, 1997, are Accounting and auditing  expenses of $11,005 and Entertainment and
Development expenses of $5,472.

As compared to the six months  ended June 30, 1996,  operating  expenses for the
current period were 15% lower.  The net loss from continuing  operations for the
six months ended June 30, 1997,  decreased by 52%, generally,  attributable to a
decrease in expenses.

The Company's present business operations do not generate sufficient revenues to
cover its  operating  expenses.  The Company,  through a  subsidiary  named Wall
Street Investment Corp., is attempting to start a financial  consulting company.
Whether  Wall Street  Investment  Corp.  will prove to be viable and a source of
revenue  is  unknown.  For the six  months  ended  June 30,  1997,  Wall  Street
Investment  Corp.  contributed  $2,500 in revenue to the  Company's  operations;
however,  for the three months ended June 30, 1997, Wall Street Investment Corp.
did not contribute any revenue to the Company's operations.


                           PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS (ITEM 103)

                  Not Applicable.

ITEM 2.           CHANGES IN SECURITIES

                  Not Applicable

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

                  Not Applicable

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

                  Not Applicable

ITEM 5.           OTHER INFORMATION

                  Not Applicable



                                        6

<PAGE>



ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K (ITEM 601)
<TABLE>

                  A)       EXHIBITS
<CAPTION>

           REGULATION S-B                                                                  CONSECUTIVE
              NUMBER                        EXHIBIT                                        PAGE NUMBER
                  <S>      <C>                                                                   <C>
                   2       Plan of purchase, sale, reorganization
                           arrangement, liquidation, succession                                  N/A
                  3(i)     Articles of Incorporation as Amended(1)<F1>                           N/A
                  3(ii)    Bylaws as Amended(2)<F2>                                              N/A
                   4       Instruments defining the rights of security
                           holders, including indentures                                         N/A
                  10       Settlement Agreement(3)<F3>                                           N/A
                  11       Statement re computation of per share earnings(4)<F4>                 N/A
                  15       Letter on unaudited financial information(5)<F5>                      N/A
                  18       Letter on change in accounting principles                             N/A
                  19       Report furnished to security holders                                  N/A
                  22       Published report regarding matters submitted
                           to vote of security holders                                           N/A
                  23       Consents of experts and counsel                                       N/A
                  24       Power of Attorney                                                     N/A
                  27       Financial Data Schedule                                                9
--------------------------------
<FN>
<F1>
(1)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 1990.
<F2>
(2)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
         December 31, 1994.
<F3>
(3)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-KSB/A Amendment No. 1 for the fiscal
         year ended December 31, 1996.
<F4>
(4)      See Part I - Financial Statements.

<F5>
(5)      See Part I - Financial Statements.

</FN>
</TABLE>
         B)       REPORTS ON FORM 8-K: NONE

                                        7

<PAGE>


                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                            CAPITAL RESERVE CORPORATION
                                            (Registrant)

Date:    AUGUST 14, 1997                    By: /S/RALPH W. NEWTON, JR.
         -------------------------              -----------------------
                                            Ralph W. Newton, Jr.
                                            Principal Financial and Accounting
                                            Officer and President

63097.10q

                                        8