<PAGE>1

                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB

(Mark One)
_X_ Quarterly report pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934 for the quarterly period ended March 31, 1999
___ Transition  report  pursuant  to  13 or  15(d)  of the  Securities  Exchange
Act  of  1934  for  the transition period from _____________ to _____________ .

Commission File No. 1-4385

                          DUNES HOTELS AND CASINOS INC.
           (Exact name of business issuer as specified in its charter)

           NEW YORK                                       11-1687244
(State or other jurisdiction or               I.R.S. Employer Identification No.
incorporation or organization)

        4600 Northgate Boulevard, Suite 130, Sacramento, California 95834
                    (Address of principal executive offices)

                                 (916) 929-2295
                          (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 or the past 90 days. Yes X No

                      APPLICABLE ONLY TO CORPORATE ISSUERS
     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the latest  practicable  date:  6,375,096 shares of common
stock, $.50 par value as of April 30, 1999.

Transitional Small Business Disclosure Format (check one): Yes No X

<PAGE>2

                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 1999


                                      INDEX

                                                                            Page
Part 1. Financial Information

               Item 1. Financial Statements

               Consolidated Condensed Balance Sheets
               March 31, 1999 and December 31, 1978                            3

               Consolidated Condensed Statements of Operations
               for the three months ended March 31, 1999
               and 1998                                                        5

               Consolidated Condensed Statements of Cash Flows
               For the three months ended March 31, 1999
               and 1998                                                        6

               Notes to Consolidated Condensed Financial
               Statement                                                       7

               Item  2. Management's Discussion and Analysis of
               Financial Condition and Results of Operations                  10

Part II. Other Information

               Item 1. Legal Proceedings                                      14
               Item 2. Changes in Securities                                  14
               Item 3. Defaults Upon Senior Securities                        14
               Item 4. Submission of Matters to a Vote of Security Holders    14
               Item 5. Other Information                                      14
               Item 6. Exhibits and Reports on Form 8-K                       14

               Signatures                                                     15

<PAGE>3

                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                      CONSOLIDATED CONDENSED BALANCE SHEET

                      MARCH 31, 1999 AND DECEMBER 31, 1998
                             (Dollars in thousands)

                                     ASSETS

<TABLE>
<CAPTION>
<S>                                                                   <C>              <C>
                                                                            March          December
                                                                           31, 1999         31, 1998
                                                                       --------------   --------------
                                                                        (Unaudited)
Cash and cash equivalents                                               $      3,431     $      3,120
 
Marketable securities                                                            824              828

Receivables
    Trade                                                                         24                9
    Related party, less allowance of $1,899 in 1999 and 1998                      37               37
    Real estate sales                                                            458              369

Inventory of real estate held for sale                                         3,869            3,950

Prepaid expenses                                                                  79              115

Property and equipment,less accumulated depreciation
    and amortization, 1999, $631; 1998, $509                                   3,195            3,228

Real estate investment                                                                            544

Other assets                                                                       3                3
                                                                        -------------    ------------
                                                                        $     11,920     $     12,203
                                                                        =============    ============
</TABLE>

<PAGE>4

                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                CONSOLIDATED CONDENSED BALANCE SHEET (CONTINUED)

                      MARCH 31, 1999 AND DECEMBER 31, 1998
                             (Dollars in thousands)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>                                                                  <C>               <C>    
                                                                         March             December
                                                                         31, 1999          31, 1998
                                                                       --------------   --------------
                                                                        (Unaudited)
Accounts payable                                                       $          49    $          25

Accrued expenses                                                                 215              185

Due to former minority interest                                                  320              320

Income taxes                                                                     307              307

Short-term debt                                                                   20               49

Long-term debt and capital lease obligation                                    1,801            1,875

Accrued preferred stock dividends in arrears                                   1,263            1,245
                                                                       --------------   --------------

                                                                               3,975            4,006
                                                                       --------------   --------------
Shareholders' equity
    Preferred stock - authorized 10,750,000 shares ($.50 par);
        issued 10,512 shares Series B $7.50 cumulative preferred
        stock, outstanding 9,610 shares in 1999 and 1998, aggregate
        liquidation value $2,446 including dividends in arrears                    5                5

    Common stock - authorized 25,000,000 shares ($.50 par);
        issued 7,799,780 shares, outstanding 6,375,906 shares
        in 1999 and 1998                                                       3,900            3,900

    Capital in excess of par                                                  25,881           25,881

    Deficit                                                                  (19,841)         (19,589)
                                                                       --------------   --------------
                                                                               9,945           10,197
    Treasury stock at cost;  Preferred - Series B, 902 shares
        Common 1,424,684 shares in 1999 and 1998                              (2,000)          (2,000)
                                                                       --------------   --------------
 
        Total shareholders' equity                                             7,945            8,197
                                                                       --------------   --------------
                                                                       $      11,920    $      12,203
                                                                       ==============   ==============

 The accompanying notes are an integral part of these condensed financial
 statements.

</TABLE>


<PAGE>5

                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                   THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                    (Dollars in thousands, except per share)

                                    UNAUDITED

<TABLE>
<CAPTION>
<S>                                                                   <C>                <C> 
                                                                           1999               1998
                                                                      -----------------  -----------------
Revenues
    Sales of real estate                                              $            673   $             84
    Rental income, agricultural properties                                          12                 17
    Drying and storage revenues                                                     47                 30
    Miscellaneous income (expense), net                                                                 5
                                                                      -----------------  -----------------
                                                                                   732                136
                                                                      -----------------  -----------------
Cost and expenses
    Cost of real estate sold                                                       629                 86
    Cost and expenses of rental income                                               1                  1
    Cost of drying and storage revenues                                             79                131
    Selling, administrative and general
        Corporate                                                                  189                243
        Real estate operations                                                      40                 49
    Bad debts (recoveries), net                                                     (3)               159
    Depreciation                                                                    33                 32
                                                                      -----------------  -----------------
                                                                                   968                701
                                                                      -----------------  -----------------

Loss before other credits (charges) and income taxes                              (236)              (565)

Other credits (charges)
    Interest and dividend income                                                    52                 59
    Interest expense                                                               (42)               (30)
    Loss on marketable securities, net                                              (4)                (2)
                                                                      -----------------  -----------------
                                                                                     6                 27
                                                                      -----------------  -----------------

Loss before income taxes                                                          (230)              (538)

Income taxes                                                                        (4)                (2)
                                                                      -----------------  -----------------

Net loss                                                              $           (234)  $           (540)
                                                                      =================  =================
Weighted average number of shares outstanding                                6,375,096          6,375,096

Loss per common share                                                 $          (0.04)  $          (0.08)
                                                                      =================  =================
</TABLE>


    The accompanying notes are an integral part of these financial statements


<PAGE>6

                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                             (Dollars in thousands)

                                    UNAUDITED

<TABLE>
<CAPTION>
<S>                                                                 <C>                  <C>

                                                                            1999               1998
                                                                      -----------------  -----------------
Cash flows from operating activities:
    Net cash provided by (used in) operating activities               $            (33)  $           (217)
                                                                      -----------------  -----------------

Cash flows from investing activities:
    Decrease (increase) in investments                                             548               (249)
    Decrease (increase) in notes receivable                                       (101)               (73)
    Purchase of equipment                                                                             (37)
                                                                      -----------------  -----------------

                                                                                   447               (359)
                                                                      -----------------  -----------------

Cash flows from financing activities
    Decrease in long-term debt                                                     (74)               (36)
    Decrease in short-term debt                                                    (29)               (54)
                                                                      -----------------  -----------------

                                                                                  (103)               (90)
                                                                      -----------------  -----------------

Increase (decrease) in cash and cash equivalents                                   311               (666)

Cash and cash equivalents, beginning of period                                   3,120              4,299
                                                                      -----------------  -----------------
Cash and cash equivalents, end of period                              $          3,431   $          3,633
                                                                      =================  =================

</TABLE>

<PAGE>7

                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                    UNAUDITED


                                              
1.   Basis  of  presentation:  The  financial  information  included  herein  is
     unaudited;  however, such information reflects all adjustments  (consisting
     solely of normal  recurring  adjustments)  which  are,  in the  opinion  of
     management, necessary for a fair statement of results of operations for the
     interim periods.

     The  results of  operations  for the three months ended March 31, 1999, are
     not necessarily indicative of the results to be expected for the full year.
     A more detailed discussion of the Company's financial position is described
     in the Company's Form 10-KSB for the year ended December 31, 1998.

2.   Consolidation:

     The  accompanying  consolidated condensed financial statements include  the
     accounts  of the  Company  and its  wholly-owned  subsidiaries  Continental
     California  Corporation  (Continental),  M&R Corporation  (MRC),  and MRC's
     subsidiary M&R Investment  Company,  Inc. (MRI) and MRI's  subsidiaries SHF
     Acquisition   Corporation  (SHF)  and  Southlake  Acquisition   Corporation
     (Southlake),  after elimination of all material  inter-company balances and
     transactions.

3.   Related party transactions:

     John  B. Anderson (Anderson), the  Company's  controlling  stockholder  and
     ormer Chairman of the Board of Directors of the Company, and entities owned
     or controlled by him (Anderson  Entities) own  approximately  67.2 % of the
     Company's  common  stock  as of  April  30,  1999.  See  Note  11(b) in the
     Company's  Form  10-KSB  for the year ended  December  31,  1998  regarding
     litigation  between Anderson and the Federal Deposit Insurance  Corporation
     (the FDIC) and a possible  change in ownership of the Company.  Each Entity
     related or  controlled  by Anderson  will  hereinafter  be identified as an
     Anderson Entity.

     In November 1997, the Company entered into a Loan Purchase  Agreement  with
     Anderson, as Trustee of the John J. Anderson Family Trust (Trust). On March
     31,  1998,  the  Nevada  District  Court  ordered  that the  Loan  Purchase
     Agreement  be  rescinded   and  all  parties   return  any  of  the  assets
     transferred.  As a result, the Company has recorded a loss of approximately
     $162,500 at March 31, 1998.  See Note 3(a)(1) in the Company's  Form 10-KSB
     for the year ended December 31, 1998 for details of this transaction.

<PAGE>8
                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                    UNAUDITED

4.   Contingencies:

(a)  As of March 31,  1999,  there were no material  legal  proceedings  pending
     against the Company.  However, see note 3 regarding legal proceedings,  not
     involving  the  Company,  which may have a material  adverse  effect on the
     Company.  A more detailed  discussion of legal  proceedings is described in
     the Company's Form 10-KSB for the year ended December 31, 1998.

(b)  SHF was advised in 1991 of possible  contamination  at Sam Hamburg  Farm of
     approximately 5,000 cubic yards of contaminated earth. The Company, through
     its  chemical  and toxic  clean-up  consultant,  has been  working with the
     California State Environmental Protection Agency in seeking alternate means
     to the disposal in toxic dump sites of the chemical and toxic-laden soil.

     Because of  the ongoing  testing, the State has not imposed a disposal date
     upon the Company. Cost of disposal is estimated  at $100 per cubic  yard or
     approximately $500,000. However, if on-site remediation can be achieved, it
     is  estimated  that the cost will be  between  $90,000  and  $115,000.  The
     Company is unable to predict  when the ongoing  testing will be complete or
     what the outcome of these tests will be.  Accordingly,  the estimates could
     materially  change as the testing and  remediation  work  continues,  which
     could be as early as 1999.
    
(c)  The Company has  received a notice from the State of  California  Franchise
     Tax  Board  (FTB)  wherein  the  FTB  alleges  that  one of  the  Company's
     subsidiaries owes California franchise tax of approximately  $316,000, plus
     approximately  $350,000  in  penalties  and  interest  resulting  from  the
     foreclosure  sale of certain real  property  owned by the  subsidiary.  The
     Company  appealed this matter to the California State Board of Equalization
     (SBE)  which  ruled in favor of the Company on one point and ruled in favor
     of FTB on another. Both sides appealed and the SBE has agreed to rehear the
     case in July 1999.  Provision has been made in the financial statements for
     management's  minimum  estimate  of the  costs  of this  matter,  including
     penalties and interest accrued.

<PAGE>9
                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                    UNAUDITED

5.   Loss per common share:

     Loss per common  share has been computed by dividing the net loss  plus the
     accrued dividends applicable to the Series B Preferred stock ($18,000), for
     the three  months  ended  March 31,  1999 and 1998 by the  number of shares
     outstanding  (6,375,096)  as of March  31,  1999  and  1998.  Dividends  on
     non-convertible  preferred  stock,  Series B, are  deducted  from income or
     added to the loss  applicable to common shares.  Dividends on the Company's
     Series B  Preferred  stock  have not been paid  since the first  quarter of
     1982.  The  Company  is in  arrears  on such  dividends  in the  amount  of
     approximately  $1,263,000 as of March 31, 1999.  The Company has no present
     intention to pay dividends on either its common or preferred shares.


<PAGE>10


                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 1999

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

Certain    information    included   herein   contains   statements   that   are
forward-looking,  such as  anticipated  liquidity  requirements  for the  coming
fiscal year,  anticipated  sources of liquidity for the coming fiscal year,  and
potential changes in control of the Company.  Such  forward-looking  information
involves important risks and uncertainties that could  significantly  affect the
Company's   financial   condition  and  future  results  of   operations,   and,
accordingly, such future financial condition and results of operation may differ
from those expressed in any forward-looking  statements made herein. These risks
and  uncertainties  include,  but are not  limited to,  those risks  relating to
actual costs necessary to clean-up certain real property chemical contamination,
real estate market conditions and general economic conditions,  the abilities of
certain  third  parties to obtain  financing  and  otherwise  perform under real
estate  purchase  agreements,  and the outcome of certain  litigation  and other
risks.  The Company  caution  readers  not to place  undue  reliance on any such
forward-looking statements, and, such statements speak only as of the date made.

YEAR 2000 ISSUE

The Company has addressed the possible  exposures  related to the impact of Year
2000  issues.  The  internal  computer  systems  for key  financial  information
processing  and  operational  equipment  relating  to  the  computer  controlled
conveyors  at the  grain  drying  facility  have  been  assessed.  It  has  been
determined that accounting software is Year 2000-certified.  Computer systems at
the grain drying  facility,  which was built in 1997,  are also  compliant.  The
dryer as well as conveyor equipment can also be operated manually.

In the two main segments that the Company operates, real estate and agriculture,
neither  segment is dependent on computer  applications.  The Company feels that
these operations will not be affected by Year 2000 issues.

OVERVIEW

REAL ESTATE

FAIRWAYS

In December 1996 the Company sold 6 lots to Murieta Investors,  LLC (MI) for the
greater of $40,000 per lot or 20% of the gross  sales  price of the  residential
dwelling (Success Payment).  To date MI has constructed 4 dwelling units and has
not started any  construction  on the  remaining 2 lots.  One  dwelling was sold
during the first quarter of 1999 and the Company  received a Success  Payment in
the amount of $43,600.

<PAGE>11

                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 1999


Pursuant to a 1998  amendment to the Purchase and Option  Agreement  between the
Company  and MI,  the  Company  granted  to MI an option to  purchase  34 of the
remaining 44 lots at the Fairways. The lots covered by the option are subject to
prior sale by the Company. The options are exercisable starting December 1, 1998
(6 lots) and every six months thereafter (4 lots each).

In addition,  if 2  consecutive  options are not  exercised  then the  remaining
options are terminated.  MI did not exercise the December 1, 1998 option and the
Company does not expect the June 1, 1999 option to be exercised. The sales price
under the option is the  greater of $50,000  per lot or 20% of the lesser of (i)
the gross sales  price or (ii) the basic sales price as defined in the  Purchase
and Option Agreement dated October 7, 1996, less $50,000.

In anticipation of the lapse of the Purchase and Option  Agreement,  the Company
plans to initiate a sales  program  with  independent  builders to complete  The
Fairways.  The program will be similar to the MI program but without options and
it is expected that several builders will participate.

SOLANO COUNTY OPTION

In December  1998,  the Company  entered  into an  agreement to sell the option.
Escrow  closed in March 1999.  The  Company  received  $500,000  cash and a note
receivable  in the  amount  of  $33,333.  The  note is  payable  in four  annual
installments.

AGRICULTURAL

The Company operates a grain drying and storage facility. The drying facility is
financed by a 5-year  lease  which  commenced  in March 1998.  At the end of the
lease the Company will obtain title to the drying  facility.  The Company  dries
and stores grain principally for one customer under a contract, which expires in
May 2002.  If the  Company  were to lose this  customer it would have a material
adverse effect on the Company's agricultural segment.

OTHER

The  California  State Board of  Equalization  has  scheduled a July 1999 appeal
hearing to determine  the amount of Franchise  Tax, if any, that may be due as a
result of the sale of certain real property in San Diego, California.

The Company has no present  intentions  to pay dividends on either its common or
preferred stock.

<PAGE>12

                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 1999

           
OPERATING RESULTS

Three months ended March 31, 1999 vs. the three months ended March 31, 1998.

Real Estate

The  revenues  from the sale of real estate at The Fairways for the three months
ended March 31, 1999 when  compared  with the three months ended March 31, 1998,
are constant,  one lot sold in March 1999 versus one lot sold in the same period
during 1998. Sales at The Fairways continue to be slow.

The  sale  of the  Solano  Option  in  March  1999  resulted  in a net  loss  of
approximately  $10,000,  sales price  received  of $533,333  versus book cost of
approximately $544,000.

Real estate sales also included the "Success Payment", in the amount of $45,000,
received from Murieta Investors,  LLC from the sale of one residential  dwelling
at The Fairways.

Net rental income from agricultural  properties for the three months ended March
31, 1999 parallel the revenue for the same period in 1998.  The 1999-year is the
second year of a two-year lease for property located at Sam Hamburg Farm.

Agricultural

The loss from the grain drying and storage  operation for the three months ended
March 31, 1999 decreased by  approximately  $68,000 when compared with the three
months ended March 31,1998.  This is a result of the Company no longer operating
the West  Sacramento  facility for the drying and storage of short grain rice as
was done during this period in 1998.

General

When  compared  with the three  months ended March 31, 1998  operating  expenses
decreased by approximately  $62,000.  This decrease is consisted  primarily of a
reduction  in selling,  administrative  and  general  expenses  consisting  of a
decrease in officers/office  salaries ($40,000), a decrease in employee benefits
($10,000),  director fees decrease  ($4,000),  a decrease in  officers/directors
liability  insurance  premiums  ($6,000) and a decrease in dues/utilities at the
Fairways ($2,000).  The increase in depreciation  expense is attributable to the
grain dryer.


<PAGE>13

                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 1999


Interest  expense  for the  three  month  ended  March  31,  1999  increased  by
approximately  $12,000 when compared with the three months ended March 31, 1998.
The increase  consisted of an increase in interest expense relating to the grain
dryer which was partially  offset by a decrease in interest expense paid to Beal
Bank.

LIQUIDITY AND CAPITAL RESOURCES

During the quarter ended March 31, 1999,  cash, cash  equivalents and marketable
securities  increased by $307,000  from  $3,948,000  at December  31,  1998,  to
$4,255,000 at March 31, 1999. The increase in cash was due primarily to the sale
of the Solano Option.  The most significant uses of cash during the three months
ended March 31, 1999 consisted of cash used in operating  activities  ($33,000),
payments  on  long-term  and  short-term  debt  ($103,000)  and  a  decrease  in
investments of $548,000.

The Company  believes that its primary  requirements for liquidity in the coming
fiscal year will be to fund ongoing  expenses at The  Fairways,  which  include,
among other things,  association  dues, water and sewer fees and property taxes;
to fund the  required  payments on the note to Beal Bank;  to fund the  required
payments  due on the grain dryer  financing;  to fund costs that may be incurred
relating to the toxic clean-up at Sam Hamburg Farm; to fund any tax payment that
my be due to the  California  Franchise  Tax  Board;  and to  fund  general  and
administrative  expenses.  In  addition,  the  Company  may be  required to fund
certain costs relating to a possible stockholder meeting.

The Company  believes that sources of required  liquidity will be cash generated
from the grain  drying  and  storage  facilities,  anticipated  lot sales at The
Fairways,  collection of notes  receivable and Success  Payments  related to the
venture with Murieta  Investors and the cash available at March 31, 1999.  Based
on known  commitments,  the Company  believes that the sources of cash described
and the  cash  available  at March  31,  1999  will be  adequate  to fund  known
liquidity requirements.

<PAGE>14

                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 1999



                             PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

         None, except for the  discussion  contained  in  footnote 3 in Notes to
Consolidated Condensed Financial Statements.

ITEM 2.  Changes in Securities

         Not applicable

ITEM 3.  Default Upon Senior Securities

         Dividends in  arrears.  See Note 5 of Notes to  Consolidated  Condensed
Financial Statements for the quarter ended March 31, 1999.

ITEM 4.  Submission of Matters to a Vote of Security Holders

         Not applicable

ITEM 5.  Other Information

         None

ITEM 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

               27.01  Financial Data Schedule

(b)      Reports on Form 8-K

               None


<PAGE>15


                                   SIGNATURES

     PURSUANT TO THE  REQUIREMENTS  OF THE SECURITIES  EXCHANGE ACT OF 1934, THE
REGISTRANT  HAS DULY  CAUSE  THIS  REPORT  TO BE  SIGNED  ON ITS  BEHALF  BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                                                   DUNES HOTELS AND CASINOS INC.
                                                             Registrant



Date: April 30, 1999                               By:  /s/ Edward Pasquale
                                                   Edward Pasquale, President



                                                   By: /s/ Marvin P. Johnson
                                                   Marvin P. Johnson
                                                   Principal Financial and
                                                   Accounting Officer