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

   
                                   FORM 10-KSB/A
                                  AMENDMENT II
    

                                   (Mark One)
               [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1995

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

         For the transition period from...............to...............

                         Commission file number 0-18396

                        ENEX 88-89 INCOME AND RETIREMENT
                              FUND - Series 7, L.P.
                 (Name of small business issuer in its charter)

           New Jersey                                        76-0259724
       (State or other jurisdiction of                      (I.R.S. Employer
       incorporation or organization)                      Identification No.)

             800 Rockmead Drive
            Three Kingwood Place
               Kingwood, Texas                                    77339
  (Address of principal executive offices)                     (Zip Code)

         Issuer's telephone number, including area code: (713) 358-8401

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

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


                          Limited Partnership Interest

            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

            Check if there is no disclosure of delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.[x]

        State issuer's revenues for its most recent fiscal year. $106,571

            State  the  aggregate  market  value  of the  voting  stock  held by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock as of a specified  date within
the past 60 days (See  definition  of  affiliate  in Rule 12b-2 of the  Exchange
Act):

                                 Not Applicable

                      Documents Incorporated By Reference:

                                      None

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     Partnerships  with  interests  that  are  "publicly  traded"  are  taxed as
corporations unless at least 90% of their income is "qualifying income." Passive
income  or  loss  from  Publicly  traded  partnerships  that  are not  taxed  as
corporations  generally  cannot be applied  against  passive income or less from
other  sources.  As  stated  in  Item  5 of  this  Annual  Report,  there  is no
established  public  trading  market  for  the  Company's  limited   partnership
interests. In addition, the Company derives more than 90% of its income from oil
and gas activities,  which  constitutes  qualifying income within the meaning of
section  7704(d) of the Code.  Therefore,  the Company should not be affected by
the publicly traded partnership rules.
    

Item 2.           Description of Property

         Presented below is a summary of the Company's property acquisitions.

     BAYWOOD II acquisition. Effective May 1, 1990, overriding royalty interests
in 4 wells  located in E. Baton  Rouge & St.  Helena  Parishes,  Louisiana  were
purchased  from Charles R.  Higgerson et al.,  for  $136,529.  The Baywood II is
operated by Coalinga Oil Company.  The Company  owns royalty  interests  ranging
from .63% to .85% in the Baywood II acquisition at December 31, 1995.

     STRALEY  acquisition.  This acquisition  consists of an overriding  royalty
interest in the Straley 1-29 well located in Grand  Traverse  County,  Michigan.
This interest was acquired from West Bay  Properties  effective June 1, 1990 for
$163,620.  The Straley  acquisition is operated by Schumde Oil Corp. The Company
retains a 3.28% overriding royalty interest in the well at December 31, 1995.

     WARDNER RANCH acquisition. Royalty interests in 170 wells in Nueces County,
Texas  were  purchased  for  $1,030,200  from  Harkins & Co.  et al.,  effective
September 1, 1990.  The Wardner Ranch  acquisition  is operated by Union Pacific
Resources Company. The Company owns royalty interests ranging from .39% to 6.27%
in the Wardner Ranch acquisition at December 31, 1995.
 
     Purchase  price as used above is defined as the actual  contract price plus
finders' fees, if applicable.  Miscellaneous  acquisition  expenses,  subsequent
capital additions, etc. are not included.


Oil and Gas Reserves

     For quantitative  information regarding the Company's oil and gas reserves,
please see Supplementary Oil and Gas Information and related tables which follow
the Notes to Financial  Statements in Item 7 of this report. The Company has not
filed any current oil and gas reserve  estimates or included any such  estimates
in reports to any federal or foreign governmental authority or agency, including
the Securities and Exchange Commission.

     Proved  oil and gas  reserves  reported  herein  are  based on  engineering
reports prepared by the petroleum engineering  consulting firm of H. J. Gruy and
Associates,  Inc. The reserves  included in this report are  estimates  only and
should  not be  construed  as exact  quantities.  Future  conditions  may affect
recovery of estimated  reserves and revenue,  and all reserves may be subject to
revision as more performance data become available.  The proved reserves used in
this report conform to the applicable definitions  promulgated by the Securities
and Exchange Commission.  No major discovery or other favorable or adverse event
that  could  potentially  cause a  significant  change in the  estimated  proved
reserves has occurred since December 31, 1995.

                                      I-3


<PAGE>

                                   SIGNATURES


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

                                      ENEX 88-89 INCOME AND RETIREMENT 
                                      FUND - SERIES 7, L.P.

                                      By:    ENEX RESOURCES CORPORATION
                                              the General Partner



   
November 7, 1996                       By:     /s/   G. B. Eckley
                                              -------------------
                                                    G. B. Eckley, President


                  In  accordance  with the  Exchange  Act,  this report has been
signed  below on November 7, 1996,  by the following  persons in the capacities
indicated.
    


ENEX RESOURCES CORPORATION             General Partner


By:  /s/      G. B. Eckley

             ------------------------
              G. B. Eckley, President


     /s/      G. B. Eckley
                                        President, Chief Executive
              ------------------        Officer and Director


              G. B. Eckley


     /s/      R. E. Densford            Vice President, Secretary, Treasurer,
                                        Chief Financial Officer and Director
             -------------------


              R. E. Densford


     /s/      James A. Klein            Controller and Chief Accounting Officer

             -----------------

              James A. Klein



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