----

| x      | Quarterly                  report pursuant to section 13 or 15(d) of the Securities Exchange                  Act of                  1934  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
|   | For                  the quarter and nine months ended September 30, 2005 or                                                                |
|   |                                                                                                                                        |
| o      | Transition                  report pursuant to section 13 or 15(d) of the Securities Exchange                  Act of                  1934 |
|   | For                  the transition period from ___________ to                  ____________                                                |

| **CRESTED                  CORP.**                                                    |
|---------------------------------------------------------------------------------------|
| (Exact                  Name of Company as Specified in its                  Charter) |

| **Colorado**                                                      |   | **84-0608126**                       |
|-------------------------------------------------------------------|--------|--------------------------------------|
| (State                  or other jurisdiction of                  |   | (I.R.S.                  Employer    |
| incorporation                  or organization)                   |   | Identification                  No.) |
|                                                              |   |                                 |
| **877                  North 8****th****West, Riverton, WY**      |   | **82501**                            |
| (Address                  of principal executive offices)         |   | (Zip                  Code)          |
|                                                              |   |                                 |
| Company's                  telephone number, including area code: |   | **(307)                  856-9271**  |

| Class                                          |   | Outstanding                  Shares at November 11, 2005 |
|------------------------------------------------|--------|----------------------------------------------------------|
| Common                  stock, $.001 par value |   | 17,164,298                                               |

----

----

**CRESTED        CORP.**

**INDEX**

|                            |                                                                                | Page                    No.     |
|---------------------------------|-------------------------------------------------------------------------------------|---------------------------------|
| **PART                    I.**  | **FINANCIAL                    INFORMATION**                                        |                            |
|                            |                                                                                |                            |
| ITEM                    1.      | Financial                    Statements:                                            |                            |
|                            |                                                                                |                            |
|                            | Condensed                    Balance Sheets                                         |                            |
|                            | September                    30, 2005 (Unaudited) and December 31, 2004 (Audited)   | 4-5                             |
|                            |                                                                                |                            |
|                            | Condensed                    Statements of Operations (Unaudited)                   |                            |
|                            | Three                    and Nine Months Ended September 30, 2005 and 2004          | 6                               |
|                            |                                                                                |                            |
|                            | Condensed                    Statements of Cash Flows (Unaudited)                   |                            |
|                            | Nine                    Months Ended September 30, 2005 and 2004                    | 7-8                             |
|                            |                                                                                |                            |
|                            | Notes                    to Condensed Financial Statements (Unaudited)              | 9-13                            |
|                            |                                                                                |                            |
| ITEM                    2.      | Management’s                    Discussion and Analysis of                    |                            |
|                            | Financial                    Condition and Results of Operations                    | 14-19                           |
|                            |                                                                                |                            |
| ITEM                    3.      | Quantitative                    and Qualitative Disclosures About Market Risk  | 20-21                           |
|                            |                                                                                |                            |
| ITEM                    4.      | Controls                    and Procedures                                          | 22                              |
|                            |                                                                                |                            |
| **PART                    II.** | **OTHER                    INFORMATION**                                            |                            |
|                            |                                                                                |                            |
| ITEM                    1.      | Legal                    Proceedings                                                | 23-24                           |
|                            |                                                                                |                            |
| ITEM                    2.      | Changes                    in Securities and Use of Proceeds                        | 24                              |
|                            |                                                                                |                            |
| ITEM                    3.      | Defaults                    upon Senior Securities                                  | 24                              |
|                            |                                                                                |                            |
| ITEM                    4.      | Submission                    of Matters to a Vote of Security Holders              | 25                              |
|                            |                                                                                |                            |
| ITEM                    5.      | Other                    Information                                                | 25                              |
|                            |                                                                                |                            |
| ITEM                    6.      | Exhibits                    and Reports on Form 8-K                                 | 26                              |
|                            |                                                                                |                            |
|                            | Signatures                                                                          | 27                              |
|                            |                                                                                |                            |
|                            | Certifications                                                                      | See                    Exhibits |

----

| **CRESTED                    CORP.**                                         |   |
|------------------------------------------------------------------------------|--------|
| **CONDENSED                    BALANCE SHEETS**                              |   |
| **(Unaudited)**                                                              |   |
| **ASSETS**                                                                   |   |
|                                                                         |   |   |   |   |   |
|                                                                         |   | September                    30, |   | December                    31, |   |
|                                                                         |   | 2005 |   | 2004 |   |
|                                                                         |   | (Restated) |   | (Audited) |   |
| CURRENT                    ASSETS:                                           |   |   |   |   |   |
| Cash                    and cash equivalents                                 |   | $ | 94,800 |   | $ | 3,800 |   |
| Marketable                    securities                                     |   |   | -- |   |   | -- |   |
|                                                                         |   |   | 94,800 |   |   | 3,800 |   |
|                                                                         |   |   |   |   |   |   |   |
| INVESTMENTS:                                                                 |   |   |   |   |   |   |   |
| Affiliates                                                                   |   |   | 3,321,600 |   |   | 2,969,800 |   |
| Non-affiliated                    companies                                  |   |   | 6,491,500 |   |   | -- |   |
|                                                                         |   |   | 9,813,100 |   |   | 2,969,800 |   |
|                                                                         |   |   |   |   |   |   |   |
| PROPERTIES                    AND EQUIPMENT:                                 |   |   |   |   |   |   |   |
| Machinery                    and other equipment                             |   |   | 10,000 |   |   | 10,000 |   |
| Developed                    oil properties, full cost method                |   |   | 886,800 |   |   | 886,800 |   |
|                                                                         |   |   | 896,800 |   |   | 896,800 |   |
| Less                    accumulated depreciation, depletion and amortization |   |   | (886,800 | ) |   | (886,800 | ) |
|                                                                         |   |   | 10,000 |   |   | 10,000 |   |
|                                                                         |   | $ | 9,917,900 |   | $ | 2,983,600 |   |
|                                                                         |   |   |   |   |   |   |   |

----

| **CRESTED                    CORP.**                                          |   |
|-------------------------------------------------------------------------------|--------|
| **CONDENSED                    BALANCE SHEETS**                               |   |
| **(Unaudited)**                                                               |   |
| **LIABILITIES                    AND SHAREHOLDERS' DEFICIT**                  |   |
|                                                                          |   |   |   |   |   |
|                                                                          |   | September                    30, |   | December                    31, |   |
|                                                                          |   | 2005 |   | 2004 |   |
|                                                                          |   | (Restated) |   | (Audited) |   |
| CURRENT                    LIABILITIES:                                       |   |   |   |   |   |
| Current                    debt to affiliate                                  |   | $ | 9,979,600 |   | $ | 9,650,900 |   |
| Deferred                    income                                            |   |   | -- |   |   | -- |   |
| Taxes                    payable                                              |   |   | -- |   |   | -- |   |
| Asset                    retirement obligation                                |   |   | 96,400 |   |   | 96,400 |   |
|                                                                          |   |   | 10,076,000 |   |   | 9,747,300 |   |
|                                                                          |   |   |   |   |   |   |   |
| COMMITMENT                    TO FUND EQUITY INVESTEES                        |   |   | 215,600 |   |   | 215,600 |   |
|                                                                          |   |   |   |   |   |   |   |
| ASSET                    RETIREMENT OBLIGATION                                |   |   | 1,141,600 |   |   | 1,073,500 |   |
|                                                                          |   |   |   |   |   |   |   |
| COMMITMENTS                    AND CONTINGENCIES                              |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |
| FORFEITABLE                    COMMON STOCK, $.001 par value                  |   |   |   |   |   |   |   |
| 15,000                    shares issued, forfeitable until earned             |   |   | 10,100 |   |   | 10,100 |   |
|                                                                          |   |   |   |   |   |   |   |
| SHAREHOLDERS'                    DEFICIT:                                     |   |   |   |   |   |   |   |
| Preferred                    stock, $.001 par value;                          |   |   |   |   |   |   |   |
|  100,000                    shares authorized none issued or outstanding |   |   | -- |   |   | -- |   |
| Common                    stock, $.001 par value; unlimited shares            |   |   |   |   |   |   |   |
|  authorized;                    17,149,298 and 17,137,298 shares         |   |   |   |   |   |   |   |
|  issued                    and outstanding                               |   |   | 17,200 |   |   | 17,200 |   |
| Additional                    paid-in capital                                 |   |   | 11,814,400 |   |   | 11,809,600 |   |
| Accumulated                    deficit                                        |   |   | (13,357,000 | ) |   | (19,889,700 | ) |
|                                                                          |   |   | (1,525,400 | ) |   | (8,062,900 | ) |
|                                                                          |   | $ | 9,917,900 |   | $ | 2,983,600 |   |
|                                                                          |   |   |   |   |   |   |   |

----

| **CRESTED                    CORP.**                                 |   |
|----------------------------------------------------------------------|--------|
| **CONDENSED                    STATEMENTS OF OPERATIONS**            |   |
| **(Unaudited)**                                                      |   |
|                                                                 |   |   |   |   |   |   |   |   |   |
|                                                                 |   | Three                    months ended September 30, |   | Nine                    months ended September 30, |   |
|                                                                 |   | 2005 |   | 2004 |   | 2005 |   | 2004 |   |
|                                                                 |   | (Restated) |   |   |   | (Restated) |   |   |   |
| REVENUES:                                                            |   | $ | -- |   | $ | -- |   | $ | -- |   | $ | -- |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COSTS                    AND EXPENSES:                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accretion                    of asset retirement obligation          |   |   | 22,700 |   |   | 22,800 |   |   | 68,100 |   |   | 68,100 |   |
| Change                    in estimate of asset retirement obligation |   |   | -- |   |   | -- |   |   | -- |   |   | 25,800 |   |
| General                    and administrative                        |   |   | 50,700 |   |   | 50,600 |   |   | 161,500 |   |   | 183,600 |   |
|                                                                 |   |   | 73,400 |   |   | 73,400 |   |   | 229,600 |   |   | 277,500 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING                    LOSS                                    |   |   | (73,400 | ) |   | (73,400 | ) |   | (229,600 | ) |   | (277,500 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                    INCOME & ESPENSES:                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividend                    income                                   |   |   | 12,400 |   |   | -- |   |   | 12,400 |   |   | -- |   |
| Interest                    income                                   |   |   | 800 |   |   | -- |   |   | 800 |   |   | -- |   |
| Gain                    on sale of marketable securities             |   |   | 448,300 |   |   | -- |   |   | 448,300 |   |   | -- |   |
| Gain                    on valuation of derivatives                  |   |   | 258,000 |   |   | -- |   |   | 1,486,800 |   |   | -- |   |
| Gain                    (loss) on sale of investments                |   |   | (65,800 | ) |   | -- |   |   | 5,816,700 |   |   | -- |   |
|                                                                 |   |   | 653,700 |   |   | -- |   |   | 7,765,000 |   |   | -- |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GAIN                    (LOSS) BEFORE EQUITY LOSS, AND               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PROVISION                    FOR INCOME TAXES                        |   |   | 580,300 |   |   | (73,400 | ) |   | 7,535,400 |   |   | (277,500 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EQUITY                    IN GAIN (LOSS) OF AFFILIATE                |   |   | 187,600 |   |   | (300,600 | ) |   | (902,700 | ) |   | (1,089,300 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GAIN                    (LOSS) BEFORE PROVISION                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FOR                    INCOME TAXES                                  |   |   | 767,900 |   |   | (374,000 | ) |   | 6,632,700 |   |   | (1,366,800 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PROVISION                    FOR INCOME TAXES                        |   |   | -- |   |   | -- |   |   | (100,000 | ) |   | -- |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                    GAIN (LOSS)                                   |   | $ | 767,900 |   | $ | (374,000 | ) | $ | 6,532,700 |   | $ | (1,366,800 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PER                    SHARE DATA                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                    GAIN (LOSS) PER SHARE, BASIC                  |   | $ | 0.04 |   | $ | (0.02 | ) | $ | 0.38 |   | $ | (0.08 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                    GAIN (LOSS) PER SHARE, DILUTED                |   | $ | 0.04 |   | $ | (0.02 | ) | $ | 0.38 |   | $ | (0.08 | ) |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BASIC                    WEIGHTED AVERAGE                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SHARES                    OUTSTANDING                                |   |   | 17,149,298 |   |   | 17,124,639 |   |   | 17,145,298 |   |   | 17,120,278 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DILUTED                    WEIGHTED AVERAGE                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SHARES                    OUTSTANDING                                |   |   | 17,164,298 |   |   | 17,124,639 |   |   | 17,160,298 |   |   | 17,120,278 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| **CRESTED                    CORP.**                                    |   |
|-------------------------------------------------------------------------|--------|
| **CONDENSED                    STATEMENTS OF CASH FLOWS**               |   |
| **(Unaudited)**                                                         |   |
|                                                                    |   |   |   |   |   |
|                                                                    |   | Nine                    months ended September 30, |   |
|                                                                    |   | 2005 |   | 2004 |   |
|                                                                    |   | (Restated) |   |   |   |
| CASH                    FLOWS FROM OPERATING ACTIVITIES:                |   |   |   |   |   |
| Net                    gain (loss)                                      |   | $ | 6,532,700 |   | $ | (1,366,800 | ) |
| Adjustments                    to reconcile net gain (loss) to net cash |   |   |   |   |   |   |   |
| used                    in operating activities:                        |   |   |   |   |   |   |   |
| Equity                    in loss of affiliate                          |   |   | 902,700 |   |   | 1,089,300 |   |
| Gain                    on sale of affiliate                            |   |   | (5,816,700 | ) |   | -- |   |
| Gain                    on valuation of derivatives                     |   |   | (1,486,800 | ) |   | -- |   |
| Gain                    on sale of marketable securities                |   |   | (448,300 | ) |   | -- |   |
| Change                    in asset retirement obligation                |   |   | -- |   |   | 25,800 |   |
| Accretion                    of asset retirement obligation             |   |   | 68,100 |   |   | 68,100 |   |
| Non                    cash compensation                                |   |   | 4,800 |   |   | 4,800 |   |
| NET                    CASH USED IN OPERATING ACTIVITIES                |   |   | (243,500 | ) |   | (178,800 | ) |
|                                                                    |   |   |   |   |   |   |   |
| CASH                    FLOWS FROM INVESTING ACTIVITIES:                |   |   |   |   |   |   |   |
| Investment                    in non-affiliated companies               |   |   | (65,800 | ) |   | -- |   |
| Proceeds                    from sale of marketable securities          |   |   | 2,177,800 |   |   | -- |   |
| Investment                    in affiliate                              |   |   | (1,905,800 | ) |   | (2,063,800 | ) |
| NET                    CASH PROVIDED BY                                 |   |   |   |   |   |   |   |
| (USED                    IN) INVESTING ACTIVITIES                       |   |   | 206,200 |   |   | (2,063,800 | ) |
|                                                                    |   |   |   |   |   |   |   |
| CASH                    FLOWS FROM FINANCING ACTIVITIES:                |   |   |   |   |   |   |   |
| Net                    activity on debt to affiliate                    |   |   | 128,300 |   |   | 2,243,100 |   |
|                                                                    |   |   |   |   |   |   |   |
| NET                    INCREASE IN                                      |   |   |   |   |   |   |   |
| CASH                    AND CASH EQUIVALENTS                            |   |   | 91,000 |   |   | 500 |   |
|                                                                    |   |   |   |   |   |   |   |
| CASH                    AND CASH EQUIVALENTS AT                         |   |   |   |   |   |   |   |
| BEGINNING                    OF PERIOD                                  |   |   | 3,800 |   |   | 3,300 |   |
|                                                                    |   |   |   |   |   |   |   |
| CASH                    AND CASH EQUIVALENTS AT                         |   |   |   |   |   |   |   |
| END                    OF PERIOD                                        |   | $ | 94,800 |   | $ | 3,800 |   |
|                                                                    |   |   |   |   |   |   |   |

----

| **CRESTED                    CORP.**                           |   |
|----------------------------------------------------------------|--------|
| **CONDENSED                    STATEMENTS OF CASH FLOWS**      |   |
| **(Unaudited)**                                                |   |
| (continued)                                                    |   |   |   |   |   |
|                                                           |   | Nine                    months ended September 30, |   |
|                                                           |   | 2005 |   | 2004 |   |
|                                                           |   | (Restated) |   |   |   |
| SUPPLEMENTAL                    DISCLOSURES:                   |   |   |   |   |   |
| Interest                    paid                               |   | $ | -- |   | $ | -- |   |
|                                                           |   |   |   |   |   |   |   |
| Income                    tax paid                             |   | $ | -- |   | $ | -- |   |
|                                                           |   |   |   |   |   |   |   |
| NONCASH                    INVESTING AND FINANCING ACTIVITIES: |   |   |   |
| Issuance                    of stock to outside directors      |   | $ | 4,800 |   | $ | 4,800 |   |
|                                                           |   |   |   |   |   |   |   |
| Investment                    in Non-affiliated companies      |   | $ | 6,734,200 |   | $ | -- |   |
|                                                           |   |   |   |   |   |   |   |
| Deferred                    gain on sale of Rocky Mountain Gas |   | $ | 424,500 |   | $ | -- |   |
|                                                           |   |   |   |   |   |   |   |
| Net                    activity on debt to affiliate           |   | $ | 200,400 |   | $ | -- |   |
|                                                           |   |   |   |   |   |   |   |
| Investment                    in affiliate                     |   | $ | 651,300 |   | $ | -- |   |
|                                                           |   |   |   |   |   |   |   |

----

**CRESTED                CORP.**

**Notes                to Condensed Financial Statements                (Unaudited)**

----

**CRESTED                CORP.**

**Notes                to Condensed Financial Statements (Unaudited)**

|                                                         |   | September                    30, 2005 |       |
|--------------------------------------------------------------|--------|---------------------------------------|------------|
| Deferred                    tax assets:                      |   |                             |       |
| Deferred                    compensation                     |   | $                                     | 3,500      |   |
| Deferred                    gains                            |   |                                  | 109,300    |   |
| Allowances                    and impairments                |   |                                  | 254,600    |   |
| Net                    operating loss carry-forwards         |   |                                  | 4,377,500  |   |
| Tax                    credits including AMT                 |   |                                  | 115,400    |   |
| Total                    deferred tax assets                 |   |                                  | 4,860,300  |   |
|                                                         |   |                                  |       |   |
| Deferred                    tax liabilities:                 |   |                                  |       |   |
| Basis                    difference of investments           |   |                                  | (1,289,700 | ) |
| Development                    and exploration costs         |   |                                  | (37,200    | ) |
| Total                    deferred tax liabilities            |   |                                  | (1,326,900 | ) |
| Net                    deferred tax assets - all non-current |   |                                  | 3,533,400  |   |
|                                                         |   |                                  |       |   |
| Valuation                    allowance                       |   |                                  | (3,533,400 | ) |
| Net                    deferred tax asset                    |   | $                                     | --         |   |

|                                                                                                                                                                                  |   | Nine                    Months Ended  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|
|                                                                                                                                                                                  |   | September                    30, 2005 |
| Expected                    federal income tax expense                                                                                                                                |   | $                                     | 2,047,000 |
| Losses                    from subsidiaries not consolidated                    for tax purposes, utilization                    of net operating losses                    and other |   |                                  | (74,000) |
| Valuation                    allowance (decrease)                                                                                                                                     |   |                                  | (1,873,000) |
| Income                    taxes                                                                                                                                                       |   | $                                     | 100,000  |

----

**CRESTED                CORP.**

**Notes                to Condensed Financial Statements (Unaudited)**

|                                                                                                                                                                                                                   |   | Nine                    months Ended |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                                                                                                                                                                   |   | September                    30,     |       |
|                                                                                                                                                                                                                   |   | 2005                                 |       | 2004 |   |
| Net                    Gain (Loss), as reported                                                                                                                                                                        |   | $                                    | 6,532,700  |   | $ | (1,366,800 | ) |
| Deduct:                    Total stock-based employee compensation expense determined under                    fair                    value based method for all award, net of related tax                    effects |   | $                                    | (1,956,400 | ) |   | -- |   |
| Pro                    forma net profit (loss)                                                                                                                                                                         |   | $                                    | 4,576,300  |   | $ | (1,366,800 | ) |
|                                                                                                                                                                                                                   |   |                                 |       |   |   |   |   |
| Earnings                    per share:                                                                                                                                                                                 |   |                                 |       |   |   |   |   |
| Basic                    - as reported                                                                                                                                                                                 |   | $                                    | 0.38       |   | $ | (0.06 | ) |
| Basic                    - pro forma                                                                                                                                                                                   |   | $                                    | 0.27       |   | $ | (0.06 | ) |
| Diluted                    - as reported                                                                                                                                                                               |   | $                                    | 0.38       |   | $ | (0.06 | ) |
| Diluted                    - pro forma                                                                                                                                                                                 |   | $                                    | 0.27       |   | $ | (0.06 | ) |
|                                                                                                                                                                                                                   |   |                                 |       |   |   |   |   |
| Basic                    weighted average shares outstanding                                                                                                                                                           |   |                                 | 17,145,298 |   |   | 17,120,278 |   |
|                                                                                                                                                                                                                   |   |                                 |       |   |   |   |   |
| Diluted                    weighted shares outstanding                                                                                                                                                                 |   |                                 | 17,160,298 |   |   | 17,120,278 |   |

----

**CRESTED                CORP.**

**Notes                to Condensed Financial Statements (Unaudited)**

| Balance                  December 31, 2004            |   | $      | 1,169,900 |   |
|-------------------------------------------------------|--------|--------|-----------|--------|
| Addition                  to Liability                |   |   | --        |   |
| Liability                  Settled                    |   |   | --        |   |
| Accretion                  Expense - 8% discount rate |   |   | 68,100    |   |
| Balance                  September 30, 2005           |   | $      | 1,238,000 |   |

----

**CRESTED                CORP.**

**Notes                to Condensed Financial Statements (Unaudited)**

|                                                         |   | Previously                            |        |       |   |                                  |   |
|--------------------------------------------------------------|--------|---------------------------------------|-------------|------------|--------|---------------------------------------|--------|
|                                                         |   | Reported                              |        |       |   | Restated                              |   |
|                                                         |   | September                    30, 2005 |        | Adjustment |   | September                    30, 2005 |   |
|                                                         |   |                                  |        |       |   |                                  |   |
| Investment                    in non-affiliated companies    |   | $                                     | 5,004,700   |       | $      | 1,486,800                             |   | $ | 6,491,500 |   |
| Total                    assets                              |   | $                                     | 8,431,100   |       | $      | 1,486,800                             |   | $ | 9,917,900 |   |
|                                                         |   |                                  |        |       |   |                                  |   |   |   |   |
| Deferred                    Income                           |   | $                                     | 424,500     |       | $      | (424,500                              | )      | $ | - |   |
| Accumulated                    deficit                       |   | $                                     | (15,268,300 | )          | $      | 1,911,300                             |   | $ | (13,357,000 | ) |
| Total                    liabilities and shareholders equity |   | $                                     | 8,431,100   |       | $      | 1,486,800                             |   | $ | 9,917,900 |   |

|                                               |   | Previously                            |      |       |   |                                  |   |
|----------------------------------------------------|--------|---------------------------------------|-----------|------------|--------|---------------------------------------|--------|
|                                               |   | Reported                              |      |       |   | Restated                              |   |
|                                               |   | September                    30, 2005 |      | Adjustment |   | September                    30, 2005 |   |
|                                               |   |                                  |      |       |   |                                  |   |
| Gain                    on valuation of derivative |   | $                                     | -         |       | $      | 1,486,800                             |   | $ | 1,486,800 |   |
| Gain                    on sale of investment      |   | $                                     | 5,392,200 |       | $      | 424,500                               |   | $ | 5,816,700 |   |
| Net                    gain (loss)                 |   | $                                     | 4,621,400 |       | $      | 1,911,300                             |   | $ | 6,532,700 |   |
|                                               |   |                                  |      |       |   |                                  |   |   |   |   |

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**CRESTED        CORP.**

**ITEM        2. **
**Management's        Discussion and Analysis of Financial Condition and Results of        Operations**
**.**

**General        Overview**

**Liquidity        and Capital Resources**

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**Capital        Resources**

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**Capital        Requirements**

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**Results        of Operations**

**Quarter        and Nine Months Ended September 30, 2005 compared with the Quarter and Nine        Months Ended September 30, 2004**

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**Nine        Months Ended September 30, 2004 compared with the Nine Months Ended September        30, 2003**

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**Forward        Looking Statements**

**Critical        Accounting Policies**

**Employee        Stock-Based Compensation**
*        Accounting for Stock-Based Compensation,*
*Accounting        for Stock-Based Compensation*
*Accounting        for Stock Issued to Employees*

**Asset        Retirement Obligation**

**Contractual        Obligations**

**Recent        Accounting Pronouncements**

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**ITEM        3. Quantitative and Qualitative Disclosures About Market        Risk**

**Risk        Factors **

**The        following risk factors should be considered in evaluating the information        in        this Form 10-Q.**

** **

**Uncertainties        in the value of the mineral properties**

| ·   | The                profitable mining and processing of uranium and vanadium at and in                the                vicinity of Plateau’s properties in Utah will depend on many factors:                Obtaining properties in proximity to the Shootaring mill to keep                transportation costs economic; delineation through extensive drilling                and                sampling of sufficient volumes of mineralized material, with sufficient                grades, to make mining and processing economic over time; continued                sustained high prices for uranium oxide and vanadium; obtaining the                capital required to upgrade the Shootaring mill and add a vanadium                circuit; and obtaining and continued compliance with operating permits. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                profitable mining at the Sheep Mountain properties in Wyoming will                depend                on: Evaluation of existing data to delineate sufficient volumes of                mineralized material, with sufficient grades, to make mining and                processing economic over time; continued sustained high prices for                uranium                oxide; and UPC and the Company having sufficient capital to complete                the                drilling and sampling work. In addition, there is no operating mill                near                Sheep Mountain; the ultimate economics of mining the Sheep Mountain                properties will depend on access to a mill or sufficiently high uranium                oxide prices to warrant shipments to faraway mills. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                profitable mining and processing of gold by Sutter Gold Mining Inc.                (in                which the Company owns a substantial stake) will depend on many factors,                including compliance with permit conditions; delineation through                extensive                drilling and sampling of sufficient volumes of mineralized material,                with                sufficient grades, to make mining and processing economic over time;                continued sustained high prices for gold; and obtaining the capital                required to initiate and sustain mining operations and build and                operate a                gold processing mill. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | We                have not yet obtained feasibility studies on any of our mineral                properties. These studies would establish the economic viability,                or not,                of the different properties based on extensive drilling and sampling,                the                design and costs to build and operate gold and uranium/vanadium mills,                the                cost of capital, and other factors. Feasibility studies can take                many                months to complete. These studies are conducted by professional third                party consulting and engineering firms, and will have to be completed,                at                considerable cost, to determine if the deposits contain proved reserves                (amounts of minerals in sufficient grades that can be extracted profitably                under current pricing assumptions for development and operating costs                and                commodity prices). A feasibility study usually must be completed                in order                to raise the substantial capital needed to put a property into production.                We have not established any reserves (economic deposits of mineralized                materials) on any of our uranium/vanadium or gold properties, and                future                studies may indicate that some or all of the properties will not                be                economic to put into production. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                molybdenum property (in which the Company will have a substantial                interest                at such time as Phelps-Dodge conveys the Mt. Emmons properties back                to USE                and the Company) has had extensive work conducted by prior owners,                but                this data will have to be updated to the level of a current feasibility                study to determine the viability of starting mining operations. Obtaining                mining and other permits to begin mining the molybdenum property                may be                very difficult, and, like any mining operation, capital requirements                for a                molybdenum mining operation will be                substantial. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Compliance        with environmental regulations may be costly**

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**ITEM        4. **
**Controls        and Procedures**

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**PART        II. OTHER INFORMATION**

**ITEM        1. **
**Legal        Proceedings**

**Sheep        Mountain Partners**

**Phelps        Dodge**

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**Coastline        Capital Partners**

**ITEM        2. **
**Changes        in Securities and Use of Proceeds**

**ITEM        3. **
**Defaults        upon Senior Securities**

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

| Name                  of Director |   | Term                  Expires |   | For        |   | Abstain |
|-----------------------------------|--------|-------------------------------|--------|------------|--------|---------|
|                              |   |                          |   |       |   |    |
| Daniel                  P. Svilar |   | 2008                          |   | 15,877,442 |   | 6,275   |
|                              |   |                          |   |       |   |    |

|                                                                                                                         |   | Votes                  For |   | Votes                  Against |   | Abstain |
|------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|--------|--------------------------------|--------|---------|
|                                                                                                                         |   |                       |   |                           |   |    |
| Appointment                  of Epstein, Weber & Conover, PLC as independent                  auditors for calendar 2005 |   | 15,877,467                 |   | 1,350                          |   | 4,900   |

**ITEM        5. **
**Other        Information**

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**ITEM        6. **
**Exhibits        and reports on Form 8-K**

|   | (a)    | Exhibits.                                                                                                                                                                                              |                                                                                                                                                                                                                                                                              |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                              |
|   |   | 31.1                                                                                                                                                                                                   | Certification                  of President Pursuant to Rule 13a-15(e) / Rule                  15d-15(e)                                                                                                                                                                          |
|   |   | 31.2                                                                                                                                                                                                   | Certification                  of Chief Financial Officer Pursuant to Rule 13a-14(a) / Rule                  15(e)/15d-15(e)                                                                                                                                                      |
|   |   | 32.1                                                                                                                                                                                                   | Certification                  of President Pursuant to 18 U.S.C. Section 1350, as adopted by                  Section 906                  of the Sarbanes-Oxley Act of 2002                                                                                                     |
|   |   | 32.2                                                                                                                                                                                                   | Certification                  of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,                  as adopted                  by Section 906 of the Sarbanes-Oxley Act of 2002                                                                                       |
|   |   |                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                              |
|   | (b)    | **Reports                  on Form 8-K.**                  The Company filed three reports on Form 8-K for the quarter ended                  September 30, 2005. The events reported were as follows: |
|   |   |                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                              |
|   |   | 1.                                                                                                                                                                                                     | The                  report filed on August 5, 2005, under Item 8.01 referenced the                  Company and                  U.S. Energy resuming exploratory drilling at its Sheep Mountain                  uranium                  property.                             |
|   |   |                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                              |
|   |   | 2.                                                                                                                                                                                                     | The                  report filed on September 1, 2005, under Item 8.01 referenced the                  outcome                  of a Status Hearing in the litigation/arbitration with Nukem,                  Inc.                                                              |
|   |   |                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                              |
|   |   | 3.                                                                                                                                                                                                     | The                  report filed on September 7, 2005, under Item 8.01 referenced an                  additional Agreement between the Company, U.S. Energy and Uranium                  Power                  Corp. to acquire additional uranium                  properties. |

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**SIGNATURES**

|                                  |   | CRESTED                  CORP.                   |   |
|---------------------------------------|--------|--------------------------------------------------|--------|
|                                  |   | (Company)                                        |   |
|                                  |   |                                             |   |
|                                  |   |                                             |   |
|                                  |   |                                             |   |
| Date:                  March 31, 2006 | By:    | /s/Harold                  F. Herron             |   |
|                                  |   | HAROLD                  F. HERRON,               |   |
|                                  |   | President                                        |   |
|                                  |   |                                             |   |
|                                  |   |                                             |   |
|                                  |   |                                             |   |
|                                  |   |                                             |   |
| Date:                  March 31, 2006 | By:    | /s/Robert                  Scott Lorimer         |   |
|                                  |   | ROBERT                  SCOTT LORIMER            |   |
|                                  |   | Principal                  Financial Officer and |   |
|                                  |   | Chief                  Accounting Officer        |   |

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