United  States  Securities  and  Exchange  Commission
Washington,  D.C.  20549
Form  10-K

Annual  Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934  for  the  fiscal  year  ended  September  30,  1998
Commission  File  Number  000-24817
Exact name of registrant as specified in its charter: 21st Century Telesis (II),
Inc.
State  or  other  jurisdiction  of  incorporation  or  organization:  Delaware
I.R.S.  Employer  Identification  No.:  33-069528
Address of principal executive offices: 650 Town Center Drive, Suite 1999, Costa
Mesa,  CA  92626
Registrant's  telephone  number,  including  area  code:  (949)  752-2178
Securities  registered  pursuant  to  Section  12(b)  of  the  Act:  none
Securities registered pursuant to Section 12(g) of the Act: 21st Century Telesis
(II),  Inc.  Preference  Stock
Indicate  by  check mark whether the registrant has file all reports required to
be  filed  by  Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  past 12 months, or such shorter period that registrant was required to file
such reports and whether registrant has been subject to such filing requirements
for  the  past  90  days.  The  answer  to  both  questions  is  yes.
Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.
Aggregate  market  value  of  the  voting  and  non-voting common equity held by
non-affiliates  of  the  registrant:  $22,688,280, as determined by the price at
which  at  which  such  equity  was  sold.
Indicate the number of shares outstanding of each of the registrant's classes of
common  stock, as of the latest practicable date: 100 shares of common stock and
2,571,328  shares  of  preference  stock  (note: all preferences associated with
registrant's  preference  stock have lapsed, and such stock is equivalent in all
respects  to  common  stock).
Documents  incorporated  by  reference:  inapplicable.


Part  I
Prefatory Note: The statements contained in this Form 10 that are not historical
facts  are  "forward-looking  statements"  (as defined in the Private Securities
Litigation  Reform  Act  of  1995),  which  can  be  identified  by  the  use of
forward-looking words such as "believes," "expects," "may," "will," "should," or
"anticipates"  or the negative thereof or other variations thereon or comparable
words.  Registrant  wishes  to  caution  the  reader  that these forward-looking
statements,  including, without limitation, statements regarding the development
of  Registrant's business, the markets for its services, its anticipated sources
of  financing  and  capital  expenditures  and other statements contained herein
regarding  matters  that  are  not  historical  facts,  are only predictions. No
assurances  can  be  given  that such predictions will prove correct or that the
anticipated future results will be achieved; actual events or results may differ
materially,  either  because  one  or  more  of  such  predictions  prove  to be
erroneous,  or  as  a  result  of  risks  facing  Registrant.

Item  1.  Business.
-General  Development  of  Business
     Registrant  and its joint venture partner, 21st Century Telesis, Inc., were
formed  in  late  1994 and early 1995 in Delaware, and formed a Delaware general
partnership  under  the  name of the 21st Century Telesis Joint Venture in early
1995,  for the purpose of raising funds to participate in the FCC's entrepreneur
block  PCS auctions. In this Form 10, references to "registrant" shall be deemed
to include a reference to its joint venture partner, 21st Century Telesis, Inc.,
and  to  the  Joint  Venture,  unless  the  context  indicates  otherwise.
     For  its  entrepreneur  block auctions, the FCC established bidding credits
and  favorable  payment  terms for qualifying small businesses. The FCC required
participants  to  prove they were genuine small businesses, and not catspaws for
larger  interests,  by  demonstrating  their  compliance  with one or another of
several  structural  profiles  approved  by the FCC. The Joint Venture satisfied
these requirements by designating a "control group," which is required to own at
least  25%  of the total shareholder equity in the licensee and must exercise de
facto  and  de  jure  control  over  its  affairs.
     Seven  individuals,  five  of  whom  are  directors  of registrant, were so
designated  in  filings  with  the  FCC  prior  to  the  commencement of the PCS
auctions.  One  of these individuals has since resigned from employment with the
Companies.  Control  is  exercised by the remaining six individuals by virtue of
their  voting  control  over  registrant's  joint  venture partner, 21st Century
Telesis,  Inc., which in turn, under the terms of the 21st Century Telesis Joint
Venture  Agreement,  enjoys  sole  management  authority over the affairs of the
Joint  Venture.  The  Joint  Venture  Agreement also specifies that 21st Century
Telesis,  Inc.  is  entitled  to  a fixed distributive share of 30% of the Joint
Venture's  distributable  profits;  The  six  "control  group"  members  own,
collectively,  sufficient  shares  of the capital stock of 21st Century Telesis,
Inc.  to  ensure  that  their  equity  interest in the licences is at least 25%,
calculated  on  a  fully-diluted  basis.
     The  FCC conducted two auctions for PCS licenses in which participation was
restricted  to qualifying small businesses: licenses in the C block, covering 30
MHz  of bandwidth and licenses in the F block, covering 10 MHz of bandwidth. The
Joint  Venture  secured  17  C block licenses, 8 F block licenses, and 2 D block
licenses  (10  MHz  PCS licenses not reserved for small business licencees). The
markets  for  which licenses are owned by Joint Venture and the amounts paid for
such  licenses  are  set  forth  in  the  two  tables  below:
Registrant's  C  Block  Licenses
<TABLE>
<CAPTION>





Market            Population  License Cost   Cost per pop<F1>
<S>               <C>         <C>            <C>
Jackson, MS. . .     615,521  $  18,126,000  $           29.45
Syracuse, NY . .     791,140     16,914,000              21.38
South Bend, IN .     330,821     13,226,846              39.82
Lincoln, NE. . .     309,515      7,657,871              24.74
Binghamton, NY .     356,645      6,902,254              19.35
Utica, NY. . . .     316,633      6,750,000              21.32
Terre Haute, IN.     236,968      5,344,596              22.55
Grand Island, NE     141,541      4,447,500              31.42
Kokomo, IN . . .     184,899      3,926,846              21.24
Watertown, NY. .     296,253      3,647,250              12.31
Marion, IN . . .     109,238      2,374,496              21.74
Ithaca, NY . . .      94,097      2,325,004              24.71
Oneonta, NY. . .     107,742      1,954,540              18.14
Danville, IL . .     114,241      1,894,256              16.58
North Platte, NE      80,249      1,549,346              19.31
McCook, NE . . .      36,618        671,963              18.35
Vincennes, IN. .      93,758        480,070               5.12
TOTAL. . . . . .   4,215,879  $  98,192,838  $       23.20<F2>
</TABLE>




<F1>  i.e.,  the  cost  of  the  license  divided by the total population of the
market.
<F2>  average  cost  per  pop.

Registrant's  D  and  F  Block  Licenses
<TABLE>
<CAPTION>




Market              Population  License Cost   Cost per Pop
<S>                 <C>         <C>            <C>
Indianapolis, IN .   1,321,911  $   2,475,408  $        1.87
Lafayette, IN. . .     247,523        236,996           0.96
Elkhart, IN. . . .     235,152        304,237           1.29
Bloomington,IN<F1>     217,914        790,650           3.63
Muncie, IN . . . .     182,386        321,221           1.76
Michigan City,IN .     107,066        160,314            1.5
Scranton, PA . . .     678,410        561,375           0.83
Plattsburgh, NY. .     123,121        114,005           0.93
Glens Fall, NY . .     118,539        521,662            4.4
Hastings, NE . . .      72,833        164,062           2.25
TOTAL. . . . . . .   3,304,855  $   5,649,930  $        1.71
</TABLE>


<F1>  The  licenses  for  Bloomington,  Indiana  and Muncie, Indiana are D block
licenses,  and  thus are paid in full; the licenses for the other markets in the
table  are  financed  with  the  FCC  over  a  ten-year  term.
The  FCC  has  granted  10-year  installment payment terms for the C block and F
block  licenses,  contingent  upon  the  licensee's  continuing  satisfaction of
applicable  control  group  requirements.
-Registrant's  Plan  of  Operation  Through  Its  Next  Fiscal  Year
--------------------------------------------------------------------
Registrant has completed all preliminary engineering studies needed to build out
its  27  markets.  It has also leased premises in South Bend, Indiana to house a
switch  and  administrative  offices and has reached agreement in principle with
the  local  power  utility  providing  for  installation  on  power  poles  of
approximately  80%  of  the  radio  ports expected to be needed for that market.
Finally,  registrant  has  prepared  detailed  construction  practices  studies
applicable  to  all  its  markets.
Registrant's  current fiscal year will end on June 30, 1999, as a consequence of
a  recent  amendment  to  registrant's  bylaws changing its fiscal year from one
ending  on  September  30  to  one  ending on June 30. During the balance of the
fiscal  year  ending  June 30, 1999, registrant will seek to conclude agreements
with  the incumbent wireline telephone service providers in its markets covering
the infrastructure requirements for registrant's PCS operations (chiefly, use of
the  incumbent's  wire  to  route  traffic  from  registrant's  radio  ports  to
registrant's  central  office  switch,  and  the provision of power to the radio
ports)  and  covering  interconnection charges for telephone traffic originating
with  a  customer of registrant and terminating with a customer of the incumbent
or  other  service  provider,  and  vice  versa.
If  registrant  receives  timely  financing in material amounts, as discussed in
Item  7 below, registrant will begin deployment of its markets during the period
mentioned above. In the absence of such financing, registrant does not expect to
complete  any  additional  significant tasks related to system deployment during
the  balance  of  its  current  fiscal  year.
The  total  cost  to  acquire  and  install the equipment needed to bring all 27
markets  on  line,  or  to being any substantial portion thereof on line, and to
establish  and  bring  to  operational level the required management, marketing,
customer  service,  maintenance  and  billing  functions,  greatly  exceeds  the
financial  resources  of  registrant  and  the Joint Venture. Over and above the
costs  mentioned  in  the  preceding sentence, additional cash will be needed to
defray anticipated start-up losses and to provided necessary working capital, in
aggregate  amounts  which  likewise  exceed  the  financial  resources currently
available  to  registrant.  See  "Management  Discussion  and Analysis," Item 7,
below.
Registrant  is  exploring  means  to finance all the above costs by a variety of
means.  In that connection, registrant has reached agreement with Hughes Network
Systems for the provision and installation of radio ports and radio port control
and network control equipment in all 27 of registrant's markets; as part of this
agreement  Hughes  has  agreed  in  principle  to  provide  the  partial  vendor
guarantees  needed  for  the financing mentioned above, subject to Hughes' final
approval  of  any  financing  ultimately  arranged.  Registrant has also reached
agreement  with  vendors  of  other  services  and  equipment  necessary for the
buildout  of its markets. All such agreements are contingent upon timely receipt
of  financing  by registrant, and none of such agreements comes into force until
such  financing  has  beensecured.  As  to the status of Registrant's efforts to
secure  financing,  see  "Management  Discussion  and  Analysis,"  Item 7, below
Concurrently  with  its  attempt  to  secure  financing  for all of its markets,
Registrant  and its affiliates have also pursued the lesser amounts of financing
needed  to  build  only  a  portion  of  their  markets.  See  Item  7.
Registrant's  expenses currently consist of (1) overhead items, such as employee
salaries,  fees paid for professional services, business travel, office premises
rentals, office equipment purchase and lease costs and telecommunications costs,
and other customary business expenses, and (2) interest payments owed to the FCC
on the deferred portion of the acquisition cost of the 17 C block licenses and 8
F  block  licenses.  See  Notes  1.d. and 2 to the Combined Financial Statements
dated  as  of September 30, 1998, included as Item 8 of this Form 10-K. On March
24,  1998,  the  FCC issued an order that, inter alia, gave licensees, including
registrant, three means by which licensees might reduce their debt to the FCC by
returning  licenses  or  spectrum to the FCC. These measures and their attendant
consequences  are discussed in Note 2 to the Combined Financial Statements dated
as  of September 30, 1998 included as Item 8 of this Form 10-K. On June 8, 1998,
registrant  returned  to  the  FCC  half  the spectrum in each of its 17 C block
licenses.  As  a  consequence  of  this  decision,  registrant's continuing debt
service  requirements  to  the  FCC have been cut approximately in half, with no
near-term  impact  on  anticipated  operations.
Registrant  currently  has  12 full-time employees, with a total annual employee
payroll  of  $933,080. Registrant anticipates having approximately 600 employees
within  five  years  if  all  27  markets  are  timely  built.
-Financial  Information  About  Foreign and Domestic Operations and Export Sales
--------------------------------------------------------------------------------
     Registrant  has  had  no  revenues  from  operations.  Except  for  certain
expenditures  incurred  in  connection  with  exploring  foreign  business
opportunities,  which  are  immaterial  in  the  aggregate,  all of registrant's
expenditures  have  been  incurred in connection with its domestic PCS business.
-PACS  Technology
-----------------
The  Joint  Venture  plans  to deploy PCS equipment based on the Personal Access
Communications  Services  ("PACS") standard.This technology, which was developed
by BellCore, has an open system interconnection architecture and is optimized to
provide  a low-cost, high-quality wireless telephone system capable of replacing
wireline  telephony.  The  system  is  designed  to function as an add-on to the
existing  wireline  infrastructures,  and  utilizes low-cost, low-power wireless
radio  ports  and radio port controllers which in turn connect with the wireline
infrastructure.  Because  cell sizes are small, the handsets carried by the user
can  be  small,  low-powered and inexpensive. PACS PCS technology is designed to
offer  superior  voice  quality,  but  also  offers  other  advanced  digital
capabilities, such as data transmission, fax, paging and, ultimately, compressed
video.  PACS  is  the only "low tier" common air interface currently approved by
the Joint Technical Committee for use in the United States. The technology is an
improved  version  of  the  Personal Handy Phone service which has been deployed
with  great  success  in Japan and which is currently undergoing trials in other
countries.  In  addition  to  the  portable applications, the technology readily
supports  fixed  point  usage,  providing  an  economical  means  to  connect
conventional  telephones to the central office switch. Because it is designed as
an  add-on to the existing wireline infrastructure, and because of the low costs
implicit  in  the  technology,  PCS  systems based on the PACS standard have the
potential to be price-competitive with wireline telephony. None of the other PCS
technologies  developed  thus  far  can be deployed with capital costs as low as
PACS  equipment.
Because  of  this  cost  advantage,  registrant  hopes  to  be  able  to achieve
satisfactory  market  penetration for its service, notwithstanding the existence
in  each  of  its  markets  of  (a)  an  existing,  well-financed and well-known
incumbent  wireline  operator;  (b)  up to two well-established cellular service
providers;  (c)  up  to  5  PCS  licensees  (including  licensees holding 10 MHz
licenses  in  the  D,  E  or  F  blocks),  some  of  whom  may be presumed to be
better-financed  than  registrant  and  whose  systems  may  be  deployed before
registrant's;  and  (d)  the aggregated SMR service offered by Nextel in much of
the  country.  In  addition,  the  FCC  has  announced  plans to make additional
spectrum  available  in  the  future  to  support  additional wireless telephone
services.  Registrant  expects  to  compete  with all the abovementioned service
providers  based  on  cost,  service  and  product  performance.
Few  PCS  licensees  have  announced  plans  to deploy systems based on the PACS
technology  selected  by  registrant: most have opted to deploy systems based on
other  standards.  At  the  present  time,  equipment designed to work under one
technological  standard  will  not work with another. As a consequence, handsets
used  by  registrant's  customers  in  their home markets will support only very
limited "roaming" outside those markets. Such roaming may become possible in the
future,  if  other  PCS  licensees  elect  to  deploy  PACS-based systems, or if
handsets  compatible with multiple standards are developed and become available.
-Registrant's  Licenses:
------------------------
     The  licenses  granted to registrant give it the right to offer PCS service
for a period of 10 years; the licenses are renewable for an indefinite number of
successive  10-year  terms,  assuming  that  registrant continues to satisfy the
FCC's  common  carrier  regulations.
The  licenses  are  subject  to  a  number  of  conditions:
1.  Construction  requirements:
a)          within  five years after issuance of the C block licenses facilities
must  be  constructed to provide adequate service to one-third of the population
of  the  market,  and  to  two-thirds  in  10  years;
b)          within  five years after issuance of the F block licenses facilities
must  be constructed to provide adequate service to one-fourth of the population
of  the  market.
2.  Registrant's  C  and  F  block  licenses  (which cover 25 of registrant's 27
markets) were obtained at FCC auctions reserved for qualifying small businesses,
and  as  a consequence are subject to a number of restrictions, chief among them
being the requirement that an identified control group exercise control over the
licenses  for  the full 10-year initial term. With FCC approval, licenses may be
transferred  during  the initial 10-year term to other entities that satisfy the
FCC's requirements respecting small businesses. Licenses may also be transferred
to entities that do not meet the FCC small business requirements, but the unpaid
balance  of  the  purchase  price  and  bidding  credits  must  be  paid in full
immediately.  The  Licenses  must  also be fully paid-up and the bidding credits
repaid  in  the  event  that  the  Joint  Venture ceases to meet the FCC's small
business  requirements  at  any  time  during  the 10-year period of the initial
license  grant.
-PACS  Equipment
----------------
     The  PACS  standard is based on an open architecture, and thus any category
of  equipment  can  be  manufactured by multiple vendors. Although this works in
favor  of ready availability and low prices, other factors may tend to constrain
supply  or  registrant's  freedom  in  choosing  equipment  vendors.
First,  no  PCS  systems based on the PACS standard have been deployed thus far,
and  it  is  uncertain  how many of such systems may be installed in the future;
lack  of demand could reduce the number of manufacturers interested in supplying
PACS  PCS  equipment.  Second,  registrant has recently signed an agreement with
Hughes  Network  Systems  for  the provision and installation of PCS networks in
registrant's  27  markets.  Even,  therefor,  if  other  vendors  enter the PACS
equipment  market,  registrant  will  be  able  to  avail itself of vendor price
competition  only  for  markets  it  may  acquire  in  the  future.
     The  equipment  to  be  installed  and/or  utilized in registrant's markets
consists  of  radio ports, radio port control units, central office switches and
billing  equipment  and  individual user handsets. The number of radio ports and
radio port controllers required in any given market will vary in accordance with
traffic  density.  For  its  27  markets,  registrant  expects to pay a total of
approximately  $220  million  for  radio  ports,  radio  port  controllers  and
associated  network  control  equipment.
The cost of a central office switch, including associated site improvement cost,
is approximately $3,000,000. Registrant estimates that the initial deployment of
operating  systems  in  all 27 markets will require expenditures for acquisition
and  installation  of  switches of between $10 to $15 million, exclusive of site
improvements.
Registrant's  business  plan  assumes  that  it  will purchase all handsets from
manufacturers  for resale to customers. Although handsets will be purchased only
as  needed  to  satisfy  anticipated  demand, they nonetheless represent, in the
aggregate,  a  material  capital  cost,  since  they must be purchased for cash,
rather  than financed. The business plan contemplates that handsets will be sold
to  customers  other  than  students  at  a  price  equal to 50% of registrant's
acquisition  cost,  with the balance amortized against the fixed monthly service
charge.  Students  will  be  charged $50 for a handset, an amount much less than
half  registrant's  acquisition  cost.  As  of  the filing date of this Form 10,
registrant was in negotiation with a major supplier of handsets over a long-term
supply  contract.
Registrant's  business  plan  assumes  a  "churn rate" of 13% per year, based on
cellular  industry  average, and further assumes that it will not be possible to
repossess  from  lost customers material numbers of handsets which have not been
fully  amortized. Registrant's anticipated capital expenditures accommodate such
losses.
In  addition to the equipment noted above, operation of registrant's PCS systems
will  require  agreements  with  local  power  utilities to permit registrant to
locate  radio  ports  on  the  utility's  poles,  and  agreements with incumbent
wireline  telephone  service providers, that (a) establish registrant's right to
use  such  provider's  wire to connect the radio ports to their associated radio
port  controllers and thence to registrant's switch; (b) provide for power to be
supplied  to  registrant's  radio  ports;  and  (c)  specify  interconnection
obligations  and  costs.  Registrant  has  reached  agreement  in principle with
American  Electric  Power  Company  on the provisions of a contract covering the
attachment  of  registrant's radio ports on AEP poles. This agreement will cover
four  of  registrant's  markets.
Registrant  believes that all of its computers capable of computations involving
dates  on  or  after  January, 2000, and has secured similar warranties from all
material  vendors  of  equipment  that  includes  computer hardware or software.

Item  2.  Properties
Registrant  leases  office  premises  in  Costa  Mesa,  California  for  its
headquarters,  under customary commercial terms. Registrant also leases premises
in  South  Bend, Indiana which will be utilized for office space and as the site
for  the  central office switch for the South Bend and contiguous markets, along
with  associated network control equipment. Site preparation costs for the South
premises  will  be  material (See Item 1, "PACS Equipment") and site preparation
will  commence  during  registrant's  current  fiscal  year,  assuming  timely
completion  of  its  financing.  See  Item  1.
In  addition,  if  financing timely becomes available, registrant will begin the
process  of  identifying  and  leasing  premises  to house its business offices,
central  office  switches  and  control  centers  in  its other market clusters.

Item  3.  Legal  Proceedings
     The  Antitrust  Division  of  the U.S. Department of Justice ("Department")
elected  to  commence  a  civil  proceeding against Registrant, among others, to
challenge  a  bidding  technique  used  by  Registrant  and  a  number  of other
participants  in  the  FCC's  C  block  auctions.
     Bidding  in  the C block auction was conducted by officers of Registrant on
behalf  of  the  21st Century Telesis Joint Venture ("JV"), the Delaware general
partnership  of which Registrant is a member, and the entity that holds title to
the  licenses  ultimately  secured  in  the  auction.
     During the auction, the JV had been higher bidder for several rounds on the
Indianapolis  market.  There  came a time in which another bidder, which had not
previously  shown  an  interest in Indianapolis, but which had been the repeated
high  bidder  for  the  Baton  Rouge  license,  topped  Registrant's  bid  for
Indianapolis.  In  the following round, Registrant, which had not previously bid
on Baton Rouge, placed the high bid on that market, bidding an amount that ended
with  the  numbers  "XXX,"  which numbers were the same as market designator for
Indianapolis.
     Thereafter,  in  the next round, the JV resumed bidding on Indianapolis and
ultimately  won  that market. The JV made no further bids on Baton Rouge and the
other  bidder  made  no  further  bids on Baton Rouge. There were no discussions
between the JV, or any of its affiliates, and the other bidder, before or during
the  auction  respecting  the C block markets, the auction or bidding strategies
for  the auction. Neither were there any discussions respecting or touching upon
market  allocation.
     After  reviewing  the above circumstances, the FCC staff concluded that the
"trailing  number"  bid  placed for  one round on the Baton Rouge market did not
constitute  a  violation  of  the  FCC's  rules  against  bidding  collusion.
     Notwithstanding  this  finding  by  the  primarily  cognizant  agency,  the
Antitrust  Division  of  the  Department  of  Justice, upon review of the facts,
concluded  that  the  single  bid  by the JV amounted to an improper signal, and
advised  Registrant  that  it  intended  to  commence an enforcement proceeding.
     Registrant  believes  that  the  position  of  the  Antitrust  Division  is
erroneous,  and  that Registrant would prevail in any enforcement action. Rather
than  devote  the  time  and resources necessary to contest the matter, however,
Registrant  has  entered  into  a  consent decree which has been filed in an 
Action commenced by  the  Department  in  Federal  District Court. Under 
the terms 
of such
decree,  Registrant agreed not to violate FCC bidding rules in the future, while
denying  that  it  has  done so in the past; no fines or penalties were assessed
against Registrant. A copy of the consent decree with the Antitrust Division
is  filed  herewith  as  an  exhibit.

Item  4.  Submission  of  Matters  to  a  Vote  of  Security  Holders.
Registrant's  annual  meeting  of  stockholders was held on August 12, 1998. The
following  directors  were  elected  to  continue  in office: H. Randolph Hart ,
Jeffrey  V.  Barbieri  ,  Lawrence  Kaufman,  Robert  Andrew  Hart IV, Philip J.
Chasmar, James A. Roddey, John H. Greenberg, Gilbert Ross Rasco, Joseph A Miller
III,  Vincent  E. Stuedeman, Allen Terrell , Philip Nelson, Frank Coughlin. Each
of  such individuals received 1,622,104 votes in favor of their election, out of
a  total  of  1,671,986  present  in  person  or  by  proxy.

At  this  meeting  stockholders also adopted a resolution amending the bylaws of
the  corporation  to  change its fiscal year from one ending September 30 to one
ending  June  30, and changing the date of the annual meeting of stockholders to
any  day  in  November  or  December.  The  two  resolutions  received 1,652,116
favorable  votes,  out  of  a total of 1, 671,986 present in person or by proxy.

Item  5.  Market for Registrant's Common Equity and Related Stockholder Matters.
There  is  no  established trading market for Registrant's equity securities. No
dividends  have  been  paid  on  Registrant's  equity securities in the two most
recent  fiscal  years,  or  since  inception.

Item  6.  Selected  Financial  Data.

SELECTED  FINANCIAL  DATA

The  following  table  presents,  for  the  periods  ended  and  as of the dates
indicated,  selected  combined  financial  information  for  the  Companies on a
combined  basis.  The  financial  information  is  derived  from  the Companies'
audited  combined  financial  statements  and  notes  thereto.  The  selected
historical  financial  information  should  be  read  in  conjunction  with
"Management's  Discussion  and  Analysis"  and the Companies' Combined Financial
Statements  and  notes  thereto  and  other  financial and operating information
included  elsewhere  in  this  report.

Operating  results  shown  in  the  following table are not indicative of future
performance due to the capital requirements associated with the build-out of the
Companies'  PCS  System  and  the  uncertainties about the Companies' ability to
continue  as  a  going  concern.
<TABLE>
<CAPTION>



                                  Year Ended       Year Ended       Year Ended      Inception to
                                 September 30,    September 30,    September 30,    September 30,
                                     1998             1997             1996             1998
                                ---------------  ---------------  ---------------  ---------------

STATEMENT OF OPERATIONS DATA:
<S>                             <C>              <C>              <C>              <C>
  Revenues . . . . . . . . . .  $            -   $            -   $            -   $       - 
                                ---------------  ---------------  ---------------  ---------------

  Operating expenses . . . . .       2,490,768        1,244,775          914,868        5,102,989 
  Extraordinary charge (a) . .       2,945,785                -                -        2,945,785 
                                ---------------  ---------------  ---------------  ---------------
  Total expenses . . . . . . .       5,436,553        1,244,775          914,868        8,048,774 
  Interest income. . . . . . .         206,991          239,485           69,084          534,797 
                                ---------------  ---------------  ---------------  ---------------
  Net loss . . . . . . . . . .      (5,229,562)      (1,005,290)        (845,784)      (7,513,977)
                                ---------------  ---------------  ---------------  ---------------

BALANCE SHEET DATA:

  Working capital. . . . . . .  $    1,214,008   $    5,137,432   $    3,901,281 
  Property and equipment . . .         111,317          103,820           91,472 
  Licenses and system
     development costs (a) . .      50,011,735       85,538,074       72,039,183 
  Total assets . . . . . . . .      53,378,145       91,611,945       79,643,724 
  Total liabilities  (a) . . .      37,222,150       70,226,388       63,807,717 
  Deficit accumulated
     during the development
     stage . . . . . . . . . .      (7,513,977)      (2,284,415)      (1,279,125)
  Total stockholders'
    Equity . . . . . . . . . .      16,155,995       21,385,557       15,836,007 
</TABLE>



(a)     The Companies recorded an extraordinary loss in June 1998 related to the
return  of  one-half  of  its  C  block  PCS spectrum and related forgiveness of
one-half of the debts and accrued interest owed to the FCC.  The return of these
licenses  contributed  to  the  decrease  in  licenses  and total liabilities at
September  30,  1998.

Item  7. Management's Discussion and Analysis of Financial Condition and Results
of  Operation.
Introduction
21st  Century Telesis, Inc. II (Registrant), and its joint venture partner, 21st
Century  Telesis,  Inc.  (21st  I)  were  formed  in  late  1994 and early 1995,
respectively,  in  Delaware and thereafter formed a Delaware general partnership
under  the  name  of 21st Century Telesis Joint Venture (21st JV) in early 1995,
for  the purpose of raising funds to participate in the FCC's entrepreneur block
PCS  license  auctions.  21st  JV's sole purpose is to acquire PCS licenses from
the FCC and to develop its PCS system in those geographic market areas.  21st JV
formed  a  Delaware  subsidiary 21st Century Bidding Corporation (21st BC) which
also  acquired  PCS  licenses from the FCC. The Joint Venture Agreement provides
that  30%  of  all  profits,  gains,  and losses of 21st JV will be allocated or
distributed  to 21st Century I and 70% is to be allocated or distributed to 21st
II.
These  companies,  collectively  referred  to  as  "the  Companies",  are in the
development  stage and, to date, have devoted substantially all of their efforts
to  developing  their  business  strategy,  raising  capital,  and designing and
developing  their  wireless  network.  21st I manages and has complete authority
over  21st  JV  under  the  terms  of  the  Joint  Venture Agreement.  Since the
Companies  are  under common control and management, the financial statements of
each  individual  company  have  been  combined  to  provide  a  more meaningful
financial  presentation  of  the  operations  of  the  Companies.

Results  of  Operations
-----------------------
The  Companies  have  had  no  revenues  from  operating  activities since their
inception.  The  Companies'  sole  source  of  revenues has been interest income
earned  on invested cash balances.  Interest income for the year ended September
30,  1998  was  $206,991  compared  to  $239,485  and $69,084 for the year ended
September 30, 1997 and for the year ended September 30, 1996, respectively.  The
decrease  in  interest  income  is  attributable to a decrease in available cash
resulting  from  operations.
Total expenses for the year ended September 30, 1998 totaled $5,436,553 compared
to  $1,244,775  for  the year ended September 30, 1997 and $914,868 for the year
ended  September  30,  1996.  The  increases  in  expenses  for  the  year ended
September  30,  1998 were attributable primarily to increased salaries caused by
an  increase in the number of personnel and costs associated with developing the
Companies  business  plans  and  PCS  market areas.  The Companies also incurred
additional  legal  and  other  professional  services  related to its efforts to
secure  financing  and  the contracts associated with the development of its PCS
system.  During  the  year  ended  September 30, 1998, the Companies incurred an
extraordinary charge of $2,945,785 related to the forgiveness of debt by the FCC
as  discussed  below.  During  the  year ended September 30, 1998, the Companies
continued  to devote substantially all of its efforts and incur costs related to
securing  financing  and  contracts  for  the  development  of  the  PCS system.

Liquidity  and  Capital  Resources During the years ended September 30, 1997 and
----------------------------------
1996  the  Companies  received  proceeds from the issuance of preferred stock by
--
21st  II  of  $6,554,840  and $15,389,118, respectively, and $801,014 during the
--
period  from  inception  to  September  30, 1995.  21st I also received $900,000
--
during  the period from inception to September 30, 1995 from the issuance of its
--
capital stock.  During the year ended September 30, 1996, the Companies borrowed
$1  million  from  Siemens Stromberg-Carlson which was repaid in full during the
year  ended  September  30, 1997.  During the year ended September 30, 1998, the
Companies  did  not  incur  any  new  debt  or  raise  any  new  equity capital.

The  Companies  paid $3,387,664 and $11,819,284 during the years ended September
30  1997  and  1996, respectively, to acquire the PCS licenses from the FCC.  On
September  17,  1996,  21st JV entered into 17 notes payable to the FCC totaling
$88,373,554 related to the acquisition of 17 C block PCS licenses.  On April 28,
1997,  21st  BC  entered  into  8  notes  payable to the FCC totaling $3,630,447
related  to the acquisition of the F block PCS licenses.  These notes payable to
the FCC, which included favorable financing terms, have been recorded at the net
present  value of the cash flows required under the FCC notes using an estimated
borrowing  cost  of  13%, which represents management's estimated borrowing cost
for  debt  similar  to  that  issued  by  the  FCC.
The  Companies also paid interest to the FCC of $3,093,074 during the year ended
September  30, 1997 related to the PCS license debts.  Interest costs related to
the  FCC  notes  payable,  including  note  discount  amortization,  have  been
capitalized  and  included  as  a  part of the PCS license cost in the Companies
combined  financial  statements.
The  FCC  issued  a reconsider order which went into effect in April 1998, which
allowed  companies  owning  C  block PCS licenses several options to restructure
their  license  holdings  and  associated  notes payable to the FCC.  On June 8,
1998,  the Companies elected the disaggregation option to return one-half of the
C block PCS license spectrum (15 MHz of the original 30 MHz) in each of the 17 C
block  PCS  licenses of which the Company acquired.  The disaggregation election
resulted  in a 50% reduction in the respective C block license debts and accrued
interest  owed  to  the FCC.  Additionally, 50% of the original down payment for
each  license  continues  to  be considered a down payment for obtaining license
spectrum.  Another  20%  of  the  down  payment  was  applied  to reduce current
interest  owed to the FCC for the remaining license debts.  The remaining 30% of
the  original  C  block PCS license down payments have been forfeited due to the
disaggregation  election.  At  September30,  1998,  the  Companies  owed the FCC
$47,817,211  (undiscounted)  and  accrued  interest  payable  of  approximately
$1,302,105.
The  Companies'  disaggregation  election  resulted in a charge to operations of
$2,945,785  being recorded in June 1998 which represented forfeiture of the down
payments  made to the FCC for the return of the license spectrum.  The Companies
are  prohibited  from owning or re-bidding on the disaggregated licenses for two
years  from  the  date  of  the  re-auction  by  the  FCC  of  those  licenses.

The  Companies capitalized $566,872 during the year ended September 30, 1997 and
$170,000  during  the  year  ended  September 30, 1998 of PCS system development
cost.
The  Companies  had  cash  available  to fund future operations of $2,660,126 at
September 30, 1998 and $5,829,299 at September 30, 1997.  At September 30, 1998,
the  Companies  had  current  liabilities of $1,529,561at September 30, 1998 and
$818,390  at  September 30, 1997.  The Companies' total liabilities decreased to
$37,222,150 at September 30, 1998 due primarily to the return of C block license
spectrum  and  the  related  forgiveness  of  debt  by  the  FCC  in  June 1998.
The  Companies  are continuing to evaluate the capital expenditures necessary to
design,  install,  and  make  operational  each of its PCS license market areas.
Related  thereto,  the  Companies  have  entered  into  various  agreements  and
contracts  with  equipment  vendors  and  other  contractors  for the design and
build-out  of  the Companies' PCS networks. These agreements are contingent upon
the  Companies  obtaining  the  necessary  capital and/or financing necessary to
finance  the  Companies'  PCS  network  development.
The Companies to date have been unsuccessful in securing financing to deploy PCS
systems in its 27 markets. These difficulties have caused the Companies actively
to  pursue  the  possibility  of securing smaller amounts of financing needed to
build  out  a  portion  of  their  markets, with a view to using such markets to
demonstrate the viability of the PACS technology the Companies have selected for
their  PCS  systems;  financing  and build out of their other markets would take
place  at  some  indefinite  point  in  the  future.
In  this  connection,  the  Companies entered into an agreement to borrow from a
substantial  lender an amount of up to $100 million to finance the deployment of
PCS  systems  in  all  their  Indiana  markets  except Indianapolis. The lending
commitment  is  subject  to  a number of contingencies, chief among which is the
requirement  that the Companies must have secured commitments for $50 million in
additional  equity by April 15, 1999, with not less than $25 million having been
subscribed  in  cash by such date. The Companies are in active discussion with a
number  of  institutional  investors  with  a  view  to securing such additional
equity,  but  no  assurances  can be given that they will be successful in their
attempt  to  raise  this  additional  capital.
In the event the Companies are unsuccessful in their  attempt promptly to secure
new  equity  financing,  or are unable promptly to satisfy the conditions of the
debt  facility mentioned above, management intends to seek to secure alternative
financing,  including  bridge financing, from one or more vendors of PCS systems
based on technology standards other than PACS. There can be no assurance offered
that  the  Companies will be successful in arranging such alternative financing.
The  Companies'  remaining  cash  is  not  expected to be sufficient to fund its
operations  at the present level and also make their next full scheduled license
payment  to  the  FCC,  due  on  April  28,  1999.  This  cash difficulty may be
exacerbated  by  the  fact  that the Companies' expenditure levels are likely to
increase  during  the  first  calendar quarter of 1999 owing to increased travel
costs  and  legal  costs associated with the lending commitment mentioned above.
Failure  to  make  an  installment  payment  on any license will bring about its
forfeiture,  as  well  as  the forfeiture of all amounts previously paid on such
license. If the Companies are not successful in raising the necessary equity and
finalizing  the  committed debt financing prior to the next FCC interest payment
date,  management  may elect not to make their C block license payments, thereby
forfeiting  their 17 C block licenses.  The amount saved thereby - approximately
$773,000  -  would  give  the  Companies  sufficient cash to continue operations
(assuming  uniform  levels  of  expenditure  at  the current levels) through the
balance  of  the  period ending June 30, 1999.  During such period the Companies
would  continue  to  seek  financing  for  the  build  out of their 10 remaining
markets.

Item  8.  Financial  Statements  and  Supplementary  Data.
C  O  N  T  E  N  T  S
                                      ----------------------



                                                            Page
                                                           ----


Independent  Auditors'  Report                                1

Combined  Balance  Sheets                                 2  -  3

Combined  Statements  of  Operations                           4

Combined  Statements  of  Shareholders'  Equity             5  -  6

Combined  Statements  of  Cash  Flows                          7

Notes  to  Combined  Financial  Statements                8  -  23
                                      


INDEPENDENT  AUDITORS'  REPORT
     ------------------------------


The  Boards  of  Directors
21st  Century  Telesis,  Inc.
21st  Century  Telesis  (II),  Inc.
21st  Century  Telesis  Joint  Venture,  and
21st  Century  Bidding  Corporation
(Development  Stage  Companies)
Costa  Mesa,  California

We  have  audited  the  accompanying  combined  balance  sheets  of 21st Century
Telesis,  Inc.,  21st  Century  Telesis  (II),  Inc., 21st Century Telesis Joint
Venture,  and  21st Century Bidding Corporation (development stage companies) as
of  September  30,  1998  and  1997  and  the  related  combined  statements  of
operations,  stockholders'  equity,  and cash flows for each of the years during
the  three  year  period ended September 30, 1998 and the period from inception,
December  6,  1994,  to September 30, 1998.  These combined financial statements
are  the  responsibility  of the Companies' management. Our responsibility is to
express  an  opinion on these combined financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that  we  plan  and perform the audits to
obtain  reasonable assurance about whether the combined financial statements are
free  of  material  misstatement.  An audit includes examining, on a test basis,
evidence  supporting  the  amounts  and  disclosures  in  the combined financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the  combined  financial statements referred to above present
fairly,  in  all  material  respects,  the  combined  financial position of 21st
Century  Telesis,  Inc.,  21st  Century Telesis (II), Inc., 21st Century Telesis
Joint  Venture,  and  21st  Century  Bidding  Corporation  (development  stage
companies)  as  of  September  30,  1998  and  1997,  and  the  results of their
operations  and  their  cash  flows  for each of the years during the three year
period  ended  September  30,  1998,  and the period from inception, December 6,
1994,  through  September  30,  1998  in  conformity  with  generally  accepted
accounting  principles.

The  accompanying combined financial statements have been prepared assuming that
the  Companies  will  continue as going concerns.  As described in Note 8 to the
combined  financial statements, the Companies will require additional capital in
order  to meet its obligations to the FCC and to fund operating cash flow needs.
The Companies will also require significant capital to build out the PCS network
infrastructure  necessary  to  provide services and implement its business plan.
These capital requirements raise a substantial doubt about the Companies ability
to  continue  as  going  concerns.  Management's plans in regard to this matter,
which  include  raising  additional  capital  through  equity offerings and debt
financing,  are  also described in Note 8.  The combined financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

/s/   POSTLETHWAITE  &  NETTERVILLE,  APAC

Baton  Rouge,  Louisiana
December  29,  1998


                              21ST CENTURY TELESIS, INC.
                           --------------------------
                         21ST CENTURY TELESIS (II), INC.
                     21ST CENTURY TELESIS JOINT VENTURE AND
                        21ST CENTURY BIDDING CORPORATION
                          (DEVELOPMENT STAGE COMPANIES)

                             COMBINED BALANCE SHEETS
                           SEPTEMBER 30, 1998 AND 1997

                                   A S S E T S
<TABLE>
<CAPTION>

                                                                       1998         1997
                                                                    -----------  -----------

CURRENT ASSETS
------------------------------------------------------------------                    
<S>                                                                 <C>          <C>

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,660,126  $ 5,829,299
Accrued interest receivable. . . . . . . . . . . . . . . . . . . .       12,291        7,292
Note receivable. . . . . . . . . . . . . . . . . . . . . . . . . .       50,000       50,000
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . .       21,152       69,231
                                                                    -----------  -----------
   Total current assets. . . . . . . . . . . . . . . . . . . . . .    2,743,569    5,955,822
                                                                    -----------  -----------



FURNITURE AND EQUIPMENT
------------------------------------------------------------------                          
Net of accumulated depreciation of $94,263 and $55,226 . . . . . .      111,317      103,820
                                                                    -----------  -----------



OTHER ASSETS
------------------------------------------------------------------                          
PCS license costs, including capitalized interest  (Notes 2 and 7)   49,274,863   84,971,202
Capitalized system development costs . . . . . . . . . . . . . . .      736,872      566,872
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      511,524       11,524
Organizational costs . . . . . . . . . . . . . . . . . . . . . . .            -        2,705
                                                                    -----------  -----------
Total other assets . . . . . . . . . . . . . . . . . . . . . . . .   50,523,259   85,552,303
                                                                    -----------  -----------


TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . .  $53,378,145  $91,611,945
                                                                    ===========  ===========

</TABLE>



The  accompanying  notes  are  an  integral  part  of  these  statements.








                              L I A B I L I T I E S

<TABLE>
<CAPTION>


                                                                1998          1997
                                                            ------------  ------------

CURRENT LIABILITIES
----------------------------------------------------------                      
<S>                                                         <C>           <C>

Accounts payable and accrued expenses. . . . . . . . . . .  $   139,148   $   420,067 
Accrued interest - FCC currently payable . . . . . . . . .    1,302,105       398,323 
Note payable - Federal Communications Commission . . . . .       88,308             - 
                                                            ------------  ------------
Total current liabilities. . . . . . . . . . . . . . . . .    1,529,561       818,390 
                                                            ------------  ------------


LONG-TERM DEBTS - less current maturities  (Note 2)
----------------------------------------------------------                            
Notes payable - Federal Communications Commission. . . . .   35,692,589    66,619,736 
Accrued interest - FCC notes payable . . . . . . . . . . .            -     2,788,262 
                                                            ------------  ------------
Total long-term debts. . . . . . . . . . . . . . . . . . .   35,692,589    69,407,998 
                                                            ------------  ------------

TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . .   37,222,150    70,226,388 
                                                            ------------  ------------

COMMITMENTS AND CONTINGENCIES  (Notes 7 and 8) . . . . . .            -             - 
----------------------------------------------------------                            

S T O C K H O L D E R S'   E Q U I T Y
----------------------------------------------------------                            

21st Century Telesis, Inc.  (Notes 3 and 7)
Common stock - Series A, $.01 par value, 736,429
shares authorized, issued and outstanding. . . . . . . . .        7,364         7,364 
Common stock - Series B, $.01 par value, 1,970,714 shares
authorized, 1,643,214 shares issued and outstanding. . . .            -             - 
Preference stock, $.10 par value, 5,500,000 shares
authorized, 175,000 shares issued and outstanding. . . . .       17,500        17,500 
21st Century Telesis (II), Inc.  (Notes 3, 4 and 7)
Preference stock, $.10 par value, 5,500,000 shares
authorized, 2,571,328 shares issued and outstanding. . . .      257,133       257,133 
Additional paid in capital . . . . . . . . . . . . . . . .   23,387,975    23,387,975 
Deficit accumulated during the development stage . . . . .   (7,513,977)   (2,284,415)
                                                            ------------  ------------
Total Stockholders' Equity . . . . . . . . . . . . . . . .   16,155,995    21,385,557 
                                                            ------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . .  $53,378,145   $91,611,945 
                                                            ============  ============
</TABLE>




                           21ST CENTURY TELESIS, INC.
                           --------------------------
                         21ST CENTURY TELESIS (II), INC.
                         -------------------------------
                     21ST CENTURY TELESIS JOINT VENTURE AND
                     --------------------------------------
                        21ST CENTURY BIDDING CORPORATION
                        --------------------------------
                          (DEVELOPMENT STAGE COMPANIES)
                          -----------------------------

                        COMBINED STATEMENTS OF OPERATIONS
                        ---------------------------------
             FOR THE YEARS ENDED SEPTEMBER 30, 1998, 1997, 1996 AND
             ------------------------------------------------------
       FROM THE DATE OF INCEPTION, DECEMBER 6, 1994, TO SEPTEMBER 30, 1998
       -------------------------------------------------------------------
<TABLE>
<CAPTION>

                                          Year Ended       Year Ended       Year Ended      Inception to
                                                                                           ---------------  
                                         September 30,    September 30,    September 30,    September 30,
                                                                                           ---------------  
                                             1998             1997             1996             1998
                                        ---------------  ---------------  ---------------  ---------------  

REVENUES                                      $-               $-               $-               $-
--------------------------------------  ---------------  ---------------  ---------------  ---------------  

OPERATING EXPENSES
--------------------------------------                                                                      
<S>                                     <C>              <C>              <C>              <C>           
Salaries . . . . . . . . . . . . . . .         908,647          563,665          389,904        2,140,859 
Travel, meetings and conferences . . .         204,432          154,578          140,052          586,774 
Legal and other professional services.         691,646          225,409          106,679        1,023,734 
Interest expense . . . . . . . . . . .          27,235           49,186           42,523          119,156 
Rent . . . . . . . . . . . . . . . . .         154,129           64,080           33,744          269,126 
Telephone and utilities. . . . . . . .          49,983           17,414           30,939          118,009 
Payroll taxes. . . . . . . . . . . . .          69,065           44,616           21,479          157,652 
Office and other expenses. . . . . . .         385,631          125,827          149,548          687,679 
Loss on return of C block
licenses  (Note 2) . . . . . . . . . .       2,945,785                -                -        2,945,785 
                                             5,436,553        1,244,775          914,868        8,048,774 
                                        ---------------  ---------------  ---------------  ---------------   
OTHER INCOME
--------------------------------------                                                                       
Interest income. . . . . . . . . . . .         206,991          239,485           69,084          534,797 
                                        ---------------  ---------------  ---------------  ---------------   
LOSS BEFORE PROVISION
--------------------------------------                                                                       
FOR INCOME TAXES . . . . . . . . . . .      (5,229,562)      (1,005,290)        (845,784)      (7,513,977)
--------------------------------------  ---------------  ---------------                                     
Provision for income taxes (Note 6). .               -                -                -                -   
                                        ---------------  ---------------  ---------------  ---------------   

NET LOSS . . . . . . . . . . . . . . .  $   (5,229,562)  $   (1,005,290)  $     (845,784)  $   (7,513,977)
--------------------------------------  ---------------  ---------------  ===============  ===============   


21ST CENTURY TELESIS, INC.
--------------------------------------                                                                       
Basic and diluted loss per share . . .  $        (0.40)  $        (0.12)  $        (0.12)
                                        ===============  ===============  ===============                    
Weighted average shares outstanding. .       2,554,643        2,554,643        2,554,643 
                                        ===============  ===============  ===============                    

21ST CENTURY TELESIS (II), INC.
--------------------------------------                                                                       
Basic and diluted loss per share . . .  $        (1.64)  $        (0.30)  $        (0.93)
                                        ===============  ===============  ===============                    
Weighted average shares outstanding. .       2,571,328        2,399,447          590,751 
                                        ===============  ===============  ===============                    
</TABLE>


The  accompanying  notes  are  an  integral  part  of  these  statements.
-------------------------------------------------------------------------



                             21ST CENTURY TELESIS, INC.
                           --------------------------
                         21ST CENTURY TELESIS (II), INC.
                         -------------------------------
                     21ST CENTURY TELESIS JOINT VENTURE AND
                     --------------------------------------
                        21ST CENTURY BIDDING CORPORATION
                        --------------------------------
                          (DEVELOPMENT STAGE COMPANIES)
                          -----------------------------
                                                                 PAGE 1 OF 2
                                                                 -----------
                   COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
                   ------------------------------------------
       FROM THE DATE OF INCEPTION, DECEMBER 6, 1994, TO SEPTEMBER 30, 1998
       -------------------------------------------------------------------
<TABLE>
<CAPTION>



     21ST CENTURY TELESIS, INC.
--------------------------------                                                                            
                                     Common Stock Series A               Common Stock Series B   Preference Stock
                                 ---------------------------              ---------------------  -----------------
                                   No. of                                   No. of               No. of
                                   Shares                           Amount  Shares     Amount    Shares   Amount
--------------------------------  ---------------------  -----------------  ---------  -------  -------   ------
<S>                               <C>                    <C>                <C>        <C>      <C>      <C>
Inception, December 6, 1994. . .                      -  $               -          -  $     -        -  $     -

Common stock Series A. . . . . .                736,429              7,364          -        -        -        -
Common stock Series B issued
   for services rendered . . . .                      -                  -  1,643,214        -        -        -
Preference stock issued for cash
    at $5.00 per share . . . . .                      -                  -          -        -  175,000   17,500
Preference stock issued for cash
     at $10.00 per share . . . .                      -                  -          -        -        -        -
Costs of raising equity. . . . .                      -                  -          -        -        -        -
Net loss . . . . . . . . . . . .                      -                  -          -        -        -        -
                                  ---------------------  -----------------  ---------  -------  -------  -------
BALANCE, September 30, 1995. . .                736,429              7,364  1,643,214        -  175,000   17,500

Preference stock issued for cash
    at $10.00 per share. . . . .                      -                  -          -        -        -        -
Preference stock issued for cash
    at $9.00 per share . . . . .                      -                  -          -        -        -        -
Preference stock issued for cash
    at $9.24 per share . . . . .                      -                  -          -        -        -        -
Costs of raising equity. . . . .                      -                  -          -        -        -        -
Net loss . . . . . . . . . . . .                      -                  -          -        -        -        -
                                  ---------------------  -----------------  ---------  -------  -------  -------
BALANCE, September 30, 1996. . .                736,429              7,364  1,643,214        -  175,000   17,500

Preference stock issued for cash
    at $10.00 per share. . . . .                      -                  -          -        -        -        -
Preference stock issued for cash
    at $9.24 per share . . . . .                      -                  -          -        -        -        -
Preference stock issued for cash
    at $10.77 per share. . . . .                      -                  -          -        -        -        -
Costs of raising equity. . . . .                      -                  -          -        -        -        -
Net loss . . . . . . . . . . . .                      -                  -          -        -        -        -
                                  ---------------------  -----------------  ---------  -------  -------  -------
BALANCE, September 30, 1997. . .                736,429              7,364  1,643,214        -  175,000   17,500

Net loss . . . . . . . . . . . .                      -                  -          -        -        -        -
                                  ---------------------  -----------------  ---------  -------  -------  -------
BALANCE, September 30, 1998. . .                736,429  $           7,364  1,643,214  $     -  175,000  $17,500
                                  =====================  =================  =========  =======  =======  =======
</TABLE>



The  accompanying  notes  are  an  integral  part  of  these  statements.
-------------------------------------------------------------------------

 
The accompanying notes are an integral part of these statements.

                     

                           21ST CENTURY TELESIS, INC.
                           --------------------------
                         21ST CENTURY TELESIS (II), INC.
                         -------------------------------
                     21ST CENTURY TELESIS JOINT VENTURE AND
                     --------------------------------------
                        21ST CENTURY BIDDING CORPORATION
                        --------------------------------
                          (DEVELOPMENT STAGE COMPANIES)
                          -----------------------------
                                                            PAGE 2 OF 2
                                                            -----------
                   COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
                   ------------------------------------------
       FROM THE DATE OF INCEPTION, DECEMBER 6, 1994, TO SEPTEMBER 30, 1998
       -------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                  21ST CENTURY TELESIS (II), INC.                  
                                                                         Preference Stock                     ADDITIONAL
                                                                  -------------------------------                  
                                                                              No. of                           PAID IN
                                                                              Shares                Amount     CAPITAL
                                                                  -------------------------------  --------  ------------
<S>                                                               <C>                              <C>       <C>
Inception, December 6, 1994. . . . . . . . . . . . . . . . . . .                                -  $      -  $         - 

Common stock Series A. . . . . . . . . . . . . . . . . . . . . .                                -         -       17,636 
Common stock Series B issued
   for services rendered . . . . . . . . . . . . . . . . . . . .                                -         -            - 
Preference stock issued for cash
    at $5.00 per share . . . . . . . . . . . . . . . . . . . . .                                -         -      857,500 
Preference stock issued for cash
     at $10.00 per share . . . . . . . . . . . . . . . . . . . .                          113,000    11,300    1,118,700 
Costs of raising equity. . . . . . . . . . . . . . . . . . . . .                                -         -     (134,950)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                -         -            - 
                                                                  -------------------------------  --------  ------------
BALANCE, September 30, 1995. . . . . . . . . . . . . . . . . . .                          113,000    11,300    1,858,886 

Preference stock issued for cash
    at $10.00 per share. . . . . . . . . . . . . . . . . . . . .                          784,695    78,470    7,768,480 
Preference stock issued for cash
    at $9.00 per share . . . . . . . . . . . . . . . . . . . . .                            5,555       555       49,445 
Preference stock issued for cash
    at $9.24 per share . . . . . . . . . . . . . . . . . . . . .                          983,552    98,355    8,989,663 
Costs of raising equity. . . . . . . . . . . . . . . . . . . . .                                -         -   (1,764,886)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                -         -            - 
                                                                  -------------------------------  --------  ------------
BALANCE, September 30, 1996. . . . . . . . . . . . . . . . . . .                        1,886,802   188,680   16,901,588 

Preference stock issued for cash
    at $10.00 per share. . . . . . . . . . . . . . . . . . . . .                          145,000    14,500    1,435,500 
Preference stock issued for cash
    at $9.24 per share . . . . . . . . . . . . . . . . . . . . .                           86,329     8,633      788,064 
Preference stock issued for cash
    at $10.77 per share. . . . . . . . . . . . . . . . . . . . .                          453,197    45,320    4,833,392 
Costs of raising equity. . . . . . . . . . . . . . . . . . . . .                                -         -     (570,569)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                -         -            . 
                                                                  -------------------------------  --------  ------------
BALANCE, September 30, 1997. . . . . . . . . . . . . . . . . . .                        2,571,328   257,133   23,387,975 

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                -         -            - 
                                                                  -------------------------------  --------  ------------
BALANCE, September 30, 1998. . . . . . . . . . . . . . . . . . .                        2,571,328  $257,133  $23,387,975 
                                                                  ===============================  ========  ============
</TABLE

The accompanying notes are an integral part of these statements.

     

                                                                    DEFICIT
                                                                   ACCUMULATED
                                                                   DURING THE

                                                                   DEVELOPMENT
                                                                      STAGE         TOTAL
                                                                  -------------  ------------
<S>                                                               <C>            <C>
Inception, December 6, 1994. . . . . . . . . . . . . . . . . . .  $          -   $         - 

Common stock Series A. . . . . . . . . . . . . . . . . . . . . .             -        25,000 
Common stock Series B issued
   for services rendered . . . . . . . . . . . . . . . . . . . .             -             - 
Preference stock issued for cash
    at $5.00 per share . . . . . . . . . . . . . . . . . . . . .             -       875,000 
Preference stock issued for cash
     at $10.00 per share . . . . . . . . . . . . . . . . . . . .             -     1,130,000 
Costs of raising equity. . . . . . . . . . . . . . . . . . . . .             -      (134,950)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (433,341)     (433,341)
                                                                  -------------  ------------
BALANCE, September 30, 1995. . . . . . . . . . . . . . . . . . .      (433,341)    1,461,709 

Preference stock issued for cash
    at $10.00 per share. . . . . . . . . . . . . . . . . . . . .             -     7,846,950 
Preference stock issued for cash
    at $9.00 per share . . . . . . . . . . . . . . . . . . . . .             -        50,000 
Preference stock issued for cash
    at $9.24 per share . . . . . . . . . . . . . . . . . . . . .             -     9,088,018 
Costs of raising equity. . . . . . . . . . . . . . . . . . . . .             -    (1,764,886)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (845,784)     (845,784)
                                                                  -------------  ------------
BALANCE, September 30, 1996. . . . . . . . . . . . . . . . . . .    (1,279,125)   15,836,007 

Preference stock issued for cash
    at $10.00 per share. . . . . . . . . . . . . . . . . . . . .             -     1,450,000 
Preference stock issued for cash
    at $9.24 per share . . . . . . . . . . . . . . . . . . . . .             -       796,697 
Preference stock issued for cash
    at $10.77 per share. . . . . . . . . . . . . . . . . . . . .             -     4,878,712 
Costs of raising equity. . . . . . . . . . . . . . . . . . . . .             -      (570,569)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (1,005,290)   (1,005,290)
                                                                  -------------  ------------
BALANCE, September 30, 1997. . . . . . . . . . . . . . . . . . .    (2,284,415)   21,385,557 

Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .    (5,229,562)   (5,229,562)
                                                                  -------------  ------------
BALANCE, September 30, 1998. . . . . . . . . . . . . . . . . . .  $ (7,513,977)  $16,155,995 
                                                                  =============  ============
</TABLE


The accompanying notes are an integral part of these statements.




                           21ST CENTURY TELESIS, INC.
                           --------------------------
                         21ST CENTURY TELESIS (II), INC.
                         -------------------------------
                     21ST CENTURY TELESIS JOINT VENTURE AND
                     --------------------------------------
                        21ST CENTURY BIDDING CORPORATION
                        --------------------------------
                          (DEVELOPMENT STAGE COMPANIES)
                          -----------------------------

                        COMBINED STATEMENTS OF CASH FLOWS
                        ---------------------------------
             FOR THE YEARS ENDED SEPTEMBER 30, 1998, 1997, 1996 AND
             ------------------------------------------------------
       FROM THE DATE OF INCEPTION, DECEMBER 6, 1994, TO SEPTEMBER 30, 1998
       -------------------------------------------------------------------

</TABLE>
<TABLE>
<CAPTION>

                                                     Year Ended       Year Ended       Year Ended      Inception to
                                                                                                      ---------------
                                                    September 30,    September 30,    September 30,    September 30,
                                                                                                      ---------------
                                                        1998             1997             1996             1998
                                                   ---------------  ---------------  ---------------  ---------------

CASH FLOWS FROM OPERATING ACTIVITIES
-------------------------------------------------                                                            
<S>                                                <C>              <C>              <C>              <C>

Net loss. . . . . . . . . . . . . . . . . . . . .  $   (5,229,562)  $   (1,005,290)  $     (845,784)  $   (7,513,977)
Adjustment to reconcile net loss to net cash
used by operating activities:
Loss on return of C block licenses. . . . . . . .       2,945,785                -                -        2,945,785 
Depreciation expense. . . . . . . . . . . . . . .          39,037           30,707           21,984           94,263 
Accrued interest receivable and prepaid expenses.          45,785          (67,450)          (9,073)         (30,738)
Increase in accounts payable and accrued expenses        (253,684)        (206,333)         279,525          (46,304)
                                                   ---------------  ---------------  ---------------  ---------------
Net cash used by operating activities . . . . . .      (2,452,639)      (1,248,366)        (553,348)      (4,550,971)
                                                   ---------------  ---------------  ---------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
-------------------------------------------------                                                                    
Payments for PCS licenses . . . . . . . . . . . .               -       (3,387,664)     (11,819,284)     (15,206,948)
Payments for other capitalized system costs . . .        (170,000)        (312,119)               -         (482,119)
Advanced on note receivable . . . . . . . . . . .               -                -          (50,000)         (50,000)
Purchases of furniture and equipment. . . . . . .         (46,534)         (43,055)        (104,620)        (205,579)
Payment of deposits and organizational costs. . .        (500,000)          (8,024)          (4,055)        (514,229)
Net cash used by investing activities . . . . . .        (716,534)      (3,750,862)     (11,977,959)     (16,458,875)
                                                   ---------------  ---------------  ---------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
-------------------------------------------------                                                                    
Proceeds from issuance of common stock - Series A               -                -                -           25,000 
Proceeds from issuance of preference stock-
 net of issuance costs. . . . . . . . . . . . . .               -        6,554,840       15,389,118       23,644,972 
Advances from (repayments to) stockholder - net .               -         (174,104)         171,138                - 
Proceeds from note payable. . . . . . . . . . . .               -                -        1,000,000        1,000,000 
Payments on note payable. . . . . . . . . . . . .               -       (1,000,000)               -       (1,000,000)
Net cash provided by financing activities . . . .               -        5,380,736       16,560,256       23,669,972 
                                                   ---------------  ---------------  ---------------  ---------------

Net increase in cash. . . . . . . . . . . . . . .      (3,169,173)         381,508        4,028,949        2,660,126 

Cash at beginning of period . . . . . . . . . . .       5,829,299        5,447,791        1,418,842                - 
                                                   ---------------  ---------------  ---------------  ---------------

Cash at end of period . . . . . . . . . . . . . .  $    2,660,126   $    5,829,299   $    5,447,791   $    2,660,126 
                                                   ===============  ===============  ===============  ===============
</TABLE>


See  Note  1  for  supplemental  cash  flow  information
--------------------------------------------------------



The  accompanying  notes  are  an  integral  part  of  these  statements.
  


                           21ST CENTURY TELESIS, INC.
                           --------------------------
                         21ST CENTURY TELESIS (II), INC.
                         -------------------------------
                     21ST CENTURY TELESIS JOINT VENTURE AND
                     --------------------------------------
                        21ST CENTURY BIDDING CORPORATION
                        --------------------------------
                          (DEVELOPMENT STAGE COMPANIES)
                          -----------------------------

                     NOTES TO COMBINED FINANCIAL STATEMENTS
                     --------------------------------------



1.     SIGNIFICANT  ACCOUNTING  POLICIES
       ---------------------------------

A.     NATURE  OF  BUSINESS
       --------------------

21st Century Telesis, Inc. ("21st I") and 21st Century Telesis (II), Inc. ("21st
II") have been in the development stage since formation as Delaware corporations
on  December  6,  1994, and January 5, 1995, respectively.  The two corporations
were  formed  to participate in auctions by the Federal Communication Commission
("FCC")  of  licenses to provide Personal Communications Services ("PCS"), a new
telecommunications  service.

In  order to take advantage of certain bidding preferences granted by the FCC to
"designated  entities"  (qualifying  small  businesses,  woman/minority  owned
businesses  and  independent telephone companies), 21st I and 21st II thereafter
formed  21st  Century  Telesis  Joint  Venture  ("21st  JV")  under  the general
partnership  law  of  Delaware, to serve as the entity that would participate in
the FCC auction and build and operate PCS systems under licenses obtained at the
FCC  auctions.  Under  the  terms  of  the  Joint  Venture  Agreement, which was
executed  as of January 23, 1995, 21st I controls and manages 21st JV, for which
services it is reimbursed for all its direct and indirect costs.  Profits, gains
and  losses  of  the 21st JV are to be distributed 30% to 21st I and 70% to 21st
II.

In the first FCC auction reserved to designated entities, for 30 MHz C block PCS
licenses, the 21st JV obtained a total of 17 C block PCS licenses out of the 493
awarded,  with  total net winning bids of $98,192,838; of this total, $9,819,284
was  paid  in cash by the 21st JV, as required by the FCC.  As discussed in Note
2,  the  Companies  elected  in  June 1998 to return one-half of the C block PCS
spectrum  (15  MHz  of the 30 MHz) to the FCC in exchange for a 50% reduction in
the  respective  license  debts.

The 21st JV also formed a wholly owned Delaware subsidiary, 21st Century Bidding
Corporation  (21st  BC),  to  participate in the FCC auctions for 10 MHz D and F
block PCS licenses.  On January 15, 1997, the FCC announced that 21st BC was the
winning  bidder  for 2 D and 8 F block PCS licenses, with total net winning bids
of  $5,649,930;  of  this  total,  $2,019,483  was  paid  in cash by 21st BC, as
required  by  the  FCC.

The  Companies'  PCS  licenses  and intended areas of operations include certain
market  areas within Indiana, Mississippi, Nebraska, and New York. The Companies
are  in  the  development  stage and, to date, have devoted substantially all of
their  efforts  to  developing  their  business  strategy,  raising capital, and
designing and developing their wireless network. Accordingly, the Companies have
recognized  no  operating  revenues and have incurred, and expect to continue to
incur,  operating  losses  and  cash  flow  deficits.

     B.     PRINCIPLES  OF  COMBINATION
            ---------------------------

The  accompanying  combined  financial statements reflect the combination of the
individual  financial  statements  of  21st  I,  21st  II,  21st JV, and 21st BC
(collectively  referred  to as "the Companies").  The Companies are under common
control  of  21st I, as described in Note 1a above, are under common management,
and  engage  in  similar  operating  activities.  Combination  of the individual
financial  statements  provides  a  more  meaningful financial presentation than
would  the  individual  financial  statements  shown  separately.  Intercompany
transactions  and  balances  have  been  eliminated  in these combined financial
statements.


1.     SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
       ---------------------------------

C.     USE  OF  ESTIMATES  IN  THE  PREPARATION  OF  FINANCIAL  STATEMENTS
       -------------------------------------------------------------------

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenues  and  expenses during the reporting period.
Actual  results  could  differ  from  those  estimates.

     D.     PCS  LICENSE  COSTS  AND  CAPITALIZED  SYSTEM  DEVELOPMENT  COSTS
            -----------------------------------------------------------------

License  costs  represent the cost of the C, D, and F block PCS licenses granted
by  the  FCC.  The  PCS  licenses  financed by the FCC under favorable financing
terms  are accounted for in accordance with industry practice at the net present
value  of  the  debt  obligations  assumed plus any cash paid for the respective
licenses. Interest related to debt pertaining to each PCS license is capitalized
until  that license is placed in service.  Amortization of the capitalized costs
related to each license will commence when that license is placed in service and
will be computed on a straight-line basis over a period not to exceed forty (40)
years.

On  September 17, 1996 21st JV acquired 17 C block PCS licenses from the FCC for
an  aggregate  price  of  $98,192,838,  net of bidding credits.  As a designated
entity,  21st JV received bidding credits equal to 25% of the gross bid price of
the  licenses.  The  Company originally paid $9,819,284 in cash and financed the
remaining  90%,  or  $88,373,554,  with  the  FCC.  On  January 15, 1997 21st BC
acquired 2 D block PCS licenses from the FCC for an aggregate price paid in cash
of  $1,111,871.  21st  BC  also  acquired 8 F block PCS licenses from the FCC on
this  date  for an aggregate price of $4,538,059.  21st BC paid $907,612 in cash
and  financed  the  remaining  balance of $3,630,447 with the FCC at an interest
rate  of  6.25%  as  described  in  Note  2.

As more fully described in Note 2, on June 8, 1998 the Company elected to return
one-half  of the C block license spectrum in exchange for a 50% reduction in the
related  license  debts  and accrued interest.  Accordingly, the Company reduced
the  carrying  value  of  the  C  block  licenses  by $43,698,686 to reflect the
forgiveness  of  debt and the return of the C block license spectrum to the FCC.

<PAGE>

1.     SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
       ---------------------------------

D.     PCS  LICENSE  COSTS AND CAPITALIZED SYSTEM DEVELOPMENT COSTS  (continued)
       ------------------------------------------------------------

At  September  30,  1998  and  1997, the Companies PCS licenses consisted of the
following:
<TABLE>
<CAPTION>



                                              1998         1997
                                           -----------  -----------
<S>                                        <C>          <C>
    Cash payments . . . . . . . . . . . .  $ 6,929,125  $11,838,767
    Net present value of debt obligations   33,572,157   64,536,596
    Capitalized interest costs. . . . . .    8,773,581    8,595,839
                                           -----------  -----------

                                           $49,274,863  $84,971,202
                                           ===========  ===========
</TABLE>


Costs incurred related to the design and development of the PCS System have been
capitalized.  When  the  assets  are  placed  in  service,  these  costs will be
transferred  to  the  appropriate  equipment  category  and depreciated over the
estimated  useful  life  of  the  equipment.

Management  periodically reviews the values assigned to the PCS licenses and the
capitalized  system  development  costs to determine whether any impairments are
other  than temporary.  This assessment is based on the undiscounted future cash
flows  from  operating  activities compared to the carrying value of the related
assets.  In  performing  this  analysis,  management  considers  such factors as
current  business  plans,  trends  and prospects, and other economic factors. An
impairment loss would be recognized when the sum of the expected future net cash
flows  is less than the carrying amount of the asset.  The Companies also record
long-lived  assets  for  which  management has committed to a plan to dispose of
assets at the lower of the carrying value or fair value less the cost to dispose
of  the  asset.  Management  believes  that the PCS licenses and the capitalized
system  development  costs in the accompanying combined financial statements are
appropriately valued although the uncertainties described in Note 7 could have a
significant  affect  on  this  evaluation  in  the  near  future.

     E.     FURNITURE,  EQUIPMENT  AND  DEPRECIATION
            ----------------------------------------

Furniture  and equipment are recorded at cost and will be depreciated over their
estimated  useful  lives  of  5  years  on  a  straight-line  basis.


<PAGE>

1.     SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
       ---------------------------------

     F.     ORGANIZATIONAL  COSTS
            ---------------------

The  Companies  incurred  various  costs  associated  with  the formation of the
Companies.  These  costs were capitalized in these combined financial statements
and  were  to  be  amortized on a straight-line basis once operations commenced.
During  the  year  ended  September  30,  1998,  the  Companies  expensed  these
insignificant  balances  pursuant  to the adoption of Statement of Position 98-5
"Reporting  on  the  Costs  of  Startup  Activities".

     G.     CAPITAL  STOCK
            --------------

21st I and 21st II have issued capital stock and incurred various costs, such as
brokerage  commissions,  legal  and other related costs, which are deducted from
additional  paid  in  capital  of  the  related  stock.

     H.     INCOME  TAXES
            -------------

The Companies file separate income tax returns.  Provisions for income taxes are
based  on  income  taxes  payable  for  the  current  year and deferred taxes on
temporary  differences between the tax bases of assets and liabilities and their
reported  amounts  in  the  financial  statements.  Deferred  tax  assets  and
liabilities are included in the financial statements at currently enacted income
tax  rates  applicable  to  the  period  in  which  the  deferred tax assets and
liabilities  are  expected  to  be  realized  or  settled  as prescribed in FASB
Statement  No.  109,  "Accounting  for Income Taxes".  As changes in tax laws or
rates  are enacted, deferred tax assets and liabilities are adjusted through the
provision  for  income  taxes.

     I.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
            ---------------------------------------

The Companies' financial instruments consist primarily of cash, note receivable,
trade  payables  and  debt instruments.  The book value of these instruments are
considered  to  be  their  respective fair value.  The determination of the book
value  of  the  FCC  note  obligations,  which  have  no quoted market value, is
discussed  in  Note  2.




<PAGE>



1.     SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
       ---------------------------------

J.     STATEMENTS  OF  CASH  FLOWS
       ---------------------------

The  Companies  consider  all  highly  liquid debt instruments purchased with an
original  maturity  of three months or less to be cash equivalents. Supplemental
disclosures  of  cash  flow  information  are  as  follows:
<TABLE>
<CAPTION>



                                     Year Ended      Year Ended      Year Ended     Inception to
                                   September 30,   September 30,   September 30,   September 30,
                                        1998            1997            1996            1998
                                   --------------  --------------  --------------  --------------
<S>                                <C>             <C>             <C>             <C>
    Cash paid for interest. . . .  $            -  $    3,183,906  $          457  $    3,184,575

    Cash paid for income taxes. .               -           4,115           4,820           8,935

    Non-cash investing and
      financing activities: . . .                                              

      Liabilities incurred for
      acquisition of PCS licenses               -       2,607,569      61,929,176      64,536,745

      PCS licenses exchanged
      for debt forgiveness. . . .      43,698,686               -               -      43,698,686

      Capitalization of interest
      not paid. . . . . . . . . .       8,002,496       5,211,892         290,723      13,505,111

      Forgiven accrued interest
      capitalized . . . . . . . .       7,751,012               -               -       7,751,012

      Common stock issued in
      exchange for origination
      costs paid by stockholder .               -               -               -          20,000

</TABLE>




<PAGE>
1.     SIGNIFICANT  ACCOUNTING  POLICIES  (continued)
       ---------------------------------

K.     EARNINGS  PER  SHARE
       --------------------

The  combined financial statements are presented in accordance with Statement on
Financial  Accounting Standards (SFAS) No. 128, "Earnings Per Share".  Basic EPS
is completed using the weighted average number of shares outstanding during each
period.  Diluted  EPS  gives  the  effect  of the potential dilution of earnings
which may have occurred if dilutive potential shares had been issued.  Since the
Companies incurred net losses, both basic and diluted earnings per share are the
same amount.  Options, warrants and commitments to issue capital stock have been
excluded  from  the  computation  of diluted net loss per share as the effect of
their  inclusion  would  have  been  anti-dilutive.

The  following  table  reconciles the numerator and denominator of the basic and
diluted  earnings  per  share  computations  shown on the combined statements of
operations  for  each  of  the  years  ended  September  30:
<TABLE>
<CAPTION>





                                            1998         1997        1996
                                        ------------  ----------  ----------
<S>                                     <C>           <C>         <C>
21st Century Telesis, Inc.
--------------------------------------                                      
  Numerator:  Net loss . . . . . . . .  ($1,015,353)  ($296,735)  ($295,066)
                                        ============  ==========  ==========

  Denominator: weighted average shares
  outstanding
    Common stock - Series A. . . . . .      736,429     736,429     736,429 
    Common stock - Series B. . . . . .    1,643,214   1,643,214   1,643,214 
    Preference stock . . . . . . . . .      175,000     175,000     175,000 
                                        ------------  ----------  ----------
                                          2,554,643   2,554,643   2,554,643 
                                        ============  ==========  ==========

  Basic and diluted EPS. . . . . . . .        ($.40)      ($.12)      ($.12)
                                        ============  ==========  ==========


21st Century Telesis II, Inc.
--------------------------------------                                      
  Numerator:  Net loss . . . . . . . .  ($4,214,209)  ($708,555)  ($550,718)
                                        ============  ==========  ==========

  Denominator:
    Weighted average preference
      shares outstanding . . . . . . .    2,571,328   2,399,447     590,751 
                                        ============  ==========  ==========

  Basic and diluted EPS. . . . . . . .       ($1.64)      ($.30)      ($.93)
                                        ============  ==========  ==========
</TABLE>




<PAGE>
1.     SIGNIFICANT  ACCOUNTING  POLICIES  (continued)

     L.     RECENT  ACCOUNTING  PRONOUNCEMENTS
            ----------------------------------

In  June  1997,  the  Financial  Accounting  Standards Board issued SFAS No. 130
"Reporting  Comprehensive  Income".  This  statement  establishes  standards for
reporting  of  comprehensive  income and its components in financial statements.
Comprehensive  income  is the total of net income and all other nonowner changes
in  equity.  The  Companies are required to adopt SFAS No. 130 no later than the
fiscal year ended September 30, 1999.  Reclassification of comparative financial
statements provided for earlier periods will be required.  The Companies believe
that  the  display  of  comprehensive income will not differ materially from the
currently  reported  net  loss  attributable  to  stockholders.

In  March 1998, Statement of Position 98-1, "Accounting for the Cost of Computer
Software  Developed or Obtained for Internal Use" ("SOP 98-1"), was issued which
provides guidance on whether and under what conditions the costs of internal-use
software  should  be  capitalized.  SOP  98-1  is effective for all transactions
entered  into in fiscal years beginning after December 15, 1998, however earlier
adoption is encouraged.  The Companies believe the adoption of SOP 98-1 will not
be  material  to  its  results  of  operations  or  cash  flows.

In  June 1997, Statement of Financial Accounting Standards No. 131, "Disclosures
about  Segments  of  an  Enterprise  and  Related  Information" was issued which
redefines  how  operating  segments  are  determined and requires disclosures of
certain  financial  and  descriptive information about operating segments.  SFAS
131  is  effective  for fiscal periods beginning after December 15, 1997 and its
adoption may require additional disclosure of the Company's historical financial
data  beginning  with  fiscal  year  ending  September  30,  1999.

2.     FCC  LICENSE  OBLIGATIONS
       -------------------------

Pursuant to the successful bid for 17 C block PCS licenses, 21st JV entered into
17  notes payable to the Federal Communications Commission (FCC) dated September
17,  1996  totaling  $88,373,554.  The  original  terms  of  the  notes required
interest  at a rate of 7.0% per annum due in quarterly interest payments through
September  30,  2002.  Commencing  December  31,  2002,  quarterly principal and
interest  payments  were  required with any unpaid balances due on September 17,
2006.  Each  note  is  secured  by  the  respective  PCS  C  block  license.  In
accordance  with  industry practices, the C block license notes were recorded at
$61,929,027  which  represented the net present value of these payments based on
the  Companies'  estimate  of  borrowing  costs  of 13% for debt similar to that
issued  by  the  FCC.

Pursuant  to the successful bid for 8 F block PCS licenses, 21st BC entered into
8  notes  payable  to  the  FCC  dated  April 28, 1997 totaling $3,630,447.  The
original  terms  of  the notes require interest at a rate of 6.25% per annum due
quarterly  from July 28, 1997 through April 28, 1999.  Commencing July 28, 1999,
quarterly principal and interest payments were required with any unpaid balances
due  on  April  28,  2007.  Each  note  is secured by the respective PCS F block
license.  Similar  to  the  C  block  licenses,  the  F block license notes were
recorded at $2,607,569 which represented the net present value of these payments
based  on  the  Company's  estimated  borrowing  cost  of  13% for similar debt.


<PAGE>
2.     FCC  LICENSE  OBLIGATIONS  (continued)
       -------------------------

In  March  1997,  the FCC issued an order suspending quarterly interest payments
due  under the C block license notes for an indefinite period of time.  In April
1997, the FCC issued a similar interest payment suspension order for the F block
license  notes.

     On June 8, 1998, the Company elected to return one-half of the spectrum (15
MHz  of  its 30 MHz) for each if its C block licenses as provided by a FCC Order
allowing  C  block  license  holders  to  restructure  their  debts.  This
dissagregation  election  extinguished  50%  of  the respective license debt and
accrued  interest  and  prohibits the Company from bidding for this spectrum, or
otherwise  acquiring in the secondary market, for two years from the date of the
start of the re-auction.  As a result of this election, the Companies recognized
a  charge to operations of $2,945,785 representing the forfeiture of part of the
original  down  payment  on  the  C block licenses.  The Company also recognized
reductions  in  its  FCC debt of $33,001,889 (net of discount), accrued interest
payable  of  $7,751,012  and  capitalized  license  cost  of  $43,698,686.

     The restructured C block license notes with a carrying value of $33,001,889
at  September  30,  1998 continue to bear interest at 7.0% and require quarterly
interest only payments of $773,269 beginning on October 31, 1998 through October
31,  2002.  Commencing  January  31,  2003,  quarterly  principal  and  interest
payments  of  $3,190,268  are required with any unpaid balances due on September
17,  2006.

The  difference  in the net present value of the C and F block license notes and
the  stated amount of these debts represents the amount of discount recorded for
both  the  notes  payable  and the related licenses.  The discounts recorded for
both  the  C  and  the  F block PCS license note payables are being amortized to
interest costs and capitalized as a part of the license costs until the licenses
are  placed  in  service.  During  the  years ended September 30, 1998, 1997 and
1996,  the  Companies  capitalized  $8,002,466,  $8,304,966  and  $290,723,
respectively,  as interest costs.  As previously discussed, accrued interest was
forgiven by the FCC on June 8, 1998 and resulted in the reduction of capitalized
interest  cost  of  $7,824,307  during  the  year  ended  September  30,  1998.

The  license  notes,  after  considering  the  restructured C block license note
terms,  require  future minimum principal payments (without consideration of the
discount)  during  each  of the years ending September 30 as follows: $88,308 in
1999;  $367,249  in  2000; $390,746 in 2001; $415,746 in 2002; $820,973 in 2003:
and  $38,734,189  is  due  in  years  thereafter.

3.     CAPITAL  STOCK
       --------------

21st  I  has  the  authority  to  issue common stock (Series A and Series B) and
preference  stock.  All  such  shares are entitled to one vote per share.  Until
June 30, 1996, Series A common stock and preference stock carried preferences as
to liquidating distributions, equal in amount to the original subscription price
of  the shares.  Such preferences lapsed by their own terms after that date, and
any  subsequent  distributions  will be pro rata as to all classes and series of
the  corporation's  capital  stock.


<PAGE>
3.     CAPITAL  STOCK  (continued)
       --------------

21st  I issued 1,621,214 shares of common stock Series B on December 15, 1994 to
eight  individuals  for services provided prior to, and as part of the formation
of 21st I.  21st I also issued 22,000 shares of common stock Series B on January
30,  1995  to  two preference stockholders in consideration for their preference
stock  investment  and  to a third party in consideration  of services rendered.
No  value  has  been  assigned  to  the  Series  B  shares  issued  for non-cash
consideration  due  to  the  lack  of  an  objective  valuation.

21st  II  also  has  common  and  preference  stock.  All  of  the corporation's
authorized  common  stock, 100 shares, is owned by 21st I; such shares have been
eliminated  in  these  combined financial statements.  At September 30, 1998 and
1997,  21st II had issued 1,864,193 shares of its preference stock to investors.
Earlier  preferences  as to liquidating distributions and weighted voting rights
lapsed  by their own terms on June 30, 1996, and each share of the corporation's
common and preference stock now participates equally in any distributions and is
entitled  to  one  vote.

In order to comply with certain FCC requirements applicable to the licenses held
by  the  21st  JV (see Notes 1a and 7), both 21st I or 21st II are authorized to
redeem shares of their preference stock at their original issue prices to ensure
that  no  single  affiliated  group  of  investors  (other  than  the  founding
stockholders  of  21st  I)  owns  more than 25% of the total outstanding capital
stock  of  the  two  corporations.

4.     CAPITAL  STOCK  OPTIONS  AND  WARRANTS
       --------------------------------------

21st  II  has from time to time approved the grant of warrants to individuals to
purchase  shares of 21st II preference shares at an exercise price of $10.00 per
share.  During the years ended September 30, 1997 and 1996, 21st II approved the
grant  of  94,600 and 48,420, respectively, warrants as compensation for certain
broker services.  Management issued 120,300 of such warrants during February and
March  1998.  Management  also  approved  and  issued another 50,000 warrants in
August  1998  for  broker services.  These warrants are exercisable for 10 years
from the date of issuance at an exercise price of $10.00 per preference share of
21st  II.  Management  expects  to  issue more warrants in connection with prior
services, the future sale of 21 II capital stock, or in connection with securing
long-term  financing.  No warrants were forfeited or exercised through September
30,  1998.

5.     RELATED  PARTY  TRANSACTIONS
       ----------------------------

The  Companies owed a stockholder and officer $174,104 at September 30, 1996 for
expenses  paid  on  behalf of the Companies.  These amounts were repaid, without
interest,  during  the  year  ended  September  30,  1997.

The  21st JV has retained an engineering firm owned by a stockholder and officer
to  provide telecommunications engineering service in connection with the design
and  build-out  of the Joint Venture's markets.  During the year ended September
30,  1998  and  1997,  the  Companies  paid  $170,000  and  $227,170  for  these
engineering services.  The Companies owed this firm $0 and $254,752 at September
30,  1998  and  1997,  respectively.  The  majority  of  these  costs  have been
capitalized  as  network  design  and  development  costs.


<PAGE>
5.     RELATED  PARTY  TRANSACTIONS  (continued)
       ----------------------------

The  Companies  paid  $48,063,  $436,959  and  $1,010,044 in consulting fees and
finder  fees to Aventine, Inc., a corporation controlled by two stockholders and
directors  of 21st I in connection with the sale of shares of 21st II during the
years  ended  September  30,  1998, 1997 and 1996, respectively.  Aventine, Inc.
controls  a  NASD broker-dealer that participated in such sales.  Aventine, Inc.
paid  salaries  to  three  stockholders  and  directors  of  21st  I.

The  Companies  entered  into  commitments  to  offer  the  opportunity  to  two
stockholders  and  director to build and/or manage the PCS network in two of the
Companies'  license  areas.  The Companies also entered into a commitment with a
stockholder  and  director  for  consulting  services to be provided pursuant to
developing  another  of  the  Companies'  PCS  market  areas.  There has been no
development  to  date  in  these  PCS license areas or payments made pursuant to
these  commitments.

6.     PROVISION  FOR  INCOME  TAXES
       -----------------------------

The  components  of  the  provision for income taxes for each of the years ended
September  30,  1998,  1997,  and  1996  and  for  the  period from inception to
September  30,  1998  are  as  follows:
<TABLE>
<CAPTION>



                                                                   Inception to
                             1998          1997        1996      September 30, 1998
                        --------------  ----------  ----------  --------------------  
<S>                     <C>             <C>         <C>         <C>                   
Current tax expense. .  $           -     ($6,815)  $   6,815   $                 -    
Deferred tax (benefit)
  provision. . . . . .     (1,764,070)   (292,895)   (279,245)           (2,496,530)
                        --------------  ----------  ----------  --------------------   
                           (1,764,070)   (299,710)   (272,430)           (2,496,530)
Change in valuation
   Allowance . . . . .      1,764,070     299,710     272,430             2,496,530 
                        --------------  ----------  ----------  --------------------   

Income tax expense . .  $           -   $       -   $       -   $                 - 
                        ==============  ==========  ==========  ====================   
</TABLE>


A  valuation  allowance  has been recorded against the deferred income tax asset
due  to  the  uncertainty  of realization of these assets at September 30, 1998,
1997  and  1996.  The  valuation  allowance  will  be  reduced  at  such time as
management believes it is more likely than not that the related net deferred tax
assets  will  be  realized.  The  Companies  have  combined  net  operating loss
carryforwards  of  approximately  $9  million  which  may be available to offset
future  taxable  income.


<PAGE>



6.     PROVISION  FOR  INCOME  TAXES  (continued)
       -----------------------------

The  combined  provision for income taxes differs from the provision computed at
the statutory federal income tax rates for each of the years ended September 30,
1998, 1997, and 1996 and for the period from inception to September 30, 1998 for
the  following  reasons:
<TABLE>
<CAPTION>



                                                                         Inception to
                               1998           1997          1996       September 30, 1998
                          --------------  -------------  -----------  --------------------
<S>                       <C>             <C>            <C>          <C>
  Net loss before income
  taxes. . . . . . . . .    ($5,229,562)   ($1,005,290)   ($845,784)          ($7,513,977)
                          ==============  =============  ===========  ====================

Income tax at statutory
    Rates. . . . . . . .    ($1,778,050)     ($341,799)   ($287,567)          ($2,554,752)
Non-deductible expenses.         13,980         42,089       15,137                58,222 
Change in valuation
allowance. . . . . . . .      1,764,070        299,710      272,430             2,496,530 
                          --------------  -------------  -----------  --------------------

Income tax expense . . .  $           -   $          -   $        -   $                 - 
                          ==============  =============  ===========  ====================
</TABLE>


Deferred  income  taxes  reflect the impact of temporary differences between the
amount  of  assets  and  liabilities  for  financial reporting purposes based on
currently  enacted tax laws and regulations.  The components of net deferred tax
assets  at  September  30,  1998  and  1997  are  as  follows:
<TABLE>
<CAPTION>



                                               1998          1997
                                           ------------  ------------
<S>                                        <C>           <C>
Deferred tax assets:
    Deferred pre-operating and
      developmental costs . . . . . . . .  $ 1,412,500   $   719,400 
    Net operating loss carryforwards. . .    3,129,230     2,116,360 
                                           ------------  ------------
                                             4,541,730     2,835,760 
    Less:  Valuation allowances . . . . .   (2,496,530)     (732,460)
                                           ------------  ------------
                                             2,045,200     2,103,300 
  Deferred tax liabilities:
    Tax deduction of capitalized interest   (2,045,200)   (2,103,300)
                                           ------------  ------------
    Net deferred tax asset. . . . . . . .  $         -   $         - 
                                           ============  ============
</TABLE>






<PAGE>
7.     COMMITMENTS  AND  CONTINGENCIES
       -------------------------------

Capital  Stock
--------------
21st  I  has  agreed  with its preference stockholders that if 21st I or 21st II
subsequently  issues  preference shares at a price lower than $10 per share, all
21st  I  shareholders  who  purchased  preference shares at $5 per share will be
given  an  opportunity  to  purchase  additional  preference shares at par value
($.10)  to reduce their average acquisition cost per share to an amount equal to
50%  of  any  subsequent  preference  share offering at less than $10 per share.
During  1997,  21st  II  issued  preference  shares at amounts less than $10 per
share.  Accordingly,  at September 30, 1998 21st I was obligated to issue 19,886
shares  of  its  preference  shares  at  par  value  ($  .10).

FCC  Control  Requirements
--------------------------
As  a qualifying small business with an identified control group (certain of the
founding stockholders of 21st I), the 21st JV benefited from bidding credits and
installment  financing  in  the  FCC's C and F block auctions.  The 21st JV must
continue  to  comply with applicable FCC small business criteria for the initial
10-year  term  of  the  licenses;  failure  to do so will result in an immediate
requirement  to pay the unpaid balance of the license fees in cash and to refund
the  bidding  credits,  plus  interest  thereon.  With FCC approval, the C and F
block  licenses  owned  by the 21st JV may be transferred at any time to another
entity  that  qualifies  under  the  FCC  small business criteria.  Transfers to
non-qualifying  transferees  are  prohibited  during  the first five years after
license  award; non-qualifying transfers from the sixth year after license award
through  tenth  and  final  year  of  the  initial license term require the cash
payment  of the unpaid balance of the license fees and the refund of the bidding
credits,  plus  interest  thereon.

FCC  Build-out  Requirement
---------------------------
All PCS license holders are required to meet certain requirements imposed by the
FCC relating to the provision of service in each license area.  C block  license
holders  must  provide  coverage  to one-third of the population in each license
service area within five years of license grant and two-thirds of the population
in  each  license  service  area  within  ten  years of license grant.   F block
license  holders  must provide coverage to one-quarter of the population in each
license  service  area  within five years of license grant, or make a showing of
substantial  service  in their license area within five years of being licensed.
Failure  to  comply  with  the  build-out  requirements could subject 21st JV to
license forfeiture or other penalties, and may have a material adverse effect on
the  financial  condition  of  21st  JV.

PCS  Network  Build-out  and  Development
-----------------------------------------
Management  of  the  Companies  has  negotiated with certain vendors to acquire,
install and maintain PCS network equipment in the operating areas represented by
its  PCS  licenses.  Related thereto, the Companies have entered into a contract
with Hughes Network Systems for the design and installation of PCS equipment for
the Companies' operating regions.  The contract is subject to the ability of the
Companies to obtain satisfactory financing for the network development.  Similar
conditional  contracts  have  been  entered into for the construction of central
office structures, telephone handsets, and various facility site locations.  The
Company will substantially rely on and be dependent upon this equipment supplier
and other suppliers to install and make operational the equipment and technology
necessary  for  the  Companies'  PCS  network.


<PAGE>
7.     COMMITMENTS  AND  CONTINGENCIES  (continued)
       -------------------------------

FCC  Network  Build-out  and  Development  (continued)
------------------------------------------------------
The development of the infrastructure necessary to offer PCS services is subject
to  delays  and  risks,  including  those  inherent  in  the general uncertainty
associated  with  design, acquisition, installation and construction of wireless
telephone  systems.  The  successful development of the licenses also depends on
the  Companies' ability to lease or acquire sites for the location of equipment,
some  of  which may be subject to zoning or other regulatory approvals which are
beyond  the Companies' control.  Delays in the site acquisition process, as well
as  in  the  acquisition of equipment or in construction, could adversely affect
the  timing  for  build-out  of  the  Companies'  licenses.

The  Companies will require substantial amounts of additional capital to design,
develop  and  build  their  PCS  network,  meet  their  FCC license debt service
requirements  and  provide  for  their  continuing  working  capital needs.  The
Companies  are  exploring  the  availability of capital in the amount of $150 to
$280 million, to be raised in the form of equity and debt financing with partial
guarantees  by  prospective  equipment  vendors.  Such efforts to date have been
unsuccessful.  These  difficulties  have caused the Companies to actively pursue
the  possibility  of securing smaller amounts of financing needed to build out a
portion  of their markets, with the plan that the balance of their markets could
be  built  at  some  indefinite  time  in  the  future.  In this connection, the
Companies  have entered into an agreement to borrow from a substantial lender an
amount  of up to $100 million to finance the deployment of PCS systems in all of
their  Indiana  markets except Indianapolis.  See Note 8.  Management intends to
continue  to  pursue  capital  for  the  development  of  all of its PCS license
markets.  Although  no  assurances  can be offered, management believes that the
Companies  will  be successful in finalizing these financing arrangements, which
will  permit  the  timely  build-out  of  its  PCS  systems.

Leases
------
The  Companies are obligated under various long-term operating leases for office
space  which  expire  at  various  dates  through 2007.  The leases provide from
minimum annual rentals plus certain payments for property operating expenses and
property  taxes  and  include  certain  renewal  options.  Future  minimum lease
commitments under noncancellable operating leases are as follows for each of the
years  ending  September  30:


1999     $     149,975
2000          147,536
2001          164,699
2002          155,114
2003          51,509
Thereafter          189,737
                    -------

Total  minimum  lease  commitments       $     858,570
                                         =     =======

Other
-----
The  Companies  had  amounts on deposit with financial institutions in excess of
federally  insured  limits  totaling  $2,454,000  at  September  30,  1998.


<PAGE>
8.     UNCERTAINTIES  REGARDING  FUTURE  OPERATIONS
       --------------------------------------------

The  Companies  are developmental companies which have incurred net losses since
inception  and  expect  to  continue  to  experience  net  losses  and cash flow
deficiencies  from  operations.  In  order  to  implement  its  business  plan,
significant  capital  will  be required to meet the FCC debt obligations, design
and build out the PCS network infrastructure necessary to provide services, meet
operating  costs  and  working  capital  needs,  and  to  market and promote the
Companies' services. At September 30, 1998, the Companies had $2,660,126 of cash
on  deposit  and  current  liabilities  of  $1,529,561,  consisting primarily of
accrued  interest  payable.  Management anticipates that its available cash will
not  be  sufficient  to fund its operations at the present level and to make the
next  scheduled  interest  payment  on all of the FCC license obligations due on
April  28,  1999.  Failure  to  make  an  installment payment on any FCC license
obligation  will  bring about the forfeiture of the license and all amounts paid
on  such  license.

The  Companies entered into a commitment letter with a bank on December 29, 1998
for  a multiple draw term loan facility for up to $100 million; the availability
of  which  is  dependent  on numerous contingencies and the Companies satisfying
certain conditions.  The most significant financial condition is the requirement
that  the  Companies must have secured commitments for $50 million in additional
equity  by April 15, 1999, with not less than $25 million having been subscribed
in  cash  by  such date.  The loan commitment is also contingent upon completion
of,  among  other things, usual due diligence reviews, no adverse changes in the
financial  condition  and  operations of the Companies, no adverse conditions in
the  capital  or syndication markets, completion of satisfactory guarantees, and
the  payment  of  various fees and costs by the Companies.  The Companies are in
active  discussion  with  a  number  of  institutional investors in an effort to
secure  additional  equity,  but  no  assurances  can be given that they will be
successful  in  their  attempt  to  raise  additional  equity  capital

This  borrowing  facility  and  the  additional  equity  capital are intended to
provide  funds  necessary for working capital, debt service requirements, and to
deploy  the  Companies'  PCS  systems  in  all  of  its  Indiana  markets except
Indianapolis.  The loan commitment is to be divided into two tranches, the first
of  which  is  for  $45  million  and  is to be guaranteed by Hughes Electronics
Company  and used only to purchase and install equipment, services, and software
from Hughes Electronics Company.  The second tranche for up to $55 million is to
be  available upon achievement of certain predetermined build out and subscriber
criteria  and  will  be  limited  to a borrowing base derived from the amount of
qualifying  PCS  system  subscribers in the initial Indiana markets.  Management
believes,  but  cannot  assure,  that  if  the  selected  Indiana  markets  are
successful,  additional  financing will become available from the same source or
other  sources  to  build out the reminder of its PCS license markets, including
Indianapolis.

In  the  event  the  Companies  are  unsuccessful in their attempt to secure new
equity  capital,  or  are  unable promptly to satisfy the conditions of the debt
facility  mentioned  above,  management  intends  to seek alternative financing,
including  bridge financing, from one or more vendors of PCS systems based on an
alternative  PCS  technical  standard  than  is  currently  being  pursued  by
management.  There  can  be  no  assurance  offered  that  the Companies will be
successful  in  arranging  such  alternative  financing.

<PAGE>
8.     UNCERTAINTIES  REGARDING  FUTURE  OPERATIONS  (continued)
       --------------------------------------------

If the Companies are not successful in attracting new financing prior to the end
of April, 1999, management may elect not to make their C block license payments,
thereby  forfeiting  their  17  C  block  licenses.  The  amount saved thereby -
approximately  $773,000  -  is expected to give the Companies sufficient cash to
continue  operations  (assuming  uniform  levels  of  expenditure at the current
levels)  through  the  balance  of the period ending June 30, 1999.  During such
period  the  Companies intend to continue to seek financing for the build out of
their  10  remaining  PCS  license  markets.



 9.     21ST  CENTURY  TELESIS  (II),  INC.
        -----------------------------------

As  described  in  Note  1,  the  combined  financial statements included in the
financial  statements  of 21st Century Telesis (II), Inc.  The condensed balance
sheets  at September 30, 1998 and 1997 and the condensed statements of operation
and  cash  flows  for  each  of  the  years  during  the three year period ended
September  30,  1998  and for the period from inception to September 30, 1998 of
21st  II  are  presented  below:
<TABLE>
<CAPTION>



                                                      1998          1997
                                                  ------------  ------------
<S>                                               <C>           <C>
Condensed Balance Sheet
------------------------------------------------                            
Assets:
Cash and cash equivalents. . . . . . . . . . . .  $   249,741   $ 5,784,144 
Investment in 21st Century Joint Venture . . . .   16,985,296    18,886,765 
Organizational costs . . . . . . . . . . . . . .            -         1,400 
                                                  ------------  ------------
                                                  $17,235,037   $24,672,309 
                                                  ============  ============
Liabilities:
Accounts payable and accrued expenses. . . . . .  $    23,995   $    72,058 
Due to 21st Century Joint Venture. . . . . . . .          546     3,175,546 
                                                  ------------  ------------
                                                       24,541     3,247,604 
                                                  ------------  ------------
Stockholders' equity:
Common stock . . . . . . . . . . . . . . . . . .        1,000         1,000 
Preference stock . . . . . . . . . . . . . . . .      257,133       257,133 
Additional paid-in capital . . . . . . . . . . .   22,512,839    22,512,839 
Deficit accumulated during the development stage   (5,560,476)   (1,346,267)
                                                  ------------  ------------
                                                   17,210,496    21,424,705 
                                                  ------------  ------------

                                                  $17,235,037   $24,672,309 
                                                  ============  ============
</TABLE>

<PAGE>


9.     21ST  CENTURY  TELESIS  (II),  INC.  (continued)
       -----------------------------------
<TABLE>
<CAPTION>

                                          Year ended               Year ended            Year ended       Inception to
                                         September 30,           September 30,            September 30,    September 30,
                                             1998                     1997                    1996             1998
                                        ---------------  ------------------------------  ---------------  ---------------

  Condensed Statement of Operations
--------------------------------------                                                                           
<S>                                     <C>              <C>                             <C>              <C>
    Revenues . . . . . . . . . . . . .  $            -   $                           -   $            -   $            - 

    Loss from unconsolidated affiliate       3,715,928                         849,942          351,593        4,917,463 
    Management fee to 21st I . . . . .         540,000                               -          240,000          874,000 
    Miscellaneous expense. . . . . . .          12,077                          17,339           21,833           51,278 
                                        ---------------  ------------------------------  ---------------  ---------------
                                             4,268,005                         867,281          613,426        5,842,741 
    Interest income. . . . . . . . . .          53,796                         158,726           62,708          282,265 
                                        ---------------  ------------------------------  ---------------  ---------------

    Net income . . . . . . . . . . . .     ($4,214,209)                      ($708,555)       ($550,718)     ($5,560,476)
                                        ===============  ==============================  ===============  ===============


  Condensed Statement of Cash Flows
--------------------------------------                                                                                   

    Cash flows from operating
    activities:
      Net losses . . . . . . . . . . .     ($4,214,209)                      ($708,555)       ($550,718)     ($5,560,476)
      Losses from 21st JV                    3,715,928                         849,942          351,593        4,917,463
Changes in operating assets
        and liabilities. . . . . . . .         (46,663)                       (158,597)         229,635           23,995 
                                        ---------------  ------------------------------  ---------------  ---------------
                                              (544,944)                        (17,210)          30,510         (619,018)
    Cash flows from investing
    activities:
      Investments in 21st JV . . . . .      (4,989,459)                     (6,082,754)     (10,830,000)     (21,902,213)

    Cash flows from financing
    activities:
      Proceeds from issuance
      of stock . . . . . . . . . . . .               -                       6,554,840       15,198,552       22,770,972 
                                        ---------------  ------------------------------  ---------------  ---------------
    Net change in cash . . . . . . . .      (5,534,403)                        454,876        4,399,062          249,741 

    Cash at beginning of year. . . . .       5,784,144                       5,329,268          930,206                - 
                                        ---------------  ------------------------------  ---------------  ---------------
    Cash at end of year. . . . . . . .  $      249,741   $                   5,784,144   $    5,329,268   $      249,741 
                                        ===============  ==============================  ===============  ===============

</TABLE>
  



Item  9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting and
Financial  Disclosure.
Inapplicable.
Item  10.  Directors  and  Executive  Officers  of  Registrant.
Current  officers  of  the  Company  are  identified  in  the  following  table:
<TABLE>
<CAPTION>



Name                                             Position
<S>                    <C>
Robert Andrew Hart IV  Chairman and Chief Executive Officer
Philip J. Chasmar . .  Executive Vice President,
  Secretary
Dion S. Whitman . . .  Chief Information Officer and Acting Chief Financial Officer
James A. LaBelle. . .  Chief Operating Officer
</TABLE>



Robert  Andrew Hart IV has served as Chairman and Chief Executive Officer of the
21st  Century  Telesis  companies  since their formation. For a period beginning
more  than  five  years  before the present, he has been the owner and principal
professional  of  Hart  Engineers,  Baton Rouge, Louisiana, a telecommunications
engineering  firm.  Mr.  Hart  serves  on  the  Board  of Directors of the Small
Business  PCS  Association,  a  trade association of nationwide scope focused on
small  business  applications  and opportunities in PCS technology. Mr. Hart has
also  served  as  Chairman  of  the Lobbying Committee of this organization. Mr.
Hart,  who  is 51 years old, is a graduate of Louisiana State University, with a
degree  in  electrical  engineering, and is a Registered Professional Electrical
Engineer.

Philip  J.  Chasmar  is one of the founders of the 21st Century Telesis project,
and  has  served  as Secretary of the 21st Century Telesis companies since their
formation.  He  was  appointed  as  Executive  Vice President and elected to the
boards  of directors of the companies in December, 1996. Mr. Chasmar is a member
of  the  "Control  Group" identified to the Federal Communications Commission in
connection  with  the  grant  of  the  companies'  PCS  licenses.  Prior  to his
involvement  in  the 21st Century Telesis project he served in various marketing
capacities  with  American  Wireless  Systems,  United Communications and Vision
Communications.  Mr.  Chasmar  is  a  graduate  of  the  Newhouse  School  of
Communications  of  Syracuse  University.  Mr.  Chasmar  is  41  years  old.

James A. LaBellewas appointed Chief Operating Officer of the Company in October,
1997.  Prior  to  this appointment, Mr. LaBelle served from 1995 to 1997 as Area
President  - Midwest of GTE Wireless Products and Services, in which position he
had  overall  management responsibility for a four-state cellular operation with
500 employees and 500,000 customers. Prior to that time, Mr. LaBelle served from
1990 to 1995 as Area President - Florida for GTE Wireless Products and Services,
in  which position he oversaw the growth of this cellular service from 30,000 to
350,000  customers.  Mr.  LaBelle  is 52 years of age and received a Bachelor of
Business  Administration  degree  from  the  University of Wisconsin in 1967 and
participated  in  the  GTE  Executive  Development  Program  from  1980 to 1997.

Dion  S.  Whitman is one of the founding stockholders of the Company, and joined
it  full-time  in  August, 1996. Prior to that time, Mr. Whitman had served from
May,  1994  as  Controller/Chief  Financial Office of the Long Beach Civic Light
Opera,  a  non-profit musical theater production company; prior to that time Mr.
Whitman  served  as  Regional  Controller  of  the  Drug  Emporium,  a  Southern
California  retail drug chain, and in a sales capacity at United Communications,
LTD. Mr. Whitman is 39 years old, and received a B.A. degree from the University
of  Southern  California.

The  directors  of  the  Company  are  identified  below:
     Robert  Andrew  Hart  IV     Philip  J.  Chasmar
     James  Ross  Rasco     Joseph  A  Miller  III
     Vincent  E.  Stuedeman     Allen  Terrell
     Philip  Nelson     Frank  Coughlin
     H.  Randolph  Hart     Jeffrey  V.  Barbieri
     Lawrence  Kaufman     John  H.  Greenberg
     James  C.  Roddey
     The  business  backgrounds of Messrs. Hart and Chasmar are given above. The
business  backgrounds  of  the  balance  of  the  directors are set forth below.

James  C. Roddey is Chairman of Star Cable Associates, Chairman of International
Sports  Marketing,  Chairman  of  the  Bantry  Group,  a  nationwide provider of
specialized  health  services,  President  of  Business  Records  Management and
Chairman  of  Production  Masters,  IncHe  is a former President and Director of
Turner Communications Corporation and of Rollins Communications Corporation. Mr.
Roddey  also  serves  on  the  boards  of  Allin  Communications Corporation and
Clo-White, Inc. Mr. Roddey is also active in charitable and civic organizations,
serving  on  the  boards  of  the  University  of  Pittsburgh, the University of
Pittsburgh  Medical  Center  and  many  other Pittsburgh area organizations. Mr.
Roddey  is  65 years of age and has served as a director of the two 21st Century
Telesis  companies  since  1995.

John  Hendrix  Greenberg  for a period beginning more than five years before the
present has been President and General Manager of the Brazoria Telephone Company
of  Brazoria,  Texas.  Mr.  Greenberg  is actively involved in a large number of
trade  associations  that  represent  the  interests  of  small- and medium-size
telephone  companies.  Mr.  Greenberg,  who  is  47  years  old, has served as a
director  of  the  two  21st  Century  Telesis  companies  since  1995.

Joseph  A.  Miller  III  is Vice President and General Manager of the Georgetown
Telephone  Company  of  Georgetown,  Mississippi  and  the  President  of Miller
Cablevision.  Mr.  Miller  is  a  former  President  of  the Alabama Mississippi
Telephone Association, and serves as a director of Bank of the South, of Crystal
Springs,  Miss. Mr. Miller, who is 37 years old, has served as a director of the
two  21st  Century  Telesis  companies  since  1995.

Gilbert  Ross  Rasco  is  Vice President of Operations of the Brazoria Telephone
Company, Brazoria, Texas. Mr. Rasco has served for a number of years as a member
of the Texas Telephone Association Legislative Committee and as a member of that
Association's  Academic  Advisory  Board.  Mr.  Rasco,  who is 46 years old, has
served  as  a  director  of  the  two 21st Century Telesis companies since 1995.

Vincent  E.  Stuedeman  is  a  certified  public  accountant  with  substantial
experience  in  telecommunications  auditing; since 1980 he has been a member of
Martin  Stuedeman  &  Associates, P.C., of Birmingham, Alabama, and he currently
serves  as its President. Mr. Stuedeman is a member of the American Institute of
Certified  Public  Accountants  and  of  the Alabama Society of Certified Public
Accountants.  Mr.  Stuedeman,  who is 49 years old,  has served as a director of
the  two  21st  Century  Telesis  companies  since  1995.

Allen Terrell for a period of more than five years has been the President of the
Rochester  Telephone  Company,  of  Rochester,  Indiana,  and  also  serves as a
director  of  that  publicly-held company. Mr. Terrell, who is 48 years old, was
elected  to  the boards of the 21st Century Telesis companies in December, 1996.
Mr.  Terrell  is  also  a director of Norwest Bank Indiana, N.A., of Fort Wayne,
Indiana,  a  publicly-held  banking  company.

Philip  Nelson  has  been  the  President  of  the Hamilton Telephone Company of
Aurora,  Nebraska  for more than five years. Mr. Nelson, who is 58 years of age,
was  elected  to  the  boards of the 21st Century Telesis companies in December,
1996.

Frank  Coughlin  is  a  principal  owner of the Lackawaxen Telephone Company, of
Rowland,  Pennsylvania. Mr. Coughlin, who is 38 years of age, was elected to the
boards  of  the  21st  Century  Telesis  companies  in  December,  1996.

H. Randolph Hart is the general partner of the H. R. Hart Communications Limited
Partnership,  the  original  major  investor  in  21st I, and the brother of Mr.
Robert  Andrew  Hart IV. For a period of more than five years, Mr. Hart has been
Credit  Manager of the Coca Cola Bottling Company of Baton Rouge, Louisiana, and
was  elected  to  the  boards of the 21st Century Telesis companies in December,
1996.  Mr.  Hart  is  47  years  old.

Jeffery V. Barbieri and Lawrence Kaufman are two of the original founders of the
21st  Century  Telesis  companies,  and  are  members  of  the  "Control  Group"
identified  to  the  FCC. Prior to their involvement in the 21st Century Telesis
project  they  served  in  various  marketing  capacities with American Wireless
Systems,  United  Communications and Vision Communications. Messrs. Barbieri and
Kaufman  were  elected  to  the  boards of the 21st Century Telesis companies in
December,  1996.  Mr.  Barbieri  is  36  years  old  and  Mr.  Kaufman  is  54.

The  founders  of  the  company  were  identified  to the Federal Communications
Commission  as  members  of the company's "Control Group," and were appointed as
officers  and  directors  as a result of the requirement of the FCC that Control
Group  members  be  active  in  the day to day management of the business. These
persons  are  Mr.  Robert  Andrew Hart IV, Chairman and Chief Executive Officer;
Philip  J. Chasmar, Executive Vice President, Secretary and a director; Lawrence
Kaufman,  a  director; Jeffery Barbieri, a director; Dion Whitman, the company's
Chief  Information Officer and Acting Chief Financial Officer; H. Randolph Hart,
an  Assistant  Secretary  of  the  company  and  a  director.

Certain board members were asked to serve as such because of their investment in
the  H.  Randolph  Hart Communications L.P., which provided the seed capital for
the  project, and/or because of their longstanding business ties with Mr. Robert
Andrew  Hart  IV.  These  individuals are John H. Greenberg; Gilbert Ross Rasco;
Joseph  A  Miller  III;  and  Vincent  E.  Stuedeman.

Several  individuals  were  asked  (or  sought) to serve as directors because of
sizable investments in the project, either directly or through affiliates: James
C.  Roddey;  Allen  Terrell;  Philip  Nelson;  and  Frank  Coughlin.

All the above-named directors have been re-elected by stockholders subsequent to
their  initial  appointments.

Form  3:
--------
Through  inadvertance,  none  of registrant's directors or officers filed Form 3
notifications  by  the  time that registrant's registration statement on Form 10
had  become  effective.  Each  of  such  officers  and directors has advised the
registrant  that  the  oversight  will  be  remedied  forthwith.
There  is  no  established  market  for  or  trading  in  the  securities of the
registrant,  and no shares of registrant have been sold to any person during the
fiscal  year  ended  September  30,  1998. Securities of registrant owned by its
officers and directors are as set forth in Item 12 below, and such ownership has
remained  unchanged  throughout  the  fiscal year ended September 30, 1998, with
this  exception:  as  disclosed  in Item 11, below, the 9 non-employee directors
have  the  option  of  receiving,  in  lieu of cash attendance fees, warrants to
purchase  125  shares of registrant's preference stock at $10 per share for each
meeting attended during the year, up to a total of 500 shares for the year. Each
of  such individuals has indicated that they wish to receive warrants in lieu of
cash  fees.  Accordingly,  the  ownership  totals  reflected  in Item 12 will be
increased  by  500 warrants each on the Form 3 notifications which will promptly
be  filed  by  Messrs. H. R. Hart, Roddey, Terrell, Coughlin, Greenberg, Rascoe,
Nelson, Miller and Stuedeman. Ownership totals shown on the Form 3 notifications
to  be  filed  by  the  remaining  directors,  viz., Messrs. R.A. Hart, Chasmar,
Barbieri  and  Kaufman, and by Messrs. And LaBelle and Whitman, who are officers
but  do  not  serve  as  directors,  will  be  as  shown  in  Item  12.

Item  11.  Executive  Compensation.
Item  11  -  Executive  Compensation
The  following  table  sets  forth  the total compensation paid to the executive
officers  of registrant during the years indicated. All compensation was paid in
the  form  of  salary;  registrant has not yet adopted any deferred or incentive
compensation  plans.  All the individuals noted in the table save Messrs. Heller
and  LaBelle  are  members  of registrant's promotional group, and Messrs. Hart,
Chasmar,  Barbieri,  Kaufman  and  Whitman  are members of registrant's "control
group'  identified  to  the  FCC.  See  Item  1.
<TABLE>
<CAPTION>




                                                          1998         1997         1996
<S>                        <C>                         <C>          <C>          <C>
Robert Andrew Hart IV . .  Chairman of the Board;
  Chief Executive Officer  			     $98,250.00  $ 92,750.00  $154,531.40
Philip J. Chasmar . . . .  Executive Vice President;
  Secretary . . . . . . .                               $95,049.92  $ 87,549.92  $ 94,944.84
Jeffery V. Barbieri . . .  Senior Executive;           $ 91,049.92  $ 89,149.92  $94,944.84
Lawrence Kaufman. . . . .  Senior Executive            $ 93,049.92  $ 87,549.92  $80,559.84
Dion Whitman. . . . . . .  Acting Chief Financial
  Officer;
  Chief Information
  Officer . . . . . . . .                               $72,000.00  $ 66,500.00  $ 24,769.20
James LaBelle . . . . . .  Chief Operating Officer      170,200.00  $ 37,000.00  $        -
Doug L. Heller. . . . . .  Chief Financial Officer     $         -  $ 35,807.20  $89,623.60
</TABLE>



(g)  Compensation  of  Directors
Those  directors  who  are  not  employees of the company, viz., Messrs. Roddey,
Terrell,  Nelson,  Coughlin, Miller, Greenberg, Rasco, Stuedeman and H. Randolph
Hart,  receive  attendance  fees of $1,250 per meeting, with a maximum of $5,000
payable  for  any  single  year  (exclusive of expenses of attendance, which are
reimbursed  in  full).  Such  fees are payable in cash, or, at the election of a
director,  are  payable in the form of warrants to purchase shares of preference
stock  of  21st  Century  Telesis  (II),  Inc.;  such warrants currently have an
exercise  price  of $10 per share, and will be deemed to have a value of $10 per
share,  so  that  the $1,250 fee for attendance at a meeting will be paid in the
form  of an option to purchase 125 shares at an exercise price of $10 per share.
The  options  will  have  a term of 10 years and are fully vested upon issuance.

(h)  Employment  Contracts
Each  of  Messrs. Robert Andrew Hart IV, Philip J. Chasmar, Jeffery V. Barbieri,
Lawrence  Kaufman and Dion Whitman, who comprise registrant's promotional group,
has  a  written  employment  contract with registrant. All of such contracts are
terminable  at  the  will of registrant's board of directors, and no termination
indemnities  are  payable  in  connection  with  any  such  termination.

     Mr.  James  LaBelle,  registrant's  Chief Operating Officer, is party to an
employment  contract  with  registrant  pursuant  to the terms of which he is to
receive  a  base  annual  salary  of  $171,600  plus  an automobile allowance of
$500/month,  with incentive compensation as follows: (a) a cash bonus of $25,000
upon completion of deployment of an operational PCS system in each Basic Trading
Area  in  which registrant possesses licenses to offer PCS service; (b) for each
full  fiscal  year  for which the earnings before income taxes, depreciation and
amortization ("EBITDA") of registrant from the operation of PCS systems shall be
a  positive  number,  as reflected in the annual audited financial statements of
registrant,  Mr.  LaBelle will be paid a cash bonus equal to 0.25% of EBITDA for
such  year.  The  contract  also  calls for Mr. LaBelle to receive stock options
commensurate  with  his  position  at  such  time  as  registrant establishes an
employee  stock  option  plan.
The  contract  is  terminable  at  will,  but  if  Mr.  LaBelle  is  terminated
involuntarily  following  a change in control of registrant, he will be entitled
to  receive a multiple of the base pay and incentive compensation he received in
the  fiscal  year next preceding such involuntary termination: the multiple will
be  three  times  such  annual  compensation if the termination occurs within 12
months  following a change in control; two times such annual compensation if the
change  of  control  occurs  during  the  13th through 24th month following such
change  in  control;  and  an  amount  equal  to  such  annual  compensation  if
termination  occurs  in  the  25th  through  36th  month  after such a change in
control. No indemnity will be payable for an involuntary termination that occurs
thereafter.

(j)  Compensation  Committee  Interlocks  and  Insider  Participation.
Registrant's  compensation  committee  consists  of Mr. Allen Terrell, Mr. James
Roddey  and  Mr.  John  Greenberg.  None  is an executive officer or employee of
registrant  or  any affiliate of registrant. No employee or executive officer of
registrant  serves  on  the  compensation committee of any entity whose board of
directors  or  compensation  committee  includes  Mr. Terrell, Mr. Roddey or Mr.
Greenberg,  or  which  employs  any  of  them.

(k)  Compensation  Committee  Action  on  Executive  Compensation
Registrant's  Compensation  Committee  was first organized on April 29, 1997. No
such  committee  had existed prior to that time. No action was proposed or taken
by  the committee during the fiscal year ended September 30, 1998, to change the
compensation  payable  to  any executive officer of registrant, as it was deemed
inappropriate materially to increase such compensation prior to the commencement
of  operations.

Item  12.  Security  Ownership  of  Certain  Beneficial  Owners  and Management.
(a) No persons other than members of management are known to own beneficially or
of record 5% or more of 21st Century Telesis, Inc. or 21st Century Telesis (II),
Inc.
(b)  Security  ownership  of  members of management is given in the table below:
<TABLE>
<CAPTION>




Name of Beneficial               Title of Class           Amount     Percent of Class
Owner                             And Nature of
                                Beneficial Owner
<S>                        <C>                          <C>          <C>
Robert Andrew Hart IV . .  21st Century Telesis, Inc.   392,857<F1>             23.91%
  Series B common
Philip J. Chasmar . . . .                            "      457,286             27.83%
Jeffery V. Barbieri     "                                   429,786             26.16%
Lawrence Kaufman. . . . .                            "      179,143             10.90%
Dion Whitman. . . . . . .                            "      102,142              6.22%
H. Randolph Hart. . . . .  21st Century Telesis, Inc.   736,429<F2>               100%
  Series A Common
James C. Roddey<F3> . . .  21st Century Telesis, Inc.        60,000             34.28%
  Preference Stock
John Hendrix Greenberg. .  21st Century Telesis (II)         25,000                 1%
  Preference Stock
Joseph A. Miller III. . .                            "   25,000<F4>                 1%
Gilbert Ross Rasco. . . .  21st Century Telesis, Inc.    82,480<F5>             11.20%
  Series A Common
Vincent E. Stuedeman. . .                            "   27,493<F6>              3.70%
Allen Terrell . . . . . .  21st Century Telesis (II)         62,500              2.40%
  Preference Stock
Philip Nelson . . . . . .                            "      100,000              3.90%
Frank Coughlin. . . . . .                            "      115,000              4.50%
</TABLE>




<F1>     Does  not include Mr. Hart's 5.6% limited partner interest in the H. R.
Hart  Communications  LP.
<F2>     Mr.  H.Randolph  Hart  has  a 16.6% undivided interest in the H.R. Hart
Communications LP as general partner. Mr. H. Randolph Hart and Mr. Robert Andrew
Hart  IV  are  brothers.
<F3>     Owned of record by Star Cable Partners; Mr. Roddey disclaims beneficial
ownership.
<F4>     Includes  20,000  shares  owned of record by Mr. Miller's mother, Olene
Miller,  as to which Mr. Miller disclaims beneficial ownership. Does not include
Mr.  Miller's  one-third  interest  in  the JOV Partnership, which owns an 11.2%
limited  partner's  interest  in  the  H.  R.  Hart  Communications  LP.
<F5>     A  derived  figure,  representing  Mr.  Rasco's 11.2% limited partner's
interest  in  the  H.R.  Hart  Communications  LP.
<F6>     A  derived  figure,  representing Mr. Stuedeman's one-third interest in
the  JOV  Partnership, which in turn owns an 11.2% limited partner's interest in
the  H.  R.  Hart  Communications  LP.

Item  13.  Certain  Relationships  and  Related  Transactions.
(a)  Transactions  with  management  and  others
Philip  J.  Chasmar  and  Jeffery  V.  Barbieri,  both of whom are promoters and
directors  of  registrant,  control Aventine, Inc., a Texas corporation which in
turn owns all the outstanding capital stock of Atlantic-Pacific Financial, Inc.,
an  NASD  broker-dealer that participated in the private placement of securities
of Registrant  or its affiliates. , Registrant or registrant's affiliates (i.e.,
21st  Century Telesis LLC and PCS Communications LLC) paid brokerage commissions
of  $453,512  and  $618,648  to  Atlantic-Pacific  Financial for the years ended
September  30,  1996  and 1997, respectively. All such payments were commissions
payable  in  connection  with  private offerings of securities of Registrant and
affiliates,  and  did not differ in kind from commissions paid to non-affiliated
broker-dealers  participating  in  such  private  placements.
In  addition  to  the  foregoing,  Registrant  and/or  its affiliated LLC's paid
$1,010,444 for the year ended September 30, 1996 and $436,959 for the year ended
September  30,  1997  and  $48,063  for  the  year  ended  September 30, 1998 to
Aventine,  Inc.  Aventine  utilized  the amounts paid to it as follows. From the
$1,010,444  paid  to  it during the year ended September 30, 1996, it paid (a) a
total of $537,172 in finder' fees and wholesaling overrides (i.e., fees paid for
inducing  broker-dealers other than Atlantic-Pacific Financial to participate in
the  private  placements)  to  six  individuals,  none  of whom were officers or
directors  of  Registrant, or members of Registrant's promotional group or 5% or
more  stockholders  in  Registrant;  (b)  salaries  of  $62,000  each to Messrs.
Chasmar,  Barbieri  and  Kaufman; (c) repayment of a "seed money" advance in the
amount  of  $165,000  made  by  the  H.  R.  Hart  Communications  L.P.,  one of
Registrant's  promoters;  and  (d) the balance was used to help defray overhead.
From  the  $436,959  paid  to Aventine during the 12 months ending September 30,
1997,  Aventine paid (a) $135,322 in finders' fees and wholesaling fees to three
individuals,  none  of whom were officers or directors of Registrant, or members
of  Registrant's promotional group or 5% or more stockholders in Registrant; (b)
salaries  of $45,000 each to Messrs. Chasmar, Barbieri and Kaufman; repaid loans
totalling  $53,966  made  to  it  by  three  of its employees, none of whom were
officers  or  directors  of  Registrant,  or members of Registrant's promotional
group  or 5% or more stockholders in Registrant; and (c) utilized the balance to
help  defray  overhead.  The  $48,063  paid in 1998 was used by Aventine to help
defray  overhead.

During  December,  1996 and January, 1997 registrant paid a total of $174,104 to
Hart Engineers, a telecommunications engineering firm owned by Mr. Robert Andrew
Hart  IV,  the  Chairman  and  Chief Executive Officer of registrant, and one of
registrant's  promoters.  The  payments were reimbursements for advances made by
Hart  Engineers  for  the  benefit  of registrant, principally during the period
prior  to  the  commencement  of  and  during  the  FCC's  PCS  auctions.
Registrant  utilizes  the  services  of  Hart  Engineers  to provide engineering
oversight  services  for  the  deployment  of  registrant's  PCS  systems.  The
arrangement, as authorized by registrant's board, calls for Hart Engineers to be
compensated  for  such  services  on a time and materials basis, at rates not to
exceed  those  customary  in  the  industry  for  services  of  like  character.
Registrant  paid  $227,170  to  Hart Engineers for services for the twelve month
period  ended  September  30,  1997,  and had an unpaid balance of an additional
approximately  $254,752  as  of  such  date, which amount was subsequently paid.
During  the  twelve  month period ended September 30, 1998, Registrant paid Hart
Engineers  $120,000  for  services,  with an additional $68,432.69 billed during
such  period  but  paid  after  September  30,  1998.
Prior  to  the C block auctions, registrant agreed with one of its stockholders,
Georgetown  Telephone Company, that in consideration of additional investment by
Georgetown,  registrant  would  attempt  to  win  the  Jackson, MS market in the
auction,  and  would  bid up to $7 million to do so. If the license was secured,
Georgetown  was to be offered the opportunity to build and manage the PCS system
for the market and would also be given the right to partition Copiah and Simpson
counties  from  the  market  for  a  further  payment  of  $50,000.  Registrant
subsequently  won the Jackson license, but at a cost greatly in excess of the $7
million  ceiling  contemplated  in  the agreement with Georgetown. Mr. Joseph E.
Miller,  one  of  the  directors  of  registrant,  is Vice President and General
Manager  of  the  Georgetown  Telephone  Company, and beneficial owner of of the
shares  of  registrant  held  of  record  by  Georgetown. Neither registrant nor
Georgetown  Telephone Company has taken any steps to implement these agreements.
Mr.  Miller has informally indicated that he is not prepared at the present time
to  waive  Georgetown's  rights  thereunder.  Registant  considers  that  such
agreements  are  not  enforceable in their original form, because the price paid
for  the  Jackson  license  substantially  exceeded  the  $7million  ceiling
contemplated  by  such  agreements.
     Family  partnerships  of  which  Mr.  Frank  Coughlin is a member purchased
115,000 shares of preference stock of registrant and received assurances that he
would  be  appointed to registrant's board and that he would be invited to serve
as  a  consultant  to  registrant for unspecified compensation. Mr. Coughlin was
appointed to registrant's board in December, 1996, and has since been elected by
stockholders.  Although  neither registrant nor Mr. Coughlin has taken any steps
to  implement  this  agreement, Mr. Coughlin has informally indicated that he is
not prepared to relinquish his right to serve as a consultant to registrant in a
paid  capacity  at  some  future  time.
The  Hamilton  Telephone  Company,  owned  in  part by Mr. Philip Nelson, one of
Registrant's  directors, has an informal agreement with the Companies to provide
management  and other services for portions of the Companies' Nebraska BTA's. In
the opinion of management of Registrant such agreement, if implemented, will not
have a material effect on the Companies' operations, prospects or profitability.

(d)  Transactions  with  Promoters
     Registrant  was  formed  through  the promotional efforts of Messrs. Robert
Andrew  Hart  IV,  Philip  J. Chasmar, Jeffery V. Barbieri, Lawrence Kaufman and
Dion  Whitman.  All  five individuals continue to serve in executive capacities,
and  all  save  Mr.  Whitman  are  members  of  registrant's board of directors.
Compensation  received  by the promoters is as shown in Item 13 (a) above and in
Item  11.  The ownership of registrant's stock by each promoter is shown in Item
12.  All  shares  shown  in  Item  12  were  issued for services rendered by the
promoters.

PART  IV

Item  14.  Exhibits,  Financial  Statement  Schedules  and  Reports on Form 8-K.
(a)  The  following  documents  are  filed  with  this  report:
(1)  21st  Century  Telesis, Inc.; 21st Century Telesis (II), Inc.; 21st Century
Telesis  Joint  Venture  and  21st  Century  Bidding  Corp.  (Development  Stage
Companies)  Combined  Financial  Statements  dated  September  30,  1998.
(2) Paribas Commitment Letter dated December 16, 1998, re secured financing, and
associated  documents.
(3)  Form  of  Agreement  between  the  Antitrust  Division of the United States
Department  of  Justice  and  21st Century Telesis (II), Inc. respecting consent
proceeding.

No  reports  on  Form  8-K  were  filed  in  the  last  quarter.

The following exhibits previously filed with registrant's registration statement
on  Form  10  are  incorporated  herein  by  reference:
1.     Certificate  of  Incorporation
2.     Bylaws
3.     21st  Century  Telesis  Joint  Venture  Agreement
4.     James  A.  LaBelle  Employment  Contract
5.     Premises  Lease--South  Bend,  Indiana  Operations  Center
6.     PCS  Licenses
A.     KNLF  303
B.     KNLF  315
C.     KNLF  304
D.     KNLF  305
E.     KNLF  306
F.     KNLF  307
G.     KNLF  308
H.     KNLF  309
I.     KNLF  310
J.     KNLF  311
K.     KNLF  312
L.     KNLF  313
M.     KNLF  314
N.     KNLF  316
O.     KNLF  317
P.     KNLF  318
Q.     KNLF  319
R.     KNLF  888
S.     KNLG  257
T.     KNLG  258
U.     KNLG  259
V.     KNLG  260
W.     KNLG  261
X.     KNLG  262
Y.     KNLG  263
Z.     KNLG  264
AA.     KNLG  265



Signatures:
Pursuant  to the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.
21st  Century  Telesis  (II),  Inc.,  registrant
By:  Robert  Andrew  Hart  IV,  Chief  Executive  Officer;  Director
Dated:  January  21,  1999
By:  Philip  J.  Chasmar,  Executive  Vice  President  and  Secretary;  Director
By:  Dion  Whitman,  Acting  Chief  Financial  Officer
Dated:  January  21,  1999
By:  Jeffery  Barbieri,  Director
Dated:  January  21,  1999
By:  Lawrence  Kaufman,  Director
Dated:  January  21,  1999
By:  John  H.  Greenberg,  Director
Dated:  January  21,  1999
By:  Gilbert  Ross  Rascoe,  Director
Dated:  January  21,  1999
By:  H.  Randolph  Hart,  Director
Dated:  January  21,  1999