SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

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

                   For the fiscal year ended: December 31, 1998

                         Commission File Number: 0-17462

                       FILMAGIC ENTERTAINMENT CORPORATION
         IMMEDIATE PREDECESSOR NAME: "ROEDEINGER MEDICAL SYSTEMS, INC."
                      PREDECESSOR NAME: "COTTON TREE, INC."

             (Exact name of registrant as specified in its charter)

UTAH                                                            87-0404991
(State or other jurisdiction of                               (IRS Employer
Incorporation or organization)                              Identification No.)

1152 N. Mountain Suite 210, Upland, CA                            91786
(Address of principal executive offices)                        (Zip Code)

        Registrant's telephone number including area code: (909) 946-1708

           Securities registered pursuant to Section 12(b) of the Act:
                                      None
           Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.0001 par value
                                (Title of Class)

         Indicate by check mark whether the registrant (a) has filed all reports
required to be filed by Section 13 pr 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES X NO

         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. [ ]

         The  aggregate  market value (the average bid and asked  prices) of the
voting stock held by  non-affiliates of the registrant on December 31, 1998, was
approximately $_______. The number of shares of Common Stock, $0.0001 par value,
outstanding   on  December  31,  1998,  was  7,323,006   shares,   held  by  221
shareholders.

<PAGE>

Item 1.                        BUSINESS

         Filmagic was  incorporated  in the State of Utah on December 7, 1983 as
Cotton Tree, Inc. In August of 1985 it acquired, in stock-for-stock acquisition,
MEDX, Inc. and changed its name to Roedeinger  Medical  Systems,  Inc. In May of
1988,  Roedeinger  Medical  System sold its line of medical  products to a third
party company, and in September of 1988 it acquired, on a stock-for-stock basis,
Filmagic, Inc. and changed its name to Filmagic Entertainment Corporation.

              It will be the business of the Company to do the following:

              Filmagic  owns a library of television  programming  consisting of
                                     943 one half hour
              Programs in a variety of  formats.This  "library" is being used as
                                          follows:

          1.  Develop a dot-com type of business  involving the present  library
              for use in the new emerging internet marketing to fill the growing
              demand for viewing films on-line.
          2.  Distribute this programming to existing television stations in the
              United  States  and Canada  through  direct  solicitation  in both
              conventional and digital means
          3.  License this programming for use by Low Power Television stations,
              Cable, and or Pay-For-Viewing  television  services through direct
              solicitation and on-line.
          4.  Acquire additional  programming,  both serial and theatrical,  for
              distribution as provided for in paragraphs 1,2& 3 above.

                  In addition,  Filmagic has been  discussing the possibility of
              acquiring  other  libraries  that can be converted to both digital
              and on-line  formats in an attempt to get the  company  back to an
              active income stream.  In its capacity as  "distributor,"  it owns
              all of the "rights," worldwide, to the movies in perpetuity.  Most
              of  its  distribution  efforts  in  the  past  were  done  through
              "sub-distributors"  on a commission basis and for the past several
              years,  with prior  management  had not move the company  past the
              development   stages.   The  new  management  has  begun  actively
              accessing  the  changing  market  and will  focus  developing  the
              company's  existing  library  for  use in  both  internet  and the
              increased demand for friendly films.

                  It is  the  company's  intention  to  continue  this  type  of
              distribution  business,  and  already has  several  other  similar
              transactions  in various  stages of  completion.  The company will
              additionally seek other opportunities for acquisitions and mergers
              that can benefit the shareholders.


Item 2.                        Financial Information

         The  activities  of the  Company in 1985,  1986,  and 1987  (Roedeinger
Medical  Systems,  Inc.) were devoted  primarily to the  refinement  of the VIDA
Heart Monitor and the development of a viable marketing  program.  There were no
products  sold as such and  Company  could be deemed to be a  development  Stage
Company.

<PAGE>

         The  acquisition of Filmagic  Incorporated in August of 1988 placed the
Company in the  entertainment  business.  The  continuation  of the Company as a
viable entity is dependent on the successful  marketing of the acquired  library
of television  programming,  and it entered into a tentative licensing agreement
with a  distributor  in  Australia.  Shortly  after this period the company went
through various changes in both management,  board and other controlling factors
which thrust the company into a continued development stage.  Additionally,  the
company went delinquent on its required filings, thus putting the company into a
non-trading status until the current management came on board this year to bring
all filings into a current  status.  Because the company does not currently have
an active income stream,  management feels that there may have to issue stock to
pay any operational costs that may occur.  Management feels that with several of
the  opportunities  currently on the table,  the company can begin generating an
income stream by year end 1999.

Item 3.                        Properties

         The Company owns, in fee, 943 one half-hour television programs.  These
programs  are in the form of "Tape  Masters"  used for  duplication.  All of the
programs are registered with the Library of Congress.
         The  principal   industry  using  the  Company's   properties  are  the
Television, Low Power Television,  Pay-for-View television, and Cable television
industry  in the United  States and  Canada.  A more  limited  market  exists in
certain foreign television markets.

Item 4.           Security Ownership of Certain Beneficial Owners and Management

The following "Table"  represents the Ownership of Certain Beneficial Owners and
                       Management as of December 31, 1997:

--------------------------------------------------------------------------------
(1) Title of   (2) Name and Address of  (3) Amount and Nature of  (4) Percent of
    Class          beneficial owner         beneficial ownership      Class**

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

Common Stock
Par value $.0001

                   Drones Financial Ltd.           500,000              0.068%
                   Union Bank Plaza Suite 2600
                   445 South Figueroa Street
                   Los Angeles, CA 90071-1630




         *Denotes Offices or Directors
         ** Based on 7,323,000 shares issued and outstanding, one class

<PAGE>

Item 5.       Directors and Executive Officers

         Mr. R. Bruce  Harris:  Age 48, CEO, and  Director.  Mr. Harris has been
         involved  in  International  Business  for many years.  Mr.  Harris has
         experience in international mergers and acquisitions,  management,  and
         development

         Mr. David L. Shade: Age 51, Director,  Corporate Counsel, Mr. Shade has
         been involved in all phases of corporate law, investment banking,  real
         estate development and entertainment acquisitions.

         Ms. Aubrye Harris:  Age 23,  Director.  Ms. Harris was an International
         Management BS and has many years experience in finance.  She has worked
         with corporate accounts, financial planning and account analysis.


Item 6.       Executive Compensation- See Note 7 Financials

Item 7.       Legal Proceedings

         The Company is not involved in any legal  proceedings as of the date of
this filing.

Item 8.       Market Price of and  Dividends on the  Registrant's  Common Equity
              and Related Stockholder Matters

         The  free-trading  shares of the Company's stock had been traded in the
Over the Counter  Market  (OTC),  "pink sheets" and had been subject to sporadic
trading  and  pricing  during a period  over four years  ago.  The stock has not
actively  traded on neither of the above two markets in the past several  years.
During  this past year there has been zero  trading on either  market.  The last
time the stock traded actively,  it was traded for as low as $.03-$.08 (bid) and
$.05-$.12  (ask).  The  shares  of  common  stock  have not been  traded  on any
"exchange."  The company  does  however,  once all filing are  brought  current,
intend  on  filing  the  necessary  documentation  to get this  company  trading
actively.


                 The Company has not paid any dividends to date.

Item 9        Recent Sales of Unregistered Securities

              None

Item 10       Description of Registrants Securities to be registered

         The Company is authorized to issue  20,000,000  shares of Common Stock,
all one class,  with a par value of $.001.  As of the date of this filing  there
were 7,323,000 shares issued and outstanding.

Item 11       Indemnification of Directors and Officers

              Not Applicable

<PAGE>

Item 12       Financial Statements and Supplementary Data

              Not Applicable.  See item 15.


Item 13       Changes In and Disagreements with Accountants on Accounting and
              Financial Disclosure

              None






Item 14       Financial Statements and Exhibits

              Registrants, Filmagic Entertainment Corporation, includes the
              following information with this filing:
              a. Balance Sheets:        1997, 1998
              b. Income Statements:     1996, 1997, and 1998
              c. Statement of Stockholders Equity: Inception to Present

                                                              SIGNATURE

         Pursuant to the  requirements  of Section 12 of the  Securities  Act of
1934, the registrant has duly caused this  regulation  statement to be signed on
its behalf by the undersigned, hereunto duly authorized.

                                             FILMAGIC ENTERTAINMENT CORPORATION
                                             ----------------------------------
                                                         REGISTRANT

                                               By:_____________________________























<PAGE>

                       Filmagic Entertainment Corporation
                               Balance Sheet 1997


ASSETS:
                                              DEC. 31, 1997         DEC. 31,1998
                                            ------------------------------------
CASH                                                  $0.00               $0.00
INTEREST RECEIVABLE  (NOTE 3)                         $0.00               $0.00
NOTES RECEIVABLE                                      $0.00               $0.00
                                            ------------------------------------

TOTAL CURRENT ASSETS                                  $0.00               $0.00

PATENT RIGHTS- NET                                    $0.00               $0.00
FILM LIBRARY     (NOTE 4)                       $140,000.00          $10,000.00
OTHER ASSETS- PROMOTIONAL MATERIAL                    $0.00               $0.00
ORGANIZATION EXPENSES                                 $0.00               $0.00
                                            ------------------------------------

TOTAL ASSETS                                    $140,000.00          $10,000.00
                                            ====================================

LIABILITIES & EQUITY
ACCOUNTS PAYABLE                                      $0.00               $0.00
INTEREST PAYABLE                                      $0.00               $0.00
                                            ------------------------------------

TOTAL CURRENT LIABILITIES                             $0.00               $0.00

NOTES PAYABLE- INVESTMENT ADVISOR (NOTE 5)            $0.00               $0.00
NOTE PAYABLE- SHAREHOLDER  (NOTE 3)                   $0.00               $0.00
                                            ------------------------------------

TOTAL LIABILITIES                                     $0.00               $0.00

COMMON STOCK                                      $7,323.00           $7,323.00
PAID IN CAPITAL                               $1,900,708.00       $1,900,708.00
RETAINED EARNINGS                           ($1,768,031.00)      ($1,898,031.00)
                                            ------------------------------------

TOTAL EQUITY                                    $140,000.00          $10,000.00
                                            ------------------------------------

TOTAL LIABILITIES & EQUITY                      $140,000.00          $10,000.00
                                            ====================================





<PAGE>







    The Accompanying Notes Are an Integral Part of These Financial Statements
                       Filmagic Entertainment Corporation


                                INCOME STATEMENT




INCOME                                YEAR ENDING   YEAR ENDING     YEAR ENDING
                                        12/31/96     12/31/97         12/31/98
DEBT REDUCTION                      $             $            $
CANCELLATION OF DEBT-SHAREHOLDER    $             $            $
INTEREST INCOME                     $             $            $
                                    --------------------------------------------

TOTAL INCOME                         $            $            $
                                    --------------------------------------------

EXPENSE
WRITE DOWN OF VIDA INVENTORY        $             $            $     130,000
INVESTMENT ADVISOR FEES             $             $            $
PATENT AMORTIZATION                 $             $            $
PROFESSIONAL FEES                   $             $            $
FILM STORAGE CHARGES                $             $            $
TRAVEL                              $             $            $               -

DEPRECIATION                        $             $            $
OFFICE EXPENSE                      $             $           -$               -
PUBLIC RELATIONS                    $             $            $
INTEREST- Amortization              $      70,000 $     70,000 $
INVESTMENT WRITE-OFF-PATENT         $             $            $
TAXES                               $             $            $
CONTRACTED FEES                     $             $            $
ORGANIZATION EXPENSE-AMORTIZATION   $             $            $
                                    --------------------------------------------

TOTAL EXPENSE                       $      70,000 $     70,000 $     130,000
                                    --------------------------------------------

NET LOSS                            $    (70,000) $   (70,000) $    (130,000)
                                    ============================================




<PAGE>












    The Accompanying Notes Are an Integral Part of These Financial Statements

                       Filmagic Entertainment Corporation

                          Notes To Financial Statements

Note 1-Summary of Significant Accounting Policies

Organization

Filmagic Entertainment  Corporation ( the "Company") was incorporated in Utah on
December 7, 1982 as Cotton Tree, Inc. On July 29, 1985, the Company acquired all
of the issued and  outstanding  shares of MEDX,  Inc.  (an Arizona  Corporation)
through a tax free  exchange  of stock  with all of the MEDX  shareholders,  and
changed its name to Roedinger Medical Systems, Inc. The premary business of MEDX
was the development and marketing of patented  medical  products under the names
of VIDA and PREVENT.

On September  11,1988,  the company  acquired all of the  outstanding  shares of
Filmagic  Incorporated (a Delaware  Corporation)  through  tax-free  exchange of
stock,  and changed its name to Filmagic  Entertainment  Corporation  (FEC). All
shares required for this acquisition (10,000,000 restricted shares) were donated
back to the Company by the principal shareholder.

Filmagic  Incorporated  was organized  October 5, 1987. Its principal asset is a
library  of 947  tape  masters  of one  half-hour  television  programming.  The
company's  intent  was to  license  these  tapes for  television  and home video
viewing in the U.S. and overseas, where such programming is applicable.  No such
transactions have been made to date.

The  Company  has  conducted  minimal  operations  since  inception,  and is now
inactive.

Cash and cash equivalents

Cash and cash equivalents  include cash on hand and on deposit and highly liquid
debt instruments with original maturities of three months or less.

Inventory

Inventories  are  stated at the lower of cost  (first-in,  first-out  method) or
market.

Property and equipment

Property  and  equipment  are  recorded  at  cost at the  time  of  acquisition.
Depreciation is computed using the straight-line method over a five year period.

Other assets

The film library consist of story rights,  production,  print,  distribution and
advertising costs (which benefit future periods),  and is stated at the lower of
Un-amortized cost or net realizable value.

<PAGE>


Income taxes

The company  accounts for income taxes in accordance  with Financial  Accounting
Standards Board  Statement 109,  "Accounting for Income Taxes." Income taxes are
provided  for  the  tax  effects  of  transactions  reported  in  the  financial
statements  and consist of taxes  currently  due plus deferred  tasex.  Deferred
taxes are recognized for temporary  differences  between the basis of assets and
liabilities  for financial  statement and income tax purposes.  The deferred tax
liabilities  represent the future tax return  consequences of those differences,
which will either be taxable or decutible  when the assets and  liabilities  are
recovered or settled.

Use of estimates

The  preparation  of the  Company's  financial  statements  in  conformity  with
generally accepted accounting principles necessarily 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  financials  statements  and the  reported  amounts of revenue and  expenses
during the reporting period. Actual results could differ from these estimates.

Earnings per share

Basic earnings per share is calculated based upon the weighted average number of
common shares  outstanding  for the year. The Company had no options or warrants
at December 31, 1998 which would have diluted the earnings per share.

Note  2- Basis of Presentation

The  Company has no current  assets and no revenue  generating  activities  that
raises substantial doubt about its ability to continue as a going concern.

Management  is presently  engaged in activities  related to a proposed  business
combination and other options which would bring about an infusion of capital.

The ability of the Company to continue as a going concern is dependent  upon its
securing sufficient additional financing and commencing significant operations.

The  financial  statements  do not  reflect  the  effect of the  uncertainty  of
discontinuing operations.

Note 3-Related Party Transactions

Officers of the Company have provided  certain  services and incurred some costs
on behalf  of the  Company  in the years  ended  1998 and  1997.  However,  such
services and costs were nominal in amount and such were not valued.

Note 4- Commitments and Contingencies

Charisma,  the  company  storing  the film  library,  is  holding  the  tapes as
collateral  against storage charges.  Management  believes the storage agreement
was terminated,  but due to the lack of capital to pursue the matter, the matter
has not been  resolved.  The  asset  value of the tapes  has been  reduced  to a
nominal amount.

Michael Redinger, a former principal  shareholder,  has asseted that the Company
owes him  approximately  $75,000 for funds advanced the Company between 1984 and
1987.  Management  contends  that  the  liability  was  resolved  by  exchanging
property, equipment and cash.

Management and counsel believer neither claim will adversely affect the Company.

<PAGE>

Note 5-  Income Taxes

The Company has a net operating  loss  carry-forward  that may be offset against
future  taxable  income.  However,  a tax benefit  has not been  reported in the
accompanying  financial statements because of the uncertainty of the utilization
of the  carry-forward.  Accordingly,  the  approximate  tax  benefit of the loss
carry-forward has been offset by a valuation allowance.

The Company has not filed income tax returns since 1996.

                                              1998          1997         1996
                                            ----------------------------------

         Net operating loss Carry-Forward   $750,000     $750,000     $750,000

         Valuation allowance                (750,000)    (750,000)    (750,000)
                                            ----------------------------------

         Income tax benefit                 $   ---      $   ----     $  ----
                                            ==================================


The net operating loss carry-forwards expire through 2010 if not used.







      The notes included are an integral part of these financial statements