FORM 10-Q/A
                                 (Amendment No. 1)

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

(Mark One)

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

                  For the Quarterly Period Ended March 31, 1998

                                       OR

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


               For the transition period from ______ to _________

                    Commission File Number 0-20829

                     DIAMOND HOME SERVICES, INC.
           (Exact name of registrant as specified in its charter)

         DELAWARE                                36-3886872
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization)

                  222 Church Street, Woodstock, Illinois 60098
          (Address of principal executive offices, including zip code)

                                 (815) 334-1414
              (Registrant's telephone number, including area code)
                -------------------------------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 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 (  )

The number of shares of the registrant's common stock outstanding as of April
30, 1998, the latest practicable date, was 8,507,375 shares.

                          PART I. FINANCIAL INFORMATION

This amendment is being filed to show the correct amounts for the line item 
"Current Assets - Deferred income tax" in the "Condensed Consolidated Balance
Sheets."

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
                  DIAMOND HOME SERVICES, INC. AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31
                                                                                  1998             1997
                                                                               ($ in thousands, except per
                                                                                       share data)

                    <S>                                                            <C>              <C>    
                    Net sales . . . . . . . . . . . . . . . . . . . . . .          $28,876          $30,175

                    Cost of sales                                                   16,189           16,812
                    Gross profit  . . . . . . . . . . . . . . . . . . . .           12,687           13,363
                    Operating expenses:
                        Selling, general, and administrative expense  . .           12,289           13,186
                        Operating interest expense  . . . . . . . . . . .               55                0
                        Amortization expense  . . . . . . . . . . . . . .              160              143
                    Operating income  . . . . . . . . . . . . . . . . . .              183               34
                    Interest income, net  . . . . . . . . . . . . . . . .              126              220
                    Income before income taxes  . . . . . . . . . . . . .              309              254
                    Income tax provision  . . . . . . . . . . . . . . . .              124               99
                    Net income  . . . . . . . . . . . . . . . . . . . . .             $185             $155

                    Net income per share:
                         Basic  . . . . . . . . . . . . . . . . . . . . .             $.02             $.02
                         Diluted  . . . . . . . . . . . . . . . . . . . .             $.02             $.02

                    Weighted average number of common shares
                         outstanding:
                         Basic  . . . . . . . . . . . . . . . . . . . . .        8,507,375        9,079,675
                         Diluted  . . . . . . . . . . . . . . . . . . . .        8,507,375        9,192,000


See accompanying notes.

</TABLE>

<TABLE>
                  DIAMOND HOME SERVICES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

<CAPTION>
                                                                              MARCH 31, 1998             December 31, 1997
                                                                                (Unaudited)
                                                                                             (In thousands)
                                                                  ASSETS

                 <S>                                                                   <C>                          <C>   
                 Current assets
                   Cash and cash equivalents . . . . . . . . . . . . .                 $7,480                       $9,966
                   Accounts receivable . . . . . . . . . . . . . . . .                  7,554                        6,630
                   Refundable income taxes . . . . . . . . . . . . . .                    746                          986
                   Prepaids  and other current assets  . . . . . . . .                  2,293                        1,959
                   Deferred income taxes . . . . . . . . . . . . . . .                  1,338                          872
                 Total current assets  . . . . . . . . . . . . . . . .                 19,411                       20,413

                 Finance company accounts receivable, net  . . . . . .                  9,694                        8,758

                 Net property and equipment  . . . . . . . . . . . . .                  5,808                        5,546
                 Intangible assets, net  . . . . . . . . . . . . . . .                 16,363                       16,514
                 Deferred income taxes . . . . . . . . . . . . . . . .                  1,893                        1,892
                 Other . . . . . . . . . . . . . . . . . . . . . . . .                  4,479                        3,466
                 Total assets  . . . . . . . . . . . . . . . . . . . .                $57,648                      $56,589


                                                LIABILITIES AND COMMON STOCKHOLDERS' EQUITY

                 Current Liabilities
                   Due to bank . . . . . . . . . . . . . . . . . . . .                 $3,300                       $2,050
                   Accounts payable and accrued liabilities  . . . . .                  9,617                       10,070
                   Due to stockholders . . . . . . . . . . . . . . . .                    554                          554
                 Total current liabilities . . . . . . . . . . . . . .                 13,471                       12,674
                 Long-term liabilities:
                   Warranty and retention  . . . . . . . . . . . . . .                  9,355                        9,161
                   Due to stockholders . . . . . . . . . . . . . . . .                    399                          544
                 Total long-term liabilities . . . . . . . . . . . . .                  9,754                        9,705
                 Common stockholders' equity . . . . . . . . . . . . .                 34,423                       34,210
                 Total liabilities and common stockholders'
                   equity  . . . . . . . . . . . . . . . . . . . . . .                $57,648                      $56,589

See accompanying notes.

</TABLE>

<TABLE>
                  DIAMOND HOME SERVICES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<CAPTION>
                                                                                                      Three Months Ended
                                                                                                           March 31
                                                                                                        (In thousands)
                                                                                                     1998            1997

            <S>                                                                                         <C>             <C> 
            Net income  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $185            $155
              Adjustments to reconcile net income to net cash provided by (used in) operating
                 activities:
                 Depreciation and amortization  . . . . . . . . . . . . . . . . . . . . . . . .          263             224
                 Deferred income taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (467)              64
                  Changes in operating assets and liabilities:
                   Accounts receivable and other assets   . . . . . . . . . . . . . . . . . . .      (1,752)           1,436
                   Accounts payable and accrued expenses  . . . . . . . . . . . . . . . . . . .        (453)         (5,366)
                   Warranty and retention   . . . . . . . . . . . . . . . . . . . . . . . . . .          194             340
              Net cash used in operating activities   . . . . . . . . . . . . . . . . . . . . .      (2,030)         (3,147)
            Investing activities:
              Consumer finance loans originated, net of collections   . . . . . . . . . . .            (936)         (1,529)
              Advances to "captive" insurance company and other   . . . . . . . . . . . . . . .        (288)           (542)
              Capital expenditures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        (365)           (341)
              Net cash used in investing activities   . . . . . . . . . . . . . . . . . . . . .      (1,589)         (2,412)
            Financing activities: 
              Borrowings on bank line of credit, net  . . . . . . . . . . . . . . . . . . . . .        1,250              --
              Payments on notes receivable from officers for treasury stock and other   . . . .           28             212
              Payments due to stockholders  . . . . . . . . . . . . . . . . . . . . . . . . . .        (145)            (84)
              Net cash provided by financing activities   . . . . . . . . . . . . . . . . . . .        1,133             128
              Net decrease in cash and cash equivalents   . . . . . . . . . . . . . . . . . . .      (2,486)         (5,431)
              Cash and cash equivalents at beginning of period  . . . . . . . . . . . . . . . .        9,966          18,982
              Cash and cash equivalents at end of period  . . . . . . . . . . . . . . . . . . .
                                                                                                      $7,480         $13,551
              Supplemental cash flow disclosure:
                 Interest paid  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $55             $--
                 Income taxes paid  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $--             $52

See accompanying notes.

</TABLE>

                  DIAMOND HOME SERVICES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)
                       (TABULAR AMOUNTS ARE IN THOUSANDS)

1.      BASIS OF PRESENTATION

       The  accompanying unaudited  condensed consolidated  financial statements
have been prepared in accordance  with generally accepted accounting  principles
for  interim   financial   information   and   Article 10   of   Regulation S-X.
Accordingly, they do  not include all of the information  and footnotes required
by generally  accepted accounting principles for  complete financial statements.
In  the opinion of management,  all adjustments (consisting  of normal recurring
accruals) considered  necessary  for a  fair  presentation have  been  included.
Operating  results for  the  three-month period  ended March  31,  1998 are  not
necessarily indicative of  the results that may be expected  for the year ending
December 31, 1998.  For further information, refer to the consolidated financial
statements included in the Company's 1997 Annual Report on Form 10-K.

       The  preparation of  financial  statements in  conformity with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect  the amounts  reported in the  financial statements  and
accompanying  notes.  Actual results could differ from those estimates.

2.     CONSUMER FINANCING

       The following summarized condensed financial information for Marquise
Financial, the Company's finance subsidiary, is before elimination of inter-
company transactions in consolidation:

<TABLE>
<CAPTION>
                                                                             March 31, 1998            December 31, 1997
                                                                              (Unaudited)
                 <S>                                                                 <C>                            <C>  
                 ASSETS:
                 Cash                                                                    $309                           $23
                 Financing receivables, net                                             9,694                         8,758
                 Other assets                                                           1,007                         1,046
                 Total assets                                                         $11,010                        $9,827
                 LIABILITIES AND STOCKHOLDER'S EQUITY:
                 Due to Bank                                                           $3,300                        $2,050
                 Due to Diamond Exteriors, Inc.                                         7,321                         7,388
                 Other                                                                    129                           147
                 Total liabilities                                                     10,750                         9,585
                 Total stockholder's equity                                               260                           242
                 Total liabilities and stockholder's equity                           $11,010                        $9,827
</TABLE>

Results of operations for the three months ended March 31, 1998 and 1997,
respectively:

<TABLE>
<CAPTION>                                                                        
                                                                          Three Months Ended
                                                                               March 31
                                                                           1998         1997
                                                                             (Unaudited)

                 <S>                                                         <C>         <C> 
                 Financing income                                            $375        $239
                 General and administrative expenses (1)                      457         349

                 Loss before tax benefit                                       82         110
                 Income tax benefit                                            33          43
                 Net loss                                                     $49         $67

(1) Includes interest expense paid to Diamond and provision for credit losses.

</TABLE>

Cash flow for the three months ended March 31, 1998 and 1997, respectively:

<TABLE>
<CAPTION>
                                                               Three Months Ended March 31
                                                                                    1998                  1997
                                                                                           (Unaudited)
                 <S>                                                                  <C>                 <C>    
                 Cash at beginning of period                                            $23                   $50
                 Net cash used in operating activities                                 (82)                  (67)
                 Net cash used in investing activities                                (815)               (1,700)
                 Net cash provided by financing activities                            1,183                 1,999
                 Cash at end of period                                                 $309                  $282
</TABLE>

       At March 31, 1998, Marquise  Financial had approximately $2.0 million  in
approved but not funded loan commitments.

3.     SUBSEQUENT EVENT

       On April 20, 1998, the Company acquired all of the issued and outstanding
capital  stock of Reeves Southeastern Corporation  for approximately $42 million
in cash and notes.  In connection with the acquisition, the Company replaced its
$15  million unsecured bank line of credit  with a $45 million secured bank line
of credit.





                                   Signatures


       Pursuant to the requirements 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.


                                             DIAMOND HOME SERVICES, INC.




                            
                                            /S/ Richard G. Reece
Date:  June 4, 1998                                            
                                        By:_________________________
                                           Richard G. Reece
                                           Vice President and
                                           Chief Financial Officer
                                           (For the Registrant and as 
                                           Principal Financial Officer)