U. S. Securities and Exchange Commission
                         Washington, D. C.  20549

                              FORM 10-QSB

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarter ended December 31, 1998
                           -----------------

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

     For the transition period from               to
                                    -------------    -------------

                        Commission File No. 0-24374
                                            ----------

                        LUCAS EDUCATIONAL SYSTEMS, INC.     
                      -----------------------------------
              (Name of Small Business Issuer in its Charter)

       DELAWARE                                            62-1690722
       --------                                            ----------         
(State or Other Jurisdiction of                     (I.R.S. Employer I.D. No.)
 incorporation or organization)

                               P. O. Box 789
                        Templeton, California 93465
                        ---------------------------    
                 (Address of Principal Executive Offices)

                Issuer's Telephone Number:  (805) 434-3982

     Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.  

     (1)   Yes  X    No            (2)   Yes  X    No 
               ---      ---                  ---      ---
  
                 (APPLICABLE ONLY TO CORPORATE ISSUERS)

          State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:

                             December 31, 1998

                          Common - 12,348,619 shares

                     DOCUMENTS INCORPORATED BY REFERENCE

          A description of any "Documents Incorporated by Reference" is
contained in Item 6 of this Report.

Transitional Small Business Issuer Format   Yes  X   No 
                                                ---     ---

                  PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.

          The Consolidated Financial Statements of the Company required
to be filed with this 10-QSB Quarterly Report were prepared by management and
commence on the following page, together with related Notes.  In the opinion
of management, these Consolidated Financial Statements fairly present the
financial condition of the Company.
       
<PAGE>
<TABLE>
                 LUCAS EDUCATIONAL SYSTEMS, INC.
                          Balance sheet
   December 31, 1998 (unaudited) and March 31, 1998 (audited)
<CAPTION>
                               December 31,   March 31,                        
                                 1998          1998     
<S>                                <C>             <C>  
                              ASSETS
Current Assets
     Cash in Bank                   $ 1,118        $ 37,191    
     Inventory                        5,610           5,610          
     Prepaid Expenses                 3,000           3,000             
     Organization costs                 -               -            
TOTAL CURRENT ASSETS                  9,728          45,801          

Property and Equipment
     Leasehold Improvements          11,070          11,070           
     Furniture and Fixtures           1,931           1,931           
     Computer Equipment              17,009          17,009           
     Automobiles                     37,382          37,382           
     Video Master Tapes               1,577           1,577           
     Video Set-up Fee                12,000          12,000           
     Accumulated Depreciation       (19,591)         (5,750)          
TOTAL PROPERTY AND EQUIPMENT         61,378          75,219           

TOTAL ASSETS                         71,106         121,020          

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
     Accounts Payable                23,714          46,036         
     Accrued Payroll Taxes              -             6,460           
     Accrued Salaries                33,000           3,403           
TOTAL CURRENT LIABILITIES            72,314          55,899         

Stockholders' Equity
     Preferred stock $.001 par; 
     1,000,000 shares authorized,
     none issued or outstanding
     
     Common Stock, $.001 par;
     20,000,000 shares authorized,
     12,348,619 and 11,243,619 
     issued and outstanding          12,349          11,244             
     Paid in capital                872,669         405,146            
     Stock Subscription Receivable      -               (25)          
     Retained Earnings Deficit     (886,226)       (351,244)         
TOTAL STOCKHOLDERS' EQUITY           (1,208)         65,121          

TOTAL LIABILITIES AND STOCKHOLDERS' 
EQUITY                               71,106         121,020          
</TABLE>
<TABLE>
                 LUCAS EDUCATIONAL SYSTEMS, INC.
                     Statement of Operations
<CAPTION>
                                   For the nine           From inception
                                   months ended         December 5, 1996 to
                                   September 30,             March 31, 
                                      1998                     1998
<S>                               <C>                          <C>
Revenues                          $       -                    $       -

Expenses
     Depreciation and amortization    13,841                         5,750
     General and Administrative      521,141                       345,494
TOTAL EXPENSES                       534,982                       351,244

LOSS FOR THE PERIOD                 (534,982)                     (351,244)

LOSS PER SHARE                         (.045)                        (.035)

WEIGHTED AVERAGE SHARES 
OUTSTANDING                       11,796,119                     9,971,810
</TABLE>
<TABLE>
                 LUCAS EDUCATIONAL SYSTEMS, INC.
                     STATEMENTS OF CASH FLOWS
<CAPTION>
                                   For the nine           From inception
                                   months ended         December 5, 1996 to
                                   September 30,             March 31, 
                                      1998                     1998
<S>                               <C>                          <C>
Cash Flows from Operating Activities:

Net Loss                      (534,982)                  (351,244)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities:
 Amortization and Depreciation        13,841                      5,750
 Common Stock Issued for Services    269,153                    116,225
 Common Stock Issued for Debt         75,000                    200,000
Changes in Operating Assets and
Liabilities:
 Increase (Decrease) in Inventory        -                       (5,610)
 Increase (Decrease) in Accounts
 Payable                           (22,322)                    46,036
 Increase (Decrease) in Payroll
 and Taxes Payable               23,137                      9,863
 Increase (Decrease) in Loan Payable  15,600                        -

Net Cash Provided (Used) by Operating
Activities                          (160,573)                    21,020

Cash Flows from Investing Activities:
Increase in Prepaid Expenses          (3,000)                    (3,000)
Increase in Fixed Assets                 -                      (80,969)

Net Cash Provided (Used) by Investing
Activities                            (3,000)                   (83,969)

Cash Flows from Financing Activities:
Sale of Common Stock                 127,500                    100,140

Net Cash Provided (Used) by Financing
Activities                          127,500                    100,140

Net Increase (Decrease) in cash      (36,073)                    37,191

Cash at Beginning of Period           37,191                        -

Cash at End of Period                  1,118                     37,191
</TABLE>
                            Note to financial statements 

     The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation.  Such adjustments are of a normal, recurring nature.

Item 2.   Management's Discussion and Analysis or Plan of Operation.

Plan of Operation.
-----------------

      The Company has not engaged in any material operations or
had any revenues from operations during the quarter ended December 31, 1998.
The Company completed a reorganization whereby it acquired all of the
outstanding voting securities of Lucas Educational Systems, Inc., a Nevada
corporation ("Lucas Nevada"), reported in a  Form 8-K Current Report dated
November 11, 1997, which has been previously filed with the Securities and
Exchange Commission and which is incorporated herein by reference.

     The Company plans in the next twelve months to promote the Company's
product through direct or indirect marketing channels.

     The Company will need $500,000 for operations for the next twelve months,
and these funds will need to be raised through debt or equity financing.   

Results of Operations.
----------------------
      
     At December 31, 1998, the Company had $71,106 in assets and current
liabilities of $72,314.  There were no revenues in the nine months ended
December 31, 1998, and losses from operations during this period were
($534,982). 

Liquidity
---------

     The Company received $7,500 in equity funding during the quarter ended
December 31, 1998, by selling 15,000 "unregistered" and "restricted" shares
of the Company's $0.001 par value common stock, at a purchase price of $0.50
per share.

     The Company received $220,000 in equity funding subsequent to the quarter
ended December 31, 1998, by selling 440,000 "unregistered" and "restricted"
shares of the Company's $0.001 par value common stock, at a purchase price of
$0.50 per share.

"Year 2000"
-----------

     The Company's management has determined that Year 2000 issues will
not materially affect them, because the major activities of the Company are
not dependent on computers that may be subject to Year 2000 issues.  With the
exception that the Company does propose to sell their products through the
Internet, which management believes to be Year 2000 compliant.

     The Company can give no assurance that third parties with whom it does
business (e.g., banks and utilities) will ensure Year 2000 compliance in a
timely manner or that, if they do not, their computer systems will not have an
adverse effect on the Company.  However, the Company does not believe that
Year 2000 compliance issues of such third parties will result in a material
adverse effect on its financial condition or results of operations.

     For the foregoing reasons, the Company has determined that the potential
consequences of the Year 2000 would not have a present material effect on its
business, results of operations or financial condition.

                   PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

          None; not applicable.

Item 2.   Changes in Securities.

          None; not applicable.

Item 3.   Defaults Upon Senior Securities.

          None; not applicable.

Item 4.   Submission of Matters to a Vote of Security Holders.

          No matter was submitted to a vote of the Company's security holders
during the period covered by this Report.

Item 5.   Other Information.

          None; not applicable.

Item 6.   Exhibits and Reports on Form 8-K.
                                                                               
                                                        Exhibit
          (a)  Exhibits.                                Number

           Annual Report on Form 10-KSB for the year    **
           ended March 31, 1998, filed August 21, 1998    
 
          (b)  Reports on Form 8-K.

           SEC Form 8-K, dated November 11, 1997,       **
           regarding the Plan with Lucas Nevada

     ** These documents and related exhibits have been previously filed with
the Securities and Exchange Commission and by this reference are incorporated
herein.

                            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.

                                       LUCAS EDUCATIONAL SYSTEMS, INC.



Date: 2/18/99                          By:/s/Jerry R. Lucas
                                       Jerry R. Lucas
                                       President and Director



          Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated:


                                       LUCAS EDUCATIONAL SYSTEMS, INC.



Date: 2/18/99                          By:/s/Jerry R. Lucas
                                       Jerry R. Lucas
                                       President and Director
                                         
Date: 2/18/99                          By:/s/Cheryl W. Lucas
                                       Cheryl W. Lucas
                                       Treasurer and Director

Date: 2/18/99                          By:/s/David Nelson
                                       David Nelson
                                       Secretary and CFO