UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q



           /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                         Commission File Number 1-13226


                                DENAMERICA CORP.
                                ----------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                  GEORGIA                                58-1861457
---------------------------------------------     -------------------------
      (State or Other Jurisdiction of                 (I.R.S. Employer
       Incorporation or Organization)                Identification No.)


          7373 N. SCOTTSDALE ROAD
      SUITE D-120, SCOTTSDALE AZ 85253                      85253
---------------------------------------------     -------------------------
  (address of principal executive offices)               (zip code)

                                 (602) 483-7055
                                 --------------
              (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  issuer's  class of common  stock as of the  latest
practicable  date, is as follows:  13,485,277  shares of Common Stock,  $.10 par
value, as of March 31, 1999.
<PAGE>
                                DENAMERICA CORP.
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1999


                                TABLE OF CONTENTS

                                                                          PAGE
                                                                          ----
PART I.  FINANCIAL INFORMATION

ITEM 1      Unaudited Financial Statements

              Condensed Consolidated Balance Sheets -
                  December 30, 1998 and March 31, 1999..................    3

              Condensed Consolidated Statements of Operations -
                  13-Week Periods ended April 1, 1998
                  and March 31, 1999....................................    4

              Condensed Consolidated  Statements of Cash Flows -
                  13-Week Periods ended April 1, 1998 and
                  March 31, 1999........................................    5

              Notes to Condensed Consolidated Financial Statements......    6

ITEM 2      Management's Discussion and Analysis of Financial
              Condition and Results of Operations.......................    7

PART II.      OTHER INFORMATION.........................................   13

              SIGNATURES  ..............................................   14

                                       2
<PAGE>
PART I. FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

                        DENAMERICA CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                       (DOLLARS IN THOUSANDS) (UNAUDITED)

                                                     DECEMBER 30,     MARCH 31,
                                                         1998           1999

                                     ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                           $   2,330     $   1,263
   Receivables                                             2,636         2,608
   Inventories                                             2,917         2,966
   Other current assets                                    5,533         5,402
                                                       ---------     ---------
      Total current assets                                13,416        12,239
PROPERTY AND EQUIPMENT, net                               55,648        56,640
INTANGIBLE ASSETS, net                                    50,580        50,375
DEFERRED INCOME TAXES                                      5,578         5,713
OTHER ASSETS                                               9,285         9,169
                                                       ---------     ---------

TOTAL                                                  $ 134,507     $ 134,136
                                                       =========     =========

                     LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable                                    $  18,026     $  17,283
   Accrued compensation                                    5,402         6,176
   Accrued taxes                                           5,089         5,123
   Other current liabilities                               8,946         8,147
   Current portion of long-term debt                      20,791        20,713
                                                       ---------     ---------
        Total current liabilities                         58,254        57,442
LONG-TERM DEBT, LESS CURRENT PORTION                      72,494        73,463
OTHER LONG-TERM LIABILITIES                                7,093         6,764
                                                       ---------     ---------

          Total liabilities                              137,841       137,669
                                                       ---------     ---------

SHAREHOLDERS' DEFICIT
   Preferred stock, $.01 par value; authorized,
       5,000,000 shares; issued and outstanding none
   Common stock $.10 par value; authorized,
       40,000,000 shares; 13,485,277 shares issued
       and outstanding                                     1,349         1,349
   Additional paid-in capital                             35,869        35,869
   Accumulated deficit                                   (40,552)      (40,751)
                                                       ---------     ---------

      TOTAL SHAREHOLDERS' DEFICIT                         (3,334)       (3,533)
                                                       ---------     ---------

TOTAL                                                  $ 134,507     $ 134,136
                                                       =========     =========

See accompanying notes to condensed consolidated financial statements

                                       3
<PAGE>
                        DENAMERICA CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)

                                                      13 WEEK PERIODS ENDED
                                                 April 1, 1998  March 31, 1999

RESTAURANT SALES                                    $72,880         $60,941
                                                    -------         -------

RESTAURANT OPERATING EXPENSES:
     Food and beverage costs                         19,970          16,463
     Payroll and payroll related costs               25,102          20,819
     Depreciation and amortization                    1,786           1,685
     Other restaurant operating expenses             19,588          16,871
                                                    -------         -------
          Total operating expenses                   66,446          55,838
                                                    -------         -------

RESTAURANT OPERATING INCOME                           6,434           5,103

ADMINISTRATIVE EXPENSES                               3,056           2,831
                                                    -------         -------

OPERATING INCOME                                      3,378           2,272

INTEREST EXPENSE, net                                 3,426           2,606
                                                    -------         -------

LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEM         (48)           (334)

INCOME TAX BENEFIT                                      (17)           (135)
                                                    -------         -------

LOSS BEFORE EXTRAORDINARY ITEM                          (31)           (199)

EXTRAORDINARY ITEM - GAIN ON
     EARLY  EXTINGUISHMENT OF DEBT-
     net of income taxes of $914                      1,371               -
                                                    -------         -------

NET INCOME (LOSS)                                    $1,340           ($199)
                                                    =======         =======


Basic and diluted income (loss) per share
     Before extraordinary item                       ( $.00)          ($.02)
                                                    =======         =======
     Net income (loss)                                 $.10           ($.02)
                                                    =======         =======

Basic and diluted weighted average shares
     outstanding
         Basic                                       13,447          13,485
         Diluted                                     13,447          13,485

See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
                        DENAMERICA CORP. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                              13 WEEK PERIODS ENDED
                                                           APRIL 1, 1998   MARCH 31, 1999
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)                                           $1,340         $(199)
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
     Depreciation and amortization                              1,786         1,685
     Amortization of deferred financing costs                     247            91
     Deferred income taxes                                        (17)         (135)
     Deferred rent                                                  -            61
     Extraordinary item                                         (1371)            -
     Other, net                                                  (523)         (215)
     Changes in operating assets and liabilities net of
         dispositions:
             Receivables                                          662            29
             Inventories                                          121           (49)
             Other current assets                                 406           166
             Accounts payable and accrued liabilities          (1,977)       (1,093)
                                                               ------        ------
          Net cash provided by operating activities               674           341
                                                               ------        ------
CASH FLOWS FROM INVESTING ACTIVITIES
     Purchase of property and equipment                          (744)       (1,459)
     Purchase of intangibles                                      (8)           (36)
     Proceeds from the sale of assets                          25,900          -
                                                               ------        ------
     Net cash provided by (used in) investing activities       25,148        (1,495)
                                                               ------        ------
CASH FLOWS FROM FINANCING ACTIVITIES
     Note receivable collections                                   77           138
     Borrowings                                                  (900)          857
     Principal reductions on long-term obligations            (24,667)         (908)
     Other                                                          -             -
                                                               ------        ------
          Net cash used in financing activities               (25,490)           87
                                                               ------        ------
NET CHANGE IN CASH AND CASH
     EQUIVALENTS                                                  332        (1,067)
CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIOD                                        1,267         2,330
                                                               ------        ------
CASH AND CASH EQUIVALENTS AT END OF
     PERIOD                                                    $1,599        $1,263
                                                               ======        ======

SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:

     Cash paid during the period for:

     Interest                                                  $2,268        $2,255
     Income taxes                                              $    7        $    2

</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>
                        DENAMERICA CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                   (UNAUDITED)

(1)  BASIS OF PRESENTATION

The  accompanying  unaudited  condensed  consolidated  financial  statements  of
DenAmerica  Corp.  and  Subsidiaries  (the  "Company")  have  been  prepared  in
accordance  with the  rules  and  regulations  of the  Securities  and  Exchange
Commission  Form 10-Q and do not include all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements.  In  the  opinion  of  the  Company's  management,  all  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been  included.  However,  these  operating  results  are not
necessarily  indicative  of the  results  expected  for  the  full  year.  These
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes  thereto  and  Management's  Discussion  and  Analysis  of
Financial  Condition and Results of Operations  included in the Company's Annual
Report on Form  10-K for the  fiscal  year  ended  December  30,  1998.  Certain
reclassifications  have been made in the 1998 financial statements to conform to
the 1999 presentation.

The Company currently operates 203 family-oriented,  full-service restaurants in
26 states, primarily in the southwestern,  midwestern, western, and southeastern
United States.  The Company owns and operates 103  Black-eyed  Pea  restaurants,
primarily in Texas, Georgia, Arizona,  Oklahoma, and the Washington,  D.C. area.
The Company  also owns and operates 100 Denny's  restaurants,  which  represents
approximately  5.8% of the  Denny's  system and makes the  Company  the  largest
Denny's franchisee in terms of revenue and the number of restaurants operated.

(2)  1998 ASSET DIVESTITURES

In  March  1998,  the  Company  completed  the  sale  of 63  Denny's  and  eight
non-branded  restaurants,  of which six were closed, to a Denny's franchisee for
gross proceeds $28,700.  Net cash proceeds of $25,200 were used to (i) repay the
promissory note (the "BEP Note") payable to the seller of Black-eyed Pea U.S.A.,
Inc.  ("BEP") at a $2,400  discount  from its  outstanding  principal  amount of
approximately $15,285; (ii) cancel outstanding warrants to acquire approximately
1,000,000 shares of Common Stock at an exercise price of $1.90 per share,  which
were  issued in  connection  with the BEP Note;  (iii)  permanently  reduce  the
Company's outstanding borrowings under the term loan of the Credit Facility; and
(iv) repay certain  equipment  operating leases  associated with the restaurants
sold in this  transaction.  The  Company  has  included  the  $2,400  before-tax
discount  on the BEP  note as an  extraordinary  item in the  accompanying  1998
financial statements.

In a separate  transaction  completed in March 1998,  the Company also sold five
Denny's  restaurants  located in Wyoming to an unrelated  party for cash of $700
plus a note in the principal  amount of $400. The Company  utilized the proceeds
from this transaction to permanently reduce its outstanding borrowings under the
term loan  portion of its Credit  Facility.  The Company has  recorded a gain of
approximately $575 on this transaction, which is included as a partial offset to
other operating expenses.

                                       6
<PAGE>
(3)  OTHER MATTERS

At March 31, 1999, the Company was not in compliance with certain financial debt
covenants  under its senior  credit  facility.  The  financial  covenants in the
credit  facility  were  established  in July 1996 and have not been  modified to
reflect the reduction in outstanding obligations or the sale of restaurants.  In
April  1999,  the  Company  received  commitments  from  lenders to provide  new
borrowings of $20.1 million. The Company believes that the financing transaction
outlined in the commitments will enable it to repay or restructure the remaining
obligations  under its senior credit facility and to cure the covenant  defaults
under its  other  agreements.  If the  Company  cannot  complete  the  financing
contemplated under the commitments,  it would continue to be in default with the
senior credit facility and other agreements  until other acceptable  refinancing
or restructuring alternatives are available. There can be no assurance, however,
that  additional  financing  will be  available  to the Company or  available on
satisfactory terms.

(4) BUSINESS SEGMENTS

The  Company  operates  family-oriented,   full-service  restaurants  under  two
separate  concepts,  Denny's and Black-eyed Pea. The Company owns the Black-eyed
Pea brand and  operates  the Denny's  restaurants  under the terms of  franchise
agreements.  The two  concepts  have  separate  management  teams and  reporting
infrastructures. During the 1998 fiscal period the Company also operated several
non-branded  restaurants.  As of  December  31,  1998,  all of  the  non-branded
restaurants  were closed or sold.  The  concept  distribution  of the  Company's
revenues and restaurant  operating  income for the  thirteen-week  periods ended
March 31, 1999 and April 1, 1998 are as follows:

         REVENUES                                      1999         1998
         --------                                    -------      -------
         Black-eyed Pea                              $35,612      $35,846
         Denny's                                      25,329       36,681
         Non-branded                                      --          353
                                                     -------      -------
             Total revenues                          $60,941      $72,880
                                                     =======      =======


         RESTAURANT OPERATING INCOME                    1999         1998
         ---------------------------                 -------      -------
         Black-eyed Pea                              $ 3,441      $ 3,598
         Denny's                                       1,662        2,882
         Non-branded                                       -          (46)
                                                     -------      -------
              Total restaurant operating income        5,103        6,434
              Administrative expenses                  2,831        3,056
                                                     -------      -------
              Total operating income                 $ 2,272      $ 3,378
                                                     =======      =======

                                       7
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

GENERAL

In two  separate  transactions  in  March  1998,  the  Company  sold 68  Denny's
restaurants  and eight  non-branded  restaurants  to  unrelated  parties.  These
transactions  generated cash proceeds of approximately $25.9 million,  which was
used to permanently  reduce  outstanding  borrowings  under the Company's credit
facility and to repay an outstanding promissory note at a $2.4 million discount.
As a  result,  the  operating  results  in the  first  quarter  of 1999  are not
comparable  with the 1998  results.  The  Company  intends to develop a total of
eight new  Black-eyed Pea  restaurants  during 1999 including two new Black-eyed
Pea  restaurants   opened  during  the  first  quarter  of  fiscal  1999.  These
transactions  follow the Company's  strategy of focusing on the  Black-eyed  Pea
concept as well as those Denny's  restaurants  that achieve certain  operational
and geographic efficiencies.

The Company  currently  operates 103  Black-eyed  Pea  restaurants in 13 states,
including 76  restaurants  in Texas,  Oklahoma,  and Arizona.  Through March 31,
1999,  comparable  same-store  sales  increased  0.6%,  and average weekly sales
increased  2.1% as compared  with the first  quarter of fiscal  1998.  Carry-out
sales accounted for  approximately  11.6% and 11.2% of restaurant  sales for the
first quarters of 1999 and 1998, respectively.

As of March 31, 1999, the Company operated 100 Denny's restaurants in 19 states,
including 55 restaurants in Texas, Florida, and Arizona. Through March 31, 1999,
comparable  same-store  sales increased 3.2%, and average weekly sales increased
14% as  compared  with the first  quarter of fiscal  1998.  The  increase is the
result  of  the  disposal  of  certain   underperforming   restaurants  and  the
improvement in the overall asset base.

COMPARISON OF RESULTS OF OPERATIONS

         The following table presents, for the periods indicated,  certain items
in the condensed consolidated statements of operations expressed as a percentage
of total restaurant sales.

                                              APRIL 1,        MARCH 31,
                                               1998             1999
                                               ----             ----
                                             (13 weeks)       (13 weeks)

Restaurant sales                                100%            100%
                                                ----            ----

Restaurant operating expenses:
   Food and beverage costs                      27.4            27.0
   Payroll and payroll related costs            34.4            34.2
   Depreciation and amortization                 2.5             2.8
   Other restaurant operating expenses          26.9            27.7
                                                ----            ----
       Total operating expenses                 91.2            91.7
                                                ----            ----
Restaurant operating income                      8.8             8.3
Administrative expenses                          4.2             4.6
                                                ----            ----
Operating income                                 4.6             3.7
Interest expense                                 4.7             4.3
                                                ----            ----
Loss before income taxes and
  extraordinary item                             (.1)            (.6)
Income tax (benefit) provision                   (.1)            (.3)
                                                ----            ----
Loss before extraordinary item                   (.0)            (.3)
Extraordinary item                               1.9               -
                                                ----            ----

Net income (loss)                               1.9%            (.3%)
                                                ====            =====

                                       8
<PAGE>
THIRTEEN-WEEK  PERIOD ENDED MARCH 31, 1999  COMPARED WITH  THIRTEEN-WEEK  PERIOD
ENDED APRIL 1, 1998

         RESTAURANT SALES.  Restaurant sales decreased $11.9 million,  or 16.4%,
to $60.9 million for the  thirteen-week  period ended March 31, 1999 as compared
with restaurant sales of $72.9 million for the thirteen-week  period ended April
1, 1998. This decrease was primarily  attributable to the sale of 76 restaurants
in the first quarter of 1998.  Restaurant  sales  attributable to the Black-eyed
Pea  restaurants  for the  fiscal  1999 and 1998  periods  totaled  58% and 49%,
respectively.

         FOOD AND BEVERAGE COSTS.  Food and beverage costs decreased to 27.0% of
restaurant sales for the  thirteen-week  period ended March 31, 1999 as compared
with 27.4% of restaurant sales for the thirteen-week period ended April 1, 1998.
This decrease is primarily a result of the sale of lower- volume  restaurants in
1998 and same-store sales increases in 1999.

         PAYROLL AND PAYROLL  RELATED COSTS.  Payroll and payroll  related costs
were 34.2% of restaurant sales for the thirteen-week period ended March 31, 1999
as compared with 34.4% of restaurant  sales for the  thirteen-week  period ended
April  1,  1998.  This  decrease  was  primarily  attributable  to the  sale  of
lower-volume restaurants in fiscal 1998 and same-store sales increases in fiscal
1999.


         DEPRECIATION  AND   AMORTIZATION.   Depreciation  and  amortization  of
restaurant equipment,  leasehold  improvements,  intangible assets,  pre-opening
costs, and other items was $1.7 million for the thirteen-week period ended March
31, 1999, as compared with $1.8 million for the thirteen-week period ended April
1, 1998.  This decrease is  attributable  to a change in  accounting  principle,
related to store opening costs.

         OTHER  RESTAURANT   OPERATING  EXPENSES.   Other  restaurant  operating
expenses were 27.7% of restaurant sales for the thirteen-week period ended March
31, 1999 as compared with 26.9% of restaurant sales for the thirteen-week period
ended April 1, 1998.  Included in the 1998 results is a gain of $575,000 related
to the sale of  restaurants.  As a result of a change in accounting  principles,
new store opening costs of approximately  $216,000,  were expensed when incurred
beginning in fiscal 1999.  Excluding  these items,  other  restaurant  operating
expenses,  expressed as a percentage of revenue, would have been 27.3% and 27.7%
in fiscal 1999 and 1998, respectively.

         RESTAURANT  OPERATING INCOME.  Restaurant operating income decreased to
$5.1 million,  or 8.3% of restaurant sales, for the  thirteen-week  period ended
March 31, 1999, as compared with $6.4 million,  or 8.8% of restaurant sales, for
the thirteen-week  period ended April 1, 1998. This decrease was principally the
result of the factors described above.

         ADMINISTRATIVE EXPENSES.  Administrative expenses were $2.8 million, or
4.6% of restaurant sales, for the thirteen-week  period ended March 31, 1999, as
compared with $3.1 million,  or 4.2% of restaurant  sales, for the thirteen-week
period ended April 1, 1998. This decrease of $225,000 is primarily  attributable
to the reduction in administrative costs associated with the restaurants sold in
March 1998.  Administrative  expenses  expressed as a percentage  of  restaurant
sales, however, increased due primarily to decreased sales following the sale of
76 restaurants in the first quarter of 1998.

         INTEREST  EXPENSE.  Interest  expense  was  $2.8  million,  or  4.3% of
restaurant sales, for the thirteen-week  period ended March 31, 1999 as compared
with $3.4 million,  or 4.7% of restaurant  sales, for the  thirteen-week  period
ended April 1, 1998.  The change is the result of the  decrease  in  outstanding
debt attributable to the sale of certain restaurants in 1998.

                                       9
<PAGE>
         INCOME  TAX  EXPENSE  (BENEFIT).  The  Company  recorded  an income tax
benefit  of  approximately  $17,000,  or an  effective  rate  of  35%,  for  the
thirteen-week  period ended April 1, 1998 and $135,000,  or an effective rate of
40%, for the thirteen-week period ended March 31, 1999.

         NET INCOME  (LOSS).  The Company  recorded a net loss of  approximately
$199,000 for the  thirteen-week  period ended March 31, 1999, as a result of the
factors described above. The Company recorded net income of $1.3 million for the
thirteen-week  period ended April 1, 1998, as a result of the factors  described
above and the  extraordinary  gain of approximately  $1.4 million in fiscal 1998
associated with the early extinguishment of debt.

LIQUIDITY AND CAPITAL RESOURCES

The Company's strategy has been to (i) focus on restaurants that achieve certain
operational and geographic efficiencies; (ii) refinance certain debt obligations
to better match operating cash flows with debt amortization;  and (iii) position
itself  for  growth.  During  the first  quarter of 1998,  the  Company  sold 76
underperforming  restaurants  and used the proceeds form these  transactions  to
repay certain debt  obligations.  The Company  believes that these  transactions
improved its overall  portfolio of operating  restaurants  and has positioned it
for  improved  operating  results  in 1999.  Excluding  the  effect of a gain of
$575,000 from an asset sale in the first quarter of 1998, net cash provided from
operating  activities  increased from  approximately  $100,000 in fiscal 1998 to
$341,000 in fiscal 1999.  In addition,  in the first quarter of 1999 the Company
made  principal  reductions  on  its  long-term   obligations  of  approximately
$900,000.  In an effort to  continue to improve its  operating  asset base,  the
Company is currently  negotiating  letters of intent with  unrelated  parties to
purchase 13  underperforming  or closed  restaurants.  The Company believes that
these transactions will be completed over the next several quarters. The Company
cannot provide assurance, however, regarding whether it will complete all or any
of these transactions or the timing of any transactions that are completed.

The Company, and the restaurant industry generally,  receives  substantially all
of its revenue in cash with a relatively small amount of receivables. Therefore,
like many other companies in the restaurant industry,  the Company operates with
a working  capital  deficit.  The Company's  working  capital  deficit was $45.2
million at March 31, 1999 and $44.8  million at December 30,  1998.  The Company
anticipates that it will continue to operate with a working capital deficit.

The Company  historically has satisfied its capital  requirements through credit
facilities  and   sale-leaseback   financings.   The  Company  requires  capital
principally for the development of new restaurants and maintenance  expenditures
on its  existing  restaurants.  Currently,  the Company is in various  stages of
development of six Black-eyed Pea restaurants, which it expects to open over the
next several quarters.  The Company estimates that its costs to develop and open
new Black-eyed Pea restaurants,  excluding real estate and building costs,  will
be approximately $350,000 to $450,000 per restaurant.  The Company believes that
its financing  commitments  will be adequate to meet its financing  needs during
the remainder of 1999.  During the first quarter of 1999,  the Company  borrowed
approximately $850,000 to finance its development activities associated with new
Black-eyed Pea restaurants.

In April 1999, the Company executed  commitment letters (the "Commitments") that
provide  for  borrowings  totaling  $20.1  million.   Under  the  terms  of  the
Commitments,  the  Company  will  enter into (a) $3.0  million of new  equipment
financing,  and (b) a loan not to exceed  $17.1  million.  The $3.0  million new
equipment  financing  will be made in  conjunction  with  the  modification  and
consolidation of existing equipment loans totaling  approximately  $15.4 million
to create a total term loan of $18.4 million, which will amortize monthly over a
seven-year period.

                                       10
<PAGE>
To  facilitate  the $17.1  million loan,  the Company  formed a  special-purpose
subsidiary and will  contribute to that  subsidiary  the assets and  liabilities
associated  with  approximately  34  Denny's   restaurants.   The  newly  formed
subsidiary  will be the borrower  under the loan,  which will be evidenced by 34
individual  promissory notes secured by the leasehold  properties.  The terms of
the notes will vary based upon the term of the leaseholds,  which approximate 15
years. The notes will amortize monthly at a fixed rate.

The Company will use the proceeds from the new loans (1) to  permanently  retire
the Credit Facility;  (2) to purchase  certain  restaurant  equipment  currently
encumbered by equipment leases; (3) to pay various fees and expenses; and (4) to
provide  working  capital.  The  Company  believes  that  it will  complete  the
financing transactions  contemplated by the Commitments in the second quarter of
1999 and that the funds provided by these  financings will be sufficient for its
ongoing  operations and anticipated  restaurant  development  activities  during
1999.

At March 31, 1999,  the Company was not in  compliance  with  certain  financial
covenants and payment terms in various debt and other agreements,  including the
Credit  Facility and Series B Notes.  The Company  believes  that the  financing
transaction  provided  for  in the  Commitments  will  enable  it to  repay  the
remaining  obligations  under  its  Credit  Facility  and to cure  the  covenant
defaults under its other agreements.  In addition, the Company intends to pursue
various alternatives to refinance existing debt by financing other assets during
1999.  If the Company  cannot  complete  the  financing  contemplated  under the
Commitments,  it would continue to be in default under the Credit Facility until
other acceptable refinancing or restructuring alternatives become available. The
Company cannot provide  assurance,  however,  that additional  financing will be
available to the Company or available on satisfactory terms.

SEASONALITY

The Company's operating results fluctuate from quarter to quarter as a result of
the seasonal nature of the restaurant industry and other factors.  The Company's
restaurant  sales are generally  greater in the second and third fiscal quarters
(April through  September) than in the first and fourth fiscal quarters (October
through March).  Occupancy and other operating  costs,  which remain  relatively
constant, have a disproportionately  negative effect on operating results during
quarters with lower restaurant sales. The Company's working capital requirements
also fluctuate seasonally.

INFLATION

The  Company  does not  believe  that  inflation  has had a  material  effect on
operating  results in past years.  Although  increases  in labor,  food or other
operating costs could  adversely  affect the Company's  operations,  the Company
generally has been able to modify its operating procedures or to increase prices
to offset increases in its operating costs.

                                       11
<PAGE>
YEAR 2000 COMPLIANCE

Many currently installed computer systems and software products may not function
properly  when  processing  dates  that begin on or after  January 1, 2000.  The
Company  currently is upgrading  its  internal  computer  network to improve its
management information systems in general, as well as to ensure that its systems
will not  malfunction as a result of "Year 2000" issues.  The Company  currently
does not  anticipate  any  material  adverse  effects  related  to the Year 2000
issues.  The Company has identified four primary systems that could be adversely
impacted  by the Year  2000  issue.  These  systems  are (1)  point-of-sale  and
restaurant  back-office  accounting  systems  in  each  of  its  Black-eyed  Pea
restaurants;  (2) point-of-sale and restaurant back-office accounting systems in
each of its Denny's  restaurants;  (3) the Company's internal accounting systems
and software;  and (4) third-party  systems,  including computer systems used by
the Company's food suppliers,  financial  institutions,  credit card processors,
and  utility  companies.  The  Company  is in  the  process  of  converting  the
point-of-sale  and  back-office  accounting  systems at its  Black-eyed  Pea and
Denny's  restaurants.  The Company  currently  anticipates that this conversion,
which includes upgrading  existing software,  will be completed by September 30,
1999. The vendor for the Company's  internal  corporate  accounting  systems has
advised the Company that it will be able to modify those systems to be Year 2000
compliant during 1999. The vendor currently is modifying the line code for those
software products.  The Company  previously engaged a third-party  consultant to
evaluate those systems and has retained another third-party consultant to assess
and test the vendor's modifications to the systems by June 30, 1999. The Company
currently  anticipates  that its costs to bring its  computer  systems into Year
2000  compliance  will not exceed  $250,000.  The Company has obtained Year 2000
compliance  certification  from all significant  third-parties  that the Company
depends upon, including food suppliers,  financial institutions, and credit card
transaction processors.  All significant  third-parties have advised the Company
that their systems are or will be Year 2000  compliant  during 1999. The Company
intends to continue to identify  technology  systems that may be subject to Year
2000 risks and to monitor and test those systems  throughout  1999.  The Company
currently does not anticipate any material  adverse effects related to Year 2000
issues.  As of the filing date of this Report,  the Company has not  developed a
contingency  plan to  address  Year 2000  issues.  Following  completion  of the
third-party  assessment and testing of modifications to its internal  accounting
systems,  the Company will develop  contingency plans to address those potential
adverse consequences,  if any, identified as remaining with respect to Year 2000
issues.

NEW ACCOUNTING STANDARDS

In April 1998, the AICPA issued  Statement of Position 98-5  "Reporting the Cost
of Start-up  Activities".  This statement requires companies to expense the cost
of start-up activities as incurred. The Company adopted this statement in fiscal
1998.

FORWARD LOOKING STATEMENTS

This  Report  on  Form  10-Q  contains  forward-looking  statements,   including
statements regarding the Company's business strategies,  the Company's business,
and the industry in which the Company operates. These forward-looking statements
are based primarily on the Company's expectations and are subject to a number of
risks and uncertainties,  some of which are beyond the Company's control. Actual
results could differ materially from the forward-looking  statements as a result
of  numerous   factors,   including  those  set  forth  in  Item  1  -  "Special
Considerations"  in the Company's Annual Report on Form 10-K for the fiscal year
ended December 30, 1998.

                                       12
<PAGE>
PART II.    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS
            Not Applicable

ITEM 2.     CHANGES IN SECURITIES
            Not applicable.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES
            Not applicable.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            Not applicable

ITEM 5.     OTHER INFORMATION
            Not applicable.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K
            (a) EXHIBITS.

            10.121  Commitment  letter  dated  April  13,  1999,  from  CNL Fund
               Advisors,  Inc. to DenAmerica Corp.  regarding  $3,000,000 of new
               equipment  financing  and  modification  and  consolidation  with
               $15,000,000 existing equipment financing. (1)

            10.122  Commitment  letter  dated April 13, 1999 from CNL  Financial
               Services,  Inc. to DenAmerica  Corp.  regarding total  cumulative
               loan not to exceed $17,100,000.

            27.1 Financial Data Schedule.
                 ------------------------

            (1)Incorporated  by reference  to the  Exhibits to the  Registrant's
               Annual Report on Form 10-K for the year ended  December 30, 1998,
               as filed on April 14, 1999.

            (B) REPORTS ON FROM 8-K.
                Not applicable.

                                       13
<PAGE>
                                   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.



                         DENAMERICA CORP.

Dated:  May 12, 1999     By: /S/ TODD S. BROWN
                            ----------------------------------------------------
                                 Todd S. Brown
                                 Senior Vice President, Chief Financial Officer,
                                 and Treasurer

                                 (Duly authorized officer of the
                                 registrant, principal financial
                                 and accounting officer)

                                       14