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

                                 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 September 30, 1997

                                       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:  0-24728

                           -------------------------
                       EQUITY CORPORATION INTERNATIONAL
            (Exact name of registrant as specified in its charter)

                                    DELAWARE
                        (State or other jurisdiction of
                         incorporation or organization)

                                   75-2521142
                    (I.R.S. employer identification number)

                       415 SOUTH FIRST STREET, SUITE 210
                                  LUFKIN, TEXAS
                    (Address of principal executive offices)

                                     75901
                                  (Zip Code)

                                 (409) 631-8700
              (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 
September 30, 1997 was 20,762,493.

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

<PAGE> 

                       EQUITY CORPORATION INTERNATIONAL
                                     INDEX

                                                                          Page
Part I.  Financial Information                                            ----

         Item 1. Financial Statements (Unaudited)

                 Consolidated Balance Sheet
                    September 30, 1997 and December 31, 1996.................3

                 Consolidated Statement of Operations
                    Three and Nine Months Ended September 30, 1997 and 1996..4

                 Consolidated Statement of Cash Flows
                    Nine Months Ended September 30, 1997 and 1996............5

                 Consolidated Statement of Stockholders' Equity
                    Nine Months Ended September 30, 1997.....................6

                 Notes to the Consolidated Financial Statements..............7

         Item 2. Management's Discussion and Analysis of Results of
                 Operations and Financial Condition.........................11

Part II. Other Information

         Item 6. Exhibits and Reports on Form 8-K...........................20

Signature...................................................................21


FORWARD-LOOKING-STATEMENTS
This Form 10-Q includes "forward-looking statements" within the meaning of 
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the 
Securities Exchange Act of 1934, as amended.  All statements other than 
statements of historical facts included in this Form 10-Q are forward-looking 
statements.  The expectations reflected in the forward-looking statements are 
based on the Company's current views with respect to future events as well as 
assumptions made by and information currently available to management.  
Important factors that could cause actual results to differ materially from 
expectations ("Cautionary Statements") are disclosed in this Form 10-Q and the 
Company's annual report on Form 10-K, including without limitation in 
conjunction with the forward-looking statements included in this Form 10-Q.  
All subsequent written and oral forward-looking statements attributable to the 
Company or persons acting on its behalf are expressly qualified in their 
entirety by the Cautionary Statements.

                                       2

<PAGE>

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

                       EQUITY CORPORATION INTERNATIONAL
                          CONSOLIDATED BALANCE SHEET
                                 (Unaudited)
<TABLE>
<CAPTION>
                                                         Sept. 30,    Dec. 31,
(In thousands, except share data)                          1997        1996
------------------------------------------------------------------------------
<S>                                                      <C>         <C>
                      ASSETS
Current assets:
   Cash and cash equivalents..........................   $   7,407   $  12,654
   Receivables, net of allowances.....................      11,559       9,050
   Inventories........................................       7,791       6,029
   Other..............................................       2,357       1,825
                                                         ---------   ---------
      Total current assets............................      29,114      29,558

Preneed funeral contracts.............................     214,064     156,028
Cemetery properties, at cost..........................      98,875      84,706
Long-term receivables, net of allowances..............      54,044      37,226
Property, plant and equipment, at cost (net)..........      88,781      57,263
Deferred charges and other assets.....................      18,106       7,986
Names and reputations (net)...........................     133,301      71,124
                                                         ---------   ---------
      Total assets....................................   $ 636,285   $ 443,891
                                                         =========   =========

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued liabilities...........   $   8,775   $   6,943
   Income taxes payable...............................          --         294
   Deferred income taxes..............................       3,317       2,605
   Current maturities of long-term debt...............         798         537
                                                         ---------   ---------
      Total current liabilities.......................      12,890      10,379

Deferred preneed funeral contract revenues............     219,977     161,153
Long-term debt........................................     136,513      49,197
Deferred cemetery costs...............................      26,740      21,268
Deferred income taxes.................................      22,869      22,799
Other liabilities.....................................       2,047       1,631
Commitments and contingencies.........................                        
Stockholders' equity:
   Preferred stock....................................          --          --
   Common Stock, $.01 par value; 50,000,000 shares
      authorized; 20,762,493 and 19,322,723 shares issued
      and outstanding in 1997 and 1996, respectively..         208         193
   Capital in excess of par value.....................     184,493     157,468
   Retained earnings..................................      30,523      19,803
   Foreign translation adjustment.....................          25          --
                                                         ---------   ---------
      Total stockholders' equity......................     215,249     177,464
                                                         ---------   ---------
      Total liabilities and stockholders' equity......   $ 636,285   $ 443,891
                                                         =========   =========

</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.


                                       3

<PAGE> 

                       EQUITY CORPORATION INTERNATIONAL
                     CONSOLIDATED STATEMENT OF OPERATIONS 
                                 (Unaudited)
<TABLE>
<CAPTION>

(In thousands, except per share data)
--------------------------------------------------------------------------
                             Three months ended        Nine months ended
                                 Sept. 30,                 Sept. 30,
                             1997        1996          1997        1996
<S>                          <C>         <C>           <C>         <C>
Net revenues:
   Funeral.................  $ 20,791    $ 13,161      $ 60,452    $ 38,147
   Cemetery................    12,360       7,891        34,191      25,426
   Other...................        --          --         1,674       2,085
                             --------    --------      --------    --------
                               33,151      21,052        96,317      65,658
                             --------    --------      --------    --------

Costs and expenses:
   Funeral.................    16,387       9,828        45,185      27,635
   Cemetery................     8,322       5,981        23,431      18,125
   Other...................        --          --           924       1,135
                             --------    --------      --------    --------
                               24,709      15,809        69,540      46,895
                             --------    --------      --------    --------

Total gross profit.........     8,442       5,243        26,777      18,763

General and adminis-
   trative expenses........     1,836       1,490         5,670       4,370
                             --------    --------      --------    --------

Operating income...........     6,606       3,753        21,107      14,393

Interest expense, net......     1,834         203         3,758       1,690
                             --------    --------      --------    --------

Income before
   income taxes............     4,772       3,550        17,349      12,703

Provision for
   income taxes............     1,598       1,438         6,629       5,709
                             --------    --------      --------    --------

Net income.................  $  3,174    $  2,112      $ 10,720    $  6,994
                             ========    ========      ========    ========

Earnings per share.........  $   0.15    $   0.11      $   0.51    $   0.40
                             ========    ========      ========    ========

Weighted average number
   of common and equivalent
      shares outstanding...    21,078      19,447        20,842      17,583
                             ========    ========      ========    ========
</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.


                                       4

<PAGE> 
                        EQUITY CORPORATION INTERNATIONAL
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                   Nine months ended Sept. 30,
(In thousands)                                            1997         1996
------------------------------------------------------------------------------
<S>                                                     <C>          <C>
Cash flows from operating activities:
   Net income.........................................  $ 10,720     $  6,994
   Adjustments to reconcile net income                                       
    to net cash provided by operating activities:                            
      Depreciation and amortization...................     5,798        3,543
      Provision for bad debts and contract                                    
       cancellations..................................     3,764        2,832
      Gain on sale of assets..........................      (755)        (909)
      Deferred income taxes...........................       782          835
   Changes in assets and liabilities, net of effects                         
    from acquisitions:                                                       
     Receivables......................................   (13,277)      (7,823)
     Inventories......................................      (162)          17
     Other current assets.............................      (475)        (351)
     Other long-term assets...........................    (2,603)        (724)
     Accounts payable and accrued liabilities.........       862         (460)
     Income taxes payable.............................      (294)        (663)
     Preneed funeral contracts and associated
      deferred revenues...............................       341          (29)
                                                        --------     -------- 

        Net cash provided by operating activities.....     4,701        3,262
                                                        --------     -------- 

Cash flows from investing activities:
   Capital expenditures...............................    (9,296)      (5,829)
   Proceeds from sale of assets.......................        96        3,037
   Acquisitions, net of cash acquired.................   (16,888)     (21,012)
   Other..............................................        66          162
                                                        --------     --------
        Net cash used in investing activities.........   (26,022)     (23,642) 
                                                        --------     --------
Cash flows from financing activities:
   Net proceeds from issuance of Common Stock.........    22,230       73,071
   Borrowings on long-term debt.......................    16,359        2,278
   Payments on debt...................................   (22,515)     (56,302)
                                                        --------     -------- 

        Net cash provided by financing activities.....    16,074       19,047 
                                                        --------     -------- 

Decrease in cash and cash equivalents.................    (5,247)      (1,333)
Cash and cash equivalents at beginning of period......    12,654        6,233
                                                        --------     -------- 

Cash and cash equivalents at end of period............  $  7,407     $  4,900
                                                        ========     ======== 
</TABLE>

The accompanying notes are an integral part of the consolidated financial 
statements.


                                       5

<PAGE> 
                        EQUITY CORPORATION INTERNATIONAL
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>

(In thousands, except                             Shares         Amount
 number of shares)                                ----------     ----------
                                                  <C>            <C>

Common Stock
   Balance at December 31, 1996.................  19,322,723     $      193
   Issued:
     Equity offering............................   1,199,178             12
     Acquisitions...............................     231,352              3
     Option exercises...........................       8,500             --
     Other......................................         740             --
                                                  ----------     ----------
   Balance at September 30, 1997................  20,762,493     $      208
                                                  ==========     ==========

Capital in excess of par value
   Balance at December 31, 1996.................                 $  157,468
     Equity offering............................                     22,089
     Acquisitions...............................                      4,807
     Option exercises...........................                         79
     Other......................................                         50
                                                                 ----------
   Balance at September 30, 1997................                 $  184,493
                                                                 ==========

Retained earnings
   Balance at December 31, 1996.................                 $   19,803
     Net income.................................                     10,720
                                                                 ----------
   Balance at September 30, 1997................                 $   30,523
                                                                 ==========

Foreign translation adjustment
   Balance at December 31, 1996.................                 $       --
     Translation adjustment.....................                         25
                                                                 ----------
   Balance at September 30, 1997................                 $       25
                                                                 ==========

   Total stockholders' equity....................                $  215,249
                                                                 ==========


</TABLE>
The accompanying notes are an integral part of the consolidated financial 
statements.


                                       6

<PAGE> 
                       EQUITY CORPORATION INTERNATIONAL
           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the 
accounts of Equity Corporation International and all majority owned 
subsidiaries ("the Company") and have been prepared pursuant to the rules and 
regulations of the Securities and Exchange Commission. Certain information in 
the notes to the consolidated financial statements normally included in 
financial statements prepared in accordance with generally accepted accounting 
principles has been condensed or omitted pursuant to these rules and 
regulations. 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 interim periods are not necessarily 
indicative of the results that may be expected for the year. Capitalized terms 
not defined herein have the meanings as defined in the notes to the 
consolidated financial statements included in the Company's annual report on 
Form 10-K for the year ended December 31, 1996. For further information, refer 
to the consolidated financial statements and footnotes thereto included in the 
Company's annual report on Form 10-K for the year ended December 31, 1996.

The Company's statutory Federal income tax rate increased from 34% to 35% as 
the Company exceeded the taxable income threshold requiring the higher tax 
rate during 1996.  As a result, the Company recorded through the provision for 
income taxes a one-time charge of $565,000 in the first quarter of 1996 to 
revalue the deferred tax liability accounts to appropriately reflect the 
higher statutory rate.

The Company recorded a reduction to its income tax provision for the three and 
nine months ended September 30, 1997 of $200,000, representing the difference 
between the Company's estimated and actual tax liability for the year ended 
December 31, 1996. In addition, after analysis of the Company's estimated 
federal and state tax liabilities, the Company reduced its estimated effective 
income tax rate for 1997 to 39.0% from 40.0%.  As a result of this reduction, 
the Company estimates that its effective tax rate for the fourth quarter of 
1997 will be approximately 38.1%. 

All assets and liabilities of foreign subsidiaries are translated into U.S. 
dollars at exchange rates in effect as of the end of the reporting period. 
Income and expense items are translated at average exchange rates for the 
reporting period. The resulting translation adjustments are recorded as a 
component of stockholders' equity. The effect of exchange rate changes on cash 
for the nine months ended September 30, 1997 has not been significant.

2. ACQUISITIONS
The following table is a summary of acquisitions made during the nine months 
ended September 30, 1997 and 1996:
<TABLE>
<CAPTION>
                        1997            1996
---------------------------------------------------
<S>                     <C>             <C>
Number acquired:
   Funeral homes.......          69              44
   Cemeteries..........           8               1
Purchase price.........$116,180,000     $49,915,000
</TABLE>

The purchase price for these acquisitions consisted of cash, Common Stock and 
debt issued or assumed. Also included in the 1997 purchase price is $924,000 
which represents the net book value of funeral home assets exchanged for one 
of the acquired cemeteries (Note 5). The excess of purchase price over the 
fair value of assets acquired and liabilities assumed is included in Names and 
reputations (net) on the Consolidated Balance Sheet and is amortized over a 
40-year period. In connection with acquisitions, the Company enters into 
customary employment, consulting and noncompetition agreements with certain 
employees and former owners of the businesses acquired. In certain situations, 
the Company will prepay a portion of the noncompetition agreements and 
amortize such prepayments on a straight-line basis over the terms of the 
agreements. The purchase prices indicated above do not include $852,000 and 
$832,000 for noncompetition agreements which were prepaid to individuals 
related to businesses acquired in 1997 and 1996, respectively. The 
acquisitions have been accounted for as purchases and their operating results 
have been included since their respective dates of acquisition.

                                       7


<PAGE> 
The net effect of acquisitions (including the exchange discussed above) on the 
Consolidated Balance Sheet was as follows:
<TABLE>
<CAPTION>
                                                   Nine months ended Sept. 30,
(In thousands)                                            1997        1996
------------------------------------------------------------------------------
<S>                                                     <C>         <C>       
Current assets........................................  $   5,158   $   3,166 
Preneed funeral contracts.............................     50,927      35,358 
Cemetery properties...................................     13,600       2,349 
Long-term receivables, net of allowances..............      7,961      (1,075)
Property, plant and equipment.........................     25,801      13,684 
Deferred charges and other assets.....................      7,842         773 
Names and reputations.................................     64,025      32,422 
Current liabilities...................................     (1,039)     (3,207)
Deferred preneed funeral contract revenues............    (51,374)    (35,458)
Long-term debt........................................    (93,699)    (25,515)
Deferred cemetery costs...............................     (5,812)        121 
Deferred income taxes.................................         --        (462)
Other liabilities.....................................        (38)       (336)
Common Stock issued...................................     (4,810)       (150)
                                                        ---------   --------- 
   Total..............................................     18,542      21,670 
   Less cash acquired.................................      1,654         658 
                                                        ---------   --------- 
   Cash used for acquisitions.........................  $  16,888   $  21,012 
                                                        =========   ========= 
</TABLE>

The following represents the unaudited pro forma results of operations for the 
nine months ended September 30, 1997 and 1996, assuming the above noted 
acquisitions and exchange had occurred as of January 1, 1996:
<TABLE>
<CAPTION>
(In thousands, except per share data)                   1997         1996
------------------------------------------------------------------------------
<S>                                                     <C>         <C>      
Net revenues..........................................  $ 114,439   $ 103,211
Income before income taxes............................     17,889      14,118
Net income............................................     11,050       7,826
Earnings per common and equivalent share..............  $    0.53   $    0.44
</TABLE>


                                       8

<PAGE>
3. PRENEED FUNERAL CONTRACTS AND DEFERRED PRENEED FUNERAL CONTRACT REVENUES
The Company sells preneed funeral contracts through various programs providing 
for future funeral services at prices prevailing when the agreement is signed. 
These contracts are included in the Consolidated Balance Sheet as Preneed 
funeral contracts. Payments on these contracts are generally placed in trust 
(pursuant to state law) or are used to pay premiums on life insurance policies 
issued by third party insurers. When the services are performed, approximately 
$95,629,000 and $67,364,000 will be funded by trusts and approximately 
$118,435,000 and $88,664,000 will be funded by insurance policies as of 
September 30, 1997 and December 31, 1996, respectively. Accumulated earnings 
from trust funds and increasing insurance benefits have been included to the 
extent that they have accrued through September 30, 1997 and December 31, 
1996. The cumulative total has been reduced by allowable cash withdrawals for 
trust earning distributions and amounts retained by the Company pursuant to 
various state laws. At September 30, 1997 and December 31, 1996, the amounts 
collected and held in trusts, at cost, which approximates market, were 
approximately $85,153,000 and $59,246,000, respectively. The amounts in trusts 
and all life insurance policies are generally transferred to the customer upon 
contract cancellation.

"Deferred preneed funeral contract revenues" includes the contract amount of 
all price guaranteed funeral services and accumulated trust earnings and 
increasing insurance benefits earned.  The Company defers recognition of trust 
earnings and insurance benefits until performance of the funeral service.  
Upon performance of the funeral service, the Company will recognize the fixed 
contract price and related accumulated trust earnings or increasing insurance 
benefits as funeral service revenues.

4. DEBT
In September 1997, the Company amended and increased its borrowing capacity 
under its uncollateralized revolving credit agreement with a group of banks 
(the "Credit Facility") to $225,000,000 from $100,000,000. The Credit Facility 
is used for acquisition financing and general corporate purposes. The Credit 
Facility provides for a revolving credit period expiring in September 2002 and 
bears interest, at the Company's option, at either (i) the prime rate or (ii) 
the London Interbank Offered Rate plus 0.50% up to 1.25% depending on the 
Company's Leverage Ratio, as defined in the agreement. The weighted average 
interest rates on amounts borrowed under the Credit Facility were 6.66% and 
6.39% at September 30, 1997 and December 31, 1996, respectively. In addition, 
the Company pays commitment fees on unused funds depending on the Company's 
Leverage Ratio. The Credit Facility also supports letters of credit totaling 
$3,152,000 related to one of the Company's acquisitions in 1996. The Credit 
Facility contains customary restrictive covenants requiring the Company to 
maintain certain financial ratios and is guaranteed by substantially all of 
the Company's subsidiaries. The Credit Facility will permit the payment of 
dividends on the Company's Common Stock only to the extent the Company 
maintains a specified net worth. Balances outstanding under the Credit 
Facility totaled $122,000,000 and $35,000,000 at September 30, 1997 and 
December 31, 1996, respectively.


                                       9

<PAGE> 
5. DISPOSITIONS
During January 1997, the Company acquired one cemetery from Service 
Corporation International ("SCI"), a former significant stockholder of the 
Company (Note 6), in exchange for one of the Company's funeral home 
facilities. This was a strategic business decision as the acquired cemetery is 
in close proximity to one of the Company's existing funeral home facilities. 
In connection with the transaction, the Company received consideration of 
$1,674,000, including $250,000 in cash, and recognized a gain of approximately 
$750,000 in the first quarter of 1997.

During March 1996, the Company conveyed to SCI licensing and lease agreements 
related to three funeral home operations which had been previously operated by 
an unaffiliated third party for an aggregate purchase price of $2,085,000. 
This amount and $1,135,000 of related costs and expenses are included in net 
revenues and costs and expenses, respectively, for the nine months ended 
September 30, 1996.

6. EQUITY OFFERINGS
In February 1997, the Company completed the registration and sale of 7,994,522 
shares of Common Stock owned by SCI which represented SCI's total investment 
in the Company. SCI received all proceeds and paid all expenses related to the 
sale of these shares. In addition, the Company received net proceeds of 
approximately $22,101,000 (after selling commissions and related expenses) in 
connection with the issuance and sale by the Company of 1,199,178 shares of 
Common Stock at $19.25 per share pursuant to the underwriters' exercise of an 
overallotment option granted by the Company. Approximately $13,000,000 of 
these proceeds was used to pay down a portion of the Company's Credit Facility 
and the remainder was used for general corporate purposes, including 
acquisitions.

On May 1, 1996 the Company completed a public offering of 4,335,000 shares of 
its Common Stock at $18.00 per share, including 585,000 shares sold to the 
underwriters pursuant to the overallotment option granted to them, for net 
proceeds of approximately $73,007,000 (after selling commissions and related 
expenses).  The net proceeds were used to payoff amounts outstanding under the 
Credit Facility and the remainder was used for general corporate purposes, 
including acquisitions.

7. RECENT FASB PRONOUNCEMENTS
In February 1997, the FASB issued Statement of Financial Accounting Standards 
("SFAS") No. 128 "Earnings Per Share" which simplifies the standards for 
computing and presenting earnings per share ("EPS") and makes them comparable 
to international EPS standards. This statement is effective for the year 
ending December 31, 1997. Earlier application is not permitted and restatement 
of prior period EPS data is required. The Company does not believe 
implementation of SFAS No. 128 will have a material impact on its EPS.

In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income" 
and SFAS No. 131 "Disclosures About Segments of an Enterprise and Related 
Information." SFAS No. 130 establishes standards for reporting and display of 
comprehensive income and its components in a full set of general purpose 
financial statements. SFAS No. 131 establishes standards for the way that 
public enterprises report segment information in annual financial statements 
and requires that those enterprises report selected information about 
operating segments in interim financial reports to shareholders. These 
statements are both effective for fiscal years beginning after December 15, 
1997. The Company does not believe implementation of SFAS Nos. 130 and 131 
will have a material effect on its financial position, results of operation or 
cash flows.


                                       10

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

The Company provides services and products in both the funeral home and 
cemetery segments of the deathcare industry.  The Company has a growth 
strategy which emphasizes an aggressive acquisition program and the 
implementation of revenue enhancement and cost containment programs. As part 
of this growth strategy, the Company maintains a separate corporate 
development department headed by a senior management executive with 
substantial deathcare experience. The department is responsible for 
identifying, evaluating, negotiating and closing acquisitions of funeral homes 
and cemeteries. With the Company's knowledge of ex-urban markets and 
experienced management team, the Company believes that it is well positioned 
to take advantage of the continuing consolidation trend in the deathcare 
industry. The Company's future results of operations will depend in large part 
on the Company's ability to continue to make acquisitions on attractive terms 
and to successfully integrate and manage the acquired properties.


RESULTS OF OPERATIONS

The following is a discussion of the Company's results of operations for the 
three and nine month periods ended September 30, 1997 and 1996.  For purposes 
of this discussion, funeral homes and cemeteries owned and operated for the 
entirety of each period being compared are referred to as existing operations. 
Correspondingly, operations acquired or opened during either period being 
compared are referred to as acquired operations.

THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED 
SEPTEMBER 30, 1996:
Total net revenues for the three months ended September 30, 1997 increased 
57.5% to $33,151,000 from $21,052,000 for the three months ended September 30, 
1996.  The increase in net revenues reflects a $9,704,000 increase in net 
revenues attributable to acquired operations and a $2,548,000 or 12.4% 
increase in net revenues from existing operations.  The substantial increase 
in revenues from acquired operations is due primarily to the full quarter 
results of the 82 funeral homes and seven cemeteries acquired between July 1, 
1996 and June 30, 1997 and the partial quarter results of the 24 funeral homes 
and three cemeteries acquired during the three months ended September 30, 
1997. The increase in revenues from existing operations was attributable 
primarily to increases in preneed sales at the Company's cemetery operations, 
offset in part by decreases in at need revenues at the Company's funeral and 
cemetery operations.

Gross profit for the three months ended September 30, 1997 increased 61.0% to 
$8,442,000 from $5,243,000 for the comparable prior year quarter.  The 
increase in gross profit is due primarily to a $1,668,000 increase 
attributable to acquired operations and a $1,558,000 or 30.4% increase from 
existing operations. The increase in gross profit from existing operations was 
attributable primarily to the increases in preneed sales discussed above.


                                       11

<PAGE> 

FUNERAL HOME SEGMENT. The following table sets forth certain information 
regarding the net revenues and gross profit of the Company from its funeral 
home operations during the three months ended September 30, 1997 and 1996.

<TABLE>
<CAPTION>
                                          Three months
                                       ended September 30,       Change
(Dollars in thousands)                   1997      1996      Amount    Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 12,534  $ 12,672  $   (138)  (1.1)%
   Acquired operations..................    8,257       336     7,921      *
   Disposed operations..................       --       153      (153)     *
                                           ------    ------    ------
      Total funeral net revenues........ $ 20,791  $ 13,161  $  7,630   58.0%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  3,006  $  3,220  $   (214)  (6.6)%
   Acquired operations..................    1,398        86     1,312      *
   Disposed operations..................       --        27       (27)     *
                                           ------    ------    ------
      Total funeral gross profit........ $  4,404  $  3,333  $  1,071   32.1%
                                           ======    ======    ======

------
*Not meaningful


Total funeral net revenues for the three months ended September 30, 1997 
increased 58.0% to $20,791,000 from $13,161,000 for the prior year quarter, 
due primarily to a $7,921,000 increase attributable to acquired operations.  
Revenues from existing operations decreased by 1.1% from the prior year 
quarter as a result of a 3.4% decrease in the number of funeral services 
performed, offset in part by a 2.4% increase in the average revenue per 
funeral service performed.

Total funeral gross profit for the three months ended September 30, 1997 
increased 32.1% to $4,404,000 from $3,333,000 for the three months ended 
September 30, 1996.  Excluding the effects of the disposed funeral home 
operations, funeral gross margin decreased to 21.2% from 25.4% in the prior 
year quarter due primarily to acquired operations, which generally have lower 
gross margins as compared to the Company's existing operations.  Depending on 
numerous factors including the size of an acquired operation, the proximity to 
other Company operations and market sensitivity, it may take 12 to 36 months 
before margin improvement is realized at an acquired operation as a result of 
new policies and procedures implemented by the Company.  Funeral gross margin 
at existing operations decreased to 24.0% from 25.4% in the 1996 third quarter 
primarily as a result of the volume declines discussed above coupled with the 
relatively fixed cost nature of funeral home operating costs.





                                       12

<PAGE> 

CEMETERY SEGMENT. The following table sets forth certain information regarding 
the net revenues and gross profit of the Company from its cemetery operations 
during the three months ended September 30, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                           Three months
                                        ended September 30,       Change
(Dollars in thousands)                     1997      1996      Amount  Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 10,577 $   7,891  $  2,686   34.0%
   Acquired operations..................    1,783        --     1,783      *
                                           ------    ------    ------
      Total cemetery net revenues....... $ 12,360  $  7,891  $  4,469   56.6%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  3,682  $  1,910  $  1,772   92.8%
   Acquired operations..................      356       --        356      *
                                           ------    ------    ------
      Total cemetery gross profit....... $  4,038  $  1,910  $  2,128  111.4%
                                           ======    ======    ======

------
*Not meaningful


Total cemetery net revenues for the three months ended September 30, 1997 
increased 56.6% to $12,360,000 from $7,891,000 for the prior year quarter, due 
primarily to increases in preneed sales and a $1,783,000 increase attributable 
to acquired operations.  Revenues from existing operations increased by 34.0% 
from the prior year quarter due primarily to increases in preneed sales and 
improved investment performance from the Company's merchandise trusts.  The 
increase in revenues from acquired operations reflects the full quarter 
results of the seven cemeteries acquired between July 1, 1996 and June 30, 
1997, along with the partial quarter results of the three cemeteries acquired 
in the three months ended September 30, 1997. 

Total cemetery gross profit for the three months ended September 30, 1997 
increased 111.4% to $4,038,000 from $1,910,000 for the three months ended 
September 30, 1996.  Cemetery gross profit at existing operations increased 
$1,772,000 or 92.8% from the prior year quarter due primarily to the increases 
in preneed sales and trust investment performance discussed above.  Cemetery 
gross margin at existing operations was 34.8% for the quarter, up from 24.2% 
in the third quarter of 1996 due in large part to these increases, along with 
improved operational efficiencies and operating leverage achieved on the 
relatively fixed portion of cemetery cost structure which is being spread over 
a larger revenue base. 

General and administrative expenses for the three months ended September 30, 
1997 increased $346,000 or 23.2% over the three months ended September 30, 
1996, due primarily to increased personnel costs along with expansion of the 
Company's corporate infrastructure necessary to support a higher rate of 
growth. General and administrative expenses as a percentage of net revenues 
declined to 5.5% for the three months ended September 30, 1997 from 7.1% for 
the same period in 1996.

Interest expense for the three months ended September 30, 1997 increased 
$1,631,000 from the comparable prior year quarter, due primarily to higher 
debt levels as average indebtedness outstanding increased to $118.2 million 
for the current year quarter from $20.5 million for the same period in 1996.  
The increase in average indebtedness outstanding is the result of increased 
acquisition activity during 1997 along with the payoff in 1996 of $52.7 
million borrowed under the Company's Credit Facility with a portion of the 
proceeds of the Company's equity offering in May 1996.  Interest income of 
approximately $106,000 related to the temporary investment of the Company's 
equity offering proceeds has been netted against interest expense for the 
three months ended September 30, 1996.


                                       13

<PAGE> 
The Company recorded a reduction to its income tax provision for the three 
months ended September 30, 1997 of $200,000, representing the difference 
between the Company's estimated and actual tax liability for the year ended 
December 31, 1996. In addition, after analysis of the Company's estimated 
federal and state tax liabilities, the Company has reduced its estimated 
effective income tax rate for 1997 to 39.0% from 40.0%, resulting in an 
effective tax rate of 33.5% for the three months ended September 30, 1997 
compared to 40.5% for the comparable three months in 1996.  The Company 
estimates that its effective tax rate for the fourth quarter of 1997 will be 
approximately 38.1%.

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED 
SEPTEMBER 30, 1996:
Total net revenues for the nine months ended September 30, 1997 increased 
46.7% to $96,317,000 from $65,658,000 for the nine months ended September 30, 
1996.  The increase in net revenues reflects a $26,227,000 increase in net 
revenues attributable to acquired operations and a $5,518,000 or 9.5% increase 
in net revenues from existing operations.  The substantial increase in 
revenues from acquired operations is due primarily to the full period results 
of the 59 funeral homes and three cemeteries acquired in 1996 and the partial 
period results of the 69 funeral homes and eight cemeteries acquired during 
the nine months ended September 30, 1997.  The increase in revenues from 
existing operations was attributable primarily to increases in preneed sales 
at the Company's cemetery operations. Included in net revenues for the nine 
months ended September 30, 1997 is $1,674,000 related to the sale of one of 
the Company's funeral homes in exchange for a cemetery and $250,000 in cash.  
Included in net revenues for the nine months ended September 30, 1996 is 
$2,085,000 resulting from the Company's sale of several long-term licensing 
and lease agreements related to three funeral homes which had previously been 
operated by a third party.

Gross profit for the nine months ended September 30, 1997 increased 42.7% to 
$26,777,000 from $18,763,000 for the comparable prior year period.  The 
increase in gross profit is due primarily to a $5,894,000 increase 
attributable to acquired operations and a $2,576,000 or 15.5% increase from 
existing operations.  The increase in gross profit from existing operations 
was primarily attributable to increased preneed sales along with improved 
operational efficiencies at the Company's cemetery operations.

                                       14

<PAGE> 

FUNERAL HOME SEGMENT. The following table sets forth certain information 
regarding the net revenues and gross profit of the Company from its funeral 
home operations during the nine months ended September 30, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                          Nine months
                                         ended Sept. 30,          Change
(Dollars in thousands)                   1997      1996      Amount    Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 34,121  $ 33,362  $    759     2.3%
   Acquired operations..................   26,331     4,110    22,221       *
   Disposed operations..................       --       675      (675)      *
                                           ------    ------    ------
      Total funeral net revenues........ $ 60,452  $ 38,147  $ 22,305    58.5%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  9,729  $  9,508  $    221     2.3%
   Acquired operations..................    5,538       748     4,790       *
   Disposed operations..................       --       256      (256)      *
                                           ------    ------    ------
      Total funeral gross profit........ $ 15,267  $ 10,512  $  4,755    45.2%
                                           ======    ======    ======

------
*Not meaningful


Total funeral net revenues for the nine months ended September 30, 1997 
increased 58.5% to $60,452,000 from $38,147,000 for the comparable prior year 
period, due primarily to a $22,221,000 increase attributable to acquired 
operations.  Revenues from existing operations increased by 2.3% from the 
prior year period due primarily to a 3.0% increase in the average revenue per 
funeral service performed, offset in part by a 0.7% decrease in the number of 
funeral services performed.

Total funeral gross profit for the nine months ended September 30, 1997 
increased 45.2% to $15,267,000 from $10,512,000 for the nine months ended 
September 30, 1996.  Excluding the effects of the disposed funeral home 
operations, funeral gross margin decreased to 25.3% from 27.4% in the prior 
year period due primarily to acquired operations, which generally have lower 
gross margins as compared to the Company's existing operations.  Funeral gross 
margin at existing operations was 28.5% for both current and prior year 
comparable periods as the volume declines discussed above were largely offset 
by improvements in the Company's pricing and merchandising strategies. 




                                       15

<PAGE> 

CEMETERY SEGMENT. The following table sets forth certain information regarding 
the net revenues and gross profit of the Company from its cemetery operations 
during the nine months ended September 30, 1997 and 1996.


</TABLE>
<TABLE>
<CAPTION>
                                          Nine months
                                         ended Sept. 30,          Change
(Dollars in thousands)                    1997      1996      Amount  Percent
------------------------------------------------------------------------------
<S>                                      <C>       <C>       <C>       <C>
Net revenues:
   Existing operations.................. $ 29,266  $ 24,507  $  4,759   19.4%
   Acquired operations..................    4,925       919     4,006      *
                                           ------    ------    ------
      Total cemetery net revenues....... $ 34,191  $ 25,426  $  8,765   34.5%
                                           ======    ======    ======

Gross profit:
   Existing operations.................. $  9,418  $  7,063  $  2,355   33.3%
   Acquired operations..................    1,342       238     1,104      *
                                           ------    ------    ------
      Total cemetery gross profit....... $ 10,760  $  7,301  $  3,459   47.4%
                                           ======    ======    ======

------
*Not meaningful


Total cemetery net revenues for the nine months ended September 30, 1997 
increased 34.5% to $34,191,000 from $25,426,000 for the nine months ended 
September 30, 1996, due primarily to increases attributable to existing and 
acquired operations.  Revenues from existing operations increased by 19.4% 
from the comparable prior year period due primarily to increases in preneed 
sales.

Total cemetery gross profit for the nine months ended September 30, 1997 
increased 47.4% to $10,760,000 from $7,301,000 for comparable period in 1996. 
Cemetery gross margin at existing operations increased to 32.2% from 28.8% in 
the 1996 period, reflecting the increases noted above along with improved 
operational efficiencies and operating leverage in the Company's cemetery 
operations. 

General and administrative expenses for the nine months ended September 30, 
1997 increased $1,300,000 or 29.7% over the same period in 1996.  This 
increase resulted primarily from nonrecurring New York Stock Exchange listing 
expenses during the second quarter of 1997, as well as increased personnel 
costs associated with the expansion of the Company's corporate infrastructure 
necessary to support a higher rate of growth.  Excluding the effects of 
nonrecurring items such as the New York Stock Exchange listing expenses along 
with the revenues recorded on the asset exchange and sale of licensing and 
lease agreements discussed above, general and administrative expenses as a 
percentage of net revenues from continuing operations decreased to 5.8% from 
6.9% in the prior year period as general and administrative expenses are being 
spread over a larger revenue base.

Interest expense for the nine months ended September 30, 1997 increased 
$2,068,000 or 122.4% from the comparable prior year period, due primarily to 
significantly higher debt levels as average indebtedness outstanding over the 
1997 period increased to $93.5 million from $42.4 million for the same period 
in 1996. This increase in average indebtedness outstanding is a result of 
increased acquisition activity during 1997 along with the payoff of $52.7 
million in 1996 borrowed under the Company's Credit Facility with a portion of 
the proceeds of an equity offering in May 1996.  Partially offsetting this 
increase was the paydown of approximately $13.0 million borrowed under the 
Company's Credit Facility with a portion of the proceeds of an equity offering 
in February 1997. Interest income of approximately $41,000 and $276,000 
related to the temporary investment of equity offering proceeds has been 
netted against interest expense for the nine months ended September 30, 1997 
and 1996, respectively.


                                       16

<PAGE> 
The Company recorded a reduction to its income tax provision for the nine 
months ended September 30, 1997 of $200,000, representing the difference 
between the Company's estimated and actual tax liability for the year ended 
December 31, 1996. In addition, after analysis of the Company's estimated 
federal and state tax liabilities, the Company reduced its estimated effective 
income tax rate for 1997 to 39.0% from 40.0%, resulting in an effective tax 
rate of 38.2% for the nine months ended September 30, 1997 compared to 44.9% 
for the comparable nine months in 1996. The 1996 tax provision includes a one-
time charge of $565,000 in the first quarter of 1996 to revalue the Company's 
deferred tax liability accounts to appropriately reflect an increase in the 
Company's statutory Federal income tax rate from 34% to 35% as the Company 
exceeded the taxable income threshold requiring the higher tax rate during 
1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically relied on cash flow from operations and third 
party borrowings to finance its operations and on third party borrowings, the 
issuance of notes payable and, in certain situations, the issuance of shares 
of Common Stock to sellers of funeral homes and cemeteries to finance its 
acquisition program.  Recently acquired funeral homes typically generate 
positive cash flow immediately following acquisition.  In contrast, recently 
acquired cemeteries typically generate negative cash flow during an 
approximately three to nine month start-up period following the introduction 
of an aggressive preneed cemetery sales effort, although in some cases this 
period has exceeded nine months.  This negative cash flow is typically offset 
by positive cash flow from mature cemetery operations.

Cash and cash equivalents totaled $7.4 million at September 30, 1997, 
representing a decrease of $5.2 million from December 31, 1996.  For the nine 
months ended September 30, 1997, net cash flow provided from operating 
activities was approximately $4.7 million, cash used in investing activities 
totaled approximately $26.0 million and cash provided from financing 
activities amounted to approximately $16.1 million.  Significant components of 
cash flow generated from operating activities include net income adjusted for 
non-cash items partially offset by an increase in receivables of $13.3 million 
primarily attributable to a 43.6% increase in preneed cemetery sales which are 
usually financed on an installment basis over 36 months. Significant 
components of cash used in investing activities included capital expenditures 
of $2.7 million related to additions and improvements at several funeral home 
facilities, $2.3 million related to the acquisition of professional vehicles 
and maintenance equipment and $1.1 million for upgrades to computer systems 
and peripheral equipment.  Additionally, the Company utilized approximately 
$16.9 million of internal funds, including funds drawn on the Credit Facility 
at December 31, 1996, to consummate funeral home and cemetery acquisitions 
during the nine months ended September 30, 1997. Significant components of 
cash provided from financing activities included (i) $22.1 million of net 
proceeds received in February 1977 in connection with the sale of the 
Company's Common Stock and the use of a portion of these proceeds to pay $13.0 
million outstanding under the Company's Credit Facility; (ii) borrowings of 
approximately $16.4 million which were used for general corporate purposes 
including, among other things, tax payments, long-term supply agreements and 
refinancings of certain notes payable issued in connection with the Company's 
acquisitions; and (iii) lump sum payments totaling approximately $9.5 million 
to extinguish certain seller financed notes and normal scheduled debt 
payments.

Long-term debt, including current maturities, at September 30, 1997 totaled 
$137.3 million as compared to $49.7 million at December 31, 1996.  The 
increase was principally attributable to increased acquisition activity during 
the nine months ended September 30, 1997, partially offset by the payoff of 
$13.0 million outstanding under the Credit Facility with a portion of the 
proceeds from the issuance of Common Stock in February 1997, as described 
below. Due to increases in recent and projected acquisition activity, the 
Company increased its borrowing capacity under the Credit Facility to $225 
million from $100 million. Long-term debt at September 30, 1997 consisted of 
$122.0 million drawn under the Credit Facility and $15.3 million owed under 
various notes payable to sellers of funeral homes and cemeteries. As of 
September 30, 1997, the Credit Facility also supported letters of credit 
totaling $3.2 million related to one of the Company's 1996 acquisitions. At 
September 30, 1997, $99.8 million was available for borrowings under the 
Credit Facility. Any amounts repaid under the Credit Facility are available 
for future borrowings under the terms of the Credit Facility.


                                       17

<PAGE> 
Borrowings under the Credit Facility bear interest, at the Company's option, 
at either (i) the prime rate or (ii) the London Interbank Offered Rate plus 
0.50% up to 1.25% per annum, depending on the Company's Leverage Ratio, as 
defined. The weighted average interest rates on amounts borrowed under the 
Credit Facility were 6.66% and 6.39% at September 30, 1997 and December 31, 
1996, respectively. The Credit Facility, which is due September 2002, contains 
customary restrictive covenants, permits the payment of dividends only to the 
extent the Company maintains a specified net worth and requires the Company to 
maintain certain financial ratios. The Credit Facility is guaranteed by 
substantially all of the Company's subsidiaries.

In February 1997, the Company received net proceeds of approximately $22.1 
million (after selling commissions and related expenses) in connection with 
the issuance and sale by the Company of 1,199,178 shares of Common Stock at 
$19.25 per share pursuant to the underwriters' exercise of an overallotment 
option granted by the Company in the registration and sale of shares of Common 
Stock owned by SCI.

The Company currently expects to acquire funeral homes and cemeteries for 
purchase prices aggregating approximately $150 million in 1997. The Company 
anticipates that the consideration for future acquisitions will consist of a 
combination of cash, long-term notes, the assumption of existing indebtedness 
of the acquired businesses, and, in some cases, the issuance of additional 
shares of the Company's Common Stock. As of September 30, 1997, approximately 
967,000 shares of Common Stock remained available for issuance pursuant to the 
Company's acquisition "shelf" registration statement.  The Company anticipates 
making ongoing capital expenditures of approximately $7.9 million in 1997.  
Additionally, the Company approved the authorization to expend approximately 
$6.1 million to construct two new funeral home facilities and perform 
significant renovations and improvements on certain of its existing funeral 
home facilities. These expenditures are expected to be incurred over the next 
6 to 12 months.  Management believes that cash flow from operations and the 
increased borrowing capacity available under the Credit Facility should be 
sufficient to meet its anticipated capital expenditures and other operating 
requirements and to substantially fund acquisitions through the first half of 
1998. The Company continually evaluates alternatives, including additional 
debt or equity financing, to ensure adequate funding for its operations, 
including planned capital expenditures and projected acquisitions. However, 
because future cash flows and the availability of financing at terms favorable 
to the Company are subject to a number of variables, such as the number, size 
and rate of acquisitions made by the Company, there can be no assurance that 
the Company's capital resources will be sufficient to fund planned future 
levels of capital expenditures and acquisitions.  Additional debt and equity 
financings may be required in connection with future acquisitions. The 
availability of these capital sources will depend on prevailing market 
conditions and interest rates and the then-existing financial condition of the 
Company.


                                     18


SEASONALITY

Although the deathcare business is relatively stable and fairly predictable, 
the Company's results of operations may periodically fluctuate due to limited 
seasonality and the timing of acquisitions. Revenues from the Company's 
funeral home operations tend to be somewhat greater in the first and fourth 
quarters of each calendar year while revenues from its cemetery operations 
tend to be somewhat greater in the second and fourth quarters of each calendar 
year.

INFLATION

Inflation has not had a significant impact on the results of operations of the 
Company.

RECENT FASB PRONOUNCEMENTS

In February 1997, the FASB issued Statement of Financial Accounting Standards 
("SFAS") No. 128 "Earnings Per Share" which simplifies the standards for 
computing and presenting earnings per share ("EPS") and makes them comparable 
to international EPS standards. This statement is effective for the year 
ending December 31, 1997. Earlier application is not permitted and restatement 
of prior period EPS data is required. The Company does not believe 
implementation of SFAS No. 128 will have a material impact on its EPS.

In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income" 
and SFAS No. 131 "Disclosures About Segments of an Enterprise and Related 
Information. " SFAS No. 130 establishes standards for reporting and display of 
comprehensive income and its components in a full set of general purpose 
financial statements. SFAS No. 131 establishes standards for the way that 
public enterprises report segment information in annual financial statements 
and requires that those enterprises report selected information about 
operating segments in interim financial reports to shareholders. These 
statements are both effective for fiscal years beginning after December 15, 
1997. The Company does not believe implementation of SFAS Nos. 130 and 131 
will have a material effect on its financial position, results of operation or 
cash flows.




                                      19

<PAGE> 

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

      10.1 -  Amended and Restated Credit Agreement, dated September 2, 1997,
              among the Company, the Banks named therein and NationsBank of
              Texas, N.A., as Agent for the Banks.

      11.1 -  Statement regarding computation of per share earnings

      27   -  Financial Data Schedule


(b)  Reports on Form 8-K

     The Company did not file any reports on Form 8-K during the quarter ended 
     September 30, 1997.




                                      20

<PAGE> 

SIGNATURE

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.

Date:  November 14, 1997

EQUITY CORPORATION INTERNATIONAL

By:  /s/ W. Cardon Gerner
     ------------------------
     Senior Vice President
     Chief Financial Officer
    (Principal Financial Officer and Duly Authorized Officer)





                                      21



</TABLE>