UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB


(Mark one)
      XX   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---------  ACT OF 1934
           

                For the quarterly period ended September 30, 1997

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

         For the transition period from ______________ to _____________

                         Commission File Number: 0-27006

                           MILLION DOLLAR SALOON, INC.
        (Exact name of small business issuer as specified in its charter)

           Nevada                                               13-3428657
  (State of incorporation)                              (IRS Employer ID Number)

                    6848 Greenville Avenue, Dallas, TX 75231
                    (Address of principal executive offices)

                                 (214) 691-6757
                           (Issuer's telephone number)



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES X NO

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: October 28, 1997: 5,218,500

Transitional Small Business Disclosure Format (check one):    YES       NO X



<PAGE>



                           MILLION DOLLAR SALOON, INC.

              Form 10-QSB for the Quarter ended September 30, 1997

                                Table of Contents


                                                                           Page
Part I - Financial Information

  Item 1   Financial Statements                                              3

  Item 2   Management's Discussion and Analysis or Plan of Operation        10


Part II - Other Information

  Item 1   Legal Proceedings                                                11

  Item 2   Changes in Securities                                            11

  Item 3   Defaults Upon Senior Securities                                  11

  Item 4   Submission of Matters to a Vote of Security Holders              11

  Item 5   Other Information                                                11

  Item 6   Exhibits and Reports on Form 8-K                                 11







                                                                               2

<PAGE>



Part 1 - Item 1 - Financial Statements
<TABLE>
<CAPTION>


                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    September 30, 1997 and December 31, 1996

                                     ASSETS
<S>                                                                              <C>        

                                                                    (Unaudited)    (Audited)
                                                                   September 30,  December 31,
                                                                         1997           1996
                                                                                    -----------
CURRENT ASSETS
   Cash on hand and in bank                                          $   266,738    $   267,856
   Note receivable - current portion                                      21,011         21,011
   Inventory                                                              10,743         11,169
   Prepaid expenses                                                       63,424         37,718
                                                                     -----------    -----------

         Total current assets                                            361,916        337,754
                                                                     -----------    -----------


PROPERTY AND EQUIPMENT
   Buildings and related improvements                                  1,955,132      1,969,411
   Furniture and equipment                                               757,111        762,095
   Vehicles                                                               52,728         52,728
                                                                     -----------    -----------
                                                                       2,764,971      2,784,234
   Less accumulated depreciation                                      (1,455,778)    (1,381,016)
                                                                     -----------    -----------
                                                                       1,309,193      1,403,218
   Land                                                                  741,487        816,487
                                                                     -----------    -----------

         Net property and equipment                                    2,050,680      2,219,705
                                                                     -----------    -----------


OTHER ASSETS
   Note receivable - noncurrent portion                                  111,134        126,219
   Accounts receivable from officers,  shareholders and affiliates       795,542        764,576
   Organization costs, net of accumulated amortization
      of $33,162 and $19,673, respectively                                41,766         55,255
   Loan costs, net of accumulated amortization of
       $12,642 and $7,902, respectively                                   18,965         23,705
   Deferred tax asset                                                     61,500         61,500
   Other                                                                  23,475         23,475
                                                                     -----------    -----------

         Total other assets                                            1,052,382      1,054,730
                                                                     -----------    -----------

TOTAL ASSETS                                                         $ 3,464,978    $ 3,612,189
                                                                     ===========    ===========
</TABLE>

                                  - Continued -

The financial  information  presented  herein has been  prepared  by  management
  without audit by independent certified public accountants.
                                                                               3

<PAGE>


<TABLE>
<CAPTION>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS - CONTINUED
                    September 30, 1997 and December 31, 1996

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                                             <C>    

                                                          (Unaudited)     (Audited)
                                                          September 30,  December 31,
                                                               1997           1996
                                                          ------------   ------------
CURRENT LIABILITIES
   Current portion of long-term debt                       $   122,370    $   158,960
   Accounts payable - trade                                     20,120         15,948
   Accrued liabilities                                          24,619         58,666
   Dividends payable                                            78,280        150,303
   Tenant deposits                                              13,325          6,500
                                                           -----------    -----------

         Total current liabilities                             258,714        390,377
                                                           -----------    -----------


LONG-TERM LIABILITIES
   Long-term debt, net of current maturities                   416,756        512,423
   Deferred tax liability                                       94,569         94,569
                                                           -----------    -----------

         Total liabilities                                     770,039        997,369
                                                           -----------    -----------

 

COMMITMENTS AND CONTINGENCIES


SHAREHOLDERS' EQUITY
   Preferred stock - $0.001 par value.  5,000,000 shares
      authorized.  None issued and outstanding                    --             --
   Common stock - $0.001 par value.  50,000,000 shares
      authorized.  5,218,500 and 5,010,084 issued
      and outstanding, respectively                              5,219          5,010
   Additional paid-in capital                                    9,781          9,990
   Retained earnings                                         2,691,186      2,599,820
                                                           -----------    -----------
                                                             2,706,186      2,614,820
   Treasury stock - at cost                                    (11,247)          --
                                                           -----------    -----------

         Total shareholders' equity                          2,694,939      2,614,820
                                                           -----------    -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                 $ 3,464,978    $ 3,612,189
                                                           ===========    ===========


</TABLE>

The financial  information  presented  herein has been  prepared  by  management
  without audit by independent certified public accountants.
                                                                               4

<PAGE>

<TABLE>
<CAPTION>


                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
             Nine and Three months ended September 30, 1997 and 1996
                                   (Unaudited)
<S>                                                                             <C>   <C>    


                                        Nine months    Nine months     Three month    Three months
                                          ended          ended            ended          ended
                                        September 30,  September 30,   September 30,  September 30,
                                            1997           1996           1997           1996
REVENUES                                 -----------    -----------    -----------    -----------
   Bar and restaurant sales              $ 2,605,627    $ 2,473,541    $   832,859    $   802,397
   Rental income                             330,417        313,029        109,805        106,861
                                         -----------    -----------    -----------    -----------
      Total revenues                       2,936,044      2,786,570        942,664        909,258
                                         -----------    -----------    -----------    -----------

COST OF SALES - BAR AND
   RESTAURANT OPERATIONS                   1,507,790      1,480,391        467,275        463,731
                                         -----------    -----------    -----------    -----------

GROSS PROFIT                               1,428,254      1,306,179        475,389        445,527
                                         -----------    -----------    -----------    -----------

OPERATING EXPENSES
   General and administrative expenses       782,376        732,812        262,046        252,844
   Interest expense                           49,976         73,664         15,637         15,545
   Depreciation and amortization              87,110         85,651         28,328         31,481
                                         -----------    -----------    -----------    -----------
      Total operating expenses               919,462        892,127        306,011        299,870
                                         -----------    -----------    -----------    -----------

INCOME FROM OPERATIONS                       508,792        414,052        169,378        145,657

OTHER INCOME (EXPENSES)
   Interest and other miscellaneous           38,035         48,167         18,016         22,857
   Gain on sale of fixed assets               48,499           --             --             --
                                         -----------    -----------    -----------    -----------

INCOME BEFORE
   INCOME TAXES                              595,326        462,219        187,394        168,514

INCOME TAX (EXPENSE) BENEFIT
   Currently payable                        (125,000)          --          (28,300)        (5,105)
   Deferred                                     --          (70,900)          --             --
                                         -----------    -----------    -----------    -----------

NET INCOME                               $   470,326    $   391,319    $   159,094    $   163,409
                                         ===========    ===========    ===========    ===========

Earnings per share of
   common stock outstanding              $      0.09    $      0.08    $      0.03    $      0.03
                                         ===========    ===========    ===========    ===========

Weighted-average number
   of shares outstanding                   5,018,406      5,010,084      5,034,780      5,010,084
                                         ===========    ===========    ===========    ===========

</TABLE>

The financial  information  presented  herein has been  prepared  by  management
  without audit by independent certified public accountants.
                                                                               5

<PAGE>
<TABLE>
<CAPTION>



                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  Nine months ended September 30, 1997 and 1996
                                   (Unaudited)
<S>                                                                             <C> <C>    

                                                                      Nine months   Nine months
                                                                         ended        ended
                                                                     September 30,  September 30,
                                                                          1997         1996
                                                                      ---------    --------- 
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                         $ 470,326    $ 391,319
   Adjustments to reconcile net income to net cash
      provided by operating activities
         Depreciation and amortization                                   87,110      103,433
         Gain on sale of fixed assets                                   (48,499)        --
         Common stock issued for consulting fees                           --         10,000
         Interest income from shareholders capitalized as principal     (30,966)        --
         (Increase) decrease in
            Federal income taxes receivable                                --          8,520
            Inventory                                                       426         (903)
            Prepaid expenses                                            (25,706)      11,361
            Deferred tax asset and other                                   --         65,900
         Increase (decrease) in
            Accounts payable and other accrued liabilities              (29,875)     (78,420)
            Tenant deposits                                               6,825         --
            Income taxes payable                                           --           --
                                                                      ---------    ---------
Net cash provided by operating activities                               429,641      511,210
                                                                      ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
   Principal collections on note receivable                              15,085       12,857
   Net proceeds from sale of fixed assets                               150,374         --
   Purchases of property and equipment                                   (1,731)      (3,981)
                                                                      ---------    ---------
Net cash used in investing activities                                   163,728        8,876
                                                                      ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Principal advances on notes payable                                     --        500,000
   Principal payments on notes payable                                 (132,257)    (103,065)
   Funds advanced to affiliated and shareholders - net                     --        (47,809)
   Purchase of treasury stock                                           (11,247)        --
   Dividends paid                                                      (450,983)    (225,453)
                                                                      ---------    ---------
Net cash used in financing activities                                  (594,487)     123,673
                                                                      ---------    ---------

INCREASE IN CASH AND CASH EQUIVALENTS                                    (1,118)     643,759
Cash and cash equivalents at beginning of period                        267,856      133,374
                                                                      ---------    ---------
Cash and cash equivalents at end of period                            $ 266,738    $ 777,133
                                                                      =========    =========

</TABLE>

                                                   - Continued -

The financial  information  presented  herein has been  prepared  by  management
  without audit by independent certified public accountants.
                                                                               6

<PAGE>



                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                  Nine months ended September 30, 1997 and 1996
                                   (Unaudited)

                                                     Nine months   Nine months
                                                      ended          ended
                                                     September 30  September 30,
                                                         1997         1996
SUPPLEMENTAL DISCLOSURES OF                          ------------  ------------
   INTEREST AND INCOME TAXES PAID

      Interest paid during the period                $ 49,976       $ 48,167
                                                     ========       ========
      Income taxes paid (refunded)                   $125,000       $ (8,520)
                                                     ========       ========


SUPPLEMENTAL SCHEDULE OF NON-CASH
   INVESTING AND FINANCING ACTIVITIES

      Declaration of third quarter
         dividend at $0.015 per share                $ 78,279       $   --
                                                     ========       ========

      Acquisition of vehicle on lease payable        $     --       $ 52,727
                                                     ========       ========





The financial  information  presented  herein has been  prepared  by  management
  without audit by independent certified public accountants.                   
                                                                               7
<PAGE>



                           MILLION DOLLAR SALOON, INC.

                          Notes to Financial Statements


Note 1 - Basis of Presentation

Million Dollar Saloon,  Inc.  (Company) was  incorporated  under the laws of the
State of Nevada on September 28, 1987.  These financial  statements  reflect the
books and  records of Million  Dollar  Saloon,  Inc.  (Nevada),  Million  Dollar
Saloon, Inc. (Texas),  Furrh, Inc., Tempo Tamers, Inc., Corporation Lex and Don,
Inc.  for the  periods  ended  September  30, 1997 and 1996,  respectively.  All
significant intercompany  transactions have been eliminated in combination.  The
consolidated entities are referred to as Company.

During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the  Securities and Exchange  Commission.  The
December  31,  1996  balance  sheet  data was  derived  from  audited  financial
statements  of the  Company,  but does not include all  disclosures  required by
generally  accepted  accounting  principles.   Users  of  financial  information
provided for interim  periods should refer to the annual  financial  information
and footnotes  contained in its Annual Report Pursuant to Section 13 or 15(d) of
The  Securities  Exchange Act of 1934 on Form 10-KSB when  reviewing the interim
financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in accordance with the instructions for Form 10-QSB,  are unaudited and
contain  all  material   adjustments,   consisting  only  of  normal   recurring
adjustments  necessary to present  fairly the  financial  condition,  results of
operations  and cash flows of the Company  for the  respective  interim  periods
presented.  The  current  period  results  of  operations  are  not  necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1997.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.


Note 2 - Summary of Significant Accounting Policies

a) Accounting principles adopted during the current period

   During the first quarter of 1997,  effective at the beginning of the quarter,
   the Company adopted Financial  Accounting  Standard No. 121,  "Accounting for
   the Impairment of Long-Lived  Assets and for Long-Lived Assets to be Disposed
   Of". In  accordance  with the  Standard,  the  Company  adopted the policy of
   evaluating all qualifying assets as of the end of each reporting quarter.  No
   adjustments  for  impairment  were  charged  to  operations  during the first
   quarter of 1997.


                                                                               8

<PAGE>



                           MILLION DOLLAR SALOON, INC.

                    Notes to Financial Statements - Continued


Note 3 - Property and equipment

   During the first  quarter of 1997,  the Company  sold a rental  property  for
   gross cash proceeds of  approximately  $149,474,  net of closing  costs,  and
   recognized a gain of approximately $48,499.


Note 4 - Contingencies

   The Company was  previously  the  subject of  asserted  claims of  employment
   discrimination  filed  with  the  Equal  Employment   Opportunity  Commission
   ("EEOC").   The  Company  has   previously   responded   to  the  charges  of
   discrimination and replied to all EEOC requests for information.  The Company
   vigorously contested each claim of discrimination.

   During  the  second  quarter  of 1997,  the  statutory  period  for filing of
   administrative claims or litigation passed with no action instigated taken by
   either  the EEOC or the  individuals  making  the  employment  discrimination
   assertions.  Accordingly,  no further action may be taken against the Company
   related to this matter.




                (Remainder of this page left blank intentionally)


                                                                               9

<PAGE>



Part I - Item 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
   AND RESULTS OF OPERATIONS

(1)   Results of Operations

Bar and restaurant operations increased by approximately  $132,000 for the first
nine months of 1997 as  compared  to the first nine  months of 1996.  During the
second quarter of 1997,  management instituted new controls over bar inventories
and the Company experienced  increased traffic due to the completion and opening
of a new mass  transit  rail  station  near the  Company's  adult  entertainment
operation.  This  increase  was  mitigated  by lower  convention  traffic in the
Dallas-Ft.  Worth  Metroplex  during this time  period,  which is one of the key
factors  contributing to the Company's patronage factors.  Additionally,  due to
scheduled   increases,   the  Company   experienced  higher  rental  incomes  of
approximately  $17,000 during this quarter as compared to the same period in the
prior year.

Cost of sales increased by approximately $27,000 during the first nine months of
1997 as compared to the same expenses for the same period in 1996. This increase
is related to increased  sales  impacting  variable  costs related to consumable
inventories,  supplies and related  State excise taxes,  principally  during the
second quarter.  Gross profit  percentages  increased  slightly to 48.7% for the
first nine months of 1997 versus  46.9% for the first nine months of 1996.  This
increase relates  directly to the new management  controls over bar inventories.
These cost versus sales  relationships  are  anticipated by management to remain
stable for the remainder of 1997.

General and administrative  expenses  increased by approximately  $50,000 in the
first nine months of 1997 versus the first nine  months of 1996.  This  increase
relates to increases in advertising and marketing expenses to offset the decline
in convention and meeting driven traffic and increase locally derived  patronage
and increased legal and accounting fees related to preliminary investigations of
potential merger and/or acquisition  candidates.  The Company has not identified
any suitable  merger or  acquisition  candidates as a result of the  preliminary
investigations.  Management  continues  to  monitor  its  expenditure  levels to
achieve optimum financial results.

Net income before  income taxes,  excluding the gain on the sale of fixed assets
of approximately  $48,000, was approximately  $547,000 for the first nine months
of 1997  versus  approximately  $462,000  for the  first  nine  months  of 1996.
After-tax net income has increased by approximately  $79,000  yielding  earnings
per share of approximately  $0.09 per share for the first nine months of 1997 as
compared to approximately $0.08 per share for the first nine months of 1996.

(2)   Liquidity

As of  September  30,  1997,  the Company has working  capital of  approximately
$103,000 as compared to $112,000 at  September  30, 1996.  The Company  achieved
positive cash flows from operations of approximately $430,000 for the first nine
months of 1997 versus approximately $511,000 for the first nine months of 1996.

The Company has identified no significant  capital  requirements for the current
annual period.  Liquidity requirements mandated by future business expansions or
acquisitions,  if any are specifically identified or undertaken, are not readily
determinable  at this  time as no  substantive  plans  have been  formulated  by
management.


                                                                              10

<PAGE>



The  Company   anticipates  the  continuance  of  dividend   payments  and  paid
approximately  $451,000  through  the first nine  months of 1997 and  declared a
dividend  of  approximately  $78,000 to be paid in the  fourth  quarter of 1997.
Future operating  liquidity,  debt service and dividend payments are expected to
be sustained  from  continuing  operations.  Additionally,  management is of the
opinion that there is additional potential  availability of incremental mortgage
debt and the opportunity for the sale of additional  common stock through either
private placements or secondary offerings.


Part II - Other Information

Item 1 - Legal Proceedings

   None

Item 2 - Changes in Securities

   None

Item 3 - Defaults on Senior Securities

   None

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

   The Company has held no regularly  scheduled,  called or special  meetings of
   shareholders during the reporting period.

Item 5 - Other Information

   None

Item 6 - Exhibits and Reports on Form 8-K

   None


                                                                              11

<PAGE>


                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                                     MILLION DOLLAR SALOON, INC.
                                      



October    28   , 1997                            /s/ Nina J. Furrh
        --------                             -----------------------------------
                                                                   Nina J. Furrh
                                                          President and Director



October    28   , 1997                           /s/ Ronald W. Johnston
        --------                            ------------------------------------
                                                              Ronald W. Johnston
                                            Chief Financial Officer and Director