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 June 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: August 1, 1997: 5,010,084

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



<PAGE>



                           MILLION DOLLAR SALOON, INC.

                 Form 10-QSB for the Quarter ended June 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

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

                                                ASSETS
                                                ------
<TABLE>
<S>                                                           <C>                  <C> 

                                                              (Unaudited)            (Audited)
                                                                 June 30,           December 31,
                                                                   1997                1996
                                                              -----------           ------------
CURRENT ASSETS
   Cash on hand and in bank                                    $   280,208          $   267,856
   Note receivable - current portion                                21,011               21,011
   Inventory                                                        11,344               11,169
   Prepaid expenses                                                 49,958               37,718
                                                               -----------          -----------
         Total current assets                                      362,521              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                                (1,432,526)          (1,381,016)
                                                               -----------          -----------
                                                                 1,332,445            1,403,218
   Land                                                            741,487              816,487
                                                               -----------          -----------
         Net property and equipment                              2,073,932            2,219,705
                                                               -----------          -----------

OTHER ASSETS
   Note receivable - noncurrent portion                            116,699              126,219
   Accounts receivable from officers,
     shareholders and affiliates                                   785,401              764,576
   Organization costs, net of accumulated
     amortization of $28,666 and $19,673
     respectively                                                   46,262               55,255
   Loan costs, net of accumulated amortization
     of $11,062 and $7,902, respectively                            20,545               23,705
   Deferred tax asset                                               61,500               61,500
   Other                                                            23,475               23,475
                                                               -----------          -----------
         Total other assets                                      1,053,882            1,054,730
                                                               -----------          -----------

TOTAL ASSETS                                                    $3,490,335           $3,612,189
                                                                 =========            =========
</TABLE>

                                  - Continued -

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

                                        3

<PAGE>



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

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

<TABLE>
<S>                                                                      <C>               <C> 

                                                                         (Unaudited)        (Audited)
                                                                           June 30,        December 31,
                                                                             1997             1996
                                                                         ------------      ------------
CURRENT LIABILITIES
   Current portion of long-term debt                                     $   122,370       $   158,960
   Accounts payable - trade                                                   19,774            15,948
   Accrued liabilities                                                        27,908            58,666
   Accrued income taxes payable                                               46,700               -
   Dividends payable                                                         100,276           150,303
   Tenant deposits                                                            11,050             6,500
                                                                        ------------      ------------
         Total current liabilities                                           328,078           390,377
                                                                        ------------      ------------

LONG-TERM LIABILITIES
   Long-term debt, net of current maturities                                 453,563           512,423
   Deferred tax liability                                                     94,569            94,569
                                                                        ------------      ------------
         Total liabilities                                                   876,210           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.  5,010,084 issued and outstanding, respectively.             5,010             5,010
   Additional paid-in capital                                                  9,990             9,990
   Retained earnings                                                       2,610,372         2,599,820
                                                                       -------------      ------------
                                                                           2,625,372         2,614,820
   Treasury stock - at cost                                                  (11,247)                -
                                                                       -------------      ------------
         Total shareholders' equity                                        2,614,125         2,614,820
                                                                       -------------      ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                $3,490,335        $3,612,189
                                                                           =========         =========

</TABLE>


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

                                        4

<PAGE>

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


                                           Six months     Six months      Three months     Three months
                                             ended          ended            ended            ended
                                          June 30, 1997   June 30, 1996   June 30, 1997    June 30, 1996
                                          -------------   -------------   -------------    -------------
REVENUES
   Bar and restaurant sales               $1,772,768      $1,671,144      $   931,698        $794,866
   Rental income                             220,612         206,168          109,807         101,963
                                          ----------      ----------       ----------         -------
      Total revenues                       1,993,380       1,877,312        1,041,505         896,829
                                          ----------      ----------       ----------         -------

COST OF SALES - BAR
   AND RESTAURANT
   OPERATIONS                              1,040,515       1,016,660          567,957         520,418
                                          ----------      ----------       ----------         -------

GROSS PROFIT                                 952,865         860,652          474,548         376,411
                                          ----------      ----------       ----------         -------

OPERATING EXPENSES
   General and
      administrative expenses                520,330         479,968          263,200         246,762
   Interest expense                           34,339          58,119           17,048          39,480
   Depreciation and amortization              58,782          54,170           29,330          27,085
                                         -----------      ----------       ----------       ---------
      Total operating expenses               613,451         592,257          309,578         313,327
                                         -----------      ----------       ----------       ---------

INCOME FROM OPERATIONS                       339,414         268,395          164,970          63,084

OTHER INCOME (EXPENSES)
   Interest and other miscellaneous           20,019          25,310           10,453          22,051
   Gain on sale of fixed assets               48,499               -                -               -
                                         -----------      ----------       ----------       ---------

INCOME BEFORE
   INCOME TAXES                              407,932         293,705          175,423          85,135

INCOME TAX (EXPENSE)
   BENEFIT
   Currently payable                         (96,700)         5,105           (42,700)          5,105
   Deferred                                        -        (70,900)                -               -
                                         -----------     ----------        ----------        --------

NET INCOME                               $   311,232    $   227,910       $   132,723       $  90,240
                                          ==========     ==========        ==========        ========

Earnings per share of
   common stock outstanding                    $0.06          $0.05             $0.03           $0.02
                                                ====           ====              ====            ====

Weighted-average number
   of shares outstanding                   5,010,084      5,010,084         5,010,084       5,010,084
                                           =========      =========         =========       =========
</TABLE>

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

                                        5

<PAGE>

                  MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six months ended June 30, 1997 and 1996
                                   (Unaudited)
<TABLE>        
<S>                                                                     <C>               <C>     
  
                                                                         Six months        Six months
                                                                           ended            ended
                                                                        June 30, 1997     June 30, 1996
                                                                        -------------     -------------
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                             $311,232          $227,910
   Adjustments to reconcile net income to net cash
      provided by operating activities
         Depreciation and amortization                                      58,782            51,587
         Gain on sale of fixed assets                                      (48,499)                -
         Common stock issued for consulting fees                                 -            10,000
         Interest income from shareholders capitalized as principal        (20,825)                -
         (Increase) decrease in
            Accounts receivable - trade                                          -            28,550
            Federal income taxes receivable                                      -             8,520
            Inventory                                                         (175)             (514)
            Prepaid expenses                                               (12,240)                -
            Deferred tax asset and other                                         -            (5,000)
         Increase (decrease) in
            Accounts payable and other accrued liabilities                 (26,932)          (77,970)
            Tenant deposits                                                  4,550                 -
            Income taxes payable                                            46,700            70,900
                                                                          --------          --------
Net cash provided by operating activities                                  312,593           313,983
                                                                          --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES
   Principal collections on note receivable                                  9,520             9,581
   Net proceeds from sale of fixed assets                                  149,374                 -
   Purchases of property and equipment                                      (1,731)           (2,399)
                                                                          --------          --------
Net cash used in investing activities                                      157,163             7,182
                                                                          --------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES
   Principal advances on notes payable                                           -           500,000
   Principal payments on notes payable                                     (95,450)          (66,913)
   Funds advanced to affiliated and shareholders - net                           -           (37,667)
   Purchase of treasury stock                                              (11,247)                -
   Dividends paid                                                         (350,707)         (150,303)
                                                                          --------           -------
Net cash used in financing activities                                     (457,404)          245,117
                                                                          --------          --------

INCREASE IN CASH AND CASH EQUIVALENTS                                       12,352           566,282
Cash and cash equivalents at beginning of period                           267,856           133,374
                                                                          --------          --------

Cash and cash equivalents at end of period                                $280,208           $699,656
                                                                           =======            =======
</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
                     Six months ended June 30, 1997 and 1996
                                   (Unaudited)

<TABLE>
<S>                                                              <C>              <C>     

                                                                  Six months        Six months
                                                                    ended             ended
                                                                 June 30, 1997     June 30, 1996
                                                                 ------------      -------------
SUPPLEMENTAL DISCLOSURES OF
   INTEREST AND INCOME TAXES PAID

      Interest paid during the period                                 $34,339          $60,702
                                                                       ======           ======

      Income taxes paid (refunded)                                    $50,000          $(8,520)
                                                                       ======           ======


SUPPLEMENTAL SCHEDULE OF NON-CASH
   INVESTING AND FINANCING ACTIVITIES

      Declaration of second quarter
         dividend at $0.02 per share                                 $100,276         $      -
                                                                      =======          ======= 

      Acquisition of vehicle on lease payable                        $      -         $ 52,727
                                                                      =======          ======= 
</TABLE>










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 June 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   remains  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  $100,000  for the first six months of 1997 as compared to the six
months of 1996.  During the second quarter,  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  $12,000  during this  quarter as compared to the same
period in the prior year.

Cost of sales increased by approximately  $24,000 during the first six 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 47.8% for the
first six months of 1997  versus  45.8% for the first six  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.

Operating expenses increased by approximately $21,000 in the first six months of
1997 versus the first six months of 1996.  This increase of  approximately  9.0%
relate to increases in advertising and marketing  expenses to offset the decline
in convention and meeting driven traffic and increase locally derived  patronage
and  to  other  nonspecific  increases  in  overall  administrative  and  office
expenses.  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 $359,000 for the first six months of
1997 versus  approximately  $294,000 for the first six months of 1996. After-tax
net income has increased by approximately $83,000 yielding earnings per share of
approximately  $0.06 per share for the first six months of 1997 as  compared  to
approximately $0.05 per share for the first six months of 1996.

(2)   Liquidity
As of June 30, 1997, the Company has working capital of approximately $34,000 as
compared to $24,000 at June 30, 1996. The Company  achieved  positive cash flows
from  operations  of  approximately  $312,600  for the first six  months of 1997
versus approximately $314,000 for the first six 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.

The  Company   anticipates  the  continuance  of  dividend   payments  and  paid
approximately  $350,000 in the first six months of 1997 and  declared a dividend
of  approximately  $100,000  to be paid in the  third  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.


                                       10

<PAGE>



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.




August 4, 1997                                       /s/ Nina J. Furrh
                                                    ----------------------------
                                                                   Nina J. Furrh
                                                          President and Director



August 4, 1997                                     /s/ Ronald W. Johnston
                                                   -----------------------------
                                                              Ronald W. Johnston
                                            Chief Financial Officer and Director


                                       12

<PAGE>