[TEST]
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                  U.S. SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C.  20549



                               FORM 10-QSB

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


For the Quarter ended  September 30, 1995   Commission File Number  0-9659
                       ------------------                           ------


                               SIGNATURE INNS, INC.
------------------------------------------------------------------------------
                (Exact name of registrant as specified in its charter)


          Indiana                            35-1426996
-------------------------------         ------------------------------------
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
incorporation or organization)


250 East 96th Street, Suite 450, Indianapolis, Indiana      46240
------------------------------------------------------      ----------
(Address of principal executive office)                     (Zip Code)

Registrant's telephone number, including area code     (317) 581-1111
                                                       --------------


Check whether the Registrant (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days.

                              Yes      X        No
                                   -------        -------     



7,783,827 Common Shares were outstanding as of November 10, 1995.




<PAGE>
                         SIGNATURE INNS, INC.

                                 INDEX


Part I - FINANCIAL INFORMATION
------------------------------

     Item 1. Financial Statements (Unaudited)

          Consolidated Statements of Operations
          Three and nine months ended September 30, 1995 and 1994

          Consolidated Balance Sheets
          September 30, 1995 and December 31, 1994

          Consolidated Statements of Shareholders' Equity
          Nine months ended September 30, 1995 and year ended
          December 31, 1994

          Consolidated Statements of Cash Flows
          Nine months ended September 30, 1995 and 1994

          Notes to Consolidated Financial Statements

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

Part II - OTHER INFORMATION
---------------------------

<PAGE>
<TABLE>

                                      SIGNATURE INNS, INC.
                         CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                      Three months Ended           Nine Months Ended
                                                        September 30,                 September 30,   
------------------------------------------------------------------------------------------------------------
                                                       1995      1994              1995       1994
                                                  ----------- -----------        ---------- -----------
<S>                                               <C>         <C>                <C>        <C>             
Revenues:
     Hotel revenues                              $1,028,358       995,297         2,687,484   3,127,351 
     Management and franchise fees                  924,252       896,265         2,405,060   2,327,358 
                                                  ----------    ----------        ----------  ----------
                                                  1,952,610     1,891,562         5,092,544   5,454,709 
                                                  ----------    ----------        ----------  ----------
Costs and expenses:
     Hotel costs and expenses                       477,115       455,453         1,322,526   1,610,888 
     Hotel depreciation and amortization             65,439        72,807           196,317     319,121 
     General and administrative expenses            567,042       505,449         1,688,540   1,599,033 
     Other depreciation and amortization             64,498        27,378           120,451      82,287 
                                                  ----------    ----------        ----------  ----------
                                                  1,174,094     1,061,087         3,327,834   3,611,329 
                                                  ----------    ----------        ----------  ----------

           Operating income                         778,516       830,475         1,764,710   1,843,380 
                                                  ----------    ----------        ----------  ----------

Other income (deductions):
     Equity in income of hotel
      limited partnerships                          348,102       310,336           649,072     700,544 
     Interest income                                 78,945        45,159           195,748     103,408 
     Interest expense - hotels                     (160,680)     (164,047)         (477,682)   (671,292)
     Interest expense - corporate                   (74,293)     (111,087)         (274,050)   (332,987)
     Capital appreciation fee                      (154,349)      (73,341)         (610,990)   (164,617)
     Gain (loss) on disposition of
      hotel, land and related assets                163,032          (697)          163,032      11,285
     Other                                          (77,717)      (55,028)         (150,974)    (87,021)
                                                  ----------     ----------        ----------  ----------
                                                   (123,040)      (48,705)         (505,844)   (440,680)
                                                  ----------     ----------        ----------  ----------

Income before extraordinary item                    901,556       781,770          1,258,866   1,402,700 
Extraordinary item - gain
     from debt extinguishment                          -             -                  -        277,805 
                                                  ----------    ----------         ----------  ----------

     Net Income                                  $  901,556       781,770          1,258,866   1,680,505 
                                                  ==========    ==========         ==========  ==========

Per common share data:
     Income before                                                             
       Extraordinary item                               0.12          0.10               0.16        0.23
     Extraordinary item                                 -            -                   -           0.05
                                                  ----------    ----------          ---------- ----------
       Net income                                $      0.12          0.10                0.16       0.28
                                                  ==========    ==========          ========== ==========

Weighted average shares
     outstanding                                  7,783,827     7,783,827           7,783,827  6,019,475 
                                                  ==========    ==========          ========== ==========

</TABLE>
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<TABLE>

                                             SIGNATURE INNS, INC.
                                        CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                            September 30,         December 31,
                                                               1995                   1994
------------------------------------------------------------------------------------------------------------
              ASSETS
<S>                                                        <C>                    <C>         
Current assets:
     Cash and cash equivalents:
     Corporate                                              1,198,655              1,153,753
     Consolidated hotels                                    1,249,868                881,760
                                                            ----------             ----------
                                                            2,448,523              2,035,513

     Other current assets                                     565,309                491,886 
                                                            ----------             ----------
     Total current assets                                   3,013,832              2,527,399 
                                                            ----------             ----------

Hotel limited partnerships:
     Equity investments                                     1,325,667              1,377,930 
     Receivables, net                                       3,630,712              3,429,712 
                                                            ----------             ----------
                                                            4,956,379              4,807,642 
                                                            ----------             ----------

Property and equipment, net:
     Consolidated hotels                                    5,218,410              5,327,740 
     Land held for sale                                       913,739                913,739 
     Corporate                                                269,629                301,726 
                                                            ----------             ----------
                                                            6,401,778              6,543,205 
                                                            ----------             ----------

Deferred costs and other assets, net of accumulated
     amortization of $448,173 and $452,990                    318,515                215,721 
                                                           -----------            -----------
                                                          $14,690,504             14,093,967 
                                                           ===========            ===========


     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Current portion of long-term debt:
       Consolidated hotels                                     65,306              3,128,478 
       Corporate subordinate note                             455,560                   -    
     Other current liabilities                                723,611                527,037 
                                                            ----------             ----------
     Total current liabilities                              1,244,477              3,655,515 
                                                            ----------             ----------

Long-term debt, less current portion:
     Consolidated hotels                                    6,652,248              3,596,888 
     Corporate line of credit                                 900,000              1,500,000 
     Corporate subordinate note                             1,244,440              1,800,000 
     Accrued capital appreciation fee                            -                   289,010 
                                                           -----------             -----------
                                                            8,796,688              7,185,898 
                                                           -----------             -----------

Other partners' equity                                        216,663                148,369 
                                                           -----------            -----------
     Total liabilities                                     10,257,828             10,989,782 
                                                           -----------            -----------


Shareholders' equity:
     Common stock, no par value.
       Authorized 20,000,000 shares                         9,805,973              9,736,348 
     Accumulated deficit                                   (5,373,297)            (6,632,163)
                                                           -----------            -----------
     Total shareholders' equity                             4,432,676              3,104,185 
                                                           -----------            -----------
                                                          $14,690,504             14,093,967 
                                                           ===========            ===========
</TABLE>
<PAGE>
<TABLE>

                                            SIGNATURE INNS, INC.
                       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

<CAPTION>

                                                           Common Stock                        
                                                  _______________________________   Accumulated
                                                       Shares         Amount           Deficit          Total

____________________________________________________________________________________________________________________
<S>                                                    <C>            <C>              <C>              <C>
Balance at December 31, 1993                           3,425,807      $9,235,445       (8,738,218)        497,227 

 Net income                                                                             2,106,055       2,106,055 
 Common shares issued                                  4,358,020         779,403                          779,403 
 Notes receivable                                                       (278,500)                        (278,500)
                                                       ----------     -----------      -----------      ----------

Balance at December 31, 1994                           7,783,827       9,736,348       (6,632,163)      3,104,185 

 Net income                                                                             1,258,866       1,258,866 
 Collection of notes receivable                                           69,625                           69,625 
                                                       ----------     -----------      -----------      ----------
Balance at September 30, 1995                          7,783,827      $9,805,973       (5,373,297)      4,432,676 
                                                       ==========     ===========      ===========      ==========

</TABLE>
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<TABLE>
 
                                SIGNATURE INNS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
---------------------------------------------------------------------------------------
Nine months ended September 30                             1995        1994
---------------------------------------------------------------------------------------
<S>                                                        <C>         <C>  
Cash flows from operating activities:
 Net income                                                $1,258,866   1,680,505 
 Items which do not use (provide) cash:
   Depreciation of property and equipment                     248,555     357,094 
   Amortization of deferred costs                              68,213      44,314 
   Equity in income of hotel limited partnerships, net       (649,072)   (700,544)
   Other partners' equity in income                           191,347     110,393 
   Capital appreciation fee accrual                           610,990     164,617 
   Gain from debt extinguishment                                 -       (277,805)
   Gain on disposal of hotel                                 (163,032)    (11,285)
   Other current items                                        123,151     (88,929)
   Other non-current items                                    (19,381)    (25,407)
                                                            ----------  ----------
      Net cash provided by operating activities             1,669,637   1,252,953 
                                                            ----------  ----------

Cash flows from investing activities:
 Proceeds from sale of hotel                                  163,032   4,310,000 
 Property and equipment additions                            (104,359)    (49,659)
 Distributions received from 
   hotel limited partnership                                  717,947     451,651 
 Loans to hotel limited partnerships                             -       (556,600)
 Advances to hotel limited partnership, net                  (201,000)     80,000 
 Deferred costs and other assets                             (171,007)    (23,952)
                                                             ---------  ----------
    Net cash provided by investing activities                 404,613   4,211,440 
                                                             ---------  ----------
Cash flows from financing activities:
 Proceeds of long-term debt                                 2,100,000        -
 Repayments of long-term debt                              (3,707,812) (5,090,340)
 Proceeds from issuance of common stock                        69,625     500,903 
 Cash distributions to partners 
   by consolidated hotel                                     (123,053)     (7,500)
                                                             ---------  ----------
      Net cash used by financing activities                (1,661,240) (4,596,937)
                                                           -----------  ----------

Change in cash and cash equivalents                           413,010     867,456 

Cash and cash equivalents at beginning of period            2,035,513   1,219,946 
                                                           -----------  ----------

Cash and cash equivalents at end of period                 $2,448,523   2,087,402 
                                                           ===========  ==========
Supplemental information:
 Interest paid                                              $ 655,546     915,903 
                                                            ==========  ==========
 Income taxes paid                                          $  19,637      11,000 
                                                            ==========  ==========
</TABLE>
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SIGNATURE INNS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1995



NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information.  Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  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
period are not necessarily indicative of the results that may be expected for
the year ended December 31, 1995.  For further information, refer to the
financial statements included in the Registrant's annual report on Form 10-KSB
for the year ended December 31, 1994.


NOTE B - AGREEMENT TO REFINANCE SUBORDINATE DEBT

In August 1995 the Company reached an agreement with Banc One Capital Partners
II (BOCP II) to repay the $1,800,000 variable rate subordinate note and 
satisfy the capital appreciation fee obligation prior to their contractual 
maturity.  On September 1, 1995 the Company repaid the balance of the 
subordinate note along with a single $900,000 cash payment in full 
satisfaction of the capital appreciation fee.  The agreement provides that if 
a change of control of the Company, as defined, occurs prior to December 1996 
an additional fee may be payable to BOCP II.

The source of funds for this transaction was provided by a new $1,700,000
term note from Bank One, Indianapolis along with an advance from the Company's
line of credit and corporate cash.  The new term note requires monthly
principal payments through December 1998 along with interest at the prime rate
plus 1.25% per annum.  


<PAGE>

     Management's Discussion and Analysis of Financial Condition
                    and Results of Operations

Hotel Operations

Hotel operations of two hotels owned by consolidated affiliates (Indianapolis
South and Elkhart) are included in the statement of operations for the nine 
months ended September 30, 1995 and 1994.  The operating results of the 
Knoxville hotel is reflected in the statement of operations through May 1994, 
the date the Company-owned hotel was sold to an affiliated partnership. 

Hotel revenues of $2,687,484 for the nine months ended September 30, 1995
represented a $439,867 decrease compared to the same period of 1994.  Hotel
revenues from the two hotels owned by consolidated affiliates increased
$180,400 for the nine months; the offsetting decrease resulted from the
disposition of the Knoxville hotel in May 1994.  The increased revenues of the
two hotels owned by consolidated affiliates resulted from a combined increase 
in occupancy and average room rates for the period.  Hotel revenues for the 
third quarter of 1995 represented a 3.3% increase compared to the same quarter 
in 1994 due to the increased performance at the two hotels owned by
consolidated affiliates.

Hotel costs and expenses of $1,322,526 for the nine months ended September 30, 
1995 represented a $288,362 decrease compared to the same period of 1994.  
Hotel costs and expenses from the two hotels owned by consolidated affiliates
increased $67,093 for the period, due primarily to the increase in the number
of rooms sold, and the offsetting decrease resulted from the disposition of
the Knoxville hotel in May 1994.  Hotel costs and expenses for the third
quarter of 1995 represented a 4.8% increase compared to the same quarter in
1994 due to the increase in the number of rooms sold at the two hotels owned
by consolidated affiliates.

Hotel depreciation and amortization expense decreased $122,804 for the nine
months ended September 30, 1995 compared to the same period of 1994 due 
primarily to the Knoxville hotel disposition in May 1994.  Hotel depreciation 
and amortization includes $218,421 for the nine months ended September 30, 
1995, relating to the two hotels owned by consolidated affiliates.

Corporate Operations

The increase in management and franchise fee income for the three and nine
month periods ended September 30, 1995 compared to the same periods in 1994 is 
due to increased revenues at the partnership owned hotels and the recognition 
of fees beginning in May 1994 from the partnership owned Knoxville hotel, 
offset slightly by fees earned from non-affiliates under short-term agreements 
which expired in late 1994.  For the nine months ended September 30, 1995 
compared to the same nine-month period in 1994 chainwide occupancy decreased 
one percentage point and average daily rate increased 4.7%.  The hotel 
industry experienced continued improvement compared to the same nine months 
in 1994 and industry wide occupancies are expected to continue to improve 
throughout 1995.  While the industry room demand growth rate is increasing 
faster than the supply of new rooms, substantially all hotel markets where 
Signature Inns are located are experiencing new hotel rooms opening, under 
construction or in the planning stages.  Hotel occupancies at certain of the 
partnership-owned hotels may be negatively impacted which could negatively 
effect the Company's management and franchise fee revenue.

General and administrative expenses for the three and nine month periods ended 
September 30, 1995 compared to the same period in 1994 increased due to 
increased employee compensation and legal costs.

<PAGE>
          Management's Discussion and Analysis of Financial Condition
                        and Results of Operations


Other Income (Deductions)

Equity in income of hotel limited partnerships represents the Company's share
of the unconsolidated hotel partnerships' income or loss.  The decrease for
the nine month period ended September 30, 1995 compared to the same period in 
1994 of $51,472 is attributable to the Company's $117,913 share of a one time
gain resulting from a partnership's debt restructuring in June 1994, offset
partially by increased hotel partnership income and increased ownership in 
one parntership owned hotel.

The increase in interest income for the three and nine month periods ended 
September 30, 1995 compared to the same period in 1994 is a result of higher 
investable cash balances earning a higher yield and interest income earned 
from the Company's loans to affiliated hotel partnerships.  Interest income 
includes $48,018 and $34,820 on loans to affiliated hotel partnerships for the 
nine months ended September 30, 1995 and 1994, respectively.

Interest expense for the three and nine month periods ended September 30, 1995
compared to the same period in 1994 decreased due to decreased average
outstanding indebtedness during the respective periods, offset slightly by
higher average interest rates.  Interest ceased on the $4.9 million Knoxville 
hotel loan upon the sale of the hotel in May 1994.

As described in NOTE B, the Company terminated the capital appreciation fee 
arrangement in exchange for a single cash payment of $900,000 on September 1,
1995.  Through June 30, 1995, $745,651 of related expense was accrued 
representing the estimated amount due the lender based on the negotiated 
payment.  An additional $154,349 of related expense was charged to operations 
in the third quarter of 1995.

In August 1995, the Company sold its easement rights to a billboard to a
billboard company for approximately $165,000.

Capital  Resources and Liquidity

The Company believes that the cash generated from management and franchising
activities and its return on hotel partnership investments, along with
additional borrowing capabilities and its cash investments will provide
adequate liquidity to meet its operating needs and the payment requirements of
its corporate obligations over the next twelve months.

At September 30, 1995, a $3.1 million non-recourse hotel mortgage loan of a
consolidated hotel affiliate is reflected as a long-term liability in the 
consolidated financial statements.  The Company is in the process of 
refinancing this mortgage loan.  Based upon preliminary commitments received 
the Company anticipates completing such refinancing prior to the December 
maturity.

In October the Company entered into a partnership agreement with a joint
venture partner; approximately $400,000 of cash was contributed by the 
Company for a 40% equity interest in the new partnership.

<PAGE>

PART II - OTHER INFORMATION
---------------------------

     Item 1. Legal Proceedings
             See note below

     Item 2. Changes in Securities
             See note below

     Item 3. Default upon Senior Securities
             See note below

     Item 4. Submission of matters to Vote of Security Holders
             See note below

     Item 5. Other Information
             See note below

     Item 6. Exhibits and Reports on Form 8-K
             See note below



     NOTE:     The response to each of the above items is not
               applicable or is in the negative and does not require a
               response pursuant to the instructions.








<PAGE>

                              SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                SIGNATURE INNS, INC.





Date November 10, 1995       By
     -----------------          ---------------------------------------
                                John D. Bontreger, President and C.E.O.
                    



Date November 10, 1995       By
     -----------------          ---------------------------------------
                                Mark D. Carney, Vice President Finance
                                and C.F.O.
                              



Date November 10, 1995        By
     -----------------          ---------------------------------------
                                Martin D. Brew, Treasurer/Controller