U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                For the Quarterly Period Ended September 30, 1998

                           Commission File No. 1-11282


                          PACESETTER OSTRICH FARM, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


               Delaware                                 72-1186845
    -------------------------------                 -------------------
    (State or Other Jurisdiction of                  (I.R.S. Employer
     Incorporation or Organization)                 Identification No.)


    10135 Hereford Road, Folsom, Louisiana                 70437
   ----------------------------------------             ----------
   (Address of Principal Executive Offices)             (Zip Code)


                                 (504) 796-5806
              ----------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


              ----------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)


     Check whether the issuer (1) has 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 issuer was required to file such reports, and (2) has
been subject to such filing requirements for the past 90 days.

                               Yes     No X
                                  ---    ---


                      APPLICABLE ONLY TO USERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS

     Check whether the issuer filed all documents and reports required to be
filed by section 12, 13, or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.

                               Yes     No
                                  ---    ---


                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 3,950,224 shares of Common
Stock at August 25, 1999.


<PAGE>


                          PACESETTER OSTRICH FARM, INC.


                                      INDEX


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

Balance Sheets - September 30, 1998 and December 31, 1997

Statement of Operations - Three Months Ended September 30, 1998, and Three
Months Ended September 30, 1997; Nine Months Ended September 30, 1998, and Nine
Months Ended September 30, 1997

Statements of Cash Flows - Nine Months Ended September 30, 1998 and Nine Months
Ended September 30, 1997

Notes to Financial Statements


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


PART II. OTHER INFORMATION


                                       2

<PAGE>


                                     PART I
                              FINANCIAL INFORMATION
Item 1. Financial Statements
                          PACESETTER OSTRICH FARM, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                     September 30,    December 31,
                                                                     (unaudited)
                                                                         1998             1997
                                                                     -------------    ------------
<S>                                                                  <C>               <C>
                                     ASSETS
CURRENT ASSETS:
  Cash and short term investments                                    $   164,627       $        --
  Accounts receivable (net of allowance of $47,603 at
  September 30, 1998 and December 31, 1997)                                3,295            77,781
                                                                     -----------       -----------
          Total current assets                                           167,922            77,781

PROPERTY, PLANT, AND EQUIPMENT, net                                       31,476            50,625
NOTE RECEIVABLE FROM STOCKHOLDER                                          42,500            42,500
NET ASSETS OF DISCONTINUED OPERATIONS                                     31,366           796,220
OTHER ASSETS                                                              14,748             3,173
                                                                     -----------       -----------
                                                                     $   288,012       $   970,299
                                                                     ===========       ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued liabilities                           $   156,256       $   201,216
  Notes payable                                                          397,015           541,899
  Advances from stockholders                                             179,626           175,965
                                                                     -----------       -----------
          Total current liabilities                                      732,897           919,080

STOCKHOLDERS' EQUITY:
  Common stock, $.001 par value, 10,000,000 shares authorized,
  3,665,224 and 3,665,224 issued and outstanding
  as of  September 30, 1998 and December 31, 1997, respectively            3,665             3,665
  Additional paid-in-capital                                           3,779,217         3,779,217
  Retained earnings (deficit)                                         (4,227,767)       (3,731,663)
                                                                     -----------       -----------
                                                                        (444,885)           51,219
                                                                     -----------       -----------
                                                                     $   288,012       $   970,299
                                                                     ===========       ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       3

<PAGE>


                          PACESETTER OSTRICH FARM, INC.
                             STATEMENT OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>

                                             Three Months Ended                   Nine Months Ended
                                                September 30,                       September 30,
                                       -----------------------------       -----------------------------
                                           1998              1997              1998              1997
                                       -----------       -----------       -----------       -----------
<S>                                    <C>               <C>               <C>               <C>
SALES                                  $    29,107       $   374,615       $   241,628       $   776,069

COST OF SALES                              239,297           223,986           339,501           398,879
                                       -----------       -----------       -----------       -----------
          Gross profit                    (210,190)          150,629           (97,873)          377,190

OPERATING EXPENSES:
  Operating                                132,622           120,669           309,725           442,677
  General and administrative                31,519            18,503            55,567            72,516
                                       -----------       -----------       -----------       -----------
  Operating Income (loss)                 (374,331)           11,457          (463,165)         (138,003)

OTHER INCOME (EXPENSES):
  Interest                                 (22,206)          (18,360)          (32,939)          (43,659)
  Other                                         --             1,120                --             1,838
                                       -----------       -----------       -----------       -----------
INCOME (LOSS) BEFORE INCOME TAXES         (396,537)           (5,783)         (496,104)         (179,824)
INCOME TAX (EXPENSE) BENEFIT                    --                --                --                --
                                       -----------       -----------       -----------       -----------
          Net income (loss)               (396,537)      $    (5,783)      $  (496,104)      $  (179,824)
                                       ===========       ===========       ===========       ===========
NET INCOME (LOSS) PER SHARE            $      (.10)             (.00)      $      (.13)      $      (.05)
                                       ===========       ===========       ===========       ===========
AVERAGE COMMON SHARES OUTSTANDING        3,665,224         3,665,224         3,665,224         3,665,224
                                       ===========       ===========       ===========       ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4

<PAGE>


                          PACESETTER OSTRICH FARM, INC.
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                       Nine Months Ended
                                                                         September 30,
                                                                   -------------------------
                                                                      1998            1997
                                                                   ---------       ---------
<S>                                                                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income (loss)                                                $(496,104)      $(179,824)
  Adjustments to reconcile net income to
  net cash provided (used) by operating activities:
    Depreciation                                                      19,149         105,277
    Amortization                                                          --              --
    Gain (Loss) on sale of assets                                         --              --
    Decrease (increase) in :
      Accounts receivable, net                                        74,486          46,539
      Livestock Inventory                                                 --         (80,863)
      Prepaid assets                                                      --              --
      Other current assets                                                --         (38,572)
      Other assets                                                   (11,575)             --
    Increase (decrease) in -
      Accounts payable and accrued liabilities                       (44,960)         84,841
      Accrued interest payable                                            --          29,400
      Borrowings from stockholders                                     3,661          (2,137)
      Deferred revenue                                                    --              --
                                                                   ---------       ---------
        Net cash provided (used) by operating activities            (455,343)        (35,339)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property, plant, and equipment                                       (5,129)
  Proceeds from sale of net assets of discontinued operations        764,854
  Proceeds from sale of property                                                      60,000
                                                                   ---------       ---------
        Net cash provided (used) by investing activities             764,854          54,871

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of restricted stock                                                        22,500
  Offering costs                                                          --              --
  Repayment of notes payable                                        (144,884)        (45,598)
                                                                   ---------       ---------
        Net cash provided (used) by financing activities            (144,884)        (23,098)

        Net increase (decrease) in cash                              164,627          (3,566)
CASH AND SHORT-TERM                                                       --              --
INVESTMENTS AT BEGINNING OF PERIOD                                        --              --
CASH AND SHORT-TERM
INVESTMENTS AT END OF PERIOD                                       $ 164,627       $  (3,566)
                                                                   =========       =========
INCOME TAXES PAID                                                  $      --       $      --
                                                                   =========       =========
INTEREST PAID                                                      $  32,939       $  25,298
                                                                   =========       =========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       5

<PAGE>


                          Pacesetter Ostrich Farm, Inc.

                          Notes To Financial Statements
                                   (unaudited)


1. Basis of Presentation:

     The financial information included herein reflects all adjustments which
are in the opinion of management, necessary for a fair statement of results for
the periods. All such adjustments, in the opinion of management, are of normal
recurring nature.

     The results of operations for the nine months ended September 30, 1998 are
not necessarily indicative of the results to be expected for the full year.

2. Property, Plant, and Equipment:

     Property, plant, and equipment consist primarily of special-use assets for
the production and raising of ostriches. The balance of property, plant, and
equipment, stated at cost less accumulated depreciation, is as follows:

                                 Estimated
                                   Years         September 30,      December 31,
                                  (Lives)            1998               1997
                                 ---------       -------------      ------------
Land                                 --           $  27,000          $ 27,000
Buildings and Improvements        10 to 30           18,370            18,370
Equipment                          5 to 7            55,276            55,276
Furniture and Fixtures                5              33,799            33,799
Construction
  in Progress
                                                  ---------          --------
                                                  $ 134,445          $134,445

Accumulated Depreciation                           (102,969)          (83,820)
                                                  ---------           -------
                                                  $  31,476          $ 50,625
                                                  =========          ========


                                       6

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial position and
operating results during the periods included in the accompanying condensed
financial statements.

Results of Operations

     For the calendar quarter ended September 30, 1998, sales decreased by
$345,508 from $374,615 for the quarter ended September 30, 1997 to $29,107 for
the quarter ended September 30, 1998. Sales decreased from $776,069 for the nine
months ended September 30, 1997, to $241,628 for the nine months ended September
30, 1998. The overall decrease in sales reflects the continued general decline
in the ostrich business.

     Cost of sales increased from $223,986 for the quarter ended September 30,
1997, to $239,297 for the quarter ended September 30, 1998. For the nine months
ended September 30, 1997 and 1998, cost of sales decreased from $398,879 to
$339,501 respectively. The increase in cost of sales as a percentage of sales
from the prior year's figures was attributable to the continued decline in the
ostrich business. The Company's gross profit decreased from $150,629 for the
quarter ended September 30, 1997 to a loss of $210,190 for the quarter ended
September 30, 1998, representing a decrease of $360,819. For the nine months
ended September 30, 1997 and 1998, gross profit decreased from $377,190 to a
loss of $97,873 respectively. Such decreases are a result of the continued
general decline in the ostrich business.

     Operating expenses increased from $120,669 for the quarter ended September
30, 1997 to $132,622 for the quarter ended September 30, 1998 representing an
increase of $11,953. Operating expenses decreased from $442,677 for the nine
months ended September 30, 1997, to $309,725 for the nine months ended September
30, 1998, representing a decrease of $132,952. Such


                                       7

<PAGE>


decreases reflect the costs associated with preparations to complete the sale of
the Company's Willcox, Arizona facility, as well as all of its livestock
inventory. General and administrative expenses increased from $18,503 for the
quarter ended September 30, 1997 to $31,519 for the quarter ended September 30,
1998, representing an increase of $13,016. General and administrative expenses
decreased from $72,516 for the nine months ended September 30, 1997, to $55,567
for the nine months ended September 30, 1998, representing a decrease of
$16,949. Such increases were mostly due to the preparation to discontinue
operations at the Willcox facility.

     The Company incurred a net loss of $396,537 or $0.10 per share for the
quarter ended September 30, 1998, compared to a net loss of $5,783 or $0.00 per
share for the same quarter a year ago. The company incurred a net loss of
$496,104 for the nine months ended September 30, 1998, compared to a net loss of
$179,824 for the nine months ended September 30, 1997. Such decreases reflect
the increased costs previously described related to the Company's discontinuance
of the operations at the Willcox facility in conjunction with the continued
general decline in ostrich prices and volumes.

Liquidity and Capital Resources

     The Company has incurred substantial losses for several years and
experienced cash flow difficulties which have caused it not to meet some of its
obligations as they have come due. As a result, there can be no assurances that
the Company will continue as a going concern. At this time, management has
exhausted all efforts to obtain what it believes would be a favorable
opportunity within the ostrich industry. As a result, the Company has begun
operations during the last two weeks of the quarter ended September 30, 1998,
related to the underground construction business. The Company has obtained key
personnel with substantial experience in many phases of construction,
particularly telecommunications construction. The Company plans to utilize the
proceeds from the sale of its Willcox, Arizona facility and inventory to
extinguish certain of its overdue obligations and begin developing its
telecommunications construction business. Refer also to the Company's Form
10-KSB for the year ended December 31, 1998, simultaneous with this report.


                                       8

<PAGE>


     Net cash used by operating activities was $455,343 for the nine months
ended September 30, 1998 compared to cash used of $35,339 for the nine months
ended September 30, 1997 mostly as a result of the increased net losses
associated with the decline of the ostrich business and the ultimate disposition
of the Willcox facility. Cash provided from investing activities increased to
$764,854 for the nine months ended September 30, 1998, compared to $54,871 for
the nine months ended September 30, 1997, mostly due to the disposition of the
Willcox facility. Cash flows used in financing activities was $144,884 for the
nine months ended September 30, 1998, compared to $23,098 for the nine months
ended September 30, 1997, reflecting both the issuance of restricted stock in
the prior year and repayments of notes payable in the current year. Cash and
short term investments for the Company increased from $(3,566) at September 30,
1997, to $164,627 at September 30, 1998 reflecting the Company's liquidation of
the Willcox facility and inventory in the current year.

     As of September 30, 1998, under the Company's 1992 Incentive Stock Option
Plan, a total of 110,000 options were issued but not exercised. Additionally, as
of September 30, 1998, the Company had issued a total of 1,150,000 nonqualified
options, based on an option price of $.15 per share, to four of its senior
management in lieu of salary. As of the date of this filing none of either class
of these options have been exercised.

Inflation

     While inflation has not had a material effect on the operations of the
Company in the past, at the present time it is not anticipated that inflation
will be a material factor in the foreseeable future.


                                       9

<PAGE>


                                    SIGNATURE

     In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized on this 25st day of August, 1999.


                                            PACESETTER OSTRICH FARM, INC.


                                            By: S/S Walter R. Green, Jr.
                                                -------------------------
                                                Walter R. Green, Jr.
                                                Chief Financial &
                                                Accounting Officer