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, 1997

                           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
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(Address of Principal Executive Offices)                (Zip Code)

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

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   (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: 3,665,244 shares of Common
Stock at November 15, 1997.


<PAGE>
                          PACESETTER OSTRICH FARM, INC.


                                      INDEX
                                      -----


PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (unaudited)

Balance Sheets - September 30, 1997 and December 31, 1996

Statement of Operations - Three Months Ended September 30, 1996, and Three
Months Ended September 30, 1997; Nine Months Ended September 30, 1996, and Nine
Months Ended September 30, 1997

Statements of Cash Flows - Nine Months Ended September 30, 1997 and Nine Months 
Ended September 30, 1996

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>

                                     ASSETS
                                     ------
                                                                           September 30,      
                                                                            (unaudited)        December 31,
                                                                              1997                 1996
                                                                              ----                 ----
<S>                                                                        <C>                 <C>   
CURRENT ASSETS:
  Cash and short term investments                                           $   (3,566)                  --
  Accounts receivable (net of allowance of $39,921 at
  September 30, 1997 and December 31, 1996)                                      82,982             129,521
  Livestock inventory                                                           451,638             370,775
  Other current assets                                                                                   --
                                                                           ------------        ------------
          Total current assets                                                  531,054             500,296

PROPERTY, PLANT, AND EQUIPMENT, net                                             950,518           1,110,666

NOTE RECEIVABLE FROM STOCKHOLDER                                                 42,500              42,500

OTHER ASSETS                                                                     41,745               3,173
                                                                           ------------        ------------

                                                                             $1,565,817          $1,656,635
                                                                           ============        ============

                                     LIABILITIES AND STOCKHOLDERS' EQUITY
                                     ------------------------------------
CURRENT LIABILITIES:
  Accounts payable and accrued liabilities                                   $  297,749          $  212,908
  Notes payable                                                                 404,506             450,104
  Accrued interest                                                               40,653              11,253
  Advances from stockholders                                                    167,180             169,317
                                                                           ------------        ------------
          Total current liabilities                                             910,088             843,582


STOCKHOLDERS' EQUITY:
  Common stock, $.001 par value, 10,000,000 shares authorized,
  3,665,244 and 3,590,244 issued and outstanding
  as of  September 30, 1997 and December 31, 1996, respectively                   3,665               3,590
  Additional paid-in-capital                                                  3,801,642           3,779,217
  Retained earnings (deficit)                                                (3,149,578)         (2,969,754)
                                                                           ------------        ------------
                                                                                655,729             813,053
                                                                           ------------        ------------
                                                                           $  1,565,817        $  1,656,635
                                                                           ============        ============
</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,
                                                         1996             1997            1996                  1997
                                                         ----             ----            ----                  ----
<S>                                                   <C>               <C>              <C>               <C>        
SALES                                                 $  324,305        $ 374,615        $ 610,746         $   776,069

COST OF SALES                                            125,552          223,986          137,035             398,879
                                                  --------------     ------------    -------------      --------------
          Gross profit                                   198,753          150,629          473,711             377,190

OPERATING EXPENSES:
  Operating                                              217,625          120,669          474,173             442,677
  General and administrative                              10,727           18,503           36,132              72,516
                                                  --------------     ------------    -------------      --------------
  Operating Income (loss)                                (29,599)          11,457          (36,594)           (138,003)

OTHER INCOME (EXPENSES):
  Interest                                               (14,225)         (18,360)         (38,501)            (43,659)
  Other                                                   18,993            1,120           56,975               1,838
                                                  --------------     ------------    -------------      --------------
INCOME (LOSS) BEFORE INCOME TAXES                        (24,831)          (5,783)         (18,120)           (179,824)

INCOME TAX (EXPENSE) BENEFIT                                  --               --               --                  --
                                                  --------------     ------------    -------------      --------------
          Net income (loss)                              (24,831)        $ (5,783)      $  (18,120)        $  (179,824)
                                                  ==============     ============    =============      ==============


NET INCOME (LOSS) PER SHARE                           $     (.01)            (.00)      $     (.01)        $      (.05)
                                                  ==============     ============    =============      ==============

AVERAGE COMMON SHARES OUTSTANDING                      3,590,224        3,665,244        3,590,224           3,665,244
                                                  ==============     ============    =============      ==============

</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,
                                                                                      1997           1996
                                                                                      ----           ----
<S>                                                                           <C>               <C>  
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Net Income (loss)                                                       $   (179,824)    $  (18,120)
       Adjustments to reconcile net income to
       net cash provided (used) by operating activities:
         Depreciation                                                               105,277        106,944
         Amortization                                                                    --             --
         Change in deferred revenue                                                      --             --
         Gain (Loss) on sale of assets                                                   --         16,696
         Decrease (increase) in :
           Accounts receivable, net                                                  46,539       (176,017)
           Livestock Inventory                                                      (80,863)        82,876
           Deposit                                                                       --             --
           Prepaid assets                                                                --             --
           Other current assets                                                     (38,572)         9,733
           Other assets                                                                  --             --
         Increase (decrease) in -
           Accounts payable and accrued liabilities                                  84,841         (5,773)
           Accrued interest payable                                                  29,400             --
           Borrowings from stockholders                                              (2,137)        16,357
           Deferred revenue                                                              --             --
                                                                               ------------   ------------
             Net cash provided (used) by operating activities                       (35,339)        32,696

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

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

             Net increase (decrease) in cash                                         (3,566)        32,696
     CASH AND SHORT-TERM                                                       ------------   ------------
     INVESTMENTS AT BEGINNING OF PERIOD                                                  --             --
     CASH AND SHORT-TERM
     INVESTMENTS AT END OF PERIOD                                               $    (3,566)  $     32,696
                                                                               ============   ============
     INCOME TAXES PAID                                                          $        --   $         --
                                                                               ============   ============
     INTEREST PAID                                                              $    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, 1997
         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:
<TABLE>
<CAPTION>


                                          Estimated Years      September 30,         December 31,
                                              (Lives)             1997                  1996
<S>                                                          <C>                      <C>        
      Land                                       --          $   144,727              $   144,727
      Buildings and Improvements              10 to 30           967,995                1,027,995
      Equipment                                5 to 7            401,816                  396,687
      Furniture and Fixtures                      5               60,447                   60,447
      Construction
      in Progress                                                 31,193                   31,193
                                                             -----------              -----------
                                                             $ 1,606,178              $ 1,661,049

      Accumulated Depreciation
                                                                (655,660)                (550,383)
                                                             -----------              -----------
                                                             $   950,518              $ 1,110,666
                                                             ===========              ===========
</TABLE>


                                       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, 1997, sales
         increased by $50,310 from $324,305 for the quarter ended September 30,
         1996 to $374,615 for the quarter ended September 30, 1997. Sales
         increased from $610,746 for the nine months ended September 30, 1996,
         to $776,069 for the nine months ended September 30, 1997. The overall
         increase in sales reflects increased international sales compared to
         the same periods in the prior year, as the Company made its first
         shipment to Brazil during the second quarter of 1997 and began
         preparations for its second shipment scheduled for October 1997.

                  Cost of sales as a percentage of sales increased
         substantially, from $125,552, or 38% of sales, for the quarter ended
         September 30, 1996, to $223,986, or 59% of sales, for the quarter ended
         September 30, 1997. For the nine months ended September 30, 1996 and
         1997, cost of sales increased from $137,035, or 22% of sales, to
         $398,879, or 51% of sales, respectively. The increase in cost of sales
         as a percentage of sales from the prior year's figures was attributable
         to the shipping costs associated with the Company's shipments of live
         ostriches to Sao Paulo, Brazil, the first during the second quarter of
         1997, and the second scheduled for October 1997. Such shipping costs
         have been recorded in full based on the date incurred, while only those
         portions of the related revenues which were actually received from such
         shipment have been recognized. As a result, the Company expects to
         receive future revenues from sales in Brazil related to birds
         previously shipped. The Company's gross profit decreased from $198,753
         for the quarter ended September 30, 1996 to $150,629, or 24%, for the
         quarter ended September 30, 1997, representing an decrease of $48,124.
         For the nine months ended September 30, 1996 and 1997, gross profit
         decreased by 20% from $473,711 to $377,190 respectively. Such decreases
         are a result of the substantial shipping costs associated with the
         Company's shipments to Brazil in the current year compared to the same
         periods a year ago, as previously described.

                  Operating expenses decreased from $217,625 for the quarter
         ended September 30, 1996 to $120,669 for the quarter ended September
         30, 1997 representing a decrease of $96,956 or 45%. Operating expenses
         decreased from $474,173 for the nine months ended September 30, 1996,
         to $442,677 for the nine months ended September 30, 1997, representing
         a decrease of $31,496 or 7%.


                                       7

<PAGE>

         Such decreases reflect continued measures taken by the Company to
         reduce operating costs in consideration of the net operating losses
         experienced in the past several years. General and administrative
         expenses increased from $10,727 for the quarter ended September 30,
         1996 to $18,503 for the quarter ended September 30, 1997, representing
         an increase of $7,776, or 73%. General and administrative expenses also
         increased from $36,132 for the nine months ended September 30, 1996, to
         $72,516 for the nine months ended September 30, 1997, representing an
         increase of $36,384, or 101%. Such increases were mostly due to the
         restoration of a portion of salaries of some of the Company's senior
         management which had been voluntarily reduced in prior years.

                  The Company incurred a net loss of $5,783 or $0.00 per share
         for the quarter ended September 30, 1997, compared to a net loss of
         $24,831 or $0.01 per share for the same quarter a year ago. The company
         incurred a net loss of $179,824 for the nine months ended September 30,
         1997, compared to a net loss of $5,783 for the nine months ended
         September 30, 1996. Such decreases reflect the increased initial costs
         previously described related to the Company's shipments of ostriches to
         Sao Paulo, Brazil, as well as the conservative treatment utilized on
         recognition of related revenue which also is previously described. The
         Company also had increased general and administrative costs previously
         described which contributed to the net losses in the current year as
         compared to a year ago.


         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. The
         Company believes that its ostrich inventory could be liquidated at an
         amount in excess of book value, if required. However, there is no
         guarantee that sales at such prices would be possible.

                  Net cash used by operating activities was $35,339 for the nine
         months ended September 30, 1997 compared to cash provided of $32,696
         for the nine months ended September 30, 1996 mostly as a result of the
         increased net losses, as well as the increases in livestock inventory,
         in the nine months ended September 30, 1997 compared to the small net
         loss and the decreases in livestock inventory reported in the same
         period a year ago. Cash provided from investing activities increased to
         $54,871 for the nine months ended September 30, 1997 compared to $0 for
         the nine months ended September 30, 1996, mostly due to the completion
         during the second quarter of 1997 of the Company's sale of 


                                       8
<PAGE>

         property owned in Willcox, Arizona and formerly operated as a
         veterninary clinic. Cash flows used in financing activities was $22,238
         for the nine months ended September 30, 1997, compared to $0 for the
         nine months ended September 30, 1996, reflecting both the issuance of
         restricted stock and repayments of notes payable in the current year.
         Cash and short term investments for the Company decreased from $32,696
         at September 30, 1996, to $(3,566) at September 30, 1997 reflecting the
         Company's limited cash flows as previously described.

                  The value of ostrich progeny produced by the Company's
         proprietary ostriches or derived by the Company as a result of the
         management of non-proprietary ostriches has not been reflected in the
         Company's financial statements, nor has the appreciation in value of
         ostrich chicks and yearlings acquired by the Company. In addition, no
         related costs associated with the maintenance of progeny from the
         Company's ostriches or independent owned ostriches have been assigned
         to inventory.

                  As of September 30, 1997, the Company held proprietary
         livestock with an original cost of $451,638, which management estimates
         to have a current fair market value in excess of book cost. There can
         be no assurances, however, that the Company will be able to realize
         such aggregate market value at the time of sale or other disposition.

                  As of March 13, 1997, under the Company's 1992 Incentive Stock
         Option Plan, a total of 114,500 options were issued but not exercised.
         On March 30, 1997, 10,000 additional options were issued to two of the
         Company's key employees based on an option price of $.15 per share. On
         June 15, 1997, another 10,000 options were issued to several key
         employees based on an option price of $.15 per share. As a result, a
         total of 134,500 options were issued and unexercised as of June 30,
         1997, under this Plan.

                  Additionally, as of March 31, 1997, the Company had issued
         450,000 nonqualified options, based on an option price of $.15 per
         share, to four of its senior management. As of June 30, and September
         30, 1997, the Company further issued 250,000 and 150,000 non-qualified
         options, respectively, at an option price of $.15 per share in lieu of
         salaries. As a result, a total of 850,000 non-qualified options were
         issued and unexercised as of September 30, 1997, not including the
         total of 134,500 options issued and unexercised as of September 30,
         1997 under the Company's 1992 Incentive Stock Option Plan as previously
         described.


         Inflation

                  While inflation has not had a material effect on the
         operations of the Company in the past, at the present time there is a
         substantial worldwide demand for ostrich products. It is anticipated
         that such market conditions will continue for the next several years,
         although as with any new commodity market, market trends and prices
         could fluctuate substantially.


                                       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 21st day of April, 1998.

                                                PACESETTER OSTRICH FARM, INC.



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







                                       10