FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

For the quarter ended March 31, 1998

                       Commission file number: 33-15096-D


                             MILESTONE CAPITAL, INC.
                             -----------------------
                 (Name of Small Business Issuer in its charter)


            Colorado                                             84-1111224
            --------                                             ----------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                       26 West Dry Creek Circle, Suite 600
                            Littleton, Colorado 80120
                            -------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (303) 794-9450
                                 --------------
                (Issuer's telephone number, including area code)

Indicate by check mark whether the Issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such shorter  periods that the  registrant  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 CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date.

Common Stock, No Par Value, 1,247,914 shares as of March 31, 1998.

<PAGE>


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                             MILESTONE CAPITAL, INC.
                        UNAUDITED CONDENSED BALANCE SHEET
                                 MARCH 31, 1998

                                     ASSETS
                                     ------

Current Assets:
 Cash and cash equivalents                                            $     252
                                                                      ---------

   Total Assets                                                       $     252
                                                                      =========


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFECIT)
                 ----------------------------------------------

Current Liabilities
 Accounts payable:
  Trade                                                               $   2,895
  Stockholder                                                             2,000
                                                                      ---------

   Total Current Liabilities                                              4,895
                                                                      ---------

Stockholders' Equity (Defecit):
 Common stock:  no par value, 20,000,000
  shares authorized, 1,247,914 issued
                                                                        481,078
 Accumulated defecit                                                   (485,521)
                                                                      ---------
                                                                         (4,443)

 Less treasury stock at cost (680 shares)                                  (200)
                                                                      ---------

  Total stockholders' Equity (Defecit)                                   (4,643)
                                                                      ---------

  Total Liabilities and Stockholders' Equity (Defecit)                $     252
                                                                      =========



                        See notes to unaudited condensed
                              financial statments.

<PAGE>

                             MILESTONE CAPITAL, INC.
                       UNAUDITED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997



                                                     1998               1997
                                                     ----               ----

Revenue                                           $      --         $      --

Operating expenses                                        923                27
                                                  -----------       -----------

Net Loss                                          $      (923)      $       (27)
                                                  ===========       ===========

Net loss per share of common stock:
  Basic                                           $      --         $      --
                                                  ===========       ===========
  Diluted                                         $      --         $      --
                                                  ===========       ===========

Weighted average number of common
 shares outstanding:
  Basic                                             1,247,234         1,247,234
  Diluted                                           1,247,234         1,247,234





                        See notes to unaudited condensed
                              financial statements.

<PAGE>

                             MILESTONE CAPITAL, INC.
                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997



                                                                  1998     1997
                                                                  ----     ----

Cash Flows From Operating Activities:
  Net loss                                                       $(923)   $ (27)
  Adjustments to reconcile net loss to net cash
   (used) by operating activities:
   Changes in liabilities:
    Increase in accounts payable-trade                             895     --
                                                                 -----    -----

         Net Cash (Used) By Operating Activities                   (28)     (27)
                                                                 -----    -----

         Net (Decrease) in Cash and Cash Equivalents               (28)     (27)

         Cash and Cash Equivalents at Beginning of Period          280      388
                                                                 -----    -----

         Cash and Cash Equivalents at End of Period              $ 252    $ 361
                                                                 =====    =====

Supplemental Disclosure of Cash Flow Information:
  Cash paid during the period for:
    Interest                                                     $--      $--
    Income taxes                                                 $--      $--



                        See notes to unaudited condensed
                              financial statements.

<PAGE>

                             MILESTONE CAPITAL, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS


Basis of Presentation

The accompanying  financial information of the Company is prepared in accordance
with the rules prescribed for filing condensed interim financial statements and,
accordingly, does not include all disclosures that may be necessary for complete
financial  statements  prepared in accordance with generally accepted accounting
principles.  The disclosures presented are sufficient,  in management's opinion,
to make the interim  information  presented  not  misleading.  All  adjustments,
consisting of normal  recurring  adjustments,  which are necessary so as to make
the interim  information not misleading,  have been made.  Results of operations
for the three  months  ended March 31, 1998 are not  necessarily  indicative  of
results of operations that may be expected for the year ended December 31, 1998.
It is  recommended  that this  financial  information  be read with the complete
financial  statements included in the Company's Annual Report on Form 10-KSB for
the year ended  December  31,  1998 as filed with the  Securities  and  Exchange
Commission.

Per Share Information

As of December 31, 1997, the Company adopted  Statement of Financial  Accounting
Standards  (SFAS) No. 128,  "Earnings Per Share," which  specifies the method of
computation,  presentation  and disclosure for earnings per share.  SFAS No. 128
requires the presentation of two earnings per share amounts, basic and diluted.

Basic earnings per share is calculated using the average number of common shares
outstanding.  Diluted earnings per share is computed on the basis of the average
number of common  shares  outstanding  plus the dilutive  effect of  outstanding
stock options using the "treasury stock" method.

The basic and diluted  earnings  per share are the same  because the Company did
not have any outstanding stock options during the periods presented.




<PAGE>


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

     The Company seeks merger candidates with on-going  operations.  As of March
31, 1998, the Company had not identified any such candidates.

Results of Operations

Three Months Ended March 31, 1998 vs. Three Months Ended March 31, 1997.

     The Company was dormant in 1997. In 1998,  the Company's  efforts  centered
around  bringing its books and records up to date.  No operating  revenues  were
generated  during the three  months  ended  March 31,  1998 and 1997.  Operating
expenses  increased  by $896 to $923 for the three  months  ended March 31, 1998
compared to $27 for the three  months  ended  March 31,  1997.  The  increase in
operating  expenses  resulted from professional fees incurred in connection with
updating the Company's  books and records.  The Company's net loss  increased to
$923 for the three  months  ended March 31,  1998  compared to $27 for the three
months ended March 31, 1997.

Liquidity and Capital Resources

     As of March 31, 1998,  the  Company's  working  capital  deficit was $4,643
compared with $3,720 at December 31, 1997. The working capital deficit increased
by $923 primarily as a result of increased  accounts  payable for the funding of
operating expenses.

     In February 1999, the Company sold 3,750,000  shares of its common stock at
$.004 per share  resulting in cash proceeds of $15,000.  Also, in February 1999,
loans payable to  stockholders of $11,525 were converted at $.004 per share into
2,881,225 shares of the Company's common stock.

     The  Company  does not have  sufficient  funds to  continue  its  operating
activities.  Future operating activities are expected to be funded by loans from
a major stockholder.

PART II. OTHER INFORMATION

ITEM 1. Legal proceedings

None.

ITEM 2. Changes in securities

None.

ITEM 3. Defaults upon senior securities

None.

ITEM 4. Submission of matters to a vote of security holders

None.

<PAGE>


ITEM 5. Other information

None.

ITEM 6. Exhibits and reports on Form 8-K

Reports on Form 8-K: During the three months covered by this report, the Company
filed no reports on form 8-K.


                                   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 thereto duly authorized.


Date: June 11, 1999                           Milestone Capital, Inc.
                                              -----------------------
                                              (Registrant)


                                              /s/ Earnest Mathis, Jr.
                                              ----------------------------------
                                              Earnest Mathis, Jr.
                                              Chief Executive Officer
                                              Chief Financial Officer
                                              (Principal Accounting Officer),
                                              Secretary and Director