U.S. SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C.  20549

                                 FORM 10-QSB

             [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) 
                    OF THE SECURITIES EXCHANGE ACT OF 1934
               For the quarterly period ended  AUGUST 31, 1996

                                     OR

  [ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE EXCHANGE ACT OF 1934
      FOR THE TRANSITION PERIOD FROM __________TO ______________
                       Commission File No. 33-37968-A

                          IMAGICA ENTERTAINMENT, INC.
           (Exact name of Registrant as specified in its charter)

                    Florida                           59-2762999
  (State or other jurisdiction of      (I.R.S. Employer Identification Number)
   incorporation or organization)  


             1518 SW 12th Avenue, Ocala, FLorida  34474   
              (Address of principal executive offices)
                           (352) 867-7860
                     (Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section 
13 or 15 (d) of the Exchange Act during the past 12 months (or for such 
shorter period that the registrant was required to file such reports), and (2) 
has been subject to such filing requirements for the past 90 days.  Yes (X)   
No ( )
Number of common shares outstanding as of August 31, 1996 (including the 
100,000 shares of redeemable common stock) - 2,403,013.

              Transitional Small Business Disclosure Format:
                         Yes  (   )    No  ( X )


<PAGE>



                                   INDEX

PART I -      FINANCIAL INFORMATION                         Page Number

Item 1.     Financial Statements (Unaudited):

          Balance Sheets                                    3
          Statements of Operations                          6  
          Statements of Cash Flows                          7 
          Notes to Financial Statements                     8

Item 2.     Management's Discussion and Analysis
          of Financial Condition and Results
          of Operations                                     9

                                   -2-
<PAGE>
<TABLE>
                  IMAGICA ENTERTAINMENT, INC. and SUBSIDARY
                               BALANCE SHEETS
<CAPTION>
                                                                       

                                         August 31,             May 31,  
                                            1996                  1996
                                        (Unaudited)            _______   
ASSETS 
<S>                                     <C>                <C>
CURRENT ASSETS:
Cash and equivalents                    $   58,450         $      --- 
Accounts receivable, less                                    
     allowance for possible losses
     of $18,611 and $30,611                514,737             528,048   
Advances to stockholders                    14,308              13,938
Inventories                                254,269             258,625   
Prepaid expenses                         1,008,021              68,823 
     Total current assets                1,849,785             869,434
                   
Property and equipment, net                810,518             871,480

Other assets:
 Loan acquisition                            5,263                 ---
 Deferred financing costs, less
  accumulated amorization of $6,159            ---               5,886
 Equipment not yet placed in service        37,500              37,500         
 Deposits on equipment                     214,035             206,632 
 Other                                       7,680              15,307                                 
                                           264,478             265,325

                                        $2,924,782          $2,006,239    
</TABLE>
                                    -3- 
<PAGE>
<TABLE>
                     IMAGICA ENTERTAINMENT, INC. and SUBSIDARY
                                    BALANCE SHEET 
<CAPTION>                     
                                       AUGUST 31,            May  31,
                                          1996                 1996
                                       (Unaudited)                           
<S>                                     <C>                 <C>
LIABILITIES and STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
 Checks issued against future deposits  $     ---           $     ---     
 Notes Payable                            143,289              105,000
 Accounts payable - trade                 722,333              652,204    
 Notes payable to stockholders            398,301              302,225
 Accrued liabilites                       551,906              520,005 
 Current maturities of long-term debt     310,247              354,317
 Current portion of obligations under                                        
  capital leases                          148,616              232,329
       Total current liabilities       $2,274,692           $2,166,080

Long-term debt, less current 
  maturities                              350,873              420,294 
Obligations under capiral leases,
  less current maturities                 265,617              153,665   
______________________________________________________________________

     Total liabilities                 $2,891,182           $2,740,039
Commitments and contingencies                 ---                  ---   
Redeemable common stock                   100,000              100,000
     
Stockholders' equity       
 Common stock, $.001 par value, 
  shares authorized 50,000,000;                     
  issued 2,403,013                         14,856                1,820 
 Additional paid-in-capital             2,900,497            1,787,784
 Accumulated deficit                   (2,640,513)          (2,282,164)
                                          274,840           (  492,560)   
</TABLE>
                                    -4-
<PAGE>                                 
<TABLE>
             IMAGICA ENTERTAINMENT, INC. and SUBSIDARY                    
                               BALANCE SHEETS  - Continued
<CAPTION>
Liabilities and Stockholders' Equity - continued


<S>                                      <C>                   <C>
Less: Treasury stock,at cost,
       97,500 shares                       91,240                91,240
      Notes receivable arising from
       the exercise of stock options      250,000               250,000      
    Total stockholders' equity           ( 66,400)             (833,800) 


                                       $2,924,782            $2,006,239   

</TABLE>
See accompanying  notes to financial statements.


                                    -5-
<PAGE>
<TABLE>
                    IMAGICA ENTERTAINEMNT, INC. and SUBSIDARY
                           STATEMENTS OF OPERATIONS  
<CAPTION>      
                                       Three months ended August 31      
                                           1996                1995       
                                      (Unaudited)         (Unaudited)     
<S>                                  <C>                 <C>               
SALES                                $963,836            $1,377,260 
COST OF SALES                         693,401             1,009,089
    GROSS PROFIT                      270,435               368,171  
OPERATING EXPENSES                    608,974               417,250
    INCOME (LOSS) FROM OPERATIONS    (338,539)             ( 49,079)     
OTHER INCOME (EXPENSES):       
    INTEREST                         ( 19,810)             ( 34,413) 
NET INCOME (loss)                    (358,349)             ( 83,492)                
Earnings (loss) per share               ($.15)                ($.01)   
Weighted Average Common Shares
    Outstanding                     2,403,013             8,441,944
</TABLE>

See accompanying notes to financial statements.


                                    -6-
<PAGE>                                    

<TABLE>
                    IMAGICA ENTERTAINMENT INC. and SUBSIDARY
                          STATEMENTS OF CASH FLOWS
<CAPTION>
                                            Three months ended August 31,
                                                  1996           1995
                                              (Unaudited)    (Unaudited)  
<S>                                            <C>             <C>
Cash flows from operating activities:
 Net income  (loss)                            $(358,348)      $ (83,491)  
 Adjustments to reconcile net income (loss) to 
  net cash provided by operating activities:
   Depreciation and amorization                   61,585          74,772
   Cash provoded by (used for):
   Accounts receivable                            13,312         (14,431) 
   Stockholders' Advances                       (    370)            ---
   Inventories                                     4,356         (40,534)
   Prepaid expenses                             (938,125)        (27,359) 
   Checks issued against future deposits        ( 23,035)        ( 1,194)   
   Accounts payable - trade                       77,858          54,867 
   Intra company payable                          15,304             ---    
   Accrued liabilities                           119,777          76,282 
Net Cash Provided by operating activities:    (1,028,759)         38,912    
Cash Flows from investing activities:
  Decrease in other assets                           224          19,380   
Net Cash provided by (used for)                                            
  investing activities:                              224          19,380  
Cash Flow from financing activities:
  Decrease in note payable                           ---             ---  
  Net decrease in stockholder note payable        41,100          15,705   
  Principal payments of long-term debt and
   capital lease obligations                     (79,864)        (67,968)   
  Proceeds from issuance of stock                    475             ---  
  Additional paid-in-capital                   1,125,275             ---  
Net Cash used for financing activities:        1,086,986         (52,263)
Net Increase (decrease) in cash and
  cash equivalents:                               58,451           6,028   
Cash and Cash Equivalents,                   
  beginning of period:                               ---           8,464
Cash and Cash Equivalents, end of period:         58,451          (37,771)
</TABLE>                                        
                                        
See accompaning notes to financial statements.
   
                                    -7-
<PAGE>                                    


                      IMAGICA ENTERTAINMENT, INC. and SUBSIDARY
                                  
                           NOTES TO FINANCIAL STATEMENTS
                    


NOTE 1 - BASIS OF PRESENTATION          
The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-QSB, and do not include all of the
information and disclosures required by generally accepted accounting 
principles.  These statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB for the 
year ended May 31, 1996.  The accompanying financial statements have not been
examined by an independent accountant in accordance with generally accepted 
auditing standards, but in the opinion of management, such financial 
statements include all adjustments, consisting only of normal recurring 
adjustments and accruals, to fairly report the Company's financial position 
and results of operations.  The results of operations for the interim periods 
shown in this report are not necessarily indicative of results to be expected 
for the fiscal year. 


NOTE 2 - SUPPLEMENTAL CASH FLOW INFORMATION


During the three months ended August 31, 1996,  the Company
issued  475,000 shares of common stock as payment for current
and future independent consulting services amounting to
$1,125,750. This amount will be amortized through June 1997.

                                    -8-
<PAGE>                                    

ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations


Sales for the three months ended August 31, 1996 were $1,377,260
reflecting a decline of  $413,424 or  30% from the comparable
period in fiscal 1996. The Company believes this was primarily
the result of working capital constraints brought on by the
April 1996 settlement of case number 94-4342-CA-E in the Circuit
Court of Marion County, Florida. Cash that would have been used
to purchase materials, labor and finance a higher sales volume,
went to satisfy the law suit and pay legal fees. The subsequent
revenue stream was reduced. With the Company having a very
limited ability to secure outside capital,  financing  of sales
have been restricted.


Gross profit for the three months ended August 31, 1996
decreased by 26.5% to $270,435 from $368,171 for the comparable
period in fiscal 1996. Despite the 30% reduction in the sales
volume, improved cost control resulted in the gross profit
improving to 28.1%  from 26.7% during the comparable period in
fiscal 1996.


Selling, general and administrative expenses (reflected as
operating expenses in the accompanying statements of operations)
took a dramatic jump to $608,974 for the three months ended
August 31, 1996 from  the $417,250 for the same period in 1995.
The accrual for an executive pay increase, consulting fees, and 
the amortization of consulting fees for the 7/10/96 S-8,
accounted for $280,692 of the $608,974 first quarter operating
expenses. Declining sales and increased operating expenses as a
percentage of sales, operating expenses increased to 63.2% for
the first quarter  of fiscal 1997 as compared to 30.3%  for the
same period in fiscal 1996.


Interest expense decreased 42.4% to $19,810 during the three
months ended August 31, 1996 as compared to the same period in
fiscal 1996. This was attributable to a decrease in interest
paid on the SunTrust note.


The  net  loss increased to ($358,349) for the three months
ended August 31, 1996 as compared to a net loss of ($82,492).
When the $280,692, accrued for consulting fees and an executive
pay increase, is factored out , the net loss for the quarter
ended August 31, 1996 is only ($77,657).   


Liquidity and Capital Resources


The Company has experienced significant cash flow difficulties
in recent years. As of August 31, 1996, the Company has certain
obligations which are currently due or due within one year
including debenture notes payable of $105,000, various notes
payable to stockholders amounting to $398,301, current
maturities of long-term debt of $310,247, and the current
portion of obligations under capital leases of $148,616. The
Company currently does not  have sufficient funds to repay such
obligations. The Company has engaged Gulf Atlantic Capital
Corporation to develop an operating plan that will maximize
profitability and cash flow, contact vendors and secured
creditors, negotiate a repayment plan, and provide plan
monitoring and future assistance in acquiring working capital.


During June 1996 the Company entered into three agreements with
various consultants to arrange the acquisition of funds from
investors. The Company anticipates that the funds generated from
raising additional capital coupled with the implementation of
the Gulf Atlantic plan will be sufficient to enable the Company
to:  (1) pay current maturities on debts; (2) acquire new
printing equipment; and (3) provide working capital for current
operations and future growth.  There can be no assurance
however, that any additional funds can be obtained, nor that net
income generated, if any, will be sufficient to enable the
Company to meet its obligations or continue operations as a
going concern.
                                    -9-
<PAGE>                                    


The Company intends to acquire various equipment in the near
future, most notably a printing machine having a cost of
approximately $460,000.  Of this amount $206,632 has been paid
to date and is included in the "deposit on equipment" in the
accompanying balance sheet. The Company anticipates that the
remaining funding will come from financing as described above.
The Company believes the machine will enable it to produce
banners at a much faster pace and at a much lower cost. 


In 1992 the company purchased land for future development with
cash ($150,000, of  which $125,000 was borrowed from the bank)
and 12,500 shares of common stock.  In connection with this
transaction, the Seller had the option to require the Company to
repurchase the common stock for $10.46 per share. The seller
elected to require the Company to repurchase the stock for
$10.64 per share. A current liability of $133,250 was recognized
as of  May 31, 1994. The Seller filed a complaint for breach of
contract in October 1994. During 1996, settlement was reached
between the Company and the Seller.  The Company was released of
the $133,250 liability, and the Seller was required to repay the
remaining balance owed the bank of $100,000 in exchange for the
return of the land and 12,500 shares of common stock.


                                     -10-
<PAGE>                                    
<PAGE> 
PART II: Other Information 
 
 
Item 6.  Exhibits and Reports on Form 8-K 
 
None. 
 
(a)  Exhibits 
 
Exhibit     Description                                             Page 
 
(a)     Exhibits

          (2)  Plan of Acquisition, Reorganization, Arrangement,
               Liquidation or Succession.                               None

          (3)  Restated Articles of Incorporation and By-Laws
               previously filed as an Exhibit to Form S-18 filed
               January 7, 1991, incorporated herein by reference.

          (4)  Instruments defining the rights of holders,
               including indentures.                                    None

          (9)  Voting Trust Agreement                                   None

         (10)  Material Contracts     

               (a)  Facility Lease between the Company and GWW
                    Partnership, dated September 27, 1989, 
                    previously filed as an Exhibit to Form S-18
                    filed on January 7, 1991, incorporated herein 
                    by reference.

               (b)  Facility Lease between the Company and CYNWD
                    dated June 16, 1990, previously filed as an Exhibit
                    to Form S-18 filed January 7, 1991, incorporated
                    herein by reference.

               (c)  Contract for Sale and Purchase (including Addendum
                    and Subscription Agreement) between the Company
                    and C.L. Dinkins, Jr. Trustee, dated May 15, 1992,
                    previously filed as an Exhibit to Form 10-K filed
                    on April 26, 1993, incorporated herein by reference.

               (d)  Irrevocable Voting Proxy between Richard D. Brown
                    and the Company, dated June 30, 1988, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (e)  Irrevocable Voting Proxy between Robert W. Burnham
                    and the Company dated June 30, 1988, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (f)  Irrevocable Voting Proxy between Mark S. Heller and
                    the Company, dated June 30, 1988, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (g)  Irrevocable Voting Proxy between John Leard and
                    the Company, dated October 31, 1989, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (h)  Irrevocable Voting Proxy between William J. White and
                    the Company, dated June 30, 1988, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (i)  Irrevocable Voting Proxy between Tracie Dawson and
                    the Company, dated June 30, 1988, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (j)  Commitment for Equipment between Climax, Inc. and
                    the Company, dated February 13, 1992, previously filed
                    as an Exhibit to Form 10-K filed on April 26, 1993,
                    incorporated herein by reference.

               (k)  Stock Repurchase Agreement between J. R. Gunter,
                    Robert Wormser, Mark Wormser and the Company
                    dated April 27, 1989.

               (l)  Employment Agreement between the Company and
                    Robert Wormser dated June 1, 1993, previously filed
                    as an Exhibit to Form 10-KSB filed on or about
                    December 20, 1993, incorporated herein by reference.

               (m)  Agreement between the Company and Florida Gulf
                    Capital & Equity Corp., Inc. previously filed as an
                    Exhibit to Form 10-QSB filed on or about May 13, 
                    1994, incorporated herein by reference.

               (n)  Irrevocable Voting Proxy between Donna Wormser
                    and the Company, dated March 3, 1993, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (o)  Irrevocable Voting Proxy between Pruitt Hall
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (p)  Irrevocable Voting Proxy between William J. White
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (q)  Irrevocable Voting Proxy between Tracie Dawson
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (r)  Irrevocable Voting Proxy between Carol Monroe
                    and the Company, dated July 29, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (s)  Irrevocable Voting Proxy between Sharon Rava
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (t)  Irrevocable Voting Proxy between Ricky Brown
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (u)  Irrevocable Voting Proxy between Mark Slaughter
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed October 26,
                    1994, incorporated herein by reference.

               (v)  Irrevocable Voting Proxy between John Fernung
                    and the Company, dated July 22, 1994, previously
                    filed as an Exhibit to Form 10-KSB filed 
                    October 26, 1994, incorporated herein by 
                    reference.

               (w)  Consulting Agreement Tod Lotz
                    and the Company, dated June 12, 1996,
                    previously filed as an Exhibit to Form S-8
                    filed July 10, 1996, incorporated herein 
                    by reference.

               (x)  Consulting Agreement Mark Schultz
                    and the Company, dated July 10, 1996,
                    previously filed as an Exhibit to Form S-8
                    filed July 10, 1996, incorporated herein 
                    by reference.

               (y)  Consulting Agreement Tod Lotz
                    and the Company, dated August 12, 1996,
                    previously filed as an Exhibit to Form S-8
                    filed September 4, 1996, incorporated herein 
                    by reference.

               (z)  Consulting Agreement between Tim Murray
                    and the Company, dated August 12, 1996,
                    previously filed as an Exhibit to Form S-8
                    filed September 4, 1996, incorporated herein 
                    by reference.

          (11)  Statement re: computation of per share earnings         None

          (18)  Letter on change in accounting principles               None

          (21)  Subsidiaries of the Registrant                          None

          (22)  Published report re: matters submitted to vote of 
                  security holders                                      None

          (24)  Power of Attorney                                       None

          (27)  Financial Data Schedule 

          (28)  Information from reports furnished to state
                insurance regulatory authorities                        None

          (99)  Additional Exhibits                                     None

(b)     Form 8-K

     There were no reports on Form 8-K filed during the last quarter 
in the period covered by this report.


SIGNATURE


     In accordance with the requirements of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.


                              IMAGICA ENTERTAINMENT, INC and SUBSIDARY
                              (Registrant)


Date: October 31, 1996        By:     _____________________________
                                   Robert S. Wormser, President
                                   (President, Chief Executive
                                   Officer and Chief Financial
                                   Officer)