SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                 AMENDMENT NO. 1

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





For The Quarter Ended September 30, 1997        Commission File Number 001-13855
                      ------------------                               ---------


                            ILX RESORTS INCORPORATED
                            ------------------------
             (Exact name of registrant as specified in its charter)


             ARIZONA                                      86-0564171
-------------------------------             ------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

          2111 East Highland Avenue, Suite 210, Phoenix, Arizona 85016
          ------------------------------------------------------------
                    (Address of principal executive offices)

         Registrant's telephone number, including area code 602-957-2777
                  ---------------------------------------------

Former name,  former  address,  and former  fiscal year,  if changed  since last
report.

                                ILX INCORPORATED

The undersigned  registrant  hereby amends its Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1997, as follows:

         Part I, Items 1 and 2 are hereby amended to read in their entirety,  as
follows:
<PAGE>
                                     Part I

Item 1.    Financial Statements

                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                            September 30,           December 31, 
                                                                                                1997                   1996
                                                                                                ----                   ----
                                                                                             (Unaudited)
<S>                                                                                       <C>                    <C>             
Assets
     Cash and cash equivalents                                                            $      2,218,261       $      3,523,047
     Notes receivable, net                                                                      15,933,418             11,745,720
     Resort property held for Vacation Ownership Interest sales                                 14,230,827             15,247,587
     Resort property under development                                                           1,727,833              1,209,706
     Land held for sale                                                                          1,551,065              1,547,493
     Deferred assets                                                                               313,813                313,346
     Property and equipment, net                                                                 5,182,104              4,877,467
     Deferred income taxes                                                                         764,449              1,178,653
     Other assets                                                                                1,938,462              1,631,886
                                                                                          ----------------       ----------------
                                                                                          $     43,860,232       $     41,274,905
                                                                                          ================       ================

Liabilities and Shareholders' Equity
     Accounts payable                                                                     $      1,919,757       $      2,310,600
     Accrued and other liabilities                                                               2,976,446              4,658,222
     Due to affiliates                                                                              41,336                139,715
     Notes payable                                                                              19,250,677             14,867,096
     Notes payable to affiliates                                                                 3,110,106              1,567,287
                                                                                          ----------------       ----------------
                                                                                                27,298,322             23,542,920
                                                                                          ----------------       ----------------

Minority Interests                                                                                      --              2,556,865
                                                                                          ----------------       ----------------

Shareholders' Equity (Note 1)
     Preferred stock, $10 par value;  10,000,000 shares authorized;  380,468 and
       392,109  shares  issued  and  outstanding;   liquidation   preference  of
       $3,804,680 and $3,921,090, respectively                                                   1,384,891              1,419,243

     Common stock, no par value; 30,000,000 shares authorized; 2,692,433 and
       2,604,858 shares issued and outstanding                                                  10,275,111              9,788,738

     Treasury stock, at cost, 6,100 and 6,000 shares, respectively                                 (37,099)               (36,536)

     Additional paid in capital                                                                     79,450                 78,300

     Retained earnings                                                                           4,859,557              3,925,375
                                                                                          ----------------       ----------------
                                                                                                16,561,910             15,175,120
                                                                                          ----------------       ----------------
                                                                                          $     43,860,232       $     41,274,905
                                                                                          ================       ================
</TABLE>
                 See notes to consolidated financial statements
                                        2
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                             Three months ended                        Nine months ended
                                                               September 30,                             September 30,
                                                               -------------                             -------------
                                                         1997                  1996                1997                 1996
                                                         ----                  ----                ----                 ----

<S>                                                 <C>                 <C>                   <C>                  <C>             
Timeshare revenues:
     Sales of Vacation Ownership Interests          $     6,812,548     $      5,480,153      $    17,750,423      $     15,270,596
     Resort operating revenue                             2,770,829            2,713,317            8,000,593             7,996,778
     Interest income                                        414,482              248,532              973,236               712,628
                                                    ---------------     ----------------      ---------------      ----------------
         Total timeshare revenues                         9,997,859            8,442,002           26,724,252            23,980,002
                                                    ---------------     ----------------      ---------------      ----------------

Cost of sales and operating expenses
     Cost of Vacation Ownership Interests sold              852,314              669,884            2,369,296             2,311,644
     Cost of resort operations                            2,672,365            2,598,017            7,938,745             7,924,836
     Sales and marketing                                  4,095,069            2,876,500           10,237,066             7,817,019
     General and administrative                             703,731              653,594            2,003,106             1,613,644
     Provision for doubtful accounts                        208,759               36,410              526,352               459,143
     Depreciation and amortization                          137,494               70,396              345,145               543,643
                                                    ---------------     ----------------      ---------------      ----------------
         Total cost of sales and operating
           expenses                                       8,669,732            6,904,801           23,419,710            20,669,929
                                                    ---------------     ----------------      ---------------      ----------------

Timeshare operating income                                1,328,127            1,537,201            3,304,542             3,310,073
                                                    ----------------    ----------------      ---------------      ----------------

Land and other business
     Sales of land and other                                 12,982               30,017               67,563               331,615
     Cost of land sold and other                              5,981               31,160               50,978               291,017
                                                    ---------------     ----------------      ---------------      ----------------

Income (loss) from land and other business                    7,001               (1,143)              16,585                40,598
                                                    ---------------     -----------------     ---------------      ----------------

Total operating income                                    1,335,128            1,536,058            3,321,127             3,350,671

Interest expense                                            564,710              478,962            1,500,472             1,406,073
                                                    ---------------      ---------------      ---------------     -----------------

Income before minority interests and
income taxes                                                770,418            1,057,096            1,820,655             1,944,598
Minority interests                                           (9,554)            (204,303)            (178,307)             (486,469)
Income taxes                                               (303,845)            (354,006)            (656,302)             (607,371)
                                                    ----------------    -----------------   ------------------     -----------------

Net income                                          $       457,019     $        498,787      $       986,046      $        850,758
                                                    ===============     ================      ===============      ================

Net income per common and equivalent share
                                                    $          0.17     $           0.19      $         0.37       $           0.33
                                                    ===============     ================      ==============       ================

Number of common and equivalent shares
                                                          2,682,732            2,602,674            2,651,535             2,578,007
                                                    ===============     ================      ===============      ================
</TABLE>
                 See notes to consolidated financial statements
                                        3
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                       Nine months ended
                                                                                                         September 30,
                                                                                                         -------------
                                                                                                  1997                   1996
                                                                                                  ----                   ----
<S>                                                                                        <C>                     <C>             
Cash flows from operating activities:
    Net income                                                                             $        986,046        $        850,758
    Adjustments to reconcile net income to net cash provided by operating activities:
      Undistributed minority interest                                                               178,032                 239,258
      Provision for doubtful accounts                                                               526,352                 459,143
      Depreciation and amortization                                                                 345,145                 543,643
      Deferred income taxes                                                                         414,204                 735,150
      Amortization of guarantee fees                                                                 67,150                  56,300
      Change in assets and liabilities:
        Decrease in resort property held for Vacation Ownership Interest sales                    1,016,760                 485,381
        Additions to resort property under development                                             (518,127)                (65,269)
        Increase in land held for sale                                                               (3,572)                 (2,309)
        Increase in other assets                                                                    (11,637)               (198,852)
        Decrease in accounts payable                                                               (390,843)               (141,757)
        Increase (decrease) in accrued and other liabilities                                        455,444                (191,012)
        Decrease in due to affiliates                                                               (98,379)               (240,863)
                                                                                           -----------------        ----------------
Net cash provided by operating activities                                                         2,966,575               2,529,571
                                                                                           -----------------       ----------------
Cash flows from investing activities:
    (Increase) decrease in deferred assets                                                          (67,617)                 66,050
    Purchases of plant and equipment, net                                                          (492,988)               (242,465)
    Notes receivable, net                                                                        (4,429,967)             (3,123,123)
    Net cash paid for minority interest                                                            (820,000)                     --
                                                                                           -----------------       ----------------
Net cash used in investing activities                                                            (5,810,572)             (3,299,538)
                                                                                           -----------------       -----------------
Cash flows from financing activities:
    Proceeds from notes payable                                                                   6,208,386               4,181,139
    Principal payments on notes payable                                                          (4,374,662)             (3,826,898)
    Principal payments on notes payable to affiliates                                              (202,181)               (339,350)
    Distributions to minority partners                                                             (140,000)               (720,000)
    Proceeds from issuance of common stock                                                           96,125                 423,875
    Acquisition of treasury stock                                                                      (563)                     --
    Redemption of preferred stock                                                                        --                 (12,000)
    Preferred stock dividend payments                                                               (47,894)                (47,971)
                                                                                           -----------------       -----------------
Net cash provided by (used in) financing activities                                               1,539,211                (341,205)
                                                                                           -----------------       -----------------
Net decrease in cash and cash equivalents                                                        (1,304,786)             (1,111,172)
Cash and cash equivalents at beginning of period                                                  3,523,047               3,746,518
                                                                                           -----------------       ----------------
Cash and cash equivalents at end of period                                                 $      2,218,261        $      2,635,346
                                                                                           =================       ================
</TABLE>
                 See notes to consolidated financial statements
                                        4
<PAGE>
                    ILX RESORTS INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Summary of Significant Accounting Policies

Principles of Consolidation and Business Activities
---------------------------------------------------

The Company's  significant  business activities include  developing,  operating,
marketing  and  financing  Vacation  Ownership  Interests  in resort  properties
located in Arizona,  Colorado,  Florida,  Indiana and Mexico.  Effective  in the
third quarter of 1994, the Company expanded its operations to include  marketing
of skin and hair care products  which are not  considered  significant to resort
operations.

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and the  instructions  to Form  10-Q and  Rule  10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial  statements.  In  the  opinion  of  management,  all  adjustments  and
reclassifications  considered  necessary for a fair and comparable  presentation
have been included and are of a normal recurring  nature.  Operating results for
the three and nine month periods ended  September 30, 1997, are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
1997. The accompanying  financial  statements should be read in conjunction with
the Company's most recent audited financial statements.

The  consolidated  financial  statements  include  the  accounts  of ILX Resorts
Incorporated and its wholly owned and majority-owned  subsidiaries ("ILX" or the
"Company").  All significant  intercompany  transactions  and balances have been
eliminated in consolidation.

Reverse Stock Split
-------------------

On January 9, 1998,  the  Company's  shareholders  approved an  amendment to the
Company's Articles of Incorporation to effect a one-for-five reverse stock split
of the Company's  issued and  outstanding  shares of common  stock.  The reverse
stock split became effective as of 5:00 p.m.  Mountain  Standard Time on January
12,  1998.  The reverse  stock  split has been  retroactively  reflected  in the
accompanying financial statements.

Revenue Recognition
-------------------

Revenue from sales of Vacation  Ownership  Interests is recognized in accordance
with Statement of Financial  Accounting Standard No. 66, Accounting for Sales of
Real  Estate  ("SFAS  No.  66").  No sales are  recognized  until such time as a
minimum of 10% of the  purchase  price has been  received in cash,  the buyer is
committed to continued  payments of the remaining purchase price and the Company
has been released of all future obligations for the Vacation Ownership Interest.
Resort  operating  revenue  represents daily room rentals and revenues from food
and other resort services. Such revenues are recorded as the rooms are rented or
the services are performed.

Statements of Cash Flows
------------------------

Cash  equivalents  are highly liquid  investments  with an original  maturity of
three months or less.  During the three and nine month periods  ended  September
30, 1997 and 1996,  the Company paid  
                                       5
<PAGE>
interest  and income taxes and  capitalized  interest to resort  property  under
development as follows:
<TABLE>
<CAPTION>
                                               Three Months Ended                         Nine Months Ended
                                                 September 30,                              September 30,
                                                 -------------                              -------------
                                           1997                 1996                  1997                 1996
                                           ----                 ----                  ----                 ----
<S>                                   <C>                  <C>                  <C>                   <C>          
Interest                              $       627,079      $     497,975        $     1,546,751       $   1,376,891
Income Taxes                          $            --      $       2,000        $            --       $       2,000
Interest Capitalized                  $        54,020      $      19,859        $       140,006       $      53,958
</TABLE>

Reclassifications
-----------------

The  financial  statements  for  prior  periods  have  been  reclassified  to be
consistent with the 1997 financial statement presentation.

Note 2 - Notes Payable

In June 1997, the Company negotiated a settlement  agreement for the 1996 breach
by a timeshare lender of a 1995 management  agreement between the lender and the
Company.  Under the management  agreement,  the lender committed to advance $3.5
million,  but  failed  to fund  $1.1  million  of this  amount.  The  settlement
agreement  provides for  repayment of the  outstanding  advances  through a note
payable in the amount of $2.4 million.  The note bears interest  commencing July
1, 1997, at 12% per annum,  payable monthly.  Commencing July 1, 1998, principal
is payable through release payments upon the sale of certain Vacation  Ownership
Interests. Any outstanding principal and interest is due in full on December 31,
2002. The note is secured by 200,000 shares of ILX stock pledged by an affiliate
of the  Company,  for which the  affiliate  will  receive a guarantee  fee.  The
settlement  agreement also includes the termination of the management  agreement
(which included a profit sharing  arrangement),  the commitment by the lender to
advance an additional $550,000, bringing the total commitment to $6,550,000, for
the construction of Varsity Clubs of America - Tucson, as well as a reduction in
interest  rate to 12%  (from  13%) on the  Varsity  Clubs  of  America  - Tucson
construction note, and the addition of a fee of $100 per annual Varsity Clubs of
America - Tucson Vacation Ownership Interest sold.

In June 1997,  the Company  entered into an agreement  with one of its timeshare
lenders whereby the Company may borrow up to $5 million  against  consumer notes
from sales of  Vacation  Ownership  Interests  in Kohl's  Ranch  Lodge  and,  in
addition,  whereby the Company in July 1997 borrowed $1.5 million,  secured by a
first  position deed of trust on Kohl's Ranch Lodge.  The existing first deed of
trust on Kohl's Ranch Lodge of $444,500 was repaid in full in  conjunction  with
the new financing.  The $1.5 million  borrowing bears interest at prime plus 4%,
interest  payable  monthly and principal  payable  through  release  payments as
Vacation  Ownership  Interests  are sold,  with a minimum  principal  payment of
$80,000 due per quarter,  and the balance due in full June 27, 2000.  Borrowings
against the $5 million  commitment  for  timeshare  paper bear interest at prime
plus 3.25% and are secured by the consumer notes.

In July 1997, the Company borrowed $598,500 from one of its timeshare lenders to
purchase 285 Vacation  Ownership  Interests in Los  Abrigados  Resort & Spa. The
Vacation Ownership Interests were acquired for approximately $567,000, including
closing costs, under an option agreement whereby the Company had both the option
and under certain  circumstances  the  obligation to purchase up to 667 Vacation
Ownership Interests at a cost of $2,100 per Interest. The July purchase was made
at a  negotiated  rate that was less than the  amount  specified  in the  option
agreement.  Following this transaction,  107 Vacation Ownership Interests remain
subject to the option.  The  borrowing is secured by the 285 Vacation  Ownership
Interests and bears interest at 
                                       6
<PAGE>
prime  plus 4%,  with a 13%  maximum  rate.  Interest  is  payable  monthly  and
principal  is payable in quarterly  installments  of $25,000  through  September
2000.

In September  1997, the Company  borrowed an additional  $800,000 from the first
mortgage holder on the Los Abrigados Resort & Spa and extended the maturity date
of the borrowing to April 1999.

During  the third  quarter  of 1997,  the  Company  borrowed  $1,309,269  on its
$6,550,000  construction financing commitment for the Varsity Clubs of America -
Tucson facility,  bringing the balance  outstanding on the loan to $1,609,269 at
September 30, 1997.

During the first nine months of 1997, the Company  borrowed  $1,651,427  against
consumer  notes  receivable  and also borrowed on its lines of credit,  of which
$200,000 was outstanding at September 30, 1997.

During the second quarter of 1997,  property and equipment of $97,181 was leased
and a vehicle was financed for $29,450.

Note 3 - Notes Payable to Affiliates

In July 1997, the Company  issued 36,800 shares of its restricted  common stock,
which were subsequently  registered with the Securities and Exchange Commission,
in exchange for a $230,000 note payable to an affiliate. In conjunction with the
exchange,  100 Vacation Ownership Interests in Los Abrigados Resort & Spa, which
secured the note, were released.

In August 1997, the Company acquired the Class B Limited Partnership Interest in
LAP,  for a  purchase  price  of  $2,920,000,  consisting  of cash  payments  of
$820,000,  the issuance of 20,000 shares of the Company's common stock valued at
$6.25 per share and the issuance of promissory notes in the amount of $1,300,000
and $675,000. The $1,300,000 note payable,  secured by the Company's 10% Class B
Limited  Partnership  Interest  in Los  Abrigados,  bears  interest  at 8%, with
principal of $100,000  payable on or before  January 1, 1998 and  principal  and
interest  payable in annual  installments of $200,000  commencing July 31, 1998,
with any unpaid  principal and interest due July 31, 2002.  Interest from August
8, 1997 through January 1, 1998 will be added to principal on December 31, 1997.
The  $675,000  note  payable,  secured by the  Company's  11.5%  Class B Limited
Partnership Interest in Los Abrigados,  bears interest at 8%, with principal and
interest  payable in annual  installments of $100,000  commencing July 31, 1998,
with any unpaid  principal  and  interest  due July 31,  2002.  The purchase was
recorded as follows:

             Increase in notes payable to affiliates   $ 1,975,000
             Issuance of common stock                      125,000
             Increase in other assets                       (6,000)
             Decrease in minority interest              (2,914,000)
                                                       ----------- 
             Issuance of cash payments                 $  (820,000)
                                                       =========== 

Note 4 - Shareholders' Equity

During  the first  nine  months of 1997,  holders  of 11,334  shares of Series C
Preferred  Stock  exchanged  their shares for 3,778 shares of common stock.  The
exchanges  were  recorded as a reduction in  preferred  stock and an increase in
common  stock of $31,282.  Shares of stock valued at $3,966 and cash of $16 were
issued in the first nine months of 1997 for the  Dividend  Arrearage  due to the
holders of Series C Preferred Stock who converted their shares in the first nine
months of 1997.
                                       7
<PAGE>
During the second  quarter of 1997,  holders of 307 shares of Series A Preferred
Stock exchanged their shares for lodging certificates at Kohl's Ranch. Preferred
stock was  reduced  by  $3,070,  which is the  liquidation  and par value of the
shares surrendered and additional paid in capital was increased by $1,150, which
is the difference between the par value of the preferred stock and the liability
recorded related to the lodging certificates.

During the first six months of 1997, the Company issued to employees in exchange
for services  provided  14,200  shares of  restricted  common  stock,  valued at
$39,875.

In June 1997, the Company entered into an agreement with EVEREN Securities, Inc.
("ESI") for ESI to act as ILX's exclusive  financial advisor,  investment banker
and agent  with  respect to  evaluation  of  alternatives  to  position  ILX for
long-term growth and to enhance shareholder value. In exchange for the services,
ILX issued 12,000 shares of ILX common stock on August 1, 1997 and will issue an
additional 12,000 shares on February 1, 1998. The shares issued and to be issued
have been valued at $112,500. In accordance with the terms of the agreement, ILX
has registered with the Securities and Exchange  Commission the shares issued in
August  and will  likewise  cause the shares to be issued in  February  to be so
registered.  The  parties  intend  for the  agreement  to remain in effect for a
minimum of one year.

Note 5 - Subsequent Events

In October 1997, the Company made a bid to acquire an approximate  5/8 undivided
interest in the common areas of and all of the  undeveloped  and unsold portions
of the  Roundhouse  Resort,  an  existing  59-unit  resort  with  five  acres of
developable  land located in  Pinetop/Lakeside,  Arizona.  The Company's bid has
been approved by the United States Bankruptcy Court for the District of Arizona,
with the closing expected in mid-November. The bid price is $700,000, to consist
of $525,000  in cash and  $175,000  in stock  valued at the market  price on the
closing date.
                                       8
<PAGE>
                                     Part I

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

                            ILX RESORTS INCORPORATED

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


Reverse Stock Split
-------------------

On January 9, 1998,  the  Company's  shareholders  approved an  amendment to the
Company's Articles of Incorporation to effect a one-for-five reverse stock split
of the Company's  issued and  outstanding  shares of common  stock.  The reverse
stock split became effective as of 5:00 p.m.  Mountain  Standard Time on January
12,  1998.  The reverse  stock  split has been  retroactively  reflected  in the
following  "Management's  Discussion  and  Analysis of Financial  Condition  and
Results of Operations."

Results of Operations
---------------------

Sales of Vacation Ownership Interests were 24.3% and 16.2% greater for the three
and nine  months  ended  September  30,  1997,  respectively,  than for the same
periods in 1996. The increases  reflect  greater sales from the Sedona and South
Bend  Sales  Offices,  sales to  customers  already  owning  Vacation  Ownership
Interests  in ILX  resorts,  and the opening of sales  offices in Tucson and the
Phoenix  metropolitan  area,  net of reduced  sales from the Kohl's  Ranch Sales
Office for the first six months of 1997.

The  increase  in sales to  existing  ILX owners in 1997  reflects  an  expanded
marketing  program  whereby owners are offered the  opportunity to upgrade their
Interest  to a larger  size unit,  to  exchange  their  Interest  to a different
resort, and/or to purchase additional Vacation Ownership Interests.  As a result
of the increased marketing efforts to existing  customers,  revenue increased to
approximately  $471,000 in 1997 from $202,000 in 1996 for the third quarter, and
to  $2,175,000  from  $703,000 for the nine months ended  September 30, 1997 and
1996, respectively.

Sales of Vacation  Ownership  Interests  from the Sedona Sales Office  increased
approximately  $190,000  and  $454,000  for the  three  and  nine  months  ended
September  30, 1997 from the same periods in 1996 due to increases in prices and
a greater  number of  timeshare  tours,  and in the first and third  quarters of
1997,  increased  closing rates  (number of Vacation  Ownership  Interest  sales
divided by number of timeshare tours).

Sales of Vacation  Ownership  Interests in Varsity Clubs of America - South Bend
were  $2,496,990  and $1,823,887 and $5,715,935 and $3,879,491 for the three and
nine  months  ended  September  30,  1997  and  1996,  respectively.   In  1997,
approximately  $3,904,000  in  Varsity  Clubs of America - South Bend sales were
generated  from the South Bend Sales  Office,  $1,768,000  from the Sedona Sales
Office,  which commenced  offering Interests in Varsity Clubs of America - South
Bend in June 1996 and $44,000  from the Tucson  Sales  Office,  which  opened in
August  1997.  Sales of  Varsity  Clubs of America - South Bend in the first six
months of 1996 were primarily from the South Bend Sales Office.  The increase in
1997 sales from the South Bend Sales Office  reflects  higher  closing rates and
increased prices.

Sales of Vacation  Ownership  Interests in Kohl's Ranch increased  approximately
$112,000 in the third quarter of 1997 from the third quarter of 1996, reflecting
increased prices,  net of a reduced 
                                       9
<PAGE>
closing rate. Sales decreased  approximately  $306,000 for the nine months ended
September  30,  1997 from the same  period in 1996 as a result of lower  closing
rates  and a lower  number of  timeshare  tours,  which in part  were  offset by
increased prices.  Second and third quarter 1997 sales include $109,395 in sales
of Kohl's Ranch  Interests  from a sales  office  opened on a trial basis in the
Phoenix metropolitan area in late April 1997. The office was not retained beyond
the trial period (April - July 1997) due to high marketing costs and low closing
rates.

In late August 1997,  the Tucson Sales Office opened and began selling  Vacation
Ownership  Interests in Los Abrigados  Resort & Spa,  Varsity Clubs of America -
South Bend and Kohl's Ranch Lodge.  Sales from this office were $240,730 for the
third quarter of 1997.

Resort operating  revenues and cost of resort operations are comparable  between
the periods presented.

The  decrease in sales of land and other and the  related  cost of sales for the
nine months ended  September 30, 1997 reflects the sale of a parcel of land held
by Genesis in the second  quarter of 1996.  Sales are  comparable  for the three
months ended September 30, 1997 and 1996.

The increase in interest  income from 1996 to 1997 is a result of the  increased
consumer paper retained by the Company and an increase in interest rates charged
by the Company effective July 1997. The Company  hypothecates  (borrows against)
the majority of its retained paper.

Sales and marketing as a percentage of sales of Vacation Ownership Interests has
increased  for both the third  quarter and nine months ended  September 30, 1997
from the same periods in 1996 due to increased costs of generating  tours to the
Arizona sales offices in 1997, a low closing rate in the trial Phoenix office in
1997,  a lower  closing rate at the Kohl's Ranch Sales Office in 1997 than 1996,
the opening of the Tucson Sales Office in 1997,  and due to the  recognition  in
1996 of benefits  from premiums  issued to potential  customers in prior periods
which expired without redemption. Increases in costs of generating tours in 1997
is due in part to the trial of  several  new  marketing  strategies  which  were
determined not to be cost effective and therefore  terminated in July and August
1997.

The increase in the  provision  for doubtful  accounts for the third  quarter of
1997 from same period in 1996  reflects an  adjustment  to the provision in 1996
based on the expected  performance of the portfolio of consumer paper, both sold
and unsold. The provision for doubtful accounts is comparable as a percentage of
sales of Vacation  Ownership  Interests for the nine months ended  September 30,
1997 and 1996.

Interest expense is comparable between periods and reflects increased borrowings
against  consumer  paper  retained by the  Company,  borrowings  against  resort
property held for Vacation  Ownership Interest sales and debt issued in exchange
for the purchase of LAP minority interest, net of payments.

General and  administrative  expenses  increased  for both the third quarter and
nine months  ended  September  30, 1997 from the same  periods in 1996 due to an
increase in payroll expense, professional fees and rent expense.

The decrease in minority  interests  from 1996 to 1997  reflects the purchase by
the  Company of the  minority  interest  in LAP in August  1997 and  reduced Los
Abrigados resort income.

Liquidity and Capital Resources
-------------------------------

The Company's  liquidity needs  principally  arise because it finances  consumer
purchases of Vacation Ownership Interests.  The Company addresses such liquidity
needs through the sale 
                                       10
<PAGE>
and/or  hypothecation  of the consumer notes it generates.  In that regard,  the
Company  has $5 million of credit  issued by a  financing  company  under  which
conforming  notes from sales of Vacation  Ownership  Interests in Los  Abrigados
Resort & Spa can be sold on a recourse  basis  through  March 1998. In addition,
the  Company  has an open  ended  arrangement  with a finance  company  which is
expected  to  provide  financing  of  notes  from  sales of  Vacation  Ownership
Interests in Los Abrigados  Resort & Spa of at least $5 million through 1997. At
September  30, 1997,  approximately  $2.2  million is available  under the fixed
commitment line and a minimum of $2.4 million is expected to be available on the
open-ended line. The Company also has financing  commitments whereby the Company
may borrow up to $2 million against  non-conforming notes from sales of Vacation
Ownership  Interests in Los Abrigados Resort & Spa, Golden Eagle Resort,  Kohl's
Ranch and  Varsity  Clubs of  America - South  Bend,  and $2.2  million  against
conforming  notes from sales of Vacation  Ownership  Interests  in Golden  Eagle
Resort  through March 1998.  Approximately  $900,000 was  available  under these
commitments at September 30, 1997.

The Company  has a $10  million  open-ended  financing  arrangement  whereby the
Company  may sell  eligible  notes  received  from sales of  Vacation  Ownership
Interests  in  Varsity  Clubs  of  America  - South  Bend on a  recourse  basis.
Approximately  $3.5 million was available under this commitment at September 30,
1997.

The Company  has  financing  commitments  whereby it may borrow up to $5 million
against conforming notes received from sales of Vacation Ownership  Interests in
Kohl's Ranch through March 1998 and $5 million through June 2000.  Approximately
$2.2 million was available on the first  commitment and $5 million on the second
commitment at September 30, 1997.

The Company will continue to retain certain  non-conforming notes which have one
to two year terms or which do not otherwise  meet existing  financing  criteria,
and  finance  these  notes  through  internal  funds.  The  Company  will pursue
additional credit facilities to finance conforming and  non-conforming  notes as
the need for such financing arises.

The Company has a $500,000 line of credit each from two financial  institutions.
At September 30, 1997, $800,000 was available for working capital.

In June 1997, the Company negotiated a settlement  agreement for the 1996 breach
by a timeshare lender of a 1995 management  agreement between the lender and the
Company.  Under the management  agreement,  the lender committed to advance $3.5
million,  but  failed  to fund  $1.1  million  of this  amount.  The  settlement
agreement  provides for  repayment of the  outstanding  advances  through a note
payable in the amount of $2.4 million.

In July 1997,  the Company  borrowed $1.5 million,  secured by a first  position
deed of trust on Kohl's  Ranch  Lodge.  The  funds  were used to repay the prior
first deed of trust of $444,500, and the balance for working capital.

In July 1997,  the Company  acquired  285  Vacation  Ownership  Interests in Los
Abrigados Resort & Spa for approximately  $567,000. The purchase of the Vacation
Ownership  Interests  was  financed  by a  $598,500  borrowing  from  one of the
Company's timeshare lenders,  and is secured by the Vacation Ownership Interests
acquired.

In August 1997, the Company acquired the Class B Limited  Partnership  Interests
in Los Abrigados for $820,000 cash,  20,000 shares of the Company's common stock
valued at $6.25 per share and notes payable totaling  $1,975,000  secured by the
Company's interest in LAP. The Company borrowed an additional  $800,000 from the
first mortgage holder on Los Abrigados to finance the acquisition.
                                       11
<PAGE>
During  the third  quarter  of 1997,  the  Company  borrowed  $1,309,268  on its
construction  financing  commitment  for the  Varsity  Clubs of America - Tucson
facility.

Cash  provided by operating  activities  increased  from  $2,529,571  in 1996 to
$2,966,575  in 1997  due to  greater  net  income  and an  increase  in  accrued
liabilities,  offset by additions to resort  property under  development in 1997
and greater  additions to resort property held for Vacation  Ownership  Interest
sales in 1996.

The increase in cash used in investing  activities  from  $3,299,538  in 1996 to
$5,810,572  in 1997  reflects  an increase  in  consumer  notes  retained by the
Company, an increase in purchases of plant and equipment and the cash payment of
$820,000 in connection with the acquisition of the minority interest in LAP.

The change from cash used in  financing  activities  in 1996 of $341,205 to cash
provided  by  financing  activities  in  1997  of  $1,539,211  reflects  greater
borrowings in 1997 and a reduction in distributions to minority partners.

Although no assurances can be made, based on the prior success of the Company in
obtaining  necessary  financings for  operations and for expansion,  the Company
believes  that  with its  existing  financing  commitments,  its cash  flow from
operations and the  contemplated  financings  discussed  above, the Company will
have  adequate  capital  resources  for at least the next twelve to  twenty-four
months.
                                       12
<PAGE>
                                   SIGNATURES





                  Pursuant to the requirements of the Securities Exchange Act of
1934, as amended,  the  Registrant  has duly caused this  Amendment No. 1 to its
quarterly  report on Form 10-Q to be  signed  on its  behalf by the  undersigned
thereunto duly authorized.



                            ILX RESORTS INCORPORATED
                                  (Registrant)




                              /S/ Joseph P. Martori
                         -------------------------------
                                Joseph P. Martori
                             Chief Executive Officer





                               /S/ Nancy J. Stone
                         -------------------------------
                                 Nancy J. Stone
                                    President





                               /S/ Jay R. Hoffman
                         -------------------------------
                                 Jay R. Hoffman
                             Chief Financial Officer






Date:  As of February 11, 1998
                                       13