SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C.  20549

                            FORM 10-Q

          Quarterly Report under Section 13 or 15 (d) of
               The Securities Exchange Act of 1934

For Quarter Ended:                 Commission File Number
 October 8, 1997                          0-14370

                          BUFFETS, INC.
      (Exact name of registrant as specified in its charter)

       Minnesota                       41-1462294
(State of incorporation)   (I.R.S. Employer Identification No.)

           10260 Viking Drive, Eden Prairie, MN  55344
             (Address of principal executive offices)

                          (612) 942-9760
                 (Registrant's telephone number)

Indicate by check mark whether the Registrant (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 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   
                   -----                  -----

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

        Class                 Outstanding as of November 14,1997
        -----                 ----------------------------------
Common Stock, $.01 par value             45,369,541 shares

                                1
<PAGE>



                  BUFFETS, INC. AND SUBSIDIARIES


                              INDEX
                              -----

                                                       Page No.
                                                       --------

 PART I.  FINANCIAL INFORMATION

 Item 1.  Consolidated Financial Statements:

          Consolidated Balance Sheets-
          January 1, 1997 and October 8, 1997 . . .       3

          Consolidated Statements of Operations-
          Forty Weeks ended October 9, 1996
          and October 8, 1997 and Twelve Weeks
          ended October 9, 1996 and
          October 8, 1997 . . . . . . . . . . . . .       4

          Consolidated Statements of Cash Flows-
          Forty Weeks ended October 9, 1996
          and October 8, 1997 . . . . . . . . . . .       5

          Notes to Consolidated Financial
          Statements. . . . . . . . . . . . . . . .       6

 Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of
          Operations  . . . . . . . . . . . . . . .       7

 PART II. OTHER INFORMATION . . . . . . . . . . . .      13


                                2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS

                              BUFFETS, INC. AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEETS
                                       (UNAUDITED)
                                                      JANUARY 1,   OCTOBER 8,
                                                         1997        1997       
                                                      ----------   ----------
                                                           (in thousands)
                                      ASSETS
CURRENT ASSETS:
  Cash and cash equivalents  . . . . . . . . . . .      $ 10,772    $ 39,044
  Receivable from landlords  . . . . . . . . . . .         2,642       2,247
  Inventory. . . . . . . . . . . . . . . . . . . .         3,653       3,961
  Notes receivable . . . . . . . . . . . . . . . .            52          29
  Prepaid rents. . . . . . . . . . . . . . . . . .         2,782       2,243
  Other current assets . . . . . . . . . . . . . .         2,587       1,185
  Deferred income taxes. . . . . . . . . . . . . .        11,975      11,010
                                                        --------    --------
   TOTAL CURRENT ASSETS. . . . . . . . . . . . . .        34,463      59,719

PROPERTY AND EQUIPMENT:
  Land . . . . . . . . . . . . . . . . . . . . . .        15,686      15,688
  Building . . . . . . . . . . . . . . . . . . . .        30,537      30,986
  Equipment. . . . . . . . . . . . . . . . . . . .       228,046     243,152
  Leasehold improvements . . . . . . . . . . . . .       185,263     199,519
                                                        --------    --------
                                                         459,532     489,345
  Less accumulated depreciation and amortization .       131,811     158,863
                                                        --------    --------
                                                         327,721     330,482
  
GOODWILL, net of accumulated amortization of $1,615 and
  $1,884, respectively . . . . . . . . . . . . . .         5,974       5,705
OTHER ASSETS . . . . . . . . . . . . . . . . . . .         2,525       2,268
                                                        --------    --------
                                                        $370,683    $398,174
                                                        --------    --------
                                                        --------    --------

                       LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable . . . . . . . . . . . . . . . .      $ 29,483    $ 26,862
  Accrued payroll and related benefits . . . . . .        16,229      17,096
  Accrued rents. . . . . . . . . . . . . . . . . .        13,892      15,035
  Accrued sales taxes. . . . . . . . . . . . . . .         3,497       4,428
  Accrued insurance. . . . . . . . . . . . . . . .         4,390       5,648
  Accrued site closing costs . . . . . . . . . . .         7,703       6,461
  Other accrued expenses . . . . . . . . . . . . .         5,779       7,755
  Income taxes . . . . . . . . . . . . . . . . . .           615       3,190
  Current portion of capital leases. . . . . . . .         2,055       1,939
                                                        --------    --------
   TOTAL CURRENT LIABILITIES . . . . . . . . . . .        83,643      88,414
  
LONG-TERM DEBT . . . . . . . . . . . . . . . . . .        41,500      41,500
LONG-TERM PORTION OF CAPITAL LEASES. . . . . . . .         5,078       3,535
DEFERRED INCOME. . . . . . . . . . . . . . . . . .           405         302
DEFERRED INCOME TAXES. . . . . . . . . . . . . . .         3,266       3,463
MINORITY INTEREST. . . . . . . . . . . . . . . . .                        17
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, $.01 par value; 5,000 shares
   authorized; none issued and outstanding 
  Common stock, $.01 par value; 60,000 shares
   authorized; issued and outstanding 45,159 and
   45,327 shares, respectively . . . . . . . . . .           452         453
  Additional paid-in capital . . . . . . . . . . .       116,330     117,434
  Retained earnings. . . . . . . . . . . . . . . .       120,009     143,056
                                                        --------    --------
   TOTAL STOCKHOLDERS' EQUITY  . . . . . . . . . .       236,791     260,943
                                                        --------    --------
                                                        $370,683    $398,174
                                                        --------    --------
                                                        --------    --------

                 See Notes to Consolidated Financial Statements.

                                      3
<PAGE>
                        BUFFETS, INC. AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                 (UNAUDITED)

                                   FORTY WEEKS ENDED       TWELVE WEEKS ENDED
                                 ----------------------  ----------------------
                                 OCTOBER 9,  OCTOBER 8,  OCTOBER 9,  OCTOBER 8,
                                    1996        1997        1996        1997   
                                 ----------  ----------  ----------  ----------
                                     (in thousands, except per share amounts)

RESTAURANT SALES . . . . . . . .   $580,837    $625,422    $180,846   $194,145 
RESTAURANT COSTS:
  Food costs . . . . . . . . . .    202,084     212,609      62,957     65,078 
  Labor costs. . . . . . . . . .    166,430     186,325      51,974     56,412 
  Direct and occupancy costs . .    136,565     151,867      43,362     47,148 
                                   --------    --------    --------   --------
  Total restaurant costs . . . .    505,079     550,801     158,293    168,638 
                                   --------    --------    --------   --------

RESTAURANT PROFITS . . . . . . .     75,758      74,621      22,553     25,507 

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES. . . .     36,867      36,301      12,578     12,190 
MERGER AND OTHER RELATED COSTS .      6,584                   6,584            
DUPLICATE SITE CLOSING COSTS . .     10,702                  10,702            
IMPAIRMENT OF ASSETS . . . . . .     27,739                  27,739  
OTHER SITE CLOSING COSTS . . . .      4,547                   4,547            
                                   --------    --------    --------   --------
                                    (10,681)*    38,320     (39,597)*   13,317 

OTHER (EXPENSE) INCOME NET . . .       (561)       (533)       (147)        99 
                                   --------    --------    --------   --------
(LOSS) EARNINGS BEFORE INCOME
  TAX BENEFIT (EXPENSE)  . . . .    (11,242)*    37,787     (39,744)*   13,416 
    
INCOME TAX BENEFIT (EXPENSE) . .      1,300     (14,740)     12,298     (5,236)
                                   --------    --------    --------   --------

NET (LOSS) EARNINGS  . . . . . .   $ (9,942)*  $ 23,047    $(27,446)* $  8,180 
                                   --------    --------    --------   --------
                                   --------    --------    --------   --------

NET (LOSS) EARNINGS PER COMMON 
  AND COMMON EQUIVALENT SHARE. .      $(.22)*      $.51       $(.60)*     $.18 
                                   --------    --------    --------   --------
                                   --------    --------    --------   --------

WEIGHTED AVERAGE COMMON AND
  COMMON EQUIVALENT SHARES
  OUTSTANDING  . . . . . . . . .     45,490      45,577      45,073     45,824 

    *Reflects non-cash and merger charge totaling $49,572,000 ($32,666,000 or 
     $.72 per share after tax)

               See Notes to Consolidated Financial Statements.

                                      4
<PAGE>
                        BUFFETS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)

                                                           FORTY WEEKS ENDED   
                                                      ------------------------
                                                      OCTOBER 9,    OCTOBER 8,
                                                         1996          1997
                                                      ---------     ---------
                                                           (in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) earnings  . . . . . . . . . . . . . . .   $ (9,942)      $23,047 
  Adjustments to reconcile net (loss) earnings
   to net cash provided by operating activities:
    Depreciation and amortization  . . . . . . . . .     31,508        31,575 
    Impairment of assets and site closing costs  . .     42,988               
    Tax benefit from early disposition of 
       common stock  . . . . . . . . . . . . . . . .        186           263 
    Deferred income  . . . . . . . . . . . . . . . .       (256)         (103)
    Deferred income taxes  . . . . . . . . . . . . .    (15,245)        1,162 
    Changes in assets and liabilities:
      Inventory. . . . . . . . . . . . . . . . . . .        148          (308)
      Other current assets . . . . . . . . . . . . .      1,194         1,993 
      Refundable income taxes. . . . . . . . . . . .      1,829               
      Other assets . . . . . . . . . . . . . . . . .        242           (45)
      Accounts payable . . . . . . . . . . . . . . .     (9,561)       (2,621)
      Accrued payroll and related benefits . . . . .        514           867 
      Accrued site closing costs . . . . . . . . . .                   (1,242)
      Other accrued expenses . . . . . . . . . . . .      7,483         5,308 
      Income taxes currently payable . . . . . . . .        620         2,575 
                                                       --------       -------
        Total adjustments  . . . . . . . . . . . . .     61,650        39,424 
                                                       --------       -------

        Net cash provided by operating activities. .     51,708        62,471 

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of investments  . . . . . . . . . . . . .   (125,251)
  Proceeds from sale of investments. . . . . . . . .    153,079
  Purchase of minority interest in HTB I . . . . . .       (950)
  Capital expenditures, net of retirements
   and net receipts from landlords . . . . . . . . .    (51,469)      (37,217)
  Cash receipts from landlords . . . . . . . . . . .      1,960         3,835 
                                                       --------       -------

      Net cash used in investing activities. . . . .    (22,631)      (33,382)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of employee stock options .      1,101           842 
  Payments of long-term debt . . . . . . . . . . . .    (14,000)              
  Net payments on short-term debt. . . . . . . . . .     (2,000)
  Payments on capital leases . . . . . . . . . . . .     (1,491)       (1,659)
                                                       --------       -------

      Net cash used in financing activities. . . . .    (16,390)         (817)
                                                       --------       -------

NET INCREASE IN CASH AND CASH EQUIVALENTS  . . . . .     12,687        28,272 

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . .     14,530        10,772 
                                                       --------       -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . . .   $ 27,217       $39,044 
                                                       --------       -------
                                                       --------       -------

Supplemental disclosures of cash flow information:

Cash paid during the period for:
  Interest (Net of capitalized interest of $252 and    
   $215 in 1996 and 1997, respectively)  . . . . . .   $  2,300      $  2,214 
  Income taxes . . . . . . . . . . . . . . . . . . .     11,212        10,785 

               See Notes to Consolidated Financial Statements.

                                5
<PAGE>
                  BUFFETS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1. In the opinion of Management, the accompanying unaudited consolidated 
   financial statements contain all adjustments (consisting only of normal
   recurring adjustments) necessary to present fairly the financial position
   of Buffets, Inc. and subsidiaries as of October 8, 1997 and the results 
   of operations for the twelve weeks ended October 9, 1996 and October 8, 
   1997 and the results of operations and cash flows for the forty weeks
   ended October 9, 1996 and October 8, 1997.

2. Minority interest reflects a 20% ownership interest in Dinertainment, Inc.

3. On May 13, 1997, the Company's Board of Directors approved the repricing 
   of stock options to substantially all employees with outstanding options.
   The employees had the opportunity from May 23, 1997 to June 30, 1997 to 
   have their options repriced at the higher of $9.00 per share or at the 
   fair market value of the Company's common stock on the date they elected 
   to reprice their options if they surrendered 50% of the options being
   repriced.  Employees having stock options to purchase 907,226 shares of 
   common stock with exercise prices ranging from $9.13 to $24.63 exchanged
   those options for stock options to purchase 453,613 shares of common stock
   with an average exercise price of $9.00.

   Also on May 13, 1997 the Board approved a stock option grant plan for 
   three Executive Officers who were excluded from the repricing program.  
   The plan provides for the three Officers the option to purchase an 
   aggregate of 275,000 shares for $9.00 per share, the fair market value
   on the date awarded.  The options vest one third if the fair market value
   as of the close of trading exceeds $12 per share for thirty consecutive 
   trading days, one third if the price exceeds $16 per share for thirty
   consecutive trading days and one third if the price exceeds $20 per share
   for thirty consecutive trading days.  The plan also provides that all 
   options become exercisable no later than May 19, 2006.

4. These statements should be read in conjunction with the Notes to 
   Consolidated Financial Statements contained in the Company's Annual 
   Report on Form 10-K for the fiscal year ended January 1, 1997 and with 
   Management's Discussion and Analysis of Financial Condition and Results
   of Operations appearing on pages 7 through 12 of this quarterly report.

                                6
<PAGE>
Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS.

    The Company operates on a fifty-two or fifty-three week fiscal year,
which ends on the Wednesday nearest December 31. The Company's first quarter
consists of sixteen weeks; all other quarters are comprised of twelve weeks.  
When a fifty-three week year occurs, the Company's fourth quarter consists of
thirteen weeks.

RESULTS OF OPERATIONS

TWELVE WEEKS ENDED OCTOBER 8, 1997

RESTAURANT SALES.  Restaurant sales of $194.1 million during the third
quarter of 1997 represented a 7.4% increase over sales of $180.8 million 
for the comparable period of 1996, primarily due to sales generated by new 
restaurants and higher sales at recently converted restaurants, partially 
offset by the temporary closing of restaurants during conversion. Two new
restaurants opened in the third quarter of 1997 compared to seven during the
third quarter of 1996, bringing the total number of Company-owned restaurants
to 359 at the end of the quarter (243 Old Country Buffet, 112 HomeTown Buffet
and four Roadhouse Grill), compared to 341 restaurants open at the end of the 
third quarter of 1996. Nine Old Country Buffet restaurants were converted to
HomeTown Buffet restaurants during the quarter.  Average weekly sales per 
restaurant for the third quarter of 1997 increased 2.9% to $45,972 from
$44,697 in the comparable period of 1996.  The 14 new restaurants opened 
during 1997 generated average weekly sales of $53,445 during the third
quarter.  Comparable restaurant sales were up .4% for the comparable period. 
Management believes that this increase is partially attributable to increased 
advertising in the third quarter of 1997.  The Company's price increases have
been in line with inflation.

RESTAURANT COSTS.  As a percentage of restaurant sales, total restaurant
costs decreased to 86.9% for the third quarter of 1997 from 87.5% for the 
third quarter of 1996.  Food costs as a percentage of restaurant sales 
decreased to 33.5% from 34.8%, due primarily to a reduction in the cost of 
dairy products; and labor costs increased to 29.1% of sales from 28.7%, 
primarily due to increases in the base compensation of store level managers
and higher expenditure on hourly wages due to a system wide implementation 
of a menu change in July of 1997 and the ongoing rollout of a certified 
training program.  Direct and occupancy costs increased as a percentage of 
restaurant sales to 24.3% in 1997 from 24.0% in 1996, due to increases in 
various restaurant costs including janitorial and repair and maintenance 
expenses.

                                7
<PAGE>
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses as a percentage of restaurant sales decreased to 
6.3% in the third quarter of 1997 from 7.0% in the third quarter of 1996. 
Such expenses in absolute terms decreased 3.1% to $12.2 million for the third
quarter of 1997 from $12.6 million for the comparable period of 1996, 
primarily due to a decrease in opening crew expense in the 1997 quarter 
offset by the increase in advertising expense.  The Company expects to incur
approximately $3.1 million in marketing expenditures in the fourth quarter 
relating to the Company's current marketing campaign, which will cover 
approximately 50% of the Company's buffet restaurants.  The Company expects
to spend approximately 1.2% of restaurant sales on advertising in fiscal 1997.

1996 MERGER COSTS, DUPLICATE SITE CLOSING COSTS AND IMPAIRMENT OF ASSETS.  
Merger costs related to the Company's acquisition of HomeTown Buffets Inc. in
September 1996, were $17,286,000, of which $6,584,000 was for investment 
banking, accounting, legal and other merger costs and $10,702,000 was for the
closure of five duplicate restaurants and HomeTown's San Diego headquarters. 
Non-merger charges taken in the third quarter of 1996 included $4,547,000
relating to the closure of three non-performing restaurants and $27,739,000
relating to the application of Statement of Financial Accounting Standards 
No. 121, "Accounting for the Impairment of Long-Lived Assets and for 
Long-Lived Assets to be Disposed of."  The Company determined that an 
impairment write down was necessary for these locations because of a 
significant drop in average weekly sales and corresponding trend of 
increasing operating losses at these locations during the first 40 weeks of 
fiscal 1996 (a period that includes the fiscal third quarter, which 
traditionally has been a strong quarter for sales).  The SFAS No. 121 
impairment was determined based upon 38 specific restaurant locations which 
had incurred operating or cash flow losses.  It was computed using estimated
fair value of the assets and the associated future cash flows of the specific
location.  HomeTown Buffet represented 27% of the impairment.  Depreciation
of the impaired assets and losses from eight restaurants amounted to $3,777,000 
through the third quarter of fiscal year 1996 ($2,342,000 or $.05 per share 
after taxes).

INCOME TAX BENEFIT (EXPENSE).  The Company's effective income tax rate was 
39.0% for the third quarter of 1997.  This rate is higher then the statutory 
rate primarily due to state income taxes. The Company's effective income tax
rate was 30.9% for third quarter 1996.  This rate is lower than the statutory 
rate primarily due to certain merger related costs which are not deductible 
for tax purposes. 

                                8
<PAGE>
FORTY WEEKS ENDED OCTOBER 8, 1997

RESTAURANT SALES.  For the first forty weeks of 1997, restaurant sales 
increased 7.7% to $625.4 million from $580.8 million in 1996, primarily due 
to sales generated by new restaurants and higher sales at recently converted 
restaurants, partially offset by the temporary closing of restaurants during 
conversion.  The Company opened 15 restaurants in the first forty weeks of 
1997 as compared to 31 in the first forty weeks of 1996.  The average weekly 
sales per restaurant in the 1997 period increased by .9% to $44,693 from
$44,279 in 1996.  Comparable restaurant sales were down 1.9% for the 
comparable periods.  Management believes that this decrease is partially 
attributable to lower advertising expenditure in the first two quarters of 
1997 than in the first two quarters of 1996 offset by the increased 
advertising expenditure in the third quarter of 1997 compared to third 
quarter of 1996.  The Company's price increases have been in line with 
inflation.

RESTAURANT COSTS.  Restaurant costs for the first forty weeks in 1997 
increased to $550.8 million from $505.1 million in 1996.  As a percentage of
restaurant sales, the 1997 period costs were 88.1% and the 1996 period costs 
were 87.0%.  Food costs decreased to 34.0% from 34.8% for the comparable
periods; and labor costs increased to 29.8% from 28.7%, primarily due to
increases in the base compensation of store level managers and higher 
expenditure on hourly wages due to a system wide implementation of a menu 
change and the rollout of a certified training program.  Direct and occupancy
costs increased to 24.3% in the first forty weeks of 1997 from 23.5% in the 
comparable period in 1996, due to increases in various restaurant costs 
including janitorial and repair and maintenance expenses. 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  For the first forty weeks of
1997, selling, general and administrative expenses decreased to $36.3 million 
from $36.9 million in 1996.  This decrease was primarily due to a decrease in 
opening crew expense in 1997.  As a percentage of sales, selling, general and
administrative expenses decreased to 5.8% in the 1997 period from 6.3% in the
1996 period.  Advertising for the first forty weeks of 1997 and 1996 was 1% 
of restaurant sales. 

INCOME TAXES.  Income taxes were 39.0% of earnings before income taxes for 
the 1997 period.  Income taxes reflect a tax benefit of $1.3 million or 11.6%
of the loss for the forty weeks in 1996.  The Company's effective tax rates 
for 1996 was lower than the statutory rate primarily due to certain merger 
related costs which are not deductible for tax purposes.

                                9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
   The Company's restaurants generate cash immediately through sales.  New 
restaurants are generally profitable shortly after opening.  The Company does
not have significant assets in the form of trade receivables or inventory, 
and often receives several weeks of trade credit from food and supply 
purveyors; therefore, the Company's operations generate substantial cash 
which is available to fund new restaurants.  The investment of cash flow from
operations in restaurant property and equipment results in a "working capital
deficit" (current liabilities exceeding current assets) which, to a 
considerable extent, represents interest-free financing from trade creditors 
that the Company intends to continue to utilize.

   The Company currently has an unsecured revolving line of credit  of up to
$50 million with interest payable at the option of the Company, at the 
applicable "eurodollar rate", "certificate of deposit rate", or the 
"reference rate" of the bank at the time of the advance.  The Company is 
also required to pay a commitment fee equal to 1/4 of 1% per annum of the 
unused balance, payable quarterly in arrears.  On July 1, 1999, providing no
default or event of default has occurred and is continuing, the line of credit
is convertible, at the Company's option, to a three-year term loan, maturing 
on July 1, 2002.  As of October 8, 1997, the Company had no borrowings 
outstanding under this credit line.

  In 1995, HomeTown Buffet, Inc., a wholly-owned subsidiary of the Company 
("HomeTown"), issued $41.5 million in aggregate principal amount of 7.0% 
subordinated convertible notes due on December 1, 2002.  Interest is payable 
semi-annually on June 1 and December 1, commencing June 1, 1996.  The notes 
are convertible into shares of the Company's common stock at a conversion 
price of $11.67, subject to adjustment under certain conditions, at any time 
until maturity.  The notes are subordinated in right of payment to all 
existing and future senior indebtedness of the Company.  The notes are 
redeemable in whole or in part, at the option of the Company, at any time on
or after December 2, 1998.

  The Company continues to require substantial amounts of capital to fund its 
growth.  The Company currently expects to open a total of approximately 19
new restaurants and convert 25 restaurants, principally from Old Country 
Buffets to HomeTown Buffets and one HomeTown Buffet to a Roadhouse Grill, 
during 1997, with 15 new restaurants already opened and all 25 conversions 
completed at October 8, 1997. 

  The Company expects to spend an aggregate of approximately $5 to $8 million 
during the remainder of 1997 on its restaurants being opened in 1997 and 
early 1998, depending on the level of contributions obtained from landlords 
for leasehold improvements and the amount of land purchased for freestanding 
buildings.  The Company anticipates that, as it further pursues the 
development of freestanding locations, the cost per location and related cash
requirements will increase substantially over prior years and that  

                                10
<PAGE>
these costs will not be offset by landlord contributions that typically have
been associated with strip mall locations.  The capital expenditure required 
for a freestanding location can be over 100% greater than for a mall location.
The Company expects that approximately 50% of 1997 new locations will be 
freestanding units, and of the freestanding restaurants virtually all will be
ground leased rather than owned.  Sources of capital for restaurant development
projects are anticipated to be funds provided by operations, credit received
from trade suppliers, landlord contributions to leasehold improvements and 
current bank financing.  The Company believes that these sources will be 
adequate to finance operations and the additional restaurants and restaurant
conversions included in the Company's restaurant development plans for at 
least through fiscal 1997 and early fiscal 1998.  However, in order to remain
prepared for further significant growth in future years, the Company will 
continue to evaluate its financing needs and seek additional funding if 
appropriate.

NON-PERFORMING RESTAURANTS
   The Company evaluates impairment of individual restaurants whenever events
or changes in circumstances indicate the carrying amount of a restaurant may 
not be recoverable.  If individual restaurant sales during the fourth quarter 
do not meet management's expectations, it is reasonably possible although 
not currently quantifiable that the Company will incur impairment charges. The
Company has reviewed all underperforming locations and is considering options
for these locations including expanding advertising or conversion to a 
different brand or concept. 

ACCOUNTING PRONOUCEMENT    
   In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, Earnings per Share, which 
is effective for interim and annual reporting periods ending after December
15, 1997.  SFAS No. 128 supersedes Accounting Principles Board Opinion No. 15, 
Earnings per Share, and replaces the presentation of primary earnings per share
with a presentation of basics earnings per share.  It also requires dual 
presentation for all entities with complex capital structures and provides 
guidance on other computational changes.  Basic earnings per share is not 
expected to be materially different than primary earnings per share due to 
the impact of common stock equivalents being insignificant.

FORWARD-LOOKING INFORMATION
   Certain statements in this quarterly report and in the Company's press
releases and oral statements made by or with the approval of the Company's 
executive officers constitute or will constitute "forward-looking statements.
All forward-looking statements involve risks and uncertainties, and actual 
results may be materially different.  The following factors are among those
that could cause the Company's actual results to differ materially from those
set forth in such forward-looking statements.

                                11
<PAGE>
   The ability of the Company to open new restaurants depends on a number of
factors, including its ability to find suitable locations and negotiate 
acceptable leases and land purchases, its ability to attract and retain a 
sufficient number of qualified restaurant managers and the availability of 
capital.  The proportion of new restaurants that will be free-standing units,
either owned or leased, rather than strip mall locations will depend upon the 
availability of suitable mall locations.  The costs of restaurant development
and conversion will depend upon the level of contributions from landlords for 
leasehold improvements, the actual number of free-standing sites utilized in 
such development, and whether such sites involve land purchases, the cost of 
building supplies and general construction risks and costs.  The Company's
ability to generate revenue as currently expected, unexpected expenses and 
the need for additional funds to react to changes in the marketplace, 
including unexpected increases in personnel costs and food supply costs, may 
impact whether the Company has sufficient cash resources to fund its restaurant
development and conversion plans for 1997 and early 1998.

   Other factors that could cause actual results of the Company to differ 
materially from those contained in any such forward-looking statements 
include the success and timing of the continuing integration of the operations
of the Company and HomeTown, the number, cost and success of restaurant 
conversions, changes in the cost and supply of food and labor, the impact of 
menu changes, the timing of television advertising planned for the remainder 
of 1997 and the cost and effectiveness of such advertising as well as the
Company's other marketing programs, general economic conditions, the actions 
of existing and future competitors, weather factors, unforseen health and 
safety developments regarding restaurant operations, and regulatory constraints.
The Company assumes no obligation to publicly release the results of any 
revision or updates to these forward-looking statements to reflect future
events or unanticipated occurrences.

                                12
<PAGE>
PART II. OTHER INFORMATION

 Item 1. Legal Proceedings

            The Company is involved in various legal actions arising in the
         normal course of business.  Management is of the opinion that their
         outcome will not have a significant effect on the Company's 
         consolidated financial statements.
            The Company and certain of its directors and executive officers 
         have been named as defendants in a Third Amended Consolidated Class 
         Action Complaint (the "complaint") brought on behalf of a putative 
         class of all purchasers of common stock of the Company from October
         26, 1993 through October 25, 1994 (the "class period") in the United
         States District Court for the District of Minnesota.  The complaint 
         alleges that the defendants made misrepresentations and omissions of
         material fact during the class period with respect to the Company's
         operations and restaurant development activities, as a result of 
         which the price of the Company's  stock allegedly was artificially 
         inflated during the class period.  The complaint further alleges that
         certain defendants made sales of common stock of the Company during
         the class period while in possession of material undisclosed 
         information about the Company's operations and restaurant development
         activities.  The complaint alleges that the defendants' conduct 
         violated the Securities Exchange Act of 1934 and seeks compensatory
         damages in an unspecified amount, prejudgement interest, and an 
         award of attorneys fees, costs and expenses.  The defendants have 
         moved to dismiss the current complaint with prejudice.  A hearing on 
         the motion to dismiss was held before The Honorable Michael J. Davis, 
         United States District Judge, on June 13, 1997.  Judge Davis took the
         motion under advisement, and has not indicated when or how he might 
         rule.  The two previous complaints were dismissed without prejudice.  
         Management of the Company believes that the action is without merit
         and intends to defend it vigorously.  Although the outcome of this
         action cannot be predicted with certainty, the Company's management 
         believes that while the outcome may have a material effect on earnings
         in a particular period, the outcome should not have a material effect 
         on the financial condition of the Company. 
            On August 9, 1996 HTB Restaurants, Inc. ("HTB Restaurants"), a 
         franchisee of HomeTown, along with its parent entities, Summit Family 
         Restaurants, Inc. ("Summit") and CKE Restaurants, Inc. (collectively, 
         the  

                                   13
<PAGE>
         "Plaintiffs"), filed suit against the Company and HomeTown in United
         States District Court for the District of Utah, Central Division. The
         suit alleged, among other things, that the Company and HomeTown 
         illegally conspired to restrict competition and to prevent the 
         Plaintiffs from developing additional HomeTown restaurants under the 
         Multiple Unit Agreement between HomeTown and HTB Restaurants (the 
         "Multiple Unit Agreement").  The suit included claims against the 
         Company and HomeTown for violations of both federal and state antitrust
         laws, for unfair business practices, and for tortuous interference 
         with contract and economic relations.  The suit also alleged claims 
         against HomeTown for breach of contract and breach of the covenant of 
         good faith and fair dealing.  Plaintiffs sought damages and attempted 
         to enjoin the merger between the Company and HomeTown.  On September 
         19, 1996, the court denied Plaintiffs' motion for preliminary 
         injunctive relief.  On January 31, 1997, an arbitrator ruled in binding
         arbitration that HomeTown was entitled to terminate the Multiple 
         Unit Agreement, along with all of HTB Restaurants' future development 
         rights.  By Order and Judgement filed on September 10, 1997, the court 
         confirmed the arbitration award.  On October 8, 1997, the Plaintiffs, 
         an entity affiliated with Plaintiffs named Star Buffet, Inc., the 
         Company, and HomeTown entered into a Settlement Agreement with respect
         to the litigation.  Pursuant to the Settlement Agreement, the 
         litigation was dismissed with prejudice, and Plaintiffs and Star 
         Buffet, Inc. released the Company and HomeTown from any and all claims
         that they might have relating to, among other things, the merger 
         between the Company and HomeTown, the Multiple Unit Agreement, and 
         the performance of HomeTown as a franchisor.  The Company and HomeTown 
         released Plaintiffs from any claims that they might have for malicious
         prosecution, abuse of process, or sanctions under the federal or state 
         rules of civil procedure, in connection with the filing and prosecution
         of the litigation and the arbitration proceeding.  HomeTown waived its 
         option to review the transfer of the stock of Summit to Star Buffet, 
         Inc.  In doing so, however, HomeTown did not approve or acquiesce to 
         the formation of Star Buffet, Inc. or to any of its activities or 
         operations.  Neither the Company nor HomeTown paid any money in the 
         settlement.

 Item 2. Changes in Securities

         None 

 Item 3. Defaults upon Senior Securities

         None 

                                14
<PAGE>
 Item 4. Submission of Matters to a Vote of Security Holders
         
         None

 Item 5. Other Information

         None

 Item 6. Exhibits and reports on Form 8-K

         3(a)   Composite Amended and Restated Articles of
                Incorporation (1)
         3(b)   By-laws of the Company (2)
         4(a)   Form of Rights Agreement, dated as of October 24,
                1995 between the Company and the American Stock
                Transfer and Trust Company, as Rights Agent (3)
         10(b)  Third Amendment dated September 12, 1997 to Second
                Amended and Restated Credit Agreement by and
                between the Company and First Bank National
                Association    
         27     Financial Data Schedule

     b)  Reports on 8-K

         None



(1)      Incorporated by reference to Exhibit 4.1 to Registration 
         Statement on Form S-3 dated June 2, 1993 (Registration No. 33-
         63694).
(2)      Incorporated by reference to Exhibit 3(b) to Annual Report on
         Form 10-K for the fiscal year ended December 29, 1993.
(3)      Incorporated by reference to Exhibit 1 to Report on Form 8-K
         dated October 24, 1995.

                                15
<PAGE>








                            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 thereunto duly authorized.


                                BUFFETS, INC.
                                (Registrant)


November 19, 1997

                                /s/ Roe H. Hatlen         
                                ------------------------------
                                Roe H. Hatlen
                                Chairman of the Board,
                                Chief Executive Officer
                                (Principal Executive Officer)
 


                                /s/ Clark C. Grant        
                                ------------------------------
                                Clark C. Grant
                                Executive Vice President of 
                                Finance and Administration
                                and Treasurer
                                (Principal Financial 
                                Officer)

                                16
<PAGE>








                                 EXHIBIT INDEX 


       Exhibits                                     Page 


10(b) Third Amendment dated September 12,
      1997 to Second Amended and Restated 
      Credit Agreement by and between the 
      Company and First Bank National 
      Association . . . . . . . . . . . . . Filed Electronically


27    Financial Data Schedule . . . . . . . Filed Electronically