SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For the Quarter Ended                                    Commission File No.
September 30, 1998                                             33-19107
---------------------                                    -------------------


                                LBO Capital Corp.
             (Exact name of Registrant as Specified in its Charter)

Colorado                                                         38-2780733
----------------------------                               -------------------
(State or Other Jurisdiction                               (IRS Employer
of Incorporation or Organization)                          Identification No.)




7001 Orchard Lake Road, Suite 424
West Bloomfield MI                                               48322-3608
---------------------------------------                    -------------------
(Address of Principal Executive Offices)                        (Zip Code)


                                 (248) 851-5651
              (Registrant's Telephone Number Including Area Code)



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 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
                             -----         -----

As of November 4, 1998, a total of  12,100,000  shares,  $.0001 par value common
stock, were issued and outstanding.


<PAGE>






                                LBO CAPITAL CORP.

              Form 10-Q Filing of Quarter Ended September 30, 1998

                                      INDEX
                                                                            Page
                                                                          Number

Part I.  FINANCIAL INFORMATION

Item 1.     Financial Statements.

            Balance Sheets
              September 30, 1998 (Unaudited) and December 31, 1997             3

            Statements of Operations (Unaudited)
              Nine months ended September 30, 1998 and 1997                    4

            Statements of Cash Flows (Unaudited)
              Nine months ended September 30, 1998 and 1997                    5

            Notes to Financial Statements (Unaudited)                          6

Item 2.     Management's  Discussion  and  Analysis  of  Financial
            Statements (Unaudited)                                             7

PART II.    OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K                                   7

            Financial Statements of Ajay Sports, Inc.
            as of September 30, 1998                                         9-x


            Signature Page                                                     x


Note:  No other  information  is included in answer to any item under Part 11 as
those other Items are either not  applicable,  or if  applicable,  the answer is
negative.







<PAGE>

Item 1.  Financial Statements.
<TABLE>
<CAPTION>

                                   LBO CAPITAL CORP.
                                     BALANCE SHEETS


                                                     (Unaudited)
                                                    September 30,      December 31,
                                                        1998               1997
                                                    -------------      ------------
<S>                                                 <C>                <C>    

                                         ASSETS
Current Assets:
    Cash and Equivalents                            $          37      $          43
    Marketable Securities - Available for Sale             49,858             24,929
                                                      ------------       ------------

      Total Current Assets                                 49,895             24,972


TOTAL ASSETS                                        $      49,895      $      24,972
                                                      ============       ============


                         LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable                                    $         731      $       4,202
    Accounts Payable - Related Entities                       210              1,060
    Notes Payable - Other                                 513,601            506,971
    Accrued Expenses and Taxes                            113,575             73,475
                                                      ------------       ------------
      Total Current Liabilities                           628,117            585,708

Stockholders' Equity
    Common Stock, $.0001 par value;
      Authorized 100,000,000 Shares;
      Issued and Outstanding 12,100,000 shares              1,210              1,210
    Additional Paid-In Capital                            623,094            623,094
    Unrealized Gain(Loss) on Available for Sale Securities  1,462            (23,467)
    Accumulated Deficit                                (1,203,988)        (1,161,573)
                                                      ------------        ------------

      Total Stockholders' Deficit                        (578,222)          (560,736)
                                                      ------------        ------------

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT           $      49,895      $      24,972
                                                      ============       ============

</TABLE>

                       See notes to financial statements.

                                           3

<PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements.
<TABLE>
<CAPTION>

                                                            LBO CAPITAL CORP.
                                                         STATEMENTS OF OPERATIONS



                                                   For the Three Months Ended September 30, For the Nine Months Ended September 30,
                                                       1998                1997                  1998                 1997
                                                   -------------      --------------       --------------        ---------------
<S>                                                <C>                <C>                  <C>                   <C> 
                                                       

REVENUES:                                          $          -0-     $           -0-      $           -0-         $          -0-

EXPENSES:
     Professional Services                                   432                 223                  113                    160
     Management Fees                                         660                 670                2,070                  2,300
     Interest Expense                                     13,574              13,399               40,099                 39,324
     Recovery of Bad Debt                                     -0-                 -0-                  -0-                  (810)
     Other Expenses                                           57                  75                  132                   (283)
                                                    -------------        -------------        -------------          -------------

            Total Expenses                                14,723              14,367               42,414                 40,692
                                                    -------------        -------------        -------------          -------------

Income (Loss) Before Income Taxes                        (14,723)            (14,367)             (42,414)               (40,692)

Income Tax Expense (Benefit):
     Currently Payable                                        -0-                 -0-                  -0-                    -0-
                                                    --------------      --------------       --------------          -------------

      Net Income (Loss)                            $     (14,723)     $      (14,367)      $      (42,414)         $     (40,692)
                                                    ==============      ==============       ==============          =============

       Net Income (Loss) per Share                 $        (.00)     $         (.00)      $         (.00)         $        (.00)
                                                    ==============      ===============      ==============          =============

       Weighted Average Number of Common Shares
          Outstanding                                 12,100,000           12,100,000          12,100,000             12,100,000
                                                     ===========          ============        ============          =============







                                                    See notes to financial statements.
</TABLE>
                                                                    4
<PAGE>

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements.

<TABLE>
<CAPTION>

                                               LBO CAPITAL CORP.
                                                  CASH FLOWS


                                                    (Unaudited)
                                                   September 30,              September 30,
                                                       1998                       1997
                                                   -------------              -------------
<S>                                                <C>                        <C>   

Cash Flows for Operating Activities:
Net Loss                                           $    (42,414)              $    (40,692)
Adjustments to Reconcile Net Income to Net
  Cash Provided by Operating Activities:
Changes in Assets and Liabilities:
  (Decrease) Increase in:
    Accounts Payable                                     (3,472)                    (2,973)
    Accounts Payable - Related Entities                    (850)                      (500)
    Accrued Expenses and Taxes                           40,100                     39,324
                                                     -----------                 -----------

        Total Adjustments                                35,778                     35,851
                                                     -----------                 -----------


Net Cash (Used for) Operations                           (6,636)                    (4,841)


Cash (Used for) Investing Activities
  Marketable Securities Available for Sale                   -0-                        -0-
                                                     -----------                 -----------
                                                             -0-                        -0-

Cash Flows from Financing Activities:
  Proceeds on Notes Payable                               6,630                      4,850
                                                     -----------                 -----------

            Net Cash Provided by Financing Activities     6,630                      4,850
                                                     -----------                 -----------

Net Increase (Decrease) in Cash                              (6)                         9

Cash and Cash Equivalents:
  At Beginning of Period                                     43                         78
                                                     -----------                 -----------

  At End of Period                               $           37              $          87
                                                     ===========                 ===========

Supplemental Disclosures of Cash Flow Information:
  Interest Paid                                  $           -0-             $          -0-
                                                     ===========                 ===========


</TABLE>




                                         See notes to financial statements.

                                                         5

<PAGE>



                                LBO CAPITAL CORP
                    NOTES TO FINANCIAL STATEMENTS (Unaudited)

      NOTE 1.  INTERIM FINANCIAL STATEMENTS

      The accompanying financial statements of LBO Capital Corp. ("the Company")
have been  prepared by the Company  without  audit by  independent  accountants,
except  for the  balance  sheet at  December  31,  1997.  In the  opinion of the
Company's management, the financial statements reflect all adjustments necessary
to present  fairly the  Company's  financial  position at September 30, 1998 and
December 31,  1997,  and the results of  operations  and cash flows for the nine
month periods ended September 30, 1998 and 1997.

      Certain  information  and  footnote   disclosures   normally  included  in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  These unaudited financial statements
should be read in  conjunction  with the financial  statements and notes thereto
included in the  Company's  Annual Report 10-K.  The results for the  nine-month
periods  ended  September  30,  1998 are not  necessarily  indicative  of future
financial results.

      NOTE 2.  INVESTMENTS.

      As previously  reported,  the Company had acquired 1,880,000 shares of the
restricted  common  stock of Ajay  Sports,  Inc.  ("Ajay")  in April  1989,  for
$182,000.  Subsequently,  this was reduced to 1,480,000  shares.  As a result of
recording the Company's equity in net losses of Ajay, the carrying value of this
investment is zero. The Company also obtained  200,000  warrants of Ajay at that
time.  Each  warrant  entitles  the Company to purchase one share of Ajay common
stock at $.18. These warrants expire June 13, 1999.

      On  August  13,  1998,  Ajay  announced  that its board of  directors  had
authorized the implementation of a 1-for-6 reverse split of the company's common
stock,  effective  with the  commencement  of trading on August  14,  1998.  The
reverse split was approved by the  stockholders of Ajay at the company's  annual
meeting on May 29, 1998.

      Following the reverse  split,  holders of Ajay's common stock will receive
one new share of $.01 par  value  common  stock  for every six  shares of common
stock currently held.  Therefore,  the number of Ajay shares held by the Company
is 246,667. The reverse split also affected the number and exercise price of the
Company's warrants, such that the Company now holds 33,333 warrants entitling it
to purchase one share of Ajay's common stock at $1.08.

                                       6
<PAGE>


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

      (a) Material Changes in Financial Condition
          ---------------------------------------

      Working  capital  decreased  by $17,486  in the  nine-month  period  ended
September  30, 1998 due to the net loss of $42,414 and an increase in unrealized
gain on investments of $24,928 for the nine months ended September 30, 1998.


      (b) Results of Operations
          ---------------------

      Registrant's  operations  for the nine  months  ended  September  30, 1998
resulted  in a loss of  $42,414.  This was due  mainly to  interest  expense  of
$40,099.

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

      The Registrant is currently  meeting its cash needs from borrowing from an
affiliate  company.  There is no  assurance  that this will  continue  in future
years.  The  Registrant's  principal  asset  is  its  investment  in  marketable
securities  of Ajay,  which it has held for over eight  years.  These shares are
carried  at a zero  value on the  Registrant's  Balance  Sheet  as a  result  of
recording  the  Registrant's  equity in net losses of Ajay.  The market value of
Ajay  stock on  September  30,  1998 as  listed  in the OTC  Bulletin  Board was
$0.718750 per share. The approximate  market value of the  Registrant's  246,667
shares was $177,292 on that date (see Note 2). The  Registrant  also owns 15,341
shares of Enercorp,  Inc.  common stock.  These shares are carried at their fair
market value of $3.25 per share at September 30, 1998,  which is $49,858.  These
shares could be liquidated to meet cash flow needs if necessary.

Part II.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits.

      Pursuant to the  provisions of Reg. ss.  210.3-09 of  Regulation  S-X, the
Registrant is required to file separate financial statements of its equity basis
investee  Ajay,  which  financial  statements  for  September 30, 1998 are filed
herewith.

(b)   Reports on Form 8-K.

      A Form 8-K was filed on July 20 1998  regarding the extension of the Class
A, Class B, and Class C warrants from July 25, 1998 to July 25, 1999.

                                       7
<PAGE>

                                LBO CAPITAL CORP.

                                    FORM 10-Q

                    For the Quarter Ended September 30, 1998


                                 Signature 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.

                                LBO CAPITAL CORP.
                                -----------------
                                  (Registrant)


                                                By  s\Thomas W. Itin
                                                  ----------------------------
                                                  Thomas W. Itin, President,
                                                  Chairman of Board of Directors




      Date signed: November 13, 1998

                                       8
<PAGE>