UNITED STATES
                       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 September 26, 1998                Commission File No. 0-12375


                        PEACHES ENTERTAINMENT CORPORATION
             (Exact Name of Registrant as Specified in Its Charter)


            Florida                                          59-2166041        
(State or Other Jurisdiction of                      (I.R.S. Employer I.D. No.)
Incorporation or Organization)                       

1180 E Hallandale Beach Blvd., Hallandale, FL                   33009   
  (Address of Principal Executive Offices)                   (Zip Code) 
                                                             
Registrant's telephone number, including area code:       (954) 454-5554


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  registrants  were
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least 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.


At November 20, 1998, there were outstanding:


39,781,170 shares of common stock


<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION

                                      Index


PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

          Condensed Balance Sheets - September 26, 1998
            (Unaudited) and March 28, 1998                                     3
                                                                           
          Condensed Statements of Operations and                           
            Retained Deficit - Three Months Ended                          
            September 26, 1998 and September 27, 1997                      
            (Unaudited)                                                        4
                                                                           
          Condensed Statements of Operations and                           
            Retained Deficit - Six Months Ended September                  
            26, 1998 and September 27, 1997 (Unaudited)                        5
                                                                           
          Condensed Statements of Cash Flows - Six                         
            Months Ended September 26, 1998 and September                  
            27, 1997 (Unaudited)                                               6
                                                                           
          Notes to Condensed Financial Statements                              7
                                                                           
     Item 2.  Management's Discussion and Analysis of Financial            
       Condition and Results of Operations                                     9
                                                                           
PART II. OTHER INFORMATION                                                 
                                                                           
     Item 6.  Exhibits and Reports on Form 8-K                                12
                                                                           
SIGNATURES                                                                    13
                                                                       


                                        2
<PAGE>

                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                        PEACHES ENTERTAINMENT CORPORATION

                            Condensed Balance Sheets

                      September 26, 1998 and March 28, 1998


<TABLE>
<CAPTION>
                                                                 September 26,    March 28,
                                                                     1998           1998
                                                                 -------------   -----------
                                                                  (unaudited)
<S>                                                               <C>              <C>      
                                     Assets

Current assets:
    Cash and cash equivalents                                     $   451,890      1,080,694
    Inventories                                                     2,643,727      2,433,433
    Prepaid expenses and other current assets                         235,716        308,419
                                                                  -----------    -----------

       Total current assets                                         3,331,333      3,822,546

Property and equipment, net                                         1,391,511      1,349,732
Other assets                                                          187,726        180,925
                                                                  -----------    -----------

                                                                  $ 4,910,570      5,353,203
                                                                  ===========    ===========

                      Liabilities and Shareholders' Equity

Current liabilities:
    Current portion of long-term obligations                      $   573,038        732,319
    Accounts payable                                                2,093,655      2,014,674
    Accrued liabilities                                               972,639        822,670
                                                                  -----------    -----------

       Total current liabilities                                    3,639,332      3,569,663

Long-term obligations                                                 518,625        578,127
Due to parent                                                         397,031        382,156
Deferred rent                                                          62,950         62,834
                                                                  -----------    -----------

       Total liabilities                                            4,617,938      4,592,780

Shareholders' equity:
    Preferred stock, $100 par value; 50,000 shares authorized;
       5,000 shares issued and outstanding                            500,000        500,000
    Common stock, $.01 par value; 40,000,000 shares authorized;
       39,781,170 shares issued                                       397,813        397,813
    Additional paid-in capital                                      1,719,190      1,749,190
    Retained deficit                                               (2,324,371)    (1,886,580)
                                                                  -----------    -----------

       Total shareholders' equity                                     292,632        760,423
                                                                  -----------    -----------

Commitments and contingencies
                                                                  $ 4,910,570      5,353,203
                                                                  ===========    ===========
</TABLE>

See accompanying notes to condensed financial statements.



                                        3
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION

             Condensed Statements of Operations and Retained Deficit

          Three months ended September 26, 1998 and September 27, 1997
                                   (Unaudited)


                                                   September 26,  September 27,
                                                        1998           1997
                                                   -------------  -------------

Net sales                                           $ 3,924,914      3,808,512
                                                    -----------    -----------

Costs and expenses:
    Cost of sales                                     2,336,793      2,347,920
    Selling, general and administrative expenses      1,711,791      1,674,012
    Depreciation and amortization                        58,378         65,700
                                                    -----------    -----------

                                                      4,106,962      4,087,632

       Loss from operations                            (182,048)      (279,120)
                                                    -----------    -----------

Other (expense) income:
    Interest expense                                    (35,008)       (58,491)
    Interest income                                       1,377          6,899
                                                    -----------    -----------

                                                        (33,631)       (51,592)

       Net loss before income taxes                    (215,679)      (330,712)

Provision for income taxes                                   --             -- 
                                                    -----------    -----------

       Net loss                                        (215,679)      (330,712)

Retained deficit, beginning of period                (2,108,692)    (1,624,227)
                                                    -----------    -----------

Retained deficit, end of period                     $(2,324,371)    (1,954,939)
                                                    ===========    ===========

Basic and diluted earnings per share                $     (0.01)         (0.01)
                                                    ===========    ===========


See accompanying notes to condensed financial statements.



                                        4
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION

             Condensed Statements of Operations and Retained Deficit

           Six months ended September 26, 1998 and September 27, 1997
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          September 26,  September 27,
                                                              1998           1997
                                                          -------------  -------------
<S>                                                        <C>              <C>      
Net sales                                                  $ 7,794,674      7,932,863
                                                           -----------    -----------

Costs and expenses:
    Cost of sales                                            4,655,597      4,901,010
    Selling, general and administrative expenses             3,394,316      3,302,022
    Depreciation and amortization                              116,339        131,400
                                                           -----------    -----------

                                                             8,166,252      8,334,432
                                                           -----------    -----------

       Loss from operations                                   (371,578)      (401,569)
                                                           -----------    -----------

Other (expense) income:
    Interest expense                                           (72,262)      (119,142)
    Interest income                                              6,049          9,442
                                                           -----------    -----------

                                                               (66,213)      (109,700)

       Loss before reorganization costs and income taxes      (437,791)      (511,269)

Reorganization costs:
    Professional fees                                               --        (44,000)
                                                           -----------    -----------

       Loss before income taxes                               (437,791)      (555,269)

Provision for income taxes                                          --             -- 
                                                           -----------    -----------

       Net loss                                               (437,791)      (555,269)

Retained deficit, beginning of period                       (1,886,580)    (1,399,670)
                                                           -----------    -----------

Retained deficit, end of period                            $(2,324,371)    (1,954,939)
                                                           ===========    ===========

Basic and diluted loss per share                           $     (0.01)         (0.01)
                                                           ===========    ===========
</TABLE>


See accompanying notes to condensed financial statements.



                                        5
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION

                       Condensed Statements of Cash Flows

           Six months ended September 26, 1998 and September 27, 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                        September 26,  September 27,
                                                                            1998           1997
                                                                        -------------  -------------
<S>                                                                      <C>              <C>      
Cash flows from operating activities:
    Net loss                                                             $  (437,791)      (555,269)
                                                                         -----------    -----------
    Adjustments to reconcile net loss to net cash used in
      operating activities:
          Depreciation and amortization                                      116,339        131,400
          Deferred rent                                                          116        (22,477)
          Changes in assets and liabilities  affecting cash flows from
            operating activities:
               (Increase) decrease in:
                   Inventories                                              (210,294)        42,439
                   Prepaid expenses and other current assets                  72,703         62,098
                   Other assets                                               (6,801)        (6,277)
               Increase (decrease) in:
                   Accounts payable                                           78,981        384,761
                   Accrued liabilities                                       149,969        (83,408)
                                                                         -----------    -----------

                     Net cash used in operating activities                  (236,778)       (46,733)
                                                                         -----------    -----------

Cash flows from investing activities:
    Purchase of property and equipment                                      (158,118)       (31,304)
                                                                         -----------    -----------

                     Net cash used in investing activities                  (158,118)       (31,304)
                                                                         -----------    -----------

Cash flows from financing activities:
    Repayment of long-term obligations                                      (218,783)      (217,788)
    Dividends paid                                                           (30,000)       (30,000)
    Due to parent                                                             14,875         29,749
                                                                         -----------    -----------

                     Net cash used in financing activities                  (233,908)      (218,039)
                                                                         -----------    -----------

                     Net decrease in cash and cash equivalents              (628,804)      (296,076)

Cash and cash equivalents, beginning of period                             1,080,694      1,456,070
                                                                         -----------    -----------

Cash and cash equivalents, end of period                                 $   451,890      1,159,994
                                                                         ===========    ===========

Supplemental disclosures of cash flow information:
Cash paid during the period for interest                                 $     9,707         38,811
                                                                         ===========    ===========
</TABLE>



See accompanying notes to condensed financial statements.



                                        6
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION

                     Notes to Condensed Financial Statements



(1)  Basis of Financial Statement Presentation

     The  accompanying   unaudited  condensed  financial  statements  have  been
     prepared in accordance with the  instructions to Form 10-Q and,  therefore,
     do  not  include  all  footnotes  and  information  necessary  for  a  fair
     presentation of financial position, results of operations and cash flows in
     conformity with generally accepted accounting  principles.  However, in the
     opinion of management, all adjustments (consisting only of normal recurring
     accruals) necessary for a fair presentation have been made.

     It  is  suggested  that  the  accompanying  unaudited  condensed  financial
     statements be read in conjunction  with the financial  statements and notes
     included in the Peaches  Entertainment  Corporation (the "Company")  annual
     report on Form 10-K for the year ended March 28, 1998.

     As of September 26, 1998, the Company was a 87.5  percent-owned  subsidiary
     of URT Industries, Inc. (the "parent").

     The results of operations for the six months ended  September 26, 1998, are
     not necessarily  indicative of the operating results to be expected for the
     year ending April 3, 1999.  The  Company's  business is seasonal in nature,
     with the highest  sales and  earnings  historically  occurring in the third
     quarter of its fiscal year, which includes the holiday selling season.

     Inventories,  which consist of compact discs,  tapes and  accessories,  are
     stated at the lower of cost (principally average) or market.

     Certain  reclassifications  have been made to the (unaudited) September 27,
     1997 quarterly financial information to conform to the presentation used in
     the (unaudited) September 26, 1998 financial information.

(2)  Earnings Per Share

     In December  1997,  the Company  adopted the  provisions  of  Statement  of
     Financial  Accounting  Standards No. 128,  "Earnings Per Share" ("Statement
     128"),  which  establishes  new  standards  for  computing  and  presenting
     earnings per share  ("EPS").  Earnings per share for all prior periods have
     been restated to reflect the provisions of this Statement.

     Basic and diluted  earnings  per share have been  computed by dividing  net
     loss,  less  preferred  dividends by the weighted  average number of shares
     outstanding during the period.



                                       7 
                                                                     (Continued)
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION

                     Notes to Condensed Financial Statements


     Basic and diluted loss per share were calculated as follows:

                                                     Six months     Six months
                                                       ended          ended
                                                   September 26,  September 27,
                                                        1998           1997
                                                   -------------  -------------
     Basic and diluted:                                          
       Net income (loss) less preferred dividends  $  (467,791)       (585,269)
                                                   ===========     ===========
                                                                 
       Weighted average shares                      39,781,270      39,781,270
                                                   ===========     ===========
                                                                 
     Basic and diluted loss per share                     (.01)           (.01)
                                                   ===========     ===========
                                                                 
(3)  Income Taxes

     The Company follows Statement of Financial Accounting Standard ("SFAS") No.
     109,  Accounting  for Income Taxes.  The Company files a  consolidated  tax
     return with its Parent.  Any applicable tax charge or credits are allocated
     on a separate  return basis.  For the six month period ended  September 26,
     1998, there was no (benefit)  provision for income taxes as the Company has
     excess net operating loss carryforwards for federal income tax purposes.

(4)  New Accounting Pronouncements

     In June 1997, the FASB issued  Statement of Financial  Accounting  Standard
     No. 130, "Reporting  Comprehensive Income" ("Statement 130"). Statement 130
     establishes standards for the reporting and display of comprehensive income
     and its components in a full set of general  purpose  financial  statements
     and is effective for fiscal years  beginning  after  December 31, 1997. The
     adoption of Statement  130 did not have a material  impact on the Company's
     financial position, results of operations or cash flows.

     In 1997,  the FASB issued  Statement of Financial  Accounting  Standard No.
     131,  "Disclosure about Segments of an Enterprise and Related  Information"
     ("Statement  131").  Statement 131  establishes  standards for the way that
     public business  enterprises report information about operating segments in
     annual  financial  statements  and requires that these  enterprises  report
     selected  information about operating segments in interim financial reports
     to  shareholders.  Statement 131 is effective for financial  statements for
     the periods  beginning  after  December 15, 1997. The adoption of Statement
     131 did not have an effect on the  Company  because it operates in a single
     segment.



                                       8
                                                                     (Continued)
<PAGE>


                        PEACHES ENTERTAINMENT CORPORATION


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

From  time to  time,  the  Company  may make  certain  statements  that  contain
"forward-looking"  information (as defined in the Private Securities  Litigation
Reform  Act  of  1995).  Words  such  as  "believe,"  "anticipate,"  "estimate,"
"project" and similar expressions are intended to identify such  forward-looking
statements.  Forward-looking  statements may be made by management  orally or in
writing,  including,  but not  limited  to, in press  releases,  as part of this
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  and as a part of  other  sections  of this  Annual  Report  or other
filings.   Readers  are  cautioned   not  to  place  undue   reliance  on  these
forward-looking  statements,  which speak only as of their respective dates, and
are subject to certain risks, uncertainties and assumptions.  Should one or more
of these risks or  uncertainties  materialize,  or should any of the  underlying
assumptions prove incorrect, actual results of current and future operations may
vary materially from those anticipated, estimated or projected.

                              RESULTS OF OPERATIONS

Sales.  The  Company's  net sales  increased  during  the second  quarter  ended
September 26, 1998 of the Company's fiscal year ending April 3, 1999 by $116,000
or 3 percent  compared to the second  quarter of fiscal 1998.  Comparable  store
sales for the second  quarter  were down 1.7 percent.  Sales for the  twenty-six
weeks  ended  September  26, 1998 were down  $138,000  or 1.7  percent  which is
primarily due to the fact that comparable  sales for the twenty-six  weeks ended
September 26, 1998 were down 2.9 percent.

Cost of  Sales.  The  Company's  cost of sales  as a  percentage  of net  sales,
decreased  from 61.6  percent  in the  previous  year's  second  quarter to 59.5
percent for the second  quarter  ended  September 26, 1998, as well as from 61.8
percent in the  previous  year first  twenty-six  to 59.7 percent in the current
years  twenty-six weeks ended September 26, 1998. The decreases in cost of sales
as a  percentage  of sales are  primarily  attributable  to increases in certain
retail prices and increases in purchase discounts.

Selling,  General  and  Administrative.   Selling,  general  and  administrative
expenses  including  depreciation,  expressed  as  a  percentage  of  net  sales
decreased  to 45.1  percent  for the second  quarter  ended  September  26, 1998
compared  to 45.7  percent in the prior year  second  quarter.  The  decrease is
primarily attributable to a decrease in comparable store expenses of .70 percent
and a decrease in corporate  overhead of 2.5  percent,  offset by an increase in
expense  associated  with the  opening  of the new  store in  Orlando,  Florida.
Selling,  general and administrative expenses including depreciation,  expressed
as a percentage of net sales  increased to 45 percent for the  twenty-six  weeks
ended  September  26, 1998 compared to 43.3 percent the  twenty-six  weeks ended
September 27, 1997. The increase is primarily  attributable to expenses incurred
throughout  the Company's  first quarter of 1999 fiscal year relating to the new
store that did not actually  open until late in the  Company's  first quarter of
1999 fiscal year.

Net Loss.  The Company  incurred a new loss of  approximately  $216,000  for the
second quarter ended September 26, 1998 compared to a net loss of  approximately
$331,000  for the second  quarter  ended  September  27,  1997.  The decrease is
primarily  attributable  to the  increase in gross profit  percentage  discussed
above.  The net loss for the  twenty-six  weeks  ended  September  26,  1998 was
approximately  $438,000 compared to a net loss of approximately $555,000 for the
twenty-six weeks ended September 27, 1997. The net loss for the twenty-six weeks
ended  September 26, 1998 includes costs  associated with the opening of the new
store in Orlando,  Florida.  There is approximately $127,000 of the $438,000 net
loss for the twenty-six  weeks ended  September 26, 1998 that is attributable to
the aforementioned new store opening costs.



                                       9
                                                                     (Continued)
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION


LIQUIDITY AND CAPITAL RESOURCES

Liquidity  and  Capital  Resources.  Cash  generated  from  operations  and cash
equivalents   are  the  Company's   primary  source  of  liquidity.   Management
anticipates  that the cash generated from  operations,  cash equivalents on hand
and financing will provide  sufficient  liquidity to maintain  adequate  working
capital for operations.  Management used funds generated from operations as well
as funds  received  from its  landlord  for the  building of the new store which
opened in May 1998.  Management  anticipates  that it would use funds  generated
from  operations  as well as  possible  financing,  for the  opening  of any new
stores,  which  it may  plan to open  this  fiscal  year.  For a  discussion  of
uncertainties affecting the Company's liquidity and capital resources,  see note
3 to the financial statements on form 10-K for the year ended March 28, 1998.

Long-Term  Obligations.  At  September  26,  1998,  the  Company  had  long-term
obligations of $518,625.  Management  anticipates  that its ability to repay its
long-term  obligations will be satisfied  primarily through funds generated from
its operations.

OTHER MATTERS

Impact of  Inflation.  Although  the Company  cannot  accurately  determine  the
precise  effect of  inflation  on its  operations,  management  does not believe
inflation  has had a material  effect on the results of  operations  in the last
three  fiscal  years.  When the cost of  merchandise  items has  increased,  the
Company has been able to pass the increase on to its customers.

Seasonality.  The  Company's  business is  seasonal in nature,  with the highest
sales and earnings  historically  occurring in the third fiscal  quarter,  which
includes the Christmas selling season.

Year 2000  Compliance.  The Year 2000 Issue is the result of  computer  programs
being written using two digits rather than four to define the  applicable  year.
Any of the Company's  computer  programs that have  data-sensitive  software may
recognize a date using "00" as year 1900  rather than the year 2000.  This could
result in a system failure or miscalculations causing disruptions of operations.
The Company  has  assessed  that it will be required to upgrade  portions of its
software  which was  originally  purchased  from  outside  vendors,  so that its
computer  systems will properly  utilize dates beyond  December 31, 1999.  These
upgrades are  currently  available,  and the Company  believes  that the cost of
these  upgrades  will not have a  material  impact  on the  ongoing  results  of
materially  operations or financial position of the Company. The Company is also
in the process of completing  its inventory of computer  information  technology
and noninformation  technology  hardware systems to assess year 2000 compliance.
Management  generally believes that its primary suppliers will be 2000 ready and
there is not  likely to be a  significant  disruption  in  product  supply.  The
Company intends to develop contingency plans. However,  there can be no absolute
assurance  that there will not be a material  adverse  effect on the  Company if
year 2000  modifications are not properly completed in a timely manner by either
the Company,  or its suppliers,  banks or any other entity with whom the Company
conducts business.



                                       10
                                                                     (Continued)
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION



New Accounting  Policies.  In June 1997, the FASB issued  Statement of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income" ("Statement 130").
Statement   130   establishes   standards  for  the  reporting  and  display  of
comprehensive  income  and  its  components  in a full  set of  general  purpose
financial  statements and is effective for fiscal year beginning  after December
31, 1997.  The adoption of Statement  130 did not have a material  impact on the
Company's financial position, results of operations or cash flows.

In 1997,  the FASB issued  Statement of Financial  Accounting  Standard No. 131,
"Disclosure about Segments of an Enterprise and Related Information" ("Statement
131").  Statement 131  establishes  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that these enterprises report selected information about
operating  segments in interim financial reports to shareholders.  Statement 131
is effective for financial  statements for the periods  beginning after December
15, 1997.  The adoption of Statement  131 will not have an effect on the Company
because it operates in a single segment.



                                       11
                                                                     (Continued)
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION



                                OTHER INFORMATION


PART II

Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

               27.0 Financial Data Schedule

     (b)  Reports on Form 8-K

          On or about  November  11,  1998,  the Company  filed a Form 8-K dated
          November 11, 1998 for the purpose of reporting on the  projected  date
          of this filing.



                                       12
                                                                     (Continued)
<PAGE>



                        PEACHES ENTERTAINMENT CORPORATION



                                   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.


                                   PEACHES ENTERTAINMENT CORPORATION
                                   Registrant


Date:     11/25/98                 /s/ Allan Wolk
     -------------------           --------------------------------------------
                                   Allan Wolk, Chairman of the Board, President
                                   (Principal Executive Officer)



Date:     11/25/98                 /s/ Jason Wolk
     -------------------           --------------------------------------------
                                   Jason Wolk, Executive Vice President,
                                   Chief Financial Officer
                                   (Principal Financial and Accounting Officer)



                                       13