<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-Q


(Mark One)

     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.

                  For the quarterly period ended June 30, 1998

                                       OR

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _________________________to _____________________
 
Commission file number                         0-27550
                       ---------------------------------------------------------

                                       
                          FIRSTPLUS Financial Group, Inc.
--------------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)


            Nevada                                                75-2561085
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                      1600 Viceroy, Dallas, Texas 75235
--------------------------------------------------------------------------------

                 (Address of principal executive offices)
                                   (Zip Code)
                                       
                                 (214) 599-6400                             
--------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------
                (Former name, former address and former fiscal year, 
                           if changed since last report)
                                       



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 _____

There were 37,884,831 shares of voting common stock and 690,990 shares of 
non-voting common stock, $.01 par value, outstanding as of July 31, 1998.

<PAGE>
                                       
                        FIRSTPLUS FINANCIAL GROUP, INC.

                               INDEX TO FORM 10-Q


Part I.   FINANCIAL INFORMATION

<TABLE>
<S>                                                                      <C>
     Item 1.   Financial Statements                                      Page

               Consolidated Balance Sheets -
                    June 30, 1998 (Unaudited) and September 30, 1997       3
          
               Consolidated Statements of Income - (Unaudited)
                    Three Months Ended June 30, 1998 and June 30, 1997
                    and Six Months Ended June 30, 1998 and June 30, 1997   4
          
               Condensed Consolidated Statements of Stockholders' 
                    Equity - (Unaudited) Three Months and Six Months 
                    Ended June 30, 1998 and June 30, 1997                  5
          
               Consolidated Statements of Cash Flows- (Unaudited) 
                    Six Months Ended June 30, 1998 and June 30, 1997       7
 
               Notes to Consolidated Financial Statements- (Unaudited)     8

     Item 2.   Management's Discussion and Analysis of Financial Condition 
               and Results of Operations                                  11
          
Part II.  OTHER INFORMATION

     Item 1.   Legal Proceedings                                          16

     Item 2.   Changes In Securities                                      16

     Item 3.   Defaults Upon Senior Securities                            16

     Item 4.   Submission of Matters to a Vote of Security Holders        16
     
     Item 5.   Other Information                                          16

     Item 6.   Exhibits and Reports on Form 8-K                           16

SIGNATURE                                                                 16
</TABLE>

                                       2
<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
               (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                    ASSETS

<TABLE>
<CAPTION>
                                                      JUNE 30,       SEPTEMBER 30,  
                                                        1998             1997       
                                                     ----------       ----------    
                                                     (UNAUDITED)                    
<S>                                                  <C>             <C>            
Cash and cash equivalents                            $   68,458       $   94,978    
Securities, available for sale                           30,958           40,995    
Loans held for sale, net                              1,808,013        1,400,446    
Investment in securitized loans                               -          190,861    
Subordinated certificates held for sale                  18,047           18,047    
Interest only strips, net                               547,720          456,123    
Servicing assets                                         83,109           40,516    
Receivable from trusts                                  259,156          138,816    
Other assets                                            105,066           66,424    
                                                     ----------       ----------    
  Total assets                                       $2,920,527       $2,447,206    
                                                     ----------       ----------    
                                                     ----------       ----------    
                                       
                     LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
Accounts payable and accrued liabilities             $   47,060       $   44,445   
Warehouse and repurchase agreements                   1,423,516        1,238,156   
Term lines                                              246,393          211,751   
Time deposits                                           291,713          120,025   
Bonds                                                   145,498          174,088   
Convertible subordinated notes                           69,920           69,920   
Notes payable and other borrowings                       40,440           39,321   
Deferred tax liabilities, net                           149,974          119,355   
                                                     ----------       ----------   
  Total liabilities                                   2,414,514        2,017,061   
                                                     ----------       ----------   

Commitments and contingencies

Stockholders' equity:
Preferred stock, non-voting, $1.00 par value, 
 8% cumulative dividend 
  Authorized shares - Series A - 300; 
   Series B - 2,300
  Issued and outstanding shares - Series A and
   Series B - none                                            -                -
Common stock, $0.01 par value:
  Authorized shares - 100,000
  Issued and outstanding shares - 37,634-1998 
    and 36,580-1997                                         377              366    
Common stock, non-voting, $0.01 par value:                                         
    Authorized shares - 25,000                             
  Issued and outstanding shares - 691-1997 and 1998           7                7    
Additional capital                                      236,477          216,881    
Unrealized gains on available for sale securities, net   17,152           20,253    
Retained earnings                                       252,000          192,638    
                                                     ----------       ----------   
  Total stockholders' equity                            506,013          430,145    
                                                     ----------       ----------    
  Total liabilities and stockholders' equity         $2,920,527       $2,447,206    
                                                     ----------       ----------    
                                                     ----------       ----------    
</TABLE>

See accompanying notes 

                                       3
<PAGE>
                                       
             FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
               UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
             (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                          Three Months Ended         Six Months Ended
                                                               June 30,                  June 30,
                                                       -----------------------    -----------------------
                                                          1998          1997        1998           1997
                                                       --------       --------    --------       --------
<S>                                                    <C>            <C>         <C>            <C>
Revenues:
Gain on securitized loan sales, net                    $ 46,983       $ 79,565    $ 85,340       $146,505
Gain on whole loan sales                                  9,210          6,570      14,157         14,789
Interest income                                          75,926         50,565     142,899         85,166
Interest only strips interest income                     24,807          8,525      48,627         11,225
Origination income                                       44,950         10,325      77,036         21,845
Servicing income                                         12,768          6,189      23,906         10,044
Insurance income                                          4,002            489       6,978            489
Other income                                              1,046          1,079       3,885          2,410
                                                       --------       --------    --------       --------
  Total revenues                                        219,692        163,307     402,828        292,473

Expenses:
Salaries and employee benefits expense                   46,830         28,475      82,432         50,860
Interest expense                                         37,440         26,460      73,413         47,095
Other operating expenses                                 75,683         31,834     136,937         55,957
Provision for possible credit losses                     14,823         13,032      33,137         25,779
                                                       --------       --------    --------       --------
  Total expenses                                        174,776         99,801     325,919        179,691
                                                       --------       --------    --------       --------
Income before income taxes                               44,916         63,506      76,909        112,782
Provision for income taxes                              (17,068)       (24,132)    (29,225)       (42,857)
                                                       --------       --------    --------       --------
  Net income                                           $ 27,848       $ 39,374    $ 47,684       $ 69,925
                                                       --------       --------    --------       --------
                                                       --------       --------    --------       --------

Weighted average common shares                           38,149         35,516      38,017         34,825
                                                       --------       --------    --------       --------
                                                       --------       --------    --------       --------
Basic earnings per share                               $   0.73       $   1.11    $   1.25       $   2.01
                                                       --------       --------    --------       --------
                                                       --------       --------    --------       --------

Weighted average common shares-assuming dilution         43,942         41,115      43,613         39,987
                                                       --------       --------    --------       --------
                                                       --------       --------    --------       --------
Diluted earnings per share                             $   0.65       $   0.98    $   1.13       $   1.79
                                                       --------       --------    --------       --------
                                                       --------       --------    --------       --------
</TABLE>

See accompanying notes

                                       4
<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                         Accumulated 
                                                        Common     Common                                   other 
                                            Preferred   stock,   stock, non-   Additional    Retained   comprehensive 
                                              stock     voting     voting       capital      earnings       income        Total
                                            ---------   ------   -----------   ----------    --------   -------------     -----
<S>                                         <C>         <C>      <C>           <C>           <C>        <C>              <C>     
Balance at December 31, 1997                  $  -      $  371      $  7        $219,329     $204,316       $19,262      $443,285
Comprehensive income, net of tax:
  Net income                                                                                     19,836
  Other comprehensive income:
  Change in unrealized gain on available 
    for sale securities, net of 
    reclassification amount                                                                                     883
                                                                                                            -------
Total comprehensive income                                                                                                 20,719
Issuance of common stock                                     2                     1,843                                    1,845
                                              ----      ------      ----        --------     --------       -------      --------
Balance at March 31, 1998                        -         373         7         221,172      224,152        20,145       465,849
Comprehensive income, net of tax:
  Net income                                                                                     27,848
  Other comprehensive income:
  Change in unrealized gain on available 
    for sale securities, net of 
    reclassification amount                                                                                  (2,993)
                                                                                                            -------
Total comprehensive income                                                                                                 24,855
Issuance of common stock                                     4                    15,305                                   15,309
                                              ----      ------      ----        --------     --------       -------      --------
Balance at June 30, 1998                      $  -      $  377      $  7        $236,477     $252,000       $17,152      $506,013
                                              ----      ------      ----        --------     --------       -------      --------
                                              ----      ------      ----        --------     --------       -------      --------
</TABLE>


See accompanying notes

                                       5
<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                         Accumulated 
                                                        Common     Common                                   other 
                                            Preferred   stock,   stock, non-   Additional    Retained   comprehensive 
                                              stock     voting     voting       capital      earnings       income        Total
                                            ---------   ------   -----------   ----------    --------   -------------     -----
<S>                                         <C>         <C>      <C>           <C>           <C>        <C>              <C>     
Balance at December 31, 1996                  $  -      $  256      $ 44        $ 88,379     $ 69,511       $   (63)     $158,127
Acquisition                                                 11                     2,781       (2,617)                        175
Comprehensive income, net of tax:
  Net income                                                                                   30,551
  Other comprehensive income:
  Change in unrealized gain on available for 
    sale securities, net of 
    reclassification amount                                                                                   7,171
                                                                                                            -------
Total comprehensive income                                                                                                 37,722
Conversion of non-voting to voting                          16       (16)                                                       -
Issuance of common stock                                    42                   123,253                                  123,295
                                              ----      ------      ----        --------     --------       -------      --------
Balance at March 31, 1997                        -         325        28         214,413       97,445         7,108       319,319
Acquisition                                                  3                       276        3,127                       3,406
Comprehensive income, net of tax:
  Net income                                                                                   39,374
  Other comprehensive income:
  Change in unrealized gain on available 
    for sale securities, net of 
    reclassification amount                                                                                   6,905
                                                                                                            -------
Total comprehensive income                                                                                                 46,279
Conversion of non-voting to voting                          21       (21)                                                       -
Issuance of common stock                                     1                      (795)                                    (794)
                                              ----      ------      ----        --------     --------       -------      --------
Balance at June 30, 1997                      $  -      $  350      $  7        $213,894     $139,946       $14,013      $368,210
                                              ----      ------      ----        --------     --------       -------      --------
                                              ----      ------      ----        --------     --------       -------      --------
</TABLE>

See accompanying notes

                                       6

<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                        Six Months Ended
                                                                            June 30,
                                                                  -----------------------------
                                                                     1998               1997
                                                                  -----------        ----------
<S>                                                               <C>                <C>
OPERATING ACTIVITIES:
  Net income                                                      $    47,684       $    69,925
  Operating activities:
     Provision for possible credit losses                              33,137            25,779
     Depreciation and amortization                                      4,491             1,289
     Gain on sales of loans                                           (99,497)         (161,294)
     Changes in operating assets and liabilities:
       Interest only strip and servicing asset amortization           106,730            31,482
       Loans originated or acquired                                (2,790,872)       (2,042,887)
       Principal collected and proceeds from sale of loans          2,752,174         1,485,352
       Interest only strips, net                                     (133,507)          (64,463)
       Receivable from trusts                                         (87,550)          (58,060)
       Other assets                                                   (11,339)           (9,423)
       Accounts payable and accrued expenses                           16,141            11,955
       Deferred tax liability                                          24,453            39,283
       Other                                                            3,342             7,739
                                                                  -----------       -----------
NET CASH USED IN OPERATING ACTIVITIES                                (134,613)         (663,323)

INVESTING ACTIVITIES:
  Cash acquisitions                                                   (21,877)                -
  Cash from acquisitions                                                    -             2,116
  Purchases of available for sale securities                          (21,072)          (48,327)
  Proceeds from sale of available for sale securities                  20,286            74,277
  Purchases of equipment and leasehold improvements                   (19,339)          (14,317)
                                                                  -----------       -----------
NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES                   (42,002)           13,749

FINANCING ACTIVITIES:
  Borrowings on warehouse financing facilities, net                    61,549           348,770
  (Repayments)/borrowings on term lines of credit, net                (29,299)           66,111
  Borrowings on notes payable, net                                        726             8,117
  Borrowings on bonds                                                 146,320           177,376
  Payments on bonds payable                                          (169,468)                -
  Net change in deposits                                              158,567              (779)
  Issuance of common stock                                             17,154           121,748
                                                                  -----------       -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES                             185,549           721,343
                                                                  -----------       -----------
INCREASE IN CASH                                                        8,934            71,769
  Cash and cash equivalents at beginning of period                     59,524            20,039
                                                                  -----------       -----------
  Cash and cash equivalents at end of period                      $    68,458       $    91,808
                                                                  -----------       -----------
                                                                  -----------       -----------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:
  Interest paid during the period                                 $    78,674       $    41,823       
                                                                  -----------       -----------
                                                                  -----------       -----------
</TABLE>

See accompanying notes
                                       7
<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                JUNE 30, 1998
                                 (UNAUDITED)

1.  BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements 
have been prepared in accordance with generally accepted accounting 
principles for interim financial information and with the instructions to 
Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include 
all of the information and footnotes required by generally accepted 
accounting principles for complete financial statements.  In the opinion of 
management, all adjustments (consisting of normal recurring accruals) 
considered necessary for a fair presentation have been included. Operating 
results for the three-month and six-month periods ended June 30, 1998 are not 
necessarily indicative of the results that may be expected for a full year.  
For further information, refer to the consolidated financial statements and 
footnotes thereto for the year ended September 30, 1997 included in FIRSTPLUS 
Financial Group, Inc.'s 1997 Annual Report filed with the Securities and 
Exchange Commission on Form 10-K.

     On December 15, 1997, the Board of Directors of FIRSTPLUS Financial 
Group, Inc. (the "Company" or "FIRSTPLUS") approved a change in the Company's 
fiscal year end from September 30 to December 31, to be effective beginning 
January 1, 1998.  Accordingly, this Quarterly Report on Form 10-Q represents 
the second quarter of the Company's new fiscal year.

     In June 1998, the FASB issued Statement of Financial Accounting Standard 
No.133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 
No.133").  SFAS No.133 establishes accounting and reporting standards for 
derivative instruments, including certain derivative instruments embedded in 
other contracts (collectively referred to as derivatives) and for hedging 
activities.  It requires that an entity recognize all derivatives as either 
assets or liabilities in the statement of financial position and measure 
those instruments at fair value.  SFAS No.133 is effective for fiscal years 
beginning after June 15, 1999.  Management has not yet determined the effect 
of SFAS No.133 on the consolidated financial statements.

2.  LOANS HELD FOR SALE

Loans held for sale consist of the following:

<TABLE>
<CAPTION>
                                                       June 30,    September 30,
                                                        1998           1997
                                                     -----------    ----------
                                                     (unaudited)
<S>                                                  <C>           <C>
High LTV Loans                                       $1,613,590     $1,310,576
Personal consumer                                       141,822         93,172
Conforming first lien mortgages                          24,649         16,488
B/C loans                                                34,743              -
Other                                                    39,768         14,581
                                                     -----------    ----------
      Subtotal                                        1,854,572      1,434,817
Allowance for possible credit losses                    (20,485)       (31,539)
Deferred finance charges                                (25,652)       (16,568)
(Discounts)/premiums, net                                  (422)        13,736
                                                     -----------    ----------
      Total                                          $1,808,013     $1,400,446
                                                     -----------    ----------
                                                     -----------    ----------
</TABLE>

                                       8
<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                JUNE 30, 1998
                                 (UNAUDITED)

3.  INTEREST ONLY STRIPS, NET

The activity in the Interest Only Strips (net of allowance for loan losses) 
is summarized as follows:

<TABLE>
<CAPTION>
                                                     Six Months     Year Ended
                                                        Ended      September 30,
                                                    June 30, 1998       1997
                                                    -------------  -------------
                                                     (unaudited)
<S>                                                 <C>            <C>
Balance, beginning of period                          $ 482,271      $ 132,973
I/O Strips created from securitizations                 366,363        608,548
Unrealized loss                                          (6,393)             -
Provision for possible losses                          (248,074)      (245,796)
Amortization                                           (101,708)       (61,707)
Charge-offs, net                                         58,060         23,866
Other                                                    (2,799)        (1,761)
                                                      ---------      ---------
Balance, end of period                                $ 547,720      $ 456,123
                                                      ---------      ---------
                                                      ---------      ---------
</TABLE>

4.   EARNINGS PER SHARE

The table below sets forth the computation of basic and diluted earnings per 
share:

<TABLE>
<CAPTION>
                                                          Three Months Ended               Six Months Ended
                                                               June 30,                       June 30,
                                                        ----------------------          ----------------------
                                                         1998           1997             1998            1997
                                                        -------        -------          -------        -------
                                                             (unaudited)                     (unaudited)
<S>                                                     <C>            <C>              <C>            <C>
Numerator:                                                    
 Numerator for basic earnings per share - income                             
  available to common stockholders (net income)         $27,848        $39,374          $47,684        $69,925
 
 Effect of dilutive securities:                                              
  Additional interest on convertible subordinated                             
   notes, net of tax                                        785            785            1,570          1,570
                                                        -------        -------          -------        -------

 Numerator for diluted earnings per share-income              
  available to common stockholders after                       
   assumed conversions                                  $28,633        $40,159          $49,254        $71,495
                                                        -------        -------          -------        -------
                                                        -------        -------          -------        -------

Denominator:                                                  
  Denominator for basic earnings per share - weighted                         
   average shares                                        38,149         35,516           38,017         34,825 

 Effect of dilutive securities:                               
  Employee stock options                                  1,503          1,309            1,306            872
  Convertible subordinated notes                          4,290          4,290            4,290          4,290
                                                        -------        -------          -------        -------
 Dilutive potential common shares                         5,793          5,599            5,596          5,162
                                                        -------        -------          -------        -------

Denominator for diluted earnings per share-adjusted           
 weighted average shares and assumed conversions         43,942         41,115           43,613         39,987
                                                        -------        -------          -------        -------
                                                        -------        -------          -------        -------

Basic earnings per share                                $  0.73        $  1.11          $  1.25        $  2.01
                                                        -------        -------          -------        -------
                                                        -------        -------          -------        -------
                                                                             
Diluted earnings per share                              $  0.65        $  0.98          $  1.13        $  1.79
                                                        -------        -------          -------        -------
                                                        -------        -------          -------        -------
</TABLE>

                                       9
<PAGE>

               FIRSTPLUS FINANCIAL GROUP, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                JUNE 30, 1998
                                 (UNAUDITED)

5.  ACQUISITION OF LIFE FINANCIAL CORP.

     On March 11, 1998, the Company and LIFE Financial Corporation ("LIFE") 
entered into an Agreement and Plan of Merger (the "Merger Agreement") whereby 
LIFE will be acquired by the Company.  Under the Merger Agreement, a newly 
formed, wholly owned subsidiary of the Company will merge with and into LIFE, 
with LIFE being the surviving corporation in the merger ("Merger").  The 
Merger is structured as a stock-for-stock merger whereby LIFE stockholders 
will receive approximately $20.00 in value of FIRSTPLUS voting common stock 
for each share of LIFE common stock, to the extent FIRSTPLUS common stock 
trades between $30.00 and $40.00 per share based on the 30-day average prior 
to closing of the Merger. It is anticipated that the Merger will be treated 
as a tax-free reorganization and a "pooling of interests."  Completion of the 
Merger is subject to certain conditions, including (i) approval by the 
stockholders of LIFE, (ii) approval by the Office of Thrift Supervision 
("OTS") and other requisite regulatory authorities, (iii) receipt of an 
opinion of counsel for LIFE that the Merger will be treated as a tax-free 
reorganization for federal income tax purposes, and (iv) other conditions to 
closing that are customary in transactions of this type.  

     LIFE announced net income of $1.15 million, or $0.17 per diluted LIFE 
share for the quarter ended June 30, 1998.  The results are lower than the 
net income reported for the March 1998 quarter of $3.7 million, or $0.54 per 
diluted LIFE share, due to several factors, including, certain I/O Strip 
valuation adjustments recorded during the June 1998 quarter.  LIFE's 
management indicated that they believe that such valuation adjustments reflect
the full amount of adjustments needed to appropriately value such assets, 
based on current market conditions and other known factors.  If further 
adjustments are appropriate, and if such adjustments are of a material 
nature, such adjustments could have an adverse effect on the Merger.
     
     The application for the change of control of LIFE was filed with the OTS 
in June 1998.  LIFE and FIRSTPLUS currently anticipate filing the required 
Form S-4 Registration Statement with the Securities Exchange Commission in 
August 1998.  







                                       10
<PAGE>


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

     FIRSTPLUS Financial Group, Inc. (together with its subsidiaries, the 
"Company" or "FIRSTPLUS") is a specialized consumer finance company that 
originates, purchases, services and sells consumer finance receivables.  The 
Company's loan products are debt consolidation or home improvement loans 
secured by second liens on residential real property ("High LTV Loans"), 
non-conforming home equity loans ("B/C Loans"), conforming first lien loans, 
and personal consumer loans.  The Company sells substantially all of its High 
LTV Loans through its securitization program and retains rights to service 
these loans.

     The following analysis of the financial condition and results of 
operations of the Company should be read in conjunction with the Company's 
Annual Report filed with the Securities and Exchange Commission on Form 10-K, 
including the consolidated financial statements and notes thereto.

FINANCIAL CONDITION
    JUNE 30, 1998

     Loans held for sale and investment in securitized loans increased to 
$1.8 billion at June 30, 1998 compared to $1.6 billion at September 30, 1997. 
This increase was due to loan originations of $4.1 billion offset by loans 
securitized of $3.0 billion, whole loan sales and loan paydowns since 
September 30, 1997.

     The Company utilizes an enhanced residual valuation model.  The model 
takes into account the most relevant valuation factors as of the date of the 
related securitization and the current balance sheet date, and specifically 
addresses discount rates.  Management makes estimates and assumptions 
regarding the value of the interest only strips ("I/O Strips") at the time of 
the securitization and at each balance sheet date.  The primary assumptions 
used to estimate the value of the I/O Strips are default and prepayment 
rates, along with an appropriate discount rate.  Based on current prepayment, 
default and discount rate assumptions used in the residual valuation model at 
June 30, 1998, the Company recorded a $4.0 million, after tax, unrealized 
loss against its I/O Strips.  The discount rate is determined based on the 
securitization structure, the over-collateralization levels, interest rate 
fluctuations and market volatility.  The Company also increased its 
prepayment and default assumptions, as part of its valuation assessment as of
June 30, 1998. Such assumptions represent management's best estimate based 
upon current conditions.  Increased competition, continued periods of low 
interest rates, general economic conditions and other factors such as the 
risks and uncertainties described in the Company's Current Report on Form 8-K 
dated December 19, 1996 could result in actual results differing from those 
estimates.  This valuation partially offsets the previously recorded 
unrealized gains on available for sale securities in equity of approximately 
$21.1 million.

     The Company's I/O Strips increased to $547.7 million at June 30, 1998, 
compared to $456.1 million at September 30, 1997, an increase of $91.6 
million or 20.1%.  The increase in the I/O Strips was the result of the 
recognition of the fair value of the I/O Strips from securitization completed 
during the six months ended June 30, 1998 and the three months ended December 
31, 1997 (the "transition period") securitizations, offset by the 
amortization of the I/O Strips and an unrealized loss of $4.0 million, after 
tax.  I/O Strips are amortized through periodic charges to the statement of 
income.  As of June 30, 1998, the carrying value of the recorded I/O Strips 
reflects their estimated fair value.

     Total stockholders' equity at June 30, 1998 was $506.0 million, compared 
to $430.1 million at September 30, 1998, an increase of $75.9 million or 
17.6%. During the six months ended June 30, 1998 and the transition period, 
the Company earned net income of $47.7 million and $11.7 million, 
respectively, and issued $17.0 million in common stock during the six months 
ended June 30, 1998.

RESULTS OF OPERATIONS
     THREE MONTHS ENDED JUNE 30, 1998 VERSUS THREE MONTHS ENDED JUNE 30, 1997
    
     The Company's total revenues increased to $219.7 million during its June 
1998 quarter, compared to $163.3 million in the June 1997 quarter, an 
increase of $56.4 million or 34.5%. During the June 1998 quarter, the 
Company's percentage of revenue, excluding gain on securitized loan sales to 
total revenue, increased to 78.6%, compared to 51.3% in the June 1997 quarter.

     Gain on securitized loan sales, net, decreased to $47.0 million in the 
June 1998 quarter, compared to $79.6 million in the June 1997 quarter, a 
decrease of $32.6 million or 41.0%. Gain on securitized loan sales, net, in 
each quarter was affected by both the size of the securitizations and the 
assumptions used in the gain on securitized loan 

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<PAGE>

sales.  During the June 1998 quarter, the Company securitized $1.15 billion 
of High LTV Loans, compared to $676.4 million in the June 1997 quarter.

     During the June 30, 1998 quarter, the Company used an approximate 18.6% 
discount rate to value the I/O Strips, by taking into account all cash flows 
that will revert to the Company, related to securitizations completed during 
the quarter.  The resulting gain on securitized loan sales, net, as a 
percentage of the loans securitized and sold was 4.09% and 11.8% for the 
quarters ended June 30, 1998 and 1997, respectively.  Other assumptions used 
in assessing the fair value of the I/O Strips during the June 1998 quarter 
were proprietary prepayment curves (reaching a voluntary constant prepayment 
rate of approximately 16.0% after nine months and further ramps to 17.75%) 
and proprietary default curves (resulting in an involuntary prepayment curve 
of 4.15%).  

     Interest income increased to $75.9 million in the June 1998 quarter, 
compared to $50.6 million in the June 1997 quarter, an increase of $25.3 
million or 50.0%. The increase in interest income was primarily attributable 
to an increase in the average loans held-for-sale balance.  Loans held for 
sale as of June 30, 1998 were $1.8 billion, compared to $1.1 billion as of 
June 30, 1997.

     Interest income on the Company's I/O Strips increased to $24.8 million 
in the quarter ended June 30, 1998, compared to $8.5 million in the quarter 
ended June 30, 1997, an increase of $16.3 million or 191.8%. This increase 
was primarily the result of the Company's larger average I/O Strip balance 
during the June 30, 1998 quarter.  I/O Strips as of June 30, 1998 were $547.7 
million, compared to $375.9 million as of June 30, 1997.  

     Origination income increased to $45.0 million in the quarter ended June 
30, 1998, compared to $10.3 million in the quarter ended June 30, 1997, an 
increase of $34.7 million or 336.9%.  This increase was the result of the 
Company's continuing shift toward direct to consumer originations, which 
accounted for 39.7% of High LTV Loan originations compared to 22.8% a year ago. 
Origination fees are deferred when collected and subsequently recognized 
when the loans are sold. The Company collected and deferred approximately 
$57.9 million of loan origination fees during the June 1998 quarter.

     Servicing income increased to $12.8 million in the quarter ended June 
30, 1998, compared to $6.2 million in the quarter ended June 30, 1997, an 
increase of $6.6 million or 106.5%.  This increase was a result of the 
increase in the Company's securitized loan portfolio, which increased to $5.6 
billion at June 30, 1998, compared to $2.3 billion at June 30, 1997.

     Total pre-tax operating expenses, which include salaries, employee 
benefits, advertising, marketing, servicing and other operating expenses, 
increased to $122.5 million in the quarter ended June 30, 1998, compared to 
$60.3 million in the quarter ended June 30, 1997, an increase of $62.2 
million or 103.2%.  The increase in operating expenses during the quarter 
ended June 30, 1998, was due to marketing costs associated with the Company's 
continued efforts to significantly increase its High LTV and "B/C" direct to 
consumer lending platforms, its originations from its direct to consumer 
lending division, the introduction of its High LTV first lien product, 
professional fees primarily associated with improving its information 
technology and increases in servicing-related personnel.  

     Interest expense for the quarter ended June 30, 1998 increased to $37.4 
million, compared to $26.5 million for the quarter ended June 30, 1997, an 
increase of $10.9 million or 41.1%.  The increase primarily related to the 
Company's overall increase in the warehouse and repurchase facilities and 
term line borrowings, which supported both loan volume growth and expanding 
operations.

     The Company's provision for possible credit losses on loans held for 
sale increased to $14.8 million for the quarter ended June 30, 1998, compared 
to $13.0 million for the quarter ended June 30, 1997, an increase of $1.8 
million or 13.8%.  The 30 day and over delinquency rate for the managed loans 
portfolio of 2.2% as of June 30, 1998 was flat compared to 2.2% as of June 
30, 1997. Gross servicing portfolio defaults, before recoveries and insurance 
recoveries received on Title I loans, equaled $40.0 million or 0.58% of the 
June 30, 1998 average quarterly loan portfolio. Of the $40.0 million, 
approximately $3.1 million were Title I defaults, which are subject to 
recoveries under the Title I insurance program. 

                                       12
<PAGE>

SIX MONTHS ENDED JUNE 30, 1998 VERSUS SIX MONTHS ENDED JUNE 30, 1997
    
     The Company's total revenues increased to $402.8 million during the six 
months ended June 1998, compared to $292.5 million in the six months ended 
June 30, 1997, an increase of $110.3 million or 37.7%.  During the six months 
ended June 30, 1998, the Company's percentage of revenue, excluding gain on 
securitized loan sales to total revenue, increased to 78.8%, compared to 
49.9% in the six months ended June 30, 1997.

     Gain on securitized loan sales, net, decreased to $85.3 million in the 
six months ended June 30, 1998, compared to $146.5 million in the six months 
ended June 30, 1997, a decrease of $61.2 million or 41.8%. Gain on 
securitized loan sales, net, in the six-month period was affected by both the 
size of the securitizations and the assumptions used in the gain on 
securitized loan sales. During the six months ended June 30, 1998, the 
Company securitized $2.2 billion of High LTV Loans, compared to $1.2 billion 
in the six months ended June 30, 1997.  The resulting gain on securitized 
loan sales, net as a percentage of the loans securitized and sold was 3.9% 
and 12.2% for the six months ended June 30, 1998 and 1997, respectively.

     Interest income increased to $142.9 million in the six months ended June 
30, 1998, compared to $85.2 million in the six months ended June 30, 1997, an 
increase of $57.7 million or 67.7%. The increase in interest income was 
primarily attributable to an increase in the average loans held-for-sale 
balance.  Loans held for sale as of June 30, 1998 were $1.8 billion, compared 
to $1.1 billion as of June 30, 1997.

     Interest income on the Company's I/O Strips increased to $48.6 million 
in the six months ended June 30, 1998, compared to $11.2 million in the six 
months ended June 30, 1997, an increase of $37.4 million or 333.9%. This 
increase was primarily the result of the Company's larger average I/O Strip 
balance during the six months ended June 30, 1998.  I/O Strips as of June 30, 
1998 were $547.7 million, compared to $375.9 million as of June 30, 1997.  

     Origination income increased to $77.0 million in the six months ended 
June 30, 1998, compared to $21.8 million in the six months ended June 30, 
1997, an increase of $55.2 million or 253.2%.  The increase was the result of 
the Company's increasing direct to consumer loan originations.  

     Servicing income increased to $23.9 million in the six months ended June 
30, 1998, compared to $10.0 million in the six months ended June 30, 1997, an 
increase of $13.9 million or 139.0%.  This increase was a result of the 
increase in the Company's securitized loan portfolio, which increased to $5.6 
billion at June 30, 1998, compared to $2.3 billion at June 30, 1997.

     Total pre-tax operating expenses, which include salaries, employee 
benefits, advertising, marketing, servicing and other operating expenses, 
increased to $219.4 million in the six months ended June 30, 1998, compared 
to $106.8 million in the six months ended June 30, 1997, an increase of 
$112.6 million or 105.4%.  The increase in operating expenses during the six 
months ended June 30, 1998, was due to marketing costs associated with the 
Company's continued efforts to significantly increase its High LTV and "B/C" 
direct to consumer lending platforms, its originations from its direct to 
consumer lending division, the introduction of its High LTV first lien 
product, professional fees primarily associated with improving its 
information technology and increases in servicing-related personnel.  

     Interest expense for the six months ended June 30, 1998 increased to 
$73.4 million, compared to $47.1 million for the six months ended June 30, 
1997, an increase of $26.3 million or 55.8%.  The increase primarily related 
to the Company's overall increase in the warehouse and repurchase facilities 
and term line borrowings, which supported both loan volume growth and 
expanding operations.

     The Company's provision for possible credit losses on loans held for 
sale increased to $33.1 million for the six months ended June 30, 1998, 
compared to $25.8 million for the six months ended June 30, 1997, an increase 
of $7.3 million or 28.3%.  The increase is the result of an increased loans 
held for sale portfolio.  

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company's operations require continued access to financing sources. 
The Company's primary operating cash requirements include the funding of (i) 
loan originations and purchases, (ii) fees and expenses incurred in 
connection with its securitization transactions, (iii) television, radio and 
direct mail advertising and other marketing, (iv) capital expenditures on 
equipment and leasehold improvements, and (v) administrative and other 
operating expenses.  Since the September 1997 quarter, the Company has been 
able to utilize a securitization structure whereby the Company issues bonds 
in excess of loans delivered. Overcollateralization requirements are met by 
future excess cash flows of the specific securitizations.  In addition, the 
Company has sold a portion of the I/O Strip for cash, which is equal to 
approximately 1.0% of loans delivered.  The Company expects to continue to 
utilize this structure in future securitization transactions.

     Adequate credit facilities and other sources of funding, which permit 
the Company to fund its operating cash requirements and to securitize or sell 
loans in the secondary market, are essential to the continuation of the 
Company's ability to originate and purchase loans.  After utilizing available 
working capital, the Company borrows money to fund its loan originations and 
purchases and repays these borrowings as the loans are repaid or sold. Upon 
the securitization or sale of loans and the subsequent repayment of the 
borrowings, the Company's working capital and warehouse facilities again 
become available to fund additional loan originations and purchases.  

     The Company currently has approximately $5.0 billion in capacity in its 
warehouse and repurchase facilities.  These facilities carry variable 
interest rates, primarily based on LIBOR, ranging from 0.50% to 1.50%.  As of 
June 30, 1998, the Company had $1.4 billion outstanding under these 
facilities.  The warehouse and repurchase facilities had a weighted average 
interest rate of 6.35% as of June 30, 1998.  

     In addition, the Company had approximately $495.9 million in term line 
facilities that are secured by I/O Strips generated from the related 
securitizations.  As of June 30, 1998, the Company had $246.4 million 
outstanding under these facilities and other lines of credit.  These 
facilities are with the same institution as the warehouse and repurchase 
facility and bear interest rates between LIBOR plus 1.75% and 1.875%.

     On April 23, 1998, the Company closed its first net interest margin 
transaction ("NIMS").  The Company secured $150 million of bonds with I/O 
Strips from its 1996-4, 1997-1, 1997-2, 1997-3 and 1997-4 High LTV Loan 
securitizations, a limited portion of servicing fees from those 
securitizations to be earned, and a $30 million demand note.  The bonds carry 
a coupon of 8.5% and were sold at 99.55% of par for a bond equivalent yield 
of approximately 8.87%.  The funds received from the bonds were used to pay 
down the term lines of credit related to each securitization.  The debt 
service of these bonds are paid from the excess residual income of the I/O 
Strips and the previously mentioned servicing fees.  If the excess residual 
income and servicing fees are not sufficient to meet scheduled debt service 
requirements, the bond holders have the right to call a $30.0 million demand 
note, with the remaining portion of the debt being unsecured.  As the bonds 
are secured by the excess residual income of I/O Strips, the bonds have 
significant prepayment risk.  If prepayment and default rates are faster than 
anticipated, the excess residual income may not be sufficient to cover debt 
service of the bonds.  

     As a result of the Company's increasing volume of loan originations and 
purchases, and its expanding securitization activities, the Company has 
operated, and expects to continue to operate, on a negative operating cash 
flow basis, which is expected to increase as the volume of the Company's loan 
purchases and originations increase and its securitization program grows.  
The Company's operations used $134.6 million during the six months ended June 
30, 1998, compared to $663.3 million used during the six months ended June 
30, 1997. The cash used in operations is primarily related to the cost of an 
enlarged infrastructure and employee base, advertising and other marketing 
costs associated with the increased Direct to Consumer loan originations and 
the costs that accompany the Company's securitization strategy.  The 
Company's investing activities used cash of $42.0 million during the six 
months ended June 30, 1998, compared to $13.7 million in the six months ended 
June 30, 1997.  Financing activities provided cash of $185.5 million for the 
six months ended June 30, 1998, compared to $721.3 million in the six months 
ended June 30, 1997.  The cash provided by financing activities was primarily 
due to borrowings related to the warehouse, repurchase, time deposits and 
term line facilities, net of repayments, which have been used to fund loan 
originations, working capital and securitization costs.  

     In addition, the Company has a strategy of maintaining a significant 
quantity of loans on its balance sheet, thus increasing the length of time 
that loans are held for sale and materially increasing its interest rate 
risk. Because the Company's present loan facilities bear interest at variable 
rates, the Company has a need for medium- to long-term 

                                       14
<PAGE>

fixed-rate financing.  If the Company is unable to obtain such financing, it 
could have a material adverse effect on the Company's results of operations 
and financial condition.

IMPACT OF YEAR 2000

     The "Year 2000" issue refers to the phenomenon whereby computer 
programs, having been written using two digits rather than four to define the 
applicable year, may erroneously recognize a date using "00" as the year 1900 
rather than the year 2000.  This error could potentially result in a system 
failure or miscalculations causing disruptions of operations, including, 
among other things, a temporary inability to process transactions or engage 
in similar normal business activities.

     The Company is in the process of upgrading its mission critical systems 
as part of its strategic initiatives to accommodate its growth and need for 
increased capacity.  As part of this process, the Company is ensuring that 
these new systems are Year 2000 mitigated.

     To a degree, the Company relies on outside software vendors, significant 
suppliers and large customers for the operation of its systems.  The Company 
is initiating formal communications with these parties to determine the 
extent to which the Company's upgraded systems are vulnerable to those third 
parties' failure to remedy their own Year 2000 issues.  The Company presently 
believes that with modifications to existing software and conversions to new 
software, the Year 2000 issue will not pose significant operational problems 
for its systems.  However, if such modifications and conversions are not 
made, or are not completed timely, the Year 2000 issue could have a material 
impact on the operations of the Company.

     The Company intends to utilize both internal and external resources to 
test the software for Year 2000 compliance and to determine whether such 
software should be reprogrammed or replaced.  The Company anticipates 
completing the Year 2000 project prior to any anticipated impact on its 
operating systems.  The total cost of the Year 2000 project is not presently 
expected to be material and is being funded through operating cash flows. 

FORWARD LOOKING STATEMENTS

     The above statements contained in this 10-Q that are not historical 
facts, including, but not limited to, statements that can be identified by 
the use of forward-looking terminology such as "may," "will," "expect," 
"anticipate," "estimate" or "continue" or the negative thereof or other 
variations thereon or comparable terminology, are forward-looking statements 
within the meaning of the Private Securities Litigation Reform Act of 1995, 
and involve a number of risks and uncertainties.  The actual results of the 
future events described in such forward-looking statements in this press 
release could differ materially from those stated in such forward-looking 
statements.  Among the factors that could cause actual results to differ 
materially are: short-term interest rate fluctuations, level of defaults and 
prepayments, general economic conditions, competition, government regulation 
and possible future litigation, as well as the risks and uncertainties 
discussed in the Company's Current Report on Form 8-K, dated December 19, 
1996, including without limitation, the uncertainties set forth from time to 
time in the Company's other public reports and filings and public statements.






                                       15
<PAGE>
               
PART II.       OTHER INFORMATION

Item 1.        LEGAL PROCEEDINGS

                    Not Applicable 

Item 2.        CHANGES IN SECURITIES

                    Not Applicable

Item 3.        DEFAULTS UPON SENIOR SECURITIES

                    Not Applicable

Item 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                    Not Applicable

Item 5.        OTHER INFORMATION

                    Not Applicable

Item 6.        EXHIBITS AND REPORTS ON FORM 8-K

                    (A)  Exhibits: 
                    
                         27- Financial Data Schedule

                    (B)  Reports on Form 8-K
                         


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.

FIRSTPLUS Financial Group, Inc.
(Registrant)

by: /s/  William P. Benac                                                     
    ---------------------------------------------------------
    William P. Benac
    Chief Financial Officer
    (Principal Financial Officer and Duly Authorized Officer)


date:  AUGUST 14, 1998    
      ------------------




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