U. S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB


(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


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

         For the transition period ended ______________to_______________

                        Commission file number 333-35063

                               Baron Capital Trust
                      (Exact name of small business issuer
                          as specified in its charter)

            Delaware                                     31-1574856 
   (State or other jurisdiction                        (IRS Employer
of incorporation or organization)                    Identification No.)

                    7826 Cooper Road, Cincinnati, Ohio 45242
                    (Address of principal executive offices)

                                 (513) 984-5001
                           (Issuer's telephone number)



         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 [ ]



<PAGE>


                         PART I - FINANCIAL INFORMATION


Item 1.       Financial Statements

                               BARON CAPITAL TRUST
                                  BALANCE SHEET
                               As of June 30, 1998


                                                                   June 30, 1998
                                                                   -------------


ASSETS

         Current Assets
                  Checking/Savings
                           Amer Stock Trans & Trust Escrow            225,540.00
                           Key Bank                                   160,857.55
                                                                    ------------

                  Total Checking/Savings                              386,397.55
                                                                    ------------

         Total Current Assets                                         386,397.55

         Other Assets

                  Investments

                           Baron Capital Properties, L.P.           1,532,240.00
                                                                    ------------

                  Total Investments                                 1,532,240.00
                                                                    ------------

         Total Other Assets                                         1,532,240.00
                                                                    ------------

         TOTAL ASSETS                                               1,918,637.55
                                                                    ============


LIABILITIES & EQUITY

         Liabilities
                  Current Liabilities
                           Other Current Liabilities
                                    Other Payables                    147,563.64
                                                                    ------------

                           Total Other Current  Liabilities           147,563.64
                                                                    ------------

         Total Current Liabilities                                    147,563.64
                                                                    ------------


         Equity
                  Common Shares                                     2,031,233.89
                  Partnership Capital                                     100.00
                  Net Income                                         -260,259.98
                                                                    ------------

         Total Equity                                               1,771,073.91
                                                                    ------------

         TOTAL LIABILITIES & EQUITY                                 1,918,637.55
                                                                    ============

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<PAGE>

                               BARON CAPITAL TRUST
                                 PROFIT AND LOSS
                            January through June 1998



                                                                  Jan - Jun 1998
                                                                  --------------

Income
         Bank account interest                                            406.66
                                                                      ----------


Total Income                                                              406.66


Expense
         Advisory Expenses                                             40,624.67
         Bank Service Charges                                             160.58
         Commissions                                                  162,498.71
         Federal Withholding on Interest                                    0.01
         Investment Expenses                                           57,382.67
                                                                      ----------

Total Expenses                                                        260,666.64
                                                                      ----------

Net Income                                                           -260,259.98
                                                                      ----------

                                       3
<PAGE>

                               BARON CAPITAL TRUST
                             STATEMENT OF CASH FLOWS
                           Period Ending June 30, 1998


                                                                       1998
                                                                  -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                        $ (260,259.98)
Changes in assets (increase) decrease in:
         Other assets                                                      0.00
Changes in liabilities, increase (decrease) in:
         Accounts payable and accrued expenses                       147,563.64
                                                                  -------------
Net cash provided by operating activities                           (112,696.34)



CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Baron Capital Properties, L.P.                      (1,532,240.00)




CASH FLOWS FROM FINANCING ACTIVITIES:
Offering Proceeds                                                  2,031,333.89

Net increase (decrease) in cash and cash equivalents                 386,397.55
Cash and cash equivalents, beginning of period                             0.00
                                                                  -------------
Cash and cash equivalents, end of period                             386,397.55


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<PAGE>


Item 2.   Management's Discussion and Analysis or Plan of Operation

     Baron Capital Trust, the Registrant  commenced  operations on May 17, 1998.
On June 30, 1998,  it acquired  beneficial  ownership of a 67-unit  multi-family
residential apartment property located in Kissimmee,  Florida.  Since that time,
it has acquired  additional  interests  in  multi-family  residential  apartment
properties.  The  Registrant  intends to  continue to acquire  similar  property
interests using proceeds from its registered public offering of 2,500,000 Common
Shares at $10.00 per share.

     The  Registrant  has the ability to satisfy its cash  requirements  for the
foreseeable  future.  However,  it will be necessary to raise additional capital
during the next 12 months to make acquisitions and to meet management's  revenue
and cash flow goals. Baron Capital Properties,  L.P. (of which the Registrant is
the sole general partner and a limited  partner)  intends to conduct an exchange
offering  under  which  it will  offer  to  issue  units  ("Units")  of  limited
partnership interest to be registered,  with an initial value of $25,000,000, in
exchange for limited partnership  interests in real estate limited  partnerships
which directly or indirectly own interests in multi-family residential apartment
properties. The Registrant intends to investigate making an additional public or
private offering of Common Shares and/or Units within the next 12 months.

     The Registrant  expects no material  change in the number of employees over
the next 12 months.






                                       5
<PAGE>


                           PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

          None


Item 2.   Changes in Securities and Use of Proceeds

          The Registrant's Form SB-2 Registration  Statement (the  "Registration
          Statement")  (Commission file number 333-35063) was declared effective
          by the  Commission  on May 15, 1998. On May 18, 1998,  the  Registrant
          commenced its public offering (the  "Offering") of Common Shares,  the
          class of securities registered, and the Offering is currently ongoing.
          The  name  of the  managing  underwriter  of  the  Offering  is  Sigma
          Financial  Corporation.  The  amount of Common  Shares  registered  is
          2,500,000 shares.  The offering price per Common Share is $10.00,  and
          the aggregate price of the offering amount registered is $ 25,000,000.
          As of the date of this report,  203,123.4 Common Shares have been sold
          in the Offering, for an aggregate offering price of $ 2,031,233.89.

          From the effective date of the Registration Statement through June 30,
          1998, the following  expenses have been incurred for the  Registrant's
          account  in  connection  with the  issuance  and  distribution  of the
          registered Common Shares:

          Underwriting discounts and commissions:            $ 162,498.71 (plus
                                                             five-year warrants
                                                             to acquire 17,265.5
                                                             Common Shares at an
                                                             exercise price of 
                                                             $ 13.00 per share)

          Finder's Fees:                                     $ 0

          Expenses Paid to or for Underwriter:               $ 0

          Other Expenses (reimbursement for advisory and
          investment expenses):                              $  98,007.34

                                                             ------------
                               Total Expenses:               $ 260,506.05

          Of such  expense  payments,  $ 98,007.34  were made  directly to Baron
          Advisors,  Inc.,  the  Managing  Shareholder  of the  Registrant.  The
          remaining  payments of $162,498.71 were made directly or indirectly to
          others.  The net offering  proceeds to the Registrant  after deducting
          the foregoing total expenses were $ 1,770,727.84.


          From the effective date of the Registration Statement through June 30,
          1998, the net offering  proceeds to the  Registrant  were used for the
          following purposes:


                                       6
<PAGE>

          Improvements to buildings and facilities:               $ 0

          Purchase and installation of equipment:                 $ 0

          Repayment of indebtedness:                              $ 0

          Working capital:                                        $ 386,397.55

          Temporary investments:                                  $ 0

          Investment in Baron Capital Properties, L.P.            $ 1,532,240.00

          Other purposes for which 5% or more of net              $ 0
          offering proceeds or $100,000 (whichever is
          less) have been used:


          Of such net proceeds, $ 1,532,240.00 was directly contributed to Baron
          Capital Properties, L.P. ("Baron Properties") (of which the Registrant
          is the sole  general  partner and a limited  partner) in exchange  for
          limited  partnership  interests in Baron Properties.  Baron Properties
          will conduct all of the real estate  operations of the  Registrant and
          hold all of its real property assets.

Item 3.   Defaults upon Senior Securities

          None


Item 4.   Submission of Matters to a Vote of Security Holders

          None


Item 5.   Other Information

          As reported on a Form 8-K Current  Report dated July 15, 1998, on June
          30, 1998, Baron Properties acquired beneficial  ownership of a 67-unit
          residential apartment property located in Kissimmee,  Florida referred
          to as the Heatherwood Apartments - Phase I.

          On July 31, 1998, Baron Properties acquired beneficial  ownership of a
          second property,  an 80-unit residential apartment property located in
          Lakewood,  Florida  referred to as Crystal Court Apartments - Phase II
          (the "Crystal Court Property").


                                       7
<PAGE>


          The Crystal Court Property,  completed in 1986, consists of 20 studio/
          one bathroom units,  54 one bedroom/ one bathroom  units,  and six two
          bedroom/one  bathroom units. The property is situated on approximately
          6.8 acres and has  approximately  42,048 square feet of rentable area.
          The average unit size of the studio, one bedroom and two bedroom units
          is  approximately  288,  576 and 864 square  feet,  respectively.  The
          average  monthly  rental rate as of July 1, 1998 for each type of unit
          is approximately $319, $369 and $455, respectively, or $1.11, $.64 and
          $.53 per square foot,  respectively.  The units were approximately 92%
          occupied as of July 1, 1998. The average  monthly  occupancy rates for
          1993, 1994, 1995, 1996 and 1997 were  approximately 95%, 91%, 91%, 90%
          and 95%, respectively.

          Baron Properties acquired the entire limited  partnership  interest in
          the Crystal Court  Partnership  from Rylex Capital,  L.L.C., a Florida
          limited liability  company an unaffiliated  third party for a purchase
          price of  $756,293.  The  Crystal  Court  Property is subject to first
          mortgage  financing with a current  principal balance of approximately
          $1,488,000. The mortgage is held by GMAC Commercial Mortgage Corp. The
          maturity date of the first mortgage loan is October 2004.  Assuming no
          prepayments of principal,  the balance that will be due at maturity is
          approximately  $1,366,490.  The  monthly  debt  service  payments  are
          $10,404,  or an annual  amount  of  $124,808.  The loan  bears a fixed
          interest  rate of 7.5% and amortizes on a 30-year  basis.  The loan is
          prepayable  with a prepayment fee equal to 1% of the then  outstanding
          principal balance.

          The  purchase   price  was  paid  out  of  the  net  proceeds  of  the
          Registrant's sale of Common Shares in its ongoing public offering. The
          purchase  price was  determined by the parties to the  transaction  in
          arms-length negotiations and was based on a June 1998 appraisal of the
          property by Consortium Appraisal,  Inc., an independent appraisal firm
          located in Winter Park, Florida.

          The  financial  statements  required  under  item  7 of  Form  8-K  in
          connection with such acquisition have not been filed with this report.
          Such financial  statements  will be filed on a Form 8-K within 60 days
          after the date of execution of this report.


Item 6.   Exhibits and Reports on Form 8-K

          (a)  No exhibits attached.

          (b)  On July 15, 1998, the Registrant filed a Form 8-K to report Baron
               Properties'   acquisition   of   beneficial   ownership   of  the
               Heatherwood  Property.  The financial  statements  required under
               item 7 of Form 8-K in connection with such  acquisition  were not
               filed  with  the  initial  report  on Form  8-K.  Such  financial
               statements  will be filed by amendment  to the initial  report on
               Form 8-K within 60 days after the date of  execution  of the Form
               8-K.






                                       8
<PAGE>

     In accordance  with the  requirements  of the Exchange Act, the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



August 14, 1998

                                    BARON CAPITAL TRUST




                                    By:         /s/  Gregory K. McGrath
                                             ---------------------------------
                                             Gregory K. McGrath
                                             Chief Executive Officer




                                    By:        /s/  David E. Williams
                                             ---------------------------------
                                             David E. Williams
                                             Chief Financial Officer




                                       9