U.S. SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549

                               Form 10-QSB

(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended November 30, 1998.

 ....Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period
from _________ to _________.

Commission File No:   __000-23559__

                      SUNBURST ACQUISITIONS III, INC.
                 ---------------------------------------
                 (Name of small business in its charter)

      Colorado                              84-14320001
----------------------               -----------------------
(State or other                      (IRS Employer Id.  No.)
jurisdiction of Incorporation)

4807 South Zang Way        Morrison,  Colorado              80465
-------------------------------------------------------------------
(Address of Principal Office)                              Zip Code

Issuer's telephone number:    (303) 979-2404

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 _____

Applicable only to issuers involved in bankruptcy proceedings during
the past five years

Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.

  Yes _____ No _____

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.  At 11/30/98 the
following shares of common were outstanding:  Preferred Stock, no par value, 
80,000 shares; Common Stock, no par value, 2,035,000 shares.

Transitional Small Business Disclosure
Format (Check one):
Yes _____     No __X__

<PAGE>

PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS AND EXHIBITS

       (a)  The unaudited financial statements of registrant for the
three months ended November 30, 1998, follow.  The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented.



                      SUNBURST ACQUISITIONS III, INC.
                      (A Development Stage Company)

                          FINANCIAL STATEMENTS
                     Quarter Ended November 30, 1998
                               (Unaudited)

<PAGE>


                             CONTENTS


     Accountants' report                                  1
     Balance Sheet                                        2
     Statements of Loss and Accumulated Deficit           3
     Statements of Cash Flows                             4
     Notes to Financial Statements                        5

<PAGE>





The Board of Directors and Stockholder of
Sunburst Acquisitions III, Inc.

The accompanying balance sheet of the Sunburst Acquisitions III, Inc. (a 
development stage company) as of November 30, 1998, and the related statements 
of loss and accumulated deficit and cash flows for the period then ended 
were not audited by us and according we do not express an opinion on them.


Denver, Colorado
January 11, 1999


                                              COMISKEY & COMPANY
                                              PROFESSIONAL CORPORATION

                                     1

<PAGE>

                         Sunburst Acquisitions III, Inc.
                         (A Development Stage Company)
                                BALANCE SHEET
                              November 30, 1998
                                 (Unaudited)

<TABLE>
<S>                                                 <C>

ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                         $     419
   Accounts receivable - related party                     103
                                                     ---------

     Total current assets                                  522

OTHER ASSETS:
   Organizational costs (net
     of amortization)                                      225
                                                     ---------

     Total other assets                                    225
                                                     ---------
     TOTAL ASSETS                                    $     747
                                                     =========

  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES                                 
   Accounts payable                                  $     110
   Accounts payable - related party                      1,430
                                                     ---------

     Total current liabilities                           1,540
                                                     ---------
STOCKHOLDERS' EQUITY
   Preferred stock, no par value
     20,000,000 shares authorized;
     80,000 shares issued and outstanding                8,000
   Common stock, no par value;
     100,000,000 shares authorized;
     2,035,000 shares issued and
     outstanding                                         4,935
   Additional paid-in capital                              750
   Deficit accumulated
     during the
     development stage                                 (14,478)
                                                     ---------
   Total stockholders' equity                             (793)
                                                     ---------
     TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY                                        $     747
                                                     =========
</TABLE>

The accompanying notes are an integral part of the financial statements.
                                   2

<PAGE>

                             Sunburst Acquisitions III, Inc.
                             (A Development Stage Company)
                       STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
                                    (Unaudited)


<TABLE>
<S>                            <C>                <C>          <C>
                               For the period     
                               from inception   For the three  For the three
                                 (August 27,    months ended   months ended
                               1997)to November   November       November
                                  30, 1998        30, 1998       30, 1997
                               ---------------  -------------  ------------

REVENUES                       $             -  $           -  $          -
                               ---------------  -------------  ------------

EXPENSES
  Legal Fees                             5,073          1,905         2,200
  General Office                           508              -            15
  Consulting fees                        4,935              -             -
  Professional fees                      2,117              -         1,000
  Amortization                              75             15            15
  Transfer agent                           913            168             -
  Taxes and licenses                       107              -             -
  Rent                                     750            150           150
                                --------------  -------------  ------------

      Total expense                     14,478          2,238         3,380
                                --------------  -------------  ------------

NET LOSS                               (14,478)        (2,238)       (3,380)

Accumulated deficit
  Balance, Beginning of period               -        (12,240)       (1,935)
                                --------------  -------------  ------------

 Balance, End of period         $      (14,478) $     (14,478) $     (5,315)
                                ==============  =============  ============
NET LOSS PER SHARE              $         (NIL) $        (NIL) $       (NIL)
                                ==============  =============  ============

WEIGHTED AVERAGE NUMBER OF 
  SHARES OF COMMON STOCK AND 
  COMMON STOCK EQUIVALENTS 
  OUTSTANDING                        2,123,043      2,195,000     2,095,000
                                ==============  =============  ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
                                  3

<PAGE>

                               Sunburst Acquisitions III, Inc.
                               (A Development Stage Company)
                                 STATEMENTS OF CASH FLOWS
                                        (Unaudited)

<TABLE>
<S>                               <C>                   <C>
                                   For the period
                                   from inception
                                     (August 27,   For the three  For the three
                                      1997) to     months ended   months ended
                                     November 30,  November 30,   November 30, 
                                       1998           1998            1997
                                  ---------------  -------------  -------------

CASH FLOWS FROM 
    OPERATING ACTIVITIES:

  Net Loss                        $       (14,478) $      (2,238) $      (3,380)
  Adjustments to reconcile
     net loss to net cash used
     by operating activities:
    Amortization expense                       75             15             15
    Rent expense                              750            150            150
    Stock issued for
     consulting fees                        4,935              -              -
    Decrease in prepaid expenses                -            474              -
    Increase in accounts 
     receivable                              (103)             -              -
    Increase (decrease) in
     accounts payable                         110           (385)             -
    Increase in accounts payable
     - related party                        1,430          1,430              -
                                   --------------  -------------  -------------

  Net cash used by
   operating activities                    (7,281)          (554)        (3,215)

CASH FLOWS FROM 
    INVESTING ACTIVITIES

  Increase in organization costs             (300)             -           (300)
                                   --------------  -------------  -------------

  Net cash used by
   investing activities                      (300)             -           (300)

CASH FLOWS FROM
    FINANCING ACTIVITIES

  Issuance of preferred
   stock                                    8,000              -              -
                                   --------------  -------------  -------------

  Net cash provided
   financing activities                     8,000              -              -
                                   --------------  -------------  -------------

  Net increase (decrease)
   in cash and cash
   equivalents                                419           (554)        (3,515)

CASH AND CASH EQUIVALENTS,
  Beginning of Period                           -            973          8,000
                                   --------------  -------------  -------------

CASH AND CASH EQUIVALENTS,
 End of Period                     $          419  $         419  $       4,485
                                   ==============  =============  =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
                                 4

<PAGE>

                          Sunburst Acquisitions III, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                November 30, 1998
                                   (Unaudited)


1.  Management's Representation of Interim Financial Information
    ------------------------------------------------------------

The accompanying financial statements have been prepared by Sunburst 
Acquisitions III, Inc. without audit pursuant to the rules and regulations of 
the Securities and Exchange Commission.  Certain information and footnote 
disclosures normally included in financial statements prepared in accordance 
with generally accepted accounting principles have been condensed or omitted 
as allowed by such rules and regulations, and management believes that the 
disclosures are adequate to make the information presented not misleading.  
These financial statements include all of the adjustments which, in the opinion
of management, are necessary to a fair presentation of financial position and 
results of operations.  All such adjustments are of a normal and recurring 
nature.  These financial statements should be read in conjunction with the 
audited financial statements at August 31, 1998.


                                 5

<PAGE>

Item 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.

Liquidity and Capital Resources

        The Company remains in the development stage and, since
inception, has experienced no significant change in liquidity or capital
resources or stockholder's equity other than the receipt of net proceeds
in the amount of $8,000 from its inside capitalization funds. 
Consequently, the Company's balance sheet for the period ending November
30, 1998, reflects a current asset value of $419 and a total asset value
of $522, primarily in the form of cash.

        The Company's business plan is to seek, investigate, and, if
warranted, acquire one or more properties or businesses, and to pursue
other related activities intended to enhance shareholder value.  The
acquisition of a business opportunity may be made by purchase, merger,
exchange of stock, or otherwise, and may encompass assets or a business
entity, such as a corporation, joint venture, or partnership.  The
Company has very limited capital, and it is unlikely that the Company
will be able to take advantage of more than one such business
opportunity.

        The Company will carry out its plan of business as discussed
above.  The Company cannot predict to what extent its liquidity and
capital resources will be diminished prior to the consummation of a
business combination or whether its capital will be further depleted by
the operating losses (if any) of the business entity which the Company
may eventually acquire.

Results of Operations

        During the period from August 27, 1998 (inception) through
November 30, 1998, the Company has engaged in no significant operations
other than organizational activities, acquisition of capital and preparation
for registration of its securities under the Securities Exchange Act of
1934, as amended.  No revenues were received by the Company during
this period.

        For the current fiscal year, the Company anticipates incurring a
loss as a result of organizational expenses, expenses associated with
registration under the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates.  The
Company anticipates that until a business combination is completed with
an acquisition candidate, it will not generate revenues and may continue
to operate at a loss after completing a business combination, depending
upon the performance of the acquired business.

        For the quarters ended November 30, 1998 and 1997, the Company
showed net losses of $2,238 and $3,380, respectively.  The decrease in
loss is due primarily to the timing differences related to expenses
incurred in relation to reporting requirements, and general and
administrative expenses.

Need for Additional Financing

        The Company believes that its existing capital will be sufficient
to meet the Company's cash needs, including the costs of compliance
with the continuing reporting requirements of the Securities Exchange
Act of 1934, as amended, for a period of approximately one year. 
Accordingly, in the event the Company is able to complete a business
combination during this period, it anticipates that its existing capital will
be sufficient to allow it to accomplish the goal of completing a business
combination.  There is no assurance, however, that the available funds
will ultimately prove to be adequate to allow it to complete a business
combination, and once a business combination is completed, the
Company's needs for additional financing are likely to increase
substantially.

        No commitments to provide additional funds have been made by
management or other stockholders.  Accordingly, there can be no
assurance that any additional funds will be available to the Company to
allow it to cover its expenses.

        Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company
might seek to compensate providers of services by issuances of stock in
lieu of cash.

Consideration of year 2000 effects relevant to the Company

        Year 2000 issues are not currently material to the Company's business,
operations or financial condition, and the Company does not currently
anticipate that it will incur any material expenses to remediate Year 2000
issues it may encounter.  However, Year 2000 issues may become material to the
Company following its completion of a business combination transaction.  In that
event, the Company will be required to adopt a plan and a budget for addressing
such issues.

PART II

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       (a)  EXHIBIT 27 - FINANCIAL DATA SCHEDULE

       There have been no reports on Form 8-K for the quarter ending
November 30, 1998.

<PAGE>
Signatures

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.

SUNBURST ACQUISITIONS III, INC.
(Registrant)

Date: January 13, 1998

/s/
Michael R. Quinn, Secretary/Treasurer