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     MARCH 31, 1998

      [ ]         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        0-22132


                          BUCKHEAD AMERICA CORPORATION
                     (Exact name of small business issuer as
                            specified in its charter)

              DELAWARE                              58-2023732
(State or other jurisdiction of        (IRS Employer Identification No.)
incorporation or organization)

           4243 DUNWOODY CLUB DRIVE, SUITE 200, ATLANTA, GEORGIA 30350
                    (Address of principal executive offices)

                                 (770) 393-2662
                           (Issuer's telephone number)

                                      N/A

(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

     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

                      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: April 30, 1998

           Common stock, par value $.01 - 1,897,780 shares outstanding

     Transitional Small Business Disclosure Format (Check one):

 Yes No X

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                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS


                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                   Condensed Consolidated Financial Statements

                             March 31, 1998 and 1997

                                   (Unaudited)

                                        2

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                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheet
                                 March 31, 1998
                                   (Unaudited)


                                     Assets

Current assets:
 Cash and cash equivalents, including
  restricted cash of $518,339                                      $  1,642,531
 Investment securities                                                3,226,344
 Accounts receivable                                                  1,384,281
 Current portions of notes receivable                                   267,992
 Other current assets                                                   326,617
                                                                     ----------
     Total current assets                                             6,847,765

Noncurrent portions of notes receivable                                 821,581
Property and equipment, at cost, net of
 accumulated depreciation                                            34,322,961
Deferred tax assets                                                   3,150,000
Deferred costs, net                                                   2,100,269
Leasehold interests, net                                              2,800,294
Other assets                                                          1,286,349
                                                                     ----------
                                                                   $ 51,329,219



                      Liabilities and Shareholders' Equity

Current liabilities:
 Accounts payable and accrued expenses                           $    2,998,062
 Current portions of notes payable                                      842,099
                                                                     ----------
   Total current liabilities                                          3,840,161

Noncurrent portions of notes payable                                 27,537,837
Other liabilities                                                       304,034
   Total liabilities                                                 31,682,032

Minority interest in partnership                                        757,822

Shareholders' equity:
   Series A preferred stock; par value $100;
    200,000 shares authorized; 30,000 shares
    issued and outstanding                                            3,000,000
   Common stock; $.01 par value; 3,000,000
    shares authorized; 1,949,630 shares issued
    and 1,897,780 shares outstanding                                     19,496
   Additional paid-in capital                                         6,963,024
   Retained earnings                                                  9,329,166
   Treasury stock (51,850 shares)                                      (422,321)
                                                                     ----------
    Total shareholders' equity                                       18,889,365

                                                                   $ 51,329,219

See accompanying notes to condensed consolidated financial statements.

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                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                Condensed Consolidated Statements of Income(Loss)
                   Three Months ended March 31, 1998 and 1997
                                   (Unaudited)


                                                  1998              1997
                                               -----------       -----------

Revenues:
 Hotel revenues                                $ 5,032,590        2,288,172
 Interest income                                    90,903          562,579
 Other income                                      188,216          886,121
                                                ----------       ----------
   Total revenues                                5,311,709        3,736,872
                                                ----------       ----------

Expenses:
 Hotel operations                                3,934,357        1,563,704
 Other operating and administrative                914,858          611,578
 Depreciation and amortization                     411,631          190,300
 Interest                                          660,049          257,048
                                                ----------       ----------
    Total expenses                               5,920,895        2,622,630
                                                ----------       ----------

       Income(loss) before income taxes           (609,186)       1,114,242

Deferred income tax benefit                       (220,000)             -
                                                 ---------       ----------
        Net income(loss)                      $   (389,186)       1,114,242
                                                ==========       ==========


Net income(loss) per common share:
  Basic                                       $      (0.24)            0.63
                                                     =====             ====

  Diluted                                     $      (0.24)            0.61
                                                     =====             ====




See accompanying notes to condensed consolidated financial statements.

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                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                   Three Months Ended March 31, 1998 and 1997
                                   (Unaudited)



                                                    1998               1997
                                               ----------          ----------


Cash flows from operating activities:
 Net income(loss)                             $  (389,186)           1,114,242
 Adjustments to reconcile net income(loss)
   to net cash provided(used)
   by operating activities:
 Depreciation and amortization                    411,631             190,300
 Gain on note sale                                   -               (800,000)
 Other, net                                      (486,128)           (214,387)
                                               ----------            ---------

     Net cash provided(used) by
       operating activities                      (463,683)            290,155
                                                 --------            ----------

Cash flows from investing activities:
 Note receivable principal receipts               192,034               852,660
 Originations of notes receivable                (186,780)             (250,000)
 Capital expenditures                            (389,685)             (513,855)
 Other, net                                      (513,957)             (233,532)
                                                ----------            ----------

     Net cash used by
       investing activities                      (898,388)             (144,727)
                                                ----------            ----------

Cash flows from financing activities:
 Repayments of notes payable                     (228,654)              (68,697)
 Additional borrowings                             26,482                   -
 Preferred stock dividends                        (75,000)                  -
                                                ----------             ---------

     Net cash used by
       financing activities                      (277,172)              (68,697)
                                                ----------            ----------

Net increase (decrease) in cash and
 cash equivalents                               (1,639,243)              76,731

Cash and cash equivalents at beginning
  of period                                      3,281,774            1,801,670
                                                ----------            ----------

Cash and cash equivalents at end of period     $ 1,642,531            1,878,401
                                                ==========            ==========





See accompanying notes to condensed consolidated financial statements.

                                        5

<PAGE>



                          BUCKHEAD AMERICA CORPORATION
                                AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements

                             March 31, 1998 and 1997
                                   (Unaudited)



(1)  Basis of Presentation

     The accompanying  unaudited condensed  consolidated financial statements 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.
     The  results  of  operations  for  interim   periods  are  not  necessarily
     indicative of the results that may be expected for a full year or any other
     interim period.  For further  information,  see the consolidated  financial
     statements  included  in the  Company's  Form  10-KSB  for the  year  ended
     December 31, 1997.


(2)  Statement   of   Financial   Accounting   Standards   No.  130,   Reporting
     Comprehensive Income

     In June 1997, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 130,  Reporting  Comprehensive  Income
     ("SFAS  130").  This  statement  establishes  standards  for  reporting and
     display of comprehensive income and its components in a full set of general
     purpose financial  statements.  The term "comprehensive  income" is used in
     SFAS 130 to describe the total of all  components of  comprehensive  income
     including  net income.  "Other  comprehensive  income"  refers to revenues,
     expenses,  gains, and losses that are included in comprehensive  income but
     excluded  from  earnings  under current  accounting  standards.  Currently,
     "other  comprehensive  income"  for the  Company  consists  solely of items
     previously recorded as a component of shareholders'  equity under SFAS 115,
     Accounting for Certain Investments in Debt and Equity Securities.

     Total  comprehensive  income(loss)for the three months ended March 31, 1998
     was  $(389,186)  compared to $659,114  for the three months ended March 31,
     1997.






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<PAGE>



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS.

FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION.

First Quarter 1997

The Company completed the renovations of the Atlanta, Georgia Country Hearth Inn
in January 1997. The Company  completed the  renovations of the Dalton,  Georgia
Country Hearth Inn in February 1997 and also completed  certain  enhancements to
the  Orlando,  Florida  Country  Hearth Inn which were  required  under its debt
obligation.  Capital expenditures on these three hotels during the first quarter
of 1997  aggregated  approximately  $500,000 and were funded from available cash
and restricted funds.

The Company received  $800,000 cash from the sale of a mortgage note in February
1997.  The  Company  also  received  approximately  $1.6  million  cash from its
investment in Industrial Revenue Bonds which were called in February 1997.

In March 1997,  the Company  announced  that it had  entered  into two  separate
agreements for the  acquisition of hotels,  hotel  management  contracts,  and a
hotel  management  business.  One  agreement  provided for the purchase of eight
Hatfield Inns located in Kentucky and  Missouri.  The Hatfield  acquisition  was
completed in September 1997. The second agreement was for the acquisition of The
Lodge Keeper Group Inc. ("Lodge Keeper"), a closely held concern that managed 24
hotels in Ohio,  Indiana,  and Michigan.  The  transaction  was completed in May
1997.

         In February 1997, the Company sold two wholly owned  subsidiaries which
held the investment in Days Inns Mortgage Trust ("DIMT").  DIMT was treated as a
partnership for income tax purposes and had produced significant tax purpose net
operating losses ("NOLs")  totaling  approximately  $34 million through December
31, 1996.  These NOLs had no impact on the Company's  book provision for regular
taxes  because the  ultimate  dissolution  of the  partnership  would  result in
immediate gain recognition for a comparable amount.  Because of NOL limitations,
the Company was exposed,  however,  to significant  potential future alternative
minimum tax liability. All of these tax attributes accompanied the DIMT interest
with its sale, and the Company's tax position is no longer impacted by DIMT.


First Quarter 1998

The conversion of the Hatfield Inns to Country Hearth Inns was completed in 1997
and the  Company  began  1998  with 16 hotel  properties  owned,  36  properties
managed, and 29 Country Hearth Inn franchise properties open and operating.  The
30th Country Hearth Inn was opened in March 1998.

Construction of an additional Company owned Country Hearth Inn in Nicholasville,
Kentucky is underway  and the Company  acquired  rights to a site in  Eddyville,
Kentucky which will begin  construction in the second quarter.  Loan commitments
are in place to fund the major  portion  of the  construction  costs for both of
these projects.


                                        7

<PAGE>



Renovation and conversion of two Lodge Keeper Ohio  properties to Country Hearth
Inns was begun in the first quarter using funds from the Company's December 1997
debenture sale.

Additionally, four new franchised properties are under construction in Kentucky,
Missouri,  and Georgia and two  conversion  franchise  properties in Georgia are
under renovation.

All ten of the above described properties are expected to open as Country Hearth
Inns in 1998.  The Company has also  announced  agreements  for the  acquisition
and/or development of twelve additional Country Hearth Inn properties.

Management believes the Company has adequate resources for the completion of its
present acquisition and development commitments. Management presently intends to
pursue additional multi-property acquisitions.  Such acquisitions, if any, would
more likely than not require additional debt and/or equity financing.



RESULTS OF OPERATIONS

First Quarter of 1998 vs. First Quarter of 1997

Hotel revenues in the first quarter of 1998 increased to over $5 million, a 120%
increase from the same period in 1997. Hotel operating  profits  approached $1.1
million in the first quarter of 1998, a 52% increase from the 1997 period. These
increases result from the Hatfield and Lodge Keeper acquisitions.

Hotel  operating  profit  margins in the first  quarter of 1998  declined to 22%
versus 32% in 1997. This is  attributable  to the extreme  seasonal impact given
the  geographic  locations of the acquired  hotels.  Management  expects  profit
margins to increase  sharply in the second and third quarters  before  declining
again in the fourth.  In the aggregate,  operating profits for hotels which were
owned in both of the first  quarters of 1997 and 1998  increased.  First quarter
1998 results of the acquired hotels were in line with management's expectations.

Note receivable interest income continued to decline as a result of decreases in
the note  receivable  portfolio.  The first quarter of 1997 included  investment
income of  approximately  $450,000 as a result of the  Industrial  Revenue Bonds
which were called.

Other income in 1997 included the $800,000 note sale gain previously  discussed.
Other income also included  Country Hearth Inn franchise  fees of  approximately
$108,000  in each of the first  quarters  of 1998 and 1997.  Management  expects
franchise fee income to increase as more franchised properties are opened.

The approximate $300,000 increase in other operating and administrative expenses
resulted  primarily  from the  Lodge  Keeper  acquisition  and the total of such
expenses  are in line  with  management's  expectations.  Lodge  Keeper  has the
capacity to absorb  additional  properties  without a proportionate  incremental
increase in overhead.

                                        8

<PAGE>



Property related  depreciation and interest expense in the first quarter of 1998
increased  proportionately to the revenue increases associated with the Hatfield
and Lodge Keeper acquisitions.  The Company also recognized $100,000 of interest
expense on its convertible debentures issued in December 1997.

As previously stated, management believes the Company has adequate resources for
the  completion  of  its  present   acquisition  and  development   commitments.
Management  also  believes  the Company has adequate  liquidity  for purposes of
funding  seasonal  cash flow  shortfalls  and does not  anticipate  the need for
additional financing for operating purposes.


RISK FACTORS

         This Form 10-QSB contains forward looking statements that involve risks
and  uncertainties.  Statements  contained  in this  Form  10-QSB  that  are not
historical  facts are forward  looking  statements  that are subject to the safe
harbor  created by the Private  Securities  Litigation  Reform Act of 1995.  The
Company's  actual  results  may differ  significantly  and  materially  from the
results indicated by such forward looking statements and by past results.  For a
discussion  of risk  factors,  see the "RISK  FACTOR"  section  contained in the
Company's Registration Statement on Form S-3 (File No. 333-37691).


                                        9

<PAGE>




                           PART II - OTHER INFORMATION



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBIT INDEX

       Exhibit             Description

       3(i)                Articles of  Incorporation.(Incorporated by reference
                           to  Exhibit  3(i)  to the  Registrant's  Registration
                           Statement  on Form 10-SB  (No.0-22132)  which  became
                           effective on
                           November 22, 1993.)

       3(i)(a)             Certificate    of   Amendment   of   Certificate   of
                           Incorporation.  (Incorporated by reference to Exhibit
                           3(i)(a)  to the  Registrant's  Annual  Report on Form
                           10-KSB for the fiscal year ended December 31, 1994.)

       3(i)(b)             Certificate    of   Amendment   of   Certificate   of
                           Incorporation. (Incorporated by reference to Appendix
                           "A" to the  Registrant's  Definitive  Proxy Statement
                           filed with the Securities and Exchange  Commission on
                           June 9, 1997.)

       3(ii)               By-Laws - Amended and  Restated as of June 27,  1994.
                           (Incorporated  by reference  to Exhibit  3(ii) to the
                           Registrant's  Annual  Report on Form  10-KSB  for the
                           fiscal year ended December 31, 1994.)

       4(i)                Certificate of Designation, Preferences and Rights of
                           Series  A   Preferred   Stock   of  the   Registrant.
                           (Incorporated  by reference to Exhibit 3(i)(c) to the
                           Registrant's  Quarterly Report on Form 10-QSB for the
                           quarter ended September 30, 1997.)

       11                  Statement re: Computation of per share Earnings

       27                  Financial Data Schedule




(B)  REPORTS ON FORM 8-K


                      The Company  filed a report on Form 8-K on January 9, 1998
                      which reported the December 22, 1997 sale of debentures to
                      investment funds managed by Tower Investment Group, Inc.







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                                   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.





Buckhead America Corporation
        (Registrant)



Date:    May 15, 1998          /s/ Douglas C. Collins
                               Douglas C. Collins
                               President and Chief Executive Officer




Date:    May 15, 1998          /s/ Robert B. Lee
                               Robert B. Lee
                               Senior Vice President and
                               Chief Financial and Accounting Officer


                                       11