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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

                                  AMENDMENT TO
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended                         Commission File Number 0-19799
  September 30, 1998

                             PILGRIM AMERICA CAPITAL
                                   CORPORATION


          Delaware                                         86-0670679
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or organization)


                             Two Renaissance Square
                       40 North Central Avenue, 12th Floor
                             Phoenix, Arizona 85004
                                 (602) 417-8100

                        Securities registered pursuant to
                            Section 12(g) of the Act:

                          Common Stock, $.01 par value

     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 [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     At December 7, 1998, the  Registrant  had 5,333,477  shares of common stock
outstanding.  On such date,  the aggregate  market value of common stock held by
non-affiliates of the Registrant was approximately $77,775,441.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Materials  have been  incorporated  by reference  into this Report from the
following documents: Materials from the Registrant's Proxy Statement relating to
the 1999 Annual Meeting of Stockholders have been incorporated by reference into
Part III, Items 10, 11,12, and 13.

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The Registrant  hereby amends its Annual Report on Form 10-K for the fiscal year
ended September 30, 1998 (the "Form 10-K") as follows:

1.   In Part IV, Item 14 of the Form 10-K, Note 8 to the Consolidated  Financial
     Statements, the first paragraph of Note 8 is deleted in its entirety and is
     replaced by the following:

"(8) Stockholders' Equity

     Between  January 1998 and September 1998, the Company  repurchased  216,650
shares  of its  common  stock at a total  purchase  price of $3.9  million.  The
purchases  were  made in  open  market  transactions  pursuant  to a  previously
announced  authorization by the Company's Board of Directors to repurchase up to
750,000 shares of common stock based on market conditions."


2.   In Part IV, Item 14 of the Form 10-K, Note 15 to the Consolidated Financial
     Statements is deleted in its entirety and is replaced by the following:

"(15) Subsequent Event

     On  November 9, 1998,  PSI signed a Letter of Intent to sell its  September
30, 1998 DAC Asset for $26.5 million,  which approximated book value, as well as
the right to  receive  .75%  annually  of the future  distribution  fees and the
contingent  deferred  sales charges from the related  Class B shares.  Under the
related  agreements,  the Company will also sell its DAC Asset on future Class B
share sales to the  purchaser  through  November 30, 1999.  The  Purchaser has a
right of first  refusal  on a two year  extension  thereafter.  The  Company  is
required under its existing  Credit  Agreement to use proceeds in excess of $3.0
million  from the sale of its DAC  Asset to pay down its  borrowings  under  the
Credit Agreement and reduce Credit  Agreement  borrowings by 50% of the proceeds
of the sale in excess of $3  million.  The  Company's  credit  facility  will be
reduced by  approximately  $11.8  million as a result of this  transaction.  The
transaction  should result in no gain or loss since the sales price approximated
book value.

     On October 8, 1998, the Company's Board of Directors approved  repurchasing
500,000  shares of the  Company's  common  stock  after the  750,000  shares are
repurchased  from the October 1997 Board approval.  In October 1998, the Company
repurchased  255,000  shares of the Company's  common stock at a total  purchase
price of $4.4 million."

     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this amendment to report on
Form  10-K  to be  signed  on its  behalf  by the  undersigned;  thereunto  duly
authorized this 30th day of December 1998.


                                       PILGRIM AMERICA CAPITAL CORPORATION
                                       a Delaware corporation



                                       By: /s/ Robert W. Stallings
                                           -------------------------------
                                           Robert W. Stallings
                                           Chairman of the Board,
                                           Chief Executive Officer and President
<PAGE>

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
amendment  to the  report on Form 10-K has been  signed  below by the  following
persons  on  behalf of the  Registrant  and in the  capacities  and on the dates
indicated:


      Signature                       Title                         Date
      ---------                       -----                         ----

                            
/s/ Robert W. Stallings     Chairman of the Board, Chief                       
-------------------------   Executive Officer and President                    
    Robert W. Stallings     (Principal Executive Officer)     December 30, 1998


/s/ James R. Reis           Vice Chairman and Chief
-------------------------   Financial Officer
    James R. Reis           (Principal Accounting Officer)    December 30, 1998

          *
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John C. Cotton              Director                          December 30, 1998

          *
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Roy A. Herberger, Jr.       Director                          December 30, 1998

          *
-------------------------
John M. Holliman, III       Director                          December 30, 1998

          *
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Stephen A McConnell         Director                          December 30, 1998

          *
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Paul J. Renze               Director                          December 30, 1998

          *
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By: James R. Reis
    Attorney-In-Fact                                          December 30, 1998