SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                          ----------------------

                                FORM 10-QSB


    [X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934

    For the quarterly period ended September 30, 1998

                         OR

    [ ]  Transition Report Pursuant to Section 13 or 15(d) of the Exchange 
Act

    For the transition period from _______ to ________


                           Commission File Number 0-4057

                              PORTSMOUTH SQUARE, INC.

             (Exact Name of Registrant as Specified in its Charter)

           California                               94-1674111
   (State or Other Jurisdiction of                 (IRS Employer
    Incorporation or Organization)                Identification No.)

Mailing Address:  P.O. Box 270828
                  San Diego, CA 92198-2828

Street Address:   11315 Rancho Bernardo Road, Suite 129
                  San Diego, CA 92127

                                  (619) 298-7201
                (Registrant's Telephone Number, Including Area Code)

   Check whether the issuer (1) has filed all reports required to be filed by 
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 
months, and (2) has been subject to such filing requirements for the past 90 
days. Yes [X]  No [ ]
     
   State the number of shares outstanding of each of the issuer's classes of 
common equity, as of the latest practicable date: 734,183 shares of issuer's
No Par Value Common Stock were outstanding as of November 10, 1998.

   Transitional Small Business Disclosure Format (check one): Yes [ ]  No [X]



<PAGE> 2


                                     INDEX

                             PORTSMOUTH SQUARE, INC.


PART I. FINANCIAL INFORMATION                                    PAGE NO.

Item 1. Financial Statements

    Balance Sheet--September 30, 1998 (Unaudited)                    3
   
    Statements of Income (Unaudited)-Three Months
    ended September 30, 1998 and 1997 and for the Nine Months
    ended September 30, 1998 and 1997                                4

    Statement of Cash Flows (Unaudited)--Nine Months
    ended September 30, 1998 and 1997                                5

    Notes to Financial Statements--September 30, 1998                6

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                          9

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                             12

SIGNATURES                                                           12

<PAGE> 3

                                 PART I
                          FINANCIAL INFORMATION
Item 1. Financial Statements

                         Portsmouth Square, Inc.
                       Consolidated Balance Sheet
                              (Unaudited)
<TABLE>
<CAPTION>
                                                      September 30,
                                                           1998
                                                      -------------
<S>                                                   <C>
Assets                                                 
  Cash and cash equivalents				                      	$      75,850 
  Investment in marketable securities:
   Held for sale                                            649,197 
   Trading                                                   19,000   
  Investment in Justice Investors                         2,314,560
  Other investments                                         200,000
  Other assets                                              128,022 
                                                       ------------
Total assets		                                        $   3,386,629
                                                       ============
Liabilities and Shareholders' Equity
Liabilities
  Due securities broker                               $           -
  Accounts payable and accrued expenses                      24,312   
  Obligation for securities sold                            124,150
  Due to Santa Fe Financial Corporation                      30,966 
                                                       ------------
Total liabilities                                           179,428
                                                       ------------

Commitments and contingencies

Shareholders' equity:
  Common stock, no par value 
   Authorized - 750,000
   Issued and outstanding - 734,183				                   2,092,300
 Additional paid-in capital                                 915,676
  Retained earnings				                                     221,735
  Unrealized loss on investment securities, 
   net of deferred tax benefit                           (   22,510)    
									                                              ------------
Total shareholders' equity                                3,207,201
                                                       ------------
Total liabilities & shareholders' equity              $   3,386,629   
                                                       ============
</TABLE>			

See Notes to Financial Statements

<PAGE> 4
 

                           Portsmouth Square, Inc.
                             Statement of Income
                                 (Unaudited)	
<TABLE>                                                 
<CAPTION>

                                       Three Months ended        Nine Months ended
                                           September 30             September 30 
          	           	  	               1998         1997        1998        1997
                                      ---------    ---------    ---------   ---------
<S>                                  <C>          <C>         <C>           <C>
Revenues:
  Equity in net income of Justice
   Investors                         $  781,297   $  755,033   $2,235,406   $1,866,018
  Dividend and interest income           16,056       29,611       41,289       95,163
  Investment gain (loss)               (127,518)    ( 51,572)    (214,999)    (130,344)
  Other income                            6,000        6,000       24,000       18,000
                                      ---------    ---------    ---------    ---------
                                        675,835      739,072    2,085,696    1,848,837
                                      ---------    ---------    ---------    ---------
Costs and expenses:
  General and administrative             68,411       76,825      250,899      243,341
  Professional and outside
    services                             35,499       24,549      131,527      106,015
  Margin and trading expenses            15,219            -       44,372            -
                                      ---------    ---------    ---------    ---------
                                        119,129      101,374      426,789      349,356
                                      ---------    ---------    ---------    ---------
Income before income taxes              556,706      637,698    1,658,898    1,499,481

Income taxes                            191,328      255,959      668,839      601,862
                                      ---------    ---------    ---------    ---------	
Net income                           $  365,378   $  381,739   $  990,059   $  897,619
                                      =========    =========    =========    =========
Net income per share                 $      .50   $     0.51   $     1.35   $     1.20
                                      =========    =========    =========    =========
Dividends per Share                  $      .25   $      .25   $     0.50   $      .50
                                      =========    =========    =========    =========
Weighted average number of  
  shares outstanding                    734,183      743,423      734,183      746,694
                                      =========    =========    =========    =========
				
Comprehensive Income 
   Net Income                        $  365,378   $  381,739   $  990,059   $  897,619
   Unrealized gain (loss) on 
    Securities arising during
    Period net of taxes                ( 80,018)     134,099     (118,986)     180,083
                                       ---------   ---------    ---------     --------
                                     $  285,360   $  515,838   $  871,073   $1,077,702
                                      =========    =========    =========    =========
</TABLE>

See Notes to Financial Statements




                            Portsmouth Square, Inc.
                            Statement of Cash Flows
                                 (Unaudited)
<TABLE>
<CAPTION>

							                                                     Nine Months ended
                                                              September 30
							                                                  1998             1997
							                                               ------------     ------------
<S>                                                   <C>              <C>
Operating activities
  Net income						                                    $   990,059      $   897,619
  Adjustments to reconcile net income to
   net cash used in operating activities:
     Equity in net income of Justice Investors	        (2,235,406)      (1,866,018)
     Increase deferred taxes & taxes payable               62,755            1,720
     Decrease in receivable, Justice Investors             87,822                -
     Decrease in other current assets                  (  131,615)	          8,703
     Net decrease in current liabilities                        -           10,699
                                                       ----------       ----------
Net cash used in operating activities                  (1,226,385)       ( 947,277)
                                                       ----------       ----------
Investing activities 
  Cash distributions from Justice Investors             1,254,960        1,224,601
  Purchase of investment securities                    (3,287,518)      (1,782,051)
  Proceeds from sale of investment securities           4,618,539        1,439,115
  Purchase of other investments                        (  100,000)      (  190,203)
  				                                                 ----------       ----------
Net cash provided by investing activities               2,485,981          691,462
                                                       ----------       ----------
Financing activities
  Increase (decrease) in amount due securities		               
     Broker                                            (  664,211)       1,196,411   
  Dividends paid                                       (  367,091)      (  373,673)
  Purchase of Portsmouth stock                                  -       (  187,938)
  Decrease in securities sold                          (  208,792)               -
			                                                    ----------       ----------
Net cash provided by (used in)
 financing activities                                  (1,240,094)         634,800
                                                       ----------       ----------
Net increase (decrease) in cash and cash
  Equivalents                                              19,502          378,985
Cash and cash equivalents at beginning 			                 
  of the year                                              56,348           21,225
                                                       ----------       ----------
Cash and cash equivalents at the end of the  
  Period                                             $     75,850     $    400,210
                                                       ==========      ===========
</TABLE>
	                
See Notes to Financial Statements

<PAGE> 6

NOTES TO FINANCIAL STATEMENTS

1.   Basis of Presentation and Significant Accounting Policies
     ---------------------------------------------------------
The financial statements included herein have been prepared by Portsmouth
Square, Inc. (the "Company"), without audit, according 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 pursuant to such rules and regulations, although the 
Company believes the disclosures that are made are adequate to make the 
information presented not misleading.  Further, the financial statements 
reflect, in the opinion of management, all adjustments (which included only 
normal recurring adjustments) necessary to state fairly the financial 
position and results of operations as of and for the periods indicated.

It is suggested that these financial statements be read in conjunction with 
the audited financial statements and the notes therein included in the 
Company's Form 10-KSB for the year ended December 31, 1997.

The results of operations for the nine months ended September 30, 1998 are 
not necessarily indicative of results to be expected for the full fiscal year 
ending December 31, 1998.


2.  Investment in Justice Investors
    -------------------------------

The Company's principal sources of revenue continue to be derived from its
49.8% interest in the Justice Investors limited partnership which owns and 
leases a Holiday Inn in San Francisco, California. The Company also serves as 
one of the two general partners of Justice Investors. Portsmouth records its 
investment on the equity basis.

Condensed financial statements for Justice Investors are as follows:

       
                           JUSTICE INVESTORS
                        CONDENSED BALANCE SHEET

                                                        September 30, 1998
                                                        ------------------
Assets
Total current assets                                       $1,403,611
Property, plant and equipment, net of
  accumulated depreciation of $10,901,403                   5,674,279
Loan fees and deferred lease costs,
  net of accumulated amortization of $109,023                 201,390
                                                            ---------
                                                           $7,279,280      
                                                            =========
<PAGE> 7

Liabilities and partners' capital 
Total current liabilities                                  $  100,219       
Long-term debt                                              1,434,054
Partners' capital                                           5,745,007
Total liabilities and                                       ---------
  partners' capital                                        $7,279,280
                                                            =========


                        
                                JUSTICE INVESTORS
                        CONDENSED STATEMENTS OF OPERATIONS

       
                                     Nine Months ended          
                                       September 30,
                                    1998           1997
                                 ----------     ----------
Revenues                         $5,231,500     $4,543,178
Costs and expenses                  742,733        805,192
                                  ---------      ---------    
Net income                       $4,488,767     $3,737,986
                                  =========      =========
        


3. Marketable Securities
   ---------------------
 
Marketable securities are stated at market value as determined by the most 
recently traded price of each security at the balance sheet date.  All 
marketable securities are defined as trading or available-for-sale 
securities.  The Company determines the appropriate classification of 
marketable securities at the time of purchase and reevaluates such 
designation at each balance sheet date.

Securities classified as available-for-sale are carried at fair market value, 
with the unrealized holding gains and losses reported as a separate component 
of shareholders' equity.  Certain securities are classified as trading 
securities when they are transferred to cover corresponding obligations of 
the same security sold short.  Those securities and the related obligations 
are marked to market with unrealized holding gains and losses included in 
earnings.  The cost of investments sold is determined on the specific 
identification or the first-in, first-out method.

<PAGE> 8

4. Related Party Transactions
   --------------------------- 

Certain costs and expenses, primarily salaries, rent and insurance, are 
allocated between the Company and its parent company, Santa Fe Financial 
Corporation ("Santa Fe") based on management's estimate of the utilization of 
resources.  Effective June 30, 1998, certain accounting and administrative 
functions of the Company and its parent corporation, Santa Fe, were 
transferred to the Los Angeles, California offices of The InterGroup 
Corporation ("InterGroup").  InterGroup presently controls more than 50% of 
the voting power of Santa Fe.  During the nine months ended September 30, 
1998, the Company made payments to InterGroup in the amount of $32,557 for 
administrative costs and reimbursement of direct and indirect costs 
associated with the management of the Company's and its investments, 
including its partnership asset.  Effective October 31, 1998, the Company and 
Santa Fe also terminated their office lease.  The Company continues to 
maintain a corporate presence in San Diego, California, but on a reduced 
basis.

The Company's President and Chief Executive Officer, John V. Winfield, 
directs the investment activity of the Company in public and private markets 
pursuant to authority granted by the Board of Directors.  Mr. Winfield also 
serves as Chief Executive Officer of Santa Fe and InterGroup and directs the 
investment activity of those companies.  Effective April 1, 1998, an employee 
of InterGroup was assigned to manage the portfolios of the Company and Santa 
Fe in consultation with Mr. Winfield.  The Company and Santa Fe reimburse 
InterGroup for an allocated portion of the compensation and benefits of such 
employee.  Depending on certain market conditions and various risk factors, 
the Chief Executive Officer, his family, Santa Fe and InterGroup may, at 
times, invest in the same companies in which the Company invests.  The 
Company encourages such investments because it places personal resources of 
the Chief Executive Officer and his family members, and the resources of 
Santa Fe and InterGroup, at risk in connection with investment decisions made 
on behalf of the Company.  Four of the Company's Directors serve as directors 
of InterGroup and three of the Company's Directors serve on the Board of 
Santa Fe.

<PAGE> 9

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

FORWARD-LOOKING STATEMENTS AND PROJECTIONS

The Company may from time to time make forward-looking statements and
projections concerning future expectations.  When used in this discussion,
the words "estimate," "project," "anticipate" and similar expressions, are
intended to identify forward-looking statements.  Such statements are subject
to certain risks and uncertainties, including partnership distributions, 
general economic conditions of the hotel industry in the San Francisco area, 
securities markets, litigation and other factors, including natural disasters 
those discussed below and in the Company's Form 10-KSB for the year ended 
December 31, 1997, that could cause actual results to differ materially from 
those projected.  Readers are cautioned not to place undue reliance on these 
forward-looking statements, which speak only as to the date hereof.  The 
Company undertakes no obligation to publicly release the results of any 
revisions to those forward-looking statements which may be made to reflect 
events or circumstances after the date hereof or to reflect the occurrence of 
unanticipated events.

RESULTS OF OPERATIONS

The Company's principal sources of revenue continue to be derived from its 
49.8% interest in the Justice Investors limited partnership and income 
received from the investment of its cash and securities assets.  The 
partnership derives most of its income from a lease with Holiday Inns, Inc., 
which was assumed by Bristol Hotel Company ("Bristol").  Effective July 31, 
1998, Bristol merged into Felcor Suite Hotels, Inc. ("Felcor") with Bristol 
Hotel Management Company continuing as the manager of the hotel.


Three Months Ended September 30, 1998 Compared to Three Months 
Ended September 30, 1997

Comparison of operating results for the three months ended September 30, 1998 
to the three months ended September 30, 1997, shows that total revenues 
decreased 8.6% from $739,072 to $675,835, primarily due to a $127,518 net 
investment loss in the current period.  However, partnership income increased 
3.5% from $755,033 to $781,297, resulting in a decrease in net income of only 
4.3% from $381,739 to $365,378.

The increase in partnership income is primarily attributable to a 7.4% 
increase in garage rental income, while hotel rental income remained 
relatively flat when compared to the very favorable third quarter of 1997.  
The net investment loss reflects a write-down on one of the Company's 
investments and management's continuing efforts to reposition the Company's 
investment portfolio by selling certain of its underperforming securities.  
The Company was successful in eliminating its margin positions by the end of 
the quarter and management believes that this more conservative approach 
should reduce the Company's overall investment risk in what has become a very 
challenging and difficult global economic environment. 

<PAGE> 10

Realized investment gains and losses may fluctuate significantly from period
to period in the future and could have a meaningful effect on the Company's
net earnings.  However, the amount of realized investment gain or loss for 
any given period may have no predictive value, and variations in amount from
period to period may have no practical analytical value.

The modest increase in costs and expenses from $101,374 to $119,129 is 
primarily attributable to margin interest and trading expenses in the amount 
of $15,219 associated with the Company's investing activities and an increase 
in professional and outside service fees, offset in part by an 11% decrease 
in general and administrative expenses. The increase in professional, and 
outside service fees from $24,549 to $35,499 reflects the accrual of annual 
audit and professional fees for the current fiscal year.  The decrease in 
general and administrative expenses from $76,825 to $68,411 reflects cost 
savings resulting from the consolidation of certain accounting and 
administrative functions of the Company and its parent corporation, Santa Fe, 
with the Los Angeles, California offices of InterGroup beginning July 1, 
1998.  Effective October 31, 1998, the Company and Santa Fe also terminated 
their office lease and moved to a much smaller space, which should result in 
additional cost savings.


Nine Months Ended September 30, 1998 Compared to Nine Months 
Ended September 30, 1997

Comparison of operating results for the nine months ended September 30, 1998 
to the nine months ended September 30, 1997, shows that net income increased 
10.3% from $897,619 to $990,059, resulting from a 12.8% increase in total 
revenues, partially offset by a 22.2% increase in costs and expenses.

The 12.8% increase in total revenues from $1,848,837 to $2,085,696 was 
primarily attributable to a 19.8% increase in partnership income from 
$1,866,018 to $2,235,406, partially offset by a $40,319 decrease in dividend 
and interest income and a $214,999 net investment loss during the nine month 
period.  The increase in partnership income is primarily attributable to an 
increase in the average daily room rate without a significant reduction in 
occupancy rates and greater garage lease income.

The decline in dividend and interest income and the net investment loss 
reflects management's decision to reduce the size of the Company's investment 
portfolio and eliminate its margin positions beginning in the second quarter. 
The net investment loss also reflects a write-down on one of the Company's 
investments and management's continuing efforts to reposition Company's 
investment portfolio by selling certain of its underperforming securities.  
The Company was successful in an eliminating its margin positions by the end 
of the quarter and management believes that this more conservative approach 
should reduce the Company's overall investment risk in what has become a very 
challenging and difficult global economic environment. 

Realized investment gains and losses may fluctuate significantly from period
to period in the future and could have a meaningful effect on the Company's
net earnings.  However, the amount of realized investment gain or loss for 
any given period may have no predictive value, and variations in amount from
period to period may have no practical analytical value.

<PAGE> 11

The increase in costs and expenses from $349,356 to $426,789 is primarily 
attributable to margin interest and trading expenses in the amount of $44,372 
associated with the Company's investing activities, an increase in 
professional and outside service fees and a 3.1% increase in general and 
administrative expenses. The increase in professional, and outside service 
fees from $106,015 to $131,527 primarily reflects the accrual of annual audit 
and professional fees for the current fiscal year.  The modest increase in 
general and administrative expenses reflects adjustments in the Company's 
proportionate share of operating expenses with its parent, Santa Fe, and 
higher administrative costs and direct and indirect costs associated with the 
management of the Company's investments, including its partnership asset.


LIQUIDITY AND SOURCES OF CAPITAL

The Company's cash flows are primarily generated by its investment in the
Justice Investors limited partnership, which derives the majority of its
income from its lease with Felcor and a lease with Evon Garage Corporation. 
In addition to its monthly limited partnership distributions from Justice
Investors, the Company also receives monthly management fees as a general
partner.  The Company also derives revenue from the investment of its cash 
and securities assets.  

As a result of increases in the amount of rental income from the hotel lease, 
the general partners of Justice Investors decided that there would be a 
special one-third increase in the monthly distribution to limited partners 
effective with the February 1997 distribution.  As a result, Portsmouth's 
monthly distribution increased to $139,440 from $109,580.  In February 1998, 
the general partners decided to continue monthly distributions at the higher 
monthly rate for another year.  The increases in monthly distributions were 
clearly identified as special distributions and, at any time, unforeseen 
circumstances could dictate a change in the amount distributed.  The general 
partners will continue to conduct an annual review and analysis to determine 
an appropriate monthly distribution for the ensuing year.  At that time, the 
monthly distribution could be increased or decreased, especially if the 
partnership was to participate financially in the future upgrading of the 
public areas of the hotel.

As of June 30, 1998, the Company was successful in eliminating its margin 
positions in its securities portfolio.  As a result the Company's current 
liabilities were reduced to $179,428 as of September 30, 1998 with current 
assets of $1,072,069.  The Company remains liquid with a current ratio of 
approximately 6 to 1 at the end of the third quarter of 1998.  Management 
believes that its capital resources are currently adequate to meet its short- 
and long-term obligations.

<PAGE> 12


YEAR 2000 ISSUES

The Company has been aware of the potential implications that the "Year 2000" 
issue could have on its business and, as a result, has started the process of 
determining what, if any, steps the Company must take to cure any computer 
software or hardware problems associated with the year 2000.  Based on 
preliminary discussions with the Company's outside service providers and the 
software and hardware vendors, the Company has determined that it should not 
incur any material liability to upgrade computer software and hardware to 
accommodate the year 2000.  The Company expects to be fully year 2000 
compliant by June of 1999.


                    PART II.     OTHER INFORMATION

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

         (a) Exhibit 27 - the Financial Data Schedule is filed 
             as an exhibit to this report.
          
         (b) Registrant did not file any reports on Form 8-K 
             during the period covered by this report.
                     

                            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.

PORTSMOUTH SQUARE, INC.
    (Registrant)

Date:    November 13, 1998

by /s/   John V. Winfield
-------------------------------------
         John V. Winfield, President,
         Chairman of the Board and
         Chief Executive Officer


Date:    November 13, 1998

by /s/   L. Scott Shields
-------------------------------------
         L. Scott Shields, Treasurer
         and Chief Financial Officer