<PAGE>
<PAGE>

                   PGI INCORPORATED AND SUBSIDIARIES

                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, 1999
                                    --------------------
                                   OR

/ / 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        1-6471
                           ----------------------

     PGI INCORPORATED
     -------------------------------------------------------------------
     (Exact name of small business issuer as specified in its charter)

                 FLORIDA                       59-0867335
     -------------------------------       -------------------
     (State or other jurisdiction of        (I.R.S. Employer
     incorporation or organization)        Identification No.)

     212 SOUTH CENTRAL, SUITE 100, ST. LOUIS, MISSOURI 63105
     -------------------------------------------------------------------
     (Address of principal executive offices)

     (314) 512-8650
     -------------------------------------------------------------------
     (Issuer's telephone number)

     -------------------------------------------------------------------
     (Former Name, Former Address and Former Fiscal year, if changed
     since last report)

     Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for 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
                                       ---     ---

     State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:  As of May
14, 1999 there were 5,317,758 shares of the Registrant's common stock
outstanding.

     Transitional Small Business Disclosure Format (Check one):
          Yes     No  X
              ---    ---

                             1

                              <PAGE>
<PAGE>

                    PGI INCORPORATED AND SUBSIDIARIES

                             FORM  10 - QSB
                  For the Quarter Ended March 31, 1999

                            Table of Contents
                            -----------------
                                                                Form  10 - QSB
                                                                    Page No.
                                                                --------------

PART I    Financial Information

      Item 1  Financial Statements
              Consolidated Statements of Financial Position
                March 31, 1999 and December 31, 1998                  3
              Consolidated Statements of Operations
                Three Months Ended March 31, 1999 and 1998            4
              Condensed Consolidated Statements of Cash Flows
                Three Months Ended March 31, 1999 and 1998            5
              Notes to Consolidated Financial Statements
                For Form 10 - QSB                                   6 - 11

      Item 2  Mangement's Discussion and Analysis of Financial
                Condition and Results of Operations                12 - 16


PART II   Other Information

      Item 1  Legal Proceedings                                       17

      Item 2  Changes in Securities                                   17

      Item 3  Defaults Upon Senior Securities                         17

      Item 4  Submission of Matters to a Vote of Security
                Holders                                               17

      Item 5  Other Information                                       17

      Item 6  Exhibits and Reports on Form 8 - K                      17


SIGNATURES                                                            18

                                2
<PAGE>
<PAGE>

                        PGI INCORPORATED AND SUBSIDIARIES

Part I            Financial Information
          Item 1  Financial Statements

<TABLE>
                      CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                   ($ in thousands)
<CAPTION>
                                                                   March 31,       December 31,
                                                                     1999              1998
                                                                     ----              ----
<S>                                                                <C>               <C>
ASSETS
      Cash and cash equivalents                                    $     72          $    161
      Restricted cash                                                 1,863             1,903
      Receivables on real estate sales - net                             91                97
      Other receivables                                                  46                52
      Land and improvement inventories                                  889               889
      Property and equipment - net                                        1                 1
      Other assets                                                      160               156
                                                                   --------          --------
                                                                   $  3,122          $  3,259
                                                                   ========          ========
LIABILITES
      Accounts payable                                             $     46          $     26
      Other liabilities                                               1,167             1,218
      Accrued interest:
         Primary lender                                                  11                22
         Debentures                                                  10,103             9,715
         Other                                                        1,683             1,654
      Credit agreements -
         Primary lender                                               1,000             1,000
         Notes and mortgages payable                                  1,198             1,198
      Convertible subordinated
         debentures payable                                           9,059             9,059
      Convertible debentures payable                                  1,500             1,500
                                                                   --------          --------
                                                                   $ 25,767          $ 25,392
                                                                   --------          --------
      Commitments and contingencies

STOCKHOLDERS' EQUITY
      Preferred stock, par value $1.00 per share;
         authorized 5,000,000 shares; 2,000,000
         Class A cumulative convertible shares issued
         and outstanding; (liquidation preference of $4.00
         per share or $8,000,000)                                     2,000             2,000
      Common stock, par value $.10 per share;
         authorized 25,000,000 shares; 5,317,758
         shares issued and outstanding                                  532               532
      Paid in capital                                                13,498            13,498
      Accumulated deficit                                           (38,675)          (38,163)
                                                                   --------          --------
                                                                    (22,645)          (22,133)
                                                                   --------          --------
                                                                   $  3,122          $  3,259
                                                                   ========          ========

See accompanying notes to consolidated financial statements for Form 10 - QSB.
</TABLE>

                                        3

                                         <PAGE>
<PAGE>

                        PGI INCORPORATED AND SUBSIDIARIES

PART I    Financial Information (Continued)

<TABLE>
                          CONSOLIDATED STATEMENTS OF OPERATIONS
                                    ($ in thousands)
                                       (Unaudited)
<CAPTION>
                                                                         Three Months Ended
                                                                     ---------------------------
                                                                     March 31,         March 31,
                                                                       1999              1998
                                                                       ----              ----
<S>                                                                   <C>               <C>
REVENUES
      Interest income                                                    20                 4
      Other income                                                        3                89
                                                                      -----             -----
                                                                         23                93
                                                                      -----             -----

COSTS AND EXPENSES
      Selling expenses                                                    1                 5
      General & administrative expenses                                  73               212
      Interest                                                          449               669
      Other expenses                                                     12                75
                                                                      -----             -----
                                                                        535               961
                                                                      -----             -----
NET INCOME (LOSS)                                                     $(512)            $(868)
                                                                      =====             =====

NET INCOME (LOSS) PER SHARE <F*>
      Primary and fully diluted                                       $(.13)            $(.19)
                                                                      =====             =====
<FN>
<F*> Considers the effect of cumulative preferred dividends in arrears for the three months
     ended March 31, 1999 and 1998.

See accompanying notes to consolidated financial statements for form 10 - QSB.
</TABLE>


                                        4

                                         <PAGE>
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                        PGI INCORPORATED AND SUBSIDIARIES


PART I    Financial Information (Continued)


<TABLE>
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    ($ in thousands)
                                       (Unaudited)
<CAPTION>
                                                                         Three Months Ended
                                                                         ------------------
                                                                     March 31,         March 31,
                                                                       1999              1998
                                                                       ----              ----
<S>                                                                    <C>              <C>
Net cash (used in) operating activities                                $(90)            $(185)
                                                                       ----             -----

Cash flows from financing activities:
      Proceeds from notes receivable                                      1                 -
      Proceeds from borrowings                                            -               196
      Principal payments on debt                                          -               (10)
                                                                       ----             -----
      Net cash provided by financing
         activities                                                       1               186
                                                                       ----             -----

Net increase (decrease) in cash                                         (89)                1

Cash at beginning of period                                             161                 2
                                                                       ----             -----

Cash at end of period                                                  $ 72             $   3
                                                                       ====             =====

See accompanying notes to consolidated financial statements for Form 10 - QSB.
</TABLE>

                                        5

                                         <PAGE>
<PAGE>

                  PGI INCORPORATED AND SUBSIDIARIES

     Notes to Consolidated Financial Statements

(1)  Basis of Presentation

     The accompanying unaudited consolidated financial statements have
     been prepared in accordance with the instructions to Form 10-QSB
     and therefore do not include all disclosures necessary for fair
     presentation of financial position, results of operations and cash
     flows in conformity with generally accepted accounting principles.
     The Company's independent accountants included an explanatory
     paragraph regarding the Company's ability to continue as a going
     concern in their opinion on the Company's consolidated financial
     statements for the year ended December 31, 1998.

     The Company remains in default under the indentures governing its
     convertible unsecured subordinated debentures and in default of
     its primary debt obligations.  A significant payment on the
     primary debt obligation occurred with the sale of the undeveloped
     land in Citrus County upon closing May 13, 1998.  (See
     Management's Discussion and Analysis of Financial Condition and
     Results of Operations and Notes 9 and 10 to the Company's
     consolidated financial statements for the year ended December 31,
     1998, as contained in the Company's Annual Report on Form
     10 - KSB).

     All adjustments (consisting of only normal recurring accruals)
     necessary for fair presentation of financial position, results of
     operations and cash flows have been made.  The results for the
     three months ended March 31, 1999 are not necessarily indicative
     of operations to be expected for the fiscal year ending December
     31, 1999 or any other interim period.

(2)  Recognition of Real Estate Sales

     The Company has adopted the installment method of profit
     recognition for all homesite sales effective January 1, 1990 and
     thereafter.  For sales consummated prior to January 1, 1990, the
     Company recognized profit under the full accrual or percentage-of-
     completion methods as appropriate.  The full accrual method
     recognizes the entire profit when minimum down payments and other
     requirements are met.  Under the percentage-of-completion method,
     profit is recognized by the relationship of costs incurred to
     total estimated costs to be incurred.  The installment method
     recognizes gross profit, as down payments and principal payments
     on contracts are received.

(3)  Per Share Data

     Primary per share amounts are computed by dividing net income
     (loss), after considering cumulative dividends in arrears on the
     Company's preferred stock, by the average number of common shares
     and common stock equivalents outstanding.  For this purpose, the
     Company's cumulative convertible preferred stock, convertible
     subordinated debentures and collateralized convertible debentures
     are not deemed to be common stock equivalents, but outstanding
     vested stock options are considered as such.  However, under the
     treasury stock method, no vested stock options were assumed to be
     exercised, and therefore no common stock equivalents existed, for
     the calculation of primary per


                             6

                              <PAGE>
<PAGE>
                  PGI INCORPORATED AND SUBSIDIARIES

     share amounts for the three months ended March 31, 1999 and 1998.
     The average number of common shares outstanding for the three
     months ended March 31, 1999 and 1998 was 5,317,758.

     Fully diluted per share amounts are computed by dividing net
     income (loss) by the average number of common shares outstanding,
     after adjusting both for the estimated effects of the assumed
     exercise of stock options and the assumed conversion of all
     cumulative convertible preferred stock, convertible subordinated
     debentures and collateralized convertible debentures into shares
     of common stock.  For the three months ended March 31, 1999 and
     1998, no stock options were assumed to be exercised and the effect
     of the assumed exercise of stock options and the assumed
     conversion of all cumulative convertible preferred stock,
     convertible subordinated debentures and collateralized convertible
     debentures would have been anti-dilutive.

     The following is a summary of the calculations used in computing
     basic and diluted income (loss) per share for the three months
     ended March 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                     ------------------
                                                                  March 31,        March 31,
                                                                    1999             1998
                                                                    ----             ----
<S>                                                              <C>              <C>
     Net Loss                                                     (512,000)         (868,000)
     Preferred Dividends                                          (160,000)         (160,000)
                                                                 ---------        ----------
     Loss Available to Common
      Shareholders                                                (672,000)       (1,028,000)
                                                                 =========        ==========

     Weighted Amount of Shares
      Outstanding                                                5,317,758         5,317,758
     Basic and Diluted Loss Per
       Share                                                          (.13)             (.19)
</TABLE>



                             7

                              <PAGE>
<PAGE>

                 PGI INCORPORATED AND SUBSIDIARIES

(4)  Statement of Cash Flows

     The Financial Accounting Standards Board issued Statement No. 95,
     "Statement of Cash Flows", which requires a statement of cash
     flows as part of a full set of financial statements.  For
     quarterly reporting purposes, the Company has elected to condense
     the reporting of its net cash flows.  Interest paid for the three
     months ended March 31, 1999 and 1998 was $43,000 and $12,000
     respectively.

     For purposes of the statement of cash flows, the Company considers
     all highly liquid debt instruments purchased with a maturity of
     three months or less to be cash equivalents.

(5)  Restricted Cash

     Restricted cash included cash pledged to agencies in various
     states and local Florida governmental units related to land
     development and environmental matters, real estate taxes in
     litigation, collateral for primary lender debt, the servicing of
     sold receivables and, as a result of sales agreements and Company
     policies, customer payments and deposits related to homesite and
     housing contracts.

(6)  Receivables on Real Estate Sales

     Net receivables on real estate sales consisted of:
<TABLE>
<CAPTION>
                                                                    March 31,       December 31,
                                                                      1999              1998
                                                                      ----              ----
                                                                        ($ in thousands)
<S>                                                                  <C>               <C>
     Contracts receivable on homesite sales                          $ 638             $ 644
     Other                                                              83                84
                                                                     -----             -----
                                                                       721               728
     Less:  Allowance for cancellations                               (630)             (631)
                                                                     -----             -----
                                                                     $  91             $  97
                                                                     =====             =====
</TABLE>

(7)  Land and Improvements

     Land and improvement inventories consisted of:
<TABLE>
<CAPTION>
                                                                    March 31,       December 31,
                                                                      1999              1998
                                                                      ----              ----
                                                                        ($ in thousands)
<S>                                                                   <C>               <C>
     Unimproved land                                                  $613              $613
     Fully improved land                                               276               276
                                                                      ----              ----
                                                                      $889              $889
                                                                      ====              ====
</TABLE>


                             8

                              <PAGE>
<PAGE>

             PGI INCORPORATED AND SUBSIDIARIES

(8)  Property and Equipment

     Property and equipment consisted of:
<TABLE>
<CAPTION>
                                                                    March 31,       December 31,
                                                                      1999              1998
                                                                      ----              ----
                                                                        ($ in thousands)
<S>                                                                   <C>               <C>
     Furniture, fixtures and other equipment                          $ 93              $ 93
     Less:  Accumulated depreciation                                   (92)              (92)
                                                                      ----              ----
                                                                      $  1              $  1
                                                                      ====              ====
</TABLE>

(9)  Other Assets

     Other assets consisted of:
<TABLE>
<CAPTION>
                                                                    March 31,       December 31,
                                                                      1999              1998
                                                                      ----              ----
                                                                        ($ in thousands)
<S>                                                                   <C>               <C>
     Deposit with Trustee of 6-1/2% debentures                        $139              $138
     Other                                                              21                18
                                                                      ----              ----
                                                                      $160              $156
                                                                      ====              ====
</TABLE>

(10) Other Liabilities

     Other liabilities consisted of:
<TABLE>
<CAPTION>
                                                                    March 31,       December 31,
                                                                      1999              1998
                                                                      ----              ----
                                                                        ($ in thousands)
<S>                                                                  <C>               <C>
     Accrued property taxes
        -  current                                                   $   37            $   32
        -  delinquent                                                   639               675
     Other accrued expenses                                             310               328
     Deposits, advances and escrows                                     174               174
     Estimated recourse liability for
        receivables sold                                                  7                 9
                                                                     ------            ------
                                                                     $1,167            $1,218
                                                                     ======            ======
</TABLE>


                             9

                              <PAGE>
<PAGE>

             PGI INCORPORATED AND SUBSIDIARIES

(11) Primary Lender Credit Agreements, Notes and Mortgages Payable and
     Convertible Subordinated Debentures Payable

     Credit agreements with the Company's primary lender and notes and
     mortgages payable consisted of the following:

<TABLE>
<CAPTION>
                                                                         March 31,       December 31,
                                                                           1999              1998
                                                                           ----              ----
                                                                             ($ in thousands)
<S>                                                                      <C>               <C>
     Credit agreements - primary lender:
       (maturing July 8, 1997, bearing interest
         at prime plus 5%):                                              $ 1,000           $ 1,000
     Notes and mortgages payable - $1,176,000
        bearing interest at prime plus 2%                                  1,198             1,198
                                                                         -------           -------

     Convertible subordinated debentures payable:

        At 6-1/2% interest; due June 1991;
         convertible into shares of common stock
         at $18.00 per share                                               1,034             1,034
        At 6% interest; due May 1, 1992; convertible
         into shares of common stock at $19.50 per
         share                                                             8,025             8,025
                                                                         -------           -------
                                                                         $ 9,059           $ 9,059
                                                                         -------           -------
     Collateralized convertible debentures payable:

        At 14% interest; due July 8, 1997, convertible
         into shares of common stock at $1.72 per
         share                                                             1,500             1,500
                                                                         -------           -------
                                                                         $12,757           $12,757
                                                                         =======           =======
</TABLE>

(12) Real Estate Sales and Other Income

     There were no real estate sales for the three months ended March
     31, 1999 and 1998.

     Other income for the three months ended March 31, 1999 and 1998
     consisted of:

<TABLE>
<CAPTION>
                                                                             Three Months Ended
                                                                             ------------------
                                                                         March 31,         March 31,
                                                                           1999              1998
                                                                           ----              ----
                                                                              ($ in thousands)
<S>                                                                         <C>               <C>
     Commission income                                                      $ -               $79
     Other income                                                             3                10
                                                                            ---               ---
                                                                            $ 3               $89
                                                                            ===               ===
</TABLE>

                             10

                              <PAGE>
<PAGE>

                 PGI INCORPORATED AND SUBSIDIARIES

(13) Commitments and Contingencies

     The aggregate outstanding balances of all receivables sold and
     exchanged with recourse totaled $41,000 and $48,000 at March 31,
     1999 and December 31, 1998, respectively.  Based on its collection
     experience with such receivables, the Company maintained
     allowances at March 31, 1999 and December 31, 1998, classified in
     other liabilities, of $7,000 and $9,000 respectively for the
     recourse provisions related to all receivables sold.

(14) Income Taxes

     Effective January 1, 1993 the Company adopted Statement of
     Financial Accounting Standards (SFAS) No. 109, "Accounting for
     Income Taxes", which requires a change from the deferred method to
     the asset and liability method of accounting for income taxes.

     At December 31, 1998, the Company had an operating loss
     carryforward of approximately $34,000,000 to reduce future taxable
     income.  These operating losses expire at various dates through
     2012.

     The following summarizes the temporary differences of the Company
     at December 31, 1998 at the current statutory rate:

     Deferred tax asset:
         Net operating loss carryforward                   $ 12,580,000
         Adjustments to reduce land to net
            realizable value                                     12,000
         Expenses capitalized under IRC 263(a)                   56,000
         ITC carryforward                                       215,000
         Valuation allowance                                (12,691,000)
                                                           ------------
                                                                172,000
     Deferred tax liability
         Basis difference of land and improvement
            inventories                                         172,000
                                                           ------------
         Net deferred tax asset                            $          0
                                                           ============




                             11

                              <PAGE>
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                 PGI INCORPORATED AND SUBSIDIARIES

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

Preliminary Note

     Readers should understand as they read this report that the
Company is not presently pursuing its core business.  The reason that
the Company is no longer pursuing its core business is set forth with
more particularity below.

     During the fiscal year ended December 31, 1996, the Company's
business focus and emphasis changed substantially as it concentrated its
sales and marketing efforts almost exclusively on the disposition in
bulk of its undeveloped, platted, residential real estate.  This change
was prompted by its continuing financial difficulties due to the
principal and interest owed on its debt and management's conclusion that
a bulk sale was the best way to reduce the Company's debt service
obligations.  The sale of this undeveloped land occurred on May 13,
1998, its remaining inventory now consists if undeveloped commercial
property.  The Company intends to make a decision as to whether it will
pursue the development and sale of the commercial property in accordance
with its traditional core business plans or whether it will attempt to
sell such property in bulk.  That decision will depend, in part, on
whether the Company believes it can generate more revenue by developing
and selling individual commercial properties or by selling in bulk.

     On January 31, 1997, Sugarmill Woods, Inc., a Florida corporation
and a wholly-owned subsidiary of the Company, and Love-PGI Partners,
L.P. ("L-PGI") (collectively as "Seller"), entered into an Option
Agreement For Sale and Purchase ("Sale Agreement") with The Nature
Conservancy, Inc., and unrelated nonprofit District of Columbia
corporation ("Purchaser"), for the sale of and purchase of approximately
5,240 shares of certain undeveloped real estate located in Citrus County
and Hernando County, Florida ("Property").  Approximately 4,890 acres of
the Property was owned by the Company, and 350 acres was owned by L-PGI.

     Shareholder approval of the sale was obtained at the Annual
Meeting of the Company on December 22, 1997.  The Company consummated
the transaction on May 13, 1998.

Results of Operations

     Revenues for the first three months of 1999 decreased by $70,000
to $23,000 from $93,000 for the comparable 1998 period due to the sale
of the Sugarmill Woods Sales business in September of 1998.  A net loss
of $512,000 was incurred for the first three months of 1999 compared to
a net loss of $868,000 for the first three months of 1998.  The net loss
decreased by $356,000 mainly as a result of substantially less
outstanding debt in the first quarter of 1999 than in 1998 because of
the bulk acreage sale in May 1998 and pay down of debts.  After
consideration of cumulative preferred dividends in arrears, totaling
$160,000 for each of the three months ended March 31, 1999 and 1998
($.05 per share of common stock), net losses per share of $.13 and $.19,
respectively, were reported for the three month periods ended March 31,
1999 and 1998.


                             12

<PAGE>
<PAGE>

                 PGI INCORPORATED AND SUBSIDIARIES

Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

     On March 28, 1996, the Company's primary lender, First Union
National Bank of Florida, a national banking association ("First Union")
assigned to PGIP L.L.C., a Missouri limited liability company ("PGIP")
all of First Union's right, title and primary credit agreements with the
Company and the Company's subsidiaries, Sugarmill Woods, Inc., Burnt
Store Marina, Inc. and Gulf Coast Credit Corporation (collectively, the
"Borrowers"), which credit agreements are in default and the maturity of
the indebtedness secured thereby has been accelerated.

     The sale of acreage on May 13, 1998 resulted in a payment of first
mortgage principal and interest to PGIP of $10,362,193.  At closing, the
Company and PGIP executed an escrow agreement (the "Escrow Agreement").
The Escrow Agreement provides that $1,000,000 of the PGI Purchase Price
would not be used to repay the First Mortgage Indebtedness, so that
$1,000,000 (the "Remaining Indebtedness") of the First Mortgage
Indebtedness would remain in place.  The $1,000,000 was placed in escrow
with PGIP as the escrow agent.  Pursuant to the Escrow Agreement, the
escrowed funds are to be paid out (i) as requested by PGI and agreed to
by PGIP, or (ii) as deemed necessary and appropriate by PGIP, in either
case, to protect PGIP's interest in the Retained Acreage (as hereinafter
defined), including PGIP's right to receive principal and interest under
the First Mortgage securing the Remaining indebtedness, or (iii) to PGIP
to pay any other obligations owed to PGIP by the Company.  The real
estate owned by the Company which was not sold to the Purchaser
(approximately 370 acres) (the "Retained Acreage") remains subject to
the First Mortgage.

     There were no real estate sales for the three months ended March
31, 1999 and 1998.

     Other income for the three months ended March 1999 and 1998
consisted of:

                                             Three Months Ended
                                             ------------------
                                         March 31,         March 31,
                                           1999              1998
                                           ----              ----
                                              ($ in thousands)

     Commission income                     $ -               $79
     Other income                            3                10
                                           ---               ---
                                           $ 3               $89
                                           ===               ===

     The stock of Sugarmill Woods Sales, Inc., a subsidiary of
Sugarmill Woods, Inc. was sold September 15, 1998 to the president of
Sugarmill Woods Sales, Inc. for a price of $25,000.  Assets at the time
of sale included the personal property, escrows and rental contracts of
the entity.  A promissory note for $24,000 was taken back by Sugarmill
Woods, Inc. secured by a lien on the stock being purchased and evidenced
by a security agreement.


                             13

                              <PAGE>
<PAGE>

                 PGI INCORPORATED AND SUBSIDIARIES

Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

     The Company suspended the construction of homes and sale of homes
and homesites in 1994.  Starting in January 1996, the Company began
concentrating on disposing in bulk of its undeveloped, platted,
residential real estate in order to decrease its debt obligations. The
Company envisioned selling off such property and retaining its
undeveloped commercial real estate for future development or bulk sales
depending on the profitability.

     The remaining acreage of the Company mainly consists of 370 acres
located in Hernando County, Florida.  The Company believes that the
Retained Acreage may in the future prove to be of greater value than the
property sold because the Retained Acreage's ratio of acreage to
frontage on the proposed Suncoast Expressway is greater than the sold
property's ratio and because of the proximity of the Retained Acreage to
the proposed Suncoast Expressway and the planned interchange between the
Suncoast Expressway and Highway 98.  The Company acknowledges that the
completion of the highway improvements could reasonably be expected to
increase materially the value of the Property.  The Company fully
recognizes, however, that completion of the Suncoast Expressway, if it
ever occurs, is still more than five years away, and that any
information or projections of enhanced values are purely speculative.

     Effective January 1, 1990 the Company implemented the installment
method of homesite sales reporting in accordance with Statement of
Financial Accounting Standard No. 66 "Accounting for Sales of Real
Estate" (see Item I - Note 2 - Recognition of Real Estate Sales).  This
method will be utilized for all installment sales regardless of the down
payment percentage.  As a result of the Secured Lender Transaction non-
recourse sale of receivables, all previously deferred profits were
recognized during 1992.

     Cash used in operating activities for the three months ended March
31, 1999 was $90,000 compared to cash used of $185,000 for the
comparable 1998 period.  During the first three months of 1999,
financing activities provided $1,000 in cash flow from notes receivable
proceeds.

Analysis of Financial Condition

     Assets totaled $3.1 million at March 31, 1999 compared to $3.3
million at December 31, 1998, reflecting the following changes:

<TABLE>
<CAPTION>
                                                 March 31,        December 31,        Increase
                                                   1999              1998            (Decrease)
                                                   ----              ----            ----------
                                                               ($ in thousands)
<S>                                               <C>               <C>                <C>
     Cash and cash equivalents                    $   72            $  161             $ (89)
     Restricted cash                               1,863             1,903               (40)
     Receivables                                     137               149               (12)
     Land and improvement
       inventories                                   889               889                 -
     Net property and equipment                        1                 1                 -
     Other assets                                    160               156                 4
                                                  ------            ------             -----
                                                  $3,122            $3,259             $(137)
                                                  ======            ======             =====
</TABLE>

                             14

                              <PAGE>
<PAGE>

             PGI INCORPORATED AND SUBSIDIARIES

Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

     Liabilities were $25.8 million at March 31, 1999 compared to $25.4
million at December 31, 1998 reflecting the following changes among
categories:
<TABLE>
<CAPTION>
                                                 March 31,        December 31,        Increase
                                                   1999              1998            (Decrease)
                                                   ----              ----            ----------
                                                               ($ in thousands)
<S>                                              <C>               <C>                <C>
     Accounts payable                            $    46           $    26            $   20
     Other liabilities                             1,167             1,218               (51)
     Accrued interest                             11,797            11,391               406
     Credit agreements -
       primary lender                              1,000             1,000                 -
     Notes and mortgages payable                   1,198             1,198                 -
     Convertible subordinated
       debentures payable                          9,059             9,059                 -
     Convertible debentures
       payable                                     1,500             1,500                 -
                                                 -------           -------            ------
                                                 $25,767           $25,392            $  375
                                                 =======           =======            ======
</TABLE>

     The Company has aggressively taken steps to curtail and simplify
operations as well as concentrate on major bulk sales of its undeveloped
acreage.  The Company remains totally dependent upon the sale of
property to fund its operations and debt service requirements.

     The Company remains in default of the entire principal plus
interest on its convertible subordinated debentures.  The amounts due
are as indicated in the following table:

<TABLE>
<CAPTION>
                                                                         March 31, 1999
                                                                         --------------
                                                                   Principal           Unpaid
                                                                   Amount Due         Interest
                                                                   ----------         --------
                                                                         ($ in thousands)
<S>                                                                  <C>               <C>
      Convertible subordinated debentures due
         June 1, 1991                                                $1,034            $  629
      Convertible subordinated debentures due
         May 1, 1992                                                  8,025             5,381
                                                                     ------            ------
                                                                     $9,059            $6,010
                                                                     ======            ======
</TABLE>

     The Company does not have funds available to make any payments of
either principal or interest on the above debentures.

                             15

                              <PAGE>
<PAGE>

                 PGI INCORPORATED AND SUBSIDIARIES

Item 2  Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued)

Year 2000 Issues
----------------

     The year 2000 issue is determined to have an immaterial effect on
the Company.  As of January 1, 1999, the Company has begun maintaining
the financial records on different software, which is also used by a
related party.  The related party is responsible for testing and
modifying the software for the year 2000 processing and expects this
exercise to be complete by August 31, 1999.  The related party is not
expected to charge PGI, Incorporated for the cost of the conversion or
modifications.  As a result, any changes required, as part of any year
2000 conversions made to the financial records will have a minimal
effect on the business, results of operations and financial condition.

     The Company has no material third party relationships with vendors
which would require year 2000 modifications, does not own or operate any
building, and had no other major information technology system with
imbedded technology.


                             16

                              <PAGE>
<PAGE>

                 PGI INCORPORATED AND SUBSIDIARIES

PART II Other Information

Item 1  Legal Proceedings

     In 1994, the Citrus County Tax Assessor denied agricultural
exemption status for the undeveloped Sugarmill Woods property and the
Company was forced to sue the County to reclaim the tax benefit.  In
1995, the Citrus County Tax Assessor again denied agricultural exemption
status for the undeveloped Sugarmill Woods property, but was overruled
by the Value Adjustment Board.  As a result, the Tax Assessor sued
Sugarmill Woods, and was again successful in denying the agricultural
exemption for the property.  The Company won on appeal, but the Tax
Assessor appealed to the Supreme Court of Florida to reinstate the
exemption. On April 1, 1999, the Supreme Court of Florida issued their
opinion in favor of Sugarmill Woods, Inc.  A motion has been filed to
recover permissible expenses incurred in litigating the case.  A hearing
will be held to settle recoverable costs and application of the decision
to subsequent years taxes.  There remains a restricted escrow of
$557,000 for payment of the taxes.

Item 2  Changes in Securities

     Not applicable.

Item 3  Defaults Upon Senior Securities

     See discussion in Item 2 with respect to defaults on the Company's
convertible subordinated debentures and collateralized convertible
debentures, which discussion is incorporated herein by this reference.

Item 4  Submission of Matters to a Vote of Security Holders

     Not applicable.

Item 5  Other Information

     Not applicable.

Item 6  Exhibits and Reports on Form 8 - K

     (a)  Exhibits - reference is made to the Exhibit Index contained
          on page 19 herein for a list of exhibits filed under this
          Item.

     (c)  No report on Form 8 - K was filed during the quarter ended
          March 31, 1999.


                             17

                              <PAGE>
<PAGE>

              PGI INCORPORATED AND SUBSIDIARIES


                         SIGNATURES

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


          PGI INCORPORATED
      ------------------------
           (Registrant)

Date:   May 14, 1999             /s/ Laurence A. Schiffer
      ------------------         --------------------------
                                 Laurence A. Schiffer
                                 President








                             18

                              <PAGE>
<PAGE>

             PGI INCORPORATED AND SUBSIDIARIES

EXHIBIT INDEX
-------------

 2.  Inapplicable.

 3.  Inapplicable.

 4.  Inapplicable.

10.  Inapplicable.

11.  Statements re:  Computations of Per Share Earnings.
     (See Note 3 to the consolidated financial statements.)

15.  Inapplicable.

18.  Inapplicable.

19.  Inapplicable.

22.  Inapplicable.

23.  Inapplicable.

24.  Inapplicable.

27.  Financial Data Schedule



                             19