SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10-QSB




 Mark One
                   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
   [X ]                     THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended         January 31, 1998
 -------------------------------------------------------

                                             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         0-17263


                             CHAMPIONS SPORTS, INC.
                             ----------------------
             (Exact name of registrant as specified in its charter)


                     Delaware                  52-1401755
                     ------------------------------------
           (State or other jurisdiction of   (I.R.S. Employer
                      organization)          Identification No.)

                   Suite 101, 2500 Wilson Blvd., Arlington VA 22201
                   ------------------------------------------------
               (Address of principal executive offices) (Zip code)

                                 (703) 526-0400
                                 --------------
              (Registrant's telephone number, including area code)

     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

         As of March 17,1998,  the Registrant had a total of 8,500,638 shares of
common stock outstanding.


                                        1

<PAGE>



                             CHAMPIONS SPORTS, Inc.

                                   FORM 10-QSB

                                      INDEX

                                                                     Page

Part I.   Financial Information

          Item 1.           Financial Statements

          Consolidated Balance Sheets as of
            January 31, 1998 (unaudited) and
            April 30, 1997                                            3

          Consolidated Statements of Operations:
            Three months and nine months ended
            January 31, 1998, and  January 31, 1997,
                  (unaudited)                                         4

          Consolidated Statements of Cash Flows:
            Nine months ended January 31, 1998, and
            January 31,1997 (unaudited)                               5

          Notes to Consolidated Financial Statements                  6

          Item 2.     Management's Discussions and
                      Analysis of Financial Condition
                      and Results of Operations                       7

Part II.  Other Information and Signatures

          Item 4.     Submission of Matters to a Vote
                      of Security Holders                             9

          Item 6.     Exhibits and Reports on Form 8-K                9

          Signatures                                                 10


                                        2

<PAGE>
<TABLE>
<CAPTION>


               Champions Sports, Inc. and Subsidiaries
                     Consolidated Balance Sheets

                                                     JAN 31         APRIL 30
                                                      1998            1997

                   ASSETS
<S>                                                   <C>               <C>

Current assets
   Cash and cash equivalents                             $553,621        $219,881
   Certificate of deposit                                  25,080          25,080
   Accounts receivable - trade                              1,833          15,599
   Inventories                                             63,109          57,919
   Prepaid  expenses                                       19,479          19,174
   Deferred tax asset                                     215,892         215,892
         Total current assets                             879,015         553,545

Property and Equipment
   Furniture and Equipment                                524,055         516,956
   Leasehold improvements                                 570,962         567,312
                                                        1,095,017       1,084,268
   Accumulated depreciation and amortization            (685,063)       (644,362)
                                                          409,954         439,906
Other assets
   Deposits                                                11,052          11,052


         Total assets                                  $1,300,021      $1,004,503

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
   Accounts payable                                       $42,345         $49,658
   Dividend payable on preferred stock                    269,160         201,870
   Notes payable                                                           17,201
   Deferred revenue                                             0               0
   Other accrued expenses                                  35,792          50,733
   Current portion of deferred lease concession             4,363           4,363
         Total current liabilities                        351,659         323,825

Deferred lease concession
 (excluding current portion)                               25,735          29,007
Note payable, excluding current portion

Commitments and contingencies                         

Stockholders' equity
   Preferred stock:
    Series A, 12% convertible cumulative,
    par value $10 per share, preferred as to
    dividends and liquidation: 650,000 shares
    authorized 56,075 issued and outstanding.            560,752         560,752
     Undesignated, par value $10 per share,
     150,000 authorized and unissued.                          0               0

   Common stock, par value $.001 per share,
   50,000,000 shares authorized, 8,500,638
    shares issued and outstanding at
    January 31, 1998 and April 30, 1997                     8,501           8,501

    Additional paid-in capital                          5,308,112       5,308,112
    Accumulated deficit                                (4,954,738)     (5,225,694)
          Total stockholders' equity                      922,627         651,671

          Total liabilities and stockholders' equity   $1,300,021      $1,004,503

See notes to consolidated financial statements
</TABLE>
                                       3

<PAGE>

<TABLE>
<CAPTION>


                    CHAMPIONS SPORTS, INC.
             Consolidated Statement of Operations
                         (Unaudited)

                                                        Three months ended         Nine months ended
                                                           January 31,                 January 31,
                                                      1998             1997        1998             1997

<S>                                             <C>              <C>           <C>               <C>    

Revenue
   Food and beverage sales                        $486,297         $440,949    $1,330,285        $1,286,367
   Merchandise                                       8,219            3,778        17,087            11,401
   Consulting,licensing, royalties
     and memorabilia fees                           89,534           81,000       315,938           276,687
   Interest income                                   4,686              315         5,936             1,108
   Other income                                      7,083            5,180        18,582            15,747
                                                  $595,818         $531,222    $1,687,829        $1,591,310
   
   Cost of food and beverage sales                 133,296          119,141       368,825           343,645
   Cost of merchandise and memorabilia sales        35,888           10,071        65,163            32,194
   Restaurant payroll and related costs            168,334          152,907       466,615           437,487
   Restaurant occupancy costs                       45,142           51,483       136,157           156,203
   Other restaurant costs                          101,144           83,118       268,859           266,147
   General and administrative                       72,884           95,200       293,448           258,145
   Depreciation and amortization                    13,567           13,567        40,702            40,702
   Interest expense                                      0              717           455             1,946
                                                   570,255          526,204     1,640,224         1,536,469

Net Income from continuing operations               25,563            5,018        47,605            54,841

Extraordinary gain                                       -                -       290,641                 -

Net income                                          25,563            5,018       338,246            54,841

Earnings per share - Primary                         $0.00            $0.00         $0.04             $0.01

Earnings per share - Diluted                         $0.00            $0.00         $0.04             $0.01

   Weighted average number of common
    shares outstanding during the period

Primay                                           8,500,638        8,500,638     8,500,638         8,500,638

Diluted                                          9,308,676        9,308,676     9,308,676         9,308,676

  </TABLE>
                 
                                        4
                                 

<PAGE>


<TABLE>
<CAPTION>


               CHAMPIONS SPORTS, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows
          Increase (Decrease) in Cash and Cash Equivalents
                For the nine months ended January 31,

                                                                           1998                  1997
<S>                                                                          <C>                    <C>    

Cash flows from operating activities:
   Net income                                                                 $338,246               $54,842
   Adjustments to reconcile net income
   to cash provided by (used ) by operating activities:
    Depreciation and amortization                                               40,702                40,702
    Extraordingay gain                                                       (290,641)                     -
  Changes in asset and liabilities
      Accounts receivable                                                       13,766              (95,472)
      Inventories                                                              (5,190)              (23,620)
      Prepaid expenses                                                           (305)              (14,724)
      Accounts payable                                                         (7,313)               (9,228)
      Other accrued expenses                                                  (14,941)                13,636
      Deferred lease concessions                                               (3,273)               (3,273)
       Net cash provided (used) by operating activities                         71,051              (37,137)

Cash flows from investing activities:
   Purchase of  property and equipment                                        (10,749)                     -
        Net cash provided by investing activities                             (10,749)                     -

Cash flows from financing activities:
   Repayment of borrowings                                                    (17,201)              (19,196)
        Net cash provided (used)  by financing activities                     (17,201)              (19,196)

Net increase  (decrease) in cash and cash equivalents                           43,101              (56,332)

Cash and cash equivalents at beginning of year                                 219,881               141,930
Cash and cash equivalents at January 31,                                       553,621                85,598

Supplemental disclosure of cash flow information:
  Cash paid during the period  for interest                                          -                 1,946

See notes to consolidated financial statements
                               
</TABLE>
                                       5

<PAGE>

                                                    
      
                             CHAMPIONS SPORTS, INC.

                   Notes to Consolidated Financial Statements

                                January 31, 1998

Summarized Financial Information

Company or group of companies for which report is filed:

CHAMPIONS Sports, Inc. and Subsidiaries

The  consolidated  balance  sheet  as of  January  31,  1998,  the  consolidated
statements of operations and the  consolidated  statements of cash flows for the
three  months and nine months  ended  January 31, 1998 and January  31,1997 have
been prepared by the company,  without audit. In the opinion of management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial position, results of operations and changes in cash
flow at January 31, 1998 and for all periods presented have been made.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted. It is suggested that these consolidated  financial statements
be read in conjunction with the financial  statements and notes thereto included
in the Company's  10-KSB as of April 30, 1997. The results of operations for the
period ended  January 31, 1998 are not  necessarily  indicative of the operating
results for the full year.


                                        6
       

<PAGE>




     Item 2.  Managements  Discussion  and Analysis of Financial  Condition  and
Results of Operations


Results of Operation

         For the nine month period ended January 31, 1998, the Company  realized
a net profit of $338,246  or $0.04 per common  share as compared to a net profit
of $54,841 or $0.01 per common share for the nine month period ended January 31,
1997.  Net income from  continuing  operations for the nine months ended January
31, 1998 was $47,605 compared to $54,841 in the comparable  period ended January
31, 1997.  The Company  realized a  extraordinary  gain of $290,641 for the nine
months  ended  January  31,  1998  from the  sale of the  CHAMPIONS  brand.  The
Company's  assets increased to $1,300,021 at January 31, 1998 from $1,004,503 at
April 30, 1997. The Company's net profit from its ongoing operations was $25,563
for the three months ended  January 31, 1998 versus  $5,018 for the three months
ended January 31, 1997.


Revenues

         The Company's  total revenues were $1,687,829 for the nine months ended
January 31, 1998 versus  $1,591,310  for the nine month period ended January 31,
1997,  a increase of $96,519 or 6.1%.  By  component,  food and  beverage  sales
increased  3.4% from the previous year for the nine months and  increased  10.3%
for the three months  period from the previous  year.  This increase in food and
beverage  sales is attributed to a increase in customer  volume as there were no
material price increases for menu items.  Merchandise  sales for the nine months
ended  January 31,  1997  accounted  for 1.0% of the  Company's  total  revenues
compared  to .7% in the  prior  comparable  period.  For the nine  months  ended
January 31, 1998, the Company realized  $315,938 from consulting and memorabilia
fees. For the three months ended January 31, 1998, this amount was $89,534.  For
the nine  months  ended  January 31,  1997,  the  Company  received  licensing ,
royalties and memorabilia  fees of $276,687.  For the three months ended January
31, 1997,  this amount was $81,000.  For the nine months ended January 31, 1998,
other income was $18,582 contrasted to $15,747 for the nine months ended January
31, 1997.  Interest  income in both  comparable  periods was less than 1% of the
Company's total revenue.


Expenses

         Cost of food and  beverage  was  27.7% of  related  sales  for the nine
months and 27.4% for the three months ended  January 31, 1998  compared to 26.7%
for the nine months and 27.0% for the three months ended January 31, 1997.  This
increase is attributed to sightly higher costs at the wholesale  level.  Cost of
merchandise and memorabilia sales for the nine months ended January 31, 1998 was
$65,163  compared  to $32,194 in the  preceding  year.  Restaurant  payroll  and
related costs were 35.1% of related food and beverage  sales for the nine months
and 34.6% for the three months ended January 31, 1998, versus 34.0% for the nine
months  and  34.7% for the three  months  ended  January  31,  1997.  Restaurant
occupancy  costs were  $136,157  for the nine  months and  $45,142 for the three
months  ended  January  31, 1998  compared  to  $156,203  for the nine month and
$51,483  for the  three  month  comparable  period  in 1997.  This  decrease  is
attributed to reduction in common area charges passed on by the landlord.  Other
restaurant  costs were 20.2% of food and beverage  sales for the nine months and
20.8% of food and beverage  sales for the three  months  ended  January 31, 1998
compared to 20.7% of food and beverage sales for the  comparable  nine month and
18.9% for the three months in 1997. General and  administrative  expense for the
Company's  corporate  office was $293,448 for the nine months ended  January 31,
1998  compared  to  $258,145  for  the  nine  months  ended  January  31,  1997.
Depreciation  and amortization  expense remained  constant at $40,702 during the
nine months ended January 31, 1998 and 1997.

                                       7

<PAGE>


Liquidity and Capital Resources

         The Company's  cash position on January 31, 1998 was $578,701  compared
to $244,961 on April 30,  1997,  an  increase of  $333,740.  For the nine months
ended January 31, 1998, the Company provided $71,051 in cash from its continuing
operating activities and repaid borrowings of $17,201. For the nine months ended
January  31,  1997,  the  Company  expended  $37,137  in cash for its  operating
activities  and repaid  borrowings  of  $19,196.  The Company met its cash needs
during the nine months  ended  January 31, 1998 and 1997 from its  revenues  and
from cash flow from its San Antonio, Texas operation.

         The  Company's  working  capital  was  $527,356  on January 31 1998 and
$229,720 on April 30, 1997.

         Stockholder's  equity was  $922,627 as of January 31, 1998  compared to
$651,671  as of April  30,  1997.  In  November  1997,  the  Company's  Board of
Directors  voted to defer  payment of the annual  dividend  on the Series A, 12%
Preferred  Stock, in order to preserve the Company's cash reserves.  This unpaid
amount,  $67,290,  has been recorded on the Company's balance sheet as a current
liability.

         The Company is actively pursuing merger/acquisition  candidates.  There
is no  assurance  that  the  Company  will be  able to  structure  a  merger  or
acquisition on terms satisfactory to the Company.


Other

         This document contains "forward-looking statements" (within the meaning
of the Private Securities  Litigation Act of 1995) that inherently involve risks
and  uncertainties.  The Company's  actual results could differ  materially from
those anticipated in these forward-looking  statements as a result of unforeseen
external factors.  These factors may include, but are not limited to, changes in
general economic  conditions,  customer acceptance of products offered and other
general competitive factors.

                                       8
                                                     

<PAGE>





Part II.   Other Information

Item 4.  Submission of Matters to A Vote of Security Holders

         None



Item 6.  Exhibits and Reports on Form 8-K

         None.

                                                     
                                       9

<PAGE>







                                   SIGNATURES

Pursuant to the requirements of Securities  Exchange Act of 1934, the registrant
has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
thereunto duly authorized.

                             CHAMPIONS Sports, Inc.




                                /s/ James Martell
                                -----------------
                                  James Martell
                 Chairman, President and Chief Executive Officer



                              /s/ James E. McCollam
                              ---------------------
                                James E. McCollam
                      Corporate Secretary, Chief Accounting
                             Officer and Controller


March 17, 1998



                                       10


<PAGE>