FORM 10-QSB

                    U.S. SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                  FORM 10-QSB

     [X]  QUARTERLY  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE
                     SECURITIES  EXCHANGE  ACT  OF  1934

     For  the  quarterly  period  ended  March  31,  1998

     OR

     [    ]  TRANSITION  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE
     EXCHANGE  ACT

     For  the  transition  period  from to

                   Commission  File  Number  1-14150
                   ---------------------------------

                        THE  COMPANY  DOCTOR
    -----------------------------------------------------------------------
     (Exact  Name  of  Small  Business  Issuer  as  Specified  in its Charter)

        DELAWARE                          72-1234136  
(State or other  Jurisdiction  of       (I.R.S.  Employer
 Incorporation  or  Organization)      Identification No.)

5215  North  O'  Connor  Blvd.,  Suite 1800, Irving, Texas               75039
----------------------------------------------------------              ------
(Address  of  Principal  Executive Offices)                         (Zip Code)

Issuer's  telephone  number,  including  area  code:             (972) 401-8300


Check whether the Issuer (1) filed all reports required to be filed by Section
13  or  15 (d) of the Exchange Act, during the past 12 months and (2) has been
subject  to  the  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  stock,  as    of  the  latest  practicable  date:

There  were  4,906,949    shares of the Issuer's common stock, at par value of
           -----------
$.01  per  share,  outstanding  as  of  March  31,  1998.



                      THE COMPANY DOCTOR AND SUBSIDIARIES

                                    PART I
ITEM  1.     FINANCIAL  STATEMENTS


                          CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>

                                                March 31,        June 30,
                                                  1998             1997
                                              -------------   -------------
                                                Unaudited
                                    ASSETS
<S>                                                 <C>              <C>
Current  assets
 Cash  and  cash  equivalents                 $    518,913     $    414,422
 Short-term  investments                               -            350,000
 Accounts  receivable
   Trade, less  allowance  for doubtful 
     accounts of $210,000                        2,254,051        1,920,719
   Related  parties                                307,861          215,189
   Other                                            15,213           16,932
 Prepaid  expenses                                 125,998          144,034
                                               -----------        ----------
       Total  current  assets                    3,222,036        3,061,296
                                               -----------        -----------

Property  and  equipment                         2,645,539        2,549,493
 Less  accumulated  depreciation 
  and  amortization                             (1,243,079)        (939,935)
                                               -----------        ----------
 Net  property  and  equipment                   1,402,460        1,609,558
                                               -----------        ----------

Other  assets
 Restricted  cash                                  893,582          618,881
 Restricted  short-term  investments             1,148,524          400,768
 Intangibles,  net                               9,193,243        9,528,963
 Other  assets                                     333,324          386,300
 Investments                                       956,171        1,900,114
                                               -----------        ---------
       Total  other  assets                     12,524,844       12,835,026
                                               -----------        ---------

Total  assets                                  $17,149,340      $17,505,880
                                                ==========       ==========

                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current  liabilities
 Notes  payable                                $ 2,742,387      $ 2,049,744
 Current  maturities of capital lease 
  obligations                                       99,092          121,913
 Accounts  payable  and  accrued  expenses       1,606,341        1,152,043
 Claims  payable                                   125,395          236,796
                                                ----------       ----------
       Total  current  liabilities               4,573,215        3,560,496

Long-term  liabilities
 Claims  payable                                 1,037,554        1,065,962
 Capital  lease  obligations,  net  of 
  current  maturities                              119,649          182,209
 Notes  payable                                  1,400,000        1,375,000
                                                ----------       ----------
       Total  liabilities                        7,130,418        6,183,667
                                                ----------       ----------

Stockholders'  equity
 Preferred  stock,  $.01  par  value,  
  5,000,000  shares  authorized  Series A
  convertible,  no  shares  issued                    -                -
 Common  stock, $.01 par value; 25,000,000 
  shares authorized; 4,906,949 shares
  issued  and  outstanding                          49,070          49,070
 Additional  paid-in-capital                    13,807,152      13,807,152
 Accumulated  deficit                           (3,837,300)     (2,534,009)
                                               -----------     ------------
       Total  stockholders'  equity             10,018,922      11,322,213
                                               -----------      -----------

Total  liabilities and stockholders equity     $17,149,340     $17,505,880
                                               ===========     ===========
</TABLE>

<PAGE>
                      THE COMPANY DOCTOR AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                                             For the Nine Months Ended
                                                      March  31,
                                             -------------------------
                                                 1998          1997
                                             -----------    ----------
                                                     (Unaudited)
<S>                                              <C>            <C>

Revenues                                     $ 8,229,513    $ 8,288,724

Cost  of  services  provided                   4,250,427      4,098,730
General  and  administrative  expenses         4,662,658      4,260,561
Marketing  expenses                              238,361        210,307
Development  and  acquisition  costs              58,500        307,265
                                              ----------      ---------
                                               9,209,946      8,876,863
                                              ----------      ---------

Loss  from  operations                          (980,433)      (588,139)

Other  income  (expense)
 Interest  expense                              (432,884)      (279,878)
 Interest  income                                146,539        245,303
 Other  loss                                     (36,513)           -
                                               ---------       ---------
     Total  other  income  (expenses)           (322,858)       (34,575)
                                               ---------       ---------

Net  loss  before  income  taxes              (1,303,291)      (622,714)

Income  tax  benefit                                -           148,000
                                               ----------     ---------

Net  loss                                    $(1,303,291)    $ (474,714)
                                              ==========      ==========

Basic  net  loss  per  common  share         $       (27)    $     (.09)
                                              ===========     ==========

Weighted average common shares outstanding     4,906,949       5,008,221
                                              ==========      ==========
</TABLE>

<PAGE>

                      THE COMPANY DOCTOR AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                For the Three Months Ended
                                                       March    31,
                                                ---------------------------
                                                    1998             1997
                                                ----------         --------
<S>                                                <C>                <C>
                                                          (Unaudited)
 
Revenues                                        $ 2,619,214       $ 2,844,723

Cost  of  services  provided                      1,337,630         1,469,040
General  and  administrative  expenses            1,578,162         1,527,921
Marketing  expenses                                  71,560            95,380
Development  and  acquisition  costs                    -              84,783
                                                 ----------        ----------
                                                  2,987,352         3,177,124
                                                 ----------        -----------

Loss  from  operations                             (368,138)         (332,401)

Other  income  (expense)
 Interest  expense                                 (138,238)         (100,803)
 Interest  income                                    47,180            71,106
 Other  loss                                         (2,212)              -
                                                  ----------       -----------
     Total  other  income  (expenses)               (93,270)         (29,697)
                                                  ----------       -----------

Net  loss  before  income  taxes                   (461,408)        (362,098)

Income  tax  expense                                      -           (9,000)
                                                   ----------       ----------

Net  loss                                        $ (461,408)      $ (371,098)
                                                  ===========      ==========

Basic  net  loss  per  common  share             $     (.09)      $     .(07)
                                                  ===========      ==========

Weighted  average  common  shares  outstanding    4,906,949        5,020,341
                                                  ===========      ==========
</TABLE>

<PAGE>
                      THE COMPANY DOCTOR AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
                                              For the Nine Months Ended
                                                       March  31,
                                              --------------------------
                                                  1998           1997
                                              ----------      ----------
<S>                                               <C>             <C>
                                                     (Unaudited)
Cash  flows  from  operating  activities
 Net  loss                                   $(1,303,291)     $  (474,714)
                                              ----------       ----------
 Adjustments  to  reconcile net loss to 
  net cash used in  operating activities
   Depreciation  and  amortization               774,941          524,979
   Deferred  tax  asset                               -          (175,000)
   Compensation  for  options  granted  
    to  unrelated  third  party                       -            54,832
   Change  in  assets  and  liabilities
     Accounts  receivable                       (424,285)        (157,326)
     Prepaid  expenses                            18,036         (144,669)
     Other  assets                                52,976          (43,849)
     Accounts  payable  and accrued expenses     454,298          617,012
     Claims  payable                            (139,809)        (341,071)
                                              ----------       ----------
                                                 736,157          334,908
                                              ----------       ----------
       Net cash used in operating activities    (567,134)        (139,806)
                                              ----------       ----------

Cash  flows  from  investing  activities
 Purchases  of  property  and  equipment         (96,046)        (479,270)
 Cash  acquired  from  medical  practices            -            337,484
 Change  in  restricted  investments            (397,756)        (120,108)
 Change  in  restricted  cash                   (274,701)        (782,476)
 Proceeds  from  investments                     943,943              -
 Purchase  of  intangibles                      (136,077)             -
                                              ----------        ----------
       Net cash (used in) provided
         investing  activities                    39,363       (1,044,370)
                                              ----------        ----------

Cash  flows  from  financing  activities
 Proceeds  from  line-of-credit  and 
   note  payable                               1,234,072         (750,437)
 Proceeds  from  exercised  warrants
   and stock options                                -              12,130
 Payments  on  notes  payable  and  
   due  to  sellers                             (516,429)      (2,391,795)
 Payments  on  equipment  leases                 (85,381)         (69,140)
                                              -----------      -----------
       Net  cash  provided  by  (used  in)
        financing activities                     632,262       (3,199,242)
                                               -----------     -----------

Cash and  cash  equivalents  decrease            104,491       (4,383,418)

Cash  and  cash  equivalents  at 
  beginning  of  period                          414,422        5,636,433
                                               -----------      ----------

Cash  and  cash equivalents at end of period  $  518,913     $  1,253,015
                                              ==========      ============
</TABLE>

Supplemental  disclosures  of  interest  paid:
     Interest  paid on borrowings for the nine months ended March 31, 1998 and
     March  31,  1997  was  $276,961  and  $279,878  respectively.

Supplemental  disclosure  of  noncash  investing  and  financing  activities:
     During  the  nine months ended March 31, 1997, the Company acquired three
     medical  practices,  and  reported  each  on  a Form 8-K.  The purchase 
     prices combined  were  allocated  as  follows:

<TABLE>
<CAPTION>

<S>                                 <C>
Assets  acquired
 Cash                           $    337,484
 Accounts  receivable                704,362
 Property  and  equipment            138,731
 Prepaid  expense  and  other          6,116
                                  ----------
                                   1,186,693
Liabilities  assumed
 Accounts  payable  and  
  accrued  expenses                  247,716
                                  ----------
 Net  assets  acquired               938,977
 Fair  value  of  common  stock 
  issued                           3,282,066

 Due  to  sellers  -  accounts 
   and  notes  payable - current   4,481,944
 Due  to  sellers  -  notes  
   payable  -  long-term             305,556
                                   ----------
 
                                 $ 7,130,589
                                   =========
</TABLE>

                      THE COMPANY DOCTOR AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE  1  -  SUMMARY  OF  ACCOUNTING  POLICIES
---------------------------------------------

The  summary  of  the  Registrant's  significant  accounting  policies  are
incorporated  by  reference  to  the Company's annual report on Form 10-KSB of
June  30,  1997.

During  the  second quarter of fiscal 1998, the Company adopted the provisions
of  Statement  of  Financial  Accounting Standard No. 128,"Earnings Per Share"
(FAS128).   FAS 128 established new definitions for calculating and disclosing
basic  and  diluted earnings per share.  In accordance with FAS 128, all prior
periods  have  been  restated  to  conform to the new methodolgy. The restated
amounts did not differ materially from amounts previously reported. No diluted
earnings  per  share information is presented as all dilutive potential common
shares  are  antidilutive.

 The  accompanying  unaudited  condensed  financial  statements  reflect  all
adjustments  which,  in  the  opinion  of management, are necessary for a fair
presentation  of the results of operations, financial position and cash flows.
The  results  of  the  interim  period  are  not necessarily indicative of the
results  for  the  full  year.

Reclassifications
-----------------

Certain  amounts  in the March 31, 1997 consolidated financial statements have
been  reclassified  to  conform  with  the  March  31,  1998  presentation.




                      THE COMPANY DOCTOR AND SUBSIDIARIES


ITEM  2  -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------------
RESULTS  OF  OPERATIONS
-----------------------

Forward-Looking  Statements
---------------------------

The  subsequent  discussion contains certain forward-looking statements within
the  meaning  of  Section 27A of the Securities Act of 1933 and Section 21E of
the  Securities  Exchange Act of 1934, which are intended to be covered by the
safe  harbors  created  thereby.  These forward-looking statements include the
plans  to  consummate  the  merger with Healthsouth or secure other sources of
working capital.  The forward-looking statements  included herein are based on
current  expectations  that  involve  numerous  risks  and  uncertainties.
Assumptions relating to the foregoing involve judgments with respect to, among
other  things,  future  economic, competitive and market conditions and future
business  decisions,  all  of  which  are  difficult  or impossible to predict
accurately  and many of which are beyond the control of the Company.  Although
the  Company  believes  that  the  assumptions  underlying the forward-looking
statements  are  reasonable,  any  of the assumptions could be inaccurate and,
therefore,  there  can  be  no  assurance  that the forward-looking statements
included  in  this  Form  10-QSB  will  prove to be accurate.  In light of the
significant uncertainties inherent  in the forward-looking statements included
herein,  the  inclusion  of  such  information  should  not  be  regarded as a
representation  by  the  Company  or  any other person that the objectives and
plans  of  the  Company  will  be  achieved.

Liquidity  and  Capital  Resources
----------------------------------

As  of  March  31, 1998, the Company's principal sources of liquidity included
cash  and  cash  equivalents  of   $518,913, and other current assets totaling
$2,703,123,  resulting  in  total  current  assets  of  $3,222,036.  Current
liabilities  were  $4,573,215  which  resulted  in negative working capital of
$1,351,179  and  a  current  ratio  of  .7 to 1.0  The Company's other current
assets  of  $2,703,123,  consisted  of  accounts  receivable of $2,577,125 and
prepaid  expenses  of  $125,998. Regular monthly payments and balloon payments
made  on  April  15,  1997 to physicians whose practices were acquired in 1996
have reduced the balance due on Notes Payable from $3,139,125 due on March 31,
1997  to  $98,994  at  March  31,  1998.

On  December  17,  1997,  the  Company  made  a  press release stating that an
agreement  had  been  signed  whereby  HeathSouth (NYSE) will be acquiring the
Company  subject  to  shareholder  approval.    Subsequent to execution of the
agreement,  the  Company  received approximately $1,050,000 from HeathSouth to
meet  a  portion of current operating requirements.  Should the agreement with
HealthSouth  not  be  consummated  for  any  reason,  the  Company's continued
existence  is  dependent  upon  obtaining other sources of working capital for
operations  and  to  fund  its  current  deficit.

<PAGE>
------


ITEM  2  -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------------
RESULTS  OF  OPERATIONS  (CONTINUED)
------------------------------------

Results  of  Operations
-----------------------

Revenue

Revenues  are  derived  primarily  from  the management of physician practices
engaged  in  the  diagnosis, treatment and management of work-related injuries
and  illnesses  and  from  other  occupational  health  care  services such as
employment-related physical examinations, drug and alcohol testing, functional
capacity  testing and other related programs.  The Company's business exhibits
some  seasonality.    From  November  through  January,  factors such as plant
closings,  vacations  and  holidays  result in fewer occupational injuries and
illnesses.    Also,  employers  generally hire fewer employees in the calendar
year's  fourth  quarter,  thus  reducing  the  number  of  pre-hiring physical
examinations  and  drug  and alcohol tests during this period.  Patient visits
also  decline  in  summer  months  due  to plant closings, vacations and fewer
illnesses  related  to  adverse weather.  Accordingly, revenues and net income
during  the Company's second and fourth fiscal quarters of each year (quarters
ended  December  and  June), will tend to be somewhat lower than the remaining
quarters  of  the  fiscal  year.

Net  revenues for the nine months ended March 31, 1998 decreased by $59,211 or
0.7%  from  $8,288,724  for the nine months ended March 31, 1997 to $8,229,513
for  the  nine months ended March 31, 1998. Revenues decreased $391,259 at two
locations  as  a  result  of  physician  turnover, leaving the Company without
licensed  physicians  and  therefore,  precluding  the Company from fulfilling
PPO/MHO  contracts  until  new  physicians  can  be  added.

Cost  of  Services  Provided
----------------------------

Cost  of  services  provided  for  the  nine  months  ended March 31, 1998 was
$4,250,427, an increase of $151,697 or 3.7% as compared to $4,098,730 at March
31,  1997.    As  a  percentage of net revenues, cost of services provided was
51.6%  an increase of  2.2% from the 49.4% level of the same nine month period
one  year  ago.    This  increase is primarily due to increases of $233,785 in
certain  areas  including,  X-rays,  pharmacy,  and  lab fees for drug screens
primarily resulting from impaired relationships with lower cost vendors due to
the  Company's  working  capital  deficit.  Also salaries for physical therapy
personnel  have  increased  $113,202  over  the  same period a year ago. These
increases  are  in  conjunction  with  additional  revenues  billed  for these
services.

General  and  Administrative
----------------------------

General  and administrative expenses for the nine months ended March 31, 1998,
were  $4,662,658,  an  increase  of  $402,097,  or  9.4%,  over  expenses  of
$4,260,561  for  the  same  period  a  year ago.  As a percentage of revenues,
general and administrative expenses were 56.7%, an increase of 5.3% from 51.4%
for  the  same nine month period a year ago.  Higher depreciation expense from
additions  to  fixed  assets  and  higher  amortization costs from acquisition
related  goodwill  and  financing  costs  resulted  in  the  primary increase.
Additionally,  increased rent expense from expansion of certain facilities and
relocation of others contributed to the increase in general and administrative
expenses.

<PAGE>


ITEM  2  -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------------
RESULTS  OF  OPERATIONS  (CONTINUED)
------------------------------------

General  and  Administrative  (continued)
-----------------------------------------

The  Company continues its cost-containment efforts in the management of fixed
and variable costs. Certain fixed expenses were negatively impacted by several
factors,  the  principal  one of which is bank service charges which increased
$49,519  or  221%  from  $22,367  for  the nine months ended March 31, 1997 to
$71,886 for the nine months ended March 31, 1998.  This increase is the result
of  the  Company's relationship with a new lender as of April 15, 1997 and the
lock  box banking system this relationship requires.  One category of variable
expenses  which  had  a  significant impact was repairs & maintenance expense.
These  expenses  increased  $6,017  or  11.0% from $54,696 for the nine months
ended  March 31, 1997 to $60,713 for the nine months ended March 31, 1998. The
consolidated  financial statements for the nine months ended March 31, 1997 do
not  reflect  repairs  &  maintenance  expense  for a full nine months for all
clinics  currently being managed as some of these clinics were acquired during
the  nine  month  period.  Expansion of one clinic and relocation of two other
clinics  also  contributed  to  the  increases.

Marketing  Expenses
-------------------

Marketing  expenses  increased  $28,054  or  13.3%  from $210,307 for the nine
months  ended  March  31, 1997 to $238,361 for the nine months ended March 31,
1998.    This  amount  represents 2.5% compared to 2.9% of revenues during the
respective  periods.

Development  and  Acquisition  Costs
------------------------------------

The  Company  had  $58,500  of   development and acquisition costs in the nine
months ended March 31, 1998, but had $307,265 of such costs in the nine months
ended  March  31,  1997.    These  costs  equaled .7% and 3.7% of revenues for
the1998  and  1997  periods,  respectively.    The  fiscal  1998  costs  were
attributable to the negotiations with HeathSouth and the fiscal 1997 cost were
attributable  to  pursuing  and  negotiating affiliations or acquisitions with
physicians  who  had  established  occupational  medicine practices or patient
bases which could be served in an occupational medical setting and development
costs  for  the  acquired  insurance  company  subsidiary.

Other  Income  or  Expense
--------------------------

Interest  income for the nine months ended March 31, 1998 was $146,539 or 1.8%
of  revenue,  as  compared  to  $245,303  or 2.9% of revenue for the same nine
months  a  year ago.  Interest income was earned from  funds invested from the
proceeds  of  the  Company's  initial  public  offering, and from the interest
bearing  investments  in  the  acquired  insurance  company  subsidiary.   The
proceeds  from  the  Company's  initial  public offering were invested in U.S.
Treasury  Notes  which  were sold over the course of the calendar year 1997 in
order to meet cash flow needs.  As of March 31, 1998 all of the initial public
offering  proceeds  had  been  spent.

<PAGE>


ITEM  2  -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------------
RESULTS  OF  OPERATIONS  (CONTINUED)
------------------------------------

Other  Income  or  Expense  (continued)
---------------------------------------

Interest  expense  increased  $153,005 or 54.7% in the nine months ended March
31,  1998  to  $432,884 from $279,878 for the nine months ended March 31, 1997
primarily  due to a term loan and a revolving line of credit which the Company
obtained  on  April 15, 1997.  The major portion of the other interest expense
was  related to capital leases and to existing debt at March 31, 1997 incurred
in  connection  with  the  acquisition  of five clinic practices approximately
mid-way  through  that  nine  month  period.

Net  Income
-----------

As a result of the factors described above, the Company recorded a net loss of
$1,303,291 ($.27 per share) for the nine months ended March 31, 1998, or 15.8%
of  revenues,  as compared to a net loss of $474,714 ($.09 per share), or 7.5%
of  revenues,  for  the  nine  months  ended  March  31,  1997.

At June 30, 1997, the Company had approximately $2.449 million (including $1.3
million  for the year ended June 30, 1997) of net operating loss carryforwards
(for  income  tax  reporting  purposes)  which expire in the year 2008 through
2012.    However, the use of net operating loss carryforward may be limited or
reduced due to the change in ownership as a result of the February 1996 public
offering,  and, accordingly, the Company may be able to utilize only a portion
of its net operating loss carryforwards.  The impairment of the tax benefit as
a  result of the net operating loss carryforwards was reduced from $324,000 in
the  nine months ended March 31, 1997 due to the addition of medical practices
in that quarter, and the historical profitability of such practices, resulting
in  a  net  $148,000  deferred tax benefit on the income statement.  This same
item had no effect on the income statement for the nine months ended March 31,
1998.


                                    PART II


Item  1.          Legal  proceedings  -  none
Item  2.          Changes  in  securities  and  Use  of  Proceeds  -  none
Item  3.          Defaults  upon  senior  securities  -  none
Item  4.          Submission  of  matters to a vote of security holders - none
Item  5.          Other  information  -  none
Item  6.          Exhibits  and  reports  on  Form  8-K:
                        (a)  Exhibits                          None
                        (b)  Forms  8-K                        None




<PAGE>

                                  SIGNATURES


In  accordance  with  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.


     THE  COMPANY  DOCTOR
     (Registrant)


Date:  May  15,  1998          By:  /s/  Fred  G.  Parrish
       --------------

     Fred  G.  Parrish
     V.P.,  Chief  Operating  Officer,
     Chief  Financial  Officer



Date:  May  15,  1998          By:  /s/  Dale  W.  Willetts
       --------------

     Dale  W.  Willetts
     Acting  Chief  Executive  Officer