U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

      For the quarterly period ended September 30, 1998

[ ]   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 33-58694


                             FBR CAPITAL CORPORATION
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in its Charter)


           Nevada                                                 13-3465289
-------------------------------                               ----------------
(State of Other Jurisdiction of                               (I.R.S. Employer
 Incorporation of Organization)                              Identification No.)


           14988 North 78th Way, Suite 203, Scottsdale, Arizona 85260
           ----------------------------------------------------------
                    (Address of Principal Executive Offices)

                                  (602)483-1466
                 ----------------------------------------------
                 (Issuer's Telephone Number Including Area Code


              ----------------------------------------------------
              (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  Exchange  Act 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 [ ]

      State the number of shares  outstanding of each of the issuer's classes of
common equity,  as of the latest  practicable date: At November 11, 1998, Issuer
had outstanding 4,648,205 shares of Common Stock, par value $.005 per share.

Transitional Small Business Disclosure Format: Yes [ ]  No [X]

                             Page 1 of 9 Total Pages
                              Exhibit Index - None
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


                             FBR CAPITAL CORPORATION

                                 BALANCE SHEETS
                                   (UNAUDITED)


                                                     SEPTEMBER 30     JUNE 30
ASSETS                                                  1998            1998
                                                        ----            ----

CURRENT ASSETS:
 Cash and cash equivalents                           $     1,814   $    15,223
 Investment in U.S. Government Treasury Bills            279,000       275,670
 Investment in common stock of Parlux
    Fragrances, Inc.                                      37,478        53,541
 Other current assets                                      2,929         4,536
                                                     -----------   -----------

TOTAL ASSETS                                         $   321,221   $   348,970
                                                     ===========   ===========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
 Accounts payable                                    $    15,342   $     4,691
 Accrued expenses                                         16,287         9,449
 Convertible notes payable                                19,500        19,500
                                                     -----------   -----------

      Total current liabilities                           51,129        33,640
                                                     -----------   -----------
SERIES A REDEEMABLE PREFERRED STOCK:
 $.01 par value; 529 shares authorized;
   2 shares issued and outstanding; at
   liquidation value of $5,600 per share                  11,200        11,200
                                                     -----------   -----------
STOCKHOLDERS' EQUITY (DEFICIT):
 Preferred stock, $.01 par value;
   10,000,000 shares authorized; no shares
   outstanding except 2 shares issued as
   Series A Redeemable Preferred Stock
 Common stock, $.005 par value;
   16,777,667 shares authorized; 4,648,205
   shares issued and outstanding                          23,241        23,241
 Additional paid-in capital                            9,337,192     9,337,192
 Accumulated deficit                                  (8,863,325)   (8,834,150)
 Other comprehensive loss                               (238,216)     (222,153)
                                                     -----------   -----------

      Total stockholders' equity                         258,892       304,130
                                                     -----------   -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $   321,221   $   348,970
                                                     ===========   ===========

      The accompanying notes are an integral part of these balance sheets.

                                       -2-
<PAGE>
                             FBR CAPITAL CORPORATION

                            STATEMENTS OF OPERATIONS
                 THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                                   (UNAUDITED)


                                                           1998          1997
                                                           ----          ----

Operating expenses                                     $  (31,695)   $  (40,543)
                                                       ----------    ----------

      Loss from operations                                (31,695)      (40,543)
                                                       ----------    ----------
Other income (expense):
  Interest expense                                           (737)         (737)
  Interest income                                           3,258         4,887
  Other income                                                 --         1,304
                                                       ----------    ----------

      Other income (expense), net                           2,521         5,454
                                                       ----------    ----------

  Net loss                                             $  (29,174)   $  (35,089)
                                                       ==========    ==========

Loss per common share and common share equivalents     $     (.01)   $     (.01)
                                                       ==========    ==========

Weighted average common share and common share
 equivalents outstanding                                4,648,205     4,636,698
                                                       ==========    ==========

Net Loss                                               $  (29,174)   $  (35,089)

Other comprehensive loss:
  Unrealized loss on investment:
    Unrealized holding loss arising during period         (16,063)       (2,288)
                                                       ----------    ----------

Comprehensive loss                                     $  (45,237)   $  (37,377)
                                                       ----------    ----------

        The accompanying notes are an integral part of these statements.

                                       -3-
<PAGE>
                             FBR CAPITAL CORPORATION

                            STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
                                   (UNAUDITED)


                                                             1998         1997
                                                             ----         ----
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                 $(29,174)   $(35,089)
                                                           --------    --------
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    (Increase) decrease in:
      Accrued interest receivable                                --      (2,731)
      Other assets                                             (571)      2,318
    Increase in:
      Accounts payable and accrued expenses                  16,336      19,174
                                                           --------    --------

         Total adjustments                                   15,765      18,761
                                                           --------    --------

         Net cash used in operating activities              (13,409)    (16,328)
                                                           --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of U.S. Government Treasury Bills           --      32,657
                                                           --------    --------

         Net cash provided by investing activities               --      32,657
                                                           --------    --------

NET INCREASE (DECREASE) CASH AND CASH EQUIVALENTS           (13,409)     16,329

CASH AND CASH EQUIVALENTS, beginning of period               15,223      10,238
                                                           --------    --------

CASH AND CASH EQUIVALENTS, end of period                   $  1,814    $ 26,567
                                                           ========    ========


        The accompanying notes are an integral part of these statements.

                                       -4-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                      THREE MONTHS ENDED SEPTEMBER 30, 1998
                                   (UNAUDITED)


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and the  instructions to Form 10-QSB.  Accordingly,  they do not include all the
information and footnotes required by Generally Accepted  Accounting  Principles
("GAAP") for complete financial  statements.  In the opinion of management,  all
adjustments  (which include only normal recurring  adjustments)  necessary for a
fair  presentation  of the results for the interim  periods  presented have been
made. The results for the three month period ended September 30, 1998 may not be
indicative of the results for the entire year. These financial statements should
be read in conjunction  with the Company's  Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1998.

CASH AND CASH EQUIVALENTS AND INVESTMENTS

The Company's  policy is to invest cash in excess of operating  requirements  in
income-producing  investments.  Temporary cash investments are all highly liquid
investments  with  maturity  of three  months  or less  when  purchased  and are
considered to be cash  equivalents  for cash flow  purposes.  Investments in the
common stock of Parlux Fragrances,  Inc., and U.S. Government Treasury Bills are
accounted for in accordance with Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities".

Investment  in  common  stock of  Parlux  Fragrances,  Inc.,  is  classified  as
"available  for  sale".  Changes  in  the  market  value  are  reflected  in the
comprehensive  loss  section  of  the  Company's  statement  of  operations  and
comprehensive loss under the caption "Unrealized loss on investment".

EARNINGS (LOSS) PER COMMON SHARE

Earnings  (loss) per common share is computed by dividing  net income  (loss) by
the  weighted  average  number of  common  share and  common  share  equivalents
outstanding during the period.  Primary and fully diluted earnings per share are
considered to be the same in all periods. The impact of outstanding warrants and
stock options were not included in the calculation of net loss per share in 1998
and 1997 as their inclusion would have an anti-dilutive effect on those results.

INCOME TAXES

The Company has a net operating loss carryforward of approximately $6,700,000 at
September 30, 1998.  Historically,  no federal tax benefit has been recorded due
to the  uncertainty of the Company's  ability to realize  benefits by generating
taxable  income in the future.  These  carryforwards  expire through fiscal year
2013.  Due to a greater  than 50% change in the  ownership  of the  Company,  as
defined in the Internal Revenue Code,  resulting from various equity  offerings,
certain  restrictions exist as to the use of net operating loss carryforwards to
offset future taxable income.

                                       -5-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                      THREE MONTHS ENDED SEPTEMBER 30, 1998
                                   (UNAUDITED)


Although the Company has significant net operating loss carryforwards  available
to offset future  taxable  income,  due to the  uncertainty  as to the Company's
future  earnings,  a full  valuation  allowance  has been provided to offset all
deferred  tax  assets.  No income  taxes  have been  provided  for either of the
interim periods based on the Company's ability to utilize its net operating loss
to offset taxable income, if any, during the periods.

RECENTLY ISSUED ACCOUNTING STANDARD

During the year,  the  Company  adopted  Financial  Accounting  Standards  Board
Statement  No. 130,  REPORTING  COMPREHENSIVE  INCOME (SFAS No.  130).  SFAS 130
requires the  reporting of  comprehensive  income in addition to net income from
operations.  Comprehensive  income  is  a  more  inclusive  financial  reporting
methodology  that includes  disclosures of certain  financial  information  that
historically has not been recognized in the calculation of net income.

At  September  30,  1998,   the  Company  held  an   investment   classified  as
available-for-sale, which has an unrealized loss of $16,063 for the three months
ended September 30, 1998.

ITEM 2.  MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND PLAN
         OF OPERATIONS

PLAN OF OPERATIONS

On June 28, 1996, the Company sold to Parlux Fragrances, Inc. (Parlux) virtually
all of the assets, properties and rights owned by the Company in connection with
its business for cash,  shares of the common stock of Parlux  (Parlux stock) and
other consideration.

The Company has not conducted any operations since the Asset Sale.  Accordingly,
the  results of its  operations  prior to the Asset Sale are not  material.  The
reasons for and terms of the Asset Sale and the  discontinuance of the Company's
business were previously reported in the Company's Proxy Statement,  dated April
22, 1996 and Form 10 KSB for the fiscal year ended June 30, 1996.

On  September  30,  1998,  the  Company  had  approximately  $2,000  in cash and
approximately  $279,000 in U.S.  Government  Treasury Bills. The Company expects
that it will earn approximately  $12,000 from interest during the current fiscal
year ending June 30, 1999.

Corporate and  administrative  expenses for the current fiscal year are expected
to be approximately $105,000 including $66,000 in fees and expense reimbursement
to the directors,  $10,000 for accounting fees for audit and tax returns, $3,000
for legal fees, $10,000 for liability insurance,  $7,800 for stock transfer fees
and printing expense, and approximately $4,000 for miscellaneous expenses. Funds
to pay the  expenses  are expected to be derived  from  interest  income  earned
during the year and from the Company's cash on hand.

Since the Asset Sale of June 1996, the Company's operations have been limited to
the conduct of administrative  activities such as paying indebtedness  remaining
after the Asset Sale,  acquiring  outstanding notes,  settling a claim for prior
services,  preparing and  filing  federal and  state  tax  returns and quarterly

                                       -6-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                      THREE MONTHS ENDED SEPTEMBER 30, 1998
                                   (UNAUDITED)


SEC filings,  undertaking and completing an exchange offer for preferred  shares
and other general corporate  activities.  Also, the Company has been identifying
and conducting  discussions with respect to a possible business combination with
one or more entities  interested in acquiring or being  acquired by the Company.
The Company is free to investigate  businesses of essentially any kind or nature
including  but not  limited to,  finance,  technology,  manufacturing,  service,
research   and   development,   healthcare,    communications,    insurance   or
transportation. While the Company has not chosen any particular area of business
in which it may propose to engage and has conducted  only limited market studies
with respect to any business, property or industry, the directors of the Company
have  considered  the  strengths and  weaknesses of the Company and  established
certain initial criteria for its search.  The Company will first seek a business
combination  with a company  having a  business  or line of  products  with good
prospects for future profits and growth. In view of the Company's small size and
book  value,  the  appropriate  candidate  is  expected  to  be an  emerging  or
developing company.  Other priority candidates may be those desiring to become a
public  company and those which have an interest in acquiring the company's cash
and net operating loss carryforwards.

A number of companies have been identified which in the judgment of the Board of
Directors meet the criteria set forth above and discussions  have been held with
several of them. There is no assurance of the availability, viability or success
of any  acquisition  or the results of  operations  of the Company in connection
with any  acquisition or business  venture.  Even if a suitable  candidate for a
business combination is found and negotiations are successfully completed, there
is no assurance of successful operations after the combination has been effected
or that  existing  stockholders  of the  Company  will  not  suffer  substantial
dilution of their equity position,  either upon the business  combination itself
or upon the completion of any additional financing which may be necessary.

The Company  continues to hold 28,555 shares of Parlux Stock of which management
intends to use 1,326  shares to redeem  two  preferred  shares  during the three
months ending  December 31, 1998.  On September  30, 1998, it had  approximately
$2,000 in cash in banks and $279,000 in U.S.  Government Treasury Bills maturing
in  November  1998.  The Parlux  Stock may be sold to the public  pursuant  to a
currently  effective  Registration  Statement  under the Securities Act of 1933,
covering those shares.  Management  believes that the Company's reserves in cash
and treasury  bills are adequate to support its current  activities for the year
ended June 30, 1999.  However,  if management decides to merge with or acquire a
business,  this may require additional  capital.  There can be no assurance that
the Company will be able to raise such capital when and if it is needed.

In connection with the Asset Sale on June 28, 1996, all employees of the Company
were  terminated  and the Company has no employees.  The Company's two executive
officers  provide  certain  services to the  Company on a part-time  contingency
basis. There are no present plans to hire any employees.

FORWARD-LOOKING STATEMENTS

Certain  information  contained in this first  Quarterly  Report on Form 10-QSB,
including,  without  limitation,  information  appearing  under  Part 1, Item 2,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations",  are forward-looking  statements (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities  Exchange Act of

                                       -7-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                      THREE MONTHS ENDED SEPTEMBER 30, 1998
                                   (UNAUDITED)


1934).  Factors  set forth in the  Company's  Annual  Report on Form 10K for the
fiscal  year  ended  June  30,  1998,  under  Item  1,  "Business"  and  Item  6
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  together  with other  factors that appear with the  forward-looking
statements, or in the Company's other Securities and Exchange Commission filings
could affect the Company's  actual results and could cause the Company's  actual
results  to  differ  materially  from  those  expressed  in any  forward-looking
statements  made by, or on behalf of, the  Company in this  Quarterly  Report on
Form 10-QSB.

CONTINGENCIES

During  November  1996,  the  Company  received a request for payment of claimed
amounts totaling  approximately  $137,000  purported to be owed to Muelhens GMBH
with whom the Company had a  distribution  agreement  from December 1993 to June
30, 1995.  As set forth in the  Company's  Annual  Report on Form 10-KSB for the
fiscal year ended June 30, 1996,  distribution agreements with Muelhens GMBH and
affiliated  parties  were  terminated  effective  June 30,  1995 on a basis that
relieved the Company of  obligations  to  Muelhen's  affiliated  companies.  The
Company  believes  that  the  claimed  amounts  were  included  in the  numerous
transactions  resolved  in the  termination  arrangements  in June  1995  and so
advised the attorneys for the claimant by letter of March 11, 1997.  The Company
is not  presently  able to  determine  whether  this request for payment will be
pursued and what amount, if, any ultimately may be due and owing thereon.


                                       -8-
<PAGE>
                             FBR CAPITAL CORPORATION


SIGNATURES


      In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of
1934,  the  Registrant  caused  this  Report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                        FBR CAPITAL CORPORATION
                                             (Registrant)

Dated: November 11, 1998

                                        By: /s/ Charles D. Snead, Jr.
                                           -------------------------------------
                                                Charles D. Snead, Jr., President




                                       -9-