United States
                       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 September 30, 1997

                                       OR

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

         For the transition period from...............to...............

                         Commission file number 0-17557

             ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
        (Exact name of small business issuer as specified in its charter)

                   New Jersey                             76-0251410
         (State or other jurisdiction of               (I.R.S. Employer
         incorporation or organization)               Identification No.)

                         Suite 200, Three Kingwood Place
                              Kingwood, Texas 77339
                    (Address of principal executive offices)

                           Issuer's telephone number:
                                 (713) 358-8401

         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 past 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

Transitional Small Business Disclosure Format (Check one):

                                    Yes No x


<PAGE>
                              PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>
<CAPTION>
ENEX  88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
BALANCE SHEET
---------------------------------------------------------------------------

                                                       September 30,
ASSETS                                                     1997
                                                      -------------
                                                        (Unaudited)
CURRENT ASSETS:
<S>                                                   <C>         
  Cash                                                $      8,261
  Accounts receivable - oil & gas sales                     15,970
                                                      -------------

Total current assets                                        24,231
                                                      -------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests                                     1,578,968
  Less accumulated depletion                             1,544,199
                                                      -------------

Property, net                                               34,769
                                                      -------------

TOTAL                                                 $     59,000
                                                      =============

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

CURRENT LIABILITIES:
    Payable to general partner                        $     74,624
                                                      -------------

PARTNERS' CAPITAL (DEFICIT):
   Limited partners                                        (22,391)
   General partner                                           6,767
                                                      -------------

Total partners' capital (deficit)                          (15,624)
                                                      -------------

TOTAL                                                 $     59,000
                                                      =============

Number of $500 Limited Partner units outstanding             3,605
</TABLE>





See accompanying notes to financial statements.
---------------------------------------------------------------------------

                                       I-1

<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------------------------

 
(UNAUDITED)                            QUARTER ENDED                 NINE MONTHS ENDED
                                ---------------------------    -------------------------------

                                September 30,   September 30,    September 30,  September 30,
                                   1997             1996            1997           1996
                                -----------    ------------    -------------    ------------
REVENUES:
<S>                              <C>           <C>             <C>            <C>          
  Oil and gas sales              $  10,298     $     2,946     $     34,375   $      29,224
                                -----------    ------------    -------------    ------------
                                                 
EXPENSES:                                        
  Depletion                          4,182            (877)          12,560          16,177
  Impairment of property                 -               -                -         333,294
  Production taxes                     421             524            1,450           3,280
  General and administrative         8,898           3,428           15,941          12,622
                                -----------    ------------    -------------    ------------
                                                 
Total expenses                      13,501           3,075           29,951         365,373
                                -----------    ------------    -------------    ------------
                                                 
NET INCOME (LOSS)                $  (3,203)    $      (129)    $      4,424   $    (336,149)
                                ===========    ============    =============    ============
</TABLE>




See accompanying notes to financial statements.
----------------------------------------------------------------------------

                                       I-2

<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND-SERIES 1, L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 1996
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
-------------------------------------------------------------------------------
                                                                                    PER $500
                                                                                    LIMITED
                                                                                    PARTNER
                                                 GENERAL          LIMITED           UNIT OUT-
                               TOTAL             PARTNER         PARTNERS           STANDING
                             -------------   ----------------  ---------------   -----------

<S>                          <C>               <C>              <C>                <C>     
BALANCE, JANUARY 1, 1996     $    305,259      $       2,840    $     302,419      $     84

NET INCOME (LOSS)                (325,307)             2,229         (327,536)          (91)
                             -------------   ----------------  ---------------   -----------

BALANCE, DECEMBER 31, 1996        (20,048)             5,069          (25,117)           (7)

NET INCOME                          4,424              1,698            2,726             1
                             -------------   ----------------  ---------------   -----------

BALANCE, SEPTEMBER 30, 1997  $    (15,624)     $       6,767    $     (22,391)(1)  $     (6)
                             =============   ================  ===============   ===========
</TABLE>

(1)  Includes 467 units purchased by the general partner as a limited partner.






See accompanying notes to financial statements.
--------------------------------------------------------------------------
                                       I-3
<PAGE>
<TABLE>
<CAPTION>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------

(UNAUDITED)
                                                              NINE MONTHS ENDED
                                                        -------------------------------
                                                        September 30,     September 30,
                                                            1997             1996
                                                        ------------      ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                     <C>               <C>            
Net income  (loss)                                      $     4,424       $   (25,518)   
                                                        ------------      ------------

Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
  Depletion and amortization                                 12,560            38,113
  Impairment of property                                          0                 -
(Increase) decrease in:
  Accounts receivable - oil & gas sales                       2,245            10,981
  Receivable from affiliated limited partnership                  -              (221)
(Decrease) in:
   Accounts payable                                          (2,485)           (3,050)
   Payable to general partner                               (11,807)          (13,868)
                                                        ------------      ------------

Total adjustments                                               513            31,955
                                                        ------------      ------------

Net cash provided by operating activities                     4,937             6,437
                                                        ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Cash distributions                                            -            (7,600)
                                                        ------------      ------------

NET INCREASE (DECREASE) IN CASH                               4,937            (1,163)

CASH AT BEGINNING OF YEAR                                     3,324             4,171
                                                        ------------      ------------

CASH AT END OF PERIOD                                   $     8,261        $    3,008    
                                                        ============      ============
</TABLE>



See accompanying notes to financial statements.
------------------------------------------------------------------------------
                                       I-4

<PAGE>

ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.       The  interim  financial   information  included  herein  is  unaudited;
         however,  such information reflects all adjustments  (consisting solely
         of  normal  recurring   adjustments)  which  are,  in  the  opinion  of
         management,  necessary  for a fair  presentation  of  results  for  the
         interim periods.

2.   The Financial  Accounting Standards Board has issued Statement of Financial
     Accounting  Standard  ("SFAS") No. 121,  "Accounting  for the Impairment of
     Long-Lived  Assets  and for  Long-Lived  Assets to be  Disposed  Of," which
     requires  certain assets to be reviewed for impairment  whenever  events or
     circumstances indicate the carrying amount may not be recoverable. Prior to
     this pronouncement,  the Company assessed properties on an aggregate basis.
     Upon  adoption of SFAS 121, the Company  began  assessing  properties on an
     individual  basis,  wherein  total  capitalized  costs may not  exceed  the
     property's  fair market  value.  The fair market value of each property was
     determined by H. J. Gruy and  Associates,  ("Gruy").  To determine the fair
     market value, Gruy estimated each property's oil and gas reserves,  applied
     certain  assumptions  regarding price and cost  escalations,  applied a 10%
     discount factor for time and certain discount  factors for risk,  location,
     type   of   ownership   interest,   category   of   reserves,   operational
     characteristics,  and other  factors.  In the first  quarter  of 1996,  the
     Company recognized a non-cash impairment  provision of $333,294 for certain
     oil and gas properties  primarily due to downward reserve  revisions on the
     Lake Decade acquisition.  The Lake Decade acquisition  included significant
     reserves  that  were  considered  "proved"  but not yet  developed.  Proved
     undeveloped  reserves  were  assigned  to  these  leases  based  on  offset
     production in existing wells and on geologic  mapping of the existing wells
     north of the producing wells.  Enex and its affiliated  entities owned less
     than 10% of this acquisition.  The other working interest owners which held
     the remaining  interest in the  acquisition,  including the operator of the
     field, also carried these reserves as "proved  undeveloped"  reserves prior
     to 1996.  Wells  drilled  near the  acquisition  in an attempt to  increase
     production from the field were dry holes.  Revised geologic mapping,  based
     on  production  from  existing  wells and the  unsuccessful  wells  drilled
     offsetting the property,  indicated a much smaller productive area than had
     been  originally  calculated.  It was  determined  by the  operator  of the
     acquisition  that future  drillings could not be justified.  The well which
     was holding the lease,  which had undeveloped  reserves assigned to it, was
     recompleted  by the operator in 1996 to a zone in which the Company did not
     own an  interest.  As a  result,  the  lease  expired  and the  undeveloped
     reserves  associated  with the lease had to be  written  off.  This was the
     cause of both  the  downward  reserve  revisions  in 1996  and the  reserve
     valuation write downs taken by the Company in the first quarter of 1996.

3.       A Special  Meeting,  whose  purpose was to vote on the proposal to sell
         Partnership's  assets  and,  thereafter,  dissolve  and  liquidate  the
         partnership in accordance with the applicable provisions of the limited
         partnership agreements, commenced at 2:00 P.M. on October 28, 1997.


                                       I-5

<PAGE>
           The proxy votes received prior to the meeting were voted as follows:

                  Enex 88-89 Income & Retirement Fund, Series 1

          For                     Against
          Liquidation           Liquidation          Abstain
          ---------------   -----------------      -----------
          49.29%                   3.44%              6.53%

As indicated in the table above, while a large majority of the votes cast by the
limited partners of the Partnership  were in favor of the proposed  liquidation,
over 40% of the limited  partnership  interests  failed to vote on the proposal.
This resulted in an inability to approve the proposal by a majority of the total
outstanding limited partnerships  interests.  As such, the meeting was adjourned
until  December 1, 1997,  to allow time for a  sufficient  number of votes to be
received to attain a majority-in-interest vote on the liquidation.

Subsequent  to the Special  Meeting,  proxy votes were  received in favor of the
proposed  liquidation,  which  together with the above noted votes,  represent a
majority-in-interest vote for the liquidation.  As such, the Partnership will be
dissolved at the Special  Meeting on December 1, 1997. The  properties  owned by
the partnership will be sold and any proceeds remaining after payment of all the
partnership's debt, will be distributed to the limited partners.

Item 2.            Management's Discussion and Analysis or Plan of Operation.

Third Quarter 1996 Compared to Third Quarter 1997

Oil and gas sales for the third quarter increased from $2,946 in 1996 to $10,298
in 1997.  This  represents an increase of $7,352 (250%).  Oil sales increased by
$502 or 18%. A 67% increase in average net oil prices increased sales by $1,295.
This increase  partially  offset by a 27% decrease in oil production.  Gas sales
increased  by $6,850 or 3200%.  An 1,119%  increase in the average net gas sales
price increased gas sales by $6,484. A 171% increase in gas production increased
sales by an additional $366. The decrease in oil production was primarily due to
natural production declines. The increase in gas production was primarily due to
lower production in 1996 from the Corinne acquisition which had been shut-in for
workovers in the third quarter of 1996. The increases in the average net oil and
gas sales price were primarily due to lower  operating costs charged against the
Company's net profits royalty properties,  especially at the Bagley acquisition,
which had a workover in the third quarter of 1996.

Depletion  expense  increased from a negative $877, in the third quarter of 1996
to $4,182 in the third quarter of 1997.  This  represents an increase of $5,059.
The negative  depletion  expense in the third  quarter of 1996 was the result of
accrual reversals for production from the Corinne field, which was shut-in 1996.
The changes in production,  noted above,  increased depletion expense by $4,212.
An increase in the depletion rate increased  depletion  expense by an additional
$847.  This rate  increase  was  primarily  the  result of a  relatively  higher
production from properties with a higher depletion rate.


                                       I-6

<PAGE>

General and  administrative  expenses increased from $3,428 in 1996 to $8,898 in
1997.  This  increase of $5,470 (160%) is primarily due to more staff time being
required to manage the Company's operations.

First Nine Months in 1996 Compared to First Nine Months in 1997

Oil and gas sales for the first nine months  increased  from  $29,224 in 1996 to
$34,375  in 1997.  This  represents  an  increase  of  $5,151  (18%).  Oil sales
decreased  by $190 (2%).  A 27%  decrease  in oil  production  reduced  sales by
$2,472.  This decrease was partially offset by a 34% increase in the average net
oil sales  price.  Gas sales  increased  by $5,341 or 27%. A 35% increase in gas
production increased sales by $6,914. This increase was partially offset by a 6%
decrease in the average net gas sales price.  The decrease in oil production was
primarily  the  result of natural  production  declines,  which were  especially
pronounced  on the  Bagley  acquisition.  The  increase  in gas  production  was
primarily due to lower production in 1996 from the Corinne acquisition which had
been  shut-in  for a  workover  in the third  quarter  of 1996,  coupled  with a
successful workover on the T.A. Richardson 6-2 in the Corinne acquisition in the
first  quarter  of  1997.  The  increase  in the  average  net oil  sales  price
corresponds  with higher  prices in the overall  market for the sale of oil. The
decrease  in the  average  net  gas  sales  price  is due to  relatively  higher
production from properties with a lower average net gas sales price.

Depletion  expense  decreased  from  $16,177 in the first nine months of 1996 to
$12,560 in the first nine months of 1997.  This  represents a decrease of $3,617
(22%). A 32% decrease in the depletion rate reduced depletion expense by $5,924.
This decrease was partially offset by the changes in production noted above. The
decrease in the depletion  rate was  primarily due to an upward  revision of the
gas reserves during December 1996.

The  Financial  Accounting  Standards  Board has issued  Statement  of Financial
Accounting  Standard  ("SFAS")  No.  121,  "Accounting  for  the  Impairment  of
Long-Lived  Assets and for Long-Lived  Assets to be Disposed Of," which requires
certain assets to be reviewed for impairment  whenever  events or  circumstances
indicate  the   carrying   amount  may  not  be   recoverable.   Prior  to  this
pronouncement,  the Company  assessed  properties  on an aggregate  basis.  Upon
adoption of SFAS 121, the Company  began  assessing  properties on an individual
basis, wherein total capitalized costs may not exceed the property's fair market
value.  The fair market value of each property was  determined by H. J. Gruy and
Associates,  ("Gruy").  To determine the fair market value,  Gruy estimated each
property's oil and gas reserves, applied certain assumptions regarding price and
cost  escalations,  applied a 10% discount factor for time and certain  discount
factors for risk,  location,  type of ownership interest,  category of reserves,
operational  characteristics,  and other factors.  In the first quarter of 1996,
the Company recognized a non-cash  impairment  provision of $333,294 for certain
oil and gas properties  primarily due to downward reserve  revisions on the Lake
Decade acquisition.  The Lake Decade acquisition  included  significant reserves
that were considered "proved" but not yet developed. Proved undeveloped reserves
were assigned to these leases based on offset  production in existing  wells and
on geologic mapping of the existing wells north of the producing wells. Enex and
its  affiliated  entities  owned  less than 10% of this  acquisition.  The other
working  interest owners which held the remaining  interest in the  acquisition,
including  the  operator of the field,  also carried  these  reserves as "proved
undeveloped"  reserves prior to 1996.  Wells drilled near the  acquisition in an
attempt to increase production from the field were dry holes.


                                       I-7

<PAGE>
evised  geologic  mapping,  based on  production  from  existing  wells and the
unsuccessful  wells drilled  offsetting  the property,  indicated a much smaller
productive  area than had been originally  calculated.  It was determined by the
operator of the acquisition  that future  drillings could not be justified.  The
well which was holding the lease, which had undeveloped reserves assigned to it,
was  recompleted  by the operator in 1996 to a zone in which the Company did not
own an interest.  As a result,  the lease expired and the  undeveloped  reserves
associated  with the lease had to be written off. This was the cause of both the
downward reserve  revisions in 1996 and the reserve  valuation write downs taken
by the Company in the first quarter of 1996.

General and administrative expenses increased from $12,622 in 1996 to $15,941 in
1997.  This  increase of $3,319 (26%) is primarily  due to more staff time being
required to manage the Company's operations.

CAPITAL RESOURCES AND LIQUIDITY

The Company's cash flow from  operations is a direct result of the amount of net
proceeds  realized  from the sale of oil and gas  production.  Accordingly,  the
changes in cash flow from 1996 to 1997 are  primarily  due to the changes in oil
and gas sales described above.

A  Special  Meeting,  whose  purpose  was  to  vote  on  the  proposal  to  sell
Partnership's assets and, thereafter,  dissolve and liquidate the partnership in
accordance with the applicable provisions of the limited partnership agreements,
commenced at 2:00 P.M. on October 28, 1997.

           The proxy votes received prior to the meeting were voted as follows.

                  Enex 88-89 Income & Retirement Fund, Series 1

          For                      Against
          Liquidation            Liquidation          Abstain
          ---------------    ----------------    ------------------
          49.29%                    3.44%              6.53%

As indicated in the table above, while a large majority of the votes cast by the
limited partners of the Partnership  were in favor of the proposed  liquidation,
over 40% of the limited  partnership  interests  failed to vote on the proposal.
This resulted in an inability to approve the proposal by a majority of the total
outstanding limited partnerships  interests.  As such, the meeting was adjourned
until  December 1, 1997,  to allow time for a  sufficient  number of votes to be
received to attain a majority-in-interest vote on the liquidation.

Subsequent  to the Special  Meeting,  proxy votes were  received in favor of the
proposed  liquidation,  which  together with the above noted votes,  represent a
majority-in-interest vote for the liquidation.  As such, the Partnership will be
dissolved at the Special  Meeting on December 1, 1997. The  properties  owned by
the partnership will be sold and any proceeds remaining after payment of all the
partnership's debt, will be distributed to the limited partners.

                                       I-8

<PAGE>
                           PART II. OTHER INFORMATION

         Item 1.   Legal Proceedings.

                   None

         Item 2.   Changes in Securities.

                   None

         Item 3.   Defaults Upon Senior Securities.

                   Not Applicable

         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)  There are no exhibits to this report.

                   (b)   The  Company  filed no  reports  on Form 8-K during the
                         quarter ended September 30, 1997.

                                      II-1

<PAGE>

                                   SIGNATURES


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


                                                           ENEX 88-89 INCOME AND
                                                RETIREMENT FUND - SERIES 1, L.P.
                                                                    (Registrant)



                                                   By:ENEX RESOURCES CORPORATION
                                                                 General Partner



                                                          By: /s/ James A. Klein
                                                             -------------------
                                                                  James A. Klein
                                                        Secretary, Treasurer and
                                                        Chief Financial Officer




November 11, 1997                                        By: /s/ Larry W. Morris
                                                             -------------------
                                                                 Larry W. Morris
                                                            Controller and Chief
                                                              Accounting Officer

                                       S-1