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 June 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

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

                                                              JUNE 30,
ASSETS                                                          1997
                                                       ---------------------
                                                            (Unaudited)
CURRENT ASSETS:
<S>                                                    <C>                 
  Cash                                                 $             12,645
  Accounts receivable - oil & gas sales                              16,709
                                                       ---------------------

Total current assets                                                 29,354
                                                       ---------------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests                                              1,578,968
  Less accumulated depletion                                      1,540,017
                                                       ---------------------

Property, net                                                        38,951
                                                       ---------------------

TOTAL                                                  $             68,305
                                                       =====================

LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)

CURRENT LIABILITIES:
   Payable to general partner                          $             80,726
                                                       ---------------------

PARTNERS' CAPITAL (DEFICIT):
   Limited partners                                                 (19,092)
   General partner                                                    6,671
                                                       ---------------------

Net partners' capital (deficit)                                     (12,421)
                                                       ---------------------

TOTAL                                                  $             68,305
                                                       =====================

Number of $500 Limited Partner units outstanding                      3,605

</TABLE>



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

                                       I-1

<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------
<TABLE>
<CAPTION>
 
(UNAUDITED)                              QUARTER ENDED                        SIX MONTHS ENDED
                              -------------------------------    --------------------------------

                                   JUNE 30,          JUNE 30,          JUNE 30,          JUNE 30,
                                     1997              1996              1997              1996
                              --------------    -------------    --------------    --------------

REVENUES:
<S>                            <C>              <C>              <C>              <C>          
  Oil and gas sales            $      3,384     $     11,107     $      24,077    $      26,278
                              --------------    -------------    --------------   --------------
                                                   
EXPENSES:                                          
  Depletion                           1,376            6,835             8,378           17,054
  Impairment of property                  -                -                 -          333,294
  Production taxes                      (18)           1,582             1,029            2,756
  General and administrative          3,669            3,994             7,043            9,194
                              --------------    -------------    --------------   --------------
                                                   
Total expenses                        5,027           12,411            16,450          362,298
                              --------------    -------------    --------------   --------------
                                                   
NET INCOME (LOSS)               $    (1,643)    $     (1,304)    $       7,627    $    (336,020)
                              ==============    =============    ==============   ==============

</TABLE>


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

                                       I-2


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

STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
FOR THE SIX MONTHS ENDED JUNE 30, 1997
-------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                         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                            7,627              1,602            6,025                2
                               -------------     --------------   --------------   --------------

BALANCE, JUNE 30, 1997         $    (12,421)     $       6,671    $     (19,092)(1)$          (5)
                               =============     ==============   ==============   ==============
</TABLE>



(1)  Includes 437 units purchased by the general partner as a limited partner.




See accompanying notes to financial statements.
-------------------------------------------------------------------------
                                       I-3

<PAGE>
ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
                                                                    SIX MONTHS ENDED
                                                           --------------------------------

                                                              JUNE 30,          JUNE 30,
                                                                1997              1996
                                                           -------------      -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                        <C>                 <C>              
Net income (loss)                                          $      7,627        $  (336,020)     
                                                           -------------      -------------

Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
  Depletion                                                       8,378             17,054
  Impairment of property                                              -            333,294
(Increase) decrease in:
  Accounts receivable - oil & gas sales                           1,506            (15,359)
Increase (decrease) in:
   Accounts payable                                              (2,485)            (2,358)
   Payable to general partner                                    (5,705)             5,130
                                                           -------------      -------------

Total adjustments                                                 1,694            337,761
                                                           -------------      -------------

NET INCREASE IN CASH                                              9,321              1,741
                                                           -------------      -------------

CASH AT BEGINNING OF YEAR                                         3,324                473
                                                           -------------      -------------

CASH AT END OF PERIOD                                      $     12,645        $     2,214      
                                                           =============      =============
                                                                                      
</TABLE>




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





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  driled  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  writedowns  taken by the Company in the first
          quarter of 1996.

3.       On April 24, 1997, the Company's General Partner submitted  preliminary
         proxy material to the Securities  Exchange Commission with respect to a
         proposed liquidation of the Company.




                                       I-5

<PAGE>




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


Second Quarter 1996 Compared to Second Quarter 1997

Oil and gas sales for the  second  quarter  decreased  from  $11,107  in 1996 to
$3,384 in 1997. This represents a decrease of $7,723 (70%).  Oil sales increased
by $2,173.  A 111% increase in average net oil prices increased sales by $1,771.
A 34% increase in oil  production  increased  sales by an additional  $402.  Gas
sales  decreased  by $9,896 or 99%. An 83%  decrease in gas  production  reduced
sales by $8,207.  A 99%  decrease in the  average  gas net sales  price  further
decreased  sales by $1,689.  The decrease in oil production was primarily due to
natural production declines. The decrease in gas production was primarily due to
lower  production  from the  Corinne  acquisition  which  had been  shut-in  for
woekovers  in the second  quarter of 1997.  The  increase in the average net oil
sales price was  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 second  quarter of 1996. The decrease in the average
net gas sales price was primarily due to relatively  lower  production  from the
Corinne acquisition which has a higher gas sales price.

Depletion  expense decreased from $6,835 in the second quarter of 1996 to $1,376
in the second quarter of 1997. This  represents a decrease of $5,459 (80%).  The
changes in production,  noted above,  reduced depletion expense by $4,313. A 45%
decrease  in the  depletion  rate  reduced  depletion  expense by an  additional
$1,146.  This rate  decrease was  primarily  the result of a  relatively  higher
production  from  properties  with a lower depletion rate coupled with an upward
revision of the gas reserves during December 1996.

General and  administrative  expenses decreased from $3,994 in 1996 to $3,669 in
1997.  This  decrease  of $325 (8%) is  primarily  due to less  staff time being
required to manage the Company's operations.


First Six Months in 1996 Compared to First Six Months in 1997

Oil and gas sales for the first six  months  decreased  from  $26,278 in 1996 to
$24,077 in 1997.  This represents a decrease of $2,201 (8%). Oil sales decreased
by $692 or 11. A 24% decrease in oil  production  reduced sales by $1,590.  This
decrease  was  partially  offset by an 18% decrease in the average net oil sales
price.  Gas sales  decreased by $1,509 or 8%. A 23%  decrease in gas  production
reduced sales by $4,533. This decrease was partially offset by a 20% increase in
the average 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 decrease in gas  production was primarily due to lower
production from the Corinne acquisition which had been shut-in for a workover in
the second  quarter of 1997,  partially  offset by a successful  workover on the
T.A. Richardson 6-2 in the Corinne acquisition in the first quarter of 1997. The
increases in the average


                                       I-6

<PAGE>



net sales prices  correspond  with higher  prices in the overall  market for the
sale of oil and gas.

Depletion  expense  decreased  from  $17,054  in the first six months of 1996 to
$8,378 in the first six months of 1997.  This  represents  a decrease  of $8,676
(51%).  The decline in production,  noted above,  reduced  depletion  expense by
$4,030.  A 36% decrease in the depletion  rate reduced  depletion  expense by an
additional  $4,646.  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.  Revised geologic
mapping,  based on production  from existing  wells and the  unsuccessful  wells
driled  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 writedowns taken by
the Company in the first quarter of 1996.

General and  administrative  expenses decreased from $9,194 in 1996 to $7,043 in
1997.  This  decrease of $2,151 (23%) is primarily  due to less staff time being
required to manage the Company's operations.

CAPITAL RESOURCES AND LIQUIDITY



                                       I-7

<PAGE>



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.  It is the  general  partner's  intention  to
distribute  substantially  all of  the  Company's  available  cash  flow  to the
Company's partners.

The Company will continue to recover its reserves and  distribute to the limited
partners the net proceeds realized from the sale of oil and gas production after
payment of its debt obligations.  Distribution  amounts are subject to change if
net revenues  are greater or less than  expected.  The general  partner does not
intend to accelerate  the repayment of the debt beyond the cash flow provided by
operating activities. Based upon current projected cash flows from its property,
it does not  appear  that  the  Company  will  have  sufficient  cash to pay its
operating expenses, repay its debt obligations and pay distributions.

On April 24, 1997, the Company's  General Partner  submitted  preliminary  proxy
material  to the  Securities  Exchange  Commission  with  respect  to a proposed
liquidation of the Company.




                                       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 June 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/ R. E. Densford
                                                                  R. E. Densford
                                                       Vice President, Secretary
                                                   Treasurer and Chief Financial
                                                                         Officer




August 11, 1997                                         By: /s/ James A. Klein
                                                             -------------------
                                                                  James A. Klein
                                                            Controller and Chief
                                                              Accounting Officer







                                       S-1