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 March 31, 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 May 6, 1998, 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
<TABLE>
<CAPTION>
                                                            March 31        June 30
ASSETS                                                        1998            1997
                                                              ----            ----
                                                           (Unaudited)
<S>                                                        <C>            <C>        
CURRENT ASSETS:
   Cash and cash equivalents                               $    12,492    $    10,238
   Investment in U.S. Government Treasury Bills                301,338        388,089
   Investment in common stock of Parlux Fragrances, Inc.        48,187         62,967
   Other current assets                                          5,583          5,818
                                                           -----------    -----------

TOTAL ASSETS                                               $   367,600    $   467,112
                                                           ===========    ===========


LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Accounts payable                                        $    10,609    $     9,694
   Accrued expenses                                              8,720          6,524
   Convertible notes payable                                    19,500         19,500
                                                           -----------    -----------

              Total current liabilities                         38,829         35,718
                                                           -----------    -----------

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                                      (8,815,354)    (8,727,512)
   Unrealized loss on investment                              (227,508)      (212,727)
                                                           -----------    -----------

              Total stockholders' equity                       317,571        420,194
                                                           -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                 $   367,600    $   467,112
                                                           ===========    ===========
</TABLE>
      The accompanying notes are an integral part of these balance sheets.
                                       -2-
<PAGE>
                             FBR CAPITAL CORPORATION

                            STATEMENTS OF OPERATIONS
                    NINE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)


                                                         1998           1997
                                                         ----           ----

Operating expenses                                   $  (100,532)   $  (129,135)
                                                     -----------    -----------

              Loss from operations                      (100,532)      (129,135)
                                                     -----------    -----------

Other income (expense):
   Other income                                            1,304         15,018
   Interest expense                                       (2,196)        (6,723)
   Gain on extinguishment of debt                           --           53,385
   Interest income                                        13,581         16,241
                                                     -----------    -----------

              Other income (expense), net                 12,689         77,921
                                                     -----------    -----------

   Net loss                                          $   (87,843)   $   (51,214)
                                                     ===========    ===========


Loss per common share and common share equivalents   $      (.02)   $      (.01)
                                                     ===========    ===========


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

      The accompanying notes are an integral part of these balance sheets.
                                       -3-
<PAGE>
                             FBR CAPITAL CORPORATION

                            STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)



                                                         1998           1997
                                                         ----           ----

Operating expenses                                   $   (27,605)   $   (46,668)
                                                     -----------    -----------

              Loss from operations                       (27,605)       (46,668)
                                                     -----------    -----------

Other income (expense):
   Interest expense                                         (721)          (721)
   Other income                                             --           15,018
   Interest income                                         4,053          5,533
                                                     -----------    -----------

              Other income (expense), net                  3,332         19,830
                                                     -----------    -----------

   Net loss                                          $   (24,273)   $   (26,838)
                                                     ===========    ===========

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


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

      The accompanying notes are an integral part of these balance sheets.
                                       -4-
<PAGE>
                             FBR CAPITAL CORPORATION

                            STATEMENTS OF CASH FLOWS
                    NINE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                       1998         1997
                                                                       ----         ----
<S>                                                                 <C>          <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                         $ (87,843)   $ (51,214)
                                                                    ---------    ---------
   Adjustments to reconcile net loss to net cash
    used in operating activities:
      Gain on extinguishment of debt                                     --        (53,385)
      (Increase) decrease in:
        Other assets                                                      235      (20,856)
      Increase (decrease) in:
        Accounts payable and accrued expenses                           3,111     (208,255)
                                                                    ---------    ---------

              Total adjustments                                         3,346     (282,496)
                                                                    ---------    ---------


              Net cash used in operating activities                   (84,497)    (333,710)
                                                                    ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Receipt of amount due from acquiror of discontinued operations        --        750,000
   Investment in U.S. Government Treasury Bills, net                     --       (380,339)
   Proceeds from sale of U.S. Government Treasury Bills                86,751         --
                                                                    ---------    ---------

              Net cash provided by investing activities                86,751      369,661
                                                                    ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayment of convertible notes payable                                --        (62,500)
                                                                    ---------    ---------

              Net cash used in financing activities                      --        (62,500)
                                                                    ---------    ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                    2,254      (26,549)

CASH AND CASH EQUIVALENTS, beginning of period                         10,238       61,871
                                                                    ---------    ---------

CASH AND CASH EQUIVALENTS, end of period                            $  12,492    $  35,322
                                                                    =========    =========
</TABLE>

Non-cash financing activities:

   On October 21,  1996,  the  Company  completed  extinguishment  of $97,500 of
   Convertible  Notes in exchange for an  aggregate  of $62,500 in cash,  11,500
   shares of the  Company's  Common  Stock,  and five  three-year  Warrants (the
   Warrants)  each to purchase up to 2,500 shares of the Company's  Common Stock
   at $2 per share.  The total amount of debt  (including  principal and accrued
   but  unpaid  interest  of  $22,525)  extinguished  pursuant  to the  exchange
   aggregated  $120,025.  This amount,  less the cash paid,  value of the common
   stock  and  the  Warrants  issued  in  the  exchange  offer,  resulted  in an
   extraordinary gain on the extinguishment of debt in the amount of $53,385.

      The accompanying notes are an integral part of these balance sheets.
                                       -5-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                    NINE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (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 nine month and three  month  periods  ended March 31,
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, 1997.

Cash and Cash Equivalents and Investments

The Company's policy is to invest cash in excess of expenditure  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".

The  Company's  investment  in  common  stock  of  Parlux  Fragrances,  Inc.  is
classified as "available for sale". Changes in the market value are reflected in
the  stockholders'  equity  section of the  Company's  balance  sheet  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 $6,600,000 at
March 31, 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
2012.  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.
                                       -6-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                    NINE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (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.

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  March  31,  1998,  the  Company  had  approximately   $12,000  in  cash  and
approximately  $301,000 in U.S.  Government  Treasury Bills. The Company expects
that it will earn approximately  $18,000 from interest during the current fiscal
year ending June 30, 1998.

Corporate and  administrative  expenses for the current fiscal year are expected
to be approximately $115,000 including $70,000 in fees and expense reimbursement
to the directors,  $15,000 for accounting fees for audit and tax returns, $6,000
for legal fees,  $12,000 for liability  insurance 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 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
                                       -7-
<PAGE>
                             FBR CAPITAL CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                    NINE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)



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 27,229  shares of Parlux  Stock and on March 31,
1998,  it had  approximately  $12,000  in cash in  banks  and  $301,000  in U.S.
Government  Treasury Bills maturing in May 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, 1998.  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  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
1934).  Factors  set forth in the  Company's  Annual  Report on Form 10K for the
fiscal  year  ended  June  30,  1997,  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.
                                       -8-
<PAGE>
                                   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:  May 6, 1998
                                        By:   /S/ Charles D. Snead, Jr.
                                              -------------------------
                                              Charles D. Snead, Jr., President
                                       -9-