United States
                       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, 1997

                                       OR

          [ ] 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 0-17557

             ENEX 88-89 INCOME AND RETIREMENT FUND - SERIES 1, L.P.
             (Exact name of registrant 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) (Zip Code)

               Registrant's telephone number, including area code:
                                 (713) 358-8401


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  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
<PAGE>
                              PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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

                                                             MARCH 31,
ASSETS                                                          1997
                                                       ---------------------
                                                            (Unaudited)
CURRENT ASSETS:
<S>                                                    <C>                 
  Cash                                                 $              8,055
  Accounts receivable - oil & gas sales                              22,897
                                                       ---------------------

Total current assets                                                 30,952
                                                       ---------------------

OIL & GAS PROPERTIES
  (Successful efforts accounting method) - Proved
   mineral interests                                              1,578,968
  Less accumulated depletion                                      1,538,641
                                                       ---------------------

Property, net                                                        40,327
                                                       ---------------------

TOTAL                                                  $             71,279
                                                       =====================

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
   Accounts payable                                    $              1,211
   Payable to general partner                                        80,846
                                                       ---------------------

Total current liabilities                                            82,057
                                                       ---------------------

PARTNERS' CAPITAL (DEFICIT):
   Limited partners                                                 (17,474)
   General partner                                                    6,696
                                                       ---------------------

Total partners' capital (deficit)                                   (10,778)
                                                       ---------------------

TOTAL                                                  $             71,279
                                                       =====================

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)                            THREE MONTHS ENDED
                                  ------------------------------------------

                                       MARCH 31,              MARCH 31,
                                          1997                  1996
                                  -------------------    -------------------

REVENUES:
<S>                               <C>                       <C>               
  Oil and gas sales               $           20,693        $        15,171   
                                  -------------------    -------------------

EXPENSES:
  Depletion                                    7,002                 10,219
  Impairment of property                           -                333,294
  Production taxes                             1,047                  1,174
  General and administrative                   3,374                  5,200
                                  -------------------    -------------------

Total expenses                                11,423                349,887
                                  -------------------    -------------------

NET INCOME (LOSS)                 $            9,270        $      (334,716)  
                                  ===================    ===================
</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 THREE MONTHS ENDED MARCH 31, 1997
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                 PER $500
                                                                                                  LIMITED
                                                                                                  PARTNER
                                                        GENERAL              LIMITED             UNIT OUT-
                                    TOTAL               PARTNER             PARTNERS             STANDING
                             ------------------   ------------------    -----------------    -----------------

<S>              <C>         <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                               9,270                1,627                7,643                    2
                             ------------------   ------------------    -----------------    -----------------

BALANCE, MARCH 31, 1997      $         (10,778)   $           6,696        $     (17,474)(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
------------------------------------------------------------------------------
<TABLE>
<CAPTION>

(UNAUDITED)
                                                                  THREE MONTHS ENDED
                                                            ------------------------------------------

                                                               MARCH 31,                MARCH 31,
                                                                  1997                    1996
                                                          -------------------      -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>                          <C>              
Net income (loss)                                         $            9,270           $     (334,716)  
                                                          -------------------      -------------------

Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
  Depletion                                                            7,002                   10,219
  Impairment of property                                                   -                  333,294
(Increase) in:
  Accounts receivable - oil & gas sales                               (4,682)                  (9,734)

Increase (decrease) in:
   Accounts payable                                                   (1,274)                  (2,245)
   Payable to general partner                                         (5,585)                   3,092
                                                          -------------------      -------------------

Total adjustments                                                     (4,539)                 334,626
                                                          -------------------      -------------------

NET INCREASE (DECREASE) IN CASH                                        4,731                      (90)
                                                          -------------------      -------------------

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

CASH AT END OF PERIOD                                     $            8,055             $        383   
                                                          ===================      ===================

</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  Inc.,  (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 due to market  conditions and reserve  revisions on
     the Lake Decade acquisition, which indicated that the carrying amounts were
     not fully recoverable.

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.


First Quarter 1997 Compared to First Quarter 1996

Oil and gas  sales for the  first  quarter  increased  from  $15,171  in 1996 to
$20,693  in 1997.  This  represents  an  increase  of  $5,522  (36%).  Oil sales
decreased  by $2,865 or 54%. A 56% decline in oil  production  reduced  sales by
$2,930.  This decrease was partially  offset by a 5% increase in the average net
oil sales  price.  Gas sales  increased  by $8,387 or 85%. A 40% increase in the
average net gas sales price  increased  sales by $5,215.  A 32%  increase in gas
production  increased  sales  by an  additional  $3,172.  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 the result of a successful  workover on the T.A. Richardson 6-2 in
the  Corinne  acquisition.  The  increases  in  the  average  net  sales  prices
correspond with higher prices in the overall market for the sale of oil and gas.

Depletion  expense decreased from $10,219 in the first quarter of 1996 to $7,002
in the first quarter of 1997.  This represents a decrease of $3,217 (31%). A 37%
decrease  in the  depletion  rate  reduced  depletion  expense by  $4,067.  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  Inc.,  (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 due to market conditions and reserve revisions on
the Lake Decade acquisition,  which indicated that the carrying amounts were not
fully recoverable.

General and  administrative  expenses decreased from $5,200 in the first quarter
of 1996 to $3,374 in the first quarter of 1997. This decrease of $1,826 (35%) is
primarily  due to less  staff  time  being  required  to  manage  the  Company's
operations.


                                       I-6

<PAGE>



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.  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-7

<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 March 31, 1997.


                                      II-1

<PAGE>


                                  SIGNATURES


      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  Report  to be  signed  on its  behalf by the
undersigned hereunto 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




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