SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended:   September 30, 1998 

                                                            OR

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

                           Commission File No.: 1-7986


                          Kent Financial Services, Inc.
        (Exact name of small business issuer as specified in its charter)


        Delaware                                                 75-1695953    
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


           376 Main Street, P.O. Box 74, Bedminster, New Jersey 07921
                    (Address of principal executive offices)


                                 (908) 234-0078
                           (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Check  whether  the issuer (1) 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 issuer 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 stock:  As of October 31, 1998,  the issuer had  1,992,060  shares of its
common stock, par value $.10 per share, outstanding.

     Transitional Small Business Disclosure Format (check one). Yes _____ No X



<PAGE>



PART I  - FINANCIAL INFORMATION
Item 1. - Financial Statements


<TABLE>


                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                   (UNAUDITED)

                                 ($000 Omitted)
<CAPTION>



                                                               September 30,
                                                                   1998    
                                                              --------------

<S>                                                              <C>
Cash and cash equivalents                                        $ 8,918
Securities owned                                                   3,651
Net receivable from clearing broker                                  352
Property and equipment:
     Land and building                                             1,440
     Office furniture and equipment                                  248
                                                                 -------
                                                                   1,688
     Accumulated depreciation                                   (    459)
                                                                 -------
     Net property and equipment                                    1,229
                                                                 -------
Other assets                                                         300
                                                                 -------
       Total assets                                              $14,450
                                                                 =======






          See accompanying notes to consolidated financial statements.


</TABLE>



<PAGE>


<TABLE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                   (UNAUDITED)

                                 ($000 Omitted)



<CAPTION>


                                                               September 30,
                                                                   1998    
                                                              ---------------
<S>                                                             <C>
Liabilities:
   Accounts payable and accrued expenses                         $ 1,389
   Long-term debt                                                    495
   Accrual for discontinued operations                               363
                                                                 -------
        Total liabilities                                          2,247
                                                                 -------

Stockholders' equity:
   Preferred stock without par value, 500,000
     shares authorized; none issued                                    -
   Common stock, $.10 par value, 4,000,000
     shares authorized; 1,992,164 issued
       and outstanding                                               199
   Additional paid-in capital                                     14,996
   Accumulated deficit                                          (  2,992)
                                                                 -------
        Total stockholders' equity                                12,203
                                                                 -------
        Total liabilities and stockholders' equity               $14,450
                                                                 =======




          See accompanying notes to consolidated financial statements.

                                                          
</TABLE>


<PAGE>


<TABLE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                      ($000 Omitted, except per share data)

<CAPTION>



                                                         Three Months Ended
                                                            September 30,  
                                                      -------------------------
                                                       1998               1997 
                                                      ------             ------
<S>                                                  <C>                 <C>
Revenues:
     Brokerage commissions and fees                   $  412             $  474
     Principal transactions:
       Trading                                            87                418
       Investing losses                              (   393)           (     5)
     Interest, dividends and other                       250                238
                                                      ------             ------
                                                         356              1,125
                                                      ------             ------

Expenses:
     Brokerage                                           339                582
     General, administrative and other                   600                583
     Interest                                             82                 89
                                                      ------             ------
                                                       1,021              1,254
                                                      ------             ------

Loss before income taxes                             (   665)           (   129)
Benefit for income taxes                             (   113)           (    20)
                                                      ------             ------
Net loss                                             ($  552)           ($  109)
                                                      ======             ======

Basic net loss per common share                      ($  .28)           ($  .05)
                                                      ======             ======

Diluted net loss per common share                    ($  .28)           ($  .05)
                                                      ======             ======

Weighted average number of common
  shares outstanding (in 000's)                        1,992              2,044
                                                      ======             ======



          See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>


<TABLE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (UNAUDITED)

                      ($000 Omitted, except per share data)


<CAPTION>

                                                         Nine Months Ended
                                                           September 30,  
                                                    ----------------------------
                                                      1998                1997  
                                                    --------            --------
<S>                                                 <C>                 <C>
Revenues:
     Brokerage commissions and fees                  $1,425              $1,247
     Principal transactions:
       Trading                                          442               1,203
       Investing gains (losses)                       1,174             (   577)
     Interest, dividends and other                      747                 658
                                                     ------              ------
                                                      3,788               2,531
                                                     ------              ------

Expenses:
     Brokerage                                        1,288               1,638
     General, administrative and other                2,136               1,544
     Interest                                           211                 214
                                                     ------              ------
                                                      3,635               3,396
                                                     ------              ------

Earnings (loss) before income taxes                     153             (   865)
Benefit for income taxes                            (    60)            (    85)
                                                     ------              ------
Net earnings (loss)                                  $  213             ($  780)
                                                     ======              ======

Basic net earnings (loss) per
  common share                                       $  .11             ($  .38)
                                                     ======              ======

Diluted net earnings (loss) per
  common share                                       $  .11             ($  .38)
                                                     ======              ======

Weighted average number of common
  shares outstanding (in 000's)                       2,006               2,064
                                                     ======              ======




          See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>


<TABLE>

                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                 ($000 Omitted)

<CAPTION>


                                                         Nine Months Ended
                                                           September 30,    
                                                     --------------------------
                                                      1998                1997 
                                                     ------              ------
<S>                                                 <C>                 <C>
Cash flows from operating activities:
     Net earnings (loss)                             $  213             ($  780)
     Adjustments:
       Depreciation and amortization                     38                  42
       Unrealized (gains) losses on
         marketable securities                      (   495)                766
       Change in marketable securities
         and U.S. Treasury securities                 2,535               2,505
       Change in net receivable from
         clearing broker                            (   283)            (   882)
       Change in accounts payable and
         accrued expenses                               372             (   329)
       Other, net                                   (    72)            (    25)
                                                     ------              ------
       Net cash provided by operating
         activities                                   2,308               1,297
                                                     ------              ------


Cash flows from investing activities -
     Purchase of equipment                          (    11)            (    27)
                                                     ------              ------
       Net cash used in
         investing activities                       (    11)            (    27)
                                                     ------              ------

Cash flows from financing activities:
     Purchase of common stock                       (   124)            (   188)
     Payments on debt                               (    23)            (    23)
                                                     ------              ------
       Net cash used in financing
         activities                                 (   147)            (   211)
                                                     ------              ------
Net increase in cash and cash
  equivalents                                         2,150               1,059
Cash and cash equivalents at
  beginning of period                                 6,768               7,109
                                                     ------              ------
Cash and cash equivalents at end of
  period                                             $8,918              $8,168
                                                     ======              ======
Supplemental disclosure of cash 
  flow information:
     Cash paid for:
       Interest expense                              $  211              $  214
                                                     ======              ======
       Taxes                                         $   29              $  117
                                                     ======              ======



          See accompanying notes to consolidated financial statements.

</TABLE>
                                                           

<PAGE>



                 KENT FINANCIAL SERVICES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1998 AND 1997

                                   (Unaudited)


1.   Financial Condition and Operating Results
     -----------------------------------------

     The  accompanying  unaudited  consolidated  financial  statements  of  Kent
Financial  Services,  Inc. and subsidiaries  (the "Company") as of September 30,
1998 and for the three and nine month periods ended  September 30, 1998 and 1997
reflect all material adjustments consisting of only normal recurring adjustments
which,  in the opinion of management,  are necessary for a fair  presentation of
results for the interim periods.  Certain  information and footnote  disclosures
required under generally accepted  accounting  principles have been condensed or
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission,  although the Company  believes that the disclosures are adequate to
make the information  presented not  misleading.  These  consolidated  financial
statements  should  be  read  in  conjunction  with  the  year-end  consolidated
financial  statements and notes thereto  included in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1997 as filed with the Securities
and Exchange Commission.

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates. Prior years'
financial  statements  have been  reclassified  to conform to the current year's
presentation.

     The  results  of  operations  for the three and nine  month  periods  ended
September 30, 1998 and 1997 are not necessarily  indicative of the results to be
expected for the entire year or for any other period.


<PAGE>



2.   Business
     --------

     The Company's  business is comprised  principally of the operation of T. R.
Winston  &  Company,  Inc.  ("Winston"),  a  wholly-owned  subsidiary,  and  the
management  of Asset  Value Fund  Limited  Partnership  ("AVF"),  an  investment
partnership  whose  primary  purpose is to make large  investments  in a limited
number of portfolio companies whose securities are considered undervalued by the
partnership's management.  Winston is a licensed securities broker-dealer and is
a member  of the  National  Association  of  Securities  Dealers,  Inc.  and the
Securities Investor Protection  Corporation.  All safekeeping,  cashiering,  and
customer   account   maintenance   activities   are  provided  by  an  unrelated
broker-dealer under a clearing agreement.

     Pursuant to the net  capital  provisions  of Rule 15c3-1 of the  Securities
Exchange Act of 1934,  Winston is required to maintain  minimum net capital.  At
September  30,  1998,  Winston had net  capital,  as defined,  of  approximately
$618,000 which was $518,000 in excess of the required minimum.


3.   Securities Owned
     ----------------

     Substantially  all  securities  are  owned  by AVF and  consist  of  equity
securities valued at market value.


4.   Net Earnings (Loss) Per Common Share
     ------------------------------------

     Net  earnings  (loss) per common share is  calculated  in  accordance  with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
No. 128") and is based on the  weighted  average  number of shares  outstanding.
Diluted  earnings per share includes the assumed  conversion of shares  issuable
upon  exercise of options  where  appropriate.  Prior years'  earnings per share
information  has been restated to comply with the  requirements of SFAS No. 128.
All share amounts and per share data have been restated to reflect a two-for-one
stock split,  effected in the form of a stock dividend,  declared on October 15,
1998 and payable on November 9, 1998 to holders of record October 26, 1998.




                                                         

<PAGE>



Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations
          -----------------------------------

Liquidity and Capital Resources
-------------------------------

     Kent Financial  Services,  Inc. (the "Company") had  consolidated  cash and
cash equivalents  (U.S.  Treasury bills with an original maturity of ninety days
or less) of $8.9 million at September  30, 1998.  At the same date,  the Company
also had securities  owned of $3.7 million.  See Note 3 of Notes to Consolidated
Financial  Statements for additional  information on the valuation of securities
owned.

     Net cash  provided by  operations  was $2.3 million and $1.3 million in the
nine months  ended  September  30, 1998 and 1997,  respectively.  Cash flow from
operations  for the nine months  ended  September  30, 1998  increased  from the
comparable  period in 1997 principally  from net income,  the change in accounts
payable and accrued  expenses and the change in the net receivable from clearing
broker, partially offset by the change in unrealized  gains/losses on securities
owned.

     Net cash used in financing activities of $147,000 and $211,000 for the nine
month  periods  ended  September  30,  1998  and  1997,  respectively,  resulted
principally  from the Company's  purchase and retirement of its common stock and
the  continued  payments  on the  mortgage  loan  collateralized  by the Company
headquarters facility. The Company believes that its liquidity is sufficient for
future operations.


Material Changes in Results of Operations
-----------------------------------------

     The Company had a net loss of $552,000,  or $.28 basic loss per share,  for
the three months ended  September 30, 1998 compared to a net loss of $109,000 or
$.05 basic loss per share, for the comparable  quarter in 1997. Diluted loss per
share was $.28 and $.05 for the  quarters  ended  September  30,  1998 and 1997,
respectively.  For the nine months  ended  September  30,  1998,  net income was
$213,000 or $.11 basic earnings per share, compared to a net loss of $780,000 or
$.38 basic loss per share,  for the  comparable  period in the prior  year.  The
diluted earnings (loss) per share was $.11 and ($.38) for the nine month periods
ended September 30, 1998 and 1997, respectively.




<PAGE>



     Total  brokerage  income  (consisting  of brokerage  commissions,  fees and
trading  gains) for the three months ended  September 30, 1998 was  $499,000,  a
decrease of $393,000, or 44%, from $892,000 in the comparable 1997 period. Total
brokerage  income was $1,867,000 for the nine months ended September 30, 1998, a
decrease of  $583,000 or 24% from  $2,450,000  for the nine month  period  ended
September  30,  1997.  Brokerage  expenses  (including  all fixed  and  variable
expenses)  decreased by $243,000,  or 42%,  from  $582,000 in the quarter  ended
September 30, 1997,  to $339,000 for the three months ended  September 30, 1998.
For the nine months ended September 30, 1998, brokerage expenses were $1,288,000
compared to $1,638,000 for the  comparable  period in the prior year, a decrease
of $350,000 or 21%.  Net  brokerage  income of  $160,000  for the quarter  ended
September 30, 1998 decreased by $150,000 or 48% from $310,000 for the comparable
period of the prior year.  For the nine month period ended  September  30, 1998,
net  brokerage  income was  $579,000,  compared to $812,000  for the nine months
ended September 30, 1997, a decrease of $233,000 or 29%.

     The decrease in total brokerage  income,  total  brokerage  expense and net
brokerage  income for the  quarter  and nine  months  ended  September  30, 1998
compared  to the  comparable  periods of 1997 was due to a decrease in the total
number of brokers employed at T. R. Winston & Company,  Inc. in 1998 compared to
1997.  These  decreases  were  partially  offset by  investment  banking fees of
$29,000 and $164,000 for the quarter and nine months ended September 30, 1998.

     Net investing  (losses) gains were  ($393,000) and $1,174,000 for the three
and  nine  months  ended  September  30,  1998,  respectively,  compared  to net
investing losses of $5,000 and $577,000 for the comparable  periods in 1997. The
changes in net  investing  gains  (losses) from the three and nine month periods
ended September 30, 1997 to the comparable periods in 1998 reflected the changes
in general market conditions and the composition of the investment portfolio.

     Interest, dividend and other income was $250,000 and $747,000 for the three
and nine months ended September 30, 1998, respectively, compared to $238,000 and
$658,000 for the three and nine months ended  September 30, 1997,  respectively.
This increase was a result of higher  invested  balances due to the reduction of
marketable securities.




<PAGE>



     General and  administrative  expenses  were  $600,000  and $583,000 for the
quarters ended September 30, 1998 and 1997, respectively, an increase of $17,000
or 3%. The increase in general and administrative  expense for the quarter ended
September  30,  1998  versus  the  quarter  ended  September  30,  1997  was due
principally to legal fees and other expenses incurred in connection with a proxy
solicitation in one of the securities owned by the Company.

     For the nine month periods ended  September 30, 1998 and 1997,  general and
administrative expenses were $2,136,000 and $1,544,000 respectively, an increase
of $592,000 or 38%. This  increase for the nine months ended  September 30, 1998
compared to the same period in 1997 is principally  due to the following  items:
(i)  $200,000  provision  for start up costs of a  subsidiary  that will provide
telephone services in the New England region, (ii) $160,000 increase in employee
bonus  accruals,  (iii)  $75,000 for legal  expenses,  (iv) $75,000  increase in
business development expenses and (v) $80,000 in expenses incurred in connection
with a proxy solicitation in one of the securities owned by the Company.


Year 2000 Matters
-----------------

     The Year 2000 Issue is the result of computer  programs being written using
two digits rather than four to define the applicable  year. Any of the Company's
computer programs that have time-sensitive  software  may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process transactions or engage in similar
normal business activities.

     Management  has  determined   that  the  year  2000  issue  will  not  pose
significant  operational  problems for its internal computer systems.  All costs
associated  with this  conversion  are being  expensed as  incurred.  Due to the
critical  relationship  with the  Company's  clearing  broker,  the Company will
develop a plan to test the  transaction  and other data provided by the clearing
broker after any required  revisions to its software.  However,  there can be no
guarantee that the systems of the clearing  broker and other  companies on which
the  Company's  systems  rely  will be  timely  converted  and would not have an
adverse effect on the Company's systems.





<PAGE>



     The Company will utilize external resources to reprogram,  or replace,  and
test  the  software  for  Year  2000  modifications.   The  Company  anticipates
completing the Year 2000 project not later than October 31, 1999, which is prior
to any anticipated impact on its operating  systems.  The total cost of the Year
2000 project is not expected to be material and will be funded through operating
cash flows.

     The costs of the project and the date on which the Company believes it will
complete the Year 2000  modifications  are based on management's  best estimate,
which were derived utilizing  numerous  assumptions of future events,  including
the continued availability of certain resources, third party modifications plans
and other factors.  However, there can be no guarantee that these estimates will
be achieved and actual results could differ materially from those anticipated.

                                                  
<PAGE>



PART II - OTHER INFORMATION
-------   -----------------

Item 4. - Submission of Matters to a Vote of Security Holders
------    ---------------------------------------------------     

     The Company held its Annual  Meeting of  Stockholders  on November 2, 1998.
Management's  nominees,  Messrs.  Paul O. Koether,  Mathew E. Hoffman,  Casey K.
Tjang and M. Michael Witte were elected to the Board of Directors.

     The following is a tabulation for all nominees:

<TABLE>
<CAPTION>


                                             For                  Withheld
                                         -----------             -----------  
     <S>                                   <C>                     <C>
     Paul O. Koether                       749,160                 23,706
     Mathew E. Hoffman                     749,290                 23,576
     Casey K. Tjang                        749,389                 23,477
     M. Michael Witte                      749,378                 23,488

</TABLE>


Item 6. - Exhibits and Reports on Form 8-K
------    --------------------------------

     (a) Exhibits
         --------

         27.   Financial Data Schedule for the nine months ended September
               30, 1998.


     (b) Reports on Form 8-K
         -------------------

        On  October  15,  1998   the   Company   filed   Form  8-K  reporting  a
        two-for-one  stock split  effected  in  the from  of  a stock  dividend.
        The  record  date  for  the  stock  split was  October  26, 1998 and the
        distribution date was November 9, 1998.


<PAGE>








                                   SIGNATURES


In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                               KENT FINANCIAL SERVICES, INC.


Dated:  November 13, 1998                      By: /s/ Mark Koscinski           
                                                   -----------------------------
                                                   Mark Koscinski
                                                   Vice President and
                                                   Principal Accounting Officer