<PAGE>
           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 June 30, 1998

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
     For the transition period from _________ to __________

Commission file number 33-17387  

                          ALLIANCE HEALTH, INC.                       
   (Exact name of small business issuer as specified in its charter)

        Delaware                                   75-2192377        
(State or other jurisdiction of         (IRS Employer Identification
 incorporation or organization)                      No.)


              421 E. Airport Freeway, Irving, Texas 75062
                (Address of principal executive office)

                            (214)-255-5533 
                      (Issuer's telephone number)
       ____________________________________________________________
          (Former name, former address and former fiscal year,
                      if changed since last year)

Check whether 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 registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
                           Yes   X    No  


                  APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: At June 30, 1997,
3,590,000 shares of common stock, $0.01 par value, were outstanding.

Transitional Small Business Disclosure Format (Check one):
     Yes      No    X 


<PAGE>
                       ALLIANCE HEALTH, INC.

                               INDEX


                                                        PAGE NUMBER

PART I    FINANCIAL INFORMATION

          Balance Sheets - June 30, 1998 and
            September 30, 1997                              1

          Statements of Operations  - Three Months and  
            Nine Months Ended June 30, 1998                 2

          Statement of Cash Flow - Nine Months Ended
            June 30, 1998 and 1997                          3

          Notes to Financial Statements                     4

          Management's Discussion and Analysis of 
            Financial Condition and Results of
            Operation                                      5-6



PART II   OTHER INFORMATION

          Item 5.  Exhibits and Reports on Form 8-K         7


SIGNATURES                                                  8

<PAGE>                                                  
                         ALLIANCE HEALTH, INC.

                     PART I - FINANCIAL INFORMATION

                             BALANCE SHEET

                                 ASSETS


<TABLE>
<CAPTION>
                                       Jun 30, 1998  Sep 30, 1997
                                        Unaudited      Audited

<S>                                     <C>          <C>
Current assets: 
 Cash                                   $ 435,454    $  940,716
 Accounts receivable-affiliate             54,710       178,348
 Other assets                                   0        15,528 
                                                               
  Total Current Assets                    490,164     1,134,592

Property & equipment                    2,315,981     1,234,422
 Less accumulated depreciation           (513,543)     (341,683) 
                                        _________     _________
                                        1,802,438       892,739
                                        _________     _________
                                       $2,292,602    $2,027,331

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                        
    Trade                              $        0    $   68,166 
    Affiliate                                   0         1,592
  Income taxes payable                     51,751       287,231
                                         ________     _________
    Total current liabilities              51,751       356,989

  Deferred Income Taxes                   114,236             0
                             
Stockholders' equity:
   Common stock-par value of $0.01
   per share; authorized 20,000,000,
   issued 3,590,000 shares                 35,900        35,900
  Additional paid-in capital              831,166       831,166
  Retained earnings                     1,259,549       803,276
                                        _________     _________
 Total stockholders' equity             2,126,615     1,670,342
                                        _________     _________
       Total Liabilities and Equity    $2,292,602    $2,027,331

</TABLE>
The accompanying notes are an integral part of these financial
statements

                           -1-

<PAGE>
                              ALLIANCE HEALTH, INC.
                                      

                             STATEMENT OF OPERATIONS

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                   Restated             Restated
                              Three Months Ended   Nine Months Ended 
                               Jun 30,    Jun 30,   Jun 30,   Jun 30,
                                1998       1997      1998      1997
<S>                         <C>       <C>       <C>        <C>
REVENUES:                   $ 635,500 $ 533,600 $1,808,800 $1,459,900 
                             ________ __________ __________ ________ 
              
        
EXPENSES:
 Advertising                  111,783    164,575   413,981   394,918
 Salaries & employee
  Benefits                    111,226     88,686   306,487   218,805
 Depreciation                  75,174     42,300   171,861   126,901
 General & administrative      56,249    100,259   260,485   220,941
                            _________   ________ _________ _________
                              354,432    395,820 1,152,814   961,565

  Operating income            281,068    137,780   655,986   498,335

  Other Income                 18,900      8,394    35,336    61,578

  Income before taxes         299,968    146,174   691,322   559,913 
                         
  Income Taxes             $   86,050 $   55,500 $ 235,050 $ 213,000
  
         Net Income        $  213,918 $   90,674 $ 456,272 $ 346,913 
 
 Net income per
   common share            $      .05  $     .03 $     .13 $     .10
                                                                     
 
Weighted average number of       
  shares outstanding        3,590,000  3,590,000 3,590,000 3,590,000
</TABLE>

The accompanying notes are an integral part of the financial
statements.



                           -2-


<PAGE>

                              ALLIANCE HEALTH, INC.

                             STATEMENT OF CASH FLOW

<TABLE>
<CAPTION>
                                             
                                          Nine Months Ended          
                                       Jun 30           Jun 30
                                        1998             1997     
<S>                                  <C>              <C>
                                     (Unaudited)      (Unaudited)
Cash flows from operating
 activities: 
  Net income                         $ 456,272        $ 346,913
  Adjustments to reconcile net
   income to net cash provided by
   (used in) operating activities:           
      Depreciation                     171,862           126,901 
      Accounts Receivable              129,441           (82,890)
     Other Assets                        1,788           (10,732)
      Accounts Payable                 (75,604)           66,924 
      Income Taxes                    (112,462)          135,130 
           
      Net cash provided by
       operating activities            571,297           582,246


Cash flows from investing activities:
 Purchase of equipment               (1,076,559)               0 
                                                                

Net increase (decrease) in cash       (505,262)          582,246
Cash at beginning of period            940,716           364,958
                                                                
 
Cash at end of period               $  435,454         $ 947,204
</TABLE>
                          
                                                          





The accompanying notes are an integral part of these financial
statements.


                           -3-


<PAGE>
                 ALLIANCE HEALTH, INC.

             NOTES TO FINANCIAL STATEMENTS
                      (Unaudited)


Note 1.    Basis of Presentation

     The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-QSB of Regulation S-B.  They do not include all information and
footnotes required by generally accepted accounting principles for
complete financial statements.  However, except as disclosed herein,
there has been no material change in the information disclosed in
the notes to the financial statements for the year ended September
30, 1997 included in the Company's Annual Report on Form 10-KSB
filed with the Securities and Exchange Commission.  The interim
unaudited financial statements should be read in conjunction with
those financial statements included in the Form 10-KSB. In the
opinion of management, all adjustments considered necessary for a
fair presentation, consisting solely of normal recurring
adjustments, have been made.  Operating results for the three month
and nine month periods ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the year ending
September 30, 1998.

     All of the Company's income was for services to S. J.
Kechejian, M.D., P.A., Metroplex Specialties, P.A., Metro Pharmacy,
Inc. And Aldine Medical Associates, companies owned by the Company's
major stockholder.


Note 2.  Organization

    Alliance Health, Inc. (the "Company") was incorporated in
Delaware on September 4, 1987.  Effective May 12, 1995, the Company
acquired the advertising division (the "Division") of K Clinics,
P.A. ("K Clinics") from S. J. Kechejian, M.D. for 1,200,000 shares
of the Company's stock.  The acquisition has been accounted for in
a manner similar to the pooling-of-interests method due to Dr.
Kechejian's control of the respective companies. 

Note 3.  Restatement

     The statements of income for the three and nine months ended
June 30, 1997 have been restated to reflect an income tax provision.







                                    -4-     

<PAGE>
                  ALLIANCE HEALTH, INC.

          MANAGEMENT'S DISCUSSION AND ANALYSIS

            OF INTERIM FINANCIAL INFORMATION



     The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial
condition and operating results for the period included in the
accompanying financial statements.

Results of Operation and Financial Condition

     For the nine months ending June 30, 1998 and 1997, the Company
had net income of $456,272 and $346,913 respectively.  Revenues in
1998 consisted of $703,800 from Metroplex Specialties for lease of
the Company's MRI, $1,105,000 for advertising from S. J. Kechejian,
M.D., P.A., Metroplex Specialties, P.A. and Metro Pharmacy, Inc. and
bank interest in the amount of $35,336. The MRI income generated from
Metroplex Specialties is on a per scan basis and is expected to
continue at roughly $70,000 to $75,000 per month during the next
period.  The advertising income generated from Metroplex Specialties,
P.A., is an ongoing arrangement with the Company billed at $67,500
during the quarter; the advertising income generated from S. J.
Kechejian, M.D., P.A., is an ongoing arrangement with the Company
billed at $300,000 during the quarter; the advertising income
generated from Aldine Medical Associates is an arrangement with the
company billed at $2,500 during the quarter; and the advertising
income generated from Metro Pharmacy, Inc., is an ongoing arrangement
with the Company billed at $22,500 during the quarter.  The quarter's
revenue constitutes a 19% increase over the same quarter in 1997.

     The expenses during the nine months ended June 30, 1998
included advertising, salaries and employee benefits, depreciation
and other general and administrative costs in the amount of
$1,152,814.  This is roughly a 20% increase in expenses over the same
period last year due to new production consulting and additional
advertising on TV, radio and billboards.  Advertising increased by
5% primarily due to general cost increases.  The increase in salaries
and benefits is due to the hiring of the Chief Operating Officer in
February, 1997 and increases in benefit cost for health insurance,
etc.  Administrative costs increased by 18% as compared to 1997. 
Several factors attributed to this including an increase in equipment
maintenance for the MRI (previously under warranty) and general taxes
for various corporate requirements and sales tax on the MRI.





                            5

<PAGE>
     The Company has negotiated a Management Service Agreement
with Aldine Medical Associates ("Aldine").  As part of the start
up costs for the facility, the Company will loan Aldine the funds
necessary for operating costs as needed.  Aldine currently owes
$48,864, and the Company is not expected to loan Aldine further
money for the present location in Tyler, Texas.  Aldine and
Alliance Health have negotiated a new management service fee to
be effective July, 1998.  Aldine will be opening additional sites
and with this the new management service fee will be $8.00 per
patient visit for all clinic patients and $24.00 for specialty,
radiologic and physical therapy patients.  Specialty patients are
at a higher fee due to the tremendous increase in administrative
services such as billing, collecting and pre-authorizations
required.

Liquidity and Capital Resources

     The Company had total assets of $2,292,602 at June 30, 1998. 
Advertising income is expected to continue at approximately
$100,000 per month and may increase if S. J. Kechejian, M.D., P.A.
or Metroplex Specialties, P.A. opens additional facilities.  The
Company is continuing to market the advertising package to other
medical providers. 

     The Company has purchased a new Hitachi MRI for a total cost
of $710,000, which has been installed at 1218 S. Main St., Fort
Worth, Texas.  Metroplex Specialties will lease the equipment for
$300 per scan performed.  The new MRI lease is expected to reduce
income generated by the current MRI lease to some degree.  Total
income generated by the leases has increased by 33% in this
quarter as compared to the quarter ended March, 1998.

     The Company is working on creating standardized protocols for
all processes to aid in expansion of Company interests.  A building
purchased in Longview, Texas for $156,017 is to be partially leased
to Aldine Medical Associates which will open a medical clinic
specializing in soft tissue injuries in July, 1998.  The property
will house the clinic and in August a physical therapy and CT imaging
center.  The Longview location, in conjunction with the Tyler
location, will create an East Texas division to serve a large
population in the East Texas area.  The Tyler clinic is currently in
a leased facility, and the Company has purchased a facility with
enough space to house both a physical therapy center and imaging
center in Tyler for $145,000.

     The Company plans to research available sites in the Marshall
area to complete the East Texas Division.  A detailed business plan
is currently being produced which will detail the board's plan to
expand the East Texas concept to other strategic geographic centers
in Texas.



                           -6-
<PAGE>
                            
                  ALLIANCE HEALTH, INC.

               PART II - OTHER INFORMATION


Item 5.     Exhibits and Reports on Form 8-K

            None.
    












                           -7-

      
<PAGE>
      
                       SIGNATURES


Pursuant to the requirements of the Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.




DATED: July 15, 1998             By:  Sarkis J. Kechejian, M.D.
                                      Sarkis J. Kechejian, M.D.
                                      President, Director and
                                      Treasurer








                           -8-