<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 December 31, 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)

                            (972)-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 December 31, 1998,
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 - December 31, 1998 and
            September 30, 1998                              1

          Statements of Operations - Three Months   
            Ended December 31, 1998 and 
            December 31, 1997                               2

          Statements of Cash Flow - Three Months Ended
            December 31, 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>
                                       Dec 31, 1998  Sep 30, 1998
                                        Unaudited      Audited
<S>                                    <C>           <C>
Current assets: 
 Cash                                  $1,019,267    $  739,596
 Accounts receivable-affiliate            183,611        64,413 
 Other assets                               5,864        12,134 
                                         ________      ________
  Total current assets                  1,208,742       816,143

Property, equipment & leasehold                                 
  improvements                          2,485,536     2,451,752
 Less accumulated depreciation           (676,083)     (591,577)
                                        _________     _________
                                        1,809,453     1,860,175
                                       $3,018,195    $2,676,318

                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                        
    Trade                                     -0-        52,825
  Accrued liabilities                      22,917        21,116   
  Income taxes payable                    317,087       249,889
                                         ________     _________
    Total current liabilities             340,004       323,830

Deferred income taxes                      34,532        34,532

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                     1,776,593     1,450,890
                                        _________     _________
 Total stockholders' equity             2,643,659     2,317,956
 
                                        _________     _________
                                       $3,018,195    $2,676,318 
</TABLE>
The accompanying notes are an integral part of these financial
statements

                           -1-


<PAGE>
                              ALLIANCE HEALTH, INC.
                                        

                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                        
                                        Three Months Ended 
                                     Dec 31,           Dec 31, 
                                      1998              1997    
                                   (Unaudited)       (Unaudited)
<S>                                <C>                 <C>
REVENUES                           $ 927,771           $ 545,100      
 
EXPENSES:
 Advertising                         126,792             133,505
 Salaries & employees
  Benefits                           105,998              96,800
 Depreciation                         84,506              42,300
 General & administrative             93,926              74,876 
                                    ________            ________
                                     411,222             347,481

  Operating income                   516,549             197,619

  Other income                         8,653               8,237
                                    
Income before taxes                  525,202             205,856      
         
Income taxes                         199,500             (78,500)
  Net income                         325,702             127,356
                         
 Net income per
   common share                    $     .09           $     .04
                                                                     
 
Weighted average number of       
  shares outstanding               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>
                                              
                                         Three Months Ended          
                                       Dec 31           Dec 31
                                        1998             1997     
                                     (Unaudited)      (Unaudited)
<S>                                  <C>              <C>
Cash flows from operating
 activities: 
  Net income                         $ 325,702        $ 127,356
  Adjustments to reconcile net
   income to net cash provided by
   (used in) operating activities:           
      Depreciation                      84,507           42,300 
      Accounts Receivable             (119,198)          71,224
      Other Assets                       6,270          (77,205)
      Accounts Payable                 (52,825)         (75,008)
      Accrued Liabilities                1,801         (174,161)
      Income Taxes                      67,198           78,500 

      Net cash provided by (used in)
       operating activities            313,455           (6,994)

Cash flows from investing activities:
 Equipment & Leasehold Improvements    (33,784)        (152,500)
                                    

Net increase (decrease) in cash        279,671         (159,494) 
Cash at beginning of period            739,596          940,716

Cash at end of period               $1,019,267        $ 781,222

</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, 1998 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 period ended December 31, 1998 are not
necessarily indicative of the results that may be expected for the year
ending September 30, 1999.

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


                                    -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 quarter ended December 31, 1998 and 1997, the Company had net
income of $325,702 and $127,356 respectively.  Revenues consisted of $335,400
from Metroplex Specialties for lease of the Company's MRIs, $542,500 for
advertising fees, bank interest in the amount of $8,653 and rent and other
income in the amount of $49,871.  The MRI income generated from Metroplex
Specialties is on a per scan basis and is expected to continue at roughly
$80,000 to $85,000 per month during the next period.  The advertising income
generated from S. J. Kechejian, M.D., P.A., is an ongoing arrangement with
the Company billed at $407,500 during the quarter; the advertising income
generated from Metroplex Specialties, P.A., is an ongoing arrangement with
the Company billed at $82,500 during the quarter; the advertising income
generated from Metro Pharmacy, Inc., is an ongoing arrangement with the
Company billed at $22,500 during the quarter and the advertising income
generated from Aldine Medical Associates is an ongoing arrangement with the
company billed at $30,000 during the quarter.  The quarter's revenue
constitutes a 70% increase over the same quarter in 1997.

     The expenses during the quarter ended December 31, 1998 included
advertising, salaries and employee benefits, depreciation and other general
and administrative costs in the amount of $411,222.  This is roughly an 18%
increase in expenses over the same quarter last year primarily due to
increased depreciation expense and other expenses associated with the MRI
equipment.

     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 loaned Aldine the funds necessary for operating costs
as needed at ten percent (10%) interest.  Aldine currently owes $183,611,
which loan has been extended for one year.  It is not expected that the
Company will have to loan Aldine further money for operational purposes. 
Aldine also pays a management service fee at a rate of $24 per patient visit
for Longview PT/OT and $8.00 per patient visit for Longview and Tyler
clinics.  The management service fee for the Longview PT/OT Center is being
raised beginning January 1999 to $32 per patient visit. 

     The Company purchased a MRP-7000-U Permanent Magnet in September 1998
for $45,869.  This equipment is installed at the Longview facility and Aldine
will pay a lease fee of $125 per scan.

                              -5-

<PAGE>
Liquidity and Capital Resources

     The Company had total assets of $3,018,195 at December 31, 1998. 
Advertising income is expected to continue at approximately $247,500 per
month and may increase if S. J. Kechejian, M.D., P.A., Aldine Medical
Associates or Metroplex Specialties, P.A. opens additional facilities. 

     The Company is researching the viability of a Hitachi Mobile MRI.  The
purchase price of the purposed MRI is $825,000 and the Company expects to
make a decision in February, 1999.

     The Company has standardized protocols for most management and
administrative processes which will help ensure future expansion of Company
interests are organized and more profitable.

     The East Texas division, which presently includes two clinics, a
physical therapy center and a MRP-7000-U Permanent Magnet cat scan imaging,
is the test "pod" for the standardized protocal.  The Company is using this
"pod" to refine current protocals and develop new protocols as needed.






                           -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: February 11, 1999         By:  Sarkis J. Kechejian, M.D.
                                      Sarkis J. Kechejian, M.D.
                                      President, Director and
                                      Treasurer












                              -8-