SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                           FORM 10-QSB

[X]     Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
        Act of 1934

        For Quarter Ended:  December 31, 1998 Commission File No. 33-18143-D

                                OR

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934

        Commission File No. 33-18143-D

                         CORVALLIS, INC.
       ---------------------------------------------------
      (Exact name of registrant as specified in its charter)

               Nevada                             87-0449399
---------------------------------------   -----------------------------
 (State or other jurisdiction            (I.R.S. Employer  
 of incorporation or organization)        Identification No.)


           1486 South 11th East
           Salt Lake City, Utah                               84105
 ---------------------------------------         ---------------------------
(Address of principal executive offices)                   (Zip Code)     

Registrant's telephone number, including area code:  (801) 487-3893
                                                    ---------------

                          Not applicable
    ----------------------------------------------------------
Former name, former address, former fiscal year, if changed since last report.

     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  [   ]

     As of the date of filing of this report, the Registrant had a total of
1,505,000 shares of common stock issued and outstanding.
          
<PAGE>

                  PART 1.  FINANCIAL INFORMATION
                                                                               
                                      
ITEM 1.  FINANCIAL STATEMENTS

    In the opinion of the Registrant, the following unaudited financial
statements contain all adjustments, consisting of only normal recurring
adjustments, necessary to present fairly the financial position of the Company
as of December 31, 1998, and the results of its operations and changes in its
financial position for the six months ended December 31, 1998 and the
year ended June 30, 1998.                                                      
                         Corvallis, Inc.
                  (a Development Stage Company)
                       Financial Statements
                        December 31, 1998 
<PAGE>


                         C O N T E N T S



Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .  3

Balance Sheets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . .  5

Statements of Stockholders' Equity . . . . . . . . . . . . . . . . . . . .  6

Statements of Cash Flows  . . . . . . . . . . . . . . . . . . . . . . . .   9

Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . .   10

<PAGE>
                                 
            <Letterhead of Crouch, Bierwolf & Chisholm
                   Certified Public Accountants
                   50 West Broadway, Suite 1130
                    Salt Lake City, Utah 84101
                      Office (801) 363-1175
                        Fax (801)363-0615>

                   INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders of
Corvallis, Inc.
Salt Lake City, Utah

The accompanying balance sheets as of December 31, 1998 and the related
statements of operations, stockholders' equity, and cash flows for the six
months ended December 31, 1998 and 1997 were not audited by us and,
accordingly, we do not express an opinion on them.

The accompanying balance sheet as of June 30, 1998 was audited by us and we
expressed an unqualified opinion on it in our report dated August 20, 1998.

/s/ Crouch, Bierwolf & Chisolm

February 10, 1999

                                3








<PAGE>
                         Corvallis, Inc.
                  (a Development Stage Company)
                          Balance Sheets

                              Assets

                                             December 31,      June 30,
                                               1998              1998
                                           ---------------  ----------------

Current assets
 Cash                                      $         -      $          - 
                                           ---------------  ----------------
      Total Current Assets                 $         -      $          -
                                           ---------------  ----------------
      Total Assets                         $         -      $          - 
                                           ===============  ================

               Liabilities and Stockholders' Equity

CURRENT LIABILITIES

 Accounts payable                          $       5,735    $      4,698 
 Stockholder's Payable                               524             524 
                                           ---------------  ----------------
Total Current Liabilities                          6,259           5,222 
                                           ---------------  ----------------
STOCKHOLDERS' EQUITY (DEFICIT)

   Common Stock, authorized
    200,000,000 shares of $.001 par value,
    issued and outstanding 1,505,000 shares
    and 1,505,000 shares issued and 
    outstanding, respectively                      1,505           1,505
   Additional Paid-in Capital                    200,070         200,070 
   Deficit Accumulated During the
     Development Stage                          (207,834)       (206,797)      
                                           ---------------  ----------------
Total Stockholders' Equity (Deficit)              (6,259)         (5,222)
                                           ---------------  ----------------
Total Liabilities and Stockholders' Equity $         -      $          -
                                           ===============  ================
 
The accompanying notes are an integral part of these financial statements.
                                4
<PAGE>

                         Corvallis, Inc.
                  (a Development Stage Company)
                     Statements of Operations
<TABLE>
<CAPTION>                                                             
                                                                                      Cumula-
                                 For the Three Months Ended For the Six Months Ended  tive
                                      December 31              December 31            Total 
                                 -------------------------- ------------------------- Since
                                      1998         1997       1998         1997       Inception
                                 ------------- ------------ ------------ ------------ ----------
<S>                              <C>           <C>          <C>          <C>          <C>
Revenues                         $      -      $      -     $      -     $       -    $     -      
 
Expenses:

  Consulting fees                       -             -            -             -       12,540
  Legal                                 -            2,500         -          2,500      11,127 
  Accounting                            -            1,515         -          1,515      11,463 
  General & Administrative              -            6,409       1,037        6,433      15,950 
                                 ------------ ------------- ------------ ----------- -----------
      Total Expenses                    -           10,424       1,037       10,448      51,080 
                                 ------------ ------------- ------------ ----------- -----------
Net loss before
 discontinued operations         $      -     $    (10,424) $   (1,037)  $  (10,448) $  (51,080)
                                 ------------ ------------- ------------ ----------- -----------
Loss on discontinued operations         -             -            -             -     (156,754)
                                 ------------ ------------- ------------ ----------- -----------
Net Loss                         $      -     $    (10,424) $   (1,037)  $  (10,448) $ (207,834)
                                 ============ ============= ============ =========== ===========

Weighted Average Loss Per Share  $     (.000) $      (.007) $    (.000)  $    (0.07) $   (0.241)
                                 ============ ============= ============ =========== ===========

</TABLE>

The accompanying notes are an integral part of these financial statements.
                                 5
<PAGE>

                          Corvallis, Inc.
                   (a Development Stage Company)
                 Statement of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                         Deficit
                                                                         Accumulated
                                                         Additional      During the
                                     Common Stock        paid-in         Development
                                Shares          Amount   Capital         Stage       
                               -------------  ---------- --------------  --------------
<S>                            <C>            <C>        <C>             <C>
Balance June, 1995                1,020,002   $    1,020 $     174,635   $    (176,385)

Capital contributed by 
 extinguishment of
 stockholders' payable                   -            -          1,150              -
 
Issuance of common stock for
 extinguishment of stockholders'
 payable at $0.05 per share in
 September, 1995                     20,000           20           980               -

Issuance of common stock for
 extinguishment of stockholders'
 payable at $0.025 per share in 
 March, 1996                        130,000          130         3,120               -



Issuance of common stock for
 services rendered at $0.025
 per share in March, 1996            80,000           80         1,920               -

Fractional shares from reverse
 stock split                              7           -             -                -

Net loss for the year ended
  June 30, 1996                          -            -             -           (7,535)
                               -------------  -----------  ------------  -------------- 
Balance, June 30, 1996            1,250,009        1,250       181,805        (183,920)
                       
Shares issued for cash in
  October 1996                       60,000           60         5,940              - 

Issuance of common stock for
  services rendered at $0.025 per
  share in October 1996              20,000           20         2,000              -

Net Loss for the year ended
 June 30,1997                            -            -             -           (9,840)
                               -------------  ----------  -------------  --------------
Balance June 30, 1997             1,330,009   $    1,330  $    189,745   $    (193,760)

Shares issued for services and
 expenses paid  $.06 per share      174,991          175        10,325              -
   
Net loss for the year ended
 June 30, 1998                           -            -             -          (13,037)
                               -------------  ----------  -------------  --------------
Balance June 30, 1998             1,505,000   $    1,505  $    200,070   $    (206,797)
               
Net loss for the six month
 period ended December 31, 1998          -            -             -           (1,037)
                               ------------   ----------  -------------  --------------
Balance December 31, 1998
 (unaudited)                   $  1,505,000   $    1,505 $     200,070   $    (207,834)
                               =============  ========== ==============  ==============

The accompanying notes are an integral part of these financial statements.
                                 6
</TABLE>
<PAGE>
                          Corvallis, Inc.
                   (a Development Stage Company)
                 Statement of Stockholders' Equity

<TABLE>
<CAPTION>
                                                                         Deficit
                                                                         Accumulated
                                                         Additional      During the
                                     Common Stock        paid-in         Development
                                Shares          Amount   Capital         Stage       
                               -------------  ---------- --------------  --------------
<S>                            <C>            <C>        <C>             <C>
Balance, June 30, 1992               745,066  $      745 $     151,298   $    (152,943)
         
Net loss for the year ended
  June 30, 1993                           -           -             -           (1,335)
                               -------------  ---------- --------------  --------------
Balance, June 30, 1993               745,066         745       151,298        (154,278)

Issuance of common stock for
  extinguishment of stockholders'
  payable at $0.2587 per share        54,936          55        14,157               -
       
Net loss for the year ended
  June 30, 1994                           -           -             -          (14,252)
                               -------------  ---------- --------------  --------------
Balance, June 30, 1994               800,002         800       165,455        (168,530)

Issuance of common stock for 
  extinguishment of stockholders'
  payable at $0.04 per share in
  March, 1995                         85,000          85         3,315               -
       
Issuance of common stock for
  extinguishment of stockholders'
  payable at $0.05 per share in
  March, 1995                         60,000          60         2,940               -

     
Issuances of common stock for
  services rendered at $.04 per
  share in March, 1995                75,000          75         2,925               -
      
Net loss for the year ended
  June 30, 1995                           -            -            -            (7,855)
                               --------------  --------- --------------  ---------------
Balance, June 30, 1995             1,020,002   $   1,020 $     174,635   $     (176,385)
                               --------------  --------- --------------  ---------------

The accompanying notes are an integral part of these financial statements.
                                 7
</TABLE>
<PAGE>
                          Corvallis, Inc.
                   (a Development Stage Company)
                 Statement of Stockholders' Equity
<TABLE>
<CAPTION>
                                                                         Deficit
                                                                         Accumulated
                                                         Additional      During the
                                     Common Stock        paid-in         Development
                                Shares          Amount   Capital         Stage       
                               -------------  ---------- --------------  --------------
<S>                            <C>            <C>        <C>             <C>
Balance at inception                     -    $       -  $           -   $          -
     
Issuance of common stock
  at inception at $0.1875 
    per share                       112,000          112        20,888              - 
     
Issuance of common stock in
  July, 1988 at $1.25 per share,
  less deferred offering costs
  offset against paid-in capital    105,120          105        91,630              - 
     
Net loss from inception to 
  June 30, 1989                          -            -             -           (19,673)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1989              217,120          217       112,518          (19,673)

Issuance of common stock for
  fixed assets and services in
  August, 1989                      506,613          507        18,801              -
     
Issuance of common stock
  in private placement at $0.9375
  per share in November, 1989        21,333           21        19,979              -
     
Net loss for the year ended
  June 30, 1990                          -            -             -          (132,670)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1990              745,066          745       151,298         (152,343)

Net loss for the year ended
   June 30, 1990                         -            -             -              (300)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1991              745,066          745       151,298         (152,643)

Net loss for the year ended
  June 30, 1992                          -            -             -              (300)
                               -------------  ---------- --------------  ---------------
Balance, June 30, 1992              745,066   $      745 $     151,298   $     (152,943)
                               -------------  ---------- --------------  ---------------
The accompanying notes are an integral part of these financials statements.
                                 8
</TABLE>
<PAGE>
                          Corvallis, Inc.
                   (a Development Stage Company)
                      Statement of Cash Flows
                                                                 From 
                                                                 Inception on
                                                                 September 28,
                                     For the Six Months          1987 through 
                                     ended December 31,          December 31,
                                  1998              1997         1998
                              ---------------  ---------------   --------------
Cash Flows form Operating
  Activities:

     Net loss                 $       (1,037)  $      (10,448)   $    (207,834)
     Discontinued operations               -                -           19,308 
     Non-cash services rendered
       and expenses paid by 
       stockholders'                       -           10,400           39,357
     Increase (decrease) in
       current liabilities             1,037                -            6,259 
                              ---------------  ---------------   --------------
     Net Cash Provided (Used)
       by Operating Activities             -              (48)        (142,910)
                              ---------------  ---------------   --------------
Cash Flows from Investment
  Activities:                              -                -                -
                              ---------------  ---------------   --------------
Cash Flows from Financing
  Activities:   

    Issuance of common stock               -              100          142,910 
                              ---------------  ---------------   --------------

     Net Cash Provided by
       Financing Activities                -              100          142,910
                              ---------------  ---------------   --------------
Net increase (decrease) in cash            -               52                -
     
Cash, beginning of year                    -               44                -
                              ---------------  ---------------   --------------
Cash, end of year             $            -   $           96                -
                              ===============  ===============   ==============
Cash, paid during 
  the year for:

     Interest                 $            -   $            -    $           -  
     Income taxes             $            -   $            -    $           -

Noncash financing activities

     Issuance of common stock 
      for fixed assets        $            -   $            -    $      19,308

     Issuance of common stock 
      for stockholders'
      payable                 $            -   $            -    $      20,612 

The accompanying notes are an integral part of these financial statements.
                                 9
<PAGE>

                          Corvallis, Inc.
                   (a Development Stage Company)
                         December 31, 1998 

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)

GENERAL

Corvallis, Inc. (the Company) has elected to omit substantially all footnotes
to the financial statements for the six months ended December 31, 1998 since
there have been no material changes (other than indicated in other footnotes)
to the information previously reported by the Company in their Annual Report
filed of Form 10-KSB for the Fiscal year ended June 30, 1998.

UNAUDITED INFORMATION

The information furnished herein was taken from the books and records of the
Company without audit.  However, such information reflects all adjustment which
are, in the opinion of management, necessary to properly reflect the results of
the interim period presented.  The information presented is not necessarily
indicative of the results from operations expected for the full fiscal year.    

                                 10
<PAGE>

                                              
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MATERIAL CHANGES IN FINANCIAL CONDITION
---------------------------------------

      The Registrant has been essentially inactive since January, 1990.  The
Registrant's financial condition has not changed materially since the year
ended June 30, 1994.  However, during the fiscal year ended June 30, 1996, the
Registrant incurred $7,535 in legal, accounting and other expenses in
connection with the filing of periodic reports of the Registrant's efforts to
reactivate its operations and the Registrant's review of business opportunities
for possible involvement by the Registrant.  During the quarter ended September
30, 1998, the Registrant incurred a total of $1,037 in such expenses, as
compared to a total of $24 in expenses for the quarter ended September 30,
1997.  

       The Registrant's financial condition has not changed materially since
the year ended June 30, 1991, or since January, 1990.  Since January, 1990, the
Registrant has had essentially no assets and no revenue or losses from
operations.

       At present, the Company does not have any assets.  The Company does not
have adequate capital to conduct any significant operations.  The Company
intends to become engaged immediately in the search for potential business
opportunities for acquisition or involvement by the Company.  Management
believes that any business venture in which the Company becomes involved will
be made by issuing shares of the Company's authorized but unissued common
stock.  It is anticipated that the Company's liquidity, capital resources and
financial statements will be significantly different subsequent to the
consummation of any such transaction. 


MATERIAL CHANGES IN RESULTS OF OPERATIONS
-----------------------------------------

     As indicated above, the Company has had essentially no operations since
January 1990.  The Registrant had no operations, and no revenue during the
quarters ended December 31, 1998 and December 31, 1997.  The Registrant had a
loss of $1,037 for the six months ended December 31, 1998 as compared to a loss
of $10.448 for the six months ended December 31, 1997.  Such losses are
attributable to expenses incurred in connection with the Company's efforts to
update and maintain its accounting, legal matters and quarterly filings. 

     The Registrant had not filed any reports on Form 10-Q or Form 10-K from
September 1989 until the second quarter of 1994, when new management undertook
efforts to reactivate the Registrant and bring it current in its filing
requirements.   However, as indicated, the financial condition of the
Registrant has not changed materially since January 1990, except for the
contribution of some cash and services by officers, directors and certain
shareholders in exchange for stock, for the purpose of reactivating the
Company.  

                     PART 2.  OTHER INFORMATION
                                                                                
                                     

ITEM 1.  LEGAL PROCEEDINGS

     The Company is not a party to any legal proceedings and, to the best of
its knowledge, no such action by or against the registrant has been threatened.

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

     No matters were submitted to a vote of security holders during the quarter
ended December 31, 1998.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.

Exhibit # Description
---------   -----------
    27      Financial Data Schedule

     (b)  Reports on Form 8-K.  During the quarter ended December 31, 1998, no
reports on Form 8-K were filed by the Registrant.



                             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 thereunto duly authorized.



                                           CORVALLIS, INC.
                                           (Registrant)


Date: February 11, 1999                    By /s/ Whitney O. Cluff
                                              ----------------------
                                                  Whitney O. Cluff, President
                                                  and Chief Executive Officer