UNITED STATES
                       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 March 31, 1999

[ ]  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 0-21205


                         NEW YORK BAGEL ENTERPRISES, INC.
         (Exact name of small business issuer as specified in its charter)


Kansas                                                           73-1369185
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                          Identification No.)

                                115 East 8th Street
                           Stillwater, Oklahoma  74074
                     (Address of principal executive offices)

                                  (405) 624-3700
                  (Issuer's telephone number, including area code)


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


As of March 31, 1999, there were 4,667,500 shares of the registrant's Common 
Stock outstanding.

Transitional Small Business Disclosure Format (check one):  [ ] Yes  [X] No



<PAGE>



                        NEW YORK BAGEL ENTERPRISES, INC.

                                     INDEX

<TABLE>
<CAPTION>
                                                                  Page No.
                                                                ----------

<S>                                                                 <C>
PART I - FINANCIAL STATEMENTS

  Item 1.  Consolidated Financial Statements

           Consolidated Balance Sheets at March 31, 1999
             (unaudited), and December 27, 1998                      3

           Consolidated Statements of Operations for the
             Thirteen Weeks Ended March 31, 1999 and
             March 29, 1998, (unaudited)                             4 

           Consolidated Statements of Cash Flows for the
             Thirteen Weeks Ended March 31, 1999 and
             March 29, 1998, (unaudited)                             5

           Notes to Unaudited Consolidated Financial Statements      6

  Item 2.  Management's Discussion and Analysis or
           Plan of Operation                                         8


PART II  -  OTHER INFORMATION

  Item 6.  Exhibits                                                 13


SIGNATURES                                                          14


</TABLE>

<PAGE>



                       NEW YORK BAGEL ENTERPRISES, INC.
                          CONSOLIDATED BALANCE SHEETS
                     MARCH 31, 1999 AND DECEMBER 27, 1998
                  

<TABLE>

<CAPTION>
                                            March 31,          December 27,
Assets                                        1999                  1998
                                           (Unaudited)

<S>                                        <C>                  <C>
Cash and cash equivalents                  $   89,201           $  217,775
Accounts receivable                           105,217               61,855
Inventories                                   309,769              310,850
Prepaid expenses and other current assets     156,595               26,609
                  
    Total current assets                      660,782              617,089
                  
Property and equipment, net                 5,887,509            6,330,238
Goodwill, net                                 792,779              805,028
Investment in Atomic Burrito - Tulsa           96,733                    -
Investment in Atomic Burrito - Wichita         80,000                    -
Other assets                                  185,967              203,823
                  
    Total assets                           $7,703,770           $7,956,178
                  





Liabilities and Stockholders' Equity                
                  
Current installments on long-term debt     $1,977,507           $1,821,894
Accounts payable                              467,457              440,387
Accrued payroll and benefits                  326,107              241,844
Accrued liabilities                           589,135              748,754
                  
    Total current liabilities               3,360,206            3,252,879
                  
Long-term debt, less current installments      46,194               49,464
Deferred rents payable                         97,725               90,094
Other liabilities                             657,135              798,662
                  
    Total liabilities                       4,161,260            4,191,099
                  
Stockholders' equity:                  
  Class A common stock, $.01 par value.                  
   Authorized 30,000,000 shares; issued                  
   and outstanding 4,667,500 shares.           46,675               46,675
Additional paid in capital                 13,390,769           13,390,769
Accumulated deficit                        (9,876,960)          (9,654,391)
Treasury stock, at cost, 10,400 shares        (17,974)             (17,974)

    Total stockholders' equity              3,542,510            3,765,079

    Total liabilities and
     stockholders' equity                  $7,703,770           $7,956,178
                  

<FN>
      See accompanying notes to unaudited consolidated financial statements.


</TABLE>
                  
<PAGE>



                        NEW YORK BAGEL ENTERPRISES, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                             THIRTEEN WEEKS ENDED
                       MARCH 31, 1999 AND MARCH 29, 1998

<TABLE>
<CAPTION>

                                               1999              1998

<S>                                         <C>              <C>
Revenues:
  Sales from Company-owned restaurants      $3,936,078       $ 4,761,687
  Franchise revenues                            15,376            79,928
          
    Total revenues                           3,951,454         4,841,615
        
Costs and expenses:          
  Cost of sales                              1,379,412         1,621,373
  Restaurant operating expenses              2,292,474         2,658,572
  General and administrative expenses          278,747           390,252
  Depreciation and amortization                184,592           252,523
  Provision for impairments and closures             -         1,105,725
          
    Total costs and expenses                 4,135,225         6,028,445
          
    Operating income (loss)                   (183,771)       (1,186,830)
          
    Interest income (expense), net             (38,798)          (35,616)
          
    Earnings (loss) before income taxes       (222,569)       (1,222,446)
          
    Income tax expense (benefit)                     -                 - 
          
    Net earnings (loss)                     $ (222,569)      $(1,222,446)
          
Earnings (loss) per share - basic
  and diluted:
    Net earnings (loss)                     $    (0.05)      $     (0.26)
       
Weighted average number of shares          
  outstanding-basic and diluted              4,657,100         4,663,753


</TABLE>

[FN]
      See accompanying notes to unaudited consolidated financial statements.



<PAGE>



                        NEW YORK BAGEL ENTERPRISES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              THIRTEEN WEEKS ENDED MARCH 31, 1999 AND MARCH 29, 1998


<TABLE>
<CAPTION>

                                               1999              1998

<S>                                         <C>              <C>
Cash flows from operating activities:
  Net earnings (loss)                       $ (222,569)      $(1,222,446)
  Adjustments to reconcile net earnings
   (loss) to net cash flows from operating
   activities:
     Depreciation and amortization             184,592           252,523
     (Gain) loss on sale of equipment           10,218                 -
     Provision for impairments and closures          -         1,105,725
     Increase (decrease) in cash resulting
      from changes in listed items:
       Inventory                                 1,082           (54,667)
       Income taxes receivable                       -           304,473
       Property and equipment available
        for sale                                     -           (15,737)
       Prepaid expenses and other
        current assets                        (129,986)          (20,667)
       Accounts receivable                     (43,362)          (16,055)
       Deferred costs                                -                 -
       Other assets                             19,595           (13,395)
       Accounts payable                         27,070          (234,390)
       Accrued and other liabilities          (209,252)           47,003 
       Deferred franchise fees                       -           (18,000)
                        
         Net cash flows from
          operating activities                (362,612)          114,367

Cash flows from investing activities:
  Additions to property, plant and equipment   (38,305)       (1,032,394)
  Investment in Atomic Burrito Joint Venture   (60,000)                - 
  Proceeds from sales of property and
   equipment including proceeds from
   sale-leaseback transactions                 180,000           800,000
                        
         Net cash flows from
          investing activities                  81,695          (232,394)
                        
Cash flows from financing activities:                        
  Proceeds from issuance of long-term debt           -           450,000
  Principal payments on long-term debt         (47,657)       (1,145,180)
  Proceeds from issuance of notes
   to Stockholders                             200,000                 -
  Purchase of treasury stock                         -           (17,974)
                        
         Net cash flows from
          financing activities                 152,343          (713,154)
                        
         Net decrease in cash                 (128,574)         (831,181)
                        
Cash at beginning of period                    217,775           872,949
                        
Cash at end of period                       $  89,201        $    41,768
                        

</TABLE>

[FN]
      See accompanying notes to unaudited consolidated financial statements.
                        


<PAGE>



                       NEW YORK BAGEL ENTERPRISES, INC.
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


(1)  OPERATIONS

The Company owns and franchises New York Bagel and Lots A' Bagels 
restaurants that provide a wide variety of bagels that are made from 
scratch, boiled and baked in the traditional "New York style."  
Breakfast menu items include a wide variety of bagels and custom-
blended cream cheeses, gourmet coffees, muffins and croissants. Lunch 
and dinner items include an assortment of bagel delicatessen 
sandwiches, prepared salads, cookies and soft drinks.  As of March 31, 
1999, the Company has 29 Company-owned restaurants primarily located in 
Oklahoma, Kansas, Colorado, Texas and Tennessee and 17 franchised 
restaurants located throughout the United States.


(2)  BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements are for 
interim periods and consequently do not include all disclosures 
required by generally accepted accounting principles for annual 
financial statements.  It is suggested that the accompanying unaudited 
consolidated financial statements be read in conjunction with the 
annual consolidated financial statements included in the Company's 1998 
Form 10-KSB for the period ended December 29, 1998.  In the opinion of 
management of the Company, the accompanying unaudited consolidated 
financial statements reflect all adjustments (all of which were of a 
normal recurring nature) necessary to present fairly the consolidated 
financial position of the Company and the results of its operations and 
its cash flows for the interim periods.  The results of the interim 
period are not necessarily indicative of the results of the full year.


(3)  IMPAIRMENT OF LONG-LIVED ASSETS AND STORE CLOSURES

Long-lived assets and certain identifiable intangibles are reviewed for 
impairment whenever events or changes in circumstances indicate that 
the carrying amount of the asset may not be recoverable.  
Recoverability of assets to be held and used (including associated 
goodwill) is measured by a comparison of the carrying amount of an 
asset to estimated future net cash flows (undiscounted and without 
interest charges) expected to be generated by the asset.  If such 
assets are considered to be impaired, the impairment to be recognized 
is measured by the amount by which the carrying amount of the assets 
exceeds the fair value of the assets.  Assets to be disposed of are 
reported at the lower of the carrying amount or fair value less costs 
to sell.
  
For purposes of determining impairment, the Company groups long-lived 
assets to be held and used at a market level due to the bakery-
satellite relationship which, in management's estimation, results in 
the market level as the lowest level for which there are cash flows 
that are largely independent of the cash flows of other groups of 
assets.

During the thirteen weeks ended March 31, 1999, there were no 
impairment charges or store closure charges incurred.



<PAGE>



The Company has entered into a joint venture agreement with Western 
Country Clubs, Inc. ("Western") whereby the Company will contribute 
certain restaurant equipment and leasehold improvements of up to seven 
of its restaurant locations and cash in certain instances to the joint 
venture.  Western will contribute cash (up to a stipulated amount per 
restaurant) to convert such restaurant locations to the new "Atomic 
Burrito" concept.  The Company will have a 40% ownership interest in 
the joint venture entities concerning Tulsa, Oklahoma and Wichita, 
Kansas.  Western will oversee the restaurant conversion, the day-to-day 
operations and accounting matters of the Atomic Burrito restaurants.  
Furthermore, Western can elect to convert only five restaurants, 
instead of the aforementioned seven, by payment of a nominal amount to 
the Company.  The joint venture agreement also calls for the opening of 
one Atomic Burrito restaurant in a location for which the Company 
currently holds an option to lease.  As of March 31, 1999 there was one 
cobranded New York Bagel and Atomic Burrito restaurant located in 
Tulsa, Oklahoma, and one Atomic Burrito restaurant located in Wichita, 
Kansas, both of which are being converted from New York Bagel 
restaurants.  The restaurant in Tulsa, Oklahoma opened in late March 
1999 and the results of their operations are not available at this 
time; however, it is not expected to have a material impact on the 
financial statements.


(4)  NET EARNINGS PER SHARE

In 1997, the Financial Accounting Standards Board issued SFAS No. 128, 
EARNINGS PER SHARE (Statement 128) which replaces the prior accounting 
standard regarding computation and presentation of earnings per share.  
Statement 128 requires a dual presentation of basic earnings per share 
(based on the weighted average number of common shares outstanding) and 
diluted earnings per share which reflects the potential dilution that 
could occur if contracts to issue securities (such as stock options) 
were exercised.  The Company adopted Statement 128 as of December 28, 
1997 and, accordingly, earnings per share data for all periods 
presented has been computed in accordance with Statement 128.  For all 
periods presented, there are no differences between net earnings (loss) 
and outstanding shares utilized in the computation of basic and diluted 
earnings per share.

Options to purchase common stock were not included in the computation 
of diluted earnings (loss) per share because the options' exercise 
price was greater than the average market price of the common shares 
during such period so the effect would not be dilutive.  As of March 31,
1999, there were 205,000 options outstanding at a weighted average
exercise price of $1.00, which may become dilutive in the future.



<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

THIS FORM 10-QSB INCLUDES STATEMENTS THAT ARE "FORWARD-LOOKING 
STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF
1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 
1934, AS AMENDED, INCLUDING STATEMENTS REGARDING THE COMPANY'S 
EXPECTATIONS, HOPES, BELIEFS, INTENTIONS OR STRATEGIES REGARDING THE 
FUTURE.  ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACTS, 
INCLUDED IN THIS FORM 10-QSB REGARDING THE COMPANY'S FINANCIAL 
POSITION, BUSINESS STRATEGY AND OTHER PLANS AND OBJECTIVES FOR FUTURE 
OPERATIONS, ARE FORWARD-LOOKING STATEMENTS.  ALL FORWARD-LOOKING 
STATEMENTS INCLUDED IN THIS FORM 10-QSB ARE BASED ON INFORMATION 
AVAILABLE TO THE COMPANY ON THE DATE HEREOF, AND THE COMPANY ASSUMES NO 
OBLIGATION TO UPDATE SUCH FORWARD-LOOKING STATEMENTS.  ALTHOUGH THE 
COMPANY BELIEVES THAT THE ASSUMPTIONS AND EXPECTATIONS REFLECTED IN 
SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CAN GIVE NO 
ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT OR 
THAT THE COMPANY WILL TAKE ANY ACTIONS THAT MAY PRESENTLY BE PLANNED.  
CERTAIN IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER 
MATERIALLY FROM THE COMPANY'S EXPECTATIONS ARE DISCLOSED IN THE "RISK 
FACTORS" SECTION OF THE COMPANY'S FORM 10-KSB ANNUAL REPORT, WHICH 
INCLUDE, WITHOUT LIMITATION, THE COMPANY'S ABILITY TO DEVELOP, 
CONSTRUCT, ACQUIRE OR FRANCHISE ADDITIONAL RESTAURANTS IN ACCORDANCE 
WITH THE COMPANY'S DEVELOPMENT SCHEDULE, CHANGES IN BUSINESS STRATEGY 
OR DEVELOPMENT PLANS, AVAILABILITY AND TERMS OF CAPITAL, ABILITY TO 
SUCCESSFULLY CONVERT CERTAIN RESTAURANTS TO ATOMIC BURRITO RESTAURANTS 
AND PARTICIPATE AS A JOINT VENTURE PARNTER, THE TRANSITION TO THE YEAR 
2000, ACCEPTANCE OF NEW PRODUCT OFFERINGS, COMPETITION, MANGEMENT OF 
QUARTER TO QUARTER EARNINGS, INCREASES IN OPERATING COSTS AND CHANGES 
IN GOVERNMENT REGULATION.  IN ADDITION, THE COMPANY'S ABILITY TO
COMPLETE THE PROPOSED TRANSACTION WITH WESTERN COUNTRY CLUBS, INC., AS
DISCUSSED IN THIS FORM 10-QSB, IS AN IMPORTANT FACTOR THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY'S EXPECTATIONS.
ALL SUBSEQUENT WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE
TO THE COMPANY OR PERSONS ACTING ON ITSBEHALF ARE EXPRESSLY QUALIFIED IN
THEIR ENTIRETY BY SUCH FACTORS.




<PAGE>



OVERVIEW

  The Company's revenues are derived from sales from Company-owned 
restaurants and franchise revenues, which consist of royalties from 
franchised restaurant sales as well as franchise and development fees.  
Franchise and development fees are initially recorded as deferred 
revenue until each franchised restaurant opens, at which time these 
fees are recorded as revenue.

  Costs of sales include food, paper and beverage costs associated with 
Company-owned restaurants.  Restaurant operating expenses consist 
primarily of labor costs, rent, advertising, utilities, maintenance and 
insurance associated with Company-owned restaurants.  General and 
administrative expenses include corporate and administrative salaries, 
accounting, legal and direct costs associated with franchise operations.


RESULTS OF OPERATIONS

  The following table sets forth the percentage relationship of certain 
operating statement data to total revenues, except as otherwise 
indicated:


<TABLE>
<CAPTION>
                                                  Thirteen Weeks
                                                       Ended
                                              Mar 31,        Mar 29,
                                               1999           1998

<S>                                           <C>            <C>
Revenues:

Sales from Company-owned restaurants           99.6%          98.4%
Franchise revenues                              0.4            1.6

Total revenues                                100.0%         100.0%


Cost  and expenses:

Cost of sales (1)                              35.0%          34.0%
Restaurant operating expenses (1)              58.2           55.8
General and administrative expenses             7.0            8.1
Depreciation and amortization                   4.7            5.2
Provision for impairments and closures          0.0           22.8


Operating income (loss)                      (  4.6)        ( 24.5)
Interest income (expense), net               (  1.0)        (  0.7)
  Net earnings (loss)                        (  5.6)        ( 25.2)


(1) As a percentage of sales from Company-owned restaurants

</TABLE>


<PAGE>



THIRTEEN WEEKS ENDED MARCH 31, 1999
COMPARED TO THIRTEEN WEEKS ENDED MARCH 29, 1998

Total revenues decreased by $890,000, or 18.4%, to $3.9 million for the 
period ended March 31, 1999 compared to $4.8 million for the period ended 
March 29, 1998, primarily due to a decrease in the number of operating stores
in operations.

Sales from Company-owned restaurants decreased $826,000, or 17.3%, to $3.9 
million for the period ended March 31, 1999 compared to $4.7 million for the 
period ended March 29, 1998.  The Company experienced a 8.2% decline in same 
store sales during the first quarter of 1999 compared to the same period in 
1998. The decline in same store sales is primarily attributed to the 
following: (i) increased competition, (ii) increased development within 
certain markets, and (iii) the maturation of the bagel industry.  The Company
is focusing on operational issues and new product offerings.  At March 31, 
1999 the Company had 29 Company-owned restaurants compared to 45 restaurants 
at March 29, 1998.

Franchise revenues and royalties decreased by $65,000, or 80.8%, to $15,000 
for the period ended March 31, 1999 compared to $80,000 for the period ended 
March 29, 1998. The overall decrease is due to the discontinuance of royalty 
revenue recognition on certain franchise restaurants due to collectibility 
concerns and no new franchises have been introduced since 1997.  As a result
of the above activity, management expects franchise revenues to continue to 
decline.  There were 17 franchised restaurants as of March 31, 1999 as 
compared to 32 restaurants at March 29, 1998.

Cost of sales decreased by $242,000, or 14.9%, to $1.4 million for the 
period ended March 31, 1999 compared to $1.6 million for the period ended 
March 29, 1998.  As a percentage of Company-owned restaurant sales, cost of 
sales increased to 35.0% for the period ended March 31, 1999 from 34.0% for 
the period ended March 29, 1998, primarily due to the increased cost of 
butterfat related items.  Butterfat is used in cream cheese, cheese, and 
other dairy products.  

Restaurant operating expenses decreased by $366,000, or 13.8%, to $2.3 
million for the period ended March 31, 1999 compared to $2.7 million for the 
period ended March 29, 1998. Such decrease is primarily due to the Company 
closing under-performing restaurants. As a percentage of Company-owned 
restaurant sales, restaurant operating expenses increased to 58.2% for the 
period ended March 31, 1999 from 55.8% for the period ended March 29, 1998.  
This increase is primarily as a result of the additional rent expense related
to the sale leaseback transactions that occurred during 1998 and 1999.

General and administrative expenses decreased $111,000 or 28.6%, to 
$279,000 for the period ended March 31, 1999 compared to $390,000 for the 
period ended March 29, 1998 primarily as a reduction in management staff.  
The Company repositioned middle management area restaurant managers into the
restaurants during the third quarter of 1998.

Depreciation and amortization decreased by $68,000, or 26.9%, to $185,000 
for the period ended March 31, 1999 compared to $253,000 for the period ended
March 29, 1998.  As a percentage of total revenues, depreciation and 
amortization decreased to 4.7% for the period ended March 31, 1999 from 5.2%
for the period ended March 29, 1998.  This decrease is primarily the result 
of the closing of certain restaurants, the impairing of other restaurants, 
and the recognition of the sale-leaseback transactions that occurred
during 1998.



<PAGE>



In the period ended March 29, 1998, the Company closed or recorded 
impairment losses on four stores in the amount of $1.1 million dollars.  For
the period ended March 31, 1999, there were no store closures or impairment 
losses.

The Company has entered into a joint venture agreement with Western 
Country Clubs, Inc. ("Western") whereby the Company will contribute certain 
restaurant equipment and leasehold improvements of up to seven of its 
restaurant locations and cash in certain instances to the joint venture.  
Western will contribute cash (up to a stipulated amount per restaurant) to 
convert such restaurant locations to the new "Atomic Burrito" concept.  The 
Company will have a 40% ownership interest in the joint venture entities 
concerning Tulsa, Oklahoma and Wichita, Kansas.  Western will oversee the 
restaurant conversion, the day-to-day operations and accounting matters of 
the Atomic Burrito restaurants.  Furthermore, Western can elect to convert 
only five restaurants, instead of the aforementioned seven, by payment of a 
nominal amount to the Company.  The joint venture agreement also calls for 
the opening of one Atomic Burrito restaurant in a location for which the 
Company currently holds an option to lease.  As of March 31, 1999 there was 
one cobranded New York Bagel and Atomic Burrito restaurant located in Tulsa, 
Oklahoma, and one Atomic Burrito restaurant located in Wichita, Kansas, both 
of which are being converted from New York Bagel restaurants. The restaurant
in Tulsa, Oklahoma opened in late March 1999 and the results of their 
operations are not available at this time; however, it is not expected to 
have a material impact on the financial statements.

Net interest expense increased by $3,000, or 8.9%, to $39,000 for the 
period ended March 31,1999 compared to net interest expense of $36,000 for 
the period ended March 29, 1998.  The increase in interest expense is due to
the borrowings from certain shareholders that was completed in January of 
this year. 


LIQUIDITY AND CAPITAL RESOURCES

The Company requires capital primarily for the development of new 
restaurants, maintenance of existing Company-owned restaurants and the 
participation as a joint venture partner in certain Atomic Burrito 
restaurants. Capital expenditures totaled $38,000 and $1.0 million for the 
thirteen week periods ended March 31, 1999 and March 29, 1998, respectively.  
The Company has funded its capital expenditures with proceeds from its Credit 
Facility and sale-leaseback transactions discussed below and cash flows from 
operating activities.  Cash flows from operating activities were $(363,000) 
and $114,000 for the periods ended March 31, 1999 and March 29, 1998, 
respectively. 

Based on its contemplated limited expansion plans, the Company estimates 
that its capital expenditures for development of Company-owned restaurants 
will be approximately $100,000 during the remainder of 1999.  The Company 
expects that proceeds from its Credit Facility, sale-leaseback transactions 
and cash provided by operating activities will provide sufficient funds to 
finance its capital expenditures through 1999.

The Company has incurred operating losses.  While the Company is taking 
corrective measures, there is no assurance that future operating losses will
not be incurred and that the Company might have to seek additional financing.
Such additional financing is not committed at this time.  The Company 
anticipates the need to raise additional funds through the private sale of 
either equity or debt securities even though no such funds are committed.



<PAGE>



CREDIT FACILITY.  As previously disclosed in the Company's 1998 Form 10-KSB,
the Company has a loan agreement with a revolving line of credit and
term loan facilities (the "Credit Facility") with NationsBank, N.A. (the 
"Bank"). The Credit Facility is secured by substantially all of the Company's
assets. During August 1998 the Company refinanced the Credit Facility for an 
additional year, which now matures on September 1, 1999.  The note is 
amortized over approximately a  seven year period requiring monthly payments 
of principal and interest of $26,000. As of  March 31, 1999, the Company had 
$1.8 million of outstanding borrowings pursuant to the Credit Facility.  As 
of March 31, 1999 the Company was not in compliance with certain restrictive 
covenants contained in the Credit Facility which require specified financial 
ratios. However, the Company does not believe such noncompliance will 
adversely impact liquidity although there is no assurance of such.  The 
Company is current on all payments due under the Credit Facility.

SALE-LEASEBACK TRANSACTION.  During January 1999, the Company entered into 
an agreement to sell and leaseback a restaurant site with an entity owned by 
a then officer of the Company and a significant stockholder, both of whom are 
Directors.  The sale-leaseback transaction included an owned restaurant 
location in which the Company sold such property to such entity for 
approximately $180,000 and leased back over a 15-year period.  The lease will 
be accounted for as operating lease.  As a result of the sale leaseback 
transaction, the Company incurred a loss of $89,000 which has been deferred 
for financial reporting purposes and is included within leasehold 
improvements and is being amortized over the term of the lease.  The Company
believes that the terms and conditions of both the real estate sale and the 
related lease back were fair and reasonable and were on terms at least as 
favorable as would be available from non-affiliated parties.  The Company 
utilized the proceeds to fund operations. 

STOCKHOLDER LOANS.  During January 1999, the Company borrowed $200,000 in 
total from four stockholders.  Each note is in the principal amount of 
$50,000 and bears interest at 12.75% per annum which is paid quarterly 
beginning March 31, 1999.  The notes are due on December 31, 1999 with 
accrued interest.  The notes are not secured.

STOCK REPURCHASE PROGRAM.  During January 1998, the Company's Board of 
Directors approved a plan to repurchase up to 1.0 million shares of the 
Company's Common Stock (the "Stock Repurchase Program").  Purchases pursuant 
to the Stock Repurchase Program are to be made from time to time in the open 
market or directly from stockholders at prevailing market prices.  The Stock
Repurchase Program is anticipated to be funded with internally generated cash
and borrowings under the Credit Facility.  As of March 31, 1999, the Company
had purchased 10,400 shares of Common Stock for $17,974.  The Company
anticipates limited purchases, if any, pursuant to the Stock Repurchase
Program during fiscal 1999.

FINANCIAL CONDITION.  Total assets at March 31, 1999 are $7.8 million as 
compared to $8.0 million as of December 28, 1998.  Cash and cash equivalents
have decreased by approximately $129,000 primarily due to minimal capital 
expenditures and the one time payments to be released from leases on closed 
restaurant locations. Property and equipment reflects an approximate $300,000 
decrease due to the sale leaseback of a previously owned restaurant.  Current 
liabilities have increased approximately $100,000 primarily as a result of 
the new loan from certain stockholders of $200,000 that matures on December 
31, 1999. Stockholders' equity has decreased $200,000 due to the net loss for 
the thirteen week period ended March 31, 1999.



<PAGE>


POTENTIAL ACQUISITION TRANSACTION

The Company has entered into a letter of intent, which was publicly announced
on May 10, 1999, whereby the Company will be acquired by Western.  However,
many of the terms of the letter of intent have been, or are anticipated to be,
modified as a result of further discussions between the Company and Western.
The Company and Western are in the process of negotiating the structure of the
proposed acquisition, and the consummation of the acquisition is subject to
many contingencies, including, without limitation, negotiation and execution
of a definitive acquisition agreement, approval of the respective Boards of
Directors of the Company and Western, approval of the respective stockholders
of the Company and Western, and completion of due diligence.  There can be
no assurance that the proposed acquisition will be consummated.


YEAR 2000 COMPLIANCE

The Company's Year 2000 issues involve (i) its restaurant point of sale 
function, (ii) its outsourced payroll function, (iii) its 
financial/management reporting function and (iv) its vendors.

The Company believes its point of sale equipment is Year 2000 compliant and 
has been informed by the software and hardware provider that Year 2000 
compliant software will be available to the Company during 1999.  Also, the 
Company believes that it has sufficient manual back-up procedures that the 
Company could rely upon to continue operations, if required to do so.  The 
Company has been informed by the provider of its outsourced payroll services 
that such services are Year 2000 compliant.  The Company previously utilized 
data processing services from an entity controlled by a director of the 
Company in connection with the Company's financial/management reporting 
function. The Company has installed its own data processing capabilities 
during 1999.  The Company estimates the cost of a new data processing system,
which would be Year 2000 compliant, to be less than $75,000.  The costs of 
becoming Year 2000 compliant, other than cost related to the possible 
implementation of a new internal data processing system, are not expected to
be material.

The Company purchases products and services from various vendors.  If the 
Company is not able to acquire such products and services due to any vendor's
inability to address the Year 2000 issue, the Company could incur a 
disruptive effect on its business.  However, the key providers of such 
products and services are generally large and sophisticated entities, and the
Company does not expect to incur a material disruption to its business from 
the Year 2000 issue.  In November 1998, the Company circulated a 
questionnaire to its large vendors to determine their status regarding 
addressing the Year 2000 issue.  The vendors that have responded to the 
questionaire have indicated that they have addressed the issue or will do so 
timely. 


PART II.  OTHER INFORMATION

Item 6.      Exhibits

      (a)  Exhibit 27 - Financial Data Schedule.



<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, thereunto duly authorized, this 14th day of  May, 1999.

                                     NEW YORK BAGEL ENTERPRISES, INC.

                                     By:  /s/ ROBERT J. GERESI
                                              Robert J. Geresi
                                              Chief Executive Officer
                                              and President

                                     By:   /s/ RICHARD R. WEBB
                                               Richard R. Webb
                                               Chief Financial Officer,
                                               Secretary and Treasurer