UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


                  QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
(X)      Quarterly  report  pursuant  to section 13 or 15 (d) of the  Securities
         Exchange Act of 1934, for the quarterly period ended January 31, 1998.

( )      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 0-17872

                          ECHO SPRINGS WATER CO., INC.
        (Exact name of small business issuer as specified in its charter)

New York                                                   #16-1433379
(State of Incorporation)                    (I.R.S. Employer ID No.)

           Building 100A, Hackensack Avenue, Kearny, New Jersey 07032
                    (Address of Principal Executive Offices)

                                                      (973) 465-5151
                           (Issuer's Telephone Number)

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

Check  whether  the issuer  (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 issuer was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                                                   Yes   X     No

Indicate the number of shares  outstanding  of each of the  Issuer's  classes of
common stock, as of the latest practicable date.

            Class                    Outstanding at February 28, 1998

Common stock, $.0001 par value                           3,822,149 shares

Transitional Small Business Disclosure Format     Yes                No   X


<PAGE>










                          ECHO SPRINGS WATER CO., INC.



                              Index to Form 10-QSB


<TABLE>
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<S>     <C>    <C>    <C>    <C>    <C>    <C>



                                                                                                                   Page
                   Item                                                                                           Number


PART I.  FINANCIAL INFORMATION                                                                                       3

 Item 1.  Financial Statements:

         Consolidated Balance Sheets -
         January 31, 1998 and October 31, 1997                                                                          3

         Consolidated Statements of Operations -
         Three months ended January 31, 1998 and 1997                                                                   4

         Consolidated Statements of Cash Flows -
         Three months ended January 31, 1998 and 1997                                                                5

         Notes to Consolidated Financial Statements                                                                 6-9

         Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                                                      10-12

PART II.          OTHER INFORMATION

         Item 1.  Legal Proceedings                                                                                 13
         Item 6.  Exhibits and Reports on Form 8-K                                                                  13

Signatures                                                                                                          14









</TABLE>


<PAGE>



PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                          ECHO SPRINGS WATER CO., INC.

                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                     ASSETS
                                                                                      January 31,           October 31,
                                                                                         1998                   1997
Current assets:
 Cash                                                                                 $   14,485             $  170,288
 Accounts receivable - net of allowance
  for doubtful accounts of $7,000 in
  1998 and $9,000 in 1997                                                                234,898                255,675
 Notes receivable, current portion                                                        28,031                 29,842
 Inventories                                                                              34,222                 25,753
 Prepaid expenses                                                                        105,652                 22,620
         Total current assets                                                            417,288                504,178

Notes receivable, net of current portion                                                 125,088                132,254

Property, plant and equipment - net                                                    1,289,036              1,187,029

Other assets                                                                             261,581                353,970

         TOTAL ASSETS                                                                 $2,092,993             $2,177,431

                LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current liabilities:
 Installment debt                                                                     $  590,000             $  624,000
 Debentures                                                                               25,000                 25,000
 Accounts payable and accrued expenses                                                 1,530,750              1,419,074
 Customer deposits                                                                       309,400                304,800
 Unearned revenues                                                                        14,095                 14,963
         Total current liabilities                                                     2,469,245              2,387,837

Shareholders' equity (deficiency):
 Common stock, $.0001 par value,
  75,000,000 shares authorized; issued
  and outstanding 3,822,149 shares in
  1998 and 1997                                                                              382                    382
 Additional paid-in capital                                                            8,792,884              8,792,884
 Accumulated deficit                                                                  (9,169,518)            (9,003,672)
         Total shareholders'
          equity (deficiency)                                                           (376,252)              (210,406)

         TOTAL LIABILITIES AND SHAREHOLDERS'
          EQUITY (DEFICIENCY)                                                         $2,092,993             $2,177,431




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

                                                         - 3 -
</TABLE>

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     FOR THE THREE MONTHS ENDED JANUARY 31,
                                   (UNAUDITED)
<TABLE>
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                                                                                    1998                        1997

Revenues:
 Gross sales                                                                  $   441,998                 $   444,476
 Credits and allowances                                                            (8,450)                     (2,652)
 Freight out                                                                       (7,535)                     (8,949)
 Other income                                                                        (749)                       (134)
                                                                                  425,264                     432,741

Costs and expenses:
 Cost of sales                                                                    167,318                     188,795
 Selling, general and
  administrative                                                                  404,368                     373,834
 Interest                                                                          18,789                      17,474
 Amortization of other assets                                                       1,219                       1,219
 Gain on disposal of assets                                                          (584)                       (860)
         Total costs and expenses                                                 591,110                     580,462

Net loss                                                                      $  (165,846)                $  (147,721)

Net loss per share                                                            $      (.04)                $      (.05)

Weighted average shares outstanding                                             3,822,149                   2,907,149








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


</TABLE>

                                                         - 4 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     FOR THE THREE MONTHS ENDED JANUARY 31,
                                   (UNAUDITED)
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<S>     <C>    <C>    <C>    <C>    <C>    <C>



                                                                                        1998                 1997

Operating activities:
 Net loss                                                                           $(165,846)           $(147,721)
 Adjustments to reconcile net loss to
  net cash used by
  operating activities -
  Depreciation and amortization                                                        34,473               39,869
  Gain on disposal of assets                                                             (584)                (860)
  Provision for doubtful accounts                                                      (2,000)
  Changes in assets and liabilities -
   Accounts receivable                                                                 22,777               23,021
   Inventories                                                                         (8,469)               7,376
   Prepaid expenses                                                                   (83,032)             (46,185)
   Other assets                                                                          (679)                (353)
   Accounts payable and accrued
    expenses                                                                          111,676               67,825
   Customer deposits                                                                    4,600                2,600
   Unearned revenues                                                                     (868)                (545)
         Net cash used by
          operating activities                                                        (87,952)             (54,973)

Investing activities:
 Capital expenditures                                                                 (42,021)              (1,262)
 Collections on notes receivable                                                        8,977                6,357
 Proceeds from disposal of assets                                                         584                  860
         Net cash provided (used) by
          investing activities                                                        (32,460)               5,955

Financing activities:
 Increase in installment debt                                                                               20,000
 Repayment of installment debt                                                        (34,000)
 Deferred public offering costs                                                        (1,391)
         Net cash provided (used) by
      financing activities                                                            (35,391)              20,000

Net decrease in cash                                                                 (155,803)             (29,018)

Cash - beginning                                                                      170,288               44,631

CASH - ENDING                                                                       $  14,485            $  15,613

SUPPLEMENTAL INFORMATION:
 Interest         paid                                                              $   6,300            $     927


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

                                                         - 5 -
</TABLE>

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)




NOTE 1 -          BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

                  Basis of Presentation
                  The interim  consolidated  financial  statements  are prepared
                  pursuant to the requirements for reporting on Form 10-QSB. The
                  October 31, 1997  balance  sheet data was derived from audited
                  consolidated   financial  statements  and  together  with  the
                  interim  consolidated  financial  statements and notes thereto
                  should be read in conjunction with the consolidated  financial
                  statements and notes  included in the Company's  latest annual
                  report on Form  10-KSB.  In the  opinion  of  management,  the
                  interim   consolidated   financial   statements   reflect  all
                  adjustments of a normal  recurring nature necessary for a fair
                  statement  of the  results for  interim  periods.  The current
                  period results of operations are not necessarily indicative of
                  results which  ultimately will be reported for the full fiscal
                  year.

                  Business
                  Echo Springs  Water Co.,  Inc.  ("the  Company"),  through its
                  subsidiaries,  is engaged  principally in the  distribution of
                  bottled water and allied  products.  The Company bottles water
                  from its own  natural  springs  in  Burlington,  NY for direct
                  distribution and sale to business and residential customers as
                  well as for other bottled water distributors.

                  Revenue Recognition
                  Revenue  from  equipment  rental  is  recognized  based on the
                  period in which it is earned and unearned  revenue is recorded
                  for the portion billed in advance. Revenues from product sales
                  are recognized  upon shipment to the wholesaler or delivery to
                  the customer, as applicable.

                  Loss Per Common Share

                  Loss per share is based upon the  weighted  average  number of
                  shares outstanding during each period. All share and per share
                  amounts  give  effect to a  1-for-25  reverse  stock  split in
                  October,  1996.  Loss per share  represents both the basis and
                  diluted amounts,  since all conversion and exercise of options
                  and warrants  would be  antidilutive  and  therefore not taken
                  into consideration.


                                                         - 6 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)





NOTE 2 -          INVENTORIES

                  Inventories  are  valued at the lower of cost or market on the
                  first-in,  first-out basis and at October 31, 1997 and January
                  31, 1998 consist of the following:

                                                 January              October
                                                  31, 1998            31, 1997

                  Bottles                        $  6,762            $
          Product held for sale                    16,714              16,585
                  Supplies                         10,746               9,168
                                                _________      
                                                  $34,222             $25,753
                                               ==========            =========
NOTE 3 -          PROPERTY, PLANT AND EQUIPMENT

                  Property,  plant  and  equipment  are  recorded  at  cost  and
                  depreciated  by the  straight-line  method over the  estimated
                  economic useful lives of the various asset groups ranging from
                  5 - 40 years and consist of the following:
                                                   January             October
                                                   31, 1998             31, 1997

                  Land                            $  150,000         $  150,000
                  Buildings and improvements         364,541            362,298
                  Water coolers, bottles and
                   brewers                           788,002            754,084
                  Machinery and equipment            496,445            397,345
                  Vehicles                            10,500             10,500
                  Furniture and fixtures              77,874             77,874
                                                   1,887,362          1,752,101
                  Less: accumulated depreciation
                   and amortization                  598,326            565,072
                                                  -----------          --------
                                                  $1,289,036         $1,187,029
                                                  ==========         ==========


                                                         - 7 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)



NOTE 4 -          OTHER ASSETS

                  Other  assets at October  31,  1997 and  January  31, 1998 are
                  comprised of the following:

                                                  January             October
                                                  31, 1998            31, 1997

                  Water rights                     $205,000            $205,000
                  Accumulated amortization           39,624              38,405
                       Net water rights             165,376             166,595

                  Deposits                           62,938             155,499
                  Deferred public offering costs     33,267              31,876
                                                  ---------              ------
                                                   $261,581            $353,970
                                                   =========           ========

NOTE 5 -          INDEBTEDNESS

                  The Company is currently in default on principal  and interest
                  payments on its debentures  and $75,000 of its debt.  Although
                  the  debt is in  default  and  therefore  currently  due,  the
                  debtholders  have informally  agreed to wait for payment until
                  completion of a proposed public offering. (Note 7).


NOTE 6 -          INCOME TAXES

                  The Company  files a  consolidated  federal  income tax return
                  with its  subsidiaries.  At October 31,  1997,  the  estimated
                  maximum amount of net operating loss carryforward available to
                  reduce  future  taxable  income is  approximately  $8,925,000,
                  expiring  from 2004 through  2012.  Deferred tax benefits from
                  the use of net operating loss  carryforwards  of approximately
                  $3,000,000 are offset by a  corresponding  amount of valuation
                  allowance  since it is more  likely  than not that all or some
                  portion of the deferred tax asset will not be realized.


                                                         - 8 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

NOTE 7 -          GOING CONCERN

                  The Company  sustained  losses of $739,620 for the fiscal year
                  ended October 31, 1997 and $165,846 for the three months ended
                  January  31,  1998.  The  Company  had  deficit  net worths of
                  $210,406 at October 31, 1997 and $376,252 at January 31, 1998.
                  In  addition,  the  Company  was in default on  principal  and
                  interest  payments on a portion of its debt.  (Note 5).  These
                  facts raise  substantial  doubt about the Company's ability to
                  continue as a going concern.

                  Considerations  which tend to mitigate  the  question of going
                  concern  include  management's  successful  efforts in raising
                  funds through private  placements,  the ability to renegotiate
                  and restructure long-term financing with major creditors, past
                  and present  efforts to convert debt to equity and the ability
                  to acquire, restructure and develop the bottled water business
                  which  it  believes   will  be  able  to  achieve   profitable
                  operations.   In  June,   1996,   the  Company   entered  into
                  negotiations  to  consummate  a public  offering  with minimum
                  gross  proceeds  of  approximately  $4,000,000.   The  Company
                  intends  to use a  portion  of the  proceeds  of the  proposed
                  public  offering  to  seek  and  consummate   acquisitions  of
                  companies in the bottled water and allied  products  business.
                  No assurance  can be given that the Company will be successful
                  in identifying  potential  acquisitions or, if made, that such
                  acquisitions will have a beneficial effect on the Company. The
                  Company has no current  agreement  to acquire any  business or
                  property,  or intent  to  acquire  any  specific  business  or
                  property.  The Company  believes  that these  factors  provide
                  meaningful  evidence as to the Company-'s  ability to continue
                  in  operation  for the next  fiscal year and support the going
                  concern   presentation   in  the   accompanying   consolidated
                  financial  statements in favor of the liquidation basis. There
                  can be no assurance, however, that management will continue to
                  be able to raise  sufficient  capital or convert existing debt
                  to equity or to achieve profitable operations going forward.


                                                         - 9 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          FOR THE THREE MONTHS ENDED JANUARY 31, 1998 COMPARED WITH THE

                       THREE MONTHS ENDED JANUARY 31, 1997

Gross sales  decreased  $2,478  (0.6%) to $441,998  for the three  months  ended
January 31, 1998  ("1998")  from $444,476 for the three months ended January 31,
1997  ("1997").   Five-gallon   sales  to  Aramark   Corporation   increased  by
approximately  $81,000, due to increased sales of approximately $12,000 to their
continuing New York and New Jersey operations plus the Company's  expansion into
this  customer's  Pennsyl-vania  locations,  which  accounted  for the remaining
approximately  $69,000.  However,  five-gallon  and allied  product sales to and
rental income from the  Company's  regular  customer base fell by  approximately
$32,000,  $9,000  and  $9,000,   respectively,   largely  due  to  a  deliberate
discontinuance  of service to marginal  customers  and only a nominal  sales and
marketing  effort as the Company  concentrated  its  efforts  toward the Aramark
business  as this  business  requires  no capital  investment  outlay for cooler
equipment and provides its own sales and marketing at no additional  cost to the
Company.  Sales of one gallons and one quarts,  both  low-margin  products,  and
freight-out decreased by approximately $31,000, $2,000 and $1,000, respectively,
largely due to a discontinuance  of service to one supermarket  customer and the
loss of one of the  Company's  distributors  which  completed  its own  bottling
facility  in July,  1997.  A $1,000  decrease  in regular  customer  credits and
allowances was offset by  approximately  $7,000 in discounts  attributable  to a
half-price  discount  offered to Aramark for three months (March 10 through June
8, 1997) and a $0.15  discount per bottle for the nine months  thereafter  as an
incentive to obtain their Pennsylva-nia business.

Cost of sales for 1998 was  $167,318  (37.9%  of gross  sales)  as  compared  to
$188,795 (42.5% of gross sales) for 1997. This 4.6 percentage point  improvement
is comprised of a 6.1  percentage  point gain due  primarily to the  above-noted
reductions in the sales of low-margin product lines,  offset by a 1.5 percentage
point  increase  caused by the  above-noted  decrease  in the  equipment  rental
portion of gross sales.

Selling,  general and administrative  expenses were $404,368 in 1998 as compared
to  $373,834 in 1997.  Delivery  and  warehouse  costs  increased  approximately
$18,000.  The Pennsylvania  operations  amounted to  approximately  $27,000 but,
while Kearny staff levels remained  similar,  a change in the staff mix resulted
in reduced labor costs of approximately $9,000.  Advertising and promotion costs
increased  approximately  $5,000 and related  primarily to the Company's Aramark
business.  The addition of one outside  salesman  added a further  approximately
$7,000.  The increase in clerical costs of  approximately  $12,000 was offset by
reductions in other general and administrative expenses.

Interest expense increased from $17,474 in 1997 to $18,789 in 1998. Amortization
of other assets of $1,219 in 1998 and 1997 related to the  amortization of water
rights.

The net loss for 1998  increased by $18,125 from $147,721 in 1997 to $165,846 in
1998.

                                                         - 10 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                         LIQUIDITY AND CAPITAL RESOURCES


The Company's  primary sources of liquidity have been cash generated from sales,
issuance of common stock,  debentures and installment  debt, and borrowings from
its officers.

During the three  months  ended  January  31,  1998 and 1997,  the  Company  had
negative  cash  flows  from   operating   activities  of  $87,952  and  $54,973,
respectively.  Investing  activities used cash of $32,460 in 1998, primarily for
the acquisition of property and equipment,  and provided cash of $5,955 in 1997,
primarily  from  collections on notes  receivable.  The Company has financed its
operating and investing  activities  during these periods  primarily through the
issuance of installment debt.

At January 31, 1998, the Company had a working capital deficiency of $2,051,957.
Short-term credit sources are limited to trade credit on purchases and services.
The report issued by the Company's  accountants  that  accompanies the Company's
Consolidated  Financial  Statements  for the year ended  October 31, 1997 states
that there is a substantial  doubt about the Company's  ability to continue as a
going concern.

Considerations  which tend to mitigate  the  question of going  concern  include
management's successful efforts in raising funds through private placements, the
ability to renegotiate and restructure long-term financing with major creditors,
past and present  efforts to convert  debt to equity and the ability to acquire,
restructure  and develop the bottled  water  business  which it believes will be
able to achieve profitable operations.

In June,  1996,  the Company  entered into  negotiations  to consummate a public
offering  with minimum gross  proceeds of  approximately  $4,000,000.  While the
doubling  of its  asset  and  equity  listing  requirements  during  1997 by the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
caused a delay in the Company's  plans,  such offering is expected to take place
during Fiscal 1998. The Company  intends to use a portion of the proceeds of the
proposed public offering to seek and consummate acquisitions of companies in the
bottled water and allied products  business.  No assurance can be given that the
Company will be successful in identifying  potential  acquisitions  or, if made,
that such acquisitions will have a beneficial effect on the Company. The Company
has no current  agreement  to acquire  any  business or  property,  or intent to
acquire any specific business or property.

The Company  believes that these factors provide  meaningful  evidence as to the
Company's  ability to continue in operation for the next fiscal year and support
the  going  concern  presentation  in the  accompanying  Consolidated  Financial
Statements  in  favor  of the  liquidation  basis.  There  can be no  assurance,
however, that management will continue to be able to raise sufficient capital or
convert  existing  debt to  equity or to  achieve  profitable  operations  going
forward.

The Company has no plans or commitments for capital expenditures during the next
twelve months other than the ordinary equipment  purchases which are expected to
be funded with additional installment debt. The Company is close to settling its
prior years'  unpaid  payroll  taxes and,  upon  agreement,  intends to pay such
amounts from additional borrowings.



                                                         - 11 -

<PAGE>




                          ECHO SPRINGS WATER CO., INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS

                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                         LIQUIDITY AND CAPITAL RESOURCES




The Company's business is subject to seasonal fluctuation, with summer being the
busiest  season and winter the  slowest.  To date,  seasonality  has not had any
material effect on the Company's financial condition or results of operations.

                                                         - 12 -

<PAGE>



                          ECHO SPRINGS WATER CO., INC.




PART II           OTHER INFORMATION


ITEM 1.           Legal Proceedings

                  There have been no new legal  proceedings or material  changes
                  to legal proceedings  during the period from those reported in
                  the Company's Form 10-KSB for the year ended October 31, 1997.

ITEM 5.           Other Events

                  None

ITEM 6.           Exhibits and Reports on Form 8-K

                  a.  Exhibits - Financial Data Schedule

                  b.  Reports on Form 8-K  -  None





                                                         - 13 -

<PAGE>






                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the issuer has duly  caused  this report to be signed on its behalf by
the undersigned, hereunto duly authorized.

                          ECHO SPRINGS WATER CO., INC.
                                    (Issuer)



         By
              Michael S. Rakusin
                  President


Dated:  March 11, 1998

                                                         - 14 -

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