SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   -----------

                                   FORM 10-K/A

[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the fiscal  year  ended  December  31,  1997 
[ ] 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 0-22342
                                  -----------

                               TRIAD GUARANTY INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                       56-1838519
(State or other jurisdiction of              (I.R.S. Employer Identification No.
    incorporation or organization))

   101 SOUTH STRATFORD ROAD, SUITE 500
       WINSTON-SALEM, NORTH CAROLINA                          27104
 (Address of principal executive offices)                   (Zip Code)

       Registrant's telephone number, including area code: (336) 723-1282
       ------------------------------------------------------------------
 
               Securities registered pursuant to Section 12(b) of
                                    the Act:

                                      None

           Securities registered pursuant to Section 12(g)of the Act:

                               Title of each class
                     Common Stock, par value $.01 per share

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 / /.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

The  aggregate  market  value of the voting stock held by  nonaffiliates  of the
registrant  as of February 17, 1998,  computed by reference to the last reported
price at which the stock was sold on such date, was $287,675,048.

The number of shares of the registrant's common stock, par value $.01 per share,
outstanding as of February 17, 1998 was 13,302,721.

Portions of the following documents are       Part of this Form 10-K into which
incorporated by reference into this           the document isincorporated by 
Form 10-K:                                    reference:
    Triad Guaranty Inc.
    Proxy Statement for 1998 Annual Meeting               Part III
    of Stockholders

<PAGE>



                                     PART IV


ITEM 14        EXHIBITS, FINANCIAL STATEMENT
               SCHEDULES, AND REPORTS ON FORM 8-K.
               -----------------------------------

           (a) The following documents are filed as a part of this Report:

            2. FINANCIAL STATEMENT SCHEDULES

               (a) Triad  Guaranty  Inc.  401(k) Profit  Sharing Plan  Financial
               Statements

               The  Financial  Statement  of Triad  Guaranty  Inc.  401(k)Profit
               Sharing Plan,  together with the report  thereon of Ernst & Young
               LLP, consisting of:

               Report of Independent Auditors

               Statements of Net Assets  Available for Benefits  (Modified  Cash
               Basis)

               Statements  of  Changes  in  Net  Asset  Available  for  Benefits
               (Modified Cash Basis)

               Notes to Financial Statements

               Schedule of Assets Held for Investment Purposes

               Schedule of Reportable Transactions

            3. EXHIBITS
 
               23.2 Consent of Ernst & Young LLP



<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the  undersigned,  thereto duly  authorized  on the 25th day of
June 1998.

                                               TRIAD GUARANTY INC.





                                               By:/s/Michael R. Oswalt
                                               -----------------------
                                               Michael R. Oswalt
                                               Vice President and Controller
                                               Principal Accounting Officer




<PAGE>

                            FINANCIAL STATEMENTS AND
                             SUPPLEMENTAL SCHEDULES

                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                     YEARS ENDED DECEMBER 31, 1997 AND 1996
                       WITH REPORT OF INDEPENDENT AUDITORS
















<PAGE>


                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

                              Financial Statements
                           and Supplemental Schedules

                     Years ended December 31, 1997 and 1996




                                    CONTENTS

Report of Independent Auditors.................................................1

Financial Statements

Statements of Net Assets Available for Benefits (Modified Cash Basis)..........2
Statements of Changes  in Net Assets Available for Benefits 
    (Modified Cash Basis)......................................................3
Notes to Financial Statements .................................................4

Supplemental Schedules

Schedule of Assets Held for Investment Purposes (Form 5500 - Line 27a)........12
Schedule of Reportable Transactions (Form 5500 - Line 27d)....................13


Note:   Supplemental  Schedules,  other than those  listed  above,  are  omitted
        because of the absence of the  conditions  under which they are required
        by  Department  of  Labor's  Rules and  Regulations  for  Reporting  and
        Disclosure under the Employee  Retirement Income Security Act of 1974 or
        because the required information is included in the financial statements
        or notes thereto.




<PAGE>



                         REPORT OF INDEPENDENT AUDITORS


Plan Administrator of the Triad Guaranty Inc.
    401(k) Profit-Sharing Plan

We have audited the accompanying statements of net assets available for benefits
(modified cash basis) of the Triad Guaranty Inc. 401(k) Profit-Sharing Plan (the
Plan) as of December 31, 1997 and 1996, and the related statements of changes in
net assets  available  for  benefits  (modified  cash  basis) for the years then
ended.  These  financial   statements  are  the  responsibility  of  the  Plan's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As described in Note 2, these financial  statements and  supplemental  schedules
were prepared on a modified cash basis of accounting,  which is a  comprehensive
basis of accounting other than generally accepted accounting principles.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, information regarding the Plan's net assets available for
benefits (modified cash basis) as of December 31, 1997 and 1996, and the changes
there in  (modified  cash  basis)  for the  years  then  ended,  on the basis of
accounting described in Note 2.

Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying  supplemental  schedules (modified
cash basis) of assets held for  investment  purposes as of December 31, 1997 and
reportable  transactions  for the year then ended, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure  under the Employee  Retirement  Income Security Act of 1974, and are
not a required  part of the financial  statements.  The  supplemental  schedules
(modified cash basis) have been subjected to the auditing  procedures applied in
our audits of the financial statements and, in our opinion, are fairly stated in
all material respects in relation to the financial statements taken as a whole.


                                        ERNST & YOUNG LLP

May 20, 1998



                                      1
<PAGE>


                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

                 Statements of Net Assets Available for Benefits
                              (Modified Cash Basis)


                                                      December 31
                                                1997              1996
                                            ----------------------------------
Assets
Investments:
   At fair value - (Notes 2 and 3):
     Mutual funds                              $   446,087      $   217,599
     Common stock                                3,436,993        1,327,273
     Loans to participants                           8,948           10,414
                                            ----------------------------------
Total investments                                3,892,028        1,555,286
Cash and cash equivalents                            8,939            1,428
                                            ----------------------------------
Net assets available for benefits               $3,900,967       $1,556,714
                                            ==================================


See notes to financial statements.



                                       2
<PAGE>


                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

           Statements of Changes in Net Assets Available for Benefits
                              (Modified Cash Basis)


                                                     Year ended December 31
                                                       1997            1996
                                                  ------------------------------
Additions to net assets attributed to:
Investment income:
   Net realized and unrealized appreciation in
     fair value of investments (Note 3)              $1,639,820   $   397,335
   Interest and dividends                                49,813        15,288
                                                  ------------------------------
                                                      1,689,633       412,623

Contributions:
   Participants'                                        552,512       399,529
   Employer's                                           119,007       125,430
                                                  ------------------------------
                                                        671,519       524,959
                                                  ------------------------------
Total additions                                       2,361,152       937,582

Deductions from net assets attributed to:
Benefits paid to participants                            16,899        38,828
                                                  ------------------------------
Net increase                                          2,344,253       898,754

Net assets available for benefits:
   Beginning of year                                  1,556,714       657,960
                                                  ------------------------------
   End of year                                       $3,900,967    $1,556,714
                                                  ==============================


See notes to financial statements.



                                       3
<PAGE>

                               TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1997


1. DESCRIPTION OF PLAN

The following  description of the Triad Guaranty Inc. 401(k) Profit-Sharing Plan
(the  Plan),   formerly  the  Triad  Guaranty   Insurance   Corporation   401(k)
Profit-Sharing  Plan,  provides only general  information.  Participants  should
refer  to the Plan  agreement  for a more  complete  description  of the  Plan's
provisions.

GENERAL

The Plan is a salary  deferral  401(k)  defined  contribution  plan covering all
employees of Triad Guaranty Inc. (the "Company" or the "Plan  Sponsor") who have
at least one year of  service.  The Plan is  subject  to the  provisions  of the
Employee  Retirement  Income  Security  Act of 1974  (ERISA).  The  Plan  became
effective November 1, 1993.

FORFEITURES

Forfeitures  of  matching  contributions  of $2,545 and $4,887 for 1997 and 1996
will be used to reduce future employer contributions.

CONTRIBUTIONS

Each year,  participants may contribute up to 15% of their annual  compensation,
as defined in the Plan. However,  these elective deferral  contributions may not
exceed the dollar limitation contained in Section 402(g).  Participants may also
contribute  amounts  representing  distributions  from other  qualified  defined
benefit or defined  contribution  plans. In accordance with the Plan provisions,
the Company may match the  participant's  elective  deferral  contribution.  The
discretionary  percentage matched is determined by the Plan sponsor.  Additional
amounts may be contributed at the option of the Plan sponsor.


                                       4
<PAGE>
                              TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


1. DESCRIPTION OF PLAN (CONTINUED)

PARTICIPANT ACCOUNTS

Each  participant's  account is credited  with the  participant's  contributions
(elective   deferral   contribution)   and  allocations  of  (a)  the  Company's
contributions   and  (b)  the  Plan's   earnings.   Allocations   are  based  on
participants'   compensation  and  account  balances.   Forfeited   balances  of
terminated   participants'  nonvested  accounts  are  allocated  to  the  active
participants'  account  balances  as  described  above.  The  benefit to which a
participant   is  entitled  is  the  benefit  that  can  be  provided  from  the
participant's account.

VESTING

Participants are immediately vested in their  contributions plus actual earnings
thereon.  Vesting in the Company  contribution  portion of their  accounts  plus
actual earnings  thereon is based on years of continuous  service.  Participants
are 20% vested after 1 year, 40% vested after 2 years, 60% vested after 3 years,
80% vested after 4 years and 100% vested after 5 years of service.

INVESTMENT OPTIONS

Upon  enrollment  in the Plan, a  participant  may direct  employer and employee
contributions in any of the following investment options:

         Oppenheimer   Income   &  Growth   Fund  -  Funds   are   invested   in
         growth-oriented   common  stocks,  plus   income-producing   securities
         including common and preferred stocks,  convertible  bonds,  debentures
         and notes.

         Oppenheimer  Limited-Term  Government  Fund -  Funds  are  invested  in
         obligations issued or guaranteed by the U.S. government,  its agencies,
         or its instrumentalities.

         Oppenheimer Global Fund - Funds are invested in international stocks.

         Fidelity  Income & Growth Fund - Funds are invested in  dividend-paying
         common stock with growth potential.

         Fidelity  Bond Fund - Funds are  invested  in high  quality  corporate
         obligations,  U.S.  government  securities,  obligations of major U.S.
         banks, prime commercial pater or similar investments.


                                       5
<PAGE>
                             TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


1. DESCRIPTION OF PLAN (CONTINUED)

          Triad Guaranty Inc. Stock Fund - Funds are invested in common stock of
          Triad  Guaranty Inc.  Purchases and sales of Triad Guaranty Inc. stock
          are made on the open market by brokers  selected by the agent retained
          by the Trustee.

Participants may change their investment options quarterly.

PAYMENT OF BENEFITS

On termination of service, a participant may receive a lump-sum payment equal to
the vested value of his or her account. Upon death, disability or retirement,  a
participant  may receive either a lump-sum  payment equal to the vested value of
his or her account, or choose from several annuity options.

2. SUMMARY OF ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements of the Plan are prepared under the modified cash method
of  accounting.  Contributions  are  recorded  when  received  and  benefits are
recorded when paid.

INVESTMENT VALUATION

The Plan's  investments  are stated at fair value.  The shares of the registered
investment  companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end.

USE OF ESTIMATES

The preparation of financial  statements  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.


                                       6
<PAGE>
                             TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


3. INVESTMENTS

The Plan's investments are held by a bank administered  trust fund.  Investments
that  represent 5 percent or more of the Plan's net assets as of December 31 are
as follows:

                                                   1997             1996
                                             -------------------------------
 Investments at fair value as determined
   by quoted market price:
     Oppenheimer Income & Growth Fund         $          -     $   111,321
     Triad Guaranty Inc. Stock Fund              3,436,993       1,327,273

For the  years  ended  December  31,  1997  and  1996,  the  Plan's  investments
(including  investments  bought,  sold,  as  well  as held  during  the  period)
appreciated in value by $1,639,820 and $397,335, respectively, as follows:

                                                  Net realized
                                                 and unrealized
                                                  appreciation
                                               (depreciation) in     Fair Value
                                               Fair Value During       at End
                                                      Year             of Year
                                              ----------------------------------
YEAR ENDED DECEMBER 31, 1997

Investments at fair value as determined 
   by quoted market price:
     Oppenheimer Income & Growth Fund             $    19,232      $   185,258
     Oppenheimer Global Fund                           (1,806)         120,822
     Fidelity Income & Growth Fund                     13,538          110,797
     Fidelity Bond Fund                                   352           29,210
     Triad Guaranty Inc. Stock Fund                 1,608,504        3,436,993
                                              ----------------------------------
                                                   $1,639,820       $3,883,080
                                              ==================================


                                       7
<PAGE>
                             TRIAD GUARANTY INC.
                           401(K) PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


3.  INVESTMENTS (CONTINUED)

                                                  Net realized
                                                 and unrealized
                                                  appreciation
                                               (depreciation) in     Fair Value
                                               Fair Value During       at End
                                                      Year             of Year
                                              ----------------------------------
Year ended December 31, 1996

Investments at fair value as determined
  by quoted market price:
     Oppenheimer Income & Growth Fund                $  6,842      $   111,321
     Oppenheimer Limited-Term Government Fund            (887)             197
     Oppenheimer Global Fund                            4,386           61,094
     Oppenheimer Short Term Investments                     -            6,713
     Fidelity Income & Growth Fund                      1,334           25,810
     Fidelity Bond Fund                                     8            5,734
     Fidelity Short-Term Investments                        -            6,730
     Triad Guaranty Inc. Stock Fund                   385,652        1,327,273
                                              ----------------------------------
                                                     $397,335       $1,544,872
                                              ==================================

                                       8
<PAGE>


                               Triad Guaranty Inc.
                           401(k) Profit-Sharing Plan

                    Notes to Financial Statements (continued)



13

                               TRIAD GUARANTY INC.
                          401(K) TO PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


4. CHANGES IN NET ASSETS BY FUND

The following table illustrates the Plan's activity between participant directed
funds for the years ended December 31, 1997 and 1996:

<TABLE>
<CAPTION>

                                               Oppenheimer
                                 Oppenheimer    Limited                Fidelity
                                  Income &        Term     Oppenheimer  Income &   Fidelity      Loans         Triad
                                   Growth      Government     Global     Growth      Bond         to        Guaranty Inc.
                                    Fund          Fund         Fund       Fund       Fund    Participants    Stock Fund      Total
                                ----------------------------------------------------------------------------------------------------
<S>                              <C>          <C>         <C>          <C>        <C>         <C>           <C>          <C>      
Net assets available for
 benefits at December 31, 1995  $  90,165     $ 31,961    $  45,355    $      -   $      -    $      -      $  490,479   $ 657,960
Net realized and unrealized
  appreciation (depreciation)
  in fair value of investments       6,842         (887)       4,386       1,334          8           -         385,652     397,335
Interest and dividends               8,564        1,517        2,861         864        197       1,000             285      15,288
Contributions:
   Employer                         15,274        3,122        5,643       2,357        472           -          98,562     125,430
   Participants                     36,448        7,725       14,654      10,442      3,074           -         327,186     399,529
Benefit payments                   (10,686)      (2,303)      (4,263)     (2,209)    (1,875)          -         (17,492)    (38,828)
Net transfers between funds        (30,811)     (40,938)      (5,294)     19,289      4,350       9,414          43,990           -
                                ----------------------------------------------------------------------------------------------------
Net assets available for
  benefits at December 31, 1996    115,796          197       63,342      32,077      6,226      10,414       1,328,662   1,556,714
Net realized and unrealized 
  appreciation (depreciation)
  in fair value of investments      19,232            -       (1,806)     13,538        352           -       1,608,504   1,639,820
Interest and dividends              15,071            -       25,675       5,377      1,428         916           1,346      49,813
Contributions:
   Participants                     48,407            -       37,121      49,969     20,395           -         396,620     552,512
   Employer                          5,602         (715)       2,980      10,883        809           -          99,448     119,007
Benefit payments                    (2,968)        (363)           -        (394)         -         607         (13,781)    (16,899)
Net transfers between funds        (15,882)         881        2,386        (653)         -      (2,989)         16,257           -
                                ----------------------------------------------------------------------------------------------------
Net assets available for
 benefits at December 31, 1997    $185,258     $      -    $ 129,698    $110,797    $29,210    $  8,948      $3,437,056   $3,900,967
                                ====================================================================================================
</TABLE>

                                       9
<PAGE>
                              TRIAD GUARANTY INC.
                          401(K) TO PROFIT-SHARING PLAN

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)


5. PLAN TERMINATION

Although  it has not  expressed  any intent to do so, the  Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan  subject  to the  provisions  of ERISA.  In the event of Plan  termination,
participants will become 100 percent vested in their accounts.

6. EXEMPT PARTY-IN-INTEREST TRANSACTIONS

All  Plan  investments  are  managed  by  the  Trustee,  and,  therefore,  these
transactions qualify as  party-in-interest.  All fees for the investment manager
services were paid by the Plan sponsor.

Certain  administrative  functions are performed by officers or employees of the
Company.  No such officer or employee  receives  compensation from the Plan. All
administrative expenses are paid directly by the Plan sponsor.

7. INCOME TAX STATUS

The Plan sponsor  believes that the Plan meets the  requirements  of a qualified
plan under applicable  provisions of the Internal Revenue Code.  Therefore,  the
related trust is not subject to tax under present  income tax laws.  The Plan is
required to operate in  conformity  with the IRC to maintain its  qualification.
The Plan  administrator is not aware of any course of action or series of events
that have occurred that might adversely affect the Plan's qualified status.

8. YEAR 2000 ISSUE (UNAUDITED)

The Plan  sponsor  has  developed  a plan to  modify  its  internal  information
technology to be ready for the year 2000 and has begun converting  critical data
processing  systems.  The project also includes  determining whether third party
service  providers have reasonable plans in place to become year 2000 compliant.
The Plan Sponsor currently  expects the project to be substantially  complete by
early 1999.  The Plan Sponsor does not expect this project to have a significant
effect on plan operations.

9.  SUBSEQUENT EVENT

Effective  January 1,  1998,  the Plan was  amended  to reduce  the  eligibility
waiting period from twelve months to six months.


                                       10
<PAGE>

















                             SUPPLEMENTAL SCHEDULES



























                                       11
<PAGE>


                               TRIAD GUARANTY INC.
                          401(K) TO PROFIT-SHARING PLAN

     SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES (FORM 5500 - LINE 27A)

                          YEAR ENDED DECEMBER 31, 1997

   Identity of Issue, Borrower,    Description of                     Current
     Lessor or Similar Party         Investment           Cost         Value
-------------------------------- -------------------- ------------- ------------

Common Stock:
   Triad Guaranty Inc.               118,517 shares    $ 1,484,863   $ 3,436,993

Mutual Funds:
   Fidelity Bond Fund                  2,872 shares         28,849        29,210
   Fidelity Growth and
      Income Fund                      2,908 shares         96,784       110,797
   Oppenheimer Income &
      Growth Fund                      5,548 shares        165,163       185,258
   Oppenheimer Global Fund             2,947 shares        121,014       120,822
   Wachovia Prime Cash 
      Management Fund                  8,939 shares          8,939         8,939
                                                      ------------- ------------
                                                           420,749       455,026

Participant loans                                            8,948         8,948
                                                      ------------- ------------

                                                       $ 1,914,560   $ 3,900,967
                                                      ============= ============


                                       12
<PAGE>


                               Triad Guaranty Inc.
                          401(k) to Profit-Sharing Plan

           Schedule of Reportable Transactions (Form 5500 - Line 27d)

                          Year ended December 31, 1997

<TABLE>
<CAPTION>
                                                                                                      Current
                                                                                                      Value on
                                                              Purchase       Selling         Cost    Transaction       Gain
   Identity of Party Involved         Description of Assets     Price         Price          Value       Date         (Loss)
----------------------------------- ------------------------ ------------ ------------- --------------------------- ---------


Category (iii)--Series of Transactions in excess of 5 percent of plan assets
<S>                                <C>                        <C>          <C>            <C>           <C>          <C>

Biltmore Prime Cash Management      Authorized Demand Notes    $ 388,857    $       -     $  388,857    $ 388,857    $
                                                                              395,834        395,834      395,834          -

Fidelity                            Growth and Income Fund        84,145                      84,145       84,145          -
                                                                               12,695         11,837       12,695        858


Oppenheimer                         Income & Growth Fund          80,482                      80,482       80,482          -
                                                                               25,779         22,138       25,779      3,641

Triad Guaranty Inc.                 Common Stock                 589,684                     589,684      589,684          -
                                                                               34,358         24,979       34,358      9,379

Wachovia Prime Cash Management      Authorized Demand Notes      348,121                     348,121      348,121          -
                                                                              340,711        340,711      340,711          -
</TABLE>


There were no category (i), (ii) or (iv) transactions during 1997.


                                       13