U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                           FORM 10-QSB

      [  X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended September 30, 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 No. 0-23015

               RED HORSE ENTERTAINMENT CORPORATION
(Exact name of small business issuer as specified in its charter)

            Nevada                          87-0450232
(State or Other Jurisdiction of           (IRS Employer
Incorporation or Organization)         Identification No.)
                                                 
         11828 La Grange Avenue, Los Angeles, CA  90025
            (Address of principal executive offices)

                         (310) 473-0213
                   (Issuer's telephone number)
                                
                         Not Applicable
(Former name, address and 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 Exchange Act 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 [ ]

APPLICABLE  ONLY  TO  ISSUERS INVOLVED IN BANKRUPTCY  PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Check whether the registrant has filed all documents and reports
required  to  be  filed by Sections 12,  13,  or  15(d)  of  the
Exchange Act subsequent to the distribution of securities  under
a plan confirmed by a court.  Yes  [   ]   No [    ]

APPLICABLE ONLY TO CORPORATE ISSUERS:
State  the number of shares outstanding of each of the  issuer's
classes  of  common  equity, as of the latest practicable  date:
455,073 shares of common stock.

<PAGE>

                           FORM 10-QSB
               RED HORSE ENTERTAINMENT CORPORATION
                                
                              INDEX
                                                       Page
PART I.   Financial Information                            
          
          Financial Statements                             
          
          Balance Sheets - September 30, 1998 and          
          December 31, 1997                               3
          
          Statements of Operations - Three Months and
          Nine Months Ended September 30, 1998 and
          1997, and Inception to September 30, 1998       4
          
          Statements of Cash Flows - Three Months          
          and Nine Months Ended September 30, 1998
          and 1997, and Inception to September 30, 1998   5
          
          Notes to Consolidated Financial Statements      7

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

PART II.  Other Information                              11
                                                           
Signatures                                               11

                             PART I.
                      Financial Information

In   the   opinion  of  management,  the  accompanying  unaudited
financial  statements included in this Form  10-QSB  reflect  all
adjustments  (consisting  only  of  normal  recurring   accruals)
necessary  for  a fair presentation of the results of  operations
for  the  periods presented.  The results of operations  for  the
periods  presented are not necessarily indicative of the  results
to be expected for the full year.

                              -2-

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                  (A Development Stage Company)
                         Balance Sheets


ASSETS

                                            September 30,         December 31,
                                                1998                  1997
                                             (Unaudited)

CURRENT ASSETS

 Cash                                       $  231,112            $  231,482

  Total Current Assets                         231,112               231,482

PROPERTY AND EQUIPMENT (Note 3)                    184                   286

TOTAL ASSETS                                $  231,296            $  231,768


              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

 Accounts payable                           $       -             $    2,010

  Total Current Liabilities                         -                  2,010

STOCKHOLDERS' EQUITY

 Common stock 50,000,000 shares authorized,
 at $0.001 par value; 455,073 shares
 issued and outstanding                          455                     455
 Additional paid-in capital                  423,353                 423,353
 Deficit accumulated
   during the development stage             (192,512)               (194,050)

  Total Stockholders' Equity                 231,296                 229,758

TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                   $   231,296              $  231,768

The accompanying notes are an integral part of the financial statements.

                              -3-

<PAGE>

                  RED HORSE ENTERTAINMENT CORPORATION
                     (A Development Stage Company)
                       Statements of Operations
                              (Unaudited)

                                                                     From
                                                                 Inception on
                                For the            For the        October 24,
                          Three Months Ended  Nine Months Ended  1986 Through
                           September 30,      September 30,      September 30,
                            1998      1997       1998    1997        1998

REVENUES                  $     -   $     -    $     -  $     -    $       -

EXPENSES

 Bad debt expense               -         -          -        -       35,000
 Outside services             450         -      1,190      685        9,107
 Professional fees            765     1,879      4,961    4,180       69,404
 Rent                           -         -          -        -        6,545
 Travel                         -         -          -        -       18,336
 Administrative expenses        -       896        118      896       24,828
 Depreciation                  34        54        102      162        1,362
 Amortization                   -         -          -        -          472
 Interest                       -         -          -        -          377

  Total Expenses            1,249     2,829      6,371    5,923      165,431

Income (Loss) Before
  Discontinued Operations  (1,249)   (2,829)    (6,371)  (5,923)    (165,431)

Loss From Discontinued
 Operations (Note 6)            -         -          -        -     (911,314)

Gain on Disposal of
 Discontinued Operations        -         -          -        -      776,190

OTHER INCOME

 Interest income            4,125     2,763      7,909    7,352      108,043

  Total Other Income        4,125     2,763      7,909    7,352      108,043

NET INCOME (LOSS)         $ 2,876   $   (66)   $ 1,538  $ 1,429    $(192,512)

BASIC NET INCOME (LOSS)
 PER SHARE                $  0.00   $  0.00    $  0.00  $  0.00

BASIC WEIGHTED AVERAGE
 SHARES OUTSTANDING       455,073   455,073    455,073  455,073

The accompanying notes are an integral part of the financial statements.

                              -4-

<PAGE>

                  RED HORSE ENTERTAINMENT CORPORATION
                     (A Development Stage Company)
                       Statements of Cash Flows
                              (Unaudited)
                                   

                                                                     From
                                                                 Inception on
                               For the           For the          October 24,
                         Three Months Ended  Nine Months Ended   1986 Through
                            September 30,      September 30,     September 30,
                            1998     1997      1998     1997         1998

OPERATING ACTIVITIES

 Net Income (Loss)        $ 2,877  $   (66)  $ 1,539  $ 1,429     $  (192,512)
 Adjustments to reconcile
  net loss to net cash
  used by operating
  activities:
   Depreciation                33       54       101      162           1,363
   Amortization                 -        -         -        -             472
   Loss on disposal of
    discontinued
    operations                  -        -         -        -        (776,190)
 Changes in operating
  assets and
  liabilities:
   Decrease in accounts
    payable                     -        -    (2,010)       -               -
   Increase in accrued
    expenses                    -        -         -        -         286,333

   Net Cash Provided
    (Used) by
    Operating Activities    2,910      (12)     (370)   1,591        (680,534)

INVESTING ACTIVITIES

 Organization expenses          -        -         -        -         (10,925)
 Sale of fixed assets           -        -         -        -           4,000
 Purchase of equipment and
  leasehold improvements        -        -         -        -      (1,255,237)

  Net Cash Provided (Used)
   by Investing Activities      -        -         -        -      (1,262,162)

FINANCING ACTIVITIES

 Proceeds from debentures       -        -         -        -       1,750,000
 Proceeds from stock
  issuance                      -        -         -        -         212,984
 Sale warrants                  -        -         -        -             100
 Exercise of warrants           -        -         -        -         210,724

   Net Cash Provided
    (Used) by
    Financing Activities  $     -  $     -   $     -  $     -      $2,173,808

The accompanying notes are an integral part of the financial statements.

                              -5-

<PAGE>

                  RED HORSE ENTERTAINMENT CORPORATION
                     (A Development Stage Company)
                 Statements of Cash Flows (Continued)
                              (Unaudited)


                                                                     From
                                                                 Inception on
                             For the             For the          October 24,
                         Three Months Ended  Nine Months Ended   1986 Through
                           September 30,       September 30,     September 30,
                            1998      1997       1998     1997       1998

INCREASE (DECREASE) IN
  CASH                   $  2,910  $    (12)   $   (370) $  1,591  $ 231,112

CASH AT BEGINNING OF
 PERIOD                   228,202   231,624     231,482   230,021     -

CASH AT END OF PERIOD    $231,112  $231,612    $231,112  $231,612  $ 231,112

SUPPLEMENTAL CASH FLOW
 INFORMATION

 Cash paid for interest  $      -  $      -    $      -  $      -  $   2,133
 Cash paid for taxes     $      -  $      -    $      -  $      -  $       -

NON CASH INVESTING
 ACTIVITIES

 Sale of subsidiary      $      -  $      -    $      -  $      -   $      -

The accompanying notes are an integral part of the financial statements.

                              -6-

<PAGE>

               RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Notes to the Financial Statements
            September 30, 1998 and December 31, 1997


NOTE 1 -   ORGANIZATION AND CORPORATE HISTORY

       The  Company  was  incorporated  in  the  State  of  Nevada  on
       December  4,  1987,  under the name of  Quantus  Capital,  Inc.
       Since  its  inception  it  has not  engaged  in  a  significant
       business  activity  and  is  considered  to  be  a  development
       stage   company.    The  articles  of  incorporation   of   the
       Company   state   that  its  purpose  is  to  engage   in   the
       business  of  making  investments and  acquisition  of  assets,
       properties  and  businesses  and  to  engage  in  any  and  all
       other lawful business.

       Pursuant  to  a  special  meeting  of  shareholders   held   on
       March   9,  1992,  the  Company  made  the  following  changes:
       (1)  To  issue  1,556,000 shares of stock to  acquire  100%  of
       the   outstanding  shares  of  127  Main  Street   Corporation,
       (the   former   Subsidiary)   a  Delaware   Corporation.    (2)
       Adopted  a  plan  of recapitalization whereby  the  issued  and
       outstanding  shares  of the Company were  reverse  split  on  a
       one  for  five  basis.   The  shares outstanding  were  reduced
       from   7,780,000   to   1,556,000.    (3)   The   articles   of
       incorporation  were  amended changing the  name  to  Red  Horse
       Entertainment  Corporation.   All  references  to   number   of
       shares   have  been  retroactively  restated  to  reflect   the
       reverse stock split.

       During    September   1992   the   former   Subsidiary    began
       operating   a  casino  in  Central  City,  Colorado,   however,
       two weeks later operations were terminated. (Note 6)

NOTE 2 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A.   Recognition of Income
       The  Company  recognizes  income and expenses  on  the  accrual
       basis  of  accounting.  The fiscal year  of  the  Company  ends
       on December 31.

     B.   Organization Costs
       The  Company's  organization  costs  were  amortized  over   60
       months using the straight-line method.

     C.Loss Per Share
       The   computation  of  loss  per  share  of  common  stock   is
       based    on    the   weighted   average   number   of    shares
       outstanding    during    the   period    of    the    financial
       statements.

     D.  Unaudited Financial Statements
       The   accompanying   unaudited  financial  statements   include
       all   of   the   adjustments   which,   in   the   opinion   of
       management,  are  necessary  for  a  fair  presentation.   Such
       adjustments are of a normal, recurring nature.

                              -7-

<PAGE>

              RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Notes to the Financial Statements
            September 30, 1998 and December 31, 1997


NOTE 2 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     E.   Provision for Taxes
       No  provision  for  taxes has been recorded  due  to  operating
       losses  at  December  31, 1994, 1993  and  1992.   The  Company
       has  net  operating  loss carryovers  for  both  book  and  tax
       purposes  of  approximately  $193,000  which  expire  in   2007
       and   2008.    The   potential  tax   benefit   of   the   loss
       carryovers   has   been   offset  in  full   by   a   valuation
       allowance.

     F.Cash and Cash Equivalents
       The  Company  considers  all  highly  liquid  investments  with
       a  maturity  of  three  months or less  when  purchased  to  be
       cash equivalents.

     G.Estimates
       The   preparation   of  financial  statements   in   conformity
       with   generally   accepted  accounting   principles   requires
       management  to  make  estimates  and  assumptions  that  affect
       the   reported   amounts   of  assets   and   liabilities   and
       disclosure  of  contingent  assets  and  liabilities   at   the
       date  of  the  financial statements and  the  reported  amounts
       of   revenues   and  expenses  during  the  reporting   period.
       Actual results could differ from those estimates.

NOTE 3 -   PROPERTY AND EQUIPMENT

       Property and equipment consists of the following:

                                          December 31,      September 30,
                                              1997              1998

       Office equipment                   $     1,071       $     1,071
       
       Less accumulated depreciation             (785)             (887)

          Total Property and Equipment    $       286       $       184

       Equipment  is  being  depreciated over  five  years  using  the
       straight line method.

NOTE 4 -   PUBLIC OFFERING

       In  1988,  the  Company  sold 1,156,000 units  to  the  general
       public.   Each  unit  consisted of one share  of  common  stock
       and  one  "A"  warrant  that could  be  used  to  purchase  one
       share  of  common  stock  for  $22.50  per  share  within   two
       years  of  the  effective date of the  offering,  and  one  "B"
       warrant  that  could  have  been used  to  purchase  one  share
       of   common   stock  for  $37.50  per  share,   which   expired
       November 8, 1993.

                              -8-

<PAGE>

              RED HORSE ENTERTAINMENT CORPORATION
                 (A Development Stage Company)
               Notes to the Financial Statements
            September 30, 1998 and December 31, 1997


NOTE 5 -   WARRANTS OUTSTANDING

       As   a   result   of   the   Company's  public   offering   the
       underwriter   purchased  a  warrant  that   entitles   him   to
       purchase 3,853 units at a price of $9.375 per unit.

       In  conjunction  with  the Company's acquisition  of  127  Main
       Street   Corporation,  the  shareholders  of  127  Main  Street
       Corporation  were  granted  warrants  or  options  to  purchase
       an   aggregate  of  453,093  shares  of  common  stock  of  the
       parent  Company  for  a period of five  years  at  a  price  of
       $9.00   per   share.    As  of  December  31,   1996,   351,212
       warrants have been exercised.

NOTE 6 -   DISCONTINUED OPERATIONS

       On   September  17,  1993  the  Company  decided  to  terminate
       the  operations  of  its  former subsidiary,  127  Main  Street
       Corporation,   and  the  casino  operations  located   at   127
       Main   Street,   Central  City,  Colorado.   Cost   over   runs
       resulting   from   site   conditions   made   it   economically
       unfeasible   to   continue   operations.    Consequently,   the
       facility   was   abandoned   and   all   lease   options    and
       improvements were lost.

NOTE 7 -   DISPOSAL OF SUBSIDIARY - RELATED PARTY TRANSACTION

       On   March  19,  1994,  the  Company  entered  into   a   stock
       purchase   agreement  whereby  two  officers  of  the   Company
       purchased  all  of  the  outstanding shares  of  the  Company's
       former   subsidiary,   127   Main  Street   Corporation.    The
       shares were sold for the nominal amount of $500.

NOTE 8 -   REVERSE STOCK SPLIT

       On   August   2,   1993,  the  shareholders  of   the   Company
       approved   a  30-for-1  reverse  stock  split.   The  financial
       statements   have   been  restated  to  reflect   this   change
       retroactively to the beginning of the periods presented.

NOTE 9 - GOING CONCERN

       The   financial   statements  have   been   prepared   on   the
       assumption   that  the  Company  is  a  going   concern.    The
       Company  has  no  revenues from operations  and  its  continued
       existence   depends  upon  management's  plans  to   locate   a
       company with which to merge.

NOTE 10 - STOCK OPTIONS

       On  February  1,  1994, the Company issued options  to  two  of
       its  officers,  for  each  one to  purchase  25,000  shares  of
       common  stock  at  a  price of $0.50  per  share.   The  option
       is for a term of five years.

                              -9-

<PAGE>

             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Nine Month periods Ended September 30, 1998 and 1997

The  Company  had  no  revenue  from  continuing  operations  for  the
nine month periods ended September 30, 1998 and 1997.

General  and  administrative  expenses  for  the  nine  month  periods
ended  September  30,  1998 and 1997, consisted of  general  corporate
administration,  legal  and  professional  expenses,  and   accounting
and  auditing  costs.   These  expenses were  $6,371  and  $5,927  for
the   nine   month  periods  ended  September  30,  1998   and   1997,
respectively.

The  Company  had  no  interest expense  in  the  nine  month  periods
ending  September  30,  1998  or  1997.   Interest  income  in   these
periods  of  $7,909  and  $7,352,  respectively,  resulted  from   the
investment of funds in short-term, liquid cash equivalents.

As  a  result  of  the  foregoing factors, the  Company  realized  net
income  of  $1,538 for the nine months ended September  30,  1998,  as
compared to a net gain of $1,429 for the same period in 1997.

Liquidity and Capital Resources

At   September   30,  1998,  the  Company  had  working   capital   of
approximately  $231,112,  as  compared to  $229,472  at  December  31,
1997.   Working  capital  as  of  both dates  consisted  substantially
of   short-term   investments,   and  cash   and   cash   equivalents.
Although  the  Company's most significant assets  consist  largely  of
cash  and  cash  equivalents, the Company has  no  intent  to  become,
or  hold  itself  out  to be, engaged primarily  in  the  business  of
investing,   reinvesting,  or  trading  in  securities.   Accordingly,
the   Company   does  not  anticipate  being  required   to   register
pursuant  to  the  Investment Company Act of 1940 and  expects  to  be
limited  in  its  ability  to invest in securities,  other  than  cash
equivalents  and  government securities, in the  aggregate  amount  of
over  40%  of  its  assets.   There can  be  no  assurances  that  any
investment made by the Company will not result in losses.

Management  believes  that  the  Company  has  sufficient   cash   and
short-term   investments  to  meet  the  anticipated  needs   of   the
Company's   operations  through  at  least   the   next   12   months.
However,  there  can  be  no  assurances  to  that  effect,   as   the
Company  has  no  significant  revenues and  the  Company's  need  for
capital  may  change  dramatically if it acquires  an  interest  in  a
business  opportunity  during  that  period.   The  Company's  current
operating  plan  is  to  (i) handle the administrative  and  reporting
requirements  of  a  public  company, and (ii)  search  for  potential
businesses,  products,  technologies and  companies  for  acquisition.
At   present,  the  Company  has  no  understandings,  commitments  or
agreements   with   respect  to  the  acquisition  of   any   business
venture,  and  there  can  be  no  assurance  that  the  Company  will
identify   a  business  venture  suitable  for  acquisition   in   the
future.    Further,  there  can  be  no  assurance  that  the  Company
would  be  successful  in  consummating any acquisition  on  favorable
terms  or  that  it  will be able to profitably  manage  any  business
venture it acquires.

                              -10-

<PAGE>

                   PART II.  OTHER INFORMATION
                                
EXHIBITS AND REPORTS ON FORM 8-K
                                
EXHIBITS:    Included  only  with  the  electronic  filing   of   this
report  is  the  Financial Data Schedule for  the  nine  month  period
ended September 30, 1998 (Exhibit Ref. No. 27).

REPORTS ON FORM 8-K:  None

SIGNATURES

In   accordance  with  the  requirements  of  the  Exchange  Act,  the
registrant  caused  this report to be signed  on  its  behalf  by  the
undersigned thereunto duly authorized.

                                   RED HORSE ENTERTAINMENT, INC.

Date:   Novmeber 13, 1998          By: /s/ Wayne M. Rogers, President
                                      (Duly Authorized and Principal
                                       Financial Officer)

                              -11-