content: FORM 10-Q
  
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  (Mark One)
  [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                             SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended         JULY 31, 1998
  
                                         OR
  
  [ ]      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                     33-1406
  
                               BUCK HILL FALLS COMPANY
               (Exact name of registrant as specified in its charter)
  
            PENNSYLVANIA                                    24-0536840
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                     Identification No.)
  
                  CRESCO ROAD, BUCK HILL FALLS, PENNSYLVANIA 18323
                 (Address of principal executive offices)(Zip Code)
  
                                   (717) 595-7511
                (Registrant's telephone number, including area code)
  
  
                (Former name, former address and former fiscal year,
                            if changed since last report)
  
           Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934  during  the  preceding  12 months  (or for such  shorter  period  that the
  registrant was required to file such reports),  and (2) has been subject to such
  filing requirements for the past 90 days.
  
  Yes     X      No
  
           As of July 31, 1998,  the registrant had 79,811 shares of Common Stock,
  no par value and 24,960 shares of Class A Common Stock, no par value, issued and
  outstanding.
  <PAGE>
                                      FORM 10-Q
  
                               BUCK HILL FALLS COMPANY
  
                                        INDEX
  
                                                                              Page
  
  Part I:           Financial Information
  
  Item 1.  Financial Statements
  
                    Condensed Consolidated Balance Sheet -
                    July 31, 1998 and October 31, 1997                          1
  
                    Condensed Consolidated Statement of Operations -
                    Nine Months and Three Months Ended July 31, 1998
                    and 1997                                                    2
  
                    Condensed Consolidated Statement of Cash Flows -
                    Nine Months Ended July 31, 1998 and 1997                    3
  
                    Notes to Condensed Consolidated Financial Statements      4-6
  
  Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations             7-9
  
  Part II:          Other Information                                          10
  
                    Signatures                                                 11
  
  <PAGE>
                           PART I - FINANCIAL INFORMATION
                            ITEM 1. FINANCIAL STATEMENTS
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
  <TABLE>
  <CAPTION>
  ----------------------------------------------------------------------------------------------------------------------
                                                                                            JULY 31,
                                                                                              1998          OCTOBER 31,
                                                                                           (UNAUDITED)          1997*
  ----------------------------------------------------------------------------------------------------------------------
  <S>                                                                                        <C>               <C>     
                                       ASSETS
  
  CURRENT ASSETS:
      Cash                                                                                   $ 77,455          $ 76,973
      Accounts receivable, net                                                                497,209           328,854
      Prepaid expenses and other
         current assets                                                                        18,324            21,659
                                                                                          -----------       -----------
  
               Total current assets                                                           592,988           427,486
  
  RESTRICTED CASH                                                                              79,889            69,122
  
  PROPERTY, PLANT AND EQUIPMENT, Net                                                        2,808,281         2,643,058
  
  DEFERRED COSTS, Net                                                                              -              3,143
                                                                                          -----------       -----------
  
                          TOTAL                                                           $ 3,481,158       $ 3,142,809
                                                                                          ===========       ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  CURRENT LIABILITIES:
      Current portion of long-term debt                                                      $ 55,554         $ 504,268
      Accounts payable, trade                                                                 274,856           124,095
      Deferred revenue                                                                        536,351                 -
      Accrued expenses and other                                                               88,167            92,411
      6-1/4% Subordinated Notes                                                                    -            140,000
                                                                                          -----------       -----------
  
               Total current liabilities                                                      954,928           860,774
  
  CUSTOMER DEPOSITS                                                                            79,889            69,122
  
  6 - 1/4% SUBORDINATED NOTES                                                                 116,000                 -
  
  LONG-TERM DEBT                                                                              891,847           912,812
                                                                                          -----------       -----------
  
                    Total liabilities                                                       2,042,664         1,842,708
                                                                                          -----------       -----------
  
  STOCKHOLDERS' EQUITY:
      Common stock                                                                          1,731,861         1,720,661
      Contributed capital                                                                     874,227           799,227
      Deficit                                                                              (1,167,594)       (1,219,787)
                                                                                          -----------       -----------
  
                    Total stockholders' equity                                              1,438,494         1,300,101
                                                                                          -----------       -----------
  
                          TOTAL                                                           $ 3,481,158       $ 3,142,809
                                                                                          ===========       ===========
  </TABLE>
  
   *  Condensed from audited financial statements
  
                The accompanying notes are an integral part of these
                    condensed consolidated financial statements.
  
                                       - 1 -
  <PAGE>
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------------------------------------------
                                                               NINE MONTHS ENDED                   THREE MONTHS ENDED
                                                           .......JULY 31.........              .......JULY 31.........
                                                           1998               1997               1998            1997
  -----------------------------------------------------------------------------------------------------------------------
  <S>                                                  <C>               <C>                 <C>             <C>      
  REVENUES                                             $ 1,532,413       $ 1,479,933         $ 863,683       $ 814,516
  
  COST OF REVENUES                                       1,312,817         1,249,260           688,093         576,383
                                                       -----------       -----------         ---------       ---------
  
  GROSS PROFIT FROM
      OPERATIONS                                           219,596           230,673           175,590         238,133
  
  GENERAL AND ADMINISTRATIVE
      EXPENSES                                             294,467           217,936            84,526          34,173
                                                       -----------       -----------         ---------       ---------
  
  (LOSS) INCOME FROM
      OPERATIONS                                           (74,871)           12,737            91,064         203,960
                                                       -----------       -----------         ---------       ---------
  
  OTHER INCOME (EXPENSE):
      Miscellaneous income                                  24,846            53,102            19,191          43,594
      Gain on sale of asset                                  2,015            53,500
      Interest expense                                    (101,794)         (119,446)          (37,358)        (37,442)
                                                       -----------       -----------         ---------       ---------
  
          Other income (expense), net                      (74,933)          (12,844)          (18,167)          6,152
                                                       -----------       -----------         ---------       ---------
  
  (LOSS) INCOME BEFORE
      EXTRAORDINARY ITEM                                  (149,804)             (107)           72,897         210,112
  
  EXTRAORDINARY ITEM - GAIN
      FROM CASUALTY (FIRE)                                 201,997                --           172,188              --
                                                       -----------       -----------         ---------       ---------
  
  NET INCOME (LOSS)                                       $ 52,193            $ (107)        $ 245,085       $ 210,112
                                                       -----------       -----------         ---------       ---------
  
  NET INCOME (LOSS) PER
      COMMON SHARE BEFORE
      EXTRAORDINARY ITEM
          Basic                                            $ (1.44)             $ --            $ 0.70          $ 2.12
                                                       ===========       ===========         =========       =========
  
          Diluted                                          $ (1.44)             $ --            $ 0.67          $ 1.98
                                                       ===========       ===========         =========       =========
  
  NET INCOME (LOSS) PER
      COMMON SHARE AFTER
      EXTRAORDINARY ITEM
          Basic                                             $ 0.50              $ --            $ 2.35          $ 2.12
                                                       ===========       ===========         =========       =========
  
          Diluted                                           $ 0.48              $ --            $ 2.25          $ 1.98
                                                       ===========       ===========         =========       =========
  </TABLE>
  
                The accompanying notes are an integral part of these
                    condensed consolidated financial statements.
  
                                       - 2 -
  
  <PAGE>
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (UNAUDITED)
  <TABLE>
  <CAPTION>
  ---------------------------------------------------------------------------------------------------------------------
                                                                                                 NINE MONTHS ENDED
                                                                                                ......JULY 31......
                                                                                              1998              1997
  ---------------------------------------------------------------------------------------------------------------------
  <S>                                                                                       <C>                 <C>    
  CASH PROVIDED BY OPERATING
       ACTIVITIES:
          Net income (loss)                                                                 $ 52,193            $ (107)
          Adjustments for noncash charges:
              Depreciation and amortization                                                  173,833           167,858
              Gain from casualty fire                                                       (201,997)
              Gain from disposition of assets                                                 (2,015)          (53,669)
          Changes in assets and liabilities                                                  520,992           304,031
                                                                                            --------         ---------
  
                  Net cash provided by operating
                     activities                                                              543,006           418,113
                                                                                            --------         ---------
  
       INVESTING ACTIVITIES:
          Insurance proceeds from fire loss                                                  235,485
          Purchase of property and equipment                                                (372,545)          (93,443)
          Proceeds from sale of asset                                                          2,015            53,880
                                                                                            --------         ---------
  
                  Net cash provided by (used in)
                     investing activities                                                   (135,045)          (39,563)
                                                                                            --------         ---------
  
       FINANCING ACTIVITIES:
          Repayment of debt                                                                 (493,679)         (697,697)
          Proceeds from additional paid in capital                                            75,000
          Proceeds from issuance of stock                                                     11,200           190,206
          Proceeds from issuance of debt                                                                       205,042
                                                                                            --------         ---------
  
                  Net cash used in financing activities                                     (407,479)         (302,449)
                                                                                            --------         ---------
  
  INCREASE IN CASH                                                                               482            76,101
  
  CASH, BEGINNING OF PERIOD                                                                   76,973           106,703
                                                                                            --------         ---------
  
  CASH, END OF PERIOD                                                                       $ 77,455         $ 182,804
                                                                                            ========         =========
  
  CASH PAID FOR INTEREST                                                                    $ 99,478         $ 119,446
                                                                                            ========         =========
  </TABLE>
  
                The accompanying notes are an integral part of these
                    condensed consolidated financial statements.
  
                                       - 3 -
  
  <PAGE>
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)
  --------------------------------------------------------------------------------
  
  NOTE 1:  BASIS OF PRESENTATION
  
           Although the interim  condensed  consolidated  financial  statements of
  Buck Hill Falls Company and Subsidiary (the "Company") are unaudited,  it is the
  opinion  of the  Company's  management  that all  normal  recurring  adjustments
  necessary for a fair statement of the results for the interim periods  presented
  have been  reflected  therein.  The results of operations for any interim period
  are not  necessarily  indicative  of results that may be expected for the entire
  year.
  
           These  statements  should be read in conjunction  with the consolidated
  financial  statements and related notes included in the Company's  annual report
  on Form 10-K for the year ended October 31, 1997.
  
  
  NOTE 2:  CHANGES IN COMPONENTS OF COMMON STOCK CLASS A
  <TABLE>
  <CAPTION>
                                                                                                       STOCK
                                      ...COMMON STOCK...               .STOCK SUBSCRIBED.          SUBSCRIPTION
                                    SHARES          AMOUNT          SHARES          AMOUNT          RECEIVABLE
  <S>                             <C>           <C>                <C>            <C>             <C>      
  Balance, October 31, 1997          24,400        $343,811           4,200          $84,190         $(84,190)
  Common Stock Issued                   560          11,200
  Common Stock Subscribed                --              --            (560)         (11,200)          11,200
                                   --------        --------        --------         --------         --------
  
  Balance, July 31, 1998             24,960        $355,010           3,640          $72,990         $(72,990)
                                   ========        ========        ========         ========         ========
  </TABLE>
  
  
                                        -4-
  <PAGE>
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (UNAUDITED)
  --------------------------------------------------------------------------------
  
  NOTE 3:  EARNINGS PER SHARE
  
           In fiscal 1998, the Company adopted  Statement of Financial  Accounting
  Standards  ("SFAS") No. 128, "Earnings Per Share," which changed the computation
  of earnings  per share  ("EPS") and  requires  presentation  of two new amounts,
  basic and diluted EPS, and additional informational disclosures. The adoption of
  SFAS No. 128 is required for all reporting  periods after  December 15, 1997 and
  requires  restatement  for all  prior  periods.  The  adoption  of SFAS No.  128
  resulted in the restatement of the Company's July 31, 1997 EPS, as follows:
  <TABLE>
  <CAPTION>
                                                                             NINE MONTHS               THREE MONTHS
                                                                                ENDED                      ENDED
                                                                            JULY 31, 1997              JULY 31, 1997
                                                                            -------------              -------------
  <S>                                                                           <C>                        <C>  
           Previously reported
               Primary fully diluted                                            $ --                       $2.12
                                                                                ====                       =====
               Fully diluted                                                    $ --                       $2.12
                                                                                ====                       =====
  
           Restated amounts:
               Basic EPS                                                        $ --                       $2.12
                                                                                ====                       =====
               Diluted EPS                                                      $ --                       $1.98
                                                                                ====                       =====
  </TABLE>
  
           The  following  data show the amounts  used in  computing  earnings per
  share and the  effects of income and the  weighted  average  number of shares of
  dilutive potential common stock for the years ended July 31, 1998 and 1997:
  <TABLE>
  <CAPTION>
                                             FOR THE NINE MONTHS                               FOR THE THREE MONTHS
                                       .......ENDED JULY 31, 1998................      ........ENDED JULY 31, 1997........
                                                             COMMON                                      COMMON
                                          INCOME             SHARES                     INCOME           SHARES
                                        NUMERATOR         DENOMINATOR        EPS       NUMERATOR      DENOMINATOR      EPS
  July 31, 1998 
       Before extraordinary item:
  <S>                                   <C>                 <C>            <C>         <C>              <C>           <C>  
           Basic EPS                    $(149,804)          104,291        $(1.44)     $ 72,897         104,291       $ .70
                                        =========           =======        ======      ========         =======       =====
           Diluted EPS                  $(149,804)          108,811        $(1.44)     $ 72,897         108,811       $ .67
                                        =========           =======        ======      ========         =======       =====
  
       After extraordinary item:
           Basic EPS                     $ 52,193           104,291        $   .50     $245,085         104,291       $2.35
                                         ========           =======        =======     ========         =======       =====
           Diluted EPS                   $ 52,193           108,811        $   .48     $245,085         108,811       $2.25
                                         ========           =======        =======     ========         =======       =====
  
                                       - 5 -
  <PAGE>
                                             FOR THE NINE MONTHS                               FOR THE THREE MONTHS
                                       .......ENDED JULY 31, 1998................      ........ENDED JULY 31, 1997........
                                                             COMMON                                      COMMON
                                          INCOME             SHARES                     INCOME           SHARES
                                        NUMERATOR         DENOMINATOR        EPS       NUMERATOR      DENOMINATOR      EPS
  
  
  July 31, 1997
       Before and after extraordinary
           item:
                Basic EPS                $ (107)              98,931       $      --   $210,112           98,931      $2.12
                                         ======             ========       =========   ========         ========      =====
                Diluted EPS              $ (107)             105,961       $      --   $210,112          105,961      $1.98
                                         ======             ========       =========   ========         ========      =====
  
  </TABLE>
  
  
  
  
  
  --------------------------------------------------------------------------------
  
  
                                        -6-
  <PAGE>
  FORM 10-Q
  
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
  ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  GENERAL
  
           The  Company's  business,  insofar as it relates  to the  provision  of
  recreational  facilities,  is  largely  seasonal  in  nature.  As a result,  the
  Company's revenues and cost of revenues typically increase  significantly in its
  third and fourth fiscal quarters.
  
  RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
  JULY 31, 1998 AS COMPARED TO THE NINE MONTHS ENDED
  JULY 31, 1997
  --------------------------------------------------------------------------------
  
           In March 1998, the Company experienced a catastrophic fire. The process
  of rebuilding and the  replacement of the assets  destroyed is nearly  complete.
  Management is confident that, with the fire renovations complete,  the increased
  demand for the Company's amenities  experienced during the later portion of June
  and July will continue through the final fiscal period of 1998.
  
           Revenues  increased $52,480 for the nine months ended July 31, 1998, as
  compared  to the same  period in the prior  year.  In 1998,  the  Company had an
  increase in  membership  revenue of nearly  $20,000 due to increased  members as
  well as an  increase  in  daily  fees.  Additionally,  revenues  from  townhouse
  maintenance  fees  were  $13,000  higher  in 1998 as  compared  to 1997,  mostly
  attributable  to an increase in the yearly fee charged to the  cottagers.  Also,
  the number of rounds of golf  increased,  resulting in an  additional  $6,500 of
  green fees in 1998.  Finally,  there was an increase  of nearly  $11,000 in snow
  plowing revenues resulting from a new policy excluding  snowplowing as a part of
  the annual  maintenance  fee  agreement.  Mitigating  the above  increases was a
  decrease of nearly  $26,000 in the Company's  dues which was the result of a new
  policy where dues are no longer assessed on undeveloped lots and "footprints".
  
           Cost of revenues  increased  $63,557 for the nine months ended July 31,
  1998 as  compared to the same period in 1997.  Repairs and  maintenance  expense
  increased  approximately  $10,500 due to repairs made on the tennis tea and golf
  course.  Electricity expense increased  approximately  $6,500 due to the loss of
  the automatic  irrigation system in the fire.  Without the automated system, the
  irrigation system operated  inefficiently  resulting in an increase in operating
  costs.  Road and path expense  increased $5,000 due to continued  efforts by the
  Company to improve the road and path system throughout the community. Offsetting
  these increases was a decrease in security expense of  approximately  $7,500 due
  to a new agreement  negotiated by the Company to provide office space for use by
  the security firm in return for a reduction of overall rates.  Insurance expense
  decreased  approximately $15,500 due to the bidding of all insurance policies in
  the prior year, the effect of which is being recognized in fiscal 1998.
  
                                       - 7 -
  <PAGE>
           General and  administrative  costs increased  $76,530 in the first nine
  months of 1998 as compared to the same period in 1997. A portion of the increase
  was the  result  of  expenses  of  $23,000  in  office  and  computer  equipment
  associated   with  the   conversion  of  the  Company's   accounting   software.
  Additionally,  there was an increase of approximately $24,000 in payroll expense
  due to the hiring of additional  personnel  and an across the board  increase of
  approximately  five  percent in wages for fiscal 1998.  There was a  substantial
  decrease in  professional  fees of  approximately  $19,000 due to a nonrecurring
  executive  search that was  required in 1997.  Other  income  decreased  $79,743
  primarily  due to realized  revenues  in 1997 of $53,000  from the sale of land.
  There was a substantial drop in interest expense of $19,000 due to the Company's
  continued effort to substantially reduce outstanding debt.
  
  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
  JULY 31, 1998 COMPARED TO THE THREE MONTHS ENDED
  JULY 31, 1997
  --------------------------------------------------------------------------------
  
           Revenues increased $49,167 during the three months ended July 31, 1998.
  As explained above, the increase was due primarily to an increase in memberships
  and daily fees.
  
           Cost of revenues increased $111,710 for the three months ended July 31,
  1998  primarily  from the increase in demand  throughout  the  community for the
  Company's numerous amenities which resulted in increases in various departmental
  expenses as explained above.
  
           General and  administrative  expenses  increased  $50,353 for the three
  months ended July 31, 1998 primarily due to the increase in expenditures for the
  upgrade in the Company's computer system and increases in payroll expense.
  
           LIQUIDITY AND CAPITAL RESOURCES
  
           At July  31,1998,  the Company had a working  capital  deficiency  of $
  361,941.  Included  in current  liabilities  is $55,554 in  scheduled  principal
  payments on long -term debt that are due within the next twelve months.
  
           On July 24, 1992, the Company entered into a loan agreement with a bank
  relating to a secured  revolving line of credit in the amount of $1,000,000 (the
  "Revolving  Credit  Facility").  Amounts  borrowed  under the  Revolving  Credit
  Facility  bear  interest at the prime rate (8.25% at July  31,1998) plus 1-1/2%.
  Pursuant  to the  loan  agreement,  approximately  2,600  acres of land and land
  improvements  located in Barrett  Township,  Monroe  County,  Pennsylvania,  are
  pledged as  collateral,  along  with dues,  assessments  and fee  revenues.  The
  Revolving Credit Facility is available through May 24, 1999, contingent upon the
  Company  maintaining  a  satisfactory  financial  position and subject to annual
  review of the Company's  financial  statements by the bank.  The loan  agreement
  with the bank  provides  that  if,  in the  opinion  of the  authorized  lending
  officers of the bank, the Company's credit worthiness  materially declines,  the
  credit  line will cease to be  available  for  future  draws,  and any  existing
  balance will be required to be fully amortized over a reasonable term.
  
  
                                       - 8 -
  <PAGE>
           The Company  was  required to make  certain  improvements  in its water
  system.  In May 1995, the Company  entered into a $900,000 loan agreement with a
  bank to refinance the existing debt and to complete the improvements.  Principal
  is payable in monthly installments of $8,985 over a 20-year amortization period.
  Interest  is  payable  at the  bank's  base rate  (8.25% at July 31,  1998) plus
  1-1/2%.  The loan  matures  in May 2015 and is secured  by a first  mortgage  on
  approximately  2,200  acres of land and land  improvements  located  in  Barrett
  Township,  Monroe  County,  Pennsylvania  and a  collateral  assignment  of  all
  revenues and assessments of the Company's water operations.
  
           The Company expects to meet its current  liabilities  through increased
  collections  as a result of the seasonal  increase in revenues  which  typically
  occurs during the Company's third and fourth  quarters  through the provision of
  recreational services.
  
           Cash remained static for the nine months ended July 31,1998.  Cash from
  operating activities increased $124,893 primarily from the advance collection of
  fees.  Cash  provided  by  investing  activities  decreased  $95,482  due to the
  insurance  proceeds received for the replacement of the assets lost in the fire,
  net of the  purchase of new fixed  assets.  Net  repayment  of debt  amounted to
  $493,000  in both 1998 and 1997.  In 1998,  $75,000 was  received as  additional
  paid-in  capital by a stockholder of the Company and will be used to construct a
  building  within the  community.  Additionally,  $11,200  was  received  for the
  payment of Common Stock Class A in 1998 as compared to $190,206 in 1997.
  
           At  July  31,  1998,  the  Company  has  no  outstanding  draws  on its
  $1,000,000 line of credit.
  
           The Company incurred a loss before  extraordinary  item of $149,804 for
  the nine  months  ended July  31,1998  and at July  31,1998,  the  Company has a
  cumulative  deficit of $1,167,594 and a working capital  deficiency of $361,940.
  Although the  Company's  line of credit is available  through May 24, 1999,  the
  ability  to borrow  under the line is  contingent  upon  certain  factors.  As a
  result,  continuation  of the Company in its present form is dependent  upon the
  successful  maintenance  of its debt  terms,  its  ability to obtain  additional
  financing,  if needed,  and the eventual  achievement  of  sustained  profitable
  operations.
  
           Management   believes  that   revisions  in  the  Company's   operating
  requirements,  including an increase in dues from $2,800 to $2,950,  provide the
  opportunity for the Company to continue as a going concern. However, there is no
  assurance  that  management's  actions  will be  successful  or, if they are not
  successful, that the Company would be able to continue as a going concern.
  
                                        - 9 -
  <PAGE>
                             PART II - OTHER INFORMATION
  
  Item 1.  Legal Proceedings
  
                    None
  
  Item 2.  Changes in Securities
  
                    None
  
  Item 3.  Defaults Upon Senior Securities
  
                    None
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
                    The Annual Meeting of the shareholders of the Company was held
                    on July 19, 1998.  At the meeting the  following  persons were
                    elected as directors of the Company, each receiving the number
                    of votes indicated next to his or her name:
  
                                      Sandra Kraus                       66,364
                                      Edward Reilly                      67,878
                                      Anthony Roberts                    61,177
  
                    The following additional persons continued as directors of the
                    Company after the meeting:
  
                                      Anthony C. Bowe
                                      James T. Sygenda
                                      David C. Toomey
                                      Richard C. Unger, Jr.
                                      Clifford Press
                                      Grace Godshalk
  
                    The   shareholders   also   approved  the   conveyance   of  a
                    conservation easement to the Buck Hill Conservation Foundation
                    by the following vote:
  
                                      Yes                                59,908
                                      No                                  2,011
                                      No vote/Abstain                    14,170
  
  Item 5.  Other Information
  
                    At its organizational  meeting on September 7, 1998, the Board
                    of Directors  elected  Richard C. Unger,  Jr. as President and
                    Chairman of the Board of the Company and reelected  Anthony C.
                    Bowe as  Vice-President  and Chief Financial Officer and David
                    C. Toomey as secretary.
  
  Item 6.  Exhibits and Reports on Form 8-K
  
                    None
  
  
                                       - 10 -
  <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.
  
                                            BUCK HILL FALLS COMPANY
                                                  (Registrant)
  
  
  Date: September 14, 1998           By: /s/ Richard C. Unger, Jr.
                                         Richard C. Unger, Jr., President and
                                         Chairman of the Board
  
  
  Date: September 14, 1998           By: /s/ Anthony C. Bowe
                                         Anthony C. Bowe
                                         Vice President, Chief Financial
                                         Officer (Principal Financial and
                                         Accounting Officer)
  
  
                                       - 11 -
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 37606}]
metadata_filer: {"company-data": {"conformed-name": "BUCK HILL FALLS CO /PA/", "cik": "0000783283", "assigned-sic": "6500", "irs-number": "240536840", "state-of-incorporation": "PA", "fiscal-year-end": "1031"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "033-01406-W", "film-number": "98709659"}, "business-address": {"street1": "PO BOX 426", "city": "BUCK HILL FALLS", "state": "PA", "zip": "18323", "phone": "7175957511"}, "mail-address": {"street1": "PO BOX 426", "city": "BUCK HILL FALLS", "state": "PA", "zip": "18323"}}
text: FORM 10-Q
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  (Mark One)
  [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                             SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended         JULY 31, 1998
  
                                         OR
  
  [ ]      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                     33-1406
  
                               BUCK HILL FALLS COMPANY
               (Exact name of registrant as specified in its charter)
  
            PENNSYLVANIA                                    24-0536840
     (State or other jurisdiction of                    (I.R.S. Employer
     incorporation or organization)                     Identification No.)
  
                  CRESCO ROAD, BUCK HILL FALLS, PENNSYLVANIA 18323
                 (Address of principal executive offices)(Zip Code)
  
                                   (717) 595-7511
                (Registrant's telephone number, including area code)
  
                (Former name, former address and former fiscal year,
                            if changed since last report)
  
           Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934  during  the  preceding  12 months  (or for such  shorter  period  that the
  registrant was required to file such reports),  and (2) has been subject to such
  filing requirements for the past 90 days.
  
  Yes     X      No
  
           As of July 31, 1998,  the registrant had 79,811 shares of Common Stock,
  no par value and 24,960 shares of Class A Common Stock, no par value, issued and
  outstanding.
  FORM 10-Q
  
                               BUCK HILL FALLS COMPANY
  
                                        INDEX
  
                                                                              Page
  
  Part I:           Financial Information
  
  Item 1.  Financial Statements
  
                    Condensed Consolidated Balance Sheet -
                    July 31, 1998 and October 31, 1997                          1
  
                    Condensed Consolidated Statement of Operations -
                    Nine Months and Three Months Ended July 31, 1998
                    and 1997                                                    2
  
                    Condensed Consolidated Statement of Cash Flows -
                    Nine Months Ended July 31, 1998 and 1997                    3
  
                    Notes to Condensed Consolidated Financial Statements      4-6
  
  Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations             7-9
  
  Part II:          Other Information                                          10
  
                    Signatures                                                 11
  PART I - FINANCIAL INFORMATION
                            ITEM 1. FINANCIAL STATEMENTS
  
                       BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                        CONDENSED CONSOLIDATED BALANCE SHEET
  ----------------------------------------------------------------------------------------------------------------------
                                                                                            JULY 31,
                                                                                              1998          OCTOBER 31,
                                                                                           (UNAUDITED)          1997*
  ----------------------------------------------------------------------------------------------------------------------
  ASSETS
  
  CURRENT ASSETS:
      Cash                                                                                   $ 77,455          $ 76,973
      Accounts receivable, net                                                                497,209           328,854
      Prepaid expenses and other
         current assets                                                                        18,324            21,659
                                                                                          -----------       -----------
  
               Total current assets                                                           592,988           427,486
  
  RESTRICTED CASH                                                                              79,889            69,122
  
  PROPERTY, PLANT AND EQUIPMENT, Net                                                        2,808,281         2,643,058
  
  DEFERRED COSTS, Net                                                                              -              3,143
                                                                                          -----------       -----------
  
                          TOTAL                                                           $ 3,481,158       $ 3,142,809
                                                                                          ===========       ===========
  
                        LIABILITIES AND STOCKHOLDERS' EQUITY
  
  CURRENT LIABILITIES:
      Current portion of long-term debt                                                      $ 55,554         $ 504,268
      Accounts payable, trade                                                                 274,856           124,095
      Deferred revenue                                                                        536,351                 -
      Accrued expenses and other                                                               88,167            92,411
      6-1/4% Subordinated Notes                                                                    -            140,000
                                                                                          -----------       -----------
  
               Total current liabilities                                                      954,928           860,774
  
  CUSTOMER DEPOSITS                                                                            79,889            69,122
  
  6 - 1/4% SUBORDINATED NOTES                                                                 116,000                 -
  
  LONG-TERM DEBT                                                                              891,847           912,812
                                                                                          -----------       -----------
  
                    Total liabilities                                                       2,042,664         1,842,708
                                                                                          -----------       -----------
  
  STOCKHOLDERS' EQUITY:
      Common stock                                                                          1,731,861         1,720,661
      Contributed capital                                                                     874,227           799,227
      Deficit                                                                              (1,167,594)       (1,219,787)
                                                                                          -----------       -----------
  
                    Total stockholders' equity                                              1,438,494         1,300,101
                                                                                          -----------       -----------
  
                          TOTAL                                                           $ 3,481,158       $ 3,142,809
                                                                                          ===========       ===========
  *  Condensed from audited financial statements
  
                The accompanying notes are an integral part of these
                    condensed consolidated financial statements.
  
                                       - 1 -
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)
  -----------------------------------------------------------------------------------------------------------------------
                                                               NINE MONTHS ENDED                   THREE MONTHS ENDED
                                                           .......JULY 31.........              .......JULY 31.........
                                                           1998               1997               1998            1997
  -----------------------------------------------------------------------------------------------------------------------
  REVENUES                                             $ 1,532,413       $ 1,479,933         $ 863,683       $ 814,516
  
  COST OF REVENUES                                       1,312,817         1,249,260           688,093         576,383
                                                       -----------       -----------         ---------       ---------
  
  GROSS PROFIT FROM
      OPERATIONS                                           219,596           230,673           175,590         238,133
  
  GENERAL AND ADMINISTRATIVE
      EXPENSES                                             294,467           217,936            84,526          34,173
                                                       -----------       -----------         ---------       ---------
  
  (LOSS) INCOME FROM
      OPERATIONS                                           (74,871)           12,737            91,064         203,960
                                                       -----------       -----------         ---------       ---------
  
  OTHER INCOME (EXPENSE):
      Miscellaneous income                                  24,846            53,102            19,191          43,594
      Gain on sale of asset                                  2,015            53,500
      Interest expense                                    (101,794)         (119,446)          (37,358)        (37,442)
                                                       -----------       -----------         ---------       ---------
  
          Other income (expense), net                      (74,933)          (12,844)          (18,167)          6,152
                                                       -----------       -----------         ---------       ---------
  
  (LOSS) INCOME BEFORE
      EXTRAORDINARY ITEM                                  (149,804)             (107)           72,897         210,112
  
  EXTRAORDINARY ITEM - GAIN
      FROM CASUALTY (FIRE)                                 201,997                --           172,188              --
                                                       -----------       -----------         ---------       ---------
  
  NET INCOME (LOSS)                                       $ 52,193            $ (107)        $ 245,085       $ 210,112
                                                       -----------       -----------         ---------       ---------
  
  NET INCOME (LOSS) PER
      COMMON SHARE BEFORE
      EXTRAORDINARY ITEM
          Basic                                            $ (1.44)             $ --            $ 0.70          $ 2.12
                                                       ===========       ===========         =========       =========
  
          Diluted                                          $ (1.44)             $ --            $ 0.67          $ 1.98
                                                       ===========       ===========         =========       =========
  
  NET INCOME (LOSS) PER
      COMMON SHARE AFTER
      EXTRAORDINARY ITEM
          Basic                                             $ 0.50              $ --            $ 2.35          $ 2.12
                                                       ===========       ===========         =========       =========
  
          Diluted                                           $ 0.48              $ --            $ 2.25          $ 1.98
                                                       ===========       ===========         =========       =========
  The accompanying notes are an integral part of these
                    condensed consolidated financial statements.
  
                                       - 2 -
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                     (UNAUDITED)
  ---------------------------------------------------------------------------------------------------------------------
                                                                                                 NINE MONTHS ENDED
                                                                                                ......JULY 31......
                                                                                              1998              1997
  ---------------------------------------------------------------------------------------------------------------------
  CASH PROVIDED BY OPERATING
       ACTIVITIES:
          Net income (loss)                                                                 $ 52,193            $ (107)
          Adjustments for noncash charges:
              Depreciation and amortization                                                  173,833           167,858
              Gain from casualty fire                                                       (201,997)
              Gain from disposition of assets                                                 (2,015)          (53,669)
          Changes in assets and liabilities                                                  520,992           304,031
                                                                                            --------         ---------
  
                  Net cash provided by operating
                     activities                                                              543,006           418,113
                                                                                            --------         ---------
  
       INVESTING ACTIVITIES:
          Insurance proceeds from fire loss                                                  235,485
          Purchase of property and equipment                                                (372,545)          (93,443)
          Proceeds from sale of asset                                                          2,015            53,880
                                                                                            --------         ---------
  
                  Net cash provided by (used in)
                     investing activities                                                   (135,045)          (39,563)
                                                                                            --------         ---------
  
       FINANCING ACTIVITIES:
          Repayment of debt                                                                 (493,679)         (697,697)
          Proceeds from additional paid in capital                                            75,000
          Proceeds from issuance of stock                                                     11,200           190,206
          Proceeds from issuance of debt                                                                       205,042
                                                                                            --------         ---------
  
                  Net cash used in financing activities                                     (407,479)         (302,449)
                                                                                            --------         ---------
  
  INCREASE IN CASH                                                                               482            76,101
  
  CASH, BEGINNING OF PERIOD                                                                   76,973           106,703
                                                                                            --------         ---------
  
  CASH, END OF PERIOD                                                                       $ 77,455         $ 182,804
                                                                                            ========         =========
  
  CASH PAID FOR INTEREST                                                                    $ 99,478         $ 119,446
                                                                                            ========         =========
  The accompanying notes are an integral part of these
                    condensed consolidated financial statements.
  
                                       - 3 -
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (UNAUDITED)
  --------------------------------------------------------------------------------
  
  NOTE 1:  BASIS OF PRESENTATION
  
           Although the interim  condensed  consolidated  financial  statements of
  Buck Hill Falls Company and Subsidiary (the "Company") are unaudited,  it is the
  opinion  of the  Company's  management  that all  normal  recurring  adjustments
  necessary for a fair statement of the results for the interim periods  presented
  have been  reflected  therein.  The results of operations for any interim period
  are not  necessarily  indicative  of results that may be expected for the entire
  year.
  
           These  statements  should be read in conjunction  with the consolidated
  financial  statements and related notes included in the Company's  annual report
  on Form 10-K for the year ended October 31, 1997.
  
  NOTE 2:  CHANGES IN COMPONENTS OF COMMON STOCK CLASS A
  STOCK
                                      ...COMMON STOCK...               .STOCK SUBSCRIBED.          SUBSCRIPTION
                                    SHARES          AMOUNT          SHARES          AMOUNT          RECEIVABLE
  Balance, October 31, 1997          24,400        $343,811           4,200          $84,190         $(84,190)
  Common Stock Issued                   560          11,200
  Common Stock Subscribed                --              --            (560)         (11,200)          11,200
                                   --------        --------        --------         --------         --------
  
  Balance, July 31, 1998             24,960        $355,010           3,640          $72,990         $(72,990)
                                   ========        ========        ========         ========         ========
  -4-
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (UNAUDITED)
  --------------------------------------------------------------------------------
  
  NOTE 3:  EARNINGS PER SHARE
  
           In fiscal 1998, the Company adopted  Statement of Financial  Accounting
  Standards  ("SFAS") No. 128, "Earnings Per Share," which changed the computation
  of earnings  per share  ("EPS") and  requires  presentation  of two new amounts,
  basic and diluted EPS, and additional informational disclosures. The adoption of
  SFAS No. 128 is required for all reporting  periods after  December 15, 1997 and
  requires  restatement  for all  prior  periods.  The  adoption  of SFAS No.  128
  resulted in the restatement of the Company's July 31, 1997 EPS, as follows:
  NINE MONTHS               THREE MONTHS
                                                                                ENDED                      ENDED
                                                                            JULY 31, 1997              JULY 31, 1997
                                                                            -------------              -------------
  Previously reported
               Primary fully diluted                                            $ --                       $2.12
                                                                                ====                       =====
               Fully diluted                                                    $ --                       $2.12
                                                                                ====                       =====
  
           Restated amounts:
               Basic EPS                                                        $ --                       $2.12
                                                                                ====                       =====
               Diluted EPS                                                      $ --                       $1.98
                                                                                ====                       =====
  The  following  data show the amounts  used in  computing  earnings per
  share and the  effects of income and the  weighted  average  number of shares of
  dilutive potential common stock for the years ended July 31, 1998 and 1997:
  FOR THE NINE MONTHS                               FOR THE THREE MONTHS
                                       .......ENDED JULY 31, 1998................      ........ENDED JULY 31, 1997........
                                                             COMMON                                      COMMON
                                          INCOME             SHARES                     INCOME           SHARES
                                        NUMERATOR         DENOMINATOR        EPS       NUMERATOR      DENOMINATOR      EPS
  July 31, 1998 
       Before extraordinary item:
  Basic EPS                    $(149,804)          104,291        $(1.44)     $ 72,897         104,291       $ .70
                                        =========           =======        ======      ========         =======       =====
           Diluted EPS                  $(149,804)          108,811        $(1.44)     $ 72,897         108,811       $ .67
                                        =========           =======        ======      ========         =======       =====
  
       After extraordinary item:
           Basic EPS                     $ 52,193           104,291        $   .50     $245,085         104,291       $2.35
                                         ========           =======        =======     ========         =======       =====
           Diluted EPS                   $ 52,193           108,811        $   .48     $245,085         108,811       $2.25
                                         ========           =======        =======     ========         =======       =====
  
                                       - 5 -
  FOR THE NINE MONTHS                               FOR THE THREE MONTHS
                                       .......ENDED JULY 31, 1998................      ........ENDED JULY 31, 1997........
                                                             COMMON                                      COMMON
                                          INCOME             SHARES                     INCOME           SHARES
                                        NUMERATOR         DENOMINATOR        EPS       NUMERATOR      DENOMINATOR      EPS
  
  July 31, 1997
       Before and after extraordinary
           item:
                Basic EPS                $ (107)              98,931       $      --   $210,112           98,931      $2.12
                                         ======             ========       =========   ========         ========      =====
                Diluted EPS              $ (107)             105,961       $      --   $210,112          105,961      $1.98
                                         ======             ========       =========   ========         ========      =====
  --------------------------------------------------------------------------------
  
                                        -6-
  FORM 10-Q
  
  BUCK HILL FALLS COMPANY AND SUBSIDIARY
  
  ITEM 2   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  
  GENERAL
  
           The  Company's  business,  insofar as it relates  to the  provision  of
  recreational  facilities,  is  largely  seasonal  in  nature.  As a result,  the
  Company's revenues and cost of revenues typically increase  significantly in its
  third and fourth fiscal quarters.
  
  RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
  JULY 31, 1998 AS COMPARED TO THE NINE MONTHS ENDED
  JULY 31, 1997
  --------------------------------------------------------------------------------
  
           In March 1998, the Company experienced a catastrophic fire. The process
  of rebuilding and the  replacement of the assets  destroyed is nearly  complete.
  Management is confident that, with the fire renovations complete,  the increased
  demand for the Company's amenities  experienced during the later portion of June
  and July will continue through the final fiscal period of 1998.
  
           Revenues  increased $52,480 for the nine months ended July 31, 1998, as
  compared  to the same  period in the prior  year.  In 1998,  the  Company had an
  increase in  membership  revenue of nearly  $20,000 due to increased  members as
  well as an  increase  in  daily  fees.  Additionally,  revenues  from  townhouse
  maintenance  fees  were  $13,000  higher  in 1998 as  compared  to 1997,  mostly
  attributable  to an increase in the yearly fee charged to the  cottagers.  Also,
  the number of rounds of golf  increased,  resulting in an  additional  $6,500 of
  green fees in 1998.  Finally,  there was an increase  of nearly  $11,000 in snow
  plowing revenues resulting from a new policy excluding  snowplowing as a part of
  the annual  maintenance  fee  agreement.  Mitigating  the above  increases was a
  decrease of nearly  $26,000 in the Company's  dues which was the result of a new
  policy where dues are no longer assessed on undeveloped lots and "footprints".
  
           Cost of revenues  increased  $63,557 for the nine months ended July 31,
  1998 as  compared to the same period in 1997.  Repairs and  maintenance  expense
  increased  approximately  $10,500 due to repairs made on the tennis tea and golf
  course.  Electricity expense increased  approximately  $6,500 due to the loss of
  the automatic  irrigation system in the fire.  Without the automated system, the
  irrigation system operated  inefficiently  resulting in an increase in operating
  costs.  Road and path expense  increased $5,000 due to continued  efforts by the
  Company to improve the road and path system throughout the community. Offsetting
  these increases was a decrease in security expense of  approximately  $7,500 due
  to a new agreement  negotiated by the Company to provide office space for use by
  the security firm in return for a reduction of overall rates.  Insurance expense
  decreased  approximately $15,500 due to the bidding of all insurance policies in
  the prior year, the effect of which is being recognized in fiscal 1998.
  
                                       - 7 -
  General and  administrative  costs increased  $76,530 in the first nine
  months of 1998 as compared to the same period in 1997. A portion of the increase
  was the  result  of  expenses  of  $23,000  in  office  and  computer  equipment
  associated   with  the   conversion  of  the  Company's   accounting   software.
  Additionally,  there was an increase of approximately $24,000 in payroll expense
  due to the hiring of additional  personnel  and an across the board  increase of
  approximately  five  percent in wages for fiscal 1998.  There was a  substantial
  decrease in  professional  fees of  approximately  $19,000 due to a nonrecurring
  executive  search that was  required in 1997.  Other  income  decreased  $79,743
  primarily  due to realized  revenues  in 1997 of $53,000  from the sale of land.
  There was a substantial drop in interest expense of $19,000 due to the Company's
  continued effort to substantially reduce outstanding debt.
  
  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
  JULY 31, 1998 COMPARED TO THE THREE MONTHS ENDED
  JULY 31, 1997
  --------------------------------------------------------------------------------
  
           Revenues increased $49,167 during the three months ended July 31, 1998.
  As explained above, the increase was due primarily to an increase in memberships
  and daily fees.
  
           Cost of revenues increased $111,710 for the three months ended July 31,
  1998  primarily  from the increase in demand  throughout  the  community for the
  Company's numerous amenities which resulted in increases in various departmental
  expenses as explained above.
  
           General and  administrative  expenses  increased  $50,353 for the three
  months ended July 31, 1998 primarily due to the increase in expenditures for the
  upgrade in the Company's computer system and increases in payroll expense.
  
           LIQUIDITY AND CAPITAL RESOURCES
  
           At July  31,1998,  the Company had a working  capital  deficiency  of $
  361,941.  Included  in current  liabilities  is $55,554 in  scheduled  principal
  payments on long -term debt that are due within the next twelve months.
  
           On July 24, 1992, the Company entered into a loan agreement with a bank
  relating to a secured  revolving line of credit in the amount of $1,000,000 (the
  "Revolving  Credit  Facility").  Amounts  borrowed  under the  Revolving  Credit
  Facility  bear  interest at the prime rate (8.25% at July  31,1998) plus 1-1/2%.
  Pursuant  to the  loan  agreement,  approximately  2,600  acres of land and land
  improvements  located in Barrett  Township,  Monroe  County,  Pennsylvania,  are
  pledged as  collateral,  along  with dues,  assessments  and fee  revenues.  The
  Revolving Credit Facility is available through May 24, 1999, contingent upon the
  Company  maintaining  a  satisfactory  financial  position and subject to annual
  review of the Company's  financial  statements by the bank.  The loan  agreement
  with the bank  provides  that  if,  in the  opinion  of the  authorized  lending
  officers of the bank, the Company's credit worthiness  materially declines,  the
  credit  line will cease to be  available  for  future  draws,  and any  existing
  balance will be required to be fully amortized over a reasonable term.
  
                                       - 8 -
  The Company  was  required to make  certain  improvements  in its water
  system.  In May 1995, the Company  entered into a $900,000 loan agreement with a
  bank to refinance the existing debt and to complete the improvements.  Principal
  is payable in monthly installments of $8,985 over a 20-year amortization period.
  Interest  is  payable  at the  bank's  base rate  (8.25% at July 31,  1998) plus
  1-1/2%.  The loan  matures  in May 2015 and is secured  by a first  mortgage  on
  approximately  2,200  acres of land and land  improvements  located  in  Barrett
  Township,  Monroe  County,  Pennsylvania  and a  collateral  assignment  of  all
  revenues and assessments of the Company's water operations.
  
           The Company expects to meet its current  liabilities  through increased
  collections  as a result of the seasonal  increase in revenues  which  typically
  occurs during the Company's third and fourth  quarters  through the provision of
  recreational services.
  
           Cash remained static for the nine months ended July 31,1998.  Cash from
  operating activities increased $124,893 primarily from the advance collection of
  fees.  Cash  provided  by  investing  activities  decreased  $95,482  due to the
  insurance  proceeds received for the replacement of the assets lost in the fire,
  net of the  purchase of new fixed  assets.  Net  repayment  of debt  amounted to
  $493,000  in both 1998 and 1997.  In 1998,  $75,000 was  received as  additional
  paid-in  capital by a stockholder of the Company and will be used to construct a
  building  within the  community.  Additionally,  $11,200  was  received  for the
  payment of Common Stock Class A in 1998 as compared to $190,206 in 1997.
  
           At  July  31,  1998,  the  Company  has  no  outstanding  draws  on its
  $1,000,000 line of credit.
  
           The Company incurred a loss before  extraordinary  item of $149,804 for
  the nine  months  ended July  31,1998  and at July  31,1998,  the  Company has a
  cumulative  deficit of $1,167,594 and a working capital  deficiency of $361,940.
  Although the  Company's  line of credit is available  through May 24, 1999,  the
  ability  to borrow  under the line is  contingent  upon  certain  factors.  As a
  result,  continuation  of the Company in its present form is dependent  upon the
  successful  maintenance  of its debt  terms,  its  ability to obtain  additional
  financing,  if needed,  and the eventual  achievement  of  sustained  profitable
  operations.
  
           Management   believes  that   revisions  in  the  Company's   operating
  requirements,  including an increase in dues from $2,800 to $2,950,  provide the
  opportunity for the Company to continue as a going concern. However, there is no
  assurance  that  management's  actions  will be  successful  or, if they are not
  successful, that the Company would be able to continue as a going concern.
  
                                        - 9 -
  PART II - OTHER INFORMATION
  
  Item 1.  Legal Proceedings
  
                    None
  
  Item 2.  Changes in Securities
  
                    None
  
  Item 3.  Defaults Upon Senior Securities
  
                    None
  
  Item 4.  Submission of Matters to a Vote of Security Holders
  
                    The Annual Meeting of the shareholders of the Company was held
                    on July 19, 1998.  At the meeting the  following  persons were
                    elected as directors of the Company, each receiving the number
                    of votes indicated next to his or her name:
  
                                      Sandra Kraus                       66,364
                                      Edward Reilly                      67,878
                                      Anthony Roberts                    61,177
  
                    The following additional persons continued as directors of the
                    Company after the meeting:
  
                                      Anthony C. Bowe
                                      James T. Sygenda
                                      David C. Toomey
                                      Richard C. Unger, Jr.
                                      Clifford Press
                                      Grace Godshalk
  
                    The   shareholders   also   approved  the   conveyance   of  a
                    conservation easement to the Buck Hill Conservation Foundation
                    by the following vote:
  
                                      Yes                                59,908
                                      No                                  2,011
                                      No vote/Abstain                    14,170
  
  Item 5.  Other Information
  
                    At its organizational  meeting on September 7, 1998, the Board
                    of Directors  elected  Richard C. Unger,  Jr. as President and
                    Chairman of the Board of the Company and reelected  Anthony C.
                    Bowe as  Vice-President  and Chief Financial Officer and David
                    C. Toomey as secretary.
  
  Item 6.  Exhibits and Reports on Form 8-K
  
                    None
  
                                       - 10 -
  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.
  
                                            BUCK HILL FALLS COMPANY
                                                  (Registrant)
  
  Date: September 14, 1998           By: /s/ Richard C. Unger, Jr.
                                         Richard C. Unger, Jr., President and
                                         Chairman of the Board
  
  Date: September 14, 1998           By: /s/ Anthony C. Bowe
                                         Anthony C. Bowe
                                         Vice President, Chief Financial
                                         Officer (Principal Financial and
                                         Accounting Officer)
  
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