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


                                    FORM 8-K


              CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


                DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

                                  September 28, 2004
                 --------------------------------------------------------------



                       Avalon Correctional Services, Inc.
                 --------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)


         Nevada                        0-20307                       13-3592263
     --------------------------------------------------------------------------
(State or other jurisdiction      (Commission File No.)           (IRS Employer
of incorporation)                                           Identification No.)


                  13401 Railway Drive, Oklahoma City, OK 73114
 ------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                  405-752-8802
 ------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)









                                        1

<PAGE>
                    INFORMATION TO BE INCLUDED IN THE REPORT


Item 7.01.  Regulation FD Disclosure.

     Avalon  Correctional  Services,  Inc.,  (the  "Company")  announces that on
September 28, 2004,  the Company  entered into a Credit  Agreement  with Bank of
America,  N.A.  Under the terms of this  Credit  Agreement,  Bank of America has
provided  to the  Company a $1  million  revolving  credit  facility  and a $4.5
million term loan credit facility. The credit facilities will bear interest at a
30 day LIBOR rate plus 250 basis points.  The revolving  credit facility matures
in two years,  with  interest  to be paid  monthly,  and the  principal  paid at
maturity.  The term loan  credit  facility  matures in three  years,  with level
monthly  principal and interest  payments based upon a fifteen year amortization
schedule.  The Bank of America credit facilites are secured by a mortgage on one
Company facility in Oklahoma City,  Oklahoma,  and a lien on Company receivables
and other non-real  property  Company assets (except for  receivables  and other
assets attributable to the Company's Colorado operations).

     The proceeds of the term loan credit facility,  together with other Company
funds,  will be used to pay off  remaining  debt  owed by the  Company  to Fleet
Capital  Corporation.  The  revolving  credit  facility will be used for working
capital needs of the Company.


                                    SIGNATURE

     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.


                               AVALON CORRECTIONAL SERVICES, INC.

                               s// Donald E.  Smith
                               DONALD E. SMITH
                               Chairman of the Board and Chief Executive Officer

                               Dated:   September 28, 2004

                                        2
<PAGE>
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{"company-data": {"conformed-name": "AVALON CORRECTIONAL SERVICES INC", "cik": "0000872202", "assigned-sic": "8744", "irs-number": "133592263", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-20307", "film-number": "041056401"}, "business-address": {"street1": "13401 RAILWAY DR", "city": "OKLAHOMA CITY", "state": "OK", "zip": "73114", "phone": "4057528802"}, "mail-address": {"street1": "13401 RAILWAY DRIVE", "city": "OKLAHOMA CITY", "state": "OK", "zip": "73114"}, "former-company": [{"former-conformed-name": "AVALON COMMUNITY SERVICES INC", "date-changed": "19930328"}, {"former-conformed-name": "AVALON ENTERPRISES INC", "date-changed": "19600201"}]}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

              CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)

                                  September 28, 2004
                 --------------------------------------------------------------

                       Avalon Correctional Services, Inc.
                 --------------------------------------------------------------
             (Exact name of Registrant as specified in its Charter)

         Nevada                        0-20307                       13-3592263
     --------------------------------------------------------------------------
(State or other jurisdiction      (Commission File No.)           (IRS Employer
of incorporation)                                           Identification No.)

                  13401 Railway Drive, Oklahoma City, OK 73114
 ------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                  405-752-8802
 ------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                        1
INFORMATION TO BE INCLUDED IN THE REPORT

Item 7.01.  Regulation FD Disclosure.

     Avalon  Correctional  Services,  Inc.,  (the  "Company")  announces that on
September 28, 2004,  the Company  entered into a Credit  Agreement  with Bank of
America,  N.A.  Under the terms of this  Credit  Agreement,  Bank of America has
provided  to the  Company a $1  million  revolving  credit  facility  and a $4.5
million term loan credit facility. The credit facilities will bear interest at a
30 day LIBOR rate plus 250 basis points.  The revolving  credit facility matures
in two years,  with  interest  to be paid  monthly,  and the  principal  paid at
maturity.  The term loan  credit  facility  matures in three  years,  with level
monthly  principal and interest  payments based upon a fifteen year amortization
schedule.  The Bank of America credit facilites are secured by a mortgage on one
Company facility in Oklahoma City,  Oklahoma,  and a lien on Company receivables
and other non-real  property  Company assets (except for  receivables  and other
assets attributable to the Company's Colorado operations).

     The proceeds of the term loan credit facility,  together with other Company
funds,  will be used to pay off  remaining  debt  owed by the  Company  to Fleet
Capital  Corporation.  The  revolving  credit  facility will be used for working
capital needs of the Company.

                                    SIGNATURE

     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.

                               AVALON CORRECTIONAL SERVICES, INC.

                               s// Donald E.  Smith
                               DONALD E. SMITH
                               Chairman of the Board and Chief Executive Officer

                               Dated:   September 28, 2004

                                        2