5
a:\FormS-8.doc
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C 20549
                 ______________________________
                            Form S-8
                     Registration Statement
                              Under
                   The Securities Act of 1933
                 _______________________________
               NETWORK SYSTEMS INTERNATIONAL, INC.
     (Exact name of registrant as specified in its charter)
            Nevada                         87-0460247
   (state of incorporation)     (I.R.S. employer identification no.)
                                     
                      200 North Elm Street
                Greensboro, North Carolina 27401
                         (336) 271-8400 
                                     
(Address and telephone number of Registrant's principal executive offices)
                                
    STOCK PROMOTION AGREEMENT WITH PALM STATE EQUITIES, INC.
                    (Full title of the plan)
                      _____________________
                      William C. Ray, Esq.
         Vice President, General Counsel, and Secretary
               Network Systems International, Inc.
                      200 North Elm Street
                Greensboro, North Carolina 27401
                         (336) 271-8400
   (Name, address, and telephone number of agent for service)
                      _____________________
                                
                 CALCULATION OF REGISTRATION FEE
                                
                           Proposed    Proposed          
                           Maximum      Maximum      Amount of
  Title of     Amount to   Offering    Aggregate   Registration
 Securities       be        Price      Offering         Fee
    to be     Registered  Per Share      Price
 Registered
Common Stock,                                            
  $.001 par     37,500      $3.37      $126,375       $37.28
    value
                                


                             PART I


      INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     Pursuant to the Note to Part I of Form S-8, the information
specified in Items 1 and 2 of Form S-8 has not been filed with
the Securities and Exchange Commission as part of this
Registration Statement.

                             PART II

       INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following documents filed by the Registrant with the
Securities and Exchange Commission are incorporated by reference
in this Registration Statement:

          (a)  The Registrant's Annual Report on Form 10-KSB for
          the fiscal year ended September 30, 1997, filed
          December 30, 1997, pursuant to Section 13(a) or 15(d)
          of the Securities Exchange Act of 1934, as amended (the
          "Exchange Act"); and

          (b)  The Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended December 31, 1997, filed February
          6, 1998, pursuant to Section 13(a) or 15(d) of the
          Exchange Act;

               The Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended March 31, 1998, filed May 14,
          1998, pursuant to Section 13(a) or 15(d) of the
          Exchange Act;

               The Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended June 30, 1998, filed August 7,
          1998, pursuant to Section 13(a) or 15(d) of the
          Exchange Act;

               The Registrant's Proxy Statement filed January 28,1998;

               The Registrant's Form NT-10K filed December 30,1997;

               The Registrant's Form 8-K filed January 26, 1998;

               The Registrant's Form 8-K filed April 29, 1998; 

               The Registrant's Form 8-K filed June 1, 1998; and

               The Registrant's Form 8-K filed July 23, 1998.


     All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act, on or after the
date of this Registration Statement and before the filing of a
post-effective amendment indicating that all securities offered
hereby have been sold or that de-registers all securities covered
hereby remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof
from the date of filing of those documents.

Item 4.  Description of Securities.

     The authorized capital stock of the Registrant consists of
100,000,000 shares of common stock, $.001 par value per share.
As of the date of this Registration Statement, the Registrant had
outstanding 7,611,754 shares common stock.  Each shareholder of
record is entitled to one vote per share on all matters to be
voted upon by the shareholders.  The Registrant's Articles of
Incorporation do not provide for cumulative voting.  The
shareholders are entitled to receive dividends when, as, and if
declared from time to time by the Registrant's Board of
Directors. The Registrant's common stock does not have any
preemptive rights.

Item 5.  Interest of Named Experts and Counsel.

     William C. Ray, Esq., who is rendering the opinion regarding
the validity of the shares of common stock being registered by
this Registration Statement, is the Vice President, General
Counsel, and Secretary of the Registrant.  Mr. Ray also
beneficially owns 350,481 shares of the Registrant's common
stock.

Item 6.  Indemnification of Directors and Officers.

     Nevada law authorizes the Registrant to indemnify any person
who was or is a party, or threatened to be made a party, to any
proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation or other entity,
against liability incurred in connection with such proceeding,
including any appeal, if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.  In the case of an action by or on behalf
of a corporation, indemnification may not be made if the person
seeking indemnification is adjudged liable, unless the court in
which the action was brought determines the person is fairly and
reasonably entitled to indemnification.  The indemnification
provisions under Nevada law require indemnification if a director
or officer has been successful on the merits or otherwise in
defense of any action, suit, or proceeding to which he or she was
a party by reason of the fact that he or she is or was a director
or officer of the corporation.  The indemnification authorized
under Nevada law is not exclusive and is in addition to any other
rights granted to officers and directors under the Articles of
Incorporation or Bylaws of the Registrant or any agreement
between officers and directors and the corporation.  A
corporation may purchase and maintain insurance or furnish
similar protection on behalf of any officer or director against
any liability asserted against the officer or director and
incurred by the officer or director in such capacity, or arising
out of the status, as an officer or director, whether or not the
corporation would have the power to indemnify him or her against
such liability under Nevada law.

     The Registrant's Bylaws and Articles of Incorporation
provide for the indemnification of the Registrant's directors and
officers, and persons who serve at the request of Registrant as
directors or officers of another corporation, against any
liability incurred in connection with the defense or settlement
of any claim, action, suit, or proceeding that the director or
officer was a party to by reason of the fact that he is or was a
director or officer of the Registrant, or other corporation,
except that the director or officer will not be indemnified for
any liability arising from action that constitute negligence or
willful misconduct.

Item 7.  Exemption from Registration Claimed.

     Not applicable.

Item 8.  Exhibits.

Exhibit       Description
Number        

4.1           Stock Promotion Agreement dated July 16,
              1997, between the Registrant and Palm
              State Equities, Inc.
5.1           Opinion of William C. Ray, Esq.
              regarding the legality of the securities
              being registered.
15            Consent of Pender Newkirk & Company.
23.1          Consent of William C. Ray, Esq.
              (contained in Exhibit 5.1).
24            Power of Attorney (Included on signature
              page)

Item 9.  Undertakings.

     The undersigned hereby undertakes:

     (1)  That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

     (2)  Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the act and is, therefore, unenforceable.  In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, such or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.


                           SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing a Form S-8
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Greensboro, State of North Carolina, on the 25th day of
September, 1998.

                               NETWORK SYSTEMS INTERNATIONAL,INC.


                               By: /s/ Michael Spohn
 
                                   Michael Spohn                               
                                   Chief Financial Officer


                          POWER OF ATTORNEY

    Pursuant to section 6(a) of the Securities Act of 1933, each
of the undersigned hereby appoints and constitutes Michael Spohn
(with full power to act alone), his attorney-in-fact, with full
power of substitution, for him and on his behalf, in any and all
capacities, to sign, execute, and file with the Securities and
Exchange Commission this Registration Statement on Form S-8 under
the Securities Act of 1933, as amended, and any amendments
relating thereto, granting unto said attorney, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done to effectuate the same as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, or their
substitutes, may lawfully do or cause to be done.

    Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

Signature              Title                            Date
                                                    
/s/ Robbie M. Efird      President, Chief Executive      9/18/98   
Robbie M. Efird          Officer,and Director                     
                   
/s/ E. W. Miller, Jr.    Executive Vice President        9/18/98    
E. W. Miller, Jr.        and Director                                      
                                                    
/s/ David F. Christian   Director                        9/18/98
David F. Christian
                                  
/s/ James W. Moseley     Director                        9/21/98              
James W. Moseley
                                     
/s/ Richard R. King      Director                        9/18/98               
Richard R. King
                                 
/s/ David P. Reynolds    Director                        9/21/98
David P. Reynolds
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 13373}]
{"company-data": {"conformed-name": "NETWORK SYSTEMS INTERNATIONAL INC", "cik": "0000842722", "assigned-sic": "6770", "irs-number": "870460247", "state-of-incorporation": "NV", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-64347", "film-number": "98715336"}, "business-address": {"street1": "200 NORTH ELM STREET", "city": "GREENSBORO", "state": "NC", "zip": "27401", "phone": "6024648900"}, "mail-address": {"street1": "200 N ELM ST", "city": "GREENSBORO", "state": "NC", "zip": "27401"}, "former-company": {"former-conformed-name": "AQUA AUSTRALIS INC", "date-changed": "19940322"}}
5
a:\FormS-8.doc
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C 20549
                 ______________________________
                            Form S-8
                     Registration Statement
                              Under
                   The Securities Act of 1933
                 _______________________________
               NETWORK SYSTEMS INTERNATIONAL, INC.
     (Exact name of registrant as specified in its charter)
            Nevada                         87-0460247
   (state of incorporation)     (I.R.S. employer identification no.)
                                     
                      200 North Elm Street
                Greensboro, North Carolina 27401
                         (336) 271-8400 
                                     
(Address and telephone number of Registrant's principal executive offices)
                                
    STOCK PROMOTION AGREEMENT WITH PALM STATE EQUITIES, INC.
                    (Full title of the plan)
                      _____________________
                      William C. Ray, Esq.
         Vice President, General Counsel, and Secretary
               Network Systems International, Inc.
                      200 North Elm Street
                Greensboro, North Carolina 27401
                         (336) 271-8400
   (Name, address, and telephone number of agent for service)
                      _____________________
                                
                 CALCULATION OF REGISTRATION FEE
                                
                           Proposed    Proposed          
                           Maximum      Maximum      Amount of
  Title of     Amount to   Offering    Aggregate   Registration
 Securities       be        Price      Offering         Fee
    to be     Registered  Per Share      Price
 Registered
Common Stock,                                            
  $.001 par     37,500      $3.37      $126,375       $37.28
    value
                                

                             PART I

      INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     Pursuant to the Note to Part I of Form S-8, the information
specified in Items 1 and 2 of Form S-8 has not been filed with
the Securities and Exchange Commission as part of this
Registration Statement.

                             PART II

       INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

     The following documents filed by the Registrant with the
Securities and Exchange Commission are incorporated by reference
in this Registration Statement:

          (a)  The Registrant's Annual Report on Form 10-KSB for
          the fiscal year ended September 30, 1997, filed
          December 30, 1997, pursuant to Section 13(a) or 15(d)
          of the Securities Exchange Act of 1934, as amended (the
          "Exchange Act"); and

          (b)  The Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended December 31, 1997, filed February
          6, 1998, pursuant to Section 13(a) or 15(d) of the
          Exchange Act;

               The Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended March 31, 1998, filed May 14,
          1998, pursuant to Section 13(a) or 15(d) of the
          Exchange Act;

               The Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended June 30, 1998, filed August 7,
          1998, pursuant to Section 13(a) or 15(d) of the
          Exchange Act;

               The Registrant's Proxy Statement filed January 28,1998;

               The Registrant's Form NT-10K filed December 30,1997;

               The Registrant's Form 8-K filed January 26, 1998;

               The Registrant's Form 8-K filed April 29, 1998; 

               The Registrant's Form 8-K filed June 1, 1998; and

               The Registrant's Form 8-K filed July 23, 1998.

     All documents filed by the Registrant pursuant to Sections
13(a), 13(c), 14, and 15(d) of the Exchange Act, on or after the
date of this Registration Statement and before the filing of a
post-effective amendment indicating that all securities offered
hereby have been sold or that de-registers all securities covered
hereby remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof
from the date of filing of those documents.

Item 4.  Description of Securities.

     The authorized capital stock of the Registrant consists of
100,000,000 shares of common stock, $.001 par value per share.
As of the date of this Registration Statement, the Registrant had
outstanding 7,611,754 shares common stock.  Each shareholder of
record is entitled to one vote per share on all matters to be
voted upon by the shareholders.  The Registrant's Articles of
Incorporation do not provide for cumulative voting.  The
shareholders are entitled to receive dividends when, as, and if
declared from time to time by the Registrant's Board of
Directors. The Registrant's common stock does not have any
preemptive rights.

Item 5.  Interest of Named Experts and Counsel.

     William C. Ray, Esq., who is rendering the opinion regarding
the validity of the shares of common stock being registered by
this Registration Statement, is the Vice President, General
Counsel, and Secretary of the Registrant.  Mr. Ray also
beneficially owns 350,481 shares of the Registrant's common
stock.

Item 6.  Indemnification of Directors and Officers.

     Nevada law authorizes the Registrant to indemnify any person
who was or is a party, or threatened to be made a party, to any
proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee, or agent of another corporation or other entity,
against liability incurred in connection with such proceeding,
including any appeal, if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.  In the case of an action by or on behalf
of a corporation, indemnification may not be made if the person
seeking indemnification is adjudged liable, unless the court in
which the action was brought determines the person is fairly and
reasonably entitled to indemnification.  The indemnification
provisions under Nevada law require indemnification if a director
or officer has been successful on the merits or otherwise in
defense of any action, suit, or proceeding to which he or she was
a party by reason of the fact that he or she is or was a director
or officer of the corporation.  The indemnification authorized
under Nevada law is not exclusive and is in addition to any other
rights granted to officers and directors under the Articles of
Incorporation or Bylaws of the Registrant or any agreement
between officers and directors and the corporation.  A
corporation may purchase and maintain insurance or furnish
similar protection on behalf of any officer or director against
any liability asserted against the officer or director and
incurred by the officer or director in such capacity, or arising
out of the status, as an officer or director, whether or not the
corporation would have the power to indemnify him or her against
such liability under Nevada law.

     The Registrant's Bylaws and Articles of Incorporation
provide for the indemnification of the Registrant's directors and
officers, and persons who serve at the request of Registrant as
directors or officers of another corporation, against any
liability incurred in connection with the defense or settlement
of any claim, action, suit, or proceeding that the director or
officer was a party to by reason of the fact that he is or was a
director or officer of the Registrant, or other corporation,
except that the director or officer will not be indemnified for
any liability arising from action that constitute negligence or
willful misconduct.

Item 7.  Exemption from Registration Claimed.

     Not applicable.

Item 8.  Exhibits.

Exhibit       Description
Number        

4.1           Stock Promotion Agreement dated July 16,
              1997, between the Registrant and Palm
              State Equities, Inc.
5.1           Opinion of William C. Ray, Esq.
              regarding the legality of the securities
              being registered.
15            Consent of Pender Newkirk & Company.
23.1          Consent of William C. Ray, Esq.
              (contained in Exhibit 5.1).
24            Power of Attorney (Included on signature
              page)

Item 9.  Undertakings.

     The undersigned hereby undertakes:

     (1)  That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

     (2)  Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the act and is, therefore, unenforceable.  In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, such or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.

                           SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing a Form S-8
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Greensboro, State of North Carolina, on the 25th day of
September, 1998.

                               NETWORK SYSTEMS INTERNATIONAL,INC.

                               By: /s/ Michael Spohn
 
                                   Michael Spohn                               
                                   Chief Financial Officer

                          POWER OF ATTORNEY

    Pursuant to section 6(a) of the Securities Act of 1933, each
of the undersigned hereby appoints and constitutes Michael Spohn
(with full power to act alone), his attorney-in-fact, with full
power of substitution, for him and on his behalf, in any and all
capacities, to sign, execute, and file with the Securities and
Exchange Commission this Registration Statement on Form S-8 under
the Securities Act of 1933, as amended, and any amendments
relating thereto, granting unto said attorney, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done to effectuate the same as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorney-in-fact and agents, or any of them, or their
substitutes, may lawfully do or cause to be done.

    Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

Signature              Title                            Date
                                                    
/s/ Robbie M. Efird      President, Chief Executive      9/18/98   
Robbie M. Efird          Officer,and Director                     
                   
/s/ E. W. Miller, Jr.    Executive Vice President        9/18/98    
E. W. Miller, Jr.        and Director                                      
                                                    
/s/ David F. Christian   Director                        9/18/98
David F. Christian
                                  
/s/ James W. Moseley     Director                        9/21/98              
James W. Moseley
                                     
/s/ Richard R. King      Director                        9/18/98               
Richard R. King
                                 
/s/ David P. Reynolds    Director                        9/21/98
David P. Reynolds