






                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


(Mark One)
               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  (X)                  THE SECURITIES EXCHANGE ACT OF 1934
                    For The Quarter Ended September 30, 1998

                                       OR

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

                           Commission File No. 0-16741


                            COMSTOCK RESOURCES, INC.
             (Exact name of registrant as specified in its charter)


          NEVADA                                                94-1667468
   (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                         Identification Number)


                   5005 LBJ Freeway, Suite 1000, Dallas, Texas
                 75244 (Address of principal executive offices)

                          Telephone No.: (972) 701-2000


   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
filing requirements for the past 90 days.
   Yes    [x]        No         
      ----------         ------


   The number of shares outstanding of the registrant's  common stock, par value
$.50, as of November 12, 1998 was 24,320,863.






<PAGE>



                            COMSTOCK RESOURCES, INC.

                                QUARTERLY REPORT

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1998

                                      INDEX






PART I.  Financial Information                                          Page No.

Item 1. Financial Statements

Consolidated Balance Sheets -
     September 30, 1998 and December 31, 1997..................................4
Consolidated Statements of Operations -
     Three Months and Nine Months ended September 30, 1998 and 1997............5
Consolidated Statement of Stockholders' Equity -
     Nine Months ended September 30, 1998......................................6
Consolidated Statements of Cash Flows -
     Nine Months ended September 30, 1998 and 1997.............................7
Notes to Consolidated Financial Statements.....................................8

Item 2. Management's Discussion and Analysis of Financial Condition
     and Results of Operations................................................11

PART II. Other Information

Item 6. Exhibits and Reports on Form 8-K......................................15



                                        2

<PAGE>



                         PART I - FINANCIAL INFORMATION


                          ITEM 1: FINANCIAL STATEMENTS


                                        3

<PAGE>


<TABLE>
<CAPTION>

                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS

                                                              September 30,  December 31,
                                                                   1998         1997   
                                                                ---------    --------- 
                                                               (Unaudited) 
                                                                    (In thousands)

<S>                                                            <C>          <C>      
Cash and Cash Equivalents..................................... $   2,516    $  14,504
Accounts Receivable:
  Oil and gas sales ..........................................    12,700       24,509
  Joint interest operations ..................................     3,065        6,732
Other Current Assets .........................................     1,935          172
                                                               ---------    ---------
             Total current assets ............................    20,216       45,917
Property and Equipment:
  Unevaluated oil and gas properties .........................    46,269       30,291
  Oil and gas properties, successful efforts method ..........   479,664      456,606
  Other ......................................................     1,733        1,561
  Accumulated depreciation, depletion and amortization .......  (115,776)     (77,677)
                                                               ---------    ---------
             Net property and equipment ......................   411,890      410,781
Other Assets .................................................     1,299          102
                                                               ---------    ---------
                                                               $ 433,405    $ 456,800
                                                               =========    =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current Portion of Long-term Debt............................. $     171    $    -- 
Accounts Payable and Accrued Expenses .........................   29,380       56,184
                                                               ---------    ---------
             Total current liabilities .......................    29,551       56,184

Long-term Debt, less Current Portion ..........................  268,000      260,000
Deferred Taxes Payable ........................................    8,988       11,207
Reserve for Future Abandonment Costs ..........................    5,475        4,815
Stockholders' Equity:
  Common stock--$0.50 par, 50,000,000 shares authorized,
    24,320,863 and 24,208,785 shares outstanding at
    September 30, 1998 and December 31, 1997, respectively ...    12,160       12,104
  Additional paid-in capital .................................   111,131      110,273
  Retained earnings (deficit) ................................    (1,888)       2,234
  Less: Deferred compensation-restricted stock grants ........       (12)         (17)
                                                               ---------    ---------
             Total stockholders' equity ......................   121,391      124,594

                                                               $ 433,405    $ 456,800
                                                               =========    =========

</TABLE>

        The accompanying notes are an integral part of these statements.

                                        4

<PAGE>



                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                               Three Months             Nine Months
                                                           Ended September 30,     Ended September 30,
                                                          --------------------    --------------------
                                                            1998         1997       1998         1997
                                                          --------    --------    --------    --------
                                                               (In thousands, except per share amounts)
<S>                                                       <C>         <C>         <C>         <C>     
Revenues:
  Oil and gas sales ...................................   $ 21,461    $ 18,159    $ 71,725    $ 59,610
  Other income ........................................         56         129         244         597
  Gain (loss) on sale of properties ...................       --            (3)       --            85
                                                          --------    --------    --------    --------
          Total revenues ..............................     21,517      18,285      71,969      60,292
                                                          --------    --------    --------    --------

Expenses:
  Oil and gas operating ...............................      6,070       4,115      18,515      12,849
  Exploration .........................................      3,875         280       7,752         280
  Depreciation, depletion and amortization ............     12,334       5,386      38,131      16,335
  General and administrative, net .....................        358         530       1,374       1,811
  Interest ............................................      4,091       1,390      12,538       3,884
                                                          --------    --------    --------    --------
          Total expenses ..............................     26,728      11,701      78,310      35,159
                                                          --------    --------    --------    --------

Income (loss) before income taxes .....................     (5,211)      6,584      (6,341)     25,133
Provision for income taxes ............................      1,824      (2,304)      2,219      (8,796)
                                                          --------    --------    --------    --------
Net income (loss) .....................................     (3,387)      4,280      (4,122)     16,337
Preferred stock dividends .............................       --           (90)       --          (410)
                                                          --------    --------    --------    --------
Net income (loss) attributable to common stock ........   $ (3,387)   $  4,190    $ (4,122)   $ 15,927
                                                          ========    ========    ========    ========
Net income (loss) per share:
          Basic .......................................   $  (0.14)   $   0.17    $  (0.17)   $   0.66
                                                          ========    ========    ========    ========
          Diluted .....................................               $   0.17                $   0.62
                                                                      ========                ========

Weighted average number of common and
    common stock equivalent shares outstanding:

          Basic.......................................      24,306      24,201      24,251      24,179
                                                          ========    ========    ========    ========
          Diluted.....................................                  25,928                  26,257
                                                                      ========                ========

</TABLE>

        The accompanying notes are an integral part of these statements.

                                        5

<PAGE>



                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  For the Nine Months Ended September 30, 1998
                                   (Unaudited)

<TABLE>
<CAPTION>



                                                                           Deferred
                                                Additional    Retained    Compensation-
                                      Common      Paid-In     Earnings     Restricted
                                       Stock      Capital     (Deficit)   Stock Grants   Total
                                     ---------   ---------   ---------    ---------    ---------
                                                          (In thousands)


<S>                                  <C>         <C>         <C>          <C>          <C>      
Balance at December 31, 1997 .....   $  12,104   $ 110,273   $   2,234    $     (17)   $ 124,594
     Issuance of common stock ....          56         360        --           --            416
     Value of stock options issued
       for exploration prospect...        --           498        --           --            498
     Restricted stock grants .....        --          --          --              5            5
     Net loss ....................        --          --        (4,122)        --         (4,122)
                                     ---------   ---------   ---------    ---------    ---------
Balance at September 30, 1998 ....   $  12,160   $ 111,131   $  (1,888)   $     (12)   $ 121,391
                                     =========   =========   =========    =========    =========










</TABLE>



        The accompanying notes are an integral part of these statements.

                                        6

<PAGE>



                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     For the Nine Months Ended September 30,
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                1998         1997
                                                              --------    --------
                                                                   (In thousands)
<S>                                                           <C>         <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss) .....................................   $ (4,122)   $ 16,337
    Adjustments to reconcile net income (loss) to net cash
      provided by operating activities:
      Compensation paid in common stock ...................        133         127
      Exploration .........................................      7,752         280
      Depreciation, depletion and amortization ............     38,131      16,335
      Deferred income taxes ...............................     (2,219)      8,796
      Gain on sale of properties ..........................       --           (85)
                                                              --------    --------
        Working capital provided by operations ............     39,675      41,790
      Decrease in accounts receivable .....................     15,476       3,596
      Increase in other current assets ....................     (1,763)       (216)
      Decrease in accounts payable and accrued expenses ...    (26,804)     (3,388)
                                                              --------    --------
        Net cash provided by operating activities .........     26,584      41,782
                                                              --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Proceeds from sales of properties ...................          7       5,080
      Capital expenditures ................................    (45,979)    (43,500)
                                                              --------    --------
        Net cash used for investing activities ............    (45,972)    (38,420)
                                                              --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Borrowings ..........................................     13,238      35,000
      Debt issuance costs .................................     (1,059)       --
      Principal payments on debt ..........................     (5,067)    (32,099)
      Proceeds from common stock issuances ................        288         487
      Stock issuance costs ................................       --           (15)
      Repurchase of common stock ..........................       --       (16,145)
      Dividends paid on preferred stock ...................       --          (410)
                                                              --------    --------
        Net cash provided by (used by) financing activities      7,400     (13,182)
                                                              --------    --------
          Net decrease in cash and cash equivalents .......    (11,988)     (9,820)
          Cash and cash equivalents, beginning of period ..     14,504      16,162
                                                              --------    --------
          Cash and cash equivalents, end of period ........   $  2,516    $  6,342
                                                              ========    ========

</TABLE>

        The accompanying notes are an integral part of these statements.

                                        7

<PAGE>


                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 1998
                                   (Unaudited)


(1)  SIGNIFICANT ACCOUNTING POLICIES -

     Basis of Presentation -

     In management's opinion, the accompanying consolidated financial statements
contain all  adjustments  (consisting  solely of normal  recurring  adjustments)
necessary to present fairly the financial position of Comstock  Resources,  Inc.
and  subsidiaries  (the  "Company")  as of  September  30,  1998 and the related
results of operations  for the three months and nine months ended  September 30,
1998 and 1997 and cash flows for the nine months  ended  September  30, 1998 and
1997.

     The accompanying unaudited financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission.  Certain
information and disclosures  normally  included in annual  financial  statements
prepared in accordance with generally accepted  accounting  principles have been
omitted pursuant to those rules and  regulations,  although the Company believes
that the  disclosures  made are adequate to make the  information  presented not
misleading.  These financial  statements  should be read in conjunction with the
Company's  financial  statements  and notes  thereto  included in the  Company's
Annual Report on Form 10-K for the year ended December 31, 1997.

     The results of operations for the nine months ended  September 30, 1998 are
not necessarily an indication of the results expected for the full year.

     Supplementary Information with Respect to the Statements of Cash Flows -

<TABLE>
<CAPTION>
                                                                      For the Nine Months
                                                                      Ended September 30,
                                                                        1998      1997
                                                                      -------   -------
                                                                         (In thousands)
     <S>                                                              <C>       <C>    
     Cash Payments -
      Interest                                                        $11,506   $ 3,978
      Income taxes                                                        276       300

     Noncash Investing and Financing Activities -
      Common stock issued for director compensation                   $   128   $   113
      Value of vested stock options under exploration joint venture       498      --

</TABLE>

     Income Taxes -

     Deferred  income taxes are provided to reflect the future tax  consequences
of  differences  between  the tax  basis of  assets  and  liabilities  and their
reported  amounts in the financial  statements  using enacted tax rates. For the
nine months  ended  September  30, 1998,  the Company had a deferred  income tax
benefit based on an expected tax rate for 1998 of 35%.




                                        8

<PAGE>

                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


     Earnings Per Share -

     Basic  earnings  per  share  is  determined   without  the  effect  of  any
outstanding  potentially dilutive stock options or other convertible  securities
and diluted  earnings  per share is  determined  with the effect of  outstanding
stock options and other  convertible  securities that are potentially  dilutive.
Basic and diluted  earnings per share for the three months and nine months ended
September 30, 1998 and 1997 were determined as follows:

<TABLE>
<CAPTION>
                                                               For the Three Months Ended September 30, 
                                                        ------------------------------------------------------
                                                                     1998                      1997           
                                                        ------------------------------------------------------
                                                                             Per                          Per
                                                         Income    Shares   Share     Income    Shares   Share
                                                        -------   -------  -------   -------   -------  ------
                                                                 (In thousands, except per share amounts)
         <S>                                            <C>        <C>     <C>       <C>       <C>      <C>
         Basic Earnings Per Share:
           Net Income (Loss)                            $ (3,387)  24,306            $  4,280  24,201
           Less Preferred Stock Dividends                   --       --                   (90)   --    
                                                        --------  -------            --------- ------  
           Net Income Available to Common Stockholders    (3,387)  24,306  $(0.14)      4,190  24,201   $0.17
                                                                           =======                      =====

         Diluted Earnings Per Share:
           Effect of Dilutive Securities:
             Stock Options                                  --      --                   --       981
             Convertible Preferred Stock                    --      --                     90     746
                                                        --------  -------            --------  ------
           Net Income (Loss) Available to Common
                 Stockholders and Assumed Conversions   $ (3,387)  24,306  $(0.14)   $  4,280  25,928   $0.17
                                                        ========= =======  =======   ========  ======   =====


                                                               For the Nine Months Ended September 30,
                                                        ------------------------------------------------------
                                                                     1998                      1997           
                                                        ------------------------------------------------------
                                                                             Per                          Per
                                                         Income    Shares   Share     Income   Shares    Share
                                                        -------   -------  -------   -------   -------  ------
                                                                 (In thousands, except per share amounts)
         Basic Earnings Per Share:
           Net Income (Loss)                            $ (4,122)  24,251            $ 16,337  24,179
           Less Preferred Stock Dividends                   --       --                  (410)   --    
                                                        --------  -------            --------- --------
           Net Income Available to Common Stockholders    (4,122)  24,251  $(0.17)     15,927  24,179   $0.66
                                                                           =======                      =====

         Diluted Earnings Per Share:
           Effect of Dilutive Securities:
             Stock Options                                  --      --                   --       935
             Convertible Preferred Stock                    --      --                    410   1,143
                                                        --------  -------            --------  ------
           Net Income (Loss) Available to Common
                Stockholders and Assumed Conversions    $ (4,122)  24,251  $(0.17)   $ 16,337  26,257   $0.62
                                                        ========= =======  =======   ========  ======   =====
</TABLE>

     New Accounting Standard -

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging Activities" ("SFAS No. 133"). The Statement  establishes  accounting
and  reporting  standards  that are  effective  after  September  15, 1999 which
require  that  every  derivative   instrument   (including   certain  derivative
instruments  embedded in other  contracts)  be recorded in the balance  sheet as
either an asset or liability  measured at its fair value. The Statement requires
that changes in the derivative's fair value be recognized  currently in earnings
unless specific hedge accounting criteria are met.

                                        9
<PAGE>


                    COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


     The Company is currently using  derivatives to hedge floating interest rate
risks.  Such  derivatives  are reported at cost, if any, and gains and losses on
such derivatives are reported when the hedged transaction  occurs.  Accordingly,
the  Company's  adoption  of SFAS No.  133 will have an  impact on the  reported
financial  position  of the  Company,  and  although  such  impact  has not been
determined,  it is currently  not believed to be material.  Adoption of SFAS No.
133 should have no significant impact on reported earnings, but could materially
affect comprehensive income.

(2)  LONG-TERM DEBT -

     On September 24, 1998, the Company entered into a new revolving bank credit
facility  which  matures on December 9, 2002 with a syndicate of ten  commercial
banks to refinance its existing bank credit facility.  As of September 30, 1998,
the Company  had $268.0  million  outstanding  under the bank  revolving  credit
facility.  Borrowings  under the bank credit  facility cannot exceed a borrowing
base determined  semiannually  by the banks.  The borrowing base as of September
30, 1998 was $280.0 million.  Amounts outstanding under the bank credit facility
bear interest at a floating  rate based on The First  National Bank of Chicago's
base rate (as defined) plus 0.75% or, at the Company's  option,  at a fixed rate
for up to six months based on the London  Interbank  Offered Rate ("LIBOR") plus
1.75%.  In addition,  the Company  incurs a commitment fee of 0.5% on the unused
portion of the borrowing  base. As of September 30, 1998, the Company had placed
the  outstanding  advances under the bank credit facility under fixed rate loans
based  on LIBOR at an  average  rate of  approximately  7.3% per  annum  and the
Company has also entered into interest rate swap agreements  which fix the LIBOR
rate for $125.0 million of the bank revolving credit facility at an average rate
of 5.1% for the next two years.

                                       10

<PAGE>



ITEM 2:       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS



Results of Operations

   The following table reflects  certain summary  operating data for the periods
presented:

<TABLE>
                                                           Three Months Ended            Nine Months Ended
                                                         ---------------------          ------------------
                                                             September 30,                September 30,
                                                          1998           1997           1998           1997
                                                         -----          -----           ----           ----
          <S>                                            <C>            <C>            <C>            <C>   
          Net Production Data:
             Oil (thousand barrels)                         611            263          1,987            869
             Natural gas (million cubic feet)             6,654          5,327         19,988         16,428
          Average Sales Price:
             Oil (per barrel)                            $12.35         $18.86         $13.30         $20.10
             Natural gas
                 (per thousand cubic feet - Mcf)           2.09           2.48           2.27           2.57
          Expenses ($ per equivalent Mcf):
             Oil and gas operating(l)                     $0.59         $ 0.60          $0.58         $ 0.59
             General and administrative, net               0.03           0.08           0.04           0.08
             Depreciation, depletion and
                  amortization(2)                          1.19           0.78           1.19           0.75
<FN>

     (1) Includes lease operating costs and production and ad valorem taxes.
     (2) Represents  depreciation,  depletion and  amortization  of oil and gas
         properties only.


</FN>
</TABLE>

     Revenues -

     The Company's oil and gas sales  increased  $3.3 million (18%) in the third
quarter of 1998, to $21.5 million from $18.2 million in 1997's third quarter due
to a 25% increase in the Company's natural gas production and a 132% increase in
the Company's oil production.  The production increases were partially offset by
a 35% decrease in the Company's average realized oil price and a 16% decrease in
the Company's  average  realized gas price.  For the nine months ended September
30, 1998, oil and gas sales increased $12.1 million (20%), to $71.7 million from
$59.6  million for the nine months ended  September  30,  1997.  The increase is
attributable  to a 22% increase in natural gas production and a 129% increase in
oil  production  offset by 12% lower  realized  natural gas prices and 34% lower
realized oil prices. The significant increases in production are attributable to
a $200.9 million acquisition of offshore properties completed in December 1997.

     Other income  decreased  $73,000  (57%) to $56,000 in the third  quarter of
1998 from  $129,000  in the third  quarter  of 1997.  Other  income for the nine
months  ended  September  30, 1998  decreased  $353,000  (59%) to $244,000  from
$597,000  for the  nine  months  ended  September  30,  1997.  The  decrease  is
attributable to a lower level of short-term cash deposits outstanding during the
quarter as well as a decrease in management  fee income  received by the Company
in 1998.

                                       11

<PAGE>



     Costs and Expenses -

     Oil and gas operating expenses,  including production taxes, increased $2.0
million  (48%) to $6.1 million in the third quarter of 1998 from $4.1 million in
the third  quarter of 1997 due  primarily to the 49% increase in oil and natural
gas production (on an equivalent Mcf basis).  Oil and gas operating expenses per
equivalent  Mcf produced  decreased  1(cent) to 59(cent) in the third quarter of
1998 from 60(cent) in the third quarter of 1997. Oil and gas operating costs for
the nine months ended  September 30, 1998  increased $5.7 million (44%) to $18.5
million from $12.8  million for the nine months ended  September 30, 1997 due to
the 47% increase in oil and natural gas production (on an equivalent Mcf basis).
Oil and gas operating  expenses per equivalent Mcf produced decreased 1(cent) to
58(cent) for the nine months ended September 30, 1998 from 59(cent) for the same
period in 1997.

     In the third quarter of 1998,  the Company had $3.9 million in  exploration
expense  compared to $300,000 in 1997. The charge is related to the write off of
three  unsuccessful  offshore  wells drilled in the Gulf of Mexico.  Exploration
expense for the first nine months of 1998 was $7.8 million  which relates to the
write off of the five unsuccessful offshore wells.

     Depreciation,  depletion and amortization  ("DD&A")  increased $6.9 million
(129%) to $12.3  million in the third  quarter of 1998 from $5.4  million in the
third quarter of 1997 due to the 49% increase in oil and natural gas  production
(on an equivalent  Mcf basis) and due to higher costs per unit of  amortization.
DD&A per  equivalent  Mcf produced  increased by 41(cent) to $1.19 for the three
months  ended  September  30,  1998 from  78(cent)  for the three  months  ended
September 30, 1997. For the nine months ended September 30, 1998, DD&A increased
$21.8  million  (133%) to $38.1  million from $16.3  million for the nine months
ended  September  30,  1997.  The increase is due to the 47% increase in oil and
natural gas  production and to higher costs per unit of  amortization.  DD&A per
equivalent  Mcf  increased  by  44(cent)  to  $1.19  for the nine  months  ended
September 30, 1998 from  75(cent) for the nine months ended  September 30, 1997.
The  increases  in the DD&A rate  relate  to the  higher  costs of the  offshore
properties acquired in December 1997.

     General and  administrative  expenses,  which are  reported net of overhead
reimbursements, decreased  $172,000  (32%) to $358,000 for the third  quarter of
1998 as compared to $530,000 for the third  quarter of 1997.  For the first nine
months of 1998, general and administrative  expenses decreased $437,000 (24%) to
$1.4 million from $1.8 million for the nine months ended September 30, 1997. The
decreases are attributable to an increase in overhead reimbursements received by
the  Company  in 1998  which was  greater  than the  increase  in the  Company's
overhead costs before reimbursements.

     Interest  expense  increased  $2.7  million  (194%) to $4.1 million for the
three  months  ended  September  30, 1998 from $1.4 million for the three months
ended September 30, 1997.  Interest  expense for the nine months ended September
30,  1998  increased  $8.7  million  (223%) to $12.5  million  in 1998 from $3.9
million for the nine months ended  September 30, 1997. The increases are related
to a higher  level of  outstanding  advances  under the  Company's  bank  credit
facility due to the December 1997 $200.9 million acquisition as well as a higher
average  interest  rate on the  Company's  bank credit  facility.  The  weighted
average annual interest rate under the Company's bank credit facility  increased
to 7.1% in 1998's  third  quarter as  compared  to 6.4% in the third  quarter of
1997.  For the nine months ended  September  30, 1998,  the  Company's  weighted
average  interest  rate under the  Company's  bank credit  facility  was 7.1% as
compared to 6.5% for the nine months ended  September 30, 1997.  The increase in
the rate was  attributable  to a higher  utilization of the borrowing base under
the bank credit facility after the December 1997 acquisition.

                                       12

<PAGE>


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (continued)


     The Company had a deferred tax benefit of $1.8 million and $2.2 million for
the three months and nine months ended September 30, 1998,  respectively,  using
an estimated tax rate of 35%.

     The Company  reported a net loss of $3.4 million for the three months ended
September  30,  1998,  as compared  to net income of $4.2  million for the three
months ended  September  30, 1997.  Net loss per share for the third quarter was
14(cent) on weighted  average shares  outstanding of 24.3 million as compared to
net  income  per share of  17(cent)  for the third  quarter  of 1997 on  diluted
weighted average shares outstanding of 25.9 million.

     The net loss for the nine months ended September 30, 1998 was $4.1 million,
as compared to net income of $15.9 million,  for the nine months ended September
30, 1997.  Net loss per share for the nine months ended  September  30, 1998 was
17(cent) on weighted  average shares  outstanding of 24.3 million as compared to
net income per share of 62(cent) for the nine months ended September 30, 1997 on
diluted weighted average shares outstanding of 26.3 million.

Capital Expenditures

     The following table summarizes the Company's capital  expenditure  activity
for the nine  months  ended  September  30,  1998 and 1997:

                                                            Nine Months Ended
                                                              September 30,
                                                           1998           1997
                                                        --------        --------
                                                             (In thousands)

     Acquisitions                                       $ 2,261          $20,113
     Other leasehold costs                                2,822            1,797
     Development drilling                                12,517           16,283
     Exploratory drilling                                19,142            3,514
     Workovers and recompletions                          8,888            1,646
     Other                                                  349              147
                                                        -------          -------
                  Total                                 $45,979          $43,500
                                                        =======          =======


Capital Resources and Liquidity

     During the nine months ended  September  30, 1998,  the primary  sources of
funds for the Company were cash  generated  from  operations  of $39.7  million,
before working capital changes, and borrowings of $13.2 million. Primary uses of
funds for the nine months ended September 30, 1998 were capital expenditures for
development and exploratory activities of $46.0 million and repayment of debt of
$5.1 million.

     The timing of most of the Company's  capital  expenditures is discretionary
with no material long-term capital expenditure  commitments.  Consequently,  the
Company  has a  significant  degree of  flexibility  to adjust the level of such
expenditures as circumstances  warrant.  For the nine months ended September 30,
1998 and 1997, the Company spent $43.3 million and $23.2 million,  respectively,
on development and exploration  activities.  The Company  currently  anticipates
spending an additional  $21.0 million on development  and  exploration  projects
during the remainder of 1998.  The Company does not have a specific  acquisition
budget,  as a  result  of  the  unpredictability  of  the  timing  and  size  of
forthcoming acquisition activities.


                                       13

<PAGE>


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (continued)


     The Company intends to primarily use internally  generated cash flow and to
a lesser  extent  borrowings  under the Company's  bank credit  facility to fund
capital   expenditures   other  than  significant   acquisitions.   The  Company
anticipates  that such sources  will be  sufficient  to fund the  expected  1998
development and exploration expenditures.  Significant future acquisitions would
require the Company to seek other debt or equity  financings.  The  availability
and  attractiveness  of these sources of financing  will depend upon a number of
factors, some of which will relate to the financial condition and performance of
the Company,  and some of which will be beyond the  Company's  control,  such as
prevailing  interest  rates,  oil  and  natural  gas  prices  and  other  market
conditions.

     The Company's bank credit facility  consists of a $280.0 million  revolving
credit  commitment  provided  by a  syndicate  of ten  banks for which The First
National Bank of Chicago serves as agent. Indebtedness under the credit facility
is secured by  substantially  all of the Company's  assets.  The Company's  bank
credit  facility is subject to borrowing  base  availability  which is generally
redetermined  semiannually  based on the banks' estimates of the future net cash
flows of the Company's  oil and gas  properties.  As of September 30, 1998,  the
borrowing base was $280.0 million. Such borrowing base may be affected from time
to time by the  performance  of the Company's oil and natural gas properties and
changes in oil and natural gas prices.  The revolving credit line bears interest
at the  option  of the  Company  at  either  (i)  LIBOR  plus  1.75% or (ii) the
"corporate  base rate" plus 0.75%.  The Company  incurs a commitment fee of 0.5%
per annum,  on the unused  portion of the  borrowing  base.  The average  annual
interest rate as of September 30, 1998, of all  outstanding  indebtedness  under
the Company's bank credit facility was approximately  7.1%. The revolving credit
line  matures on December 9, 2002 or such earlier date as the Company may elect.
The credit facility contains covenants which,  among other things,  restrict the
payment of cash dividends,  limit the amount of consolidated debt, and limit the
Company's ability to make certain loans and investments.

     The Company has reviewed its computer  systems and has determined  that its
systems are Year 2000 compliant.  Accordingly, the Company does not believe that
Year 2000 compliance represents a material risk to the Company.

                                       14

<PAGE>


                           PART II - OTHER INFORMATION


ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

a.       Exhibits
         --------

         10.1(a)     Credit  Agreement  dated as of September 24, 1998,  between
                     the Company, the Banks Party thereto and The First National
                     Bank of  Chicago,  as agent and Toronto  Dominion  (Texas),
                     Inc., as Syndication Agent.

         27.         Financial Data Schedule for the Nine Months ended September
                     30, 1998.


b.       Reports on Form 8-K
         -------------------

                None.

                                   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.

                                 COMSTOCK RESOURCES, INC.

Date    November 12, 1998        /s/M. JAY ALLISON
        ---------------          --------------------
                                 M. Jay Allison, Chairman, President and Chief
                                 Executive Officer (Principal Executive Officer)


Date    November 12, 1998         /s/ROLAND O. BURNS
        -----------------        --------------------
                                 Roland O. Burns, Senior Vice President,
                                 Chief Financial Officer, Secretary, and
                                 Treasurer (Principal Financial and Accounting
                                 Officer)


                                       15
