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


                                  SCHEDULE 13D


                    Under the Securities Exchange Act of 1934
                                (Amendment No. )*



                                ARC Capital, Inc.
                                (Name of Issuer)


                              Class A Common Stock
                         (Title of Class of Securities)


                                   002044 10 5
                                 (CUSIP Number)


             Alan Steel, 2067 Commerce Drive, Medford, Oregon 97504
       (Name, Address and Telephone Number of Person Authorized to Receive
                           Notices and Communications)


                                January 10, 1997
             (Date of Event which Requires Filing of this Statement)


     If the filing  person has  previously  filed a statement on Schedule 13G to
report the acquisition  which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box .

     Check the  following box if a fee is being paid with the statement . (A fee
is not required only if the reporting  person:  (1) has a previous  statement on
file  reporting  beneficial  ownership of more than five percent of the class of
securities  described  in Item 1;  and (2) has  filed  no  amendment  subsequent
thereto reporting  beneficial  ownership of five percent or less of such class.)
(See Rule 13d-7.)

     Note: Six copies of this statement, including all exhibits, should be filed
with the  Commission.  See Rule 13d-1(a) for other parties to whom copies are to
be sent.

*The  remainder of this cover page shall be filled out for a reporting  person's
initial filing on this form with respect to the subject class of securities, and
for  any  subsequent   amendment   containing   information  which  would  alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the  Securities  Exchange  Act of
1934 ("Act") or otherwise  subject to the liabilities of that section of the Act
but  shall be  subject  to all other  provisions  of the Act  (however,  see the
Notes).

                            Exhibit Index at Page 4
                                SEC 1746 (12-91)


<PAGE>



                                  SCHEDULE 13D

--------------------------------------------------------------------------------
CUSIP No.  002044 10 5
--------------------------------------------------------------------------------

     
--------------------------------------------------------------------------------
     1    NAME OF REPORTING PERSON
          S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

          Alan Steel
--------------------------------------------------------------------------------
     2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                        (a)
                                                                        (b)


--------------------------------------------------------------------------------
     3    SEC USE ONLY


--------------------------------------------------------------------------------
     4    SOURCE OF FUNDS*

          OO
--------------------------------------------------------------------------------
     5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
          ITEMS 2(d) or 2(E)


--------------------------------------------------------------------------------
     6    CITIZENSHIP OR PLACE OF ORGANIZATION

          United States of America
--------------------------------------------------------------------------------
                                   7    SOLE VOTING POWER

                                        726,000
                            ----------------------------------------------------
         NUMBER OF                 8    SHARED VOTING POWER
          SHARES
       BENEFICIALLY                     0
       OWNED BY EACH
         REPORTING
        PERSON WITH
                            ----------------------------------------------------
                                   9    SOLE DISPOSITIVE POWER

                                        726,000
                            ----------------------------------------------------
                                  10    SHARED DISPOSITIVE POWER
                                        0

--------------------------------------------------------------------------------
     11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

          726,000
--------------------------------------------------------------------------------
     12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*



--------------------------------------------------------------------------------
     13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

          5.4%
--------------------------------------------------------------------------------
     14   TYPE OF REPORTING PERSON*

          IN
--------------------------------------------------------------------------------

                      *SEE INSTRUCTIONS BEFORE FILLING OUT!
          INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
       (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION



<PAGE>



Item 1.  Security and Issuer.

         This report relates to the Class A Common Stock,  no par value,  of ARC
Capital, Inc., a California corporation (the "Issuer").  The principal executive
officers are:


      Name                    Address                       Title

William J. Young        2067 Commerce Drive       Chairman, President and Chief
                        Medford, OR 97504         Executive Officer

Alan Steel              2067 Commerce Drive       Vice President Finance and
                        Medford, OR 97504         Chief Financial Officer


Item 2.  Identity and Background.


     (a) The person filing this statement is Alan Steel.

     (b) The principal  business  address of Mr. Steel is 2067  Commerce  Drive,
Medford, OR 97504.

     (c) Mr. Steel's  principal  occupation is Vice President  Finance and Chief
Financial  Officer  of ARC  Capital,  Inc.,  which  engages in the  business  of
manufacturing automated visual recognition and defect removal equipment, and the
principal  executive  offices  of which  are  located  at 2067  Commerce  Drive,
Medford, Oregon 97504.

     (d) Mr.  Steel has not,  during the last five years,  been  convicted  in a
criminal proceeding (excluding traffic violations or similar misdemeanors).

     (e) Mr.  Steel  was not,  during  the last five  years,  a party to a civil
proceeding of a judicial or administrative  body of competent  jurisdiction as a
result of which he was  subject to a judgment,  decree or final order  enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws.

     (f) Mr. Steel is a citizen of the United States.

Item 3.  Source and Amount of Funds or Other Consideration.

         The Company  issued to Mr. Steel,  in  recognition of his good work and
service in  management of the Company,  shares of Class A Common Stock  ("Common
Stock") and options to purchase shares of Common Stock.  No other  consideration
has been  provided  at this time.  However,  the terms of the  options  covering
250,000 shares of Common Stock provide for an exercise price of $1.00 per share.
See Section 1 of the Incentive Stock Option Agreement attached hereto as Exhibit
B and  incorporated  herein by  reference.  In  addition,  the lapse of  certain
restrictions  covering  476,000 shares of Common Stock is  conditioned  upon the
payment of $1.80 per share.  See Sections 2 and 3 of the ARC Capital  Restricted
Stock  Agreement  attached  hereto  as  Exhibit  A and  incorporated  herein  by
reference.

Item 4.  Purpose of Transaction.

         Pursuant to its 1997 Restricted  Stock Plan and 1994 Stock Option Plan,
each of which meets the  requirements  of Rule 16b-3 of the Securities  Exchange
Act of 1934, as amended (the  "Exchange  Act"),  the Issuer has issued shares of
Class A Common  Stock  ("Common  Stock") and options  exercisable  for shares of
Common Stock to certain employees,  including Mr. Steel, in recognition of their
good work and  service,  and as an  incentive  to  remain  in the  employ of the
Issuer.

         Mr.  Steel has acquired  such  securities  for purposes of  investment.
Depending upon market conditions and other factors that Mr. Steel deems material
to his investment  decision,  Mr. Steel may purchase additional shares of Common
Stock  or  other  securities  of the  Issuer  in the  open  market,  in  private
transactions  or from the  Issuer,  or may  dispose  of all or a portion  of the
shares of Common  Stock or other  securities  of the Issuer  that he now owns or
hereafter may acquire.  Other than as set forth above, Mr. Steel has no plans or
proposals which relate to or would result in:

     (a) The  acquisition by any person of additional  securities of the Issuer,
or the disposition of securities of the Issuer;

     (b)  An   extraordinary   corporate   transaction,   such   as  a   merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;

     (c) A sale or transfer of a material  amount of assets of the Issuer or any
of its subsidiaries;

     (d) Any change in the  present  board of  directors  or  management  of the
Issuer,  including  any  plans or  proposals  to  change  the  number or term of
directors or to fill any existing vacancies on the board;

     (e) Any material change in the present capitalization or dividend policy of
the Issuer;

     (f) Any  other  material  change  in the  Issuer's  business  or  corporate
structure;

     (g) Changes in the Issuer's  charter,  bylaws or instruments  corresponding
thereto or other  actions  which may impede  the  acquisition  of control of the
Issuer by any person;

     (h)  Causing a class of  securities  of the  Issuer to be  delisted  from a
national  securities  exchange or to cease to be  authorized  to be quoted in an
inter-dealer quotation system of a registered national securities association;

     (i) A class of  equity  securities  of the  Issuer  becoming  eligible  for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or

     (j) Any action similar to any of those enumerated above.

Item 5.  Interest in Securities of the Issuer.

     (a) Mr.  Steel is the  beneficial  owner of  726,000  shares of the Class A
Common Stock of the Issuer, constituting 5.4% of such class.

     (b) Mr. Steel has sole power to vote,  direct the vote of,  dispose of, and
direct the disposition of the shares described in (a) above.

     (c) Not applicable.

     (d) Not applicable.

     (e) Not applicable.

Item 6.  Contracts, Arrangements, Understanding or Relationships with Respect to
         Securities of the Issuer.

     476,000 shares of Class A Common Stock  beneficially owned by Mr. Steel are
subject to the ARC Capital  Restricted  Stock  Agreement  dated January 10, 1997
between Mr.  Steel and the Issuer,  attached  hereto as Exhibit A. The  relevant
sections affecting such securities are Section 2 "Restrictions; Forfeitability,"
Section 3 "Payment  When  Restrictions  Lapse,"  Section 5  "Nontransferability;
Legend," and Section 7 "Dissolution  of the Company."  250,000 shares of Class A
Common Stock  underlying  options owned by Mr. Steel and exercisable  within the
next 60 days are subject to certain  restrictions  in the Incentive Stock Option
Agreement  dated  February 5, 1995 between  Alan Steel and the Issuer,  attached
hereto as Exhibit B. The relevant sections affecting such securities are Section
6 "Nontransferability,"  Section 9 "Restrictions on Transfer of Shares," Section
12 "Sale of Other  Disposition," and Section 13 "180-Day Holdback." The relevant
sections specified in this Item 6 are incorporated herein by reference.

Item 7.  Material to be Filed as Exhibits.

     Two exhibits are filed  herewith.  Exhibit A is the ARC Capital  Restricted
Stock Agreement  dated January 10, 1997 between Mr. Steel and ARC Capital,  Inc.
Exhibit B is the Incentive Stock Option Agreement dated February 5, 1995 between
Mr. Steel and Applied Laser Systems (predecessor to ARC Capital,  Inc.) relating
to the Applied Laser Systems 1994 Stock Option Plan.

         After reasonable  inquiry and to the best of my knowledge and belief, I
certify that the information  set forth in this statement is true,  complete and
correct.



Date:  January 10, 1997                      -----------------------------------
                                                         Alan Steel






<PAGE>


                                  Exhibit Index


A.       ARC Capital Restricted Stock Agreement dated January 10, 1997
                  between Mr. Steel and ARC Capital, Inc...................... 6

B.       Incentive Stock Option Agreement dated February 5, 1995
                  between Mr. Steel and Applied Laser Systems
                  (predecessor to ARC Capital, Inc.) relating
                  to the Applied Laser Systems 1994 Stock Option Plan......... 7


