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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 (541) 776-7700
            (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

          James Ewan
--------------------------------------------------------------------------------
     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

                                        872,000
                            ----------------------------------------------------
         NUMBER OF                 8    SHARED VOTING POWER
          SHARES
       BENEFICIALLY                     0
       OWNED BY EACH
         REPORTING
        PERSON WITH
                            ----------------------------------------------------
                                   9    SOLE DISPOSITIVE POWER

                                        872,000
                            ----------------------------------------------------
                                  10    SHARED DISPOSITIVE POWER

                                        0
--------------------------------------------------------------------------------
     11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

          872,000
--------------------------------------------------------------------------------
     12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*




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

          6.5%
--------------------------------------------------------------------------------
     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 James Ewan.

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

     (c) Mr. Ewan's  principal  occupation  is President of SRC Vision,  Inc., a
subsidiary  of the  Issuer,  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.  Ewan has not,  during the last five  years,  been  convicted  in a
criminal proceeding (excluding traffic violations or similar misdemeanors).

     (e) Mr.  Ewan  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. Ewan is a citizen of the United States.

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

     The  Company  issued  to Mr.  Ewan,  in  recognition  of his good  work and
service, 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  300,000  shares  of Common  Stock
provide for an exercise price of $1.00 per share. See Section 1 of the Incentive
Stock Option Agreements  attached hereto as Exhibits B and C, respectively,  and
incorporated herein by reference. In addition, the lapse of certain restrictions
covering 572,000 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 1991 and 1994 Stock Option
Plans,  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. Ewan, in recognition
of their good work and  service,  and as an incentive to remain in the employ of
the Issuer.

     Mr. Ewan has acquired such securities for purposes of investment. Depending
upon market  conditions  and other  factors that Mr. Ewan deems  material to his
investment decision,  Mr. Ewan 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. Ewan 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.  Ewan is the  beneficial  owner of  872,000  shares  of the Class A
Common Stock of the Issuer, constituting 6.5% of such class.

     (b) Mr.  Ewan 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.

     572,000  shares of Class A Common  Stock  are  subject  to the ARC  Capital
Restricted  Stock  Agreement  dated  January 10,  1997  between Mr. Ewan 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."  150,000 shares of Class A Common Stock underlying
options owned by Mr. Ewan and exercisable within the next 60 days are subject to
certain  restrictions in the Incentive Stock Option  Agreement dated February 5,
1995 between James Ewan and the Issuer,  attached hereto as Exhibit B, regarding
options  issued under the Applied  Laser  Systems  1994 Stock  Option Plan.  The
relevant sections affecting such securities are Section 6  "Nontransferability,"
Section 9  "Restrictions  on  Transfer  of  Shares,"  Section  12 "Sale or other
Disposition,"  and  Section 13  "180-Day  Holdback."  150,000  shares of Class A
Common Stock  underlying  options owned by Mr. Ewan and  exercisable  within the
next 60 days are subject to certain  restrictions  in the Incentive Stock Option
Agreement  dated  February 5, 1995 between  James Ewan and the Issuer,  attached
hereto as Exhibit C,  regarding  options  issued under the Applied Laser Systems
1991 Stock Option Plan.  The relevant  sections  affecting  such  securities are
Section 6 "Nontransferability,"  Section 9 "Restrictions on Transfer of Shares,"
Section 12 "Sale or 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.

     Three exhibits are filed herewith.  Exhibit A is the ARC Capital Restricted
Stock  Agreement  dated January 10, 1997 between Mr. Ewan and ARC Capital,  Inc.
Exhibit B is the Incentive Stock Option Agreement dated February 5, 1995 between
Mr. Ewan and Applied Laser Systems  (predecessor to ARC Capital,  Inc.) relating
to the Applied Laser Systems 1994 Stock Option Plan.  Exhibit C is the Incentive
Stock Option Agreement dated February 5, 1995 between Mr. Ewan and Applied Laser
Systems relating to the Applied Laser Systems 1991 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                      ----------------------------------
                                                        James Ewan






<PAGE>


                                  Exhibit Index

A.       ARC Capital Restricted Stock Agreement
                  dated January 10, 1997 between Mr. Ewan
                  and ARC Capital, Inc........................................ 5

B.       Incentive Stock Option Agreement
                  dated February 5, 1995 between Mr. Ewan
                  and Applied Laser Systems (predecessor to
                  ARC Capital, Inc.)relating to the Applied 
                  Laser Systems 1994 Stock Option Plan........................ 6

C.       Incentive Stock Option Agreement
                  dated February 5, 1995 between Mr. Ewan
                  and Applied Laser Systems relating to the Applied
                  Laser Systems 1991 Stock Option Plan........................ 7



