FORM 8-K
                                 CURRENT REPORT




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




                                 Date of Report
                        (Date of earliest event reported)
                                  March 3, 1998



                      ULTRAMAR DIAMOND SHAMROCK CORPORATION
             (Exact name of Registrant as specified in its charter)



Delaware                   1-11154                          13-3663331
(State of                  (Commission                    (IRS Employer
Incorporation)             File Number)                 Identification No.)


6000 N. Loop 1604 W.
San Antonio, Texas                                      78249-1112
(Address of Principal                                   (Zip Code)
Executive Offices)

Registrant's telephone number, including area code:(210) 592-2000

(a)      Item 5.  Other Events

     On March 3, 1998 Ultramar  Diamond  Shamrock  Corporation  (the  "Company")
notified the holders of all  1,724,400  outstanding  shares of its 5% Cumulative
Convertible  Preferred Stock (the "5% Preferred")  that is intends to redeem all
outstanding  shares of 5% Preferred on March 18, 1998.  The 5% Preferred will be
redeemed  by the  issuance  of  common  stock  of the  Company  at the  rate  of
approximately  1.9246  share of common  stock for each share of 5%  Preferred so
redeemed.  The Company expects to issue 3,318,706  shares of its common stock in
connection  with the  redemption or  conversion of the 5% Preferred  Stock on or
prior to March 18, 1998.

(b)      Exhibits

         99.1 Form of Notice of Redemption and Termination of
Conversion Right.

                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                      ULTRAMAR DIAMOND SHAMROCK CORPORATION


                                      By:  /s/ Todd Walker
                                               Todd Walker Attorney-In-Fact


March 3, 1998