SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549



                                  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) August 31, 1999


                         AVTEL COMMUNICATIONS, INC.

           (Exact Name of Registrant as Specified in its Charter)



                                  Delaware
         -------------------------------------------------------------
               (State or Other Jurisdiction of Incorporation)

            0-27580                                  87-0378021
    (Commission File Number)             (I.R.S. Employer Identification No.)


              501 Bath Street, Santa Barbara, California     93101

            (Address of Principal Executive Offices)        (Zip Code)


                               (805) 884-6300

            (Registrant's Telephone Number, Including Area Code)










Item 5. Other Events.

         On August 31, 1999, AvTel Communications, Inc. ("AvTel") entered
into a Stock Purchase Agreement (the "Stock Purchase Agreement") with
Matrix Telecom, Inc., a wholly-owned subsidiary of AvTel ("Matrix"), and
Energy TRACS Acquisition Corp. ("ETAC"). ETAC is a wholly-owned subsidiary
of Platinum Equity Holdings, LLC. Pursuant to the Stock Purchase Agreement,
AvTel agreed to sell all of the issued and outstanding capital stock of
Matrix to ETAC or its assignee. On September 1, 1999, ETAC assigned its
rights under the Stock Purchase Agreement to Matrix Acquisition Holdings
Corp.

         The closing of the transaction is subject to certain
contingencies, including regulatory consents and the approval of AvTel
shareholders. Shareholders representing over 50% of votes required to
approve the transaction have indicated that they will vote in favor of the
agreement.

Item 7: Financial Statements, Pro Forma Financial Information and Exhibits.

(c)     Exhibits

2.1     Stock Purchase Agreement dated August 31, 1999, among AvTel
        Communications, Inc., Matrix Telecom, Inc. and Energy TRACS
        Acquisition Corp.

99.1    Press Release, dated September 1, 1999.



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                                 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 hereunto duly authorized.


                                         AVTEL COMMUNICATIONS, INC.



Dated: September 8, 1999                 By: /s/ ANTHONY E. PAPA
                                                 ----------------
                                         Anthony E. Papa
                                         Chairman and Chief Executive Officer






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