FORM 8-K

                       Securities and Exchange Commission

                             Washington, D.C. 20549


                                 CURRENT REPORT

                         Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


                        Date of Report: January 15, 1999


                       PREMIUM CIGARS INTERNATIONAL, LTD.
             (Exact name of registrant as specified in its charter)



    Arizona                         0-29414                    86-0846405
(State or other                 (Commission File              (IRS Employer
 Jurisdiction of                     Number)              Identification Number)
 Incorporation


15849 North 77th Street, Scottsdale, Arizona                      85260
(Address of Principal Executive Offices)                        (Zip Code)


       Registrant's Telephone Number, including area code: (602) 922-8887


ITEM 5. OTHER EVENTS

     TERMINATION  OF AGREEMENT FOR CREDIT LINE.  On January 6, 1999 PCI received
a letter from  Altres  Financial  rescinding  its  conditional  approval of a $1
million  line of credit.  In  November,  PCI  announced  that it had  reached an
agreement in principle with Altres. PCI is pursuing other alternatives to obtain
a line of credit or other funding for operations.

     POSSIBLE  DE-LISTING  FROM NASDAQ SMALL CAP. On January 12,  1999,  PCI was
informed by NASDAQ Listing  Qualifications that the NASDAQ staff is recommending
de-listing  of PCI shares  from the NASDAQ  Small Cap Market.  The NASDAQ  staff
acknowledges that PCI is in compliance with NASDAQ marketplace rules relating to
minimum bid price  requirements  for continued  NASDAQ Small Cap Market listing.
However, because PCI shares have had closing bid prices of less than $1.00 since
December  14,  1998,  the NASDAQ  staff is  relying on its "broad  discretionary
authority" in its recommendation.

     PCI  strongly  believes  that it meets all  listing  criteria of the NASDAQ
Small Cap Market, and that it should maintain its listing.  PCI will apply for a
hearing  to  maintain  listing  on or before  January  23,  1998.  Any  proposed
de-listing will be stayed pending the hearing.

     CALIFORNIA PROPOSITION 65. PCI received  correspondence from an attorney in
California,  alleging that PCI did not comply with certain  notice  requirements
under a California  regulation known as Proposition 65 and threatening a lawsuit
against PCI.  Additionally,  PCI received a demand for indemnification  from the
Southland  Corporation  for costs and/or damages  relating to a lawsuit filed by
the same attorney against Southland for violation of Proposition 65.

     Proposition  65 is a  California  law  which  requires  warning  labels  on
products containing certain substances  identified by the State of California as
cancer-causing  agents.  PCI is currently  negotiating to resolve this matter on
behalf of itself and all of its customers.

                                   SIGNATURES

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

Friday, January 15, 1999                    PREMIUM CIGARS INTERNATIONAL, LTD.



                                            By: /s/  John E. Greenwell
                                               ------------------------------
                                               John E. Greenwell, President