SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  SCHEDULE 13D

                    Under the Securities Exchange Act of 1934

                                (Amendment No. 2)

                        SHELLS SEAFOOD RESTAURANTS, INC.
                                (Name of Issuer)

                     Common Stock, $.01 par value per share
                         (Title of Class of Securities)

                                   822809 10 9
                                 (CUSIP Number)

                               Frederick R. Adler
                           1520 South Ocean Boulevard
                            Palm Beach, Florida 33480
                                 (561) 659-2001
            (Name, Address and Telephone Number of Person Authorized
                     to Receive Notices and Communications)

                              December 27-29, 1998

            (Date of Events 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 ____.








                                  SCHEDULE 13D


CUSIP No. 822809 10 9

1.     NAMES OF REPORTING PERSONS
       I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

       (a)    Frederick R. Adler

2.     CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

3.     SEC USE ONLY

4.     SOURCE OF FUNDS
       Not Applicable

5.     CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
       ITEMS 2(d) or 2(e)

6.     CITIZENSHIP OR PLACE OF ORGANIZATION
       (a)    USA

NUMBER                  7.  SOLE VOTING POWER
OF                                  (a) 2,000

SHARES                  8.  SHARED VOTING POWER
BENEFICIALLY                (a)     -0-

OWNED BY                9.  SOLE DISPOSITIVE POWER
EACH                                (a) 2,000

REPORTING               10. SHARED DISPOSITIVE POWER
PERSON WITH                 (a)     -0-

11.    AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

(a)  1,268,226 (*) (*) 916,226 of these shares may be deemed to be  beneficially
     owned for Federal  securities  laws  purposes by Frederick  R. Adler,  as a
     result of such shares being held by the Frederick R. Adler Intangible Asset
     Management Trust.  350,000 of these shares may be deemed to be beneficially
     owned for  Federal  securities  laws  purposes by  Frederick  R. Adler as a
     result of such shares  being held by the Adler  Children  Trust.  Mr. Adler
     disclaims beneficial ownership of such 1,266,226 shares.

12.    CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES



546309.3/wp8





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

(a)  26.4%  (**) (**)  Excluding  the  shares  held by the  Frederick  R.  Adler
     Intangible  Asset  Management  Trust  and the  Adler  Children  Trust,  the
     Reporting  Person would  beneficially  own less than 1% of the  outstanding
     Common Stock.

14.    TYPE OF REPORTING PERSON
                            (a)     IN



This  Amendment  No. 2 is being  filed by  Frederick  R. Adler  (the  "Reporting
Person") to reflect (a) the  transfer  from the  Frederick  R. Adler  Intangible
Asset Management Trust, a trust of which the Reporting Person is the settlor and
beneficiary (the "Asset Trust"),  to the Reporting Person, on December 27, 1998,
of warrants to purchase an  aggregate  of 350,000  shares of common  stock,  par
value $.01 per share (the "Common Stock"), of Shells Seafood  Restaurants,  Inc.
at   exercise   prices   ranging   from   $3.15  to   $3.50   per   share   (the
"Warrants")and(b)the  transfer by the  Reporting  Person of (i) the  Warrants on
December 28, 1998, to the Adler  Children  Trust, a trust of which the Reporting
Person is the settlor and the Reporting  Person's children are the beneficiaries
and wife is the trustee (the "Children Trust"); and(ii) 156,500 shares of Common
Stock on December 29, 1998 (including  5,000 shares of Common Stock purchased by
the  Reporting  Person with personal  funds on December 23, 1998),  to the Asset
Trust.

Item 1.  SECURITY AND ISSUER

         No change.

Item 2.  IDENTITY AND BACKGROUND

         No change.

Item 3.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

         Not Applicable with respect to the transactions reported herein, except
that with  respect  to the  purchase  of the 5,000  shares of Common  Stock at a
purchase  price of $3.75 per share on December 23, 1998,  the  Reporting  Person
used personal funds.


Item 4.  PURPOSE OF TRANSACTION

         All the shares of Common Stock and the Warrants  beneficially  owned by
the Reporting Person were acquired solely for investment  purposes.  On December
27, 1998, the Asset Trust  transferred the Warrants to the Reporting  Person. No
consideration was paid with respect to such transfer.  On December 28, 1998, the
Reporting   Person   transferred   the  Warrants  to  the  Children   Trust.  No
consideration  was paid with respect to the transfer.  On December 29, 1998, the
Reporting Person transferred  156,500 shares of Common Stock to the Asset Trust.
No consideration was paid with respect to the transfer.

Item 5.  INTEREST IN SECURITIES OF THE ISSUER.

         (a) The Reporting Person beneficially owns an aggregate of 2,000 shares
of Common Stock  representing  less than 1% of the outstanding  shares of Common
Stock.   The  Asset  Trust,  of  which  the  Reporting  Person  is  settlor  and
beneficiary,  beneficially  owns an aggregate of 916,226  shares of Common Stock
representing approximately 20.6% of the outstanding shares of Common Stock.



The Children Trust, a trust of which the Reporting Person is the settlor and the
Reporting  Person's  children  are the  beneficiaries  and wife is the  trustee,
beneficially  owns warrants to purchase an aggregate of 350,000 shares of Common
Stock,  representing  approximately  7.3% of the  outstanding  shares  of Common
Stock.  Mr. Adler may be deemed to  beneficially  own the shares and warrants to
purchase shares of Common Stock held by each of the Asset Trust and the Children
Trust for Federal  securities  laws  purposes.  Mr. Adler  disclaims  beneficial
ownership of the shares and warrants to purchase  shares of Common Stock held by
the Asset  Trust  and the  Children  Trust for  purposes  of  Section  13 of the
Securities Exchange Act of 1934 and for all other purposes.

         (b) For  information  with  respect  to the power to vote or direct the
vote and the power to dispose or to direct the  disposition  of the Common Stock
beneficially owned by the Reporting Person, see Rows 7-10 of the cover page.

         (c) No  transactions in the Common Stock were effected by the Reporting
Person during the past 60 days except:

         (i) On December 23, 1998, the Reporting  Person  purchased 5,000 shares
of Common  Stock in the open  market in a  broker's  transaction,  at a purchase
price of $3.75 per share.

         (ii) On December 27, 1998, the Asset Trust  transferred the Warrants to
the Reporting Person. No consideration was paid with respect to such transfer.

         (iii) On December  28,  1998,  the  Reporting  Person  transferred  the
Warrants to the Children Trust. No  consideration  was paid with respect to such
transfer.

         (iv) On December 29, 1998,  the Reporting  Person  transferred  156,500
shares  of Common  Stock to the  Asset  Trust.  No  consideration  was paid with
respect to such transfer.

         (d)          Not applicable.

         (e) The Reporting Person ceased to be the beneficial owner of more than
5% of the  Company's  securities  as a result of the  transfer by the  Reporting
Person of the shares of Common Stock to the Asset Trust on December 29, 1997 and
to the Children Trust on December 28, 1998. The Reporting Person,  however,  may
still be deemed to be the  beneficial  owner of more than 5% of the Common Stock
of the  Company  for the  reasons set forth in Item 11 of the cover page to this
report.






Item 6.  CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
                      RESPECT TO SECURITIES OF THE ISSUER.

         None.

Item 7.  MATERIAL TO BE FILED AS EXHIBITS.

     None

546309.3/wp8




                                    SIGNATURE

         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.



                                            /s/ Frederick R. Adler         
                                            Frederick R. Adler



Date:    January 8, 1999