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 2, 2004



                             Greenbriar Corporation
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)






         Nevada                       0-8187                     75-2399477
------------------------       ---------------------         -------------------
(State of incorporation)       (Commission File No.)           (IRS Employer
                                                             Identification No.)






                 1755 Wittington, Suite 340, Dallas, Texas 75234
          ------------------------------------------------------------
          (Address of principal executive offices, including zip code)




                                 (972) 407-8400
              ----------------------------------------------------
              (Registrant's telephone number, including area code)






Item 5.  Other Events and Required ID disclosures

         On January 8, 2004,  Greenbriar  Corporation  (the "Company")  issued a
press  release  announcing  that the Internal  Revenue  Service was  considering
assessing  penalties  against the Company  under  Section  6700 of the  Internal
Revenue Code.

         On August 2, 2004,  the Company  issued a press  release  announcing  a
settlement  of the above matter with the Internal  Revenue  Service  wherein the
Company  agreed  to pay  $216,000  as a penalty  pursuant  to  Section  6700 but
expressly denied that it engaged in any conduct that would be subject to penalty
under the tax law. A copy of this press  release is  attached  hereto as Exhibit
99.1 and is incorporated herein by reference.

         This information and Exhibit 99.1 hereto are being furnished, and shall
not be deemed to be  "filed",  with the SEC.  The  information  in this  current
Report on Form 8-K shall not be incorporated by reference into any filing of the
registrant  with  the SEC,  whether  made  before  or  after  the  date  hereof,
regardless of any general incorporation language in such filings.

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

         (c)      Press Release of Greenbriar Corporation dated August 2, 2004.





                                   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.

Date:    August 3, 2004                 GREENBRIAR CORPORATION
                                        (Registrant)

                                        By: /s/  Gene S. Bertcher
                                           -------------------------------------
                                           Gene S. Bertcher
                                           President and Chief Executive Officer









                                  EXHIBIT INDEX

Exhibit #

99.1                Press Release of Greenbriar Corporation dated August 2, 2004