UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                FORM 10-Q

(Mark One)
             Quarterly Report Under Section 13 or 15 (d) of the Securities 
    X        Exchange Act of 1934
             For the quarterly period ended June 20, 1998
             
                                    OR           
             
             Transition Report Pursuant to Section 13 or 15 (d) of the 
             Securities Exchange Act of 1934
             For the transition period from _________to _________

Commission file No.:  33-48862


                       HOMELAND HOLDING CORPORATION
          (Exact name of registrant as specified in its charter)


         Delaware                                        73-1311075
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                        Identification No.)

                        2601 Northwest Expressway
                      Oil Center-East, Suite 1100
                        Oklahoma City, Oklahoma              73112
               (Address of principal executive offices)    (Zip Code)

                           (405) 879-6600
       (Registrant's telephone number, including area code)

       Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15 (d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter 
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.  Yes  X    No

       Indicate by check mark whether the registrant has filed all documents 
and reports required to be filed by Section 12, 13 or 15 (d) of the Securities 
Exchange Act of 1934 subsequent to the distribution under a plan confirmed by 
a court. Yes  X    No 

       Indicate the number of shares outstanding of each of the registrant's 
classes of common stock as of July 28, 1998:

          Homeland Holding Corporation Common Stock:  4,835,901 shares
                              
                              
                              
                              
                       HOMELAND HOLDING CORPORATION
                                
                               FORM 10-Q
              FOR THE TWENTY-FOUR WEEKS ENDED JUNE 20, 1998
                                
                                INDEX
                                
                                
                                
                                                                       Page
PART 1 FINANCIAL INFORMATION

ITEM 1.   Financial Statements.........................................  1

          Consolidated Balance Sheets as of
             June 20, 1998, and January 3, 1998........................  1
          Consolidated Statements of Operations
             Twelve Weeks ended June 20, 1998, and June 
             14, 1997..................................................  3
          Consolidated Statements of Operations
             Twenty-four Weeks ended June 20, 1998, and June 
             14, 1997..................................................  4
          Consolidated Statements of Stockholders Equity (Deficit)
             Twenty-four Weeks ended June 20, 1998 and June 
             14, 1997..................................................  5
          Consolidated Statements of Cash Flows
             Twenty-four Weeks ended June 20, 1998 and June 
             14, 1997..................................................  6
          Notes to Consolidated Financial Statements...................  7

ITEM 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations....................................  8

PART II   OTHER INFORMATION


ITEM 5.   Other Information............................................ 12

ITEM 6.   Exhibits and Reports on Form 8-K............................. 13






                                      i


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                  HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                       CONSOLIDATED BALANCE SHEETS

              (In thousands, except share and per share amounts)


                             ASSETS

                                               June 20,          January 3, 
                                                 1998               1998
                                              (Unaudited)
Current assets:                                      
 Cash and cash equivalents                   $   5,813          $   4,778
 Receivables, net of allowance for 
  uncollectible accounts of $1,108 
  and $1,198                                     7,557              9,313 
 Inventories                                    45,371             45,946
 Prepaid expenses and other current assets       3,222              2,581
                                                             
      Total current assets                      61,963             62,618 

Property, plant and equipment:                               
 Land and land improvements                      9,417              9,303 
 Buildings                                      20,029             19,995 
 Fixtures and equipment                         25,372             22,267
 Leasehold improvements                         16,676             13,459
 Software                                        5,115              4,991
 Leased assets under capital leases              8,610              8,610
 Construction in progress                           30              2,769

                                                85,249             81,394
Less, accumulated depreciation                               
 and amortization                               15,702             11,299 

Net property, plant and equipment               69,547             70,095

Reorganization value in excess of amounts                                       
 allocable to identifiable assets, less                                   
 accumulated amortization of $26,832 at
 June 20, 1998, and $20,346 at
 January 3, 1998                                15,772             23,162

Other assets and deferred charges               10,011             10,166
                                                             
   Total assets                              $ 157,293          $ 166,041
                                                             
                                                      Continued


                The accompanying notes are an integral part
                 of these consolidated financial statements.

                                     1


                 HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                   CONSOLIDATED BALANCE SHEETS, Continued

            (In thousands, except share and per share amounts)


                   LIABILITIES AND STOCKHOLDERS' EQUITY
                                

                                               June 20,         January 3,  
                                                 1998              1998
                                              (unaudited)

Current liabilities:                                 
 Accounts payable - trade                    $  18,105          $  18,941
 Salaries and wages                              2,230              2,508
 Taxes                                           3,632              3,605
 Accrued interest payable                        2,671              2,619
 Other current liabilities                       7,554             10,042
 Current portion of long-term debt               1,753              1,728
 Current portion of obligations under 
  capital leases                                 1,286              1,286

  Total current liabilities                     37,231             40,729
                                                             
Long-term obligations:                                       
 Long-term debt                                 78,836             78,353
 Obligations under capital leases                2,001              2,608
 Other noncurrent liabilities                    1,951              2,027
                                                             
  Total long-term obligations                   82,788             82,988
                                                             
                                                             
Stockholders' equity:                                        
 Common Stock,                                             
  $0.01 par value, authorized - 7,500,000                                       
  shares, issued 4,825,899 shares at June 
  20, 1998, and issued 4,820,637
  shares at January 3, 1998                         48                 48
 Additional paid-in capital                     56,159             56,040
 Accumulated deficit                           (18,933)           (13,764)
                                                             
  Total stockholders' equity                    37,274             42,324
                                                             
  Total liabilities and stockholders' 
   equity                                    $ 157,293          $ 166,041
                                                             



                The accompanying notes are an integral part
                 of these consolidated financial statements.

                                     2


                HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                   CONSOLIDATED STATEMENTS OF OPERATIONS

             (In thousands, except share and per share amounts)
                                   (Unaudited)
                                

                                                                           
                                                      
                                              12 weeks       12 weeks        
                                               ended           ended            
                                              June 20,        June 14,  
                                                1998           1997

Sales, net                                 $  123,509      $   116,264    
                                                             
Cost of sales                                  94,146           87,603         

 Gross profit                                  29,363           28,661 
                                                             
Selling and administrative expenses            26,598           25,079 

Amortization of excess reorganization value     3,205            3,364 

 Operating profit (loss)                         (440)             218    
                                                             
Interest expense                                1,848            1,833 
                                                             
Loss before income taxes                       (2,288)          (1,615) 

Income tax expense                                471              920     
                  
Net loss                                       (2,759)          (2,535) 

Basic and diluted earnings per share: 
 Net loss per share                        $    (0.57)       $   (0.53)

Weighted average shares outstanding          4,824,781        4,758,025 

                                                             


                The accompanying notes are an integral part
                 of these consolidated financial statements.

                                     3


                                      
                 HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                   CONSOLIDATED STATEMENTS OF OPERATIONS

             (In thousands, except share and per share amounts)
                                 (Unaudited)
                                


                                                                         
                                             24 weeks           24 weeks   
                                              ended              ended     
                                             June 20,           June 14,
                                              1998               1997

Sales, net                                 $  244,912        $  236,314        
                                                             
Cost of sales                                 186,068           178,481 
                                                             
 Gross profit                                  58,844            57,833   
                                                             
Selling and administrative expenses            52,778            50,266   

Amortization of excess reorganization value     6,486             6,824      

 Operating profit (loss)                         (420)              743   

Interest expense                                3,799             3,815   

Loss before income taxes                       (4,219)           (3,072)        
                                                             
Income tax expense                                950             1,721   
                         
Net loss                                       (5,169)           (4,793)    

Basic and diluted earnings per share:
 Net loss per share                        $    (1.07)       $    (1.01)        
                                                             
Weighted average shares outstanding           4,823,482        4,758,025        
                                                             



                The accompanying notes are an integral part
                 of these consolidated financial statements.

                                      4



                   HOMELAND HOLDING CORPORATION AND SUBSIDIARY
                                        
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                        
               (In thousands, except share and per share amounts)
                                   (Unaudited)
                                        
<TABLE>
<CAPTION>
                                                                                    
                                        Common Stock                Additional     
                                                         Paid-In   Accumulated     Stockholder's 
                                    Shares     Amount    Capital     Deficit     Equity (Deficit)
<S>                              <C>          <C>       <C>        <C>           <C>

Balance, December 28, 1996       4,758,025    $   48    $ 56,013   $  (3,120)    $   52,941

Net loss                             -            -          -        (4,793)        (4,793)

Balance, June 14, 1997           4,758,025        48    $ 56,013   $  (7,913)    $   48,148    

Balance, January 3, 1998         4,820,637    $   48    $ 56,040   $ (13,764)    $   42,324       

Net loss                             -            -          -        (5,169)        (5,169)                          

Issuance of common stock            15,262        -     $    119        -        $      119           

Balance, June 20, 1998           4,835,899    $   48    $ 56,159   $ (18,933)    $   37,274         -




</TABLE>




                     The accompanying notes are an integral part
                      of these consolidated financial statements.

                                          5


                  HOMELAND HOLDING CORPORATION AND SUBSIDIARY

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

              (In thousands, except share and per share amounts)
                                    (Unaudited)
                                


                                                                                
                                                     24 weeks      24 weeks     
                                                      ended         ended       
                                                     June 20,      June 14,   
                                                      1998           1997       

Cash flows from operating activities:
 Net loss                                            $ (5,169)     $ (4,793)    
 Adjustments to reconcile net income (loss) to net
  cash provided by operating activities:
   Depreciation and amortization                        4,434         3,510  
   Amortization of excess reorganization value          6,486         6,824 
   Amortization of financing costs                         35            29 
   (Gain) loss on disposal of assets                       36            (1)
   Amortization of beneficial interest in
    operating leases                                       56            56
   Adjustment to excess reorganization value             -              292
   Deferred income taxes                                  905         1,721   
   Change in assets and liabilities:
     Decrease in receivables                            1,756         1,892    
     Decrease in inventories                              575         1,849    
     Decrease (increase) in prepaid expenses
      and other current assets                           (641)          534 
     Decrease (increase) in other assets and
      deferred charges                                     48          (118)    
     Decrease in accounts payable-trade                  (836)       (1,670)    
     Decrease in salaries and wages                      (278)         (752) 
     Increase in taxes                                     27           804     
     Increase (decrease) in accrued interest payable       52          (211)   
     Decrease in other current liabilities             (2,488)       (1,352)  
     Increase (decrease) in other noncurrent 
      liabilities                                         (61)          113    
                                             
       Net cash provided by operating activities        4,937         8,727    
                                                      
Cash flow used in investing activities:
 Capital expenditures                                  (3,926)       (3,559)    
 Cash received from sale of assets                          4            20     
                                                      
       Net cash used in investing activities           (3,922)       (3,539)    

Cash flows used by financing activities:
 Borrowings under term loan                              -             -        
 Borrowings under revolving credit loans               60,810        63,409  
 Payments under revolving credit loans                (59,855)      (63,241) 
 Proceeds from issuance of common stock                   119          - 
 Principal payments under note payable                   (447)          (31) 
 Principal payments under capital lease obligations      (607)         (683)    
 Payments of secured debt obligations                    -             -     
           
       Net cash provided (used) in 
        financing activities                               20          (546)    
                                                   
Net increase in cash and cash equivalents               1,035         4,642   

Cash and cash equivalents at beginning of period        4,778         1,492    
                                                      
Cash and cash equivalents at end of period           $  5,813       $ 6,134     

Supplemental information:
 Cash paid during the period for interest            $  3,909       $ 4,005   

 Cash paid during the period for income taxes        $   -          $  -     


                                
                The accompanying notes are an integral part
                 of these consolidated financial statements.

                                     6



                                 

              HOMELAND HOLDING CORPORATION AND SUBSIDIARY

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Unaudited)

1.   Basis of Preparation of Consolidated Financial Statements:

            The accompanying unaudited interim consolidated financial
     statements of Homeland Holding Corporation ("Holding") and its 
     Subsidiary, Homeland Stores, Inc. ("Stores" and together with Holding,
     the "Company"), reflect all adjustments, which consist only of normal 
     and recurring adjustments, which are, in the opinion of management,
     necessary for a fair presentation of the consolidated financial
     position and the consolidated results of operations and cash flows
     for the periods presented.  

             These unaudited consolidated financial statements should be read
     in conjunction with the consolidated financial statements of the Company
     for the period ended January 3, 1998, and the notes thereto.

2.     Accounting Policies:

            The significant accounting policies of the Company are summarized
     in the consolidated financial statements of the Company for the 53 weeks
     ended January 3, 1998, and the notes thereto.
     
3.     Net Loss Per Share:

            Options to purchase 256,000 shares of common stock with a weighted 
     average exercise price of $6.68 were outstanding at June 20, 1998, but 
     were not included in the computation of diluted earnings per share
     because the effect would be antidilutive.


                                     7

Item 2.     Management's Discussion and Analysis of Financial
       Conditions and Results of Operations
  
       General
       
              The table below sets forth selected items from the Company's
       consolidated income statement as a percentage of net sales of the 
       periods indicated:
       
                                12 weeks ended           24 weeks ended
                             June 20, June 14,         June 20, June 14,
                              1998      1997           1998          1997
      Net Sales              100.0%    100.0%         100.0%        100.0%
      Cost of Sales           76.2      75.3           76.0          75.5
         Gross Profit         23.8      24.7           24.0          24.5
      Selling and 
       administrative         21.5      21.6           21.5          21.3
      Amortization of   
       excess reorganization
       value                   2.6       2.9            2.6           2.9 
      Operating profit
       (loss)                 (0.3)      0.2           (0.1)          0.3 
      Interest expense         1.5       1.6            1.6           1.6
      Loss before income                                   
       taxes                  (1.8)     (1.4)          (1.7)         (1.3) 
      Income tax                                
       provision               0.4       0.8            0.4           0.7

         Net loss             (2.2)     (2.2)          (2.1)         (2.0)
  
  
  
  
  Results of Operations.
  
            Comparison of Twelve Weeks and Twenty-Four Weeks ended June 20,
  1998, with Twelve Weeks and Twenty-Four Weeks ended June 14, 1997.
  
            Net sales for the 12 weeks and 24 weeks ended June 20, 1998,
  increased 6.2 % and 3.6%, respectively, from the net sales of the
  corresponding period of 1997.  Comparable store sales for the 12 weeks
  and 24 weeks ended June 20, 1998, increased by 0.4% and decreased by
  2.1%, respectively, as compared to the corresponding periods of 1997.
  
            The improvement in total sales in the quarter is partially due
  to an additional four stores in operation versus the same quarter last
  year.  The sales improvement in the quarter is also due to a change in
  like-store sales trends from a decline of 4.4% in the first quarter
  to an increase of 0.4% in the second quarter.  This turnaround in trend
  is primarily due to increasing customer acceptance of card-based promotions,
  re-grand openings of five remodeled stores, greater usage of targeted
  localized promotions, and better store level execution.


                                     8


            There were 4 competitive grand openings during the second
  quarter of 1998, two of which were Wal-Mart Supercenters.

            The Company also closed a small store less than 2 miles away
  from a larger, remodeled store during the second quarter.

            Gross  profit as a percentage of sales for the 12 weeks ended 
  June 20, 1998, was 23.8%, a decrease from the corresponding period in
  1997 of 24.7%. The decrease in gross profit margin was primarily a result
  of increased promotional activities relating to new competitors and re-
  grand opening sales of the five remodeled stores.  Management anticipates
  that future improvements in cost of goods will help offset increases
  in promotional costs.  Gross profit as a percentage of sales for the 24
  weeks ended June 20, 1998, was 24.0%, a decrease from the corresponding
  period in 1997 of 24.5%.
  
            Selling and administrative expenses for the 12 weeks ended
  June 20, 1998, decreased to 21.5%, as a percentage of net sales, 
  compared to 21.6% for the corresponding period of 1997.  The reduction
  during the second quarter reflects improvements in store level productivity
  and lower fixed expense ratios due to increased sales.  For the 24
  weeks ended June 20, 1998, selling and administrative expenses as a
  percentage of sales increased by 0.2% to 21.5% from 21.3% in the
  corresponding period of 1997.   

            The Company recorded amortization of excess reorganization value
  of $3.2 million and $6.5 million for the 12 weeks and 24 weeks ended
  June 20, 1998, respectively.  The amortization of the excess
  reorganization value will negatively affect earnings for the next five 
  fiscal quarters.
  
            Interest  expense for the 12 weeks ended June 20, 1998, and 
  June 14, 1997, was $1.8 million.  Interest expense for the 24 weeks ended
  June 20, 1998, and June 14, 1997, was $3.8 million.
  
            The  Company recorded an income tax provision of $0.5 million and 
  $0.9 million for the 12 weeks and 24 weeks ended June 20, 1998,
  respectively.  The effective tax rate differs from the statutory rate due
  to amortization of excess reorganization value, which is not deductible for 
  income tax purposes.   The net operating loss ("NOL") carryforwards 
  available for utilization in 1998 are limited to approximately 
  $3.3 million, the benefit of which is being recorded as a reduction of
  excess reorganization value rather than a reduction of income tax expense.
  The NOL carryforward available in 1998 is expected to be fully utilized 
  in the third quarter of 1998, and accordingly, the Company will commence 
  to incur income tax liabilities.

                                      9

  
            The Company's EBITDA (as defined hereinafter) for the 12 weeks
  ended June 20, 1998, declined to $5.0 million or 4.1% of net sales, 
  from the EBITDA of $5.4 million or 4.7% of net sales for the corresponding
  period in 1997.  For the 24 weeks ended June 20, 1998, EBITDA was $ 10.6
  million or 4.3% of net sales compared to $11.1 million or 4.7% for the
  corresponding period of 1997. 
  
            Net loss for the 12 weeks ended June 20, 1998, was $2.8 
  million or $0.57 per share compared to a net loss of $2.5 million or 
  $0.53 per share for the corresponding period in 1997. Net loss for the 
  24 weeks ended June 20, 1998, was $5.2 million or $1.07 per share 
  compared to a net loss of $4.8 million or $1.01 per share for the 
  corresponding period in 1997. 
  
         The Company is amortizing its excess reorganization value of $45
  million over a three-year period, and such amortization has affected 
  earnings significantly. If the Company excluded such amortization of 
  excess reorganization value for the 12 weeks and 24 weeks ended June 
  20, 1998, the Company would record income of $0.4 million or $0.9 per
  share and income of $1.3 million or $0.27 per share, respectively.
  
  Liquidity and Capital Resources
  
            The primary sources of liquidity and capital for the Company's
  operations have been borrowing under the revolving credit facility and
  internally-generated funds.

            The Company's EBITDA (earnings before interest, taxes, 
  depreciation and amortization), as presented below, is the Company's 
  measurement of internally-generated cash for working capital needs, 
  capital expenditures and payment of debt obligations:

                                     12 weeks ended      24 weeks ended
                                   June 20,  June 14,  June 20,  June 14,
                                     1998      1997      1998      1997

    Loss before income taxes        (2,288)   (1,615)    (4,219)   (3,072)
                                                          
    Interest expense                 1,848     1,833      3,799     3,815
                                                           
    Amortization of 
     reorganization value            3,205     3,364      6,486     6,824
                                                           
    Depreciation and
     amortization                    2,272     1,821      4,492     3,566
                                                           
          EBITDA                     5,037     5,403     10,558    11,133
                                                           
        As a percentage of
         sales                       4.10%      4.70%      4.30%     4.70%
                                                           
        As a multiple of 
         interest expense             2.7x       3.0x       2.8x      2.9x

                                       10

                                 
           Cash flow from operations provided $4.9 million for the 24 weeks
  ended June 20, 1998, and $8.7 million for the 24 weeks ended June 14, 1997. 
  The decrease in cash flow from operations in comparison between the two
  periods was due primarily to higher purchases of inventory and decreases
  in other current liabilites.
  
           The Company's investing activities used net cash of $3.9 million
  in the 24 weeks ended June 20, 1998, as compared to net cash used by 
  investing activities of $3.5 million in the 24 weeks ended June 14, 1997.
  
           Financing activities of the Company provided net cash of $0.1 
  million and used net cash of $0.5 million for the 24 weeks ended June 20,
  1998, and June 14, 1997, respectively.

           As of June 20, 1998, the Company had $11.6 million of borrowings
  and $3.3 million of letters of credit outstanding under its $32.0 million
  revolving credit facility.  The revolving credit facility provides for
  borrowings to the lesser of (a) $32.0 million or (b) the applicable
  borrowing base.  The applicable borrowing base on June 20, 1998, was 
  $29.7 million.  Management believes that the revolving credit facility and 
  cash flow from operations will be adequate for the Company's short-  
  term requirements.
  
           The Company is continuing to improve its store facilities through  
  its capital expenditure program to maintain and enhance its market
  competitiveness.  Cash capital expenditures for 1998 are expected to be
  at $12.9 million.  The credit agreement limits the Company to $13.0 million
  cash capital expenditures for 1998.  The Company is also allowed $7.0
  million of new capital leases each year.

  Safe Harbor Statements Under the Private Securities Litigation Reform Act 
  of 1995
  
           The statements made under Item 2: Management's Discussion and 
  Analysis of Financial Condition and Results of Operations and other 
  statements in this Form 10-Q which are not historical facts, particularly
  with respect to future net sales, are forward-looking statements. These
  forward-looking statements are subject to risks and uncertainties that 
  could render them materially inaccurate or different. The risks and 
  uncertainties include, but are not limited to, the effect of economic 
  conditions, the impact of competitive promotional and new store activities,
  labor cost, capital constraints, availability and costs of inventory, 
  changes in technology and the effect of regulatory and legal developments.
  

                                      11

  
  PART II - OTHER INFORMATION
  
  Item 5.   Other Information
  
            Ms. Deborah A. Brown was elected Vice President - Accounting, 
  Corporate Controller, Treasurer and Assistant Secretary on July 9, 1998.
  
            Mr. Wayne S. Peterson has accepted the position of Senior Vice
  President, Chief Financial Officer, and Secretary pending the completion
  of the merger of his current employer, Buttrey Food & Drug with Albertson's
  Inc. 

                                       12






  Item 6.    Exhibits and Reports on Form 8-K
  
             (a)     Exhibits:     The following exhibits are filed as part
                                   of this report:
  
                     Exhibit No.   Description
  
                          27       Financial Data Schedule.
  
  
             (b)    Report on Form 8-K:  The Company did not file any 
                    Form 8-K during the quarter ended June 20, 1998.


                                        13




                                       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 thereunto duly authorized.
  
  
                             HOMELAND HOLDING CORPORATION
  
  
  Date: August 4, 1998       By: /s/  David B. Clark
                                 David B. Clark, President, Chief Executive
                                 Officer and Director
                                 (Principal Executive Officer)
                           
  
  Date: August 4, 1998       By: /s/  Deborah A. Brown
                                 Deborah A. Brown, Vice President - Accounting
                                 Corporate Controller, Treasurer and
                                 Assistant Secretary
                                 (Principal Financial Officer)