TMSSEQUOIA

                   NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
                        To Be Held January 22, 1999


     	Notice is hereby given that the Annual Meeting of Shareholders of
TMS, Inc., an Oklahoma corporation (the "Company"), will be held in Room 119
of the Stillwater Public Library, 1107 South Duck, Stillwater, Oklahoma, on
Friday, January 22, 1999, at 10:00 a.m., Central Standard Time, for the
following purposes:

     	(1)	      To elect five persons to serve as directors of the Company;

     	(2)	      To approve and ratify the selection of KPMG Peat Marwick LLP
                as independent auditors; and

     	(3)	      To consider and act upon any other matters which may properly
                come before the Meeting or adjournments thereof.

     	Shareholders of record at the close of business on December 1, 1998
shall be entitled to notice of and to vote at the Meeting or any adjournment
thereof.


                              					BY ORDER OF THE BOARD OF DIRECTORS,




                              					Deborah D. Mosier, Secretary


December 7, 1998

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                                   TMS, INC.
                             206 West Sixth Street
                          Stillwater, Oklahoma 74074

                           PROXY STATEMENT FOR THE
                        ANNUAL MEETING OF SHAREHOLDERS
                         TO BE HELD JANUARY 22, 1999

     	This Proxy Statement is furnished to shareholders of TMS, Inc., an
Oklahoma corporation (the"Company"), in connection with the solicitation of
proxies to be used at the Annual Meeting of Shareholders (the "Meeting") to be
held in Room 119 of the Stillwater Public Library, 1107 South Duck,
Stillwater, Oklahoma on Friday, January 22, 1999, at 10:00 a.m., Central
Standard Time, or at any adjournment thereof.  The persons named as proxies in
the enclosed form were selected by the Board of Directors of the Company.

     	This Proxy Statement and the accompanying proxy are first being mailed
to shareholders on or about December 9, 1998, along with the Annual Report to
Shareholders, including financial statements for the fiscal year ended August
31, 1998.

                                   GENERAL

Outstanding Shares and Voting Rights; Voting Procedures

     	At December 1, 1998, the Company had 13,589,179 shares of common stock,
$.05 par value ("Common Stock"), outstanding.  The presence, in person or by
proxy, of the holders of at least a majority of the outstanding shares of
Common Stock is necessary to constitute a quorum of such class at the Meeting.
Shareholders have no cumulative voting rights.

     	Any person signing and mailing the enclosed proxy may vote in person
if in attendance at the Meeting.  Proxies may be revoked at any time before
they are voted by notifying the Secretary of such revocation, in writing, at
the Meeting, or by submitting a later dated proxy.  Shareholders are
encouraged to vote on the matters to come before the Meeting by marking their
preferences on the enclosed proxy and by dating, signing, and returning the
proxy in the enclosed envelope.  If a preference is not indicated on a proxy,
the proxy will be voted "FOR" the nominees to serve as directors of the
Company and "FOR" the ratification and selection of independent auditors.

     	It is not anticipated that matters other than those described above
and in the Notice of Annual Meeting, to which this Proxy Statement is
appended, will be brought before the Meeting for action, but if any other
matters properly come before the Meeting, it is intended that votes thereon
will be cast pursuant to said proxies in accordance with the best judgment of
the proxy holders.

     	With respect to the tabulation of votes on any matter, all abstentions
and non-votes for nominees are treated as present or represented and entitled
to vote at the Meeting.

Record Date

     	The close of business on December 1, 1998 has been fixed as the record
date for the determination of shareholders entitled to receive notice of and
to vote at the Meeting.  Each outstanding share of Common Stock is entitled to
one vote on all matters herein.

<PAGE>   1



Expenses of Solicitation

     	The expenses of this solicitation of proxies will be borne by the
Company, including expenses in connection with the preparation and mailing of
this Proxy Statement and all documents which now accompany or may hereafter
supplement it.  Solicitations will be made only by the use of the mails,
except that, if deemed desirable, officers and regular employees of the
Company may solicit proxies by telephone. It is contemplated that brokerage
houses, custodians, nominees and fiduciaries will be requested to forward
the proxy soliciting material to the beneficial owners of the Common Stock
held of record by such persons and that the Company will reimburse them for
their reasonable expenses incurred in connection therewith.

                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

     	The following table sets forth information regarding the beneficial
ownership of shares of the Company's Common Stock as of October 31, 1998, by
each shareholder known to the Company to be a beneficial owner of more than 5%
of Company's Common Stock.  Unless otherwise indicated, the beneficial owner
has sole voting and investment power with respect to such shares of Common
Stock.


                                       Amount and Nature           Percent
Name and Address                     of Beneficial Ownership     of Class (1)
----------------                     -----------------------     ------------
Dana R. Allen
433 Airport Boulevard, #414
Burlingame, California 94010              1,934,506(2)              14.2%

Theodore A. Walker
P.O. Box 1580
Alvin, Texas 77512                          920,000(3)               6.8%

James R. Rau, M.D.
1203 South Hill Street
Alvin, Texas 77511                          754,500(4)               5.5%

-----------------------
(1)	Shares of Common Stock subject to options exercisable on or before
    February 1, 1999 ("Currently Exercisable Options") are deemed outstanding 
    for purposes of computing the percentage for such person but are not deemed
    outstanding in computing the percent of any other person.

(2)	Includes 34,044 shares subject to Currently Exercisable Options.

(3)	Includes 56,000 shares which are held by Mr. Walker in joint tenancy
    with his wife, Jerline, with whom he shares voting and investment
    power.

(4)	Includes 345,010 shares held by Dr. Rau's wife, Martha, with whom he
    shares voting and investment power as to such shares, and 137,500
    shares subject to Currently Exercisable Options.

     	As of the close of business on October 31, 1998, Cede & Co. owned of
record, but not beneficially, 6,281,023 shares (47%) of Common Stock.  Cede &
Co., the nominee for the Depository Trust Company, holds securities of record
for participating financial institutions such as banks and broker/dealers.

<PAGE>   2




Market for the Company's Common Stock

        The Company's Common Stock is traded in the over-the-counter market,
and prices are quoted by the National Quotation Bureau, Incorporated ("NQB")
on the "pink sheets," and the NASD Non-Nasdaq OTC Bulletin Board.  The
following table sets forth the quarterly range of high and low bid prices of
the Company's Common Stock for fiscal years 1998 and 1997.  The quotations are
inter-dealer prices without retail mark-ups, mark-downs, or commissions and
may not represent actual transactions.  The source of such quotations is the
NQB.

                                                Bid Prices
                                            -----------------
                             Fiscal 1998      High      Low
                             -----------      ----      ---
                            First Quarter   $ 9/16     13/32
                            Second Quarter     1/2      5/16
                            Third Quarter    11/16      5/16
                            Fourth Quarter   19/32     11/32

                             Fiscal 1997      High      Low
                             -----------      ----      ---
                            First Quarter      7/8      9/16
                            Second Quarter   11/16      9/16
                            Third Quarter    11/16     17/32
                            Fourth Quarter    9/16     15/32


     	The Company has not declared or paid any cash dividends since its
incorporation, nor does it anticipate that it will pay dividends in the
foreseeable future.  Any earnings realized by the Company are expected to be
reinvested in the Company's business; however, the declaration and payment of
dividends in the future will be determined by the Board of Directors in light
of conditions then existing, including, among others, the Company's earnings,
its financial condition and capital requirements (including working capital
needs), and any arrangements restricting the payment of dividends.

     	As of December 1, 1998, there were approximately 1730 recordholders of
Common Stock, which is the only outstanding class of the capital stock of the
Company.


                              ELECTION OF DIRECTORS

General

     	Pursuant to the Bylaws of the Company, the shareholders are to elect
at the Meeting, directors to hold office until the next Annual Meeting of
Shareholders and until their successors shall be elected and shall qualify.
The Board of Directors has fixed the number of directors at five for the
ensuing year.

     	The Board of Directors has no reason to believe that any nominee will
become unavailable. However, in the event that any of the nominees should
become unavailable, proxies solicited by the Board of Directors will be voted
for the election of substitute nominees or additional nominees designated by
the Board of Directors.

<PAGE>   3



     	PROXIES SOLICITED BY THE BOARD OF DIRECTORS, IF PROPERLY SIGNED 
AND RETURNED, WILL BE VOTED "FOR" THE ELECTION OF THE FIVE NOMINEES 
LISTED BELOW AS DIRECTORS OF THE COMPANY.


Information Concerning Nominees

     	Certain information as of October 31, 1998, concerning the nominees
to the Board of Directors of the Company, is set forth below based upon
information supplied by such persons.  Unless otherwise indicated, the
beneficial owner has sole voting and investment power with respect to such
shares of Common Stock.

                                            Common Stock Beneficially Owned
                                            --------------------------------

                             Director            Number          Percentage
                     Age      Since            of Shares         of Class(1)
                     ---     --------          ---------         -----------
Dana R. Allen         45      1996           1,934,506(2)          14.2%
James R. Rau, M.D.    69      1990             754,500(3)           5.5%
Doyle E.Cherry        56      1988             330,903(4)           2.4%
Art Crotzer           47      1997             412,595(5)           3.0%
Marshall C. Wicker    72      1994             361,828(6)           2.7%

All executive officers and directors as a 
group (6 persons)                            3,891,999(7)          27.3%

-----------------------
       	(1)	    Shares of Common Stock subject to Currently Exercisable
                Options are deemed outstanding for purposes of computing the
                percentage for such person but are not deemed outstanding in
                computing the percent of any other person.

        (2)     See footnote (2) to the table under the heading "Security
                Ownership of Certain Beneficial Owners."

        (3)     See footnote (4) to the table under heading "Security
                Ownership of Certain Beneficial Owners."

       	(4)	    Includes 20,000 shares held by Mr. Cherry in joint tenancy
                with his wife, Theresa, with whom he shares voting and
                investment power; and 225,000 shares subject to Currently
                Exercisable Options.

       	(5)	    Includes 18,000 shares held by Mr. Crotzer in joint tenancy
                with his wife, Reta, with whom he shares voting and investment
                power, and 111,615 shares subject to Currently Exercisable
                Options.

       	(6)	    Includes 163,399 shares held by Mr. Wicker in joint tenancy with
                his wife, Bettye, with whom he shares voting and investment
                power; and 50,000 shares subject to Currently Exercisable
                Options.

       	(7)	    Includes 547,409 shares as to which directors and executive
                officers share voting and investment power with others and
                654,826 shares subject to Currently Exercisable Options.

Information Concerning Nominees

        The Company's nominees for the five directorships are listed below
with brief statements setting forth their principal occupations and other
biographical information.

<PAGE>   4

        Arthur D. Crotzer has served as President and Chief Executive Officer
of the Company since October 1997.  Since 1983 he has served in various other
management capacities with the Company, most recently as Senior Vice President
of Engineering. Mr. Crotzer was awarded a Bachelor of Science degree in math
and physics from Austin Peay State University in 1973, and in 1975 he earned
a Master of Science degree in computer science from Oklahoma State University.

       	Dana R. Allen has served as Chairman of the Board of Directors of the
Company since August 1998, and as a Director of the Company since March 1996.
Mr. Allen had previously served as Executive Vice President of the Company and
General Manager of the Company's Image Enhancement and Forms line of business.
Mr. Allen was President of Sequoia Computer Corporation ("Sequoia") from 1987
until joining the Company in March 1996.  Prior to founding Sequoia in 1987,
Mr. Allen was Data Development Manager and Product Manager for Triad Systems,
Inc., a data services company.  Prior to that time, Mr. Allen served as
President of H&A Auto Parts, an auto parts retailer/wholesaler.

       	Doyle E. Cherry served as Chairman of the Board of Directors of the
Company from October 1997 through August 1998, and has served as a Director
of the Company since 1988. Mr. Cherry is a chartered financial consultant and
since 1961 has worked in the insurance and securities industries and the
actuarial, tax and financial consulting fields.  From 1982 to August 1993, Mr.
Cherry also served as President and Chief Executive Officer of First Market
Corporation and the First Market Group of Companies.  From 1993 through
October 1997, he served as President of Thiotech USA, Inc., a chemical
manufacturer and distributor located in Houston, Texas.  Mr. Cherry is
currently serving as President of C&H Pipe, a pipe manufacturing company
located in Houston, Texas.

       	Dr. James R. Rau has served as a Director of the Company since 1990.
Dr. Rau practiced medicine from 1956 to 1985 in a private practice and from
1985 to 1988 as a part-time physician with the Monsanto Company in Houston,
Texas.  Since leaving Monsanto, Dr. Rau has managed his financial and real
estate investments.

       	Marshall C. Wicker has served as a Director of the Company since 1994.
Since 1983, he has owned and operated Marwick Enterprises, which is engaged
in ranching and investments.  Mr. Wicker is a Professional Engineer and a
member of the American Association of Petroleum Geologists and Society of
Exploration Geophysicists.

Executive Officers

       	The following sets forth the name and a description of the background
and principal occupation of each executive officer of the Company who is not
a director of the Company.
	
	       Deborah D. Mosier, 31, joined the Company in 1995 as Controller of
Financial Operations and was appointed Chief Financial Officer in October
1996.  Prior thereto, Ms. Mosier worked for six years in the audit practice of
KPMG Peat Marwick LLP.  Ms. Mosier received her Bachelor of Science Degree
with a major in accounting from Oklahoma State University and is a Certified
Public Accountant.

Board of Directors' Meetings

        During the 1998 fiscal year, the Company's Board of Directors held
six meetings.  All members of the Board of Directors attended more than
seventy-five percent (75%) of the Board of Directors' meetings.

<PAGE>   5




Committees of the Board

       	The Board of Directors has a standing Compensation Committee.  Such
committee is currently comprised of Dr. Rau and Messrs. Cherry and Wicker, and
conducts all necessary business during the regular meetings of the Board or
through action by written consent.  The Compensation Committee administers the
Company's stock option plans.  The Company does not have a standing nominating
committee.

Certain Relationships and Related Transactions

       	No officer or director had transactions with or indebtedness to the
Company in excess of $60,000 during the fiscal year ended August 31, 1998.

Compliance with Section 16(a) of the Securities Exchange Act

       	Section 16(a) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder require that certain officers, directors and beneficial
owners of the Company's Common Stock file various reports with the Securities
and Exchange Commission (the "SEC").  Based solely upon a review of such
reports filed with the SEC, the Company believes that no late reports were
filed, for the fiscal year ended August 31, 1998. 


                           EXECUTIVE COMPENSATION


Summary Compensation Table

       	The following table sets forth the cash and noncash compensation for
each of the last three fiscal years awarded to or earned by the Chief
Executive Officer of the Company.

                                  Annual Compensation
                                                                 All Other
Name and Principal Position     Year      Salary     Bonus     Compensation
---------------------------     ----      ------     -----     -------------
Arthur D. Crotzer (1)           1998     $97,621    $27,010       $2,840
Maxwell Steinhardt (2)          1998     $25,750         -          $773
                                1997    $121,200         -        $1,832 
                                1996    $110,667         -             -
	
   
   (1)  Mr. Crotzer became Chief Executive Officer effective October 23, 1997.
        "All Other  Compensation" includes employer matching contributions to
        the Company's defined contribution plan.

   (2)  Mr. Steinhardt became Chief Executive Officer in March 1996 and
        resigned effective October 23, 1997. "All Other Compensation" includes
        employer matching contributions to the Company's defined contribution
        plan.


Option Grants Table

     The following table sets forth restricted stock options awarded to
executive officers during fiscal year 1998.  No director or executive officer
was granted any stock appreciation rights during fiscal year 1998.

<PAGE>   6




                         Number of
                        Securities   % of Total
                        Underlying Options Granted   Exercise
                         Options   to Employees in    Price     Expiration
     Name               Granted(#)  Fiscal Year 1998 ($/Share)    Date
     ----               ----------  ---------------- ---------  ----------
Deborah D. Mosier
Chief Financial Officer  100,000         100%         $0.3125 February 6, 2008


Compensation of Directors

        Each non-employee Director receives $1,000 per month for services as
a Director.  Additional non-employee Director compensation in fiscal 1998
included awarding of options to purchase an aggregate of 162,500 shares of the
Company's common stock at $0.3125 per share (market price on the date of
grant). The non-employee Directors consist of Dr. Rau and Messrs. Cherry and
Wicker. The options were awarded to the non-employee Directors entitle the
Directors to purchase common stock as follows: Mr. Cherry, 75,000 shares; Mr.
Wicker, 50,000 shares; and Dr. Rau 37,500 shares.  The options vested
immediately on the date of grant and expire on February 6, 2008.  


                       APPROVAL OF SELECTION OF AUDITORS

       	Subject to approval by the shareholders, the Board of Directors has
selected the firm of KPMG Peat Marwick LLP, certified public accountants (the
"Auditors"), as auditors of the Company for the fiscal year ending August 31,
1999.  Representatives of the Auditors are expected to be present at the
Meeting to respond to questions of shareholders.

       	The Company has been advised by the Auditors that neither the firm
nor any of its associates has any relationship with the Company or any
affiliate of the Company other than the usual relationship that exists between
independent public accountants and their clients.  To the knowledge of the
Board of Directors, neither the Auditors nor any of its associates has any
direct or material indirect financial interest in the Company and its
subsidiaries in the capacities of promoter, underwriter, voting trustee,
director, officer, or employee.

       	During the past fiscal year, the Auditors have examined the accounts
of the Company and provided other services with respect to certain filings of
the Company with the Securities and Exchange Commission.

       	The affirmative vote of the holders of a majority of the shares of
Common Stock present at the Meeting in person or by proxy and entitled to
vote is required to approve this proposal.

       	The Board of Directors recommends a vote "FOR" the selection of KPMG
Peat Marwick LLP as auditors of the Company for the current fiscal year and
the proxy, unless otherwise indicated thereon, will be voted "FOR" the
ratification of KPMG Peat Marwick LLP as auditors of the Company for the
current fiscal year.

<PAGE>   7


	
                           SHAREHOLDERS' PROPOSALS

       	Proposals by shareholders intended to be presented at the 1999 Annual
Meeting of Shareholders must be received by the Company prior to September 30,
1999, in order for the proposals to be included in the proxy statement and
proxy card relating to such meeting.  It is suggested that proposals be
submitted to the Company by certified mail, return receipt requested.


                               OTHER MATTERS

       	Management knows of no other business which is likely to be brought
before the Meeting.  If other matters not now known to management come before
the Meeting, however, it is the intention of the persons named in the
accompanying proxy to vote in accordance with their best judgment.



                                 					BY ORDER OF THE BOARD OF DIRECTORS,




                                 					DEBORAH D. MOSIER, Secretary


December 7, 1998




        A copy of the Company's Form 10-KSB Annual Report as filed with the
Securities and Exchange Commission will be furnished without charge to
shareholders on request to the Chief Financial Officer of the Company, at its
address stated herein.

<PAGE>   8






                                   TMS, Inc.
                             206 West Sixth Street
                          Stillwater, Oklahoma 74074

       	This Proxy is solicited on behalf of the Board of Directors of TMS,
Inc. (the "Company").  The undersigned hereby appoints Doyle E. Cherry,
Arthur D. Crotzer, Dana R. Allen,  James R. Rau, M.D., and Marshall C. Wicker,
as  proxies, each with the power to appoint his substitute, and hereby
appoints and authorizes them to represent and vote as designated below, all the 
shares of common stock of the Company held of record by the undersigned on 
December 1, 1998, at the Annual Meeting of Shareholders to be held on 
January 22, 1999, or any adjournment thereof.

1.ELECTION OF DIRECTORS [  ] FOR all nominees    [  ] WITHHOLD AUTHORITY
                             listed below             to vote for all nominees
                            (except as marked         listed below
                             to the contrary below)
		
          Dana R. Allen      Doyle E. Cherry      James R. Rau, M.D. 
                 Arthur D. Crotzer       Marshall C. Wicker

(INSTRUCTION) :  To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below).


______________________________________________________________________________
[  ]  FOR                       [  ]  AGAINST                   [  ]  ABSTAIN

2.  PROPOSAL to approve and ratify the selection of KPMG Peat Marwick LLP as
    the Company's independent auditors for the fiscal year ending August 31,
    1999.

[  ]  FOR                       [  ]  AGAINST                   [  ]  ABSTAIN

3.   In their discretion, the Proxies are authorized to vote upon such other
     business as may properly come before the meeting or any adjournment
     thereof.

                 (Continued and to be signed on the reverse side.)

<PAGE>    8



       	This proxy, when properly executed, dated and delivered, will be voted
in the manner directed herein by the undersigned shareholder.  If no direction
is made, this proxy will be voted FOR Proposals 1, 2 and 3.

   Please sign exactly as name appears below.  When shares are held by joint 
   tenants, both should sign.  When signing as attorney or as executor, 
   administrator, trustee or guardian, please give full title as such.  If 
   corporation, please sign in full corporate name by president or other 
   authorized officer.  If a partnership, please sign in partnership name by 
   authorized person.

Date: ___________________________________, 19_____


X______________________________________________
		      (Signature)

X______________________________________________
          (Signature, if held jointly)

PLEASE SIGN, DATE AND RETURN THE PROXY CARD 
PROMPTLY USING THE ENCLOSED ENVELOPE.

<PAGE>    10