SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549



                                   FORM 10-Q



                  Quarterly Report Under Section 13 or 15(d)
                    of the Securities Exchange Act of 1934




For Quarter Ended December 31, 1995             Commission File Number 0-13318



                            STAR TECHNOLOGIES, INC.
            (Exact name of registrant as specified in its charter)



            Delaware                                            93-0794452
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)


                                 515 Shaw Road
                           Sterling, Virginia  20166
                   (Address of principal executive offices)
                                  (Zip Code)


                                (703) 689-4400
             (Registrant's telephone number, including area code)

                                Not Applicable
             (Former name, former address and former fiscal year,
                         if changed since last report)




      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     



  19,880,244 shares of Common Stock were outstanding as of December 31, 1995.
<PAGE>
PART I.  FINANCIAL INFORMATION

     Item 1.  Financial Statements
<TABLE>

                            STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF OPERATIONS

                                           (Unaudited)
                              (In thousands, except per share data)
<CAPTION>
                                                        Three Months Ended   Nine Months Ended 
                                                           December 31,        December 31,  
                                                          1995      1994      1995      1994 

<S>                                                     <C>       <C>       <C>       <C>
Revenue (includes revenue from GEMS of $10, $4,486      $   875   $ 4,905   $ 3,956   $16,774
  and $2,288, $15,481)
Cost of revenue                                             672     2,694     2,347    10,304

Gross margin                                                203     2,211     1,609     6,470

Operating expenses
  Research and development                                  457       979     1,585     2,761
  Selling, general and administrative                     1,011     1,064     2,873     3,313
  Recognition of accumulated foreign translation gain         -         -         -      (494)

    Total operating expenses, net                         1,468     2,043     4,458     5,580

Operating income (loss)                                  (1,265)      168    (2,849)      890

Interest income, net                                         97        65       348       130
Other income (expense), net                                   3         -        38       (14)

Net income (loss) before provision for income taxes      (1,165)      233    (2,463)    1,006

Provision for income taxes                                    -         -         -         -

Net income (loss)                                       $(1,165)  $   233   $(2,463)  $ 1,006
                                                        =======   =======   =======   =======




Net income (loss)                                       $(1,165)  $   233   $(2,463)  $ 1,006
Preferred stock dividend requirement                       (348)     (516)     (994)   (1,548)
Repurchase of preferred stock                                 -         -     4,954         -

  Net income (loss) applicable to common shares         $(1,513)  $  (283)  $ 1,497   $  (542)
                                                        =======   =======   =======   =======

Earnings (loss) per share:
  Per common and common equivalent share                $  (.08)  $  (.01)  $   .08   $  (.03)
                                                        =======   =======   =======   =======
  Assuming full dilution                                $  (.08)  $  (.01)  $   .08   $  (.03)
                                                        =======   =======   =======   =======

                  See accompanying notes to consolidated financial statements.
</TABLE>


                                               -1-
<PAGE>
<TABLE>
                            STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                           (Unaudited)
                                (In thousands, except share data)
<CAPTION>
                                                                         Dec. 31,    March 31,
Assets                                                                     1995        1995   
Current assets
  <S>                                                                   <C>         <C>
  Cash (includes restricted cash of $89 and $530)                        $   207     $ 1,353
  Short-term investments                                                   5,858       7,900
  Accounts receivable, net (includes GEMS receivable of $3 and $91)          163         248
  Inventory, net                                                             999       2,462
  Other current assets                                                        95          70
    Total current assets                                                   7,322      12,033

Property and equipment, net                                                  537         698
Other assets                                                                 217         289

    Total assets                                                         $ 8,076     $13,020
                                                                         =======     =======
Liabilities and Stockholders' Equity
Current liabilities
  Accounts payable                                                       $   496     $   893
  Accrued payroll and related benefits                                       321         615
  Other accrued liabilities                                                  513       1,089
  Notes payable and capital lease obligations                                 17          49
    Total current liabilities                                              1,347       2,646

Commitments and contingencies                                                  -           -

Stockholders' equity
  Preferred stock; $.01 par value; 1,000,000 shares authorized
    Series A convertible; 500,000 shares designated; 46,900
      shares issued; 46,900 shares outstanding; aggregate
      liquidation preference of $1,688                                         1           1
    Series B convertible; 120,117 shares designated; 59,584 and
      87,513 shares issued; 59,584 and 87,513 shares outstanding;
      aggregate liquidation preference of $5,958 and $8,751                    1           1
    Series C convertible; 80,079 shares designated; 39,723 and
      58,343 shares issued; 39,723 and 58,343 shares outstanding;
      aggregate liquidation preference of $3,972 and $5,834                    1           1
  Common stock; $.01 par value; 60,000,000 shares authorized;
    19,927,035 and 19,919,035 shares issued; 19,880,244 and
    19,872,244 shares outstanding                                            199         199
  Additional paid-in capital                                              63,446      64,628
  Treasury stock, at cost; 46,791 shares                                    (201)       (201)
  Retained deficit                                                       (56,718)    (54,255)

    Total stockholders' equity                                             6,729      10,374

    Total liabilities and stockholders' equity                           $ 8,076     $13,020
                                                                         =======     =======

                   See accompanying notes to consolidated financial statements.

</TABLE>




                                               -2-
<PAGE>
<TABLE>
                             STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (Unaudited)
                                          (In thousands)

<CAPTION>
                                                                          Nine Months Ended
                                                                            December 31,   
  
                                                                           1995        1994 

Cash flows from (used for) operating activities
  <S>                                                                    <C>         <C>
  Net income (loss)                                                      $(2,463)    $1,006

Adjustments to reconcile net income (loss) to net cash
  from (used for) operating activities
    Depreciation and amortization                                            241      1,094
    Gain on recognition of translation adjustment                              -       (494)
    Decrease in restricted cash                                              441          -
    Decrease in accounts receivable                                           85      2,182
    Decrease in inventory                                                  1,463      1,624
    Increase in other current assets                                         (25)       (23)
    Decrease in accounts payable                                            (397)      (115)
    Increase (decrease) in accrued liabilities                              (870)       490

Net cash from (used for) operating activities                             (1,525)     5,764

Cash flows from (used for) investing activities
    Capital expenditures                                                     (65)      (328)
    Other investing activities, net                                           57         12

                                                                              (8)      (316)

Cash flows from (used for) financing activities
    Decrease in notes payable and capital lease obligations                  (32)       (88)
    Repurchase of preferred stock                                         (1,187)         -
    Proceeds from stock option exercises                                       5          1

                                                                          (1,214)       (87)

Net increase (decrease) in cash and equivalents                           (2,747)     5,361

Cash and equivalents, beginning of period                                  8,723      1,776

Cash and equivalents, end of period                                      $ 5,976     $7,137
                                                                         =======     ======


                   See accompanying notes to consolidated financial statements.

</TABLE>








                                               -3-
<PAGE>
                   STAR TECHNOLOGIES, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Star Technologies, Inc. (the "Company") has historically designed and 
manufactured performance-enhancing computing products and solutions for the 
image and signal processing marketplace, principally for medical imaging.  
During fiscal 1994, Star initiated a transition strategy to develop products 
for the image and information management market.  A key segment of this market 
is medical imaging, which draws upon Star's historical skills and experience.  
With a focus on total systems integration, Star is developing innovative 
solutions that span the medical imaging spectrum.  Star's current product focus 
is a family of DICOM 3.0-compliant solutions, with special expertise in the 
area of DICOM image storage.  Star markets its products and technology to OEM 
suppliers of medical imaging equipment.  In addition, Star continues to pursue 
contract engineering and manufacturing business.


NOTE 1 - Financial Information

     The interim financial statements presented herein are unaudited.  They 
reflect all adjustments that, in the opinion of management, are necessary to 
fairly present the Company's financial position and results of operations for 
the interim periods presented.  All such adjustments are of a normal, recurring 
nature.  The results of operations for the three- and nine-month periods ended 
December 31, 1995 are not necessarily indicative of the results to be expected 
for the entire fiscal year.

     The interim consolidated financial information should be read in 
conjunction with the Company's Annual Report on Form 10-K, Commission file 
number 0-13318, for the fiscal year ended March 31, 1995.

     Certain fiscal 1995 amounts have been reclassed for comparative purposes.


NOTE 2 - Short-Term Investments

    The Company's short-term investments consist entirely of commercial paper.  
These investments, which are held to maturity (less than three months from the 
date of purchase), are carried at cost which approximates their market value.


NOTE 3 - Inventory

     Inventory is stated at the lower of cost (first-in, first-out basis) or 
market.  All classifications of inventory include materials and an allocation 
of manufacturing overhead.  Systems-in-process and completed systems include an 
allocation of labor.

     The major classifications of inventory are as follows (in thousands):
<TABLE>
<CAPTION>
                                          Dec. 31,      March 31,
                                            1995          1995   

     <S>                                    <C>          <C>
     Components and subassemblies           $936         $1,973
     Systems-in-process                       34            413
     Completed systems                        29             76

                                            $999         $2,462
                                            ====         ======
</TABLE>
                                      -4-
<PAGE>
     Approximately $400,000 of inventory at March 31, 1995 related to a lot 
terminated for the convenience of the government during fiscal 1994 under a 
long-term subcontract under the United States Navy's SH-60 Program.  The 
Company submitted a claim for recovery of related costs and inventory.  During 
December 1995, the Company received a payment on the claim covering certain 
related costs and the full cost of inventory.  The Company is actively working 
with the government and the prime contractor toward final settlement of the 
claim.


NOTE 4 - Accounts Receivable

     Accounts receivable are shown net of an allowance for doubtful accounts of 
$21,000 and $74,000 at December 31, 1995 and March 31, 1995, respectively.


NOTE 5 - Sales to General Electric Medical Systems ("GEMS")

     The Company's revenue from shipments of ST-RP's and related services to 
GEMS totaled $10,000 and $4.5 million for the quarters ended December 31, 1995 
and 1994, respectively.  For the nine months ended December 31, 1995 and 1994, 
revenue from GEMS totaled $2.3 million and $15.5 million, respectively.  During 
May 1995, GEMS ceased purchasing such products from the Company.  In January 
1995, the Company filed a demand for arbitration against GEMS brought under a 
development and technology transfer agreement with GEMS (the "Development 
Agreement").  The arbitration claim is expected to be resolved by the end of 
the fiscal year.  (See Note 8.)  


NOTE 6 - Notes Payable and Capital Lease Obligations

     On September 30, 1995, the Company's revolving credit note agreement 
expired and was not renewed.  The Company had not borrowed under this agreement 
since December 1993 and has had sufficient cash reserves for its operating 
needs since that time.  Although the Company does not currently need borrowing 
availability to meet its anticipated operating requirements, the Company is in 
discussion with several banks regarding potential credit agreement 
arrangements.  The Company's remaining short-term obligations relate entirely 
to capital lease obligations.

     The Company expects to have sufficient cash, through its current cash and 
short-term investments position and from operations, to meet its fiscal 1997 
operating requirements.  In the event that the Company requires more funds, 
there can be no assurance that the Company would be successful in raising new 
capital from external sources.


NOTE 7 - Repurchase of Preferred Stock

     In March and April, 1995, the Company repurchased and retired 46% of the 
outstanding  shares of its Series B and Series C Senior Preferred Stock (the 
"Preferred Stock") from two of the three preferred shareholders.  In the March 
transaction, the Company paid $950,000 for 37,240 shares of the Preferred Stock 
which had a redemption price of more than $4.9 million, including cumulative 
undeclared dividends of $1.2 million.  In the April transaction, the Company 




                                      -5-
<PAGE>
paid $1.2 million for 46,549 shares of the Preferred Stock which had a 
redemption price of $6.2 million, including cumulative undeclared dividends in 
excess of $1.5 million.  For purposes of computing the earnings per share for 
the nine-month period ended December 31, 1995, the April transaction resulted 
in the availability of $5.0 million additional earnings to common stockholders, 
representing the difference between the carrying amount of the redeemed 
Preferred Stock, including cumulative undeclared dividends, and the price paid 
by the Company to repurchase the stock.


NOTE 8 - Commitments and Contingencies

     In July 1991, the Company filed a lawsuit against Ronald G. Walters 
("Walters") in the United States District Court for the Northern District of 
Ohio alleging breach of contract arising from Walters' interference with the 
Company's ownership of a certain technology used in its reconstruction 
processor business.  Walters alleged ownership of the technology, and in a 
counterclaim filed in August 1991, sought unstated damages and a declaratory 
judgment regarding the disputed technology.  In April 1995, a trial was held in 
the United States District Court for the Northern District of Ohio on the 
Company's claim for breach of contract against Walters and Walters' 
counterclaim for breach of contract against the Company.  On April 24, 1995, a 
jury returned a verdict for Walters, finding in his favor on his claim for 
breach of contract and against Star on its claim for breach of contract.  The 
jury found that Walters does not have an obligation to assign his ownership 
rights in the disputed technology to Star.  On June 13, 1995, Walters filed a 
separate lawsuit against the Company, its Directors and certain officers in the
United States District Court for the Northern District of Ohio alleging patent 
infringement and unjust enrichment in connection with the Company's use of the 
disputed technology.  Walters seeks damages of $67,500,000, trebling of any 
damages awarded, and an injunction that would prohibit the Company from using 
the disputed technology.  Management believes it has valid defenses to this 
claim.

     On January 25, 1995, the Company filed a demand for arbitration (the 
"Demand") with the Commercial Arbitration Tribunal of the American Arbitration 
Association requesting arbitration of certain contract claims against GEMS 
brought under the Development Agreement.  The Development Agreement obligates 
GEMS to purchase its requirements for up to 900 reconstruction processors, 
defined in the Development Agreement as "GE Commercial Reconstruction 
Processors" ("GECRPs"), from the Company and to pay royalties for certain 
reconstruction processors that GEMS has the right to produce under the 
Agreement.  GEMS has developed its own reconstruction processor instead of 
purchasing the Company's.  As discussed in Note 5, in May 1995, GEMS ceased 
ordering reconstruction processors from the Company.  Additionally, GEMS has 
informed the company that GEMS is using in its reconstruction processors 
certain technology in which the Company has a proprietary interest.  The 
Company believes that the Agreement prohibits such use.  Accordingly, the 
Demand alleges that GEMS has breached its obligation to purchase its 
requirements for GECRPs from the Company and has breached its obligation not to 
use certain proprietary technology in its reconstruction processors.  The 
Company is seeking monetary damages from GEMS and a permanent injunction 
prohibiting GEMS from selling, marketing and distributing reconstruction 
processors containing technology that is proprietary to Star.  The arbitration 
hearing has ended; a decision is expected by the end of fiscal 1996.




                                      -6-
<PAGE>
     Item 2. Management's Discussion and Analysis of Results of
             Operations and Financial Condition

Results of Operations

     The Company previously reported that General Electric Medical Systems 
("GEMS") had informed the Company that GEMS intended to phase into full 
production a reconstruction processor it was developing and to phase out 
purchases of the Company's most recently developed reconstruction processor, 
the ST-RP.  Revenue from GEMS accounted for 90% of the Company's total revenue 
for the fiscal year ended March 31, 1995.  GEMS informed the Company that it 
did not intend to purchase additional units after May 1995.  Accordingly, the 
Company has not had orders from GEMS for the ST-RP and has not shipped any new 
systems since May 1995.  The Company believes that GEMS is obligated, under the 
terms of the Development and Technology Transfer Agreement between the Company 
and GEMS (the "GEMS Agreement"), to continue to obtain its requirements for 
reconstruction processors from the Company.  In January 1995, the Company filed 
a demand for arbitration in accordance with the terms of the GEMS Agreement.  
The arbitration hearing has ended; a decision is expected by the end of fiscal 
1996.  There can be no assurances that the Company will prevail in its 
arbitration claim against GEMS, or that a favorable outcome would result in 
additional sales to GEMS or damages payable to the Company.

     Revenue for the three- and nine-month periods ended December 31, 1995 
decreased 82% and 76% respectively, from the same periods a year ago, due to 
the cessation of sales to GEMS of the ST-RP in May 1995, as discussed above.  
Revenue from sales to GEMS totalled $10,000 and $4.5 million for the quarters 
ended December 31, 1995 and 1994, respectively; and $2.3 million and $15.5 
million for the nine-month periods ended December 31, 1995 and 1994, 
respectively.  The Company's primary sources of revenue during the quarter 
ended December 31, 1995 were from the payment received for the claim on the 
U.S. Navy's SH-60 Program, discussed in Note 3, and from maintenance and 
support agreements.

     The gross margin percentage for the nine-month period ended December 31, 
1995 was 41% as compared to 39% for the comparable prior year period.  The 
higher margin reflects cost reductions achieved on the medical imaging product 
sold to GEMS during the first quarter of fiscal 1996 and the completion of a 
low margin, long-term subcontract in the fourth quarter of fiscal 1995, offset 
in part by a higher absorption rate of fixed costs associated with reduced 
revenue levels during the year.  The gross margin percentage for the quarter 
ended December 31, 1995 was 23% which reflects the loss of the higher margin 
GEMS medical imaging product last sold to GEMS in May 1995 as well as a higher 
absorption rate of fixed costs associated with reduced revenue levels during 
the quarter.

     In response to the elimination of reconstruction processor sales to GEMS, 
in early June 1995, the Company reduced its workforce by approximately 30%, 
affecting manufacturing, engineering and administrative departments.  Resultant 
cost reductions are reflected beginning in the second quarter of fiscal 1996.

     Research and development ("R&D") expense for the three and nine months 
ended December 31, 1995 decreased 53% and 43% from the comparable prior year 
periods.  The decreases are primarily attributable to lower costs as a result 
of the sale of the Graphicon division in March 1995 and a company-wide 
reduction in workforce in June 1995.  The Company has concentrated its R&D 
efforts over the past two years exploring growth opportunities in the medical 


                                      -7-
<PAGE>
imaging business in which the Company has over ten years of experience.  The 
Company has targeted the medical information system market, including both 
medical reporting and digital medical imaging and communications systems.  
Due to the nature of its business, the Company expects R&D expense to continue 
to be a significant operating expense.

     Selling, general and administrative expense for the three and nine months 
ended December 31, 1995 decreased 5% and 13% respectively from the same periods 
a year ago primarily due to the company-wide workforce reduction in June 1995, 
offset in part by higher legal fees associated with the GEMS arbitration 
hearing.

     During the three- and nine-month periods ended December 31, 1995 and 1994, 
the Company earned $97,000 and $65,000, and $348,000 and $130,000 respectively, 
of net interest income on its short-term investments.  

Liquidity and Capital Resources

     The Company had a net cash outflow from operating activities of $1.5 
million for the nine months ended December 31, 1995, primarily as a result of 
the significant reduction in revenue.

     On September 30, 1995, the Company's revolving credit note agreement 
expired and was not renewed.  The Company had not borrowed under this agreement 
since December 1993 and has had sufficient cash reserves for its operating 
needs since that time.  Although the Company does not need borrowing 
availability to meet its anticipated operating requirements for the fiscal 
year, the Company is in discussion with several banks regarding potential 
credit agreement arrangements.  The Company's remaining short-term obligations 
relate entirely to capital lease obligations.

     The Company expects to have sufficient cash, through its current cash and 
short-term investment position and from operations, to meet its fiscal 1997 
operating requirements.  In the event that the Company requires more funds, 
there can be no assurance that the Company would be successful in raising new 
capital from external sources.

     In March and April, 1995, the Company repurchased and retired 46% of the 
outstanding  shares of its Series B and Series C Senior Preferred Stock (the 
"Preferred Stock") from two of the three preferred shareholders.  In the March 
transaction, the Company paid $950,000 for 37,240 shares of the Preferred Stock 
which had a redemption price of more than $4.9 million, including cumulative 
undeclared dividends of $1.2 million.  In the April transaction, the Company 
paid $1.2 million for 46,549 shares of the Preferred Stock which had a 
redemption price of $6.2 million, including cumulative undeclared dividends in 
excess of $1.5 million.  For purposes of computing earnings per share for the 
nine months ended December 31, 1995, the April transaction resulted in the 
availability of $5.0 million additional earnings to common stockholders, 
representing the difference between the carrying amount of the redeemed 
preferred stock, including cumulative undeclared dividends, and the price paid 
by the Company to repurchase the stock.

     For the remaining preferred shareholder, General Electric Company ("GE"), 
the Preferred Stock accrues dividends at a rate of 12% per annum (exclusive of 
any penalty), effective June 1, 1995.  The original rate was 10% per annum.  
The dividend rate is subject to scheduled annual increases of 2% per annum on 
June 1, 1996 and 1% per annum on June 1, 1997.  The per annum dividend rate on 
the Preferred Stock is also subject to a 2% increase should the Company breach 

                                      -8-
<PAGE>
any of certain covenants outlined in the Preferred Stock Purchase Agreement or 
not pay in full when due any dividends on the Preferred Stock.  The Company is 
not in compliance with certain of the covenants in the Preferred Stock Purchase 
Agreement and has not paid the dividends due on the remaining Preferred Stock.  
Consequently, dividends have been calculated at an aggregate dividend rate of 
12% per annum through May 31, 1995, and are currently calculated at 14% per 
annum.  To the extent declared, such dividends would be payable quarterly in 
the amount of $348,000 in cash.  Unpaid cumulative dividends in arrears on the 
remaining Preferred Stock total $4.3 million as of December 31, 1995.  The 
Company has suspended discussions with GE regarding the remaining Preferred 
Stock, pending resolution of the arbitration concerning the GEMS Agreement 
referred to above.

     As discussed in Note 8 to the unaudited interim Consolidated Financial 
Statements, on June 13, 1995, Ronald Walters filed a claim against the Company 
for patent infringement and unjust enrichment.  While the Company cannot 
predict the likely outcome of this matter at this time, a judgment against the 
Company could have a material adverse impact on the Company's results of 
operations and liquidity.  Management believes that it has valid defenses 
against this claim.

Corporate Repositioning

     As previously discussed in Results of Operations, GEMS, the Company's 
major customer, informed the Company that it would not purchase additional 
ST-RP units from the Company after May 1995.  Total revenue for the first nine 
months of fiscal 1996 decreased 95% from the same period a year ago.  The 
Company does not anticipate any additional orders from GEMS for the ST-RP 
product.

     In May and August 1995, the Company received Food and Drug Administration 
approval to market the Image Management Server and the Film Image Scan System, 
two of the Company's new products.  The Company continues to work on these and 
other products in the imaging and information systems market and anticipates 
initial sales of the products during the fourth quarter of fiscal 1996.  The 
Company can give no assurances that the new products will be accepted in the 
market place or will significantly offset the lost revenue from GEMS.  

     In May 1995, the Company engaged the investment banking firm of Broadview 
Associates, LP of San Mateo, California to assist the Company in the 
identification of strategic opportunities.  The Company continues to review 
business opportunities and new products that build on the Company's experience.

Recent Accounting Pronouncements

     In March 1995, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No. 121, Accounting for the Impairment of 
Long-lived Assets and for Long-lived Assets to be Disposed of ("Statement 
121").  Statement 121 will require that the Company review its long-lived 
assets for impairment whenever events or circumstances indicate that the 
carrying amount of an asset may not be recoverable.  To the extent that the 
undiscounted net future cash flows expected to be generated from an asset are 
less than the carrying amount, an impairment loss is recognized as the  
difference between that asset's carrying amount and its fair value.  The 
Company is required to adopt Statement 121 during the year ending March 31, 
1997.  In the opinion of management of the Company, the adoption of Statement 
121 will not have a material impact on the Company's financial condition or 
results of operations.

                                      -9-
<PAGE>
PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings

     See Part I, Item 1, Note 8.

     Item 3.  Defaults Upon Senior Securities

     The Company's Series B and C Senior Preferred Stock (the "Preferred 
Stock") issued in May 1990 accrues dividends at a rate of 12% per annum 
(exclusive of any penalty), effective June 1, 1995.  The original rate was 10% 
per annum.  The dividend rate is subject to scheduled annual increases of 2% on 
June 1, 1996 and 1% per annum on June 1, 1997.  The per annum dividend rate on 
the Preferred Stock is also subject to a 2% increase should the Company breach 
any of certain covenants outlined in the Preferred Stock Purchase Agreement or 
not pay in full when due any dividends on the Preferred Stock.  The Company is 
not in compliance with certain of the covenants in the Preferred Stock Purchase 
Agreement and has not paid the dividends due on the Preferred Stock.  
Consequently, dividends have been calculated at an aggregate dividend rate of 
12% per annum through May 31, 1995, and are currently calculated at 14% per 
annum.  To the extent declared, such dividends would be payable quarterly in 
the amount of $348,000 in cash.  Unpaid cumulative dividends in arrears on the 
Preferred Stock total $4.3 million as of December 31, 1995.  The Company has 
suspended discussions regarding the Preferred Stock with the holder, GE, 
pending resolution of the arbitration concerning the GEMS Agreement referred to 
above.

     Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits.

         Exhibit No. 11 - Statement Regarding Computation of Per Share Earnings

         Exhibit No. 27 - Financial Data Schedule

     (b) Reports on Form 8-K.

         No reports on Form 8-K were filed by the Company during the quarter 
         ended December 31, 1995.




















                                     -10-
<PAGE>
                                  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.

                                            STAR TECHNOLOGIES, INC.


Dated:  February 13, 1996                                                
                                            Robert C. Compton
                                            Chairman of the Board of Directors,
                                            President and Chief Executive
                                            Officer and Director

                                                                         
                                            Brenda A. Potosnak
                                            Controller, Treasurer, Secretary
                                            and Principal Accounting Officer







































                                     -11-