SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549
                          FORM 10-QSB

       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934


For quarter ended September 30, 1998

Commission File Number 2-15966  


                      TAYCO DEVELOPMENTS, INC.                    
     (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



             NEW YORK                           16-0835557        
(State or other Jurisdiction of           (I.R.S. Employer
 incorporation or organization)            Identification Number)



100 TAYLOR DRIVE, NORTH TONAWANDA, NEW YORK            14120-0748
Address of principal executive offices                   Zip Code

Registrant's telephone number, including area code -  716-694-0877


Indicate by check mark whether the registrant (1) has filed all
annual, quarterly, and other reports required to be filed with all
the Commission and (2) has been subject to the filing requirements
for at least the past 90 days.  

Yes  X   No    

Indicate the number of shares outstanding, of each of the Issuer's
classes of common stock as of the close of the period covered by
this report.

        CLASS                    Outstanding at September 30, 1998
    Common Stock                             990,213
  ($.05 par value)
<PAGE>
                          FORM 10-QSB
                TAYCO DEVELOPMENTS, INC. - INDEX


PART I - FINANCIAL INFORMATION
                                                                  
                                                         PAGE NO.

     Item 1.   Financial Statements                              

               Balance Sheets                                   3
               September 30, 1998, and June 30, 1998

               Statement of Income for three months             4
               ended September 30, 1998 and
               September 30, 1997
                     
               Statement of Cash Flows for three months         5
               ended September 30, 1998 and
               September 30, 1997
               
               Notes to Condensed Financial Statements          6
          
     Item 2.   Management's Discussion and Analysis of          7
               the Financial Condition and Results of
               Operations                                        


PART II - OTHER INFORMATION

     Item 1.   Legal Proceedings                               10

     Item 2.   Changes in Securities                           10

     Item 3.   Defaults Upon Senior Securities                 10

     Item 4.   Submission of Matters to Vote of Security       10
               Holders

     Item 5.   Other Information                               10

     Item 6.   Exhibits                                        10

     SIGNATURES                                                11

<PAGE>
                          FORM 10-QSB
                                
           TAYCO DEVELOPMENTS, INC. -  BALANCE SHEET
                                  
     ASSETS                              9/30/98          6/30/98
Current
  Cash                               $    37,409      $    25,063
  Receivables - Affiliates, Current      122,892          123,745
  Prepaid Other Expenses                   8,585            4,422
    Total Current Assets                 168,886          153,230
Investments - Affiliate, at Equity     1,549,776        1,517,311
  Furniture and Equipment - at Cost       73,389           73,389 
Less:  Accumulated Depreciation           63,008           62,108 
                                       1,560,157        1,528,592
Other Assets        
  Patents, Net                           129,539          131,089
  Receivables - Affiliates, Long-term     - 0 -            - 0 - 
  Cash Value - Life Insurance, Net        56,780           56,780
      Total Other Assets                 186,319          187,869

TOTAL ASSETS                         $ 1,915,362      $ 1,869,691

     LIABILITIES AND STOCKHOLDERS' EQUITY
Current
  Payables - Trade                   $    - 0 -       $    - 0 -
  Payables - Affiliate                    - 0 -            - 0 -
  Current Portion of Long Term Debt       33,437           33,437
  Accrued Income Taxes                     8,840            4,543
  Accrued Expenses                        10,655           17,375
    Total Current Liabilities             52,932           55,355
  Long-term Debt                           9,235           14,411
  Deferred Income Taxes                    3,100            3,100

Stockholders' Equity
  Common Stock, par value $.05
  per share, 1,000,000 shares
  authorized,  990,213 issued             49,696           49,696
  Paid - In Capital                      670,605          670,605
  Retained Earnings                    1,135,423        1,082,153
                                       1,855,724        1,802,454
Less: Cost of Treasury Stock
        3,709 shares at Cost               5,629            5,629
   Total Stockholders' Equity          1,850,095        1,796,825
                                     $ 1,915,362      $ 1,869,691
<PAGE>



                          FORM 10-QSB
                    TAYCO DEVELOPMENTS, INC.
           CONSOLIDATED CONDENSED STATEMENT OF INCOME


     
                                  THREE MONTHS ENDED SEPTEMBER 30


                                                                  
                                         1998             1997

NET SALES
   Royalties                        $   37,626        $   32,714
   Research and Development             65,902            75,612
      Total Revenues                   103,528           108,326

EXPENSES
   Research and Development             36,987            35,602
   Selling, General Administrative      33,662            33,030
   Amortization - Patents                3,900             3,750
      Total Expenses                    74,549            72,382

      Operating Income                  28,979            35,944

OTHER INCOME/(EXPENSE)                     826               800
Income Before Provision for Income
   Taxes and Equity in Net Income
   of Affiliates                        29,805            36,744

Provision for Income Taxes               9,000            11,000

Net Income before Equity in
   Net Income of Affiliates             20,805            25,744

Equity in Net Income of Affiliates      32,465            24,410

Net Income                         $    53,270       $    50,154

Net Income per Share               $       .05       $       .05  
       


<PAGE>



                           FORM 10-QSB
                     TAYCO DEVELOPMENTS, INC.
                      STATEMENT OF CASH FLOW


                                  THREE MONTHS ENDED SEPTEMBER 30

                                          1998            1997
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Income                          $ 53,270        $ 50,154 
   Adjustments to Reconcile
     Net Income/to Net
   Net Cash Provided by Operating
     Activities:
     Amortization - Patents               3,000           3,750 
     Equity in Net Income of            (32,465)        (24,410)
       Affiliates
   Changes in:
     Receivables - Affiliates               853          (8,215)
     Prepaid Expenses                    (4,163)          9,038
     Payables  -    Trade                  - 0 -           - 0 -
               -    Affiliates             - 0 -           - 0 - 
     Accrued Income Taxes                 4,297          (2,071) 
     Accrued Expenses                    (6,720)          1,804
     Amounts due to Stockholder          (5,176)         (7,628)
     Net Property, Plant & Equipment        900           1,200 
   Net Cash Provided by Operating
     Activities                          13,796          23,622

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of Patents                (1,450)        (12,094)
   Net Increase in Cash                  12,346          11,528
Cash Balance, Beginning of Period        25,063          24,006 
Cash Balance, End of Period           $  37,409      $   35,534 


                                <PAGE>
                                
                                
                          FORM 10-QSB
                    TAYCO DEVELOPMENTS, INC.
      NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENT



1.   In opinion of the Company, the accompanying unaudited
     consolidated condensed financial statements contain all
     adjustments necessary to present fairly the financial position
     as of September 30, 1998 and the results of operations for the
     three months ended.

2.   There is no provision nor shall there be any provision for
     profit sharing, dividends, or any other benefits of any nature
     at any time for this fiscal year.

3.   For the three month period ended September 30, 1998 to
     calculate the earnings per share, the profit was divided by
     990,213 shares outstanding less Treasury Shares of 3,709. 

4.   The results of operations for the three month period ended
     September 30, 1998, are not necessarily indicative of the
     results to be expected for the full year. 
<PAGE>
                          FORM 10-QSB
                    TAYCO DEVELOPMENTS, INC.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS



     The following is Management's discussion and analysis of
certain significant factors which have affected the Company's
earnings during the periods included in the accompanying
consolidated condensed statements of income.

     The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for forward-looking statements.  Certain matters
discussed in this section and elsewhere in this report are forward-
looking statements.  As such, these statements involve risks and
uncertainties including, but not limited to, economic conditions,
product demand and industry capacity, competition, pricing
pressures, the need for the Company to keep pace with customer
needs and technological developments, and other factors.

     A summary of the period to period changes in the principal
items included in the consolidated statements of income is shown
below:

                           Comparisons of three months ended     
                        September 30, 1998 vs. September 30, 1997
                                           Increase  (Decrease)

Royalties                                      $ 4,912  
Research and Development Revenue                (9,710)
R&D Expense                                      1,385 
SG&A                                               632
Amortization                                       150 
Operating Income                                (6,965) 
Other Income (Expense)                              26 
Income Before Taxes and Equity in Affiliates    (6,939) 
Provision for Taxes                             (2,000) 
Equity in Affiliates                             8,055
Net Income                                       3,116



                           FORM 10-QSB
                     TAYCO DEVELOPMENTS, INC.
                 MANAGEMENT'S DISCUSSION (CONT'D)


     Improved Royalty and Income from Affiliates offset reduced R&D
revenue, as Net Income improved by 6% in the first quarter of
Fiscal Year 1999.

     In the first quarter of Fiscal Year 1999 (QI99), total
revenues were $103,528, compared to $108,326 in the first quarter
of Fiscal Year 1998 (QI98).  An increase in Royalty Revenues was
more than offset by a decrease in R&D income as the Company's
engineers spent proportionately more time on internal developmental
and analytical projects.  The nature of certain of these projects
is discussed later in this section.

     Total expenses changed from $72,382 in QI98 to $74,549 in QI99
due almost entirely to personnel related expenses and an increased
amortization accrual rate.  Operating income for QI99 was $28,979
versus $35,944 for QI98 due primarily to the lowered R&D income
figure.

     Equity in the Net Income of Affiliates improved from $24,410
in QI98 to $32,465 in QI99 as the Company's affiliate, Taylor
Devices, reported higher earnings based on improved gross margins. 
Net Income for QI99 was $53,270 and $.054 per share, an improvement
of 6.2% over the QI98 figures of $50,154 and $.051 per share.

     The Company's balance sheet reflects the continuing stability
of the operations with the only item of note being the steadily
declining amount due as long-term debt, which now has about 16
months to go until it is paid off in full.

     As mentioned above, the Company's engineers spent
proportionately more time on developmental projects in QI99 than in
most past quarters.  Most of the efforts were for the
aerospace/defense market.  There were continuing efforts on the
flat damper project which is in the modeling and procurement
stages.  This unit has the potential to become a component in
military cabinets being built under COTS (Commercial Off-the-Shelf)
directives with the possibility of a requirement for substantial
quantities over an extended period of time.  Another developmental
effort was the generation of software code to optimize the
placement of the current generation of tension/compression dampers
in military cabinetry.  Two additional separate efforts focused on
potential use of company technology in submarines: semi-active
dampers for deck isolation and tension/compression units for shock
isolation of critical steering/guidance components.  The final
aerospace/defense developmental effort revolved around the design
parameters for tension/compression dampers for a new generation of
larger sea-to-air defensive missiles.


     Based partly on the good results of QI99, Management believes that
Fiscal Year 1999 will produce good financial results consistent
with those of the past few years.  The single largest unknown
variable, the Equity Income from the Company's affiliates, appears
at this time to be on track for these anticipated stable results. 
In the coming months, Management will continue to keep the
Company's efforts balanced between projects offering short-term and
long-term benefits to the Company.<PAGE>


                           FORM 10-QSB
                     TAYCO DEVELOPMENTS, INC.




PART II - OTHER INFORMATION

     ITEM 1   Legal Proceedings
          The Company is not currently engaged in any litigation.


     ITEM 2   Changes in Securities - None


     ITEM 3   Defaults Upon Senior Securities - None


     ITEM 4   Submission of Matters to Vote of Securities Holders
-
          None


     ITEM 5   Other Information - None


     ITEM 6   Exhibits - None

<PAGE>
                                
                          FORM 10-QSB
                    TAYCO DEVELOPMENTS, INC.
                                
                                
                                
                                
                           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.



TAYCO DEVELOPMENTS, INC.
(Registrant)





By   /S/ Douglas P. Taylor                Date   11/10/98         
    Douglas P. Taylor
    Chairman of the Board of Directors
    President
    (Principal Executive Officer)



          AND




By   /S/ Kenneth G. Bernstein              Date   11/10/98        
    Kenneth G. Bernstein
    Chief Accounting Officer