SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, D.C.   20549-1004

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998

                        COMMISSION FILE NUMBER  0-020992

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

             MASSACHUSETTS                                            04-2842217
     (State  or other jurisdiction               (I.R.S. Employer Identification
Number)
      of  incorporation  or  organization)

                                 101 MAIN STREET
                       CAMBRIDGE, MASSACHUSETTS 02142-1521
   (Address, including zip code, of registrant's principal executive offices)

                                 (617) 577-1017
               (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  AT  LEAST  THE  PAST  90  DAYS.

                     YES            X                            NO    ________
                            ---------

AS  OF  NOVEMBER  9,  1998 THERE WERE 9,315,707 SHARES OF COMMON STOCK, $.01 PAR
VALUE  PER  SHARE,  OUTSTANDING.



<PAGE>

 

                         MATHSOFT, INC. AND SUBSIDIARIES

                                    FORM 10-Q



                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998

                                TABLE OF CONTENTS


                                                       PAGE
                                                       ----
<TABLE>
<CAPTION>


<S>                                                                   <C>
PART I.    FINANCIAL INFORMATION:

Item 1. Consolidated Condensed Financial Statements

- Consolidated Condensed Balance Sheets as of
    	September 30, 1998 and December 31, 1997                                                           3

- Consolidated Condensed Statements of Operations for the
    	Three and Nine Month Periods Ended September 30, 1998
 	and 1997                                                                                           5

         - Consolidated Condensed Statements of Cash Flows for the
   	 Nine Month Periods Ended September 30, 1998 and 1997                                              6

         - Notes to Consolidated Condensed Financial Statements                                             8

  Item 2. Management's Discussion and Analysis of Financial
    	Condition and Results of Operations                                                                12

  Cautionary Statements                                                                                    18

</TABLE>



<TABLE>
<CAPTION>


<S>                                         <C>

PART II.   OTHER INFORMATION:

  Item 5.  Other Information                22

  Item 6. Exhibits and Reports on Form 8-K  22


SIGNATURES                                  23
</TABLE>



<PAGE>

                        MATHSOFT, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (UNAUDITED)
                                     ASSETS
<TABLE>
<CAPTION>


                                                            SEPTEMBER 30,   DECEMBER 31,
                                                                 1998           1997
                                                            --------------  -------------
<S>                                                         <C>             <C>
CURRENT ASSETS:
       Cash and cash equivalents                            $    4,669,309  $   4,133,541
       Accounts receivable, less reserves of
            approximately $1,149,000 at September 30, 1998
            and $1,598,000 at December 31, 1997                  3,320,600      2,527,973
       Other receivables                                         1,331,503        944,361
       Inventories                                                 211,705        255,205
       Prepaid expenses                                            409,105        233,714

                    Total current assets                         9,942,222      8,094,794
                                                            --------------  -------------

PROPERTY AND EQUIPMENT, AT COST:
       Computer equipment and software                           4,238,372      4,609,382
       Property and equipment under capital lease                1,340,004        615,910
       Furniture and fixtures                                    1,024,095      1,012,763
       Leasehold improvements                                      624,658        626,890
                                                            --------------  -------------
                                                                 7,227,129      6,864,945
       Less - Accumulated depreciation and amortization          5,841,774      5,315,979
                                                            --------------  -------------

                                                                 1,385,355      1,548,966


OTHER ASSETS                                                       560,481        168,390

                                                            $   11,888,058  $   9,812,150
                                                            ==============  =============






<FN>

 The  accompanying  notes  are an integral part of these consolidated condensed financial
statements.
</TABLE>


                                        3
<PAGE>
                        MATHSOFT, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (UNAUDITED)
                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                                        SEPTEMBER 30,    DECEMBER 31,
<S>                                                    <C>              <C>
                                                                 1998            1997 
CURRENT LIABILITIES:
       Current portion of capital lease obligations    $      601,680   $     374,089 
       Accounts payable                                     2,091,412       2,243,290 
       Accrued expenses and other liabilities               2,169,412       2,236,655 
       Deferred revenue                                     1,776,524       1,389,042 
                                                       ---------------  --------------
                    Total current liabilities               6,639,028       6,243,076 
                                                       ---------------  --------------

CAPITAL LEASE OBLIGATIONS, LESS CURRENT PORTION               254,306          73,751 
                                                       ---------------  --------------

STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value -
            Authorized - 1,000,000 shares
            Issued and outstanding-none                             -               - 
       Common stock, $.01 par value-
            Authorized - 20,000,000 shares
            Issued and outstanding - 9,307,807 shares
            at September 30, 1998 and 9,108,616
            shares at December 31, 1997                        93,078          91,086 
       Additional paid-in capital                          29,677,581      29,339,752 
       Accumulated deficit                                (24,675,468)    (25,887,525)
       Cumulative translation adjustment                     (100,467)        (47,990)
                                                       ---------------  --------------
                   Total stockholders' equity               4,994,724       3,495,323 
                                                       ---------------  --------------
                                                       $   11,888,058   $   9,812,150 
                                                       ===============  ==============









<FN>

 The accompanying notes are an integral part of these consolidated condensed financial
                                      statements.
</TABLE>


                                        4

<PAGE>
                        MATHSOFT, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED               NINE MONTHS ENDED
                                                              SEPTEMBER 30,                   SEPTEMBER 30,
                                                       1998               1997            1998            1997
                                                 -----------------  -----------------  ----------  ------------------
<S>                                              <C>                <C>                <C>         <C>
REVENUES:
       Software licenses                         $       5,287,939  $       5,432,088  14,491,398  $      12,345,599 
       Services and other                                  941,206            922,870   2,662,849          2,208,893 
                                                 -----------------  -----------------  ----------  ------------------
            Total revenues                               6,229,145          6,354,958  17,154,247         14,554,492 
                                                 -----------------  -----------------  ----------  ------------------

COST OF REVENUES:
       Software licenses                                   754,665            984,678   2,060,469          2,530,011 
       Services and other                                  311,240            316,273     949,654            734,063 
                                                 -----------------  -----------------  ----------  ------------------
            Total cost of revenues                       1,065,905          1,300,951   3,010,123          3,264,074 
                                                 -----------------  -----------------  ----------  ------------------
            Gross profit                                 5,163,240          5,054,007  14,144,124         11,290,418 
                                                 -----------------  -----------------  ----------  ------------------

OPERATING EXPENSES:
       Sales and marketing                               2,624,591          2,621,963   7,453,609          7,865,695 
       Research and development                          1,240,101          1,401,826   3,594,533          4,166,809 
       General and administrative                          733,734            679,224   1,936,162          2,170,396 
                                                 -----------------  -----------------  ----------  ------------------
            Total operating expenses                     4,598,426          4,703,013  12,984,304         14,202,900 
                                                 -----------------  -----------------  ----------  ------------------

            INCOME (LOSS) FROM OPERATIONS                  564,814            350,994   1,159,820         (2,912,482)

INTEREST INCOME, NET                                        15,014              8,842      61,827             67,790 
                                                 -----------------  -----------------  ----------  ------------------

            INCOME (LOSS) BEFORE PROVISION FOR
                INCOME TAXES                               579,828            359,836   1,221,647         (2,844,692)

PROVISION FOR INCOME TAXES                                   9,589             10,035       9,590             38,905 
                                                 -----------------  -----------------  ----------  ------------------
            NET INCOME (LOSS)                    $         570,239  $         349,801   1,212,057  $      (2,883,597)
                                                 =================  =================  ==========  ==================


BASIC NET INCOME (LOSS) PER SHARE                $            0.06  $            0.04        0.13  $           (0.32)
                                                 =================  =================  ==========  ==================

DILUTED NET INCOME (LOSS) PER SHARE              $            0.06  $            0.04        0.12  $           (0.32)
                                                 =================  =================  ==========  ==================

WEIGHTED AVERAGE COMMON SHARES
            OUTSTANDING - BASIC                          9,281,958          9,023,775   9,219,825          9,012,239 
                                                 =================  =================  ==========  ==================


WEIGHTED AVERAGE COMMON SHARES
            OUTSTANDING - DILUTED                        9,938,991          9,791,346   9,893,607          9,012,239 
                                                 =================  =================  ==========  ==================







<FN>

           The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>

                                        5
<PAGE>

                        MATHSOFT, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                      NINE MONTHS ENDED
                                                                         SEPTEMBER 30,
                                                                       1998          1997
                                                                   ------------  ------------
<S>                                                                <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income (loss)                                                $ 1,212,057   $(2,883,597)
  Adjustments to reconcile net income (loss) to  net
    cash used in operating activities -
     Depreciation and amortization                                     781,975       936,418 
     Compensation associated with issuance of options                        -        10,000 
     Changes in assets & liabilities-
         Accounts receivables                                         (792,627)     (563,589)
         Other receivables                                            (387,142)            - 
         Inventories                                                    43,500       266,270 
         Prepaid expenses                                             (175,391)       76,390 
         Accounts payable                                             (151,876)     (298,514)
         Accrued expenses                                              (67,245)      611,731 
         Deferred revenue                                              387,482       485,768 
                                                                   ------------  ------------
             Net cash provided by (used in) operating activities       850,733    (1,359,123)

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchases of property and equipment                                 (506,849)     (514,372)
  Increase in other assets                                            (503,606)      (42,574)
                                                                   ------------  ------------
            Net cash used in investing activities                   (1,010,455)     (556,946)
                                                                   ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on capital lease obligations and short-term debt           (444,564)     (199,330)
  Proceeds from capital lease obligations and short-term debt          852,710       649,838 
  Proceeds from exercise of stock options and
        Employee Stock Purchase Plan                                   339,821       208,607 
                                                                   ------------  ------------
            Net cash provided by financing activities                  747,967       659,115 

Effect of exchange rate changes on cash and cash equivalents           (52,477)       48,286 
                                                                   ------------  ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   535,768    (1,208,668)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       4,133,541     3,916,098 
                                                                   ------------  ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                           $ 4,669,309   $ 2,707,430 
                                                                   ============  ============

<FN>

      The accompanying notes are an integral part of these consolidated condensed financial
                                         statements.
</TABLE>

                                        6
<PAGE>

                        MATHSOFT, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                                   NINE MONTHS ENDED
                                                                                                     SEPTEMBER 30,
                                                                                                     1998     1997
                                                                                                    -------  -------
<S>                                                                                                 <C>      <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION:
          Cash paid during the period for-
                Interest                                                                            $60,409  $23,229
                                                                                                    =======  =======
                Income taxes                                                                        $16,368  $10,511
                                                                                                    =======  =======

















 The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>


                                        7

<PAGE>


                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.    BASIS  OF  PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared  by  MathSoft, Inc. ("MathSoft" or the "Company") pursuant to the rules
and  regulations  of  the  Securities  and Exchange Commission regarding interim
financial  reporting.    Accordingly, they do not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements  and  should  be read in conjunction with the consolidated
financial  statements  and  notes thereto for the transition period from July 1,
1997  to  December  31, 1997.  The accompanying consolidated condensed financial
statements  reflect  all  adjustments  (consisting  solely  of normal, recurring
adjustments)  which  are,  in  the  opinion  of management, necessary for a fair
presentation  of  results  for  the  interim  periods presented.  The results of
operations for the three and nine-month periods ended September 30, 1998 are not
necessarily  indicative  of the results to be expected for the full fiscal year.

2.          RECLASSIFICATION  OF  AMOUNTS

Certain  amounts  in  prior  period  comparative  financial statements have been
reclassified  to  conform  to  the  current  year  presentation.

3.    INVENTORIES

Inventories  are stated at the lower of cost (first-in, first-out) or market and
consist  of  the  following:
<TABLE>
<CAPTION>


                        SEPTEMBER 30,   DECEMBER 31,
                             1998           1997
<S>                     <C>             <C>
Materials and supplies  $      178,622  $      44,786
Finished goods                  33,083        210,419
                        --------------  -------------
                        $      211,705  $     255,205
                        --------------  -------------

</TABLE>





<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


4.    BASIC  AND  DILUTED  NET  INCOME  (LOSS)  PER  COMMON  SHARE

In  March 1997, the Financial Accounting Standards Board (FASB) issued Statement
of  Financial Accounting Standards (SFAS) No. 128, Earnings Per Share.  SFAS No.
128 establishes standards for computing and presenting earnings per share.  This
statement  is  effective  for  fiscal years ending after December 15, 1997.  Net
income  (loss)  per share has been restated for all periods presented to conform
with  SFAS  No.  128.
<TABLE>
<CAPTION>
                                     THREE-MONTH  PERIODS              NINE-MONTH PERIODS
                                             ENDED                          ENDED
                                        SEPTEMBER  30,                 SEPTEMBER 30,
<S>                                <C>         <C>           <C>       <C>
                                       1998         1997               1998      1997 

   Net income (loss)                $  570,239  $  349,801       $1,212,057  $(2,883,597)

                                     ==========  ============     ==========  ===========
   Weighted average
      common shares                 
      outstanding - Basic           9,281,958    9,023,775        9,219,825    9,012,239

  Effect of dilutive securities,
      stock options                   657,033      767,571          673,782            - 
                                   ----------  ------------         --------     -------

  Weighted average
      common shares                 9,938,991    9,791,346        9,893,607    9,012,239 
      outstanding - Diluted
                                   ==========  ============       ==========   ===========

  Basic net income (loss)
      per share                    $     0.06  $      0.04        $    0.13       $(0.32)
                                   ==========  ============         ========      =======

  Diluted net income (loss)
       per share                   $     0.06  $      0.04         $   0.12       $(0.32)
                                   ==========  ============          ========     =======
</TABLE>



<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


The  following  securities  were  not included in computing diluted earnings per
share  because  their  effect  would  be  antidilutive:

<TABLE>
<CAPTION>


                         THREE-MONTH  PERIODS     NINE-MONTH  PERIODS
                                   ENDED                ENDED
                               SEPTEMBER  30,         SEPTEMBER 30,

<S>                          <C>       <C>       <C>       <C>
                                 1998      1997      1998        1997
  Antidilutive securities-
  Stock options               512,486   484,986   306,086   2,018,011
                             --------  --------  --------  ----------
  Average exercise price of
  antidilutive securities    $   3.83  $   4.10  $   4.90  $     2.91
                             ========  ========  ========  ==========
</TABLE>




5.              COMPREHENSIVE  INCOME  (LOSS)

In  July  1997,  the  FASB  issued SFAS No. 130, Reporting Comprehensive Income.
SFAS  No.  130  establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial statements,
in  order  to  measure  all changes in stockholders equity of an enterprise that
result  from  transactions  and  other  economic events of the period other than
transactions  with  stockholders.   Comprehensive income, as defined by SFAS No.
130,  is the total of net income and all other nonowner changes in equity.  This
statement  is  effective for fiscal years beginning after December 15, 1997, and
accordingly  the  Company  adopted  it  in  its  first  fiscal  quarter of 1998.

Total  Comprehensive  Income  (Loss)  is  as  follows:
<TABLE>
<CAPTION>

                                    THREE-MONTH  PERIODS         NINE-MONTH PERIODS
                                         ENDED                       ENDED
                                       SEPTEMBER  30,             SEPTEMBER  30,
<S>                                <C>          <C>           <C>         <C>
                                         1998          1997         1998         1997 

  Net income (loss)                $  570,239   $   349,801   $1,212,057  $(2,883,597)
                                   -----------  ------------  ----------  ------------
  Cumulative translation              
          Adjustment                 (18,403)       36,569       (52,477)      48,286 
                                   -----------  ------------   -----------  ----------  
                                                                                        
  Comprehensive income    
 (loss)                           $  551,836   $   386,370     $1,159,580 $(2,835,311)

                                   ===========  ============ ===========  ============ 
</TABLE>




<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)



6.            RECENTLY  ISSUED  ACCOUNTING  STANDARD

In  July  1997,  the  FASB issued SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information.  SFAS No. 131 requires certain financial and
supplementary  information  to  be  disclosed on an annual and interim basis for
each  reportable  segment  of an enterprise.  Reportable segments, as defined by
this  statement,  correspond to the way management organizes units and evaluates
performance internally, and may be based upon products, geography, legal entity,
management  structure  or  a  combination  of  these  methods.   SFAS No. 131 is
applicable  only  to  public,  for-profit  entities  and  is effective for years
beginning after December 15, 1997.  It need not be applied to interim statements
in  the  initial  year  of  application  and accordingly it is not being applied
herein.    The  Company  intends  to  comply with SFAS No. 131 in its year-ended
December  31,  1998  financial  statements.




<PAGE>

                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Three Month Period Ended September 30, 1997 Compared with the Three Month Period
ended  September  30,  1998

RESULTS  OF  OPERATIONS

Total  revenues  decreased  2.0%  from  $6,355,000  for  the  three months ended
September  30,  1997  ("1997  quarter") to $6,229,000 for the three months ended
September  30,  1998  ("1998  quarter").    The  decrease  in total revenues was
primarily  attributable  to  a  decrease  in  upgrade  revenue  generated by the
Company's  core  product, Mathcad for Windows, as the new release occurred later
in  the calendar year in 1998 than in 1997.  Mathcad 8 was released in September
of  1998  versus  a  June  1997  release  of  Mathcad  7.

Worldwide S-PLUS license and maintenance revenue increased 10.9% from $1,610,000
in  the  1997  quarter  to  $1,785,000  in  the 1998 quarter, and increased as a
percentage of total revenues from 25.3% to 28.7%, respectively.  The increase in
revenue is attributable to both the September 1997 release of S-PLUS 4.0 and the
May 1998 release of S-PLUS 4.5.  Prior to the September 1997 release the product
line had reached its fourth year of life without a major new release.  Worldwide
Mathcad product line sales decreased 5.3% from $4,277,000 in the 1997 quarter to
$4,052,000  in  the 1998 quarter, and decreased as a percentage of total revenue
from  67.3%  to 65.1%, respectively.  The decrease in sales was due to Mathcad 8
being  released  in  September  of 1998 versus a June 1997 release of Mathcad 7.
Total  international revenues attributable to sales of all Company product lines
remained  consistent  at  $1,542,000 for the 1998 quarter compared to $1,500,000
for  the  1997,  but  increased  as a percentage of total revenues from 23.6% to
24.8%,  respectively.

Total  cost  of  revenues  decreased  18.1% from $1,301,000 for the 1997 quarter
compared  to  $1,066,000  for the 1998 quarter, and decreased as a percentage of
total revenues from 20.5% to 17.1%, respectively.  The decrease in total cost of
revenues  as  a  percentage  of  total  revenues  was  primarily attributable to
switching  from  diskette to CD media with the release of Mathcad 7 for Windows,
thereby  decreasing  direct  material  costs  on  a  per  unit  basis.

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS  OF  OPERATIONS  (CONTINUED)

Sales and marketing expenses remained relatively flat at $2,625,000 for the 1998
quarter  compared  to  $2,622,000  for  the  1997  quarter,  but  increased as a
percentage  of  total  revenues from 41.3% to 42.1%, respectively.  The relative
consistency  with  prior period expenses is due to management efforts to control
costs.

Research  and  development  expenses decreased 11.6% from $1,402,000 in the 1997
quarter  to  $1,240,000  in  the  1998 quarter, and decreased as a percentage of
total  revenues  from  22.1%  to  19.9%,  respectively.  The decrease in overall
research  and  development  expenses  was  due to a decrease in consulting costs
associated  with development initiatives in the Company's Data Analysis Products
Division,  and  decreased  translation  fees  due to a September 1998 release of
Mathcad versus a June 1997 release, offset by increased salaries expense related
to  the  launch  of  Mathcad  8.

General  and  administrative  expenses  increased 8.1% from $679,000 in the 1997
quarter  to $734,000 in the 1998 quarter, and decreased as a percentage of total
revenues from 10.7% to 11.8%, respectively.  The increase in overall general and
administrative  expenses  was  due  primarily  to increased headcount as well as
professional  fees related to the acquisition of an UK distributor in June 1998.


Nine  Month  Period Ended September 30, 1997 Compared with the Nine Month Period
ended  September  30,  1998

RESULTS  OF  OPERATIONS

Total  revenues  increased  17.9%  from  $14,554,000  for  the nine months ended
September  30, 1997 to $17,154,000 for the nine months ended September 30, 1998.
The  increase  in  total  revenues  was  primarily  attributable  to a worldwide
increase in both new license and upgrade revenue generated by the Company's core
product,  Mathcad  7  (released  in  June  of  1997)  and Mathcad 8 (released in
September  of  1998)  for Windows as well as new license and maintenance revenue
generated  from its S-PLUS 4.0 product released in September 1997 and S-PLUS 4.5
released  in  May  1998.

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS  OF  OPERATIONS  (CONTINUED)

Worldwide  Mathcad  product  line  sales increased 14.2% from $9,447,000 for the
nine  month  period  ended  September 30, 1997 to $10,786,000 for the nine month
period  ended September 30, 1998, but decreased as a percentage of total revenue
from  64.9%  to  62.9%,  respectively.  Worldwide S-PLUS license and maintenance
revenue  increased  26.3%  from  $4,243,000  for  the  nine  month  period ended
September  30,  1997  to  $5,359,000  for  the nine month period ended September
30,1998,  and  increased  as a percentage of total revenues from 29.2% to 31.2%,
respectively.  Total international revenues attributable to sales of all Company
product  lines  increased  5.4%  from  $4,335,000 in the nine month period ended
September  30,  1997 to $4,570,000 for the nine month period ended September 30,
1998,  and  decreased  as  a  percentage  of total revenues from 29.8% to 26.6%,
respectively.

Total  cost of revenues decreased 7.8% from $3,264,000 for the nine month period
ended September 30, 1997 to $3,010,000 for the nine month period ended September
30,  1998  and  decreased as a percentage of total revenues from 22.4% to 17.5%,
respectively.    The decrease in total cost of revenues as a percentage of total
revenues  was primarily attributable to switching from diskette to CD media with
the  release  of Mathcad 7 for Windows, thereby decreasing direct material costs
on  a  per unit basis.  To a lesser degree, fixed costs, such as licensing costs
for  the  "S"  language  used in the S-PLUS product line and the amortization of
purchased  technology,  decreased  as  a  percentage of total revenues due to an
overall  higher  revenue base in the nine-month period ended September 30, 1998.

Sales  and  marketing  expenses decreased 5.2% from $7,866,000 in the nine month
period  ended  September  30,  1997 to $7,454,000 in the nine month period ended
September  30,  1998, and decreased as a percentage of total revenues from 54.0%
to  43.5%,  respectively.   The decrease in overall sales and marketing expenses
was  primarily  attributable  to  a  decrease in salaries and variable marketing
expenditures,  as  the  nine month period ended September 30, 1997 had increased
expenditures  related  to  the launch of StatServer, S-PLUS 4.0 and Mathcad 7 as
well  as  increased  S-PLUS sales expenditures to support direct sales into this
expanded  product  line.

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS  OF  OPERATIONS  (CONTINUED)

Research  and  development  expenses decreased 13.7% from $4,167,000 in the nine
months ended September 30, 1997 to $3,595,000 in the nine months ended September
30,  1998,  and decreased as a percentage of total revenues from 28.6% to 21.0%,
respectively.  The decrease in overall research and development expenses was due
to a decrease in consulting costs associated with development initiatives in the
Company's  Data Analysis Products Division and decreased translation fees due to
a  September  1998  release  of  Mathcad  versus  a June 1997 release, offset by
increased  salaries  expense  related  to  the  launch  of  Mathcad  8.

General  and administrative expenses decreased 10.8% from $2,170,000 in the nine
month  period  ended  September  30, 1997 to $1,936,000 in the nine month period
ended  September  30, 1998, and decreased as a percentage of total revenues from
14.9%  to  11.3%,  respectively.    The  decrease  in  overall  general  and
administrative  expenses was due primarily to decreased foreign exchange losses.


LIQUIDITY  AND  CAPITAL  RESOURCES

Cash  and cash equivalents, totaling $4,669,000 at September 30, 1998, increased
$536,000  during  the nine-month period ended September 30, 1998 from $4,134,000
at  December  31,  1997.   The increase in cash resulted primarily from net cash
provided  by  operating  activities  of  $851,000,  net  proceeds  generated  by
equipment  financing  transactions and stock option exercises and Employee Stock
Purchase Plan of $408,000 and $340,000, respectively, offset by net cash used in
investing activities of $1,010,000.  Investing activities consisted primarily of
purchases  of  property and equipment of $507,000, purchase of UK distributor of
$387,000  and  purchased  technology  of  $100,000.

The Company's financial reserves are represented by cash and cash equivalents of
$4,669,000  as  of  September  30,  1998.  The Company also has a line of credit
agreement  with a commercial bank.  Borrowings under the line are limited to the
lesser  of  65%  of eligible domestic accounts receivable or $1,000,000 based on
certain  profitability  covenants.    Borrowings are secured by a first security
interest  on  substantially all of the Company's assets and bear interest at the
bank's  prime  rate  (8.25%  at  September 30, 1998) plus 1%. The line of credit
contains  certain  restrictive  covenants,  including  minimum  amounts  of
profitability,  equity, leverage and liquidity, all as defined in the agreement,
and  expires on December 31, 1998.  There were no amounts outstanding under this
line  at  September  30,  1998.

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


LIQUIDITY  AND  CAPITAL  RESOURCES  (CONTINUED)

The  Company  believes  its  financial  reserves  and  cash  flows  from  future
operations  will  be  sufficient to meet its liquidity requirements for at least
the next twelve months.  The foregoing statement is forward-looking and involves
risks  and  uncertainties,  many of which are outside the Company's control. The
Company's  actual  experience  may  differ materially from that discussed above.
Factors  that  might  cause  such  a difference include, but are not limited to,
those  discussed  in  "Cautionary Statements" as well as future events that have
the  effect  of  reducing  the  Company's  available  cash  balances,  such  as
unanticipated  operating  losses  or  capital  expenditures or cash expenditures
related to possible future acquisitions.  The Company may be presented from time
to  time  with  acquisition  opportunities  which  require  additional  external
financing, and the Company may from time to time seek to obtain additional funds
from  public or private issuances of equity or debt securities.  There can be no
assurance  that  any  such  financing  will  be  available  at  all  or on terms
acceptable  to  the  Company.

YEAR  2000  COMPLIANCE

Many  currently  installed  computer  systems and software products are coded to
accept  only  two  digit entries in the date code field.  These date code fields
will  need  to  accept four digit entries to distinguish 21st century dates from
20th  century dates.  As a result, many companies' software and computer systems
may  need  to  be  upgraded or replaced in order to comply with such "Year 2000"
requirements.   MathSoft is in the process of evaluating and correcting the Year
2000  compliance  of  its  proprietary  products  and  services  and third party
equipment  and  software that it uses, as well as its non-information technology
systems,  such  as  building  security,  voice  mail  and  other  systems.

The Company's Year 2000 compliance efforts will consist of the following phases:
(i)  identification of all software products, information technology systems and
non-information  technology  systems;  (ii)  assessment of repair or replacement
requirements; (iii) repair or replacement; (iv) testing; (v) implementation; and
(vi)  creation  of  contingency  plans  in  the even of Year 2000 failures.  The
Company  has  substantially  completed phases (i) and (ii) and has begun phases
(iii)  and  (iv)  of its Year 2000 efforts.  The Company expects to complete its
Year  2000  compliance  efforts  by  the  end  of  June  1999.

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


YEAR  2000  COMPLIANCE  (CONTINUED)

To  date,  the  Company  has not incurred any material expenditure in connection
with  identifying  or  evaluating  Year  2000  compliance  issues.   Preliminary
estimates  regarding  expected  costs  to MathSoft for evaluating and correcting
Year  2000  issues are in the range of $300,000 to $750,000, but there can be no
assurance  that  the  costs  will  not  exceed  such  amounts.    The  Company's
expectations regarding Year 2000 remediation efforts will evolve as it continues
to  analyze and correct its systems.  The Company has not yet developed a formal
Year  2000-specific  contingency  plan.   The Company expects that a formal Year
2000  contingency  plan  will  evolve  as  it completes its Year 2000 compliance
efforts.  Failure by the Company to resolve Year 2000 issues with respect to its
products  and  services  could  have  a material adverse effect on the Company's
business, results of operation and financial condition.  Furthermore, failure of
third-party  equipment  or software to operate properly with regards to the year
2000  and  thereafter  could require MathSoft to incur significant unanticipated
expenses  to  remedy  any  problems.


<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS


In  addition  to  the other information in this report, the following cautionary
statements  should  be  considered  carefully  in evaluating the Company and its
business.    Information  provided  by the Company from time to time may contain
certain  "forward-looking"  information,  as  that  term  is  defined by (i) the
Private  Securities  Litigation  Reform  Act  of  1995  (the  "Act") and (ii) in
releases  made  by  the  Securities  and Exchange Commission (the "SEC").  These
cautionary  statements  are being made pursuant to the provisions of the Act and
with  the intention of obtaining the benefits of the "safe harbor" provisions of
the  Act.

VARIABILITY  OF  QUARTERLY OPERATING RESULTS.  The Company's quarterly operating
results  may  vary significantly from quarter to quarter, depending upon factors
such  as the introduction and market acceptance of new products and new versions
of  existing  products,  the  ability  to reduce expenses, and the activities of
competitors.  Because a high percentage of the Company's expenses are relatively
fixed  in  the near term, minor variations in the timing of orders and shipments
can  cause  significant  variations in quarterly operating results.  The Company
operates  with  little  or  no  backlog  and  has  no  long-term  contracts, and
substantially  all  of its product revenues in each quarter result from software
licenses  issued  in  that  quarter,  and  the  Company's  ability to accurately
forecast  future revenues and income for any period is necessarily limited.  Any
forward-looking information provided from time to time by the Company represents
only  management's  then-best  current estimate of future results or trends, and
actual  results  may  differ  materially  from  those contained in the Company's
estimates.

POTENTIAL  VOLATILITY  OF STOCK PRICE.  There has been significant volatility in
the  market  price  of securities of technology companies.  The Company believes
factors such as announcements of new products by the Company or its competitors,
quarterly  fluctuations  in  the  Company's  financial results or other software
companies'  financial  results,  shortfalls  in  the  Company's actual financial
results  compared to results previously forecasted by stock market analysts, and
general  conditions  in  the  software  industry and conditions in the financial
markets  could  cause  the  market  price  of  the  Common  Stock  to  fluctuate
substantially.   These market fluctuations may adversely affect the price of the
Company's  Common  Stock.

RISKS  ASSOCIATED  WITH  ACQUISITIONS.    The  Company  has  made  a  number  of
acquisitions  and  will continue to review future acquisition opportunities.  No
assurances  can  be  given  that  acquisition  candidates  will  continue  to be
available  on  terms  and  conditions  acceptable  to the Company.  Acquisitions
involve  numerous  risks,  including,  among  other things, possible dilution to
existing shareholders, difficulties and expenses incurred in connection with the
acquisitions  and  the subsequent assimilation of the operations and services or
products  of  the  acquired  companies,  the difficulty of operating new (albeit
related) businesses, the diversion of management's attention from other business
concerns  and  the  potential loss of key employees of the acquired company.  In
the  event  that  the  operations  of  an  acquired  business  do not live up to
expectations,  the  Company may be required to restructure the acquired business
or

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS


RISKS  ASSOCIATED  WITH  ACQUISITIONS    (CONTINUED).
write-off  the  value  of  some  or  all of the assets of the acquired business.
There  can  be no assurance that any acquisition will be successfully integrated
into  the  Company's  operations.

RISKS  ASSOCIATED  WITH DIVESTITURES.  The Company's product offerings presently
may  be  divided  between  two principal product families - those related to its
Mathcad line addressing the calculation needs of the technical, professional and
education markets, and its S-PLUS offerings, marketed primarily to professionals
needing  statistical  analysis  tools.

In  setting strategic goals to maximize shareholder value, the Company from time
to  time  considers the options of divesting itself of one product family or the
other,  or  product lines within a given family, to concentrate its focus on the
business  opportunity  associated  with  the remaining product family or product
lines.

At  the  present time, the Company is not party to any agreement relating to the
sale  of  either  of its product families or product lines within such families,
but  it  may  elect  to pursue such options at any time.  If the Company were to
consummate  such a sale, there can be no assurance that it would receive returns
from  such  sale  that  investors  in  the  Company  would  consider attractive.

RISKS  ASSOCIATED  WITH  DISTRIBUTION  CHANNELS.    The  Company  markets  and
distributes  its S-PLUS products in the U.S. through the Company's telesales and
outside  sales  force  and  internationally  through  third  party resellers and
distributors.    Mathcad  products are currently marketed and distributed in the
U.S.  through third party resellers and distributors, telesales and direct mail.
Internationally,  the  Company's  Mathcad  products are marketed and distributed
through  third party resellers and distributors.  There can be no assurance that
the  Company  will  be able to retain its current resellers and distributors, or
expand  its  distribution  channels  by  entering  into  arrangements  with  new
resellers  and  distributors in the Company's current markets or in new markets.

RISKS  ASSOCIATED  WITH  INTERNATIONAL  OPERATIONS.  Sales outside North America
accounted  for  approximately  36.1%,  32.5%  and  approximately  34.0%  of  the
Company's  total  revenues  in  the twelve months ended June 30, 1995, 1996, and
1997,  and approximately 29.5% of the Company's total revenues in the six months
ended  December  31,  1997,  and  approximately  26.6% for the nine months ended
September  30,  1998, and may continue to represent a significant portion of the
Company's  product  revenues.    Any decrease in sales outside North America may
have  a  materially  adverse  effect  on  the  Company's operating results.  The
Company's  international  business  and financial performance may be affected by
fluctuations  in  exchange  rates  and  by  trade  regulations.


<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS


RELIANCE  ON  THIRD  PARTY LICENSORS.  Maple V, a software product licensed as a
part  of  the most recent version of Mathcad, contains certain copyrighted texts
licensed  from  third  party publishers incorporated in the Company's Electronic
Books,  and  the  S  programming  language,  the  language  on  which all of the
StatSci's  products  are  based,  are currently licensed from a single source or
limited  source  suppliers.   If such licenses are discontinued, there can be no
assurance  that the Company will be able to independently develop substitutes or
to  obtain alternative sources or, if able to be developed or obtained as needed
in  the  future,  that  such efforts would not result in delays or reductions in
product shipments or cost increases that could have a material adverse effect on
the  Company's  consolidated  business  operations.

RAPID  TECHNOLOGICAL  CHANGE;  COMPETITION.   The technical calculation software
market is subject to rapid and substantial technological change, similar to that
affecting  the  software industry generally.  The Company, to remain successful,
must  be  responsive  to  new  developments  in  hardware  and  chip technology,
operating  systems,  programming  technology, Internet technology and multimedia
capabilities.    In  addition,  the  Company  competes  against  numerous  other
companies,  some  of  which  have  significant  name  recognition,  as  well  as
substantially  greater  capital  resources,  marketing  experience, research and
development  staffs  and  production facilities than the Company.  The Company's
financial  results  may be negatively impacted by the failure of new or existing
products  to  be  favorably  received  by  retailers and consumers due to price,
availability,  features, other product choices or the necessity of promotions to
increase  sales  of  the  Company's  products.

YEAR  2000 ISSUES.  The Year 2000 issue exists because many computer systems and
applications  currently  use  two-digit date fields to designate a year.  As the
century  date change occurs, date-sensitive systems will recognize the year 2000
as  1900, or not at all.  This inability to recognize or properly treat the Year
2000 may cause systems to process critical financial and operational information
incorrectly.    The  Company  utilizes  software  from third parties and related
technologies throughout its business that will be affected by the date change in
the  year  2000.  An internal study is currently under way to determine the full
scope  and  related  costs to insure that the Company's systems continue to meet
its  needs.  The Company began incurring expenses in 1997 to resolve this issue.

<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

UNCERTAINTIES  REGARDING  PROTECTION  OF  PROPRIETARY  TECHNOLOGY; UNCERTAINTIES
REGARDING  PATENTS.    The  Company  believes  that  while  the  mathematical
calculations  performed by the Company's software are not proprietary, the speed
and  quality  of  displaying  the  computation and the ease of use are unique to
MathSoft's products.  The Company's success will depend, in part, on its ability
to  protect  the  proprietary  aspects  of  its  products.  The Company seeks to
protect  these  proprietary  aspects  of  its  products  principally  through  a
combination  of  contract  provisions and copyright, patent, trademark and trade
secret  laws.   There can be no assurance that the steps taken by the Company to
protect  its  proprietary rights will be adequate to prevent misappropriation of
its  technology.  Although the Company believes that its products and technology
do not infringe any existing proprietary rights of others, the use of patents to
protect  software  has  increased  and there may be pending or issued patents of
which the Company is not aware that the Company may need to license or challenge
at  significant  expense.  There can be no assurance that any such license would
be  available  on acceptable terms, if at all, or that the Company would prevail
in  any  such  challenge.

RELIANCE  ON  ATTRACTING  AND  RETAINING KEY EMPLOYEES.  The Company's continued
success  will  depend  in  large  part  on  its  ability  to  attract and retain
highly-qualified technical, managerial, sales and marketing and other personnel.
Competition  for  such  personnel  is  intense.  The Company has non-competition
agreements  with  its  key  management  and technical personnel. There can be no
assurance  that  the  Company will be able to continue to attract or retain such
personnel.





<PAGE>
                         MATHSOFT, INC.  AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM  5.    OTHER  INFORMATION

The  proposed date for the 1999 Annual Meeting of stockholders of the Company is
May  7,  1999.    Proposals  of stockholders intended for inclusion in the proxy
statement  to  be  furnished  to  all  stockholders entitled to vote at the 1999
Annual Meeting must be received at the Company's principal executive offices not
later than December 3, 1998 (120 days before the mailing date for the 1999 proxy
statement).   The deadline for providing timely notice to the Company of matters
that  stockholders  otherwise  desire to introduce at the 1999 Annual Meeting is
February  19,  1999  (45  days  before  the  mailing  date  for  the  1999 proxy
statement).    In  order  to  curtail any controversy as to the date, on which a
proposal  was  received  by  the Company, it is suggested that proponents submit
their  proposals  by  Certified  Mail,  Return  Receipt  Requested.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  Exhibits:

27.1    Financial  Data  Schedule.

     (b)  Reports  on  Form  8-K:

The  Company  filed  a  Current Report on Form 8-K dated July 22, 1998 reporting
fiscal  second  quarter  results.

The  Company filed a Current Report on Form 8-K dated October 13, 1998 reporting
fiscal  third  quarter  results.






<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                                    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.


<TABLE>
<CAPTION>

<S>                                                 <C>
  MATHSOFT, INC.



Dated:  November 13, 1998                           By  /s/ Charles J. Digate
                                                    -------------------------
  Charles J. Digate
  Chairman, President and Chief Executive Officer
  (Principal Executive Officer)




Dated:  November 13, 1998                           By  /s/ Robert P. Orlando
                                                    -------------------------
  Robert P. Orlando
  Vice President Finance and Administration,
  Chief Financial Officer, Treasurer, and Clerk
  (Principal Financial and Accounting Officer)
</TABLE>





<PAGE>
                        MATHSOFT, INC.  AND SUBSIDIARIES

                                  EXHIBIT INDEX


EXHIBIT  NO.                              DESCRIPTION
------------                              -----------

27.1          Financial  Data  Schedule.