UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                            FORM 10-Q
                                
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
   SECURITIES EXCHANGE ACT OF 1934

   For the quarterly period ended December 31, 1997

                            OR

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

   For the transition period from ______ to __________


                 Commission File Number:  0-8125

                  ----------------------------

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

State of New York                            16-0958589
(State or other jurisdiction                 (I.R.S. Employer
of incorporation or organization)            Identification No.)

       130 Perinton Parkway, Fairport, New York     14450
  (Address of principal executive offices)          (Zip Code)

                         (716) 223-4060
      (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 the filing
requirements for the past 90 days.    Yes   X      No _____


As of February 20, 1998 there were outstanding 6,286,495 shares
of the registrant's common stock, par value $.05 per share.
</PAGE>

                  PART I FINANCIAL INFORMATION
            DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                   Consolidated Balance Sheet
                                
                                        Dec. 31, 1997  Mar. 31, 1997
                                          (Unaudited)               
Assets                                                              
Current assets:                                                     
Cash and cash equivalents                 $ 7,128,288    $ 2,244,265
Accounts receivable, less allowance                                 
for doubtful accounts of $563,400 and      23,428,292     15,246,309
$313,800, respectively
Inventories                                33,844,010     29,995,215
Deferred income tax charges                 2,173,715      2,132,156
Prepaid expenses and other assets           1,774,764        883,137
                                           ----------     ----------
                                           68,349,069     50,501,082
                                           ----------     ----------
Fixed assets                               11,746,215     11,248,171
                                                                    
Deferred income taxes                       3,046,420      3,046,200
Goodwill and other intangibles              4,975,111      2,942,626
Other assets                                  598,455        537,772
                                           ----------     ----------
  Total Assets                            $88,715,270    $68,275,851
                                           ==========     ==========

Liabilities and Shareholders' Equity                                
Current liabilities:                                                
Current portion of long term debt         $ 2,935,971    $   953,648
Current portion of capital lease                                     
  obligation                                   58,987        147,574
Short term borrowings                         684,000              0
Accounts payable                           14,467,732     12,259,380
Accrued payroll and benefits                1,315,461      2,818,487
Other accrued liabilities                   2,537,267      3,254,593
                                           ----------     ----------
                                           21,999,418     19,433,682
                                                                    
Obligations under capital leases               25,000         54,125
Other long term liabilities                 3,330,784      2,924,975
Long term debt                             14,650,644     28,031,802
                                                                    

Shareholders' equity:                                               
Common stock, par value $.05 per                                    
 share; Authorized - 12,000,000                                     
 shares; Issued - 6,325,282 shares                                  
 at December 31, 1997, and                                          
 4,478,993 shares at March 31, 1997           316,221        223,950
Capital in excess of par value             42,601,283      9,448,917
Retained earnings                          10,210,540      8,594,306
                                           ----------     ----------
                                           53,128,044     18,267,173
Less - Treasury stock, at cost             (3,785,647)       (52,553)
  Notes receivable for stock                                        
    purchases                                (325,401)      (378,373)
  Cumulative translation adjustment          (307,572)        (4,980)
                                           ----------     ----------
                                           48,709,424     17,831,267
                                           ----------     ----------
Total liabilities and shareholders'      
  equity                                  $88,715,270    $68,275,851
                                           ==========     ==========
                                
         (See accompanying notes to financial statements)
</PAGE>


            DETECTION SYSTEMS, INC. AND SUBSIDIARIES
   Consolidated Statement of Operations and Retained Earnings
                           (Unaudited)

                                        Dec. 31, 1997  Dec. 31, 1996
For the Three Months Ended:                   (Current     (Preceding
                                                 Year)          Year)
                                           ----------    -----------
Net sales                                 $31,346,845    $26,441,837
                                                                    
Costs and expenses:                                                 
 Production                                21,392,505     17,366,386
 Research and development                   2,266,100      2,046,418
 Marketing, administrative and general      7,185,519      5,165,390
                                           ----------     ----------
Total costs and expenses                   30,844,124     24,578,194
                                                                    
Operating income                              502,721      1,863,643

Interest income                                91,813         54,270
Interest expense                             (418,948)      (464,645)
Other income (expense)                        (21,981)             0
                                           ----------     ----------
Income before taxes                           153,605      1,453,268

Provision for taxes                            48,000        379,000
                                           ----------     ----------
Net income                                $   105,605   $  1,074,268
                                           ==========     ==========
                                                                    
Retained earnings at beginning of                                   
  period                                   10,104,935      6,287,437
                                           ----------     ----------
Retained earnings at end of period        $10,210,540   $  7,361,705
                                           ==========     ==========
                                                                    
Earnings per share                                                  
 Basic                                          $0.02          $0.24
 Diluted                                        $0.02          $0.21
                                
        (See accompanying notes to financial statements)
</PAGE>

            DETECTION SYSTEMS, INC. AND SUBSIDIARIES
            Consolidated Income Statement(Unaudited)

For the Nine Months Ended:              Dec. 31, 1997  Dec. 31, 1996
                                       (Current Year)     (Preceding
                                                               Year)
                                         -----------     ----------
                                                                     
Net Sales                                  $94,017,726    $74,485,802
                                                                    
Costs and expenses:                                                 
  Production                                62,483,836     49,309,576
  Research and development                   6,554,052      5,803,833
  Marketing, administrative and general     20,990,760     14,635,291
                                            ----------     ----------
                                                                    
Total costs and expenses                    90,028,648     69,748,700
                                                                    
Operating income                             3,989,078      4,737,102

Interest income                                 97,843         82,396
Interest expense                            (1,873,248)    (1,332,458)
Other income                                   216,777         23,643
                                            ----------    -----------

Income before taxes                          2,430,450      3,510,683
                                                                    
Provision for taxes                            826,200      1,018,000
                                            ----------    -----------
                                                                     
Net income                                 $ 1,604,250   $  2,492,683
                                            ----------    -----------
                                                                    
Retained earnings at beginning of                                   
period                                       8,594,306      4,869,022
                                                                    
Amortization of redeemable common                                   
  stock                                         11,984
                                            ----------    -----------
Retained earnings at end of period         $10,210,540    $ 7,361,705
                                            ==========    ===========
                                                                    
Earnings per share                                                  
 Basic                                           $0.31          $0.58
 Diluted                                         $0.28          $0.52
                                                                     
        (See accompanying notes to financial information)
</PAGE>

            DETECTION SYSTEMS, INC. AND SUBSIDIARIES
        Consolidated Statement of Cash Flows (Unaudited)

For the Nine Months Ended December 31            1997           1996
Cash Flows from Operating Activities:            ----           ----
Net income                                 $1,604,250     $2,492,683
                                            ---------     ----------
Adjustments to reconcile net income to                               
net cash provided by operating
activities:
  Depreciation and amortization             2,951,340      1,901,244
  Gain on sale of land                       (205,000)               
  Stock based compensation                     85,975               
Deferred compensation                         457,415        (16,669)
                                                                      
  Changes in operating assets and                                   
liabilities:
  Accounts receivable                      (1,820,675)    (4,222,330)
  Inventories                               2,313,245    (10,177,328)
  Income tax receivable                      (829,486)        97,424
  Prepaid expenses and other assets          (959,934)    (1,155,565)
  Accounts payable                         (2,279,886)     5,100,922
  Accrued payroll and benefits             (1,643,109)     1,354,410
Other accrued liabilities                  (2,577,193)      (248,677)
                                            ---------      ---------
  Total adjustments                        (4,507,308)    (7,366,569)
                                            ---------      ---------
 Net cash used in operating                                          
  activities                               (2,903,058)    (4,873,886)
                                                                     
Cash Flows from Investing Activities:                                
Proceeds from sale of land                    312,000                
Capital expenditures                       (1,976,675)    (2,317,285)
Purchase of companies, net of cash         (6,816,052)               
acquired
                                            ---------     ----------
Net cash used in investing activities      (8,480,727)    (2,317,285)
                                            ---------      ---------
                                                                    
Cash Flows from Financing Activities:                               
Proceeds from borrowings                    6,718,198      5,257,700
Proceeds from issuance of common stock     28,519,669      2,000,005
Principal payments on long-term debt                                 
and                                       (19,135,399)      (527,789)
  capital lease obligations
Common stock transactions                     455,948        437,521
Amortization of redeemable common stock        11,984               
                                            ---------     ----------
Net cash provided by financing             16,570,400      7,167,437
activities
                                            ---------     ----------
Effect of exchange rate changes on cash      (302,592)               
balances
                                                                    
Net increase in cash and cash                                       
  equivalents                               4,884,023        (23,704)

Cash and cash equivalents at                2,244,265        913,716
beginning of period

Cash and cash equivalents at end of        $7,128,288       $889,982
period
                                            =========      =========
                                                                    
Cash paid during the year for:                                      
Interest                                   $1,531,948       $976,200
Income taxes                               $1,611,600       $585,200
                                
        (See accompanying notes to financial information)
</PAGE>

            DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                 NOTES TO FINANCIAL INFORMATION
               THREE AND NINE MONTH PERIODS ENDED
                        December 31, 1997
                           (Unaudited)

NOTE 1. GENERAL

The accompanying unaudited interim consolidated financial
information has been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission (SEC).  The
unaudited interim consolidated financial information include the
consolidated accounts of Detection Systems, Inc. and its majority-
owned subsidiaries (collectively, "the Company") with all
intercompany transactions eliminated.  In the opinion of
management, all adjustments necessary for a fair statement of the
financial position, results of operations and cash flows for the
interim periods presented have been made.  Certain footnote
disclosures normally included in financial information prepared
in accordance with generally accepted accounting principles
(GAAP) have been condensed or omitted pursuant to such SEC rules
and regulations.  The financial information should be read in
conjunction with the Company's Annual Report on Form 10-K for the
year ended March 31, 1997.

Cash flow statement - During the first quarter of fiscal 1998,
the Company issued 221,738 and 34,121 shares of common stock in
connection with the acquisitions of DA Systems and Seriee S.A.,
respectively.  The Company repurchased the 221,738 shares issued
in connection with the acquisition of DA Systems during the
second quarter of fiscal 1998 (see Note 3).

Earnings per share - The Company adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share," during
the quarter ended December 31, 1997.  As required by this
Statement, earnings per share of prior periods are presented in
accordance with the provisions of SFAS No. 128.   There are no
significant reconciling items between net income as presented in
the consolidated statement of operations and net income available
to common stockholders used in the calculation of earnings per
share.  Earnings per share in future periods will be impacted by
the acquisition of EDM in January 1998 (See Note 3).  Reconciling
items between the number of shares used in the calculation of
basic and diluted earnings per share relate only to deferred
compensation plans, options and warrants, as follows:

                            Three months ending  Nine months ending
                                       Dec. 31,       Dec. 31,
                                                          
                                1997       1996       1997      1996
Weighted average number                                             
 of shares outstanding     6,047,782  4,451,985  5,164,808 4,320,765

Shares associated with                                              
 deferred compensation,                                             
 option and warrant plans    582,474    582,297    590,755   469,182

NOTE 2.  INVENTORIES

Major classifications of inventory follow:

                                  Dec. 31, 1997        Mar. 31, 1997
Component parts                     $17,488,101          $19,457,368
Work in process                       1,778,394            2,697,459
Finished products                    14,577,516            7,840,388
                                     ----------           ----------
                                    $33,844,010          $29,995,215
                                     ==========           ==========

NOTE 3.  ACQUISITIONS

In May 1997, the Company acquired all of the outstanding stock of
DA Systems, in exchange for 221,738 shares of its common stock.
The shares were callable at the Company's option at $17 per share
plus interest at 8.25% until June 30, 1998, and could be put to
the Company at that price after that date.  The Company exercised
its call option to repurchase these shares in connection with the
issuance of common stock in September 1997.  The cost of this
acquisition was approximately $4.0 million.  DA Systems is a
leading British manufacturer of security control equipment with
annual net sales of approximately $10.8 million.

In June 1997, the Company acquired 99.5% of the outstanding stock
of Seriee S.A. of France, in exchange for 34,121 shares of its
common stock, valued at approximately $0.6 million.  Seriee is a
leading manufacturer of electronic control and communication
equipment with annual net sales of approximately $6.3 million.

In June 1997, the Company acquired 98.7% of the outstanding stock
of Radio-Active Systems N.V.("RAS") of Belgium for approximately
$3.6 million in cash.  RAS has the largest security equipment
distribution network in Belgium with annual net sales of
approximately $10 million.

In January 1998, the Company acquired all of the outstanding
stock of Electronics Design & Manufacturing Pty Limited ("EDM")
of Australia in exchange for 186,667 shares of its common stock
and $2.8 million in cash.  EDM is a major Australian manufacturer
of security control equipment with annual net sales of
approximately $4.6 million.

These transactions have been accounted for as purchases and,
accordingly, the results of DA Systems, Seriee, RAS and EDM are
included, or in the case of EDM, will be included in the
consolidated financial information as of the date of acquisition.
The financial information reflects the preliminary allocation of
purchase price as the purchase price allocation has not been
finalized.  Unallocated excess of purchase price over net assets
acquired as of December 31, 1997 is $2.3 million and is included
with goodwill and other intangibles.

Note 4.  ISSUANCE OF COMMON STOCK

In September 1997, the Company sold 1,325,000 shares of common
stock at $20 per share in a public offering. The Company had
granted the underwriters a 30-day option to purchase up to
231,750 additional shares of common stock under the same terms
and conditions as the public offering to cover over-allotments,
and this option was exercised in October 1997.  Expenses
associated with this offering of approximately $2.7 million were
net against proceeds.

NOTE 5.  RESTATEMENT

The company has discovered an incorrect posting in Second
Quarter fiscal quarter 1998 accounts payable of approximately
$950,000.  This error occurred in the conversion of its China
manufacturing facility's existing information system to the
corporate system.  The Company is restating its second quarter of
fiscal 1998.  As a result of this, net income for the second
quarter was $0.4 million ($0.08 per basic share and $0.07 per
diluted share) compared to previously reported net income of $1.1
million ($0.22 per basic share and $0.20 per diluted share).

This week, the Company will file an amendment to its quarterly
report on Form 10-Q for the quarter and six months ended
September 30, 1997 as filed on November 14, 1997.  The year to
date results of operations and Management's Discussion and
Analysis included in this report reflect the restated results of
operations for the quarter ended September 30, 1997.
                                
                                
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

Overview

   The Company is a leading supplier of equipment to the
electronic protection industry. The Company designs, manufactures
and markets electronic detection, control and communication
equipment for security, fire protection, access control and CCTV
applications, offering products primarily for the commercial and
mid- to high-end residential portions of the market. From its
founding in 1968 until 1995, the Company was primarily a niche
provider of  intrusion detection devices for the domestic market.
In 1995, the Company adopted a strategy designed to substantially
expand its product offerings, establish an international sales
presence, increase its manufacturing capacity and improve its
manufacturing cost structure. The Company has since made six
acquisitions, opened sales offices in six countries and
established a manufacturing facility in China. The Company's net
sales increased 26.2% to $94.0 million in the nine months ended
December 31, 1997 from $74.5 million in the comparable period in
fiscal 1997.  Approximately $15.6 million of the Company's sales
for the nine months ended December 31, 1997 are from these
acquired companies.

   The Company's significant acquisitions during the current
fiscal year were: (i) purchase in May 1997 of DA Systems in the
U.K., with annual net sales of approximately $10.8 million, (ii)
purchase in June 1997 of Seriee in France, with annual net sales
of approximately $6.3 million, (iii) purchase in June 1997 of RAS
in Belgium, with annual net sales of approximately $10.0 million
and (iv) purchase in January 1998 of EDM in Australia, with
annual net sales of approximately $4.6 million. Previous
significant acquisitions were Radionics (February 1996) and
Senses International, Inc. (July 1996). These acquisitions have a
significant impact on the comparative financial information for
the three and nine month periods ending December 31, 1997 and
1996.  The acquisitions were funded by borrowings under a
commercial credit facility and/or issuance of the Company's
common stock.

     Since the opening of the China manufacturing facility in
late fiscal 1996 and throughout fiscal 1997, a portion of the
Company's manufacturing was moved from domestic plants to the
China facility.  While production of the Company's highest volume
products were moved to China during this period, such products
were limited in number relative to the Company's entire product
line. During the first and second quarters of fiscal 1998, a far
greater number of products that continued to be manufactured at
the Company's Radionics subsidiary were moved to the China
facility.  Manufacturing efficiencies consistent with previous
product transfers are anticipated, but the short term impact of
this rapid shift in production location resulted in unexpected
inefficiencies, exacerbated by the Company's multiple
manufacturing information systems, which created difficulties in
effectively coordinating overall materials procurement,
production and scheduling. Consequently, production quantities,
yields and efficiency of the China facility declined during this
period while production related overhead expenses, such as
freight, remained constant or increased. To help assure timely
customer deliveries, the Company restarted manufacturing some of
its products at its Radionics facility. These factors resulted in
higher average unit costs for much of the product sold by the
Company during the second and third quarters of fiscal 1998.

     Recently, the Company assigned a senior executive, George E.
Behlke, Vice President of Engineering, to manage and improve
manufacturing operations worldwide.  In addition, the Company has
added key personnel to both the financial and management
information systems departments.  This team is leading the
modification of the Company's inventory and manufacturing
information systems, allowing the Company to improve all aspects
of the supply chain process.

Results of Operations

   The following table sets forth, for the periods indicated, the
percentages which certain items of income and expense bear to net
sales:

                         Three months    Nine months      Fiscal year
                       ended Dec. 31,  ended Dec. 31,       March 31,
                         1997    1996   1997    1996    1997     1996
                                                                     
Net sales               100.0%  100.0% 100.0%  100.0%  100.0%   100.0%
Costs and expenses:                                                  
 Production              68.3    65.7   66.5    66.2    64.2     66.9
 Research and             7.2     7.7    7.0     7.8     8.0     11.2
development
 Marketing,                                                          
administrative           22.9    19.6   22.3    19.6    21.1     25.1
  and general
 Purchased in-process                                                
research and                                                     22.3
development
                         ----    ----   ----    ----    ----     ----
Operating                 1.6     7.0    4.2     6.4     6.7    (25.5)
income(loss)
Interest income           0.3     0.0    0.1     0.0     0.2      0.8
Interest expense          1.3     1.8    2.0     1.8     1.7      0.8
Other income            (0.1)     0.3    0.3     0.1     0.0      0.0
(expense)
                         ----    ----   ----    ----    ----     ----
Income (loss) before                                                 
 income taxes             0.5     5.5    2.6     4.7     5.2    (25.5)
Provision (benefit)                                                  
 for income taxes         0.2     1.4    0.9     1.4     1.5     (6.7)
                         ----    ----   ----    ----    ----     ----
 Net income (loss)        0.3%    4.1%   1.7%    3.3%    3.7%   (18.8)%
                          ====    ====   ====    ====    ====    =====


Three Months Ended December 31, 1997 Compared to Three Months
Ended December 31, 1996

   The Company's net sales increased 18.6% to $31.3 million in
the fiscal 1998 period from $26.4 million in the comparable
period in fiscal 1997.  The net sales of DA Systems, RAS and
Seriee, which were acquired in the first quarter of fiscal 1998,
accounted for $6.5 million of this increase.  Excluding the
impact of acquisitions, sales declined $1.6 million primarily as
a result of reduced sales volumes to the Company's largest
domestic distributor. In addition, during the third quarter of
fiscal 1998, two of the Company's larger customers were acquired
by other companies.  It is anticipated that these transactions
may result in some decline in sales to these customers in the
future.  However, the Company is working to minimize any
potentially adverse impact.

   Production expenses increased 23.2% to $21.4 million in the
fiscal 1998 period from $17.4 million in the comparable period in
1997. The increase in production expenses was primarily due to a
corresponding increase in the Company's net sales. Gross margin
during the third quarter of fiscal 1998 of 31.7% declined from
the 34.3% gross margin reported for the third quarter of fiscal
1997.  Margins have been adversely impacted by lower margin sales
from companies acquired during fiscal 1998 as well as
manufacturing inefficiencies from the consolidation of
manufacturing operations in China, previously discussed.

   Research and development expenses increased 10.7% to $2.3
million in the fiscal 1998 period from $2.0 million in the
comparable period in fiscal 1997.  As a percentage of net sales,
research and development expenses decreased to 7.2% in the fiscal
1998 period from 7.7% in the comparable period in fiscal 1997.
The increase in research and development expenses was primarily
due to the addition of DA Systems and Seriee research and
development expenses.  The decrease in research and development
expenses as a percentage of net sales was primarily due to
savings achieved from the continued consolidation of certain
research and development efforts of Radionics and the Company.

   Marketing, administrative and general expenses increased 39.1% to
$7.2 million in the fiscal 1998 period from $5.2 million in the
comparable period in fiscal 1997.  As a percentage of net sales,
marketing, administrative and general expenses increased to 22.9%
in the fiscal 1998 period from 19.6% in the comparable period in
fiscal 1997.  This increase was primarily due to additional
marketing, administrative and general expenses related to the
newly acquired companies and increased international marketing
expenditures.  General expenses also included $250,000 of
exchange losses during the quarter ended December 31, 1997.
Exchange losses were insignificant during the same quarter last
year.  The Company is currently reviewing strategies to reduce
exposure to currency fluctuations.

   Interest expense decreased to $0.4 million in the fiscal 1998
period from $0.5 million in the comparable period in fiscal 1997.
This decrease was primarily due to the repayment of borrowings
originally used to finance the Company's international expansion
and increased inventory levels.  Borrowings were repaid using
proceeds from the second quarter offering of common stock.

   The Company's effective income tax rate for the fiscal 1998
period was 31.2% compared to 26.1% for the comparable period in
fiscal 1997.  The higher effective rate is due to a shift in the
source of pretax income among domestic and international
entities.


Nine Months Ended December 31, 1997 Compared to Nine Months Ended
December 31, 1996

   The Company's net sales increased 26.2% to $94.0 million in
the fiscal 1998 period from $74.5 million in the comparable
period in fiscal 1997.  The net sales of DA Systems, RAS and
Seriee which were acquired in the first fiscal quarter of fiscal
1998, accounted for $15.6 million of this increase.  Excluding
the impact of these acquisitions, sales increased $3.9 million or
5.2% as a result of increased sales penetration across many
accounts.

   Production expenses increased 26.7% to $62.5 million in the
fiscal 1998 period from $31.9 million in the comparable period in
fiscal 1997 primarily due to the corresponding increase in sales.
Gross margins remained steady at 33.5% in the fiscal 1998 period
compared to 33.8% reported in the comparable year ago period.

   Research and development expenses increased 12.9% to $6.6
million in the fiscal 1998 period from $5.8 million in the
comparable period in fiscal 1997.  As a percentage of net sales,
research and development expenses decreased to 7.0% in the fiscal
1998 period from 7.8% in the comparable period in fiscal 1997.
The increase in research and development expenses was primarily
due to the addition of DA Systems' and Seriee's research and
development expenses.  The decrease in research and development
expenses as a percentage of net sales was primarily due to
savings achieved from the continued consolidation of certain
research and development efforts of Radionics and the Company.

   Marketing, administrative and general expenses increased 43.4% to
$21.0 million in the fiscal 1998 period from $14.6 million in the
comparable period in fiscal 1997.  As a percentage of net sales,
marketing, administrative and general expenses increased to 22.3%
in the fiscal 1998 period from 19.6% in the comparable period in
1997. This increase was primarily due to additional marketing,
administrative and general expenses related to the newly acquired
companies and increased international marketing expenditures.
General expenses for the nine months ended December 31, 1998 also
include $431,000 of losses associated with foreign exchange
transactions, an increase of approximately $325,000 over the same
period of fiscal 1997.

   Interest expense increased to $1.9 million in the fiscal 1998
period from $1.3 million in the comparable period in fiscal 1997.
This increase was primarily due to additional borrowings required
to finance the Company's international expansion and increased
inventory levels necessary during the transition of a portion of
the Company's manufacturing operations to the China facility.

   The Company's effective income tax rate for the fiscal 1998
period was 34.0% compared to 29.0% for the comparable period in
fiscal 1997.  The higher effective rate reflects a shift in the
source of pretax income between domestic and international
entities.

Liquidity and Capital Resources

   The Company considers liquidity to be its ability to meet its
long- and short-term cash requirements.  Prior to 1996, those
requirements were primarily met by cash generated from the
Company's operating activities and cash reserves.  Since the 1995
implementation of the Company's strategy designed to enhance its
product offerings, manufacturing capacity and international
operations, particularly its acquisitions and the development of
the China facility, the Company has required external sources of
financing to satisfy its liquidity needs.

   Nine Months Ended December 31, 1997.  During the nine months
ended December 31, 1997, the Company used cash in its operations
of $2.9 million.  This use of cash was primarily driven by an
increase in net working capital due to the increase in inventory
related to the shift in manufacturing to the Company's China
facility and significant reductions in accounts payable, payroll
and other accruals.

   During the nine months ended December 31, 1997, cash used for
investing activities was $8.5 million.  Approximately $6.8
million was used for the acquisition of RAS, DA Systems and $2.0
million was used for capital expenditures, primarily for
production tooling.

   During the nine months ended December 31, 1997, cash flows
provided by financing activities were $16.6 million.  Net proceed
from the sale of common stock were approximately $28.4 million,
with $19.1 million of these proceeds being used to repay
outstanding borrowings.

   Capital Resources.  On December 31, 1997, the Company had cash
balances of $7.1 million.  On that date, the Company also has
$17.0 million available under a revolving credit facility.  This
credit facility bears interest based on the prime rate or the
London Interbank Offered Rate, plus applicable points based on
the Company's degree of financial leverage, and matures on July
31, 1998.

     During September 1997, the Company sold 1,325,000 shares of
common stock at $20 per share.  Expenses of approximately
$2,333,500 were net against proceeds.  The Company granted the
underwriters a 30-day option to purchase up to 231,750 additional
shares of common stock under the same terms and conditions as the
public offering to cover over-allotments.  This option was
exercised in October 1997.

   The Company expects to continue its pursuit of acquisitions
and the development of new products and markets.  The Company has
budgeted $3.0 million for capital expenditures during fiscal
1998, excluding any amounts required for acquisitions.  These
expenditures will include continued investment in facilities and
equipment necessary to produce and market its security detection,
fire detection, security, fire and access control products as
well as certain new products.  The Company also plans to continue
its efforts to market its products internationally.

   The Company believes that the combination of its current cash
balances, cash flows from operations and existing credit
facilities will be sufficient to fund its planned operations
during fiscal 1998.

   Dividend Policy.  The Company is dedicated to promoting
shareholder value through long term profitability and growth and
believes that continued investments in future product development
are essential to this goal.  For this reason, it has been the
Company's policy to not pay cash dividends.

   Year 2000 Issues.  The Company does not believe that Year 2000
issues will significantly affect future financial results or
required cash expenditures.

Forward-Looking Statements

   The foregoing discussion and analysis contain certain
"forward-looking statements" within the meaning of Section 27A of
the Securities Act, which represent the Company's expectations or
beliefs, including, but not limited to, statements concerning the
Company's operations, performance, financial condition, growth
and acquisition strategies, margins and growth in sales of the
Company's products.  For this purpose, any statements contained
therein that are not statements of historical fact may be deemed
to be forward-looking statements.  These statements by their
nature involve substantial risks and uncertainties, certain of
which are beyond the Company's control, and actual results may
differ materially depending on a variety of important factors.

                                
                           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.

                              DETECTION SYSTEMS, INC.
Registrant


DATE: February 23, 1998       /s/ Karl H. Kostusiak
                              Karl H. Kostusiak, President



                              /s/ Frank J. Ryan
                              Frank J. Ryan, Vice President,
                              Secretary and Treasurer
                              (Chief Financial Officer)
                                
                                
                                
                                
                    PART II OTHER INFORMATION
                                
                                
Item 1.  Legal Proceedings

       Not applicable


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

       Not Applicable
       
       
          
Item 5.  Other matters
       
       Not Applicable
       

Item 6.  Exhibits and Reports for Form 8-K.

       A. Exhibits

          See Exhibit Index

       B.   Reports on Form 8-K
       

          On February 2, 1998, a Form 8-K was filed under Item 5,
          related to the Registrant's acquisition of all of the
          outstanding stock of Electronics Design & Manufacturing
          Pty Limited on January 21, 1998.  No financial reports
          were included with this report.
                                
                          EXHIBIT INDEX
     
3 (a)     Detection Systems, Inc. Certification of
          Incorporation, as amended, are incorporated by
          reference to Exhibit 3(a) to the Company's 1997
          Annual Report on Form 10-K.
          
3 (b)     Detection Systems, Inc. By-laws, as amended, are
          incorporated by reference to Exhibit 3(b) to the
          Company's 1997 Annual Report on Form 10-K.
          
10 (a)    Executive Employment Agreement with Karl H. Kostusiak
          is incorporated by reference to Exhibit 10(a) of the
          Company's Quarterly Report on Form 10-Q for the
          quarter ended 6/30/97.
          
10 (b)    Executive Employment Agreements with David B. Lederer
          are incorporated by reference to Exhibit 10(b) of the
          Company's Quarterly Report on Form 10-Q for the
          quarter ended 6/30/97.
          
10 (c)    Deferred Compensation Plans are included as Exhibit
          10(c) of this Quarterly Report on Form 10-Q.
          
(11)      Statement regarding computation of per share earnings
          is included as Exhibit 11 of this Quarterly Report on
          Form 10-Q.
          
(27)      Financial data schedule is included as Exhibit 27 to
          the electronic Edgar filing of this Quarterly Report
          on Form 10-Q.
                                
                                
                                
                           Exhibit 11

            DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                                
         Consolidated Computation of Earnings Per Common
                   And Common Equivalent Share


For the Three Months Ended:                        December 31, 1997
                                                      --------------
                                                                    
Net Income                                                  $105,605
                                                                    
Weighted average number of shares                          6,047,782
Common Stock equivalent due to assumed                              
  exercise of stock options and warrants and                        
  deferred compensation plan shares                          582,474
                                                                    
Earnings per share                                                  
 Basic                                                         $0.02
 Diluted                                                       $0.02
                                                                    
                                                                    
For the Nine Months Ended:                         December 31, 1997
                                                  ------------------
                                                                    
                                                          $1,604,250
Net Income
 Plus:  amortization of redeemable stock                      11,984
                                                           ---------
Net income available to common stockholders               $1,616,234
                                                           =========
                                                                    
Weighted average number of shares                          5,164,808
Common Stock equivalent due to assumed                              
exercise of stock options and warrants and                          
deferred compensation plan shares                            590,755
                                                                    
Earnings per share                                                  
 Basic                                                         $0.31
 Diluted                                                       $0.28