PAGE 1


                 SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549
                                  
                              FORM 10-Q

      /X/ Quarterly report pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934

          For the quarterly period ended September 30, 1995 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             1-1915
                                  
                                  
                                                      DeSoto, Inc.
           (Exact name of registrant as specified in its charter)
                                  
                                  
              Delaware                              36-1899490
       (State or other jurisdiction of            (I.R.S. Employer
       incorporation or organization)            Identification No.)
                                  
                                  
                                  
     16750 South Vincennes Road, South Holland, Illinois  60473
              (Address of principal executive offices)
                                  
                                  
                                   708 - 331 - 8800
        (Registrant's telephone number, including area code)



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 and (2) has been subject  to  such  filing
requirements for the past 90 days.    Yes  X            No




At  October 31, 1995 the registrant had 4,679,207 shares  of  common
stock outstanding.

                                                          PAGE 2


                    DeSOTO, INC. AND SUBSIDIARIES


                                INDEX


                                                            Page
                                                             No.
PART I.  FINANCIAL INFORMATION

         Consolidated Condensed Statements of Operations
           for the Three Months and Nine Months ended
           September 30, 1995 and September 30, 1994          3

         Consolidated Condensed Balance Sheets as of
           September 30, 1995 and December 31, 1994           4

         Consolidated Statements of Cash Flows
           for the Nine Months Ended September 30, 1995
           and September 30, 1994                             5

         Notes to Consolidated Condensed Financial
           Statements                                         6-7

         Management's Analysis of Financial Statements        8-11

PART II. OTHER INFORMATION

           Item 1.  Legal Proceedings                         12
           Item 6.  Exhibits and Reports on Form 8-K          13


SIGNATURE                                                     14

                                                              PAGE 3





DeSOTO, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

                                         Three Months Ended Nine Months Ended
                                            September 30,       September 30,
                                           1995      1994      1995     1994
                                        (in thousands except per share amounts)

NET REVENUES............................ $ 11,132  $ 21,394  $ 46,373 $ 67,320
COSTS AND EXPENSES:
   Cost of sales........................   12,225    20,851    48,040   65,161
   Selling, administrative and general..    2,821     2,845     8,550    8,944
   Retirement security program..........   (1,732)   (1,183)   (5,114)  (3,566)
   Nonrecurring expense.................    5,689         -     5,689        -
                                          --------  --------  -------- --------
TOTAL OPERATING COSTS AND EXPENSES......   19,003    22,513    57,165   70,539
                                          --------  --------  -------- --------

LOSS FROM OPERATIONS....................   (7,871)   (1,119)  (10,792)  (3,219)

OTHER CHARGES AND CREDITS:
   Interest expense.....................       87       128       546      436
   Nonoperating income..................        -         -    (6,360)  (1,303)
                                          --------  --------  -------- --------

Loss before Income Taxes................   (7,958)   (1,247)   (4,978)  (2,352)
Benefit for Income Taxes................   (1,812)     (465)     (707)    (877)
                                          --------  --------  -------- --------
NET LOSS................................   (6,146)     (782)   (4,271)  (1,475)

Dividends on Preferred Stock............      (88)      (81)     (256)    (236)
                                           -------  --------  -------- --------

Net Loss Available for Common Shares.... $ (6,234) $   (863) $ (4,527) $(1,711)
                                          ========  ========  ======== ========

NET LOSS PER COMMON SHARE............... $  (1.33) $  (0.19) $  (0.97) $ (0.37)
                                           =======  ========  ======== ========

Average Common Shares Outstanding.......    4,679     4,657     4,676    4,656
                                           =======  ========  ======== ========


See accompanying notes to consolidated condensed financial statements.
                                                              PAGE 4
DeSOTO, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

                                                   September 30,  December 31,
                                                         1995        1994
                                                     (Unaudited)
ASSETS                                             (in thousands ofdollars)

  Current Assets:
    Cash............................................. $    434   $1,702
    Restricted cash..................................       30       58
    Restricted short-term investments................      620      710
    Accounts and notes receivable - Net..............    7,320   11,848
    Inventories:
      Finished goods.................................      591    4,331
      Raw materials and work-in-process..............    1,375    4,182
                                                      -------- --------
                                                         1,966    8,513

    Prepaid expenses and other current assets........    4,384    3,510
                                                      -------- --------
    Total Current Assets.............................   14,754   26,341

  Restricted Investments.............................    4,630    4,666
  Property, Plant and Equipment - Net................    4,926    7,968
  Prepaid Pension....................................   44,989   39,319
  Other Non-Current Assets...........................    2,867    4,818
                                                      -------- --------
                                                      $ 72,166 $ 83,112
                                                      ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities:
    Accounts payable................................. $ 15,414  $14,961
    Revolving Credit Agreement.......................        -    8,381
    Reserves and liabilities related to
      restructuring programs.........................    4,393    1,884
    Waste site clean-up..............................      922    2,522
    Other............................................    6,358    5,725
                                                       ------- --------
      Total Current Liabilities......................   27,087   33,473

  Waste site clean-up - long-term....................    6,518    6,744
  Post Retirement and Post
    Employment Insurance.............................    1,478    1,510
  Deferred Income Taxes..............................   13,619   13,392
  Long-Term Deferred Gain............................    2,878    3,175
  Redeemable Preferred Stock.........................    3,983    3,569
  Common Stock and Other Stockholders' Equity........   16,603   21,249
                                                      -------- --------
                                                      $ 72,166 $ 83,112
                                                      ======== ========


See accompanying notes to consolidated condensed financial statements.
                                                             PAGE 5
DeSOTO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                                       Nine Months Ended
                                                         September 30,
                                                        1995        1994
                                                (in thousands of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss...........................................  $ (4,271)    $ (1,475)
Non-cash items:
  Loss on disposal of liquid laundry detergent
    and fabric softener sheet business.............     2,605            -
  Depreciation and amortization....................    (5,670)      (3,750)
  Deferred income taxes............................      (706)       1,013
  Amortization of deferred gain ...................      (297)        (262)
  Net gain on disposal of property,
    plant and equipment............................       (48            -
  Other non-cash items.............................        38          120
                                                     --------     --------
  Net non-cash items...............................    (2,836)        (594)
Changes in assets and liabilities resulting
  from operating activities:
    Net decrease in inventories....................     3,418        2,221
    Net (increase) decrease in trade accounts
      and notes receivable.........................     3,125       (1,389)
    Net increase (decrease) in other liabilities...     1,284       (2,458)
    Net increase (decrease) in accounts payable....       453         (119)
    Net decrease in other non-current assets.......       203          442
    Net decrease in other current assets...........       177        6,630
    Other..........................................         -            1
                                                     --------     --------
  
  Net cash flows from operating activities.........     1,553        3,259
                                                     --------     --------
ASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of liquid laundry detergent
    and fabric softener sheet business.............     5,305            -
  Proceeds from sale of
    property, plant and equipment..................       500            -
  Additions to property, plant and equipment.......     5,560         (631)
                                                      -------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments under Revolving Credit Agreement........    (8,381)      (2,700)
  Exercise of stock options........................         -
70
                                                      -------     --------
Net cash flows from financing activities...........    (8,381)      (2,630)
                                                      -------     --------
Net increase (decrease)
  in cash and cash equivalents.....................    (1,268)          (2)
Cash and cash equivalents at beginning of year.....     1,702           45
                                                      -------     --------

Cash and cash equivalents at end of period.........   $   434     $     43
                                                      =======     ========

See accompanying notes to consolidated condensed financial statements.
                                                       PAGE 6

DeSOTO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
normal  recurring accruals) necessary for a fair presentation of  the
results of operations for the periods indicated.

The  results of operations for the three months and nine months ended
September  30, 1995 are not necessarily indicative of the results  to
be expected for the full year.

A. ACCOUNTING POLICIES
   
   The reader is directed to the Company's 1994 Annual Report on Form
   10-K  previously filed with the Securities and Exchange Commission
   for details of the accounting policies followed by the Company.

B. INCOME TAXES
   
   The  provision  (benefit)  for income taxes  is  computed  at  the
   current  estimated effective income tax rate for  the  year.   The
   loss  before  income  taxes  in 1995  included  the  write-off  of
   goodwill of approximately $3.3 million which is not deductible for
   income tax purposes.

   The  Company  has received proposed adjustments from the  Internal
   Revenue  Service  as a result of their audit  of  the  years  1990
   through  1993.  These adjustments assess additional  tax  for  the
   period under audit as well as penalties and interest.  The Company
   does  not  agree  with certain of the additional  assessments  and
   plans to appeal the examiner's findings.

C. INVENTORY VALUATION
   
   Inventory  at September 30, 1995 is valued at the last-in,  first-
   out (LIFO) method of inventory accounting.  If the first-in, first-
   out (FIFO) method of inventory accounting had been used for all of
   the  Company's inventories, inventories would have been $2,001,000
   and  $1,889,000  higher than reported at September  30,  1995  and
   December 31, 1994, respectively.

D. REVOLVING CREDIT AGREEMENT

   On  December 7, 1994, the Company entered into a revolving  credit
   agreement  with CIT.  The agreement provided for up to $14,000,000
   under  a  revolving  credit facility.   The  funds  available  for
   borrowing  were  based  on  a  formula  which  included  specified
   percents of accounts receivable and inventory.  The interest  rate
   on  the  facility  was  prime  plus  1  1/4%.  Proceeds  from  the
   transactions  discussed in both Footnote G  and  the  Management's
   Discussion and Analysis were utilized to reduce the CIT debt.   As
   of   September  30,  1995,  the  revolving  credit  agreement  was
   terminated  and  the  Company had no outstanding  borrowing.   For
   further discussion see the Liquidity and Capital Resources section
   of Management's Analysis of Financial Statements.

                                                       PAGE 7


E. NONOPERATING INCOME
   
   The  Company  reached settlements in the second quarter  with  two
   insurance  carriers  regarding the  cost  of  cleanup  at  certain
   hazardous  waste  sites.   As a result of these  settlements,  the
   Company  recorded income of approximately $6.0 million during  the
   second  quarter.  Nonoperating income also included  approximately
   $243,000  in  the  first quarter from royalty  income  related  to
   technology  sold  by  the  Company in 1990.   Nonoperating  income
   during  the  second  quarter  of 1994  resulted  from  settlements
   related  to insurance and legal issues.  In addition, the  Company
   recorded  nonoperating  income during the first  quarter  of  1994
   resulting  from  the  settlement of an arbitration  related  to  a
   portion  of  the business sold by the Company in 1990 and  royalty
   income related to technology sold by the Company in 1990.

F. STOCKHOLDERS' EQUITY

   The  components of the change in stockholders' equity  during  the
   nine months ended September 30, 1995 are as follows:

   Balance, January 1, 1995                       $21,249

   Net loss                                        (4,271)
   Accrued dividends - redeemable preferred stock    (256)
   Accretion of redeemable preferred stock to
      liquidation preference                         (158)
   Shares issued under employee stock
      options and other grants                         39
                                                  -------
   Balance, September 30, 1995                    $16,603
                                                  =======
G. DISPOSITIONS

   On   July  21,  1995,  the  Company  announced  the  transfer  and
   assignment of various operations and assets involved in its liquid
   detergent  and  fabric  softener dryer  sheet  businesses  to  two
   separate  buyers.   The  Company assigned the  rights  to  certain
   customers with respect to these businesses.  The Company also sold
   other assets which included certain accounts receivable, inventory
   and  machinery and equipment.  Both transactions also provide  for
   the  Company to receive royalties and other earn-out opportunities
   over  a  three-year period in one case and over a four-year period
   in  the  other  case.   The  proceeds of these  transactions  were
   utilized to reduce the Company's senior secured debt owed to CIT.

   The  Company  recorded  a  net loss on  the  sale  of  the  liquid
   detergent  and  fabric  softener sheet businesses  (including  the
   write-off  of  related  goodwill).  The Company  also  recorded  a
   charge  of  $3.1  million in the third quarter relative  to  costs
   associated  with the closure of operating facilities  relative  to
   these  transactions.  The third quarter non-recurring  expense  of
   $5,689,000 reflects the net impact of these transactions.
                                                      PAGE 8


   The  following  information is provided on a pro  forma  basis  to
   illustrate  the  effect of certain adjustments to  the  historical
   consolidated  financial statements that would have  resulted  from
   the  above  dispositions  if  such transactions  had  occurred  on
   January  1,  1994.  The results are not necessarily indicative  of
   actual   results  had  the  foregoing  transactions  occurred   as
   described  above,  nor  do they purport to  represent  results  of
   future operations of the Company.

                                 Three Months Ended    Nine Months Ended
                                    September 30,        September 30,
                                    1995      1994      1995       1994
                         (in thousands except per share amounts - unaudited)
   
   Net revenues                    $6,359    $8,726   $20,069   $28,361
                                   =======   =======  ========  ========
   Net earnings (loss)             $ (226)   $ (194)  $ 3,279   $   458
                                   =======   =======  ========  ========
   Net earnings (loss)
     per common share              $(0.07)   $(0.06)  $  0.65   $  0.05
                                   =======   =======  ========  ========

   For additional information, see Management's Analysis of Financial
   Statements.



MANAGEMENT'S ANALYSIS OF FINANCIAL STATEMENTS

Liquidity and Capital Resources

During  July  1995,  in  connection  with  the  Company's  previously
disclosed review of strategic alternatives, the Company completed the
transfer  and assignment to two separate buyers of various operations
and assets involved in its liquid detergent and fabric softener dryer
sheet  businesses.   The  assets involved included  certain  customer
rights,  accounts receivable, inventory and machinery and  equipment.
Initial  proceeds  from these transactions were used  to  reduce  the
Company's  senior  secured debt under its revolving credit  agreement
with  CIT.  Both transactions also provide for the Company to receive
royalties  and other earn-out opportunities over a three-year  period
in  one  case  and  over a four-year period in the other  case.   The
Company continues to manufacture powdered laundry detergents  at  its
facilities in Joliet, Illinois and Union City, California.

In  September  1995,  the Company completely repaid  the  outstanding
borrowing  under  its revolving credit agreement  with  CIT  and  the
agreement  was  terminated.  The Company is currently seeking  a  new
financing  agreement.   The  terms  and  conditions  of  a  financing
agreement have not been finalized and there can be no assurance  that
an agreement will in fact be consummated.

As  part  of the Company's continuing effort to manage its cash  flow
requirements, the Company has undertaken discussions with  its  trade
creditors.   These discussions commenced in September  1995.   In  an
effort  to facilitate such discussions, the creditors have  formed  a
committee  comprised of seven of the Company's trade creditors.   The
Company has requested a moratorium on the payment of accounts payable
that existed as of an as yet unspecified date.

                                                      PAGE 9


The  financing negotiations discussed above and the discussions  with
the creditor committee each contemplate various methods of maximizing
the  economic benefit to the Company of its over-funded pension plan.
The  Company anticipates that the excess would become a component  of
the  financing  agreement and/or a payout plan to satisfy  the  trade
creditors.

The  aforesaid  dispositions  and  the  resulting  shut-down  of  the
Company's   operating  facilities  in  South  Holland  and  Thornton,
Illinois  are expected to reduce the cash required to fund continuing
operations.   However, in light of the uncertainty  with  respect  to
future  sources  of  liquidity, there can be no  assurance  that  the
Company will have adequate liquidity on a going forward basis to fund
operations.

The  disposition  of the liquid detergent and fabric  softener  sheet
businesses  contributed  to  the  decrease  in  accounts  receivable,
inventory  and  property, plant and equipment at September  30,  1995
versus December 31, 1994.

Accounts  receivable at September 30, 1995, when compared to December
31,  1994, also reflect a reduction in trade accounts receivable  due
to  the  impact  of  reduced sales.  Inventory levels  have  declined
during  the  same  time  period due in  part  to  lower  requirements
stemming from lower sales.

Other current assets increased since the prior year end primarily due
to  an increase in current deferred income tax assets.  This increase
reflects the tax effects of a provision for costs associated with the
closure of the operating facilities described above.

Factors contributing to the decline in property, plant and equipment,
other  than  the dispositions discussed above, include  the  sale  of
equipment  no  longer used in operations as well  as  the  excess  of
depreciation over capital expenditures.

Other  non-current assets decreased during the first nine  months  of
1995  due  to the write-off of approximately $3.3 million of goodwill
in  the  third quarter.  This write-off was partially offset  by  the
minimum  long-term royalty of $1.6 million recorded as  part  of  the
disposition  of  the  liquid  detergent  and  fabric  softener  sheet
businesses in July.

The  increase  in accounts payable reflects the payment  of  invoices
beyond  terms  as  discussed  above.  The increase  in  restructuring
reserves  reflects  the  third  quarter  provision  of  $3.1  million
relative to costs associated with the closure of operating facilities
that produced liquid detergent products and fabric softener sheets.

The  current  portion of the waste site clean-up  liability  declined
versus the 1994 year-end primarily due to payments relative to  three
sites.   In the case of one of the waste sites, the Company has  been
released  from further participation in funding cleanup of the  site.
Approximately $1.8 million of the $2.0 million of cash used  to  fund
these  payments was generated from restricted short-term  investments
or insurance proceeds.
                                                            PAGE 10


Results of Operations for the Nine Months Ended September 30, 1995

Results  of operations for the nine months ended September  30,  1995
reflect the disposition of the Company's liquid detergent and  fabric
softener  dryer  sheet businesses as of July 1995.  These  businesses
accounted for approximately $26.3 million of net revenues during  the
first  nine  months of 1995 and $39.0 million of net revenues  during
the  comparable period in 1994.  Sales in 1995 include  approximately
$3.5 million of sales of liquid laundry detergent that occurred after
the closing date of the transactions.  These sales primarily occurred
as  part  of  the  transition  process  before  full  production  was
transferred  to  the  buyers.  The Company continues  to  manufacture
powdered laundry detergents.


Net   revenues   for  the  first  nine  months  of   1995   decreased
approximately 31% versus the same period in 1994.  The decline can be
attributed largely to a decrease in sales to three customers:  Kmart,
Lever Brothers and Sears.

Sales to Kmart in 1995 were approximately $5.2 million lower than the
comparable period in 1994.  Nearly half of the 1995 decline in  Kmart
sales occurred in the third quarter as a result of the disposition of
the liquid detergent and fabric softener sheet businesses.  The other
major  factor contributing to the decline in Kmart sales was a higher
level of promotional activity by Kmart in 1994.

Sales  to Lever Brothers in 1994 included approximately $3.3  million
of  sales of auto dish gel and fabric softener sheets.  As previously
reported,  Lever transferred this business out of DeSoto  during  the
second   and  third  quarters  of  1994.   The  Company   no   longer
manufactures either product.

Nine  months sales to Sears in 1995 were approximately $2.2  million
lower  than  the  same  period in 1994.  This decline  was  partially
attributable  to promotional activity in 1994 as well as  competitive
pressures on the Company that have had a negative impact on sales  in
general.

Lower  gross profit resulted from pricing pressures, product/customer
mix,  lower  volume,  and the continued escalation  in  the  cost  of
corrugated  and plastic packaging as well as unrecovered fixed  costs
at  certain  of  the Company's operating plants.   In  addition,  the
Company continued to manufacture products for the buyer of its liquid
detergent  business  during the third quarter.  These  products  were
sold to the buyer at prices that approximated cost.

Selling,  general  and administrative expenses were  lower  than  the
first  nine  months  of  1994.  The expenses in  1994  reflected  the
operation  of the Columbus, Georgia facility, which closed  in  March
1994, and the Stone Mountain, Georgia facility, which closed in  July
1994.   The  lower  1995  expense level also reflects  the  continued
efforts at cost containment.

Nonrecurring  expense included a net loss on the sale of  the  liquid
detergent and fabric softener sheet businesses (including the  write-
off  of  related  goodwill) and a $3.1 million  provision  for  costs
associated with the closure of operating facilities as part of  these
dispositions.

Interest expense was higher for the first nine months of 1995  versus
the  same period last year, due to a higher interest rate because  of
the increase in the prime rate.

                                                            PAGE 11


Nonoperating  income during 1995 included approximately $6.0  million
from  insurance  settlements and approximately  $243,000  of  royalty
income   related  to  technology  sold  by  the  Company   in   1990.
Nonoperating income in 1994 included settlements related to insurance
and legal issues and royalty income related to technology sold by the
Company in 1990.

Results of Operations for the Three Months Ended September 30, 1995

Third quarter net revenues declined 48% in 1995 when compared to  the
third quarter of 1994.  A major portion of this decline is the result
of  the  disposition  of the Company's liquid  detergent  and  fabric
softener  dryer  sheet businesses as of July 1995.  These  businesses
accounted  for  approximately $12.7 million of  sales  in  the  third
quarter of 1994 versus $4.8 million in the 1995 third quarter.

Competitive  pressures had a negative impact on sales in general  and
contributed  to  a  28% decrease in sales to Sears for  the  quarter.
Sears sales in the 1994 third quarter also benefited from promotional
activity during that period.

The  decline in gross profit resulted from pricing pressures, reduced
volume  and  unrecovered  fixed costs at  certain  of  the  Company's
operating   facilities.   Significant  increases  in  the   cost   of
corrugated and plastic packaging contributed to the decline as  well.
In  addition, products manufactured during the third quarter for  the
buyer  of the Company's liquid detergent business were sold  to  that
buyer  at  prices  that  approximated  the  Company's  cost,  further
reducing the Company's gross profit as a percentage of sales.

Nonrecurring  expense  during  the  quarter  included  a   net   loss
(including  the write-off goodwill) on the disposition of the  liquid
detergent  and  fabric softener sheet businesses.  In  addition,  the
Company  recorded  a  charge  of  $3.1  million  during  the  quarter
providing   for   the  costs  associated  with   the   shut-down   of
manufacturing facilities relating to these dispositions.

                                                            PAGE 12
PART II.  OTHER INFORMATION

Item 1. Legal Proceedings


         On  October  3,  1995,  the Company  received  a  unilateral
Administrative  Order  issued by the U. S.  Environmental  Protection
Agency under Section 106 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), alleging that  the
Company is a potentially responsible party ("PRP") in connection with
the  Marina  Cliffs  Site in the City of South Milwaukee,  Wisconsin.
The  Company  is  currently investigating its alleged liability,  but
presently  believes that it has no liability and that  any  potential
environmental damage at the site is the result of activity by parties
other than DeSoto.

         Fort  Dearborn  Lithograph Co. has filed  suit  against  the
Company  in  the Circuit Court of Cook County, Illinois,  seeking  to
collect  allegedly  unpaid  invoices  for  goods  and  services,   of
approximately  $500,000.   The Company  has  filed  an  answer  which
disputes, among other things, the alleged amount owed.  Discovery  is
ongoing and this matter could be decided as early as January 1996.

                                                             PAGE
13


Item 6. Exhibits and Reports on Form 8-K

            a)    The  exhibits to this report are listed in  the
            Index to Exhibits on page 15 hereof.

            b)                           Reports on Form 8-K.   A
            current  report on Form 8-K dated as of September  1,
            1995 was filed to report under Item 5 the appointment
            of  Anne E. Eisele as President, and William Spier as
            Chief  Executive  Officer, of the  Company  replacing
            John  R. Phillips who resigned as President and Chief
            Executive Officer, and as a Director, of the Company.

                                        PAGE 14


SIGNATURE


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.



     DeSOTO, INC.
     (Registrant)





     Anne E. Eisele
     ----------------------------
     Anne E. Eisele
     President and
       Chief Financial Officer
     (Principal Financial Officer)





     William Spier
     ----------------------------
     William Spier
     Chief Executive Officer




 November 14, 1995
---------------------------------
             Date

     PAGE 15
                                
                                
                                
                                
                                
                  DeSOTO, INC. AND SUBSIDIARIES
                                
                                
                        INDEX TO EXHIBITS





     11     - Computation of Fully Diluted Earnings Per Share


     27     - Financial Data Schedule


































__________________

* SEC File No. 1-1915
                                                         PAGE 16

                                                         Exhibit 11

                    DeSOTO, INC. AND SUBSIDIARIES
                                  
           COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
                                  
               (in thousands except per share amounts)
                                  
                              Three Months Ended   Nine Months Ended
                                 September 30,       September 30,
                                1995      1994      1995      1994

Net Loss                      $(6,146)  $  (782)  $(4,271)  $(1,475)
Preferred Dividends               (88)      (81)     (256)     (236)
                              -------   -------   -------   -------

Net Loss
  Applicable to Common Stock  $(6,234)  $  (863)  $(4,527)  $(1,711)
                              =======   =======   =======   =======

Net Loss
  Per Common Share:           $ (1.33)  $ (0.19)  $ (0.97)  $ (0.37)
                              =======   =======   =======   =======

Average Common Shares
  Outstanding (A)               4,679     4,657     4,676     4,656
                              =======   =======   =======   =======

Net Fully Diluted Loss
  Per Common Share (B)        $ (1.33)  $ (0.19)  $ (0.97)  $ (0.37)
                              =======   =======   =======   =======

Average Common Shares
            Outstanding         4,679     4,657     4,676     4,656
Additional Shares Outstanding
  After Application of the
    Treasury Stock Method           -         -         -         1
                              -------   -------   -------   -------

Total (B)                       4,679     4,657     4,676     4,657
                              =======   =======   =======   =======

(A) Outstanding common stock options and common stock warrants have
    been omitted because the effect reduces the net loss per share.
(B) Reflecting the dilutive effect of outstanding common stock
    options and common stock warrants under the treasury stock method.