SECURITIES AND EXCHANGE COMMISSION

                           Washington, D. C. 20549

                                  FORM 10-Q


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


For Quarter Ended:  September 30, 1995

Commission File Number:  1-5642  

                                                                             
                              DRAVO CORPORATION                              
           (Exact name of registrant as specified in its charter)

           Pennsylvania                                  25-0447860          
(State or other jurisdiction of                        (I.R.S. employer
  incorporation or organization)                      identification no.)


One Oliver Plaza, Pittsburgh, Pennsylvania                 15222             
(Address of principal executive offices)                (Zip Code)           


Registrant's telephone number, including area code:        (412) 566-3000    




Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


Yes  X   No       

The number of shares outstanding of each of the registrant's classes of common
stock as of October 31, 1995:


     Title of Class                              Shares Outstanding
Common Stock, $1.00 par value                        14,703,546   




                     DRAVO CORPORATION AND SUBSIDIARIES

                                    INDEX


PART I - FINANCIAL INFORMATION

                                                                  Page No.

       Consolidated Balance Sheets at September 30, 1995
       and December 31, 1994                                         3, 4    
 
       Consolidated Statements of Operations for the
       Quarters ended September 30, 1995 and 1994                       5

       Consolidated Statements of Operations for the 
       Nine Months ended September 30, 1995 and 1994                    6    

       Consolidated Statements of Cash Flows for the
       Nine Months ended September 30, 1995 and 1994                 7, 8

       Notes to Consolidated Financial Statements                  9 - 14

       Management's Discussion and Analysis of Financial    
       Condition and Results of Operations                         15, 16


PART II - OTHER INFORMATION
 
      Item 6.  Exhibits and Reports on Form 8-K                        17


SIGNATURES                                                             18























                                     -2-
                     DRAVO CORPORATION AND SUBSIDIARIES
                         Consolidated Balance Sheets
                                ($ in 000's)

<TABLE>
                                                 September 30,   December 31,
                                                     1995            1994    
                                                  (unaudited)
<CAPTION>
<S>                                                <C>            <C>
ASSETS

Current assets:
 Cash and cash equivalents                         $    176        $  2,027
 Accounts receivable, net                            23,309         140,602
 Notes receivable, net                                1,280           2,803
 Inventories                                         13,279          12,638
 Net assets of disc. operations                         692             --
 Other current assets                                 1,453           2,067

  Total current assets                               40,189         160,137

Advances to and equity in joint ventures              2,469           2,536
Notes receivable                                      3,610           5,061
Other assets                                         25,639          21,281
Deferred income taxes                                24,853          24,853

Property, plant and equipment                       220,616         195,333
Less: accumulated depreciation and 
 amortization                                       107,236         101,872

  Net property, plant and equipment                 113,380          93,461

    Total assets                                   $210,140        $307,329

</TABLE>





















See accompanying notes to consolidated financial statements.


                                     -3-

                     DRAVO CORPORATION AND SUBSIDIARIES
                         Consolidated Balance Sheets
                                ($ in 000's)
<TABLE>
                                                 September 30,   December 31,
                                                     1995            1994    
                                                  (unaudited)
<CAPTION>
<S>                                                <C>             <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Current portion of long-term notes                $  6,087        $ 85,077 
 Accounts payable - trade                            13,777          36,257
 Income taxes                                           837             352
 Accrued insurance                                    1,615           2,265
 Accrued retirement contribution                      4,509           2,388
 Net liabilities of discontinued operations             --           13,547
 Other current liabilities                            6,818          13,912

  Total current liabilities                          33,643         153,798

Long-term notes                                      59,072          42,440
Net liabilities of discontinued operations           10,519           8,445
Other liabilities                                     6,034           5,900

Redeemable preference stock:
 Par value $1, issued 200,000 shares: 
  Series D, $12.35 cumulative, convertible, 
  exchangeable (entitled in liquidation to 
  $20.0 million)                                     20,000          20,000

Shareholders' equity:
 Preference stock, par value $1, authorized 
  1,878,870: Series B, $2.475 cumulative, 
  convertible; issued 25,386 and 28,386 shares
  (entitled in liquidation to $1.5 million and 
  $1.6 million);                                         25              28 
  Series D, reported above             

 Common stock, par value $1, authorized 
  35,000,000 shares; issued 15,051,237 
  and 14,985,839                                     15,051          14,986

 Other capital                                       64,003          63,554
 Retained earnings                                    6,300              18
 Treasury stock at cost:
  Common shares 347,691 and 119,221                  (4,507)         (1,840)

 Total shareholders' equity                          80,872          76,746

 Total liabilities and shareholders' equity        $210,140        $307,329

</TABLE>




See accompanying notes to consolidated financial statements.


                                     -4-

                     DRAVO CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Operations
               (unaudited, $ in 000's, except per share data)
<TABLE>
<CAPTION>
                                                Quarters ended September 30, 

                                                       1995            1994
<S>                                                <C>             <C>
Revenue                                            $ 37,774        $ 75,305
Cost of revenue                                      28,310          62,636

    Gross profit                                      9,464          12,669

Selling, general and administrative expenses          5,440           7,379

    Earnings from operations                          4,024           5,290

Other income (expense):
 Equity in earnings of joint ventures                    96             689 
 Other expense                                           --             (50)
 Interest income                                         --             224
 Interest expense                                      (970)         (2,480)

    Net other income (expense)                         (874)         (1,617)

Earnings before taxes                                 3,150           3,673
Provision (benefit) for income taxes                    220            (194)

Net earnings                                          2,930           3,867
Preference dividends                                    633             636

Net earnings available 
 for common shares                                 $  2,297        $  3,231

Earnings per share:
 Operations                                        $   0.15        $   0.22

Weighted average shares outstanding                  14,889          14,927

</TABLE>









See accompanying notes to consolidated financial statements.









                                     -5-


                     DRAVO CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Operations
               (unaudited, $ in 000's, except per share data)
<TABLE>

                                              Nine Months ended September 30,
                                                     1995          1994 
<CAPTION>
<S>                                               <C>             <C>
Revenue                                           $ 107,376       $ 205,614
Cost of revenue                                      79,731         172,725

    Gross profit                                     27,645          32,889

Selling, general and administrative expenses         16,133          22,195

    Earnings from operations                         11,512          10,694

Other income (expense):
 Equity in earnings of joint ventures                   564           1,467 
 Other income                                           182             566
 Interest income                                         75             568
 Interest expense                                    (3,534)         (7,118)

    Net other income (expense)                       (2,713)         (4,517)

Earnings before taxes                                 8,799           6,177
Provision for income taxes                              616             432

Earnings before cumulative
 accounting change                                    8,183           5,745
Cumulative effect of accounting change                   --          (1,361)
                                                    
Net earnings                                          8,183           4,384
Preference dividends                                  1,901           1,909 

Net earnings available for
 common shares                                     $  6,282         $ 2,475  

Earnings (loss) per share:
 Operations                                        $   0.42         $  0.26
 Cumulative effect of accounting change                  --           (0.09)
 
 Total                                             $   0.42        $   0.17

Weighted average shares outstanding                  14,896          14,931


</TABLE>







See accompanying notes to consolidated financial statements.


                                     -6-
                     DRAVO CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                           (unaudited, $ in 000's)

<TABLE>
<CAPTION>
                                                                             
                                              Nine Months ended September 30,
                                                     1995          1994  
<S>                                                <C>              <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings                                       $  8,183         $ 5,745
Adjustments to reconcile net earnings
 to net cash provided (used) by continuing
 operations activities:
  Depreciation and amortization                       6,869          13,139
  Change in accounting principle                         --          (1,361)
  Gain on sale of assets                                 --            (566)
  Equity in joint ventures                               67             278 
  Changes in assets and liabilities:
   Increase in accounts receivable                   (3,171)         (3,626)
   Decrease in notes receivable                         472             757  
   Decrease (increase) in inventories                  (641)          6,581
   Decrease (increase) in other current assets          888          (4,092)
   Increase (decrease) in accounts payable 
    and accrued expenses                            (27,423)         16,136 
   Increase in taxes payable                            485             485  
   Increase in other assets                          (4,358)         (6,894)
   Increase in other liabilities                        134              12 

Net cash provided (used) by continuing
 operations activities                              (18,495)         26,594 

Decrease in net liabilities of discontinued
 operations                                         (11,865)         (4,738)
Proceeds from repayment of notes receivable
 from sale of discontinued operations                 2,200           1,200

Net cash used by discontinued operations
 activities                                          (9,665)         (3,538) 
  
Net cash provided (used) by operating
 activities                                         (28,160)         23,056 

CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of assets                       120,464           1,456
 Additions to property, plant and equipment         (27,742)        (39,018)
 Other, (net)                                            51             -- 

Net cash provided (used) by investing activities   $ 92,773        $(37,562)

</TABLE>





See accompanying notes to consolidated financial statements.

                                      
                                     -7-


                     DRAVO CORPORATION AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                           (unaudited, $ in 000's)

<TABLE>
<CAPTION>
                                                Nine Months ended September 30, 

                                                     1995          1994 
<S>                                                <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
 Net borrowing under revolving credit
  agreements                                       $ 22,749        $  6,900
 Principal payments under long-term notes           (85,156)         (1,477)
 Proceeds from issuance of long-term notes                0          10,980
 Proceeds from issuance of common stock                 511              42
 Purchase of treasury stock                          (2,667)             --
 Dividends on preference stock                       (1,901)         (1,909)

Net cash provided (used) by financing activities    (66,464)         14,536

Net increase (decrease) in cash and 
 cash equivalents                                    (1,851)             30 
Cash and cash equivalents at beginning of
 period                                               2,027             808

Cash and cash equivalents at end of period         $    176        $    838

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 Cash paid (received) during the period for:
  Interest (net of amount capitalized)             $  3,941        $  6,970
  Income tax                                            131             (53)



</TABLE>




















See accompanying notes to consolidated financial statements.


                                     -8-

                     DRAVO CORPORATION AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements

(1)  Basis of Presentation

The accompanying consolidated financial statements include the accounts
of Dravo Corporation and its majority-owned subsidiaries (the company). 
The principal subsidiary is Dravo Lime company, one of the nation's
largest lime producers.  The company completed a transaction on December
30, 1994 in which it sold substantially all the assets and certain
liabilities of Dravo Basic Materials Company, Inc. (DBM).  The assets and
liabilities sold have been removed from the company's September 30, 1995
and December 31, 1994 balance sheets.  DBM is inactive except for
activities associated with winding up its affairs.  The statements of
operations include the results of DBM for the quarter and for the nine
months ended September 30, 1994.  Significant intercompany balances and
transactions have been eliminated in the consolidation process.

These unaudited consolidated financial statements include all adjustments,
consisting only of normal, recurring accruals, which management considers
necessary for a fair presentation of the company's consolidated financial
position, results of operations, and cash flows for the interim periods
presented.  Certain reclassifications of previously reported balances have
been made to conform to the current period's presentation.


(2)  Inventories

     Inventories are classified as follows:

     ($ in 000's)
<TABLE>
<CAPTION>
                                                   September 30, December 31,
                                                       1995          1994    

         <S>                                       <C>            <C>
         Materials and supplies                    $ 11,460       $ 10,804
         Finished goods                               1,819          1,834

         Net inventories                           $ 13,279       $ 12,638
</TABLE>
Inventories are valued at average production cost or market, whichever is
lower.  The cost of products produced includes raw materials, direct
labor, and operating overhead.
















                                     -9-

                     DRAVO CORPORATION AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements

(3)  Contingent Liabilities

The company has been notified by the federal Environmental Protection
Agency (EPA) that the EPA believes the company is a potentially
responsible party (PRP) for the clean-up of soil and groundwater
contamination at four subsites in Hastings, Nebraska.  The Hastings site
is one of the EPA's priority sites for taking remedial action under the
Comprehensive Environmental Response, Compensation and Liability Act
(CERCLA).  

At one of these subsites, a municipal landfill, the company believes it
could not have disposed of hazardous wastes at the particular subsite
because the landfill was closed prior to the time the company and its
predecessor initiated the operation which generated the type of hazardous
substances found at this subsite.  Other PRPs, including the local
municipality, have agreed to perform the remedial investigation and to
design soil and groundwater remedies at this subsite.  The company has
agreed to participate in an EPA initiated allocation proceeding for this
subsite.

The company has also been notified by EPA that EPA considers it a PRP at
another municipal landfill in Hastings.  At least three other parties
(including the City of Hastings) are considered by EPA to be PRPs at this
second subsite.  At this subsite, the company has concluded that the City
of Hastings is responsible for a proper closure of the landfill and the
remediation of any release of hazardous substances.  In January, 1994, EPA
invited the company and the other PRPs to make an offer to conduct a
remedial investigation and feasibility study (RI/FS) of this subsite and
stated that the EPA was in the process of preparing a work plan for the
RI/FS.  None of the PRPs has volunteered to undertake the RI/FS.

With respect to the third subsite, the company and two other PRPs have
been served with administrative orders directing them to undertake soil
remediation and interim groundwater remediation at that subsite.  The
company is currently complying with these orders while reserving its right
to seek reimbursement from the United States for its costs if it is
determined it is not liable for response costs or if it is required to
incur costs because of arbitrary, capricious or unreasonable requirements
imposed by the EPA.  

The EPA has taken no legal action with respect to its demand that the
company and the other PRPs pay its past response costs.  A total of five
parties have been named by the EPA as PRPs at this subsite, but two of
them have been granted de minimis status.  The company believes other
persons should also be named as PRPs.

The fourth subsite is a former naval ammunition depot which was
subsequently converted to an industrial park.  The company and its
predecessor owned and operated an HVAC facility in this industrial park. 
To date the company's investigation indicates that it did not cause the
release of hazardous substances in this subsite during the time it owned
and operated the facility.  The United States has undertaken to conduct
the remediation of this subsite.
 


                                  -10-
                   DRAVO CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements 

(3)  Contingent Liabilities (continued)

In addition to subsite clean-up, the EPA is seeking a clean-up of area-
wide contamination associated with all of the subsites in and around
Hastings, Nebraska.  The company, along with other Hastings PRPs, has
recommended that the EPA adopt institutional controls as the area-wide
remedy in Hastings.  EPA has indicated some interest in this proposal but
has decided to first conduct an area-wide remedial investigation before
choosing a remedy. 

On August 10, 1992 the company filed suit in the Alabama District Court
against its primary liability insurance carriers and one of its
predecessor's insurers, seeking a declaratory judgment that the company
is entitled to a defense and indemnity under its contracts of insurance
(including certain excess policies provided by one of the primary
carriers) with regard to the third Hastings subsite.  The company has
settled the claim against its predecessor's insurer, but the case against
the company's insurers is still in litigation.  An award of punitive
damages is also being sought against the company's insurers for their bad
faith in failing to investigate the company's claim and/or denying the
company's claim.  The company has notified its primary and excess general
liability carrier, as well as the excess carrier of its predecessor, of
the receipt of its notice of potential liability at the first, second and
fourth subsites.

Estimated total clean-up costs, including capital outlays and future
maintenance costs for soil and groundwater remediation of approximately
$18 million, are based on independent engineering studies.  Included in
the discontinued operations provision is the company's estimate that it
will participate in 33 percent of these remediation costs.  The company's
estimated share of the costs is based on its assessment of the total
clean-up costs, its potential exposure, and the viability of other named
PRPs.

In 1990, the company filed an action now pending in Luzerne County,
Pennsylvania alleging breach of contract and unjust enrichment arising out
of the termination of a construction contract for the Hazleton
Gasification Facility Expansion.  The suit named as defendants Continental
Energy Associates (CEA), the project owner; Continental Cogeneration
Corporation (CCC), the general partner of CEA; and Swiss Bank Corporation,
the project lender.  CEA and CCC filed a separate suit against the company
which, as amended, seeks damages for breach of contract, negligent design
and construction, negligent misrepresentation, fraud and tortious
interference with the contract of surety.  The two suits, along with a
third action commenced by CEA and CCC against the company's surety, the
Insurance Company of North America, were consolidated.                  
                                                                        
                                                                        
                                                                        
                                                                        
                                                 





                                  -11-
                   DRAVO CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements 

(3)  Contingent Liabilities (continued)

In late 1994, both CEA and CCC filed for protection from creditors under
Chapter 11 of the United States Bankruptcy Code.  In January 1995, the
Bankruptcy Court entered an order approving non-binding mediation of the
dispute with the company.

As a result of the mediation, CEA, CCC and the company reached an
agreement setting forth the terms of a full and final settlement of the
dispute.  The settlement which was approved by the Bankruptcy Court on
August 14, 1995 provided for payment by the company of $2.8 million. The
company's contribution to the settlement was charged against the
previously established reserve for discontinued operations.

Other claims and assertions made against the company will be resolved, in
the opinion of management, without material additional charges to
earnings.

The company has asserted claims that management believes to be
meritorious, but no estimate can be made at present of the timing or the
amount of recovery.



































                                  -12-

                   DRAVO CORPORATION AND SUBSIDIARIES
               Notes to Consolidated Financial Statements

(4)  Discontinued Operations

In December, 1987, Dravo's Board of Directors approved a major
restructuring program which concentrated the company's future direction
exclusively on opportunities involving its natural resources business. 
The plan included the sale or other disposition of the former Engineering
and Construction segment.  

The remaining discontinued operations' assets and liabilities at September
30, 1995 and December 31, 1994 relate to non-cancelable leases, insurance,
environmental, legal and other matters associated with exiting the
engineering and construction business and are presented below:
<TABLE>
                                                          
($ in 000's)                                  September 30,  December 31,
<CAPTION>
                                                 1995           1994    
<S>                                           <C>            <C>

Current assets:
 Accounts and retainers receivable            $    107       $     24
 Other                                           5,347             --

   Total current assets                          5,454             24

 Accounts and retainers receivable                 328            444
 Other                                           2,122          5,121

   Total assets                               $  7,904       $  5,589

Current liabilities:
 Accounts and retainers payable               $    158       $     63
 Accrued loss on leases                          2,173          2,315
 Other                                           2,431         11,193

   Total current liabilities                     4,762         13,571

 Accounts and retainers payable                     15            -- 
 Accrued loss on leases                          3,980          5,632
 Other                                           8,974          8,378

   Total liabilities                          $ 17,731       $ 27,581

 Net liabilities and accrued loss 
  on leases of discontinued operations        $ (9,827)      $(21,992)


</TABLE>











                                    -13-

                     DRAVO CORPORATION AND SUBSIDIARIES
                 Notes to Consolidated Financial Statements

(5)   Pro forma Information

      The company completed a transaction on December 30, 1994 in which it sold
      to Martin Marietta Materials, Inc. (Martin Marietta), effective January
      3, 1995, substantially all the assets of its construction aggregates
      business.  Assets sold included the assets, properties and leases of
      Dravo Basic Materials Company, Inc. (DBM), a wholly-owned subsidiary of
      the company, and Atchafalaya Mining Company, Inc. (AMC), a wholly-owned
      subsidiary of DBM, used in the production, marketing, distribution and
      sale of various aggregate products.  Also sold was the capital stock of
      Dravo Bahama Rock Limited (DBR), a wholly-owned foreign subsidiary of
      DBM.

      Pro forma data is provided below for comparative purposes only and does
      not purport to be indicative of the results which actually would have
      been obtained if the disposition had been effected on the pro forma
      dates, or other results which may be obtained in the future.

      The following pro forma statement of operations presents the results of
      operations assuming the disposition had been completed as of the
      beginning of 1994.  Adjustments have been made to exclude the results of
      DBM, to decrease interest expense for loans prepaid in early 1995 from
      the sale proceeds, and to record interest income at overnight investment
      rates for cash received in excess of liabilities paid.
<TABLE>
<CAPTION>
      ($ in 000's,                   Quarters ended      Nine Months ended
        except per share data)        September 30,        September 30,

                                     1995       1994       1995      1994
                                    Actual    Pro Forma   Actual   Pro Forma
      <S>                          <C>        <C>        <C>        <C>

      Revenue                      $ 37,774   $ 32,430   $107,376   $ 93,731

      Gross profit                    9,464      7,827     27,645     23,208

      Selling, general and 
       administrative expenses        5,440      4,802     16,133     13,569

      Other income (expense)      
       Equity in earnings of
        joint ventures                   96        405        564        985 
       Other income                      --         --        182        199
       Interest income                   --        445         75      1,326 
       Interest expense                (970)    (1,210)    (3,534)    (3,513)
        Net other income (expense)     (874)      (360)    (2,713)    (1,003)

      Earnings before taxes           3,150      2,665      8,799      8,636

      Income tax expense                220        187        616        605

      Earnings from continuing 
       operations                  $  2,930   $  2,478   $  8,183   $  8,031 

      Earnings per share, 
       continuing operations       $   0.15  $    0.12  $    0.42  $    0.32
</TABLE>
                                    -14-

                   DRAVO CORPORATION AND SUBSIDIARIES
            Management's Discussion and Analysis of Financial
                   Condition and Results of Operations
 
The company completed a transaction on December 30, 1994 in which it sold
to Martin Marietta Materials, Inc., effective January 3, 1995,
substantially all the assets of its construction aggregates business,
Dravo Basic Materials Company, Inc. (DBM).  As a result, the company has
one principal operating subsidiary, Dravo Lime Company, a major U.S. lime
producer.

The statements of operations for the quarter and nine month periods ending
September 30, 1994 include DBM.  For a more meaningful comparison, the
current year's results should be compared to last year's results on a pro
forma basis.  The pro forma results assume the DBM sales transaction
occurred prior to 1994 and are presented in Note 5 of the Notes to
Consolidated Financial Statements.

Net earnings for the quarter were $2.9 million, or 15 cents per common
share, compared to $3.9 million, or 22 cents per share, in 1994.  The
third quarter typically was DBM's strongest earnings period and last year
it contributed approximately $700,000 to net income, including income from
a joint venture shell dredging operation.  Earnings from joint ventures
are down nearly $600,000 due to higher maintenance expense at a contract
mining facility and the sale of the shell dredging operation as part of
the DBM transaction.  Both revenue and gross profit were significantly
higher for the lime business compared to last year.  The increased
capacity provided by the expansion of the Black River facility and
continued strong demand for lime contributed to the improvement.  Selling,
general and administrative expenses were lower than last year due to
personnel reductions and consolidation of the company's administrative
functions following the DBM sale.  Interest expense is lower due to
capitalization of interest associated with the Black River construction
project and an overall lower debt level as the company used the proceeds
from the DBM sale to reduce debt.

Year-to-date earnings of $8.2 million, 42 cents per share, are $3.9
million, 25 cents per share, higher than last year.  Higher tonnage,
revenue, gross profit and earnings before interest and tax from lime
operations caused part of the improvement.  Interest expense was less than
half the $7.1 million expensed last year due to lower debt levels and
interest capitalization.  Earnings from joint ventures are $903,000 lower
than last year, for the same reasons stated above in the quarter review,
with the contract mining operation accounting for $400,000 of the
variance.  Last year's results included a $1.4 million charge, nine cents
per share, related to adoption of Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits." 
On a pro forma basis, earnings slightly exceeded last year as the improved
lime earnings were offset by higher administrative expenses and lower
interest income.  The variances occur because of differences between
actual experience and the assumptions used to calculate the pro forma
information.  Certain general and administrative expenses that were
allocated to DBM last year were removed from expense for pro forma
purposes, however, a portion of those expenses must still be supported by
continuing operations.  The interest variance results from the net 




                                  -15-
                   DRAVO CORPORATION AND SUBSIDIARIES
            Management's Discussion and Analysis of Financial
             Condition and Results of Operations (Continued)

proceeds received from the DBM sale, after debt reduction, actually being
used to finance capital improvements instead of being invested and
returning interest income at short-term rates as calculated in the pro
forma presentation.

Significant changes in the company's balance sheet from year-end 1994 to
September 30, 1995 resulted from the collection of $120.5 million on
January 3, 1995 from the sale of DBM's assets.  The proceeds were used to
reduce debt more than $85 million, satisfy DBM's accounts payable and
finance ongoing capital projects.

In October, the company issued an order for a new kiln as part of a
previously announced $20 million expansion at its Maysville, Kentucky
operation.  The expansion also includes an upgrade of underground
limestone mining operations and will increase production capacity 350,000
tons by early 1997.  Construction and permanent financing for the
expansion is being negotiated with the company's current bank lenders.

In August 1995, the company paid $2.8 million as its share of a previously
announced settlement with Continental Energy Associates (CEA), the owner
of a coal gasification facility built by Dravo in Hazleton, Pennsylvania. 
The payment was charged against the previously established reserve for
discontinued operations and, therefore, did not impact current earnings.
































                                  -16-

                   DRAVO CORPORATION AND SUBSIDIARIES

                      PART II - Other Information 


            
      Item 6.     Exhibits and Reports on Form 8-K

            (a)   Exhibits                                              
                  
                  The following is filed as an exhibit to Part I of this
                  Form 10-Q:

                  Exhibit No. 11 - Statement re computation of per share
                  earnings.                                  

            (b)   Reports on Form 8-K
             
                  The Company filed no Reports on Form 8-K for the
                  quarter ended September 30, 1995.  







































                                  -17-

                               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.




                                                                        
                                              DRAVO CORPORATION         
                                                   (Registrant)




Date: November 10, 1995                    /s/ERNEST F. LADD III        
                                           Ernest F. Ladd III
                                           Executive Vice President and 
                                           Chief Financial Officer      
                                      
                                                                      
Date: November 10, 1995                     /s/LARRY J. WALKER          
                                            Larry J. Walker             
                                            Vice President and Controller 
                                            (Principal Accounting Officer)
                                   
                                   






























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