UNITED STATES

                      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 ....... May 2, 1999

     OR

     ( )     Transition Report Pursuant to Section 13 or 15(d) of the
             Securities Exchange Act of 1934


     Commission file Number    0-20269

     DUCKWALL-ALCO STORES, INC.
     (Exact name of registrant as specified in its charter.)

     Kansas                                       48-0201080
     (State or other jurisdiction of              (I.R.S. Employer
     incorporation or organization)               Identification No.)

     401 Cottage Avenue
     Abilene, Kansas                              67410-2832
     (Address of principal executive offices      (Zip Code)

     Registrant's telephone number, including area code:
     (785) 263-3350

          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 [ ]


     APPLICABLE ONLY TO CORPORATE ISSUERS:

     5,049,199 shares of common stock, $.0001 par value (the issuer's
     only class of common stock), were outstanding as of May 2, 1999.

<PAGE>
<TABLE>

PART I.  Financial Information.

         ITEM 1.  Financial Statements.


                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary
                         Consolidated Balance Sheets

                            (Dollars in Thousands)
<CAPTION>


                                             May 2,         January 31,
                                              1999             1999
                                           (Unaudited)
                                           ___________      __________
<S>                                                <C>               <C>
ASSETS

Current assets:
     Cash and cash equivalents                  $7,684           $10,423
     Receivables                                 3,167             3,557
     Inventories                               123,123           113,225
     Prepaid expenses                              432               359

          Total current assets                 134,406           127,564

Property and equipment                          75,413            73,967
Less accumulated depreciation                   36,569            35,340

          Net property and equipment            38,844            38,627

Property under capital leases                   20,407            20,407
Less accumulated amortization                   14,578            14,428

          Net property under capital leases      5,829             5,979

Other non-current assets                           318               304


               Total assets                   $179,397          $172,474

<FN>
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>

                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary
                         Consolidated Balance Sheets

                            (Dollars in Thousands)
<CAPTION>

                                             May 2,          January 31,
                                              1999             1999
                                         (unaudited)                                      (Unaudited)
                                          ___________       ____________
<S>                                                <C>               <C>
LIABILITIES AND STOCKHOLDERS' EQUITY



Current liabilities:
   Current maturities of:
     Long term debt                             $1,582            $1,556
     Capital lease obligations                     540               540
   Accounts payable                             32,167            20,488
   Income taxes payable                             85             1,780
   Accrued salaries and commissions              3,062             4,705
   Accrued taxes other than income               3,846             3,520
   Other current liabilities                     1,675             2,643
   Deferred income taxes                         2,256             2,256

          Total current liabilities             45,213            37,488

Notes payable under revolving loan              30,061            30,598
Long term debt
     less current maturities                     4,490             4,825

Capital lease obligations
     less current maturities                     7,955             8,089

Other noncurrent liabilities                     1,463             1,484
Deferred revenue                                 1,019             1,075
Deferred income taxes                            2,489             2,489

          Total liabilities                     92,690            86,048

Stockholders' equity:
Common stock, $.0001 par value, authorized
  20,000,000 shares; issued and outstanding
  5,049,199 shares and 5,092,324 shares
  respectively                                       1                 1
Additional paid-in capital                      53,827            54,247

Retained earnings since June 2, 1991            32,879            32,178

          Total stockholders' equity            86,707            86,426

          Total liabilities and
               stockholders' equity           $179,397          $172,474

<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary
                      Consolidated Statement of Operations

                 (Dollars in Thousands Except Per Share Amounts)
                                  (Unaudited)
<CAPTION>

                                                   For the Thirteen
                                                     Week Periods

                                               May 2,           May 3,
                                                1999             1998
                                            ___________      ___________
                                                    <C>              <C>
Net sales ...............................      $87,028           $81,052
Cost of sales ...........................       57,890            52,902

          Gross profit ..................       29,138            28,150

Selling, general
     and administrative .................       25,525            24,207

Depreciation
     and amortization ...................        1,577             1,389


          Total operating expenses ......       27,102            25,596


Income from operations ..................        2,036             2,554

Interest expense.........................          905             1,026

Earnings before income taxes and
     cumulative effect of accounting change      1,131             1,528

Income tax ..............................          430               574

Earnings before cumulative effect of
    accounting change ...................          701               954

Cumulative effect of accounting
    change (net of tax) .................            -              (956)

Net earnings ............................      $   701           $    (2)

Earnings per share - basic

Earnings before cumulative effect of
    accounting change ...................      $  0.14           $  0.19

Cumulative effect of accounting change ..          .00             (0.19)

Net earnings ............................      $  0.14           $  0.00

Earnings per share - diluted

Earnings before cumulative effect of
    accounting change ...................      $  0.14           $  0.18

Cumulative effect of accounting change ..          .00             (0.18)

Net earnings ............................      $  0.14           $  0.00

<FN>
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary
                     Consolidated Statements of Cash Flow

                            (Dollars in Thousands)
                                  (Unaudited)
<CAPTION>
                                               For the Thirteen Week
                                                   Periods Ended
                                           May 2, 1999        May 3, 1998
                                       -----------------    ----------------
<S>                                                <C>                 <C>

Cash flows from operating activities:

     Net Earnings                               $  701             $   (2)
     Adjustments to reconcile
       net earnings to net cash
       used in operating activities

         Cumulative effect of accounting
            change, net of income tax benefit        0                956
         Amortization of
            debt financing costs                    30                 51
         Depreciation and amortization           1,577              1,389
         LIFO expense                              177                  0
         Increase in inventories               (10,075)           (10,704)
         Increase in accounts payable           11,679              9,409
         Decrease (increase) in receivables        390               (928)
         Decrease (increase)
            in other current assets                (73)                54
         Increase in accrued taxes
            other than income                      326                465
         Decrease in accrued
            salaries and commissions            (1,643)            (1,928)
         Decrease in income taxes payable       (1,695)            (1,450)
         Decrease in other
            liabilities                         (1,045)              (523)
Net cash provided by (used in)
         operating activities                      349             (3,211)

Cash flow from investing activities:

        Capital expenditures                    (1,644)            (3,149)
        Increase in other assets                   (44)                 0
        Net cash used in investing
           activities                           (1,688)            (3,149)


Cash flow from financing activities:

        Proceeds from exercise of
          outstanding stock options                 70                157
        Common stock redemption                   (490)                 0
        Increase (decrease) in
          revolving loan                          (537)            10,918
        Principal payments on
          long term notes                         (309)              (200)
        Principal payments on
          capital leases                          (134)              (130)
        Debt issue costs                             0               (320)
Net cash provided by (used in) financing
          activities                            (1,400)            10,425


        Net increase (decrease) in cash         (2,739)             4,065
        Cash at beginning of period             10,423              2,555
        Cash at end of period                   $7,684             $6,620

<FN>
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>

                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary
             Notes to Unaudited Consolidated Financial Statements


(1)  Basis of Presentation

              The accompanying unaudited consolidated financial
         statements are for interim periods and, consequently, do not
         include all disclosures required by generally accepted
         accounting principles for annual financial statements.  It is
         suggested that the accompanying unaudited consolidated
         financial statements be read in conjunction with the
         consolidated financial statements included in the Company's
         fiscal 1999 Annual Report.  In the opinion of management of
         Duckwall-ALCO Stores, Inc., the accompanying unaudited
         consolidated financial statements reflect all adjustments
         (consisting of normal recurring accruals) necessary to present
         fairly the financial position of the Company and the results of
         its operations and cash flows for the interim periods.

(2)  Principles of Consolidation

              The consolidated financial statements include the accounts
         of Duckwall-ALCO Stores, Inc. and its wholly-owned subsidiary.
         All significant intercompany transactions and balances have
         been eliminated in consolidation.

(3)  Earnings Per Share

              Earnings per share has been computed based on the weighted
         average number of common shares outstanding during the period
         plus common stock equivalents, when dilutive, consisting of
         stock options.

         The average number of shares used in computing earnings
         per share was as follows:


                    Thirteen Weeks Ending          Basic      Diluted

                    May 2, 1999                   5,081,216   5,081,216
                    May 3, 1998                   5,100,974   5,156,695

<PAGE>
                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary


[CAPTION]
 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATION

(Dollars in thousands)

The thirteen weeks ended May 2, 1999 and May 3, 1998 are referred to herein as
the first quarter of fiscal 2000 and 1999, respectively.

As used below the term "competitive market" refers to any market wherein there
is one or more national or regional full-line discount stores located in the
market served by the Company.  The term "non-competitive  market" refers to
any market where there is no national or regional full-line discount store
located in the market served by the Company.  Even in a non-competitive
market, the Company faces competition from a variety of sources.

RESULTS OF OPERATIONS

Thirteen Weeks Ended May 2, 1999 Compared to Thirteen Weeks Ended May 3, 1998.

The Company continues to execute its basic strategy of opening stores
in under-served markets that have no competition from national or
regional full-line discount retailers.  During the first quarter of
fiscal 2000, the Company opened 9 stores and closed 3 stores,
resulting in a quarter end total of 263 stores.  All of the stores
opened were in new, non-competitive markets.  Two of the ALCO stores
closed were in competitive markets.  At quarter end, over  80% of the
total stores were located in non-competitive markets.

Net sales for the first quarter of fiscal 2000 increased $5,976 or
7.4% to $87,028 compared to $81,052 for the first quarter of fiscal
1999.  Net sales for all stores open the full period in both the
first quarter of fiscal 2000 and fiscal 1999 (comparable stores)
increased $290 or 0.4%.  Net sales for these comparable stores in
the prototype class 18 ALCO stores increased $611 or 2.0%.  Net sales
for non-comparable stores increased $5,686 for the first quarter of
fiscal 2000 compared to the first quarter of fiscal 1999.

Gross margin for the first quarter of fiscal 2000 increased $988 or
3.5% to $29,138 compared to $28,150 in the first quarter of fiscal
1999.  Gross margin as a percentage of sales was 33.5% for the first
quarter of fiscal 2000 compared to 34.7% in the first quarter of
fiscal 1999.  The decrease in the margin percentage was due to
additional LIFO expense as well as higher permanent markdowns on
existing merchandise from the initial implementation of the Company's
new pricing strategy "New Low Prices Everyday" (NLPE).

Selling, general and administrative  expense increased $1,318 or 5.4%
to $25,525 in the first quarter of fiscal 2000 compared to $24,207
in the first quarter of fiscal 1999, primarily due to the increase
in total stores.  As a percentage of net sales, selling, general and
administrative expenses were 29.3% in the first quarter of fiscal
2000 compared to 29.9% in the first quarter of fiscal 1999.  The
improved operating expense performance was partially attributable
to less promotional spending due to the implementation of the NLPE
pricing strategy.

Depreciation and amortization expense increased $188 or 13.5% to
$1,577 in the first quarter of fiscal 2000 compared to $1,389 in
the first quarter of fiscal 1999.  The increase is due to additional
buildings and equipment associated with the store expansion program.

Income from operations decreased $518 or 20.3% to $2,036 in the first
quarter of fiscal 2000 compared to $2,554 in the first quarter of
fiscal 1999.  Income from operations as a percentage of net sales
decreased to 2.3% in the first quarter of fiscal 2000 compared to
3.2% in the first quarter of fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of funds are cash flow from operations,
borrowing under its revolving loan credit facility and vendor trade
credit financing (increases in accounts payable).

At May 2, 1999 working capital (defined as current assets less current
liabilities) was $89,193 compared to $90,076 at the end of fiscal 1999.

Cash generated by operating activities in the first quarter of fiscal
2000 was $349.  Cash used by operating activities in the first quarter
of fiscal 1999 was $3,211.  The decrease in the amount of cash used by
operating activities in the first quarter of fiscal 2000 compared to
the first quarter of fiscal 1999 was primarily due to an increase in
trade accounts payable levels.

The Company used cash from financing activities in the first quarter
of fiscal 2000 of $1,400.  Cash was used to make payments on the
revolving loan, long term notes, and capital leases, and for stock
redemption.  Cash generated by financing activities in the first
quarter of fiscal 1999 was $10,425.  This was generated by borrowing
under the revolving loan credit facility.

Cash used for acquisition of property and equipment in the first
quarters of fiscal 2000 and 1999 totaled $1,644 and $3,149,
respectively.  Total anticipated cash payments for acquisition of
property and equipment in fiscal 2000, principally for store buildings
and store and warehouse fixtures and equipment, are $11,000.

THE YEAR 2000 ISSUE

The information in this Year 2000 section is a Year 2000 Readiness
Disclosure under the Year 2000 Information Readiness and Disclosure
Act.

INTERNAL CONSIDERATION

The Company has been evaluating and adjusting all of its known date-
sensitive systems and equipment for Year 2000 readiness.  The
assessment phase of the Year 2000 project is substantially complete
and mission critical systems have been or are in the process of being
remediated or replaced.  The assessment phase of the project included
information technology systems as well as non-information technology
equipment.  Over 80% of the required coding conversions on
information technology have occurred to-date.  The Company
anticipates completing essentially all known remaining coding
conversions during the first half of fiscal 2000.  All code
conversions dealing with fiscal 2000 which began February 1, 1999,
have been completed and returned to production prior to February 1,
1999.  Virtually all of the Company's remediation efforts have been
and will continue to be performed by Company associates and a limited
number of selected software and hardware providers.

As systems have been replaced or remediated, system testing has been
conducted prior to return to production, however, upon completion of
the remediation phase the Company will conduct additional system
testing as deemed necessary.  This testing is anticipated during the
second and third quarters of fiscal 2000.

Completion of the rollout of Y2K ready store systems is currently
scheduled for the end of June, 1999.  At this point the Company
believes the new store systems being rolled out to be Year 2000 ready,
however, additional testing and monitoring will continue throughout
1999 as deemed necessary.

COSTS RELATED TO YEAR 2000

The total estimated cost of the Company's Year 2000 project is $1,000.
To-date  the Company has spent approximately $434 on hardware and
software upgrades, and expects to spend as much as an additional $266.

Additionally the Company has or will incur as much as $300 in internal
and external programming costs.  The Company believes internal
programming resources have been and will continue to be adequate to
provide Y2K ready systems.  Additional resources are providing the
Company with some enhancements to proprietary systems.  The hardware
replacements have also provided quicker, more reliable systems to the
Company.  All expenditures related to the Company's Year 2000
readiness initiatives have or will be funded by cash flows from
operations, borrowing under the Company's line of credit, or other
financing sources, and have been or will be capitalized or expensed
depending on the classification of the expenditure according to
generally accepted accounting principles.

EXTERNAL CONSIDERATIONS

In addition to internal Year 2000 activities, the Company is
communicating with other companies with which its systems interface
or rely upon.  Conversion, testing and implementation of Year 2000
ready EDI transactions has begun with successful implementations to
suppliers that are ready to receive Y2K ready transmissions.  This
conversion will continue throughout 1999 as suppliers become Y2K
compliant.  We have observed a significant number of EDI trading
partners that are still in the process of Y2K upgrades, and are not
yet ready to receive Y2K ready transmissions.  Completion of this
testing and conversion will be substantially complete by September
1999, assuming trading partner compliance.  Contingency plans will
be developed, to the best of the Company's ability,  for those
vendors who appear to be unlikely to achieve Y2K readiness by the
end of September 1999.

There can be no assurance that there will not be adverse effects on
the Company if third parties, such as utility companies or
merchandise suppliers, do not convert their systems in a timely
manner and in a way that is compatible with the Company's systems.
However, management believes that ongoing communications with and
assessment of these third parties will minimize these risks.

The Company recognizes the risks of  business disruption resulting
from service and merchandise suppliers noncompliance.  Possible
consequences include, but are not limited to, loss of basic utilities
within certain locations, inability to process transactions, send or
transmit purchase orders, or engage in similar normal business
activities.  Additionally, due to the lack of a uniform definition of
Year 2000 compliance, the Company recognizes the potential of an
increase in sales returns of merchandise that contain embedded chips,
or hardware or software components.  Due to the Company's product
mix, and the anticipated cooperation from the Companies suppliers, if
returns of merchandise increase, such returns are not expected to be
material to the Company's financial condition.

CONTINGENCY PLANS

The contingency planning phase of the Year 2000 project has begun.
To-date the Company is in the process of determining areas where
contingency planning is appropriate.  Upon completion of this analysis
the Company will establish contingency plans based on actual testing
and production experience.  External dependency contingency planning
will be based on ongoing communications with the Company's suppliers
and service providers.  The Company anticipates the majority of its
contingency plans to be in place by the end of September 1999.  In
addition the Company intends, during the fourth quarter of 1999 to
conduct training with associates on the execution of contingency
plans should the need arise.

SUMMARY

The Company believes its information technology systems will be
ready for the Year 2000.  Should incidences of non-compliance occur
the Company will dedicate both internal and external resources to
resolve any problems.  Although the Company is taking the steps it
deems reasonable to mitigate external Year 2000 issues, many
elements of these risks, and the ability to definitively mitigate
them, are outside the control of the Company.  Given the importance
of certain key service providers, the inability of these business
partners to provide their services to the Company on a timely basis
could have a material adverse effect on the Company's operations and
financial results.  Ongoing communications with the Company's
service providers should help mitigate these risks.  No single
merchandise vendor accounts for a significant  total of the Company's
purchases.

The cost of the conversions and the completion dates are based on
management's best estimates and may be updated as additional
information becomes available.

BUSINESS OPERATIONS AND SEGMENT INFORMATION

The Company's business activities include operation of ALCO discount
stores in towns with populations which are typically less than 5,000
not served by other regional or national full-line discount chains
and Duckwall variety stores that offer a more limited selection of
merchandise which are primarily located in communities of less than
2,500 residents.

For financial reporting purposes, the Company has established two
operating segments: "ALCO Discount Stores", and "All Other", which
includes the Duckwall variety stores and other business activities,
such as general office, warehouse and distribution activities.

<TABLE>
					         For the Thirteen Week
						  Periods Ended
                                                 May 2,          May 3,
Segment Information                              1999            1998
<CAPTION>

<S>                                        <C>               <C>
Net Sales:
   ALCO Discount Stores                      $79,085            $73,205
   All Other:
      External                                 7,943              7,847
      Intercompany                            53,859             52,552
                                            $140,887           $133,604

Depreciation and Amortization:
   ALCO Discount Stores                         $990               $725
   All Other                                     587                664
                                              $1,577             $1,389

Income (expense) from Operations:
   ALCO Discount Stores                       $6,311             $5,858
   All Other                                  (4,112)            (3,490)
                                              $2,199             $2,368

Capital Expenditures:
   ALCO Discount Stores                         $915             $1,842
   All Other                                     698              1,307
                                              $1,613             $3,149
Identifiable Assets:
   ALCO Discount Stores                     $142,172           $139,194
   All Other                                  36,474             34,164
                                            $178,646           $173,358
<FN>
</TABLE>


Income from operations as reflected in the above segment information has
been determined differently than income from operations in the accompanying
consolidated statements of operations as follows:

	Intercompany Sales
Intercompany sales represent transfers of merchandise from the warehouse to
ALCO discount stores and Duckwall variety stores.

	Intercompany Expense Allocations
General and administrative expenses incurred at the general office have not
been allocated to the ALCO Discount Stores for purposes of determining
income from operations for the segment information.

        Warehousing and distribution costs including freight applicable to
merchandise purchases, have been allocated to  the ALCO Discount Stores
segment based on the Company's customary method of allocation for such
costs (primarily as a stipulated percentage of merchandise purchases).

	Inventories
Inventories are based on the FIFO method for segment information purposes
and on the LIFO method for the consolidated statements of operations.

	Property Costs
In fiscal 1999, for ALCO stores for which the Company owns the store
building, rent expense was charged to, and the applicable depreication expense
was excluded from income from operations for purposes of determining the
segement information for the ALCO Discount Stores.  In fiscal 2000, for most
such ALCO stores, no rent expense was charged to, and applicable depreciation
expense was included in income from operations.  This change in accounting
method resulted in a $41 increase in income from operations for the ALCO
Discount Store segement in fiscal 2000.  There was no effect on income from
operations as reflected in the accompanying consolidated statements of
operations.

	Leases
All leases are accounted for as operating leases for purposes of determining
income from operations for purposes of determining the segment information
for the ALCO Discount Stores whereas capital leases are accounted for as
such in the consolidated statements of operations.

Identifiable assets as reflected in the above segment information include
cash and cash equivalents, receivables, inventory, property and equipment,
and property under capital leases.

A reconciliation of the segment information to the amounts reported in the
consolidated financial statements is presented below:
<TABLE>
                                                         For The Thirteen Week
                                                             Periods Ended
<CAPTION>
                                                         May 2,          May 3,
                                                         1999            1998
<S>                                                   <C>              <C>
Net sales per above segment information                $140,887         $133,604
Intercompany elimination                                (53,859)         (52,552)
     Net sales per consolidated statements
       of operations                                    $87,028          $81,052

Income from operations per above segment information     $2,199           $2,368
Inventory method                                           (177)               0
Property costs                                               29              211
Leases                                                      (15)             (25)
     Income from operations per consolidated
        statements of operations                         $2,036           $2,554

<FN>
</TABLE>
<PAGE>


OTHER INFORMATION

PART II



     Item 1.   Legal Proceedings
          No legal proceedings except those covered by insurance occurred
          during the thirteen week period ended May 2, 1999.


     Item 2.   Changes in Securities
          Not applicable


     Item 3.   Defaults Upon Senior Securities
          Not Applicable


     Item 4.   Submission of Matters to a Vote of Security Holders
          Not Applicable


     Item 5.   Other Information
          None


     Item 6.   Exhibits and Reports on Form 8-K
          (a)  None
          (b)  Reports on Form 8-K
               No reports filed







<PAGE>



                          Duckwall-ALCO Stores, Inc.
                                And Subsidiary

                                  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.



                                  DUCKWALL-ALCO STORES, INC.
                                  (Registrant)




Date, June 14, 1999               /s/Richard A. Mansfield
                                  Richard A. Mansfield
                                  Vice President - Finance
                                  Chief Financial Officer


                                  Signing on behalf of the
                                  registrant and as principal
                                  financial officer



<PAGE>