U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


(Mark One)

____X______QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
           EXCHANGE ACT OF 1934

           For Quarterly Period Ended December 31, 1995.


__________ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                  For the transition period from __________ to __________.


Commission File No. 0-3366

                             BRYAN STEAM CORPORATION
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          NEW MEXICO                                    35-0202050
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                               POST OFFICE BOX 27
                                 PERU, IN 46970
           -------------------------------------------------------------
          (Address of principal executive offices, including area code)

                                 (317) 473-6651
                                 
                (Issuer's telephone number, including area code)


     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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 __________

         
     State the number of shares  outstanding of each of the issuer's  classes of
common equity,  as of the lates practicable date. 

             COMMON STOCK                           191,284 
           (Title of class)                    (Number of shares 
                                           outstanding January 31, 1996)

<PAGE>
                          PART. I FINANCIAL INFORMATION

Item 1.   Financial Statements

                             BRYAN STEAM CORPORATION
                     CONDENSED CONSOLIDATED INCOME STATEMENT
<TABLE>
<CAPTION>

                                   Unaudited             Unaudited           Unaudited             Unaudited
                                               For the                                  For the
                                          Six months Ended:                      Fiscal Quarter Ended:
                                --------------------------------------     ------------------------------------
                                   12/31/95               12/31/94            12/31/95              12/31/94
                                (Current Year)        (Preceding Year)     (Current Year)      (Preceding Year)       
                                --------------        ----------------     --------------      ----------------       
<S>                            <C>                       <C>                <C>                  <C>       
Gross sales less
     discounts, returns          $12,170,623            $9,507,803           $6,202,227           $4,560,792
                                 -----------            ----------           ----------           ----------
     and allowances                                                                            
Cost and expenses --                                                                           
Cost of goods sold                $7,918,151            $6,276,487           $4,022,319           $3,076,784
Selling, general and                                                                           
     administrative expenses       2,909,177             2,508,395            1,564,777            1,383,681
                                 -----------            ----------           ----------           ----------
Total cost and expenses          $10,827,328            $8,784,882           $5,587,096           $4,460,465
                                 -----------            ----------           ----------           ----------
Interest expense                     $50,356            $       --              $27,470           $       --
                                 -----------            ----------           ----------           ----------
Income (or loss) before                                                                        
     taxes on income and                                                                       
     extraordinary items          $1,292,939              $722,921             $587,661             $100,327
Provisions for taxes                                                                           
     on income                       554,682               282,257              238,401               39,240
                                 -----------            ----------           ----------           ----------
Net income (or loss)                $738,257              $440,664             $349,260              $61,087
                                 -----------            ----------           ----------           ----------
Earnings per share*                    $3.86                 $2.30                $1.83                $0.32
                                 -----------            ----------           ----------           ----------
Dividends per share                    $1.40                 $1.30                $1.40                $1.30
                                 ===========            ==========           ==========           ==========
                                                                                             
*    Based on  191,284  shares  of  Common  Stock  issued  and  outstanding
     throughout the periods involved.

</TABLE>

                                       1
<PAGE>


                             BRYAN STEAM CORPORATION
                                 PERU, INDIANA
                           CONSOLIDATED BALANCE SHEET

                                                     Unaudited        Unaudited
                                                    December 31,       June 30,
                                                    ------------       --------
ASSETS                                              
CURRENT ASSETS                                                    
     Cash and cash equivalents                       $841,032        $2,192,946
     Investment securities                          1,460,789         1,928,404
     Accounts receivable (net)                      4,270,869         3,002,774
     Prepaid expenses                                 273,645           239,919
     Inventory                                      4,019,750         4,181,513
                                                  -----------       -----------
          TOTAL CURRENT ASSETS                    $10,866,085       $11,545,556
                                                  -----------       -----------
FIXED ASSETS                                                      
     Land, buildings, equipment                    $7,220,077        $6,067,148
     Less:  Depreciation accumulated                2,758,663         2,542,731
                                                  -----------       -----------
          TOTAL FIXED ASSETS                       $4,461,414        $3,524,417
                                                  -----------       -----------
OTHER ASSETS                                                      
     Organization expenses                                        
        (Net of amortization)                          $4,500            $5,000
     Noncompete agreement                                         
        (Net of amortization)                         289,999                --
     Goodwill - Hoppes                                            
        (Net of amortization)                           8,998             8,833
     Deferred patent costs                                        
        (Net of amortization)                           6,595             6,865
                                                  -----------       -----------
          TOTAL OTHER ASSETS                         $310,092           $20,698
TOTAL ASSETS                                      $15,637,591       $15,090,671
                                                  ===========       ===========
LIABILITIES AND NET WORTH                                         
CURRENT LIABILITIES                                               
     Accounts payable - trade                         $78,042          $320,072
     Loans payable - bank                             131,376           200,000
     Accrued commissions                            1,086,691           694,809
     Accrued property taxes                           232,718           226,651
     Accrued taxes & other expenses                   119,400           105,365
     Accrued federal income tax                        78,891           118,730
     Accrued state income tax                          25,742            36,453
     Deferred federal income tax                       39,915            39,915
     Deferred state income tax                          9,157             9,157
                                                  -----------       -----------
          TOTAL CURRENT LIABILITIES                $1,801,932        $1,751,152
                                                  -----------       -----------
LONG-TERM LIABILITIES                                             
     Loans payable - bank                            $800,000          $800,000
     Deferred federal income tax                      262,474           262,474
     Deferred state income tax                         60,215            60,215
     Dividends payable                                 34,506             8,863
                                                  -----------       -----------
          TOTAL LONG-TERM LIABILITIES              $1,157,195        $1,131,552
                                                  -----------       -----------
TOTAL LIABILITIES                                  $2,959,127        $2,882,704
                                                  -----------       -----------
NET WORTH                                                         
     Capital stock                                   $810,272          $810,272
     Treasury stock, at cost                          (28,727)          (28,727)
     Retained earnings                             11,896,919        11,426,422
                                                  -----------       -----------
          TOTAL NET WORTH                         $12,678,464       $12,207,967
                                                  -----------       -----------
TOTAL LIABILITIES AND NET WORTH                   $15,637,591       $15,090,671
                                                  ===========       ===========


                                       2
<PAGE>

                             BRYAN STEAM CORPORATION
                                  PERU, INDIANA
                COMPARATIVE CONSOLIDATED STATEMENT OF CASH FLOWS
 
                                                 Unaudited           Unaudited
                                                Jul 01, 1995       Jul 01, 1994
                                                     to                 to
                                                Dec 31, 1995       Dec 31, 1994
                                                ------------       ------------
                                              
CASH FLOWS FROM OPERATING                     
ACTIVITIES                                    
 Net income                                   $    738,257          $  440,664
 Non-cash items included in net income        
  Amortization                                      10,606               6,366
  Depreciation                                     215,932             197,718
  Changes in:                                 
   Inventory                                       161,763             632,655
   Accounts receivable                          (1,268,095)           (818,081)
   Prepaid expenses                                (33,726)            (57,980)
   Prepaid federal income tax                            -             126,752
   Accounts payable                               (242,030)           (325,067)
   Commissions payable                             391,882             465,813
   Accrued county property taxes                     6,067              14,638
   Accrued taxes & other expenses                   14,035             (15,309)
   Federal income taxes payable                    (39,839)                  -
   State income taxes payable                      (10,711)            (23,495)
                                              ------------          ----------
NET CASH PROVIDED BY OPERATING                
   ACTIVITIES                                 $    (55,859)         $  644,674
                                              ------------          ----------
                                              
CASH FLOW FROM INVESTING                      
ACTIVITIES                                    
 Noncompetition payments                      $   (300,000)         $        -
 Purchases of plant and equipment               (1,152,929)           (240,214)
 Redemptions of investment securities              467,615            (161,392)
                                              ------------          ----------
NET CASH (USED) BY INVESTING                  
   ACTIVITIES                                 $   (985,314)         $ (401,606)
                                              ------------          ----------
                                              
CASH FLOWS FROM FINANCING                     
ACTIVITIES                                    
 Payments on long-term debt                   $    (68,624)         $        -
 Dividends paid                                   (242,117)           (248,711)
                                              ------------          ----------
                                              
NET CASH (USED) BY FINANCING                  
   ACTIVITIES                                 $   (310,741)         $ (248,711)
                                              ------------          ----------
                                              
NET INCREASE (DECREASE) IN CASH               
   & EQUIVALENTS                              $ (1,351,914)         $   (5,643)
                                              ============          ==========
                                              
CASH & CASH EQUIVALENTS                       
 July 01,                                     $  2,192,946          $  360,213
 December 31,                                      841,032             354,570
                                              ------------          ----------
                                              
NET INCREASE (DECREASE) IN CASH               
   & EQUIVALENTS                              $ (1,351,914)         $   (5,643)
                                              ============          ==========
                                              
SUPPLEMENTAL DISCLOSURES OF CASH FLOW         
INFORMATION:                                  
 Cash paid during the period for:             
  Interest (Net of amount                     
            capitalized)                      $     50,356           $      23
                                              
  Income taxes                                $    369,036           $ 179,036


                                       3
<PAGE>



Item 1.   CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

          The unaudited interim consolidated  financial statements to which this
          management's   discussion   and  analysis  is  attached   reflect  all
          adjustments  which are, in the opinion of  management,  necessary to a
          fair  statement of the results for the interim period  presented.  All
          such adjustments are of a normal, recurring nature.

          The  accompanying   consolidated   financial  statements  include  the
          accounts  of  the  Company   and  of  its   wholly-owned   subsidiary.
          Intercompany   transactions  and  balances  have  been  eliminated  in
          consolidation.

          Pension  benefits are based on taxable  earnings and years of service.
          The Company's  policy is to fund at least the minimum amounts required
          by Federal law and regulation.

          The Company's  policy regarding  investment  securities is to classify
          them  as  current  assets.  None  of  the  investment  securities  are
          considered  to be  available-for-sale  or  trading  securities  by the
          Company.  Gross  unrealized  holding  gains and  losses on  investment
          securities classified as held to maturity at December 31, 1995 are not
          material to the accompanying consolidated financial statements and are
          not reported therein.


                                       4
<PAGE>



Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
                CONDITION AND CONSOLIDATED RESULTS OF OPERATIONS

          Consolidated  net  income for the second  quarter  of  $738,257  is up
          (67.53%) from the net income of $440,664 for the corresponding quarter
          last year. The increase in consolidated  net income results  primarily
          from the  significant  $209,737  increase in net income of Bryan Steam
          Corporation  (the  Parent)  for  the  quarter,   as  compared  to  the
          corresponding  quarter of the prior fiscal year. The Parent's increase
          in net income  results  from  improved  sales,  which  offset  smaller
          increases   in  cost  of  goods   sold  and   selling,   general   and
          administrative expenses.

          Consolidated   sales  for  the  quarter   increased  35.99%  from  the
          corresponding  quarter last year,  and increased  28.01% over the same
          year to  date  period  last  year.  Cost of  goods  sold  increased  a
          corresponding  30.73% from the same quarter a year ago, and  increased
          26.16% over last year for the year to date. The $1,641,435 increase in
          consolidated  sales for the quarter results from two causes.  Wendland
          Manufacturing Corp. (the new Subsidiary) contributed $747,212 of sales
          for the quarter to total  consolidated  sales,  and the Parent's sales
          for the quarter increased $894,223 over the corresponding quarter last
          year. This increase results from the Parent having shipped 42.90% more
          units  during the current  quarter than during the same quarter a year
          ago, and 39.06% more units than the same  six-month  period last year.
          Consolidated  selling,  general and administrative  expenses increased
          13.09% from the  corresponding  quarter a year ago, and 15.98% for the
          year to date. The new Subsidiary's selling, general and administrative
          expenses totalled  $273,803,  while the Parent's selling,  general and
          administrative  expenses  increased  $80,210  from  the  corresponding
          quarter last year.  This  increase for the quarter  results  primarily
          from   increases   in   group   insurance   expense   resulting   from
          hospitalization claims. The increase for the year to date results from
          anticipated increases in advertising,  catalogs and printing, pension,
          and  interest  expenses,  none of which  are  material  to the  income
          statement.

          The consolidated working capital ratio at December 31, 1995 of 6.03 to
          1, is down from 6.59 to 1 at  year-end,  and from the 6.69  ratio of a
          year  ago.  Consolidated  cash and  equivalents  are  down  $1,351,914
          (61.65%)  from  year-end,  and up  $486,462  (137.20%)  from  the same
          quarter  a year  ago.  Consolidated  investment  securities  decreased
          $467,615  (24.25%) from year-end,  and decreased  $1,333,714  (47.73%)
          from the same  quarter a year ago. The use of  $1,115,000  of cash and
          equivalents and investment  securities  redemption proceeds by the new
          Subsidiary   to  purchase  the   business   assets  of  a  Texas  tank
          manufacturer  was the primary cause for the softening of the Company's
          working capital ratio. The Subsidiary also acquired  substantially all
          the business  assets of a heat exchanger  manufacturer  on December 6,
          1995 for  $215,000.  The  Subsidiary  intends to utilize the purchased
          assets in the  manufacture  of heat  exchangers,  but had no  activity
          during the quarter.  Accounts receivable of the Parent are up $693,933
          (23.11%)  from  year-end,  and up (4.13%) over the same quarter a year
          ago, as a result of having shipped 151 more units than during the same
          quarter last year.  The increase in shipments  results from  increased
          production  from  two  shifts  operating  overtime  during  the  first
          quarter, and expected seasonally strong sales.  Accounts receivable of
          the  new  Subsidiary  totalled  $574,162  at the  end  of the  current
          quarter.



                                       5
<PAGE>




Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION
               AND CONSOLIDATED RESULTS OF OPERATIONS (CONTINUED)


          The Parent's inventory dropped $426,763 (10.21%) from year-end as more
          work-in-progress  was brought to  finished,  saleable  condition,  and
          increased  $506,254  (15.58%) over the same quarter a year ago because
          of increased  production  during the current  year.  The  Subsidiary's
          inventory at the end of the current quarter totalled $265,000.

          Consolidated  trade accounts payable decreased  $242,030 (75.62%) to a
          historically  customary  level  from  year-end.  Consolidated  accrued
          commissions increased $391,882 (56.40%) from year-end as a result of a
          sharp increase in accounts receivable.  Accrued income taxes decreased
          $50,550  (32.57%)  from  year-end , and are up  $99,073  from the same
          quarter last year, as a result of greater net income.

          Production  continues  at near  capacity.  The  backlog  of  orders at
          December 31, 1995,  was $3,126,000  down (32.04%) from  year-end,  and
          down (31.24%) from a year ago. The plant is operating a first shift of
          124  employees  and a second shift of 8  employees,  both on a 40 hour
          work week.  Fourteen  second shift workers are on layoff.  The Company
          has $68,624  available on its $1,000,000  revolving line of credit and
          $500,000 available on its $500,000 operating line of credit.

          Planned  capital  expenditures  this year of up to $500,000  (of which
          approximately $355,000 has been utilized), primarily for manufacturing
          equipment, will continue to be funded internally.



                                       6
<PAGE>






                           PART II. OTHER INFORMATION

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          At the Annual  Meeting of the  Stockholders  held October 5, 1995, the
          following votes were cast in respect of the nominees for director:

                                                 Votes
                           -----------------------------------------------------
    Director                 For                Withheld             Abstentions
    --------               -------              --------             -----------
Harold V. Koch             146,482                 87                     0
Albert J. Bishop           146,553                 16                     0
H. Jesse McVay             146,563                  6                     0
G.N. Summers               146,557                 12                     0
Jack B. Jackson            146,558                 11                     0
James B. Lockhart, Jr.     146,569                  0                     0
Bryan D. Herd              146,569                  0                     0

Item 6.   Exhibits and reports on Form 8-K

          (b) No  reports  on Form 8-K  were  filed  during  the  quarter  ended
          December 31, 1995.




                                       7
<PAGE>



                                   SIGNATURES

          Pursuant to the  requirements  of the Exchange Act, the Registrant has
          duly caused this report to be signed on its behalf by the  undersigned
          thereunto duly authorized.


                                                 BRYAN STEAM CORPORATION



                                  By:      /s/ Albert J. Bishop
                                           ------------------------------------
                                            Albert J .Bishop, President

                                  Date:    February 14, 1996
                                           

                                  By:      /s/ Kurt Krauskopf
                                           ------------------------------------
                                           Kurt Krauskopf, Secretary, Controller

                                  Date:    February 14, 1996


 

                                       8