UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549
                              FORM 10-Q
        (Mark One)
        [  X  ]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR
                         15(d) OF THESECURITIES EXCHANGE ACT OF 1934
             For the quarterly period ended September 29, 1996
                                  OR
        [     ]          TRANSITION REPORT PURSUANT TO SECTION 13 or 
                         15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
             For the transition period from ________ to _______.

                      Commission File No. 0-13576

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

      Delaware                                           04-2789167
     (State of Incorporation)      (I.R.S. Employer Identification No.)
      6901 West Sunrise Blvd.
      Fort Lauderdale, Florida                                 33313
     (Address of Principal Executive Offices)                (Zip Code)
      Telephone:  954-587-2900

          Securities registered pursuant to Section 12(g) of the Act:

                          Title of each class

                Common Stock, par value $.01 per share

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.   X   Yes      No

The  number of shares outstanding of the registrant's only class of  Common
Stock as of  November 11, 1996 was 37,027,935.

                          Encore Computer Corporation

                                   Index
                                                                Page
Part I        FINANCIAL INFORMATION

Item 1        Condensed Consolidated Financial Statements          3

              Notes to Condensed Consolidate
              Financial Statements                                 8

Item 2        Management's Discussion and Analysis of Financial
              Condition and Results of Operations                 14

Part II              OTHER INFORMATION                            19

Signature Page                                                    20


ENCORE COMPUTER CORPORATION                                                     
Condensed Consolidated Statements of Operations                                 
(Unaudited)                                                                     
(in thousands except per share data)                                            
                                                                                
                                   Three Months Ended        Nine Months Ended  
                                  Sept 29,    Oct 1,        Sept 29,    Oct 1,  
                                    1996       1995           1996       1995   
Net sales:                                                                      
 Equipment                       $   8,558  $   3,727     $   21,680 $    13,604
 Service                             4,711      6,139         14,902      21,128
                                    13,269      9,866         36,582      34,732
                                                                                
Costs and expenses:                                                             
 Cost of equipment sales (Note B)   10,918      3,323         21,872      29,431
 Cost of service sales               5,005      4,692         14,079      15,779
 Research and development            7,866      8,216         23,807      25,665
 Sales, General and Admin            7,760      8,005         24,292      26,026
 Restruct costs (Note B)                 0          0              0       4,499
  Total                             31,549     24,236         84,050     101,400
                                                                                
Operating loss                     -18,280    -14,370        -47,468     -66,668
                                                                                
 Int exp, princ related parties       -911       -380         -2,149      -2,590
 Interest income                        55         25            131         105
 Other (expense)/income, net            87       -109           -171          66
                                                                                
Loss before income taxes           -19,049    -14,834        -49,657     -69,087
                                                                                
                                                                                
Net loss                         $ -19,049  $ -14,781     $  -49,657 $   -69,274
                                                                                
Net loss per common share (Note A):                                             
                                                                                
Net loss attributable to common                                                 
 shareholders                    $ -25,707  $ -19,751     $  -68,311 $   -82,741
                                                                                
Loss per common share            $   -0.58  $   -0.47     $    -1.55 $     -1.97
                                                                                
Weighted average shares                                                         
 of common stock                    44,373     42,447         44,068      42,010
                                                                                
The accompanying notes are an integral part of the condensed consolidated       
financial statements.                                                           
Condensed Consolidated Balance Sheets                                           
(in thousands except share data)                                                
                                                           Unaudited            
                                                            Sept 29,    Dec 31, 
                                                              1996       1995   
ASSETS                                                                          
Current assets:                                                                 
 Cash and cash equivalents                                $    4,471 $     3,490
 Accounts receivable, less allowance                          16,715      13,030
 Inventories (Note C)                                         25,582      15,796
 Prepaid expenses and other current assets                     1,293       1,353
  Total current assets                                        48,061      33,669
                                                                                
Property and equipment, net                                   33,843      35,800
Capitalized software, net                                      1,014       2,258
Other assets                                                     775         810
  Total assets                                            $   83,693 $    72,537
                                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)                       
Current liabilities:                                                            
 Current portion of long term debt-relat parties (Note E) $   61,201 $         0
 Current portion of long term debt-other (Note E)                184         171
 Accounts payable and accrued liabilities (Note D)            33,804      28,008
  Total current liabilities                                   95,189      28,179
                                                                                
Long term debt-related parties (Note E)                            0      40,154
Long term debt-other (Note E)                                    518         658
Other liabilities                                              1,201       1,032
  Total liabilities                                           96,908      70,023
                                                                                
Shareholders' equity (Capital deficiency) (Notes E and F):                      
 Preferred stock, $.01 par value; authorized 10,000,000 shares:                 
  Series A Convertible Participating Preferred, issued                          
   73,641 shares in 1996 and 1995                                  1           1

  6% Cumulative Series B Convertible Preferred, issued                          
   728,722 and 707,345  in 1996 and 1995, respectively,                         
   with an aggregate liquidation preference of  $72,872,200                     
   and $70,734,500 in 1996 and 1995, respectively.                 7           7

  6% Cumulative Series D Convertible Preferred, issued                          
   1,115,074 and 1,082,362   in 1996 and 1995, respectively,                    
   with an aggregate liquidation preference  of $111,507,400                    
   and $108,236,200 in 1996 and 1995, respectively                11          11

  6% Cumulative Series E Convertible Preferred, issued                          
   1,139,782 and 1,106,343 in 1996 and 1995, with an                            
   aggregate liquidation preference of $113,978,200 and                         
   $110,634,300 in 1996 and 1995, respectively                    11          11

  6% Cumulative Series F Convertible Preferred, issued                          
   533,333 and 517,687 in 1996 and 1995, respectively,                          
   with an aggregate liquidation preference of $53,333,300                      
   and $51,768,700 in 1996 and 1995, respectively.                 5           5

  6% Cumulative Series G Convertible Preferred, issued                          
   572,289 and 555,500 in 1996 and 1995, respectively,                          
   with an aggregate liquidation preference of $57,228,900                      
   and $55,550,000 in 1996 and 1995, respectively.                 6           6

  6% Cumulative Series H Convertible Preferred, issued                          
   350,000 in 1996 with an aggregate liquidation preference                     
   of $35,000,000.                                                 4           0

 Common stock, $.01 par value; authorized 200,000,000 shares;                   
  issued 37,022,985 and 36,067,792 in 1996 and 1995,                            
  respectively.                                                  370         361

 Additional paid-in capital                                  446,791     412,876
 Accumulated deficit                                        -460,421    -410,764
  Total shareholders' equity (Capital deficiency)            -13,215       2,514
  Total liab and shareholders' equity (Capital Deficiency)$   83,693 $    72,537
                                                                                
                                                                                
The accompanying notes are an integral part of the condensed consolidated       
financial statements.
                                                           
Condensed Consolidated Statements of Cash Flows                                 
(Unaudited)                                                                     
(in thousands)                                                                  
                                                                                
                                                                                
                                                                                
                                                            Nine Mos   Nine Mos 
                                                             Ended       Ended  
                                                            Sept 29,    Oct 1,  
                                                              1996       1995   
                                                                                
Cash flows from operating activities:                                           
Net loss                                                  $  -49,657 $   -69,274
Adjustments to arrive at net cash used in operating activities:                 
 Depreciation and amortization                                 8,510       8,773
 Non cash compensation (Note F)                                  589       1,425
 Inventory obsolescence and writedown to lower of cost                          
  or market                                                    3,395      12,097
 Bad debt provision/(credit)                                      -1       2,996
 Restructuring charges                                             0       4,499
Net changes in operating assets and liabilities:                                
 Accounts receivable                                          -3,684       6,042
 Inventories                                                 -13,181      -1,986
 Prepaid expenses and other current assets                        60         353
 Other assets                                                     35         618
 Accounts payable and accrued liabilities                      3,042      -5,847
 Other liabilities                                               169           0
  Net cash used in operating activities                      -50,723     -40,304
                                                                                
Cash flows from investing activities:                                           
 Additions to property and equipment                          -5,309      -2,918
 Capitalization of software costs                                  0      -1,231
  Net cash used in investing activities                       -5,309      -4,149
                                                                                
Cash flows from financing activities:                                           
 Net borrowings under revolving loan agreements               56,047      43,585
 Principal payments of long term debt                           -127        -154
 Preferred stock dividends paid                                -2.00       -1.00
 Issuance of common stock                                      1,095       1,464
  Net cash provided by financing activities                   57,013      44,894
                                                                                
Increase in cash and cash equivalents                            981         441
                                                                                
Cash and cash equivalents, beginning                           3,490       2,517
                                                                                
Cash and cash equivalents, ending                         $    4,471 $     2,958
                                                                                
                                                                                
The accompanying notes are an integral part of the condensed consolidated       
financial statements.                                                           
                                                                                
Condensed Consolidated Statements of Cash Flows                                 
                                                                                
                                                                                
                                                            Nine Mos   Nine Mos 
                                                             Ended       Ended  
                                                            Sept 29,    Oct 1,  
                                                              1996       1995   
Supplemental disclosure of cash flow information (in thousands):
                
 Cash paid during the period for interest                 $       78 $     1,776
                                                                                
 Cash paid during the period for income taxes                     69         496
                                                                                
                                                                                
                                                                                
Non-cash investing and financing activity:                                      
                                                                                
 Indebtedness exchanged for preferred stock               $   35,000 $   105,000
                                                                                
  During the third quarter of 1995, the Company recorded a $400,000 adjustment  
  of estimated transaction costs related to Gould capital transactions.         
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
The accompanying notes are an integral part of the condensed consolidated       
financial statements.                                                           
                                                                                
Condensed Statements of Shareholders' Equity (Capital Deficiency)               
(in thousands except share data)                                                
                                   Preferred Stock                              
                     Series A          Series B         Series D                
                             Par                 Par            Par             
                     Shares  Val   Shares        Val     Shares Val             
Bal Dec 31, 1995     73,641    1  707,345          7  1,082,362  11             
                                                                                
Common stock options                                                            
exercised,  $.69 to $2.00                                                       
per share                                                                       
                                                                                
Shares issued through employee                                                  
 stock purchase plan, at a price of                                             
 $1.9125 per share                                                              
                                                                                
Issuance of Series H Convertible                                                
 Preferred Stock (Note E)                                                       
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G                    0    0   21,377          0     32,712   0
             
Extension of expiration date on outstanding                                     
 grant of common stock options                                                  
                                                                                
Net loss                                                                        
Bal Sep 29, '96      73,641$   1  728,722 $        7  1,115,074$ 11             
                                                                                
                                                                                
                                                                                
The accompanying notes are an intergral part of the consolidated                
financial statements.                                                           
                                                                                
                                                                                
                                                                                
                                                                                
                                   Preferred Stock                              
                     Series E          Series F         Series G      Series H  
                             Par                 Par            Par          Par
                     Shares  Val   Shares        Val     Shares Val   Shares Val
Bal Dec 31, 1995  1,106,343  $11  517,687         $5    555,500  $6        0  $0
                                                                                
Common stock options exercised,                                                 
 $.69 to $2.00 per share                                                        
                                                                                
Shares issued through employee stock purchase                                   
 plan, at a price of $1.9125 per share                                          
                                                                                
Issuance of Series H Convertible                                                
 Preferred Stock (Note E)                                                       
                                                                                
Dividends issued to Preferred Stockholders                                      
 in shares of Series B, D, E, F                                                 
 and G               33,439    0   15,646          0     16,789   0        0   0

Extension of expiration date on outstanding                                     
 grant of common stock options                                                  
                                                                                
Net loss                                                                        
Bal Sep 29, 1996  1,139,782  $11  533,333         $5    572,289  $6  350,000  $4
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                                                                                
                   Common Stock                         Shrhldrs'               
                                   Addt'l                    Eq                 
                             Par  Paid-in      Accum   (Capital                 
                     Shares  Val  Capital    Deficit       Def)                 
Bal Dec 31, 1995 36,067,792 $361 $412,876  $-410,764     $2,514                 
                                                                                
Common stock options exercised, $.69                                            
to $2.00/shar       769,261    7      732          0        739                 
                                                                                
Shares issued through employee                                                  
 stock purchase plan, at a price of                                             
 $1.9125/share      185,932    2      354          0        356                 
                                                                                
Issuance of Series H Convertible Preferred                                      
 Stock (Note E)           0    0   32,242          0     32,246            0   0
                                                                                
Dividends issued to Preferred                                                   
 Stockholders in shares of Series                                               
 B, D, E, F and G         0    0       -2          0         -2
                 
Extension of expiration date on outstanding                                     
 grant of common stock                                                          
 options                  0    0      589          0        589                 
                                                                                
Net loss                  0    0        0    -49,657    -49,657                 
Bal Sep 29, 1996 37,022,985 $370 $446,791  $-460,421   $-13,215

                 
Encore Computer Corporation
Notes to Condensed Consolidated Financial Statements

A. Summary of Significant Accounting Policies
Basis of Presentation and Other Matters

The accompanying condensed consolidated financial statements
are  unaudited  and  have been prepared by  Encore  Computer
Corporation  ("Encore" or the "Company") in accordance  with
generally    accepted   accounting   principles.     Certain
information  and footnote disclosures normally  included  in
the  Company's annual consolidated financial statements have
been  condensed  or  omitted.  It is  suggested  that  these
condensed  consolidated  financial  statements  be  read  in
conjunction   with   the   audited  consolidated   financial
statements for the year ended December 31, 1995.

The  condensed  consolidated financial  statements,  in  the
opinion  of  the Company, reflect all adjustments (including
normal recurring accruals) necessary for a fair statement of
the  results for the interim periods.  All adjustments  made
during the interim periods are normal recurring adjustments.
The  year-end  condensed balance sheet data is derived  from
audited  financial  statements  but  does  not  include  all
disclosures   required  by  generally  accepted   accounting
principles.   Certain reclassifications have  been  made  to
conform prior period data to current period presentation.

The  results of operations for the interim periods  are  not
necessarily indicative of the results of operations for  the
fiscal years.

The accompanying financial statements have been prepared  on
the   basis  of  accounting  principles  that  presume   the
realization  of assets and the settlement of liabilities  in
the ordinary course of business.  As discussed more fully in
Note   E   of  Notes  to  Condensed  Consolidated  Financial
Statements,  the  principal  source  of  financing  for  the
Company  has  been  provided  by  Japan  Energy  Corporation
("Japan Energy"; a Japanese Corporation) and certain of  its
wholly  owned subsidiaries including Gould Electronics  Inc.
("Gould") and EFI International, Ltd. ("EFI") (collectively,
the "Japan Energy Group").  Based on the Company's cash flow
projections,  management  believes  the  amounts   currently
available  under its credit agreement with Gould  should  be
sufficient to meet its needs through year end.  The  Company
is in the process of developing alternative financing  sources. 
Should  the  Japan
Energy  Group  withdraw its' financial  support  before  the
Company  returns to profitability  and alternative financing
sources  are not obtained, the Company will suffer a  severe
liquidity crisis and it will have difficulties settling  its
liabilities in the normal course of business.

Per Share Data
Per share data is calculated based upon the weighted average
number   of   shares  of  common  stock  and  common   stock
equivalents outstanding.  In fiscal periods which report net
losses,  the  calculation does not  include  the  effect  of
common  stock  equivalents such as stock options  since  the
effect  on  the  amounts  reported  would  be  antidilutive.
Series  A Convertible Participating Preferred Stock ("Series
A")   has  been  considered  common  stock  (on  an  assumed
converted basis) for purposes of all income (loss) per share
calculations.  All other series of preferred stock have been
determined  to  be  common  stock equivalents  but  are  not
included in the weighted average number of shares of  common
stock and equivalents or in the calculation of net loss  per
share for the periods presented because the effect would  be
antidilutive.

Net loss per common share was determined by dividing the net
loss,  as  adjusted, by applicable shares outstanding.   The
loss  was  adjusted by the aggregate amount of dividends  on
the  Company's  preferred stock.  Preferred stock  dividends
amounted  to  $6,658,400 and $18,654,700 for the  three  and
nine  month  periods ended September 29, 1996, respectively.
For  the three and nine month periods ended October 1, 1995,
preferred   stock  dividends  amounted  to  $4,970,100   and
$13,466,900,  respectively.   As  of  March  31,  1996,  the
Company reported a capital deficiency and was precluded from
paying   dividends  on  its  preferred  stock   outstanding.
Accordingly,  the normal quarterly dividends  payable  April
15,  1996 for the period January 15, 1996 to April 15,  1996
on  the Series B, D, E, F and G amounting to $6,042,800 were
accumulated by the Company.  On April 16, 1996, the  Company
completed  an  exchange  of Series H  Convertible  Preferred
Stock  ("Series  H") for indebtedness owed.   Following  the
exchange,  the Company had a capital surplus and  therefore,
was  able  to pay the accumulated dividends on the preferred
shares.   Dividends payable July 15, 1996  and  October  15,
1996  of  $6,658,400  and $6,758,300, respectively  for  the
periods April 15, 1996 to July 15, 1996 and July 16, 1996 to
October  15,  1996  have  been accumulated.   All  dividends
accumulated during 1995 were paid in 1995.

B.  Termination of Amdahl Reseller Agreement

During  1994, the Company and Amdahl Corporation  ("Amdahl")
entered  into  a five year reseller agreement  (the  "Amdahl
Reseller  Agreement")  which granted  Amdahl  the  exclusive
right  to distribute the Company's Infinity Storage Products
under  the Amdahl brand.  The Amdahl Reseller Agreement,  as
amended, established procurement schedules, which if certain
product requirements were met, would have required Amdahl to
purchase  a significant amount of product from the  Company.
Sales  under  the Amdahl Reseller Agreement were anticipated
to have significant sales volumes in the first half of 1995.
However,   certain  significant  contractual  issues   arose
delaying  the  sale of products and on June 8, 1995,  Encore
announced  that  the  Amdahl  Reseller  Agreement  had  been
terminated.

Due  to  the  termination of the Amdahl Reseller  Agreement,
product  sales  fell  well  short of  expectations  and  all
elements  of  the  Company's  results  of  operations   were
adversely affected.  As a result of these events, during the
second  quarter  of  1995,  the Company  charged  operations
$19,241,000, consisting of $11,442,000 charged  to  cost  of
sales to reduce inventory carrying amounts to estimated  net
realizable value, as well as $2,800,000 charged to  cost  of
sales  for uncollected Amdahl accounts receivable,  $500,000
charged   to   research  and  development  to   write   down
capitalized  software projects in process, and a  $4,499,000
charge to restructuring costs.

C. Inventories

Inventories consist of the following (in thousands):

                                   September 29,        December 31,
                                           1996                1995
Purchased parts                     $     8,317          $    9,161
Work in process                          11,901               4,570
Finished goods                            5,252               1,799
Loaned computer equipment
  and consignment inventory                 112                 266
                                    $    25,582          $   15,796

Storage  Product  inventory  amounted  to  $19,409,000   and
$11,139,000  at  September 29, 1996 and December  31,  1995,
respectively.   The  Company is expanding  its  programs  to
market   the  Storage  Product  through  various   channels,
including  direct, distributor and OEM sales  and  marketing
campaigns.     The   Company   has   acquired    significant
inventories,  provided customers with  product  on  a  trial
basis  and  continues  to improve the product  features  and
functionality.  The Company was unsuccessful in  negotiating
an OEM agreement in the third quarter of 1996, but continues
to discuss possible agreements with several potential OEM's.
As  a  result  of  lower than expected  sales,  the  Company
charged equipment cost of sales $2,584,000 during the three-
month   period   ended   September  29,   1996,   increasing
obsolescence reserves for Storage Product inventory.   Total
inventory   reserves  were  approximately  $24,618,000   and
$21,249,000  at  September 29, 1996 and December  31,  1995,
respectively.

D. Accounts Payable and Accrued Liabilities;

Accounts payable and accrued liabilities consist of
the following (in thousands):

                                       September 29,     December 31,
                                               1996             1995
Accounts payable                          $   7,462        $   7,339
Accrued salaries and benefits                 5,195            4,261
Accrued restructuring costs                     347            1,566
Accrued interest-related parties             10,339            5,921
Accrued taxes                                 3,812            4,045
Deferred income,
  principally maintenance contracts           1,537              827
Other accrued expenses                        5,112            4,049
                                          $  33,804        $  28,008

Accrued interest of $8,902,000 and $5,215,000 was payable to
Gould   at  September  29,  1996  and  December  31,   1995,
respectively.   The balance of accrued interest  to  related
parties  is  being  amortized over the term  of  the  credit
agreement.

E.  Debt

Debt consists of the following (in thousands):;

                                      September 29,     December 31,
                                              1996             1995
Debt to unrelated parties:
 Mortgages payable                      $      702      $       829
 Current portion of debt                      (184)            (171)
 Total long term debt to
      unrelated parties                 $      518      $       658
Debt to related parties:
 Credit Agreement  with
  Gould Electronics Inc.                $   61,201      $    40,154
 Current portion of debt                   (61,201)             -  
 Total long term debt to
      related parties                   $      -        $    40,154

The  Japan  Energy  Group  is a related  party  due  to  the
significant  financial interests of Gould  and  EFI  in  the
Company.   Assuming  full  conversion  of  preferred   stock
holdings  as  of September 29, 1996, the Japan Energy  Group
beneficially owns 78% of the Company's common stock.

On  April  16,  1996, Gould as authorized  by  Japan  Energy
Corporation canceled $35,000,000 of indebtedness pursuant to
a  Revolving Credit Agreement ("Credit Agreement") which was
scheduled  to mature on that date, in exchange  for  350,000
shares of the Company's Series H Convertible Preferred Stock
("Series H") as discussed in more detail in Note F of  Notes
to Condensed Consolidated Financial Statements.

In  addition to the exchange of indebtedness for  Series  H,
Gould  amended the Credit Agreement in order to provide  the
Company  with a committed borrowing facility of $65,000,000.
Gould  also  has  allowed the Company to  borrow  additional
funds  in  excess of the maximum limit.  As of November  12,
1996, the Company owed to Gould $65,744,351 under the Credit
Agreement, plus $9,751,000 in accrued interest.
The credit facility bears interest at the prime rate plus 2%
(10.25%  at September 29, 1996).  As of December  31,  1995,
the   Company  owed  Gould  $40,154,000  under  the   Credit
Agreement bearing interest at the prime rate plus 2% (10.50%
at  December  31,  1995).  Borrowings are collateralized  by
substantially  all of the Company's tangible and  intangible
assets   and   the  agreement  contains  various   covenants
including  maintenance of cash flow, leverage  and  tangible
net  worth  ratios and limitations on capital  expenditures,
dividend payments and additional indebtedness.

Gould extended the maturity date of the Credit Agreement  to
April 30, 1997, and waived compliance with certain financial
covenants contained in the agreement until January 1,  1997.
The  Series  B  Convertible  Preferred  Stock  ("Series  B")
includes  terms which allow the holders to elect a  majority
of  the directors of the Company if certain operating income
levels  are not achieved and the Company fails to  pay  cash
dividends for eight consecutive quarters.  Gould has  agreed
it  would  not vote its shares of the Series B or  take  any
other action as a holder of the Series B to elect a majority
of  the directors of the Company until at least December 31,
1996.

Certain of the Company's operations relate to classified  U.
S.  Government  contracts.  Accordingly, the  United  States
Government  has  previously reviewed the extent  of  Gould's
ownership  of the Company's common stock, since  Gould,  the
Company's  largest shareholder, is owned and  controlled  by
Japan   Energy  Corporation,  a  foreign  corporation.    In
connection  with  the various exchanges of indebtedness  for
preferred  stock,  the  United States Defense  Investigative
Service  ("DIS") has indicated that it has no  objection  to
the   relationships  under  the  United  States   government
requirements  relating  to  foreign  ownership,  control  or
influence  between the Japan Energy Group and  the  Company.
The  DIS  has  not yet reviewed the effect this exchange  of
indebtedness for Series H combined with the expansion of the
credit facility has on the relationship between the Company,
Japan  Energy  Corporation and its wholly owned subsidiaries
(Gould and EFI).

Since  1989,  the  principal source  of  financing  for  the
Company  has  been  provided by  Japan  Energy  Group.   The
Company is in the process of developing alternative  financing
sources.   Should
the  Japan  Energy  Group  withdraw its'  financial  support
before  the Company returns to profitability and alternative
financing sources are not obtained, the Company will  suffer
a  severe  liquidity  crisis and it will  have  difficulties
settling its liabilities in the normal course of business.

F.  Shareholders' Equity

On   April   16.   1996,  Gould  canceled   $35,000,000   of
indebtedness  in  exchange for Series H with  a  liquidation
preference  of  $35,000,000.  The  Series  H  carries  a  6%
cumulative  annual  dividend requirement  payable  quarterly
which the Company can accumulate or pay in additional shares
of  preferred  stock (valued at its liquidation  preference)
until    the   Company's   shareholders'   equity    exceeds
$50,000,000.   The Series H is convertible, at the  holder's
option,  into the Company's common stock at $3.25 per  share
only; (a) if the shareholder is a United States citizen or a
corporation or other entity owned in the majority by  United
States  citizens, or (b) in connection with an  underwritten
public  offering.   The  Series H  is  convertible,  at  the
Company's  option, if the price of the common stock  exceeds
$3.90 per share for twenty consecutive days and; (a) a buyer
is  contractually committed to purchase for at  least  $3.90
per  share  at  least  50%  of the  shares  into  which  all
outstanding  Preferred Stock would be converted,  or  (b)  a
buyer  is  contractually committed to purchase for at  least
$3.50  per  share at least 75% of the shares into which  all
outstanding Preferred Stock would be converted.  The  Series
H  is senior in liquidation priority to all other classes of
the  Company's preferred and common stock and is  redeemable
by the Company at any time for cash equal to the liquidation
preference  plus  accumulated  dividends.   Because  of  the
related  party  nature  of the transaction,  the  difference
between thecarrying amount of the indebtedness exchanged and
the   par   value  of  the  securities  issued   and   other
consideration granted has been credited to additional  paid-
in  capital.   A  summary of the financial  effects  of  the
transaction are as follows (in thousands):

Reduction of debt                                       $35,000

  Par value of shares issued                                 (4)
  Accrued estimated transaction costs                      (200)
  Reversal of accrued interest on previous recapitalization 111
  Accrued interest on the remaining Gould indebtedness for
   the remaining term of the agreement                   (2,665)
       Increase in additional paid in capital          $ 32,242

During  the nine months ended September 29, 1996 and October
1,  1995,  options granted to certain officers and employees
of  the  Company were scheduled to expire if not  exercised.
However,  at the time the options were scheduled  to  expire
the   Company's   policy  on  insider  trading   effectively
prevented   the  officers  from  exercising   the   options.
Accordingly, the Board of Directors approved an extension of
the  expiration  date until January 21, 2000  for  the  1996
extension and September 7, 1996 for the 1995 extension.  The
extensions were treated as a cancellation of the old options
and  a grant of new options in the same amounts at the  same
exercise   prices.    Non-cash  non-recurring   compensation
charges of $589,000 and $1,425,000 were recorded in the nine-
month  periods  ended September 29, 1996 and July  2,  1995,
respectively,  in  connection  with  the  extension  of  the
expiration dates of the stock options.

Item 2
                              
            Management's Discussion and Analysis
      of Financial Condition and Results of Operations
   for the Three and Nine Months Ended September 29, 1996
                       Compared to the
         Three and Nine Months Ended October 1, 1995

The following is management's discussion and analysis of the
financial condition and the results of operations of  Encore
Computer  Corporation ("Encore" or the  "Company")  for  the
three  and  nine-month  periods  ended  September  29,  1996
compared  to the three and nine-month periods ended  October
1,  1995.   The Company's net loss for the three  and  nine-
month  periods  in  1996  was $19,049,000  and  $49,657,000,
respectively, compared to the net loss for the same  periods
of  1995  of $14,781,000 and $69,274,000, respectively.   As
discussed  in  Note B of the Notes to Condensed Consolidated
Financial Statements, during the second quarter of 1995  the
Company recorded a charge to operations totaling $19,241,000
which  related to the termination of the reseller  agreement
between Encore and Amdahl Corporation.

RESULTS OF OPERATIONS:
Total net sales for the three and nine-month periods of 1996
were $13,269,000 and $36,582,000, respectively, compared  to
net  sales for the three and nine-month periods of  1995  of
$9,866,000  and $34,732,000, respectively.   For  the  nine-
month  period  ended September 29, 1996, domestic  sales  of
$15,857,000  decreased  8%,  while  international  sales  of
$20,725,000 increased 18% from the same period in 1995.

Equipment sales increased by 130% to $8,558,000 and  by  59%
to $21,680,000 during the three and nine-month periods ended
September 29, 1996, respectively, when compared to the  same
periods  of  the  prior  year.   Domestic  equipment   sales
increased  28%  to  $10,079,000 for the  nine  months  ended
September   29,  1996  and  international  equipment   sales
increased 102% to $11,601,000 compared to the same period in
1995.    Sales  of  the  Company's  Storage  Products   were
$3,035,000  and  $5,960,000 for the  three  and  nine  month
periods ending September 29, 1996, respectively. In the real-
time  market, RSX sales continue to offset declines in other
end-of-life  products,  while the new Alpha-based  real-time
product is planned to extend the Company's presence  in  the
marketplace.

The  following table illustrates equipment cost of sales for
the  three  and  nine months ended September  29,  1996  and
October 1, 1995:

                       THREE MONTHS       NINE MONTHS ENDED
                           ENDED
                      Sep-29   Oct-1       Sep-29    Oct-1
                       1996     1995        1996     1995
                                                           
Equipment Sales        $8,558   $3,727     $21,680  $13,604
                                                           
Equipment Cost of
     Sales            $10,918   $3,323     $21,872  $29,431
Restructuring                                      ($14,242)
Additional            ($2,584)            ($2,584)         
Obsolescence
                                                           
Adjusted Cost of       $8,334   $3,323     $19,288  $15,189
Sales
                                                           
Adjusted Cost as %        97%      89%         89%     112%
of Revenue

During  the  second quarter ended July 2, 1995, the  Company
charged  equipment cost of sales $14,242,000 as a result  of
the  termination  of the Amdahl Agreement, as  discussed  in
Note  B  of  the  Notes to Condensed Consolidated  Financial
Statements.

During the first nine months of 1996, the Company has made a
substantial effort to expand programs to market the  Storage
Product   through   various  channels,   including   direct,
distributor and OEM sales and marketing campaigns.  Sales of
this  product are increasing, however, to date have not  met
management's   expectations.   The  Company   has   acquired
significant inventories, provided product to customers on  a
trial  basis, and continues to improve product features  and
functionality.  The Company was unsuccessful in  negotiating
an OEM agreement in the third quarter of 1996, but continues
to discuss possible agreements with several potential OEM's.
As  a  result  of  lower than expected  sales,  the  Company
charged equipment cost of sales $2,584,000 during the  three
month   period   ending  September  29,   1996,   increasing
obsolescence reserves for Storage Product inventory.  As  of
September  29,  1996,  total  reserves for  Storage  Product
inventory  were  $18,749,000 or 49% of  gross  inventory  of
$38,158,000.

Adjusted  cost of sales as a percentage of revenue  for  the
nine-month  period ended September 29, 1996 was  89%  versus
112%  for  the comparable period in 1995.  This decrease  is
attributed to an improvement in efficiency and manufacturing
variances  due  to  the  maturing  of  the  Storage  Product
manufacturing  process.   However,  during  the  three-month
period ended September 29, 1996, adjusted cost of sales as a
percentage of revenue increased to 97% from 89% for the same
period  in  1995.   During the third quarter  of  1996,  the
Company  discounted Storage Products in order  to  penetrate
the  marketplace and establish reference accounts.   Storage
product warranty costs were also higher in the period due to
the  effect  of engineering changes on current installations
and spare part inventory.

Service sales continue to decline.  For the three and  nine-
month  periods  ending  September 29,  1996,  service  sales
decreased  $1,428,000 or 23% and $6,226,000 or 30%  compared
to  the  same  periods in 1995.  For the nine-month  period,
domestic  service  revenues declined 38%  and  international
service  revenues declined 23%.  Continued declining service
revenues reflect the effect on the service business of;  (i)
the Company's prolonged decline in equipment sales, (ii) the
price   competitiveness  of  the  marketplace,   (iii)   the
completion   of   long  running  government   programs   and
subsequent   deinstallation  of  systems  and  (iv)   longer
warranty periods for equipment sales required to compete  in
the storage marketplace.  The Company expects this trend  to
continue.

The  following table illustrates service gross  margins  for
the  three and nine month periods ended September  29,  1996
and October 1, 1995:

                       THREE MONTHS       NINE MONTHS ENDED
                           ENDED
                      Sep-29   Oct-1       Sep-29    Oct-1
                       1996     1995        1996     1995
                                                           
Service Sales          $4,711   $6,139     $14,902  $21,128
                                                           
Cost of Service         5,005    4,692      14,079   15,779
Sales
                                                           
Gross Margin            ($294)  $1,447        $823   $5,349
                                                           
Gross Margin as % of      (6%)     24%          6%      25%
Sales

All  service  sales  are  derived from  installed  real-time
products   and  the  cost  structure  within   the   service
department  is  highly variable due to  the  utilization  of
service  partners.   Therefore, as revenues  decline,  costs
decline  as well.  Moreover, management continues to  reduce
fixed  costs  on  an  ongoing basis.  However,  the  Company
continues   its   investment   in   various   programs   and
infrastructure  necessary  to support  the  Storage  Product
line.   Cost  of service sales for the three and nine  month
periods ended September 29, 1996, increased $313,000  or  7%
and decreased $1,700,000 or 11%, respectively, when compared
to  the same periods in 1995. Storage product support  costs
for the three and nine month periods of 1996 were $2,113,000
and $4,879,000, respectively, and included an adjustment  to
obsolescence reserves for spare parts of $600,000.  For  the
three  and nine month periods ended October 1, 1995, Storage
Product  support  costs  totaled  $968,000  and  $2,844,000,
respectively.  Excluding  the cost associated  with  Storage
Products,  gross margin as a percentage of customer  service
revenue  was  39% and 38% during the three  and  nine  month
periods  ended September 29, 1996, respectively, versus  39%
for the same periods of 1995.

Research and development costs for the three and nine  month
periods  ended  September  29,  1996,  decreased  from   the
comparable  periods of 1995 by $350,000 or 4% and $1,858,000
or  7%, respectively.  However, during the second quarter of
1995  the  Company charged research and development $500,000
for  the  write  down  of capitalized software  projects  as
discussed  in  Note B of the Notes to Condensed Consolidated
Financial  Statements.   Excluding  this  charge,   spending
decreased  $1,358,000 or 5% for the nine month period  ended
September 29, 1996, when compared to 1995.  This decrease is
due to the continued effect of headcount reductions taken in
the  second quarter of 1995.  As a percentage of net  sales,
research and development expenses decreased to 59% and  65%,
respectively, for the three and nine month periods of  1996,
from  83%  and  72% exclusive of the $500,000, respectively,
for the same periods in 1995.  The Company plans to continue
high  levels  of  research and development  expenditures  in
order   to   become  the  market  leader  in   the   storage
marketplace.   The Company expects research and  development
spending  in the fourth quarter of 1996 to remain relatively
constant.

Selling,  general and administrative expenses  decreased  by
$245,000 and $1,734,000, respectively for the three and nine
month  periods of 1996 when compared to 1995.  The  decrease
is  attributable  to  cost reduction actions  taken  in  the
second  quarter  of 1995 to adjust expenses to  levels  more
consistent  with  the declining revenue  base.   During  the
three-month  period ending September 29, 1996,  the  Company
spent  $765,000 to launch a new marketing campaign aimed  at
the  storage marketplace and focusing on the Infinity SP and
its'  innovative  DataShare  Facility.   Additionally,   the
Company  incurred  charges  of  $589,000  related   to   the
extension   of  stock  options  for  certain  officers   and
employees  as discussed in Note F of the Notes to  Condensed
Consolidated Financial Statements.  As a percentage  of  net
sales,  selling, general and administrative costs  were  59%
and  66%, respectively, for the three and nine-months  ended
September  29,  1996 compared to 81% and 75%,  respectively,
for the comparable three and nine month periods of 1995.  An
increase  in  sales, general and administrative expenses  is
expected  in the near term as the Company expands its  sales
and marketing efforts for the Storage Product.

During  the second quarter of 1995 management evaluated  the
Company's  latest financial projections, and concluded;  (i)
the  termination  of  the  Amdahl  contract  resulted  in  a
significant  delay  in the realization of product  revenues,
(ii)  the rate of decline in real-time equipment and service
revenues had exceeded its previous estimates and (iii)   the
rate  of worldwide sales growth anticipated in newer product
lines  remained  significantly below projected  levels.   In
light  of  these  conclusions, management  restructured  its
operations   and   recorded  a  charge  to   operations   of
$4,499,000.   The  most significant of  these  restructuring
actions  were;  (i)  a  95  person  reduction  in  workforce
primarily in manufacturing and development, resulting  in  a
severance  charge  of  $1,335,000,  (ii)  a  write  down  of
$782,000 in the carrying value of the equipment used in  the
support of the Amdahl Agreement and (iii)  the write off  of
$1,123,000 of  capitalized software assets relating  to  the
Company's UNIX based product lines.

Interest  expense for the three month period ended September
29, 1996 was $911,000 versus $380,000 for the same period in
1995.   Interest expense primarily reflects interest charges
under the Gould Credit Agreement.  For the nine-month period
ended September 29, 1996 interest expense decreased $441,000
to  $2,149,000 when compared to the nine month period  ended
October  1, 1995.  This decrease is due to various exchanges
of indebtedness for preferred stock.

Other expense primarily consists of foreign exchange gain or
loss.   The Company realized gains in the nine month  period
ending  October 1, 1995 and losses in the comparable  period
in  1996.   The  foreign exchange effect  on  the  Company's
financial results is minimal over time.

Income  taxes for the three and nine month periods  of  1995
related   to   profitable  operations  of  certain   foreign
subsidiaries.   For  the comparable  three  and  nine  month
periods of 1996 the Company has not recorded a provision for
income  taxes as a result of losses incurred and  large  net
operating loss carryforwards.

LIQUIDITY AND CAPITAL RESOURCES:

Since  1989, the primary source of financing for the Company
has been provided by Japan Energy Corporation and its wholly
owned  subsidiaries, Gould Electronics, Inc. and  EFI,  Inc.
(the  "Japan  Energy Group").  The Japan  Energy  Group  has
provided  the  Company with its revolving  credit  facility,
loan  guarantees,  refinanced  subordinated  debentures  and
entered  into  various  exchanges of  indebtedness  for  the
Company's  preferred  stock.   As  of  September  29,  1996,
assuming  full  conversion of its holdings in the  Company's
preferred  stock,  the Japan Energy Group beneficially  owns
78% of the Company's common stock.

During  the  past  five  years,  the  Company  has  incurred
significant operating losses and has been unable to generate
cash  flows from operating activities.  As of September  29,
1996,  the  Company had a capital deficiency of $13,215,000.
Cash  used in operating activities for the nine month period
ended September 29, 1996 amounted to $50,723,000 compared to
$40,304,000  for  the  same  period  in  1995.   Among   the
significant  uses of cash in the nine months of  1996  were;
(i)  the  net  loss for the period of $49,657,000  and  (ii)
inventory acquisitions of $13,181,000, primarily related  to
the  Storage  Product.   Non  cash  expenses  included;  (i)
depreciation and amortization of $8,510,000, (ii)  increased
obsolescence  reserves  of $3,395,000  and  (iii)  non  cash
compensation of $589,000 as discussed in Note F of the Notes
to  Condensed Consolidated Financial Statements.   Increased
accounts  receivable of $3,684,000 were partially offset  by
increased  accounts  payable  and  accrued  liabilities   of
$3,042,000.

During  the nine-month periods ended September 29, 1996  and
October  1,  1995, expenditures for property  and  equipment
were   $5,309,000   and   $2,918,000,   respectively   while
expenditures    for  capitalized  software   were   $0   and
$1,231,000,  respectively.  Purchases of   Customer  Service
spare parts in support of the Storage Product acccounted for
46% of total spending for property and equipment in the nine-
month period ended September 29, 1996.

Cash  provided  by financing activities for  the  nine-month
periods  ended  September  29,  1996  and  October  1,  1995
amounted to $57,013,000 and $44,894,000, respectively.   The
principal source of financing has been through various  loan
agreements  provided by Japan Energy Group.   On  April  16,
1996  the  Japan  Energy  Group  continued  its  support  as
discussed  in  Note E of the Notes to Condensed Consolidated
Financial Statements by; (i) accepting Preferred Series  "H"
Stock in exchange for $35,000,000 of debt and (ii) providing
a  $65,000,000 line of credit.  Gould also has  allowed  the
Company  to borrow additional funds in excess of the maximum
limit.   As  of  November 12, 1996,  Encore  owed  to  Gould
$65,744,351 in debt, plus $9,751,000 in accrued interest.

During  the  next twelve months and until such time  in  the
future  as  the  Company returns to  a  state  of  continued
profitability, it will have to fund its operating activities
through   further  financing  activities.
Based   on  the  Company's  cash  flow  projections,
management  believes the amounts currently  available  under
its credit agreement with Gould should be sufficient to meet
its  needs  through year end.  The Company is in the process
of developing alternative financing sources.
Should the  Japan  Energy  Group
withdraw  its' financial support before the Company  returns
to  profitability  and alternative financing sources are not
obtained, the Company will suffer a severe liquidity  crisis
and  it  will have difficulties settling its liabilities  in
the normal course of business.


                    Part II - Other Information

Item 6.  Exhibits and Reports on Form 8-K
    (a)  Exhibits required by Item 601 of Regulation S-K
         Exhibit No. 11 - Statement re: computation
             of per share earnings.  See page 21.
         Exhibit  No. 27 - Financial Data Schedule.  See page 22.
    (b)  Reports on Form 8-K
           No reports on Form 8-K were filed by the Company during the
           quarter ended September 29, 1996.

                        Encore Computer Corporation

                              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.

Encore Computer Corporation
Date:November 13, 1996

                        KENNETH G. FISHER           EDWARD J. BAKER
                        _________________           _______________
                        Kenneth G. Fisher           Edward J. Baker
                        Chairman of the Board       Corporate Controller
                        and Chief Executive Officer Secretary
                                                    Chief Accounting
                                                    Officer