<PAGE>
                                FORM 10Q

                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549

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

                   For Quarter Ended September 30, 1997

                        Commission File No. 0-18200

                     ARMANINO FOODS OF DISTINCTION, INC.
            ------------------------------------------------------
            (Exact name of registrant as specified in its charter)

            COLORADO                                        84-1041418
---------------------------------            --------------------------------
(State or other jurisdiction                 (I.R.S. Employer Identification
of incorporation or organization)                        Number)
   
                 30588 San Antonio Street, Hayward, CA  94544
              -------------------------------------------------
              (Address of principal executive office)(Zip Code)

Registrant's telephone number, including area code: (510) 441-9300

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 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 ---

Number of registrant's common shares outstanding at September 30, 1997: 
11,246,399.
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
              Condensed Consolidated Balance Sheets
                           (Unaudited)
     
                              ASSETS
                                             September 30,     December 31, 
                                                 1997              1996
Current Assets:                              ------------      -----------
  Cash and cash equivalents                  $ 1,961,744       $   742,856
  Treasury bills, held to maturity             1,462,463         3,990,912
  Accounts receivable                          1,046,325         1,698,339
  Inventory                                    1,375,189         1,066,904
  Prepaid expenses                               256,387           108,106
  Current deferred tax asset                     570,483           656,000
                                             -----------       -----------
    Total Current Assets                       6,672,591         8,263,117

Property and Equipment, Net                    4,804,414         2,599,936 

Other Assets:
  Deposits                                        13,000           477,610
  Goodwill, net                                  553,938           585,438
                                             -----------       -----------
    Total Other Assets                           566,938         1,063,048 
                                             -----------       -----------
    Total Assets                             $12,043,943       $11,926,101
                                             -----------       -----------

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued expenses      $ 1,060,930       $   999,476
  Income taxes payable                           178,967                 -
  Notes payable                                        -            32,073
  Current portion of long-term debt               27,558            25,749
  Line of credit payable                               -                 -
  Net liabilities of discontinued operations           -            75,145
                                             -----------       -----------
    Total Current Liabilities                  1,267,455         1,132,443

Deferred tax liability                           126,000           126,000

Long-term debt                                    25,660            45,850
                                             -----------       -----------
    Total Liabilities                          1,419,115         1,304,293

Stockholders' Equity: 
  Common stock                                11,136,042        11,529,739
  Additional paid in capital                      22,311            22,311
  Accumulated deficit                           (533,525)         (930,242)
                                             -----------       -----------
    Total Stockholders' Equity                10,624,828        10,621,808
                                             -----------       -----------
    Total Liabilities and 
      Stockholders' Equity                   $12,043,943       $11,926,101
                                             -----------       -----------
The accompanying notes are an integral part of these condensed financial
statements. The balances for December 31, 1996 were taken from the audited
financial statements at that date and condensed. 
                               -2-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
         Condensed Consolidated Statements of Operations
        For the Quarter Ended September 30, 1997 and 1996
                           (Unaudited)
                                               September 30,  September 30,
                                                    1997          1996 
                                                ------------   ------------
Net Sales                                        $3,807,454     $3,642,270

Cost of Goods Sold                                2,626,888      2,511,373
                                                -----------    -----------
    Gross Profit                                  1,180,566      1,130,897
                                                -----------    -----------
Operating Expenses:
  General and administrative                        417,428        289,893
  Salaries and wages                                196,372        218,371
  Commissions                                        67,451         91,093
  Advertising, demonstrations, promotions,   
     and slotting allowances                        239,297        184,153
                                                -----------    -----------
    Total Operating Expenses                        920,548        783,510
                                                -----------    -----------
Income (Loss) From Operations                       260,018        347,387

Other Income                                         43,564         73,905
                                                -----------    -----------
Income From Continuing Operations Before
     Income Taxes                                   303,582        421,292

Current Tax Expense                                  81,967         29,490

Deferred Tax Expense                                 39,466        139,027
                                                -----------    -----------
Income From Continuing Operations Before
     Discontinued Operations                        182,149        252,775
Net (Loss) From Discontinued Operations 
     Of AFDI, Inc.                                        -       (111,218) 
                                                -----------    -----------
Net Income                                      $   182,149    $   141,557
                                                -----------    -----------
Primary Earnings per Common share:
     Continuing Operations                      $       .02    $       .02
     Discontinued Operations                            .00           (.01)
                                                -----------    -----------
     Net Earnings                               $       .02    $       .01
                                                -----------    -----------
Weighted Average Common Shares Outstanding       11,471,505     12,453,958
                                                -----------    -----------
Fully Diluted Earnings per Common share:
     Continuing Operations                      $       .02    $       .02
     Discontinued Operations                            .00           (.01)
                                                -----------    -----------
     Net Earnings                               $       .02    $       .01
                                                -----------    -----------
Weighted Average Common Shares Outstanding       11,523,421     12,617,407
                                                -----------    -----------
The accompanying notes are an integral part of these condensed financial
statements.    
                               -3-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
         Condensed Consolidated Statements of Operations
      For the Nine Months Ended September 30, 1997 and 1996
                           (Unaudited)

                                            September 30,   September 30,
                                                 1997           1996 
                                             ------------   ------------
Net Sales                                    $10,894,179    $10,540,175

Cost of Goods Sold                             7,503,863      7,050,294

    Gross Profit                               3,390,316      3,489,881

Operating Expenses:
  General and administrative                   1,163,070        809,275
  Salaries and wages                             843,056        817,211
  Commissions                                    246,923        290,444
  Advertising, demonstrations, promotions,
     and slotting allowances                     629,497        520,762

    Total Operating Expenses                   2,882,546      2,437,692
     
Income From Operations                           507,770      1,052,189

Other Income                                     153,431        194,256

Income From Continuing Operations Before     
     Income Taxes                                661,201      1,246,445

Current Tax Expense                              178,967         87,251
Deferred Tax Expense                              85,517        411,327

Income From Continuing Operations Before
     Discontinued Operations                     396,717        747,867

Net (Loss) From Discontinued Operations
     Of AFDI, Inc.                                     -       (170,587)

Net Income                                    $  396,717    $   577,280

Primary Earnings per Common Share: 
     Continuing Operations                    $      .04            .06
     Discontinued operations                         .00            .01
     Net Earnings                             $      .04            .05

Weighted Average Common Shares Outstanding    11,466,637     12,125,090

The accompanying notes are an integral part of these condensed financial
statements.
                               -4-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
         Condensed Consolidated Statements of Cash Flows
      For the Nine Months Ended September 30, 1997 and 1996
                           (Unaudited)

                                             September 30,  September 30,
                                                 1997           1996
Cash Flows From Operating Activities:        ------------   ------------
  Net income                                 $   396,717    $   577,280    
                                             -----------    -----------
  Adjustment to reconcile net income to net
  cash (used for) provided by operations:
    Depreciation and amortization                319,427        278,161
    Changes in assets and liabilities:
    Decrease in accounts receivable              652,014        241,186
    (Increase)Decrease in inventories           (308,285)        46,502 
    (Increase)Decrease in prepaid expenses      (148,281)      (143,592)
    (Increase)in other assets                          -       (150,715)
    Decrease in deferred tax assets               85,517        384,854
    Increase(Decrease)in accounts payable     
     and accrued expenses                         61,454       (266,436)
    Increase in income taxes payable             178,967              -
    Increase (Decrease) in net liabilities
      of discontinued operations                 (75,145)             -
                                             -----------    -----------
     Total Adjustments                           765,668        389,960
                                             -----------    -----------
Net Cash Provided By Operating Activities      1,162,385        967,240
                                             -----------    -----------
Cash Flows To Investing Activities:
  Organizational costs paid                            -        (42,776)
  Purchase of Goodwill                                 -       (609,938)
  Decrease(Increase) in deposits for
     equipment purchases                         464,610              -
  Capital expenditures                        (2,492,405)      (706,695)
  Reduction (Increase) in U.S. treasury 
     bills, net                                2,528,449     (1,436,561)
                                             -----------    -----------
Net Cash (Used For) Investing Activities         500,654     (2,795,970)
                                             -----------    -----------
Cash Flows From Financing Activities:
  Issuance of common stock                        13,356      2,731,865
  Purchase of treasury stock                    (407,053)             -
  Payments on capital lease obligations          (18,381)       (17,405) 
  Increase in borrowings                               -         47,520       
Payments on notes payable                        (32,073)             -
                                             -----------    -----------
Net Cash (Used For) Provided By  
  Financing Activities                          (444,151)     2,761,980
                                             -----------    -----------
Net Increase (Decrease) In Cash and
  Cash Equivalents                             1,218,888        933,250

Cash and Cash Equivalents Beginning of Period    742,856        746,250
                                             -----------    -----------
Cash and Cash Equivalents End of Period      $ 1,961,744    $ 1,679,500  
                                             -----------    -----------
The accompanying notes are an integral part of these condensed financial
statement.
                               -5-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                        September 30, 1997
                           (Unaudited)

Note 1 - BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information.  Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements.  In the opinion of management,
all adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation have been included.  It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the December 31, 1996
audited financial statements for Armanino Foods of Distinction, Inc.  The
results of operations for the periods ended September 30, 1997 and 1996 are
not necessarily indicative of the operating results for the full year.

     During the first quarter of 1997, the Company discontinued the
operations of AFDI, Inc.  The financial statements for the prior period have
been restated to reflect the operating results of AFDI, Inc. as discontinued
operations.

     The condensed consolidated financial statements include the accounts of
Armanino Foods of Distinction, Inc. ("Parent") and it's wholly-owned
subsidiary Alborough, Inc. (dba "Emilia Romagna").

     For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments (Treasury Bills) purchased with a maturity of
three months or less to be cash equivalents.  

     The calculation of primary earnings per share is based on the weighted
average number of outstanding common shares during the period plus, when their
effect is dilutive, additional shares assuming the exercise of certain vested
and non-vested stock options and warrants reduced by the number of shares
which could be repurchased with the proceeds.  Fully dilutive earnings per
share are not presented as their effect for the nine months ended September
30, 1997 and September 30, 1996 was anti-dilutive.

     The Company acquired a subsidiary (Alborough, Inc.) during May, 1996. 
The Company recorded goodwill in the amount of $609,938 as part of the
purchase.  The Company is amortizing the goodwill over 15 years, on a straight
line basis.
                               -6-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                        September 30, 1997
                           (Unaudited)

Note 2 - INVENTORY

     Inventory is carried at the lower of cost or market with cost being
determined on the first-in, first-out method and consisted of the following at
September 30, 1997 and December 31, 1996:

                                    September 30,     December 31,
                                         1997            1996
                                     ------------     -----------
     Raw materials & supplies           609,484       $   275,472    
     Finished goods                     765,705           791,432
                                    $ 1,375,189       $ 1,066,904

Note 3 - RELATED PARTY TRANSACTIONS

     The Company incurred $23,788 and $20,027 respectively, for the nine
months ended September 30, 1997 and 1996, in accounting and consulting fees to
Polly, Scatena, Gekakis & Co., an accounting firm, the managing partner of
which is also a stockholder and director of the Company.  Services provided by
the accounting firm are an extension of the internal accounting functions of
the Company, as well as management, business and systems consulting.

Note 4 - INCENTIVE COMPENSATION

     The Company has accrued $50,000 and $130,000 for the nine months ended
September 30, 1997 and September 30, 1996 respectively, for its management and
employee incentive compensation plans.  These amounts are based on achieving a
predetermined level of sales, net income and personal goals and objectives. 
For the current year this amount is eligible for distribution only when the
(1) predetermined level of sales and net income and/or (2) personal goals and
objectives are achieved. 

Note 5 - PROPERTY AND EQUIPMENT

     Property and equipment consists of the following:

                                   September 30,  December 31,
                                       1997          1996
                                    ------------  -----------
     Furniture & Office Equipment   $  259,594     $  224,968
     Plant Machinery & Equipment     4,170,721      2,096,048
     Leasehold Improvements          1,760,758      1,389,223
                                    ----------     ----------
                                     6,191,073      3,710,239

     Accumulated Depreciation        1,386,659      1,110,303 
                                    ----------     ----------
                                    $4,804,414     $2,599,936
                                    ----------     ----------
                               -7-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                        September 30, 1997
                           (Unaudited)

Note 5 - PROPERTY AND EQUIPMENT (Continued)

     As of September 30, 1997 the Company placed in service equipment and
leasehold improvements totaling $2,492,405 which had been acquired since 1996. 
At December 31, 1996, $464,610 of these purchases were included in deposits.

Note 6 - LINE OF CREDIT

     As of September 30, 1997 the Company had a $500,000 line of credit. 
This line of credit provides for interest at prime plus .75% with a maturity
date of September 10, 1998.  At September 30, 1997, there was no balance
outstanding on this line of credit.  This line of credit is secured by the
Company's inventory, accounts receivable and equipment.

Note 7 - INCOME TAXES

     The Company accounts for income taxes in accordance with FASB Statement
109, "Accounting for Income Taxes."  

     As of September 30, 1997 and December 31, 1996 the net deferred tax
assets and liabilities consisted of the following:

                                    September 30,     December 31,
                                        1997             1996     
                                    ------------      -----------
     Current deferred tax asset     $  570,483         $  656,000
     Deferred Tax Liability           (126,000)          (126,000)

     Management estimates that the Company will generate adequate net profits
to offset net operating loss carryforwards prior to the expiration of the net
operating loss carryforwards.  Consequently, a deferred tax asset valuation
allowance has not been accrued.

Note 8 - COMMON STOCK

     The Company  received $9,250, for the nine months ended September 30,
1997, from the issuance of 10,000 shares at $.925 in connection with options
exercised, under the 1993 Stock Option Plan.  Additionally, the Company issued
5,000 shares of restricted stock valued at $4,106 to a consultant.  This
issuance was recorded as compensation expense.  

     During the nine months ended September 30, 1997, the Company purchased
352,700 shares of common stock for $407,503 on the open market to be retired
by the Company.
                               -8-
<PAGE>
                  PART I - FINANCIAL INFORMATION
               ARMANINO FOODS OF DISTINCTION, INC.
       Notes to Condensed Consolidated Financial Statements
                        September 30, 1997
                           (Unaudited)

Note 9 - ACQUISITION OF SUBSIDIARY

     On May 20, 1996, the Company acquired all of the outstanding common
stock of Alborough, Inc., (dba Emilia Romagna), in a business combination
accounted for as a purchase.  Alborough, Inc. is primarily engaged in the
manufacturing of gourmet Italian foods.  The results of operations of
Alborough, Inc. is included in the accompanying financial statements since the
date of acquisition.  The total cost of the acquisition was $738,779, which
exceeded the fair market value of the net assets of Alborough, Inc. by
$609,938.  The excess is recorded as goodwill and is being amortized over 15
years.  The purchase price could increase significantly depending upon
Alborough, Inc. meeting certain earnings performance criteria over the 3 year
period subsequent to the consummation of the purchase agreement.  The
agreement between the parties provides that additional payments may be earned
by Alborough, Inc's previous shareholders based on a percentage of gross
margin attributable to sales made to specified customers.  The sales must be
made during a specified period of time and subject to certain minimum sales
levels being achieved.  As of September 30, 1997, no additional payments have
been made to Alborough Inc.'s former shareholders as minimum sales to the
specified customers had not been achieved.

Note 10 - DISCONTINUED OPERATIONS

     During the first quarter of 1997 the Company closed its quick service
Italian restaurant locations and discontinued the operations of AFDI, Inc.  
The Company completed the disposition of the business during the second
quarter of 1997.  AFDI, Inc. is reported as a discontinued operation for the
year ended December 31, 1996.

Note 11 - CONTINGENCIES

     On June 11, 1997, Mass Marketing Services filed a lawsuit in Superior
Court of San Diego County, California against Armanino Foods of Distinction
seeking damages for breach of contract, open book account and reasonable value
of services rendered.  The lawsuit arose after the Company terminated its
sales representation agreement with Mass Marketing.  Mass Marketing asserts
that it is entitled to an additional ten months of commissions (approximately
$100,000) and attorney s fees under the agreement.  The parties agreed to
arbitrate the dispute in San Mateo County, California.  No date has been set
for the arbitration.  Management cannot reasonably predict the ultimate
outcome, but believes that it will not have a material effect on the Company's
financial position.  The Company intends to vigorously defend their position. 
                               -9-
<PAGE>
                  PART I - FINANCIAL INFORMATION
   ITEM II:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

Quarter and Nine Months Ended September 30, 1997 v. Quarter and Nine Months
Ended September 30, 1996

     Net sales for the quarter ended September 30, 1997 were $3,807,454 as
compared to $3,642,270 for the quarter ended September 30, 1996.  For the nine
months ended September 30, 1997, net sales were $10,894,179 as compared to
$10,540,175 for the nine months ended September 30, 1996.  The small increase
is primarily attributed to a 13% increase in the foodservice pesto sales and
the inclusion of sales of Emilia Romagna, the Company s subsidiary, for a full
nine months in 1997 vs. four months in 1996.  These additional sales were
offset by lower pasta sales to a club store customer.  In August 1996 this
club store customer decided to buy its pasta products from a different
manufacturer. In September 1997, this club store customer agreed to place one
of the Company s pastas back into a limited number of stores on a trial basis. 
The Company is optimistic that this trial will lead to placements of the
Company s pasta products in additional locations of this club store customer. 
Meatball sales for the first nine months increased 2% from the same period
last year.  The club store customer has made a decision to start its own
manufacturing operations for the meatball products.  The Company anticipates
total meatball sales will be approximately 28% lower due to reduced sales to
this club store customer for the fourth quarter of 1997 compared to prior year
same quarter.  The Company expects no sales from this club store customer in
1998.  The Company is experiencing positive pressures from the market place
for new items which will be produced on the new pasta/entree line which the
Company placed in service during September of 1997.  The Company is presently
in the start-up phase of the new entree line and expects to phase up to full
operations by the beginning of the second quarter of 1998.

     Cost of goods sold as a percentage of net sales remained at 69% for the
quarter ended September 30, 1997 compared to the quarter ended September 30,
1996.  Cost of goods sold as a percentage of net sales increased from 67% for
the nine months ended September 30, 1996 to 69% for the nine months ended
September 30, 1997. This increase was primarily due to a change in the product
mix.  The change in the product mix was the result of purchasing a new
subsidiary (Alborough, Inc.).  The new products of the subsidiary currently
have lower margins than some of the Company's other products.  Additionally,
higher freight charges to one of the customers of the subsidiary increased
this percentage.

     Operating expenses as a percentage of net sales were approximately 24.2%
for the quarter ended September 30, 1997 as compared to 21.5% for the quarter
ended September 30, 1996.  Operating expenses for the first nine months of
1997 were approximately 26.5% as compared to 23.1% for first nine months of
1996.  The increase is primarily due to increases in general and
administrative expenses and salaries expense.  General and administrative
expenses increased due to the acquisition of Alborough, Inc., increase in
outside professional fees and the hiring of a public relations firm. 
Additionally, the revision the packaging design and merchandising materials
for the Company's product lines added to this expense. Salaries increased due
to additional personnel at the Company. 

     Net income from continuing operations was $182,149 for the quarter ended
September 30, 1997 compared to $252,775 for the quarter ended September 30,
1996.  Net income  from continuing operations was $396,717 for the nine months
ended September 30, 1997, as compared to $747,867 for the nine months ended
September 30, 1996.  The decrease in net income from continuing operations for
the quarter and nine months is attributed to lower gross margins due to the
change in the product mix and an increase in operating expenses.
                               -10-
<PAGE>
                  PART I - FINANCIAL INFORMATION

   ITEM II:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1997 V. QUARTER AND NINE MONTHS
ENDED SEPTEMBER 30, 1996

LIQUIDITY AND CAPITAL RESOURCES

     At September 30, 1997, the Company had working capital of $5,405,136, a
decrease of $1,725,538 from December 31, 1996.  The decrease was primarily due
to purchases of pasta equipment and leasehold improvements.  Current assets as
of September 30, 1997 included $4,470,532 in cash and cash equivalents, U.S.
treasury bills, and accounts receivable.  Management believes that this level
of working capital is adequate to meet anticipated needs for liquidity.

     During the nine months ended September 30, 1997, cash provided by
operating activities of the Company amounted to $1,162,385.  This was
primarily a result of the decrease in accounts receivable.

     In September 1994, the Company obtained a line of credit in the amount
of $500,000.  The line provides for interest at prime plus .75% with a
maturity date of September 10, 1998.  At September 30, 1997, there was no
balance outstanding on this line of credit.  The purpose for obtaining the
line of credit is to afford the Company greater cash liquidity.

     During the first nine months of 1997, the Company purchased 352,700
shares of common stock for $407,403 on the open market to be retired by the
Company.  The Company will consider purchasing additional shares on the open
market from time to time, based on market conditions.

     Since the fourth quarter of 1996, the Company has purchased
manufacturing equipment and leasehold improvements for the new pasta entree
line.  During the nine months ended September 30, 1997 the Company placed in
service this manufacturing equipment and leasehold improvements totaling
$2,420,798 at the Hayward, California facility.

     On May 20, 1996, the Company purchased all of the outstanding stock of
Alborough, Inc. (dba Emilia Romagna).  The total cost of the acquisition was
$738,779 including professional fees paid in relation to the acquisition. 
Additionally, the terms of the agreement include an "earn-out" formula which 
provides for payments to Alborough shareholders over a three year period based
on certain performance criteria established.  The purchase price could
increase significantly depending upon Alborough, Inc. meeting certain earnings
performance criteria over the 3 year period subsequent to the consummation of
the purchase agreement.  The agreement between the parties provides that
additional payments may be earned by Alborough, Inc. shareholders based on a
percentage of gross margin attributable to sales made to specified customers. 
The sales must be made during a specified period of time and subject to
certain minimum sales levels being achieved.  As of September 30, 1997, the
Company has not incurred any additional cost due to this provision.
                               -11-
<PAGE>
                             PART II
                        OTHER INFORMATION

II.  OTHER INFORMATION

Item 1.   Legal Proceedings

On June 11, 1997, Mass Marketing Services filed a lawsuit in Superior Court of
San Diego County, California against Armanino Foods of Distinction seeking
damages for breach of contract, open book account and reasonable value of
services rendered.  The lawsuit arose after the Company terminated its sales 
representation agreement with Mass Marketing.  Mass Marketing asserts that it
is entitled to an additional ten months of  commissions (approximately
$100,000) and attorney's fees under the agreement.  The parties agreed to
arbitrate the dispute in San Mateo County, California.  No date has been set
for the arbitration.  Management cannot reasonably predict the ultimate
outcome, but believes that it will not have a material effect on the Company's
financial position.  The Company intends to vigorously defend their position. 

Item 2.   Changes In Securities
               
During the quarter ended September 30, 1997, the Company sold 5,000 shares of
its Common Stock which were not registered under the Security Act of 1933, as
amended, to Jim Drewitz, a consultant to the Company, in exchange for services
valued at $4,106.  In connection with this issuance, the Company relied on 
Section 4(2) of the Securities Act of 1933, as amended.  The shares were
offered for investment only to a sophisticated investor and not for the
purpose of resale or distribution, and the transfer thereof was appropriately
restricted by the Company.

Item 3.   Defaults Upon Senior Securities.  None

Item 4.   Submission Of Matters To A Vote Of Security Holders.  None
               
Item 5.   Other Information.  None

Item 6.   Exhibits And Reports On Form 8-K
          A.  Exhibit
               27 - Financial Data Schedule       Filed herewith
                                                  electronically
          B.  Reports on Form 8-K - None 


                            SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the
undersigned thereunto duly authorized.

                              ARMANINO FOODS OF DISTINCTION, INC.

                              By  /s/ William J. Armanino
Dated: November 6, 1997                 William J. Armanino
                                        President
                                        Chief Executive Officer
                                        Chief Financial Officer
                                        Treasurer  
                               -13-
<PAGE>
                          EXHIBIT INDEX
     EXHIBIT                            METHOD OF FILING
27.  Financial Data Schedule       Filed herewith electronically