SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                  FORM 10-Q

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended March 29, 1998

                                      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. 0-12942

                             PARLEX CORPORATION
           (Exact Name of Registrant As Specified in its Charter)

          Massachusetts                                04-2464749
  (State or other jurisdiction of       (IRS Employer Identification Number)
   incorporation or organization)

145 Milk Street, Methuen, Massachusetts                   01844
(Address of principal executive offices)                (Zip Code)

                                978-685-4341
            (Registrant's telephone number, including area code)

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

                        YES   [X]             NO   [ ]

      The number of shares of the Registrant's Common Stock, par value $.10 
per share, outstanding at April 23, 1998, was 4,638,399 shares.


<PAGE>                              -1-


                             PARLEX CORPORATION


                                    INDEX


Part I - Financial Statements:

  Consolidated Balance Sheets - March 29, 1998 and June 30, 1997      3

  Consolidated Statements of Income - For the Three Months 
   and Nine Months Ended March 29, 1998 and March 30, 1997            4

  Consolidated Statements of Cash Flows - For the Nine Months 
   Ended March 29, 1998 and March 30, 1997                            5

Notes to Unaudited Consolidated Financial Statements                  6

Management's Discussion and Analysis of Financial Condition 
 and Results of Operations                                            8

Part II - Other Information                                          11

Signatures                                                           12

Exhibit Index                                                        13

Exhibit 11                                                           14


<PAGE>                              -2-


                     PARLEX CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                      March 29, 1998 and June 30, 1997
                                 (Unaudited)

<TABLE>
<CAPTION>
                                          March 29, 1998      June 30, 1997
                                          --------------      -------------

                                   ASSETS
<S>                                         <C>                <C>
Current assets: 
   Cash and cash equivalents                $14,253,495        $   596,614
   Accounts receivable - net                 10,504,059          9,029,388
   Inventories: 
      Raw material                            3,458,745          2,706,302
      Work in process                         5,738,612          4,556,175
   Deferred income taxes                        294,033            294,033
   Other current assets                       1,469,419            850,956
                                            ------------------------------
     Total current assets                    35,718,363         18,033,468
                                            ------------------------------
Property, plant and equipment: 
   Land                                         468,864            468,864
   Buildings                                  7,017,618          7,017,478
   Machinery and equipment                   24,764,774         22,823,785
   Leasehold improvements, construction
    in progress and other                     6,741,350          3,974,058
                                            ------------------------------
      Total                                  38,992,606         34,284,185
   Less accumulated depreciation
    and amortization                        (21,488,629)       (20,671,859)
                                            ------------------------------
      Property, plant and
       equipment - net                       17,503,977         13,612,326
                                            ------------------------------
Other assets                                    604,158            588,098
                                            ------------------------------
      Total                                 $53,826,498        $32,233,892
                                            ==============================

                    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: 
   Current portion of long-term debt                  -        $   500,000
   Bank loan                                $ 1,300,482            500,000
   Accounts payable                           5,338,760          5,047,284
   Accrued liabilities                        2,099,011          2,150,228
   Income taxes payable                        (154,158)           244,404
                                            ------------------------------
      Total current liabilities               8,584,095          8,441,916
                                            ------------------------------

Long-term debt                                  650,000          2,500,000
                                            ------------------------------

Other non-current liabilities                 2,351,997          1,986,924
                                            ------------------------------

Minority interest in Parlex (Shanghai)        1,795,991          1,521,363
                                            ------------------------------

Stockholders' equity 
   Preferred stock                                  -0-                -0-
   Common stock                                 484,729            379,875
   Additional paid-in capital                23,755,542          3,334,424
   Retained earnings                         17,249,938         15,111,769
   Less treasury stock at cost               (1,037,625)        (1,037,625)
   Cumulative translation adjustments            (8,169)            (4,754)
                                            ------------------------------
      Total Stockholders' equity             40,444,415         17,783,689
                                            ------------------------------
      Total                                 $53,826,498        $32,233,892
                                            ==============================
</TABLE>

See Notes to Unaudited Consolidated Financial Statements


<PAGE>                              -3-


                     PARLEX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
For the Three Months and Nine Months Ended March 29, 1998 and March 30, 1997
                                 (Unaudited)

<TABLE>
<CAPTION>
                                    Three Months Ended               Nine Months Ended
                            -------------------------------   -------------------------------
                            March 29, 1998   March 30, 1997   March 29, 1998   March 30, 1997
                            --------------   --------------   --------------   --------------

<S>                           <C>              <C>              <C>              <C>
Product sales                 $14,210,541      $13,202,672      $42,013,580      $40,007,384
License fees and royalties         85,411           22,046          183,007           92,803
                              --------------------------------------------------------------
Total Revenues                 14,295,952       13,224,718       42,196,587       40,100,187
                              --------------------------------------------------------------

Costs and Expenses: 
  Cost of products sold        11,268,857       10,239,384       33,123,743       32,624,343

  Selling, general and 
   administrative expenses      1,996,916        1,753,584        5,808,759        5,078,073
                              --------------------------------------------------------------

  Operating costs and
   expenses                    13,265,773       11,992,968       38,932,502       37,702,416
                              --------------------------------------------------------------

Operating income                1,030,179        1,231,750        3,264,085        2,397,771

Other income - (Note 2)           263,019            2,007          494,085          125,115

Interest expense                  (32,985)        (114,790)        (191,222)        (335,323)
                              --------------------------------------------------------------

Income before income taxes      1,260,213        1,118,967        3,566,948        2,187,563

Provision for income taxes       (399,800)        (437,600)      (1,154,150)        (844,500)
                              --------------------------------------------------------------

Net income before minority
 interest                         860,413          681,367        2,412,798        1,343,063

Minority interest (Note 3)        (37,463)         (38,587)        (274,630)          45,994
                              --------------------------------------------------------------

Net income (Notes 4, 5)       $   822,950      $   642,780      $ 2,138,168      $ 1,389,057
                              ==============================================================

Basic EPS                     $       .18      $       .18      $       .51      $       .39
                              --------------------------------------------------------------
Diluted EPS                   $       .17      $       .17      $       .49      $       .38
                              --------------------------------------------------------------

Weighted average shares -
 Basic                          4,620,229        3,574,541        4,180,671        3,563,625
                              ==============================================================
Weighted average shares -
 Diluted                        4,788,906        3,738,773        4,376,368        3,696,810
                              ==============================================================
</TABLE>

See Notes to Unaudited Consolidated Financial Statements


<PAGE>                              -4-


                     PARLEX CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
         For the Nine Months Ended March 29, 1998 and March 30, 1997
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                        March 29, 1998    March 30, 1997
                                                        --------------    --------------

<S>                                                      <C>               <C>
Cash Flows Provided by Operating Activities: 
Net income                                               $ 2,138,168       $ 1,389,057
                                                         -----------------------------

Adjustments to reconcile net income to net 
 cash provided by (used for)operating activities: 
  Depreciation and amortization                            1,761,352         1,429,288
  Gain on sale of equipment                                  (68,572)             (250)
  Deferred compensation                                       61,726            55,280
  Minority Interest                                          274,627           (50,477)
  Increase (decrease) in cash from:                  
    Accounts receivable - net                             (1,474,671)       (1,731,624)
    Inventories                                           (1,934,880)          185,241
    Other current assets                                    (618,463)          (61,930)
    Accounts payable                                         291,476           (33,217)
    Accrued liabilities                                      (51,216)          765,538
    Income taxes payable                                    (398,562)          493,928
                                                         -----------------------------
Total adjustments                                         (2,157,183)        1,051,777
                                                         -----------------------------

Net cash provided by (used for) operating activities         (19,015)        2,440,834
                                                         -----------------------------

Investment Activities: 
  Additions to property, plant and equipment              (5,359,472)       (2,078,826)
  Increase in other assets                                   (16,060)          (28,685)
  Proceeds from the sale of equipment                         77,800               250
                                                         -----------------------------
  Net cash used for investment activities                 (5,297,732)       (2,107,261)
                                                         -----------------------------

Financing Activities: 
  Repayments under revolving credit agreement             (2,350,000)         (125,000)
  Payments of long term debt                                                  (100,000)
  Loan payable - Joint Venture                               800,482            99,332                   
  Exercise of stock options and stock offering            20,525,972            68,962
                                                         -----------------------------
  Net cash (used for) from financing activities           18,976,454           (56,706)
                                                         -----------------------------
  Effect of exchange rate changes with cash                   (2,826)                -
                                                         -----------------------------

Net Increase in Cash and Cash Equivalents                 13,656,881           276,867

Cash and Cash Equivalents at Beginning of Period             596,614           386,608
                                                         -----------------------------

Cash and Cash Equivalents at End of Period               $14,253,495       $   663,475
                                                         =============================
</TABLE>

See Notes to Unaudited Consolidated Financial Statements


<PAGE>                              -5-


                     PARLEX CORPORATION AND SUBSIDIARIES

            Notes to Unaudited Consolidated Financial Statements

1.  Management Statement

      The financial statements as reported in Form 10-Q reflect all 
adjustments which are, in the opinion of management, necessary to present 
fairly the financial position as of  March 29, 1998 and the results of 
operations and cash flows for the three months and nine months ended March 
29, 1998, and March 30, 1997.  All adjustments made to the interim financial 
statements were of a normal recurring nature.

      The Company followed the same accounting policies in the preparation 
of these interim financial statements as described in the Company's annual 
filing on Form 10-K for the year ended June 30, 1997, and this filing should 
be read in conjunction with that annual report.

2.  Other Income

      In the current quarter this year, other income was comprised 
principally of interest income, and to a lesser extent, items of a 
miscellaneous nature, while last year other income contained no interest 
income.  For the first nine months, both this year and last, other income 
also included the gain on the sale of equipment.

3.  Joint Venture

      In May 1995, the Company entered into an agreement to establish a 
limited liability company in the form of a joint venture in the People's 
Republic of China.  The Company owns 50.1% of the joint venture.  The joint 
venture manufactures flexible printed circuits and commenced operations in 
September 1995.  The Company reports the financial results of this venture 
on a three month time lag. 

4.  Recent Accounting Pronouncements

      In March 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per 
Share."  The Company adopted this standard in the quarter ended December 28, 
1997, and restated all previously reported earnings per share information to 
conform with the new pronouncement's requirements.

      In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive 
Income," and SFAS No. 131, "Disclosures About Segments of an Enterprise and 
Related Information."  SFAS No. 130 establishes standards for reporting and 
display of comprehensive income and its components (revenues, expenses, 
gains and losses) in a full set of general purpose financial statements.  
SFAS No. 131 establishes standards for the manner in which public business 
enterprises report selected information about operating segments in annual 
financial statements and


<PAGE>                              -6-


requires that those enterprises report selected information about operating 
segments in interim financial reports. It also establishes standards for 
related disclosures about products and services, geographic areas and major 
customers. Both standards will be adopted by the Company during the first 
quarter of fiscal year 1999.

5.  Common Stock

      In October 1997, the Company completed a stock offering of 1,150,000 
shares of its common stock, of which 1,000,000 shares were issued by the 
Company and 150,000 were sold by selling shareholders.  After deducting 
underwriting discounts and commissions and offering expenses, the net 
proceeds to the Company approximated $20,000,000.


<PAGE>                              -7-


                   Management's Discussion and Analysis of
                Financial Condition and Results of Operations

Operations

      Total revenues in the third quarter of the current fiscal year were 
$14,295,952, an increase of 8% from the $13,224,718 reported in the 
corresponding period a year ago.  Revenues were generated primarily from 
product sales, while the remainder was derived from licensing and royalty 
fees.

      For the first nine months, revenues were $42,196,587, or 5% higher 
than the $40,100,187 reported last year.  For most of the current fiscal 
year, revenue has been constrained by equipment capacity which will be 
resolved substantially during the next quarter based upon the current 
equipment and facility expansion program.

      The cost of products sold as a percentage of revenue was 79%, a slight 
increase from the 77% reported in the third quarter last year. For the first 
nine months, the cost was 78% versus 81% for the same period last year.  The 
primary reason for the increase in the quarter was a change in product mix.  
The reduction over nine months is attributed to manufacturing efficiencies.

      The Company continues to focus on margin improvement.  Learning curves 
associated with the introduction of PALFlex(R), one of the Company's 
proprietary products, and the movement of certain finishing operations to a 
new manufacturing facility in Empalme, Mexico should have a positive 
influence on margins in the ensuing quarters.

      Selling, general, and administrative expenses as a percentage of 
revenue was 14% in the current quarter and for the first nine months this 
year versus 13% for the same periods last year.  The significant growth 
being experienced by Parlex (Shanghai), the Chinese joint venture, and the 
additional expenses associated with increasing the sales force in order to 
accommodate its future growth were the primary factors contributing to the 
increase.

      Other income in the current quarter was $263,019 as compared to $2,007 
in the third quarter last year.  For the first nine months, other income 
totaled $494,085 versus $125,115 last year.  In the current quarter, the 
principal portion of other income resulted from interest income, with the 
remainder comprised of items of a miscellaneous nature.  For the first nine 
months this year, other income also included the gain on the sale of 
equipment.  In the third quarter and first nine months of the prior year, 
other income was comprised of miscellaneous items and the sale of equipment.

      Interest expense was $32,985 this quarter as compared to $114,790 in 
the third quarter last year.  For the first nine months, interest expense 
was $191,222 versus $335,323 for the same period last year.  A portion of 
the proceeds from the secondary offering (refer to "Liquidity and Capital 
Revenues") were used to reduce the Company's long-term debt of $3,200,000 
(in October, 1997), which resulted in the reduction of interest expense.


<PAGE>                              -8-


      The above factors resulted in income before income taxes of $1,260,213 
and $3,566,948 for the third quarter and first nine months, respectively.  
This compares to $1,118,967 in the third quarter and $2,187,563 for the 
first nine months last year.

      The Company's effective tax rate this year is anticipated to 
approximate 32%, which is reflected in both the current quarter and year to 
date.  Last year, the Company's presumed tax rate was estimated at 39%.  The 
reduction in rate relates primarily to the Parlex (Shanghai) earnings 
generated thus far, which are not subject to income taxes in China.  The 
Company considers these earnings as being permanently reinvested in the 
Chinese venture.

      After providing for taxes and recognizing the minority interest in the 
Chinese joint venture, the Company's net income was $822,950 and $2,138,168 
for the current quarter and first nine months, respectively.  This compares 
to $642,780 and $1,389,057 for the respective time periods last year.

Recent Accounting Pronouncements

      In March 1997, the Financial Accounting Standards Board ("FASB") 
issued Statement of Financial Accounting Standards ("SFAS") No. 128, 
"Earnings Per Share".  The Company adopted this standard in the quarter 
ended December 28, 1997, and restated all previously reported earnings per 
share information to conform with the new pronouncement's requirements.

      In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive 
Income," and SFAS No. 131, "Disclosures About Segments of an Enterprise and 
Related Information."  SFAS No. 130 established standards for reporting and 
display of comprehensive income and its components (revenues, expenses, 
gains and losses) in a full set of general purpose financial statements.  
SFAS No. 131 established standards for the manner in which public business 
enterprises report information about operating segments in annual financial 
statements and requires that those enterprises report selected information 
about operating segments in interim financial reports.  It also establishes 
standards for related disclosures about products and services, geographic 
areas and major customers.  Both standards will be adopted by the Company 
during the first quarter of fiscal year 1999. 

Liquidity and Capital Resources

      In October 1997, the Company completed a stock offering of 1,000,000 
shares of its common stock, and these shares were priced at $22.00 per 
share.  After deducting underwriting discounts and commissions and offering 
expenses paid by the Company, the net proceeds to the Company approximated 
$20,000,000.


<PAGE>                              -9-


      Since the offering, the Company has paid off its revolver loan balance 
and plans to spend approximately $12,000,000 over the next two years to 
expand its manufacturing facilities and purchase capital equipment that will 
increase its manufacturing capacity and accommodate various new 
technological processes.  The remaining portion of the proceeds will be used 
for general corporate purposes.  Additionally, the Company has a $10,000,000 
unsecured revolving line of credit.  No monies have been borrowed against 
this line.

      The Company believes that its cash flow from operations, together with 
the proceeds from the offering and the amount available under its revolving 
credit facility, should be sufficient to meet the Company's foreseeable 
needs.

      The Company has a deferred compensation obligation that is owed to the 
Chairman of the Board of Directors.  Under the current arrangement, monthly 
payments begin in June 1999, or the first month after the termination of 
employment, whichever occurs first, and continues for no fewer than 60 
months or, at the election of the employee prior to his termination of 
employment, for up to 120 months.  Amounts to be paid within one year are 
not expected to be material.

"Safe Harbor" Statement Under the Private 
 Securities Litigation Reform Act of 1995

      This quarterly Report on Form 10-Q contains certain forward-looking 
statements as defined under the Federal Securities Laws.  The Company's 
actual results of operations may differ significantly from those 
contemplated by such forward-looking statements as a result of various 
factors beyond its control, including, but not limited to, economic 
conditions in the electronics industry, particularly in the principal 
industry sectors served by the Company, changes in customer requirements and 
in the volume of sales to principal customers, competition and technological 
change.


<PAGE>                              -10-


                         PART II - OTHER INFORMATION


      Items 1-5  THESE ITEMS ARE INAPPLICABLE

      Item 6     Exhibits and Reports on Form 8-K.

                 (a)  Exhibits - See Exhibit Index

                 (b)  The Company filed no reports on Form 8-K
                      during the quarter for which this report is filed.


<PAGE>                              -11-


                                 SIGNATURES


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


                                       PARLEX CORPORATION 


                                       By: /s/ Peter J. Murphy
                                          Peter J. Murphy
                                          President


                                       By: /s/ Steven M. Millstein
                                          Steven M. Millstein
                                          Vice President of Finance
                                          (Principal Accounting and 
                                          Financial Officer)



                                       May 13, 1998
                                       Date


PAGE>                               -12-


                                EXHIBIT INDEX


Exhibit      Description of Exhibit                                    Page
-------      ----------------------                                    ----

11           Statement Regarding Computation of Per Share Earnings

27           Financial Data Schedule


<PAGE>                              -13-