UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM 10-Q


[X]      Quarterly Report Pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934.
[ ]      Transition Report Pursuant to Section 13 or 15(d) of the
         Securities Exchange Act of 1934.

For Quarter Ended September 30, 1997
Commission File Number 0-11951



                                 JSCE, Inc.                                  
            
            (Exact name of registrant as specified in its charter)

       Delaware                                 37-1337160         
(State or other jurisdiction of   (IRS Employer Identification No.) 
 incorporation or organization)

     8182 Maryland Avenue,  St. Louis, Missouri          63105  
   (Address of principal executive offices)           (Zip Code)

                               (314) 746-1100                      
              (Registrant's telephone number, including area code)

                               Not Applicable                      
              (Former name, former address and former fiscal year,
               if changed since last report)

      Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.  Yes  X      No     


                     APPLICABLE ONLY TO CORPORATE ISSUERS:


      As of September 30, 1997, the registrant had outstanding 1,000
shares of common stock, $.01 par value per share.
<PAGE>
                        PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements
<TABLE>
                                   JSCE, Inc.         
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In millions)
                                  (Unaudited)
<CAPTION>
                                           Three months ended    Nine months ended 
                                             September 30,          September 30, 
                                            1997        1996       1997       1996
<S>                                        <C>         <C>       <C>        <C>
Net sales                                  $ 832       $ 834     $2,395     $2,594

Costs and expenses
  Cost of goods sold                         703         683      2,054      2,083
  Selling and administrative expenses         64          65        193        195

    Income from operations                    65          86        148        316

  Interest expense, net                      (48)        (48)      (142)      (147)
            
        
    Income before income taxes and
      extraordinary item                      17          38          6        169

Provision for income taxes                     9          16          9         67

    Income (loss) before extraordinary item    8          22         (3)       102

Extraordinary item
  Loss from early extinguishment of debt,
    net of income tax benefits                                                  (4)
 
    Net income (loss)                      $   8       $  22     $   (3)   $    98
</TABLE>

See notes to consolidated financial statements.
<PAGE>
<TABLE>
                                     JSCE, Inc.         
                            CONSOLIDATED BALANCE SHEETS
                         (In millions, except share data)
<CAPTION>
                                                   September 30,     December 31,
                                                       1997               1996    
                                                     (unaudited)
<S>                                                  <C>                 <C>
Assets                        
Current assets
  Cash and cash equivalents                          $    12             $    12
  Receivables, less allowances of
    $10 in 1997 and $9 in 1996                           316                 279
  Inventories
    Work-in-process and finished goods                    92                  81
    Materials and supplies                               132                 126 
                                                         224                 207

  Deferred income taxes                                   41                  46
  Prepaid expenses and other current assets                8                   8 
    Total current assets                                 601                 552

Net property, plant and equipment                      1,497               1,466
                                                    
Timberland, less timber depletion                        266                 263

Goodwill, less accumulated amortization of
  $56 in 1997 and $50 in 1996                            241                 246
Other assets                                             147                 161
                                                     $ 2,752             $ 2,688 

Liabilities and Stockholder's Deficit
Current liabilities                                         
  Current maturities of long-term debt               $     9             $    10
  Accounts payable                                       311                 290
  Accrued compensation and payroll taxes                  85                  92
  Interest payable                                        48                  30
  Other accrued liabilities                               95                 103
    Total current liabilities                            548                 525

Long-term debt, less current maturities                1,986               1,934

Other long-term liabilities                              231                 241

Deferred income taxes                                    365                 363

Stockholder's deficit                                       
  Common stock, par value $.01 per share;
    1,000 shares authorized and outstanding
  Additional paid-in capital                           1,102               1,102
  Retained earnings (deficit)                         (1,480)             (1,477) 
    Total stockholder's deficit                         (378)               (375) 
                                                    $ 2,752              $ 2,688 
</TABLE>
See notes to consolidated financial statements.    
<PAGE>
<TABLE>
                                       JSCE, Inc.         
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     (In millions)
                                      (Unaudited)
<CAPTION>
                                                        Nine months ended  
                                                           September 30,    
                                                         1997        1996  

<S>                                                     <C>          <C>
Cash flows from operating activities                                       
  Net income (loss)                                     $   (3)      $   98
  Adjustments to reconcile net income (loss) to 
  net cash provided by operating activities
    Extraordinary loss from early extinguishment of debt                  7
    Depreciation, depletion and amortization                106         101
    Amortization of deferred debt issuance costs              8          10
    Deferred income taxes                                     7          25
    Non-cash employee benefit expense                         5          12
    Change in current assets and liabilities,
      net of effects from acquisitions
        Receivables                                         (38)          39
        Inventories                                         (16)          28
        Accounts payable and accrued liabilities             (4)          10
        Interest payable                                     18           16
        Income taxes payable                                 (2)           1
    Other, net                                               (2)          (3)
  Net cash provided by operating activities                  79          344

Cash flows from investing activities
  Property additions                                       (109)         (88)
  Timberland additions                                      (18)         (14)
  Construction funds held in escrow                           8           (8)
  Investment in affiliates and acquisitions                  (9)
  Proceeds from property and timberland disposals             5            5
  Net cash used for investing activities                   (123)        (105)

Cash flows from financing activities
  Net borrowings (repayments) under Accounts
    Receivable Securitization Program                        26          (25)
  Proceeds from long-term borrowings                                     261
  Net borrowings (repayments) of long-term 
    Debt and related premiums                                18         (486)
  Deferred debt issuance costs                                            (6)
  Net cash provided by (used for) financing activities       44         (256)

Decrease in cash and cash equivalents                         0          (17)
Cash and cash equivalents
  Beginning of period                                        12           27
  End of period                                          $   12       $   10
</TABLE>


See notes to consolidated financial statements.
<PAGE>
                                      JSCE, Inc.         
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Tabular amounts in millions)
                                     (Unaudited)
   
   
   1. Basis of Presentation
   
   The accompanying consolidated financial statements of JSCE, Inc.
  have been prepared in accordance with the instructions to Form
  10-Q and reflect all adjustments which management believes
  necessary (which include only normal recurring accruals) to
  present fairly the financial position and results of operations. 
  These statements, however, do not include all information and
  footnotes necessary for a complete presentation of financial
  position, results of operations and cash flows in conformity with
  generally accepted accounting principles.  Interim results may
  not necessarily be indicative of results which may be expected
  for any other interim period or for the year as a whole. For
  further information refer to the consolidated financial
  statements and footnotes included in the JSCE, Inc. Annual Report
  on Form 10-K for the year ended December 31, 1996, filed on
  February 26, 1997 with the Securities and Exchange Commission
  (the "JSCE 1996 10-K").
   
   JSCE, Inc. is a wholly-owned subsidiary of Jefferson Smurfit
  Corporation ("JSC").  JSCE, Inc. and where appropriate, its
  consolidated subsidiaries, are hereinafter collectively referred
  to as "JSCE" or the "Company".  JSC has no operations other than
  its investment in the Company.  The Company owns a 100% equity
  interest in Jefferson Smurfit Corporation (U.S.) ("JSC (U.S.)"). 
  JSC (U.S.) has extensive operations throughout the United States.
   
   
   
   2. Summarized Financial Information of JSC (U.S.)
   
   The following summarized financial information is presented for
  JSC (U.S.), a wholly-owned subsidiary of JSCE.  No separate
  financial statements are presented for JSC (U.S.) because the
  financial statements of JSC (U.S.) are identical to those of
  JSCE.  JSC (U.S.) is the issuer of the 1994 Senior Notes and the
  1993 Senior Notes and is the borrower under the 1994 Credit
  Agreement, each as defined in the JSCE 1996 10-K.  JSCE is the
  guarantor of the 1994 Senior Notes and the 1993 Senior Notes and
  is the guarantor under the 1994 Credit Agreement.
<PAGE>
   2. Summarized Financial Information of JSC (U.S.)
<TABLE>
<CAPTION>
   
   Condensed consolidated balance sheets:
                                                         September 30,   December 31,
                                                               1997           1996   
   
    
    <S>                                                   <C>            <C>   
    Current assets                                        $   601        $   552
    Property, plant and equipment and timberlands, net      1,763          1,729
    Goodwill                                                  241            246
    Other assets                                              147            161
     Total assets                                         $ 2,752        $ 2,688
    
    Current liabilities                                   $   548        $   525
    Long-term debt                                          1,986          1,934
    Other liabilities                                         596            604
    Stockholder's deficit
     Common stock                                                               
     Additional paid-in capital                             1,102          1,102
     Retained earnings (deficit)                           (1,480)        (1,477)
       Total stockholder's deficit                           (378)          (375)
     Total liabilities and stockholder's deficit          $ 2,752        $ 2,688
</TABLE>
    
    
    Condensed consolidated statements of operations:
<TABLE>
<CAPTION>
                                         Three months ended      Nine months ended
                                            September 30,           September 30,   
                                          1997         1996        1997       1996  
    
    <S>                                  <C>         <C>        <C>        <C>
    Net sales                            $ 832       $ 834      $ 2,395    $ 2,594 
    Costs and expenses                     767         748        2,247      2,278
    Interest expense                        48          48          142        147 
    Income before income taxes and
     extraordinary item                     17          38            6        169
    Provision for income taxes               9          16            9         67
    Extraordinary item
     Loss from early extinguishment of
       debt, net of income tax benefits                                         (4)
    
     Net income (loss)                   $   8       $  22      $    (3)   $    98
    
<PAGE>   
   Item 2.   Management's Discussion and Analysis of Financial Condition
   and Results of Operations

</TABLE>
<TABLE>
   
   Results of Operations
<CAPTION>
   
   (In millions)                         Three months ended    Nine months ended
                                           September 30,         September 30,   
                                           1997       1996       1997       1996
   <S>                                   <C>         <C>       <C>        <C> 
   Net sales
     Paperboard/Packaging Products       $ 753       $ 755     $2,173     $2,346
     Newsprint                              79          79        222        248
     Total net sales                     $ 832       $ 834     $2,395     $2,594
   
   
   Income from operations
     Paperboard/Packaging Products       $  56       $  78     $  132     $  263
     Newsprint                               9           8         16         53
     Total income from operations        $  65       $  86     $  148     $  316
</TABLE>
   
   
   The Company's net sales and income from operations for the three
  months and nine months ended September 30, 1997 declined compared to
  last year due primarily to product pricing.  For the three months ended
  September 30, 1997, the Company's net sales were comparable and income
  from operations declined 24% compared to last year.  For the nine
  months ended September 30, 1997, the Company's net sales declined 8%
  and income from operations declined 53% compared to last year.  The
  decline in net sales due to sales price and product mix for the three
  months ended September 30, 1997 was nearly offset by higher sales
  volumes.  The net sales impact of changes in price and product mix,
  shipment volumes, new plants and closed operations are shown in the
  chart below.
<TABLE>
<CAPTION>
   
   (In millions)                             Change in net sales analysis             
                                      Three months             Nine months 
                                    1997 compared to 1996   1997 compared to 1996
   <S>                                   <C>                        <C>
   Sales price and product mix
     Paperboard/Packaging Products       $ (25)                     $(219)
     Newsprint                              (1)                       (73)
                                           (26)                      (292)
   
   Sales volume
     Paperboard/Packaging Products           23                         52
     Newsprint                                1                         47
                                             24                         99
   
   Acquisitions and new facilities
     Paperboard/Packaging Products            8                         19
   
   Closed or sold facilities
     Paperboard/Packaging Products           (8)                       (25)  
   
     Total net sales decrease             $  (2)                     $(199)
</TABLE>
<PAGE>
     
Paperboard/Packaging Products Segment
For the three months ended September 30, 1997, net sales of the
Paperboard/ Packaging Products segment were $753 million, a
decrease of $2 million compared to last year and income from
operations was $56 million, a decrease of $22 million compared to
last year.  The net sales decline was due primarily to lower
product prices for many of the Company's major products,
particularly for containerboard and corrugated shipping containers.
Increases in shipment volume for many of the Company's major
products partially offset the declines due to the lower product
prices. The major changes in net sales price and shipments within
the product groups of the Paperboard/Packaging Products segment are
discussed below. 
      
For the three months ended September 30, 1997, net sales of
containerboard and corrugated shipping containers were $352
million, a decline of $24 million compared to last year.  Strong
demand for containerboard and corrugated shipping containers
enabled the Company to successfully implement price increases for
these products.  Liner and medium prices were increased by $40 per
ton and $30 per ton, respectively, during the quarter and
corrugated shipping container prices were increased beginning
September 1, 1997 and will be fully implemented in the fourth
quarter. Despite the increases, average prices for containerboard
and corrugated shipping containers during the quarter were lower
than last year by 4% and 9%, respectively. Pricing of corrugated
shipping containers was flat, however, when compared to the second
quarter of 1997.  An additional containerboard price increase of
$50 per ton was implemented by the Company on October 1, 1997, and
a 12% price increase for corrugated shipping containers effective
November 17, 1997 was announced. No assurance can be given however,
that the announced increase will be successful. Shipments of
corrugated shipping containers during the third quarter increased
by 5% compared to last year.  
   
Net sales of reclaimed fiber and virgin wood fiber for the third
quarter were $99 million, an increase of $27 million compared to
last year.   Reclaimed fiber shipments were also strong during the
third quarter, increasing 6% compared to last year.  Reclaimed
fiber prices during the third quarter were approximately $30 per
ton higher, on average, compared to last year.
   
Net sales of the other products in this segment for the third
quarter were lower than last year by 2% overall, due primarily to
lower prices and plant closures.
   
For the nine months ended September 30, 1997, net sales of the
Paperboard/ Packaging Products segment decreased $173 million to
$2,173 million, a 7% drop compared to the same period in 1996 and
income from operations decreased to $132 million, a  50% drop
compared to the same period last year.  The decreases in net sales
and income from operations were primarily a result of the
significant price reductions in containerboard and corrugated
shipping containers, particularly as compared to the first half of
1996. 

Net sales of containerboard and corrugated shipping containers for
the year-to-date period were $1,042 million, a decline of $186
million compared to last year. Average prices for containerboard
and corrugated shipping containers were lower than last year by 18%
and 16%, respectively, for the year-to-date period.  Demand for
corrugated shipping containers has been strong throughout 1997,
with sales volume increasing by 7% compared to last year.  The
Company took downtime, amounting to 23,000 tons, at two of its
containerboard mills in the second quarter of 1997.  Additional
downtime is expected in the fourth quarter of 1997, including a
ten-day shutdown of three containerboard mills in December and a
21-day shutdown of the Company's mottled white paper machine in the
Brewton, AL mill for a major machine upgrade.  The downtime will
have a negative effect on fourth quarter profits.
<PAGE>
Net sales of reclaimed fiber and virgin wood fiber for the year-to-
date period were $257 million, an increase of $53 million compared
to last year.  Reclaimed fiber prices for the nine months ended
September 30, 1997 were 15% higher, on average, compared to last
year.  Reclaimed fiber shipments increased 9% for the year-to-date
period.

Net sales of the other products in this segment for the year-to-
date period were lower than last year by 4% overall, due primarily
to lower prices and plant closures.

Newsprint Segment
Net sales for the Newsprint segment for the three months ended
September 30, 1997, were $79 million, the same as last year.
Strengthening demand for newsprint enabled the Company to implement
a $75 per metric ton increase in the price of newsprint during the
second quarter of 1997. Despite the increase, the average sales
price during the third quarter was lower than last year by
approximately $30 per metric ton.  The impact of the price decline
was offset by increased sales volume.  Sales volume was 5% higher
than last year during the third quarter.  Income from operations
for the third quarter was $9 million, an increase of $1 million
compared to last year. 
         
For the nine months ended September 30, 1997 net sales for the newsprint
segment were $222 million, a decline of $26 million compared to last year,
and income from operations was $16 million, a decline of $37 million 
compared to last year.  The declines were due to lower average newsprint
prices, which, on average, were lower than last year by $155 per metric
ton, or 23%. Sales volume for the nine months ended September 30, 1997,
increased 29%, due in part to the downtime taken at the mills in 1996.
 
Costs and Expenses
The Company's cost of goods sold as a percent of net sales increased
compared to last year for the three months and nine months ended September
30, 1997 due primarily to overall lower sales prices and, to a lesser
extent, higher recycled fiber cost in 1997. In the Paperboard/Packaging
Products segment the percentage increased from 81% in 1996 to 85% in 1997
for the three months ended September 30 and increased from 81% in 1996 to
86% in 1997 for the nine months ended September 30. For the newsprint
segment, the percentage decreased from 86% in 1996 to 84% in 1997 for the
three month period and increased from 76% in 1996 to 89% in 1997 for the
nine month period. 
   
Selling and administrative expenses as a percent of net sales were
comparable to last year for the three months and were higher than last
year for the nine months ended September 30, 1997. Overall lower sales
prices were the primary reason for the increase in the percentage of
selling and administrative expenses to net sales for the nine months ended
September 30, 1997, compared to last year. The modest decline in selling
and administrative expenses was due primarily to lower employee benefits
cost. 
<PAGE> 
Interest expense was comparable to last year for the three months ended
September 30, 1997, but declined $5 million for the nine months ended
September 30, 1997.  The decrease for the year-to-date period was due
primarily to lower average debt levels outstanding.  The average effective
interest rate for the Company's outstanding debt was comparable for the
1997 and 1996 periods.

The provision for income taxes was $9 million for the three months ended
September 30, 1997 and $9 million for the nine months ended September 30,
1997.  The effective tax rates for the stated periods differed from the
Federal statutory tax rate due to several factors, the most significant of
which was the effect of permanent differences from applying purchase
accounting.

The Company will be required to adopt Statement of Financial Accounting
Standards No. 128, "Earnings Per Share", in the fourth quarter of 1997. 
The effect of the adoption of the new rules is expected to be immaterial
to reported earnings per share for the three months and nine months ended
September 30, 1997.
<TABLE>
<CAPTION>
      
      Statistical Data                 Three months ended         Nine months ended
       (In thousands of tons,             September 30,             September 30, 
            except as noted)              1997        1996         1997     1996 
      
      <S>                                  <C>         <C>        <C>      <C>
      Mill production:
        Containerboard                     512         510        1,464    1,463
        Recycled boxboard and
          solid bleached sulfate           207         198           615     579
        Newsprint                          159         142           474     417
      
      Sales volume:
        Corrugated shipping containers     531         505         1,563   1,461
        Corrugated shipping containers
          (billion square feet)            8.2         7.8          24.0    22.5
        Folding cartons                    124         118           351     350
        Fiber reclaimed and brokered     1,208       1,135         3,562   3,270
</TABLE>
      
      
   Liquidity and Capital Resources
 
   Operating activities have historically been the major source of cash to
   fund the Company's capital expenditures and debt payments.  Net cash
   provided by operating activities for the nine months ended September 30,
   1997 of $79 million and net borrowings of $44 million were used primarily
   to fund capital investments and acquisitions totaling $136 million. 
   During 1997, the Company acquired a corrugated shipping container plant in
   Florida and three Chicago-area recycling plants.  The Company shut down
   and sold a small uncoated recycled paperboard mill in Monroe, MI, which
   was unprofitable in recent years.  The Company also sold its plant in
   Farmingdale, NY, which produced fragranced advertising products.  During
   the third quarter, the Company purchased a 50,000 acre woodlands tract
   that complements its southern holdings.
 
   The Company's credit agreement (the "Credit Agreement") contains various
   business and financial covenants including, among other things,
   maintenance of minimum levels of consolidated earnings before
   depreciation, interest, taxes and amortization and maintenance of minimum
   interest coverage ratios.  In view of the economic downturn within the
   Company's business segments, particularly in the early part of 1997, the
   Company sought an amendment to the Credit Agreement to ease certain of its
   financial covenants.  The amendment to the Credit Agreement was granted in
   June 1997.  The Credit Agreement also requires prepayments if JSC (U.S.)
   has excess cash flows, as defined, or receives proceeds from certain asset
   sales, insurance, issuance of equity securities or incurrence of certain
   indebtedness.  
<PAGE> 
   Such restrictions, together with the highly leveraged position of the
   Company, could restrict corporate activities including the Company's
   ability to respond to market conditions, to provide for unanticipated
   capital expenditures or to take advantage of business opportunities.  
 
   At September 30, 1997, the Company had $299 million of unused borrowing
   capacity under its Credit Agreement and $109 million of unused borrowing
   capacity under its $315 million accounts receivable securitization
   program, subject to JSC (U.S.)'s level of eligible accounts receivable. 
   The Company believes that cash provided by operating activities and
   available financing sources will be sufficient for the next several years
   to pay interest on the Company's obligations, amortize its term loans and
   fund capital expenditures.
<PAGE>      
                            PART II - OTHER INFORMATION
             
     Item 1.   Legal Proceedings
        
      As previously reported, in January 1997, Smurfit Newsprint Corporation
      ("SNC"), a wholly owned subsidiary of Jefferson Smurfit Corporation
      ("JSC"), was sued in state court in South Carolina on a purported class-
      action basis, over an exterior siding product manufactured by SNC and
      known as Cladwood.  In June 1997, SNC was dismissed from the case for
      lack of jurisdiction.

      As previously reported, in July 1997, SNC was sued in federal court in
      Georgia on a purported class-action basis, over Cladwood.  Subsequently,
      Plaintiffs voluntarily dismissed the case in federal court and, in
      October 1997, filed a similar case in state court in Georgia, naming as
      defendants SNC and certain manufacturers and distributors of
      premanufactured homes in Georgia.  The newly-filed complaint alleges the
      same causes of action as were set forth in the federal court matter;
      namely, breach of warranty and negligence.  Plaintiffs seek an
      unspecified aggregate amount of actual, statutory and punitive damages. 
      SNC intends to vigorously defend the action.
   
       Item 2.  Changes in Securities - None
        
       Item 3.  Defaults Upon Senior Securities - None
        
       Item 4.  Submission of Matters to a Vote of Security Holders - None
        
       Item 5.  Other Information
        
      In August 1997, Mr. James R. Thompson resigned from the Board of
      Directors of the Company and Mr. Thomas A. Reynolds III was appointed
      to the Company's Board of Directors.  Mr. Reynolds is a partner in the
      law firm of Winston & Strawn.  Mr. Reynolds joined Winston and Strawn
      in 1983.  He is an adjunct faculty member at Northwestern University
      School of Law and is a member of the Board of Directors of Georgetown
      University.

      In October 1997, Mr. James Hoch resigned from the Board of Directors of
      the Company and Mr. Michael M. Janson was appointed to the Company's
      Board of Directors.  Mr. Janson is a Managing Director of Morgan Stanley
      Capital Partners III, Inc. and Morgan Stanley & Co. Inc. ("MS&CO").  Mr.
      Janson joined MS&Co in 1987 and MS&CO's Merchant Banking Division in
      1997.  He was previously a Managing Director in MS&CO's High Yield
      Capital Markets Department.  
        
      Item 6.   Exhibits and Reports on Form 8-K
        
          a)     The following exhibits are included in this Form 10-Q.
        
                 27.1   Financial Data Schedule.
        
          b)     Reports on Form 8-K

                 None
      
<PAGE>
                                  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.

                                    JSCE, Inc.            
                                   (Registrant)


Date  October 31, 1997                /s/  Patrick J. Moore     
                                           Patrick J. Moore
                                          Vice President and
                                       Chief Financial Officer
                                   (Principal Accounting Officer)