SECURITIES AND EXCHANGE COMMISSION
                              
                        Washington, D. C.  20549





                                 Form 10-Q



          ____________________________________________________________


          Quarterly Report Pursuant To Section 13 or 15 (d) of the
                   Securities Exchange Act of 1934



For quarter ended January 31, 1996       Commission file number 0-12195



                             THERMWOOD CORPORATION

        ____________________________________________________________
           (Exact name of Registrant as specified in its charter)


                INDIANA                               35-1169185
   ____________________________                 __________________________
     (State or other jurisdiction of            (I.R.S.  Employer
     incorporation or organization)              Identification No.)



    P. O. Box 436, Dale, Indiana                           47523
  _______________________________                ________________________
(Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code: 812-937-4476


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, and (2) has been subject to such
filing requirements for the past 90 days.  Yes X No


Common Stock, no par value, 6,283,146 shares outstanding as of January 31, 1996


<TABLE>
                             THERMWOOD CORPORATION
                      CONDENSED STATEMENTS OF OPERATIONS
                                (Unaudited)
 Item 1.                                                     
                                                          
                                Three Months Ended     Six Months Ended
                                   January 31             January 31
                            ----------------------    -----------------------
                                1996       1995          1996         1995
                            -----------  ----------   ----------- -----------
                                                                
<S>                         <C>          <C>          <C>         <C>
SALES                       $3,225,514   $3,217,182   $7,076,811  $6,400,943
Less commissions               345,540      353,258      860,287     720,598
                            ----------   ----------   ----------- ----------   
NET SALES                    2,879,974    2,863,924    6,216,524   5,680,345
                                                                
COST OF SALES                1,777,134    1,746,212    3,857,635   3,498,000
                            ----------   ----------   ----------  ----------  
GROSS PROFIT                 1,102,840    1,117,712    2,358,889   2,182,345
                                                                
RESEARCH AND DEVELOPMENT,                                   
MARKETING, ADMINISTRATIVE
AND GENERAL EXPENSES           822,066      776,860    1,777,807   1,513,613
                            ----------   ----------   ----------  ----------   
OPERATING PROFIT               280,774      340,852      581,082     668,732
                                                                
OTHER INCOME (EXPENSE):                                         
                                                                
 Interest expense -
   related party                  (277)      (2,195)        (986)     (4,853)
 Interest expense - other      (40,485)     (70,373)    (104,747)   (144,248)
 Other                          (2,528)       2,327        7,984      22,837
                            -----------   ----------   ----------  ----------   
  Net other income (expense)   (43,290)     (70,241)     (97,749)   (126,264)
                            -----------   ----------   ----------  ----------  
EARNINGS BEFORE INCOME TAXES   237,484      270,611      483,333     542,468
                                                                
Income taxes                         0            0            0       5,000
                            -----------   ----------   ----------  ----------  
NET EARNINGS                  $237,484     $270,611     $483,333    $537,468
                                                                
Earnings per common and common                                 
 equivalent share:
    Primary                        .02         .04          .05         .07
    Assuming full dilution         .02         .04          .05         .07
                                                                   
Average number of common                                   
 shares outstanding
    Primary                  6,396,721   5,149,546    6,174,131    5,155,429
    Assuming full dilution   7,357,721   7,219,546    7,135,131    7,225,429
                                                                
                                                                
See notes to condensed financial statements.
</TABLE>
<TABLE>
                                THERMWOOD CORPORATION
                               CONDENSED BALANCE SHEETS
                                    (Unaudited)
Item 1.    (Continued)                            
                                           
                                           January 31                July 31
                                              1996                     1995
                                        ---------------          -------------
<S>                                         <C>                    <C>
ASSETS
Current Assets                                           
    Cash                                    $    90,344             $   10,544
    Accounts receivable                         699,171              1,181,599
    Inventories--Note B                       3,220,427              3,008,947
    Deferred income taxes                       454,000                454,000
    Prepaid expenses                            283,261                375,165
                                             ----------             ---------- 
        Total Current Assets                  4,747,203              5,030,255
                                             ----------             ----------  
 Property and Equipment (Net of 
   Accumulated Depreciation                   1,523,571              1,502,977
                                                         
Other Assets                                             
   Patents, trademarks and other                149,163                211,861
   Deferred income taxes                        782,000                782,000
                                             ----------              ---------  
    Total Other Assets                          931,163                993,861
                                             ----------              ---------  
    Total Assets                             $7,201,937             $7,527,093
                                             ----------             ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities                                      
     Accounts payable                           770,537               792,544
     Accrued liabilities                        690,790               752,688
     Customer deposits                          290,045               642,359
     Current portion of long-term      
       liabilities                                5,842                31,598  
                                             ----------            -----------  
   Total Current Liabilities                  1,757,214             2,219,189
                                                         
Long-term Liabilities - less current portion
     Capital lease obligations                   18,715                21,738
     Bonds payable, net of           
      unamortized discount                      861,554             1,848,684
                                              ---------            -----------  
         Total Long-term Liabilities            880,269             1,870,422
                                              ---------            ----------- 
Shareholders' Equity                                     
  Preferred Stock, no par value                            
   2,000,000 shares authorized, and
   1,000,000 shares issued and outstanding     3,302,819            3,437,120
  Common stock, no par value, 20,000,000                         
   shares authorized, 6,283,146 and 5,149,546
   shares issued and outstanding               9,955,993            8,988,897
      Less subscriptions receivable              (20,000)                   0  
  Accumulated deficit                         (8,674,358)          (8,988,535)
                                              -----------          -----------  
    Total Shareholders' Equity                 4,564,454            3,437,482
                                              -----------          ----------- 
Total Liabilities and Shareholders' Equity    $7,201,937           $7,527,093
                                              ===========          ===========  
                                                         
See notes to condensed financial statements.
</TABLE>
<TABLE>
                                                        
                           THERMWOOD CORPORATION                 
                    CONDENSED STATEMENTS OF CASH FLOWS
                              (Unaudited)
Item 1. (Continued)                          
                                            Six Months Ended January 31
                                             1996              1995
                                          --------------  ---------------       
<S>                                           <C>             <C>
OPERATING ACTIVITIES:
Net earnings                                   $483,333        $537,468
                                                   
                             
 Adjustments to reconcile net earnings
  to net cash provided by operating                           
  activities:
    Depreciation and amortization              167,656         146,657
    Amortization of bond discount               14,665          13,579
    Gain on sale of assets                     (15,630)              0
                                                   
Changes in operating assets and liabilities:
    Accounts receivable                        482,428        (263,492)
    Inventories                               (211,480)       (309,028) 
    Prepaid expenses                            91,904          21,304
    Other assets                                     0          (5,265)
    Accounts payable                           (22,007)        119,402
    Accrued liabilities                        (61,898)        (32,404)
    Customer deposits                         (352,314)         63,261
                                              ---------      ----------     
Net cash provided by operating activities      576,657         291,482
                                              ---------      ----------     
INVESTING ACTIVITIES:                              
    Proceeds on sale of fixed assets            40,000               0
    Purchases of property and equipment       (209,122)        (65,577)
                                              ---------      ----------       
Net cash used by investing activities         (169,122)        (65,577)
                                              ---------      ----------       
FINANCING ACTIVITIES:                              
   Principal payments on long-term liabilities (28,778)        (29,539)
   Payment of dividends on preferred stock    (169,156)       (196,054)
   Redemption of preferred stock              (134,301)              0
   Exercise of qualified stock options           4,500               0
                                              ---------       ---------      
Net cash used by financing activities         (327,735)       (225,593)
                                              ---------       ---------     
Increase in cash                                79,800             312
Cash, beginning of period                       10,544           9,707
                                              ---------       ---------     
Cash, end of period                           $ 90,344        $ 10,019
                                              =========       =========
ADDITIONAL INFORMATION:                            
Interest paid                                 $ 90,030        $127,146
                                              =========       =========     
Conversion of bonds payable,                   
net of unamortized discount                   $942,596        $      0
                                              =========       =========     
Subscriptions receivable for
  common stock issued                         $ 20,000        $      0   
                                              =========       =========       
Assets acquired under capital lease           $      0        $ 31,929
                                              =========       =========      
</TABLE>

See notes to condensed financial statements.

NOTES TO CONDENSEDFINANCIAL STATEMENTS:

Note A - Basis of Presentation
_______________________

The unaudited condensed financial statements have been
prepared in accordance with the instructions to Form l0-Q
and, therefore, do not include all information and footnotes
required by generally accepted accounting principles for
complete financial statements.  The statements have not been
examined by independent accountants but include, in the
opinion of the Company, all adjustments (consisting of
normal recurring adjustments) necessary to present fairly
the condensed financial position and the results of
operations for the periods presented.  These financial
statements should be read in conjunction with the Company's
financial statements included on Form 10-K for the year
ended July 31, 1995 and Form 10-Q for the quarter ended
January 31, 1995.

Operating results for the interim periods are not
necessarily indicative of the results that may be expected
for the year ended July 31, 1996.

Note B - Inventories
________________

Inventories are priced at the lower of cost (first-in, first-
out method) or market.
<TABLE>
                           January 31      July 31     
Components of                 1996           1995      
inventory:                ------------    ----------
                                                      
  <S>                      <C>           <C>
   Raw material             $1,839,257    $1,753,104  
   Work in process             934,735       995,106  
   Finished goods              446,435       260,737  
                            ----------    ----------                          
Total                       $3,220,427    $3,008,947  
                            ==========    ==========                          
</TABLE>
Note C - Reclassifications
_____________________

Certain amounts presented in the prior year condensed
financial statements have been reclassified to conform to
the current year presentation.

Note D - Earnings per Share
____________________________

Primary earnings per common and common equivalent share is
based on net earnings less preferred stock dividend
requirements and the weighted average number of common
shares outstanding adjusted for the incremental shares
attributed to dilutive stock options and warrants using the
treasury stock method.

Earnings per share assuming full dilution is determined by
dividing net earnings attributable to common shareholders
plus interest and amortization expense (net of income taxes)
related to convertible debentures by the sum of the weighted
average number of common shares outstanding and the
incremental shares attributed to dilutive common stock
equivalents and  the assumed conversion of the convertible
debentures.

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

Results of Operations
---------------------
Net sales for the quarter ended January 31, 1996 were
$2,879,974 a slight increase of less than 1% compared to
second quarter net sales in fiscal 1995 and a decrease of
approximately 14%  from the first quarter of fiscal year
1996.  Net sales for the six months of the current fiscal
year were $6,216,524, an increase of $536,179, or 9.4%, from
last year's six-month period.

Gross profit for the current quarter was $1,102,840, a
decrease of 1.3% from the second quarter last year and a
decrease of 12% from the first quarter of 1996.  Gross
profit for the six months ended January 31, 1996 was an
increase of approximately $177,000, or 8%, over the same
period for fiscal year 1995.  Gross profit margin as a
percentage of net sales was 38.3% for the quarter ended
January 31, 1996 compared to 37.7% for the first quarter of
fiscal 1996 and 39.0% during the second quarter of fiscal
year 1995 and decreased from 38.4% to 37.9% for the six
month periods ended January 31, 1995 and 1996, respectively.

The lower gross margin for the second quarter of fiscal 1996
and increased research and development, marketing,
administrative and general expenses resulted in a decrease
of approximately $33,000 from net earnings of $270,611 for the 
second quarter of fiscal year 1995 to $237,484 for the second
quarter of fiscal year 1996.

Research and development, marketing and administrative
expenses  increased slightly for the second quarter of
fiscal year 1996 compared to the same period in 1995 but
decreased approximately $134,000 or 14% from the first
quarter of 1996.  Some marketing expenses in the first
quarter of fiscal 1996 did not recur during the second
quarter.

Interest expense in the second quarter of fiscal year 1996
was $40,762, a decrease of  approximately 43.8% from $72,568
for the same quarter last year and a decrease of 5.6% over
the first quarter of fiscal year 1996.  For the six-month
period ended 1996, interest expense was $105,733 compared to
$149,101 for the same period of fiscal year 1995, a decrease
of approximately 29%.  This lower level of interest is due
primarily to a reduction of approximately $1.1 million in
long-term 12% debentures which were voluntarily converted to
common stock.  The remaining balance of  debentures is
approximately $861,000, net of unamortized discount, at
January 31, 1996.

Liquidity and Capital Resources
-------------------------------
At January 31, 1996 the Company's working capital was
$2,989,989 compared to $2,811,066 at July 31, 1995.  This
increase was primarily due to cash generated from
operations.  The Company is now purchasing bulk quantities
of raw materials in order to produce many components which
were previously purchased already machined, thus increasing
inventory approximately $211,000.  Several machines were
built to a certain point before options were added in
anticipation of the needs of customers for a prompt
delivery.  While this contributed to an increase in
inventory, the faster delivery schedules contributed to a
lower level of customer deposits which decreased by
approximately $352,000 from July 31, 1995.

Backlog  decreased during the second fiscal quarter ended
January 31, 1996 to $900,000 compared to $1,300,000 at the
end of the preceding quarter. Accounts receivable decreased because 
of lower sales levels in November and December due to the slowing of 
orders in September and October.  Sales in January and February picked
up because of increased orders in the months of November and December, 
and it appears that on the basis of these results, accounts receivable
and sales will continue at more normal levels.


PART II.  OTHER INFORMATION

    ITEM 1.  LEGAL PROCEEDINGS:

             None.


    ITEM 2.  CHANGES IN SECURITIES:

A total of  $431,000 of 12% convertible debentures were
converted to 431,000 common shares at a price of $1 per
share during the quarter ended January 31, 1996.  These
debentures combined with those converted during the first
quarter of fiscal 1996 equal a total of $1,109,000 debentures
converted year to date.  An additional 1,600 shares of common
shares were issued during the quarter ended January 31, 1996
due to the exercise of qualified stock options by employees.
The year-to-date total of qualified stock options exercised is 24,600.


       ITEM 3.  DEFAULTS UPON SENIOR SECURITIES:

         a.  None.

         b.  Not applicable.


    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.  Exhibits.  None.

         b.  Reports on Form 8-K.  None were filed during the quarter.

                                 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.

                    THERMWOOD CORPORATION
                    __________________________
                    (Registrant)



Date____________ By__________________________________________
                 Kenneth J. Susnjara
                 President (Principal Executive Officer)



Date____________ By__________________________________________
                 Rebecca F. Fuller
                 Treasurer (Principal Financial Officer)