SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                              FORM 10-QSB

        [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                OF THE SECURITIES EXCHANGE ACT OF 1934
            For the quarterly period ended October 31, 1999
                                  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 Number:  0-12195

                 ________THERMWOOD CORPORATION_______
   (Exact name of small business issuer 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)

Issuer's telephone number, including area code:   (812) 937-4476

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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

Indicate  the  number of shares outstanding of each  of  the  issuer's
classes of common equity as of the latest practicable date.

                                                 Class
Outstanding at October 31, 1999        Common Stock, no par value
985,045  Shares


     Transitional Small Business Format (check one);  Yes        No  X
                      PART I.  FINANCIAL INFORMATION
<TABLE>
Item 1.   Financial Statements

                           THERMWOOD CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)

                                                  Three Months Ended
                                                       October 31
                                                 1999            1998
                                               ---------------------------
  <S>                                          <C>              <C>
  Sales
     Machine sales                             $5,639,238       $5,097,403
     Technical sales                            1,427,603        1,349,210
                                               ----------       ----------
                                                7,066,841        6,446,613
     Less commissions                             816,727          821,391
                                               ----------       ----------
  Net sales                                     6,250,114        5,625,222

  Cost of sales
     Machine sales                              2,984,458        2,618,678
     Technical sales                              604,676          617,156
                                               ----------       ----------
  Total cost of sales                           3,589,134        3,235,834

  Gross profit                                  2,660,980        2,389,388

  Research and development, marketing,
    administrative and general expenses         1,925,146        1,928,098
                                               ----------       ----------
       Operating income                           735,834          461,290
                                               ----------       ----------
  Other income (expense):
     Interest expense                           (190,103)         (56,921)
     Other income (expense)                      (16,830)            6,352
                                               ----------       ----------
     Other expense, net                         (206,933)         (50,569)

     Earnings before income taxes and
        extraordinary loss                        528,901          410,721

  Income tax expense                              210,000          192,026
                                               ----------       ----------
     Earnings before extraordinary loss           318,901          218,695

  Extraordinary loss on repurchase of
  bonds, net of income tax benefit               (30,728)                0
                                               ----------         --------
       Net earnings                              $288,173         $218,695
                                               ==========         ========
  Earnings per share:
     Basic                                          $0.29            $0.15
     Diluted                                        $0.29            $0.15

  Weighted average number of shares:
     Basic                                        985,045        1,440,976
     Diluted                                    1,007,553        1,481,327

 See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
                       THERMWOOD CORPORATION
               CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Unaudited)

                                         October 31       July 31
                                            1999           1999
                                        ------------   ------------
                 Assets
  Current assets
    <S>                                  <C>           <C>
     Cash                                 $   49,088    $   80,941
     Accounts receivable                   2,704,538     1,902,865
     Income taxes recoverable                135,457       135,457
     Inventories                           5,845,567     5,266,765
     Deferred income taxes                   655,000       655,000
     Prepaid expenses                        300,223       422,536
                                           ---------     ---------
       Total current assets                9,689,873     8,463,564
                                           ---------     ---------
  Property and equipment (net of
  accumulated depreciation)                2,728,476     2,766,859
                                          ----------     ---------
  Other assets
     Patents, trademarks and other           141,158       145,608
     Bond issuance costs net of
      accumulated amortization               457,011       481,179
     Deferred income taxes                   325,000       325,000
                                         -----------   -----------
       Total other assets                    923,169       951,787
                                         -----------   -----------
         Total assets                    $13,341,518   $12,182,210
                                         ===========   ===========
  Liabilities and Shareholders' Equity

  Current liabilities
      Accounts payable                  $  1,853,587   $ 1,144,634
      Accrued liabilities                  1,116,792       943,756
      Customer deposits                    1,634,084     1,080,337
      Current portion of long-term
       liabilities                            36,748        36,748
      Note payable to bank                 1,696,320     2,196,320
                                        ------------    ----------
       Total current liabilities           6,337,531     5,401,795
                                        ------------    ----------
  Long-term liabilities - less current portion
     Capital lease obligations                65,210        70,777
     Debentures payable net of
      unamortized discount                 2,854,150     2,913,184
                                        ------------    ----------
       Total long-term liabilities         2,919,360     2,983,961
                                        ------------    ----------
  Shareholders' equity
     Common stock, no par value, 4,000,000
  shares authorized, 985,045 shares
  issued and outstanding at October 31,
  1999 and July 31, 1999,  respectively   7,953,077     7,953,077

     Accumulated deficit                 (3,832,825)   (4,120,998)
                                         -----------   -----------
                                           4,120,252     3,832,079
     Less subscriptions receivable            35,625        35,625
                                         -----------   -----------
       Total shareholders' equity          4,084,627     3,796,454
                                         -----------   -----------
  Total liabilities and shareholders'
     equity                              $13,341,518   $12,182,210
                                         ===========   ===========

  See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
                      THERMWOOD CORPORATION
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)

                                          Three Months Ended
                                              October 31
                                          1999           1998
                                        -------------------------
  Cash Flows From Operating Activities:

  <S>                                      <C>          <C>
  Net earnings                             $288,173     $218,695

  Adjustments to reconcile net earnings
   to net cash provided by operating
   activities:
     Depreciation and amortization          229,228      104,707
     Changes in operating assets
       and liabilities:
       Accounts receivable                (801,673)    (373,098)
       Inventories                        (578,802)    (271,803)
       Prepaid expenses and other assets    122,313     (70,311)
       Accounts payable and other
         accrued expenses                   881,989      433,515
       Customer deposits                    553,747      108,276
                                         ----------   ----------
  Net cash provided by operating
     activities                             694,975      149,981
                                         ----------   ----------
  Cash Flows From Investing
  Activities:
   Purchases of property and equipment     (102,461)     (80,244)
                                         -----------  -----------
  Net cash used by investing activities    (102,461)     (80,244)
                                         -----------  -----------
  Cash Flows From Financing
  Activities:
   Principal payments on notes payable,
   lease obligations and long-term debt    (505,567)      (1,563)
   Redemption of debentures                (118,800)            0
                                         -----------  -----------
  Net cash used by financing activities    (624,367)      (1,563)

  Increase (decrease) in cash              (31,853)       68,174
  Cash, beginning of period                  80,941      115,937
                                          ----------   ----------
  Cash, end of period                     $  49,088     $184,111
                                          =========    ==========
  ADDITIONAL INFORMATION:
  Interest paid                            $206,835    $  54,588
                                       ============   ==========
  Conversion of bonds payable, net     $          0    $  64,391
  of unamortized discount              ============   ==========


  See notes to condensed
  consolidated financial statements.
</TABLE>





NOTES TO CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS:

Note A - Basis of Presentation
_________________________

The unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form l0-QSB 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 management, 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 consolidated financial statements
included on Form 10-KSB for the year ended July 31, 1999 and Form 10-
QSB for the quarter ended October 31, 1998.

Operating results for the interim periods are not necessarily
indicative of the results that may be expected for the year ending
July 31, 2000.

Note B - Inventories
_________________

Inventories are priced at the lower of cost (first-in, first-out
method) or market.
<TABLE>
                           October 31      July 31
Components of                 1999           1999
inventory:                 -----------    -----------

   <S>                     <C>            <C>
   Finished goods           $1,031,933     $  937,662
   Work in process           1,396,793      1,112,684
   Raw materials             3,416,841      3,216,418
                           -----------     ----------
Total                       $5,845,567     $5,266,765
                           ===========     ==========
</TABLE>
Note C - Reclassifications
________________________

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


Note D - Earnings per Share
______________________________

Earnings  per share for each of the three-month periods ended  October
31 were determined as follows:
<TABLE>
                                        1999                    1998
                                    Basic    Diluted        Basic     Diluted
Earnings:                        --------------------   ----------------------
<S>                            <C>        <C>          <C>         <C>
Earnings before
 extraordinary loss            $318,901    $318,901    $218,695    $218,695

Add interest expense on
 convertible debentures               0       3,300           0       3,840

Add amortization of discount
 on debentures and issuance costs     0         619           0       1,495

Income  tax effects of earnings
 adjustments                          0     (1,568)           0      (2,134)
                              ---------   ---------  ---------    ---------
Earnings  available  to  common
 shareholders                  $318,901    $321,252    $218,695    $221,896

Extraordinary loss, net of
 tax benefit                   (30,728)    (30,728)           0           0
                               --------   ----------  ---------    ---------
Net earnings available to
 common shareholders           $288,173    $290,524     $218,695   $221,896
                               ========   ==========    =========  ===========
Shares:

Outstanding                     985,045     985,045   1,440,976   1,440,976

Incremental shares related
 to dilutive stock options            0         508           0      17,751

Incremental shares related to
 convertible bonds                    0      22,000           0      22,600
                               --------   ---------   ---------   ---------
Total weighted-average shares   985,045   1,007,553   1,440,976   1,481,327
                               ========   =========   =========   =========

Earnings per share:

Income before extra-
 ordinary earnings                $0.32       $0.32       $0.15       $0.15

Extraordinary loss, net of
 income taxes                     (0.03)     (0.03)           0           0
                                --------   ---------   ----------   ----------

Net earnings                      $0.29      $0.29        $0.15       $0.15
                               ========   =========   ==========   ==========
</TABLE>
Item 2.   Management's Discussion and Analysis

Forward-Looking Statements

This Quarterly Report on Form 10-QSB contains certain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including, without limitation, statements
containing the words "believes," "anticipates," "expects," and words
of similar import.  Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, financial condition, performance or achievements of
the Company and its subsidiaries to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements.  Certain of these factors are
discussed in more detail elsewhere herein and in the Company's Annual
Report on form 10-KSB, including, without limitation, the sections:
"Description of Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."  Given these
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements.  The Company disclaims any obligation
to update any such forward-looking statements to reflect future events
or developments.

Results of Operations

Net sales for the quarter ended October 31, 1999 were $6,250,113, an
increase of 11% over the same quarter of the previous year.  Gross
profit for the current quarter was $2,660,980, an increase of 11% over
the first quarter last year. Cost of sales as a percentage of net
sales was 57.43%, approximately the same as the first quarter of last year.

Research and development, marketing, administrative and general
expenses were $1,925,146 compared with $1,928,098 for the first
quarter of fiscal 1999. Operating profit was $735,834 compared to
$461,290 for the same period in fiscal year 1999.  The 60% increase in
operating profit was a result of higher sales and lower marketing expenses.

Interest expense in the first quarter of fiscal year 2000 was
$190,103, an increase of approximately $133,000 from last year.  This
higher level is due to interest on 12% subordinated debentures that
were exchanged for stock in April, 1999. The subordinated debentures
were discounted to yeild an effective interest rate of 22%.  Earnings
before income taxes in the first quarter of fiscal year 2000 were
$528,901 compared to $410,721 in the first quarter of fiscal year
1999, or an increase of approximately 29%.  Federal income taxes were
accrued in the amount of $210,000, lowering earnings to a net of
$318,901 compared to $218,695 in the first quarter of fiscal 1999.
Income was further reduced by an extraordinary loss of $30,728, net of
taxes.  This was due to the repurchase of debentures with a face value
of $165,000 at a cost of $118,800.
Liquidity and Capital Resources

At October 31, 1999 the Company's working capital was $3,352,342
compared to $3,061,769 at July 31, 1999.  This increase was due to
cash generated from operations in excess of payments on notes payable
of $500,000.  Current backlog is approximately $3,192,000 compared
with $5,059,000 backlog at July 31, 1999.  The decrease is due to a
slowing of orders in the first quarter and shipment of much of the
backlog which existed at July 31, 1999.

Shareholders' equity increased from $3,796,454 at July 31, 1999 to
$4,084,627 in the three-month period ended October 31, 1999 due
entirely to net earnings.

Year 2000 Issues

Our  failure  to adequately prepare our computers and software  to  be
year  2000  compliant could disrupt our business  and  materially  and
adversely  affect  our operations.  Many currently installed  computer
systems  and  software products use two digits  rather  than  four  to
define  the applicable year.  In other words, date-sensitive  software
may  recognize a date using "00" as the year 1900 rather than the year
2000.  This could result in system failures or miscalculations causing
disruptions of operations, including, among other things, a  temporary
inability  to track inventory, issue purchase orders, write checks  or
engage in similar normal business activities.

During the fiscal year ended July 31, 1998, we began a risk evaluation
of  potential Year 2000 issues and formed a Year 2000 Committee  which
consists   of   the   Chief  Executive  Officer,   Vice-President   of
Engineering, Information Systems Manager and two other employees.  The
Committee's  purpose is to assess all risks, analyze current  systems,
including  all  information technology and non-information  technology
systems,  coordinate upgrades and replacements and report the  current
and projected status of all known Year 2000 compliance issues.

During  the  assessment phase, we identified computer-related  systems
and  software with potential Year 2000 problems.  In the first quarter
of  fiscal 1999, we began corresponding with the vendors that had  not
supplied  Year  2000 statements, requesting the Year  2000  compliance
status  of  their products.   Responses received to date from  vendors
have  not  indicated  any  Year  2000 problems.   We  have  identified
alternative vendors should our current vendors fail to perform due  to
Year  2000  problems; however, use of some of these vendors  would  be
inconvenient  and could be costly.   Moreover, we have  not  contacted
these  alternate  vendors  to determine whether  they  are  Year  2000
compliant.

As  a  precaution, we plan to stock additional inventory from our non-
U.S. vendors prior to the beginning of the year 2000.

One   mission-critical  system,  the  inventory  shop  floor   control
software, was not Year 2000 compliant.  This software tracked incoming
orders,  inventory levels, material requirements planning, shop  floor
control,  labor  tracking, shipping and administrative  and  financial
tracking functions.  We have  purchased a new system that is Year 2000
compliant and, in our judgment, superior to the  system we were using.
The  new system was installed during the fourth quarter of fiscal year
1999.   Upgrades to all of the non-mission critical systems have  been
completed as of July 31, 1999.

We  estimate that the replacement or remedial costs for our Year  2000
compliance  issues  have  been  less than  $150,000  and   consist  of
software  and  hardware upgrades that include new features  which  are
combined with Year 2000 corrections.  The majority of these costs have
been   expensed  as  incurred  or  capitalized  and  depreciated,   as
appropriate, during fiscal year 1999.

We  have  tested  the  machine control systems  and  related  computer
software which we sell and we believe that such equipment is Year 2000
compliant.

We  estimate that the worst case Year 2000 issue scenario would  occur
if  the  new  inventory shop floor control software is not  Year  2000
compliant.   At  that point, we would look to alternate  vendors.   We
believe  that  there are a number of alternate vendors that  claim  to
have Year 2000 compliant software.  In the event that we are unable to
integrate  Year 2000 compliant software from any of these vendors,  we
would  be forced to hire additional staff and return to manual methods
of  tracking inventory and purchasing raw materials.  We believe  that
we  could  implement this contingency plan within a  short  period  of
time.   However, until such time as this contingency plan took effect,
our  ability  to  manufacture  could  be  materially  disrupted.    In
addition, during the time that we were required to operate under  this
plan,  our results of operations would be adversely affected primarily
due  to the resulting increased administrative expense, and higher raw
materials  inventory levels that would be needed  to  assure  that  we
would have sufficient raw materials to avoid disruption of production.

                         THERMWOOD CORPORATION
                              FORM 10-QSB
                           October 31, 1999

                      PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item 2.  Changes in Securities and use of proceeds

None.

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

None.


                                             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    December 1, 1999          By__/s/ Kenneth J. Susnjara
____________________________
                                     Kenneth J. Susnjara
                                     President (Principal Executive Officer)



    Date    December 1, 1999         By___/s/ Rebecca F. Fuller
____________________________
                                     Rebecca F. Fuller
                                     Treasurer (Principal Financial Officer)