SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, DC 20549

                          FORM 10-QSB

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

         For the quarterly period ended August 31, 2004

     [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

    For the transition period from            to


                 Commission file number 0-17741


                          EPOLIN, INC.
(Exact name of Small Business Issuer as Specified in its Charter)


New Jersey                                               22-2547226
(State or Other Jurisdiction                       (I.R.S. Employer
of Incorporation or                                  Identification
Organization)                                               Number)

                      358-364 Adams Street
                    Newark, New Jersey 07105
            (Address of Principal Executive Offices)

                         (973) 465-9495
        (Issuer's Telephone Number, Including Area Code)

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   [      ]

State  the  number of shares outstanding of each of  the  Issuers
classes of common equity, as of the latest practicable date:

          Common, no par value per share: 11,852,855
                outstanding as of August 31, 2004

<PAGE>

                PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements.

      See  the Consolidated Financial Statements annexed to  this
report.


Item  2.    Management's  Discussion  and  Analysis  or  Plan  of
Operation.

     The  following discussion should be read in conjunction with
the Financial Statements included in this report and is qualified
in its entirety by the foregoing.

Forward-Looking Statements

      This report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs
and  assumptions  made  by the Company's management  as  well  as
information currently available to the management.  When used  in
this document, the words "anticipate", "believe", "estimate", and
"expect"  and  similar  expressions,  are  intended  to  identify
forward-looking statements.  Such statements reflect the  current
views  of  the  Company  with respect to future  events  and  are
subject to certain risks, uncertainties and assumptions.   Should
one  or  more  of  these risks or uncertainties  materialize,  or
should underlying assumptions prove incorrect, actual results may
vary  materially  from  those described  herein  as  anticipated,
believed,  estimated or expected.  Certain  of  these  risks  and
uncertainties  are  discussed in this report  under  the  caption
"Uncertainties  and Risk Factors" in Part I, Item 1  "Description
of  Business"  of the Company's Form 10-KSB for  the  year  ended
February  29, 2004.  The Company does not intend to update  these
forward-looking statements.

Executive Overview

     Epolin,  Inc.  (the  "Company") is  a  specialized  chemical
company   primarily  engaged  in  the  manufacturing,  marketing,
research  and  development  of dyes and  dye  formulations.   The
Company's  business is heavily weighted towards the  development,
manufacture  and  sale of near infrared dyes.   Applications  for
these  dyes  cover several markets that include laser protection,
welding,  sunglasses, optical filters, glazing  and  imaging  and
security   inks  and  tagants.   The  Company  also  manufactures
specialty   chemicals   for  certain   United   States   chemical
manufacturers.

      The  Company has succeeded in growing over the last  decade
based  on  the development, application and manufacture  of  near
infrared  dyes.  Although the Company does not rely upon  patents
for  protection  of  its  dye business, no  competitors,  to  the
Company's  knowledge, actively market near infrared dyes  without
bundling the dyes as part of another product.  The Company's dyes
can  be uniquely formulated to each customer's specifications and
manufactured  in  the Company's own facility.  In  addition,  the
Company  holds  a broad range of dyes in inventory for  immediate
sale.

       The  Company  sells  its  products  to  manufacturers   of
plastics/resins, credit cards, electronics, glass and other basic
materials.  The Company's customers are located in all regions of
the  world, although a material portion of the Company's business
is  dependent  on certain domestic customers, the loss  of  which
could  have  a  material effect on operations.   As  the  service
economy continues to dwarf the manufacturing sector in the United
States,  the  Company  anticipates  that  its  products  will  be
increasingly  used by manufacturers located abroad.   During  the
six  months ended August 31, 2004, approximately 53.8%  of  sales
were  to three customers. Two of these customers, located in  the
eastern United States, accounted for 47.7% of sales.  During  the
six  months ended August 31, 2003, approximately 67.0%  of  sales
were to four customers.  Three of three customers, located in the
eastern United States, accounted for 58.6% of sales.

<PAGE>

Results of Operations

      The following table sets forth operations data expressed as
a percentage of sales.

                              Three Months Ended

                             August 31, August 31,
                      2004      2003

Sales                         100%      100%

Cost of sales and expenses:
  Cost of sales               28.4      30.1
  Selling, general and
  administrative              25.3      28.9
     Total                    53.7      59.0

Operating Income              46.3      41.0

Income before taxes           47.5      42.1

Net income (after taxes and
extraordinary item)           30.2      11.7

                              Six Months Ended
                            August 31,  August 31,
                              2004      2003

Sales                         100%      100%

Cost of sales and expenses:
  Cost of sales               34.0      31.6
  Selling, general and
  administrative              30.2      28.5
     Total                    64.2      60.1

Operating Income              35.8      40.0

Income before taxes           37.4      41.5

Net income (after taxes and
extraordinary item)           23.2      17.8


Sales

      Sales  increased  to $841,000 for the  three  months  ended
August  31, 2004 from $681,000 for the three months ended  August
31,  2003, an increase of $160,000 or 23.5%.  For the six  months
ended  August  31,  2004,  sales  decreased  to  $1,304,000  from
$1,367,000  for the six months ended August 31, 2003, a  decrease
of  $63,000  or  4.6%.  The Company experienced increased  orders
from  many of its regular customers during the three months ended
August 31, 2004 compared to the first three months of the current
fiscal year  in which the Company experienced reduced orders from
many of such customers.

Cost of Sales and Expenses

       Cost   of   sales  increased  to  $239,000  and  $443,000,
respectively, for the three and six months ended August 31,  2004
from  $205,000 and $433,000, respectively, for the three and  six
months   ended   August   31,   2003.    Selling,   general   and
administrative  expenses  increased  to  $213,000  and  $394,000,
respectively, for the three and six months ended August 31,  2004
from  $197,000 and $390,000, respectively, for the three and  six
months  ended  August 31, 2003.  The total of cost of  sales  and
expenses  for the three months ended August 31, 2004 was $452,000
as  compared  to $402,000 for the three months ended  August  31,
2003,  an  increase of $50,000.  For the six months ended  August
31,  2004, the total of costs of sales and expenses was  $837,000
as compared to $822,000 for the six months ended August 31, 2003,
an increase of $15,000.

Operating Income

      Operating income for the three months ended August 31, 2004
increased  to  $389,000 from $279,000 for the three months  ended
August  31, 2003, an increase of $110,000.  Operating income  for
the  six months ended August 31, 2004 decreased to $467,000  from
$545,000 for the six months ended August 31, 2003, a decrease  of
$78,000.   A change in operating income for the six months  ended
August  31, 2004 compared to the comparable period of  the  prior
year was primarily due to the reduced level of sales achieved  by
the  Company in the first quarter of the current fiscal year,  as
well as a relatively small increase in total of cost of


<PAGE>

sales and
expenses for the six months ended August 31, 2004.

 Other Income

     Total other income for the three and six months ended August
31,  2004  was $11,000 and $21,000, respectively, as compared  to
$7,000  and  $22,000, respectively, for the three and six  months
ended  August 31, 2003.  The Company realized $9,000 and $18,000,
respectively, in rental income for the three and six months ended
August  31, 2004 as compared to $6,000 and $18,000, respectively,
in  rental  income for the three and six months ended August  31,
2003.   Effective November 1, 2002, the Company began to sublease
approximately  2,500 square feet of its space  to  a  non-related
party  to  operate an optics and security inks laboratory  at  an
annual rent of $36,000.  The Company realized interest income  of
$1,800  and  $3,100, respectively, for the three and  six  months
ended   August   31,   2004  compared  to  $1,400   and   $4,300,
respectively, for the three and six months ended August 31, 2003.

Income

      During the three and six months ended August 31, 2004,  the
Company reported income before taxes of $400,000 and $488,000  as
compared to income before taxes of $286,000 and $568,000 for  the
three  and  six months ended August 31, 2004.  Income taxes  were
$146,000  and $185,000 for the three and six months ended  August
31,  2004 compared to $97,000 and $214,000 for the three and  six
months  ended  August  31,  2003.  Net  income  after  taxes  was
$254,000 or $0.02 per share for the three months ended August 31,
2004  as  compared  to net income after taxes (and  extraordinary
item)  of  $79,000 or $0.01 per share for the three months  ended
August  31, 2003.  Net income after taxes was $303,000  or  $0.03
per share for the six months ended August 31, 2004 as compared to
net  income  after taxes (and extraordinary item) of $243,000  or
$0.02  per  share  for  the six months  ended  August  31,  2003.
Excluding  the extraordinary item recognized in fiscal 2003,  the
Company  had net income after taxes of $190,000 and $354,000  for
the   three   and  six  months  ended  August  31,   2003.    The
extraordinary  item  was  recognized  in  connection   with   the
settlement reached in fiscal 2003 in the litigation commenced  in
December  2000  by  two individuals (each a former  director  and
former  employee  of  the Company) for  which  there  was  not  a
comparable  item in the current fiscal year.  Had this  not  been
included  in  the  prior year, net income  would  have  increased
$64,000  for  the three months ended August 31, 2004 compared  to
the  prior  year and decreased $50,000 for the six  months  ended
August 31, 2004 compared to the prior year.

      Net income in the future will be dependent upon our ability
to increase revenues faster than we increase our selling, general
and administrative expenses, research and development expense and
other  expenses.  Although we suffered a setback in sales in  the
first quarter of fiscal 2005, business improved during the second
quarter.   We  are  encouraged  that  we  have  recently  shipped
development quantities of dyes to certain new customers which  we
hope  will  lead  to  new  ongoing  business  for  the  Company's
products.  No assurance can be given however that that such  will
be  the  case  or  that  our  sales  will  remain  at  the  level
experienced in the second quarter or improve.

Operations Outlook

      We  are currently going through a period of reassessing our
direction  in order to increase value for our shareholders.   Our
business,  though reasonably healthy, has not recently  grown  to
the  degree  management anticipated.  For example, during  fiscal
2004  sales reached an all time high of $2.73 million.  But  this
was  not significantly more than in 2003 ($2.69 million) or  2002
($2.55  million). The plateau of sales over the last three  years
was  in  contrast to the sales growth we saw since  1991.   Based
upon these observations, we tried to learn what could be done  to
stimulate  growth  and recapture the promise  of  a  true  growth
company.  Our  first  task was to draw up a  business  plan.   We
believe this highlighted our one major weakness and that  was  in
sales  and marketing.  For years we felt it to be unnecessary  to
go  out  and reach our customers.  We believed that our web

<PAGE>

site
was  sufficiently explicit to attract anyone interested  in  near
infrared light management to come to us because we were the "only
game  in town". We now realize that the customer has alternatives
which  do  not  include the use of Epolin dyes.  We  believe  the
business   plan   made   clear  the   necessity   of   hiring   a
Sales/Marketing  executive along with back up  technical  service
help.    This is in process.  In order to cover the cost of these
additional personnel, we decided to make certain sacrifices.  For
this  reason  we  have  for  the time being  suspended  the  cash
dividends  program  which we have had in place  since  2002.   We
believe it is in the Company's best interest to sacrifice current
payout to shareholders for future growth.

      The  new  products that are now the firm underpinnings  for
future  growth  are  based upon security inks,  new  visible  and
infrared  dyes  and  the forward integration  of  our  dyes  into
formulated  pellets. We are making it easy for  the  customer  to
enter the field of welding and specialty filters without the need
for specialized knowledge in formulating product. This eliminates
the  need for the customer to extrude pellets, making it a simple
task to use the pellets directly in injection molding.

      Another factor that was considered in the business plan was
management  succession.  Murray S. Cohen, the Company's  Chairman
of  the Board and Chief Executive Officer, recently announced his
intention  to  step  down  as  Chief  Executive  Officer  at   an
undetermined future date, while continuing to remain as  Chairman
of  the  Board  and  Chief Scientist for the Company.   With  the
hiring of a Sales/Marketing executive, such will add to our  pool
of  personnel  who  can be considered at a  later  date  for  the
position of CEO.

Liquidity and Capital Resources

      The  Company's  primary source of funds is cash  flow  from
operations in the normal course of selling products.   On  August
31,  2004, the Company had working capital of $2,168,000, a  debt
to  equity  ratio  of  0.15  to 1, and  stockholders'  equity  of
$2,924,000.  On August 31, 2004, the Company had $823,000 in cash
and  cash  equivalents,  total assets  of  $3,349,000  and  total
liabilities of $425,000.

      The  Company anticipates, based on currently proposed plans
and assumptions relating to its operations, that its current cash
and  cash  equivalents together with projected  cash  flows  from
operations  and projected revenues will be sufficient to  satisfy
its  contemplated  cash requirements for more than  the  next  12
months.

      Inflation  has  not  significantly impacted  the  Company's
operations.

Other Information

     In  August  2001,  the  Board of Directors  of  the  Company
authorized a 500,000 share stock repurchase program.  Pursuant to
the  repurchase program, the Company may purchase up  to  500,000
shares  of  its common stock in the open market or  in  privately
negotiated  transactions  from time  to  time,  based  on  market
prices.  The Company indicated that the timing of the buyback  of
the  Company's  shares will be dictated by overall financial  and
market  conditions  and  other  corporate  considerations.    The
repurchase  program  may  be suspended  without  further  notice.
During  the  fiscal  year ended February 29,  2004,  a  total  of
184,000 shares were repurchased at a cumulative cost of $103,405.
During  the  six months ended August 31, 2004, no repurchases  of
shares  were made by the Company.  During the fiscal  year  ended
February 28, 2003, a total of 32,500 shares were repurchased at a
cumulative  cost  of $18,624 while during the fiscal  year  ended
February 28, 2002, a total of 30,000 shares were repurchased at a
cumulative cost of $14,837.

     During fiscal 2004, the Company paid two cash dividends, the
first  being  $.02 per share in August 2003 and the second  being
$.02  per shares in February 2004.  During the fiscal year  ended
February 28, 2003, the Company also paid two cash dividends,  the
first being $.04 per share in July 2002 and the second being $.03
per  share in January 2003.  Prior thereto, and during the fiscal
year  ended  February 28, 2002, the

<PAGE>

Company also  paid  two  cash
dividends,  the  first being $.03 per share in June  2001  (which
represented the first time that a cash dividend was paid  by  the
Company) and the second being $.04 per share in February 2002.

Off-Balance Sheet Arrangements

     The Company has no off-balance sheet arrangements as defined
in Item 303(c) of Regulation S-B.


Item 3.   Controls and Procedures.

     The   Company's   Chief  Executive  Officer  and   Principal
Financial Officer have reviewed the Company's disclosure controls
and  procedures  as  of  the end of the period  covered  by  this
report.   Based upon this review, such officers believe that  the
Company's  disclosure controls and procedures  are  effective  in
timely  alerting  them  to material information  required  to  be
included  in this report. There have been no significant  changes
in internal control over financial reporting that occurred during
the  fiscal  quarter covered by this report that have  materially
affected,  or  are  reasonably likely to materially  affect,  the
Company's internal control over financial reporting.

<PAGE>

                   PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

     There are no material pending legal proceedings to which the
Company is a party or to which any of its property is subject.


Item 2.  Changes in Securities.

     During the quarter ended August 31, 2004, the Company issued
12,500 shares of Common Stock upon exercise of previously granted
stock options at an aggregate exercise price of $3,125.

      All  of  such  shares  were issued  in  reliance  upon  the
exemption  from  registration pursuant to  Section  4(2)  of  the
Securities  Act  of  1933, as amended, for "transactions  by  the
issuer not involving any public offering".


Item 3.  Defaults Upon Senior Securities.

     None.


Item 4.  Submission of Matters to a Vote of Security-Holders.

     None.


Item 5.  Other Information.

          None.


Item 6.  Exhibits and Reports on Form 8-K.

          (a)  Exhibits.

31.1 Certification of Chief Executive Officer pursuant to Section
     302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of
     the Exchange Act)
31.2 Certification of Principal Financial Officer pursuant to
     Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and
     15d-14 of the Exchange Act)
32.1 Certification pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)

          (b)  Reports on Form 8-K.

          Listed  below are reports on Form 8-K filed during  the
          fiscal quarter ended August 31, 2004.

             None.

<PAGE>

                           SIGNATURES

     In accordance with the requirements of the Exchange Act, the
Registrant caused this Report to be signed on its behalf  by  the
undersigned thereunto duly authorized.


                                   EPOLIN, INC.
                                   (Registrant)



Dated: October 15, 2004           By:/s/ Murray S. Cohen
                                  Murray S. Cohen,
                                  Chairman of the Board
                                  and Chief Executive Officer


Dated: October 15, 2004           By:/s/ James Ivchenko
                                  James Ivchenko,
                                  President (Principal Financial
                                  Officer)