SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                                            
                                FORM 10-K

              Annual Report pursuant to Section 13 or 15(d)
                 of the Securities Exchange Act of 1934
               For the Fiscal Year ended October 31, 1998
                                            
                      Commission File Number 1-6071

                            RYMER FOODS INC.
         (Exact Name of Registrant as Specified in its Charter)

  Incorporated in the State of Delaware     IRS Employer Identification No.
                                                        36-1343930
                  4600 South Packers Avenue, Suite 400
                         Chicago, Illinois 60609
                             (773) 927-7777

       Securities Registered Pursuant to Section 12(b) of the Act:

   Title of each class            Name of each exchange on which registered
  Common Stock, $0.04 par value        Over the Counter Bulletin Board

       Securities Registered Pursuant to Section 12(g) of the Act:

                                  None

  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 requirement for the past 90 days.     Yes  X         No    

  Indicate by check  mark if disclosure  of delinquent  filers pursuant  to
  Item 405  of Regulation  S-K is  not contained  herein, and  will not  be
  contained, to the best of registrant's knowledge, in definitive proxy  or
  information statements incorporated by reference in Part III of this Form
  10-K or any amendment to this Form 10-K.          Yes  X        No    

          APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
              PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

  Indicate by check mark whether the registrant has filed all documents and
  reports required  to  be  filed  by  Sections 12,  13  or  15(d)  of  the
  Securities Exchange  Act  of  1934  subsequent  to  the  distribution  of
  securities under a plan confirmed by a court.     Yes  X        No    

  As of January 8, 1999, 4,300,000 shares of common stock were outstanding,
  and the aggregate market value of the common shares held by nonaffiliates
  on that date was approximately $.7 million.

                   DOCUMENTS INCORPORATED BY REFERENCE

  Proxy Statement for 1999 Annual Meeting of Stockholders (Part III) (to be
  filed with the Securities and Exchange  Commission on or before  February
  28, 1999).  Certain exhibits are  incorporated herein by reference.   The
  Index of Exhibits is on Page 30 of this document.
<PAGE>
                              
                                 PART I

  Item 1.  Business
  The statements in  this report that  are forward looking  are based  upon
  current expectations  and  actual  results may  vary.    See  "Cautionary
  Statement" under  "Management's  Discussion  and  Analysis  of  Financial
  Condition and Results of Operations" in this report.

  In accordance  with  the  AICPA Statement  of  Position  90-7,  Financial
  Reporting by entities  in Reorganization Under  the Bankruptcy Code,  the
  Company adopted  fresh-start reporting  as of  September  20, 1997.    In
  accordance with fresh-start  accounting, the  gain on  discharge of  debt
  resulting  from  the   bankruptcy  proceedings  was   reflected  on   the
  predecessor Company's financial statements for the period ended September
  20, 1997.    In addition,  the  accumulated deficit  of  the  predecessor
  Company at September 20, 1997, was eliminated, and at September 21, 1997,
  the reorganized  Company's financial  statements reflected  no  beginning
  retained earnings  or  deficit.    In  addition,  the  Company's  capital
  structure was recast in conformity with its approved Plan. 

  As a result of the Company adopting fresh-start accounting, reporting for
  the year  ended  October  25,  1997  is  accomplished  by  combining  the
  financial results for  the one-month period  ended October  25, 1997  and
  those of the eleven-month  period ended September 20,  1997.  Because  of
  the application of  fresh-start reporting, the  financial statements  for
  the periods after reorganization are not comparable in any respect to the
  financial statements for the periods prior to reorganization.

  General

  Rymer Foods Inc.  (Rymer Foods or  the Company)  through its  subsidiary,
  Rymer Meat Inc. (Rymer Meat), is primarily engaged in the development and
  production of frozen, pre-seasoned, portion controlled meat entrees.  The
  Company is engaged in the production of such products for restaurants and
  other  foodservice  customers  and  retail   sales.    Rymer  Foods   was
  incorporated under the laws of Delaware in 1969.

  The Company announced on July 8, 1997, that it had received the necessary
  approvals from  its  creditors and  stockholders  for confirmation  of  a
  prepackaged plan of  reorganization under  Chapter 11  of the  Bankruptcy
  Code (the Plan).  Rymer Foods' operating subsidiary, Rymer Meat, was  not
  a party to the Bankruptcy proceedings.  To implement the Plan, on July 8,
  1997 the Company  commenced a  voluntary Chapter  11 case  in the  United
  States Bankruptcy  Court  for  the Northern  District  of  Illinois  (the
  Bankruptcy Court) and filed the Plan with the Bankruptcy Court.  The Plan
  was confirmed  by  the  Bankruptcy  Court on  August  21,  1997  and  was
  consummated on  October 6,  1997.   Although  the consummation  date  was
  October 6, 1997, fresh-start reporting was adopted on September 20, 1997.
  There were no fresh-start adjustments during the period  of September 21,
  1997 to October 6, 1997.

  Immediately following consummation  of the Plan,  Senior Noteholders  and
  certain creditors received 80% of the new common stock, existing  holders
  of common stock received  10% of the new  common stock, and Rymer  senior
  management received 10% of the new common stock.
<PAGE>

  The Company  believes  that consummation  of  the Plan  strengthened  its
  capital structure and has thereby enhanced its ability to further develop
  its businesses.  Management believes that the Company's future success is
  dependent in part upon reversing its sales decline, on the containment of
  operating costs and  on maintaining  good credit  relationships with  its
  lenders.  However,  there can  be no assurance  of the  success of  these
  initiatives.

  In 1998 the Company  reported a loss from  continuing operations of  $2.0
  million.  The Company reduced operating  expenses by $1.7 million or  30%
  as  compared  to  a  combined  1997  due  primarily  to  elimination   of
  restructuring costs in 1998.

  On a combined basis for 1997  (the one-month period ended October 25, and
  the eleven-month period ended September 20, the  Company  reported a loss
  from continuing operations of $4.9 million.

  In fiscal 1996, the Company reported a loss from continuing operations of
  $7.1 million.  The Company achieved  reductions in operating expenses  of
  $5.0 million or 51% as compared  to fiscal 1995 due primarily to  ongoing
  cost reductions at its meat processing facility and corporate office. 

  As discussed in Note 2 to the Consolidated Financial Statements, there is
  substantial doubt  about the  Company's ability  to continue  as a  going
  concern.

  Products, Markets and Distribution

  The  Company's  principal  products  are  frozen,  pre-seasoned,  portion
  controlled meat  entrees.   Major beef  products include  commercial  and
  choice cut steaks.  The Company also produces other meat products such as
  specialty ground and breaded products and certain cooked products  (e.g.,
  pot roast,  meat loaf).    The Company  engages  in the  development  and
  production  of  proprietary  "signature"  recipes  for  chain  restaurant
  customers.  The Company also offers  its customers services such as  menu
  planning, new product development and  other marketing services, such  as
  handling and cooking procedures.   These programs, products and  services
  are custom-designed for each chain restaurant customer.

  The markets served by the Company include family-style restaurant  chains
  and foodservice distributors.   Products are  primarily sold through  the
  Company's own marketing staff, as well as through independent brokers and
  foodservice distributors.

  Raw Materials

  The Company's primary raw material is beef which is available in adequate
  supply.  The Company is not dependent upon any one source for its primary
  raw material.

  The Company has agreements with certain of its suppliers to purchase  raw
  materials.  These agreements  extend for up to  one year and specify  the
  price  and  quantity  of  materials  to  be  purchased.    The  aggregate
  commitment for future purchases as of October 31, 1998 was  approximately
  $4.3 million.
<PAGE>
  Customers

  Sales to two groups  of the Company's  customers, Bonanza and  Ponderosa,
  together  accounted  for  approximately  8%,  16.7%,  and  26.0%  of  the
  Company's sales from continuing operations in fiscal 1998, 1997 and 1996,
  respectively.    Franchise   rights  for  both   Bonanza  and   Ponderosa
  restaurants are owned by Metromedia, Inc.  The Bonanza and certain of the
  Ponderosa restaurants are independently owned and operated.

  The loss  of any  of  the Company's  major  customers, or  a  substantial
  portion of these accounts,  could have a material  adverse effect on  the
  Company.   The Company  is pursuing  new sales  opportunities.   However,
  there can be no assurance of the success of these sales efforts.

  The Company believes that it has satisfactory ongoing relationships  with
  its current customers.   There can be no  assurances, however, that  such
  relationships can  be preserved,  especially if  the Company's  financial
  condition and results of operation do not improve.

  Trademarks, Patents and Research Activities

  Rymer Meat sells  and markets its  products under  the "Rymer"  trademark
  label.  The Company considers this  trademark important in its  marketing
  efforts.

  Research and development expenses are charged to operations as  incurred.
  Expenditures  for the three fiscal years ending October 31, 1998, October
  25, 1997, and  October 26, 1996  were not material  as compared to  other
  operational expenses.

  Competitive Conditions

  The Company's business is highly  competitive, with a substantial  number
  of competitors.   A  large  number of  companies  process and  sell  meat
  products to restaurants.  Every year  new companies are formed and  enter
  the meat industry, some becoming sizeable  competitors in a short  period
  of time.  

  Some of the  competitors in  the Company's  markets are  larger than  the
  Company and have  greater resources.   The Company believes  that in  the
  markets it  serves it  provides  its customers  with  a broader  line  of
  quality products and services than many of its competitors.   Competition
  in the  markets served  by the  Company is  based primarily  on  quality,
  service and price.  Management believes that the Company's primary  bases
  for competing  are its  reputation for  quality, service,  broad menu  of
  products,  willingness  to  develop  proprietary  recipes  for   specific
  customers and competitive pricing.

  Environmental Matters

  The Company  believes  that  it is  in  compliance  with  all  applicable
  federal, state and local provisions regulating the discharge of materials
  into the  environment, or  otherwise relating  to the  protection of  the
  environment. No significant costs were incurred by the Company to  comply
  with environmental  regulations  during  the  three  fiscal  years  ended
  October 31, 1998, October  25, 1997, and October  26, 1996.  The  Company
  has not received notice of, and is not aware of any claims arising  under
  any federal or state environmental laws.
<PAGE>

  Employees

  At October 31, 1998, Rymer Foods had approximately 190 employees, of whom
  approximately 150 were covered by union contracts.  The Company currently
  enjoys stable relations with its employees.

  Seasonality

  The quarterly  results of the  Company  are affected by seasonal factors.  
  Sales are  usually  lower  in  the  fall  and  winter  primarily  due  to
  consumers' dining preferences.

  Item 2.  Properties

  At October  31, 1998,  the principal  physical  property of  Rymer  Foods
  consisted of the following:

                          Footage   Ownership Expiration      Facility Use
                          -------   --------------------      ------------
       Chicago, Illinois  123,000     Leased Month to     Offices/Production/
                                          Month               Warehouse

  The Chicago  facility is  considered suitable  and adequate  to meet  the
  needs of  the  Company.    The  long term  lease  for  the  Chicago  meat
  processing facility expired in July 1996.   The Company has  subsequently
  negotiated for revised lease  space and lower rental  costs.  However,  a
  new lease  has not  been finalized.   Management  expects to  lease on  a
  month-to-month basis for the time being.  See Note 8 to the  Consolidated
  Financial Statements for a  summary of the  Company's rental expense  for
  leased facilities and for production and office equipment.

  Item 3.  Legal Proceedings

  None

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

  None

                                 PART II

  Item  5.    Market  for  the  Registrant's  Common  Equity  and   Related
  Stockholder Matters

  The Company's  common  stock  currently  trades  under  the symbol  RFDS.  
  Previously, in fiscal 1997, the Company's stock traded under the  symbols
  RYR (NYSE), RYMR (OTCBB), and RYMRQ  (OTCBB).  The current symbol  (RFDS)
  is a result of the Company's  reorganization and reflects the new  common
  stock issued to previous  noteholders and shareholders.   The new  Common
  Stock began trading on November 5, 1997 at an opening value of $1.00  per
  share.  The opening trading value reflected the new Common Stock issuance
  and the 25 to 1 reverse stock split as outlined in the Company's plan  of
  reorganization.

  Share prices for  1997 have  not been  restated to  reflect the  25 to  1
  reverse stock  split.   On January  9, 1999,  the Company's  stock  price
  closed at $0.19 per share.
<PAGE>

  The following table sets  forth, for the  fiscal quarters indicated,  the
  high and low sales prices of  the Common Stock.   As of January 9,  1999,
  there were approximately 279 holders of record of Common Stock.

                                           High           Low
                                           ----           ---
            1998
              First Quarter               $ 1.38         $ 1.00
              Second Quarter                1.25           0.75
              Third Quarter                 0.75           0.25
              Fourth Quarter                0.81           0.34

            1997
              First Quarter               $ 0.50         $ 0.25
              Second Quarter                0.28           0.01
              Third Quarter                 0.10           0.04
              Fourth Quarter                0.09           0.06


  Dividends

  No dividends have been paid on the Common Stock since prior to 1983.  The
  ability  of  Rymer  Foods  to  pay  dividends  on  the  Common  Stock  is
  substantially limited by its  bank credit agreements.   The Company  does
  not anticipate that it  will be able  to pay any  dividend on the  Common
  Stock in the foreseeable future.

<PAGE>
<TABLE>
 Item 6.  Selected Financial Data
 (in thousands, except per share data)

                              Reorganized Company               Predecessor Company
                          Twelve      One        Eleven
                          Month       Month      Month       Fiscal     Fiscal    Fiscal
                          Period      Period     Period       Year       Year      Year
                          Ended       Ended      Ended       Ended      Ended     Ended
                         Oct. 31,    Oct. 25,   Sept. 20,   Oct. 26,   Oct. 28,  Oct. 29,
                           1998        1997       1997        1996       1995      1994
                          ------      -----      ------      ------     ------   -------
<S>                      <C>        <C>        <C>         <C>        <C>
Results from continuing
 operations:
 Net sales               $30,203    $ 2,796    $ 31,095    $ 44,329   $ 79,920  $106,252
 (Loss) income from
  continuing operations
  before extraordinary             
  item                    (2,017)      (113)     (4,828)     (7,144)   (29,620)    1,883
 (Loss) income from            
  discontinued operations    -          -           -          (167)       290       121
 (Loss) gain on
  dispositions of
  discontinued operations    -          -          (566)      1,853)       -       4,474
 Extraordinary gain on
  discharge  of debt         -          -        25,603         -          -         -  
                          ------      -----      ------      ------     ------   -------
 Net (loss) income        (2,017)      (113)     20,209      (9,164)   (29,330)    6,478

 Working capital (deficit) 1,474      2,472     (22,623)    (18,202)   (10,524)   16,013
 Total assets              6,880      8,266       9,070      10,563     26,074    51,506
 Long-term liabilities       -          -         1,097         806        842    19,994
 Stockholders'
  equity (deficit)         2,893      4,910       5,023     (15,616)    (6,858)   22,464


 Basic per share common
  stock data:
  Loss from continuing         
   operations           $  (0.47)    $ (0.03)       *           *          *         *
  Net loss              $  (0.47)    $ (0.03)       *           *          *         *

  See  Notes  3  and  4  to  the  Consolidated  Financial  Statements   for
  information  regarding  the  Company's  Restructuring  and   discontinued
  operations.

  *    Earnings per share amount as it  relates to the predecessor  company
       is not meaningful due to the reorganization.                       
</TABLE>
<PAGE>

  Item 7.  Management's Discussion and Analysis of Financial Condition  and
  Results of Operations

  Cautionary Statement  The  statements  in  this  Form  10-K, included  in
  this Management's Discussion and Analysis, that are  forward looking  are
  based upon current expectations and actual results may differ materially.
  Therefore, the inclusion of such forward looking information  should  not
  be regarded as a representation by  the Company  that the   objectives or
  plans of the Company will be achieved.  Such statements  include, but are
  not limited to, the Company's  expectations regarding the  operations and
  financial condition of the Company.  Forward looking statements contained
  in this Form 10-K included in this Management's  Discussion and Analysis,
  involve numerous risks and uncertainties that could cause actual  results
  to  differ  materially  including, but  not limited  to,  the  effect  of
  changing economic conditions, business conditions and growth in  the meat
  industry,  the Company's ability to maintain its lending arrangements, or
  if  necessary, access external sources  of capital,  implementing current
  restructuring  plans and accurately forecasting  capital expenditures. In
  addition,  the  Company's  future  results  of  operations  and financial
  condition  may  be  adversely  impacted  by  various  factors  including,
  primarily, the level of the Company's  sales.   Certain of  these factors
  are described  in  the  description of the Company's business, operations
  and financial  condition  contained  in  this  Form  10-K.    Assumptions
  relating   to  budgeting,   marketing,  product  development   and  other
  management decisions are subjective in many respects and thus susceptible
  to interpretations  and periodic revisions based on actual experience and
  business developments, the impact of which may cause the Company to alter
  its marketing, capital expenditure or  other budgets,  which may  in turn
  affect the  Company's  financial position and results of operations.

  General

  The  Company's  consolidated  results  from  continuing  operations   are
  generated by its Meat processing operation.

  In accordance  with  the  AICPA Statement  of  Position  90-7,  Financial
  Reporting by Entities  in Reorganization Under  the Bankruptcy Code,  the
  Company adopted  fresh-start reporting  as of  September  20, 1997.    In
  accordance with fresh-start  accounting, the  gain on  discharge of  debt
  resulting  from  the   bankruptcy  proceedings  was   reflected  on   the
  predecessor Company's financial statements for the period ended September
  20, 1997.    In addition,  the  accumulated deficit  of  the  predecessor
  Company at September 20, 1997, was eliminated, and at September 21, 1997,
  the reorganized  Company's financial  statements reflected  no  beginning
  retained earnings  or  deficit.    In  addition,  the  Company's  capital
  structure was recast in conformity with its approved Plan. 


  As  a  result  of  the  Company's  adoption  of  fresh-start  accounting,
  reporting for  the  year  ended  October  25,  1997  is  accomplished  by
  combining the financial  results for the  one-month period ended  October
  25, 1997 and those of the  eleven-month  period ended September 20, 1997.  
  Because of  the  application  of  fresh-start  reporting,  the  financial
  statements for  the  periods  after reorganization  are  not  necessarily
  comparable  to  the  financial  statements  for  the  periods  prior   to
  reorganization.
<PAGE>
  The Company announced on July 8, 1997, that it had received the necessary
  approvals from  its  creditors and  stockholders  for confirmation  of  a
  prepackaged plan of  reorganization under  Chapter 11  of the  Bankruptcy
  Code (the Plan).  Rymer Foods' operating subsidiary, Rymer Meat, was  not
  a party to the Bankruptcy proceedings.  To implement the Plan, on July 8,
  1997 the Company  commenced a  voluntary Chapter  11 case  in the  United
  States Bankruptcy  Court  for  the Northern  District  of  Illinois  (the
  Bankruptcy Court) and filed the Plan with the Bankruptcy Court.  The Plan
  was confirmed  by the  Bankruptcy Court  on August  21, 1997  and  became
  effective on October 6, 1997.

  Fiscal  1998 Compared  with Fiscal  1997

  Consolidated sales for 1998  of $30.2 million decreased from 1997 by $3.7
  million or 10.9%.  Sales volume  accounted for  approximately 96% of  the
  sales decrease with lower prices  and changes in the sales mix accounting
  for the remaining decrease.

  Sales decreased primarily due to reduced sales to certain major customers
  during the first quarter of 1998.  In addition, sales decreased partially
  as  a  result  of  the  Company's  customers experiencing sales declines.
  Many  restaurant   chains   have   experienced   sales  declines  due  to
  ever-increasing competitive pressures in the casual dining segment of the
  foodservice  market.  The  decrease  was  primarily volume related as the
  average selling price decreased by only 1.3%. 

  As compared to 1997, consolidated cost of sales decreased by $2.8 million
  or 9.1% while total gross profit decreased by $.9 million or 29.3%.  As a
  percentage of sales,  the consolidated gross  margin decreased  to 7%  as
  compared to 8.9% in 1997.

  Gross profit decreased compared to 1997  primarily due to decreased  unit
  sales along  with  mix changes  in  sales to  national  restaurant  chain
  accounts and  higher  raw  material costs.    In  addition,  the  Company
  experienced inefficiencies in production related to changes in personnel.

  Selling, general and administrative  expenses remained approximately  the
  same.   Selling  expenses  increased by  $.3  million  primarily  due  to
  additional promotion cost  related to introduction  of Angus Ranch  Brand
  Steaks.  Administrative expenses decreased  by $.3 million primarily  due
  to administrative headcount reductions.

  Interest expense decreased by $2.1 million or 91.6% from 1997 to 1998 due
  primarily to the elimination of Senior Note interest in 1998. 

  In 1998, no provision for income taxes was recorded due to the  Company's
  loss.

  Fiscal 1997 Compared with Fiscal 1996

  Consolidated sales for 1997 of $33.9 million decreased from 1996 by $10.4
  million or 23.5%.   Sales volume accounted for  approximately 90% of  the
  sales decrease with lower prices and changes in the sales mix  accounting
  for the remaining 10% decrease.
<PAGE>
  Sales decreased primarily due to reduced  unit sales to certain  national
  restaurant chains.   This  decrease was  primarily due  to reduced  sales
  volume due to  increasing competition.   National restaurant chain  sales
  declined 15.8% versus 1996.

  As compared  to  1996, consolidated  cost  of sales  decreased  by  $11.6
  million or 27.4% while  total gross profit increased  by $1.2 million  or
  65.7%.  As a percentage of sales, the consolidated gross margin increased
  to 8.9% of net  sales as compared to  4.1% of net sales  in 1996.   Gross
  profit increased  compared  to  1996 primarily  due  to  improvements  in
  operational efficiencies. 

  Selling, general and administrative expenses decreased by $0.8 million or
  17.1%.  Selling  expenses of  $1.6  million  remained  the same  as 1996.  
  Administrative expenses  decreased  by  $0.8  million  primarily  due  to
  administrative headcount reductions.

  Interest expense decreased by $1.9 million or 44.4% as compared to  1996.
  The decrease  was primarily  due to  decreased  interest  expense on  the
  Company's 11% Senior Notes.   As permitted  by the Company's  Prepackaged
  Bankruptcy Plan, Senior  Note interest no  longer accrued effective  upon
  the filing of the Company's Chapter 11 petition on July 8, 1997.

  On October 16, 1997,  the Company entered into  an agreement to sell  its
  Plant City, Florida  facility, an asset  remaining from the  discontinued
  Rymer Chicken operation  which was disposed  of in 1993.   The  agreement
  requires a purchase  price of $800,000.   The terms  of the  sale are  as
  follows:  35%  cash down  payment, balance to  be paid  over a  five-year
  period.  This note was paid in cash in 1998.  The sale was closed in  the
  second fiscal quarter of 1998.   As a result of  the pending sale of  the
  facility, a $566,000 loss was incurred  in the eleven month period  ended
  September 20, 1997.  This charge  is included as a loss from  disposition
  of discontinued  operations in  the Company's  consolidated statement  of
  operations in 1997.  The loss  is primarily attributable to a  write-down
  of the facility's book value to  the sales price plus estimated  expenses
  to repair the facility.

  On July 8, 1997, the Company announced that it had received the necessary
  approvals from  its  creditors and  stockholders  for confirmation  of  a
  prepackaged plan under Chapter 11 of the Bankruptcy Code.  As a result of
  the  Company's  restructuring,  the  Company  incurred  $1.6  million  in
  restructuring costs.  These costs included legal fees, financial  advisor
  costs, and other fees and expenses to consummate the Bankruptcy Plan.

  In 1997, no provision for income taxes was recorded due to the  Company's
  loss.

  Liquidity and Capital Resources

  The Company makes sales  primarily on a seven  to thirty day balance  due
  basis. Purchases from suppliers have payment terms generally ranging from
  wire transfer at time of shipment to fourteen days.
<PAGE>

  The Company's cash management techniques involve the use of zero  balance
  disbursement accounts.  Check clearings are covered by advances from  the
  Company's credit lines.  Thus, in the absence of excess funds  classified
  as cash  equivalents,  the Company's  cash  balances are  credit  balance
  accounts representing outstanding  checks.  The  Company classified  such
  credit balances as accounts payable in the Consolidated Balance Sheet.

  On April 23, 1998 the Company entered into a loan and security  agreement
  with FINOVA which replaced  the working  capital agreement  with LaSalle.  
  The Credit facility  provides up to  $4 million for  the Company  through
  April 23, 2001.   The FINOVA agreement contains  loan covenants that  the
  Company must meet.  At October 31, 1998, the Company was in violation  of
  a covenant which  FINOVA has  agreed to  waive.   The Company  may be  in
  violation  of certain loan  covenants in the  future.  While  the Company
  believes  that FINOVA  will  waive these violations  going forward, there
  are no assurances in that regard.

  In conjunction with  its bankruptcy filing,  the Company,  on August  29,
  1997, entered into a  revised loan agreement with  LaSalle.  The  revised
  agreement provided a credit facility of up to $4 million for the  Company
  through April 1998  based on borrowing  base  availability  calculations.
  The agreement revised certain loan covenants and waived all prior  events
  of default as of the quarter ended July  25, 1997.  At October 25,  1997,
  the Company had a bank loan of $1.4 million outstanding under its line of
  credit with LaSalle.  

  As permitted by the terms of its 11% Senior Notes, the December 15,  1996
  interest payment  was  made  by issuing  additional  Senior  Notes  in  a
  principal amount equal to the interest payment due. The Company was  also
  required to make an  interest payment on June  15, 1997 of  approximately
  $1.3 million in respect to  the Senior Notes.   As part of the  Company's
  restructuring, its 11% Senior Notes were converted into equity. 

  As discussed in Note 2 to the Consolidated Financial Statements, there is
  substantial doubt  about the  Company's ability  to continue  as a  going
  concern. 

  The Company had working capital of  $1.5 million at October 31, 1998  and
  $2.5 million at October 25, 1997.

  The Company had total lines of  credit available based on borrowing  base
  calculations of $2.6  million at  October 31,  1998 and  $2.4 million  at
  October 25, 1997, of  which $.7 million  and $1.0 million,  respectively,
  was unused.

  The Company  has  agreements  with  certain  of  its  customers  to  sell
  merchandise over  the next  year for  specified prices.  The Company  has
  agreements with certain of its suppliers to purchase raw materials.   The
  agreements extend for up to one  year and provide the price and  quantity
  of materials to  be supplied.   The Company had  purchase commitments  of
  approximately $4.3 million as of October 31, 1998.

  The Company  anticipates  spending  approximately  $350,000  for  capital
  expenditures in  1999.    The  expenditures  are  primarily  for  planned
  improvements.  There are no  specific commitments outstanding related  to
  these planned expenditures.  Such  capital expenditures will be  financed
  with cash from operations and/or bank borrowings.
<PAGE>

  The Year 2000 ("Y2K")  issue is the result  of computer programs using  a
  two-digit format, as opposed to four digits, to indicate the year.   Such
  computer systems will be unable to interpret dates beyond the year  1999,
  which could cause a system failure  or other computer errors, leading  to
  disruptions in operations.  In 1997, the Company developed a  three-phase
  program for  the Y2K  information  systems compliance.    Phase I  is  to
  identify  those systems  which the Company  has  exposure to  Y2K issues.  
  Phase II is the development and implementation of action plans to be  Y2K
  compliant in all areas by early 1999.  Phase III, to be completed by mid-
  1999 is the final testing of each area of exposure to ensure  compliance.
  The Company has identified two major areas determined to be critical  for
  successful Y2K compliance:

  (1) financial and informational systems applications and (2)  third-party
  relationships.

  In accordance with Phase I of the program, the Company has conducted  its
  review and has determined all major areas which need to be upgraded.   In
  the financial and information systems area, a number of applications have
  been identified as Y2K compliant due to their recent implementation.  The
  Company's core financial reporting  systems are not  Y2K  compliant,  but
  are scheduled for upgrade in early 1999.  The Company has contacted  most
  of their major third parties, who  state they intend to be Y2K  compliant
  by 2000.

  The Company  believes  that  the  cost  to  update  its  systems  is  not
  significant.   The Company  plans on  completing the  work  with existing
  personnel.  The Company anticipates completion in the first half of 1999.

  Seasonality

  The quarterly results of the Company  are affected by  seasonal  factors.  
  Sales are usually lower in the fall and winter.

  Impact of Inflation

  Raw materials are subject to fluctuations in price. However, the  Company
  does not expect  such fluctuations to  materially impact its  competitive
  position.

  Fourth Quarter Adjustments

  1998
  None.

  1997
  On October 16, 1997,  the Company entered into  an agreement to sell  its
  Plant City,  Florida  facility.   As  a result  of  the pending  sale,  a
  $566,000 loss  was incurred.   This  charge is  included as  a loss  from
  disposition of  discontinued  operations in  the  Company's  consolidated
  statement of operations.  The loss is primarily attributable to a  write-
  down of  the facility's  book value  to the  agreed contract  price  plus
  estimated expenses to repair the facility.
<PAGE>

  1996
  In December 1996, the Company had  an independent appraisal performed  of
  the Plant City facility, an asset  remaining from the discontinued  Rymer
  Chicken operation which was disposed of in December 1993.  As a result of
  the appraisal, the carrying  value of the facility  and land was  written
  down by $450,000 to the appraised  value of  approximately  $1.2 million.  
  The $450,000 writedown is included as a loss from discontinued operations
  in the Company's consolidated statement of operations.

  Item 8.  Financial Statements and Supplementary Data

  Index to Consolidated Financial Statements and Supplementary
   Financial Data

                                                                      Pages

  Reports of Independent Accountants                                  13-14

  Financial Statements:

    Consolidated Statements of Operations for the fiscal years
    ended October 31, 1998, October 25, 1997 and October 26, 1996        15

    Consolidated Balance Sheets as of October 31, 1998 and
    October 25, 1997                                                     16

    Consolidated Statements of Cash Flows for the fiscal years
    ended October 31, 1998, October 25, 1997 and October 26, 1996        17

    Consolidated Statements  of  Stockholders'  Equity  (Deficit)
    for the fiscal years ended October 31, 1998, October 25, 1997
    and October 26, 1996                                                 18


  Notes to Consolidated Financial Statements                          19-28

  Supplementary Financial Data:

    Schedule II - Valuation and Qualifying Accounts and Reserves         29


  Note:  Reporting for the year ended October 25, 1997 is
  accomplished by combining the financial results for the
  one-month period ended  October 25, 1997  and  those of
  the eleven-month period ended September 20, 1997.


<PAGE>
                    REPORT OF INDEPENDENT ACCOUNTANTS


         To the Stockholders and Board of Directors
         Rymer Foods Inc.

         We have  audited the consolidated balance sheets  of Rymer
         Foods  Inc. and subsidiaries  as of  October 31, 1998  and
         October  25,  1997,  and the  consolidated  statements  of
         operations, stockholders' equity (deficit)  and cash flows
         for the year ended October  31, 1998, the one-month period
         ended October  25, 1997 and the eleven-month  period ended
         September  20, 1997.   These financial statements  are the
         responsibility   of  the   Company's   management.     Our
         responsibility   is  to  express   an  opinion  on   these
         financial statements.

         We  conducted  our  audits in  accordance  with  generally
         accepted  auditing  standards.   Those  standards  require
         that we  plan and perform  the audit to  obtain reasonable
         assurance about whether the  financial statements are free
         of  material misstatement.   An audit includes  examining,
         on  a  test basis,  evidence  supporting the  amounts  and
         disclosures  in the financial  statements.  An  audit also
         includes  assessing  the accounting  principles  used  and
         significant  estimates  made  by management,  as  well  as
         evaluating  the overall financial  statement presentation.
         We  believe that our  audits  provide  a reasonable  basis
         for our opinion.

         In  our  opinion,  the financial  statements  referred  to
         above  present  fairly,  in  all  material  respects,  the
         consolidated  financial position of  Rymer Foods Inc.  and
         subsidiaries as of October 31,  1998 and October 25, 1997,
         and  the  consolidated  results of  their  operations  and
         their cash flows for the year  ended October 31, 1998, the
         one-month  period ended October  25, 1997 and  the eleven-
         month period ended September  20, 1997, in conformity with
         generally  accepted accounting principles.   We have  also
         audited Schedule  II of Rymer Foods Inc.  and subsidiaries
         for  the years  ended  October 31,  1998  and October  25,
         1997.   In our opinion, this schedule presents  fairly, in
         all material respects, the  information required to be set
         forth therein.

         As  more  fully  described  in  Notes   1  and  5  to  the
         consolidated  financial statements,  effective October  6,
         1997, the Company emerged  from bankruptcy.  In accordance
         with   an   American   Institute   of   Certified   Public
         Accountants'  Statement  of  Position,   the  Company  has
         adopted  "fresh  start"  reporting   whereby  its  assets,
         liabilities and  new capital structure have  been adjusted
         to  reflect  estimated fair  values  as of  September  20,
         1997.  As a  result, the consolidated financial statements
         for  periods  subsequent to  September  20, 1997,  reflect
         this   basis  of   reporting  and   are  not   necessarily
         comparable    to    the    Company's    pre-reorganization
         consolidated financial statements.
<PAGE>

         The  accompanying  consolidated financial  statements  and
         financial statement  schedule have been  prepared assuming
         that Rymer  Foods Inc. will continue as a  going  concern. 
         As  more  fully  described  in  Notes   2  and  7  to  the
         consolidated  financial statements,  the Company's  credit
         facility  extends through April  2001.   At year end,  the
         Company was in violation of  certain loan covenants.  This
         could  result  in  termination  of  the  Company's  credit
         agreements,  raising substantial doubt  about its  ability
         to  continue as a  going concern.   Management's plans  in
         regard  to these matters  are  also  described  in Note 2.  
         The  financial statements do  not include any  adjustments
         that might result from the outcome of this uncertainty.


                                     /s/ Grant Thornton LLP
                                                                 
            

         Chicago, Illinois               Grant Thornton LLP
         December 11, 1998

<PAGE>
                    REPORT OF INDEPENDENT ACCOUNTANTS

         To the Stockholders and Board of Directors
         Rymer Foods Inc.

         We   have   audited   the   consolidated   statements   of
         operations, stockholders' deficit and  cash flows of Rymer
         Foods  Inc. and subsidiaries  for the  year ended  October
         26, 1996.   We have  also audited the  financial statement
         Schedule II  of Rymer Foods Inc. and subsidiaries  for the
         year ended  October 26, 1996.  These  financial statements
         and  financial statement schedule  are the  responsibility
         of  the Company's management.   Our  responsibility is  to
         express an  opinion on these financial statements  and the
         financial statement schedule based on our audit.

         We  conducted  our  audit  in  accordance  with  generally
         accepted  auditing  standards.   Those  standards  require
         that we  plan and perform  the audit to  obtain reasonable
         assurance about whether the  financial statements are free
         of  material misstatement.   An audit includes  examining,
         on  a  test basis,  evidence  supporting the  amounts  and
         disclosures  in the financial  statements.  An  audit also
         includes  assessing  the accounting  principles  used  and
         significant  estimates  made  by management,  as  well  as
         evaluating  the overall financial  statement presentation.
         We  believe that our  audit  provides  a reasonable  basis
         for our opinion.

         In  our  opinion,  the financial  statements  referred  to
         above  present  fairly,  in  all  material  respects,  the
         consolidated  results  of  operations and  cash  flows  of
         Rymer  Foods  Inc. and  subsidiaries  for the  year  ended
         October  26, 1996, in  conformity with generally  accepted
         accounting  principles.     Also,  in  our   opinion,  the
         financial statement  schedule, for the year  ended October
         26,  1996,  when  considered  in  relation  to  the  basic
         financial  statements taken as  a whole, presents  fairly,
         in  all  material  respects,  the  information  set  forth
         therein.
<PAGE>
         The  accompanying  consolidated financial  statements  and
         financial statement  schedule have been  prepared assuming
         that Rymer  Foods Inc. will continue as a  going  concern. 
         As  more fully  described in  Note 2  to the  Consolidated
         Financial Statements,  the Company has  reported recurring
         losses  from  continuing  operations,  has  experienced  a
         significant decrease  in net sales  in 1996 and  1995, and
         at October  26, 1996 has a stockholders' deficit  of $15.6
         million.   Additionally, the  Company does  not expect  to
         have sufficient available cash in  fiscal 1997 to make the
         June  15, 1997  11% Senior  Note interest  payment.   This
         will  result in  an event  of  default at  which time  the
         Senior  Notes   will  become  due  and  payable.     These
         conditions  raise substantial  doubt  about the  Company's
         ability  to continue as  a going  concern.    Management's
         plans regarding  these matters are also described  in Note
         2.   The consolidated financial statements do  not include
         any  adjustments that  might  result from  the outcome  of
         this uncertainty.



                                     /s/ PricewaterhouseCoopers LLP


         Chicago, Illinois               Coopers & Lybrand L.L.P.
         December 16, 1996

<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
For the fiscal years ended October 31, 1998, October 25, 1997 and October 26, 1996
(in thousands except share data)

                              Reorganized Company     Predecessor Company
                              Twelve      One         Eleven
                              Month       Month       Month       Fiscal
                              Period      Period      Period      Year
                              Ended       Ended       Ended       Ended
                              Oct. 31,    Oct. 25,    Sept. 20,   Oct. 26,
                                1998        1997        1997        1996
                               ------      ------      -------     -------
<S>                           <C>         <C>         <C>         <C>

Net sales                     $30,203     $ 2,796     $ 31,095    $ 44,329
Cost of sales                  28,078       2,562       28,324      42,516
                               ------      ------      -------     -------
  Gross profit                  2,125         234        2,771       1,813
Selling, general and
 administrative expenses        4,001         333        3,793       4,794
Restructuring charge              -            -         1,608          -
                               ------      ------      -------     -------
Operating loss                 (1,876)        (99)      (2,630)     (2,981)
Interest expense                  196          15        2,318       4,198
Other Income                      (55)         (1)        (120)        (35)
                               ------      ------      -------     -------
  Loss from continuing
  operations before
  income taxes                 (2,017)       (113)      (4,828)     (7,144)
                               ------      ------      -------     -------
Provision for income taxes        -            -           -            -  
  Loss from continuing
  operations                   (2,017)       (113)      (4,828)     (7,144)
Loss from discontinued
  operations, net                 -            -           -          (167)
Loss on dispositions of
  discontinued operations, net    -            -          (566)     (1,853)
                               ------      ------      -------     -------
Net loss before
  extraordinary item           (2,017)       (113)      (5,394)     (9,164)
Extraordinary gain on
  discharge of debt               -            -        25,603          -
                               ------      ------      -------     -------
Net (loss) income             $(2,017)    $  (113)    $ 20,209    $ (9,164)
                               ======      ======      =======     =======
<PAGE>
Per common share:
 Basic:
   Loss from continuing
    operations                $ (0.47)    $ (0.03)         *           *
   Net loss before        
    extraordinary item        $ (0.47)    $ (0.03)         *           *
   Net loss                   $ (0.47)    $ (0.03)         *           *
 Diluted:
   Loss from continuing
    operations                $ (0.47)    $ (0.03)         *           *
   Net loss before
    extraordinary item        $ (0.47)    $ (0.03)         *           *
   Net loss                   $ (0.47)    $ (0.03)         *           *
Weighted average shares of
 common stock outstanding:
 Basic                        4,300,000   4,300,000        *           *
 Diluted                      4,300,000   4,300,000        *           *


See accompanying notes.

*    Earnings per share amount as it relates to the predecessor company is
     not meaningful due to the reorganization.

</TABLE>
<PAGE>
<TABLE>
  CONSOLIDATED BALANCE SHEETS
  October 31, 1998 and October 25, 1997

    ASSETS                                        1998          1997
                                                 ------        ------
                                                    (in thousands)
  <S>                                           <C>           <C>
  Current assets:
    Receivables, net of allowance for doubtful
     accounts of $155,000 in 1998 and $141,000
     in 1997                                    $ 1,956       $ 1,406
    Inventories                                   3,266         4,304
    Other                                           113           193
                                                 ------        ------
       Total current assets                       5,335         5,903
  Property, plant and equipment:
    Leasehold improvements                        1,001           958 
    Machinery and equipment                         989           811 
                                                 ------        ------
                                                  1,990         1,769 
  Less accumulated depreciation and amortization    567            44 
                                                 ------        ------
                                                  1,423         1,725 
  Assets held for sale or lease                      -            800 
  Other                                             122            43 
                                                 ------        ------
                                                $ 6,880       $ 8,471 
                                                 ======        ======
    LIABILITIES AND STOCKHOLDERS' EQUITY                                   
                                                 
  Current liabilities:
    Current portion of borrowings               $ 1,851       $ 1,394 
    Accounts payable                                667           368 
    Accrued interest                                 21            15 
    Accrued liabilities                           1,322         1,654 
                                                 ------        ------
       Total current liabilities                  3,861         3,431 
  Deferred employee benefits                        126           130 
                                                 ------        ------
                                                  3,987         3,561 

  Commitments and contingencies (Note 13)            -             -

  Stockholders' equity
    Preferred stock, none outstanding                -             -    
    Common stock, $.04 par, 20,000,000  shares
     authorized, 4,300,000 shares outstanding
     in 1998 and 1997                               172           172 
    Additional paid-in capital                    4,851         4,851 
    Accumulated deficit                          (2,130)         (113)
                                                 ------        ------
       Total stockholders' equity                 2,893         4,910 
                                                 ------        ------
                                                $ 6,880       $ 8,471 
                                                 ======        ======
  See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal years ended October 31, 1998, October 25, 1997 and October 26, 1996
                 
                                                    Reorganized Company Predecessor Company
                                                    Twelve    One       Eleven
                                                    Month     Month     Month      Fiscal
                                                    Period    Period    Period     Year
                                                    Ended     Ended     Ended      Ended
                                                    Oct. 31,  Oct. 25,  Sept. 20,  Oct. 26,
                                                     1998      1997       1997       1996
                                                   -------    ------    -------    -------
  <S>                                             <C>        <C>       <C>        <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Loss from continuing operations                 $ (2,017)  $  (113)  $ (4,828)  $ (7,144)
  Non-cash adjustments to loss:        
    Depreciation and amortization                      523        44        579      1,077
    Restructuring charge                                -         -       1,608         - 
    Deferred compensation expense                       -         -          -         (26)
    Provision for bad debts                             60        10        110         53
    Payment in kind interest on Senior Notes            -         -          -       3,621
  Changes in assets and liabilities:
    Net (increase) decrease to accounts receivable    (610)      179      1,024      1,896
    Net (increase) decrease to inventories           1,038        58     (1,090)     8,847
    Net (increase) decrease to other current
     and other long-term assets                          1       (17)        95        663
    Net (decrease) increase to accounts
     payable and accrued expenses                     (257)       40      1,128     (1,385)
                                                   -------    ------    -------    -------
  Net cash flows from operating activities
   of continuing operations                         (1,262)      201     (1,374)     7,602
  Net cash flows from operating activities
   of discontinued operations                           -         (7)      (196)     3,077
                                                   -------    ------    -------    -------
       Net cash flows from operating activities     (1,262)     (194)    (1,571)    10,679 
  CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from the sale of Rymer Seafood               -          -        950      1,500
  Capital expenditures                                (221)       (6)      (609)      (529)
  Other                                                 -          -          1          1
  Net cash flows from investing activities
   of discontinued operations                          800         -         -          (5)
                                                   -------    ------    -------    -------
       Net cash flows from investing activities        579        (6)       342        967
                                                   -------    ------    -------    -------
<PAGE>

  CASH FLOWS FROM FINANCING ACTIVITIES:
  Change in cash overdraft                             226        38       (181)      (348)
  Repayments under line-of-credit facility         (33,689)   (3,051)   (27,021)   (49,991)
  Borrowings under line-of-credit facility          34,146     2,825     28,431     42,075
  Principal payments on debt                            -         -          -        (267)
                                                   -------    ------    -------    -------
  Net cash flows from financing activities
   of continuing operations                            683      (188)     1,229     (8,531)
  Net cash flows from financing activities of
   discontinued operations                              -         -          -      (3,115)
                                                   -------    ------    -------    -------
       Net cash flows from financing activities        683      (188)     1,229    (11,646)
                                                   -------    ------    -------    -------
  Net change in cash                                    -         -          -          -  
  Cash and cash equivalents balance at                  
   beginning of fiscal year                             -         -          -          -
                                                   -------    ------    -------    -------
  Cash and cash equivalents balance at end
   of fiscal year                                 $     -    $    -    $     -    $     -
                                                   =======    ======    =======    =======
  See accompanying notes.

</TABLE>
<PAGE>
<TABLE>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the fiscal years ended October 31, 1998, October 25, 1997 and October 26, 1996


                                            Additional             Notes Receivable      Total
                                   Common    Paid-In   Accumulated  from Sale of     Stockholders'
                                   Stock     Capital     Deficit    Common Stock   Equity (Deficit)
                                   -------    -------    -------      ------           -------
<S>                               <C>        <C>        <C>          <C>              <C>
Balance at October 28, 1995       $ 10,754   $ 44,363   $(61,569)    $  (406)         $ (6,858)
  Net loss                              -          -      (9,164)                       (9,164)
  Repayment of notes      
   receivable                           -          -          -          406               406
                                   -------    -------    -------      ------           -------
Balance at October 26, 1996         10,754     44,363    (70,733)                      (15,616)
Net income for the eleven 
 month period ended
 September 20, 1997                     -          -      20,209          -             20,209
Effect of reorganization and
 fresh start accounting:
  Cancellation of predecessor
   deficit                         (10,599)   (39,925)    50,524          -                 -  
  Issuance of new shares pursuant
   to plan of reorganization            17        413         -           -                430
                                   -------    -------    -------      ------           -------
Balance at September 20, 1997          172      4,851         -           -              5,023
Net loss for one month period  
 ended October 25, 1997                 -          -        (113)         -               (113)
                                   -------    -------    -------      ------           -------
Balance at October 25, 1997            172      4,851       (113)         -              4,910
Net loss                                -          -      (2,017)         -             (2,017)
                                   -------    -------    -------      ------           -------
Balance at October 31, 1998       $    172   $  4,851   $ (2,130)    $    -           $  2,893
                                   =======    =======    =======      ======           =======
                                                                                       
See accompanying notes.

</TABLE>
<PAGE>
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

  1.  Summary of Significant Accounting Policies

  Fiscal Year and Basis of Presentation

  The fiscal year of the  Company ends the last  Saturday in October.   For
  all years presented, the fiscal year  was 52 weeks except 1998 which  was
  53 weeks.

  In accordance  with  the  AICPA Statement  of  Position  90-7,  Financial
  Reporting by Entities  in Reorganization Under  the Bankruptcy Code,  the
  Company adopted  fresh-start reporting  as of  September  20, 1997.    In
  accordance with fresh-start  accounting, the  gain on  discharge of  debt
  resulting  from  the   bankruptcy  proceedings  was   reflected  on   the
  predecessor Company's financial statements for the period ended September
  20, 1997.    In addition,  the  accumulated deficit  of  the  predecessor
  Company at September 20, 1997, was eliminated, and at September 21, 1997,
  the reorganized  Company's financial  statements reflected  no  beginning
  retained earnings  or  deficit.    In  addition,  the  Company's  capital
  structure was recast in conformity with its approved Plan. 

  As a result of the Company adoption of fresh-start accounting,  reporting
  for the year  ended October  25, 1997  is accomplished  by combining  the
  financial results for  the one-month period  ended October  25, 1997  and
  those of the eleven-month  period ended September 20,  1997.  Because  of
  the application of  fresh-start reporting, the  financial statements  for
  the periods after reorganization are not comparable in any respect to the
  financial statements for the periods prior to reorganization.

  Principles of Consolidation

  The consolidated financial statements include the accounts of the Company
  and  all  of  its  subsidiaries  after  elimination  of  all  significant
  intercompany accounts and transactions.   The Company  is engaged in  the
  development and production  of frozen,  pre-seasoned, portion  controlled
  meat entrees for restaurants  and other foodservice customers,  primarily
  in the United States.

  Cash Equivalents

  The Company considers short-term investments purchased with maturities of
  ninety days or less to be cash equivalents.

  Inventories

  Inventories are  stated  at the  lower  of first-in,  first-out  cost  or
  market.

  Property, Plant and Equipment

  Property, plant  and  equipment are  stated  at cost.    Depreciation  is
  recognized on a straight-line  basis over the  estimated useful lives  of
  the related assets generally from 3  years to 7 years.  Expenditures  for
  maintenance and repairs are charged to operations as incurred.  Gains  or
  losses  on  the  disposition  of  assets  are  reflected  in  results  of
  operations.
<PAGE>

  Revenue Recognition

  The Company recognizes sales revenues at the time of shipment.

  Income Taxes

  Deferred income taxes  are recorded to  reflect the  tax consequences  on
  future years of differences between the  basis of assets and  liabilities
  for income tax and  for financial reporting purposes.   In addition,  the
  amount of any future tax benefits is reduced by  a valuation allowance to
  the extent such benefits are not expected to be fully realized.

  Earnings (Loss) Per Share

  Since there is a net loss, common stock equivalents are excluded from the
  diluted earnings per share calculation since they would be antidilutive.

  Amounts for the predecessor company are not presented as the data is  not
  meaningful due to the Company's reorganization.

  Use of Estimates

  The preparation  of financial  statements  in conformity  with  generally
  accepted accounting principles requires management to make estimates  and
  assumptions that affect  the reported amounts  of assets and  liabilities
  and disclosure of contingent assets and  liabilities at October 31,  1998
  and October 25, 1997, and the  reported amounts of revenues and  expenses
  during the three  year period  ended October  31, 1998.   Actual  results
  could differ from those estimates.

  2.  Going Concern

  The accompanying  consolidated financial  statements have  been  prepared
  assuming the Company will continue as a going concern.

  In 1998, the  Company reported a  decrease in net  sales from  continuing
  operations as compared to 1997 of 10.9% principally due to lower sales to
  certain national restaurant chains.  Also in 1998, the Company reported a
  loss from continuing operations of $2.0 million,  the   sixth  loss  from
  continuing  operations  before extraordinary item in the last seven years. 

  At year end, the Company was in violation of certain loan covenants.  The
  Company's lender, FINOVA, has agreed to  waive the covenant violation  at
  year end.  The Company may be in  violation in the future and this  could
  cause termination  of the  Company's credit  agreement.   This  situation
  raises  substantial  doubt  about  the  Company's  ability  to   continue
  operating as a  going concern.   The fiscal  1998 consolidated  financial
  statements do  not include  any adjustments  that might  result from  the
  outcome of these uncertainties.

  Management believes that  the Company's  future success  is dependent  in
  part upon reversing its  sales decline, on  the containment of  operating
  costs, and on the success of relationships with its lenders.  The Company
  is pursuing new  sales opportunities while  continuing to streamline  its
  production process and to reduce other costs. 
<PAGE>

  3.  Restructuring and Restructuring Charges

  During the 1997 fiscal year, the Company recorded a Restructuring  charge
  of $1.6  million  related to its Senior  Note restructuring plan.   These
  costs  included  legal  fees,  financial  consultants,  and  other  costs
  associated with the conversion process of  the Company's Senior Notes  to
  equity.

  4.  Discontinued Operations and Assets Held for Sale

  The accompanying consolidated financial statements reflect the operations
  of the  Company's Rymer  Seafood and  Rymer  Plant City  subsidiaries  as
  discontinued operations for accounting purposes.

  Rymer International Seafood

  On August 28, 1996, the Company  completed the sale of substantially  all
  of the assets of its Seafood subsidiary to BGL I, Inc., an entity  formed
  by the then current President of Rymer Seafood who is also the son of one
  of the Company's then Board members.  The Company's shareholders approved
  the transaction at a special meeting on August 28, 1996.  Consummation of
  the sale was  subject to certain  conditions, including  approval by  the
  holders of 66  2/3% of the  outstanding Common Stock  of the Company  and
  approval  from  the  holders  of Rymer's  outstanding  11% Senior  Notes.  
  Senior noteholder approval was received prior to the shareholder  meeting
  of August 28,  1996.   The sales  price was  approximately $8.5  million,
  consisting  of  $1.5  million  in  cash,  $1.0  million  in  a  ten  year
  subordinated note from the buyer and the assumption by the buyer of  $5.1
  million in bank debt and $0.9 million of other current liabilities.   The
  Company recorded a  loss on the  sale of Rymer  Seafood of  approximately
  $1.9 million, which was recorded as  of the measurement date (August  28,
  1996) in the fourth quarter of 1996.   On November 11, 1996, the  Company
  received a  payment  of $950,000  in  full  settlement of  its  ten  year
  subordinated note from the buyer of its Seafood operation.  The  proceeds
  from the note  were used  to pay down  the Company's  then existing  loan
  balance with LaSalle.

  Rymer Chicken - Plant City

  During 1992, the Company  decided to place its  idle Plant City,  Florida
  chicken facility and equipment for sale.

  During 1993, the  Company recognized  a loss  of $344,000  to reduce  the
  carrying value of the Plant City property to an estimated net  realizable
  value of  $1.6 million.   This  loss was  partially offset  by income  of
  $272,000 from the  elimination of  reserves established  during 1992  for
  Plant City losses.   In  December 1996,  the Company  had an  independent
  appraisal performed  of the  Plant City  facility.   As a  result of  the
  appraisal, the carrying value of the  facility and land was written  down
  by $450,000 to the  appraised value of approximately  $1.2 million.   The
  $450,000 writedown is included as a loss from discontinued operations  in
  the Company's consolidated statement of operations.

  During the final quarter of 1997,  the Company entered into an  agreement
  to sell its  Plant City,  Florida facility.   The contract  called for  a
  purchase price of $800,000.  The  terms of the selling agreement were  as
  follows:  35% down payment,  balance  to  be paid  over a five-year note.  
  The five year note was paid off in cash in 1998.  The sale was closed  in
  the second  fiscal quarter  of 1998.   As  a result  of the  sale of  the
  facility, a $566,000  loss was incurred.   This charge  is included as  a
  loss  from  disposition  of  discontinued  operations  in  the  Company's
  consolidated statement of operations prior to the reorganization in 1997.
  The loss is primarily attributable to  a write-down of the  plant's  book
  value to the agreed contract price plus estimated expenses to repair  the
  facility.
<PAGE>

  Other Discontinued Operations

  The  following  summarizes  the  results  of  the  various   discontinued
  operations reflected  in  the  accompanying  Consolidated  Statements  of
  Operations (in thousands):

                         Reorganized Company            Predecessor Company  
                       Twelve             One         Eleven
                        Month            Month         Month          Fiscal
                       Period           Period        Period           Year
                        Ended            Ended         Ended          Ended
                       Oct. 31,         Oct. 25,     Sept. 20,       Oct. 26,
                        1998              1997         1997            1996
                       -------          -------      -------         -------
Sales:
  Rymer Seafood       $   -            $    -       $   -           $ 52,547 
  Rymer Chicken           -                 -           -                -   
                       -------          -------      -------         -------
     Total sales      $   -            $    -       $   -           $ 52,547 
                       =======          =======      =======         =======
Income (loss) from
 discontinued
 operations:
  Rymer Seafood       $   -            $    -       $   -           $    283 
  Rymer Chicken           -                 -           -               (450)
                       -------          -------      -------         -------
                      $   -            $    -       $   -           $   (167)
                       =======          =======      =======         =======
Loss on dispositions
 of discontinued
 operations:
  Rymer Seafood       $   -             $   -       $   -           $ (1,853)
  Rymer Chicken           -                 -          (566)             -   
                       -------          -------      -------         -------
                      $   -             $   -       $  (566)        $ (1,853)
                       =======          =======      =======         =======

  5.  Reorganization Plan

  The Company  adopted "fresh-start  reporting" on  September 20,  1997  in
  accordance with Statement of Position ("SOP") 90-7 issued by the American
  Institute of  Certified  Public Accountants.    SOP 90-7  calls  for  the
  adoption of "fresh-start  reporting" if the  reorganization value of  the
  emerging entity immediately before the date of confirmation is less  than
  the total of all postpetition liabilities and prepetition allowed claims,
  and if holders of existing voting shares immediately before  confirmation
  receive less than 50 percent of the voting shares of the emerging entity,
  both conditions of  which were satisfied  by the Company.   Although  the
  consummation date was October 6, 1997, fresh-start reporting was  adopted
  on September 20,  1997.  There  were no  fresh-start related  adjustments
  during the period September 21, 1997 to October 6, 1997.

  Under fresh-start accounting, all assets and liabilities are restated  to
  reflect their reorganization value, which approximates book value at date
  of reorganization.  Therefore, no reorganization value has been allocated
  to the  assets  and  liabilities.    In  addition,  the  amount  of  debt
  forgiveness  was  $25.6  million  and  the  accumulated  deficit  of  the
  predecessor company at  September 20,  1997 totalling  $50.4 million  was
  eliminated,  and  at  September  21,  1997,  the  reorganized   company's
  financial statements reflected no beginning retained earnings or deficit.

  The effect of the  plan of reorganization  on the Company's  Consolidated
  Balance Sheet as of September 20, 1997 is as follows (in thousands):
<PAGE>

                       Pre-
                  Reorganization    Adjustment            Reorganized
                  Balance Sheet     to Record     Fresh-Start   Balance Sheet
                  September 20,      Plan of       Accounting    September 21,
                       1997      Reorganization   Adjustments        1997   
                      ------         ------         --------        ------
ASSETS
Current assets       $ 5,875        $  (144)        $    -         $ 5,731

Non-current assets     3,363           (764)             -           2,599
                      ------         ------          -------        ------
                     $ 9,238        $  (908)        $    -         $ 8,330

LIABILITIES

Other liabilities    $ 4,645        $(1,338)        $    -         $ 3,307
Liabilities subject
 to Chapter 11        25,603        (25,603)             -            - 

Stockholder equity:
 Common stock         10,754             17          (10,599)          172
 Paid-in capital      44,363            413          (39,925)        4,851
 Accumulated deficit (76,127)        25,603           50,524          -  
                      ------         ------          -------        ------
                     (21,010)        26,033              -           5,023
                      ------         ------          -------        ------
                    $  9,238        $  (908)        $    -         $ 8,330
                      ======         ======          =======        ======
  6.  Inventories

  Inventories consist of the following (in thousands):

                               Oct. 31,          Oct. 25,
                                 1998              1997 
                                ------            ------
         Raw materials         $ 2,166           $ 2,651
         Finished goods          1,100             1,653
                                ------            ------
                               $ 3,266           $ 4,304
                                ======            ======
  7.  Borrowings

  Current borrowings consisted of the following (in thousands):
                                                                          
                                         October 31,        October 25,
                                            1998               1997  
                                           -----              -----
       Banks, with interest of 2% over   
       prime in 1998 and 1 1/2% over
       prime in 1997                      $ 1,851            $ 1,394
                                           ======             ======


  The prime rate applicable to the Company's outstanding bank notes payable
  was 8% at October 31, 1998  and 8.5% at October  25, 1997.  The  weighted
  average interest rate relating  to these borrowings  was 10.1% and  10.0%
  during fiscal 1998 and 1997 respectively.
<PAGE>

  The Company on April 23, 1998  entered into a loan agreement with  FINOVA
  that replaced  the loan  agreement with  LaSalle.   The  credit  facility
  provides up to $4 million  for the Company through  April 23, 2001.   The
  FINOVA agreement contains loan covenants that the Company must meet.   At
  October 31, 1998, the Company was in violation of a covenant which FINOVA
  has agreed to waive.   The Company  may be in  violation of certain  loan
  covenants in the  future.  While  the Company believes  that FINOVA  will
  waive those violations going forward, there can be no assurances in  that
  regard.

  In conjunction with  its bankruptcy filing,  the Company,  on August  29,
  1997, entered into a  revised loan agreement with  LaSalle.  The  revised
  agreement provided a credit facility of up to $4 million for the  Company
  through April 1998  based on  borrowing  base  availability calculations.  
  The agreement revised certain loan covenants and waived all prior  events
  of default as of the quarter ended July  25, 1997.  At October 25,  1997,
  the Company had a bank loan of $1.4 million outstanding under its line of
  credit with  LaSalle.    Subsequent  to  year-end,  the  Company  was  in
  violation of  certain loan  covenants with  LaSalle.   LaSalle agreed  to
  waive such  covenants.   The  Company was  in  compliance with  its  loan
  covenants as of October 25, 1997. 

  Under the agreement noted above the  Company's Rymer Meat subsidiary  had
  total lines of credit available of  $2.6 million at October 31, 1998  and
  $2.4 million at October 25, 1997, of which $.7 million and $1.0  million,
  respectively, was unused.

  The Company's  bank  agreements  contain  certain  restrictive  covenants
  which, among other things, limit the  amount of indebtedness incurred  by
  the Company and its subsidiaries and  require the maintenance of  certain
  financial ratios by the Company and its subsidiaries.  Substantially  all
  of  the  Company's property,  plant and  equipment  and  certain  current
  assets  are  pledged  as  collateral  under  its   bank  agreement.

  8.  Leases

  The Company and its subsidiaries  lease certain facilities and  equipment
  used for offices and manufacturing.  Total rental expense from continuing
  operations  under  all  operating  leases  was  approximately   $476,000,
  $476,000, and  $683,000, in  fiscal 1998,  fiscal 1997  and fiscal  1996,
  respectively.  The above lease costs  do not include the costs of  taxes,
  insurance,  maintenance  and   utilities  which  the   Company  and   its
  subsidiaries are required to pay.

  The lease for the Chicago meat processing facility expired in July  1996.
  The  Company  has subsequently  negotiated for  revised lease  space  and
  lower rental costs and  leases  the  facility on  a month-to-month basis.  

  Property, plant and equipment recorded under lease commitments under non-
  cancelable leases are not material.
<PAGE>

  9.  Income Taxes

  The Company's deferred tax  asset is related  primarily to its  operating
  loss carryforward for  tax  reporting  purposes  which  approximated $9.0
  million and  $18.0 million  at  October 31,  1998  and October 25,  1997,
  respectively.   The   Company  recorded  a  valuation allowance amounting
  to the entire deferred tax asset balance because  the Company's financial
  condition,  its  lack of  a  history  of  consistent  earnings,  possible
  limitations  on the  use  of carryforwards,  and  the expiration dates of
  certain of the net operating loss carryforwards  give rise to uncertainty
  as to whether the deferred tax asset is realizable.

  The components of the net deferred tax asset recorded in the accompanying
  consolidated balance sheets as of October  31, 1998 and October 25,  1997
  are as follows (in thousands):
                                                                          
                                                     1998           1997
                                                    ------         ------
       Deferred tax assets:
         Accounts receivable                       $    53        $    48
         Inventories                                    94             88
         Property, plant and equipment                 352            888
         Other liabilities and reserves                 97            405
         Alternative minimum tax credits                68             33
         Net operating loss carryforwards            3,152          6,067
         Investment tax credits                        512            174
         Contribution carryover                         10              0
                                                    ------         ------
           Total deferred tax assets                 4,338          7,703
         Less:  Valuation allowance                 (4,338)        (7,703)
                                                    ------         ------
           Net deferred tax asset                  $   -          $   -   
                                                    ======         ======

  The following table accounts  for the difference  between the actual  tax
  provision attributable  to  loss  before income  taxes  and  the  amounts
  obtained by applying the statutory U.S. Federal income tax rate of 34% to
  the loss before income taxes.                                                

                                               Fiscal Years Ended
                                     October 31,    October 25,    October 26,
                                        1998           1997           1996 
                                       -------        -------        -------
(Loss) income before income taxes:
  Loss from continuing operations     $ (2,017)      $ (4,941)      $ (7,144)
  (Loss) income from discontinued
   operations                              -             (566)          (167)
  Loss on dispositions of        
   discontinued operations                 -              -           (1,853)
                                       -------        -------        -------
  Total loss before income taxes      $ (2,017)      $ (5,507)      $ (9,164)
                                       =======        =======        =======
Total (benefit) provision computed
 by applying the U.S. statutory
 rate (34%)                           $   (686)      $ (1,872)      $ (3,116)
Increases (decreases) in taxes due to:
  Loss which provides no current
   tax benefit                             686          1,872          3,052
  Other differences, net                   -              -               64
                                       -------        -------        -------
Actual tax provision                  $    -         $    -         $    -
                                       =======        =======        =======
<PAGE>

  The Company's Federal  income tax returns  are subject to  review by  the
  Internal Revenue Service, the results of  which cannot be predicted  with
  certainty.   At October  31,  1998, the  Company  had an  operating  loss
  carryforward for tax reporting purposes approximating $9 million which is
  available to offset future Federal taxable income which begins to  expire
  in 2007.  Additional  restrictions under Section 382  may apply to  limit
  the amount of net  operating loss carryforward which  can be utilized  in
  the future.

  10.  Stockholders' Equity

  The Company has authorized 20,000,000  shares of common stock with a  par
  value of $0.04 per share and 400,000 shares of preferred stock with a par
  value of $10 per share.

  At October 31, 1998,  there were 430,000   stock shares reserved for  the
  exercise of stock options.


  11.  Capital Stock, Stock Options and Warrants

  In 1994, the Company adopted  the 1994 Stock Plan  (the 1994 Plan).   The
  1994 Plan permitted the issuance to  key employees and directors  options
  to purchase up to 580,000 shares of common stock.

  Options granted under the 1994 Plan  were exercisable at the fair  market
  value of the Common Stock on the date the option was granted.  At October
  26, 1996,  293,250 options  were outstanding  under the  1994 Plan.    In
  connection with the Company's restructuring,  the options under the  1994
  Plan were cancelled.

  No compensation expense has been recognized by the Company as all options
  were granted at the market price of the stock at the date of the grant.

  A summary of stock  option activity and other  related information is  as
  follows:

                                                                          
                                         1998         1997            1996
                                       -------      -------         -------

Shares under option at beginning of
 year                                      -        624,750         799,500
Options granted (at $.44 to $1.00 in
 in 1998, at prices of $1.50 in 1996)  348,000          -           175,000
Options cancelled and expired              -       (624,750)       (681,250)
                                       -------      -------         -------

Shares under option at the end of the
 year
No shares exercised at October 31,
 1998                                  348,000          -           293,250
                                       =======      =======         =======
Shares available for option at
 end of year                            82,000          -           624,750
                                       =======      =======         =======

<PAGE>

  In  October  1995,  the  Company  engaged  the  financial  advisory   and
  turnaround firm of Kirkland Messina, Inc.  (KM) to assist the Company  in
  developing a plan  to return the  Company to profitability.   As part  of
  KM's compensation, the  Company issued  KM 500,000  warrants to  purchase
  common stock of the Company  at an exercise price  in cash of $1.675  per
  share.  The warrants issued to KM expire October 1, 1998, however,  these
  warrants were cancelled as the result of the Company's restructuring.

  On November 8, 1995, the Company announced  that it had hired P. E.  (Ed)
  Schenk as  its President  and Chief  Executive Officer.  As part  of  Mr.
  Schenk's compensation, he was issued 750,000 warrants to purchase  common
  stock of  the Company  at an  exercise price  of $1.00  per share.    The
  warrants issued to Mr.  Schenk expire November 8,  1998.  These  warrants
  also were cancelled as the result of the Company's restructuring.

  In connection with the reorganization, the Company issued 430,000  common
  shares to senior management.  The estimated fair value of the shares  was
  recorded as expense for the eleven month period ended September 20, 1997.

  Effective with the Company's reorganization, a new stock option plan  was
  put into place.  As of October 25, 1997, there were no shares granted  or
  exercised under the new plan.

  During 1998,  the  Company issued  options  to key  employees  and  board
  members for the purchase of 348,000 shares of common stock.  The  options
  vest either immediately or  equally over a  four year period,  commencing
  with the date of grant.  The  exercise price ranges from $0.44 per  share
  to $1.00 per share, the market price on the date  of grant.  The  options
  will expire five years from the date of  grant.  The pro forma affect  of
  applying the fair  value based  method to this  option would  not have  a
  material affect on the reported net earnings (loss) and would not  change
  the net  earnings  (loss) per share for  the year ended October 31, 1998.  
  The fair value  of this  option was  computed by  applying the  following
  assumptions to the Black  Scholes options pricing  model:  no  dividends;
  risk-free interest rate  of 5.76%; volatility  of 26.0%;  and an  average
  term of 4 years.

                                                                    
  12.  Employee Benefit Plans

  The Company currently sponsors a Company-wide  401(k) savings plan.   The
  plan covers all salaried  personnel at the  Chicago processing plant  and
  the Company's  corporate  headquarters who  have  completed 6  months  of
  service.  The Company makes matching contributions to the 401(k)  savings
  plan of up to 5% of each participants' compensation.

  Contributions and  costs  expensed  under the  401(k)  savings  plan  for
  employees relating  to the  Company's continuing  operations amounted  to
  approximately $86,000, $96,000 and $91,000 for fiscal 1998, fiscal  1997,
  and fiscal 1996, respectively. 

  13.  Commitments and Contingencies

  The amounts of  liability, if  any, for  claims and  actions against  the
  Company and its  subsidiaries at October  31, 1998  are not  determinable
  but, in the opinion of management, such liability, if any, would not have
  a material effect  upon the Company's  financial position  or results  of
  operations.
<PAGE>

  The Company  has  agreements  with  certain  of  its  customers  to  sell
  merchandise over the next year for  specified prices.   The Company  also
  has agreements with certain of its suppliers to purchase raw materials.  
  The agreements  extend for  up to  one  year and  provide the  price  and
  quantity  of  materials  to  be  supplied.    The  Company  had  purchase
  commitments of $4.3 million as of October 31, 1998.

  14.  Supplemental Cash Flow Information

  Supplemental cash flow information is as follows (in thousands):
                                                                          
                                             1998       1997        1996
                                             ----       ----        ----
       Cash paid for:          
         Interest                            $190       $128        $423

         Federal, state and local
          income taxes (net of tax refunds)  $ 10       $ 10        $(32)

  15.  Concentration of Credit Risk and Supplemental Sales Information

  Financial instruments that potentially subject the Company to significant
  concentrations of credit risk consist principally of accounts receivable.

  The Company routinely  assesses the financial  strength of its  customers
  and, as a consequence, believes that its trade accounts receivable credit
  risk exposure  is limited.   The  Company  establishes an  allowance  for
  doubtful  accounts based upon factors  surrounding  the  credit  risk  of
  specific customers, historical trends, and other information.

  Sales to  customers outside  the  United States  were  less than  10%  of
  consolidated sales in each year presented. 

  Sales to  two  groups  of the  Company's  other  customers,  Bonanza  and
  Ponderosa, together accounted  for approximately 8%,  16.7% and 26.0%  of
  the Company's sales from continuing operations  in fiscal 1998, 1997  and
  1996, respectively. Franchise rights for  both Bonanza and Ponderosa  are
  owned by  Metromedia, Inc.   The  Bonanza and  certain of  the  Ponderosa
  restaurants are independently owned and operated.

  The loss  of any  of  the Company's  major  customers, or  a  substantial
  portion of these accounts,  could have a material  adverse effect on  the
  Company. 

  16.  Fourth Quarter Adjustments

  1998

  None

  1997

  During the final quarter of 1997,  the Company entered into an  agreement
  to sell its Plant  City, Florida facility.   As a  result of the  pending
  sale, a $566,000 loss was  incurred.  This charge  is included as a  loss
  from disposition of discontinued operations in the Company's consolidated
  statement of operations.  The loss is primarily attributable to a  write-
  down of  the facility's  book value  to the  agreed contract  price  plus
  estimated expenses to repair the facility.
<PAGE>

  1996

  In December 1996, the Company had  an independent appraisal performed  of
  the Plant City facility, an asset  remaining from the discontinued  Rymer
  Chicken operation which was disposed of in December 1993.  As a result of
  the appraisal, the carrying  value of the facility  and land was  written
  down by $450,000 in  the fourth quarter of  fiscal 1996 to the  appraised
  value of approximately $1.2 million.  The $450,000 writedown is  included
  as a  loss from  discontinued operations  in the  Company's  consolidated
  statement of operations.

  17.  New Accounting Pronouncements

  In June 1997, the FASB issued Statement of Financial Accounting  Standard
  No. 130, Reporting Comprehensive Income.   This statement, effective  for
  fiscal years beginning after December 15, 1997, would require the company
  to report components  of comprehensive  income in  a financial  statement
  that is displayed with the same prominence as other financial statements.
  Comprehensive income is defined by Concepts Statement No. 6, Elements  of
  Financial Statements as  the change in  equity of  a business  enterprise
  during a period from transactions and other events and circumstances from
  nonowner sources.   It includes  all changes  in equity  during a  period
  except those resulting  from investments by  owners and distributions  to
  owners.  The Company has not yet determined its comprehensive income.

  Also in  June 1997,  the FASB  issued Statement  of Financial  Accounting
  Standard No. 131, Disclosure about Segments of an Enterprise and  Related
  Information.   This statement,  effective  for financial  statements  for
  periods beginning  after  December  15,  1997,  requires  that  a  public
  business enterprise reports financial  and descriptive information  about
  its reportable operating segments.   Generally, financial information  is
  required to  be  reported  on  the basis  that  is  used  internally  for
  evaluating segment performance and deciding how to allocate resources  to
  segments.  The Company is evaluating this pronouncement and will make any
  segment disclosures as necessary.

  Item 9. Changes in and Disagreements  with Accountants on Accounting  and
  Financial Disclosure

  None

                                  PART III


  Item 10.  Directors and Executive Officers of the Registrant

  The disclosure required by Item 10  is set forth in, and is  incorporated
  by reference  to, the  Company's Proxy  Statement  relating to  the  1998
  Annual Meeting of Stockholders, which will  be filed with the  Securities
  and Exchange Commission on  or before February 28,  1999 (the 1999  Proxy
  Statement).

  Item 11.  Executive Compensation

  The disclosure required by Item 11  is set forth in, and is  incorporated
  by reference to, the 1999 Proxy Statement.
<PAGE>

  Item 12.  Security Ownership of Certain Beneficial Owners and Management

  The disclosure required by Item 12  is set forth in, and is  incorporated
  by reference to, the 1999 Proxy Statement.

  Item 13.  Certain Relationships and Related Transactions

  The disclosure required by Item 13  is set forth in, and is  incorporated
  by reference to, the 1999 Proxy Statement.

                                 PART IV

  Item 14.  Exhibits, Financial  Statement  Schedules, and Reports  on Form
  8-K

  (a) 1. The following audited consolidated financial statements of    Page
         the Company are included in Part II, Item 8:

         Consolidated Statements of Operations for the fiscal years
         ended October 31, 1998, October 25, 1997 and October 26,
         1996                                                           15

         Consolidated Balance Sheets as of October 31, 1998 and
         October 25, 1997                                               16

            Consolidated Statements of Cash Flows for the fiscal years
            ended October 31, 1998, October 25, 1997 and October 26,
            1996                                                        17

            Consolidated Statements  of Stockholders' (Deficit)
            Equity for the fiscal years ended October 31, 1998,
            October 25, 1997 and October  26, 1996                      18

            Notes to Consolidated Financial Statements                 19-28

             Note:   Reporting  for  the year  ended  October 25,
             1997 is accomplished by combining the  financial
             results for the  one-month period ended  October 25,
             1997 and those of the eleven-month period ended
             September 20, 1997.

                                                            
  (a) 2. Financial Statement Schedules:

            Schedule II - Valuation and Qualifying Accounts and
            Reserves                                                    29

            Schedules, other than those listed above, are omitted
            as they are not applicable or required or equivalent
            information  has  been included  in  the  financial
            statements or notes thereto.
<PAGE>

  (a) 3.     Exhibits:

          2        Plan of Reorganization                                *

         11        Computation of Earnings Per Share                    31

         21        Subsidiaries of the Company                          32

         27        Financial Data Schedule (EDGAR filing version)      N/A

         NOTE:  With the exception of Exhibit Nos. 2, 11, 21
         and 27, the registrant will furnish copies of such
         other Exhibits upon written request to the Secretary at
         the address on the cover of the Form 10-K Annual Report.
         A reasonable copying and handling fee will be charged.

  (b)    Reports on Form 8K

           None


         *    Included  as  an  exhibit   in  the  Company's  S-4
         filing; incorporated herein by reference.

<PAGE>


             SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
  FOR THE YEARS ENDED  OCTOBER 31, 1998, OCTOBER  25, 1997 AND OCTOBER  26,
  1996
                    RYMER FOODS INC. AND SUBSIDIARIES


                                            Additions         
                                            Charged to
                    Balance at  Charged to    Other                 Balance at
                    Beginning   Costs and    Accounts   Deductions     end
  Description        of Year     Expenses   (describe)  (describe)   of Year
                       -----      ------      ------      -------     -----
    (in thousands)

  Deducted in the
   balance sheets
   from the assets
   to which they
   apply:

  Allowance for
   doubtful accounts-
   current:

    For the fiscal
     year ended
     October 31, 1998  $  141     $   60                $   46 (a)   $  155

    For the fiscal year
     ended October 25,
     1997                 200        120                   179 (a)      141

    For the fiscal year
     ended October 26,
     1996                 353         53                   206 (a)      200
    
  (a)  Accounts written off, net of recoveries
<PAGE>

                               SIGNATURES

  Pursuant to the  requirements of Section  13 or 15(d)  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.


                                 Rymer Foods Inc.
                                 (Registrant)     


                                 By   /s/ P. Edward Schenk      
                                 P. Edward Schenk, Chairman of the Board,
                                 Chief Executive Officer, and President


  Date:  January 25, 1999



  Pursuant to the requirements of the Securities Exchange Act of 1934, this
  report has been signed  below by the following  persons on behalf of  the
  Registrant and in the capacities and on the date indicated.


  /s/ P. Edward Schenk    Chairman of the Board,                      1/25/99
  P. Edward Schenk        Chief Executive Officer and President
                          (Principal Executive Officer)

  /s/ Edward M. Hebert    Director, Senior Vice President, Chief      1/25/99
  Edward M. Hebert        Financial Officer, Treasurer and Secretary

  /s/ Michael Bowen       Director                                    1/25/99
  Michael Bowen  

  /s/ Michael J. Brinati  Director                                    1/25/99
  Michael J. Brinati

  /s/ John W. Elting      Director                                    1/25/99
  John W. Elting 

  /s/ Barry Spector       Director                                    1/25/99
  Barry Spector