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 25, 1997
                                             
                       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
<PAGE>
   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  9,  1998,  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 $4.4 million.

                    DOCUMENTS INCORPORATED BY REFERENCE

   Proxy Statement for  1998 Annual Meeting  of Stockholders (Part  III)
   (to be filed with the Securities and Exchange Commission on or before
   February 28,  1998).   Certain exhibits  are incorporated  herein  by
   reference.  The Index of Exhibits is on Page 31 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.

   On a combined basis (the one-month period ended October 25, 1997, and
   the eleven-month  period  ended  September  20,  1997),  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 to  primarily  ongoing cost  reductions  at its  meat  processing
   facility and corporate office. 

   In  fiscal  1995,  the  Company  reported  a  loss  from   continuing
   operations  of  $29.6  million,  of  which  $20.4  million   resulted
   from the  writedown  of  goodwill.   This  writedown  eliminated  all
   remaining goodwill of the  Company.  The  goodwill was determined  to
   have been impaired because of the financial condition of the  Company
   and the  Company's  inability  to generate  future  operating  income
   without  substantial  sales  volume  increases which  were uncertain.  
   Moreover, anticipated future cash flows of the Company indicated that
   the recoverability of the asset was not reasonably assured.

   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.
<PAGE>
   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 25, 1997  was
   approximately $2.8 million.
   
   Customers

   The   Company's   customers   consist   primarily   of   family-style
   restaurants, restaurant chains and foodservice distributors. Sales to
   three restaurant  chains owned  by  Darden (formerly  General  Mills)
   comprised approximately 14% of the Company's revenues from continuing
   operations in fiscal  1995.  During  the first quarter  of 1996,  the
   Company was informed by Darden that its supply contracts would not be
   renewed for fiscal 1996.

   Sales to two  groups of the  Company's other  customers, Bonanza  and
   Ponderosa, together  accounted for  approximately 16.7%,  26.0%,  and
   23.1% of the  Company's sales  from continuing  operations in  fiscal
   1997, 1996 and 1995, 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.

   The Company  has agreements  with certain  of its  customers to  sell
   products over  the next  year for  specified prices.   The  Company's
   aggregate commitments  under sales  agreements  at October  25,  1997
   approximated $1.0 million.


   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 25,
   1997, October 26,  1996, and October  28, 1995 were  not material  as
   compared to other operational expenses.
<PAGE>
   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.    Steakhouse  sales,  which  now   comprise
   approximately 16.2% of Rymer Meat sales, continued to decline  during
   fiscal 1997 due to the ongoing  consolidation within that segment  of
   the restaurant market along  with  increasing  competitive pressures.  
   The segment  of retail  sales which  represents home  delivery  sales
   declined in 1997 to 6.3% of  total sales versus 14.6% of total  sales
   in 1996.

   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  25, 1997, October  26, 1996, and  October
   28, 1995.  The Company has not  received notice of, and is not  aware
   of any claims arising under any federal or  state environmental laws.

   Employees

   At October 25, 1997, Rymer Foods had approximately 228 employees,  of
   whom approximately 185 were covered by union contracts.  On  December
   19, 1997, the Company laid off  30 employees, 27 of which were  union
   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.
<PAGE>
   Item 2.  Properties

   At October 25, 1997, the principal physical properties of Rymer Foods
   consisted of the following:

                       Footage   Ownership  Expiration   Facility Use
   Chicago, Illinois   123,000     Leased   Month to     Offices/Production/
                                            Month           Warehouse
   Plant City, Florida  42,000     Owned    Not          Held for sale
                                            Applicable

   The Chicago facility is considered suitable and adequate  to meet  the
   needs of the Company.  The  owned facility is used as  collateral  for
   the Company's bank credit agreement.  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.
   However, a new lease has not been  finalized.   Management expects  to
   lease on a month-to-month basis for  the  time  being.  See  Note 7 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 and 1996 have not been restated to reflect  the
   25 to 1 reverse stock split.  On January 9, 1998, the Company's stock
   price closed at $1.125 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,
   1998, there were approximately 710 holders of record of Common Stock.

                                       High           Low

             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

             1996
               First Quarter            1.50           0.63
               Second Quarter           1.13           0.56
               Third Quarter            0.94           0.47
               Fourth Quarter           0.69           0.50



   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  former
   Senior Note Indenture also prohibited the payment of dividends on the
   Common Stock  at any  time  that any  of  the Senior  Notes  remained
   outstanding.  The Company does not anticipate that it will be able to
   pay any dividend on the Common Stock in the foreseeable future.


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


                        Reorganized
                         Company        Predecessor Company
                           One     Eleven
                          Month    Month
                         Period    Period 
                          Ended    Ended            Fiscal Years Ended
                        Oct. 25,  Sept. 20,  Oct. 26, Oct. 28, Oct. 29, Oct. 30,
                          1997      1997       1996     1995     1994     1993
                                     

Results from continuing
 operations:
 Net sales               $ 2,796  $31,095   $ 44,329 $ 79,920 $106,252 $ 99,644
 (Loss) income from
  continuing operations
  before extraordinary             
  item                      (113)  (4,828)    (7,144) (29,620)   1,883  (23,867)
 (Loss) income from            
  discontinued operations    -        -         (167)     290      121      777
 (Loss) gain on
  dispositions of
  discontinued operations    -       (566)    (1,853)     -      4,474      261
 Extraordinary gain on
  discharge of debt          -     25,603        -        -        -        -  
 Net (loss) income          (113)  20,209     (9,164) (29,330)   6,478  (11,441)

 Working capital (deficit) 2,472  (22,623)   (18,202) (10,524)  16,013   14,108
 Total assets              8,266    9,070     10,563   26,074   51,506   65,627
 Long-term liabilities       -      1,097        806      842   19,994   45,968
 Stockholders'
  equity (deficit)         4,910    5,023    (15,616)  (6,858)  22,464   15,590

                                                                               
                                                                      
Primary per share common
 stock data:
 Loss from           
  continuing operations  $ (0.03)     *          *         *       *        *
 Net loss                $ (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.
     
<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. 
<PAGE>
   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.

   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 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.

   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

   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. 
<PAGE>
   Discontinued Operations

   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.  The sale is expected to close 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.   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.

   Restructuring Charge

   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.

   Income Taxes

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

   Fiscal 1996 Compared with Fiscal 1995

   Consolidated sales for 1996 of $44.3  million decreased from 1995  by
   $35.6 million or 45%.  Sales  volume accounted for approximately  92%
   of the sales decrease with lower prices and changes in the sales  mix
   accounting for the remaining decrease.

   Sales decreased primarily due to the  loss of sales to certain  major
   customers during the second quarter of 1995 and the first quarter  of
   1996.    The  Company  also  experienced  a  significant  decline  of
   approximately 69% in unit sales to national restaurant chains.   This
   decrease was primarily due to reduced  sales volume due to  increased
   competition. 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  Company experienced a  decline of 7.8%  in the  average
   selling price primarily due to a lower priced mix of products sold in
   1996 as compared to 1995.

   As compared to 1995,  consolidated cost of  sales decreased by  $33.5
   million or 44.1% while total gross  profit decreased by $2.1  million
   or 53.2%.  As  a percentage of sales,  the consolidated gross  margin
   decreased to 4.1% as compared to 4.8% in 1995.

<PAGE>
   Gross profit decreased  compared to 1995  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  decreased  by  $4.2
   million or 47%.  Selling expenses decreased by $1.4 million primarily
   due to  reduced sales  personnel and  lower expenses  related to  the
   Company's retail products sold in grocery and wholesale club  stores.
   Administrative  expenses decreased by  $2.8 million primarily due  to
   administrative headcount reductions.

   Interest Expense

   Interest expense increased by $412,000 or 10.9% as compared to  1995.
   This  increase  was  primarily  attributable  to  increased  interest
   expense on the Company's 11% Senior Notes.  On December 15, 1995  and
   June 15, 1996, the Company announced that, as permitted by the  terms
   of its 11% Senior Notes due December 15, 2000, it had elected to make
   its December 15,  1995 and  June 15,  1996 interest  payments on  its
   Senior Notes by issuing additional Senior Notes in a principal amount
   equal to the  interest payment  due.   According to  the Senior  Note
   Indenture, such an election requires the Company to pay its  interest
   at a rate of 18%  versus the 11% rate  applicable if the interest  is
   paid in cash.

   The Company has also announced that, 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.

   Discontinued Operations

   On January  5, 1996,  the Company  announced that  it had  signed  an
   agreement in principle to sell the assets of Rymer Seafood 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 Board members.  On August
   28, 1996, the Company completed the sale of substantially all of  the
   assets of  its Seafood  subsidiary  to BGL  I,  Inc.   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 on 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 Bank.
<PAGE>
   The Company  recorded  income  related to  its  discontinued  seafood
   operation during 1996 of $283,000 compared  to income of $290,000  in
   1995.

   In December 1996, the Company had an independent appraisal  performed
   of its  Plant City,  Florida 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.   In January 1996, the  Company
   entered into a preliminary agreement to lease the Plant City facility
   for a  period of  ten years.   The  preliminary lease  agreement  was
   cancelled in June 1996. As a result, the facility had been  available
   for sale or lease.

   Income Taxes

   In 1996,  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.

   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.

   In conjunction with its bankruptcy filing, the Company, on August 29,
   1997, entered  into  a revised  loan  agreement with  LaSalle.    The
   revised agreement provides 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 has agreed to waive such  covenants.
   The  Company   may  continue  to be  in  violation  of  certain  loan
   covenants in  the  future also.    While the  Company  believes  that
   LaSalle will waive  those covenants going  forward, there  can be  no
   assurances in that regard.   The Company was  in compliance with  its
   loan covenants as of  October 25, 1997.   The Company's current  loan
   agreement expires on April  30, 1998.  If  the loan agreement  should
   not be renewed, the Company will need to seek alternate financing.
<PAGE>
   Previously, in  conjunction  with  its sale  of  Rymer  Seafood,  the
   Company, on  August  28,  1996,  had  entered  into  a  revised  loan
   agreement with  LaSalle.   The revised  agreement provided  a  credit
   facility of up to $5 million for the Company through April 1997 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  27, 1996.  At  October 26, 1996, the  Company
   had a bank loan of $211,000 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  $2.5 million at October 25,  1997
   and a net working deficit at October 26, 1996 of $18.2 million  which
   was principally due  to the 11%  Senior Notes being  classified as  a
   current liability.

   The Company had total  lines of credit  available based on  borrowing
   base calculations  of  $2.4 million  at  October 25,  1997  and  $2.6
   million at October 26, 1996, of which $1.0 million and $2.4  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's
   aggregate commitment under  sales agreements  was approximately  $2.8
   million at October 25,  1997.  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
   approximately $1.0 million as of October 25, 1997.
   
   The Company anticipates spending  approximately $600,000 for  capital
   expenditures in 1998.   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.

   The Company's main  computer system  and software  are not  currently
   Year 2000 compliant.  The Year  2000 issue is the result of  computer
   programs being written using  two digits rather  than four to  define
   the applicable year.   Any of  the Company's  computer programs  that
   have date sensitive software may recognize  a date using "00" as  the
   year 1900 rather than the year 2000.   This could result in a  system
   failure  or  miscalculations   causing  disruptions  of   operations,
   including, but  not  limited to,  a  temporary inability  to  process
   transactions, invoices or other similar normal business activities.
<PAGE>
   Based on a recent assessment, the Company has determined that it will
   need to modify a significant portion of  its  software  so  that  its
   computer  system will properly utilize data beyond December 31, 1999.
   The  Company plans on completing its  Year 2000 modifications by  the
   end of  its third quarter of fiscal 1998 utilizing internal resources
   for all program changes. As a result, the Company does not anticipate
   any material costs to complete its Year 2000 program modifications.

   There can be no assurances that this time frame will be achieved  and
   actual results could  differ materially from  these plans.   Specific
   factors that might cause such  material differences include, but  are
   not limited to,  the availability and  cost of  personnel trained  in
   this area, the ability  to locate and  correct all relevant  computer
   codes and similar uncertainties.

   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

   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.

   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.
<PAGE>
   1995
   During the fourth quarter  of 1995, the  Company recorded a  goodwill
   writedown of  $20.4  million.    (See  Note  1  to  the  Consolidated
   Financial Statements.)    This  writedown  eliminated  all  remaining
   goodwill of the Company.

   During  the  fourth   quarter  of  1995,   the  Company  recorded   a
   restructuring charge of  $761,000 related to  the restructuring  plan
   commenced in  October  of 1995  to  reduce operating  costs,  improve
   efficiencies, and return the Company to  profitability.  (See Note  3
   to the Consolidated Financial Statements.)

   During the fourth quarter of 1995, the Company recorded an additional
   interest  charge   of  approximately   $470,000.  This   charge   was
   attributable to  increased  interest  expense on  the  Company's  11%
   Senior Notes.  On December 15,  1995, the Company announced that,  as
   permitted by the terms of its 11% Senior Notes due December 15, 2000,
   it had elected to make its December 15, 1995 interest payment on  its
   Senior Notes by issuing additional Senior Notes in a principal amount
   equal to the  interest payment  due.   According to  the Senior  Note
   Indenture, such  an  election  requires the  Company  to  accrue  its
   interest at  a rate  of 18%  versus the  11% rate  applicable if  the
   interest is paid in cash.

<PAGE>
   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 25, 1997, October 26, 1996 and October 28, 1995   15

     Consolidated Balance Sheets as of October 25, 1997 and
     October 26, 1996                                                16

     Consolidated Statements of Cash Flows for the fiscal years
     ended October 25, 1997, October 26, 1996 and October 28, 1995   17

     Consolidated Statements of Stockholders' Equity (Deficit)
     for the fiscal  years ended October 25, 1997,
     October 26, 1996 and October 28, 1995                           18

     Notes to Consolidated Financial Statements                   19-28

   Supplementary Financial Data:

     Schedule II - Valuation and Qualifying Accounts and Reserves    31


   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 sheet  of
          Rymer  Foods Inc. and  subsidiaries as of  October 25,
          1997, and  the consolidated statements  of operations,
          stockholders' equity (deficit) and  cash flows for 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 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  financial position of  Rymer Foods  Inc.
          and  subsidiaries  as of  October  25, 1997,  and  the
          consolidated  results of  their  operations and  their
          cash flows for 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 year
          ended  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 1998.
          Subsequent  to 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.
                                

          Chicago, Illinois               Grant Thornton LLP
          December 12, 1997
<PAGE> 
          REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors
Rymer Foods Inc.

We  have audited the consolidated balance sheet of Rymer Foods Inc.  and
subsidiaries as of October 26, 1996, and the consolidated statements  of
operations,  stockholders' deficit and cash flows for each  of  the  two
years  in  the period ended October 26, 1996.  We have also audited  the
financial statement Schedule II of Rymer Foods Inc. and subsidiaries for
the  years ended October 26, 1996 and October 28, 1995.  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 audits.

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  26,  1996,  and  the
consolidated results of their operations and their cash flows  for  each
of  the  two  years in the period ended October 26, 1996, in  conformity
with  generally accepted accounting principles.  Also, in  our  opinion,
the  financial statement schedule, for the years ended October 26,  1996
and October 28, 1995, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material  respects,
the information set forth therein.

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 1.  The consolidated
financial  statements do not include any adjustments that  might  result
from the outcome of this uncertainty.



                              /s/ Coopers & Lybrand L.L.P.


Chicago, Illinois             Coopers & Lybrand L.L.P.
December 16, 1996
<PAGE>
<TABLE>
   CONSOLIDATED STATEMENTS OF OPERATIONS
   For the fiscal  years ended October  25, 1997, October  26, 1996  and
   October 28, 1995             (in thousands except share data)
                                                                        
                                 Reorganized
                                   Company        Predecessor Company               
                                     One     Eleven
                                    Month    Month
                                    Period   Period
                                    Ended    Ended     Fiscal Years Ended  
                                   Oct. 25, Sept. 20,  Oct. 26,  Oct. 28,
                                     1997      1997      1996      1995        
   <S>                             <C>      <C>       <C>       <C>
   Net sales                       $ 2,796  $ 31,095  $ 44,329  $ 79,920
   Cost of sales                     2,562    28,324    42,516    76,048
      Gross profit                     234     2,771     1,813     3,872
   Selling, general and
    administrative expenses            333     3,793     4,794     9,042
   Restructuring charge                -       1,608       -         761
   Goodwill writedown                  -         -         -      20,377
      Operating loss                   (99)   (2,630)   (2,981)  (26,308)
   Interest expense                     15     2,318     4,198     3,786
   Other income                         (1)     (120)      (35)     (474)
      Loss from
      continuing operations
      before income taxes             (113)   (4,828)   (7,144)  (29,620)
   Provision for income taxes          -         -         -         -  
      Loss from
       continuing operations          (113)   (4,828)   (7,144)  (29,620)
   (Loss) income from discontinued
       operations, net                 -         -        (167)      290
   Loss on dispositions of            
    discontinued operations, net       -        (566)   (1,853)      -   
   Net loss before
    extraordinary item                (113)   (5,394)   (9,164)  (29,330)
   Extraordinary gain on discharge
    of debt                            -      25,603       -         -   
   Net (loss) income              $   (113)$  20,209  $ (9,164) $(29,330)

   Per common share:
    Primary:
      Loss from
      continuing operations       $  (0.03)       *         *         * 
      Net loss before
       extraordinary item         $  (0.03)       *
      Net loss                    $  (0.03)       *         *         *
    Fully diluted:
      Loss from
       continuing operations      $  (0.03)       *         *         * 
      Net loss before
       extraordinary item         $  (0.03)       *         *         * 
      Net loss                    $  (0.03)       *         *         *
   Weighted average shares of
    common stock outstanding:
    Primary                      4,300,000        *         *         * 
    Fully diluted                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 25, 1997 and October 26, 1996
                                                        
    ASSETS                                         1997         1996      
                                               Reorganized   Predecessor
                                                 Company       Company   
                                                    (in thousands)
   <S>                                           <C>          <C>
   Current assets:
     Receivables, net of allowance for doubtful
      accounts of $141,000 in 1997 and $200,000
      in 1996                                    $ 1,406      $ 2,729
     Inventories                                   4,304        3,272
     Other                                           193        1,170
        Total current assets                       5,903        7,171
   Property, plant and equipment:
     Leasehold improvements                          958        1,785 
     Machinery and equipment                         811        6,735 
                                                   1,769        8,520 
   Less accumulated depreciation and amortization     44        6,899 
                                                   1,725        1,621 

   Assets held for sale or lease                     800        1,150 
   Other                                              43          621
                                                $  8,471     $ 10,563 
              
     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                     

   Current liabilities:
     Current portion of borrowings              $  1,394     $ 21,754 
     Accounts payable                                368          558 
     Accrued interest                                 15        1,421 
     Accrued liabilities                           1,654        1,640 
        Total current liabilities                  3,431       25,373 
   Long term debt                                    -             70 
   Deferred employee benefits                        130          736 
                                                   3,561       26,179 

   Commitments and contingencies (Note 14)
   Stockholders' equity (deficit)
     Preferred stock, none outstanding               -            -    
     Common stock, $.04 par, 20,000,000 shares
      authorized, 4,300,000 shares outstanding
      in 1997 and $1.00 par, 20,000,000 shares
      authorized, 10,754,093 shares outstanding
      in 1996                                        172       10,754
     Additional paid-in capital                    4,851       44,363 
     Accumulated deficit                            (113)     (70,733)
        Total stockholders' equity (deficit)       4,910      (15,616)
                                               $   8,471    $  10,563 
              
   See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal years ended October 25, 1997, October 26, 1996 and October 28, 1995

                                        Reorganized        Predecessor Company
                                          Company     Eleven
                                         One Period   Period
                                         Month        Month    
                                         Ended        Ended       Fiscal Years Ended      
                                          Oct. 25,    Sept. 20,   Oct. 26,    Oct. 28,
                                            1997         1997       1996        1995      
                                                                     
<S>                                        <C>       <C>        <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
(Loss) income from continuing operations   $  (113)  $  (4,828) $  (7,144)  $ (29,620)
Non-cash adjustments to loss:                                        
  Depreciation and amortization                 44         579      1,077       2,340 
  Writedown of goodwill                        -           -          -        20,377
  Restructuring charge                         -         1,608        -           761
  (Gain) loss on disposal of properties        -           -            3          (3)
  Deferred compensation expense                -           -          (26)        (24)
  Provision for bad debts                       10        110          53         675
  Payment in kind interest on Senior Notes     -           -        3,621       1,206
Changes in assets and liabilities:
  Net decrease to accounts receivable          179      1,024       1,896       1,752
  Net (increase) decrease to inventories        58     (1,090)      8,847      (2,230)
  Net (increase) decrease to other current
   and other long-term assets                  (17)        95         660         (20)
  Net (decrease) increase to accounts
   payable and accrued expenses                 40      1,127      (1,385)     (2,996)
Net cash flows from operating activities
 of continuing operations                      201     (1,375)      7,602      (7,782)
Net cash flows from operating activities
 of discontinued operations                     (7)      (196)      3,077      (1,082)
  Net cash flows from operating activities     194     (1,571)     10,679      (8,864)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of Rymer Seafood        -          950       1,500         -  
Capital expenditures                            (6)      (609)       (529)       (815)
Other                                          -            1           1         (21)
Net cash flows from investing activities
 of discontinued operations                    -          -            (5)        (33)
  Net cash flows from investing activities      (6)       342         967        (869)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in cash overdraft                        38       (181)       (348)       (425)
Repayments under line-of-credit facility    (3,051)   (27,021)    (49,991)    (88,170)
Borrowings under line-of-credit facility     2,825     28,431      42,075      96,297
Principal payments on debt                     -          -          (267)     (2,292)
Proceeds from borrowings                       -          -           -            48
Proceeds from employee stock purchases         -          -           -            32
Net cash flows from financing activities
 of continuing operations                     (188)     1,229      (8,531)      5,490
Net cash flows from financing activities of
 discontinued operations                       -          -        (3,115)      2,402
  Net cash flows from financing activities    (188)     1,229     (11,646)      7,892
Net change in cash                             -          -           -        (1,841)
Cash and cash equivalents balance at                   
 beginning of fiscal year                      -          -           -         1,841
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  25, 1997, October  26, 1996  and
   October 28, 1995
                                                                        
                                                           Notes
                                   Additional            Receivable   Total
                             Common Paid-In  Accumulated from Sale Stockholders'
                              Stock  Capital  Deficit    of Common    Equity           
                                                           Stock     (Deficit)
<S>                           <C>     <C>      <C>        <C>        <C>
Balance at October 29, 1994   $10,741 $44,344  $(32,239)  $  (382)   $22,464
  Net loss                                      (29,330)             (29,330)
  Shares issued under employee
   stock purchase plan             13      19                             32
  Interest charged on notes
   receivable                                                 (24)       (24)
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                    0
  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

                         
   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.

   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
   now 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.
<PAGE>
   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.

   Goodwill

   In October  of 1995,  the Company  recorded a  goodwill writedown  of
   $20.4 million.  This writedown  eliminated all remaining goodwill  of
   the Company. 

   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

   Earnings (loss)  per share  is calculated  using the  treasury  stock
   method.   Primary and  fully diluted  per share  data was  calculated
   using weighted average  outstanding shares for  the one month  period
   ended October 25, 1997.  There were no common stock equivalents as of
   October 25, 1997.

   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 25, 1997 and  October 26, 1996, and  the reported amounts  of
   revenues and expenses during the three year period ended October  25,
   1997.  Actual results could differ from those estimates.
<PAGE>
   2.  Going Concern

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

   In 1997, the Company reported a decrease in net sales from continuing
   operations as  compared to  1996 of  23.5% principally  due to  lower
   sales to  certain national  restaurant chains.    Also in  1997,  the
   Company reported a loss from  continuing operations of $4.9  million,
   the fifth loss from  continuing operations before extraordinary  item
   in the last six years. 

   Subsequent to year end, the Company was in violation of certain  loan
   covenants.    Additionally,  the  Company's  current  loan  agreement
   expires on  April 30,  1998.   If the  loan agreement  should not  be
   renewed, the Company  will need to  seek alternate  financing.   This
   could result in 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 1997  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 negotiations with its lenders.
   The Company  is pursuing new sales opportunities while continuing  to
   streamline its production process and to reduce other costs. 

   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.

   During the fourth quarter of 1995, the Company recorded a Restructuring
   charge of $761,000 related to the restructuring plan commenced in October
   of 1995 to reduce operating costs, improve efficiencies, and return the
   Company to profitability.  Of this amount, approximately $200,000 
   represented fees and expenses of financial and turnaround consultants.
   The remaining amount represented primarily severance payments related
   to the reduction of sixteen non-union employees.  Four of these employees
   were executive officers, six were selling and administrative positions,
   and six were related to operations.  In addition, the Company eliminated
   approximately 80 union positions.  No severance costs were incurred
   related to the union reductions.  In total, the restructuring resulted
   in an approximate 20% reduction of the Company's work force.  The amount
   of actual consulting fees and termination benefits paid and charged 
   against the reserve was approximately $582,000 and $179,000 in fiscal
   1996 and fiscal 1995, respectively.

   4.  Discontinued Operations and Assets Held for Sale

   The  accompanying  consolidated  financial  statements  reflect   the
   operations  of  the  Company's   Rymer  Seafood  and  Rymer   Chicken
   subsidiaries as discontinued operations for accounting purposes.
<PAGE>
   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 calls for a  purchase
   price of  $800,000.   The  terms  of  the selling  agreement  are  as
   follows:  35% down payment, balance to be paid over a five-year note.
   The  sale is expected to close in the second fiscal quarter of  1998.
   As  a result of the pending 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.   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:
                                                                        
                            Reorganized
                              Company         Predecessor Company             
                                One       Eleven
                               Month      Month
                               Period     Period
                               Ended      Ended      Fiscal Years Ended     
                              Oct. 25,  Sept. 20,   Oct. 26,   Oct. 28,
                                1997       1997       1996       1995   
                                      (in thousands)

    Sales:
      Rymer Seafood            $   -     $    -     $ 52,547   $ 70,377 
      Rymer Chicken                -          -          -          -   
         Total sales           $   -     $    -     $ 52,547   $ 70,377 

    Income (loss) from
     discontinued operations:
      Rymer Seafood            $   -     $    -     $    283   $    290

      Rymer Chicken                -          -         (450)       -
                               $   -     $    -     $   (167)  $    290

    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.
<PAGE>
   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):

                          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
    Accumulted 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. 25,      Oct. 26,
                               1997          1996 

           Raw materials      $ 2,651      $ 1,619
          Finished goods        1,653        1,653
                              $ 4,304      $ 3,272
<PAGE>
   7.  Borrowings

   Borrowings consisted of the following (in thousands):

                                                                        
                                                  October 25, October 26,
                                                     1997        1996     

        Banks, with interest of 1 1/2% over
         prime in 1997 and 1996                   $  1,394     $   210
        Senior Notes due December 15, 2000, with
         interest at 18% in 1996                       -        21,544
        Other                                          -            70
                                                     1,394      21,824
        Less current maturities                      1,394      21,754
                                                  $    -       $    70

   The prime rate  applicable to  the Company's  outstanding bank  notes
   payable was 8.5% at October 25, 1997, and 8.25% at October 26,  1996.
   The  weighted average interest rate relating to these borrowings  was
   10.0% and 9.8% during fiscal 1997 and 1996, respectively.

   In conjunction with its bankruptcy filing, the Company, on August 29,
   1997, entered  into  a revised  loan  agreement with  LaSalle.    The
   revised agreement provides 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 has agreed to waive such  covenants.
   The  Company  may  continue  to  be  in  violation  of  certain  loan
   covenants in  the  future also.    While the  Company  believes  that
   LaSalle will waive  those covenants going  forward, there  can be  no
   assurances in that regard.   The Company was  in compliance with  its
   loan covenants as of  October 25, 1997.   The Company's current  loan
   agreement expires on April  30, 1998.  If  the loan agreement  should
   not be renewed, the Company will need to seek alternate financing.

   The Company's  Rymer  Meat  subsidiary  had  total  lines  of  credit
   available of $2.4  million at October  25, 1997 and  $2.6 million  at
   October  26,  1996,   of  which  $1.0   million  and  $2.4   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.
<PAGE>
   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,  $683,000,  and  $970,000,  in  fiscal  1997,
   fiscal 1996 and fiscal 1995, 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.    The  annualized  rate  for  the  Chicago  lease   is
   approximately  $476,000.    Other  long-term  lease  costs  are   not
   significant.

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

   9.  Income Taxes

   The  Company's  deferred  tax  asset  is  related  primarily  to  its
   operating  loss  carryforward  for   tax  reporting  purposes   which
   approximated $18.0 million and $38.6 million at October 25, 1997  and
   October 26, 1996, 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 25, 1997  and
   October 26, 1996 are as follows (in thousands):

                                                                        
                                                      1997         1996

        Deferred tax assets:
          Accounts receivable                       $   48     $    130
          Inventories                                   88           19
          Property, plant and equipment                888          670
          Other liabilities and reserves               405          435
          Alternative minimum tax credits               33           98
          Net operating loss carryforwards           6,067       13,143
          Investment tax credits                       174          512
            Total deferred tax assets                7,703       15,007
          Less:  Valuation allowance                (7,703)     (15,007)

            Net deferred tax asset                   $  -       $    -
<PAGE>
   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 25,  October 26, October 28,
                                                1997        1996        1995  
(Loss) income before income taxes:
  (Loss) income from continuing operations   $ (4,941)   $ (7,144)    $(29,620)
  (Loss) income from discontinued operations     (566)       (167)         290
  (Loss) income on dispositions of
   discontinued operations                        -        (1,853)         -  
  Total (loss) income before income taxes    $ (5,507)   $ (9,164)    $(29,330)

Total (benefit) provision computed by applying
 the U.S. statutory rate (34%)               $ (1,872)   $ (3,116)    $ (9,972)
Increases (decreases) in taxes due to:
  Goodwill written off                            -           -          6,936
  Goodwill amortization                           -           -            391
  Other differences, net                          -            64            8
  Loss which provides no current tax benefit    1,872       3,052        2,637
  Actual tax provision                         $    -      $    -        $   -  

   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 25, 1997, the  Company had an  operating
   loss  carryforward  for  tax  reporting  purposes  approximating  $18
   million  which is  available to offset future Federal taxable income
   which begin 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 25, 1997, there were  no common stock shares reserved  for
   the exercise of stock options.

<PAGE>
   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  and  at October  28,  1995,
   527,000 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:

                                                                        
                                             1997       1996       1995 

 Shares under option at beginning of year   624,750    799,500   755,000
 Options granted (at prices of $1.50
  in 1996, at $1.63 to $3.25 in 1995)           -      175,000   101,000
 Options cancelled and expired             (624,750)  (681,250)  (56,500)

 Shares under option at the end of the year
 No shares exercisable at October 25, 1997      -      293,250   799,500
 Shares available for option at
  end of year                                   -      624,750   118,500

   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.

   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.
<PAGE>
   In October 1995,  the Financial Accounting  Standards Board  released
   Statement of Financial Accounting Standards No. 123, "Accounting  for
   Stock-Based  Compensation"  ("SFAS  123").    SFAS  123  provides  an
   alternative to  APB  Opinion  25, "Accounting  for  Stock  Issued  to
   Employees"  ("APB25")  and  requires  additional  disclosures.    The
   Company has elected to follow APB 25 in accounting for stock  options
   granted.    As  a  result,   the  Company  generally  recognizes   no
   compensation  expense  associated  with  stock  options.    SFAS  123
   requires disclosure  of  pro  forma  fair  market  value  of  options
   granted, pro forma net income and pro forma earnings per share as  if
   the Company had accounted for its stock options granted subsequent to
   October 28, 1995, under the fair value method of that statement.  The
   Company has not disclosed such information since no options have been
   granted subsequent to the  reorganization and all options  previously
   outstanding were cancelled in connection with the reorganization.

   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.

   12.  Stock Purchase Agreements

   On April 11, 1989, the stockholders approved the sale and issuance of
   180,000 shares of common  stock for $9.00 per  share to three  former
   executives for  recourse promissory  notes, commitments,  and in  one
   case, to  provide  consulting  services  to  the  Company.  The notes
   due  the Company  bear 9.5%  interest  and  were  originally  due  on
   February  24, 1994.  In  fiscal  years  1991,  1992  and  1993,   the
   Board of Directors approved  amendments to the employment, consulting
   and  stock  purchase agreements.   In these  amendments,  the  former
   executives accepted annual salary reductions and  reductions  in  the
   amount  of  additional  compensation  payable  under  the  employment
   agreements.   In  consideration  for  these  reductions,  the  former
   executives received notes  in settlement for  all future  obligations
   for additional  compensation  under  the  employment  and  consulting
   agreements.  Concurrently,  the contractual  purchase obligations  of
   the former executives under the  1989 stock purchase agreements  were
   reduced by a total of $7.75 per share.

   The notes  payable  and notes  receivable  related to  these  amended
   agreements matured  in  January 1996.    On January  2,  1996,  notes
   payable  of  approximately   $406,000  were   offset  against   notes
   receivable of approximately  the same amount.   The notes  receivable
   were classified  as  a  reduction of  Stockholders'  equity  as  they
   related to stock purchase agreements.
<PAGE>
   13.  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 $96,000, $91,000 and  $171,000 for fiscal 1997,  fiscal
   1996, and fiscal 1995, respectively. 

   Under terms  of  a  deferred compensation  agreement  with  a  former
   officer/director of the Company, the present value of future payments
   under the agreement had been included in deferred employee  benefits,
   amounting to $577,000 at October 26, 1996.  No amount is included  at
   October 25, 1997 as the deferred compensation agreement was converted
   to equity during the Company's restructuring process.

   14.  Commitments and Contingencies

   The amounts of liability, if any, for claims and actions against  the
   Company and its subsidiaries at October 25, 1997 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.

   The Company  has agreements  with certain  of its  customers to  sell
   merchandise over the next year for  specified prices.  The  Company's
   aggregate commitment  under sales  agreements is  approximately  $1.0
   million at October 25,  1997.  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
   $2.8 million as of October 25, 1997.

   15.  Supplemental Cash Flow Information

   Supplemental cash flow information is as follows (in thousands):

                                                                        
                                          1997        1996       1995

     Cash paid for:
       Interest                           $128       $  423      $2,019

     Federal, state and local
       income taxes (net of tax refunds)  $ 10       $  (32)     $  613
<PAGE>
   16.  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 three restaurant
   chains  owned   by   Darden  (formerly   General   Mills)   comprised
   approximately  14%  of   the  Company's   revenues  from   continuing
   operations in  1995.    During the  first  quarter  of  1996,  Darden
   informed the  Company  that certain  supply  contracts would  not  be
   renewed for 1996.

   Sales to two  groups of the  Company's other  customers, Bonanza  and
   Ponderosa, together  accounted for  approximately 16.7%,  26.0%,  and
   23.1% of the  Company's sales  from continuing  operations in  fiscal
   1997, 1996 and 1995, 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. 

   17.  Fourth Quarter Adjustments

   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.

   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.
<PAGE>
   1995

   During the fourth quarter  of 1995, the  Company recorded a  goodwill
   writedown of $20.4 million.  (See Note 1).  This writedown eliminated
   all remaining goodwill  of the Company.   The asset  of goodwill  was
   determined to have  been impaired  because of  the current  financial
   condition of  the Company  and the  Company's inability  to  generate
   future operating income  without substantial  sales volume  increases
   which are uncertain.  Moreover, anticipated future cash flows of  the
   Company indicated  that  the  recoverability of  the  asset  was  not
   reasonably assured.

   During  the  fourth   quarter  of  1995,   the  Company  recorded   a
   Restructuring charge of  $761,000 related to  the restructuring  plan
   commenced in  October  of 1995  to  reduce operating  costs,  improve
   efficiencies, and return the Company to profitability.  (See Note 3).
    Of this amount, approximately $200,000 represents fees and  expenses
   of financial and  turnaround consultants while  the remaining  amount
   represents primarily severance payments.

   During the fourth quarter of 1995, the Company recorded an additional
   interest  charge  of  approximately   $470,000.    This  charge   was
   attributable to  increased  interest  expense on  the  Company's  11%
   Senior Notes.  On December 15,  1995, the Company announced that,  as
   permitted by the terms of its 11% Senior Notes due December 15, 2000,
   it had elected to make its December 15, 1995 interest payment on  its
   Senior Notes by issuing additional Senior Notes in a principal amount
   equal to the  interest payment  due.   According to  the Senior  Note
   Indenture, such an election requires the Company to pay its  interest
   at a rate of 18%  versus the 11% rate  applicable if the interest  is
   paid in cash.

   18.  New Accounting Pronouncements

   In February  1997, the  Financial Accounting  Standards Board  (FASB)
   issued Statement of Financial Accounting Standards No. 128,  Earnings
   Per Share  (FAS  128).   FAS  128  is  designed to  improve  the  EPS
   information  provided  in  financial  statements by  simplifying  the
   existing   computational   guidelines,   revising   the    disclosure
   requirements,  and  increasing  the  comparability  of  EPS data   on
   an  international  basis.   FAS  128   is  effective   for  financial
   statements issued for periods  ending after December  15, 1997.   The
   Company does not anticipate  any impact of FAS  128 on its  financial
   statements.

   In February 1997, the FASB  issued Statement of Financial  Accounting
   Standards No. 129, Disclosure of Information about Capital  Structure
   (FAS 129).  FAS 129 establishes standards for disclosing  information
   about an entity's capital structure.  This Statement is effective for
   financial statements for periods ending after December 15, 1997.  The
   Company does not anticipate any impact from this pronouncement as  it
   is currently complying with the disclosure requirements.
<PAGE>
   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
<PAGE>

                                    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 1997 Annual Meeting of Stockholders, which will be filed with
   the  Securities and Exchange  Commission on  or before  February 28,
   1998 (the 1998 Proxy Statement).

   Item 11.  Executive Compensation

   The disclosure  required  by  Item  11  is  set  forth  in,  and  is
   incorporated by reference to, the 1998 Proxy Statement.

   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 1998 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 1998 Proxy Statement.

<PAGE>
                                  PART IV

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

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

                Consolidated Statements of Operations for
                the fiscal years ended October 25, 1997,
                October 26, 1996 and October  28, 1995               15

                Consolidated Balance Sheets as of October
                25, 1997 and October 26, 1996                        16

                Consolidated Statements of Cash Flows for
                the fiscal years ended October 25, 1997,
                October 26, 1996 and October 28, 1995                17

                Consolidated Statements of Stockholders'
                (Deficit) Equity for the fiscal years
                ended October 25, 1997, October 26, 1996
                and October 28, 1995                                 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                                         31

             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                    33
             21 Subsidiaries of the Company                          34
             23 Consents of Independent Accountants                35-36
             27 Financial Data Schedule (EDGAR filing version)      N/A

           NOTE:   With the exception of Exhibit Nos. 2, 11, 21, 23  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

          Subsequent  to  the Company's fiscal year end, a Form 8-K  was
          filed  on  October  28,  1997  notfying  that  the   Company's
          audit/client relationship with Coopers and Lybrand L.L.P.  had
          been terminated.

           *    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 25, 1997, OCTOBER  26, 1996 AND  OCTOBER
   28, 1995


                     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 25, 1997   $  200    $  120                $  179 (a)     $  141

 For the fiscal year
 ended October 26, 1996      353        53                   206 (a)        200

 For the fiscal year
 ended October 28, 1995      581       675                   903 (a)        353
   (restated)


   (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 23, 1998



   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,                 1/23/98
        P. Edward Schenk  Chief Executive Officer and President
                          (Principal Executive Officer)

    /s/ Edward M. Hebert  Senior Vice President, Chief Financial 1/23/98
        Edward M. Hebert  Officer and Treasurer

    /s/ Michael Bowen     Director                               1/23/98
        Michael Bowen  

   /s/ Michael J. Brinati Director                               1/23/98
       Michael J. Brinati

   /s/ John W. Elting     Director                               1/23/98
       John W. Elting 

   /s/ Barry Spector      Director                               1/23/98
       Barry Spector    

<PAGE>      

                                                          Exhibit 21


                             RYMER FOODS INC.

                        SUBSIDIARIES OF THE COMPANY

                             OCTOBER 25, 1997




                             State of    Percent
    Subsidiary Name        Incorporation  Owned             Owner     

    Rymer Meat Inc.           Illinois     100        Rymer Foods Inc.

    Rymer Chicken Inc. (1)    Arkansas     100        Rymer Meat Inc.

    Rymer International
     Seafood Inc. (2)         Illinois     100        Rymer Meat Inc.

    Rymer Chicken Inc. -
     Plant City (3)           Florida      100        Rymer Meat Inc.

    Queen City Foods Inc.     Georgia      100        Rymer Meat Inc.



1)  Substantially all of the assets of Rymer Chicken Inc. were sold on
    December 10,  1993.  See  Item 1  and Note  4 to  the Consolidated
    Financial Statements.

2)  Substantially all  of the  assets of  Rymer Seafood  were sold  on
    August 28,  1996.   See  Item 1  and Note  4  to the  Consolidated
    Financial Statements.

3)  Facility is currently under contract for sale.  See  Note 4 to the
    Consolidated Financial Statements.