SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                   FORM 10-Q

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

      For Quarterly Period Ended              October 31, 1998


      Commission file number        1-683


                          Multigraphics, Inc.
      (Exact name of registrant as specified in its charter)

      Delaware                                34-0054940
      (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)               Identification No.)

      431 Lakeview Court Mt. Prospect, IL                    60056

      (Address of principal executive offices)               (Zip Code)

                          (847) 375-1700
             (Registrant's telephone number, including area code)

                          AM International, Inc.
                          (Former Name)

      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
      (or  for such shorter period that  the registrant was required  to
      file  such  reports), and  (2) has  been  subject to  such  filing
      requirements for the past 90 days.

                Yes  X              No 

      Indicate  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 

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

                       2,831,814 shares of Registrant's
       Common Stock, $.025 par value, were outstanding as of December 8,
                                     1998.

<PAGE>
                                MULTIGRAPHICS, INC.

                                     INDEX



                                                               Page
      PART I -       Financial Information

           Item 1 -  Condensed Consolidated Statement of
                     Operations for the Three Months Ended
                      October 31, 1998 and November 1, 1997
                      (unaudited).                                1

                     Condensed Consolidated Balance Sheet
                     as of October 31, 1998 (unaudited) and
                     July 31, 1998.                               2

                     Condensed Consolidated Statement of
                     Cash Flows for the Three Months Ended
                     October 31, 1998 and November 1, 1997
                     (unaudited).                                 3

                     Notes to Condensed Consolidated Financial
                     Statements (unaudited).                     4 - 8

           Item 2 -  Management's Discussion and Analysis of
                     Financial Condition and Results of
                     Operations.                                 9 - 13


      Part II             Other Information

           Item 4-        Submission of Matters to a Vote of
                          Security Holders                        14

           Item 6    -    Exhibits                                14



<PAGE>

                        PART I - FINANCIAL INFORMATION
      Item 1 - Financial Statements
                              MULTIGRAPHICS, INC.
                CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
               (Dollars in thousands, except per share amounts)
                                  (Unaudited)
<TABLE>
      <S>                          <C>          <C>
                                   October 31,   November 1,
                                      1998          1997
      Revenues
        Machines and Supplies       $ 15,736     $   10,160
        Services                       9,933         10,540

           Total Revenues             25,669         20,700


      Cost of Sales
        Machines and Supplies         12,483          7,856
        Services                       6,319          7,298

           Total Cost of Sales        18,802          15,154


      Gross Margin                     6,867          5,546
      Operating Expenses
        Selling, general and
        administrative                 6,085          5,053
        Miscellaneous (income)
        expense                           24           (16)

       Total Operating Expenses        6,109          5,037

      Operating income                   758            509

      Non - operating income
      (expense):
        Interest income                 20              120
        Interest expense               (495)          (374)
        Other, net                      (21)              -


      Income Before Taxes                262            255

      Income tax expense                 100             97


      Net income                    $    162     $      158



<PAGE>
      Net income per common
      share :
                   Basic            $   0.06     $     0.06



                  Diluted           $   0.06     $     0.06




       Weighted average shares
       of common stock and common stock
       equivalents outstanding (in
       thousands):
                   Basic               2,830          2,815

                   Diluted              2,928          2,815


      The Notes to Consolidated Financial Statements are
      an integral part of these financial statements.
</TABLE>


                              MULTIGRAPHICS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEET
               (Dollars in thousands, except per share amounts)
                                                     (Unaudited)
<TABLE>                                               October 31,    July 31,
                                                          1998         1998
      <S>                                                <C>          <C>
      Assets
      Current assets:
      Cash and cash equivalents                           $  2,901     $ 2,869
      Accounts receivable, net                              12,889      14,629
      Inventories, net                                      14,355      13,188
      Prepaid expenses and other
      assets                                                   578         726

      Total current assets                                  30,723      31,412

      Property, plant and
      equipment, net                                         9,285       9,554
      Goodwill                                               3,777       3,681
      Other assets, net                                      1,011         992

      Total assets                                        $ 44,796     $45,639

<PAGE>

      Liabilities and Shareholders' Equity
      Current liabilities:
      Short-term borrowings and current
      maturities of long-term debt                        $ 10,543     $10,745
      Accounts payable                                      8,382        7,312
      Service contract deferred income                      11,179      12,013
       Payroll related expenses                              5,827       6,219
       Other                                                 4,752       5,248

      Total current liabilities                             40,683      41,537


      Long-term debt                                         1,016       1,048
      Post-retirement benefit
      obligations                                            8,351       8,626
      Other long-term liabilities                            4,619       4,572

      Total liabilities                                     54,669      55,783


      Shareholders Equity:
      Preferred stock, 0.5 million shares
      authorized; no shares issued
      Common stock, $.025 par value; 9.5
      million shares authorized;                                 -           -
      2,829,526 issued as of October 31, 1998
      and July 31, 1998                                         70          70
      Capital in excess of par value                        22,956      22,847
      Accumulated earnings (deficit)                      (32,899)    (33,061)

      Total shareholders' equity                           (9,873)    (10,144)
      Total liabilities and
      shareholders' equity                               $  44,796    $ 45,639


      The Notes to Consolidated Financial Statements are an
      integral part of these financial statements.
</TABLE>
<PAGE>
                              MULTIGRAPHICS, INC.
                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
               (Dollars in thousands, except per share amounts)
                                  (Unaudited)
                                                     Three Months Ended
<TABLE>
                                                  October 31,   November 1,
                                                     1998           1997
      <S>                                            <C>          <C>
      Cash Flows from Operating
      Activities:
      Net income                                     $    162      $     158
      Adjustments to reconcile net income
      to cash flow from operating
      activities:
      Depreciation of property, plant
      and equipment                                       457            454
      Amortization of Goodwill                             21              -
      Benefit from operating loss
      carryforwards                                       100             97
      Change in assets and
      liabilities:
      Accounts receivable, net                          1,740          1,976
      Inventory, net                                  (1,167)            994
      Prepaid expenses and other
      assets                                              148            200
      Accounts payable                                  1,070        (1,024)
      Other current liabilities                         (888)        (2,512)
      Other, net                                      (1,022)          (381)

      Cash flow from operating
      activities                                          621           (38)


      Cash Flows from Investing
      Activities:
        Acquisition activities                          (167)              -
        Capital expenditures                            (188)          (147)

      Cash flow from investing
      activities                                        (355)          (147)

      Cash Flows from Financing
      Activities:
      Net borrowings (payments) under
      revolving credit facilities                         960              -
      Payments of Bankruptcy Claims                   (1,094)          (972)
      Payments under capital lease
      arrangements                                      (100)          (170)
      Cash flow from financing activities               (234)        (9,620)
<PAGE>      
      Increase (decrease) in cash and
      cash equivalents                                     32        (1,327)
      Cash and cash equivalents at
      beginning of period                               2,869         10,376

      Cash and cash equivalents at end
      of period                                      $  2,901      $   9,049



      The Notes to Consolidated Financial Statements are an
      integral part of these financial statements.
</TABLE>


                              MULTIGRAPHICS, INC.
                  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
               (Dollars in thousands, except per share amounts)
                                  (Unaudited)

      Note 1 - Basis of Presentation

      The  Condensed Consolidated Financial  Statements included  herein
      have been prepared by the Company, without audit, pursuant  to the
      rules  and regulations of the Securities and Exchange  Commission.
      In   the  opinion  of   management,  the  Condensed   Consolidated
      Financial  Statements  reflect all  adjustments,  which are  of  a
      recurring nature, necessary for fair presentation.   Certain prior
      year  amounts have been reclassified  to conform with the  current
      year  presentation.    The  accompanying   Condensed  Consolidated
      Financial  Statements  and the  related notes  should be  read  in
      conjunction  with the  Consolidated Financial  Statements and  the
      related  notes thereto included in the Company's Annual Report  on
      Form 10-K for the year ended July 31, 1998.
<PAGE>
      Note 2 - Acquisitions

      In  December 1997, the  Company purchased all  of the  outstanding
      shares  of Publishing Solutions Inc.,  and acquired the  operating
      assets  of Hanley Graphic Products Company.  Publishing  Solutions
      provides  its  customers with  equipment and  systems  integration
      solutions  utilizing digital technologies  for design,  pre-press,
      imaging,  and  interactive  media applications.    Hanley  Graphic
      Products  Company is a  regional dealer of graphic arts  equipment
      and  supplies serving  customers in  Northern Illinois.   In  June
      1998,  the Company  acquired the  business and  certain assets  of
      Progressive  LithoPlate  and Supply  Company, a  regional  graphic
      arts dealer serving customers in Northern Illinois.   In September
      1998,  the Company  acquired the  business and  certain assets  of
      Austin,  Texas  based Texas  PrePress  Systems, Inc.,  a  regional
      prepress  systems integrator.   The aggregate  purchase price  for
      the four companies was approximately $6,900 including  expenses of
      the  transactions,  and could  increase by  a maximum  of  $1,950,
      contingent  upon the  companies' attainment  of certain  operating
      targets over the two years following the acquisition.   The excess
      purchase  price over the fair market value of net assets  acquired
      amounts to a preliminary value of $3,840, which will  be amortized
      over  a period  not  to exceed  forty years.   The  allocation  of
      purchase  price was  based on  preliminary estimates,  and may  be
      revised at a later date.

      The  acquisitions  have  been  accounted  for  as  purchases  and,
      accordingly,   the  financial   statements  include   results   of
      operations  from  the  respective  dates  of  acquisition.     The
      following  pro forma  summary presents the  results of  operations
      for  the current and prior period  as though the acquisitions  had
      taken  place at the beginning of the prior period.  The pro  forma
      amounts  give effect  to certain  adjustments including  increased
      interest  expense,  goodwill amortization,  estimated  income  tax
      expense  as well as other factors, and do not necessarily  reflect
      the results which would have occurred had the  businesses operated
      as  a single entity during such periods, nor are they  necessarily
      indicative of results which may be obtained in the future.

      Note 2    Acquisitions (continued)


                                   Three Months Ended

                                October 31,  November 1,
                                   1998         1997
<TABLE>                          
      <S>                        <C>          <C>
      Revenues                   $   25,879   $   28,464

      Net Income                 $      165   $      233

      Earnings per
      share:
                Basic            $     0.06   $     0.08
                Diluted          $     0.06   $     0.08

</TABLE>
<PAGE>

      Note 3 - Borrowing Arrangements

      The Company's short and long-term borrowings are comprised of the
      following:

                                                 October 31     July 31,
                                                   1998           1998
<TABLE>                                          
      <S>                                        <C>            <C>
      Revolving Credit Facility                  $    8,727     $   7,768
      General Unsecured Claims & Priority Tax
      Claims                                          1,171         2,265
      Capital Leases                                  1,661         1,760

                        Total                    $   11,559     $  11,793


      
      Classified in the Consolidated Balance
      Sheet as follows:
         Short-term                              $   10,543     $  10,745
         Long-term                                    1,016         1,048

                        Total                    $   11,559     $  11,793
</TABLE>
<PAGE>
      In  May,  1997 the  Company  entered  into a  $10,000  three  year
      secured  Revolving  Credit  Facility (subject  to  borrowing  base
      limitations) with Foothill Capital Corporation ("Foothill").   The
      Revolving  Credit Facility includes a $5,000 sub-facility for  the
      issuance of letters of credit. As security for utilization  of the
      Revolving   Credit  Facility,  the  Company  granted  a   security
      interest  and general lien upon  all of its  assets.  On  February
      19,  1998 the Revolving Credit  Facility was amended and  restated
      ("the  Amendment") to add the  Company's wholly owned  subsidiary,
      Publishing  Solutions Inc., as a  co-borrower under the  Facility.
      The Amendment was made, among other things, to allow  the eligible
      assets  of  Publishing  Solutions  Inc.  to  be  included  in  the
      Company's  borrowing  base and  to  reset the  Company's  covenant
      requirements  in light  of the  acquisitions made  by the  Company
      during the quarter ended January 31, 1998.  On July 30,  1998 the
      Revolving  Credit Facility was  amended further  to, among other
      things; (1) grant the Company the ability  to increase
      the Revolving Credit Facility limit in increments of $1,000  up to
      a maximum limit of $15,000, and (2) extend the expiration  date an
      additional  two years to May 30, 2000  plus an automatic one  year
      extension   unless  terminated  pursuant  to  the  terms  of   the
      Revolving  Credit  Facility.    On  July  31,  1998,  the  Company
      increased  the Revolving Credit Facility  limit to $11,000 and  on
      November  6,  1998 the  Company  further increased  the  Revolving
      Credit  Facility  limit to  $12,000.   On  October 31,  1998,  the
      calculated  borrowing  base  was approximately  $11,100.    As  of
      October  31, 1998, the Company had borrowings of $8,727 under  the
      Revolving  Credit Facility and was utilizing approximately  $1,829
      of   the  Facility  to  secure  outstanding  letters  of   credit.
      Interest  generally will be charged  at a spread  of 1% above  the
      reference  (i.e. prime)  rate of  Foothill and can  be reduced  in
      1/2%  increments in each of the next  two fiscal years if  certain
      performance  measures are achieved.  As  of October 31, 1998,  the
      reference  rate was 8.0%.   Letter  of credit fees  are 0.75%  per
      annum  plus issuance  costs and  processing fees.   The  agreement
      contains  restrictive  covenants  limiting  capital  expenditures,
      restricting  the  payment  of dividends  and  other  payments  and
      providing  for  quarterly  measures of  working  capital  and  net
      worth, among other things.  In addition, the agreement  limits the
      Company's  ability  to borrow  or  to request  letters  of  credit
      following  a material  adverse change as  determined by  Foothill.
      As  of October 31, 1998,  the Company was  in compliance with  the
      covenants of the Revolving Credit Facility.
<PAGE>
      On  October 13, 1993 the  Company concluded a reorganization  when
      the  United States Bankruptcy Court  for the District of  Delaware
      confirmed the Company's Plan of Reorganization ("the Plan").   The
      Plan  provides that  holders of allowed  general unsecured  claims
      receive  cash payments toward satisfaction  of the full amount  of
      their  claims  in equal  quarterly payments  payable on  the  last
      business  day of  each calendar quarter  ending after  October 13,
      1993  over a five-year  period, together with  interest at 5%  per
      annum.   The last scheduled quarterly payment was paid during  the
      quarter  ended October 31, 1998.   Holders of priority tax  claims
      are  paid  10% of  the allowed  claim  together with  accrued  and
      unpaid interest at 8% per annum on the then outstanding  amount on
      each  anniversary of October  13, 1993 which  occurs prior to  the
      sixth  anniversary of the date of assessment, and the balances  of
      such  claims along with accrued and  unpaid interest on the  sixth
      anniversary.    For  financial  reporting  purposes   interest  on
      general  unsecured claims has been  imputed at 9%  per annum.   At
      October 31,  1998 the Company had $2,408 of restricted cash  which
      pertains  to the settlement of disputed claims in accordance  with
      the Plan.

      Note 4 - Capital Structure

      The  Company has  authorized 10,000,000  shares of  capital  stock
      with 9,500,000 shares being reserved for issuance as  Common Stock
      and  500,000  shares  being reserved  for  issuance  as  Preferred
      Stock.   The Company's 1994 Long Term Incentive Plan provides  for
      the  issuance  of 560,000  shares of  Common  Stock.   Options  to
      purchase the Common Stock  are awarded at  a price not  less than
      100%  of the  market price  on the  date of  the grant, become
      exercisable at  various dates  generally from one to four years
      after the date of  grant, and  expire ten years  after the  date
      of grant.   At  October 31, 1998  options  to  purchase 351,983
      shares  were  outstanding  at option prices ranging from $2.1875
      to $8.2139 per share.

      On  October 20, 1998,  the Company's Board  of Directors  approved
      the  Multigraphics, Inc. 1998 Stock Incentive Plan for  Directors.
      Options  to purchase a  total of 140,000  shares of the  Company's
      Common Stock are included in the Plan.  Under the Plan,  each non-
      employee director received an option for 10,000 shares  on October
      20,  1998 and will receive an additional 5,000 share option  grant
      on the date of each annual meeting of stockholders,  commencing in
      1999,  at an option  exercise price  per share equal  to the  fair
      market  value of a  share of Common  Stock on the  date of  grant.
      Such  options are exercisable in  part or in full  on the date  of
      grant and will expire ten years after the date of grant.

      The Company has not issued any Preferred Stock.  The  Common Stock
      is  not subject  to conversion  or redemption and  when issued  is
      fully paid an non-assessable and has no preemptive rights.
<PAGE>
      Note 5 - Commitments and Contingencies

      The  Company  received  creditor  claims  during   its  bankruptcy
      proceedings which the Company believes are  duplicative, erroneous
      or  exaggerated and  to which  the Company believes  it has  valid
      defenses.   The  Company has  filed objections  to these  disputed
      claims  in the United States Bankruptcy Court in Delaware.  As  of
      October  31,  1998  disputed  claims  amounted   to  approximately
      $5,205.     The  disputed  claims   are  primarily  comprised   of
      environmental and product liability claims.

      The Company has been notified of various environmental  matters in
      connection  with certain  current or former  Company locations  in
      Illinois,  Ohio, Indiana,  Pennsylvania, and  Rhode Island.    The
      Company  is  also involved  in  various other  administrative  and
      legal  proceedings incidental to  its business, including  product
      liability  and  general  liability  lawsuits  against   which  the
      Company is partially insured.

      The  disputed claims in  the bankruptcy proceeding  and the  other
      legal  proceedings  are  in  many  cases  in  excess  of  recorded
      reserves.  At the present time, it is management's  opinion, based
      on   information  available  to   the  Company  and   management's
      experience  in such matters,  that the resolution  of these  legal
      proceedings  is not expected to have a material adverse effect  on
      the  Company's  financial  condition,  results  of  operations  or
      liquidity.

      Note 6 - Components of Certain Balance Sheet Accounts
<TABLE>                                      <C>            <C>
      <S>                                      October 31,      July 31,
      Accounts receivable:                     1998            1998

       Accounts receivable                   $    13,258       $14,929
       Allowance for doubtful accounts             (369)         (300)

       Total accounts receivable, net        $    12,889       $14,629


      Property, plant and equipment:
      Machinery and equipment                $    12,176       $11,985
      Leasehold improvements                       3,338         3,338

                                             $    15,514     $ 15,323

      Less accumulated depreciation and
      amortization                               (6,229)       (5,769)


      Property, plant and equipment, net     $     9,285       $ 9,554

      Goodwill:
             Goodwill                        $     3,840       $ 3,723
             Amortization                           (63)          (42)

             Goodwill,  net                  $     3,777       $ 3,681
</TABLE>
<PAGE>
      Item 2.

                     MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The  discussion  of  the  results  of  operations   and  financial
      condition  presented  below should  be  read in  conjunction  with
      Management's  Discussion and  Analysis included  in the  Company's
      Annual Report to Shareholders for the year ended July 31, 1998.

      As previously reported, the Company acquired the  operating assets
      of  Hanley  Graphic Products  Company, and  purchased all  of  the
      outstanding  shares  of  Publishing  Solutions  Inc.  in  separate
      transactions  consummated in  the second quarter  of fiscal  1998,
      and  in June 1998 the Company  acquired the business and  certain
      assets   of  Progressive  Lithoplate  and  Supply  Company.     In
      September  1998  the Company  acquired  the business  and  certain
      assets  of Austin,  Texas based  Texas PrePress  Systems, Inc.,  a
      regional prepress systems integrator.  The acquisitions  have been
      accounted  for  as purchases  and, accordingly,  the  consolidated
      financial  statements  include  the  post-acquisition  results  of
      these  operations since their respective  acquisition dates.   All
      per share data is presented on a diluted basis.

      Consolidated Results of Operations
<TABLE>
      <S>                        <C>                 <C>
                                         Three Months Ended
      ($ in millions)       October 31, 1998    November 1, 1997
      Revenues                    $25.7               $20.7
      Gross margin                  6.9                 5.5
      Gross margin %              26.8%               26.8%
      Operating expenses            6.1                 5.0
      Operating income              0.8                 0.5
      Non-operating
      expense, net                  0.5                 0.2
      Income tax expense            0.1                 0.1
      Net income                   $0.2                $0.2
</TABLE>

      The  net income for the first quarter  ended October 31, 1998  was
      $0.2  million ($0.06 per common share).   In the comparable  prior
      year  period, the Company  also had  net income of   $0.2  million
      ($0.06 per common share).
<PAGE>
      First  quarter revenues  of $25.7 million  increased $5.0  million
      over  the comparable prior  year period. Since  December of  1997,
      the  Company has acquired  four regional graphic  arts dealers  as
      part  of its  strategy of  expanding its target  customer base  of
      small to mid-size commercial printers. The 24% growth  in revenues
      was  primarily attributable to the acquisitions of three  regional
      graphic  arts dealers  which the  Company completed  in the  prior
      fiscal year, and the September 1998 acquisition of  Texas PrePress
      Systems,   a  regional   prepress  systems   integrator.     These
      acquisitions  complement the Company's internal efforts to  expand
      its  product  offerings, enhance  its  digital sales  and  support
      capabilities  and provide technical  service to manufacturers  and
      national accounts.

      Gross  margin of $6.9 million increased  by $1.4 million over  the
      comparable  prior  year  period, while  the  overall  margin  rate
      remained  unchanged.    The increased  margins  derived  from  the
      acquired  operations  and from  a favorable  sales mix  more  than
      offset  declines  in  margin  from  press  products   and  related
      services, upon which the Company had historically  been dependent,
      and  which  have  been  in  long  term  decline.    As  previously
      reported,  the Company has  pursued a growth  strategy to  replace
      the  revenues  previously  derived from  its  historically  higher
      margin  manufactured  products with  product lines  added  through
      distribution  agreements, joint ventures, affiliations with  third
      parties  and acquisitions of graphic arts dealers.  To offset  the
      lower  margin  rates  which  accompany  those  relationships,  the
      Company  has invested  in information systems  and has  undertaken
      other  reorganization measures  to increase  efficiency and  lower
      expenses.

      Selling, general and administrative expenses in the  first quarter
      of  $6.1 million  increased by  $1.1 million over  the prior  year
      period,  but declined  as a  percent of  sales.   The increase  in
      expense levels was primarily the result of the addition  of direct
      sales  and  sales  support  personnel  related  to   the  acquired
      businesses.   The  improved relationship  of expenses  to  revenue
      levels  was the result of various actions taken by the Company  to
      lower  headcount, facility  and other  general and  administrative
      costs, while improving service levels and operational efficiency.

      Non-operating expenses consist primarily of net  interest expense,
      which  increased  $0.3  million  from  the  prior  year.    Higher
      interest costs in the current year quarter were due  to borrowings
      primarily  incurred  to finance  acquisitions.   Interest  expense
      related  to pre-petition debt  obligations decreased $0.1  million
      from  the prior year, and  the final scheduled payment  obligation
      was disbursed in September 1998.

      The  Company recorded income  tax expense of  $0.1 million  during
      its  fiscal  first  quarters  of  1999  and  1998.    Fresh  Start
      Reporting  rules require recognition of  tax expense although  the
      Company  had  no requirement  to pay  U.S.  Federal taxes  due  to
      utilization  of net operating loss carryforwards available to  the
      Company.
<PAGE>
      As noted above and in previous reports, the Company  has developed
      strategies  to increase revenues  through product line  additions,
      third  party service agreements and acquisitions.  An increase  in
      revenue  levels could improve profitability since the Company  has
      infrastructure  and  systems, which are  capable  of  absorbing  a
      greater volume of transactions.

      Liquidity and Capital Resources
      (Three months ended October 31, 1998 and November 1, 1997)

      The Company's total cash and cash equivalents was $2.9  million at
      both  July 31, 1998 and October 31, 1998.  Although cash  balances
      remained  unchanged, debt  decreased by  $0.2 million  during  the
      first  quarter of the current year as  a $1.1 million decrease  in
      general  unsecured bankruptcy claims was largely offset by a  $1.0
      million increase in revolving credit facility borrowings.

      Operating  Activities.   In the  first quarter  ended October  31,
      1998  the Company  had a  cash flow from  operating activities  of
      $0.6  million  as  compared  to a  minimal  cash  outflow  in  the
      comparable  period ended November  1, 1997.   Net income was  $0.2
      million in both the current and prior year period.

      Accounts  receivable  decreased  by  $1.7  million  in  the  first
      quarter ended October 31, 1998 and $2.0 million in  the comparable
      period  ended November 1,  1997 resulting from  collection of  the
      relatively   higher  outstanding  balances  which  exist  at   the
      inception  of  each fiscal  year.    In the  first  quarter  ended
      October   31,  1998,  inventories   increased  $1.2  million   due
      primarily  to higher stocking levels  of machines and supplies  to
      support  the  Company's digital  product  offerings.   During  the
      prior  year  quarter,  inventories  decreased  $1.0   million  due
      primarily  to lower stocking levels of machines resulting from  an
      increase in drop shipment sales.  Accounts payable  increased $1.1
      million  during  the first  quarter  ended October  31,  1998  due
      primarily to the higher inventory levels discussed above.   During
      the  prior year quarter, accounts  payable decreased $1.0  million
      due  to lower  inventory purchases and  reductions resulting  from
      taking  prompt payment  discounts with  vendors.   In the  current
      year  first  quarter, accrued  liabilities  were reduced  by  $0.9
      million  due  primarily to  payment  of $0.4  million  of  payroll
      related  liabilities and  payments  of approximately $0.3  million
      for   severance.     During  the  prior   year  quarter,   accrued
      liabilities were reduced by $2.5 million primarily due  to payment
      of  $1.2 million of payroll  related liabilities, payment of  $0.6
      million  to settle a recourse obligation of a divested  operation,
      and other  payments of approximately $0.5 million relating  to the
      Company's phase-out of its manufactured machine product line.

      Investing  Activities.  Cash flows  from investing activities  are
      for  capital  expenditures  primarily  to  upgrade  the  Company's
      information systems.  In addition, during the first  quarter ended
      October  31, 1998, the  Company incurred acquisition  expenditures
      primarily relating to the Company's acquisition of  Texas PrePress
      Systems, Inc.
<PAGE>
      Financing  Activities.  Payments of general unsecured claims  were
      $1.1  million and $1.0 million  in the first  quarter of 1998  and
      1997,  respectively.  During the  first quarter ended October  31,
      1998  the Company  increased net  borrowings under  its  Revolving
      Credit Facility by $1.0 million which occurred as a result  of the
      operating, investing, and financing activities discussed above.
      The Company's primary source of financing is its  revolving credit
      facility  which was established  in May 1997  and which has  been
      subsequently  amended to provide liquidity  needed to execute  the
      Company's  growth  strategy.    The  Company  believes   that  its
      existing  cash reserves and the  liquidity provided by the  credit
      facility are sufficient to finance current operations  and support
      future  growth  strategies, which may include the acquisitions  of
      other  regional  dealers  or  distributors  in  the  graphic  arts
      industry.   The  Company may  also seek  to increase  its  capital
      availability  to expand  its growth  strategy beyond  its  current
      sources of liquidity.

      YEAR 2000 DISCLOSURE

      The   Company's   information   systems   will   require   certain
      modifications  to enable them  to be able  to process  information
      without  regard to whether the date occurs  prior to or after  the
      year  2000.  Currently, some  information systems do not  properly
      identify  a year  that begins  with "20" instead  of the  familiar
      "19".    These  and similar  issues are generally  referred to  as
      "Year  2000"  issues.    The  Company's  information  systems  are
      relatively new, and its recent systems implementation in  the Fall
      of  1997  achieved  near compliance  in  the  Company's  operating
      systems  and full compliance in its host  hardware.  Based on  the
      Company's  experience in  the new  system implementation  and  its
      analysis  of  the work  remaining,  the Company  anticipates  that
      expenditures for modifying the systems will be  approximately $0.2
      million, and the work necessary to complete all  modifications and
      testing  will be complete by mid 1999.   During the first  quarter
      ended  October 31,  1998, the  Company expended  $0.1 million  for
      Year  2000  modifications.    The  Company  is  working  with  its
      software   and  systems  licensor  in  completing  this   project.
      Accordingly,  the  Company does  not  believe that  the  remaining
      actions or the associated costs will be material to  the Company's
      operating results.

      The  Company has also undertaken a  review of its other  equipment
      and  operating systems, and  has begun the  process of  contacting
      its  significant  vendors  and service  providers  to  assess  the
      possible  impact on the Company of such third parties' failure  to
      address Year 2000 issues.  Although the Company cannot  verify the
      results  of its inquiries  of third parties,  it has not  received
      any information which would lead it to believe that there  will be
      material  problems in  obtaining products,  supplies and  services
      from   its   third   party   service   providers    and   vendors.
      Nevertheless,  any significant  or prolonged  interruption in  the
      supply  of essential services or  products could adversely  effect
      the   Company's  revenues  and  financial  results.     Similarly,
      problems  with any  significant portion  of the  Company's  20,000
      customers  in  processing and  paying  invoices from  the  Company
      could result in cash flow shortages and liquidity problems.
<PAGE>
      The  Company  is undertaking  to  prepare a  contingency  plan  to
      address  potential Year  2000 problems.   The  systems issues  and
      supplier  contacts described above  are a part  of those  efforts.
      In  the event that the Company identifies potential problems  with
      a  service provider  or other  vendor, it will  attempt to  obtain
      services  and  products  from other  sources.    The  Company  has
      available  to it a  broad range  of products, however,  and it  is
      unlikely  that  serious shortages  will materialize.    Similarly,
      although  the Company will have  completed and tested its  systems
      capabilities  in  advance  of  the  year  2000,  the   Company  is
      preparing   to  operate  without   significant  portions  of   its
      operating    and   information   systems.      Customer    service
      representatives  are trained to take orders without access to  the
      information  systems, purchasing  representatives are  trained  to
      purchase parts without access to the information systems,  and the
      Company's  finance department  is preparing  to invoice  and  bill
      customers   without  access   to  the   information  systems,   if
      necessary.     The  Company  is   unable  to  anticipate   whether
      significant  customers  or significant  numbers of  its  customers
      will   have  difficulty  processing   and  paying  its   invoices.
      Moreover,  the  Company cannot  predict  or address  all  possible
      problems which may be associated with Year 2000 issues.


      FORWARD LOOKING STATEMENTS

      This  document  contains certain  forward-looking  statements  and
      other  statements that are not historical facts concerning,  among
      other  things, market conditions and the Company's strategies  for
      growth and expansion.  These statements are highly  dependent upon
      a  variety of important factors that  could cause such results  or
      events  to differ materially.  These factors include, but are  not
      limited to, changing market conditions, the availability  and cost
      of  products, the impact of competitive products and pricing,  the
      continued  ability to execute its  strategic plans, the continued
      availability of sources of financing to assist in the execution of
      the Company's strategic plans, the impact  of Year  2000  issues,
      including,  in  particular,  the  ability  of customers  and
      vendors  to  achieve  Year  2000  compliance,   and  other  risks
      detailed herein and from time-to-time in the  Company's Securities
      and  Exchange Commission filings.  There can be no assurance  that
      the Company has accurately identified and properly weighed  all of
      the  factors  that affect  market conditions  and demand  for  the
      Company's  products and services, that  the public information  on
      which  the Company has relied is accurate or complete or that  the
      Company's  analysis of the market and demand for its products  and
      services  is correct and, as a  result, that the strategies  based
      on such analysis will be successful.

      PART II - OTHER INFORMATION

<PAGE>
      Item 4.   Submission of Matters to a Vote of Security Holders.

      On  December  3,  1998, Registrant  held  its  Annual  Meeting  of
      Stockholders for the fiscal year ended July 31, 1998.

      Registrant's stockholders reelected the five incumbent  members of
      the  Board of Directors to serve until the next annual meeting  or
      until  their successors are elected and  qualified.  The Board  of
      Directors   consists  of  Robert  E.  Anderson  III,  Jeffrey   D.
      Benjamin,  Robert  N. Dangremond,  Jeff M.  Moore, and  Thomas  D.
      Rooney.

      Registrant's stockholders also ratified the appointment  of Arthur
      Andersen  LLP as the  Registrant's independent public  accountants
      for  the fiscal year  ending July 31,  1999.  The  vote total  was
      2,763,575  votes "for", 2,626  votes "against", and  577 votes  to
      "abstain".

      Item 6.   Exhibits

                (a)  Exhibits

                27   Financial Data Schedule

                (b)  Reports on form 8-K
                     None
      Pursuant  to the requirements  of the Securities  Exchange Act  of
      1934,  the Registrant had duly caused this report to be signed  on
      its behalf by the undersigned thereunto duly authorized.

                                             MULTIGRAPHICS, INC.

      Date:     December 14, 1998             /s/ Gregory T. Knipp
                                                  Gregory T. Knipp
                                             Vice  President and Chief
                                             Financial Officer
                                    (authorized officer and principal
                                    accounting officer)
      <PAGE>