FORM 10-Q/A

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 1998

                                       OR

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



                         Commission file number 1-11803




                          AMERICAN PAD & PAPER COMPANY
             (Exact name of registrant as specified in its charter)


            Delaware                                           04-3164298
    (State or other jurisdiction of                         (I.R.S. Employer
    incorporation or organization)                        Identification No.)

                    17304 Preston Road, Suite 700, Dallas, TX
                                   75252-5613
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (972) 733-6200
              (Registrant's telephone number, including area code)



         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         


         As of November 13 , 1998,  American Pad & Paper Company had  27,724,045
shares of Common Stock outstanding.

===============================================================================


<PAGE>
                          PART 1 - FINANCIAL INFORMATION

                          AMERICAN PAD & PAPER COMPANY
                     CONSOLIDATED BALANCE SHEETS (Unaudited)
                    (in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                    September 30,  December 31,
                                                          1998          1997
                                                   --------------  ------------
<S>                                               <C>............ <C>..........
ASSETS

Current assets:
  Cash ............................................$       33,228  $      4,855
  Accounts receivable, net ........................        49,001        74,203
  Inventories, net ................................       129,607       154,359
  Refundable income taxes .........................           751         4,059
  Prepaid expenses and other current assets .......         1,704         1,402
  Deferred income taxes ...........................         2,000        11,992
                                                   --------------  ------------
    Total current assets ..........................       216,291       250,870

Property, plant and equipment, net ................       152,181       151,390
Intangible assets, net ............................       187,080       233,698
Other .............................................         2,729         2,443
                                                    -------------  ------------

     Total assets ................................. $     558,281  $    638,401
                                                    =============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt ............... $       1,021  $      1,538
  Accounts payable ................................        42,674        56,356
  Accrued expenses ................................        53,329        40,157
  Restructuring reserve ...........................         5,741          --
                                                    -------------  ------------
     Total current liabilities ....................       102,765        98,051

Long-term debt ....................................       412,348       398,577
Deferred income taxes .............................        12,337        39,477
Other .............................................         1,568         1,630
                                                    -------------  ------------
   Total liabilities ..............................       529,018       537,735
                                                    -------------  ------------

Commitments and contingencies Stockholders' equity:
  Preferred stock, 150 shares authorized,
   no shares issued and outstanding, respectively
                                                             --             --
  Common stock,  voting,  $.01 par value,  75,000
   shares authorized,  27,724 and
   27,436 shares issued
    and outstanding, respectively .................           277           274
  Additional paid-in capital ......................       301,287       301,279
  Accumulated deficit .............................      (272,301)     (200,887)
                                                    -------------  ------------

    Total stockholders' equity ....................        29,263       100,666
                                                    -------------  ------------

    Total liabilities and stockholders' equity .... $     558,281  $    638,401
                                                    =============  ============
</TABLE>

          See accompanying notes to consolidated financial statements


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<PAGE>
                                   SIGNATURES

Pursuant to the  requirements of the Securities  Exchange Act of 1934,  American
Pad & Paper  Company has duly  caused  this report to be signed on November  13,
1998 on their behalf by the undersigned thereunto duly authorized.


<TABLE>

<S>                                    <C>

/s/ James W. Swent, III                            /s/ David N. Pilotte
----------------------------            ----------------------------------------
James W. Swent, III                                    David N. Pilotte
Chief Executive Officer and             Vice President and Corporate Controller
Chief Financial Officer                        Principal Accounting Officer
Principal Financial Officer
</TABLE>


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