SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-Q

         (Mark One)
            [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 EXCHANGE ACT OF 1934

                       Commission file number: 333-42201

                       BEAR ISLAND PAPER COMPANY, L.L.C.
             (Exact name of registrant as specified in its charter)

                     Virginia                           06-0980835
          (State or other jurisdiction of            (I.R.S. Employer
           Incorporation or organization)         Identification Number)

                              10026 Old Ridge Road
                                  Ashland, VA
                    (Address of Principal Executive Offices)

                                     23005
                                   (Zip Code)

                                 (804) 227-3394
              (Registrant's telephone number, including area code)

             Former Name, Former Address and Former Fiscal Year, if
                   Changed Since Last Report: Not Applicable

         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  and
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  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date: Not Applicable.


<PAGE>
                        BEAR ISLAND PAPER COMPANY, L.L.C.
                                      INDEX


                                                                         Page(s)
 Part I.  Financial Information

     Item 1

       Condensed Balance Sheets                                             1

       Condensed Statements of Income                                       2

       Condensed Statements of Cash Flows                                   3

       Notes to Condensed Financial Statements                              4


     Item 2

       Management's Discussion and Analysis of Financial 
          Condition and Results of Operations                               8

 Part II. Other Information

     Item 6. Exhibits and Reports on Form 8-K                              11


 Signatures                                                                12

<PAGE>
<TABLE>

PART I.  FINANCIAL INFORMATION
ITEM I.  FINANCIAL STATEMENTS
                        BEAR ISLAND PAPER COMPANY, L.L.C.
                            CONDENSED BALANCE SHEETS

<CAPTION>

                                                                                      September 30,      December 31,
                                               ASSETS                                    1998                1997
                                                                                    ----------------   -----------------
                                                                                      (Unaudited)
 Current assets:
<S>                                                                                 <C>                <C>             
     Cash and short-term investments                                                $     2,612,642    $      1,353,049
     Accounts receivable                                                                 14,030,510          14,133,335
     Inventories                                                                         13,494,078          14,213,313
     Other current assets                                                                   560,606             147,911
                                                                                    ----------------   -----------------

             Total current assets                                                        30,697,836          29,847,608

 Property, plant and equipment                                                          200,416,897         195,084,008
 Less accumulated depreciation                                                            8,394,623             822,264
                                                                                    ----------------   -----------------

             Net property, plant and equipment                                          192,022,274         194,261,744
                                                                                    ----------------   -----------------

 Deferred financing costs                                                                 8,385,995           8,375,199
                                                                                    ----------------   -----------------

               Total assets                                                         $   231,106,105    $    232,484,551
                                                                                    ================   =================


                                  LIABILITIES AND MEMBER'S EQUITY

 Current liabilities:
     Current portion of long-term debt                                                      953,958             880,304
     Accounts payable and accrued liabilities                                             9,935,942           9,446,785
     Accrued interest payable                                                             3,780,884           1,344,915
                                                                                    ----------------   -----------------

               Total current liabilities                                                 14,670,784          11,672,004

 Long-term debt                                                                         183,775,000         195,555,000
                                                                                    ----------------   -----------------

               Total liabilities                                                        198,445,784         207,227,004
                                                                                    ----------------   -----------------

 Member's equity:
     Contributed capital                                                                 27,536,910          25,469,737
     Retained earnings (accumulated deficit)                                              5,123,411            (212,190)
                                                                                    ----------------   -----------------

             Total member's equity                                                       32,660,321          25,257,547
                                                                                    ----------------   -----------------

               Total liabilities and member's equity                                $   231,106,105    $    232,484,551
                                                                                    ================   =================
 See accompanying notes to the condensed financial statements.
</TABLE>


                                                            1
<PAGE>
<TABLE>
                        BEAR ISLAND PAPER COMPANY, L.L.C.
                         CONDENSED STATEMENTS OF INCOME
                                   (UNAUDITED)

<CAPTION>

                                                   Company           Predecessor         Company          Predecessor
                                                ---------------    ----------------  ----------------   ----------------
                                                  Three months ended September 30,     Nine months ended September 30,
                                                -----------------------------------  -----------------------------------
                                                      1998               1997              1998               1997

<S>                                             <C>                <C>               <C>                <C>            
 Net sales                                      $   31,025,905     $    29,482,270   $    92,530,816    $    85,372,576
 Cost of sales                                      23,721,041          26,023,300        69,667,290         77,224,807
                                                ---------------    ----------------  ----------------   ----------------

             Gross profit                            7,304,864           3,458,970        22,863,526          8,147,769

 Selling, general and administrative expenses:

     Management fees to Brant-Allen                   (930,777)           (884,468)       (2,775,924)        (2,561,177)
     Other                                             (72,811)           (284,414)         (623,503)          (668,182)
                                                ---------------    ----------------  ----------------   ----------------

             Income from operations                  6,301,276           2,290,088        19,464,099          4,918,410

 Other income (deductions):
     Interest expense                               (4,571,376)         (1,167,188)      (14,285,596)        (3,592,344)
     Other income                                       65,863             160,551           157,098            477,657
                                                ---------------    ----------------  ----------------   ----------------

               Net income                       $    1,795,763     $     1,283,451   $     5,335,601    $     1,803,723
                                                ===============    ================  ================   ================
 See accompanying notes to the condensed financial statements.
</TABLE>



                                                            2

<PAGE>
<TABLE>
                          BEAR ISLAND PAPER COMPANY, L.L.C.
                         CONDENSED STATEMENTS OF CASH FLOWS
                                     (UNAUDITED)
<CAPTION>

                                                    Company          Predecessor
                                                ----------------   ----------------
                                                  Nine months ended September 30,
                                                -----------------------------------
                                                      1998               1997
 Operating activities:
<S>                                             <C>                <C>            
     Net income                                 $     5,335,601    $     1,803,723
     Adjustments to reconcile net income
           to net cash provided by
           operating activities:
       Depreciation and depletion                     7,572,359          8,303,929
       Amortization of deferred financing
         costs                                          514,474             44,433
       (Gain) on sale of property, plant
        and equipment                                                     (134,300)    
     Changes in current assets and liabilities:
       Accounts receivable                              102,825          1,994,552
       Notes receivable                                                     13,548
       Inventory                                        719,235             83,318
       Other current assets                            (412,695)          (276,498)
       Accounts payable and accrued
         liabilities                                  2,556,330         (2,717,490)
       Accrued interest payable                       2,435,969          1,102,344 
                                                ----------------   ----------------

             Cash provided by operating
                   activities                        18,824,098         10,217,559
                                                ----------------   ----------------

 Investment activities:
     Purchases of property, plant and
           equipment                                 (5,332,889)        (5,724,037)
     Proceeds from disposition of property,     
          plant and equipment                                              134,300
                                                ----------------   ----------------

             Net cash used in investing
                   activities                        (5,332,889)        (5,589,737)
                                                ----------------   ----------------

 Financing activities:
     Principal payments on long-term debt           (11,706,346)        (4,947,602)
     Payment of deferred financing costs               (525,270)
                                                ----------------   ----------------

             Net cash used in financing
                   activities                       (12,231,616)        (4,947,602)
                                                ----------------   ----------------

             Net increase (decrease) in cash          1,259,593           (319,780)

 Cash and short-term investments, beginning
       of period                                      1,353,049         13,625,322
                                               -----------------  -----------------

               Cash and short-term
                     investments, end of
                     period                     $     2,612,642    $    13,305,542
                                                ================   ================
 Increase in promissory notes for
     equipment acquisition                                         $       533,680
                                                                   ================                   

 Noncash financing activities:
     Contributions from Brant-Allen             $     2,067,173
                                                ================

 See accompanying notes to the condensed financial statements.
</TABLE>



                                        3

<PAGE>

                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.   In  the  opinion  of  management,   the  accompanying  condensed  financial
     statements of Bear Island Paper Company, L.L.C. (the "Company") contain all
     adjustments  necessary to present  fairly,  in all material  respects,  the
     Company's financial position as of September 30, 1998 and December 31, 1997
     and the Company's  condensed  results of operations  for the three and nine
     month  periods  ended  September  30,  1998 and the  condensed  results  of
     operations  of the  predecessor,  Bear  Island  Paper  Company,  L.P.  (the
     "Predecessor"),  for the three and nine month periods  ended  September 30,
     1997 as well as the condensed cash flows of the Company and Predecessor for
     the nine month periods ended September 30, 1998 and 1997, respectively. All
     adjustments are of a normal and recurring nature. These condensed financial
     statements should be read in conjunction with the financial  statements and
     notes thereto  included in the Company's  Form 10K filed on April 30, 1998.
     The December 31, 1997 balance sheet data was derived from audited financial
     statements,  but does not include  all  disclosures  required by  generally
     accepted accounting principles.

     The results of operations  for the nine months  period ended  September 30,
     1998 should not be regarded as  necessarily  indicative of the results that
     may be expected for the entire year.



2.   Effective  December 1, 1997, the Company  completed the purchase of the 70%
     partnership  interest (the  "Acquisition")  in the Predecessor (the Company
     and Predecessor are collectively referred to as the "Companies") previously
     owned by  subsidiaries  of Dow Jones & Company,  Inc. ("Dow Jones") and The
     Washington Post Company (the  "Washington  Post").  Immediately  before the
     Acquisition  and certain related  financings  which were used to facilitate
     the funding of the  Acquisition,  the  Predecessor  was converted into Bear
     Island Mergerco,  L.L.C. ("Mergerco") and Mergerco was then merged into the
     Company  with the  Company  being the  surviving  entity.  The Company is a
     wholly owned subsidiary of Brant-Allen Industries, Inc. ("Brant-Allen"),  a
     Delaware corporation.

     The Company accounted for the Acquisition as a purchase.  The allocation of
     the purchase price resulted in purchase adjustments being applied to assets
     and liabilities  acquired.  In this  connection,  since  Brant-Allen was an
     owner  of a 30%  interest  in the  Predecessor  prior  to the  Acquisition,
     purchase  adjustments were applied to adjust 70% of the basis of the assets
     and liabilities  acquired to fair value. As a result of the Acquisition and
     new basis of accounting,  the Company's financial statements for the period
     subsequent  to the  Acquisition  are not  comparable  to the  Predecessor's
     financial statements for the periods prior to the Acquisition.




                                       4

<PAGE>
                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

     On  January  30,  1998,  the  Company  became  subject  to the  information
     requirements  of the  Securities  Exchange Act of 1934, as amended,  and is
     required  to file  reports  and other  information  with the United  States
     Securities and Exchange Commission.


3.   No provision for income taxes is required in the financial statements since
     each member or partner (prior to the  Acquisition) is  individually  liable
     for any  income  tax that may be  payable  on its  share of the  Companies'
     taxable income.


4.   Finished  goods and raw  materials  inventories  are valued at the lower of
     cost or market,  with cost determined on the first-in,  first-out  ("FIFO")
     basis.  Stores  inventories  are  valued  at the lower of  average  cost or
     market.

     Inventories consisted of:

                                      September 30,      December 31,
                                     ---------------   ----------------
                                           1998              1997
          Raw materials              $    3,829,237    $     4,085,044
          Stores                          8,936,217          9,105,893
          Finished goods                    728,624          1,022,376
                                     ---------------   ----------------
                                     $   13,494,078    $    14,213,313
                                     ===============   ================


5. Long-term debt consisted of:

                                           September 30,     December 31,
                                         ----------------  -----------------
                                               1998               1997
     Senior Secured Notes                $   100,000,000   $    100,000,000

     Term Loan Facility                       69,475,000         70,000,000

    *Revolving Credit Facility                15,000,000         26,000,000

     Long-term purchase obligations              253,958            435,304
                                         ----------------  -----------------
                                             184,728,958        196,435,304
     Less current portion                        953,958            880,304
                                         ----------------  -----------------
                  Total long-term debt   $   183,775,000   $    195,555,000
                                         ================  =================

       *Available credit line on September 30, 1998 approximately $31.3 million


                                       5
<PAGE>
                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

6.   A component of selling, general and administrative expenses as shown on the
     statements  of  income  includes  aggregate   management  fees  charged  by
     Brant-Allen.

     During the nine months ended  September  30, 1998 the board of directors of
     the Company's parent,  Brant-Allen,  contributed the unpaid accrued portion
     of the management fee totaling $2,067,173 through September 30, 1998 to the
     Company's  capital.  This  portion of the  management  fee is limited as to
     payment in cash by the Company to Brant-Allen under the indenture governing
     the Company:  $100 million  principal  amount 10% Senior  Secured Notes due
     2007 (the "Notes").  The  contribution  of this accrued  liability has been
     reflected  as an  addition  to  contributed  capital  in  the  accompanying
     condensed  balance  sheet at September 30, 1998.  Brant-Allen's  board also
     agreed that until further action is taken by the board, future accrued fees
     (which are not payable in cash because of the Notes' restrictive covenants)
     should be contributed to the Company's capital.

     The  Predecessor  was a party to a wood  supply  contract  with Bear Island
     Timberlands   Company,   L.P.   ("Timberlands"),   an  affiliate,   whereby
     Timberlands had guaranteed to supply all of the  Predecessor's log and pulp
     chip  requirements  at  prices  negotiated  annually.  Concurrent  with the
     Acquisition, the Company modified certain terms of the wood supply contract
     with Bear Island  Timberlands  Company L.L.C.  ("BITCO"),  the successor to
     Timberlands and a wholly-owned  subsidiary of Brant-Allen.  Purchases under
     the wood supply contract approximated $991,500 and $2,137,000 for the three
     and nine month  periods  ended  September  30,  1998,  and  $4,210,000  and
     $10,982,000  for the three and nine month periods ended September 30, 1997,
     respectively.

     The Predecessor  recognized costs of approximately  $613,000 and $1,641,000
     for recycling  procurement  fees paid to  Timberlands  during the three and
     nine month  periods  ended  September  30,  1997,  respectfully,  which are
     included  in  cost  of  sales  in  the  accompanying   condensed  financial
     statements.

     The Companies charged BITCO and Timberlands for certain  administrative and
     other expenses. These charges approximated $175,000 and $560,000 during the
     three and nine month  periods  ended  September  30, 1998 and  $350,000 and
     $1,068,000  during the three and nine month  periods  ended  September  30,
     1997, respectively.

     The Company's receivables and payables and the Companies' sales to partners
     and affiliates were as follows:
<TABLE>
<CAPTION>
                                                                          September 30,     December 31,
                                                                        ----------------  ----------------
                                                                               1998              1997
<S>                                                                     <C>               <C>            
          Due from Brant-Allen                                          $        35,468   $     1,193,315
          Due from Dow Jones                                                  2,442,719         1,930,538
          Due from BITCO                                                         19,088            42,029
          Due to F. F. Soucy, Inc., a wholly owned subsidiary of
                Brant-Allen                                                      85,632           109,901
<CAPTION>

                                                    Three Months Ended September 30,   Nine Months Ended September 30,
                                                   ---------------------------------- ----------------------------------
                                                      1998               1997               1998              1997
          Net sales to Dow Jones                 $     6,804,271    $     6,506,925   $    19,992,012   $    18,632,950
          Net sales to The Washington Post               *                5,950,125           *              19,542,872
</TABLE>

     Sales to Dow Jones represented  approximately 22% of total sales during the
     three and nine month  periods ended  September 30, 1998 and 1997.  Sales to
     The Washington Post  represented  approximately  20% and 23% of total sales
     during the three and nine month  periods  ended  September  30,  1997.  The
     remaining  sales  were  to  other  unaffiliated   printing  and  publishing
     enterprises located primarily in the eastern United States.

*Effective December 1, 1997 no longer a partner or affiliate.


                                       6
<PAGE>
                        BEAR ISLAND PAPER COMPANY, L.L.C.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

7.   The  Financial   Accounting  Standards  Board  issued  Statement  No.  131,
     "Disclosures  about  Segments of an  Enterprise  and Related  Information,"
     ("SFAS No.  131") in June 1997,  which  became  effective  for fiscal years
     beginning after December 31, 1997.  SFAS No. 131 establishes  standards for
     reporting   information   about  operating   segments,   including  related
     disclosures  about  products  and  services,  geographic  areas,  and major
     customers. Interim reporting disclosures are not required in the first year
     of adoption and are therefore not provided. At the time of adoption of SFAS
     No. 131,  this  standard is not  expected to have a material  impact on the
     financial  position  or  results of  operations  of the  Company  since the
     Company operates as one segment.

     Statement  of  Financial  Accounting  Standards  No. 132 ("SFAS No.  132"),
     "Employers' Disclosures about Pensions and Other Postretirement  Benefits,"
     was issued by the Financial  Accounting  Standards  Board in February 1998,
     which is effective for all years  beginning  after December 31, 1997.  This
     statement   revises   employers'   disclosures   about  pension  and  other
     postretirement  benefit  plans.  Implementation  of  SFAS  No.  132  is not
     expected to  significantly  change the Company's  current  disclosures when
     adopted in the fourth quarter of 1998.

     Statement  of  Financial  Accounting  Standards  No. 133 ("SFAS No.  133"),
     "Accounting for Derivative  Instruments and Hedging Activities," was issued
     by the  Financial  Accounting  Standards  Board  in  June  1998,  which  is
     effective for all fiscal  quarters of all fiscal years beginning after June
     15, 1999. This statement establishes accounting and reporting standards for
     derivative  instruments,  including certain derivative instruments embedded
     in other contracts, and for hedging activities.  At the time of adoption of
     SFAS No. 133,  this  standard is not expected to have a material  impact on
     the financial position or results of operations of the Company.

                                       7
<PAGE>
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

         The  following  is  management's  discussion  and  analysis  of certain
significant  factors  affecting  the  Company's  results of  operations  and the
Predecessor during the periods included in the accompanying condensed statements
of income and the changes in the Company's  financial  condition  since December
31,  1997.  Some  of the  information  presented  in the  following  discussion,
including  certain  disclosures  made  related  to the  Year  2000,  constitutes
forward-looking comments within the meaning of the Private Securities Litigation
Reform Act of 1995.  Although the Company believes its expectations are based on
reasonable  assumptions  within  the bounds of  knowledge  of its  business  and
operations,  there can be no  assurance  that  actual  results  will not  differ
materially  from its  expectations.  Factors which could cause actual results to
differ  from  expectations  include,  without  limitation,  the timing of orders
received from customers, the gain or loss of significant customers,  competition
from other  manufacturers,  a  significant  rise in interest  rates,  changes in
demand for the  Company's  products,  results of testing  systems  for year 2000
compliance and costs to remediate non-Year 2000 complaint systems, disruption of
business caused by failure of vendors,  suppliers,  or customers to be Year 2000
compliant,  non-Year 2000 complaint  equipment,  or the loss of electrical power
due to non-Year 2000 complaint energy providers.  In addition,  increases in the
cost of the product, changes in the market in general and significant changes in
new  product   introduction   could  result  in  actual  results   varying  from
expectations.

General

         The Company  manufactures  and is dependent on one product,  newsprint,
which is used in general printing and the newspaper  publishing industry and for
advertising  circulars.  Accordingly,  demand for newsprint  fluctuates with the
economy,  newspaper  circulation and purchases of advertising  lineage which may
significantly  impact the Company's  selling price of newsprint and,  therefore,
its revenues and  profitability.  In addition,  variation in the balance between
supply and demand as a result of global  capacity  additions  have an increasing
impact on both  selling  prices  and  inventory  levels  in the  North  American
markets. Capacity is typically added in large blocks because of the scale of new
newsprint machines.

         As a result,  the  newsprint  market is highly  cyclical,  depending on
changes  in  global  supply,   demand  and  inventory   levels.   These  factors
significantly  impact the  Company's  sales  volume and  newsprint  prices  and,
therefore, the Company's revenues and profitability.  Given the commodity nature
of  newsprint,  the Company,  like other  suppliers  to this market,  has little
influence over the timing and extent of price  changes.  Sales are recognized at
the time of shipment from the Company's mill. However,  significant fluctuations
in revenue can and do occur as a result of changes in market conditions.

         In December,  1997, the Company  purchased the 70% Limited  Partnership
interests of the  Predecessor  owned equally by  subsidiaries  of The Washington
Post Company,  Inc. and Dow Jones & Company,  Inc. (the "Acquisition").  Funding
for the Acquisition was provided through the issuance of $100 million  principal
amount of 10%  Senior  Secured  Notes due 2007 (the  "Notes")  and $120  million
principal amount of bank debt (the "Bank Credit Facilities")  comprised of a $70
million  principal amount Term Loan Facility and a $50 million  Revolving Credit
Facility. Following the Acquisition 100% of the Company was owned by Brant-Allen
Industries,   Inc.   ("Brant-Allen"),   the  original  general  partner  of  the
Predecessor.

         During the nine months ended  September 30, 1998 the board of directors
of the Company's parent, Brant-Allen,  contributed the unpaid accrued portion of
the  management  fee  totaling  $2,067,173  through  September  30,  1998 to the
Company's  capital.  This portion of the management fee is limited as to payment
in cash by the Company to Brant-Allen  under the indenture  governing the Notes.
The contribution of this accrued  liability has been reflected as an addition to
contributed capital in the accompanying condensed balance sheet at September 30,
1998.  Brant-Allen's board also agreed that until further action is taken by the
board,  future accrued fees (which are not payable in cash because of the Notes'
restrictive covenants) should be contributed to the Company's capital.



THREE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1997        

         Net sales  increased by $1.5 million,  or 5.2%, to $31.0 million in the
third quarter of 1998,  from $29.5  million in the third  quarter of 1997.  This
increase was attributable to a 5.5% increase in the average net selling price of
the Company's products.  Sales volumes remained constant at approximately 56,300
tons.



         Cost of sales  decreased by $2.3  million,  or 8.8% to $23.7 million in
the third quarter of 1998 from $26.0 million in the third quarter of 1997.  This
decrease was  attributable  primarily to an 8.7% decrease in unit  manufacturing
costs per ton. The decrease in unit manufacturing cost per ton was a result of a

                                       8                                  
<PAGE>

27.5% decrease in fiber costs  primarily due to a 37.4% decrease in the price of
wood in the third  quarter  of 1998 to  reflect  the  pricing of wood fiber on a
market basis that is being used after  consummation  of the  Acquisition  from a
non-arms  length fixed price basis  including  upcharges in the third quarter of
1997 that was used prior to the  Acquisition.  Cost of sales as a percentage  of
net sales  decreased  to 76.4% in the third  quarter of 1998,  from 88.3% in the
third quarter of 1997,  due to depressed  newsprint  selling prices in the third
quarter of 1997 and reduced unit costs of manufacturing as noted above.

         Selling, general and administrative expenses decreased by $0.2 million,
or 14.4%,  to $1.0 million in the third quarter of 1998 from $1.2 million in the
third quarter of 1997. This decrease was primarily attributable to a decrease in
certain general expenses.

         As a result of the above factors,  income from operations  increased by
$4.0 million to $6.3  million in the third  quarter of 1998 from $2.3 million in
the third quarter of 1997.

         Interest expense increased by $3.4 million to $4.6 million in the third
quarter  of 1998 from $1.2  million  in the third  quarter  of 1997,  due to the
increase in the Company's indebtedness as a result of the Transaction.

         As a result of the above factors, the Company's net income increased by
$0.5 million to $1.8 million in the third  quarter of 1998 from $ 1.3 million in
the third quarter of 1997.



NINE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED TO NINE MONTHS ENDED SEPTEMBER 
30, 1997

         Net sales  increased by $7.1 million,  or 8.4%, to $92.5 million in the
first nine months of 1998,  from $85.4 million in the first nine months of 1997.
This  increase was  attributable  to a 9.6 % increase in the average net selling
price of the Company's  products and was offset,  in part, by a 1.1% decrease in
sales  volumes to  approximately  167,400  tons in the first nine months of 1998
from approximately 169,300 tons in the first nine months of 1997.

         Cost of sales decreased by $7.5 million,  or 9.8 %, to $69.7 million in
the first  nine  months of 1998 from $77.2  million in the first nine  months of
1997.  This  decrease was  attributable  primarily  to an 8.8%  decrease in unit
manufacturing  costs per ton and a 1.1% decrease in sales volumes.  The decrease
in unit  manufacturing  cost per ton was a result of a 24.3%  decrease  in fiber
costs  primarily  due to a 32.5%  decrease in the cost of wood in the first nine
months of 1998 to reflect  the  pricing of wood fiber on a market  basis that is
being used after  consummation of the  Acquisition  from a non arms length fixed
price basis  including  upcharges in the first nine months of 1997 that was used
prior to the  Acquisition.  Cost of sales as a percentage of net sales decreased
to 75.3% in the first nine  months of 1998,  from 90.5% in the first nine months
of 1997, due to depressed  newsprint  selling prices in the first nine months of
1997 and reduced unit costs of manufacturing in 1998 as described above.

         Selling, general and administrative expenses increased by $0.2 million,
or 5.3 %, to $3.4  million in the first nine months of 1998 from $3.2 million in
the first nine months of 1997.  This increase was primarily  attributable  to an
increase in the management fee paid by the Company to Brant-Allen  that resulted
from higher net sales,  the additional  administrative  and regulatory  expenses
incurred  as a result  of the  Company's  issuance  of the  Notes,  offset  by a
decrease in certain general expenses.

         As a result of the above factors,  income from operations  increased by
$14.5  million  to $19.4  million  in the  first  nine  months of 1998 from $4.9
million in the first nine months of 1997.

         Interest  expense  increased by $10.7  million to $14.3  million in the
first nine  months of 1998 from $3.6  million in the first nine  months of 1997,
due  to  the  increase  in  the  Company's  indebtedness  as  a  result  of  the
Acquisition.

         As a result of the above factors, the Company's net income increased by
$3.5 million to $5.3 million in the first nine months of 1998 from $ 1.8 million
in the first nine months of 1997.

                                       9
<PAGE>

Liquidity and Capital Resources

         Historically,  the Company's principal liquidity requirements have been
for working capital,  capital expenditures and debt service.  These requirements
have been met  through  cash  flows  from  operations  and/or  loans and  equity
contributions  from either Brant-Allen or the Company's former limited partners,
subsidiaries of Dow Jones and The Washington  Post.  Following the  Acquisition,
the Company's  principal  liquidity  requirements are expected to be principally
for working capital, debt service under the Bank Credit Facilities and the Notes
and the funding of capital expenditures.

         The Company's  cash and  short-term  investments  at September 30, 1998
were $2.6 million, representing an increase of $1.2 million from $1.4 million at
December 31, 1997. Cash flows from operating  activities  during the nine months
ended September 30, 1998 were used to cover capital expenditures of $5.3 million
in connection with upgrading and maintaining it's manufacturing  facility and to
reduce  long-term  debt by $11.7  million.  The  Company  anticipates  that cash
provided from  operations  in the future,  combined  with  borrowings  under the
Revolving  Credit  Facility will be  sufficient  to pay its operating  expenses,
satisfy debt-service obligations and fund capital expenditures.

         Management  anticipates  that the Company's total capital  expenditures
for the balance of 1998 and 1999 will  primarily  relate to  maintenance  of its
newsprint  facilities  and cost  reduction  projects,  allowing  the  Company to
improve quality and, therefore, enhance its competitive position.

         At September 30, 1998, the Company had approximately  $184.7 million of
indebtedness, consisting of borrowings of $15 million under the Revolving Credit
Facility,  $69.5  million under the Term Loan  Facility,  $100 million under the
Notes and  approximately  $0.2 million in  long-term  purchase  obligations.  In
addition,  $31.3 million was available in unused  borrowing  capacity  under the
Revolving Credit Facility.


Year 2000 Compliance

         The  Company  has  made a  review  of its  information  technology  and
non-information technology systems and is in the process of modifying, upgrading
or replacing its computer  software  applications and systems to accommodate the
"Year 2000" dating changes  necessary to permit correct  recording of year dates
for 2000 and later years.

         The Company does not, at the present time, have sufficient  information
to  estimate  the cost  through  completion  of  modifying  all of the  required
systems, however, the Company does not anticipate that the cost of its Year 2000
compliance  program  will be material to its  financial  condition or results of
operations.

         The Company believes that it will be able to achieve  compliance by the
end of 1999, and does not currently  anticipate  any material  disruption in its
operations  as the  result of any  failure by the  Company to be in  compliance.
During 1999,  the Company plans to develop a contingency  plan should it fail to
implement all necessary "Year 2000" program changes prior to December 31, 1999.

         The  Company  does  not  currently  have  information   concerning  the
compliance  status  of its  non-affiliated  suppliers  and  customers.  With the
exception  of  electrical  energy  which  the  Company  has not  determined  its
supplier's  Year  2000  compliance,  no  vendor's  non-compliance  would  have a
material effect on the Company's  operations.  The most reasonably  likely worst
case scenario is that the Company will operate  non-compliant  applications on a
manual basis until, complaint  applications can be installed of modified.  These
costs could have a material adverse effect on the Company's  financial condition
and results of operations.



                                          10
<PAGE>


Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibit 27, Financial Data Schedule 

(b) No  reports on Form 8-K have been filed  during the  quarter  for which this
report is filed.












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<PAGE>

Signatures


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, there unto duly authorized.



                                        BEAR ISLAND PAPER COMPANY, L.L.C.



                                        By:  /s/ Peter M. Brant
                                        ----------------------------
                                        Peter M. Brant
                      President, Chairman of the Board and
                             Chief Executive Officer



                                        By:  /s/ Edward D. Sherrick
                                        ----------------------------
                                        Edward D. Sherrick
                                        Vice President of Finance
                                        (Principal Financial Officer and
                            Chief Accounting Officer)





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