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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549



                                    FORM 10-Q



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

                     For the period ended November 30, 2004


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

                For the transition period from _______ to _______


                         Commission File Number: 0-8656



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

            Delaware                                       13-2635899
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                       Identification No.)


                      400 Oser Avenue, Hauppauge, NY 11788
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                  631-231-0333
--------------------------------------------------------------------------------
                         (Registrant's telephone number)

                                      None
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


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.
[X] Yes     [ ]  No

Indicate by check mark whether the Registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act).
[ ] Yes     [X]  No

                               SHARES OUTSTANDING
--------------------------------------------------------------------------------
           4,568,012 shares of common stock, par value $.01 per share,
                             as of December 31, 2004


                                     Page 1
================================================================================
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                                      INDEX



                                                                           Page
                                                                          Number
                                                                          ------
Part I.  Financial Information:


         Item 1. Financial Statements:


                 Condensed Consolidated Balance Sheets -
                   November 30, 2004 and May 31, 2004........................ 3


                 Condensed Consolidated Statements of Income -
                   For the three months and six months ended November
                   30, 2004 and 2003......................................... 4


                 Condensed Consolidated Statements of Cash Flows -
                   For the six months ended November 30, 2004 and 2003....... 5


                 Notes to Condensed Consolidated Financial Statements........ 6


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


         Item 3. Quantitative and Qualitative Disclosure About Market Risk...14


         Item 4. Procedures and Controls.....................................15


Part II. Other Information...................................................15

         Item 6.  Exhibits and Reports on Form 8-K...........................15

Signatures...................................................................15


                                     Page 2
<PAGE>

Part I. Financial Information
        Item 1.  Financial Statements


                           TSR, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE><CAPTION>
                                                                     November 30,     May 31,
ASSETS                                                                   2004          2004
                                                                     -----------   -----------
                                                                     (Unaudited)
<S>                                                                  <C>           <C>
Current Assets:
     Cash and cash equivalents (Note 3) ..........................   $ 4,250,596   $ 2,268,796
     Marketable securities (Note 5) ..............................     5,961,414     6,498,839
     Accounts receivable (net of allowance for
          doubtful accounts of $430,000) .........................     8,191,951     9,904,620
     Other receivables ...........................................        35,092        29,700
     Prepaid expenses ............................................        17,051        38,918
     Prepaid and recoverable income taxes ........................         3,545        15,483
     Deferred income taxes .......................................       180,000       180,000
                                                                     -----------   -----------
          Total current assets ...................................    18,639,649    18,936,356

Equipment and leasehold improvements, at cost (net of accumulated
     depreciation and amortization of $739,774 and $731,581) .....        31,470        24,001
Other assets .....................................................        49,892        84,893
Deferred income taxes ............................................       148,000       143,000
Acquired client relationships, (net of accumulated amorization
      of $171,608 and $157,308) ..................................          --          14,300
                                                                     -----------   -----------
                                                                     $18,869,011   $19,202,550
                                                                     ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts and other payables .................................   $   162,189   $   144,391
     Accrued expenses and other current liabilities ..............     1,982,435     2,139,799
     Advances from customers .....................................     1,489,415     1,532,642
     Income taxes payable ........................................       166,585       143,553
                                                                     -----------   -----------
          Total current liabilities ..............................     3,800,624     3,960,385
                                                                     -----------   -----------

Minority Interest ................................................        69,942        50,161
                                                                     -----------   -----------

Stockholders' Equity:
     Preferred stock, $1 par value, authorized
          1,000,000 shares; none issued ..........................          --            --
     Common stock, $.01 par value, authorized
          25,000,000 shares; issued 6,228,326 and 6,204,326 shares        62,283        62,283
     Additional paid-in capital ..................................     5,081,927     5,079,027
     Retained earnings ...........................................    21,885,536    22,081,995
                                                                     -----------   -----------
                                                                      27,029,746    27,223,305

     Less: Treasury Stock, 1,660,314 shares, at cost .............    12,031,301    12,031,301
                                                                     -----------   -----------
                                                                      14,998,445    15,192,004
                                                                     -----------   -----------

                                                                     $18,869,011   $19,202,550
                                                                     ===========   ===========
</TABLE>
              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                     Page 3
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
          FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
<TABLE><CAPTION>

                                                                    Three Months Ended               Six Months Ended
                                                                       November 30,                    November 30,
                                                                   2004            2003            2004            2003
                                                               ------------    ------------    ------------    ------------
<S>                                                            <C>             <C>             <C>             <C>
Revenues, net ..............................................   $ 13,138,281    $ 12,996,626    $ 26,519,239    $ 25,733,445

Cost of  sales .............................................     10,231,397      10,016,017      20,684,995      19,888,876
Selling, general and administrative expenses ...............      1,906,599       1,889,646       3,773,169       3,876,188
                                                               ------------    ------------    ------------    ------------
                                                                 12,137,996      11,905,663      24,458,164      23,765,064
                                                               ------------    ------------    ------------    ------------

Income from  operations ....................................      1,000,285       1,090,963       2,061,075       1,968,381

Other income (expense):
     Interest and dividend  income .........................         34,012          24,656          61,479          66,266
     Realized and unrealized gain (loss) from marketable
       securities,  net ....................................          1,184           3,367          (3,828)         10,033
     Minority interest in subsidiary operating profits .....        (20,071)        (19,653)        (35,781)        (37,558)
                                                               ------------    ------------    ------------    ------------

Income before income taxes .................................      1,015,410       1,099,333       2,082,945       2,007,122
Provision  for income  taxes ...............................        440,000         461,000         909,000         865,000
                                                               ------------    ------------    ------------    ------------

    Net income .............................................   $    575,410    $    638,333    $  1,173,945    $  1,142,122
                                                               ============    ============    ============    ============

Basic and diluted net income per common share ..............   $       0.13    $       0.14    $       0.26    $       0.25
                                                               ============    ============    ============    ============

Weighted average number of basic common shares outstanding .      4,568,012       4,544,012       4,568,012       4,533,512
                                                               ============    ============    ============    ============

Weighted average number of diluted common shares outstanding      4,569,649       4,551,732       4,569,563       4,541,286
                                                               ============    ============    ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                     Page 4
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED NOVEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
<TABLE><CAPTION>
                                                                Six Months Ended
                                                                   November 30,
                                                               2004            2003
                                                               ----            ----
<S>                                                        <C>             <C>
Cash flows from operating activities:
     Net income ........................................   $  1,173,945    $  1,142,122
     Adjustments to reconcile net income to net cash
       provided by operating activities:
        Depreciation and amortization ..................         22,493          41,490
        Realized and unrealized loss (gain) from
          marketable securities, net ...................          3,828         (10,033)
        Stock based compensation expense ...............          2,900          43,520
        Minority interest in subsidiary operating profit         35,781          37,558
        Deferred income taxes ..........................         (5,000)           --

Changes in assets and liabilities:
          Accounts receivable ..........................      1,712,669        (132,261)
          Other receivables ............................         (5,392)         28,499
          Prepaid expenses .............................         21,867          20,756
          Prepaid and recoverable income taxes .........         11,938         (35,281)
          Other assets .................................         35,001           1,151
          Accounts payable and accrued expenses ........       (139,566)       (378,170)
          Income taxes payable .........................         23,032         (20,755)
          Advances from customers ......................        (43,227)       (217,273)
                                                           ------------    ------------

     Net cash provided by operating activities .........      2,850,269         521,323
                                                           ------------    ------------

Cash flows from investing activities:
        Proceeds from maturities and sales of
          marketable securities ........................      6,476,443      12,925,210
        Purchases of marketable securities .............     (5,942,846)     (2,984,810)
        Purchases of fixed assets ......................        (15,662)         (1,767)
                                                           ------------    ------------

    Net cash provided by investing activities ..........        517,935       9,938,633
                                                           ------------    ------------

Cash flows from financing activities:
       Distribution to minority interest ...............        (16,000)           --
       Proceeds from exercise of stock options .........           --           696,938
       Cash dividends paid .............................     (1,370,404)     (9,769,626)
                                                           ------------    ------------

    Net cash used in financing activities ..............     (1,386,404)     (9,072,688)
                                                           ------------    ------------

Net increase in cash and cash equivalents ..............      1,981,800       1,387,268
Cash and cash equivalents at beginning of period .......      2,268,796       5,063,098
                                                           ------------    ------------

Cash and cash equivalents at end of period .............   $  4,250,596    $  6,450,366
                                                           ============    ============

Supplemental Disclosures:
       Income tax payments .............................   $    879,000    $    921,000
                                                           ============    ============
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                     Page 5
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2004
                                   (UNAUDITED)

1.   Basis of Presentation
     ---------------------

     The accompanying condensed consolidated interim financial statements
     include the accounts of TSR, Inc. and its subsidiaries (the "Company"). All
     significant inter-company balances and transactions have been eliminated in
     consolidation. These interim financial statements have been prepared in
     accordance with accounting principles generally accepted in the United
     States of America applying to interim financial information and with the
     instructions to Form 10-Q of Regulation S-X of the Securities and Exchange
     Commission. Accordingly, certain information and footnote disclosures
     required by accounting principles generally accepted in the United States
     of America and normally included in the Company's annual financial
     statements have been condensed or omitted. These interim financial
     statements as of and for the six months ended November 30, 2004, are
     unaudited; however, in the opinion of management, such statements include
     all adjustments (consisting of normal recurring accruals) necessary to
     present fairly the consolidated financial position, results of operations,
     and cash flows of the Company for the periods presented. The results of
     operations for the interim periods presented are not necessarily indicative
     of the results that might be expected for future interim periods or for the
     full year ending May 31, 2005. These interim financial statements should be
     read in conjunction with the Company's consolidated financial statements
     and notes thereto included in the Company's Annual Report on Form 10-K for
     the year ended May 31, 2004.

2.   Net Income Per Common Share
     ---------------------------

     Basic net income per common share is computed by dividing income available
     to common stockholders (which for the Company equals its net income) by the
     weighted average number of common shares outstanding, and diluted net
     income per common share adds the dilutive effect of stock options and other
     common stock equivalents. Options covering 8,363 and 26,280; and 8,449 and
     26,226 shares of common stock have been omitted from the calculations of
     diluted net income per common share for the three month and six month
     periods ended November 30, 2004 and November 30, 2003, respectively, as
     their effect would have been antidilutive.

3    Cash and Cash Equivalents
     -------------------------

     The Company considers short-term highly liquid investments with maturities
     of three months or less at the time of purchase to be cash equivalents.
     Cash and cash equivalents were comprised of the following as of November
     30, 2004:

          Cash in banks...............................    $    429,150
          Money Market Funds..........................       3,821,446
                                                          ------------
                                                          $  4,250,596

4.   Revenue Recognition
     -------------------

     The Company's contract computer programming services are generally provided
     under time and materials agreements with customers. Accordingly, the
     Company recognizes such revenues as services are provided. Advances from
     customers represent amounts received from customers prior to the Company's
     provision of the related services and credit balances from overpayments.

                                     Page 6
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                                NOVEMBER 30, 2004
                                   (UNAUDITED)


5.   Marketable Securities
     ---------------------

     The Company accounts for its marketable securities in Accordance with
     Statement of Financial Accounting Standards No. 115 "Accounting for Certain
     Investments in Debt and Equity Securities." Accordingly, the Company
     classifies its marketable securities at acquisition as either (i)
     held-to-maturity, (ii) trading, or (iii) available-for-sale. Based upon the
     Company's intent and ability to hold its US Treasury securities to maturity
     (which maturities are less than one year), such securities have been
     classified as held-to -maturity and are carried at amortized cost. The
     Company's equity securities are classified as trading securities, which are
     carried at fair value with unrealized gains and losses included in
     earnings. The Company's marketable securities are summarized as follows:


                                               Gross       Gross
                                            Unrealized  Unrealized
                                 Amortized    Holding     Holding      Recorded
                                   Cost        Gains      Losses        Value
                                   ----        -----      ------        -----

     United States Treasury
       Securities.............  $5,942,846       --           --       5,942,846

     Equity Securities........      16,866     1,702          --          18,568
                                ----------    ------    ---------    -----------
                                $5,959,712    $1,702    $            $ 5,961,414
                                ==========    ======    =========    ===========





                                     Page 7
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                                NOVEMBER 30, 2004
                                   (UNAUDITED)

6.   Stock Options
     -------------

     On July 28, 2003 the Company paid a large nonrecurring cash dividend of
     $2.00 per share to shareholders of record as of July 11, 2003. The dividend
     paid amounted to $9,088,024. Guidance under Emerging Issues Task Force
     (EITF) 00-23, ISSUES RELATED TO THE ACCOUNTING FOR STOCK COMPENSATION UNDER
     APB OPINION NO.25 AND FASB INTERPRETATION NO.44, requires modification for
     outstanding stock options by adjusting the price and/or the number of
     shares under a fixed stock option award as a result of a large nonrecurring
     cash dividend. The Company did not adjust the terms of any outstanding
     stock options and, given the circumstances, a new measurement date and
     variable accounting treatment was required for its outstanding options at
     the dividend payment date. The Company had 10,000 and 34,000 such
     outstanding options, all of which were vested, as of November 30, 2004 and
     2003 respectively which are now subject to variable accounting treatment.
     Accordingly, the Company recorded a non-cash compensation charge (recovery)
     of $10,500 and $(6,460) for the three months ended November 30, 2004 and
     2003 and $2,900 and $43,520 for the six months ended November 30, 2004 and
     2003 and will continue to adjust the compensation charge associated with
     these options through the earlier of their exercise, forfeiture or
     expiration dates.

     The Company has one stock-based employee compensation plan in effect. The
     Company accounts for all transactions under which employees receive shares
     of stock or other equity instruments in the Company based on the price of
     its stock in accordance with the provisions of Accounting Principles Board
     Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. All options
     granted under the plan had an exercise price equal to the market value of
     the underlying common stock, and the number of shares represented by such
     options were known and fixed, on the date of grant. However, as a result of
     the large nonrecurring cash dividend, the remaining outstanding 10,000
     options are now treated as variable options. The following table
     illustrates the effect on net income and earnings per share if the Company
     had applied the fair value recognition provisions of Statement of Financial
     Accounting Standards (SFAS) No. 123 ACCOUNTING FOR STOCK-BASED
     COMPENSATION.
<TABLE><CAPTION>
                                                Three Months Ended           Six Months Ended
                                                   November 30,                November 30,
                                                   ------------                ------------
                                                2004          2003          2004          2003
                                                ----          ----          ----          ----
<S>                                          <C>           <C>           <C>           <C>
Net income:
  As reported...........................     $  575,410    $  638,333    $1,173,945    $1,142,122
Deduct: Total stock-based  employee
compensation expense determined under
fair value method for all awards, net
of minority interest and related tax
effects.................................            --            --            --            --
Add:  Stock based employee
compensation expense (recovery)
included in reported net income, net
of related tax effect...................         10,500        (6,460)        2,900        43,520
                                             ----------    ----------    ----------    ----------
  Proforma net income...................     $  585,910    $  631,873    $1,176,845    $1,185,642
                                             ==========    ==========    ==========    ==========
Basic net income per share:
  As reported...........................     $     0.13    $     0.14    $     0.26    $     0.25
                                             ==========    ==========    ==========    ==========
Proforma................................     $     0.13    $     0.14    $     0.26    $     0.26
                                             ==========    ==========    ==========    ==========
</TABLE>

There were no options granted in fiscal 2004 and 2003.

                                     Page 8
<PAGE>

PART I. FINANCIAL INFORMATION
        ITEM 2.

                           TSR, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
condensed consolidated financial statements and the notes to such financial
statements.

Forward-Looking Statements
--------------------------

Certain statements contained in Management's Discussion and Analysis of
Financial Condition and Results of Operations, including statements concerning
the Company's future prospects and the Company's future cash flow requirements
are forward looking statements, as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projections
in the forward looking statements which statements involve risks and
uncertainties, including but not limited to the following: risks relating to the
competitive nature of the markets for contract computer programming services;
the extent to which market conditions for the Company's contract computer
consulting services will continue to adversely affect the Company's business;
the concentration of the Company's business with certain customers; uncertainty
as to the Company's ability to maintain its relations with existing customers
and expand its contract computer consulting services business; the impact of
changes in the industry, such as the use of vendor management companies in
connection with the consulting procurement process the increase in customers
moving IT operations offshore, and uncertainty as to the operating results of
the Company's new legacy system migration service and other risks and
uncertainties set forth in the Company's filings with the Securities and
Exchange Commission.

Results of Operations
---------------------

The following table sets forth for the periods indicated certain financial
information derived from the Company's condensed consolidated statements of
earnings. There can be no assurance that trends in operating results will
continue in the future:

Three months ended November 30, 2004 compared with three months ended November
------------------------------------------------------------------------------
30, 2003
--------

                                                 Three Months Ended
                                                     November 30,
                                            (Dollar amounts in Thousands)
                                              2004                  2003
                                              ----                  ----
                                                   % of                  % of
                                       Amount    Revenues    Amount    Revenues

Revenues ...........................  $ 13,138     100.0    $ 12,997     100.0
Cost of sales ......................    10,231      77.9      10,016      77.1
                                      --------    ------    --------    ------
Gross profit .......................     2,907      22.1       2,981      22.9

Selling, general, and
  administrative expenses...........     1,907      14.5       1,890      14.5
                                      --------    ------    --------    ------
Income from operations .............     1,000       7.6       1,091       8.4

Other income .......................        15       0.1           8       0.0
                                      --------    ------    --------    ------
Income before income taxes .........     1,015       7.7       1,099       8.4
Provision for income taxes .........       440       3.3         461       3.5
                                      --------    ------    --------    ------

Net income .........................  $    575       4.4    $    638       4.9
                                      ========    ======    ========    ======


                                     Page 9
<PAGE>

                           TSR, INC. AND SUBSIDIARIES

Revenues
--------

Revenues consist primarily of revenues from computer programming consulting
services. Revenues for the quarter ended November 30, 2004 increased $141,000 or
1.1% over the comparable period in fiscal 2004. At the beginning of the current
quarter, the Company's largest customer, AT&T, cut back its IT budget for
certain of its divisions, resulting in a reduction of approximately 20
consultants on billing. However, the overall business trend with other customers
remained positive, causing the average number of consultants on billing with
customers to remain at 389 for both the quarters ended November 30, 2004 and
2003. While approximately 100 consultants remain on billing with AT&T, we cannot
predict the extent to which further reductions may take place.

Cost of Sales
-------------

Cost of sales for the quarter ended November 30, 2004, increased $215,000 or
2.1% to $10,231,000 from $10,016,000 in the prior year period. Cost of sales as
a percentage of revenues increased from 77.1% in the quarter ended November 30,
2003 to 77.9% in the quarter ended November 30, 2004. These increases are
primarily attributed to the increased costs resulting from a higher percentage
of the consultants on billing being direct employees of the Company rather than
employees of subcontractors and continued competitive market pressures on rates.

Selling, General and Administrative Expenses
--------------------------------------------

Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses increased $17,000 or 0.9% from
$1,890,000 in the quarter November 30, 2003 to $1,907,000 in the quarter ended
November 30, 2004. This increase was primarily attributable to expenses of
approximately $81,000 incurred in establishing the Company's new "Transformer"
service offering. A decrease in legal expenses offset most of these additional
expenses.

The Company is in the process of developing a new service, "Transformer", aimed
at companies with large investments in legacy systems, which will use an
automated process to transform the code of older legacy applications, in
computer languages such as Fortran, into more modern, flexible applications that
are less expensive to operate and maintain. The Company has begun to market the
service to potential customers. While the Company believes that the new service
offers the potential to generate revenues in the future, the Company cannot
predict whether it will be successful in completing the development of, and
marketing, this service or whether it will realize significant revenues from
this service.

Other Income
------------

Other income resulted primarily from interest and dividend income, which
increased by $9,000 to $34,000 due to higher interest rates in the quarter ended
November 30, 2004. Additionally, the Company had a net unrealized gain of $3,000
in the quarter ended November 30, 2003 versus a gain of $5,000 in the quarter
ended November 30, 2004 from marketable securities due to mark to market
adjustments of its trading securities equity portfolio. The unrealized gain of
$5,000 in the quarter ended November 30, 2004 was offset by a loss of $4,000 on
the sale of marketable securities due to a merger.

Income Taxes
------------

The effective income tax rate of 43.3% for the quarter ended November 30, 2004
increased from a rate of 41.9% in the quarter ended November 30, 2003.


                                     Page 10
<PAGE>

                           TSR, INC. AND SUBSIDIARIES


Six months ended November 30, 2004 compared with six months ended November 30,
------------------------------------------------------------------------------
2003
----

                                                     Six Months Ended
                                                       November 30,
                                              (Dollar amounts in Thousands)
                                               2004                  2003
                                               ----                  ----
                                                    % of                  % of
                                         Amount   Revenues    Amount    Revenues

Revenues ...........................   $ 26,519     100.0    $ 25,733     100.0
Cost of sales ......................     20,685      78.0      19,889      77.3
                                       --------    ------    --------    ------
Gross profit .......................      5,834      22.0       5,844      22.7


Selling, general, and administrative
  expenses .........................      3,773      14.2       3,876      15.1
                                       --------    ------    --------    ------
Income from operations .............      2,061       7.8       1,968       7.6

Other income .......................         22      --            39       0.2
                                       --------    ------    --------    ------
Income before income taxes .........      2,083       7.8       2,007       7.8
Provision for income taxes .........        909       3.4         865       3.4
                                       --------    ------    --------    ------
Net income .........................   $  1,174       4.4    $  1,142       4.4
                                       ========    ======    ========    ======

Revenues
--------

Revenues consist primarily of revenues from computer programming consulting
services. Revenues for the six months ended November 30, 2004 increased $786,000
or 3.1% from the comparable period in fiscal 2004. Increased opportunities to
place consultants on billing with existing clients in the first quarter of the
current six month period was partially offset by a budget reduction at the
Company's largest client in the second quarter of the current period. This
resulted in the average number of consultants on billing with clients increasing
to 387 for the six months ended November 30, 2004 from 380 in the six months
ended November 30, 2003.

Cost of Sales
-------------

Cost of sales for the six months ended November 30, 2004, increased $796,000 or
4.0% to $20,685,000 from $19,889,000 in the prior year period. Cost of sales as
a percentage of revenues increased from 77.3% in the six months ended November
30, 2004 to 78.0% in the six months ended November 30, 2004. These increases are
primarily attributable to utilizing a higher percentage of consultants as direct
employees of the Company rather than employees of subcontractors and continued
competitive market pressures on rates.





                                     Page 11
<PAGE>

                           TSR, INC. AND SUBSIDIARIES

Selling, General and Administrative Expenses
--------------------------------------------

Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses decreased $103,000 or 2.7%
from $3,876,000 in the six months ended November 30, 2003 to $3,773,000 in the
six months ended November 30, 2004. This decrease was primarily attributable to
decreased legal, technical recruiting and amortization expenses. The decrease in
these expenses was offset to some extent by approximately $125,000 of expenses
incurred in establishing the Company's new "Transformer" service offering.


Other Income
------------

Other income resulted primarily from interest and dividend income, which
decreased by $5,000 to $61,000 due to lower investable balances in the six
months ended November 30, 2004. Additionally, the Company also had a net
unrealized gain of $10,000 in the six months ended November 30, 2003 from
marketable securities due to mark to market adjustments of its trading
securities equity portfolio. The Company also had a realized loss of $4,000 in
the six months ended November 30, 2004 from the sale of marketable securities
due to a merger.

Income Taxes
------------

The effective income tax rate of 43.6% for the six months ended November 30,
2004 increased from a rate of 43.1% in the six months ended November 30, 2003.











                                     Page 12
<PAGE>

                           TSR, INC. AND SUBSIDIARIES


Liquidity and Capital Resources
-------------------------------

The Company expects that cash flow generated from operations together with its
cash and marketable securities will be sufficient to provide the Company with
adequate resources to meet its liquidity requirements for the foreseeable
future.

At November 30, 2004, the Company had working capital of $14,839,000 and cash
and cash equivalents of $4,251,000 as compared to working capital of $14,976,000
and cash and cash equivalents of $2,269,000 at May 31, 2004. The Company's
working capital also included $5,961,000 and $6,499,000 of marketable securities
at November 30, 2004 and May 31, 2004, respectively.

Net cash provided by operating activities of $2,850,000 for the six months ended
November 30, 2004, compared to cash provided of $521,000 for the six months
ended November 30, 2003. The cash provided by operating activities resulted
primarily from the Company's net income and a decrease in accounts receivable.
This decrease occurred due to increased collections from a major customer who
had delayed payments due to administrative issues at May 31, 2004. All amounts
outstanding at May 31, 2004 for this client have been collected.

Net cash provided by investing activities of $518,000 for the six months ended
November 30, 2004 primarily resulted from allowing US Treasury Bills to mature
without reinvesting all of the proceeds.

Net cash used in financing activities resulted primarily from the payment of a
cash dividend of $1,370,000 and distributions to the minority interest of
$16,000.

The Company's capital resource commitments at November 30, 2004 consisted of
lease obligations on its branch and corporate facilities. The Company intends to
finance these lease commitments from cash flow provided by operations, available
cash and short-term marketable securities.

The Company's cash and marketable securities were sufficient to enable it to
meet its cash requirements during the six months ended November 30, 2004. The
Company has available a revolving line of credit of $5,000,000 with a major
money center bank through October 6, 2005. As of November 30, 2004, no amounts
were outstanding under this line of credit.

                 Tabular Disclosure of Contractural Obligations
<TABLE><CAPTION>
-----------------------------------------------------------------------------------------------------
                                                           Payments Due By Period
-----------------------------------------------------------------------------------------------------

      Contractural Obligations
      ------------------------                       LESS THAN                              MORE THAN
                                          TOTAL        1 YEAR     1-3 YEARS    3-5 YEARS     5 YEARS
                                          -----     ----------   ----------   ----------   ----------
<S>                                    <C>         <C>          <C>          <C>          <C>
Long-Term Debt.....................          --           --           --           --           --
Capital Lease Obligations..........          --           --           --           --           --
Operating Leases...................       476,000      308,000      168,000         --           --
Purchase Obligations...............          --           --           --           --           --
Employment Agreements..............     1,837,000      796,000    1,041,000         --           --
Other Long-Term Liabilities
 Reflected on the Registrant's
 Balance Sheet under GAAP..........          --           --           --           --           --
                                       ----------   ----------   ----------   ----------   ----------
Total..............................    $2,313,000   $1,104,000   $1,209,000   $     --     $     --
                                       ==========   ==========   ==========   ==========   ==========
</TABLE>

                                     Page 13
<PAGE>

                           TSR, INC. AND SUBSIDIARIES

Critical Accounting Policies
----------------------------

The Securities and Exchange Commission ("SEC") issued disclosure guidance for
"critical accounting policies." The SEC defines "critical accounting policies"
as those that require the application of management's most difficult, subjective
or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.

The Company's significant accounting policies are described in Note 1 to the
Company's consolidated financial statements, contained in its May 31, 2004
Annual Report on Form 10-K, as filed with the SEC. The Company believes that the
following accounting policies require the application of management's most
difficult, subjective or complex judgments:

ESTIMATING ALLOWANCES FOR DOUBTFUL ACCOUNTS RECEIVABLE
We perform ongoing credit evaluations of our customers and adjust credit limits
based upon payment history and the customer's current credit worthiness, as
determined by our review of their current credit information. We continuously
monitor collections and payments from our customers and maintain a provision for
estimated credit losses based upon our historical experience and any specific
customer collection issues that we have identified. While such credit losses
have historically been within our expectations and the provisions established,
we cannot guarantee that we will continue to experience the same credit loss
rates that we have in the past. A significant change in the liquidity or
financial position of any of our significant customers could have a material
adverse effect on the collectibility of our accounts receivable and our future
operating results.

VALUATION OF DEFERRED TAX ASSETS
We regularly evaluate our ability to recover the reported amount of our deferred
income taxes considering several factors, including our estimate of the
likelihood of the Company generating sufficient taxable income in future years
during the period over which temporary differences reverse. Presently, the
Company believes that it is more likely than not that it will realize the
benefits of its deferred tax assets based primarily on the Company's history of
and projections for taxable income in the future. In the event that actual
results differ from our estimates or we adjust these estimates in future
periods, we may need to establish a valuation allowance against a portion or all
of our deferred tax assets, which could materially impact our financial position
or results of operations.

VALUATION OF LONG-LIVED AND INTANGIBLE ASSETS
We assess the recoverability of long-lived assets and intangible assets whenever
we determine that events or changes in circumstances indicate that their
carrying amount may not be recoverable. Our assessment is primarily based upon
our estimate of future cash flows associated with these assets. Although there
has been a sustained weakness in our operating results, through November 30,
2004, we have continued to generate net income. Accordingly, we have not
determined that there has been an indication of impairment of any of our assets.
However, should our operating results deteriorate, we may determine that some
portion of our long-lived assets or intangible assets are impaired. Such
determination could result in non-cash charges to income that could materially
affect our financial position or results of operations for that period.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The Company's earnings and cash flows are subject to fluctuations due to (i)
changes in interest rates primarily affecting its income from the investment of
available cash balances in money market funds and (ii) changes in market values
of its investments in trading equity securities. Under its current policies, the
Company does not use interest rate derivative instruments to manage exposure to
interest rate changes. The Company's present exposure to changes in the market
value of its investments in equity securities is not significant.


                                     Page 14
<PAGE>

Item 4. Controls and Procedures

DISCLOSURE CONTROLS AND PROCEDURES. The Company conducted an evaluation, under
the supervision and with the participation of the principal executive officer
and principal financial officer, of the Company's disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 (the "Exchange Act")). Based on this evaluation, the principal executive
officer and principal financial officer concluded that, as of the end of the
period covered by this report, the Company's disclosure controls and procedures
are effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING. There was no change in the Company's
internal control over financial reporting (as such term is defined in Rule
13a-15(f) under the Exchange Act) during the Company's most recently reported
completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.


Part II. Other Information

Item 6. Exhibits and Reports on Form 8K

     (a). Exhibit 31.1 - Certification by J.F. Hughes pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002.

          Exhibit 31.2 - Certification by John G. Sharkey pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
          Act of 2002.

          Exhibit 32.1 - Certification by J.F. Hughes pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

          Exhibit 32.2 - Certification by John G. Sharkey pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

     (b). Reports on Form 8K: - None



                                   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 thereunto duly authorized.


                                                    TSR Inc.
                                                  (Registrant)


Date: January 3, 2005             /s/ J.F. Hughes
                                  ----------------------------------------------
                                  J.F. Hughes, Chairman, President and Treasurer



Date: January 3, 2005             /s/ John G. Sharkey
                                  ----------------------------------------------
                                  John G. Sharkey, Vice President Finance




                                     Page 15