U.S. Securities and Exchange Commission
                           Washington, D.C.  20549

                                 FORM 10-QSB

(Mark One)
[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

       For the quarterly period ended September 30, 1996


[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

       For the transition period from                   to

       Commission file number               0-2054

                                TSI, INC.
     (Exact name of small business issuer as specified in its charter)


                                Montana
      (State or other jurisdiction of incorporation or organization)
 
                               81-0267738
                   (IRS Employer Identification No.)

            128 Second Street South, Great Falls, Montana 59405
                (Address of principal executive offices)


                             (406) 727-2600
                       (Issuer's telephone number)


                             Not Applicable
       (Former name, former address and former fiscal year, if changed
        since last report)


  Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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


              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS

  Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes         No


                    APPLICABLE ONLY TO CORPORATE ISSUERS

  State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

              
         Class                           Outstanding at September 30, 1996
$.05 Par Value Common Stock                      9,423,142 Shares



Transitional Small Business Disclosure Format (Check One): Yes    ; No  X

<PAGE>



                                   TSI, INC.

                                    INDEX


                             SEPTEMBER 30, 1996
                                                                  Page Number
PART I

  Condensed Consolidated Financial Statements:

     Balance Sheet
       September 30, 1996                                             2

     Statements of Income -
       Three Months and Nine Months Ended
       September 30, 1996 and 1995                                    3

     Statements of Cash Flows -
       Nine Months Ended September 30, 1996 and 1995                  4

     Notes to Consolidated Financial Statements                       5

  Management's Discussion and Analysis of the
    Statements of Income                                              6


PART II

  Other Information                                                   7

  Signatures                                                          8

                                    1

<PAGE>


                                  TSI, INC.

                                BALANCE SHEET

                          AS OF SEPTEMBER 30, 1996
     ASSETS                                                          
Current Assets                                                       
  Cash                                                          $  8,294,551   
  Marketable Securities                                            2,534,366   
  Receivables - Net                                                   88,710

             Total Current Assets                                 10,917,627    
Other Assets                                                         
   Noncurrent Investments                                         10,257,457   
   Other Assets                                                        2,238
Property, Plant and Equipment, Net                                 1,041,021  

                        TOTAL ASSETS                            $ 22,218,343 
                                                                     
     LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current Liabilities                                                  
  Accounts Payable and Accrued Liabilities                      $    198,389
  Income Taxes Payable                                               337,930
  Due To Parent Company                                              235,099
  Deferred Income Taxes                                              340,000

            Total Current Liabilities                              1,111,418 

Provision For Estimated Title and Escrow Losses                    1,073,947   

Minority Interests                                                   320,175

Excess Of Fair Value Of Net Assets Acquired Over Cost                 67,130

Deferred Income Taxes                                              2,778,700

Stockholder's Equity                                                 
  Common Stock - $.05 Par Value;(30,000,000                          
   shares authorized;  9,423,142 shares issued)                      471,157
  Additional Paid-In Capital                                       8,082,957
  Retained Earnings                                                3,806,074  
  Unrealized Gains on Investments                                  4,506,785  

             Total Stockholders' Equity                           16,866,973   

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 22,218,343 


               See Notes to Consolidated Financial Statements

                                    2

<PAGE>
<TABLE>

                                 TSI, INC.
<CAPTION>
                            STATEMENTS OF INCOME





                                  For The Three                   For The Nine    
                                  Months Ended                    Months Ended      
                                  September 30,                   September 30,
                               1996           1995              1996           1995

<S>                        <C>           <C>               <C>              <C>             
                                                                             
Operating Revenues         $  733,695    $  735,814       $2,284,150       $1,978,386           
                                                                             
Operating Expenses                                                           
  Salaries and Payroll                                                       
   Costs                      196,742       184,138          577,467          540,464 
  Depreciation                 19,623        26,174           58,978           78,987                    
  Other Expenses              198,723       193,796          592,423          572,555                

  Total Expenses              415,088       404,108        1,228,868        1,192,006         

                              318,607       331,706        1,055,282          786,380              
Gain (Loss) on Sales of                                                      
 Assets                          -           10,500             -              47,853                       
Amortization of                                                              
 Deferred Credit                2,055         2,055            6,165            6,165          
Minority Portion of                                                          
 (Income)                      (8,244)       (7,792)         (20,855)         (18,092)              
Income Tax Expense           (107,000)      (95,000)        (362,000)        (250,000)                      

     Net Income            $  205,418    $  241,469       $  678,592       $  572,306        
                                                                             
Earnings Per Share                                                           
(Earnings Per Weighted                                                       
 Average Shares                                                              
 Outstanding: 9,423,142                                                      
 shares in 1996 and                                                          
 1995)                     $      .02    $      .03       $      .07       $      .06    
                                                                            
Dividends Per Share        $       --    $       --       $       --       $       --            


</TABLE>
               See Notes To Consolidated Financial Statements


                                     3

<PAGE>
                                  TSI, INC.

                          STATEMENTS OF CASH FLOWS

                                                         For The Nine           
                                                         Months Ended
                                                         September 30,
                                                      1996             1995
     CASH FLOWS FROM OPERATING ACTIVITIES                                
                                                                         
Net Cash Provided By Operating                                           
 Activities                                        $  835,434      $  596,545
                                                                         
     CASH FLOWS FROM INVESTING ACTIVITIES                                
                                                                         
Proceeds From Sales of Property,                                         
 Plant and Equipment                                    1,289          93,762

Cash Received on Principal of                                            
 Notes Receivable                                     106,125           1,650

Cash Purchases of Minority Interests                     (150)           (500)

Capital Expenditures Paid in Cash                         -           (29,481)

Cash Used for Purchases of Marketable                                    
 Securities Available For Sale                       (184,209)        (24,795)

Cash Received on Dispositions of Marketable                              
 Securities Available For Sale                        372,453          84,515   
                                                                         
Net Cash Provided By Investing                                           
  Activities                                          295,508         125,151   
                                                                         
     CASH FLOWS FROM FINANCING ACTIVITIES                                
                                                                         
Cash Advanced (To) Parent Company                      73,180         (58,364)

Net Cash (Used) By Financing                                             
 Activities                                            73,180         (58,364)
                                                                         
NET INCREASE IN CASH                                1,204,122         663,332  

CASH - BEGINNING OF PERIOD                          7,090,429       6,181,974

CASH - END OF PERIOD                               $8,294,551      $6,845,306

 




                See Notes to Consolidated Financial Statements

                                     4
<PAGE>                                 

                                TSI, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            September 30, 1996
 


        In the opinion of management, all adjustments necessary (consisting
of only normal recurring accruals) have been made to the unaudited financial
statements to present fairly the financial position as of September 30, 1996
and the results of the Company's operations for the three months and nine
months ended September 30, 1996 and 1995 and cash flows for the nine months 
ended September 30, 1996 and 1995.

       The results of operations for the three months and nine months ended
September 30, 1996 and 1995 are not necessarily indicative of the results 
to be expected for the full year.

       The consolidated financial statements include the accounts of the
company, its wholly owned subsidiaries and its majority owned subsidiaries.
All significant intercompany transactions and balances have been eliminated 
in consolidation.

       M Corp owns approximately 91% of the Company's issued and outstanding
common stock.

       The Company adopted the provisions of Statement of Financial 
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities (SFAS No. 115) effective January 1, 1994. The Company has
classified its investments, both current and noncurrent, in debt and equity
securities as Available-For-Sale, in accordance with the various 
classifications of securities contained in SFAS No. 115.

       In accordance with SFAS No .115, the Company's portfolios, current and
noncurrent, of Available-For-Sale investments are carried at fair value in 
the Company's balance sheet at September 30, 1996. The net unrealized holding
gains at September 30, 1996, net of the estimated income tax effects and 
minority interests in the unrealized holding gains, is reported as a 
separate component of stockholder's equity at September 30, 1996.


                                     5

<PAGE>
                                  TSI, INC.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS
                            OF THE INCOME STATEMENT

                             SEPTEMBER 30, 1996



       A   summary  of  the  period  to  period  changes  in  items  included
in the statements of income is shown below.

                                                   
                                       COMPARISON      OF
                               THREE MONTHS           NINE MONTHS
                                   ENDED                 ENDED
                               SEPTEMBER 30,          SEPTEMBER 30,
                               1996 AND 1995          1996 AND 1995

                               INCREASES              (DECREASES)

Revenues                  $  (2,119)       .3%       $ 305,764       15.6%  

Expenses                     10,980       2.7%          36,862        3.1%      

Gain on Sales                                                  
  of Assets                 (10,500)   (100.0%)        (47,853)    (100.0%)   

Net Income                  (36,051)    (14.9%)        106,286       18.6%


Operating revenues increased $305,764, 15.6%, in the first nine months of 1996
as compared with the first nine months of 1995. During the first nine months
of 1996, the Company realized net gains on the disposition of available-for-
sale investments in the amount of $135,728 whereas a net loss in the amount 
of $20,392 was incurred on the disposition of available-for-sale investments 
during the first nine months of 1995. Revenues from the Company's title 
insurance operations increased $144,710, 13.1%, in the first nine months of 
1996 as compared with the first nine months of 1995 due primarily to an 
increase in the real estate economies within which the Company operates.

Depreciation expense decreased $20,009, 25.3%, in the first nine months of
1996 as compared with the first nine months of 1995 due in part to a sale of
properties during 1995.

Salaries and payroll costs increased $37,003, 6.9%, in the first nine months
of 1996 as compared with the first nine months of 1995 due primarily to an
increase in payroll rates and an increase in the number of employees in the
Company's title insurance operations.

The provision for income tax expense increased $112,000, 44.8%, in the first
nine months of 1996 as compared with the first nine months of 1995 due
primarily to the increase in pre-tax income.


                                   6

<PAGE>




                                TSI, INC.

                                 PART II
  
                             OTHER INFORMATION

                             SEPTEMBER 30, 1996

ITEM 1    LEGAL PROCEEDINGS

          None

ITEM 2    CHANGES IN SECURITIES

          None

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

          None

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          No matters were submitted to a vote of security holders during the
          third quarter of 1996. However, on October 22, 1996, a meeting of 
          shareholders was held at which the Company's entire Board of 
          Directors was elected. The Company's shareholders also authorized 
          the Board of Directors to select an independent certified public 
          accounting firm to audit the Company's financial statements for
          1996.

ITEM 5    OTHER INFORMATION

          None

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

          None




                                    7
<PAGE>

                                 TSI INC.

                                SIGNATURES







    In accordance with the requirements of the Exchange Act, the registrant
    caused this report to be signed on its behalf by the undersigned,
    thereunto duly authorized.





                                TSI, INC.
                               Registrant









Date:  October 30, 1996            s/N. Scott Atchison
                                     N. Scott Atchison
                                     Assistant Secretary-Treasurer





Date:  October 30, 1996            s/Jerry K. Mohland
                                     Jerry K.Mohland,
                                     Accountant



                                       8