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, 1997


[ ]  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, 1997
$.05 Par Value Common Stock                     10,483,142 Shares



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

<PAGE>



                                   TSI, INC.

                                    INDEX


                             SEPTEMBER 30, 1997
                                                                  Page Number
PART I

  Condensed Consolidated Financial Statements:

     Balance Sheet
       September 30, 1997                                             2

     Statements of Income -
       Three Months and Nine Months Ended
       September 30, 1997 and 1996                                    3

     Statements of Cash Flows -
       Nine Months Ended September 30, 1997 and 1996                  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, 1997
     ASSETS                                                          
Current Assets                                                       
  Cash                                                          $ 13,046,841   
  Marketable Securities, at Fair Value                             2,418,132   
  Receivables - Net                                                  106,614
  Due From Parent Company                                            486,220

             Total Current Assets                                 16,057,807    
Other Assets                                                         
   Noncurrent Investments                                          6,875,660   
   Other Assets                                                        2,238
Property, Plant and Equipment, Net                                   950,245  

                        TOTAL ASSETS                            $ 23,885,950 
                                                                     
     LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current Liabilities                                                  
  Accounts Payable and Accrued Liabilities                      $    207,295
  Income Taxes Payable                                             1,405,130
  Deferred Income Taxes                                              257,200

            Total Current Liabilities                              1,869,625 

Provision For Estimated Title and Escrow Losses                    1,006,808   

Minority Interests                                                   348,375

Excess Of Fair Value Of Net Assets Acquired Over Cost                 58,910

Deferred Income Taxes                                              1,282,500

Stockholder's Equity                                                 
  Common Stock, $.05 Par Value,
  (30,000,000 shares authorized,
  10,483,142 shares outstanding                                      524,157
  Additional Paid-In Capital                                       8,665,957
  Retained Earnings                                                7,914,549  
  Unrealized Gains on Investments                                  2,215,069  

             Total Stockholders' Equity                           19,319,732   

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 23,885,950 


               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,        
                               1997           1996              1997           1996    

<S>                        <C>           <C>               <C>              <C>             
                                                                             
Operating Revenues         $  844,467    $  733,695        $8,096,103       $2,284,150       
                                                                                         
Operating Expenses                                                                          
  Salaries and Payroll                                                                      
   Costs                      210,246       196,742           591,450          577,467   
  Depreciation                 28,095        19,623            84,286           58,978          
  Other Expenses              179,210       198,723         1,097,800          592,423         
                                                                                           
  Total Expenses              417,551       415,088         1,773,536        1,228,868         
                                                                                           
                              426,916       318,607         6,322,567        1,055,282         
Amortization of                                                                             
 Deferred Credit                2,055         2,055             6,165            6,165          
Minority Portion of                                                                          
 (Income)                      (7,828)       (8,244)          (30,377)         (20,855)           

                              421,143       312,418         6,298,355        1,040,592                  

Income Tax Expense           (305,000)     (107,000)       (2,355,000)        (362,000)            
                                                                                          
     Net Income            $  116,143    $  205,418       $ 3,943,355       $  678,592    
                                                                                             
Earnings Per Share                                                                         
(Earnings Per Weighted                                                                         
 Average Shares:                                                                           
 9,658,698 Shares in 1997                                                                    
 and 9,423,142 Shares                                                                         
 in 1996)                  $      .01    $      .02       $       .41       $      .07    
                                                                                              
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,
                                                      1997             1996
     CASH FLOWS FROM OPERATING ACTIVITIES                                
                                                                         
Net Cash Provided By Operating                                           
 Activities                                        $   82,715      $  835,434
                                                                         
     CASH FLOWS FROM INVESTING ACTIVITIES                                
                                                                         
Proceeds From Sales of Property,                                         
 Plant and Equipment                                    6,994           1,289

Capital Expenditures Paid in Cash                     (31,784)            -

Cash Received on Principal of                                            
 Notes Receivable                                         -           106,125

Cash Purchases of Minority Interests                     (304)           (150)

Cash Used for Purchases of Marketable                                    
 Securities Available For Sale                       (521,953)       (184,209)

Cash Received on Dispositions of Marketable                              
 Securities Available For Sale                      5,383,074         372,453 
                                                                         
Net Cash Provided By Investing                                           
  Activities                                        4,836,027         295,508   
                                                                         
     CASH FLOWS FROM FINANCING ACTIVITIES                                
                                                                         
Cash Advanced From  (To) Parent Company            (1,033,600)         73,180

Issuance of Stock For Cash                            636,000             - 

Net Cash Provided (Used) By 
   Financing Activities                              (397,600)         73,180
                                                                         
NET INCREASE IN CASH                                4,521,142       1,204,122

CASH - BEGINNING OF PERIOD                          8,525,699       7,090,429

CASH - END OF PERIOD                              $13,046,841      $8,294,551

 




                See Notes to Consolidated Financial Statements

                                     4
<PAGE>                                 

                                TSI, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            September 30, 1997
 


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, 1997
and the results of the Company's operations for the three months and nine
months ended September 30, 1997 and 1996 and cash flows for the nine months 
ended September 30, 1997 and 1996.

The results of operations for the three months and nine months ended
September 30, 1997 and 1996 are not 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 92% 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, 1997. The net unrealized holding
gains at September 30, 1997, 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, 1997.


                                     5

<PAGE>
                                  TSI, INC.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS
                            OF THE INCOME STATEMENT

                             SEPTEMBER 30, 1997



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,
                               1997 AND 1996          1997 AND 1996

                               INCREASES              (DECREASES)

Revenues                  $ 110,772      15.1%       $5,811,953     254.4%  

Expenses                      2,463        .6%          544,668      44.3%     

Net Income                  (89,275)    (56.5%)       3,264,793     481.1%



Revenues increased $5,811,953 in the first nine months of 1997 as compared 
with the first nine months of 1996 due to the gain recognized by the Company 
on the merger of Security Bancorp with and into WesterFed Financial 
Corporation which was completed during the first quarter of 1997. The Company 
recognized a gain on the merger in the pretax amount of approximately 
$5,351,000. Pursuant to the terms of the merger, the Company received 
approximately 275,000 shares of WesterFed Financial Corporation common stock 
and cash in the amount of approximately $5,351,000. During the first nine 
months of 1997 the Company recognized a gain on the contribution of assets 
in kind to a charitable organization in the amount of approximately $408,000.
The gains recognized during the first nine months of 1997 were the primary 
reason for the increase in revenues and the increase in net income in the 
first nine months of 1997 as compared with the first nine months of 1996. 
Operating expenses increased $544,668 (44.3%) in the in the first nine months 
of 1997 as compared with the first nine months of 1996 due primarily to the 
contribution in kind by the Company of assets having a fair market value of 
approximately $525,000 to a charitable organization which resulted in an 
income tax savings to the Company in the amount of approximately $215,000. 
The provision for income tax expense increased $1,993,000 (550.6%) in the 
first nine months of 1997 as compared with the first nine months of 1996 due 
to the increase in pretax income.



                                   6

<PAGE>




                                TSI, INC.

                                 PART II
  
                             OTHER INFORMATION

                             SEPTEMBER 30, 1997

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

          None 

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, 1997            s/K. King
                                     K. King
                                     Assistant Secretary-Treasurer





Date:  October 30, 1997            s/Jerry K. Mohland
                                     Jerry K.Mohland,
                                     Accountant



                                       8