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, 1998


[ ]  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, 1998
$.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, 1998
                                                                  Page Number
PART I

  Condensed Consolidated Financial Statements:

     Balance Sheet
       September 30, 1998                                             2

     Statements of Income and Comprehensive Income -
       Three Months and Nine Months Ended
       September 30, 1998 and 1997                                    3

     Statements of Cash Flows -
       Nine Months Ended September 30, 1998 and 1997                  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, 1998
     ASSETS                                                          
Current Assets                                                       
  Cash                                                          $ 14,551,345   
  Marketable Securities, at Fair Value                             1,815,400   
  Receivables - Net                                                  151,475

             Total Current Assets                                 16,518,220    
Other Assets                                                         
   Noncurrent Investments                                          6,242,847   
   Other Assets                                                        2,238
Property, Plant and Equipment, Net                                   902,375  

                        TOTAL ASSETS                            $ 23,665,680 
                                                                     
     LIABILITIES AND STOCKHOLDERS' EQUITY                            
Current Liabilities                                                  
  Accounts Payable and Accrued Liabilities                      $    210,258
  Income Taxes Payable                                                48,947
  Due To Parent Company                                              109,100 
  Deferred Income Taxes                                               41,900

            Total Current Liabilities                                410,205 

Provision For Estimated Title and Escrow Losses                      993,928   

Minority Interests                                                   375,390

Excess Of Fair Value Of Net Assets Acquired Over Cost                 50,690

Deferred Income Taxes                                              1,164,600

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                                                9,530,641  
  Accumulated Other Comprehensive Income                           1,950,112  

             Total Stockholders' Equity                           20,670,867   

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 23,665,680 


               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,        
                               1998           1997              1998           1997    

<S>                        <C>           <C>               <C>              <C>             
                                                                             
Operating Revenues         $1,346,983    $  844,467        $3,640,632       $8,096,103       
                                                                                         
Operating Expenses                                                                          
  Salaries and Payroll                                                                      
   Costs                      249,086       210,246           685,585          591,450   
  Depreciation                 27,848        28,095            71,805           84,286          
  Other Expenses              200,285       179,210         1,106,303        1,097,800         
                                                                                           
  Total Expenses              477,219       417,551         1,863,693        1,773,536         
                                                                                           
                              869,764       426,916         1,776,939        6,322,567         
Amortization of                                                                             
 Deferred Credit                2,055         2,055             6,165            6,165          
Minority Portion of                                                                          
 (Income)                      (6,546)       (7,828)          (34,585)         (30,377)           

                              865,273       421,143         1,748,519        6,298,355                  

Income Tax Expense           (338,000)     (305,000)         (500,000)      (2,355,000)            
                                                                                          
     Net Income               527,273       116,143         1,248,519        3,943,355   
                                                                                             
Other Comprehnesive Income (Loss)                                                          
  Increase (Decrease) in                                                                
  Unrealized Holding Gains,                                                            
  Net of Income Taxes      (1,035,485)       40,165        (1,247,347)      (2,494,800)
                                                                                        
Comprehensive Income
   (Loss)                  $ (508,212)   $  156,308       $     1,172       $1,448,555

                                                                                              

</TABLE>
               See Notes To Consolidated Financial Statements


                                     3

<PAGE>
                                  TSI, INC.

                          STATEMENTS OF CASH FLOWS

                                                         For The Nine           
                                                         Months Ended
                                                         September 30,
                                                      1998             1997
     CASH FLOWS FROM OPERATING ACTIVITIES                                
                                                                         
Net Cash Provided By Operating                                           
 Activities                                       $   933,308     $    82,715
                                                                         
     CASH FLOWS FROM INVESTING ACTIVITIES                                
                                                                         
Proceeds From Sales of Property,                                         
 Plant and Equipment                                    8,695           6,994

Capital Expenditures Paid in Cash                     (62,769)        (31,784)

Cash Purchases of Minority Interests                     (681)           (304)

Cash Used for Purchases of Marketable                                    
 Securities Available For Sale                        (76,462)       (521,953)

Cash Received on Dispositions of Marketable                              
 Securities Available For Sale                        592,148       5,383,074
                                                                         
Net Cash Provided By Investing                                           
  Activities                                          460,931       4,836,027 
                                                                         
     CASH FLOWS FROM FINANCING ACTIVITIES                                
                                                                         
Cash Advances From (To) Parent Company                 72,170      (1,033,600)

Issuance of Stock For Cash                               -            636,000

Net Cash Provided (Used) By 
   Financing Activities                                72,170        (397,600)
                                                                         
NET INCREASE IN CASH                                1,466,409       4,521,142

CASH - BEGINNING OF PERIOD                         13,084,936       8,525,699

CASH - END OF PERIOD                              $14,551,345     $13,046,841

 




                See Notes to Consolidated Financial Statements

                                     4
<PAGE>                                 

                                TSI, INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            September 30, 1998
 


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, 1998
and the results of the Company's operations for the three months and nine
months ended September 30, 1998 and 1997 and cash flows for the nine months 
ended September 30, 1998 and 1997.

The results of operations for the three months and nine months ended
September 30, 1998 and 1997 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, 1998. 

The net unrealized holding gain at September 30, 1998, net of the estimated 
income tax effects and minority interests in the unrealized holding gains, 
is included in Accumulated Other Comprehensive Income at September 30, 1998
in accordance with the provisions of Financial Accounting Standards No. 130.


                                     5

<PAGE>
                                  TSI, INC.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS
                            OF THE INCOME STATEMENT

                             SEPTEMBER 30, 1998



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,
                               1998 AND 1997          1998 AND 1997

                               INCREASES              (DECREASES)

Revenues                  $ 502,516      59.5%       $(4,455,471)    (55.0%)  

Expenses                     59,668      14.3%            90,157       5.1%     

Net Income                  411,130     354.0%        (2,694,836)    (68.3%)


Revenues decreased $4,455,471 in the first nine months of 1998 as compared 
with the first nine months of 1997 due primarily 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 during 1997 in the pretax amount
of approximately $5,351,000. During the first nine months of 1998 the 
Company recognized gains on the disposition of investments in the pretax 
amount of $368,939. During the first nine months of 1998 the Company 
recognized a gain on the contribution of assets in kind to a charitable 
organization in the amount of $417,420 as compared with a similar gain in 
the amount of $408,000 recognized during the first nine months of 1997. 
The gains recognized during the first nine months of 1997 were the primary 
reason for the decrease in revenues and the decrease in net income in the 
first nine months of 1998 as compared with the first nine months of 1997. 
Operating expenses increased $90,157 (5.1%) in the first nine months of 1998 
as compared with the first nine months of 1997 due primarily to increases in 
payroll and payroll costs associated with the Company's title insurance 
agency business. The provision for income tax expense decreased $1,855,000 
(78.7%) in the first nine months of 1998 as compared with the first nine 
months of 1997 due to the decrease in pretax income.




                                   6

<PAGE>




                                TSI, INC.

                                 PART II
  
                             OTHER INFORMATION

                             SEPTEMBER 30, 1998

ITEM 1    LEGAL PROCEEDINGS

          None

ITEM 2    CHANGES IN SECURITIES AND USE OF PROCEEDS

          None

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

          None

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          On September 10, 1998 a meeting of shareholders was held at which 
          the Company's entire Board of Directors was elected. Directors 
          elected to the Board were G.Robert Crotty, Jr., Paul J. McCann, Jr. 
          and Miriam Arneson. 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 1998.

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, 1998            s/K. King
                                     K. King
                                     Assistant Secretary-Treasurer





Date:  October 30, 1998            s/Jerry K. Mohland
                                     Jerry K. Mohland,
                                     Accountant



                                       8