| Wisconsin                            | 39-0667110               |
|--------------------------------------|--------------------------|
| (State      or other jurisdiction of | (I.R.S.      Employer    |
| Incorporation      or organization)  | Identification      No.) |
|                                 |                     |

----

|                                                                |   | September      26, |    |   | June      30, |   |
|---------------------------------------------------------------------|--------|--------------------|---------|--------|---------------|--------|
|                                                                |   | 2008               |    |   | 2008          |   |
| Assets                                                              |   |               |    |   |          |   |
| Current      assets:                                                |   |               |    |   |          |   |
| Cash                                                                |   | $                  | 14,888  |   |          | $      | 14,447 |   |
| Trade      accounts receivable, net                                 |   |               | 60,381  |   |          |   | 67,611 |   |
| Inventories,      net                                               |   |               | 99,024  |   |          |   | 97,691 |   |
| Deferred      income taxes                                          |   |               | 6,235   |   |          |   | 6,297 |   |
| Other                                                               |   |               | 9,537   |   |          |   | 9,649 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Total      current assets                                           |   |               | 190,065 |   |          |   | 195,695 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Property,      plant and equipment, net                             |   |               | 65,698  |   |          |   | 67,855 |   |
| Goodwill,      net                                                  |   |               | 17,754  |   |          |   | 18,479 |   |
| Deferred      income taxes                                          |   |               | 4,626   |   |          |   | 5,733 |   |
| Intangible      assets, net                                         |   |               | 8,842   |   |          |   | 9,589 |   |
| Other      assets                                                   |   |               | 7,510   |   |          |   | 7,277 |   |
|                                                                |   |               |    |   |          |   |   |   |
|                                                                |   | $                  | 294,495 |   |          | $      | 304,628 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Liabilities      and Shareholders' Equity                           |   |               |    |   |          |   |   |   |
| Current      liabilities:                                           |   |               |    |   |          |   |   |   |
| Short-term      borrowings and current maturities of long-term debt |   | $                  | 796     |   |          | $      | 1,730 |   |
| Accounts      payable                                               |   |               | 33,451  |   |          |   | 37,919 |   |
| Accrued      liabilities                                            |   |               | 45,975  |   |          |   | 49,939 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Total      current liabilities                                      |   |               | 80,222  |   |          |   | 89,588 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Long-term      debt                                                 |   |               | 54,351  |   |          |   | 48,227 |   |
| Accrued      retirement benefits                                    |   |               | 33,735  |   |          |   | 34,325 |   |
| Other      long-term                                                |   |               | 1,188   |   |          |   | 2,163 |   |
|                                                                |   |               |    |   |          |   |   |   |
|                                                                |   |               | 169,496 |   |          |   | 174,303 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Minority      interest                                              |   |               | 486     |   |          |   | 679 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Shareholders'      equity:                                          |   |               |    |   |          |   |   |   |
| Common      shares authorized: 30,000,000;                          |   |               |    |   |          |   |   |   |
| issued:      13,099,468; no par value                               |   |               | 13,655  |   |          |   | 14,693 |   |
| Retained      earnings                                              |   |               | 144,037 |   |          |   | 142,361 |   |
| Accumulated      other comprehensive (loss) income                  |   |               | (4,532  | )      |          |   | 2,446 |   |
|                                                                |   |               | 153,160 |   |          |   | 159,500 |   |
| Less      treasury stock, at cost                                   |   |               |    |   |          |   |   |   |
| (1,832,732      and 1,823,574 shares, respectively)                 |   |               | 28,647  |   |          |   | 29,854 |   |
|                                                                |   |               |    |   |          |   |   |   |
| Total      shareholders' equity                                     |   |               | 124,513 |   |          |   | 129,646 |   |
|                                                                |   | $                  | 294,495 |   |          | $      | 304,628 |   |

----

|                                                                             |   | Three      Months Ended |   |
|----------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                             |   | September      26,      |   |   | September      28, |   |
|                                                                             |   | 2008                    |   |   | 2007 |   |
|                                                                             |   |                    |   |   |   |   |
| Net      sales                                                                   |   | $                       | 72,671 |   |   | $ | 73,613 |   |
| Cost      of goods sold                                                          |   |                    | 52,599 |   |   |   | 49,762 |   |
| Gross      Profit                                                                |   |                    | 20,072 |   |   |   | 23,851 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Marketing,      engineering and administrative expenses                          |   |                    | 16,318 |   |   |   | 14,694 |   |
| Earnings      from operations                                                    |   |                    | 3,754  |   |   |   | 9,157 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Interest      expense                                                            |   |                    | 597    |   |   |   | 744 |   |
| Other      income, net                                                           |   |                    | (820   | ) |   |   | (5 | ) |
|                                                                             |   |                    | (223   | ) |   |   | 739 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Earnings      before income taxes and minority interest                          |   |                    | 3,977  |   |   |   | 8,418 |   |
| Income      taxes                                                                |   |                    | 1,353  |   |   |   | 3,237 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Earnings      before minority interest                                           |   |                    | 2,624  |   |   |   | 5,181 |   |
| Minority      interest                                                           |   |                    | (159   | ) |   |   | (75 | ) |
|                                                                             |   |                    |   |   |   |   |   |   |
| Net      earnings                                                                |   | $                       | 2,465  |   |   | $ | 5,106 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Dividends      per share                                                         |   | $                       | 0.0700 |   |   | $ | 0.0550 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Earnings      per share data:                                                    |   |                    |   |   |   |   |   |   |
| Basic      earnings per share                                                    |   | $                       | 0.22   |   |   | $ | 0.44 |   |
| Diluted      earnings per share                                                  |   | $                       | 0.22   |   |   | $ | 0.44 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Weighted      average shares outstanding data:                                   |   |                    |   |   |   |   |   |   |
| Basic      shares outstanding                                                    |   |                    | 11,250 |   |   |   | 11,496 |   |
| Dilutive      stock awards                                                       |   |                    | 128    |   |   |   | 136 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Diluted      shares outstanding                                                  |   |                    | 11,378 |   |   |   | 11,632 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Comprehensive      income:                                                       |   |                    |   |   |   |   |   |   |
| Net      earnings                                                                |   | $                       | 2,465  |   |   | $ | 5,106 |   |
| Adjustment      for amortization of net actuarial loss and prior service    cost |   |                    | 470    |   |   |   | - |   |
| Foreign      currency translation adjustment                                     |   |                    | (7,448 | ) |   |   | 2,708 |   |
|                                                                             |   |                    |   |   |   |   |   |   |
| Comprehensive      (loss) income                                                 |   | $                       | (4,513 | ) |   | $ | 7,814 |   |

----

|                                                   |   | Three      Months Ended |   |
|--------------------------------------------------------|--------|-------------------------|--------|
|                                                   |   | September      26,      |   |   | September      28, |   |
|                                                   |   | 2008                    |   |   | 2007 |   |
|                                                   |   |                    |   |   |   |   |
| Cash      flows from operating activities:             |   |                    |   |   |   |   |
| Net      earnings                                      |   | $                       | 2,465  |   |   | $ | 5,106 |   |
| Adjustments      to reconcile net earnings to          |   |                    |   |   |   |   |   |   |
| net      cash (used) provided by operating activities: |   |                    |   |   |   |   |   |   |
| Depreciation      and amortization                     |   |                    | 2,399  |   |   |   | 1,755 |   |
| Other      non-cash changes, net                       |   |                    | 447    |   |   |   | 594 |   |
| Net      change in working capital, excluding cash     |   |                    | (6,603 | ) |   |   | (2,313 | ) |
|                                                   |   |                    |   |   |   |   |   |   |
| Net      cash (used) provided by operating activities  |   |                    | (1,292 | ) |   |   | 5,142 |   |
|                                                   |   |                    |   |   |   |   |   |   |
| Cash      flows from investing activities:             |   |                    |   |   |   |   |   |   |
| Acquisitions      of plant assets                      |   |                    | (1,679 | ) |   |   | (2,502 | ) |
|                                                   |   |                    |   |   |   |   |   |   |
| Net      cash used by investing activities             |   |                    | (1,679 | ) |   |   | (2,502 | ) |
|                                                   |   |                    |   |   |   |   |   |   |
| Cash      flows from financing activities:             |   |                    |   |   |   |   |   |   |
| Decrease      in notes payable, net                    |   |                    | (1,403 | ) |   |   | (395 | ) |
| Proceeds      from long-term debt                      |   |                    | 6,306  |   |   |   | 11,251 |   |
| Proceeds      from exercise of stock options           |   |                    | 72     |   |   |   | 100 |   |
| Purchase      of treasury stock                        |   |                    | -      |   |   |   | (13,367 | ) |
| Dividends      paid                                    |   |                    | (789   | ) |   |   | (653 | ) |
| Other                                                  |   |                    | -      |   |   |   | 18 |   |
|                                                   |   |                    |   |   |   |   |   |   |
| Net      cash provided (used) by financing activities  |   |                    | 4,186  |   |   |   | (3,046 | ) |
|                                                   |   |                    |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash           |   |                    | (774   | ) |   |   | 575 |   |
|                                                   |   |                    |   |   |   |   |   |   |
| Net      change in cash and cash equivalents           |   |                    | 441    |   |   |   | 169 |   |
|                                                   |   |                    |   |   |   |   |   |   |
| Cash      and cash equivalents:                        |   |                    |   |   |   |   |   |   |
| Beginning      of period                               |   |                    | 14,447 |   |   |   | 19,508 |   |
|                                                   |   |                    |   |   |   |   |   |   |
| End      of period                                     |   | $                       | 14,888 |   |   | $ | 19,677 |   |

----

| A. | Basis      of Presentation |
|----|----------------------------|

| ·   | Disclosure      of the objectives for using derivative instruments be disclosed in terms      of underlying risk and accountingdesignation; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Disclosure      of the fair values of derivative instruments and their gains and losses in      a tabular format; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Disclosure      of information about credit-risk-related contingent features;      and |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | Cross-reference      from the derivative footnote to other footnotes in which      derivative-related information isdisclosed. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| B. | Inventory |
|----|-----------|

|                 |   | September      26, |   |   | June      30, |   |
|----------------------|--------|--------------------|--------|--------|---------------|--------|
|                 |   | 2008               |   |   | 2008          |   |
| Inventories:         |   |               |   |   |          |   |
| Finished      parts  |   | $                  | 52,566 |   |          | $      | 53,697 |   |
| Work      in process |   |               | 20,465 |   |          |   | 20,725 |   |
| Raw      materials   |   |               | 25,993 |   |          |   | 23,269 |   |
|                 |   |               |   |   |          |   |   |   |
|                 |   | $                  | 99,024 |   |          | $      | 97,691 |   |

| C. | Warranty |
|----|----------|

|                                      |   | Three      Months Ended |   |
|-------------------------------------------|--------|-------------------------|--------|
|                                      |   | September      26,      |   |   | September      28, |   |
|                                      |   | 2008                    |   |   | 2007 |   |
|                                      |   |                    |   |   |   |   |
| Reserve      balance, beginning of period |   | $                       | 8,125  |   |   | $ | 7,266 |   |
| Current      period expense               |   |                    | 793    |   |   |   | 894 |   |
| Payments      or credits to customers     |   |                    | (792   | ) |   |   | (830 | ) |
| Translation                               |   |                    | (288   | ) |   |   | 197 |   |
|                                      |   |                    |   |   |   |   |   |   |
| Reserve      balance, end of period       |   | $                       | 7,838  |   |   | $ | 7,527 |   |

| D. | Contingencies |
|----|---------------|

| E. | Business      Segments |
|----|------------------------|

|                                  |   | Three      Months Ended |     |
|---------------------------------------|--------|-------------------------|----------|
|                                  |   | September      26,      |     |   | September      28, |   |
|                                  |   | 2008                    |     |   | 2007 |   |
| Manufacturing      segment sales      |   | $                       | 60,430   |   |   | $ | 64,547 |   |
| Distribution      segment sales       |   |                    | 30,820   |   |   |   | 25,764 |   |
| Inter/Intra      segment elimination  |   |                    | (18,579  | ) |   |   | (16,698 | ) |
|                                  |   |                    |     |   |   |   |   |   |
| Net      sales                        |   | $                       | 72,671   |   |   | $ | 73,613 |   |
|                                  |   |                    |     |   |   |   |   |   |
| Manufacturing      segment earnings   |   | $                       | 3,118    |   |   | $ | 8,790 |   |
| Distribution      segment earnings    |   |                    | 3,180    |   |   |   | 2,517 |   |
| Inter/Intra      segment elimination  |   |                    | (2,321   | ) |   |   | (2,889 | ) |
|                                  |   |                    |     |   |   |   |   |   |
| Earnings      before income taxes     |   |                    |     |   |   |   |   |   |
| and      minority interest            |   | $                       | 3,977    |   |   | $ | 8,418 |   |
|                                  |   |                    |     |   |   |   |   |   |
|                                  |   |                    |     |   |   |   |   |   |
|                                  |   | September      26,      |     |   | June      30, |   |
| Assets                                |   | 2008                    |     |   | 2008 |   |
|                                  |   |                    |     |   |   |   |   |   |
| Manufacturing      segment assets     |   | $                       | 367,172  |   |   | $ | 369,842 |   |
| Distribution      segment assets      |   |                    | 64,378   |   |   |   | 67,223 |   |
| Corporate      assets and elimination |   |                    |     |   |   |   |   |   |
| of      inter-company assets          |   |                    | (137,055 | ) |   |   | (132,437 | ) |
|                                  |   |                    |     |   |   |   |   |   |
|                                  |   | $                       | 294,495  |   |   | $ | 304,628 |   |

| F. | Stock-Based      Compensation |
|----|-------------------------------|

| G. | Pension      and Other Postretirement BenefitPlans |
|----|----------------------------------------------------|

|                                       |   | Three      Months Ended |   |
|--------------------------------------------|--------|-------------------------|--------|
|                                       |   | September      26,      |   |   | September      28, |   |
|                                       |   | 2008                    |   |   | 2007 |   |
|                                       |   |                    |   |   |   |   |
| Pension      Benefits:                     |   |                    |   |   |   |   |
| Service      cost                          |   | $                       | 289    |   |   | $ | 288 |   |
| Interest      cost                         |   |                    | 1,756  |   |   |   | 1,716 |   |
| Expected      return on plan assets        |   |                    | (2,223 | ) |   |   | (2,388 | ) |
| Amortization      of prior service cost    |   |                    | (180   | ) |   |   | (180 | ) |
| Amortization      of transition obligation |   |                    | 13     |   |   |   | 12 |   |
| Amortization      of net loss              |   |                    | 801    |   |   |   | 427 |   |
| Net      periodic benefit cost (income)    |   | $                       | 456    |   |   | $ | (125 | ) |
|                                       |   |                    |   |   |   |   |   |   |
|                                       |   |                    |   |   |   |   |   |   |
| Postretirement      Benefits:              |   |                    |   |   |   |   |   |   |
| Service      cost                          |   | $                       | 10     |   |   | $ | 9 |   |
| Interest      cost                         |   |                    | 324    |   |   |   | 342 |   |
| Amortization      of net actuarial loss    |   |                    | 137    |   |   |   | 133 |   |
| Net      periodic benefit cost             |   | $                       | 471    |   |   | $ | 484 |   |

| H. | Income      Taxes |
|----|-------------------|

| I. | Goodwill      and Other Intangibles |
|----|-------------------------------------|

| Balance      at June 30, 2008      |   | $      | 18,479 |   |
|------------------------------------|--------|--------|--------|--------|
| Translation      adjustment        |   |   | (725   | )      |
|                               |   |   |   |   |
| Balance      at September 26, 2008 |   | $      | 17,754 |   |

|                                      |   | September      26, |   |   | June      30, |   |
|-------------------------------------------|--------|--------------------|--------|--------|---------------|--------|
|                                      |   | 2008               |   |   | 2008          |   |
| Intangible      assets with finite lives: |   |               |   |   |          |   |
| Licensing      agreements                 |   | $                  | 3,015  |   |          | $      | 3,015 |   |
| Non-compete      agreements               |   |               | 2,050  |   |          |   | 2,050 |   |
| Other                                     |   |               | 5,991  |   |          |   | 5,991 |   |
|                                      |   |               |   |   |          |   |   |   |
|                                      |   |               | 11,056 |   |          |   | 11,056 |   |
| Accumulated      amortization             |   |               | (5,449 | )      |          |   | (5,176 | ) |
| Translation      adjustment               |   |               | 891    |   |          |   | 1,235 |   |
|                                      |   |               |   |   |          |   |   |   |
| Total                                     |   | $                  | 6,498  |   |          | $      | 7,115 |   |

| Fiscal      Year |   |   |   |
|------------------|--------|--------|--------|
| 2009             |   | $      | 784    |   |
| 2010             |   |   | 819    |   |
| 2011             |   |   | 819    |   |
| 2012             |   |   | 819    |   |
| 2013             |   |   | 773    |   |
| 2014             |   |   | 773    |   |

| J.   | Debt |
|----------------|------|

|                                            |   | September      26, |   |   | June      30, |   |
|-------------------------------------------------|--------|--------------------|--------|--------|---------------|--------|
|                                            |   | 2008               |   |   | 2008          |   |
|                                            |   |               |   |   |          |   |
| Revolving      loan                             |   | $                  | 26,250 |   |          | $      | 19,700 |   |
| 10-year      unsecured senior notes             |   |               | 25,000 |   |          |   | 25,000 |   |
| Notes      payable                              |   |               | -      |   |          |   | 1,010 |   |
| Other                                           |   |               | 3,897  |   |          |   | 4,247 |   |
| Subtotal                                        |   |               | 55,147 |   |          |   | 49,957 |   |
| Less:      current maturities and notes payable |   |               | (796   | )      |          |   | (1,730 | ) |
| Total      long-term debt                       |   | $                  | 54,351 |   |          | $      | 48,227 |   |

| K.   | Shareholders’      Equity |
|----------------|---------------------------------|

| (In      thousands)             |   |                    |   |   |               |   |   |   |   |   |   |   |
|---------------------------------|--------|-------------------------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|
|                            |   | Three      Months Ended |   |
|                            |   | September      26,      |   |   | September      28, |   |
|                            |   | 2008                    |   |   | %                  |   |   | 2007   |   |   | %      |   |
| Net      sales                  |   | $                       | 72,761 |   |               |   |   |   | $      | 73,613 |   |   |   |   |
| Cost      of goods sold         |   |                    | 52,599 |   |               |   |   |   |   | 49,762 |   |   |   |   |
|                            |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |
| Gross      profit               |   |                    | 20,072 |   |               |   | 27.6   | %      |   |   | 23,851 |   |   |   | 32.4 | % |
|                            |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Marketing,      engineering and |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| administrative      expenses    |   |                    | 16,318 |   |               |   | 22.5   | %      |   |   | 14,694 |   |   |   | 20.0 | % |
|                            |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      from operations   |   | $                       | 3,754  |   |               |   | 5.2    | %      |   | $      | 9,157  |   |   |   | 12.4 | % |

|                         |    | Less      than | 1-3     | 3-5     | After      5 |
|------------------------------|---------|----------------|---------|---------|--------------|
| Contractual      Obligations | Total   | 1      year    | Years   | Years   | Years        |
| Revolver      borrowing      | $26,250 |           | $26,250 |    |         |
| Long-term      debt          | $28,897 | $796           | $5,037  | $8,658  | $14,406      |
| Operating      leases        | $12,992 | $3,250         | $5,812  | $3,637  | $293         |
| Total      obligations       | $68,139 | $4,046         | $37,099 | $12,295 | $14,699      |

| ·   | Disclosure      of the objectives for using derivative instruments be disclosed in terms      of underlying risk and accountingdesignation; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Disclosure      of the fair values of derivative instruments and their gains and losses in      a tabular format; |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | Disclosure      of information about credit-risk-related contingent features;      and |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | Cross-reference      from the derivative footnote to other footnotes in which      derivative-related information isdisclosed. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| Period                                    | (a)      Total Number of Shares Purchased | (b)      Average Price Paid per Share | (c)      Total Number of Shares Purchased as Part of Publicly Announced Plans or      Programs | (d)      Maximum Number of Shares that May Yet Be Purchased Under the Plans or      Programs |
|-------------------------------------------|-------------------------------------------|---------------------------------------|------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|
|                                      |                                      |                                  |                                                                                           |                                                                                         |
| July      1, 2008 – July 25, 2008   | 0                                         | NA                                    | 0                                                                                              | 500,000                                                                                      |
|                                      |                                      |                                  |                                                                                           |                                                                                         |
| July      26, 2008 - August 29, 2008      | 0                                         | NA                                    | 0                                                                                              | 500,000                                                                                      |
|                                      |                                      |                                  |                                                                                           |                                                                                         |
| August      30, 2008 - September 26, 2008 | 0                                         | NA                                    | 0                                                                                              | 500,000                                                                                      |
|                                      |                                      |                                  |                                                                                           |                                                                                         |
| Total                                     | 0                                         |                                  | 0                                                                                              |                                                                                         |

| 31a | Certification      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002. |
|-----|---------------------------------------------------------------------------------------------------------------|

| 31b | Certification      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002. |
|-----|---------------------------------------------------------------------------------------------------------------|

| 32a | Certification      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002. |
|-----|---------------------------------------------------------------------------------------------------------------|

| 32b | Certification      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002. |
|-----|---------------------------------------------------------------------------------------------------------------|

----

|                                   | TWIN      DISC, INCORPORATED |
|----------------------------------------|------------------------------|
|                                   | (Registrant)                 |
|                                   |                         |
|                                   |                         |
| Date:  November      5, 2008 | /s/JEFFREY      S. KNUTSON   |
|                                   | Jeffrey      S. Knutson      |
|                                   | Corporate      Controller    |
|                                   | Chief      AccountingOfficer |