SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                FORM 10-Q


                Quarterly Report Pursuant to Section 13 or 15(d) 
           X   	of the Securities Exchange Act of 1934.
               For the quarterly period ended December 31, 1998 or
     

                 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 01912

                            	VACU-DRY COMPANY

           (Exact name of registrant as specified in its charter)



              California                       				94-1069729
        (State of incorporation)	           (IRS Employer Identification #)


100 Stony Point Road, Suite 200 Santa Rosa, California	    95401
(Address of principal executive offices)	               	(Zip Code)

Registrant's telephone number, including area code:  	707/535-4000
	
7765 Healdsburg Avenue, Sebastopol, California  95472
(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. 

YES: __X__   NO:____


As of February 12, 1999, there were 1,515,722 shares of common stock, no par 
value, outstanding.



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

THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISK AND 
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE 
RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN OF 
THE FACTORS SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE 
YEAR ENDED JUNE 30, 1998

The financial statements herein presented for the quarter and six months ended 
December 31, 1998, reflect all the adjustments that in the opinion of 
management are necessary for the fair presentation of the financial position
and results of operations for the period then ended. All adjustments during
the periods presented, are of a normal recurring nature unless otherwise
stated. In June of 1998, Vacu-dry Company formed a new company, Made In
Nature Company, Inc. (MINCO), for the purpose of acquiring substantially all 
of the business and assets of Made In Nature, Inc., a natural foods marketer 
of organic consumer packaged goods.  Accordingly, the results of operations 
of MINCO are included in the consolidated results herein.

Liquidity and Capital Resources

Because the Company's operations, except for MINCO, are seasonal, the Company's 
liquid resources normally fluctuate during the year.  The Company experiences a 
normal seasonal decrease in production beginning in April.  Inventories and 
related short-term borrowings are usually at their peak at this time.  The 
slowdown in production normally extends through July and corresponds to the 
availability of raw fruit on an affordable basis. The Company's inventory 
ordinarily decreases during the period beginning in May and ending in September 
which creates a corresponding increase in liquidity. The normal operating cycle 
of the Company has been significantly affected by the recent high level of 
sales of food storage (canned goods) products. Consumer concerns over 
potential Year 2000 (Y2K) computer-related problems have resulted in demand 
that has significantly exceeded prior year's sales. These increased sales 
have required higher production and inventory levels during the current 
fiscal year.  MINCO has contracts with organic growers and packers and is 
normally able to schedule production as needed to meet demand.

The Company experienced lower cash flow during the current fiscal quarter 
due to negative results from MINCO'S operations. MINCO's fiscal year-to-date 
sales and profitability have not met management's expectations. The Company 
is exploring new strategies in an attempt to achieve break-even results from 
MINCO operations by the end of the fiscal year. As a result of the 
acquisition of MINCO and the build-up of the food storage products, the debt 
to equity ratio increased from .82 in fiscal 1998 to 1.52 in fiscal 1999.  
The current ratio 2.20 for fiscal 1999 compares to 2.42 for the previous 
fiscal year.  The decrease was due to higher accounts payable for the 
purchase of food storage ingredients.

Operating capital for the Company is obtained from external and internal 
sources. The Company's largest external source is a $5,000,000 revolving 
line of credit provided by a bank at the bank's prime rate.  Under the terms 
of the revolving line of credit agreement, the Company can elect short term 
LIBOR financing or long term prime rate financing.  As of December 31, 1998, 
the Company had $1,508,000 of available funds under the line of credit.  This 
amount is less than the $2,806,000 of availability under the $4,500,000 
revolving line of credit at December 31, 1997.  The decline in available 
borrowings resulted from the Company's utilization of the revolving line to 
fund higher inventory levels particularly for the food storage products and 
funding the negative cash flow of MINCO.  The Company has finalized a 
short-term agreement with its current lender to increase the existing bank 
line of credit to fund the increased working capital requirements associated 
with the higher food storage sales. During the quarter, the Company obtained 
longer term financing to fund the MINCO acquisition.  The five-year term note 
in the amount of $2,100,000 is secured by real estate at a fixed interest 
rate of 7.365%.  The agreement requires monthly principal and interest 
payments with the unpaid balance due December 1, 2003.


As of December 31, 1998, the Company was not in compliance with one of the 
covenants related to its outstanding debt.  The Company has received a waiver .
of this non-compliance by its bank.  The Company's loan agreement with its bank 
includes a negative covenant prohibiting the declaring or paying of a dividend 
in cash, stock or any other property without the prior approval by the bank.

Excluding computer system expenditures which are expected to be financed 
through leasing arrangements, a capital expenditure budget of approximately 
$988,000 has been established by the Company for the 1999 fiscal year. These 
funds will primarily be used to purchase new and recondition existing 
equipment related to the manufacturing operation as well as to make certain 
structural repairs needed to maintain the value of building improvements. 
The Company anticipates financing these expenditures through internally 
generated funds. 

The Company has reviewed its information technology (IT) systems and determined 
that it is not Year 2000 compliant.  The Company has purchased new software, 
which is warranted to be Year 2000 compliant.  In addition the Company has 
acquired new hardware on which to operate the new software.  The Company has  
completed its assessment of its non-IT systems.  All identified non-IT systems 
have been certified Year 2000 compliant by the original manufacturers. The 
Company has hired a consulting firm to manage the implementation of the 
software. The conversion for Vacu-dry and MINCO to this new system is 
expected to be completed by June 30, 1999. The conversion to the new 
software is divided into two Phases. Phase I for just the ingredient 
business is in the final stages of completion. The completion of the final 
Phase has been delayed until May 31, 1999. MINCO will begin their 
implementation on March 1, 1999 and is expected to complete all phases by 
May 31, 1999. We have allocated one month at the end of the conversion to 
make sure we have addressed all of the issues related to the conversion.  A 
group of ten managers have formed an "Implementation Team" and are 
strongly supported by upper management.  Both the Implementation Team and upper 
management are confident that the implementation can be completed by  June 30, 
1999.  Management estimates that the total cost of the system will be 
approximately $900,000. The expenditures for the new system will primarily 
occur in fiscal 1999.  As of December 31, 1998, the Company has expended 
approximately $350,000 of the total budget. The Company anticipates 
financing these costs through a lease agreement.  The Company has assessed 
its risk relative to the Year 2000 issue and is confident that it can 
accomplish the conversion prior to December 31, 1999. If this conversion 
does not happen the Company would have to rely on PC based software to 
accomplish its normal business activities until the conversion can be 
completed.

Until recently, the Company has been successful in leasing all of its idle 
production facility other than a portion occupied by Product Development. The 
Company signed a long-term lease for approximately one-half of the previously 
vacated portion of this facility. The Company has secured a short-term lease, 
which expires February 28, 1999 for the balance of the available space. The 
Company is working to obtain a replacement tenant without a loss of income but 
has been unsuccessful to date. In addition, the Company continues to lease a 
portion of its current operating facility and has entered into a long-term 
lease with the primary tenant.

The Company and MINCO consolidated their corporate offices and moved into a new 
location in December 1998.


Results of Operations

Quarter

Net sales increased $1,627,000 or 21.7% in the second quarter of fiscal 1999. 
This increase was primarily due to food storage sales of $3,355,000, which 
represents an increase of $2,806,000 versus the prior year's sales of $305,000. 
MINCO'S sales for the quarter were $565,000. Declines in both the prices and 
volume for the remaining food ingredients business have partially offset the 
aforementioned higher sales.

Cost of sales for the quarter ended December 31, 1998 approximated those for 
the prior year: 78.3% versus 78.5% of net sales. 

Selling, general and administrative expenses increased $924,000 or 129% in the 
second quarter. Of this change, approximately $652,000 is a result of MINCO.
The remaining balance of $272,000 is a result of staffing increases and their
related wages.

Interest expense increased $71,000 as a result of our increased average 
borrowings on the line of credit. This was due to funding needs for increased 
food storage sales and MINCO'S negative cash flow.


Year-to Date

Net sales increased $3,440,000 or 25.1% for the six months ended December 31, 
1998. This increase was primarily due to second quarter food storage sales, 
currently as noted above. The portion of the increase due to the inclusion of 
MINCO'S sales was $1,258,000. Fiscal year-to-date sales for the food 
ingredients business have been adversely affected by competitive pricing. As
a result of the growing concern regarding the Y2K issue, food storage 
product sales have been steadily increasing. As of the date of filing, we 
believe that it is prudent to forecast further increases as "Year 2000" (Y2K)
and "end of the millennium" concerns are expected to build in 1999.  We are 
optimistic about our prospects in this business but must maintain an 
appropriate level of caution. New competitors are continually entering this 
category.  Even as concerns build over the Y2K issue, so do arguments that 
the concerns are unfounded or overblown. The increase in sales the Company is 
currently experiencing is expected to return to prior lower levels as we 
approach January 1, 2000, if not earlier.  Until then, it is our challenge 
to rapidly, but cost effectively, build production capacity 
and scale up inventories without subjecting ourselves to undue risk associated 
with the anticipated decline in sales.  At this time we are increasing our 
short-term capacity to meet the forecasted demand. 

Cost of sales as a percent of net sales decreased from 83.7% as of December 31, 
1997 to 82.2% as of December 31, 1998. The primary reason for the decrease was 
lower raw material costs. The effect of MINCO'S results in the consolidated 
costs of sales for fiscal 1999 was approximately 6.8% or $1,161,000.

Selling, general and administrative expenses increased $1,810,000 or 139% 
through the six months ended December 31, 1998. The portion of the increase due
to the inclusion of MINCO was $1,427,000 or 110%. The remaining balance was 
due to increases in staffing and professional services. 

Interest expense increased $104,000 as a result of our higher average 
borrowings on the line of credit. This was due to funding needs for increased
food storage sales and MINCO'S negative cash flow.

The effective tax rate for the second quarter ended December 31, 1998 of 36% is 
comparable to the 37% incurred for the fiscal year ended June 30, 1998.





                            VACU-DRY COMPANY
                 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                             (UNAUDITED)
                        (Dollars in thousands)
<TABLE>                             
                           <C>             <C>             <C>             <C>   
                            Six Months      Six Months      Three Months	   Three Months	  
 	                           Ended            Ended		         Ended	       	  Ended
                            12/31/98         12/31/97	      	12/31/98	       12/31/97	
											 
REVENUES:

 	Net Sales	                 $17,129	         $13,689	         $9,108      	   $7,481
 	Other		                        373	             275	            193	            107
                         			________        	________       	________       	________
		Total revenue	              17,502	          13,964	          9,301          	7,588

Costs & Expenses

 	Cost of sales	              14,074	          11,457          	7,128          	5,870
 	S, G & A                     3,106	           1,296          	1,639             715
 	Interest                      	228	             124            	129            	 58
                         			________        	________       	________       	________
		Total cost & expenses	      17,408	          12,877          	8,896        	  6,643

EARNINGS BEFORE INCOME TAXES
	AND MINORITY	                    94           	1,087            	405	            945

MINORITY INTEREST	               132	               0             	59               0
		                         	________        	________       	________       	________
EARNINGS BEFORE INCOME TAXES	    226           	1,087            	464        	    945

PROVISION FOR INCOME TAXES	       35	             370	            144            	323
                         			________	        ________       	________       	________
NET EARNINGS	                   $191	            $717	           $320        	   $622

WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS:
	Basic	                   	1,512,270	       1,643,668	      1,515,722 	     1,644,559
	Diluted	                 	1,539,843       	1,648,390      	1,539,827      	1,652,776

EARNINGS PER COMMON SHARE
	Basic	                       	$0.13           	$0.44          	$0.21	          $0.38
	Diluted	                     	$0.12           	$0.43          	$0.21        	  $0.38

                              See Notes to Interim Financial Statements
</TABLE>
                               VACU-DRY COMPANY
                          CONSOLIDATED BALANCE SHEETS
                                (Unaudited)
                           (Dollars in thousands)
<TABLE>
                      <C>        <C>        <C>                                              <C>        <C>       <C>    
                    	  12/31/98	  12/31/97  	6/30/98  	  	                                    12/31/98   12/31/97  6/30/98
ASSETS		                                              	  LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT ASSETS:				                                      CURRENT LIABILITIES:

Cash                      $132       $155 	    $385     	Current maturities of long-term debt    $ 438       $595 	   $438

Accounts receivable      2,402     	2,722     2,298     	Accounts payable                        5,374     	2,904    3,789

Income tax receivable	     234         70      	163     	Accrued payroll & related liabilities	    939	       719	     936

Inventories	            12,376     	8,170    	7,926     	Accrued expenses	                         350	       233	     353

Prepaid expenses	          119         56       298      Income taxes payable                      -0- 	      256 	    -0-

Current deferred taxes     360	       240       360                                   	         ______	     _____   ______
                      	_______   	_______   	______	                                                                       
Total current assets   $15,623    $11,413  	$11,430     	Total current liabilities	             $7,101 	   $4,707  	$5,516
                           			                                          				 
                                                      		 Borrowings under line of credit	        3,492	     1,694	   2,297

Property, plant &	                                      	Long term debt-net of                
  equipment	, net        7,114      6,867	    6,784	      current maturities	                    4,020	     1,492	   2,203
			       
							
                                                     				DEFERRED INCOME TAXES	                    865	       826	     865
	       			
                                                         MINORITY INTEREST	                        376	       -0- 	    509

                                                     				SHAREHOLDERS' EQUITY:
Goodwill ,                                              
 net of amortization     2,708       -0-      2,562
                                                     				Capital stock	                          2,851	     3,650	   2,837	
                                                        	Warrants for common stock                 456        -0-      456   
                                                     				Retained earnings	                      6,284	     5,911	   6,093
                                                                           					                ______ 	   ______	  ______
				
                                                        	Total shareholders' equity	             9,591	     9,561	   9,386

                      _______   _______   	_______	      Total liabilities and	                _______	   _______	 _______
Total Assets	         $25,445  	$18,280	   $20,776         shareholders' equity	               $25,445	   $18,280	 $20,776

                           See notes to interim financial statements
</TABLE>
	


                            VACU-DRY COMPANY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (UNAUDITED)
              FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 AND 1997



CASH FLOWS FROM OPERATING ACTIVITIES:	           1998	           1997

Net earnings	                                    $191	           $717

Adjustments to reconcile net earnings to net
	cash used for operating activities:
		Depreciation and amortization expense          	624	            541
		Deferred income tax provision                  	-0-             	(1)
		Minority interest                             	(132)           	-0-

	Changes in assets & liabilities:
		Accounts receivable, net                      	(148)        	(1,155)
		Income tax receivable                          	(70)           	-0-
		Inventories, net	                            (4,487)        	(3,115)
		Prepaid assets	                                 179             	75
		Accounts payable	                             1,457	          2,414
		Accrued payroll & related liabilities            	3            	180
		Accrued expenses                                	(5)	            60
		Income taxes payable	                           -0-            	256
		                                           	_______        	_______
		  Net adjustments                           	(2,579)          	(745)
		                                           	_______        	_______
 	  Net cash used for operating activities    	(2,388)           	(28)
			                                           _______        	_______
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures	                           (891)          	(177)
		                                           	_______        	_______
		  Net cash used for investing activities	      (891)          	(177)
                                              _______         _______
CASH FLOWS FROM FINANCING ACTIVITIES:
	Borrowings under the line of credit	          12,812          	5,070
	Payments on line of credit	                  (11,617)        	(4,730)
	Principal payments of long-term debt	           (283)	          (278)
	Proceeds from MINCO financing	                 2,100	            -0-
	Issuance of common stock	                         14	             15
			                                           _______        	_______
		  Net cash provided by financing activities	  3,026	             77
                                           			_______        	_______
NET DECREASE IN CASH	                            (253)	          (128)

CASH AT THE BEGINNING OF THE YEAR	                385            	283
                                              			____           	____
TOTAL CASH AT THE END OF THE PERIOD	             $132	           $155



                 See notes to Interim Financial Statement



                               VACU-DRY COMPANY
                   	NOTES TO INTERIM FINANCIAL STATEMENTS	
                    	SIX MONTHS ENDED DECEMBER 31, 1998


Note 1  - 		The accompanying fiscal 1999 and 1998 unaudited interim 
            statements have been prepared pursuant to the rules of the 
            Securities and Exchange Commission.  Certain information and 
            disclosures normally included in annual financial statements 
            prepared in accordance with generally accepted accounting 
            principles have been condensed or omitted pursuant to such 
            rules and regulations, although the Company believes these 
            disclosures are adequate to make the information not 
            misleading.  In the opinion of management, all adjustments 
            necessary for a fair presentation for the periods presented 
            have been reflected and are of a normal recurring nature.  
            These interim financial statements should be read in 
            conjunction with the financial statements and notes thereto for 
            each of the three years in the period ended June 30, 1998.  The 
            results of operations for the six month period ended December 
            31, 1998 are not indicative of the results that may be achieved 
            for the entire year ending June 30, 1999. 
			
			         Due to the seasonal nature of the Company's business, the prior 
            year interim balance sheet is presented in the accompanying 
            unaudited financial statement.

            Reclassification - Certain 1997 amounts were reclassified to 
            conform to the 1998 presentation.

Note 2  - 		Inventories  -
            Inventories are stated at LIFO cost for Vacu-dry; FIFO cost for 
            MINCO. The excess of current cost of the  inventory over LIFO 
            cost was $914,000 at December 31, 1998 and $1,115,000 at June 
            30, 1998.

            Inventories at December 31, 1998 and June 30, 1998, consisted 
            of the following: 

                                   	 12/31/98	 	    6/30/98
					       Vacu-dry LIFO
							
              Finished goods	     	$6,073,000   	$4,695,000 
              Work in progress    	   778,000   	   470,000 
              Raw materials, &
                containers       		 3,308,000  		   442,000 
                                    _________     _________  
                                  $10,159,000  		$5,607,000
       					MINCO FIFO

         			  Finished goods		      2,217,000		   2,319,000
                                    _________     _________ 
      			   Total Inventories     $12,376,000	  	$7,926,000

Note 3  -		Statement of Cash Flows  -
           Interest and income tax payments reflected in the Consolidated 
           Statement of Cash Flows were as follows:

                                   				  1998		  1997
	
                   Interest paid    		$198,000		$126,000
                   Income taxes paid 	$102,000		$114,000

			                    	
                                  
               

                                   PART II
                              	OTHER INFORMATION

Item 1.	Legal Proceedings

        There are no legal proceedings pending.

Item 2.	Changes in Securities

        The Company's revolving line of credit agreement with its Bank dated 
        November 17, 1998, includes a convenant which prohibits the 
        declaring or paying of any dividend or distribution in either cash, 
        stock or any other property on the Company's stock now or hereafter 
        outstanding, nor redeem, retire, repurchase or otherwise acquire 
        shares of any class of the Company's stock now or hereafter 
        outstanding, without the prior approval by the Bank.

Item 4.	Submission of Matters to a Vote of Security Holders.

        No matters were submitted to a vote of security holders during the 
        period covered by this report.



Item 6.	Exhibits & Reports on Form 8-K

        a.	Exhibits  
           (27) Financial Data Schedule (by electronic filing only)

      		b.	Reports on Form 8-K - 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.


Date:	February 12, 1999                     	/s/ Gary L. Hess
                                          			_______________________
                                           		Gary L. Hess, President


Date:	February 12, 1999                     	/s/ Tom R. Eakin
		                                       		 	_______________________
                                          	 	Tom R. Eakin, VP Finance