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, 1995 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 #)

7765 Healdsburg Ave., Sebastopol, California               95472
(Address of principal executive offices)                 (Zip Code)


Registrant's telephone number, including area code:  707/829-4600     
          

                                 Not-Applicable
___________________________________________________________________________
(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 December 31, 1995, there were 1,706,252 shares of common stock, no
par value, outstanding.





                                        
                                     -1-
                                       
                                    PART I
                            FINANCIAL INFORMATION


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


The financial statements herein presented for the quarter and six months 
ended December 31, 1995 and 1994, 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.

Liquidity and Capital Resources

Because the Company's operations are seasonal in nature, the Company's liquid
resources fluctuate during the year in a way that changes very little from 
year to year.  To assist in analyzing the seasonal  impact on the balance 
sheet, we have included comparative figures from December 1995 and 1994 in 
addition to the prior fiscal year.  Inventory and accounts payable balances 
are normally at their lowest level as of the end of the fiscal year and their
highest level as of the end of the second quarter.  This seasonal increase 
in the accounts payable balance results in a temporary increase in the Debt 
to Equity ratio.  Adverse weather conditions earlier this year resulted in a 
poor apple crop and has required purchasing more tonnage from out of state 
than in normal years.  The inventory level as of December 31, 1995  in 
comparison with December 31, 1994 is significantly lower as a result of the 
smaller California apple crop.  The net working capital increased from 
$3,775,000 as of June 30, 1995 to $4,150,000 as of December 31, 1995.  The 
1995 level is very comparable with December 31, 1994 of $4,058,000.  The
increase in the accounts receivable balance is a result of the increased 
sales and extended payment terms.      

The Company's liquidity resources are obtained from external and internal 
sources.  The Company's largest external source is a revolving line of credit 
provided by a bank at the Bank's prime rate. The Company has a revolving line 
of credit limit of $3,500,000 ($3,000,000 as of December 31, 1994) secured by 
inventory and accounts receivable. As of December 31, 1995, the Company had 
$1,818,000 of available funds under this revolving line of credit.  The 
current availability of $1,818,000 compares with $767,000 of available 
funds (on a $3,000,000 limit) as of December 31, 1994.  As of
December 31, 1995, the Company was in compliance with all of the covenants
and restrictions related to its outstanding debt. The most significant source 
of internal liquidity is the Company's net working capital. One source of 
long term liquidity is the sale of the idle production facility, although the 
Company is not relying on the sale of this facility as a source of liquidity, 
the Company's short and long-term liquidity would materially increase upon 
such a sale. The Company has leased the majority of the idle facility on a 
short and long-term basis. 






                              -2-

The Company has established a capital expenditure budget of approximately 
$537,000 for the 1995-1996 fiscal year. Through December 31, 1995, the 
Company has expended $121,000 of the $537,000, all of which has been 
internally funded.  The Company anticipates financing these assets through 
internally generated funds and possibly the use of debt financing. At this 
time the Company has not leased the area occupied by Product Development at 
the idle facility and thus to conserve cash the Company is deferring this
relocation until this area is either leased or the entire facility is sold. The
capital expenditure budget will be used to refurbish existing equipment and 
to purchase some new equipment.
         
                 
Results of Operations

Quarter

Net sales increased $822,000 or 14% in the second quarter of fiscal 1996.  
Although the sales increase is still a function of volume, we anticipate that 
in the remaining quarters of the fiscal year we will see the affects of higher 
prices. The short apple crop worldwide has driven the cost of apples up and 
consequently the sale price of evaporated and low moisture apples
has increased.  

Other revenue increased $252,000 or 812% as a result of increased rental income
from the idle production facility and $110,000 from the refund of reserve 
related to debt owing to the State of California.  This refund will not be 
recurring in future quarters.

Cost of sales as a percentage of net sales increased from 85% in 1994 to 88% in
1995. LIFO materially effected the comparative results for the quarters. In 
1995 LIFO resulted in a charge against earnings of $250,000 and comparatively 
in 1994 LIFO was a credit of $250,000 to earnings.  The unfavorable purchase 
price variance in 1995 is the predominant reason for the LIFO charge against 
earnings.  The Company anticipates an unfavorable LIFO impact on earnings 
during the last six months similar to the impact this quarter.

Selling, general and administrative expenses decreased $14,000 or 3% in the 
second quarter. This decrease is primarily a result of  the downsizing which 
occurred in May of 1995.  The Company anticipates similar favorable results 
in the next six months. 

Interest expense decreased $13,000 as a result of lower borrowings during the 
quarter on the line of credit. 







                                        



                                      -3-


Year-To-Date

Net sales increased $1,077,000 or 9% during the six months ended December 1995. 
The sales increase was a result of volume rather than price.  In the next six 
months this relationship should change as we experience the affects of higher 
prices.     
 
Other revenue increased $192,000, primarily as a result of the refund of the 
reserve of $110,000, related to debt owing to the State of California. 

Cost of sales as a percentage of net sales increased from 85% in 1994 to 90% 
in 1995.  As discussed above in the quarter results, the charge against 
earnings from LIFO had a substantial impact on the comparative results 
between years. Although our processing tonnage is down as a result of the 
smaller apple crop, our factory overhead has decreased proportionately.  The 
balance in the Deferred Factory Overhead reserve is the same as
December 1994.  As we discussed in the first quarter 10Q, the Company has 
achieved an increase in the reserve to a level equal to last year.  The 
Deferred Factory Overhead Reserve is normally accumulated in the first and 
second quarters to offset the lower production level in the fourth quarter.  

Selling, general and administrative expenses decreased $204,000 or 18% during 
the six months ended December 1995. This decrease is a result of numerous 
factors, including; the effects of the downsizing, lower legal fees as a 
result of settlement of litigation, decreased expenses related to the SAR 
plan and other miscellaneous expense reductions.


Interest expense increased $15,000  during the six months ended December 1995
as a result of a higher outstanding balance on the line of credit coming 
into the current fiscal year.



















                                      -4-

                         PART II  --  OTHER INFORMATION


Item 1.    Legal Proceedings

           There are no legal proceedings pending.

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 5.    Other Information

           Confoco Representation Agreement
           Effective July 1, 1996, the representation agreement with Confoco, 
           Inc., for the sale of low moisture banana and pumpkin flakes will 
           terminate.  Confoco, Inc., has decided to consolidate the sales 
           and marketing of its products internally. From July 1, 1995 
           through December 31, 1995 the Company recorded sales of $1,722,000
           of Confoco products with a gross profit of $221,000.  The
           Company estimates it's sales of Confoco products for the entire 
           1996 Fiscal year to be approximately $2,500,000 with $321,000 of 
           related gross profit.  For the 1995 Fiscal year the Company 
           recorded sales of $3,452,000 of Confoco products with a gross 
           profit of $532,000. The Company intends to put 
           significant effort into replacing these lost sales.  However, there 
           is no assurance that such sales can be replaced, or if they can be 
           replaced, the same gross profit will be realized.  If these sales 
           and related gross profit are not replaced, the resulting decline 
           will have a material negative impact on the Company's
           earnings.  Under the Company's agreement with Confoco, for the two 
           years from the date of termination the Company is prohibited from 
           distributing in the United States, Canada  and Mexico,  banana 
           products similar to those currently being sold.

           Leased Properties
           The Company recently finalized a lease with Fantastic Foods for 
           the balance of Plant #1( Idle Production Facility) for a term of 
           two years.  Combined with the other tenants, the Company is 
           currently leasing properties at Plant #1 and #2 with annualized 
           gross revenues of approximately $500,000.  The tenants at
           these locations include Fantastic Foods, Inc., Benziger Family 
           Winery, P&L Specialties and a couple of other smaller companies.

           Retirement of President & CEO 
           Donal Sugrue, President and CEO, has advised the Board of Directors 
           of his intention to retire this year after thirty four years of 
           service with the Company.  The Executive Committee of the Board of 
           Directors has initiated a search for a successor and is currently 
           in the process of interviewing candidates.  Mr. Sugrue  
           has agreed to accommodate the wishes of the Board of Directors in 
           regard to timing and orderly transition of the presidency.  Mr. 
           Sugrue will continue to serve as a member of the Board of Directors.

                                      -5-



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


<PAGE>
                                            VACU-DRY COMPANY
                                     CONDENSED STATEMENT OF EARNINGS
                                               (UNAUDITED)


<TABLE>
                             <C>Six Months    <C>Six Months       <C>Three Months<C>Three Months 
                                  Ended            Ended               Ended         Ended     
                                 12/31/95         12/31/94            12/31/95       12/31/94      
             
REVENUES:                                                   
     Net sales                  $13,251,000      $12,174,000          $6,772,000    $5,950,000

     Other                          343,000          151,000             283,000        31,000
                                ___________      ___________          __________    __________
        Total revenue           $13,594,000      $12,325,000          $7,055,000    $5,981,000

COST & EXPENSES:

     Cost of sales               11,927,000      $10,355,000           5,993,000     5,053,000

     Selling, general &
       administrative               925,000        1,129,000             488,000       502,000

     Interest                       169,000          154,000              73,000        86,000
                                ___________      ___________          __________    __________
       Total cost & expenses    $13,021,000      $11,638,000          $6,554,000    $5,641,000

EARNINGS BEFORE INCOME TAXES        573,000          687,000             501,000       340,000

PROVISION FOR INCOME TAXES          235,000          275,000             206,000       136,000
                                   ________         ________            ________      ________
NET EARNINGS                       $338,000         $412,000            $295,000      $204,000

EARNINGS PER COMMON SHARE              $.20             $.24                $.17          $.12

AVERAGE COMMON SHARES
 OUTSTANDING                      1,700,015        1,700,852           1,701,957     1,702,099



                                See notes to interim financial statements
</TABLE>

<TABLE>
<CAPTION>
                                                 VACU-DRY COMPANY
                                                   Balance Sheets
                                                    (Unaudited)
                                              (Dollars in thousands)


CURRENT ASSETS:      12/31/95  12/31/94  6/30/95 CURRENT LIABILITIES:          12/31/95   12/31/94  6/30/95
<S>                   <C>       <C>     <C>                                     <C>      <C>      <C> 
Cash                     $225     $282    $187   Borrowings under line of credit  $1,682   $2,233   $2,351

Accounts receivable     2,313    1,624   1,679   Current maturities of L/T debt      480      475      480

Other receivable            6       97     155   Accounts payable                  2,566    2,438      393

Inventories             7,469    8,504   5,414   Accrued p/r & related               633      652      524

Prepaid expenses           63       66     176   Accrued expenses                    197      615      391

Current deferred taxes    303      502     303   Deferred factory overhead           525      525     -0-
                      _______  _______  ______     
Total current assets  $10,379  $11,075  $7,914   Income taxes payable                146       79     -0-

                                                                                   _____    ______   _____
                                                 Total current liabilities        $6,229   $7,017   $4,139
Net property, plant & 
equipment               7,078    7,760   7,421     
                                                 LONG-TERM DEBT - Net of
                                                         current maturities        1,771    2,348    2,105
         
                                                 DEFERRED INCOME TAXES               905      803      912

                                                 SHAREHOLDERS' EQUITY;

                                                 Capital stock                     3,971    3,958    3,936
                                                 Retained earnings                 4,581    4,545    4,243

                                                 Total shareholders' equity        8,552    8,503    8,179

                     _______   _______   _______ Total liabilities and           ______   _______  _______
Total Asset          $17,457   $18,835   $15,335    shareholders' equity         $17,457  $18,671  $15,335
</TABLE>

                                See notes to interim financial statements<PAGE>
                                VACU-DRY COMPANY
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
               FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 AND 1994



                                        
                                        
CASH FLOWS FROM OPERATING ACTIVITIES:                               
                                                  1995          1994

  Net earnings                                $338,000      $412,000 
                                               ________      ________
Adjustments to reconcile net earnings to net
     cash provided by operating activities  -

   Refund of reserve related to debt owing to the
     State of California                      (110,000)           -0-
    
    Depreciation expense                       464,000       423,000 

  Changes in certain assets & liabilities              
     (Increase) in receivables                (485,000)      (51,000)
     (Increase) in inventories              (2,055,000)   (3,727,000)
     Decrease in prepaid assets                113,000        38,000 
     Increase in accounts payable            2,173,000     1,723,000 
   (Decrease) in accrued expenses             (194,000)     (460,000)
   Increase in acc p/r & related liab.         109,000        57,000 
   Increase in deferred overhead               525,000       525,000 
   Increase in income taxes payable            146,000        79,000 
   (Decrease) in deferred taxes                 (7,000)           -0-
                                               ________    __________
       Total adjustments                       679,000    (1,393,000)
                                               ________    __________
   Net cash provided by
     (used for) operating activities         1,017,000      (981,000)
                                             __________    __________
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                       (121,000)     (726,000)
                                              _________     _________
   Net cash (used for) investing activities   (121,000)     (726,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Additional borrowings on line of credit   5,739,000     5,988,000 
   Payments on line of credit               (6,408,000)   (4,035,000)
   Quarterly dividend of $0.05 per share            -0-     (170,000)
   Employee purchase of Company stock           35,000        63,000 
   Stock buy back of Company shares                 -0-      (39,000)
   Principal payments of long-term debt       (224,000)     (237,000)
                                              _________     _________
   Net cash provided by 
    (used for) financing activities           (858,000)    1,570,000
                                              _________     _________
NET INCREASE (DECREASE) IN CASH                 38,000      (137,000)

CASH AT THE BEGINNING OF THE YEAR              187,000       419,000 
                                               ________      ________
TOTAL CASH AT THE END OF THE PERIOD           $225,000      $282,000 



                    See notes to interim financial statements
   
<PAGE>
                                VACU-DRY COMPANY
                      NOTES TO INTERIM FINANCIAL STATEMENTS
                       SIX MONTHS ENDED DECEMBER 31, 1995

Note 1 -  The Interim Financial Statements herein presented for the six months 
          ended December 31, 1995, reflect all adjustments which are in the 
          opinion of management, necessary to a fair presentation of the 
          financial position and the results of operations for the period 
          then ended.  The statements are unaudited and are not necessarily 
          indicative of results for the full year.

Note 2 -  Inventories  -

          Inventories are stated at the lower of cost, using the last-in, 
          first-out (LIFO) method or market.

          The excess of current cost of the inventory over LIFO cost was 
          $1,584,000 at December 31, 1995 and $1,334,000 at June 30, 1995.

          Inventories at December 31, 1995 and June 30, 1995, consisted of the
          following:
                                     12/31/95         6/30/95

          Finished Foods             $5,837,000       $4,926,000
          Work in progress              300,000          239,000
          Raw materials & containers  1,332,000          249,000
                                     $7,469,000       $5,414,000

Note 3 -  Borrowings Under Line of Credit -

          The Company renewed its line of credit with the bank on 
          November 1, 1995.  The maximum amount available under the line of 
          credit was reduced from $4,000,000 to $3,500,000.  The interest 
          rate and security were not changed.

Note 4 -  Statement of Cash Flows -

          Interest and income tax payments reflected in the Consolidated 
          Statement of Cash Flows were as follows:
                                        1995            1994
          
          Interest paid              $178,000        $126,000
          Income taxes paid         $  84,000        $158,000

Note 5 -  Income Taxes -

          The effective income tax rate for 1995 is 41%, which compares to 
          40% for 1994.  There were no federal or state tax operating 
          loss carryforwards for book or tax purposes at December 31, 1995.





                                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.


                                   VACU-DRY COMPANY


                                         (Don Sugrue)
Date:          February 14, 1996        ____________________________

                                         Donal Sugrue, President


                                          (Tom Eakin)
Date:          February 14, 1996        ____________________________
                                         Tom Eakin, VP, Finance