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
       SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
       FROM _______________________ TO __________________________
 

                  Commission File Number:  000-13858


               NATIONAL INDUSTRIAL SECURITY CORPORATION
  (Exact name of small business issuer as specified in its charter)


               Delaware                           86-0214815
     (State or other jurisdiction              (I.R.S. Employer
   of incorporation or organization)          Identification No.)

        222 East Kirkham Road
         St. Louis, Missouri                        63119
(Address of principal executive offices)          (Zip Code)

                           (314) 962-1414
                     (Issuer's Telephone Number)

__________________________________________________________________
       (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 Securities 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      .
                                                -----    -----

State the number of shares outstanding of each of the issuer's
class of common equity, as of the latest practicable date:  The
number of shares of the registrant's only class of common stock
issued and outstanding, as of September 30, 1998, was 6,944,100
shares.

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


<PAGE>
                              PART I

ITEM 1.   FINANCIAL STATEMENTS.

      The unaudited financial statements for the nine month period
ended September 30, 1998, are attached hereto.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PLAN OF
          OPERATION

     The following discussion should be read in conjunction with
the Company's unaudited financial statements and notes thereto
included herein.  In connection with, and because it desires to
take advantage of, the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the
following discussion and elsewhere in this report and in any other
statement made by, or on the behalf of, the Company, whether or not
in future filings with the Securities and Exchange Commission. 
Forward looking statements are statements not based on historical
information and which relate to future operations, strategies,
financial results or other developments.  Forward looking
statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to
future business decisions, are subject to change.  These
uncertainties and contingencies can affect actual results and could
cause actual results to differ materially from those expressed in
any forward looking statements made by, or on behalf of, the
Company.  The Company disclaims any obligation to update forward
looking statements.

Overview

     The Company is a Delaware corporation based in Missouri which
provides security guard and related security services to commercial
and industrial clients in the St. Louis, Missouri metropolitan
area.  In addition to guard services, the Company continues to
provide monitoring services for alarm systems already in service. 
The Company no longer sells the NISCO proprietary alarm system due
to technological advances and competitive conditions. Approximately
40 alarm systems are currently being monitored.  This activity
accounts for less than 1% of the Company's revenues.  The Company
employs approximately 50 security guards and has an office staff of
four, all in St. Louis, Missouri.

     The labor market for security guards continues to be extremely
constricted making it difficult for the Company to obtain
sufficient applicants and to hire staff replacement personnel when
needed.  This tight labor condition restricts the Company's ability


                                                               2

<PAGE>
to market for new clients and to maintain its existing client base. 
It is also difficult to obtain sufficient cash flow from its
existing client base or potential prospects to provide for wage
increases to employees.

     Because of the Company's limited operations and as a result of
management's desire to provide the Company's shareholders with the
greatest possible return on their investment, over the past year
management of the Company has been seeking out unaffiliated
entities who have expressed a desire to merge with the Company in
order to become a public reporting company.  Relevant thereto, the
Company signed a Letter of Intent on July 30, 1998, preliminary to
entering into a proposed Reorganization Agreement (the
"Agreement"), which was subsequently signed on September 17, 1998,
with Naidger Power Systems, Inc. ("NPS"), a privately held Delaware
corporation.  The Agreement is subject to due diligence by the
parties and certain closing conditions.  While no assurances can be
provided, the transaction is expected to close on or about November
6, 1998. 

     The Agreement calls for one for three reverse split of the
issued and outstanding Common Stock of the Company, thereby
reducing the total issued and outstanding common shares from
6,994,100 to 2,331,367 shares.  The Company will receive a secured
note (the "Note") in the principal amount of $100,000 to be used
for debt reduction.  See "Liquidity and Capital Resources" below. 
The Note is to be payable in three equal installments of $25,000
each over a 90 day period, with a final installment due in 12
months.  The Company will issue 8,000,000 "restricted" shares of
its Common Stock in exchange for all of the issued and outstanding
common stock of NPS, which includes NPS's New York-based, wholly
owned subsidiary, Polcorp, Inc., which has two wholly owned
operating subsidiaries, Metrix Metal and Metrix Tools, which
operate manufacturing facilities in Poland.

Results of Operations

     Comparison of Results of Operations for the three month period
ended September 30, 1998 and three month period ended September 30,
1997

     For the three month period ended September 30, 1998, revenues
were $170,718, as compared to revenues of $162,000 for the three
month period ended September 30, 1997, an increase of $8,718 (5%). 
Labor costs remained relatively constant during these periods, with
said costs rising $11,767 (9.5%) over the similar period in 1997. 
General and Administrative expenses increased $18,358, from $47,619
in the three months ended September 30, 1997, to $65,977 in the
similar period in 1998, as a result of expenses incurred related to
a marketing effort undertaken by the Company which was directed at
enticing health care facilities as customers, which effort was
subsequently discontinued due to a perceived lack of potential

                                                               3

<PAGE>
profitability after examination by management of associated costs. 
During the three month period ended September 30, 1998, the Company
broke even, as an outstanding account payable was resolved on a
discounted basis, resulting in an adjustment to miscellaneous
income.

     Comparison of Results of Operations for the nine month period
ended September 30, 1998 and three month period ended September 30,
1997

     Revenues for the nine month period ended September 30, 1998
decreased $3,713 (1%) compared with the same period in 1997.  The
decrease in revenues is due to the loss of clients as a result of
competitive bidding, client restructuring, relocations and client
budget reductions.  If the proposed Agreement with NPS does not
close, the Company hopes to reestablish revenue growth through the
recruitment of additional clients.  Start up costs for new
customers vary dependent upon the size of the client.  Such costs
are expensed as incurred.

     The percentage of labor expense to service revenues was 76% at
September 30, 1997 as compared to 77% at September 30, 1998. 
General and Administrative expenses decreased by $27,608 due to
lower administrative salaries and reduced rent expense.

     Net profit for the nine months ended September 30, 1998 was
$20,134 compared with a net loss of $38,425 during the same period
in 1997.

Liquidity and Capital Resources

     At September 30, 1998, the Company's bank line of credit was
paid in full and not renewed upon expiration.

     The Company has a $100,000 loan agreement with the President
of the Company to meet its working capital requirements.  As of
September 30, 1998, the principal balance of the loan was $93,906
and is due May 31, 1999.  The note is collateralized by accounts
receivable and property and equipment of the Company.  The note
requires monthly interest payments at prime (8.25% at September 30,
1998) plus 5.25%.  Interest expense relating to this note was
$4,217 for the nine months ending September 30, 1998.

     The Company has an additional promissory note owing to the
Company's President in the principal amount of $26,000, which
requires monthly interest payments at prime plus 6%.  The note is
due February 28, 1999.  The proceeds of this loan were used to
settle an outstanding account payable on terms favorable to the
Company and to reduce the loan balance on its line of credit.

     The Company's independent auditors have concluded in the 1997
audit of its financial statements that there is material

                                                               4

<PAGE>
uncertainty as to the Company's ability to continue as a going
concern.  Management of the Company agrees, and if operating
conditions do not improve so as to allow for more profitable
results from operations, the Company will consider alternatives
such as (i) a sale of all, or substantially all, of its assets;
(ii) a complete winding down of operations and liquidation of the
Company; or (iii) a merger with another entity.

     In the event the proposed Agreement with NPS does not close,
the Company' short term liquidity will remain dependent on existing
loans from the Company's President.  Long-term or short-term
financing is not available based on the Company's meager results
from operations.  The Company believes it has adequate financing to
continue its current operations in coming months until the proposed
Agreement with NPS is closed, which is expected to substantially
increase revenues and net worth of the Company without debt
financing.  However, there can be no assurances that the proposed
Agreement with NPS will be successfully consummated, or that if so
consummated, that the Company's revenues and net worth will
increase as expected.

Inflation

     Inflation has not had, and is not expected to have, a
significant impact on the Company's financial position or operating
results.
     
Trends

     As described above herein, as of the date of this report the
Company's principal business is in the security industry.  However,
because of competitive changes in the industry and the ability to
attract and maintain a labor force, as well as the Company's
inability to generate positive cash flow, management has elected to
attempt to change the principal business of the Company.

     Management is unaware of any existing trends which may have an
impact on the proposed business of the Company, either negative or
positive.  Management believes it will have more understanding of
such trends, if any, once the Company has implemented its new
business plan.

Year 2000 Disclosure

     Many existing computer programs use only two digits to
identify a year in the date field.  These programs were designed
and developed without considering the impact of the upcoming change
in the century.  If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000.  As a
result, many companies will be required to undertake major projects
to address the Year 2000 issue.  The Company presently owns
approximately $3,000 worth of computers.  It utilizes outside

                                                               5

<PAGE>
contractors for the bulk of its computer work.  These consultants
have advised the Company that they have made all necessary
revisions to their software to avoid any potential problems arising
in the year 2000.  However, as of the date of this report, the
Company has not addressed this issue with its potential share
exchange candidate, Naidger Power Systems, Inc., and management is
unaware of whether NPS has undertaken any actions in this regard.

     The Company's common stock shares are currently traded on the
NASDAQ over the counter Bulletin Board using the trading symbol
"NISC".


                   PART II.  OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS - None

ITEM 2.    CHANGES IN SECURITIES - None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES - None

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -  

          Pursuant to the laws of the State of Delaware, on July
27, 1998, the holders of a majority of the issued and outstanding
Common Stock of the Company authorized a reverse split of the
Company's issued and outstanding Common Stock whereby one (1) share
of Common Stock shall be issued in exchange for every three (3)
shares of Common Stock issued and outstanding immediately prior to
the Effective Date of the proposed share exchange between the
Company and Naidger Power Systems, Inc., which transaction is
described above herein.  This reverse split will only be effective
if the proposed transaction with NPS successfully closes.

ITEM 5.    OTHER INFORMATION - None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)  Exhibits
 
                EX-27     Financial Data Schedule

           (b)  Reports on Form 8-K.

                None.

                                                               6

<PAGE>
<TABLE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS


<CAPTION>
                                ASSETS

                                             09/30/98   12/31/97
                                            (unaudited) (audited)
                                            ----------  ----------
<S>                                         <C>         <C>
CURRENT ASSETS

Cash                                        $    3,850  $    5,741
Accounts Receivable
  Trade                                         53,304      64,147
  Other                                            712         336
Prepaid Expenses                                17,296      16,696
                                            ----------    --------

TOTAL CURRENT ASSETS                            75,162      87,220

PROPERTY & EQUIPMENT, at cost
Furniture & Equipment                           85,034      85,034
Less Accumulated Depreciation
  and Amortization                             (85,034)    (85,034)
DEFERRED CHARGES, net of
  Accumulated Amortization                       8,549       9,908

DUE FROM OFFICER                                     0      16,235
                                            ----------  ----------

TOTAL ASSETS                                $   83,711  $  113,364
                                            ==========  ==========


<FN>
     The accompanying notes are an integral part of these financial
statements.


                                                               7

<PAGE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES

                CONSOLIDATED BALANCE SHEETS (Continued)



<CAPTION>
                  LIABILITIES & STOCKHOLDERS' EQUITY


                                             09/30/98    12/31/97
                                           (unaudited)   (audited)
                                            ----------  ----------
<S>                                         <C>         <C>
CURRENT LIABILITIES

Accounts payable & accrued expenses         $   20,393  $   28,288
Accrued salaries & related taxes                34,862      27,892
Accrued legal fees                                   0      40,722
Line of Credit, Bank                                 0      31,000
Deferred revenue                                 1,764       1,811
                                            ----------  ----------

TOTAL CURRENT LIABILITIES                       57,019     129,713

LONG TERM NOTE (Note F)                         93,906      71,000

STOCKHOLDERS' EQUITY (deficiency in assets)
  Common Stock - authorized shares
  12,000,000; par value $.1667 per share;
  issued and outstanding 6,994,100 shares    1,165,680   1,165,680

  Additional Paid in Capital                    38,785      38,785

  Deficit                                   (1,271,679) (1,291,814)
                                            ----------  ---------- 
TOTAL STOCKHOLDERS' EQUITY
  (deficiency in assets)                       (67,214)    (87,349)
                                            ----------  ----------

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY    $   83,711  $  113,364
                                            ==========  ==========

<FN>
     The accompanying notes are an integral part of these financial
statements.

</TABLE>
                                                               8

<PAGE>
<TABLE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES


                 CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Three Months Ended September 30, 1998
                             (unaudited)

<CAPTION>
                                             09/30/98    09/30/97
                                            ----------  ----------
<S>                                         <C>         <C>
SERVICE REVENUES (Note D)                   $  170,718  $  162,000
                                            ----------  ----------
COST & EXPENSES
  Labor                                        134,790     123,023
  General & Administrative                      65,977      47,619
                                            ----------  ----------

  TOTAL COST & EXPENSES                        200,767     170,642
                                            ----------  ----------

PROFIT (LOSS) FROM OPERATIONS                  (30,049)     (8,642)

OTHER INCOME (EXPENSE)
  Interest Expense                                (151)     (3,265)
  Investment Income                                  0           0
  Miscellaneous (Note E)                        30,586         150
                                            ----------  ----------

NET (LOSS) PROFIT                           $      386  $  (11,757)
                                            ==========  ==========

NET (LOSS) PROFIT PER COMMON SHARE          $     0.00  $    (0.00)
                                            ==========  ==========


<FN>
     The accompanying notes are an integral part of these financial
statements.

</TABLE>
                                                               9

<PAGE>
<TABLE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES


                 CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Nine Months Ended September 30, 1998
                              (unaudited)

<CAPTION>
                                             09/30/98    09/30/97
                                            ----------  ----------
<S>                                         <C>         <C>
SERVICE REVENUES (Note D)                   $  500,570  $  504,283
                                            ----------  ----------
COST & EXPENSES
  Labor                                        384,483     384,540
  General & Administrative                     120,842     148,450
                                            ----------  ----------

  TOTAL COST & EXPENSES                        505,325     532,990
                                            ----------  ----------

PROFIT (LOSS) FROM OPERATIONS                   (4,755)    (28,707)

OTHER INCOME (EXPENSE)
  Interest Expense                              (6,311)     (9,786)
  Investment Income                                  0          42
  Miscellaneous (Note E)                        31,200          26
                                            ----------  ----------

NET (LOSS) PROFIT                           $   20,134  $  (38,425)
                                            ==========  ==========

NET (LOSS) PROFIT PER COMMON SHARE          $     0.00  $    (0.00)
                                            ==========  ==========


<FN>
     The accompanying notes are an integral part of these financial
statements.


</TABLE>
                                                               10

<PAGE>
<TABLE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES

                   CONSOLIDATED STATEMENT OF CASH FLOWS
               For the Nine Months Ended September 30, 1998
                              (unaudited)

<CAPTION>
                                             09/30/98    09/30/97
                                            ----------  ----------
<S>                                         <C>         <C>
CHANGE IN CASH AND SHORT-TERM INVESTMENTS:

    Net Profit (Loss)                       $   20,134  $  (26,668)
                                            ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Adjustments to reconcile net earnings
      to net cash provided by operating
      activities                                     0           0
    Depreciation                                     0         600
    Amortization                                 1,359         906
    Changes in assets and liabilities:
      Accounts receivable                       10,469      43,076
      Prepaid expenses                            (300)      9,602
      Due from officer                          16,235
      Accounts payable and accrued expenses     (7,895)     (4,423)
      Accrued salaries & related expenses        6,970       5,703
      Accrued legal fees                       (40,722)      1,800
      Deferred revenue                             (47)       (340)
                                            ----------  ----------

NET CASH PROVIDED BY (USED IN)
  OPERATING ACTIVITIES                           6,203      18,850
                                            ----------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Borrowings under line of credit 
      with bank                                      0           0
    Payments under line of credit with bank    (31,000)    (11,000)
    Borrowings on note payable to officer       22,906           0
    Payments under note payable to officer           0     (23,000)
                                            ----------  ----------

NET CASH PROVIDED BY FINANCING ACTIVITIES       (8,094)    (34,000)
                                            ----------  ----------

NET INCREASE (DECREASE) IN CASH                 (1,891)    (15,150)

CASH, beginning of period                        5,741       9,103
                                            ----------  ----------

CASH, end of period                         $    3,850  $   (6,047)
                                            ==========  ==========

<FN>
     The accompanying notes are an integral part of these financial
statements.

</TABLE>
                                                               11

<PAGE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR QUARTER ENDED
                   SEPTEMBER 30, 1998 (unaudited)

NOTE A:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation:

The consolidated financial statements include the accounts of National
Industrial Security Corporation (the "Company") and its two wholly owned
subsidiaries, neither of which operated in the three years ended
December 31, 1997, or during the 1998 fiscal year.  All material
intercompany balances have been eliminated.

In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (which include only normal
recurring accruals) necessary to fairly present the financial position
of the Company and its subsidiaries at September 30, 1998, and the
results of the operations and changes in its cash flows for the nine
month period ended September 30, 1998.

Depreciation and Amortization:

Property and equipment is depreciated on straight-line and accelerated
methods over the useful lives of the related assets which approximate
five years.  Leasehold improvements and equipment under capital leases
are amortized over the asset life or the lease term, if shorter.

Deferred charges at September 30, 1998 consist principally of goodwill
and patent costs which are being amortized over 20 years.  Accumulated
amortization of deferred charges was $20,724 at December 31, 1997, and
$22,083 at September 30, 1998.

Income/Loss per share

Income or loss per share computations are based on the weighted average
number of common shares outstanding each year.



                                                               12

<PAGE>
               NATIONAL INDUSTRIAL SECURITY CORPORATION
                          and SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR QUARTER ENDED
                    SEPTEMBER 30, 1998 (unaudited)
                             (continued)
 
NOTE B:  INCOME TAXES

At September 30, 1998, the Company had net operating loss carryforwards
aggregating approximately $819,000 expiring through year 2010, and new
jobs credit carryforwards of $8,450 expiring principally in 1998.

NOTE C:  COMMITMENTS AND CONTINGENCIES:

Leases:

The Company leases its office space under an operating lease on a month
to month basis.  Future minimum lease commitments under all non-
cancelable operating and capital leases in effect at September 30, 1998,
as follows:

                                             1998
                                            ------

          Operating leases                  $3,000
                                            ------

          TOTAL LEASE PAYMENTS              $3,000
                                            ======

Rent expense was $9,000 and $9,000 for the nine months ended September
30, 1998 and 1997, respectively.

NOTE D:  SIGNIFICANT CUSTOMERS:

Revenues with three major customers accounted for approximately 82% of
the total service revenues at September 30, 1998.  One of these major
clients has notified the Company that it will close the St. Louis World
Headquarters facility in coming months, and relocate to another city,
which could cause the termination of services and approximately $200,000
in annual revenues will be lost.

Accounts receivables from these three customers represents approximately
64% of total trade accounts receivable at September 30, 1998.

NOTE E:  MISCELLANEOUS INCOME

An account payable for past legal services was settled in full in the
quarter ended September 30, 1998, resulting in an adjustment to
miscellaneous income.

                                                               13

<PAGE>
                          SIGNATURES


           Pursuant to the requirements of Section 12 of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                         NATIONAL INDUSTRIAL SECURITY CORPORATION
                         (Registrant)

                         Dated:  October 28, 1998


                         By:/s/ Max T. Jackson
                            -------------------------------------
                            Max T. Jackson, President






                                                               14

<PAGE>
                     NATIONAL SECURITY INDUSTRIAL CORPORATION

                 Exhibit Index to Quarterly Report on Form 10-QSB
                     For the Quarter Ended September 30, 1998

EXHIBITS                                                 Page No.

  EX-27     Financial Data Schedule . . . . . . . . . . .     16







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