UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
      SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended October 27, 1996 

                                       OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
     SECURITIES EXCHANGE ACT OF 1934

               For the transition period from            to 

         Commission File Number...............0-16376.................

                          THE VALLEY FAIR CORPORATION
         .............................................................
             (Exact name of registrant as specified in its charter)

                   DELAWARE                       22-1727148
         .............................................................
         (State or other jurisdiction of        (I.R.S. Employer)
          incorporation or organization)        (Identification No.)

              260 Bergen Turnpike, Little Ferry, New Jersey 07643
         .............................................................
               (Address of principal executive offices) Zip Code

                                 (201) 440-4000
         .............................................................
              (Registrant's telephone number, including area code)

                                      NONE
         .............................................................
              (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  [ ] 

      APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
                           THE PRECEDING FIVE YEARS:
Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports to be filed by Sections 12, 13 or 15(D) of the  Securities  Exchange Act
of 1934 subsequent to the  distribution of the securities under a plan confirmed
by a court. Yes [X]  No  [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                          367,913 shares October 27, 1996
<PAGE>


               The Valley Fair Corporation and Subsidiary



                                 C O N T E N T S


                                                                         
         Consolidated  Condensed Balance Sheets October 27, 1996 and January 28,
         1996

         Consolidated   Condensed   Statements  of  Income  Thirteen  Weeks  and
         Thirty-nine  Weeks  Ended  October  27,  1996 and  Thirteen  Weeks  and
         Thirty-nine Weeks Ended October 29, 1995

         Consolidated Statements of Cash Flows - Thirty-nine Weeks Ended October
         27, 1996 Thirty-nine Weeks Ended October 29, 1995

         Notes to Consolidated Condensed Financial Statements

         Management's  Discussion  and  Analysis of the  Consolidated  Condensed
         Statements of Income

         Other Information and Signatures
<PAGE>
<TABLE>
<CAPTION>
                                  THE VALLEY FAIR CORPORATION AND SUBSIDIARY
                                         CONSOLIDATED BALANCE SHEETS
                                                 (Unaudited)

                                                                                   October 27,    January 28, 
                                                                                       1996          1996 
                                                                                   -----------   -----------
<C>                                                                                <C>           <C> 
     ASSETS 
Current assets:
  Cash .........................................................................   $ 3,357,432   $ 3,608,605
  Accounts and notes receivable-net ............................................     1,074,419       840,100
  Inventories ..................................................................    24,039,969    23,955,006
  Prepaid expenses .............................................................     1,260,117       582,341
  Deferred income taxes ........................................................       418,000       443,000
                                                                                   -----------   -----------
     Total current assets ......................................................    30,149,937    29,429,052

Property, plant, and equipment, net ............................................     4,123,562     4,265,859

Other assets ...................................................................       312,625       336,174
                                                                                   -----------   -----------
                                                                                    34,586,124    34,031,085
                                                                                   ===========   ===========

     LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Note payable - bank ..........................................................     9,560,000     9,710,300
  Current portion of long term debt ............................................        42,226        65,010
  Accounts payable     Trade....................................................     4,516,286     2,911,974
                       Affiliate ...............................................       255,572       405,764
  Accrued expenses and other current liabilities................................     2,117,498     1,626,208
                                                                                   -----------   -----------
     Total current liabilities .................................................    16,491,582    14,719,256
                                                                                   ===========   ===========

Long-term debt, less current maturities ........................................       200,703       233,569
Deferred income and security deposits ..........................................        54,838       113,081
Deferred income taxes ..........................................................       472,000       497,000
                                                                                   -----------   -----------
     Total liabilities .........................................................    17,219,123    15,562,906
                                                                                   ===========   ===========
<PAGE>
<CAPTION>
                                  THE VALLEY FAIR CORPORATION AND SUBSIDIARY
                                         CONSOLIDATED BALANCE SHEETS
                                                 (Unaudited)
                                                 (Continued)

                                                                                   October 27,    January 28, 
                                                                                       1996          1996 
                                                                                   -----------   -----------
<C>                                                                                <C>           <C> 
Stockholder's  equity Common stock par value
 $.30 per share;  authorized 666,666 shares,
  issued 367,913 shares at October 27, 1996
  367,983 shares at January 28, 1996 ...........................................       110,344       110,395
Additional paid-in capital .....................................................       798,375       802,754
Retained earnings ..............................................................    16,458,282    17,555,030
                                                                                   -----------   -----------
Total stockholders' equity .....................................................    17,367,001    18,468,179
                                                                                   ===========   ===========

Total liabilities and stockholders equity.......................................   $34,586,124   $34,031,085
                                                                                  =============  =========== 

The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                  THE VALLEY FAIR CORPORATION AND SUBSIDIARY
                                 CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                                 (Unaudited)

                                 Thirteen Weeks                 Thirty-nine Weeks
                             Ended           Ended           Ended           Ended
                          Oct.27,1996     Oct.29,1995     Oct.27,1996     Oct.29,1995
                         ------------    ------------    ------------    ------------
<S>                      <C>             <C>             <C>             <C>
Net sales
 excluding licensee ..   $ 14,460,429    $ 15,999,305    $ 43,679,875    $ 47,882,732

Cost of Sales ........     10,057,212      10,639,307      30,427,879      31,958,013
                         ------------    ------------    ------------    ------------
                            4,403,217       5,359,998      13,251,996      15,924,719

Tenant departments
 licensee revenue ....      1,294,997       1,208,290       4,070,144       3,609,720
                         ------------    ------------    ------------    ------------
                            5,698,214       6,568,288      17,322,140      19,534,439
                         ------------    ------------    ------------    ------------

Expenses:
 Selling, general ....      5,769,253       6,264,847      18,418,417      18,547,176
 and administrative
 Interest expense ....        186,568         257,589         559,898         770,235
                         ------------    ------------    ------------    ------------
                            5,955,821       6,522,436      18,978,315      19,317,411
 

Income - (Loss) before
 income taxes ........       (257,607)         45,852      (1,656,175)        217,028

Income taxes (benefit)              0          18,311        (559,400)         86,811
                         ------------    ------------    ------------    ------------
Net Income - (loss) ..   $   (257,607)   $    27, 541    $ (1,096,775)   $    130,217


Earnings per .........   $      (0.70)   $       0.07    $      (2.98)   $       0.35
 common share

Weighted average
 number of shares       
 outstanding..........        367,934         368,026         367,948         368,036   
                

The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                THE VALLEY FAIR CORPORATION AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
               Thirty-nine Weeks Ended October 27, 1996 and
                 Thirty-nine Weeks Ended October 29, 1995


                                                       1996              1995 
                                                   -----------      -----------
<S>                                                <C>              <C>
Cash flows from operating activities:

 Net income - (loss) .........................     $(1,096,775)     $   130,217

 Adjustments to reconcile
  net income to net cash
  provided by operating
  activities:

     Depreciation and amortization ...........         432,351          457,023
     Increase in accounts and
      notes receivable .......................        (234,319)         (43,981)
     Increase in inventories .................         (84,963)      (4,863,897)
     Increase in prepaid items ...............        (677,776)        (305,058)
     (Decrease) increase in deferred
      income and security deposits ...........         (58,243)          46,887
     Decrease in deferred taxes ..............             -0-              -0-
     Increase in accounts payable and
      accrued expenses .......................       1,945,410          722,232
     Decrease in cash value life
      insurance and other ....................          23,549           30,110
                                                   -----------      -----------

     Total adjustments .......................       1,346,009       (3,956,684)
                                                   -----------      -----------

     Net cash provided (used) by
      operating activities ...................         249,234       (3,826,467)
                                                   -----------      -----------

Cash flows from investing activities:

     Capital expenditures ....................        (290,027)        (249,178)
                                                   -----------      -----------

     Net cash used in investing
      activities .............................        (290,027)        (249,178)
                                                   -----------      -----------

<PAGE>
<CAPTION>
                THE VALLEY FAIR CORPORATION AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                 Thirty-nine Weeks Ended October 27, 1996
                 Thirty-nine Weeks Ended October 29, 1995
                                   (continued)


                                               1996              1995 
                                           ------------      ------------
<S>                                        <C>               <C>
Cash flows from financing activities:

     Proceeds from issuance
      of debt                                   -0-           3,689,000
     Principal payments of debt              (205,950)         (806,923)
     Purchase of common stock                  (4,430)             (884)
                                           ----------        ---------- 
     Net cash provided by
      financing activities                   (210,380)        2,881,193
                                           ----------        ---------- 

     Net increase (decrease)
      in cash                                ( 251,173)      (1,194,452)

     Cash and cash equivalents at
      beginning of period                    3,608,605        3,652,566
                                           -----------       ---------- 

     Cash and cash equivalents at
      end of period                        $3,357,432        $2,458,114
                                           ==========        ========== 

</TABLE>
<PAGE>
                THE VALLEY FAIR CORPORATION AND SUBSIDIARY
           NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
             For the Thirty-nine Weeks Ended October 27, 1996
                                   (Unaudited)


NOTE 1  -   BASIS OF PRESENTATION


            The financial information included herein is unaudited. In addition,
            the financial  information does not include all disclosures required
            under generally accepted accounting  principles because certain note
            information  included  in  the  company's  annual  report  has  been
            omitted:   however,   such  information   reflects  all  adjustments
            (consisting  solely of normal recurring  adjustments)  which are, in
            the opinion of  management,  necessary  to a fair  statement  of the
            result for the interim periods.

            The results of operations  for the  Thirty-nine  Weeks Ended October
            27,  1996  are  not  necessarily  indicative  of the  results  to be
            expected for the full year.

NOTE 1(b)

            Effective  February  1,  1993,  the  Company  adopted  statement  of
            Financial Accounting Standards No. 109, Accounting For Income Taxes.
            Statement  109 requires a charge for deferred  taxes to an asset and
            liability method of accounting for income taxes. Under the asset and
            liability method, deferred tax assets and liabilities are recognized
            for the future tax consequences. attributable to differences between
            the  financial  statement  carrying  amounts of existing  assets and
            liabilities and their respective tax bases. The change in accounting
            method for income taxes had no effect on  consolidated  earnings for
            the period and prior financial statements were not restated.


NOTE 2  -   EARNINGS PER SHARE

            Earnings  per share  were  computed  by  dividing  net income by the
            weighted average number of shares of common stock outstanding during
            the periods. The Company has purchased and retired additional shares
            during the current periods.  The earnings per share  calculation has
            been adjusted to reflect these retirements during the periods.

<PAGE>
                THE VALLEY FAIR CORPORATION AND SUBSIDIARY

        Management's Discussion and Analysis of Financial Condition
                            and Results of Operations

Results of Operations

Consolidated  net  sales  decreased  approximately  $4,203,000  or 8.8%  for the
thirty-nine  week period ended October 27, 1996, as compared to the  thirty-nine
weeks ended October 29, 1995.  Consolidated  net sales  decreased  $1,539,000 or
9.6% for the  thirteen  week period ended  October 27, 1996,  as compared to the
same prior year period. Same store sales decreased  approximately  $3,297,000 or
7.4 % for the  thirty-nine  week period as compared  with the prior year period.
Sales  decreased  $941,000 or 6.3% for the thirteen week period as compared with
the prior year period as  competition  and  economic  uncertainties  continue to
effect consumer  buying  patterns.  Tenant licensee  revenue and other increased
$460,000 or 12.7 % for the  thirty-nine  week period  ended  October 27, 1996 as
compared to the  thirty-nine  weeks  ended  October 29,  1995.  Tenant  licensee
revenue and other  increased  $87,000 or 7.2% for the thirteen week period ended
October 29, 1995 as compared to the same prior year period.

The gross  margins for the  thirty-nine  and thirteen week periods ended October
27,  1996 were 30.3% and 30.5%  respectively  as  compared  to 33.3%,  and 33.5%
respectively,  for both the periods a year ago. A decrease in merchandise  which
had been purchased on terms  favorable to the  Corporation and the change in mix
of sales from stores generated these lower margins.

Selling, general and administrative expenses decreased approximately $129,000 or
 .7% compared to the  thirty-nine  weeks ended October 29, 1995. For the thirteen
week period, selling,  general and administrative expenses decreased $496,000 or
7.9 % compared to the prior year period. For the thirty-nine weeks ended October
27, 1996 the decrease was due to those  expenses  directly  attributable  to the
sales decreases and partially offset by an increase in expenses  incurred in the
closing of sixteen locations.  For the thirteen weeks ended October 27, 1996 the
decrease was due to expenses directly  attributable to the sales decreases.  The
relationship of selling,  general and  administrative  expenses to net sales was
42.2% and 39.9%  respectively,  for the  thirty-nine  and thirteen  week periods
ended  October 27, 1996  compared  to 38.7% and 39.2 % for the  thirty-nine  and
thirteen week periods ended October 19, 1995.

Interest  expense for the  thirty-nine  weeks ended  October 27, 1996  decreased
approximately $210,000 or 27.3% as compared to the 1995 period. For the thirteen
week period ended October 27, 1996, interest expense decreased $71,000 or 28.0%.
These decreases are a result of decreased borrowings in the current year .

The  Corporation's  effective income tax benefit for the thirty-nine weeks ended
October 27, 1996 was $662,000 or 40.0%.  For the  thirty-nine  week period ended
October 30, 1995 the tax rate was $87,000 or 40%.

Liquidity and Capital Resources

As of  October  27,  1996,  the  Corporation's  cash and  short-term  investment
balances  amounted  to  $3,357,000.   The  Corporation's  principal  sources  of
liquidity are its available cash balances and funds  available  through its line
of credit.

The  Corporation  believes  that  its  cash  and  investment  balances  will  be
sufficient to meet its anticipated  needs throughout the remainder of the fiscal
year 1997.
<PAGE>
                       PART II    OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

          (b)  Reports  from 8-K - There  were no  reports on form 8-K filed for
               the quarter ended October 27, 1996.




                                   SIGNATURES

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


                                           THE VALLEY FAIR CORPORATION
                                           ---------------------------
                                                   (Registrant)


Date:  December 9, 1996                          /s/Erwin Lehr
                                                    ----------
                                                    Erwin Lehr 
                                                    President




Date:  December 9, 1996                          /s/Ross N. Alfieri
                                                    ---------------
                                                    Ross N. Alfieri  
                                                    Treasurer