SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------

                                   FORM 10-QSB

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2006

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________

Commission File No. 0-5278

                                 IEH CORPORATION
             (Exact name of registrant as specified in its charter)

           New York                                         1365549348
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                       Identification Number)


               140 58th Street, Suite 8E, Brooklyn, New York 11220
                    (Address of principal executive office)

       Registrant's telephone number, including area code: (718) 492-4440

                  --------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report.

         Check whether the Issuer: (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

2,303,468 shares of Common Shares, par value $.01 per share, were outstanding as
of September 29, 2006.

<PAGE>

                                 IEH CORPORATION

                                    CONTENTS

<TABLE>
<CAPTION>
                                                                                   Page
                                                                                  Number
                                                                                  ------
<S>                                                                                 <C>

PART I - FINANCIAL INFORMATION

ITEM 1- FINANCIAL STATEMENTS

         Balance Sheets as of September 29, 2006 (Unaudited) and March 31, 2006      4

         Statement of Operations (Unaudited) for the three and six months ended
              September 29, 2006 and September 23, 2005                              6

         Statement of Cash Flows (Unaudited) for the six months ended September
              29, 2006 and September 23, 2005                                        7

         Notes to Financial Statements (Unaudited)                                   9

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS                         19

ITEM 3 - CONTROLS AND PROCEDURES                                                    26

PART II - OTHER INFORMATION

ITEM 1 - Legal Proceedings                                                          26

ITEM 2 - Unregistered Sales of Equity Securities and Use of Proceeds                26

ITEM 3 - Defaults Upon Senior Securities                                            26

ITEM 4 - Submission of Matters to a Vote of Security Holders                        27

ITEM 5 - Other Information                                                          27

ITEM 6 - Exhibits and Reports on Form 8-K                                           27


                                       2
<PAGE>

SIGNATURES                                                                          27


EXHIBITS


Exhibit 31.1   Certification Pursuant to Section 302 of the Sarbanes Oxley Act      28


Exhibit 31.2   Certification Pursuant to Section 302 of the Sarbanes Oxley Act      29


Exhibit 32.1   Certification Pursuant to Section 906 of the Sarbanes Oxley Act      30


Exhibit 32.2   Certification Pursuant to Section 906 of the Sarbanes Oxley Act      31

</TABLE>





                                       3
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                   As of September 29, 2006 and March 31, 2006

<TABLE>
<CAPTION>

                                                                   Sept. 29,     March 31,
                                                                     2006         2006
                                                                  ----------   ----------
<S>                                                               <C>          <C>
                                                                  (Unaudited)    (Note 1)

                                     ASSETS

CURRENT ASSETS:
Cash                                                              $    8,476   $    8,742
Accounts receivable, less allowances for doubtful accounts of
    $11,562 at September 29, 2006 and March 31, 2006                 994,621      900,347
Inventories (Note 3)                                               1,373,000    1,540,423
Prepaid expenses and other current assets (Note 4)                    61,874       25,992
                                                                  ----------   ----------

          Total current assets                                     2,437,971    2,475,504
                                                                  ----------   ----------


PROPERTY, PLANT AND EQUIPMENT, less accumulated
   depreciation and amortization of $6,472,930 at September 29,
   2006 and $6,373,522 at March 31, 2006                           1,200,145    1,200,143
                                                                  ----------   ----------
                                                                   1,200,145    1,200,143
                                                                  ----------   ----------

OTHER ASSETS:
  Other assets                                                        23,266       23,177
                                                                  ----------   ----------
                                                                      23,266       23,177
                                                                  ----------   ----------

Total assets                                                      $3,661,382   $3,698,824
                                                                  ==========   ==========
</TABLE>


        The accompanying notes and should be read in conjunction with the
                             financial statements.


                                       4
<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                   As of September 29, 2006 and March 31, 2006

<TABLE>
<CAPTION>

                                                                     Sept. 29,       March 31,
                                                                       2006            2006
                                                                    -----------    -----------
<S>                                                                     <C>            <C>
                                                                    (Unaudited)      (Note 1)

                        LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts receivable financing (Note 6)                              $   412,828    $   269,099
Notes payable, equipment, current portion (Note 8)                        3,136          3,358
Loans payable- officers (Note 9)                                         12,000         79,000
Accrued corporate income taxes                                           16,331         33,697
Accounts payable                                                        668,929        775,870
Pension plan payable, current portion (Note 10)                          44,000         43,000
Other current liabilities (Note 7)                                      131,122        188,036
                                                                    -----------    -----------

          Total current liabilities                                   1,288,346      1,392,060
                                                                    -----------    -----------

LONG-TERM LIABILITIES:
Pension Plan payable, less current portion (Note 10)                          0         20,000
Notes payable, equipment, less current portion (Note 8)                   2,091          3,437
                                                                    -----------    -----------
          Total long-term liabilities                                     2,091         23,437
                                                                    -----------    -----------

          Total liabilities                                           1,290,437      1,415,497
                                                                    -----------    -----------

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at September 29, 2006 and
March 31, 2006                                                           23,035         23,035
Capital in excess of par value                                        2,744,573      2,744,573
Retained earnings (Deficit)                                            (396,663)      (484,281)
                                                                    -----------    -----------
          Total stockholders' equity                                  2,370,945      2,283,327
                                                                    -----------    -----------

          Total liabilities and stockholders' equity                $ 3,661,382    $ 3,698,824
                                                                    ===========    ===========
</TABLE>


          The accompanying notes should be read in conjunction with the
                              financial statements


                                       5
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                          Six Months Ended            Three Months Ended
                                          ----------------            ------------------
                                       Sept. 29,     Sept. 23,     Sept. 29,      Sept. 23,
                                         2006          2005          2006           2005
                                      -----------   -----------   -----------    -----------
<S>                                        <C>           <C>           <C>            <C>
REVENUE, net sales                    $ 3,042,925   $ 3,404,772   $ 1,446,766    $ 1,675,603
                                      -----------   -----------   -----------    -----------

COSTS AND EXPENSES

Cost of products sold                   2,258,859     2,291,465     1,106,041      1,140,706
Selling, general and administrative       549,658       552,463       278,560        300,002
Interest expense                           32,168        52,634        15,376         25,217
Depreciation and amortization              99,409        90,120        49,704         45,060
                                      -----------   -----------   -----------    -----------
                                        2,940,094     2,986,682     1,449,681      1,510,985
                                      -----------   -----------   -----------    -----------


OPERATING INCOME                          102,831       418,090        (2,915)       164,618

OTHER INCOME                                  786           402           208            344
                                      -----------   -----------   -----------    -----------

INCOME BEFORE INCOME TAXES                103,617       418,492        (2,707)       164,962

PROVISION FOR INCOME TAXES                 16,000        38,000         5,500         13,322
                                      -----------   -----------   -----------    -----------

NET INCOME                            $    87,617   $   380,492   $    (8,207)   $   151,640
                                      ===========   ===========   ===========    ===========

BASIC AND DILUTED EARNINGS PER
SHARE                                 $       .04   $       .17   $      (.01)   $       .07
                                      ===========   ===========   ===========    ===========


WEIGHTED AVERAGE NUMBER OF
COMMON SHARES
OUTSTANDING (in thousands)                  2,303         2,303         2,303          2,303
                                      ===========   ===========   ===========    ===========
</TABLE>


          The accompanying notes should be read in conjunction with the
                              financial statements

                                       6
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       Six Months Ended
                                                                    ----------------------
                                                                    Sept. 29,    Sept. 23,
                                                                       2006        2005
                                                                    ---------    ---------
<S>                                                                   <C>          <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                          $  87,617    $ 380,492
                                                                    ---------    ---------

Adjustments to reconcile net income to net cash used in operating
  activities:
Depreciation and amortization                                          99,409       90,120

Changes in assets and liabilities:
(Increase) decrease in accounts receivable                            (94,274)      17,344
(Increase) decrease inventories                                       167,423      (32,697)
(Increase) decrease in prepaid expenses and other current assets      (35,882)     (13,769)
(Increase) decrease in other assets                                       (89)      18,530

Increase (decrease) in accounts payable                              (106,941)     (57,031)
Increase (decrease) in other current liabilities                      (56,914)     (38,546)
Increase (decrease) in accrued corporate income taxes                 (17,366)      20,336
Increase (decrease) in union health and welfare plan                       --
Increase (decrease) in due to pension plan payable                    (19,000)     (43,000)
                                                                    ---------    ---------

          Total adjustments                                           (63,634)     (38,713)
                                                                    ---------    ---------

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                       23,983      341,779
                                                                    ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property, plant and equipment                          (99,410)     (97,328)
                                                                    ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES                               $ (99,410)   $ (97,328)
                                                                    =========    =========
</TABLE>

          The accompanying notes should be read in conjunction with the
                              financial statements

                                       7
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash
                                   (Unaudited)


                                                         Six Months Ended
                                                      ----------------------

                                                       Sept. 29,   Sept. 23,
                                                         2006         2005
                                                      ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable                   $  (1,568)   $  (2,535)
Proceeds from accounts receivable financing             143,729     (166,070)
Proceeds from loans payable- officers                   (67,000)     (55,844)
                                                      ---------    ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES      75,161     (224,449)
                                                      ---------    ---------

INCREASE (DECREASE) IN CASH                                (266)      20,002

CASH, beginning of period                                 8,742       25,154
                                                      ---------    ---------

CASH, end of period                                   $   8,476    $  45,156
                                                      =========    =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the six months for:

     Interest                                         $  27,110    $  45,694
                                                      =========    =========

     Income Taxes                                     $  29,962    $  17,664
                                                      =========    =========



             The accompanying should be read in conjunction with the
                              financial statements

                                       8
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1-  INTERIM RESULTS AND BASIS OF PRESENTATION:

         The accompanying unaudited financial statements as of September 29,
         2006 and September 23, 2005 and for the six months then ended have been
         prepared in accordance with generally accepted accounting principles
         for interim financial information and with the instructions to Form
         10-QSB and Items 303 and 310 of Regulation S-B. In the opinion of
         management, the unaudited financial statements have been prepared on
         the same basis as the annual financial statements and reflect all
         adjustments, which include only normal recurring adjustments, necessary
         to present fairly the financial position as of September 29, 2006 and
         September 23, 2005 and the results of operations and cash flows for the
         six months then ended. The financial data and other information
         disclosed in these notes to the interim financial statements related to
         these periods are unaudited. The results for the six months ended
         September 29, 2006, are not necessarily indicative of the results to be
         expected for any subsequent quarter or the entire fiscal year. The
         balance sheet at March 31, 2006 has been derived from the audited
         financial statements at that date.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted pursuant to the
         Securities and Exchange Commission's rules and regulations. The Company
         believes, however, that the disclosures in this report are adequate to
         make the information presented not misleading in any material respect.
         The accompanying financial statements should be read in conjunction
         with the audited financial statements of IEH Corporation as of March
         31, 2006 and notes thereto included in the Company's report on Form
         10-KSB as filed with the Securities and Exchange Commission.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

         Description of Business:

         The Company is engaged in the design, development, manufacture and
         distribution of high performance electronic printed circuit connectors
         and specialized interconnection devices. Electronic connectors and
         interconnection devices are used in providing electrical connections
         between electronic component assemblies. The Company develops and
         manufactures connectors, which are designed for a variety of high
         technology and high performance applications, and are primarily
         utilized by those users who require highly efficient and dense (the
         space between connection pins with the connector) electrical
         connections.

         The Company is continuously redesigning and adapting its connectors to
         meet and keep pace with developments in the electronics industry and
         has, for example, developed connectors for use with flex-circuits now
         being used in aerospace programs, computers, air-borne communications
         systems, testing systems and other areas. The Company also services its
         connectors to meet specified product requirements.

                                       9
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

         Revenue Recognition:

         Revenues are recognized at the shipping date of the Company's products.
         The Company has historically adopted the shipping terms that title
         merchandise passes to the customer at the shipping point (FOB Shipping
         Point). At this juncture, title has passed, the Company will recognize
         the sale, inventory has been relieved, and the customer will be
         invoiced. The Company does not offer any discounts, credits or other
         sales incentives.

         The Company's policy with respect to customer returns and allowances as
         well as product warranty is as follows:

         The Company will accept a return of defective product within one year
         from shipment for repair or replacement at the Company's option. If the
         product is repairable, the Company at its own cost will repair and
         return to the customer. If unrepairable, the Company will either offer
         an allowance against payment or will reimburse the customer for the
         total cost of product.

         Most of the Company's products are custom ordered by customers for a
         specific use. The Company provides engineering services as part of the
         relationship with its customers in developing the custom product. The
         Company is not obligated to provide such engineering service to its
         customers. The Company does not charge separately for these services.

         Inventories:

         Inventories are stated at cost, on a first-in, first-out basis, which
         does not exceed market value.

         The Company manufactures products pursuant to specific technical and
         contractual requirements. The Company historically purchases material
         in excess of its requirements to avail itself of favorable pricing as
         well as the possibility of receiving additional orders from customers.
         This excess may result in material not being used in subsequent
         periods, which may result in this material being deemed obsolete.

         The Company annually reviews its purchase and usage activity of its
         inventory of parts as well as work in process and finished goods to
         determine which items of inventory have become obsolete within the
         framework of current and anticipated orders. The Company based upon
         historical experience has determined that if a part has not been used
         and purchased or an item of finished goods has not been sold in three
         years, it is deemed to be obsolete. The Company estimates which
         materials may be obsolete and which products in work in process or
         finished goods may be sold at less than cost. A periodic adjustment,
         based upon historical experience is made to inventory in recognition of
         this impairment.

                                       10
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

         Concentration of Credit Risk:

         The Company maintains cash balances at one bank. Amounts on deposit are
         insured by the Federal Deposit Insurance Corporation up to $100,000 in
         the aggregate. There were no uninsured balances at either September 29,
         2006 or March 31, 2006.

         Property, Plant and Equipment:

         Property, plant and equipment is stated at cost less accumulated
         depreciation and amortization. The Company provides for depreciation
         and amortization using the Double Declining Balance method over the
         estimated useful lives (5-7 years) of the related assets.

         Maintenance and repair expenditures are charged to operations, and
         renewals and betterments are capitalized. Items of property, plant and
         equipment, which are sold, retired or otherwise disposed of, are
         removed from the asset and accumulated depreciation or amortization
         account. Any gain or loss thereon is either credited or charged to
         operations.

         Income Taxes:

         The Company follows the policy of treating investment tax credits as a
         reduction in the provision for federal income tax in the year in which
         the credit arises or may be utilized. Deferred income taxes arise from
         temporary differences resulting from different depreciation methods
         used for financial and income tax purposes. The Company has adopted
         Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
         for Income Taxes".

         Net Income Per Share:

         The Company has adopted the provisions of SFAS No. 128, "Earnings Per
         Share", which requires the disclosure of "basic" and "diluted" earnings
         (loss) per share. Basic earnings per share is computed by dividing net
         income by the weighted average number of common shares outstanding
         during each period. Diluted earnings per share is similar to basic
         earnings per share except that the weighted average number of common
         shares outstanding is increased to reflect the dilutive effect of
         potential common shares, such as those issuable upon the exercise of
         stock or warrants, as if they had been issued. For the six months ended
         September 29, 2006 and September 23, 2005, there were no items of
         potential dilution that would impact on the computation of diluted
         earnings or loss per share.

         Fair Value of Financial Instruments:

         The carrying value of the Company's financial instruments, consisting
         of accounts receivable, accounts payable, and borrowings, approximate
         their fair value due to the relatively short maturity (three months) of
         these instruments.

                                       11
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

         Use of Estimates:

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities, revenues and expenses, and disclosure of contingent assets
         and liabilities at the date of the financial statements. Actual amounts
         could differ from those estimates.

         Impairment of Long-Lived Assets:

         SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To Be
         Disposed Of", requires that long-lived assets and certain identifiable
         intangibles to be held and used by an entity be reviewed for impairment
         whenever events or changes in circumstances indicate that the carrying
         amount of an asset may not be recoverable. The Company has adopted SFAS
         No. 121. There were no long-lived asset impairments recognized by the
         Company for the six months ended September 29, 2006 and September 23,
         2005.

         Reporting Comprehensive Income:

         The Company has adopted the provisions of SFAS No. 130, "Reporting
         Comprehensive Income". This statement established standards for
         reporting and display of comprehensive income and its components
         (revenues, expenses, gains and losses) in an entity's financial
         statements. This Statement requires an entity to classify items of
         other comprehensive income by their nature in a financial statement and
         display the accumulated balance of other comprehensive income
         separately from retained earnings and additional paid-in capital in the
         equity section of a statement of financial position. There were no
         material items of comprehensive income to report for the six months
         ended September 29, 2006 and September 23, 2005.

         Segment Information:

         The Company has adopted the provisions of SFAS No. 131, "Disclosures
         About Segment of An Enterprise and Related Information." This Statement
         requires public enterprises to report financial and descriptive
         information about its reportable operating segments and establishes
         standards for related disclosures about product and services,
         geographic areas, and major customers. The adoption of SFAS No. 131 did
         not affect the Company's presentation of its results of operations or
         financial position.

         Research and Development:

         The Company provides personalized engineering services to its customers
         by designing connectors for specific customer applications. The
         employment of electromechanical engineers

                                       12
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

         Research and Development (continued):

         is the anticipated cornerstone of the Company's future growth. The
         Company maintains a testing laboratory where its engineers experiment
         with new connector designs based on changes in technology and in an
         attempt to create innovative, more efficient connector designs.

         The Company did not expend any funds on customer-sponsored research and
         development during the six months ended September 29, 2006 and
         September 23, 2005. In addition the Company did not receive any
         revenues related to customer sponsored research and development
         activities during the six months ended September 29, 2006 and September
         23, 2005.

         Effect of New Accounting Pronouncements:

         The Company does not believe that any recently issued but not yet
         effective accounting standards, have a material effect on the Company's
         financial position, results of operations or cash flows.

Note 3 - INVENTORIES:

         Inventories are stated at cost, on a first-in, first-out basis, which
         does not exceed market value.

         The Company manufactures products pursuant to specific technical and
         contractual requirements. The Company historically purchases material
         in excess of its requirements to avail itself of favorable pricing as
         well as the possibility of receiving additional orders from customers.
         This excess may result in material not being used in subsequent
         periods, which may result in this material being deemed obsolete.

         The Company annually reviews its purchase and usage activity of its
         inventory of parts as well as work in process and finished goods to
         determine which items of inventory have become obsolete within the
         framework of current and anticipated orders. The Company based upon
         historical experience has determined that if a part has not been used
         and purchased or an item of finished goods has not been sold in three
         years, it is deemed to be obsolete. The Company estimates which
         materials may be obsolete and which products in work in process or
         finished goods may be sold at less than cost. A periodic adjustment,
         based upon historical experience is made to inventory in recognition of
         this impairment.


                                       13
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 3 - INVENTORIES (continued):

         Inventories are comprised of the following:

                                      Sept. 29,    March 31,
                                        2006         2006
                                     ----------   ----------

         Raw materials               $  809,246   $  907,849
         Work in progress               116,293      130,480
         Finished goods                 447,461      502,094
                                     ----------   ----------

                                     $1,373,000   $1,540,423
                                     ==========   ==========


Note 4 - PREPAID EXPENSES AND OTHER CURRENT ASSETS:

         Prepaid expenses and other current assets are comprised of the
         following:


                                    Sept. 29,      March 31,
                                       2006          2006
                                   -----------   -----------

         Prepaid insurance         $    12,679   $    13,955
         Prepaid corporate taxes        31,128        11,905
         Other current assets           18,067           132
                                   -----------   -----------
                                   $    61,874   $    25,992
                                   ===========   ===========

Note 5 - PROPERTY, PLANT AND EQUIPMENT:

         Property, plant and equipment are as follows:


                                          Sept. 29,    March 31,
                                            2006         2006
                                         ----------   ----------

         Computers                       $  205,799   $  205,799
         Leasehold improvements             585,831      585,831
         Machinery and equipment          4,761,604    4,705,561
         Tools and dies                   1,956,356    1,912,989
         Furniture and fixture              155,935      155,935
         Website development cost             7,550        7,550
                                         ----------   ----------

                                          7,673,075    7,573,665
         Less: accumulated
         depreciation and amortization    6,472,930    6,373,522
                                         ----------   ----------

                                       14
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 5 - PROPERTY, PLANT AND EQUIPMENT(continued):

                                          -----------   ----------

                                          $ 1,200,145   $1,200,143
                                          ===========   ==========


Note 6 - ACCOUNTS RECEIVABLE FINANCING:

         The Company entered into an accounts receivable financing agreement
         whereby it can borrow up to eighty percent of its eligible receivables
         (as defined in the agreement) at an interest rate of 2 1/2 % above JP
         Morgan Chase's publicly announced rate of 8.25% at September 29, 2006,
         with a minimum of 12% per annum. The agreement has an initial term of
         one year and will automatically renew for successive one-year terms,
         unless terminated by the Company or Lender upon receiving sixty days
         prior notice. The loan is secured by the Company's accounts receivable
         and inventories. The balance due under this agreement as of September
         29, 2006 was $412,828. The balance due as of March 31, 2006 was
         $269,099.

Note 7 - OTHER CURRENT LIABILITIES:

         Other current liabilities are comprised of the following:

                                          Sept. 29,    March 31,
                                            2006         2006
                                         ----------   ----------

         Payroll and vacation accruals   $   78,724   $  169,919
         Sales commissions                   11,599       15,367
         Other                               40,799        2,750
                                         ----------   ----------
                                         $  131,122   $  188,036
                                         ==========   ==========

Note 8 - NOTES PAYABLE EQUIPMENT:

         The Company financed the acquisition of new equipment with notes
         payable. The notes are payable over a sixty month period. The balance
         remaining at September 29, 2006 amounted to $5,227. The interest rate
         on the remaining lease is 22%.

         Aggregate future principal payments are as follows:

               Fiscal Year Ending March:
           2007                                        $  1,568
           2008                                           3,136
           2009                                             523
                                                       --------
                                                       $  5,227
                                                       ========

                                       15
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 9 - RELATED PARTIES TRANSACTIONS:

         During the year ended March 26, 2004, two of the Company's officers
         loaned the Company a total of $52,000 on a non-interest bearing basis.
         The Company used these funds as a source of additional working capital.

         During the year ended March 25, 2005, one of these officers loaned the
         Company an additional $135,744 on a non-interest bearing basis as well.
         These funds were also used by the Company for working capital
         requirements.

         During the year ended March 31, 2006, the Company had repaid $108,744
         of the total funds loaned to it. The balance as of March 31, 2006 was
         $79,000.

         During the six months ended September 29, 2006, the Company repaid an
         additional $67,000. As of September 29, 2006 the balance owed to these
         officers was $12,000.

Note 10 - PENSION PLAN-SALARIED PERSONNEL:

         On June 30, 1995, the Company applied to the Pension Benefit Guaranty
         Corporation ("PBGC") to have the PBGC assume all of the Company's
         responsibilities and liabilities under its Salaried Pension Plan. On
         April 26, 1996, the PBGC determined that the Salaried Pension Plan did
         not have sufficient assets available to pay benefits, which were and
         are currently due under the terms of the Plan.

         The PBGC further determined that pursuant to the provisions of the
         Employment Retirement Income Security Act of 1974, as amended
         ("ERISA"), that the Plan must be terminated in order to protect the
         interests of the Plan's participants. Accordingly, the PBGC proceeded
         pursuant to ERISA to have the Plan terminated and the PBGC appointed as
         statutory trustee, and to have July 31, 1995 established as the Plan's
         termination date.

         The Company and the PBGC negotiated a settlement on the entire matter
         and on July 2, 2001, an agreement was reached whereby the Company's
         liability to the PBGC was reduced to $244,000. The Company will make
         monthly payments to the PBGC as follows:

              September 1, 2003 to August 1, 2004       $2,000 per month
              September 1, 2004 to August 1, 2006       $3,000 per month
              September 1, 2006 to August 1, 2007       $4,000 per month


         Additionally, the Company has made balloon payments of $25,000 each on
         January 1, 2004, May 1, 2004, May 1, 2005 and January 1, 2006.

         The Company also granted the PBGC a lien on the Company's machinery and
         equipment.

                                       16
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 10 - PENSION PLAN-SALARIED PERSONNEL (continued):

         As a result of this agreement the amount due the PBGC was restated to
         $244,000. $19,000 was paid during the six months ended September 29,
         2006. $86,000 was paid during the year ended March 31, 2006; $56,000
         was paid during the year ended March 25, 2005 and $39,000 was paid
         during the year ended March 26, 2004. The balance of $44,000 is
         reported as a current liability in the accompanying balance sheet.

Note 11 - CHANGES IN STOCKHOLDERS' EQUITY:

         The accumulated deficit decreased by $87,617, which represents the net
         income for the six months ended September 29, 2006.

Note 12 - 2001 EMPLOYEE STOCK OPTION PLAN:

         On September 21, 2001 the Company's shareholders approved the adoption
         of the Company's 2002 Employees Stock Option Plan to provide for the
         grant of options to purchase up to 750,000 shares of the Company's
         common stock to all employees, including senior management.

         Options granted to employees under this plan may be designated as
         options which qualify for incentive stock option treatment under
         Section 422A of the Internal Revenue Code, or options which do not so
         qualify.

         Under this plan, the exercise price of an option designated as an
         Incentive Stock Option shall not be less than the fair market value of
         the Company's common stock on the day the option is granted. In the
         event an option designated as an incentive stock option is granted to a
         ten percent (10%) shareholder, such exercise price shall be at least
         110 Percent (110%) of the fair market value or the Company's common
         stock and the option must not be exercisable after the expiration of
         five years from the day of the grant.

         Exercise prices of non-incentive stock options may be less than the
         fair market value of the Company's common stock.

         The aggregate fair market value of shares subject to options granted to
         a participant(s), which are designated as incentive stock options, and
         which become exercisable in any calendar year, shall not exceed
         $100,000. As of September 29, 2006 no options had been granted under
         the plan.

Note 13 - CASH BONUS PLAN:

         In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
         Executive Officers. Contributions to the Cash Bonus Plan are made by
         the Company when pre-tax operating profits exceed $150,000 for a fiscal
         year, and then to the extent of 10% of the excess of the greater of
         $150,000 or 25% of pre-tax operating profits. There was no contribution
         for the six months

                                       17
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note 13 - CASH BONUS PLAN (continued):

         ended September 29, 2006. For the year ended March 31, 2006 the
         contribution was $75,500. The contribution for the year ended March 25,
         2005 was $4,188.

Note 14 - COMMITMENTS:

         The Company leases it facility under a renewed tenure lease agreement,
         which expires on August 23, 2011. The Company is obligated under this
         lease at minimum annual rentals as follows:

         Fiscal year ending March:

         2007                      $  56,382
         2008                        112,765
         2009                        112,765
         2010                        112,765
         2011                         75,177
                                   ---------
                                   $ 469,854
                                   =========

         The rental expense for the six months ended September 29, 2006 and
         September 23, 2005 was $69,296 and $66,575, respectively.

         Rental expense for the six months ended September 29, 2006 includes a
         surcharge of $12,914.

Note 14  COMMITMENTS (continued):

         The Company has a collective bargaining multi-employer pension plan
         with the United Auto Workers of America, Local 259. Contributions are
         made in accordance with a negotiated labor contract and are based on
         the number of covered employees employed per month. With the passage of
         the Multi-Employer Pension Plan Amendments Act of 1990 (the "Act"), the
         Company may become subject to liabilities in excess of contributions
         made under the collective bargaining agreement. Generally, these
         liabilities are contingent upon the termination, withdrawal, or partial
         withdrawal from the Plan.

         The Company has not taken any action to terminate, withdraw or
         partially withdraw from the Plan nor does it intend to do so in the
         future. Under the Act, liabilities would be based upon the Company's
         proportional share of the Plan's unfunded vested benefits, which is
         currently not available. The amount of accumulated benefits and net
         assets of such Plan also is not currently available to the Company. The
         total contributions charged to operations under this pension plan were
         $33,925 for the six months ended September 29, 2006 and $30,994 for the
         six months ended September 23, 2005.

                                       18
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

Statements contained in this report, which are not historical facts may be
considered forward-looking information with respect to plans, projections, or
future performance of the Company as defined under the Private Securities
litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ materially
from those projected. The words "anticipate", "believe", "estimate", "expect",
"objective", and "think" or similar expressions used herein are intended to
identify forward-looking statements. The forward-looking statements are based on
the Company's current views and assumptions and involve risks and uncertainties
that include, among other things, the effects of the Company's business, actions
of competitors, changes in laws and regulations, including accounting standards,
employee relations, customer demand, prices of purchased raw material and parts,
domestic economic conditions, including housing starts and changes in consumer
disposable income, and foreign economic conditions, including currency rate
fluctuations. Some or all of the facts are beyond the Company's control.

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related footnotes, which provide
additional information concerning the Company's financial activities and
condition.

Critical Accounting Policies

The Financial Statements have been prepared in accordance with accounting
principles generally accepted in the United States of America, which require the
Company to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the Financial Statements, and revenues and
expenses during the periods reported. Actual results could differ from those
estimates. The Company believes the following are the critical accounting
policies, which could have the most significant effect on the Company's reported
results and require the most difficult, subjective or complex judgments by
management.


o        Impairment of Long-Lived Assets:
         The Company reviews its long-lived assets for impairment whenever
         events or circumstances indicate that the carrying amount of an asset
         may not be recoverable. If the sum of the expected cash flows,
         undiscounted and without interest is less than the carrying amount of
         the asset, an impairment loss is recognized as the amount by which the
         carrying amount of the asset exceeds its fair value. The Company makes
         estimates of its future cash flows related to assets subject to
         impairment review.

o        Inventory Valuation:
         Raw materials and supplies are valued at the lower of first-in,
         first-out cost or market. Finished goods and work in process are valued
         at the lower of actual cost, determined on a specific identification
         basis, or market. The Company estimates which materials may be obsolete
         and which products in work in process or finished goods may be sold at
         less than cost, and adjusts their inventory value accordingly. Future
         periods could include either income or expense items if estimates
         change and for differences between the estimated and actual amount
         realized from the sale of inventory.

                                       19
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                            OPERATIONS (continued):

Critical Accounting Policies (continued):

o        Income Taxes:
         The Company records a liability for potential tax assessments based on
         its estimate of the potential exposure. Due to the subjectivity and
         complex nature of the underlying issues, actual payments or assessments
         may differ from estimates. Income tax expense in future periods could
         be adjusted for the difference between actual payments and the
         Company's recorded liability based on its assessments and estimates.

o        Revenue Recognition:
         Revenues are recognized at the shipping date of the Company's products.
         The Company has historically adopted the shipping terms that title
         merchandise passes to the customer at the shipping point (FOB Shipping
         Point). At this juncture, title has passed, the Company will recognize
         the sale, inventory has been relieved, and the customer will be
         invoiced. The Company does not offer any discounts, credits or other
         sales incentives.

         The Company's policy with respect to customer returns and allowances as
         well as product warranty is as follows:

         The Company will accept a return of defective product within one year
         from shipment for repair or replacement at the Company's option. If the
         product is repairable, the Company at its own cost will repair and
         return it to the customer. If unrepairable, the Company will either
         offer an allowance against payment or will reimburse the customer for
         the total cost of the product.

         Most of the Company's products are custom ordered by customers for a
         specific use. The Company provides engineering services as part of the
         relationship with its customers in developing the custom product. The
         Company is not obligated to provide such engineering service to its
         customers. The Company does not charge separately for these services.

o        Research & Development:
         The Company provides personalized engineering services to its customers
         by designing connectors for specific customer applications. The
         employment of electromechanical engineers is the anticipated
         cornerstone of the Company's future growth. The Company maintains a
         testing laboratory where its engineers experiment with new connector
         designs based on changes in technology and in an attempt to create
         innovative, more efficient connector designs.

                                       20
<PAGE>


                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                             OPERATIONS (continued):

Results of Operations

Comparative Analysis-Six Months Ended September 29, 2006 and September 23, 2005

The following table sets forth for the periods indicated, percentages for
certain items reflected in the financial data as such items bear to the revenues
of the Company:

              Relationship to Total Revenues
                                                          Sept. 29,   Sept. 23,
                                                             2006        2005
                                                          ---------   ---------

         Operating Revenues (in thousands)                $   3,043   $   3,405
                                                          ---------   ---------

         Operating Expenses:
           (as a percentage of Operating Revenues)

                   Costs of Products Sold                     74.23%      67.30%
                     Selling, General and Administrative      18.06%      16.23%
                     Interest Expense                          1.06%       1.55%
                     Depreciation and amortization             3.27%       2.65%
                                                          ---------   ---------

                            TOTAL COSTS AND EXPENSES          96.62%      87.73%
                                                          ---------   ---------

         Operating Income (loss)                               3.38%      12.27%

         Other Income                                           .03%         --
                                                          ---------   ---------

         Income (loss) before Income Taxes                     3.41%      12.27%

         Income Taxes                                           .53%       1.12%
                                                          ---------   ---------

         Net Income (loss)                                     2.88%      11.15%
                                                          =========   =========

Operating revenues for the six months ended September 29, 2006 amounted to
$3,042,925 reflecting a 10.6% decrease versus the six months ended September 23,
2005 revenues of $3,404,772. The decrease in revenues is a direct result of
completion of open orders during the six months ended September 29, 2006.

Cost of products sold amounted to $2,258,859 for the six months ended September
29, 2006, or 74.23% of operating revenues. This reflected a $32,606 or 1.4%
decrease in the cost of products sold from $2,291,465 or 67.30% of operating
revenues for the six months ended September 23, 2005. This decrease is due
primarily to the reduced cost of production associated with the decrease in
sales.

                                       21
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                            OPERATIONS (continued):

Comparative Analysis-Six Months Ended September 29, 2006 and September 23, 2005
(continued):

Selling, general and administrative expenses were $549,658 and $552,463 or
18.06% and 16.23% of operating revenues for the six months ended September 29,
2006 and September 23, 2005, respectively. This category of expense decreased by
$2,805 or 1.0% from the prior year. The decrease can be attributed to a decrease
in commissions and travel.

Interest expense was $32,168 for the six months ended September 29, 2006 or
1.06% of operating revenues. For the fiscal six months ended September 23, 2005,
interest expense was $52,634 or 1.55% of operating revenues. The decrease of
$20,466 or 38.88% reflects the repayment of interest bearing liabilities.

Depreciation and amortization of $99,409 or 3.27% of operating revenues was
reported for the six months ended September 29, 2006. This reflects an increase
of $9,289 from the prior six months ended September 23, 2005 of $90,120 or 2.65%
of operating revenues. The increase is due primarily to the purchase of new
capital assets.

The Company reported net income of $87,617 for the six months ended September
29, 2006 representing basic earnings of $.04 per share as compared to a net
income of $380,492 or $.17 per share for the six months ended September 23,
2005. The decrease in net income for the current year can be attributed
primarily to the reported decrease in commercial sales.

Comparative Analysis-Three Months Ended September 29, 2006 and September 23,
2005

Three months ended September 29, 2006 compared to the three months ended
September 23, 2005:

The following table sets forth for the periods indicated, percentages for
certain items reflected in the financial data as such items bear to the revenues
of the Company:

<TABLE>
<CAPTION>
                                                                         Three Months Ended
                                                                       ----------------------
                                                                       Sept. 29,     Sept. 23,
                                                                          2006          2005
                                                                       ---------     ---------
<S>                                                                         <C>           <C>
         Operating Revenues (in thousands)                             $   1,447     $   1,676
                                                                       ---------     ---------

         Operating Expenses: (as a percentage of operating revenues)
         Cost of Products Sold                                             76.43%        68.08%
         Selling, General and Administrative                               19.28%        17.90%
         Interest Expense                                                   1.04%         1.51%
         Depreciation and Amortization                                      3.46%         2.69%
                                                                       ---------     ---------
                   Total Costs and Expenses                               100.21%        90.18%
                                                                       ---------     ---------

         Operating Income (loss)                                            (.21)%        9.82%
         Other Income                                                         --            --
                                                                       ---------     ---------
         Income (loss) before Income Taxes                                  (.21)%        9.82%
         Income Taxes                                                        .35%          .79%
                                                                       ---------     ---------
         Net Income (loss)                                                  (.55)%        9.03%
                                                                       =========     =========
</TABLE>

                                       22
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                            OPERATIONS (continued):


Comparative Analysis -Three Months Ended September 29, 2006 and September 23,
2005 (continued):

Operating revenues for the three months ended September 29, 2006 amounted to
$1,446,766, reflecting a 13.66% decrease versus the comparative three months
ended September 23, 2005 operating revenues of $1,675,603. The decrease is a
direct result of the completion of open orders during the quarter ended
September 29, 2006.

Cost of products sold amounted to $1,106,041 for the three months ended
September 29, 2006 or 76.43% of operating revenues. This reflected a decrease of
$34,665 or 3.04% of the cost of products sold of $1,140,706 or 68.08% for the
three months ended September 23, 2005. The decrease represents the cost
associated with the decrease in sales.

Selling, general and administrative expenses for the three months ended
September 29, 2006 were $278,560 or 19.28% of revenues compared to $300,002 or
17.90% of revenues for the comparable three-month period ended September 23,
2005. This decrease was due primarily to a decrease in sales commissions and
travel.

Interest expense was $15,376 or 1.04% of revenues for the period ended September
29, 2006 as compared to $25,217 or 1.51% of revenues in the three-month period
ended September 23, 2005. The decrease in interest is associated with the
Company's repayment of its loans payable.

Depreciation and amortization of $49,704 or 3.46% of revenues was reported for
the three-month period ended September 29, 2006. This reflects an increase of
$4,644 or 10.31% from the comparable three-month period ended September 23, 2005
of $45,060 or 2.69% of revenues. The increase is due primarily to the purchase
of new capital assets.

The Company reported a net loss of $8,207 for the three months ended September
29, 2006 representing basic loss per common share of $.01 as compared to basic
income of $151,640 or $.07 earnings per common share for the three months ended
September 23, 2005. The decrease in net income for the current year can be
attributed primarily to the reported decrease in commercial sales.

Liquidity and Capital Resources:

The Company reported working capital of $1,149,625 as of September 29, 2006
compared to a working capital of $1,083,444 as of March 31, 2006. The increase
in working capital of $66,181 attributable to the following items:

        Net income                                         $  87,617
        Depreciation and amortization                         99,409
        Capital expenditures                                 (99,410)
        Other transactions                                   (21,435)

As a result of the above, the current ratio (current assets to current
liabilities) was 1.9 to 1.0 at September 29, 2006 as compared to 1.8 to 1.0 at
March 31, 2006. Current liabilities at September 29, 2006 were $1,288,346
compared to $1,392,060 at March 31, 2006.

                                       23
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                            OPERATIONS (continued):

Liquidity and Capital Resources (continued):

The Company reported $99,410 in capital expenditures for the six months ended
September 29, 2006 and reported depreciation of $97,328 for the same six-month
period.

The net income of $87,617 for the six months ended September 29, 2006 resulted
in an increase in stockholders' equity to $2,370,945 as compared to
stockholders' equity of $2,283,327 at March 31, 2006.

The Company has an accounts receivable financing agreement with a factor, which
bears interest at 2.5% above prime with a minimum of 12% per annum. At September
29, 2006 the amount outstanding with the factor was $412,828 as compared to
$269,099 at March 31, 2006. The loan is secured by the Company's accounts
receivables and inventories. The factor provides discounted funds based upon the
Company's accounts receivables, these funds provide the primary source of
working capital for operations.

In the past two fiscal years, management has been reviewing its collection
practices and policies for outstanding receivables and has revised its
collection procedures to a more aggressive collection policy. As a consequence
of this new policy the Company's experience is that its customers have been
remitting payments on a more consistent and timely basis. The Company reviews
the collectability of all accounts receivable on a monthly basis. The reserve is
less than 2% of average gross accounts receivable and is considered to be
conservatively adequate.

During the year ended March 26, 2004, two of the Company's officers loaned the
Company a total of $52,000 on a non-interest bearing basis. The Company used
these funds as a source of additional working capital.

During the year ended March 31, 2005, one of these officers loaned the Company
an additional $135,744 on a non-interest bearing basis as well. These funds were
also used by the Company for working capital requirements.

During the year ended March, 31, 2006, the Company had repaid $108,744 of the
total funds loaned to it. The balance as of March 31, 2006 was $79,000.

Through the six months ended September 29, 2006 the Company had repaid $67,000
of the total funds loaned to it. The balance due to these officers at September
29, 2006 was $12,000.

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan Amendments Act of 1990 ("The Act"), the Company may become subject to
liabilities in excess of contributions made under the collective bargaining
agreement. Generally, these liabilities are contingent upon the termination,
withdrawal, or partial withdrawal from the Plan. The Company has not taken any
action to terminate, withdraw or partially withdraw from the Plan nor does it
intend to do so in the future. Under the Act, liabilities would be based upon
the Company's proportional share of the Plan's unfunded vested benefits, which
is currently not available. The amount of accumulated benefits and net assets of
such Plan also is not currently available to the Company. The total
contributions charged to operations under this pension plan were $33,925 for the
six months ended September 29, 2006 and $30,994 for the six months ended
September 23, 2005.

                                       24
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                            OPERATIONS (continued):

Liquidity and Capital Resources (continued):

On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits, which were and are currently due under the
terms of the Plan.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA") that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The Company and the PBGC agreed to the terms of a settlement of the matter. The
agreement is effective July 2, 2001. Under the agreement, the Company and the
PBGC agreed on a total sum of $244,000. The Company has agreed to make payments
as follows:

         September 1, 2003 to August 1, 2004        $2,000 per month
         September 1, 2004 to August 1, 2006        $3,000 per month
         September 1, 2006 to August 1, 2007        $4,000 per month

Additionally, the Company has made balloon payments of $25,000 each on January
1, 2004, May 1, 2004, May 1, 2005 and January 1, 2006.

The Company granted the PBGC a lien on the Company's machinery and equipment.

As a result of this agreement the amount due the PBGC was restated to $244,000.
$19,000 was paid during the six months ended September 29, 2006. $86,000 was
paid during the year ended March 31, 2006; $56,000 was paid during the year
ended March 25, 2005 and $39,000 was paid during the year ended March 26, 2004.
The balance of $44,000 is reported as a current liability in the accompanying
balance sheet.

On September 21, 2001 the Company's shareholders approved the adoption of the
Company's 2002 Employees Stock Option Plan to provide for the grant of options
to purchase up to 750,000 shares of the Company's common stock to all employees,
including senior management. No options have been granted under the Employee
Option Plan to date.

Options granted to employees under this plan may be designated as options which
qualify for incentive stock option treatment under Section 422A of the Internal
Revenue Code, or option which do not so qualify. Under this plan, the exercise
price of an option designated as an Incentive Stock Option shall not be less
than the fair market value of the Company's common stock on the day the option
is granted.

In the event an option designated as an incentive stock option is granted to a
ten percent (10%) shareholder, such exercise price shall be at least 110 percent
(110%) of the fair market value or the Company's common

                                       25
<PAGE>

                                 IEH CORPORATION

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                            OPERATIONS (continued):

Liquidity and Capital Resources (continued):

stock and the option must not be exercisable after the expiration of five years
from the day of the grant. Exercise prices of non-incentive stock options may be
less than the fair market value of the Company's common stock.
The aggregate fair market value of shares subject to options granted to its
participants, which are designated as incentive stock options, and which become
exercisable in any calendar year, shall not exceed $100,000. As of September 29,
2006 no options had been granted under the plan.

In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for Executive
Officers. Contributions to the Cash Bonus Plan are made by the Company when
pre-tax operating profits exceed $150,000 for a fiscal year, and then to the
extent of 10% of the excess of the greater of $150,000 or 25% of pre-tax
operating profits. There were no contributions to the Cash Bonus Plan for the
fiscal six months ended September 29, 2006. For the year ended March 31, 2006
the contribution was $75,500. The contribution to the bonus plan for the year
ended March 25, 2005 was $4,188.


ITEM 3.  CONTROLS AND PROCEDURES

Based on an evaluation of the effectiveness of the Company's "disclosure
controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended, (the "Exchange Act."), the
Company's Chief Executive Officer and Chief Financial Officer (who is also our
controller and principal accounting officer) concluded that, as of the end of
the period covered by this Report on Form 10-QSB, the Company's disclosure
controls and procedures are effective to ensure that all information required to
be disclosed by the Company in this Report that it files or submits under the
Exchange Act is, recorded, processed, and reported within the time periods
specified within the Securities and Exchange Commission's rules and forms. There
have been no changes in our internal control over financial reporting during the
quarter ended September 29, 2006 that have been materially affected, or are
reasonably likely to materially affect our internal controls over financial
reporting.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not involved in any legal proceedings which may have a material
effect upon the Company, its financial condition or operations.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS;
         PURCHASES OF EQUITY SECURITIES

Not applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                                       26
<PAGE>

None

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

None

ITEM 5.  OTHER MATTERS.

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit 31.1    Certification Pursuant to Section 302 of the Sarbanes Oxley Act

Exhibit 31.2    Certification Pursuant to Section 302 of the Sarbanes Oxley Act

Exhibit 32.1    Certification Pursuant to Section 906 of the Sarbanes Oxley Act

Exhibit 32.2    Certification Pursuant to Section 906 of the Sarbanes Oxley Act

(b) Reports on Form 8-K during Quarter

None

                                   SIGNATURES

In accordance with Section 13 and 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on this November 6, 2006.


                                              IEH CORPORATION


                                              /s/ Michael Offerman
                                              ------------------------------

                                              Michael Offerman
                                              President


                                       27