UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549
                                 
                               Form 10-K/A No. 1

(Mark One)

(  X)  Annual  Report  Pursuant to Section  13  or  15(d)  of  the
Securities Exchange Act of 1934  (Fee Required)
     For the fiscal year ended March 31, 1998
(   )  Transition Report Pursuant to Section 13 or 15 (d)  of  the
Securities Exchange Act of 1934 (Fee Required)

     For   the  transition  period  from  __________________    to
     ___________________

Commission file Number    0-12712    1-8964

                      Halifax Corporation
     (Exact name of registrant as specified in its charter)

         Virginia                           54-0829246
(State or other jurisdiction of
incorporation of organization   (IRS Employer Identification No.)

       5250   Cherokee  Avenue,  Alexandria,   VA    22312
               (Address of principal executive offices)

Registrant's telephone number, including area code (703)750-2202

Securities registered pursuant to Section 12(b) of the Act:

Title of each class  Name of each exchange on which registered

 Common Stock ($.24 par value)     American Stock Exchange


Securities registered pursuant to Section 12 (g) of the Act:


                              None
                        (Title of class)

                        (Title of class)

      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.
                                                      (X)Yes ( )No

      Indicate  by  check mark if disclosure of delinquent  filers
pursuant  to  Item 405 of Regulation S-K is not contained  herein,
and  will not be contained, to the best of registrant's knowledge,
in  definitive  proxy  or information statements  incorporated  by
reference in Part III of this Form 10-K or any amendment  to  this
Form 10-K.                                                    (X)


The  aggregate  market  value of the voting  stock  held  by  non-
affiliates  of  the Registrant as of June 9, 1998  was  $9,974,851
computed  by the average of high and low prices of such  stock  on
said date.

Indicate  the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.




           Class               Outstanding at June 9, 1998

        Common Stock                   2,010,482
       $.24 par value






              DOCUMENTS INCORPORATED BY REFERENCE

                             -None-






















     For   a   menu  of  Halifax  Corporation  news  releases
     available  by fax 24 hours (no charge) or to retrieve  a
     specific  release,  please  call  1-800-758-5804,   ext.
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     on the Internet.
<PAGE>
                                 
                              PART I



Item 1.  General Development of Business


A TECHNOLOGY SERVICES & FACILITIES MANAGEMENT COMPANY

Halifax Corporation is a Technology Services and Facilities
Management Company for commercial and government activities.
Technology Services includes the integration, systems engineering,
installation, maintenance and training for computer systems,
communications systems and simulation systems.   Facilities
Management includes the management, operations and maintenance
support of military bases, prisons, waterways, major office
complexes and communications sites. Revenues are generated in
three primary markets:  commercial, federal government, and
state/local governments; and the Company conducts offshore and
overseas business activities within these markets.  Key elements
of the Company's business strategy are privatization and
outsourcing.

Services and associated products are developed and delivered by the
parent corporation and its three wholly-owned subsidiaries:
Halifax Technology Services Company (HTSC), Halifax Engineering,
Inc. (HEI) and Halifax Technical Services, Inc. (HTSI).  Computer
and network maintenance services and communication installation
services for government and commercial customers are largely
conducted by the parent company.  Computer integration and systems
engineering services are primarily conducted by HTSC, especially
in the commercial sector.  Communication systems installation and
logistics services are provided for the federal government by HEI.
Facilities Management, operation and support services are provided
by HTSI for federal, state, and local governments.



PRIMARY SERVICES PROVIDED


TELECOMMUNICATIONS SERVICES
Services include engineering, installation, maintenance and
logistic services for telecommunications systems and networks
worldwide.

TECHNOLOGY CONSULTING AND SYSTEMS INTEGRATION SERVICES
A full range of consulting and systems integration services to
include design and implementation of networks and information
systems.  Consulting services are geared to solving government and
business problems through technology and field-proven management
methodology.

Y2K DESKTOP AND NETWORK SOLUTIONS
Services include year 2k desktop solutions for enterprise PC
hardware and software compliance.  Implementation approach
comprises assessment, remediation consulting and support, and
testing and validation.

INTERACTIVE TECHNOLOGIES
Services include website design, development and marketing,
Internet/Intranet services, and multimedia sales and educational
tools.

COMPUTER MAINTENANCE AND REPAIR
A comprehensive blend of nationwide coverage, multi-vendor and
multi-systems support, project management expertise, and
customized service programs including on-site, on-call and depot
repair.

SIMULATION SYSTEMS SERVICES
Operation, integration, and maintenance of simulations systems for
aircraft, missiles, automobiles, and other applications.

FACILITIES MANAGEMENT AND OUTSOURCING SERVICES
Total facilities and maintenance outsourcing capabilities for a
wide range of diverse organizations and applications.


<PAGE>

HISTORY


The  Company  was  incorporated in Virginia  in  1967  as  Halifax
Engineering, Inc., the successor to the business begun as  a  sole
proprietorship  in 1967.  On April 1, 1970, Halifax  acquired  the
Field  Service  Division of United Industries. This  expanded  the
business  base  in technical services and field  engineering.   In
January  1981, the Company acquired all of the outstanding  common
stock  of  ASSET Incorporated ("ASSET"), a marine engineering  and
naval   architecture   company,   of   Falls   Church,   Virginia.
Subsequently, in May, 1981, ASSET acquired all of the  outstanding
common  stock of Blyth & Son, Inc. ("Blyth Marine"), a boat repair
facility  located in Suffolk, Virginia.  On April 1,  1983,  ASSET
was merged into the Company.

As  of  October 1, 1984, the Company, under a plan adopted by  the
Board  of Directors, ceased operations at the boat repair facility
of  its  wholly-owned  subsidiary, Blyth Marine,  and  placed  the
facility  on  the  market for sale.  The remaining  operations  of
Blyth Marine were merged into the Company on February 1, 1985, and
the facility was sold on September 13, 1985.

On  October  18, 1984, the Company had a change of management  and
control  as  the result of the founder, chairman and president  of
the  Company  selling his stock and retiring from  all  activities
other than serving, until September 1993, as a member of the Board
of Directors.

In February, 1990, the Company purchased the assets of the services
business  of  Sidereal Corporation, a division of  TransTechnology
Corporation.   The Sidereal Field Service Division had  nationwide
customers  for  its  primary  service  of  maintaining  electronic
messaging switches.  This division contributed to the expansion of
Halifax's nationwide service offerings.

On  April  16, 1990, the Company purchased the assets of Del  Net,
Inc.,  a  privately owned Beltsville, Maryland,  computer  service
company  with  a Washington/Baltimore customer base which  further
expanded the Company's nationwide Electronics Services business.

On  September  6, 1991, the Company changed its name from  Halifax
Engineering,  Inc. to Halifax Corporation to reflect the  expanded
nature  of  its  business  as a national provider  of  Electronics
Services and Facilities Support for government and industry.

On  December 31, 1991, the Company sold Halifax Security Services,
Inc.,  a  wholly-owned subsidiary which operated security services
for the parent corporation.

On  June  30, 1993, the Company acquired the services division  of
Electronic  Associates, Inc.  The division expanded the  Company's
non-federal business and provided an additional service  line  for
simulator operations, maintenance and integration.

On  April  1,  1996,  the  Company completed  the  acquisition  of
privately  held CMS Automation, Inc. (CMSA), a Richmond,  Virginia
computer systems integration company.  On April 23,1997, the  name
of  CMSA  was  changed  to  Halifax Technology  Services   Company
("HTSC").

On  November  25,  1996,  the  Company  through  its  wholly-owned
subsidiary,   CMSA,   acquired  the   ongoing   computer   network
integration  business  of  Consolidated Computer  Investors,  Inc.
("CCI")  of  Hanover,  Maryland through an  asset  purchase.   The
combined  entity  name was changed to Halifax Technology  Services
Company (HTSC).

The  discontinuation of various service lines since October,  1984
has  enabled  the  Company  to focus on  Technology  Services  and
Facilities Management.

The  Company maintains its principal executive offices at  Halifax
Office  Park,  5250 Cherokee Avenue, Alexandria,  Virginia  22312.
Telephone number (703) 750-2202.
<PAGE>


Federal Government Contracts


Many  of  the  Company's revenues are derived  from  contracts  or
subcontracts  with the United States Government.  In fiscal  years
1998,  1997 and 1996, the Company received revenues from  95,  183
and  491  Government contracts respectively, which  accounted  for
approximately  35%, 47% and 73%, respectively,  of  the  Company's
total  revenues.   In  1998  the  number  of  contracts  does  not
separately count the tasks orders completed under IDIQ (Indefinite
Delivery Indefinite Quantity) contracts as in prior years, however
the  number of primary contracts is consistent across the   years.
The   Company's  trend  is  toward  a  balance  among  commercial,
state/municipal government and federal government contracts.

The services of the Company are performed under cost reimbursable,
time-and-materials  and  fixed-price contracts  and  subcontracts.
Under  cost  reimbursable contracts the Government reimburses  the
Company   for   its  allowable  costs  permitted   by   Government
regulations and pays the Company a negotiated fixed fee, incentive
fee,  award  fee or combination thereof.  Under time-and-materials
contracts,  the Company receives a fixed hourly rate  intended  to
cover salary costs attributable to work performed on the contracts
and  related indirect expenses, as well as profit margin,  and  is
reimbursed  for  other direct costs. Under fixed-price  contracts,
the  Government pays the Company an agreed-upon price for services
rendered.   In  addition,  under certain  fixed  price  contracts,
incentive  fees are allowed if established performance  goals  are
met  or  exceeded  and  penalties are imposed  if  goals  are  not
attained.   Under  fixed-price  contracts  and  time-and-materials
contracts,  the Company bears any risk of increased or  unexpected
costs that may reduce its profits or cause it to sustain a loss.

The Company's Government contracts and subcontracts are subject to
termination, reduction or modification as a result of  changes  in
the   Government's   requirements   or   budgetary   restrictions.
Moreover, when the Company participates as a subcontractor, it  is
subject to the risk that the primary contractor may fail or become
unable to perform the prime contract.

All  Government  contracts  are  subject  to  termination  at  the
convenience  of  the  Government.   If  a  contract  were  to   be
terminated  for  convenience, the Company would be reimbursed  for
its  allowable  costs incurred up to the date of  termination  and
would be paid a proportionate amount of the stipulated profits  or
fees  attributable to the work actually performed.  To  date,  the
Government  has only terminated three contracts with  the  Company
for convenience.

Contracts with the Government are generally complex in nature, and
require  Halifax  to  comply  with  numerous  Federal  regulations
regarding  discrimination  in  the  hiring  of  personnel,  fringe
benefits    for   employees,   safety,   safeguarding   classified
information,   responsibility  for   Government   property,   fire
prevention,  equipment maintenance, record keeping and accounting,
management qualifications, drug free work place and numerous other
matters.   The Company has not experienced any material difficulty
in complying with applicable federal regulations.  Management does
not  believe  the  proposed scaling down of  the  Federal  defense
establishment  will have an adverse effect on its  revenues  since
the  Company is not R&D oriented, and Defense Department  cutbacks
affecting  the Company's operation are not considered significant.
However,  the  Company's recent acquisitions and  reassignment  of
marketing   resources   have  been  accomplished   which   should,
management believes, reduce dependency on defense contracting.

The  Company is sensitive to the present climate in the Government
with respect to fraud, waste and abuse, and has adopted a Code  of
Business  Ethics  and Standards of Conduct and associated  Company
procedures.  In addition, all employees receive training in ethics
and  associated  Company  procedures  and  a  hot  line  has  been
established   to   encourage  reporting   of   potential   ethical
violations.

Under  certain  circumstances the Government can  suspend  or  bar
individuals  or  firms from obtaining future  contracts  with  the
Government for specified periods of time.  Any such suspension  or
debarment  could have a material adverse effect upon the  Company.
The  books and records of the Company are subject to audit by  the
Defense Contract Audit Agency, which can result in adjustments  to
contract  costs  and  fees.   Audits  by  such  Agency  have  been
completed for years through fiscal 1990.  While it is not possible
to  know  the outcome of future audits, it is the opinion  of  the
Company's management, that liabilities, if any, arising from  such
audits  should not have a material adverse effect on the Company's
financial position or results of operations.

<PAGE>

Commercial and State/Municipal Government Contracts

The Company continues to expand its commercial and state/municipal
government business.  Commercial revenues are expected to continue
to  grow  through  the targeting of non-federal opportunities  and
from outsourcing opportunities.  Acquisition strategy and the  in-
house  development of computer network solutions, integration  and
management  services have significantly increased  this  trend  in
commercial  services.   State/municipal government  contracts  are
expected to expand from privatization opportunities.

The  following table reflects the aforementioned distributions  of
revenues by type of customer:
<TABLE>
<CAPTION>


               Years Ended
                March 31,
                                                                          
                  1998                  1997               1996         
<S>          <C>              <C>   <C>           <C>  <C>           <C>
Commercial    $  28,595,000   39%    $ 22,587,000  30%  $6,004,000   13%
                                     
                                                                          
State/Local      19,062,000   26%    17,580,000   23%    6,730,000   14%
                                                                          
Federal          26,080,000   35%                 47%   34,425,000   73%
Government                            36,111,000
                                                                          
Total          $ 73,737,000  100%    $76,278,000  100%  $47,159,000 100%
                                     

</TABLE>



Type of Contracts

The  following  table reflects by type of contract the  amount  of
revenues  from  continuing  operations  derived  for  the  periods
indicated:
<TABLE>
<CAPTION>


             Years Ended
              March 31,
                                                                           
                1998                  1997                   1996        
<S>         <C>            <C>   <C>             <C>    <C>             <C>
Cost         $  6,252,000     8%     $ 7,195,000     9%    $ 2,232,000   5%
reimbursable

                                                                           
Time      &     7,967,000    11%       8,576,000    11%      7,333,000  16%
materials
                                                                           
Fixed-price  $ 59,518,000    81%     $60,507,000    80%     37,594,000  79%
                                                                           
Total        $ 73,737,000   100%     $76,278,000   100%   $ 47,159,000  100
                                                                          %

</TABLE>


Accounts Receivable

Accounts receivable at March 31, 1998 and 1997 represented 55% and
54%   of  total  assets,  respectively.  Accounts  receivable  are
comprised of billed receivables and unbilled receivables.   Billed
receivables   represent  invoices  presented  to   the   Customer.
Unbilled  receivables  represent  future  payments  due  from  the
Customer for which invoices have not or cannot be presented  until
a later period.  The reasons that invoices for payment obligations
are not presented may be categorized as follows:  (1) fee and cost
retainage   rights  of  the  Government;  (2)  lack  of   billable
documents;  (3)  excess of actual direct and indirect  costs  over
amounts  currently billable under cost reimbursement contracts  to
the  extent they are expected to be billed and collected; and  (4)
amounts  arising  on  fixed-price contracts  from  recognition  of
revenues under the percentage of completion method.
<PAGE>

The  financing  of  receivables requires bank borrowings  and  the
payment  of  associated interest expense.  Interest expense  is  a
business  expense  not permitted as a reimbursable  item  of  cost
under Government contracts.

For a listing of the amounts of retainages and unbilled receivables
as  of  March  31,  1998 and 1997, see Note 3 to the  accompanying
Consolidated Financial Statements.


Backlog

The  Company's funded backlog for services as of March  31,  1998,
1997  and  1996  was  $45,000,00, $29,000,000,   and  $24,000,000,
respectively.  "Funded" backlog represents commercial  orders  and
government   contracts  to  the  extent  that  funds   have   been
appropriated  by  Congress and allotted to  the  contract  by  the
procuring  Government  agency.  Some of  the  Company's  contracts
orders  provide for potential funding materially in excess of  the
monies  initially  provided by the Government.  Additional  monies
are  subsequently  and  periodically authorized  in  the  form  of
incremental  funding  documents.  The excess of  potential  future
funding  over  funding provided represents  unfunded  backlog.   A
majority  of the Company's customer orders or contract awards  and
extensions for contracts previously awarded are received or  occur
at  random  during  the  year  and may  have  varying  periods  of
performance.

As  of  March  31, 1998, based on total amounts bid  on  contracts
awarded,  the  Company's  five-year potential  revenues  for  work
remaining   to   be   performed  under  existing   contracts   are
approximately $364,000,000.  The unfunded portion is  $319,000,000
which   includes  $89,000,000  in  options  and  $230,000,000   in
undefinitized  work.  The realization of these potential  revenues
is  dependent upon a variety of contract contingencies beyond  the
control  of the Company, such as complete funding and the exercise
of  all existing contract options by the Government and commercial
clients.   Accordingly,  there  can  be  no  assurance  that  such
revenues will be realized.

Commercial contracts do not typically have multi-year options, and
accordingly,  backlog levels are not significantly  increasing  in
proportion to total revenues.


Marketing

The  Company  contracts  with the Federal Government,  State/Local
Governments  and  commercial activities, each  of  which  requires
different  marketing approaches.  The Federal Government maintains
that  it buys from companies rather than having companies sell  to
it,  and  marketing  is  more related to keeping  abreast  of  the
Government's  specified needs versus building markets  within  the
Government  for  the  Company's services.   However,  the  Company
conducts  a  sizable portion of its business within the commercial
and   state/local   government  sectors,  and  consequently   uses
traditional marketing approaches to determine commercial  customer
needs  and  to  assure its services will be considered  for  those
needs.

In February, 1997, the Company formed the Federal Services division
to   promote,   market  and  sell  all  of  Halifax's  information
technology  and  communications systems  capabilities  within  the
Federal Government.

The  Company's ability to compete successfully for Government work
is  largely  dependent on recognizing Government requirements  and
opportunities,  the  submission of responsive  and  cost-effective
proposals, and a solid reputation for the successful completion of
government contracts.  Recognition of Government requirements  and
opportunities   come  from  inclusion  on  bidders   lists,   from
participation in activities of professional organizations and from
literature  published  by the government and other  organizations.
Associations with large corporations are being developed to  allow
the Company to act as a subcontractor on some contract efforts.

Commercial marketing involves the determination of customer  needs
that  match  the  services offered by the  Company,  and  this  is
accomplished through individuals that conduct sales calls,  attend
trade  shows,  and  build  a  network of  customer  knowledge  and
confidence  in  the Company.  A field sales program  for  computer
services provides for direct
sales   by   field  personnel  to  commercial  customers.    Those
activities, along with the development of strategic alliances  and
the reputation the Company has built, provide the normal manner in
which the Company's commercial business is obtained.
<PAGE>


The  Company's  April 1, 1996  and November 25, 1996 acquisitions,
CMS  Automation, Inc., and Consolidated Computer Investors,  Inc.,
respectively,  are  network integration  and  solutions  companies
which conduct their marketing and sales activities largely through
Account Managers.

The Company's President provides leadership in long-range marketing
and  teaming arrangements.  Operating Vice Presidents  direct  bid
and proposal efforts for their operating elements.


Competition

The Company has numerous competitors in all areas in which it does
business.   Some  competitors are large diversified  firms  having
substantially  greater financial resources  and  larger  technical
staffs   than   the  Company,  including,  in  some   cases,   the
manufacturers of the systems being supported.  Government in-house
capabilities can also be deemed to be competitors of  the  Company
in  that  they  perform certain services which might otherwise  be
performed  by  the  Company.  It is not possible  to  predict  the
extent  of competition which present or future activities  of  the
Company will encounter because of changing competitive conditions,
customer   requirements,  technological  developments  and   other
factors. The principal competitive factors for the type of service
business   in   which   the  Company  is  engaged   are   quality,
responsiveness,  ability  to perform  within  estimated  time  and
expense limits and pricing.


Personnel

On  March 31, 1998, the Company had 622 employees of which 83 were
part  time employees.  Because of the nature of services provided,
many  employees are professional or technical personnel with  high
levels  of  training and skills, including engineers, and  skilled
technicians  and  mechanics.  The Company  believes  its  employee
relations  to  be  excellent.   Although  many  of  the  Company's
personnel  are  highly  specialized  and  there  is  a  nationwide
shortage  of  certain qualified technical personnel,  the  Company
does not normally experience any material difficulty obtaining the
personnel it requires to perform under its contracts and generally
does  not bid on contracts where difficulty may be encountered  in
hiring  personnel.  The Company interfaces with  labor  unions  on
four  of  its   federal and state/local government contracts.   To
date,  relations with these units have been excellent.  Management
believes  that the future growth and success of the  Company  will
depend,  in part, upon its continued ability to retain and attract
highly qualified personnel.



Item 2. Properties

On  November 6, 1997, the Company concluded  the sale of its twin-
building office complex for $5,250,000 and the lease back  of  the
Company's  headquarters  building.  The  transaction  resulted  in
other  income  of $1,490,000 of which $715,000 will  be  amortized
over the 12 year lease-back of its headquarters building. The  net
sale proceeds were applied to the reduction of debt.

The  Company is obligated under approximately 28 small  short-term
facility leases connected with its nationwide maintenance  service
operations.


Item 3. Legal Proceedings

There  are  no  material pending legal proceedings  to  which  the
Company  is  a party.  The Company is engaged in ordinary  routine
litigation  incidental  to the Company's  business  to  which  the
Company is a party.

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

No matters were submitted to a vote of the security holders in the
fourth quarter of fiscal 1998.




                            PART II

Item  5.   Market  for  Registrant's  Common  Equity  and  Related
Stockholder Matters

The  Company's  Common Stock, par value $0.24, is  traded  on  the
American   Stock   Exchange.   At  June  22,  1998,   there   were
approximately 743 holders of record of the Company's Common  Stock
as  reported  by  the  Company's transfer agent.   American  Stock
Transfer  &  Trust  Co. became the Company's  transfer  agent  and
registrar on January 1, 1996.

The following table sets forth the quarterly range of high and low
sales prices on the American Stock Exchange.


                  Fiscal Year 1998   Fiscal Year 1997

Fiscal Quarter,     High    Low     High    Low

April - June      11-1/2   6-3/4    8-1/8   4-5/8
July - Sept.      10-7/8   7-5/8    7-7/8   6-5/8
Oct. - Dec.       13-1/8   8-3/4    13-1/8  7-5/8
Jan. - March      10       7-1/2    15     10-1/8

In fiscal 1998, the Company paid a cash dividend of $0.05 per share
on  June 10, 1997, September 10, 1997, December 10, 1997 and March
10,  1998  to shareholders of record on  May 27, 1997, August  27,
1997, November 26, 1997 and February 26, 1998, respectively.

In  fiscal  1997, the Company paid a cash dividend of  $0.043  per
share  on June 10, 1996 to shareholders of record on May 24, 1996,
cash  dividends  of  $0.047 per share on September  10,  1996  and
December  10, 1996 to shareholders of record  on August  22,  1996
and  November 27, 1996, respectively, and a cash dividend of $0.05
per share on March 10, 1997 to shareholders of record  on February
21, 1997.

In fiscal 1996, the Company paid a cash dividend of $0.043 on June
10, 1995, September 10, 1995, December 10, 1995 and March 10, 1996
to  shareholders  of  record on May 20,  1995,  August  22,  1995,
November 22, 1995 and February 23, 1996, respectively.


Item 6.  Selected Financial Data

The following table includes certain selected financial data of the
Company  for  the fiscal years and periods indicated  (amounts  in
thousands except per share data):
<TABLE>
<CAPTION>


                         1998       1997        1996       1995       1994
<S>                    <C>       <C>        <C>         <C>        <C>
Revenue                $ 73,737    $76,278    $ 47,159   $ 45,603   $ 72,501
Net Income                  442        954         763        858        853
   per common share  -      .22        .47         .43        .48        .47
basic
   per common share  -      .21        .46         .43        .48        .47
diluted
                                                                            
Long-term obligations                                                       
  including current                                                         
  maturities             15,709     17,174       3,869      7,230     10,031
                                                                            
Cash dividends per                                                          
  common share              .20       .187                    .17        .16
                                                  .173
                                                                            
Total assets at                                                             
  year-end               37,975     41,000      24,828     22,107     24,728
</TABLE>





Item 7. Management's Discussion and Analysis of Financial Condition
    and Results of Operations

Certain statements under the caption "Management's Discussion  and
Analysis  of  Financial Condition and Results of  Operations"  and
elsewhere in this Annual 10K Report and the documents incorporated
herein by reference constitute "forward-looking statements" within
the  meaning  of  the United States Private Securities  Litigation
Reform Act of 1995.  Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or
industry  results,  to  be materially different  from  any  future
results, performance, or achievements expressed or implied by such
forward-looking statements.  Such factors include,  among  others,
the  following:  general economic and business conditions  in  the
Company's   market  area,  inflation,  continuation  of  favorable
banking  arrangements,  the availability  of  capital  to  finance
planned growth, changes in government regulations and competition,
which  will,  among  other things impact on  the  ability  of  the
Company to implement its business strategy.

Forward-looking statements are intended to apply only at the  time
they are made.  Moreover, whether or not stated in connection with
a  forward-looking statement, the Company undertakes no obligation
to  correct  or  update  a forward-looking  statement  should  the
Company  later become aware that it is not likely to be  achieved.
If  the  Company  were  to  update or correct  a  forward-looking
statement,  investors  and others should  not  conclude  that  the
company will make additional updates or corrections thereafter.

Readers  are  referred  to the "Factors  that  May  Affect  Future
Results"  section within this Item 7 of Form 10K which  identifies
important  risk factors that could cause actual results to  differ
from those contained in the forward-looking statements.

The  following discussion should be read in conjunction  with  the
consolidated   financial  statements  and   notes   thereto.   All
information is based on the Company's fiscal year ended March  31.
(Tabular  information:   dollars in thousands,  except  per  share
amounts).
<TABLE>
<CAPTION>

Results of Operations       1998     Change    1997     Change      1996
<S>                       <C>        <C>     <C>      <C>        <C>
Revenues                   $ 73,737     (3%)  $76,278        62%    $ 47,159
                                                                            
Operating    cost     and    72,397     (2%)   74,160        62%      45,687
expenses:
  Percent of revenue            98%               97%                    97%
                                                                            
Operating income              1,340    (37%)    2,118        44%       1,472
  Percent of revenue             2%                3%                     3%
                                                                            
Net income                      442    (54%)      954        25%         763
                                                                            
Net  income per  share  -       .22    (54%)      .48        12%         .43
basic
Net  income per  share  -       .21    (55%)      .47         9%         .43
diluted
                                                                            
</TABLE>

Revenues

1998 revenues decreased 3% from 1997, primarily because of a large
revenue  gap  created by the completion of a major digital  switch
contract  and the subsequent delay in the award and implementation
of a similar but larger contract.
<TABLE>
<CAPTION>

Operating Costs and         1998    Change     1997      Change      1996
Expenses
<S>                       <C>      <C>       <C>        <C>        <C>
Cost of services           $67,081     (4%)  $  69,530        67%  $  41,675
  Percent of revenues          91%                 91%                   88%
                                                                            
Selling,    General    &     5,316      15%      4,630        25%      3,692
Administrative
  Percent of revenues           7%                  6%                    8%
                                                                            
Litigation expense               -                   -                   320
  Percent of revenues            -                   -                  0.7%
                                                                            
</TABLE>

The   Company's  1998  cost  of  services  decreased  in  relative
proportion to the decrease in revenues.

Litigation expenses of $320,000 in the second fiscal quarter ended
September 30, 1995, include legal costs associated with a trial of
a lawsuit.

The  increase  in  selling,  general  and  administrative  (S,G&A)
expenses  since 1996 is due primarily to the acquisition  of  CMSA
and  CCI.   The  proportion of S,G&A expense increased  to  7%  of
Revenues compared with 6% of Revenues in 1997 due to the Company's
conforming the treatment of S,G&A at HTSC to the parent  company's
treatment.   The  Company  achieved the objective  of  maintaining
expenditures as a percentage of revenue at 6-7% in 1998.

Operating Income

Operating  income  decreased by $778,000 and  from  3%  to  2%  of
Revenues  compared with 1997.  Operating income increased $646,000
in 1997 when compared to 1996 yet remained flat at 3% of Revenues.
<TABLE>
<CAPTION>

Interest and Other Income    1998    Change     1997     Change      1996
or Expense
<S>                         <C>      <C>     <C>        <C>       <C>
Interest expense                  $      62%    $   950      66%     $   573
                              1,535
Other (income)              (1,004)      90%      (409)      13%       (362)
                                                                            
</TABLE>

Interest  expense significantly increased by $585,000 or 62%  from
1997.   The increase came from increased debt levels to  fund  the
Company's working capital requirements, losses during the year  in
its  Computer  Maintenance  division and  additions  to  inventory
levels  and capital equipment.  This increase resulted  despite  a
decrease in the Company's average interest rate.  Interest expense
had  increased in 1997 when compared to 1996, because of increased
capital requirements.

In  1998, other income is comprised of a gain from the sale of the
Company's office park of $780,000 and $228,000 of sublease income,
net  of expenses, from the Company's office park.  The total  gain
on the sale was $1.49 million of which $715,000 was deferred over
the life of the lease-back of the Company's headquarters building.
<TABLE>
<CAPTION>


Income Taxes       1998       Change       1997        Change       1996
<S>             <C>         <C>         <C>         <C>          <C>
Income taxes         $  367         41%      $  623          25%     $   498
Effective   tax       45.4%                   39.5%                    39.5%
rate
                                                                            
</TABLE>

These fluctuations in income taxes were relatively proportional to
changes  in  pretax income.  However, the Company's effective  tax
rate  increased  in  1998 compared with the 1997  and  1996  rates
primarily due to the treatment of the sale of the Company's office
park  and  taxation  of  certain  costs  deferred  for  accounting
treatment.

Factors That May Affect Future Results

The Company's future operating results may be affected by a number
of  factors including uncertainties relative to national  economic
conditions,  especially  as they affect interest  rates,  industry
factors,  the  Company's  ability  to  successfully  increase  its
business and effectively manage expense margins.

The Company must continue to effectively manage expense margins in
relation to revenues by directing new business development towards
markets  that complement or improve existing service  lines.   The
Company  must  also  continue to emphasize operating  efficiencies
through  cost  containment strategies, reengineering  efforts  and
improved service delivery techniques.

The  Company  participates  in  the computer  industry,  providing
consulting,  integration, networking, maintenance and installation
services.    This  industry  has  been  characterized   by   rapid
technological advances that have resulted in frequent introduction
of  new  products,  product enhancements  and  aggressive  pricing
practices, which also impacts
pricing  of  service activities.  The Company's operating  results
could be adversely affected by industry wide pricing
pressures.   Also,  the  Company's  operating  results  could   be
adversely  impacted  should the Company be unable  to  effectively
achieve   the  revenue  growth  necessary  to  provide  profitable
operating  margins  in  its  field maintenance  operations.    The
Company's plan for growth includes intensified marketing  efforts,
an  expanding  commercial sales program, strategic alliances  and,
where appropriate, acquisitions that expand our market share  such
as  our  CMSA  and CCI acquisitions in fiscal 1997.   The  Company
intends  to  expand  upon recent alliances, acquisitions  and  new
contracts   to   provide   the  density  necessary   to   maintain
profitability in the competitive information technology industry.

Because  of  the  foregoing  factors as  well  as   other  factors
affecting the Company's profitability, it is difficult to  project
future operating results.
<TABLE>
<CAPTION>


Liquidity     and      Capital      1998             1997           1996
Resources
<S>                            <C>              <C>              <C>
Cash                               $    67,000       $  268,000  $ 2,743,000
                                                                            
Working capital                     20,363,000       17,487,000    5,924,000
Net  cash  (used) provided  by     (1,712,000)      (6,875,000)    7,110,000
operations
Net  cash  provided (used)  in       3,334,000      (1,757,000)    (644,000)
investment activities
Net  cash  (used) provided  by     (1,823,000)        6,157,000  (3,741,000)
financing activities
                                                                            
</TABLE>


At March 31, 1998, the Company's working capital of $20,363,000 and
current ratio of 2.85 indicate strength consistent with the  prior
years.   A  large prepayment to the Company on a hardware delivery
order  in the fourth quarter of 1996, which was applied to  reduce
long-term  debt, resulted in working capital of $5,924,000  and  a
current  ratio  of  1.50.   The current ratio  adjusted  for  that
transaction would have been 2.4, consistent with 1997.

In  fiscal 1998, the sale of the Company's office complex provided
over  $4.8 million of cash net of selling expenses which was  used
to  retire mortgage debt of  $2.5 million and other operating debt
as  well as pay income taxes on the transaction.  In January, 1998
in  a  private placement without public registration, the  Company
issued  a  $2  Million  7% Convertible Subordinated Debenture  due
January,  2003  to  Research Industries,  Incorporated.   The  net
proceeds  were applied to the reduction in the Company's Revolving
Line of Credit.  Otherwise in 1998, operations required $1,712,000
for working capital needs.

In 1997, the uses of cash in operations, $6,875,000, and investment
activities, $1,757,000, reflect the effect of the acquisitions  of
CMSA  and  CCI and the insertion of working capital into  the  two
companies   including  the  substitution   by   the   Company   of
approximately  $7.3 million of bank debt at significantly  reduced
interest rates for prior high-interest rate financing from nonbank
financiers.

The Company leases approximately 28 field sites.  Disclosure of the
future  minimum  lease payment is in Note 9  to  the  consolidated
financial  statements.  Capital expenditures in 1998  approximated
1997  levels.  The Company continues to sublease a portion of  its
headquarters building generating net other income of approximately
$112,000 annually.

Effective  June 25, 1998, the company renegotiated  its  borrowing
agreement  to  provide significantly increased funding  availability
from its current collateral base and to provide for planned growth
in operation levels.  This debt package, including term debt and a
revolving  line of credit, remains long term, coming due  in  July
2000,  and  is  annually extendible.  After this refinancing,  the
Company believes that its balances of cash and cash equivalents in
conjunction  with funds generated from operations and  from  short
term  borrowings should be sufficient to meet its  operating  cash
requirements.

Year 2000 Compliance

As  a  service provider to commercial and government entities  for
the  assessment, remediation, and testing for Year 2000  readiness
of  computer desktop devices and networks, Halifax has established
a program for compliance of its own hardware, software, and files.
The Company is planning for the remediation of in-house systems 
associated with  accounting/finance, service call management, local 
and  wide area networks, messaging systems, and administration.
Some of these features are being taken care of as a by-product  of
the Company's program to web-enable (Internet) many of its systems
to  meet  customer  requirements  and/or  promote  efficiency  and
competitive  advantage.  The Company estimates  its  costs  to  be
fully compliant by mid-1999 at $200,000.

Item 8.  Financial Statements and Supplementary Data

Financial  statements and supplementary data of  the  Company  are
attached hereto.

Item  9.   Changes  in  and  Disagreements  with  Accountants   on
Accounting  and Financial Disclosure

None.
                                 
                             PART III

Item 10.  Directors and Executive Officers of the Registrant

The following paragraphs set forth the name and age of each
executive officer and the members of the Board of Directors of the
Company, together with their respective periods of service as
officers and directors and other positions with the Company.  All
directors hold office for one (1) year or until their successors
are duly elected and qualified.

                           DIRECTORS

Howard C. Mills, age sixty-four, has since October 16, 1984, been
President, Chief Executive Officer and a Director of the Company.
Prior to that time he served as Vice President and Executive Vice
President of the Company.  Mr. Mills joined Halifax in 1981 when
it acquired ASSET Incorporated of which Mr. Mills was President
and Chief Executive Officer.  Mr. Mills has forty one years
experience in the management, engineering and technical services
business, including twelve years as President of ASSET
Incorporated,  three years as President of Blyth Marine, five
years as a Division Vice President of the Stanwick Corporation,
and eight years in engineering management with the Newport News
Shipbuilding and Dry Dock Company.

Arch C. Scurlock, age seventy-eight, presently Chairman of the
Board of Directors, has been a Director of the Company since 1973.
He had served from 1969 to 1992 as Chairman of the Board of
TransTechnology Corporation, a manufacturer of aerospace-defense
and other industrial products.  Since 1968, he has been President
and a Director and controlling shareholder of Research Industries
Incorporated, a private investment company.

John H. Grover, age seventy, has been a Director of the Company
since 1984.  He has served as Executive Vice President, Treasurer
and Director of Research Industries Incorporated, since 1968 and
as a Director of TransTechnology Corporation from 1969 to 1992.

Clifford M. Hardin, age eighty-two, elected Director of the
Company on March 25, 1985, is a Director of SRI, Inc. Lincoln,
Nebraska.  Dr. Hardin is also a Trustee of Winrock International,
the American Assembly and the University of Nebraska Foundation.
Dr. Hardin's past positions have included Chancellor of the
University of Nebraska (1954-1969), Secretary, United States
Department of Agriculture (1969-1971), Vice Chairman of the Board
and Director of Corporate Research for Ralston Purina Company
(1971-1980) and Director of the Center for the Study of American
Business at Washington University (1980-1982).  Dr. Hardin also
served as an economist at Washington University until 1985.  From
1981 to 1987 Dr. Hardin served as a Director of Stifel Financial
Corporation, The parent corporation of Stifel Nicolaus & Company,
a St. Louis Securities brokerage firm registered with the
Securities and Exchange Commission.

Ernest L. Ruffner, age sixty-three, elected Director of the
Company on March 25, 1985, is an attorney engaged in the private
practice of law as a member of the firm of Pompan, Murray, Ruffner
& Werfel in Alexandria, Virginia.  He has been an attorney for 33
years.  Mr. Ruffner is a graduate of the United States Military
Academy, served as a First Lieutenant in the United States Army
Corps of Engineers and has been a Director of Research Industries
Incorporated since 1983.  Mr. Ruffner has been Secretary of the
Company since 1985.  In January 1992, he was given the additional
designation of Counsel of the Company, and in September 1994, he
was elected General Counsel (See Item 13).

Alvin E. Nashman, age seventy-one, elected director of the Company
on September 17, 1993, is a Board Member of Computer Sciences
Corporation (CSC).  He also serves on the Boards of NYMA
Corporation and MILTOPE Corporation, where he is Chairman.  Dr.
Nashman headed the multi-division systems groups of CSC for 27
years and served two terms as Chairman of the Board of the Armed
Forces Communications and Electronics Associates (AFCEA).

John Toups, age seventy-two, elected Director of Company on
September 17, 1993, served as President and CEO of Planning
Research Corporation (PRC) from 1978 to 1987.  He also served as
interim Chairman of Board and CEO of the National Bank of
Washington and Washington Bancorp and is currently a Director of
CACI International, NVR and Telepad Corporation.


                     OTHER EXECUTIVE OFFICERS

John D. D'Amore, age forty-eight, Vice President Finance and
Accounting and Chief Financial Officer, Controller and Treasurer,
joined Halifax on April 10, 1996. He previously served as Vice
President Finance for CTA International, Inc. and CTA Space
Systems, subsidiaries of CTA Incorporated. Prior to that he served
in various executive finance positions including five years as
Vice President Finance with Presearch Inc.  Mr. D'Amore is a
Certified Public Accountant and a member of the Virginia Bar.

James C. Dobrowolski, age thirty-five, joined Halifax as a result
of the Company acquiring EAI Services which he had managed for two
years.  Mr. Dobrowolski currently serves as the Vice President in
charge of the Simulation and Facilities Services Division.  Prior
to joining EAI as Director of Contracts in April 1988, he was with
Engineering and Professional Services Inc. where he served as
Manager of Subcontract Administration for two years.

Thomas L. Mountcastle, age forty-four, is President of Halifax
Technology Services Company, a wholly owned subsidiary of Halifax
and Vice President and Chief Information Officer (CIO) of Halifax
Corporation.  Mr. Mountcastle joined Halifax as a result of the
Company acquiring CMS Automation, Inc. on April 1, 1996 where he
had served as President since 1990.  Prior to that he served in
various capacities in computer technology including two years as
President of Data Support Systems.

Thomas F. Nolan, age fifty-three, has been Vice President,
Computer Services Division since December, 1995.  Before joining
the Company, Mr. Nolan worked six years as an independent
executive in Financial Services Management.  Prior to that, he was
Senior Vice President, Marketing for Decision Data Services, Inc,
a nation wide computer maintenance firm.  For sixteen years Mr.
Nolan held various executive positions with Bell Atlantic
Corporation's SORBUS Service Division.

Frank J. Ostronic, age sixty-nine, Vice President Federal Services
Division, joined Halifax on  May 24, 1996.  Mr. Ostronic has over
thirty-nine years experience in various executive positions
including fourteen years with Computer Science Corporation as Vice
President of Program Development.  A U.S. Naval Academy graduate,
Mr. Ostronic retired from the U.S. Navy with the rank of Captain.

Melvin L. Schuler, age fifty-four, is Vice President for
Operations of the Federal Services Division.  He is also Vice
President for Operations of the Company's wholly-owned subsidiary,
Halifax Engineering, Inc.  Mr. Schuler has been with Halifax since
1972, serving in various management positions within this service
line.

James L. Sherwood, IV, age fifty-six, is Vice President, Contracts
and Administration.  He previously served as Vice President of the
Company's Facilities Services Division.  In addition, he served as
Assistant Vice President and Manager for various divisions of the
Company and ASSET Inc., which he joined in 1978.  Prior to joining
ASSET Inc., Mr. Sherwood held various electrical engineering
positions with Potomac Electric Power Company and Newport News
Shipbuilding and Dry Dock Company.  He is a Registered
Professional Engineer in several states including Virginia.


<PAGE>
Item 11.  Executive Compensation

The following table sets forth information on the Chief Executive
Officer and the only other officers whose compensation exceeded
$100,000 serving at the close of the fiscal year ended March 31,
1998 for services rendered in all capacities during the fiscal
years ended March 31, 1998, 1997, and 1996.

<TABLE>
<CAPTION>



                                            SUMMARY COMPENSATION TABLE
                                                                                      
                 Annual       Long Term     
              Compensation   Compensation
                   
                                                        Awards  Payouts               
                                                Other                                 
                                                Annual  Restri                        All Other
                           Salary     Bonus     Compen- cted    Options      LTIP     Compen-sation
                                                sation  Stock   SARs         payouts
                                                        Awards
              Year          ($)        ($)      ($) (1)   ($)   (#)            ($)     ($)
<S>           <C>          <C>        <C>       <C>     <C>     <C>          <C>      <C>
Howard C.     1998         164,417    none      4,119   none       none      none      3,227(2)
Mills(5)
CEO/President 1997         160,804    43,200    4,323   none       7,200     none      3,135(2)
              1996         149,925    28,336    5,623   none       7,200     none      2,999(2)
                                                                                      
James L.      1998         106,156    none      none    none       none      none      2,136(2)
Sherwood IV
              1997         101,550    14,400    none    none       3,000     none      2,013(2)
              1996          96,785    13,970    none    none       1,800     none      5,284(3)
                                                                                      
James C.      1998         112,390    17,950    none    none       none      none      2,607(2)
Dobrowolski
              1997         113,549    28,430    none    none       6,375     none      6,117(3)
              1996          96,940    13,627    2,400   none       3,600     none         599(2)
                                                                                      
Melvin L.     1998         103,650    54,096    none    none       none      none       3,345(2)
Schuler
              1997          97,786    57,670    none    none       4,500     none       1,956(2)
              1996          89,733    19,712    none    none       1,500     none       1,794(2)
                                                                                      
Thomas L.     1998         129,996    none      none    none      none       none       2,700(2)
Mountcastle
              1997         127,497    none      none    none     13,500      none       1,200(2)
                                                                                      
Thomas E.     1998         111,177    8,439     none    none       1,500     none       2,399(2)
Nolan
              1997         107,623    none      none    none       6,375     none     13,768(4)
                                                                                      
Frank J.      1998         110,240    none      none    none       5,000     none     1,823(2)
Ostronic
                                                                                      
John D.       1998         102,412    none      none    none       4,000     none     2,050(2)
D'Amore

</TABLE>

(1)  Value of Company furnished auto.
(2)  Amounts contributed to officer under 401(k) plan.
(3)  Amounts contributed to officer under 401(k) plan and paid vacation.
(4)  Amounts contributed to officer under 401(k) plan and living expenses.
(5)  The Company entered into an Executive Severance
     Agreement ("Agreement") with Mr. Mills in recognition of his
     position of high responsibility and the substantial
     contributions he has made to the Company over many years.  The
     Agreement provides benefits under certain circumstances
     including a change in control of the Company and is
     automatically renewed from year to year.  It confirms that
     employment is at will and provides for termination without
     additional compensation in the event of death, resignation,
     retirement or for cause.  Except in connection with a change
     of control, termination for any other reason results in
     compensation equal to eighteen (18) months salary.  In the
     event of termination within one (1) year  after a change in
     control or in the event Mr. Mills resigns or retires during
     the first ninety (90) days after a change in control, he would
     receive compensation equal to thirty-six (36) months salary
     subject to statutory limitations.



Director Compensation

During the year, Directors who are not officers of or otherwise
compensated by the Company receive an annual fee of $1,000 and
also receive $2,000 and reimbursement of expenses incurred for
each meeting of the Board of Directors which they attend.


Stock Option Plans

In 1984, the Company's shareholders approved the 1984 Incentive
Stock Option and Stock Appreciation Rights Plan (the 1984 "Plan").
The Company's key employees, including officers, were eligible to
participate.  Directors who were not officers were not eligible.

At the 1988 Annual Meeting of Shareholders, the shareholders
approved amendments to the 1984 Plan which increased to 165,000
the number of shares authorized for issuance pursuant to the 1984
Plan and brought the 1984 Plan into conformity with the Tax Reform
Act of 1986.

The 1984 Plan terminated May 15, 1994; however options continue to
be outstanding to officers and employees of the Company covering
3,674 shares of Common Stock.  These options all expire prior to
July 18, 1998.  (See note 7 to the consolidated  financial
statements.)

At the September 16, 1994 Annual Meeting, the shareholders
approved the new Key Employee Stock Option Plan ("1994 Plan").

The maximum number of shares subject to the 1994 Plan and approved
for issuance is 180,000 shares of the Company's Common Stock
either authorized and unissued or shares held in treasury.  This
number is subject to adjustment in the event of stock splits,
stock dividends or other recapitalization of the Company's Common
Stock.  The Company has registered the shares issuable to the plan
with the SEC.

The 1994 Plan is administered by a Committee selected by the Board
and is comprised of not less than three members of the Board.  The
Committee has the sole and absolute discretion to establish from
time-to-time the criteria for participation in the 1994 Plan and
to select the officers and other key employees to whom Options may
be granted, to determine all claims for benefits under the  1994
Plan, to impose such conditions and restrictions on Options as it
determines appropriate, with the consent of the recipient, to
cancel Options and to substitute new Options for previously
awarded Options which, at the time of such substitution, have an
exercise price in excess of fair market value of the underlying
shares of Company Common Stock.

The Committee also has the sole and absolute discretion to grant
options entitling the Participants to purchase shares of Company
Common Stock from the Company in such number, at such price and on
such terms and subject to such conditions, not inconsistent with
the terms of the 1994 Plan, as may be established by the
Committee.  The Company will receive no consideration with regard
to the granting of any Option granted under this 1994 Plan.  Due
to the broad discretion of the Committee, it is not possible to
determine at this time the benefits or amounts that will be
received by or allocated to the participants, if any.

Except as otherwise expressly provided in the 1994 Plan, the
Committee may designate, at  the time of the grant of an Option,
the Option as an Incentive Stock Option under Section 422 of the
Internal Revenue Code.  The Purchase Price of each share of
Company Common Stock which may be purchased upon exercise of any
Option granted under the 1994 Plan shall be established by the
Committee in its discretion, and in the case of Incentive Stock
Options, such Purchase Price shall not be less than 100% of the
Fair Market Value on the Date of Grant.


Each Option granted under the 1994 Plan shall be exercised by
written notice to the Company.  The Purchase Price of shares
purchased upon exercise of an Option granted under the 1994 Plan
shall be paid in full.

No option may be exercised in whole or in part prior to six months
from the Date of Grant.

The Board has complete power and authority to amend the 1994 Plan
at any time as it deems necessary or appropriate and no approval
by the stockholders of the Company or by any other person,
committee or entity of any kind is required to make any amendment;
provided, however, that the Board shall not, without the
affirmative approval of stockholders of the Company, increase the
number of shares of Company Common Stock available for Option
grants thereunder or make any other amendment which requires
stockholder approval under Rule 16b-3 of the Code.


In fiscal year 1996, options totaling 23,700 shares were offered
to employees at exercise prices ranging from $4.58 to $4.83, the
market prices on the dates of issuance.

In fiscal year 1997, options totaling 105,600 shares were offered
to employees at exercise prices ranging from $4.67 to $7.67, the
market prices on the dates of issuance.

In fiscal year 1998, options totaling 15,500 shares were offered
to employees at exercise prices ranging form $7.56 to $10.25, the
market price on the dates of issuance

At the September 19, 1997 Annual Meeting of Shareholders, the
shareholders approved the new Non-Employee Director Stock Option
Plan.  The maximum number of shares subject to the plan and
approved for issuance is 100,000 shares of the Company's Common
Stock either authorized and unissued or shares held in treasury.
This number is subject to adjustment in the event of stock splits,
stock dividends or other recapitalization of the Company's Common
Stock.  The Company has registered the shares issuable to the plan
with the SEC.  The plan will be administered by the Board of
Directors in whom the plan vests all powers and authority under
the plan.

Under the terms of the plan, each year on the first day of the
first month following the Annual Meeting of Shareholders of the
Company, each Non-Employee Director who has been elected or
reelected as a Board member shall receive an option.  This option
may be either a first option or subsequent option.  At initial
election to the Board a first option shall be granted for 5000
Common Stock shares.  A first option becomes exercisable in
installments cumulatively with respect to one sixtieth of the
Option Stock per month after the date of grant, so that one
hundred percent shall be exercisable five years after the date of
grant.  Upon each annual reelection as a Board Member, a
subsequent option shall be granted of up to a maximum of 2000
Common Stock shares.  A subsequent option becomes exercisable in
installments cumulatively with respect to one-twelfth of the
optioned stock per month after the date of grant, so that one
hundred percent shall be exercisable one year after the date of
grant.  The total maximum number of shares of Common Stock for
which any director shall be granted options under this plan is
13,000.  No option or any part of an option shall be exercisable
after the expiration of ten years from the date the Option was
granted.

In fiscal 1998, options totaling 30,000 shares were offered to non-
employee Directors at $10.25 per share, the market price on date
of issuance.<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and
Management

The following table sets forth as of  June 9, 1998 (1) the number
of shares of the Company's Common Stock owned beneficially by each
person who owned of record, or was known by the Company to have
owned beneficially, more than 5% of such shares then outstanding,
(2) the number of shares owned beneficially by each director of
the Company, and (3) the number of shares owned beneficially by
all officers and directors as a group.  Information as to the
beneficial ownership is based upon statements furnished to the
Company by such persons.


  Name and Address of        Amount and Nature of
   Beneficial Owner          Beneficial Ownership      Percent

  Research Industries              660,300              32.8
  Incorporated (1)(2)(3)
  123 North Pitt Street
  Alexandria, VA 22314

  Arch C. Scurlock (1)(5)           661,800             32.9
  123 North Pitt Street
  Alexandria, VA 22314

  Howard C. Mills (4)                68,367              3.4
  5250 Cherokee Avenue
  Alexandria, VA 22312

  Alvin E. Nashman                    4,500              0.2
  3170 Fairview Park Drive
  Falls Church, VA  22042

  John Toups                          4,500              0.2
  1209 Stuart Robeson Dr.
  McLean, VA  22101

  John H. Grover (2)                  1,500              0.1
  123 North Pitt Street
  Alexandria, VA 22314

  Clifford M. Hardin                  1,500              0.1
  10 Roan Lane
  St. Louis, MO 63124

  Ernest L. Ruffner (3)                 150                0
  209 North Patrick Street
  Alexandria, VA 22314

 Thomas L. Mountcastle              32,666              1.6
 2215 Tomlynn Street
 Richmond, VA  23230


<PAGE>


  Name and Address of        Amount and Nature of
   Beneficial Owner          Beneficial Ownership      Percent

 Melvin L. Schuler                  7,450               0.4
 5250 Cherokee Avenue
 Alexandria, VA  22312

  John D. D'Amore                    450                 0
 5250 Cherokee Avenue
 Alexandria, VA  22312

 James L. Sherwood IV                425                 0
 5250 Cherokee Avenue
 Alexandria, VA  22312

 Frank J. Ostronic                   150                 0
 5250 Cherokee Avenue
 Alexandria, VA  22312

 Thomas E. Nolan                     100                 0
 5250 Cherokee Avenue
 Alexandria, VA  22312

 James C. Dobrowolski                  0                 0
 5250 Cherokee Avenue
 Alexandria, VA  22312

  All officers and directors       783,558              38.9
  as a group, including
  the above
    (14 persons) (5)


 (1)  Research Industries Incorporated is 93% owned by Arch C. Scurlock, 
      Chairman of the Company's Board of Directors. Dr. Scurlock is also 
      President and a director of Research Industries Incorporated.

(2)   Mr. Grover is also a 5% owner, a director and Executive Vice 
      President and Treasurer of Research Industries Incorporated.

(3)   Mr. Ruffner is a director of Research Industries Incorporated.

(4)   Includes 450 shares held by Mr. Mills' wife.

(5)   Includes 660,300 shares owned by Research Industries
      Incorporated.

(6)   Research Industries Incorporated owns $2 Million face amount
      of the Company's 7%  Convertible
      Subordinated Debenture dated January 27, 1998.








Item 13.  Certain Relationships and Related Transactions

Ernest L. Ruffner, Secretary and General Counsel and a Director of
the Company, is a member of the law firm of Pompan, Murray,
Ruffner & Werfel.  During the fiscal year ended March 31, 1998,
the Company paid $62,000 for legal services to Mr. Ruffner as
General Counsel.

Jacob Pompan of Pompan, Murray, Ruffner & Werfel has represented
the Company in its government contract affairs since 1984.  During
the fiscal year ended March 31, 1998, the Company paid $9,096 to
the firm for this representation.

Alvin E. Nashman, a Director of the Company, provides consulting
services to the Company under an agreement.  During the fiscal
year ended March 31, 1998, the Company paid $24,000 for consulting
services to Mr. Nashman.

                               PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

(a)  The following documents are filed as part of this report:

        1.Consolidated Financial Statements

          o  Report of Independent Auditors
          o  Consolidated Statements of Earnings for the
             years ended March 31, 1998, 1997 and 1996
          o  Consolidated Balance Sheets as of March 31,
             1998 and 1997
          o  Consolidated Statements of Cash Flows for
             the years ended March 31, 1998, 1997 and 1996
          o  Consolidated Statements of Changes
             in Stockholders' Equity for the years ended March 31,
             1998, 1997 and 1996
          o  Notes to Consolidated Financial Statements

     2. Financial Statement Schedule

          o  Schedule II, Valuation & Qualifying Accounts

All other schedules are omitted since they are not applicable, not
required or the required information is included in the
consolidated financial statements or notes thereto.

     3.  Exhibits

 3.1 Articles of Incorporation, as amended.  (Incorporated by
     reference to Exhibit 3.1 to Form 10-K for the year ended
     March 31, 1995.)

 3.2  By-laws, as amended.  (Incorporated by reference to Exhibit
      3.2 to Form 10-K for the year ended March 31, 1995.)

 4.1  Loan and Security Agreement dated January 30, 1989 between
      the Company and Crestar Bank.  (Incorporated by reference to
      Exhibit 4.1 to Form 10-K for the year ended March 31, 1989.)

 4.2  First Amendment to Amended and Restated Loan and
      Security Agreement between the Company and Crestar Bank
      dated Dec. 11, 1992 and Amended and restated revolving note.
      (Incorporated by reference to Exhibit 4.2 to Form 10K for
      the Year ended March 31, 1993.)

 4.3  Loan agreement dated June 30, 1993 between
      the Company and Crestar Bank. (Incorporated by reference to
      Exhibit 4.3 to Form 10-K for the year ended March 31, 1994.)

 4.4  Second Amendment to Amended and Restated
      Loan and Security Agreement between the Company and Crestar
      Bank dated November 14, 1994 and amended and restated
      revolving note.  (Incorporated by reference to Exhibit 4.4
      to Form 10-K for the year ended March 31, 1995.)

10.1  1984 Incentive Stock Option and Stock
      Appreciation Rights Plan, as amended.  (Incorporated by
      reference to Exhibit 10.3 to the 1989 10-K.)

10.2  Agreement of purchase and sale with
      amendments dated June 7, 1992, between the Company and
      ReCap Inc. for  the Halifax Office Complex.  (Incorporated
      by reference to Exhibit 10.5 of the 1992 10-K.)

10.3  1994 Key Employee Stock Option Plan.
      (Incorporated by reference to Exhibit 10.3 to Form 10-K for
      the year ended March 31, 1995.)

10.4  Howard C. Mills Executive Severance Agreement

10.5  Thomas L. Mountcastle Employment Agreement

22.   Subsidiaries of the registrant

23.  Consent of Ernst &Young LLP, Independent Auditors

 (b) Reports on Form 8-K - None


<PAGE>
                               SIGNATURES
                                 
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

HALIFAX CORPORATION


By /s/Howard C. Mills
   Howard C. Mills
   President and Chief Executive Officer       Date: 6/29/98

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the dates
indicated.

     Signature                       Title                      Date


/s/Howard C. Mills                 President and               6/29/98
Howard C. Mills                    Chief Executive
Principal Executive Officer        Officer, Director



/s/John D. D'Amore                 Vice President,             6/29/98
John D. D'Amore                    Chief Financial Officer,
Principal Financial and            Treasurer & Controller
Accounting Officer


                                   Chairman of the
Arch C. Scurlock                   Board of Directors


/s/John H. Grover                  Director                    6/29/98
John H. Grover


                                   Director
Clifford M. Hardin


/s/Ernest L. Ruffner               Director                    6/29/98
Ernest L. Ruffner


/s/Alvin E. Nashman                Director                    6/29/98
Alvin E. Nashman


/s/John Toups                      Director                    6/29/98
John Toups

<PAGE>
                                 
                   REPORT OF INDEPENDENT AUDITORS
                                 

Board of Directors and Stockholders
Halifax Corporation

We have audited the accompanying consolidated balance sheets of
Halifax Corporation as of March 31, 1998 and 1997, and the related
consolidated statements of earnings, changes in stockholders'
equity and cash flows for each of the three years in the period
ended March 31, 1998.  Our audits also included the financial
statement schedule listed in the index at item 14(a)2.  These
financial statements and schedule are the responsibility of the
Company's management.  Our responsibility is to express an opinion
on these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Halifax Corporation at March 31, 1998 and 1997, and
the consolidated results of its operations and its cash flows for
each of the three years in the period ended March 31, 1998, in
conformity with generally accepted accounting principles.  Also,
in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information
set forth therein.



/s/Ernst & Young LLP

Washington, D.C.
June 15, 1998, except for Note 5
as to which the date is June 25, 1998
                                 


 <PAGE>
<TABLE>

HALIFAX CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<CAPTION>

                                         1998         1997          1996
<S>                                  <C>           <C>          <C>
Revenues (Note 1)                    
                                      $73,737,000   $76,278,000 $ 47,159,000
                                                                            
Operating costs and expenses:                                               
    Cost of services                   67,081,000   69,530,000    41,675,000
    Litigation expense                                       -       320,000
    Selling, general and                5,316,000    4,630,000     3,692,000
administrative
                                                                            
Total operating costs and expenses     72,397,000   74,160,000    45,687,000
                                                                            
Operating income                        1,340,000    2,118,000     1,472,000
                                                                            
Interest expense                        1,535,000      950,000       573,000
Other income                          (1,004,000)    (409,000)     (362,000)
                                                                            
Income before income taxes                809,000    1,577,000     1,261,000
                                                                            
Income taxes (Note 8)                     367,000      623,000       498,000
                                                                            
Net earnings                            $ 442,000    $ 954,000     $ 763,000
                                                                            
Net earnings  per common  share -         $   .22       $  .48        $  .43
basic
                                                                            
Net earnings  per common share -          $   .21      $   .47        $  .43
diluted
                                                                            
Weighted average number of common                                           
shares outstanding - basic              2,006,603    1,985,599     1,756,881
                                                                            
Weighted average number of common                                           
shares outstanding - diluted            2,067,499    2,050,609     1,756,919
                                                                            

See notes to consolidated financial statements
</TABLE>


<PAGE>
<TABLE>

HALIFAX CORPORATION
CONSOLIDATED BALANCE SHEETS  MARCH 31, 1998 AND 1997
<CAPTION>

                                                    March
                                                31
                                               1998               1997
<S>                                     <C>                 <C>
ASSETS                                                                      
                                                                            
CURRENT ASSETS                                                              
  Cash                                      $        67,000    $     268,000
  Trade accounts receivable (Note 3)             20,814,000       21,951,000
  Other receivables                                       -           62,000
  Inventory                                       8,203,000        6,860,000
  Prepaid expenses and other current              1,811,000        1,300,000
assets
  Income taxes receivable                             4,000           43,000
  Deferred income taxes (Notes 1 and                483,000          659,000
8)
TOTAL CURRENT ASSETS                             31,382,000       31,143,000
                                                                            
PROPERTY AND EQUIPMENT, at cost less                                        
accumulated                                       3,578,000        6,624,000
  depreciation and amortization (Notes
1 and 4)
                                                                            
COST IN EXCESS OF NET ASSETS ACQUIRED,                                      
net of accumulated                                2,481,000        2,583,000
 amortization (Notes 1 and 2)
                                                                            
OTHER ASSETS                                        534,000          650,000
                                                                            
TOTAL  ASSETS                                  $ 37,975,000    $  41,000,000
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
CURRENT LIABILITIES                                                         
  Accounts payable and accrued                $   7,004,000     $  8,382,000
expenses (Note 6)
  Deferred maintenance revenue                    1,461,000        2,265,000
  Bank overdrafts                                 1,768,000        1,803,000
  Current portion of long-term debt &               786,000        1,206,000
mortgage note payable (Note 5)
                                                                            
TOTAL CURRENT LIABILITIES                        11,019,000       13,656,000
                                                                            
LONG-TERM DEBT (Note 5)                          14,923,000       13,570,000
MORTGAGE NOTE PAYABLE (Note 5)                            -        2,398,000
DEFERRED INCOME TAXES (Notes 1 and 8)               735,000          853,000
DEFERRED INCOME                                     690,000                 
                                                                           -
                                                                            
TOTAL LIABILITIES                                27,367,000       30,477,000
                                                                            
STOCKHOLDERS' EQUITY (Note 7)                                               
 Common stock, $.24 par value:                                              
 Authorized - 4,500,000 shares                                              
 Issued - 2,267,166 in 1998 and                                             
2,258,866 in 1997
 Outstanding - 2,010,482 in 1998 and                544,000          542,000
2,000,632 in 1997
 Additional paid-in capital                       4,399,000        4,358,000
 Retained earnings                                5,877,000        5,836,000
                                                 10,820,000       10,736,000
Less treasury stock at cost - 256,684               212,000          213,000
shares in 1998 and 258,234 in 1997
TOTAL STOCKHOLDERS' EQUITY                       10,608,000       10,523,000
                                                                            
TOTAL LIABILITIES AND STOCKHOLDERS'            $ 37,975,000    $  41,000,000
EQUITY

See notes to  consolidated financial statements
</TABLE>

<TABLE>

HALIFAX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 1998, 1997, AND 1996
<CAPTION>

                                     1998           1997           1996
<S>                             <C>             <C>            <C>
Cash flows from operating                                                   
activities:
                                                                            
Net income                           $  442,000    $  954,000     $  763,000
                                                                            
Adjustments to reconcile net                                                
income to net
  cash provided (used) by                                                   
operating activities:
                                                                            
  Depreciation and amortization       1,366,000     1,060,000        599,000
  (Gain) loss on sale of              (776,000)       164,000              -
property and equipment
  (Increase) decrease in              1,137,000   (5,355,000)      (562,000)
accounts receivable
  (Increase) decrease in other           62,000        83,000          1,000
receivables
  (Increase) decrease in            (1,343,000)   (1,284,000)        688,000
inventory
  (Increase) decrease in                                                    
prepaid expense and other             (335,000)   (1,005,000)         77,000
    current assets
 (Increase) decrease in other assets    56,000      (367,000)       (44,000)
 (Increase) decrease in income           39,000     (184,000)      (111,000)
tax receivable
  Increase (decrease) in                                                    
accounts payable accrued expenses
  and other current liabilities     (2,217,000)   (1,036,000)      5,502,000
  Increase (decrease) in income               -      (91,000)         90,000
taxes payable
 (Decrease) increase in deferred                                               
 income taxes                         (118,000)       186,000        107,000
  Decrease in deferred income          (25,000)             -              -
   Total adjustment                 (2,154,000)   (7,829,000)      6,347,000
                                                                                                                              
   Net cash (used) provided by      (1,712,000)   (6,875,000)      7,110,000
operating activities
                                                                            
Cash flows from investing                                                   
activities:
                                                                            
 Purchase of property and                                                
equipment, net of                   (1,472,000)   (1,684,000)      (247,000)
acquisitions
 Proceeds from sale of property      4,856,000         41,000          3,000
and equipment
 Acquisitions                          (50,000)     (114,000)      (400,000)
                                                                            
 Net cash provided (used) in          3,334,000   (1,757,000)      (644,000)
investing activities
                                                                            
Cash flows from financing                                                   
activities:
                                                                            
 Proceeds from borrowing of          36,850,000    40,216,000     16,271,000
long-term debt
 Retirement of long-term debt      (38,315,000)  (33,866,000)   (19,632,000)
 Cash dividends paid                  (401,000)     (371,000)      (305,000)
 Proceeds from sale of stock                                                
upon exercise of
  stock options                          43,000       178,000              -
 Purchase of treasury stock                   -             -       (75,000)
 Net cash (used) provided by        (1,823,000)     6,157,000    (3,741,000)
financing activities
                                                                            
Net (decrease) increase in cash       (201,000)   (2,475,000)      2,725,000
Cash at beginning of year               268,000     2,743,000         18,000
Cash at end of year                   $  67,000    $  268,000   $  2,743,000

See notes to consolidated financial statements
</TABLE>





<TABLE>

HALIFAX CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 1998, 1997, AND 1996
<CAPTION>



                             Additional                        Treasury
              Common Stock                             Stock
                                             Paid-In       Retained                                     
                 Shares       Par Value      Capital       Earnings      Shares         Cost         Total
<S>           <C>            <C>          <C>            <C>           <C>          <C>          <C>
                                                                                                               
Balance                                                                                                        
March 31,         2,220,022   $   518,000   $  3,401,000 $  4,795,000      449,529   $ (313,000)    $ 8,401,000
1995
                                                                                                               
Cash                                                                                                           
Dividends
($.173 per                -             -              -    (305,000)            -             -      (305,000)
share)
Net income                -             -              -      763,000            -             -        763,000
Purchase of                                                                                                    
Treasury                  -             -              -            -       18,150      (75,000)       (75,000)
stock
                                                                                                               
Balance                                                                                                        
March 31,         2,220,022   $   518,000   $  3,401,000  $ 5,253,000      467,679   $ (388,000)    $ 8,784,000
1996
                                                                                                               
Cash                                                                                                           
Dividends
($.187 per                -             -              -    (371,000)            -             -      (371,000)
share)
Net income                -             -              -      954,000            -             -        954,000
                                                                                                               
Exercise of                                                                                                    
Stock Options        38,611         9,000        169,000            -            -             -        178,000
                                                                                                               
Stock Split             233        15,000       (15,000)            -            -             -              -
                                                                                                               
CMSA                      -                      803,000            -    (209,445)       175,000        978,000
Acquisition                             -
                                                                                                               
Balance                                                                                                        
March 31,         2,258,866   $   542,000   $  4,358,000  $ 5,836,000      258,234   $ (213,000)   $ 10,523,000
1997
                                                                                                               
Cash                                                                                                           
Dividends
($.20 per                 -             -              -    (401,000)            -             -      (401,000)
share)
Net income                -             -              -      442,000            -             -        442,000
                                                                                                               
Exercise of                                                                                                    
Stock Options         8,300         2,000         41,000            -            -             -         43,000
                                                                                                               
CMSA                                                                                                           
Acquisition
Earnout                                                                    (1,550)         1,000          1,000
                                                                                                               
Balance                                                                                                        
March 31,         2,267,166   $   544,000   $  4,399,000  $ 5,877,000      256,684  $  (212,000)   $ 10,608,000
1998
</TABLE>

See notes to consolidated financial statements.



<PAGE>


HALIFAX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1998, 1997 AND 1996

1.  SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY

    Business   Activity  -  Halifax  Corporation,  (the   Company)
    provides  Technology  Services and Facilities  Management  for
    commercial and government activities.  These services  include
    the    integration,    systems   engineering,    installation,
    maintenance  and training for computer systems, communications
    systems,   and   simulation  systems;  and   the   management,
    operations   and   maintenance  support  of  military   bases,
    prisons,    waterways,    major    office    complexes,    and
    communications  sites.    Revenues from services  rendered  to
    the  United States Government and the relative percentages  of
    such revenues to total revenues for the years ended March  31,
    1998,  1997 and 1996 are $26,080,000 (35%), $36,111,000 (47%),
    and  $34,425,000 (73%), respectively.  The reduction in United
    States  Government revenue in 1998 is primarily  a  result  of
    the  Company's  acquisition activities, however the  Company's
    trend  is  toward  a balance among commercial, state/municipal
    government and federal government revenues.

    Principles  of  Consolidation  -  The  Company's  consolidated
    financial  statements include the accounts of the Company  and
    its  wholly-owned subsidiaries.  All significant  intercompany
    transactions are eliminated in consolidation.

    Revenue  Recognition  - On cost type contracts,  revenues  are
    recorded as reimbursable costs are incurred and related  fixed
    and   award   fees  are  recorded  using  the  percentage   of
    completion method.  On time and materials contracts,  revenues
    are  recorded  at  the contractual rates as  labor  hours  and
    other   direct   expenses  are  incurred.   On   fixed   price
    contracts,  revenues  are  recorded using  the  percentage  of
    completion   method.   Revenues  collected  in   advance   for
    commercial  maintenance contracts are deferred and  recognized
    over  the  term of the related agreements.  For all contracts,
    recognition   is   made   of  any  anticipated   losses   when
    identified.   Disputes involving amounts owed the  Company  by
    customers   arise  in  the  normal  course  of  the  Company's
    business.   These  disputes are primarily due  to  changes  in
    contract    specifications   and   disagreements   over    the
    interpretation  of  contract provisions.   Such  disputes  are
    recorded  at  the  lesser  of their estimated  net  realizable
    value  or  actual costs incurred.  Claims against the  Company
    recognized  when  the   loss   is considered  probable and 
    reasonably  determinable  in  amount. Deferred  maintenance 
    revenue is recognized ratably  over  the performance period.

    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  and
    disclosure  of contingent assets and liabilities at  the  date
    of  the  financial  statements and  the  reported  amounts  of
    revenues  and  expenses during the reporting  period.   Actual
    results could differ from those estimates.

    Property  and Equipment - Property and equipment is stated  at
    cost.    Depreciation  is  provided  using  the  straight-line
    method over the estimated useful lives of the related assets.

    Inventory  - Inventory consists principally of spare  computer
    parts  valued  at the lower of cost or market on the  first-in
    first-out basis and computer and computer peripheral  hardware
    and  software  in  the  process of  delivery  upon  resale  to
    customers  valued  at  the lower of  cost  or  market  on  the
    average  cost  basis  and  is displayed  on  the  consolidated
    balance  sheet  net of allowances for inventory  valuation  of
    $356,000   and    $499,000  at  March  31,  1998   and   1997,
    respectively.

    Accounts   Receivable  and  Inventories  -   Receivables   and
    inventories are primarily attributable to long-term  contracts
    or  programs  in  progress  for which  the  related  operating
    cycles  are longer than one year.  In accordance with industry
    practice, these items are included in current assets.

    Income  Taxes  -  Deferred  taxes  are  provided on  all  
    temporary  differences measured  using  enacted tax rates 
    expected to  be  in  effect during the  periods  in  which the  
    temporary  differences reverse.

    Cost in Excess of Net Assets Acquired - Cost in excess of  net
    assets  of acquired companies, described in Note 2, is  being
    amortized  using  the  straight-line  method  over  25  years.
    Accumulated  amortization was  $335,000  and  $219,000  as  of
    March 31, 1998 and 1997, respectively.

     Earnings Per Common Share -  The computation  of basic earnings 
     per share is based on  the weighted  average  number of shares
     outstanding  during  the  period.

     The   computation  of   diluted earnings per share is based on
     the weighted average number of shares  outstanding  during the 
     period plus  dilutive  common stock  equivalents  consisting of 
     certain shares  subject to stock options based on the average 
     market price of the common stock  and contingently issuable 
     shares based on an earn-out provision related to the acquisition 
     of CMSA.

     
    New  Accounting Pronouncements -  Effective December 31, 1997,
    the  Corporation  adopted  Statement of  Financial  Accounting
    Standards   (SFAS)  No.  128,  "Earnings  Per  Share",   which
    established   new  standards  for  computing  and   disclosing
    earnings  per share.  The Statement requires dual presentation
    of  "basic" and "diluted" earnings per share, each as  defined
    therein, which replace primary and fully diluted earnings  per
    share,  respectively,  required under previous  guidance.   In
    accordance with SFAS No.  128, all earnings per share  amounts
    included  in the consolidated financial statements  have  been
    restated to conform (see Note 13).

     In  1997,  the Financial Accounting Standards Board  issued
     SFAS  No.  131, "Disclosures about Segments of an  Enterprise
     and Related Information."  SFAS No. 131 establishes standards
     for the way in which publicly-held companies report financial
     and descriptive information about their operating segments in
     financial statements for both interim and annual periods, and
     requires additional disclosures with respect to products  and
     services,  geographic areas of operation and major customers.
     The  Statement is effective for fiscal years beginning  after
     December  15, 1997.  The Company intends to comply  with
     the  provisions of this standard in fiscal year 1999, however
     disclosure under SFAS 14, "Disclosures about Segments  of  an
     Enterprise and Related Information," the predecessor standard
     to  SFAS  131  is included in the accompanying   consolidated
     financial statements.  (See Note 14.)
<PAGE>

2.  ACQUISITIONS

CMS Automation, Inc. (CMSA) and Consolidated ComputerInvestors, 
Inc. (CCI)

On  April  1, 1996, the Company completed the acquisition  of  CMS
Automation,  Inc.  (CMSA), a private Richmond, VA  based  computer
network  integration and solutions company.   On April  23,  1997,
CMSA  was  renamed  Halifax Technology Services  Company   (HTSC).
Financial  consideration  was  in  the  Company's  stock  with  an
assumption of debt.  There was an initial payment of approximately
209,400  shares  valued  at approximately $978,000  from  Treasury
Stock representing approximately 12% of Halifax outstanding shares
at  closing  and there may be additional payments of common  stock
through fiscal 1999 based on the annual earnings of  CMSA.

The  acquisition  has been accounted for as a  purchase  with  the
purchase  price allocated to the assets and liabilities  based  on
their  estimated  fair  value at the  date  of  acquisition.   The
initial  purchase price and costs of the transaction exceeded  the
fair  value  of  net  assets  purchased  by  $391,000  which   was
capitalized as cost in excess of net assets acquired.

On  November  25,  1996,  the  Company  through  its  wholly-owned
subsidiary,   CMSA,   acquired  the   ongoing   computer   network
integration  business  of  Consolidated Computer  Investors,  Inc.
("CCI")  of  Hanover,  Maryland through an  asset  purchase.   The
Company  paid  $114,000 in cash and assumed secured debt  totaling
$1,680,000.

The  acquisition  has been accounted for as a  purchase  with  the
purchase  price allocated to the assets and liabilities  based  on
their  estimated fair value.  The initial purchase price and costs
of the transaction exceeded the fair value of net assets purchased
by  $375,000  which was capitalized as cost   in  excess  of   net
assets acquired.

The Company's fiscal 1997 results include CMSA's and CCI's results
of  operations  beginning  April 1, 1996  and  November  1,  1996,
respectively.   The  proforma impact of  the  CCI  acquisition  on
fiscal  1997  is immaterial.  The following fiscal  1996  proforma
information is unaudited and reflects both of the acquisitions  as
if the purchase transactions had occurred on April 1, 1995.
<TABLE>
<CAPTION>



               For the                                      
              Year Ended
               March 31    Dec.    Profor          Dec.    Proform     
                 1996      31,       ma   Profor    31,       a    Proforma
               Halifax     1995    Adjust   ma     1995    Adjustm Combined
                           CMSA    ments  Combin    CCI     ents
                                   & Tax    ed              & Tax
                                   Effect                  Effect
                ($ In                      
              thousands,
              except per
                share
                data)
<S>           <C>        <C>       <C>    <C>     <C>      <C>     <C>
Revenues       $47,159  $21,249      $-  $68,408   $13,526  $-     $81,934
                                                  
                                                                            
Net Income     $   763   $(109)    $137   $ 791    $(231)   $313   $873
(Loss)
                                                                            
Earnings per   $   .43     N/A            $.40      NA             $.44
share-basic
                                                                            
Weighted                                                        #1,966,326
Average                                                                  
Number of
Common
Shares
Outstanding-
basic
</TABLE>



Electronics Associates, Inc. (EAI)


On   June 30, 1993, the Company purchased substantially all of the
assets   and  liabilities  of  the  Field  Services  Division   of
Electronic  Associates, Inc. (EAI) which was primarily engaged  in
the  maintenance  of  electronic equipment  and  software  for  an
initial  purchase price of approximately $2.4 million.  Additional
payments of $1,000,000 were paid over the next 3 years as  certain
revenue  objectives  were  achieved.  The  Company  paid  $200,000
relating to this requirement in 1994 and $400,000 in both 1995 and
1996.


3.   ACCOUNTS RECEIVABLE

   Accounts receivable consist of:
<TABLE>
<CAPTION>

                                       March 31,
                                         1998                   1997
<S>                             <C>                      <C>
Amounts billed                            $  17,987,000        $  19,708,000
                                                                            
Amounts unbilled:                                                           
 Amounts currently billable                   2,871,000            1,800,000
 Retainages and amounts                         272,000              677,000
awaiting audit
Total                                        21,130,000           22,185,000
Allowance for doubtful accounts               (316,000)            (234,000)
Total                                   $    20,814,000       $   21,951,000
                                                                            
</TABLE>


     Retainages  are   generally billable  upon acceptance of work by 
     customers or  completion of contract audits by the Government.  
     It is anticipated that the  accounts  receivable balance at 
     March 31, 1998  will  be substantially collected within one year.


4.   PROPERTY AND EQUIPMENT

      Property and equipment consists of:
<TABLE>
<CAPTION>


                                       March 31,          
<S>                        <C>              <C>               <C>
                                                           Estimated
                             1998             1997        Useful Lives
                                                              
Automotive equipment             $  351,000       $  375,000  4 years    
Machinery and equipment           8,005,800        6,260,000  3 - 10 years
Furniture and fixtures            1,420,200        1,323,000  5 - 10 years
Building and improvements           150,000        3,955,000  32 years
Land                                      -          648,000  
Total                             9,927,000       12,561,000  
                                                              
Accumulated depreciation          6,349,000        5,937,000  
and amortization
Total                          $  3,578,000     $  6,624,000  
                                                              
</TABLE>

<PAGE>

5.   LONG-TERM DEBT AND MORTGAGE NOTE PAYABLE
<TABLE>
<CAPTION>

                                               March 31,
<S>                                          <C>             <C>
                                                  1998            1997
Long-term debt consists of:                                                 
                                                                            
Revolving credit agreement amended effective                                
February 4, 1997, April 30, 1997, June 30,                                  
1997, September 5, 1997 and December 3,                                     
1997,  with a maximum credit line of                                        
$12,800,000.  Amounts available under this                                  
agreement are determined by applying stated                                 
percentages to the Company's eligible billed                                
receivables and inventory.  Interest accrues   $  11,130,000     $ 11,046,000
at either the prime rate plus 1/4% or the 
LIBOR rateplus 1.6%  to 1.9% depending upon 
a leverage ratio.  At March 31, 1998 the 
interest rate was 7.587%.  This agreement 
was to expire July 31, 1998, however it was 
replaced by a new agreement effective 
June 25, 1998.
                                                                            
7% Convertible Subordinated Debenture dated                                 
January 27, 1998.  Principal due in full on                                 
January 27, 2003.  Interest payable                                         
semiannually in arrears beginning August 1,                                 
1998.  May be prepaid by the Company on any                                 
date more than two years after January 27,     $  2,000,000                -
1998.  Convertible by noteholder at any time
at a conversion price  of $11.72 per common
share.  The closing market price of the
company's common stock on March 31, 1998 was
$9.25.
                                                                            
Other notes payable and capital lease                                       
obligations with interest rates ranging from                                
the prime rate to 15%, due in monthly             $   5,000        $  20,000
installments and maturing at dates through
1999.  The prime rate was 8.5% at March 31,
1998.
                                                                            
Mortgage note paid off on November 6, 1997.                                 
Previously payable in monthly installments                                  
of $10,257 plus interest at prime plus 1/4%                                 
through August 31, 2001. At March 31, 1998,               -     $  2,531,000
the interest rate was 8.75%.  The note was
collateralized by buildings and land which
have been sold.
                                                                            
EAI acquisition term loan facility dated                                    
June 30, 1993.  Note is payable in 60 equal                                 
monthly installments of $41,666 plus                                        
interest.  The note may be apportioned                                      
between prime rate and LIBOR rate options.       $  203,000        $ 645,000
Interest accrues at either the prime rate
plus 1/2% or the LIBOR rate plus 2.5%.  At
March 31, 1998, the prime rate and LIBOR
options were at 9% and 8.125%, respectively.
                                                                            
CMSA acquisition term loan facility dated                                   
June 14, 1996.  Note is payable in 24 equal                                 
monthly installments of $29,762 plus                                        
interest and a final installment of            $  1,845,000     $  2,202,000
$1,785,712 due on June 30, 1998 plus
interest.  Interest accrues at the prime
rate plus 1/4%.  At March 31, 1998, the
interest rate was 8.75%.
                                                                            
CCI acquisition term loan facility dated                                    
November 26, 1996.  Note is payable in 48                                   
equal monthly installments of $16,979 plus       $  526,000       $  730,000
interest.  Interest accrues at the prime
rate plus 1/4%.  At March 31, 1998, the
interest rate was 8.75%.
                                                                            
                                                 15,709,000     $ 17,174,000
Less current maturities                             786,000        1,206,000
Total                                          $ 14,923,000    $  15,968,000
                                                                            
</TABLE>




     Advances under the revolving credit agreement and term loan 
     facilities are collateralized by a first priority security 
     interest in  all of the accounts receivable of the Company, 
     the inventory of Halifax Corporation  and all of the Company's 
     other assets.  Additionally, advances under the term loan 
     facilities are secured by the acquired assets.  The revolving 
     credit agreement also contains convenants which require the 
     Company to maintain certain net worth and financial statement 
     ratios.  The amount of $11,130,000 has been excluded from 
     current liabilities because the Company intends that at least 
     that amount would remain outstanding under this agreement for 
     an uninterrupted peroid extending beyound one year from the 
     balance sheet date.

     The Company signed a new banking agreement on June 25, 1998 which 
     restructures all of the Company's debt as presented at March 31, 
     1998 except for the "7% Convertible Subordinated Debenture" and the
     "Other Notes Payable."  The new debt structure consists of a
     revolving line of credit and two term loans which in total
     make $17.5 million of credit available to the Company.
     Advances under the revolving line of credit and term loan
     facilities are collateralized by a first priority security
     interest in all of the accounts receivable of the Company,
     the inventory of Halifax Corporation and all other assets of
     the Company except for the inventory of  HTSC.  The agreement
     contains covenants which require the Company to maintain or
     achieve certain net worth, capital, cash flow and other
     financial statement ratios or values.  Pricing is performance
     driven and based on LIBOR with a range from LIBOR plus 1.5%
     to 3.55%. Term loan principal amortization is required on a
     quarterly basis.

     The aggregate annual maturities of long-term debt, based on the 
     terms of the new banking agreement, are:
<TABLE>

         <S>                <C>
                   1999   -                786,000
                   2000   -                181,000
                   2001   -             12,742,000
                   2002   -                      -
                   2003   -              2,000,000
             Thereafter   -                      -
                  Total   -           $ 15,709,000
</TABLE>


6.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

          Accounts payable and accrued expenses consist of:
<TABLE>
<CAPTION>

                                               March 31,
                                        1998                 1997
  <S>                          <C>                    <C>
  Accounts payable                       $  3,075,000        $  5,328,000
  Accrued expenses                          2,152,000           1,381,000
  Accrued vacation                            829,000             859,000
  Accrued payroll                             594,000             563,000
  Payroll taxes accrued and                   354,000             251,000
  withheld
                                         $  7,004,000        $  8,382,000
                                                                         
</TABLE>

7.   COMMON STOCK

     Stock Options - Under the Company's 1984 Stock Option
     and Stock Appreciation Rights Plan (as amended), options to
     purchase shares of the Company's common stock have been
     granted to officers and key employees at a price not less
     than the fair market value of the stock at the date of grant.
     Any grants of options or stock appreciation rights under the
     plan are limited to a maximum of 165,000 shares of the
     Company's common stock.  Options and/or stock appreciation
     rights expire five years after the date of grant.  The 1984
     plan terminated May 15, 1994.  On September 16, 1994 the
     shareholders approved the new Key Employee Stock Option Plan
     ("1994 Plan").  The maximum number  of shares subject to the
     1994 Plan and approved for issuance is 180,000 shares of the
     Company's common stock either authorized and unissued or
     shares held in treasury.  This number is subject to
     adjustment in the event of stock splits, stock dividends or
     other recapitalization of the Company's common stock.

<PAGE>
          A summary of options activity is as follows:
<TABLE>

<CAPTION>


                                                                                                 Weighted
                                           Optioned        Option Price                          Average
                                            Shares          Per Share           Total         Exercise price
<S>                                     <C>              <C>               <C>               <C>
1984 PLAN                                                                                                    
                                                                                                             
Balance March 31, 1995                           58,650      $4.59 - 5.67          $280,000     $        4.77
                                                                                                             
Options forfeited upon retirement/                                                                           
  termination of employees                      (6,000)       4.59 - 5.00          (28,140)              4.69
Balance March 31, 1996                                    $   4.59 - 5.00     $     251,860     $        4.78
                                                 52,650
                                                                                                             
Options exercised                              (38,611)       4.59 - 5.00         (178,795)              4.63
Options forfeited upon retirement/                                                                           
  termination of employees                      (1,688)              5.00           (8,440)              5.00
Balance March 31, 1997                           12,351   $   5.00 - 5.67      $     64,625     $        5.23
                                                                                                             
Options exercised                               (8,677)   $   5.00 - 5.67          (46,255)              5.33
                                                                                                             
Balance March 31, 1998                            3,674    $         5.00      $     18,370     $        5.00
                                                                                                             
Options exercisable at                                                                                       
March 31, 1998                                    3,674    $         5.00      $     18,370     $        5.00
                                                                                                             
1994 PLAN                                                                                                    
                                                                                                             
Balance March 31, 1995                           48,000   $          4.67       $   224,000     $        4.67
                                                                                                             
Options granted                                  23,700       4.58 - 4.83           114,175              4.82
Options forfeited upon retirement/                                                                           
  termination of employees                      (4,500)       4.58 - 4.83          (21,250)              4.72
Balance March 31, 1996                                     $  4.58 - 4.83      $    316,925     $        4.72
                                                 67,200
                                                                                                             
Options granted                                 105,600       4.67 - 7.67           680,800              6.45
Options forfeited upon retirement/                                                                           
  termination of employees                     (24,000)       4.67 - 7.33         (137,810)              5.74
Balance March 31, 1997                          148,800   $   4.58 - 7.67     $     859,915     $        5.78
                                                                                                             
Options exercisable at                                                                                       
March 31, 1998                                   16,200   $          4.67      $     75,654     $        4.67
                                                                                                             
Options granted                                  15,500      7.56 - 10.25           134,665              8.69
Options forfeited upon retirement/                                                                           
  termination of employees                     (25,000)      4.67 - 10.25         (172,800)              6.91
Balance March 31, 1998                          138,800   $  4.58 - 10.25   $      821,760      $        5.92
                                                                                                             
NON-EMPLOYEE DIRECTORS STOCK OPTION                           
PLAN
                                      
Options granted                                  30,000                             307,500             10.25
                                                                    10.25
Balance March 31, 1998                           30,000       $     10.25   $       307,500     $       10.25
                                                                    

</TABLE>



All  stock-based incentive awards granted in  1998, 1997 and  1996
under the 1984 and 1994 Plans were stock options which have 5 year
terms  and  vest  at the end of the third and fourth  years.   All
awards  granted  in  1998 under the Non-Employee  Directors  Stock
Options  Plan were stock options which have 5 year terms and  vest
in  installments cumulatively with respect to one-sixtieth of that
option  stock per month after the date of grant.  Exercise  prices
of all options awarded in all years  under all plans were equal to
the  market  price  of the stock on the date of  grant.   Proforma
information  regarding  net earnings and  earnings  per  share  as
required by SFAS No. 123 has been determined as if the Company had
accounted  for  its employee stock options under  the  fair  value
method.   The  fair value for these options was estimated  at  the
date of grant using a Black-Scholes option pricing model with  the
following  weighted-average assumptions for 1998 and  1997:  risk-
free  interest  rate  of  5.99% to 6.52% and  6.16%  respectively,
dividend  yield  of  2% and 3.1% respectively,  volatility  factor
related to the expected market price of the Company's common stock
of   .262,  and  weighted-average expected option life  of   three
years.  The weighted average fair values of options granted during
1998 and 1997 were $2.56 and $1.25, respectively.

For  purposes of proforma disclosures, the options' estimated fair
 values are amortized to expense over the options'
vesting periods.  Therefore, the proforma results presented  below
include  up  to  33%  of the total proforma  expense  for  options
awarded  in  that  year depending upon the  date  of  grant.   The
Corporation's proforma information  for the years ended March  31,
is as follows:
<TABLE>
<CAPTION>


     (In thousands, except       1998          1997           1996
     per share data)
     <S>                     <C>           <C>           <C>
     Proforma net earnings       $    402        $   930         $   759
     Proforma earnings per                                              
     common share:
       Basic                          .20            .46             .43
       Diluted                        .19            .45             .43
                                                                        
</TABLE>

          Employee Plans - During fiscal 1985, the Company adopted
   a  401(k)  retirement plan covering substantially all non-union
   employees  with  more  than  3 months  of  service.   The  plan
   provides  that the Company will contribute an amount  equal  to
   50%  of a participants contribution up to 4% of salary, and  at
   the  Company's  discretion, additional amounts based  upon  the
   profitability  of  the  Company.  The  Company's  contributions
   were  $199,000 in 1998, $191,000 in 1997 and $157,000 in  1996.
   The  Company  has an Employee Stock Purchase Plan  under  which
   all  employees of the Company are eligible to contribute  funds
   for  the  purchase of the Company's common stock  on  the  open
   market at market value.  Under the Plan, the Company agrees  to
   pay all brokerage commissions associated with such purchases.

8.       INCOME TAXES

         Deferred tax assets and liabilities on the balance
   sheets reflect the net tax effect of temporary differences
   between carrying amounts of assets and liabilities for
   financial statement purposes and the amounts used for income
   tax purposes.  The deferred tax assets and liabilities are
   classified on the balance sheets as current or non current
   based on the classification of the related assets and
   liabilities.

         The components of income tax expense are as follows for
   the years ended March 31:
<TABLE>
<CAPTION>

                              1998              1997             1996
     <S>                <C>               <C>               <C>
     Current:                                                              
       Federal                  $ 256,000      $   494,000      $   355,000
       State                       53,000          101,000           75,000
     Total current:               309,000          595,000                 
                                                                    430,000
       Deferred                    58,000           28,000           68,000
     Total                     $  367,000      $   623,000     $    498,000
</TABLE>

         The components of the Company's deferred tax assets and
   liabilities consist of the following at March 31:
<TABLE>
<CAPTION>

                                     1998                 1997
<S>                           <C>                 <C>
Deferred tax assets - current                                         
                                                  
Accounts receivable/reserves        $      36,000       $      102,000
Inventory                                 174,000              234,000
Accrued compensation/vacation             273,000              323,000
Net operating loss carry                   51,000               51,000
forwards - HTSC
AMT credit carry forward -                 15,000               15,000
HTSC
Less: valuation allowance                (66,000)             (66,000)
                                     $   483,000         $     659,000
                                                                      
Deferred tax liability                                               
 (asset)-noncurrent
                                                                      
Deferred start-up costs              $     62,000                $   -
Deferred gain on building sale           (258,000)                   -
Depreciation/amortization                 895,000                     
                                                               785,000
Sublease rental income                      2,000               33,000
Contract claims/Other                      34,000               35,000
                                     $    735,000        $     853,000


   The differences between the provision for income taxes
   at the expected statutory rate and those shown in the
   consolidated statements of earnings are as follows for the
   years ended March 31:

</TABLE>
<TABLE>
<CAPTION>

                                   1998           1997           1996
<S>                           <C>             <C>           <C>
Provision for income taxes                                                 
 at statutory rate                     34.0%          34.0%           34.0%
State taxes, net of federal              4.6            4.4             4.3
benefit
Permanent differences                    4.8            1.1             1.4
Other                                    2.0              -            (.2)
Total                                  45.4%          39.5%           39.5%
</TABLE>






9.       LEASING ACTIVITY

         The Company is obligated under operating leases for
   office space and certain equipment.  The following is a
   schedule of the future minimum lease payments under operating
   leases as of March 31, 1998.

<TABLE>
<CAPTION>

     Year ending March 31,                                    
     <S>                            <C>
     1999                                    $       1,287,000
     2000                                              880,000
     2001                                              700,000
     2002                                              696,000
     2003                                              694,000
     thereafter                                      2,315,000                   
     Total minimum lease payments             $      6,572,000
</TABLE>

         Total rental expense under operating leases was
   $954,000, $411,000 and $201,000 for the years ended March 31,
   1998, 1997, and 1996, respectively.  Aggregate future minimum
   rentals to be received under noncanceable subleases as of
   March 31, 1998 are $84,000


10.RELATED PARTY TRANSACTIONS

         During the years ended March 31, 1998, 1997, and 1996,
   the Company paid  $62,000, $77,000 and $0, respectively, for
   legal services to a Company Board member as General Counsel;
   $9,096, $4,651 and $9,000 respectively to  a law firm in which
   a Company Board member is a partner; and $24,000, $22,000 and $0,
   respectively, for consulting services to another Company Board
   member.


11.COMMITMENTS AND CONTINGENCIES

         The Company's contracts with the U.S. Government are
   subject to cost audit by Government authorities.   Such audits
   have been completed through March 31, 1990.  It is not
   possible to predict the outcome of future audits but it is the
   opinion of the Company's management that liabilities, if any,
   arising from such audits would not have a material adverse
   effect on the Company's consolidated financial position or
   results of operations.

         Upon the death of a Company officer or a certain former
   officer and at the option of their estates, the Company is
   committed to repurchase their shares (79,267) at current book
   value.  At March 31, 1998, the aggregate book value of such
   shares was approximately $418,000.

         The Company is defendant or co-defendant in various
   lawsuits.  In the opinion of management, none of these
   lawsuits could materially affect the consolidated financial
   position or results of operations of the Company.


12.SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         The Company paid the following amounts for interest and
   income taxes during the years ended March 31:
<TABLE>
<CAPTION>

                               1998            1997              1996
     <S>                  <C>             <C>             <C>
     Interest              $   1,532,000     $    950,000        $   573,000
                                                                            
     Income taxes         $      578,000     $    722,000        $   457,000
                                                                            
</TABLE>


13 - Earnings per share

The following table sets forth the computation of basic and
diluted earnings per share:
<TABLE>
<CAPTION>

                                   1998           1997            1996
<S>                           <C>            <C>             <C>
Numerator:                                                                  
                                                                            
  Net earnings                   $   442,000     $   954,000      $  763,000
                                                                            
  Numerator for basic                                                       
earnings per share-
    income available to          $   442,000     $   954,000      $  763,000
common stockholders
                                                                            
  Numerator for diluted                                                     
earnings per share-
    income available to                                                     
common stockholders
    after assumed                $   442,000     $   954,000      $  763,000
converstions
                                                                            
Denominator:                                                                
                                                                            
  Denominator for basic            2,006,603       1,985,599       1,756,881
earnings per share-
    weighted-average shares                                                 
                                                                            
  Effect of dilutive                                                        
securities:
    Employee stock options            55,536          63,153              38
    Contingent stock-                  5,360           1,857               -
acquisition
    7% Convertible                         -               -               -
Subordinated Debenture
                                                                            
  Dilutive potential common                                                 
shares
    Denominator for diluted                                                 
earnings per
      share - adjusted                                                      
weighted-average
      shares and assumed           2,067,499       2,050,609       1,756,919
conversions

Earnings per share:
                                                                            
Basic earnings per share         $       .22      $      .48    $        .43
                                                                            
Diluted earnings per share       $       .21      $      .47   $         .43
                                                                            
</TABLE>





<PAGE>

14.Information on Industry Segments and Related Information

   The Company operates in two principal business segments:
technology services and facilities management.

   Technology Services includes the integration, systems
engineering, installation, maintenance and training for
computer systems, communications systems and simulation systems as
well as the resale of telephone communications switches.  Other 
primary services provided include year 2000 desktop solutions for 
enterprise PC hardware and software compliance, interactive 
technologies including website design, development and
marketing, Internet/Intranet services and multimedia sales and
educational tools.

   Facilities Management includes the management, operations and
maintenance support of military bases, prisons, waterways, major 
office complexes and communications sites.
<TABLE>
<CAPTION>


 Selected Financial Data by          1998          1997            1996
 Business Segment
 <S>                             <C>           <C>            <C>
 Net Sales                                                                  
  Technology Services               $  59,180    $    61,313    $     35,694
  Facilities Management                14,557         14,965          11,465
                                    $  73,737    $    76,278    $     47,159
 Operating Income                                                           
  Technology Services               $     973    $       792    $        731
  Facilities Management                   367          1,326             741
                                    $   1,340    $     2,118    $      1,472                        
 Depreciation and Amortization                                              
  Technology Services              $    1,274   $        968    $        507
  Facilities Management                    92                               
                                                          92              92
                                       $1,366    $     1,060  $          599
 Expenditures for Property and                                              
 Equipment
  Technology Services              $    1,462   $      1,673  $          237
  Facilities Management                                                     
                                           10             11              10
                                   $    1,472   $      1,684  $          247
 Identifiable Assets                                                        
  Technology Services              $   34,144   $     35,918  $       20,613
  Facilities Management                 3,831          5,082           4,215
                                   $   37,975   $     41,000  $       24,828
                                                                            
</TABLE>

<TABLE>
<CAPTION>


 Net Sales by Customer Category      1998           1997           1996
 <S>                             <C>           <C>             <C>
 US. Government
  Technology Services            $    18,354     $     27,585  $    25,861
  Facilities Management                7,726            8,526        8,564
                                 $    26,080     $     36,111  $    34,425
                                                                            
 State and Local government                                                 
  Technology Services            $     12,231     $     11,141  $    3,829
  Facilities Management                 6,831            6,439       2,901
                                        
                                 $     19,062     $     17,580  $      6,730
 Commercial                                                                 
  Technology Services            $     28,595     $     22,587  $      6,004
  Facilities Management                                                     
                                            -                -             -
                                 $     28,595     $     22,587  $      6,004

</TABLE>



15.QUARTERLY FINANCIAL DATA (unaudited)

         (In thousands, except on a per share basis)
<TABLE>
<CAPTION>

                           1st          2nd           3rd           4th
                         Quarter      Quarter       Quarter       Quarter
1998                                                                        
<S>                    <C>          <C>           <C>          <C>
Revenues                    $18,035    $  18,673       $18,232    $ 18,797
Income before income          (384)          196           452         545
taxes
Net income                    (232)          118           274         282
Per share                                                                   
  Earnings per share -        (.11)          .06           .14          .14
basic
  Earnings per share -        (.11)          .06           .13          .14
diluted
  Dividends per share           .05          .05           .05          .05
Market price                                                                
High                         11-1/2       10-7/8        13-1/8           10
Low                           6-3/4        7-5/8         8-3/4        7-1/2
                                                                            
</TABLE>

 Basic EPS totals to $.23 versus $.22 for the year due to
 rounding during computation at fiscal quarters.
 Diluted EPS totals to $.22 versus $.21 for the year due to
  rounding during computation at fiscal quarters.
<TABLE>
<CAPTION>

                           1st          2nd            3rd            4th
                         Quarter      Quarter        Quarter        Quarter
1997                                                                         
<S>                    <C>          <C>           <C>             <C>
Revenues                   $15,640       $20,531         $21,913      $18,194
Income before income           435           536             594           12
taxes
Net income                     269           319             359            7
Per share                                                                    
  Earnings per share -         .14           .16             .18          .00
basic
  Earnings per share -         .14           .15             .17          .00
diluted
  Dividends per share         .043          .047            .047          .05
Market price                                                                 
High                         8-1/8         7-7/8          13-1/8           15
Low                          4-5/8         6-5/8           7-5/8       10-1/8
                                                                             
</TABLE>


   Diluted EPS totals to $.46 versus $.47 for the year due to
rounding during computation at fiscal quarters.


<PAGE>

<TABLE>

                        Halifax Corporation
                                 
          Schedule II, Valuation and Qualifying Accounts
                                 
                          March 31, 1998
                                 
<CAPTION>

                      Balance at     Additions                  Balance at
                       beginning     charged to                   end of
                        of year        cost &     Deductions       year
                                      expense
<S>                  <C>            <C>          <C>           <C>
Year Ended March                                                           
31, 1998:
                                                                           
Allowance for                                                              
doubtful
  accounts                $234,000      $288,000      $206,000     $316,000
                                                                           
                                                                           
Allowance for                                                              
inventory
  obsolescence            $499,000    $1,986,000    $2,129,000     $356,000
                                                                           
                                                                           
Year Ended March                                                           
31, 1997:
                                                                           
Allowance for                                                              
doubtful
  accounts                $188,000      $158,000      $112,000     $234,000
                                                                           
                                                                           
Allowance for                                                              
inventory
  obsolescence            $804,000      $809,000    $1,114,000     $499,000
                                                                           
                                                                           
                                                                           
Year Ended March                                                           
31, 1996:
                                                                           
Allowance for                                                              
doubtful
  accounts                $170,000       $20,000       $ 2,000     $188,000
                                                                           
                                                                           
Allowance for                                                              
inventory
  obsolescence            $611,000    $1,195,000    $1,002,000     $804,000
                                                                           
                                                                           
                                                                           
                                                                           
</TABLE>
<PAGE>
EXHIBIT 23

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in Halifax Corporation's
Registration Statement (Form S-8) pertaining to the Halifax Corporation
1994 Key Employee Stock Option Plan and Non-Employee Directors Stock 
Option Plan of our report dated June 15, 1998, except for note 5 as to
which the date is June 25, 1998, included in the Annual Report on Form 
10-K of Halifax Corporation for the year ended March 31, 1998,, with 
respect to the consolidated financial statements, as amended, included 
in this Form 10-K/A.


/s/ERNST & YOUNG LLP


Washington, DC
July 9, 1998
<PAGE>