SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                           FORM 10-Q



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

          For the quarterly period ended        June 30, 1999
                                          ------------------------
                               OR

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


For the transition period from                                to
                                -------------------------        ---------
Commission File Number                                  0-29798
                                ------------------------------------------

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


                      Nevada                                23-1408659
     -------------------------------              ----------------------------
     (State or other jurisdiction of                 (I.R.S. Employer
      Incorporation or Organization)                 Identification No.)


                  7249 National Drive, Hanover, Maryland 21076
                 ----------------------------------------------
                   (Address of principal executive offices)


                                  (410) 712-0275
                   ----------------------------------------
             (Registrant's telephone number, including area code)

      Indicate  by check mark whether the registrant (1) has filed  all  reports
required  to be filed by Section 13 or 15(d) of the Securities Exchange  Act  of
1934  during  the  preceding  12 months (or for such  shorter  period  that  the
registrant was required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.

                           Yes   X      NO
                              ------       ------
As  of  August  12, 1999 a total of 5,287,597 shares of Common Stock,  $.75  par
value, were outstanding.




                 COMPUDYNE CORPORATION AND SUBSIDIARIES

                                 INDEX



                                                                    Page No.
                                                                  -----------
Part I.  Financial Information

Item 1. Financial Statements

   Consolidated Balance Sheets - June 30, 1999 (unaudited)
   and December 31, 1998                                               3

   Consolidated Statements of Operations - Three Months and Six
   Months Ended June 30, 1999 and 1998 (unaudited)                     4

   Consolidated Statements of Cash Flows
   Six Months Ended June 30, 1999 and 1998 (unaudited)                 5

   Notes to Consolidated Financial Statements                        6-8

Item 2. Management's Discussion and Analysis of
   Results of Operations and Financial
   Condition                                                        9-13

Item 3. Quantitative and Qualitative Disclosures
   About Market Risk                                                  13

Part II.  Other Information                                           14

   Signature                                                          15


<TABLE>
                 COMPUDYNE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                         (Dollars in Thousands)

                                                  June 30,    December 31,
                                                    1999         1998
                                                 ---------  -------------
ASSETS                                           (Unaudited)

Current Assets:
<S>                                             <C>        <C>
  Cash and cash equivalents                      $     460  $   1,528
  Accounts receivable                               29,545     27,451
  Costs in excess of billings                        5,081      2,610

  Inventories:
    Finished Goods                                       -        112
    Work in process                                    307        499
    Raw materials and supplies                       3,972      3,611
                                                  --------   --------
       Total inventories                             4,279      4,222
                                                  --------   --------
  Prepaid expenses and other current assets            319        127
                                                  --------   --------
Total Current Assets                                39,684     35,938
                                                  --------   --------
Non-current receivables, related parties                72         72
                                                  --------   --------

Property, plant and equipment, at cost:
  Land and improvements                                250        276
  Buildings and leasehold improvements               1,397      1,188
  Machinery and equipment                            3,631      2,334
  Furniture and fixtures                               278        182
  Automobiles                                          351        299
  Construction in progress                             710        939
  Software                                           2,000          -
                                                  --------   --------
   Total property, plant and equipment               8,617      5,218
    Less: accumulated depreciation
          and amortization                            (595)      (295)
                                                 ---------   --------
        Net property, plant and equipment            8,022      4,923
                                                 ---------   --------

Deferred tax asset                                      88         88
Intangible assets, net of
 accumulated amortization                            2,408      2,474
Goodwill, net of accumulated amortization                -         62
Other assets                                            36         13
                                                  --------  ---------
  Total other assets                                 2,532      2,637
                                                  --------  ---------
Total Assets                                     $  50,310  $  43,570
                                                 =========  =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                               $   6,781  $   6,891
  Accrued payroll expenses                           2,196      1,543
  Billings in excess of contract costs incurred      6,915      6,492
  Other accrued expenses                               441        735
  Accrued income taxes                                 671        346
  Reserve for losses on acquired
  CorrLogic contracts                                2,343          -
  Current portion of term loan                       2,000      1,125
  Current portion of notes payable related parties      25         20
                                                 ---------  ---------
  Total Current Liabilities                         21,372     17,152

Term loan                                            9,500     10,375
Long term notes                                     10,138      9,000
Notes payable, related parties                           -         15
Warranty reserves                                      462        463
Long term pension liability                            484        484
Other liabilities                                      206        191
                                                 ---------  ---------
  Total Liabilities                                 42,162     37,680
                                                 ---------  ---------

SHAREHOLDERS' EQUITY:
  Common stock, par value $.75 per share:
  10,000,000 shares authorized; 5,367,716
  and 5,200,049 shares issued and
  outstanding at June 30, 1999 and
  December 31, 1998                                  4,026      3,900
  Other capital                                     11,522     10,397
  Treasury shares, at cost; 85,119 shares as
    of June 30, 1999; 78,636 shares as of
    December 31, 1998                                 (177)      (120)
  Receivable from management                           (50)       (90)
Accumulated deficit                                 (7,173)    (8,197)
                                                 ----------  ---------
   Total Shareholders' Equity                        8,148      5,890
                                                 ----------  ---------
  Total Liabilities and Shareholders' Equity     $  50,310  $  43,570
                                                 ==========  =========
 See notes to consolidated financial statements (unaudited)
</TABLE>

<TABLE>
                          COMPUDYNE CORPORATION
                             AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In Thousands, Except Per Share Data)
                              (Unaudited)

<S>                               <C>        <C>        <C>       <C>
                                    Three Months Ended      Six Months Ended
                                      June 30,                June 30,
                                        1999      1998       1999     1998
                                       ------   -------    -------  ------
Net  sales                         $   27,697  $  6,184  $  49,684 $11,267
Cost of sales                          22,814     4,806     39,423   8,754
                                       ------   -------    -------  ------
  Gross margin                          4,883     1,378     10,261   2,513

Selling,  general  and
administrative expenses                 3,538       983      7,697   1,967
Research and development                   41        61         81      68
                                       ------   -------     ------  ------
  Operating income                      1,304       334      2,483     478
                                       ------   -------     ------  ------
Other (income) expense
  Interest expense                        554        16      1,103      44
  Other  income                          (246)       (8)      (291)     (3)
                                     --------    -------    ------   -----
  Total other (income) expense,
  net                                     308         8        812      41
                                      -------  --------    -------    ----

Income before income tax provision        996       326      1,671     437
Income tax provision                      381       125        646     135
                                        ------  -------   --------    ----
Net income                           $    615  $    201    $ 1,025  $  302
                                     ========   =======    =======  ======
Basic earnings per share             $    .12  $    .05    $   .20  $  .07
                                       ======   =======   ========   =====
Weighted average number of
    common  shares  outstanding         5,176     4,125      5,176    4,125
                                       ======   =======   ========   ======
Diluted  earnings per share          $    .11  $    .04  $     .18 $    .07
                                      =======   =======   ========   ======
Weighted average number of
    common  shares  and equivalents     5,821     4,525      5,821    4,525
                                      =======   =======   ========   ======
       See Notes to Consolidated Financial Statements (unaudited)

</TABLE>


<TABLE>
                 COMPUDYNE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (In Thousands)
                              (Unaudited)

                                                           Six Months Ended
                                                               June 30,
                                                          -------   -------
                                                             1999      1998
                                                          -------   -------
Cash flows provided by (used in) operating activities:

<S>                                                     <C>       <C>
Net income                                               $  1,025  $    302

Adjustments to reconcile net income to net cash
 provided by operations:
  Depreciation                                                586        90
  Amortization                                                 71         -
  Gain   on  the  sale  of  assets                           (184)        -

Changes in assets and liabilities
  Accounts receivable                                        (637)      156
  Costs   in   excess  of  billings                           (43)        -
  Prepaid expenses                                             71        27
  Inventories                                                (538)      (23)
  Other assets                                                (22)        -
  Accounts payable                                          1,154       (20)
  Accrued liabilities                                        (911)     (137)
  Accrued income taxes                                        327       126
  Billings in excess of costs                                  54         -
  Other liabilities                                          (189)      (24)
                                                           -------   -------

Net cash flows provided by operations                         764       497
                                                           -------   -------
Cash flows provided by (used in) investing activities:
    Additions   to  property,  plant  and  equipment       (1,837)     (159)
  Sale of MicroAssembly assets                              1,200         -
  Purchase of CorrLogic                                    (1,186)        -
                                                           -------  --------
Net  cash  flows  used in investing activities             (1,823)     (159)
                                                           -------  --------
Cash flows provided by (used in) financing activities:

  Sale of common stock                                          1         -
  Purchase of treasury stock                                    -      (120)
  Decrease in short term debt                                   -      (233)
   Repayment  of long term debt, related  parties             (10)       15
                                                          --------  --------
Net   cash   used   in  financing  activities                  (9)     (338)
                                                          --------  --------
Net decrease in cash                                       (1,068)        -
Cash  and  cash  equivalents at beginning of  period        1,528         -
                                                          --------  --------
Cash  and  cash equivalents at end of  period            $    460  $      -
                                                          ========  ========
Supplemental disclosure of cash flow information:
  Cash paid during the period for:
     Interest                                            $  1,103  $     44

       See Notes to Consolidated Financial Statements (unaudited)
</TABLE>

               COMPUDYNE CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



  1.   BASIS OF PRESENTATION

  The accompanying unaudited consolidated financial statements of CompuDyne
  Corporation  and subsidiaries ("CompuDyne" or the "Company"),  have  been
  prepared  pursuant  to the rules and regulations of  the  Securities  and
  Exchange  Commission.  Certain information and note disclosures  normally
  included in the annual financial statements, prepared in accordance  with
  generally accepted accounting principles, have been condensed or  omitted
  pursuant  to  those rules and regulations, although the Company  believes
  that  the disclosures made are adequate to make the information presented
  not  misleading.  Certain prior amounts have been changed to  conform  to
  the current period presentation.

  In  the  opinion  of management, the accompanying unaudited  consolidated
  financial    statements   reflect   all   necessary    adjustments    and
  reclassifications (all of which are of a normal, recurring  nature)  that
  are  necessary for fair representation for the periods presented.  It  is
  suggested  that  these  consolidated  financial  statements  be  read  in
  conjunction  with  the consolidated financial statements  and  the  notes
  thereto  included in the Company's latest annual report to the Securities
  and  Exchange  Commission on Form 10-K for the year  ended  December  31,
  1998.


  2.   ACQUISITIONS/DISPOSALS OF BUSINESSES

  Acquisition  of  Correctional Information  Systems  -  On  May  30,  1999
  (effective  April  30, 1999), CompuDyne entered into and  consummated  an
  agreement  by  and  between  BI Incorporated,  ("BI")  and  CompuDyne  to
  purchase  the  CIS  division of BI consisting  of  the  seller's  assets,
  properties  and  rights  primarily used in it's  business  of  designing,
  selling, and  installing  software  that  manages  prison  administration
  activities.  CompuDyne  has  accounted  for  the  acquisition  using  the
  purchase method of accounting.  The purchase price was allocated  to  the
  assets and liabilities based on their estimated fair market values.   The
  financial  statements  reflect preliminary  allocation  of  the  purchase
  price.   The  allocation has not been finalized due to certain valuations
  in  process,  therefore, the allocation may change.  The  purchase  price
  included  $1.0  million  in  cash,  a promissory  note  in  the  original
  principal amount of $1,137,576 payable in 5 equal yearly installments and
  bearing  an  interest  rate  of 7.5% per annum,  and  166,667  shares  of
  unregistered,  legended  common  stock of  CompuDyne,  which  shares  are
  restricted from sale for the earlier of: two years from the closing date,
  or  90  days following the sale of common stock by CompuDyne in a  public
  offering.   CompuDyne  is  operating  the  business  as  a  wholly  owned
  subsidiary under the name CorrLogic, Inc. ("CorrLogic").

  Disposition  of  assets  of MicroAssembly - On  May  28,  1999  CompuDyne
  entered into and consummated an agreement by and between its wholly owned
  subsidiary,  MicroAssembly  Systems,  Inc.,  ("the  seller")   and   Penn
  Engineering & Manufacturing Corp., ("PENN") for MicroAssembly to sell  to
  PENN all of the rights, properties and business of the seller.  The sales
  price  was $1.4 million in cash. It is CompuDyne's intention to  collapse
  the MicroAssembly corporate structure after some final payable/receivable
  issues  are  resolved.   The net gain on the sale  of  these  assets  was
  approximately  $150  thousand and is included in "Other  income"  in  the
  accompanying consolidated statement of operations.  Sales and net  income
  of this subsidiary were insignificant for the three and six month periods
  ended  June  30, 1999 and 1998.  This sale was consummated in  order  for
  management to focus on the core business of CompuDyne.








<TABLE>

  3.   ACCOUNTS RECEIVABLE

  Accounts receivable consist of the following:

  (dollars in thousands)                      June 30,        December 31,
                                                 1999                1998

  U.S. Government Contracts:
<S>                                      <C>                <C>
    Billed                                $     1,686        $      1,622
    Unbilled                                    1,423                 818
                                          -----------        ------------
                                                3,109               2,440
  Commercial
    Billed                                     21,801              19,756
    Unbilled                                    5,100               5,695
                                          -----------        ------------
                                               26,901              25,451

  Total Accounts Receivable               $    30,010        $     27,891
  Less Allowance for Doubtful Accounts           (465)               (440)
                                          ------------       -------------
  Net Accounts Receivable                 $    29,545        $     27,451
                                          ============       =============
</TABLE>

  4.   COMMON STOCK AND COMMON STOCK OPTIONS

  On   June   25,  1999,  the  Compensation  and  Stock  Options  Committee
  ("Committee")  granted  options  to  purchase  up  to  45,000  shares  of
  CompuDyne  stock to key employees of CorrLogic at a price  of  $8.75  per
  share (the midpoint of current bid/ask at the date of grant).

  On  May 24, 1999, the shareholders approved an amendment to the CompuDyne
  Corporation 1996 stock option plan from employees to increase the  number
  of shares available for distribution to 900,000 shares.

  On  May  27, 1999 CompuDyne issued 166,667 shares of unregistered  common
  stock  as  part  of  the  purchase price of the  assets  of  Correctional
  Information Systems a division of BI Incorporated.

  5. NET INCOME PER SHARE

  Earnings  per  share  are  presented in accordance  with  SFAS  No.  128,
  "Earnings Per Share."  This statement requires dual presentation of basic
  and  diluted  earnings  per share on the face of  the  income  statement.
  Basic  earnings per share excludes dilution and is computed  by  dividing
  income available to common shareholders by the weighted-average number of
  shares  outstanding for the period.  Diluted earnings per share  reflects
  the  potential dilution that could occur if securities or other contracts
  to issue common stock were exercised or converted into common stock.

  The  following  is  a reconciliation of the amounts used  in  calculating
  basic and diluted net income per common share:

<TABLE>
                                                                       Per Share
                                               Income         Shares      Amount
                                            ---------      ----------    -------
                                    (dollars in thousands)

  Basic net income per common share for the
    six months ended June 30, 1999:
  Income   available  to  common  stockholders
<S>                                         <C>             <C>          <C>
                                             $  1,025        5,176,055    $ .20
  Effect of dilutive stock options                             645,357
  Diluted net income per common share for
   the  six  months  ended  June 30, 1999    $  1,025        5,821,412    $ .18
                                             --------        ---------   ------
  Basic net income per common share for
    the six months ended June 30, 1998:
  Income   available  to
  common  stockholders                       $    302        4,124,542    $ .07
  Effect of dilutive stock options                             399,992    -----
  Diluted net income per common share for                    ---------
     the  six  months  ended June 30,  1998  $    302        4,524,534    $ .07
                                             --------        ---------    -----

  Basic net income per common share for the
   three months ended June 30, 1999:
  Income   available  to
   common  stockholders                      $    615        5,176,055    $ .12
  Effect of dilutive stock options                             645,357    -----
  Diluted net income per common share for                    ---------
  the  three  months  ended June 30,  1999   $    615        5,821,412    $ .11
                                             --------        ---------    -----
  Basic net income per common share for
    the three months ended June 30, 1998:
  Income   available  to
  common  stockholders                       $    201        4,124,542   $ .05
  Effect of dilutive stock options                             399,992   -----
  Diluted net income per common share for                    ---------
    the three months ended June 30, 1998:    $    201        4,524,534   $ .04
                                             --------        ---------   -----
</TABLE>
  6.   SUBSEQUENT EVENT

  On  August 2, 1999 the company closed on an industrial revenue bond  with
  the  Industrial Development Board of the City of Montgomery.  The  amount
  of  the  issue is $2.1 million for a term of 15 years, with a tax  exempt
  floating  rate,  which  may be converted to a fixed  rate  with  30  days
  notice.  The  initial  rate  is 3.4% and  varies  weekly.   There  is  an
  additional  .25%  to be paid for a remarketing fee.  The  bond  issue  is
  guaranteed by an irrevocable letter of credit issued by LaSalle  National
  Bank at a rate of 2.5%.

  7.   OPERATING SEGMENT INFORMATION

  Segment information has been prepared in accordance with the Statement of
  Financial Accounting Standards (SFAS) No. 131, "Disclosure about Segments
  of  an  Enterprise and Related Information", ("SFAS No. 131").  SFAS  No.
  131  defines  "operating  segments to be  those  components  about  which
  separate  financial information is available that is regularly  evaluated
  by  management  in  deciding how to allocate resources and  in  assessing
  performance.  SFAS No. 131 further requires that the segment  information
  presented  be  consistent with the basis and manner in  which  management
  internally  desegregates  financial  information  for  the  purposes   of
  assisting in making internal operating decisions.

<TABLE>
                                          Revenues
                          -----------------------------------------------------
                           Three Months Ended      Six Months Ended
                                 June 30,             June 30,
                          ----------  --------   ---------    -------
                              1999      1998       1999          1998
                          ---------  ---------   ---------   --------
  <S>                    <C>         <C>       <C>         <C>
  Norment/Norshield       $   20,397  $      -  $   36,159  $       -
  Quanta Systems               2,093     2,608       4,505      5,194
  Data    Control   Systems      315       378         425        780
  SecurSystems                 3,409     2,673       6,511      4,314
  SYSCO                           59        55         260         55
  MicroAssembly                  270       470         670        924
  CorrLogic                    1,154         -       1,154          -
                           ---------  --------  ----------  ---------
                           $  27,697  $  6,184  $   49,684  $  11,267
                           =========  ========  ==========  =========
</TABLE>
<TABLE>
                                           Pre-Tax Profit
                          ----------------------------------------------
                             Three Months Ended         Six Months Ended
                                  June 30,                 June 30,
                                1999      1998          1999        1998
                          ----------  --------   -----------   ---------
  <S>                    <C>         <C>        <C>           <C>
  Norment/Norshield       $      701  $      -   $     1,334   $      -
  Quanta Systems                  62       121           144         222
  Data    Control   Systems       12        29           (44)         87
  SecurSystems                   198       238           270         219
  SYSCO                         (100)      (79)         (179)       (141)
  MicroAssembly                  138        29           165          49
  CorrLogic                        -         -             -           -
  CompuDyne   Corporate          (15)      (12)          (19)          1
                           ---------- ---------  ------------  ----------
                           $     996  $    326   $      1,671  $     437
                           ========== =========  ============  ==========
</TABLE>



               COMPUDYNE CORPORATION AND SUBSIDIARIES
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS

  RESULTS OF OPERATIONS

  Second Quarter 1999 and 1998 Comparison

  CompuDyne's  net sales increased $21.5 million from $6.2 million  in  the
  second quarter of 1998 to $27.7 million in the second quarter of 1999.  A
  large  portion of the increase in net sales was attributable  to  Norment
  Industries  ("Norment").  Norment had net sales of $20.4 million  in  the
  second  quarter  of  1999.  All of Norment's second quarter  results  are
  incremental  since Norment was purchased on November  30,  1998.   Quanta
  SecurSystems,  Inc. ("SecurSystems") net sales were $3.4 million  in  the
  second  quarter of 1999 compared with $2.7 million in the second  quarter
  of  1998,  an  increase  of  $727 thousand.  Quanta  Systems  Corporation
  ("Quanta  Systems") net sales decreased $515 thousand to $2.1 million  in
  the  second quarter of 1999 compared with $2.6 million in the same period
  for  1998.  MicroAssembly Systems, Inc. ("MicroAssembly") had a  decrease
  of  $200  thousand in net sales for the second quarter of  1999  to  $270
  thousand compared with $470 thousand in the second quarter of 1998.   The
  second  quarter  of  1999  reflects only two  months  of  operations  for
  MicroAssembly because the assets of MicroAssembly were sold effective May
  30,  1999 and it will be discontinued.   Data Control Systems ("DCS") had
  net  sales  of  $315  thousand in the second quarter of  1999,  down  $63
  thousand from $378 thousand in the first quarter of 1998.  SYSCO Security
  Systems ("SYSCO") had $59 thousand in net sales for the second quarter of
  1999,  a slight increase over $55 thousand in the second quarter of 1998.
  CorrLogic, Inc. ("CorrLogic") had net sales of $1.1 million in the second
  quarter  of 1999.  This was incremental since CorrLogic was purchased  on
  April 30, 1999.

  Gross  margin for CompuDyne increased $3.5 million from $1.4  million  in
  the second quarter of 1998 to $4.9 million in the second quarter of 1999.
  Norment had a gross margin of $3.2 million in the second quarter of 1999.
  Gross  margin for SecurSystems increased $106 thousand from $739 thousand
  in  the second quarter of 1998 to $845 thousand in the second quarter  of
  1999.   This was due to the increase in net sales.  Quanta Systems had  a
  decrease in gross margin of $81 thousand, down from $401 thousand in  the
  second  quarter of 1998 to $320 thousand in the second quarter  of  1999.
  DCS  had a decrease of $9 thousand in gross margin to $78 thousand in the
  second  quarter  of 1999, down from $87 thousand in the  same  period  of
  1998.   MicroAssembly's gross margin decreased $110  thousand  from  $130
  thousand  in  the second quarter of 1998 to $20 thousand  in  the  second
  quarter of 1999.  The second quarter of 1999 reflects only two months  of
  operations for MicroAssembly since the assets of MicroAssembly were  sold
  effective  May 30, 1999 and it will be discontinued. SYSCO had  a   gross
  margin of $5 thousand in the second quarter of 1999 down slightly from $9
  thousand  in  the same period of 1998.  CorrLogic had a gross  margin  of
  $383  thousand in the second quarter of 1999. This margin is net of  $206
  thousand  of  losses  on  acquired  contracts  charged  against  reserves
  established when the contracts were acquired.  This was incremental since
  CorrLogic was purchased on April 30, 1999.

  Selling,  general and administrative expenses increased $2.5 million  for
  CompuDyne in the second quarter of 1999, increasing from $983 thousand in
  1998   to   $3.5  million  in  1999.   Norment's  selling,  general   and
  administrative  expenses  of  $2.0 million  accounted  for  most  of  the
  increase.   These  costs were incremental since Norment was  acquired  on
  November 30, 1998.  SecurSystems had an increase in selling, general  and
  administrative  costs of $76 thousand, increasing from $461  thousand  in
  the  second  quarter of 1998 to $538 thousand in 1999.   Quanta  Systems'
  selling, general and administrative costs decreased from $216 thousand in
  the  second  quarter of 1998 to $168 thousand in the  second  quarter  of
  1999,  a  $48  thousand  decrease.  Selling, general  and  administrative
  expenses  for  DCS increased $21 thousand to $12 thousand in  the  second
  quarter  of  1999 from $(11) thousand in 1998.  This reflects a  year-to-
  date adjustment to the G & A allocation between Quanta Systems and DCS in
  the  second quarter of 1998.  Year-to-date variances are discussed in the
  half   year   comparisons.    MicroAssembly's   selling,   general    and
  administrative  expenses decreased $32 thousand to $60  thousand  in  the
  second  quarter  of 1999 down from $92 thousand in the  same  period  for
  1998.  SYSCO's selling, general and administrative expenses decreased  to
  $77  thousand  in the second quarter of 1999, down $5 thousand  from  $82
  thousand  in the second quarter of 1998.  CompuDyne's corporate  selling,
  general and administrative expenses increased $190 thousand in the second
  quarter  of  1999  to  $331  thousand, up from  $141  thousand  in  1998.
  Research and development costs, which are related only to Quanta Systems'
  DCS product division decreased $19 thousand to $41 thousand in the second
  quarter of 1999 from $60 thousand in 1998.

  Interest  expense  for  the  second quarter of  1999  was  $554  thousand
  compared  to  $16 thousand in 1998, an increase of $538  thousand.   This
  increase  is  attributable  to  the financing  of  the  Norment/Norshield
  acquisition.   Other  income for the second  quarter  of  1999  was  $246
  thousand  compared  to $8 thousand in 1998.  This increase  is  primarily
  attributable  to  the $150 thousand gain from the sale of MicroAssembly's
  net assets.

  CompuDyne's  second quarter 1999 profit before taxes was  $996  thousand,
  increasing $670 thousand from the second quarter of 1998 which  was  $326
  thousand.  This was a 206% increase.  Norment had pre-tax profit of  $701
  thousand  in  the  second  quarter of 1999.  SecurSystems  decreased  $40
  thousand  from  $238  thousand in the second  quarter  of  1998  to  $198
  thousand  in  the second quarter of 1999. This was lower than anticipated
  because  some projects have slipped into the second half.  Quanta Systems
  pre-tax  profit was $62 thousand in the second quarter of 1999, down  $59
  thousand  from a profit of $121 thousand in the second quarter  of  1998.
  We  feel  this is a result of the government diverting money which  would
  have  been  spent on security to Year 2000 problems.  Quanta Systems  has
  recently  signed  a  $3.8 million contract which  should  increase  their
  second  half  pre-tax profits.  DCS had a pre-tax profit of $12  thousand
  for  the second quarter of 1999, a decrease of $17 thousand compared with
  the  $29  thousand profit for the second quarter of 1998.   MicroAssembly
  had  a pre-tax profit of $138 thousand for the second quarter of 1999  up
  $109  thousand  from $29 thousand in the second quarter  of  1998.   This
  includes  a  gain on the sale of MicroAssembly's assets of $150  thousand
  and  only  reflects two months of operations for MicroAssembly since  the
  assets  of MicroAssembly were sold effective May 30, 1999 and it will  be
  discontinued.   SYSCO had a pre-tax loss of $89 thousand  in  the  second
  quarter  of  1999  compared with a loss of $78 thousand during  the  same
  period in 1998.  CorrLogic had virtually no pre-tax profit or loss  since
  losses  from its contracts were charged against the reserves set  up  for
  expected future losses when CorrLogic was purchased.

  Year-to-Date Comparison

  CompuDyne's net sales increased $38.5 million or 344% in the  first  half
  of 1999.  Net sales were $49.7 million in the first half of 1999 compared
  with  $11.2 million in the first half of 1998.  Norment had $36.2 million
  in net sales in the first half of 1999.  All of Norment's results for the
  first  half are incremental since it was purchased on November 30,  1998.
  SecurSystems  had  $6.5 million in net sales in the first  half  of  1999
  compared  with $4.3 million for the same period in 1998, an  increase  of
  $2.2  million.   Quanta  Systems net sales for the  first  half  of  1999
  totaled  $4.5  million.  This was a decrease of $689  thousand  from  the
  first  half  of 1998 net sales of $5.2 million. DCS had $425 thousand  in
  net  sales  for  the  first half of 1999, down $355  thousand  from  $780
  thousand  in the first half of 1998. MicroAssembly's net sales  decreased
  $254  thousand  from  $924 thousand in the first half  of  1998  to  $670
  thousand in the first half of 1999. The first half of 1999 reflects  only
  five  months  of  operations  for  MicroAssembly  since  the  assets   of
  MicroAssembly  were  sold  effective  May  30,  1999  and  it   will   be
  discontinued.  SYSCO had $260 thousand in net sales for the first half of
  1999.   This was up $205 thousand from $55 thousand in the first half  of
  1998.  CorrLogic had net sales of $1.2 million in the first half of 1999.
  These sales were incremental.

  CompuDyne's  gross margins increased $7.8 million in the  first  half  of
  1999  to  $10.3 million, up from $2.5 million during the same  period  in
  1998.   Gross  margin at Norment was $7.4 million for the first  half  of
  1999.   SecurSystem's  gross  margins increased  $333  thousand  to  $1.6
  million in the first half of 1999 from $1.2 million in the first half  of
  1998.  Quanta Systems gross margins were $632 thousand in the first  half
  of  1999, down $144 thousand from 1998 first half gross margins  of  $776
  thousand.   Gross  margins  at  DCS decreased  $134  thousand  from  $210
  thousand   in  1998  to  $76  thousand  in  the  first  half   of   1999.
  MicroAssembly's gross margins decreased $121 thousand from $273  thousand
  in  the  first half of 1998 to $152 thousand during the same  period  for
  1999. The first half of 1999 only reflects five months of operations  for
  MicroAssembly  since the assets of MicroAssembly were sold effective  May
  30,  1999  and  it will be discontinued.  SYSCO had a $75 thousand  gross
  margin for the first half of 1999 compared with $10 thousand in the first
  half  of 1998.  Gross margin at CorrLogic was $383 thousand in the  first
  half  of 1999.  This margin is net of $206 thousand of losses on acquired
  contracts  charged against reserves established when the  contracts  were
  acquired.  This was incremental because CorrLogic was purchased on  April
  30, 1999.

  CompuDyne's  selling,  general and administrative  costs  increased  $5.7
  million to $7.7 million in the first half of 1999 up from $2.0 million in
  the  same  period in 1998.  Norment had $4.9 million in selling,  general
  and administrative expenses for the first half of 1999.  SecurSystems had
  an increase of $139 thousand in the first half of 1999, with $1.1 million
  in  1999  compared with $949 thousand for 1998.  Quanta Systems  selling,
  general and administrative expenses decreased by $112 thousand to $309 in
  the  first  half of 1999, down from $421 thousand in the same period  for
  1998.   This  decrease  was the result of staff reductions  due  to  slow
  sales.   DCS's costs were $14 thousand in the first half of 1999 compared
  with  $25 thousand for the same period in 1998.  MicroAssembly's selling,
  general and administrative costs were $148 thousand in the first half  of
  1999  decreasing  $58 thousand from $206 thousand in the  first  half  of
  1998.  Selling, general and administrative costs for SYSCO increased  $90
  thousand  in the first half of 1999, up from $140 thousand for  the  same
  period  in 1998.  This is primarily due to increased payrolls.  CorrLogic
  had  $371  thousand in selling, general and administrative costs  in  the
  first  half of 1999.  These costs were incremental since it was purchased
  on April 30, 1999.

  Research and development costs, which are related only to Quanta Systems'
  DCS  product division, were $81 thousand in the first half of 1999.  This
  is  up  $13 thousand from $68 thousand for the same period in 1998.   The
  costs  in  1999  were  spent  primarily on improvements  to  one  of  its
  products.

  Interest  expense  increased $1.1 million  in  the  first  half  of  1999
  compared to the same period for 1998.  This increase was attributable  to
  the financing of the Norment/Norshield acquisition.  Other income for the
  first  half  of 1999 was $291 thousand compared to $3 thousand  in  1998.
  The  increase  is  primarily  attributable  to  the  $150  thousand  gain
  resulting from the sale of MicroAssembly's net assets.

  Pre-tax profit before taxes for CompuDyne increased $1.2 million to  $1.7
  million  in the first half of 1999 from $437 thousand in the same  period
  for  1998.  Pre-tax profit for Norment was $1.3 million in the first half
  of  1999.   SecurSystems pre-tax profit increased $51  thousand  to  $270
  thousand  in the first half of 1999 from $219 thousand in the first  half
  of  1998.  Although this was an increase it was a slower first half  than
  expected  since some projects have slipped into the second half.   Quanta
  Systems pre-tax profit was $144 thousand in the first half of 1999.  This
  was  a  decrease of $78 thousand from $222 thousand in the first half  of
  1998.  We  feel this is a result of the government diverting money  which
  would  have been spent on security to Year 2000 problems.  Quanta Systems
  has  recently signed a $3.8 million contract which should increase  their
  second  half pre-tax profits.  DCS had a pre-tax loss of $44 thousand  in
  the  first half of 1999.  This was a decrease of $131 thousand  over  the
  same period in 1998. MicroAssembly's pre-tax profit for the first half of
  1999 was $165 thousand, increasing $115 thousand from $50 thousand in the
  same period of 1998.  This includes a gain on the sale of MicroAssembly's
  assets  of  $150 thousand and only reflects two months of operations  for
  MicroAssembly  since the assets of MicroAssembly were sold effective  May
  30,  1999 and it will be discontinued.   SYSCO had a pre-tax loss of $179
  thousand in the first half of 1999 compared with a $140 thousand loss  in
  the  first half of 1998, an increased loss of $39 thousand.  This is  due
  to  additional resources required for this operation.  CorrLogic  had  no
  pre-tax profit or loss since all losses were charged against the reserves
  set up for expected future losses when CorrLogic was purchased.

  LIQUIDITY AND CAPITAL RESOURCES

 The  Company's principle source of cash is from operating activities  and
 bank borrowings. The Company's primary requirement for working capital is
 to  carry billed and unbilled receivables, the majority of which are  due
 under  prime contracts with the United States Government, state and local
 governments or subcontracts thereunder.

  On  August 2, 1999 Norment closed on an industrial revenue bond with  the
  Industrial  Development Board of the City of Montgomery.  The  amount  of
  the  issue  is  $2.1 million for a term of 15 years, with  a  tax  exempt
  floating  rate,  which  may be converted to a fixed  rate  with  30  days
  notice.  The  initial  rate  is 3.4% and  varies  weekly.   There  is  an
  additional  .25%  to be paid for a remarketing fee.  The  bond  issue  is
  guaranteed by an irrevocable letter of credit issued by LaSalle  National
  Bank at a rate of 2.5%.

  Net cash flows provided by operations was $764 thousand in the first half
  of  1999,  an increase of $267 thousand from the 1998 cash flow  used  in
  operations of $497 thousand.  Net income increased from $302 thousand  in
  the  first half of 1998 to $1.0 million during the same period  in  1999.
  The  sale of MicroAssembly assets realized $1.2 million in the first half
  of  1999,  and an additional $200 thousand in July 1999 when an  escrowed
  balance  was  received.  The purchase of CorrLogic cost $1.2  million  in
  cash.  Capital additions totaled $1.8 million in the first half of  1999.
  This was $1.7 million more than in the same period of 1998.

  YEAR 2000 COMPLIANCE

  State  of  readiness  -  The  Company has  developed  and  is  well  into
  implementing a company wide Year 2000 Plan (the "Plan") with  the  intent
  to  ensure  that  it's computer equipment and software will  be  able  to
  distinguish  between the year 1900 and the year 2000  and  will  function
  properly  with  respect to all dates, whether in  the  twentieth  or  the
  twenty-first centuries (such functionality is referred to below as  being
  "Year 2000 compliant").

  The  Company's  plan initially focused on the accounting systems  of  the
  operating  divisions. Norment/Norshield has implemented a  new  financial
  and   accounting  software  system  called  PENTA.   This  implementation
  includes  Year  2000  compliant hardware as  well  as  software.   Quanta
  Systems  implemented a Year 2000 compliant Deltek system in  1998.   This
  was  implemented with Year 2000 compliant hardware as well  as  software.
  Additional  computers were identified and replaced in 1998.  SecurSystems
  has  installed a new network which has Year 2000 compliant  hardware  and
  software.   The  accounting package used by SecurSystems  is  Timberline.
  Timberline  has  supplied and SecurSystems has installed  the  Year  2000
  compliant  version of this software.  MicroAssembly's  assets  have  been
  sold  and  it  is  the  company's intention  to  collapse  the  shell  of
  MicroAsembly therefore there are no Year 2000 issues.

  The  Company  presently  believes  that  it's  planned  replacements  and
  modifications of certain existing computer equipment and software will be
  completed by January 1, 2000 so as to avoid any of the Year 2000  related
  disruptions  or malfunctions of its computer equipment and software  that
  it has identified.
<TABLE>
                                                  (in thousands)
  Costs  to  address the Company's
  Year 2000 Issues:                        Costs Prior       Estimate  to
                                           June 30 1999       Complete
                                           ------------     ------------
  <S>                                     <C>               <C>
  Norment/Norshield
  Hardware/Software                        $     1,350       $       50
  Quanta Systems/DCS   Hardware/Software           103               10
  SecurSystems         Hardware/Software/
                       Phone Equipment             114                -
                                           -----------      ------------
                                           $     1,567       $       60
                                           ===========      ============
</TABLE>

  The Company will use both internal and external resources to reprogram or
  replace   its   IT  systems  and  non-IT  systems  for  the   Year   2000
  modifications.

  Costs - The Company does not separately track the internal costs incurred
  on the Year 2000 project.  Such costs are principally payroll and related
  costs  for  its  internal personnel.  The total cost  of  the  Year  2000
  project, excluding these internal costs is estimated at $1.6 million  and
  is  being funded through operating cash flows.  Over $1.2 million,  which
  includes  costs  expended by Norment/Norshield  prior  to  the  Company's
  acquisition on November 28, 1998, was spent in 1998.

  The  cost  of  the project and the date on which the Company believes  it
  will  complete the Year 2000 modifications are based on management's best
  estimates, which are derived using numerous assumptions of future events,
  including  the  continued  availability of certain  resources  and  other
  factors.  However, there can be no guarantee that these estimates will be
  achieved   and  actual  results  could  differ  materially   from   those
  anticipated.  Specific factors that might cause such material differences
  include,  but are not limited to, the availability and cost of  personnel
  trained  in  this  area, the ability to locate and correct  all  relevant
  computer codes and similar uncertainties.

  Risks  -  Management  believes that based on  the  information  currently
  available  to the Company, that the most likely worst case scenario  that
  could  be  caused  by  failures  relating  to  Year  2000  could  pose  a
  significant  threat not only to CompuDyne, its customers  and  suppliers,
  but to all businesses.  Risks include:

      -Legal  risks, including customer, supplier, employee or  shareholder
  lawsuits over failure to deliver contracted services, product failure, or
  health and safety issues.

     -Loss of sales due to failure to meet customer quality expectations or
  inability to ship products.

     -Increased operational costs due to manual processing, data corruption
  or disaster recovery.

     -Inability to bill or invoice.

  Contingency  plans  - As part of its continuous assessment  process,  the
  Company  will develop contingency plans as necessary.  These plans  could
  include,  but are not limited to, material stockpiling, use of  alternate
  suppliers  and  development of alternate means to  process  orders.   The
  Company currently plans to complete such planning by December 1999.

  CompuDyne  is using its best efforts to ensure that the Year 2000  impact
  on  its  critical  systems and processes will not affect  its  supply  of
  product,  quality or service.  However, in the event that the Company  is
  unable to complete its remedial actions described above and is unable  to
  implement  adequate contingency plans in the event problems arise,  there
  could  be  a material adverse effect on the Company's business, financial
  position, results of operations, or cash flows.

  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The Company believes that there have been no material changes in exposure
  to market risk during the second quarter of 1999 from those set forth in
  the Company's annual report filed with the Securities and Exchange
  Commission on Form 10-K for the year ended December 31, 1998.

                    PART II - OTHER INFORMATION

  Item 1 - Legal Proceedings

  The  Company  is  party  to  certain  legal  actions  and  inquiries  for
  environmental  and  other matters resulting from  the  normal  course  of
  business.   Although  total amount of liability  with  respect  to  these
  matters  cannot be ascertained, management of the Company  believes  that
  any  resulting  liability  should not  have  a  material  effect  on  its
  financial position or results of future operations.

  Item 2 - Changes in Securities

        On  May 30, 1999, as part of the consideration for the Registrant's
  acquisition  of  the assets of the CIS Division of BI, Incorporated,  the
  Registrant  issued  to BI, Incorporated (through the Registrant's  wholly
  owned  subsidiary,  CorrLogic,  Inc.)  166,667  shares  of  unregistered,
  legended shares of the Registrant's common stock and a promissory note in
  the  original  principal amount of $1,137,576 payable in 5  equal  yearly
  installments  and bearing an interest rate of 7.5% per annum.   Based  on
  BI,   Incorporated's  investment  representations   and   the   privately
  negotiated  terms  of  the transaction, the transaction  is  exempt  from
  registration pursuant to Section 4(2) of the Securities Act of 1933.

  Item 3 - Defaults Upon Senior Securities

       None

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

        At the Annual meeting on May 24, 1999, the shareholders approved an
  amendment  to  the  CompuDyne Corporation 1996  stock  option  plan  from
  employees  to  increase the number of shares available  for  distribution
  from 300,000 to 900,000 shares. The votes were cast as follows:

            For            3,482,805
            Against           44,441
            Abstain           14,772

       At the Annual meeting on May 24, 1999, the shareholders approved the
  appointment of Deloitte & Touche LLP as the independent auditors  of  the
  corporation for the fiscal year ending December 31, 1999.  The votes were
  cast as follows:

            For            4,285,775
            Against              665
            Abstain            1,421

  Item 5 - Other Information

       None

  Item 6 - Exhibits and Reports on Form 8-K

         Exhibit  (10)  Purchase  and  Sale  of  the  CIS  Division  of  BI
  Incorporated dated as of May 27, 1999 (effective April 30, 1999) among BI
  Incorporated, CorrLogic, Inc. and CompuDyne Corporation.

                             SIGNATURE

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

                                     COMPUDYNE CORPORATION



  Date: August 12, 1999    /s/ William C. Rock
                           William C. Rock
                           Chief Financial Officer