UNITED STATES
               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        September 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 November 12, 1999 a total of 5,380,466 shares of Common Stock,  $.75
par value, were outstanding.


<PAGE>
             COMPUDYNE CORPORATION AND SUBSIDIARIES

                             INDEX



                                                                     Page No.

Part I.  Financial Information

 Item 1. Financial Statements

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

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

   Consolidated Statements of Cash Flows
   Nine   Months   Ended  September  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                                                           9-12

Part II.  Other Information


 Item 6. Exhibits and Reports on Form 8-K                                13

 Signature                                                               14




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


                                         September 30,         December 31,
                                              1999                  1998
                                        ---------------        --------------
                                        <C>                    <C>
ASSETS                                    (Unaudited)

Current Assets:
 Cash and cash equivalents              $      1528            $     1,528
 Accounts receivable, net                    28,148                 27,451
 Costs in excess of billings                  5,760                  2,610

  Inventories:
     Finished Goods                              -                     112
     Work in process                            502                    499
     Raw materials and supplies               4,059                  3,611
                                        --------------          --------------
      Total inventories                       4,561                  4,222
                                        --------------          --------------
   Prepaid  expenses  and other                 335                    127
   current  assets                      --------------          --------------
Total Current Assets                         40,332                 35,938
                                        --------------          --------------
Non-current receivables,
related  parties                                 72                     72
                                        --------------          --------------
Property, plant and equipment, at cost
   Land and improvements                        250                    276
   Buildings and leasehold improvements       1,125                  1,188
   Machinery and equipment                    3,721                  2,334
   Furniture and fixtures                       720                    182
   Automobiles                                  368                    299
   Construction in progress                   1.665                    939
   Software                                   2,009                      -
                                        ---------------         --------------
      Total property, plant and equipment     9,858                  5,218
   Less: accumulated depreciation
   and amortization                          (1,283)                  (295)
                                       ---------------          -------------
      Net property, plant and equipment       8,575                  4,923
                                       ---------------          -------------

   Deferred tax asset                            88                     88
   Intangible assets, net of accumulated
   amortization                               2,381                  2,474
   Goodwill, net of accumulated
   amortization                                   -                     62
   Other assets, net                            171                     13
                                       ---------------          --------------
       Total other assets                     2,640                  2,637
                                       ---------------          --------------
   Total Assets                         $    51,619            $    43,570
                                       ===============          =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                     $      8,085              $   6,891
  Other  accrued expenses                     1,981                    735
  Accrued payroll expenses                    1,431                  1,543
  Billing in excess of contract costs
  incurred                                    7,119                  6,492
  Accrued income taxes                        1,121                    346
  Reserve for losses on acquired CorrLogic
  contracts                                   1,938                      -
  Current portion of term loan                1,890                  1,125
  Current portion of notes payable related
  parties                                         -                     20
                                       ----------------          ------------
    Total Current Liabilities                23,565                 17,152

Term loan                                     6,000                 10,375
Long term notes                              12,098                  9,000
Notes payable, related parties                    -                     15
Warranty reserves                               463                    463
Long term pension liability                     484                    484
Other liabilities                               183                    191
                                      ----------------          -------------
    Total Liabilities                        42,793                 37,680
                                      ----------------          -------------

SHAREHOLDERS' EQUITY:
  Common stock, par value $.75 per
  share 10,000,000 shares  authorized;
  5,380,466 and 5,200,049 shares issued
  and outstanding at September 30, 1999
  and December 31, 1998                       4,035                  3,900
  Other capital                              11,536                 10,397
  Treasury shares, at cost; 85,119 shares
  as of September 30, 1999; 78,636 shares
  as of December 31, 1998                      (177)                  (120)
  Receivable from  management                   (50)                   (90)
  Accumulated Deficit                        (6,518)                (8,197)
                                      ----------------           -------------
     Total Shareholders' Equity               8,826                  5,890
                                      ----------------           -------------
Total Liabilities and Shareholders'
Equity                                   $   51,619               $ 43,570
                                      ================           =============
</TABLE>


           See Notes to Consolidated Financial Statements (unaudited).



             COMPUDYNE CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF OPERATIONS
             (In Thousands, Except Per Share Data)
                          (Unaudited)
<TABLE>
                         Three  Months  Ended          Nine Months Ended
                            September,30,                September 30,
                           1999         1998            1999         1998
<S>                  <C>          <C>             <C>          <C>
                      ---------    ----------      ---------    ---------
Net sales             $  27,827    $    6,461      $  77,511    $  17,688
Cost of sales            22,354         4,927         61,777       13,641
                      ---------    ----------      ---------    ---------
  Gross margin            5,473         1,534         15,734        4,047

Selling, general
and administrative
expenses                  3,887         1,093         11,584        3,069
Research and Development      -           113             81          181
                      ---------    -----------      ---------    ---------
   Operating income       1,586           328          4,069          797
                      ---------    -----------      ---------    ---------


Other(income)expense
  Interest expense          573            37          1,676           82
  Other income              (78)          (14)          (369)         (18)
                       ---------    ----------      ---------    ----------
   Total other (income)
   expense, net             495            23          1,307           64
                       ----------   ----------      ---------    -----------
Income before income
tax provision             1,091           305          2,762          733

Income tax provision        437            93          1,083          228
                      -----------   ----------    ------------  -------------
    Net income        $     654     $     212     $    1,679    $     505
                      ===========   ==========    ============  =============

Basic EPS:
    Net income        $     .12     $     .06     $      .32    $     .13
                      ===========   ==========    ===========   ==============
Weighted average
 number of common
 shares outstanding       5,290         3,845          5,214        3,845
                      ===========   ==========    ===========   ==============
Diluted EPS:
 Net income           $     .11     $     .04       $     .29   $     .11
                      ===========   ==========    ===========   ===============
Weighted average number of
common shares and
equivalents               5,934          4,447          5,856        4,447
                      ===========   ==========    ===========   ==============


  See Notes to Consolidated Financial Statements (unaudited).

</TABLE>


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


<TABLE>
                                                      Nine    Months   Ended
                                                          September 30,
                                                 -----------------------------
                                                      1999              1998
                                                 -----------       ----------
Cash flows provided by (used in) operating activities:

<S>                                                <C>              <C>
Net income                                          $  1,679         $    505

Adjustments to reconcile net income to net cash
 provided by operations:
    Depreciation  and  Amortization                     1079              137
    Gain on the sale of assets                         ( 170)               -

Changes in assets and liabilities
  Accounts receivable                                    560           (1,162)
  Deferred income taxes                                    -               20
  Costs in excess of billings                           (722)               -
  Prepaid expenses                                       (30)              (2)
  Inventories                                           (820)             450
  Other assets                                          (158)             (53)
  Accounts payable                                     1,282               66
  Accrued liabilities                                  1,133             (118)
  Accrued income taxes                                   777              211
  Billings in excess of costs                            258                -
  Other liabilities                                     (620)             (35)
                                                   ----------        ---------
Net cash flows provided by
operating activities                                   4,248               19
                                                   ----------        ----------
Cash flows provided by (used in) investing activities:
  Additions to property, plant and equipment          (2,801)            (252)
  Sale of MicroAssembly assets                         1,400                -
  Purchase of CorrLogic                               (1,170)               -
                                                   -----------       ----------
Net cash flows used in investing activities           (2,571)            (252)
                                                   -----------       ----------

Cash flows provided by (used in) financing activities:

 (Repayment)borrowings of long term debt              (3,750)             363
  Proceeds from bond issuance                          2,100                -
  Sale of common stock                                    24                -
  Purchase of treasury stock                             (56)            (120)
  Repayment of current debt,related parties              (35)             (10)
  Collection on note receivable, related parties          40                -
                                                  ------------       ----------
Net cash(used in) provided by financing activities    (1,677)             233
                                                  ------------       ---------

Net increase in cash                                       -               -
Cash and cash equivalents
at beginning  of  period                               1,528               -
                                                   -----------       ---------
Cash and cash equivalents at end of period         $   1,528          $    -
                                                   ===========       =========

Supplemental disclosure of cash flow information:
  Cash paid during the period for:
    Interest                                      $    1,590          $   82
    Taxes                                         $      321          $   29

  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 (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 presentation 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.   ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:
<TABLE>
                                            ($ in thousands)
                                     September 30,    December 31,
                                         1999            1998
                                     ------------     ------------
U.S. Government Contracts:
<S>                                 <C>                <C>
 Billed                              $      2,012       $    1,622
 Unbilled                                     919              818
                                     ------------     ------------
                                            2,931            2,440
Commercial Contracts:
 Billed                                    19,805           19,756
 Unbilled                                   5,888            5,695
                                     ------------     ------------
                                           25,693           25,451
    Total Accounts Receivable        $     28,624     $     27,891
Less Allowance for Doubtful Accounts         (476)            (440)
                                     ------------     ------------
Net Accounts Receivable              $     28,148     $     27,451
                                     ============     ============
</TABLE>

3.   COMMON STOCK AND COMMON STOCK OPTIONS

On   August   17,1999   the  Compensation  and  Stock   Options   Committee
("Committee") granted options to purchase 2,000 shares of common  stock  to
non-employee  directors  at a price of $7.00 per share,  the  then  current
market price.

On  August 18, 1999 the Committee granted options to purchase up to  26,000
shares of CompuDyne common stock to key employees of Norment/Norshield at a
price of $6.875 per share, the then current market price.

On  May  03,  1999 the Committee granted options to purchase up  to  30,000
shares of CompuDyne common stock to a key employee of Norment at a price of
$7.375 per share.


  4.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:

                                                                      Per
<TABLE>                                                               Share
                                           Income     Shares         Amount
                                          --------   ----------    ----------
<S>                                       <C>        <C>              <C>
                                         (dollars in thousands)
Basic net income per common share for the
 nine months ended September 30, 1999:
Income  available to common stockholders   $ 1,679    5,214,151        $ .32
Effect of dilutive stock options                        641,474    ---------
Diluted net income per common share for               ---------
 the nine months ended September 30, 1999  $ 1,679    5,855,625        $ .29
                                          --------    ---------    ---------
Basic net income per common share for
 the nine months ended September 30, 1998:
Income  available to common stockholders   $   505    3,845,323        $ .13
Effect of dilutive stock options                        601,749    ---------
Diluted net income per common share for               ---------
 the nine months ended September 30, 1998  $   505    4,447,072        $ .11
                                          --------    ---------     -------

 Basic net income per common share for the
 three months ended September 30, 1999:
Income  available to common stockholders    $  654     5,289,597       $ .12
Effect of dilutive stock options                         644,801    --------
Diluted net income per common share for               ----------
 the three months ended September 30, 1999  $  654     5,934,398       $ .11
                                            -------    ----------    --------
Basic net income per common share for
 the three months ended September 30, 1998:
Income  available to common stockholders    $   212    3,845,323       $ .06
Effect of dilutive stock options                         601,749    --------
Diluted net income per common share for    --------   ----------
 the three months ended September 30, 1998  $   212    4,447,072       $ .04
                                           --------   ----------    --------
</TABLE>
5.        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         Nine Months Ended
                           September 30,              September 30,
                         1999           1998          1999          1998
                    ---------     ----------     ---------     ---------
<S>                <C>           <C>           <C>           <C>
Norment/Norshield   $  18,731     $        -     $  54,890     $       -
Quanta Systems          2,879          3,391         7,809         9,366
SecurSystems            3,568          2,592        10,079         6,866
SYSCO                     150             40           410            94
MicroAssembly               -            438           670         1,362
CorrLogic               2,499              -         3,653             -
                    ---------     ----------      --------     ---------
                    $  27,827     $    6,461      $ 77,511     $  17,688
                    =========     ==========      ========     =========

                                    Pre-Tax Profit
                    ----------------------------------------------------
                         Three Months Ended         Nine Months Ended
                            September 30,              September 30,
                         1999           1998          1999          1998
                    ---------     ----------      --------     ---------
Norment/Norshield   $     620     $        -      $  1,954     $       -
Quanta Systems            163            187           263           495
SecurSystems              324            259           593           479
SYSCO                     (43)          (116)         (222)         (256)
MicroAssembly               -            (36)          165            13
CorrLogic                   -              -             -             -
CompuDyne Corporate        27             11             9             2
                    ---------      ---------      --------     ---------
                    $   1,091      $     305      $  2,762     $     733
                    =========      =========      ========     =========
</TABLE>


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

RESULTS OF OPERATIONS

Third Quarter 1999 and 1998 Comparison
---------------------------------------
CompuDyne's  net  sales increased $21.4 million from $6.4  million  in  the
third  quarter of 1998 to $27.8 million in the third quarter  of  1999.   A
large  portion  of  the increase in net sales was attributable  to  Norment
Industries  ("Norment").  Norment had net sales of  $18.7  million  in  the
third  quarter  of  1999.   All  of Norment's  third  quarter  results  are
incremental  since  Norment  was purchased on November  30,  1998.   Quanta
SecurSystems,  Inc.  ("SecurSystems") net sales were $3.6  million  in  the
third  quarter of 1999 compared with $2.6 million in the third  quarter  of
1998,  an  increase of $976 thousand.  Quanta Systems Corporation  ("Quanta
Systems")  net sales decreased $513 thousand to $2.9 million in  the  third
quarter  of  1999 compared with $3.4 million in the same period  for  1998.
MicroAssembly Systems, Inc. ("MicroAssembly") was sold on May 30, 1999  and
therefore  had  no  sales in the third quarter of 1999.  MicroAssembly  had
sales  of  $438  thousand  in the third quarter of  1998.   SYSCO  Security
Systems  ("SYSCO") had $150 thousand in net sales for the third quarter  of
1999,  a  $110 thousand increase over $40 thousand in the third quarter  of
1998.   CorrLogic, Inc. ("CorrLogic") had net sales of $2.5 million in  the
third  quarter of 1999.  This was incremental since CorrLogic was purchased
on April 30, 1999.

Gross margin for CompuDyne increased $4.0 million from $1.5 million in  the
third  quarter  of  1998  to $5.5 million in the  third  quarter  of  1999.
Norment  had a gross margin of $3.1 million in the third quarter  of  1999.
Gross margin for SecurSystems increased $205 thousand from $813 thousand in
the  third  quarter of 1998 to $1.0 million in the third quarter  of  1999.
This  was  due to the increase in net sales.  Quanta Systems had a decrease
in  gross  margin of $207 thousand, down from $627 thousand  in  the  third
quarter   of  1998  to  $420  thousand  in  the  third  quarter  of   1999.
MicroAssembly had no gross margin in the third quarter of 1998 since it was
sold  on  May 30, 1999.  SYSCO had a  gross margin of $34 thousand  in  the
third  quarter of 1999 up slightly from $16 thousand in the same period  of
1998.   CorrLogic had a gross margin of $855 thousand in the third  quarter
of  1999.  This  margin  is  net of $405 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 $2.8  million  for
CompuDyne  in  the third quarter of 1999, increasing from $1.1  million  in
1998   to   $3.9   million  in  1999.   Norment's  selling,   general   and
administrative  expenses of $2.0 million accounted for a large  portion  of
this increase.  These costs were incremental since Norment was acquired  on
November  30, 1998.  SecurSystems had an increase in selling,  general  and
administrative costs of $70 thousand, increasing from $519 thousand in  the
third  quarter of 1998 to $589 thousand in 1999.  Quanta Systems'  selling,
general and administrative costs decreased from $249 thousand in the  third
quarter  of  1998  to $156 thousand in the third quarter  of  1999,  a  $93
thousand  decrease.   There  were no selling,  general  and  administrative
expenses  for  MicroAssembly since it was sold on May  30,  1999.   SYSCO's
selling,  general and administrative expenses decreased to $65 thousand  in
the  third  quarter of 1999, down $60 thousand from $125  thousand  in  the
third  quarter  of  1998.  CorrLogic had incremental selling,  general  and
administrative  expenses of $836 thousand in the  third  quarter  of  1999.
CompuDyne's   corporate   selling,  general  and  administrative   expenses
increased  $174 thousand in the third quarter of 1999 to $271 thousand,  up
from $97 thousand in 1998.

Research  and development costs, which are related only to Quanta  Systems'
DCS product division decreased $113 thousand to $0 in the third quarter  of
1999 from $113 thousand in 1998.

Interest  expense for the third quarter of 1999 was $573 thousand  compared
to $37 thousand in the third quarter of 1998, an increase of $536 thousand.
This  increase  is  attributable to the financing of the  Norment/Norshield
acquisition.   Other income for the third quarter of 1999 was $78  thousand
compared  to $14 thousand in 1998.  This included $22 thousand in  interest
income and $44 thousand gain on the sale of assets.

CompuDyne's  third  quarter  1999 profit before  taxes  was  $1.1  million,
increasing  $787 thousand from the third quarter of 1998,  which  was  $305
thousand.   This was a 258% increase.  Norment had pre-tax profit  of  $620
thousand in the third quarter of 1999.  SecurSystems increased $64 thousand
from  $259  thousand in the third quarter of 1998 to $324 thousand  in  the
third quarter of 1999.  Quanta Systems pre-tax profit was $163 thousand  in
the  third quarter of 1999 down $24 thousand from a profit of $187 thousand
in  the  third quarter of 1998.  We feel this is a result of the government
diverting  funds,  which would have been spent on  security  to  Year  2000
problems. MicroAssembly was sold on May 30, 1999 and therefore had no  pre-
tax  profit in the third quarter of 1999.  SYSCO had a pre-tax loss of  $43
thousand in the third quarter of 1999 compared with a loss of $116 thousand
during  the same period in 1998.  CorrLogic had 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 $59.8 million or 325% in  the  first  nine
months  of  1999. Net sales were $77.5 million in the first nine months  of
1999 compared with $17.7 million in the first nine months of 1998.  Norment
had  $54.9 million in net sales in the first nine months of 1999.   All  of
Norment's  results for the first nine months are incremental since  it  was
purchased  on  November 30, 1998.  SecurSystems had $10.1  million  in  net
sales  in the first nine months of 1999 compared with $6.9 million for  the
same period in 1998, an increase of $3.2 million.  Quanta Systems net sales
for  the  first  nine  months of 1999 totaled $7.8  million.   This  was  a
decrease  of $1.6 million from the first nine months of 1998 net  sales  of
$9.4  million.  MicroAssembly's net sales decreased $692 thousand from $1.4
million in the first nine months of 1998 to $670 thousand in the first nine
months of 1999. The first nine months of 1999 reflects only five months  of
operations  for MicroAssembly since the assets of MicroAssembly  were  sold
effective  May  30,  1999  and it has been discontinued.   SYSCO  had  $410
thousand in net sales for the first nine months of 1999.  This was up  $316
thousand from $94 thousand in the first nine months of 1998.  CorrLogic had
net  sales  of $3.7 million in the first nine months of 1999.  These  sales
were incremental since CorrLogic was purchased on April 30, 1999.

CompuDyne's gross margins increased $11.7 million in the first nine  months
of  1999  to $15.7 million, up from $4.0 million during the same period  in
1998.   Gross margin at Norment was $10.5 million for the first nine months
of  1999.   SecurSystem's gross margins increased  $583  thousand  to  $2.6
million  in  the first nine months of 1999 from $2.1 million in  the  first
nine months of 1998.  Quanta Systems gross margins were $1.1 million in the
first  nine months of 1999, down $485 thousand from 1998 first nine  months
gross  margins  of  $1.6 million.  MicroAssembly's gross margins  decreased
$200  thousand from $352 thousand in the first nine months of 1998 to  $152
thousand  during the same period for 1999. The first nine  months  of  1999
only  reflects five months of operations for MicroAssembly since the assets
of  MicroAssembly  were sold effective May 30, 1999  and  it  has  been  be
discontinued.   SYSCO had a $109 thousand gross margin for the  first  nine
months of 1999 compared with $26 thousand in the first nine months of 1998.
Gross  margin  at CorrLogic was $1.2 million in the first  nine  months  of
1999.   This margin is net of $612 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  $8.5
million  to  $11.6 million in the first nine months of 1999  up  from  $3.1
million  in  the same period in 1998. Norment had $6.9 million in  selling,
general  and  administrative expenses for the first nine  months  of  1999.
SecurSystems had an increase of $208 thousand in the first nine  months  of
1999,  $1.7  million in 1999 compared with $1.5 million for  1998.   Quanta
Systems  selling,  general and administrative expenses  decreased  by  $217
thousand to $478 thousand in the first nine months of 1999, down from  $695
thousand  in  the same period for 1998.  This decrease was  the  result  of
staff  reductions due to slow sales. MicroAssembly's selling,  general  and
administrative  costs were $148 thousand in the first nine months  of  1999
decreasing  $163 thousand from $311 thousand in the first  nine  months  of
1998.  The assets of MicroAssembly were sold effective May 30, 1999 and  it
has been discontinued.  Selling, general and administrative costs for SYSCO
increased  $29  thousand in the first nine months of  1999,  up  from  $265
thousand  for  the  same period in 1998.  CorrLogic  had  $1.2  million  in
selling, general and administrative costs in the first nine months 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 nine months of  1999.
This  is down $100 thousand from $181 thousand for the same period in 1998.
The  costs  in  1999 were spent primarily on improvements  to  one  of  its
products.

Interest  expense increased $1.6 million in the first nine months  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 $369 thousand compared to $18 thousand in 1998.  The
increase is attributable to the $184 thousand gain resulting from the  sale
of  MicroAssembly's  net  assets, $100 thousand interest  income,  and  $43
thousand gain on the sale of assets.

Pre-tax  profit before taxes for CompuDyne increased $2.0 million  to  $2.8
million in the first nine months of 1999 up from $733 thousand in the  same
period for 1998.  Pre-tax profit for Norment was $2.0 million in the  first
nine  months of 1999.  SecurSystems pre-tax profit increased $114  thousand
to $593 thousand in the first nine months of 1999 from $479 thousand in the
first nine months of 1998.  Quanta Systems pre-tax profit was $263 thousand
in  the  first  nine months of 1999.  This was a decrease of $232  thousand
from  $495 thousand in the first half of 1998. We feel this is a result  of
the government diverting funds, which would have been spent on security  to
Year  2000  problems.  MicroAssembly's pre-tax profit for  the  first  nine
months  of  1999  was  $165 thousand, increasing  $152  thousand  from  $13
thousand in the same period of 1998.  This includes a gain on the  sale  of
MicroAssembly's assets of $184 thousand and 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  pre-tax
loss of $222 thousand in the first nine months of 1999 compared with a $256
thousand  loss in the first nine months of 1998, a decreased  loss  of  $34
thousand.   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.

Net  cash  flows provided by operating activities was $4.4 million  in  the
first  nine months of 1999, an increase of $4.4 million from the 1998  cash
flow  provided by operating activities $19 thousand.  Net income  increased
from  $505 thousand in the first nine months of 1998 to $1.7 million during
the  same  period in 1999.  The sale of MicroAssembly assets realized  $1.4
million  of cash, which includes $200 thousand that was initially escrowed,
in  the  first  nine months of 1999.  The purchase of CorrLogic  cost  $1.2
million  in cash. Capital additions totaled $2.8 million in the first  nine
months  of  1999.  This was $2.5 million more than in the  same  period  of
1998.


YEAR 2000 READINESS
-------------------
State  of  readiness  - The Company has completed the implementation  of  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 ready").

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 ready hardware as well as software.  Quanta Systems implemented a Year
2000  ready  Deltek system in 1998.  This was implemented  with  Year  2000
ready  hardware as well as software.  Additional computers were  identified
and  replaced in 1998.  SecurSystems has installed a new network, which has
Year  2000  ready  hardware and software.  The accounting package  used  by
SecurSystems  is Timberline.  Timberline has supplied and SecurSystems  has
installed  the  Year 2000 ready 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 replacements and modifications  of
certain existing computer equipment and software is now complete 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 to
                                                      September 30 1999
                                                      -----------------
<S>                                                  <C>
Norment/Norshield   Hardware/Software                 $      1,400
Quanta Systems/DCS  Hardware/Software                          113
SecurSystems        Hardware/Software/
                    Phone Equipment                            114
                                                      ------------
                                                      $      1,627
                                                      ============
</TABLE>
The  Company has used 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.  Of this amount, 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.

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 third 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 the 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  it's  financial
position or results of future operations.

Item 2 - Changes in Securities

        None

Item 3 - Defaults Upon Senior Securities

        None

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

        None

Item 5 - Other Information

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%.

Item 6 - Exhibits and Reports on Form 8-K

        (a) Exhibit (27) - Financial Data Schedule


                           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: November 12, 1999            /s/ William C. Rock
                                   -------------------
                                   William C. Rock