SECURITIES AND EXCHANGE COMMISSION
                                 Washington, DC

                                   Form 10-QSB

                  Quarterly Report under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

         For the quarter ended March 31, 1998 Commission File No. 0-774
                              DANIEL GREEN COMPANY
             (Exact name of registrant as specified in its charter)

     MASSACHUSETTS                                          15-0327010
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

     DOLGEVILLE, NEW YORK                                     13329
(Address of principal executive offices)                    (Zip Code)

       Registrant's telephone number, including area code: (315) 429-3131

Former  name,  former  address and former  fiscal  year,  if changed  since last
report: None.

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 Act of 1934 during the preceding twelve months and (2)
has been subject to the filing requirements for at least the past
90 days.                   YES  X    NO

         CLASS                                   OUTSTANDING AT MARCH 31, 1998

Common Stock $2.50 par value                                 1,698,329

















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                                                                          Page 2
                              DANIEL GREEN COMPANY

                                     INDEX
                                                                            Page
                                                                          Number

Index             . . . . . . . . . . . . . . . . . . . . . . .              1

PART I - Financial Information

Balance Sheets, Assets
          March 31, 1998 and December 31, 1997  . . . . . . . .              2

Balance Sheets, Liabilities & Stockholders' Equity
          March 31, 1998 and December 31, 1997  . . . . . . . .              3

Statements of Operations for the three months ended
          March 31, 1998 and March 31, 1997   . . . . . . . . .              4

Statements of Cash Flows for the three months ended
          March 31, 1998 and March 31, 1997   . . . . . . . . .              5

Notes to Financial Statements . . . . . . . . . . . . . . . . .              6

Management Discussion & Analysis of Financial Conditions
          and Results of Operations . . . . . . . . . . . . . .              8

PART II - Other Information   . . . . . . . . . . . . . . . . .             11








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                                                                          Page 3




                              DANIEL GREEN COMPANY
                                 Balance Sheets

                                     ASSETS
                                                       March 31   December 31
                                                         1998        1997
                                                      (Unaudited)     (*)
Current Assets:
Cash                                                 $     6,395 $  901,875

Accounts Receivable, trade
 less allowances for doubtful accounts
 (1998 - $248,505  1997 - $231,000)                    3,410,299  5,721,431

Deferred Income Tax Asset                                287,306    287,306

Income Tax Receivable                                    430,897          0

Inventories, at lower of cost (FIFO) or market:
         Raw Materials                                 2,048,692  1,941,033
         Work In Process                                 148,261    374,484
         Finished Goods                                6,114,762  6,153,858
                                                      ---------- -----------
           Total Inventories                           8,311,715  8,469,375

Other Current Assets                                           0     65,656
                                                      ---------- -----------

Total Current Assets                                  12,446,612 15,445,643

Property, plant & equipment:
Real Estate and Water Power, at cost                   3,374,864   3,374,864
Machinery, Equipment, & Lasts, at cost                 5,591,709   5,565,199
                                                      ----------   ---------
                                                       8,966,573   8,940,063
Less: Accumulated Depreciation                         7,299,092   7,232,416
                                                      ---------- -----------
Property, plant & equipment, net                       1,667,481   1,707,647

Other Assets:

Prepaid Pension Expense                                  819,896     894,896
Other Assets                                              97,217     114,687
                                                      ---------- -----------

Total Other Assets                                       917,113   1,009,583
                                                      ---------- -----------
Total Assets                                         $15,031,206 $18,162,873
                                                      ========== ===========



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                                                                          Page 4


                              DANIEL GREEN COMPANY

                                 Balance Sheets

                       Liabilities & Stockholders' Equity

                                                        March 31    December 31
                                                          1998         1997
                                                       (Unaudited)      (*)
Current Liabilities:

Notes Payable, line of credit                        $   459,607   $ 2,219,802
Notes Payable, current                                   562,754       562,030
Accounts Payable, trade                                  487,446       303,492
Accrued Salaries & Commissions                           171,394       240,065
Other Accrued Liabilities                                 60,542       283,261
Income Tax Payable                                             0       421,389
                                                      ----------    ----------


Total Current Liabilities                              1,741,743     4,030,039

Notes Payable, non-current                             1,184,142     1,325,104
Deferred Tax Liability                                   611,726       611,726
                                                      ----------    ----------

Total Liabilities                                      3,537,611     5,966,869


Stockholder's Equity

Common Stock                                           4,245,823     4,245,823
Paid-in-excess of par value                              741,303       741,303
Retained Earnings                                      6,506,469     7,208,878
                                                      ----------    ----------
Total Stockholders' Equity                            11,493,595    12,196,004
                                                      ----------    ----------

Total Liabilities & Stockholders' Equity             $15,031,206   $18,162,873


(*) Derived from audited financial statements.

See notes to financial statements.




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                                                                          Page 5

                              DANIEL GREEN COMPANY

                            Statements of Operations
                                                    (Unaudited)

                                                     For the Three Months Ended
                                                       March 31     March 31
                                                         1998         1997
                                                      ---------      ---------


Net Sales                                           $ 2,499,463    $ 3,323,762

Costs and Expenses:

 Cost of Goods Sold                                   2,302,757      2,593,147
 Selling, General, & Administrative                   1,275,989      1,293,387
 Interest Expense                                        53,635        140,852
                                                      ---------      ---------

Total Costs and Expenses                              3,632,381      4,027,386
                                                      ---------      ---------

Loss before credit for Income Taxes                  (1,132,918)      (703,623)

Credit for Income Taxes                                 430,509        267,594
                                                      ---------      ---------
Net Loss                                              ($702,409)     ($436,246)
                                                      =========      =========
Net Loss per Share:
     Basic                                               ($0.41)        ($0.29)
                                                      =========      =========
         Diluted                                          $0.41          $0.29
                                                      ---------      ---------
Shares Outstanding:
     Basic                                            1,698,329      1,511,892
                                                      ---------      ---------
         Diluted                                      1,698,329      1,511,892







See notes to financial statements.







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                                                                          Page 6

                              DANIEL GREEN COMPANY
                            Statements of Cash Flows
                                                    (Unaudited)
                                                      For the Three Months Ended
                                                         March 31      March 31
                                                          1998           1997
                                                       ----------     ---------
Operating Activities:
 Net Loss                                            $   (702,409)   $ (436,246)
  Adjustments to reconcile net loss to net
 cash provided by (used in) operating
 activities:
  Depreciation                                             65,876        87,624
  Amortization                                                  0         6,134
Changes in assets & liabilities:
 (increases) decreases in:
  Accounts Receivable, trade                            2,311,132     2,519,707
  Income Tax Refund Receivable                           (430,897)     (268,437)
  Inventories                                             157,660    (1,549,638)
  Other Current Assets                                     65,656         3,727
  Other Assets                                             17,470        (4,966)
 increases (decreases) in:
  Accounts Payable, trade                                 183,954       264,273
  Accrued Salaries                                        (68,671)     (136,956)
  Income Taxes Payable                                   (421,389)            0
  Deferred tax liability                                        0      (258,193)
  Other Accrued Liabilities                              (222,719)      216,970
                                                       ----------     ---------
Net Cash Provided by Operating Activities               1,030,663       444,000
Investing Activities:
 Purchase of property & equipment                         (25,710)       (2,841)
                                                       ----------     ---------
Net Cash Used in Investing Activities                     (25,710)       (2,841)
Financing Activities:
 Net  Payments
         on Line of Credit                             (1,760,195)     (237,839)
 Repayments of Notes Payable                             (140,238)     (195,513)
                                                                0        (8,507)
Net Cash Used in Financing Activities                  (1,900,433)     (441,908)
Net Decrease in Cash                                     (895,480)         (749)
Cash at Beginning of Period    $901,875                    94,875        13,213
                                                       ----------     ---------
Cash at End of Period                                     $ 6,395      $ 12,464
                                                       ==========     =========
See notes to financial statements.





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                                                                          Page 7

                              DANIEL GREEN COMPANY


                          Notes to Financial Statements


Note 1.           In the  opinion of the  Company,  the  accompanying  unaudited
                  financial statements contain adjustments,  all of which are of
                  a normal and recurring nature, necessary to present fairly the
                  financial  position  as of March 31,  1998 and the  results of
                  operations and cash flows for the three months then ended.

Note 2.           The results of operations for the three months ended March 31,
                  1998  are not  necessarily  indicative  of the  results  to be
                  expected for the full year.

Note 3.           Prior Period Adjustment The Company's financial statements for
                  the quarter ended March 31, 1997 have been restated. Due to an
                  error in  accounting  for the sale of  certain  products.  The
                  Company erroneously  recognized sales for product shipped to a
                  customer on a consigned  basis.  The previous  practice of the
                  Company was to adjust these sales  numbers on an annual basis,
                  for year-end  reporting  purposes.  Since the Company  expects
                  these  types of  consignment  arrangements  to increase in the
                  future,  the Company  decided that it was necessary to account
                  for them properly on an interim basis as well.

                  The  effect of this  restatement  on the net loss and net loss
                  per share for the quarter ended March 31, 1997 was as follows:

                                                            Net Loss
                                  Net Loss                  Per Share

Previously reported               ($348,737)                ($0.23)
Restatement                       ($87,510)                 ($0.06)
-----------                       ---------                 -------
As Restated                       ($436,246)                ($0.29)






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                                                                          Page 8

                              DANIEL GREEN COMPANY

             Management Discussion & Analysis of Financial Condition
                            and Results of Operations

1.       Liquidity and Capital Resources

         For the quarter  ended March 31,  1998,  net cash flows from  operating
activities  were  $1,030,663  as compared to $444,000  for the first  quarter in
1997.

          Although the Company  experienced  a higher first quarter loss than in
1997 ($702,409 versus $436,246), lower inventory levels along with the Company's
continued  efforts  to  reduce  accounts  receivable,  enabled  the  Company  to
dramatically improve its cash from operations.  Inventories in the first quarter
of 1998 were  $8,311,715  compared to  $10,003,341 at the end of March 31, 1997.
Lower  purchases  during the first  quarter  along with  decreases in production
levels  have  contributed  to this  change.  The  majority  of cash  provided by
operations was used to pay down debt.

         Accounts receivable  decreased at the end of the first quarter of 1998,
to $3,410,299  from  $4,062,374 at the end of the same quarter of 1997,  and has
gone down by $2,311,132 since the beginning of the fiscal year.

         The Company has a credit arrangement with KeyBank National  Association
which  provides the Company with an  $8,000,000  revolving  line of credit and a
$2,100,000  mortgage/term  loan. The revolver  carries an interest rate of LIBOR
plus  2.25% and will  expire on April 30,  2000.  The  revolver  is  secured  by
accounts  receivable,  inventory,  equipment and cash.  The Company's  borrowing
against the revolver is at an all-time  low and stands at $459,607,  compared to
$4,299,967  a year ago.  Based on the balance owed under the  revolving  line of
credit,  the Company  believes it will be better  positioned this year to handle
working  capital  needs  during  the  peak  borrowing  periods  of June  through
September.

         The  mortgage  term  loan is  secured  by the  Company's  manufacturing
facilities and totaled $1,746,896 as of March 31, 1998.

         The line of credit contains


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                                                                          Page 9

certain  financial  covenants  relative to working capital,  tangible net worth,
total  debt to  tangible  net worth and debt  service  coverage.  All  financial
covenants,  with the  exception of the debt service  coverage,  are measured for
compliance on an annual basis.  The debt service  coverage ratio is measured for
compliance  quarterly.  The Company was not in compliance  with the debt service
coverage  covenant as of March 31,  1998.  On May 12th,  the Company  obtained a
waiver from KeyBank National Association. Going forward, the Company and KeyBank
are currently  reviewing and establishing a new debt service  coverage  covenant
for 1998.

         Management  is not aware of any known  demands,  commitments  or events
which would materially affect its liquidity.  There are no material expenditures
or commitments  which would affect capital  resources in a significant way. Cash
generated by operations,  supplemented  by short-term  borrowings,  should cover
planned requirements.

2.       Results of Operations

         Shipments  of footwear  products  were 25% lower in  comparison  to the
first quarter of 1997. The Company believes that its first quarter sales results
are based,  in part, on a carry-over of poor retailing  activity  during the 4th
quarter of 1997.  This situation has resulted in many customers  carrying higher
inventory  levels,  reducing orders placed,  and therefore fewer shipments being
made by the Company during the 1st quarter of 1998.

         Cost of goods  sold for the  first  quarter  was  92.1% of net sales as
compared  to 78.0% in 1997.  Due to  inventory  on-hand at the end of 1997,  the
Company  produced fewer shoes in the first quarter of 1998 and charged-off  more
fixed  manufacturing  costs to operations than last year. In addition,  sales of
higher  margined  products in the quarter were 43% below sales  levels  reported
last  year.  Both  of  these  conditions  led to a  higher  cost of  goods  sold
percentage,  for the first quarter of 1998 as compared to 1997. Selling, general
and  administrative  (SG&A)  expenses for the first quarter of 1998 are slightly
below 1997 by $17,398 or 1.3%. As a percentage  of sales,  SG&A expenses for the
first  quarter  of 1998 are up  considerably  over last  year.  Several  factors
account for this increase:  (1) billings  received  during the first quarter for
services provided by the Company's law firm and computer  software company,  (2)
the timing effect of changing since January 1, 1998,


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                                                                         Page 10

the  compensation  plan of our field  sales force from a  commission-based  to a
salaried plus  incentive-based  program;  and (3) expenses  related to the "new"
defined  contribution  401(k)  savings plan.  For the first quarter of 1998, the
defined  contribution  expense amounted to approximately  $88,000.  In the first
quarter of 1997,  the  Company  did not have a  decrease.  The prior year didn't
commence until the third quarter.

         Interest expense for the first quarter of 1998 has decreased by $87,217
or 61.9%  compared  to the first  quarter  of 1997.  This  significant  decrease
reflects, in part, lower debt levels.

         The Company incurred a net loss before taxes of $1,132,918 in the first
quarter  of 1998,  compared  to a pre-tax  loss of  $703,623  last  year.  On an
after-tax basis, the loss for the quarter was ($702,409) or ($0.41) per share as
opposed to a ($436,246) after-tax loss of ($0.29) per share in the first quarter
of 1997.

         On  March  30,  1998 the  Company  hired  Mr.  Greg  Tunney  as its new
President  and Chief  Operating  Officer.  Mr.  Tunney was  previously  the Vice
President,  National Sales Manager of the Naturalizer and Dr. Scholl's  Division
of the Brown Shoe Company located in St. Louis, Missouri.



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                                                                         Page 11

                              DANIEL GREEN COMPANY

                           Part II - Other Information

1.       Legal Proceedings - None.

2.       Changes in Securities - None.

3.       Default upon Senior Securities - None.

4.       Submission of matters to a vote of security holders.

         At the  Annual  Meeting  of  Stockholders  held on March  27,  1998 and
         adjourned to April 1, 1998, stockholders present in person and by proxy
         voted upon two proposals other than the election of Directors:


Proposal I

         To  amend  the  articles  of   organization   to  permit   meetings  of
stockholders  to be held anywhere in the United  States,  as listed on the Proxy
Statement dated March 3, 1998. Of the total shares outstanding, 1,383,531 or 81%
voted on Proposal I as follows:

For               1,347,514 or 97.3%
Against              31,261 or  2.2%
Abstained             4,756 or   .3%
No Vote                   0 or    0%


Proposal II

         To  ratify  the  selection  of  Deloitte  & Touche  LLP as  independent
auditors for the  Company.  Of the total  shares  outstanding,  1,383,531 or 81%
voted on Proposal II as follows:

For               1,373,911 or 99.3%
Against               7,020 or   .5%
Abstained             2,600 or   .1%
No Vote                   0 or    0%




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                                                                         Page 12

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.


                                                      DANIEL GREEN COMPANY
                                                           Registrant



Date: May 15, 1998                                 /s/ Stanley W. Kabot
                                                   Stanley W. Kabot
                                                   Chief Financial Officer,
                                                   Treasurer


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