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 January 2, 1999

                        Commission File Number 0-8936

                       DATAMARINE INTERNATIONAL, INC.
           (Exact name of registrant as specified in its charter)

            Massachusetts                         04-2454559
      (State of Incorporation)      (I.R.S. Employer Identification Number)

             7030 220th SW, Mountlake Terrace, Washington 98043
                  (Address of principal executive offices)

                                (425)771-2182
            (Registrant's telephone number, including area code)

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

                               Yes [X]  No [ ]

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

            Class                         Outstanding at January 2, 1999
Common Stock, $.01 Par Value                        1,531,820


                       PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

               DATAMARINE INTERNATIONAL, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                  Three Months Ended
                                               --------------------------
                                               January 2,      January 3,
                                                  1999            1998
                                               ----------      ----------

<S>                                            <C>             <C>
Net sales                                      $3,019,302      $3,091,724

Cost of products sold                           1,923,569       2,140,087
                                               --------------------------

Gross profit                                    1,095,733         951,637

Operating expenses:
  Research and development                        337,644         369,871
  Selling                                         664,575         676,572
  General and administrative                      307,317         310,142
  Narrowband operations                            71,430          68,458
                                               --------------------------
      Operating expenses                        1,380,966       1,425,043
                                               --------------------------

Operating loss                                   (285,233)       (473,406)

Interest expense                                  236,181         157,810
Other (income), net                               (33,832)         (9,711)
                                               --------------------------

Loss before income taxes                         (487,582)       (621,505)

Income tax expense (benefit)                            -               -
                                               --------------------------

Net loss                                       $ (487,582)     $ (621,505)
                                               ==========================

Loss per share, basic                          $    (0.33)     $    (0.47)
Loss per share, diluted                        $    (0.33)     $    (0.47)

Average shares outstanding, basic and
 diluted                                        1,494,169       1,321,661
</TABLE>


The accompanying notes are an integral part of these financial statements.


               DATAMARINE INTERNATIONAL, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                              (Unaudited)
                                               January 2,      October 3,
                                                  1999            1998
                                               ----------      ----------

                                   ASSETS
<S>                                            <C>             <C>
Current assets:
  Cash and cash equivalents                    $  224,699      $  393,161
  Accounts receivable, net of allowance of
   $133,328 and $118,218, respectively          1,811,221       1,778,737
  Inventories                                   4,704,226       5,094,890
  Prepaid expenses and other current assets       121,626         184,459
                                               --------------------------
      Total current assets                      6,861,772       7,451,247

Property, plant and equipment                   5,140,343       5,086,143
  Less accumulated depreciation                 3,543,363       3,451,165
                                               --------------------------
      Property, plant and equipment, net        1,596,980       1,634,978

Other assets, net                                 420,734         447,874
                                               --------------------------

      Total assets                             $8,879,486      $9,534,099
                                               ==========================

                    LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
  Note payable to bank                         $1,418,665      $1,418,665
  Notes payable to related parties and
   others                                         544,697         744,697
  Accounts payable                              1,150,933       1,319,375
  Accrued expenses                              1,697,282       1,800,643
  Current maturities of long-term debt and
   capital lease obligations                    2,010,249       1,932,026
                                               --------------------------
      Total current liabilities                 6,821,826       7,215,406

Long-term debt and capital lease
 obligations, less current maturities              93,413         109,702
                                               --------------------------

      Total liabilities                         6,915,239       7,325,108
                                               --------------------------

Redeemable preferred stock, $1 par value;
 none issued                                            -               -

Stockholders' equity:
  Convertible preferred stock, $1 par value,
   Authorized 1,000,000 shares;
   including redeemable preferred stock;
   none issued                                          -               -
  Common stock, $.01 par value,
   Authorized 3,000,000 shares; 1,531,820
   and 1,435,056 shares issued and
   outstanding, respectively                       15,318          14,351
  Capital in excess of par value                4,477,174       4,241,522
  Unearned compensation                           (21,958)        (28,177)
  Retained earnings (accumulated deficit)      (2,506,287)     (2,018,705)
                                               --------------------------
      Total stockholders' equity                1,964,247       2,208,991
                                               --------------------------

      Total liabilities and stockholders'
       equity                                  $8,879,486      $9,534,099
                                               ==========================
</TABLE>


The accompanying notes are an integral part of these financial statements.


               DATAMARINE INTERNATIONAL, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                                 --------------------------
                                                 January 2,      January 3,
                                                    1999            1998
                                                 ----------      ----------

<S>                                              <C>             <C>
OPERATING ACTIVITIES
  Net loss                                       $(487,582)      $(621,505)
  Adjustments to reconcile net loss to
   net cash used in operating activities:
    Depreciation and amortization                  103,014         109,609
    Gain on asset dispositions                      (5,395)         (5,395)
    Amortization of debenture discount and
     issue costs                                   108,047          53,429
    Provision for losses on accounts
     receivable                                     15,110          16,392
    Employee investment plan expense                18,294          10,092
    Amortization of unearned compensation            6,219           5,407
    Changes in operating assets and liabilities:
      Accounts receivable                          (47,594)         64,459
      Inventories, prepaid expenses and other
       current assets                              453,497         (52,550)
      Accounts payable and accrued expenses       (249,380)        320,906
                                                 -------------------------
  Net cash used in operating activities            (85,770)        (99,156)

INVESTING ACTIVITIES
    Purchases of property, plant and equipment,
     including self-constructed equipment          (54,200)         (1,225)
    Other                                          (15,174)         (3,783)
                                                 -------------------------
  Net cash used in investing activities            (69,374)         (5,008)

FINANCING ACTIVITIES
    Proceeds from sale of common stock               1,297           4,614
    Proceeds from notes payable to related
     parties and others                                  -         100,000
    Principal payments on note payable to
     bank, capital lease obligations and
     long-term debt                                (14,615)       (191,437)
                                                 -------------------------
  Net cash used in financing activities            (13,318)        (86,823)

  Decrease in cash and cash equivalents
   during period                                  (168,462)       (190,987)
  Cash and cash equivalents at beginning
   of period                                       393,161         532,896
                                                 -------------------------

  Cash and cash equivalents at end of period     $ 224,699       $ 341,909
                                                 =========================

  Supplementary Cash Flow Information
    Interest paid                                $  43,951       $  66,858
    Capital lease obligations incurred to
     acquire equipment                                   -          35,941
    Conversion of subordinated note and
     accrued interest                              217,028               -
</TABLE>


The accompanying notes are an integral part of these financial statements.


            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation:

The accompanying unaudited, consolidated, condensed quarterly financial 
statements have been prepared in accordance with instructions to Form 10-Q 
and, therefore, do not include all information and footnotes normally 
included in financial statements prepared in conformity with Generally 
Accepted Accounting Principles ("GAAP").  The information furnished 
reflects all adjustments (consisting only of normal recurring adjustments) 
which are, in the opinion of management, necessary for the fair statement 
of financial position, results of operations and cash flows for the interim 
period.  In the opinion of management, they fairly represent the operating 
results of the Company for the periods presented.  The year-end condensed 
balance sheet was derived from audited financial statements, but does not 
include all disclosures required by GAAP.  The results of operations for 
the periods presented are not necessarily indicative of the results to be 
expected for the full year.  Accounting policies used in fiscal 1999 are 
consistent with those used in fiscal 1998  These financial statements 
should be read in conjunction with the financial statements and the notes 
thereto included in the Company's annual report on Form 10-K for the year 
ended October 3, 1998.

2.  Going Concern

As shown in the consolidated financial statements the Company incurred a 
net loss of $487,582 for the quarter ended January 2, 1999, and incurred 
losses for fiscal 1998 and 1997 as well.  The Company is in violation of 
certain covenants of its senior bank loan and has subordinated debt 
obligations due in February and March 1999.  These factors, as described 
below, raise doubt about the Company's ability to continue as a going 
concern.  The Company's ability to continue as a going concern is 
contingent upon its ability to raise additional capital and operate at a 
profit.

The bank has not taken any specific action with respect to the covenant 
violation, but has not waived the violation.  Absent a waiver, we continue 
to be out of compliance with the minimum quarterly revenue covenant.  Since 
April 10, 1998 the bank has chosen not to extend additional advances 
against the line until the terms of the loan are renegotiated.  At this 
time we have elected not to make changes in the loan agreement but the bank 
may require us to do so in the future.  If the bank were to demand 
immediate repayment of the loan we would not have sufficient resources to 
do so.

In order to redeem its obligations as scheduled in February and March 1999, 
and meet its operating and capital requirements in 1999, the Company will 
require additional funding.  The Company has engaged an investment banker 
to raise approximately $3,500,000 in subordinated debt, the proceeds of 
which would be used to redeem existing subordinated debt and provide 
additional working capital.  No such funding is committed at this time, and 
there is no assurance that the Company will be able to obtain additional 
financing on acceptable terms.

3.  Inventory Components:

Inventories consisted of the following at:

<TABLE>
<CAPTION>
                                 January 2, 1999      October 3, 1998
                                 ---------------      ---------------

      <S>                           <C>                  <C>
      Finished Goods                $1,808,001           $1,855,862
      Work-In-Process                  170,676              436,443
      Raw Material                   2,725,549            2,802,585
                                    -------------------------------
                                    $4,704,226           $5,094,890
                                    -------------------------------
</TABLE>


4.  Income Taxes:

Management has considered recent losses, the inability to predict with 
certainty what land mobile sales will be in the post FCC auction period, 
and uncertainties surrounding the Company's status as a going concern.  
Based on the information available, management believes that a valuation 
allowance equal to 100% of the deferred tax asset should continue to be 
established.  Until such time as future taxable income is more likely than 
not the Company will continue to reserve an appropriate portion of its 
deferred tax asset.

5.  Earnings Per Share:

Basic net income or loss per common share is based on the weighted average 
number of common shares outstanding during the year.  Diluted earnings per 
share is based on the weighted average number of common shares and common 
stock equivalents outstanding.  Common stock equivalents include shares 
which would be issued upon exercise of stock options, warrants or 
conversion of debentures.  Common stock equivalents are excluded from the 
calculation when they are anti-dilutive.

Stock options for 194,524 shares, preferred stock convertible into 175,639 
shares, subordinated notes convertible into 133,333 shares and warrants for 
53,420 common shares were not included in the loss per share calculation 
for the quarter ended January 2, 1999 because they would be anti-dilutive.

6.  New Accounting Standards:

In June 1997, the FASB issued Statement of Financial Accounting Standards 
No. 130, "Reporting Comprehensive Income."  This statement requires that 
changes in comprehensive income be shown in a financial statement that is 
displayed with the same prominence as other financial statements.  The 
statement will be effective for fiscal years beginning after December 15, 
1997.  Reclassification for earlier periods is required for comparative 
purposes.  The Company does not expect the statement to have a material 
impact on its consolidated financial position or results of operations.

In June 1997, the FASB issued Statement of Financial Accounting Standards 
No. 131, "Disclosures About Segments of an Enterprise and Related 
Information."  This statement supersedes Statement of Financial Accounting 
Standards No. 14, "Financial Reporting for Segments of a Business 
Enterprise."  This statement includes requirements to report selected 
segment information quarterly, and entity-wide disclosures about products 
and services, major customers, and the material countries in which the 
entity holds assets and reports revenues.  The statement will be effective 
for fiscal years beginning after December 15, 1997.  Reclassification for 
earlier periods is required, unless impracticable, for comparative 
purposes.  Management has not yet determined the effects, if any, of SFAS 
131 on the consolidated financial statements.

In June 1998 the FASB issued Statement of Financial Accounting Standards 
No. 133, "Accounting for Derivative Instruments and Hedging Activities."  
This statement requires that all derivative instruments be recorded on the 
balance sheet at their fair value.  Changes in the fair value of 
derivatives are recorded each period in current earnings or other 
comprehensive income, depending on whether a derivative is designated as 
part of a hedge transaction and, if it is, the type of hedge transaction.  
The statement will be effective for fiscal years beginning after June 15, 
1999.  Since the Company does not use derivative instruments management 
does not expect the statement to have any effect on its consolidated 
financial position or results of operations.

7.  Long Term Debt:

On December 19, 1995 Datamarine International, Inc. (the "Company") 
completed a private placement issuance of $2,000,000 in Subordinated 
Convertible Debentures (the "Debentures") with Alta Subordinated Debt 
Partners III ("ASDP III"), originally due December 19, 2000.

On November 24, 1997 the Company received notice from ASDP III of an 
alleged violation of certain covenants related to the Debenture Purchase 
Agreement dated December 19, 1995.  The alleged default was based on a 
breach of financial covenants concerning additional debt, and was not based 
on the particular terms of the Notes, nor was it payment related.  ASDP III 
claimed that an event of default had occurred, that the default had 
remained uncured for more than thirty days, and that the Debentures were 
immediately due and payable.  Management of the Company believed that it 
had obtained the consent of ASDP III and did not agree with the claims made 
by ASDP III.

On February 24, 1998 the Company and ASDP III reached a tentative agreement 
to modify certain provisions of the Debentures, which was memorialized in a 
term sheet.  That agreement was reached in order to resolve ASDP III's 
November 24, 1997 claims.  The new terms changed the maturity date of the 
Debentures from December 19, 2000 to February 19, 1999, deferred all 
interest payments on the Debentures until February 19, 1999 and required 
the Company to issue to ASDP III on February 19, 1999 approximately 175,600 
common shares of the Company.  These common shares are the shares that ASDP 
III is otherwise entitled to receive upon conversion of the convertible 
preferred stock component of the Debentures.

The February 24, 1998 modifications set forth in the term sheet were 
executed by both parties, and were subject to satisfaction of certain 
conditions including the execution of final documents at a later date.  On 
July 10, 1998 the Company executed final documents prepared by ASDP III's 
counsel (the "Amendments").  The Company believed that it had complied with 
the terms of the Amendments demanded by ASDP III and that an agreement had 
been reached between the parties. 

However, the Company recently received notice from ASDP III's counsel that 
ASDP III had not executed the Amendments, did not intend to do so at that 
time and that it demanded numerous additional conditions placed upon its 
acceptance of the Amendments.  Until receipt of this notice, the Company 
had not been aware that this was ASDP III's position with respect to the 
Amendments.  After considering carefully its options and bearing in mind 
the best interests of the Company, the Company notified ASDP III on January 
22, 1999 that the Company revoked the offer to amend that had been 
manifested by its own execution of the Amendment.  Because the Amendments 
are not effective the original terms of the Debenture Agreement are in 
effect, in which case the Company faces an alleged and unresolved default 
under the Debenture Agreement dating back to November 24, 1997.  Due to 
uncertainties regarding the Debenture terms, and without waiving its right 
to take a different position in the future, the Company has elected to 
reflect the earlier February 19, 1999 maturity date in the financial 
statements.  Accrued and unpaid interest on the Debentures as of January 2, 
1999 was approximately $617,890.

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

Statements included in this report which are not historical in nature are 
forward-looking statements made pursuant to the safe harbor provisions of 
the Private Securities Litigation Reform Act of 1995, and as such may 
involve risks and uncertainties.  This Quarterly Report on Form 10-Q and 
the Annual Report on Form 10-K contain certain detailed factors that could 
cause the Company's actual results to materially differ from forward-
looking statements made by the Company.

Introduction

Datamarine International, Inc. and its subsidiaries ("we" or the "Company") 
manufacture radio communications and navigation instrumentation products.  
Presently, the Company's primary operations are in a single industry 
segment, namely electronics.  The Company also owns and manages specialized 
mobile radio ("SMR") licenses in the 220 MHz radio service, although such 
operations to date have been minimal.

Datamarine International, Inc. was incorporated in Massachusetts on April 
23, 1969.  All of the Company's product development and manufacturing 
facilities are at its Mountlake Terrace, Washington location.  The Company 
has sales and service facilities on the east and west coasts of the United 
States and in Chatswood, NSW, Australia.  Marine communication products, 
branded SEA, and marine instrumentation products, branded Datamarine, are 
sold worldwide through approximately 500 dealers in the United States and 
approximately 20 foreign countries.

Sales of narrowband communications products for the land mobile radio 
market are made through the Company's wholly-owned subsidiary, SEA, Inc. 
("SEA"), to business users nationwide.  SEA has developed and marketed 
narrowband radio equipment since 1984 and began selling its current line of 
narrowband equipment for use in the 220 MHz band in 1993.

On October 19,1992, the Federal Communications Commission ("FCC") conducted 
a lottery which led to the issuance of approximately 3,500 Phase I licenses 
for a new land mobile service in the 220-222 MHz band.  The FCC adopted 
challenging technical parameters for the equipment to be used in the 220 
MHz radio service.  By establishing these parameters the FCC intended to 
encourage the development of new spectrum-efficient technologies for land 
mobile applications.  This service is mandated to use narrowband 
technologies which will result in a fivefold increase in the number of 
communications channels as compared to conventional technologies.  SEA was 
the first manufacturer to receive FCC type acceptance for 220 MHz radio 
equipment.  SEA shipped its first 220 MHz radios in 1993.

As of September 30, 1996 ownership of Phase I licenses for locations which 
had not met regulatory build-out requirements reverted to the Federal 
government.  The Federal Communications Commission ("FCC") conducted an 
auction of Phase II licenses which commenced in September 1998 and 
concluded in October 1998.  The auction was for licenses covering "Economic 
Areas", "Regions" and "Nationwide" areas as defined by the FCC.  We expect 
that once the recently auctioned Phase II licenses are granted, demand for 
our higher margin 220 MHz base station products will increase.

During fiscal 1995 Narrowband Network Systems, Inc. ("NNS") was 
incorporated in the state of Washington as a subsidiary of SEA, and SEA 
owns 97.5% of NNS's outstanding stock.  NNS was formed to participate in 
the business of providing SMR services.  NNS has entered into both 
"Management Agreements" and "Operator Agreements" with the holders of 220 
MHz licenses granted by the FCC related to SMR services in approximately 47 
market areas across the United States.  Management Agreements require NNS 
to construct, develop and operate SMR systems in certain markets.  Operator 
Agreements require NNS to provide licenses, system facilities and "SMR 
Operators" in certain markets.  The Management Agreements typically allow 
NNS to acquire the license holder's interest in exchange for a percentage 
of gross receipts from the system and a percentage of any profit realized 
by NNS upon the system's ultimate disposition.  The Operator Agreements 
typically give NNS a contractual percentage of system revenue based on the 
level of support provided to each system.  The Company has met all 
regulatory build-out requirements related to its licenses.  Because NNS 
commenced only limited operations at the end of 1995, revenues and 
associated cash expenses have been immaterial since inception.

Foreign sales typically account for about 5% of our sales.  In past years, 
narrowband products have only been sold domestically so foreign sales 
represent only marine revenues.  With the recently completed auction of 220 
MHz licenses in Mexico, narrowband products may begin to be sold outside 
the United States.

Products and Marketing

Land Mobile Communications - The Company's narrowband land mobile radio 
system products have been type accepted by the FCC for use in the 220 MHz 
radio service.  These products consist of hand held, mobile and base 
station components, utilizing the narrowband technology, an enhanced form 
of single sideband that is ideal for the 5 KHz channel width used in the 
220 MHz radio service, and were developed for sale to business users of 
private land mobile radio services.  The narrowband technology helps solve 
the problem of frequency congestion by allowing five narrowband channels to 
be operated within the same spectrum as would presently be utilized by one 
25 KHz FM channel.

Marine Communications - The SEA marine communications products are high 
performance radios used on commercial vessels, fishing vessels and ocean-
going yachts.  The product line currently consists of 28 products with 
suggested list prices between $765 and $40,000.  The SEA products include 
HF/SSB and VHF/FM radios, Satcom C, Weather fax, Emergency distress radio 
beacons (EPIRBS), Search and rescue transponders (SARTS) and Global 
Maritime Distress and Safety Systems (GMDSS).

Marine Instrumentation - Marine instrumentation products are sold primarily 
to the recreational boating market.  The products are well established in 
the marketplace with up-to-date instruments for each type of pleasure 
craft: small boats and yachts; sail and power; inshore and offshore. The 
Datamarine product line currently consists of 28 products sold under the 
DART, LINK, Corinthian and ChartLINK names, with suggested list prices 
between $400 and $3,900. The Datamarine products include depth sounders, 
knotmeters and water temperature instruments, wind speed and direction 
instruments, integrated instruments, and electronic chart plotters.

Results of Operations

The following table sets forth the components of sales and gross profit by 
product line for the Quarter Ended January 2, 1999 and the comparable 
quarter in the prior fiscal year.

<TABLE>
<CAPTION>
         Sales                                              Gross Profit
-----------------------                                -----------------------
January 2,   January 3,                                January 2,   January 3,
   1999         1998                                      1999         1998
------------------------------------------------------------------------------

<C>          <C>          <S>                          <C>           <C>
$  453,215   $  715,840   Land Mobile Communications   $   99,604    $(55,324)
 2,093,544    1,859,875   Marine Communications           807,783     779,266
   472,543      516,009   Marine Instrumentation          188,346     227,695
-----------------------------------------------------------------------------
$3,019,302   $3,091,724   Total                        $1,095,733    $951,637
-----------------------------------------------------------------------------
</TABLE>


Sales order backlogs at January 2, 1999 were as follows:  Land Mobile 
Communications $228,000, Marine Communications $865,000 and Marine 
Instrumentation $128,000.

The following table sets forth income and expense items as a percentage of 
net sales for the quarter, and the percentage change in those items from 
the comparable quarter in the previous two years.

<TABLE>
<CAPTION>

  Income and Expense Items                                      Percentage
as a Percentage of Net Sales                                Increase (Decrease)
----------------------------                                -------------------
                                                               1998     1997
 January 2,     January 3,                                      to       to
    1999           1998                                        1999     1998
-------------------------------------------------------------------------------

    <C>            <C>         <S>                             <C>      <C>
    100%           100%               Net sales                 (2)       10
     64             69          Cost of products sold          (10)       19
     36             31               Gross profit               15        (7)
     46             46            Operating expenses            (3)        9
     (9)           (15)             Operating loss             (40)       69
     (8)            (5)            Interest expense             50        28
    (16)           (20)           Loss before taxes            (22)       62
      -              -         Benefit for income taxes          -      (100)
    (16%)          (20%)               Net loss                (22)      144
</TABLE>


Net sales decreased by $72,422 or 2% compared to the same quarter in the 
prior fiscal year.  Net sales of the Company's land mobile products 
decreased by $262,625 or 37% compared to the same quarter in the prior 
fiscal year.  Net sales of the Company's marine communications systems 
increased by $233,669 or 13%.  Net sales of the Company's marine 
instrumentation systems decreased by $43,466 or 8% compared to the same 
quarter in the prior fiscal year.

Land mobile revenues continue to be comprised mostly of mobile radio 
products and will continue to be so until new licenses are granted by the 
FCC.  Although the auction of Phase II licenses concluded in October 1998, 
successful bidders are expected to receive their licenses in February 1999.  
Our land mobile revenue projections assumed that licenses would be issued 
Sooner, therefore so land mobile sales for the first quarter were below our 
expectations.  Sales of marine communications and marine instrumentation 
products continued to contribute to the Company's performance.  Marine 
communications sales were ahead of the same quarter last year and slightly 
below management's projections.  Sales of GMDSS products were strong as 
expected though shortages of some products caused delays in shipments 
projected for the first quarter.  Marine instrumentation sales were 
slightly less than the same quarter in the prior year and below 
management's projections.  Instrumentation sales in the first quarter of 
last year were unusually strong and marine instrument revenues are expected 
to increase when the Company's new chart product starts shipping later this 
fiscal year.

Gross profit was $1,095,733 (36% of net sales), as compared to $951,637 
(31% of net sales) in the prior year, an increase of $144,096 or 15%.  The 
gross profit on land mobile products was $99,604 (22% of such sales), as 
compared to $(55,324) (-8% of such sales) in the prior year, an increase of 
$154,928.  Land mobile gross profit improved due to better margin on mobile 
radio products and the sale of some higher margin repeater systems.  The 
gross profit on marine communications systems was $807,783 (39% of such 
sales), as compared to $779,266 (42% of such sales) in the prior year, an 
increase of $28,517 or 4%.  The gross profit on marine instrumentation 
systems was $188,346 (40% of such sales), as compared to $227,695 (44% of 
such sales) in the prior year, a decrease of $39,349 or 17%.  The overall 
gross profit margin improved compared to the prior year due to higher 
margins on land mobile products.  Land mobile margins vary depending upon 
the sales mix across the product line, and mobile radio products typically 
have substantially lower gross margins than base station equipment.  The 
market for communications products is very competitive and downward 
pressure on selling prices for mobile radios is expected to continue.  We 
expect that land mobile gross margin will improve when shipments of base 
station products can resume as a result of Phase II licenses being granted.  
The profit margins on marine communication and marine instrumentation 
products vary according to product sales mix.  Margins for marine 
communications and marine instrumentation products are expected to remain 
about the same as the current quarter.

Operating expenses were $1,380,966 (46% of net sales), as compared to 
$1,425,043 (46% of net sales) last year, a decrease of $44,077 or 3%.  
Engineering expenses were about 9% less than the prior year.  Engineering 
salaries, consulting and consumable supplies expense comprised most of the 
reductions.  Total selling expenses declined about 2%.  Salary and royalty 
expenses declined while marketing expenses related specifically to the new 
chart product increased.  Administrative expenses were comparable in total 
to the prior year.  Narrowband operating expenses increased slightly due to 
higher site rental expenses.

Interest expense increased $78,371 or 50% over the prior year.  The 
maturity date of the Subordinated Convertible Debentures was changed from 
December 2000 to February 1999 which resulted in increased amortization of 
the related discount and debt issuance costs.  During April 1998 the 
Company issued additional warrants to the holders of the Subordinated Short 
Term Notes in connection with extending the maturity date of those notes.  
The $97,500 value of the warrants is amortized to expense over the one year 
term of the extension.

Other income increased because the Company was reimbursed for some non-
recurring land mobile engineering services.

Income taxes were zero for 1999 and 1998 because the Company fully reserves 
its deferred tax asset.

Liquidity and Capital Resources

On January 2, 1999, the Company's principal sources of liquidity consisted 
of approximately $225,000 in cash and equivalents.  The Company had drawn 
$1,418,665 on its $2,000,000 working capital bank line and there was no 
additional availability because the bank is not making any new advances and 
the line was overadvanced by $55,000.  The maturity date of the bank line 
is February 28, 1999.  Whether the line will be renewed and the terms of 
any such renewal cannot be determined at this time.  The Company continues 
to have operating losses and negative cash flow from operating activities.  
The Company's current operating plans include a strategy for reducing 
expenses and certain cash payments in order to decrease the net cash used.  

We are currently negotiating a new senior bank loan agreement with a 
different lender which would replace our current bank loan.  The new 
agreement would give us additional borrowing capacity.  In order to 
complete the new bank loan agreement, the holder of the Subordinated 
Convertible Debentures must agree to subordinate their debt to the new 
senior lender.  We have not been able to obtain a subordination agreement 
at this time so further action on the new bank loan agreement has been 
postponed.

The Company also has subordinated debt obligations due in February and 
March 1999.  In order to redeem its obligations as scheduled in February 
and March 1999, and meet its operating and capital requirements in 1999, 
the Company will require additional funding.  The Company has engaged an 
investment banker to raise approximately $3,500,000 in subordinated debt, 
the proceeds of which would be used to redeem existing subordinated debt 
and provide additional working capital.  No such funding is committed at 
this time, and there is no assurance that the Company will be able to 
obtain additional financing on acceptable terms.

Year 2000

The Year 2000 ("Y2K") issue is expected to cause some problems in computer 
programs which are not able to properly recognize dates beyond the year 
1999.  In order to address possible Y2K problems we have a Y2K compliance 
group which includes persons from engineering, manufacturing, sales and 
administration to oversee Y2K readiness, coordinate Y2K communications and 
report regularly to senior management.

The Company has implemented a program to identify and resolve the effect of 
Year 2000 software issues on the integrity and reliability of its products, 
financial and operational systems.  In addition, the Company is also 
communicating with its principal customers, suppliers and service providers 
to assess whether Year 2000 issues will have an adverse impact on the 
Company.

We have completed a review of all of our products and have not identified 
any Y2K compliance problems.  A majority of our products do not have date 
related functions and those that do are either Y2K compliant or do not use 
date information in critical functions.  We have completed a review of our 
financial and information system area and determined that our primary 
systems are Y2K compliant.  One commercially available sales software 
product is not Y2K compliant but a compliant version is currently available 
and the Company expects to replace that software by July 1999.  With regard 
to manufactured products, we have contacted a majority of our major 
suppliers.  Of the suppliers which have responded to date, most have stated 
that they are Y2K compliant or intend to be so by the year 2000.  Some of 
our suppliers have indicated that they are not responding to detailed Y2K 
inquiries, but that they do not foresee any Y2K compliance problems.  Of 
course, there is no way to be certain that the supply of products from 
third parties will not be affected by Y2K problems, which could result in a 
disruption of the Company's normal production and sales operation.

We have not completed our contingency plan for those areas which are most 
susceptible to disruption but plan to do so by July 1999.  Due to the wide 
range of uncertainties surrounding Y2K issues we cannot be sure that our 
contingency plans will prevent all forms of disruptions.  We estimate that 
the total costs incurred for Y2K compliance efforts through January 2, 1999 
were $22,000 and that the remaining costs to be incurred will be 
approximately $12,000.

                         PART II - OTHER INFORMATION

Items 1, 2, 3, 4 and 5

There were no reportable events or matters under these captions during the 
quarter ended January 2, 1999.

Item 6.  Exhibits and Reports on Form 8-K
(a)      Exhibits

3.1      Articles of Organization, as amended, incorporated by reference to 
         Annual Report on Form 10-K for the Fiscal Year Ended September 30, 
         1995.

3.2      Bylaws, incorporated by reference to Registration Statement 0-8936 
         on Form 10.

4        Debenture Purchase Agreement with exhibits, incorporated by 
         reference to Annual Report on Form 10-K for the Fiscal Year Ended 
         September 30, 1995.

4.1      Subordinated Notes Agreement with exhibits, incorporated by 
         reference to Annual Report on Form10-K for the Fiscal Year Ended 
         September 27, 1997.

4.2      Terms for Amendment of December 19, 1995 Debenture Agreement, 
         incorporated by reference to Annual Report on Form 10-K for the 
         Fiscal Year Ended September 27, 1997.

10.1     Datamarine International, Inc. 1991 Stock Option Plan, 
         incorporated by reference to Registration Statement 33-48532 on 
         Form S-8.

10.2     1992 Stock Option Plan for Non-employee Directors, incorporated by 
         reference to Annual Report on Form 10-K for the Fiscal Year Ended 
         October 1, 1994.

10.3     Debenture Purchase Agreement with exhibits, same as 4 above.

10.4     1995 Stock Option Plan for Non-employee Directors, incorporated by 
         reference to Annual Report on Form 10-K for the Fiscal Year Ended 
         September 28, 1996.

27       Financial Data Schedule

(b)      Reports on Form 8-K.  None.


                                 SIGNATURES

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.

                                       Datamarine International, Inc.
                                                (Registrant)



Date: February 9, 1999                 /s/ JAN KALLSHIAN
      ----------------                 -----------------
                                       Jan Kallshian
                                       Chief Financial Officer