FORM 10-Q

                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

(Mark one)

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

For the quarterly period ended    July 31, 1998

                                                        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     1-4310


                   FEDERATED PURCHASER, INC.
      (Exact name of registrant as specified in its charter)

      NEW YORK                             22-1589344
(State or other jurisdiction of          (I.R.S. Employer
incorporation or organization)           Identification No.)

       268 CLIFFWOOD AVENUE, CLIFFWOOD, NEW JERSEY 07721
              (Address of principle executive offices)
                              (Zip Code)

                                 (732) 290-2900
              (Registrant's telephone number, including area code)


              (Former name, former address and former fiscal year,
                          if changed since last report)

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


                 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

                    PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.
Yes      No

                          APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock,  as of the latest  practicable  date. As of September 14, 1998,
there are 1,719,758 shares of common stock outstanding.

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
















                                             FEDERATED PURCHASER, INC.


                                    CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                              JULY 31, 1998 AND 1997






                                             FEDERATED PURCHASER, INC.
                                       CONSOLIDATED CONDENSED BALANCE SHEETS

                                                      ASSETS
<TABLE>
<CAPTION>

                                                                              July 31,             October 31,
                                                                                1998                  1997
                                                                               (Unaudited)
<S>                                                                          <C>                  <C>

CURRENT ASSETS:
  Cash                                                                        $    77,854           $    69,358
  Accounts receivable, less allowance for doubtful
    accounts of $21,303 at July 31, 1998 and $16,803
    at October 31, 1997, respectively                                             331,212               384,059
  Inventories                                                                     203,844               228,583
  Prepaid expenses and sundry receivables                                           1,604                49,754
  Note receivable - Freedom Electronics Corporation                               100,000                27,500
  Restrictive covenant receivable                                                   9,375                24,375

  TOTAL CURRENT ASSETS                                                            723,889               783,629

PROPERTY AND EQUIPMENT, at cost, less accumulated
  depreciation of $134,520 and $126,687                                            12,767                20,600

OTHER ASSETS:
  Note receivable, Freedom Electronics Corporation,
    net of current portion                                                          -                    92,500
  Security deposits                                                                10,845                10,845
  Other                                                                            93,601                93,601

  TOTAL OTHER ASSETS                                                              104,446               196,946

TOTAL ASSETS                                                                  $   841,102            $1,001,175

                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current portion of long-term debt                                       $        -               $      8,331
  Accounts payable                                                                616,448               468,479
  Accrued expenses                                                                 90,029                31,984

  TOTAL CURRENT LIABILITIES                                                       706,477               508,794

DEFERRED INCOME                                                                     9,375                24,375

TOTAL LIABILITIES                                                                 715,852               533,169

STOCKHOLDERS EQUITY:
  Common stock, $.10 par value,
    Authorized, 5,000,000 shares,
    Issued and outstanding, 1,719,758 shares                                      171,976               171,976
  Additional paid-in capital                                                    1,692,342             1,692,342
  Accumulated deficit                                                          (1,677,990)           (1,335,234)
    Total                                                                         186,328               529,084
  Less:  Treasury stock at cost                                                    61,078                61,078

  TOTAL STOCKHOLDERS EQUITY                                                      125,250               468,006

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $   841,102            $1,001,175


</TABLE>


                                                        (1)



                            FEDERATED PURCHASER, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                                   (Unaudited)




<TABLE>
<CAPTION>


                                                              Three Months Ended                     Nine Months Ended
                                                                         July 31,                             July 31,
                                                            1998             1997                 1998                1997
<S>                                                    <C>               <C>                  <C>                <C>

SALES                                                   $   592,343       $   836,668          $1,979,639         $2,515,054

OPERATING EXPENSES:
  Cost of sales                                             420,738           636,828           1,466,692          1,919,823
  Selling, shipping and general and administrative          283,869           275,579             867,033            774,253
  Interest expense                                              259               706               1,953              2,013
  Depreciation and amortization                               3,172             3,290               7,833              9,436

  TOTAL OPERATING EXPENSES                                  708,038           916,403           2,343,511          2,705,525

LOSS FROM OPERATIONS                                       (115,695)          (79,735)           (363,872)          (190,471)

OTHER INCOME:
  Restrictive covenant                                        5,625             5,625              15,000             18,750
  Interest income                                             1,837             1,838               5,177              8,721
  Miscellaneous income                                       -                 -                    1,639             -

  TOTAL OTHER INCOME                                          7,462             7,463              21,816             27,471

LOSS BEFORE PROVISION FOR
   INCOME TAXES                                            (108,233)          (72,272)           (342,056)          (163,000)

PROVISION FOR INCOME TAXES                                   -                     40                 700              1,015

NET LOSS                                                $  (108,233)     $    (72,312)        $  (342,756)       $  (164,015)


WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING                               1,611,317         1,611,317           1,611,317          1,611,317

LOSS PER BASIC AND DILUTED
  COMMON SHARE                                       $         (.07)   $         (.05)      $        (.21)    $         (.10)

CASH DIVIDEND PER COMMON SHARE                       $          .00    $          .00      $          .00     $          .00



</TABLE>











                                                               (2)



                            FEDERATED PURCHASER, INC.
            CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
                    NINE MONTHS ENDED JULY 31, 1998 AND 1997

                                   (Unaudited)







<TABLE>
<CAPTION>



                                                                                                                  Common Stock
                                                                                                                    Held in
                                                                          Additional                                Treasury
                                                   Common Stock             Paid-in         Accumulated              At Cost
                                              Shares         Amount         Capital            Deficit       Shares       Amount

<S>                                          <C>          <C>              <C>            <C>              <C>            <C>

BALANCES - November 1, 1996                  1,719,758    $   171,976      $1,692,342     $(1,053,333)     108,441        $61,078


  Net loss                                      -              -               -            (164,015)       -             -


BALANCES - July 31, 1997                     1,719,758    $   171,976      $1,692,342     $(1,217,348)     108,441        $61,078



BALANCES - November 1, 1997                  1,719,758       $171,976      $1,692,342     $(1,335,234)     108,441     $   61,078


  Net loss                                       -              -               -            (342,756)       -           -


BALANCES - July 31, 1998                     1,719,758       $171,976      $1,692,342     $(1,677,990)     108,441     $  61,078



</TABLE>




















                                                                (3)



                                     FEDERATED PURCHASER, INC. AND SUBSIDIARY
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     NINE MONTHS ENDED JULY 31, 1998 AND 1997

                                                    (Unaudited)


<TABLE>
<CAPTION>



                                                                                    1998               1997
<S>                                                                               <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                         $(342,756)         $(164,015)
  Adjustments to reconcile net loss to
    net cash from operating activities:
      Depreciation and amortization                                                    7,833              9,436
      (Increase) decrease in operating assets:
        Accounts receivable                                                           52,847             89,821
        Inventories                                                                   24,739             35,097
        Prepaid expenses and sundry receivables                                       48,150                312
      Increase (decrease) in operating liabilities:
        Accounts payable                                                             147,969             59,330
        Accrued expenses                                                              58,045            (29,413)

  NET CASH PROVIDED BY (USED BY) OPERATING ACTIVITIES                                 (3,173)               568

CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in association membership                                                  -                  (1,700)
  Collection of note receivable                                                       20,000             15,000

  NET CASH PROVIDED BY INVESTING ACTIVITIES                                           20,000             13,300

CASH FLOWS USED BY FINANCING ACTIVITIES:
  Payments on long-term debt                                                          (8,331)            (7,445)

NET INCREASE IN CASH                                                                   8,496              6,423

CASH - beginning of period                                                            69,358             95,918

CASH - ending of period                                                           $   77,854          $ 102,341



SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for:
    Interest                                                                     $     1,953        $     2,013

    Income taxes                                                              $       -          $       -








</TABLE>





                                                        (4)



                            FEDERATED PURCHASER, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                             JULY 31, 1998 AND 1997

                                   (Unaudited)








NOTE 1

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
financial  statements  contain all adjustments  (consisting of normal  recurring
accruals) necessary to present fairly the financial position as of July 31, 1998
and the results of operations for the nine months ended July 31, 1998 and 1997.

NOTE 2

     The results of operations  for the nine months ended July 31, 1998 and 1997
are not necessarily indicative of the results to be expected for the full year.






































                                                               (5)

<PAGE>
Item 2.
                            FEDERATED PURCHASER, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (Unaudited)

RESULTS OF OPERATIONS

     The Company  recognized  a loss of $342,756  for the nine months ended July
31, 1998 on net sales of $1,979,639  compared to a loss of $164,015 for the nine
months ended July 31, 1997 on net sales of $2,515,054.  The loss of $342,756 for
the current  nine month  period  represents  an increase of $178,741 in the loss
from the prior  year to the  current  year.  The  current  three  month  loss of
$108,233 is $35,921  higher than the prior year for the same three month period.
As a result of negative cash flows associated with these losses,  as of July 31,
1998,  working  capital  had  decreased  to  $17,412  and  the  Company  had  an
accumulated  deficit of $1,677,990.  Because the Company currently has no access
to any outside source of capital,  management  must meet its short-term  capital
requirements  solely  from  cash  from  operations  (if any) and  existing  cash
reserves. At July 31, 1998, the Company's cash reserves were $77,854.  There can
be no assurance  that the Company's  cash reserves will be sufficient to satisfy
the Company's  capital  requirements  or that the Company's  inability to obtain
capital from outside sources will not force the Company to seek protection under
the United States Bankruptcy Code.

     Net sales  were  $1,979,639  for the nine  months  ended  July 31,  1998 as
compared to  $2,515,054  for the nine months  ended July 31, 1997, a decrease of
$535,415 or 21.3% under the prior year.  Net sales were  $592,343  for the three
months  ended July 31, 1998 as compared to $836,668  for the three  months ended
July 31, 1997, a decrease of $244,325 or 29.2% under the prior year for the same
three  month  period.  This  decrease  in  net  sales  is a  result  of  intense
competition  from larger  competitors,  as well as certain other industry trends
which negatively  impact smaller  electronics  distributors such as the Company.
These  competitive  circumstances  have continued to reduce the Company's  sales
volume, which, along with gross margins, must improve in the short- term for the
Company  to reverse  its  negative  results of  operations.  The  likelihood  of
achieving  the  necessary  increases  in both  sales  volume  and gross  margins
continues to be  compromised by several  factors,  including the loss of certain
customers  due to  the  departure  of  key  sales  personnel,  intense  industry
competition  and certain other industry  trends which  adversely  impact smaller
electronics distributors.  These trends include the consolidation of other small
distributors,  the increase in the use of technology (which Federated's  limited
capital resources have not permitted it to acquire), the diminished availability
of capital  within the  business,  market  place  changes  favoring  value-added
services,  and the reduction of franchises by major  vendors.  While  management
continues  its effort to improve  sales volume while  preserving  the  Company's
current  customer base,  there can be no assurances that management will succeed
in achieving the sales increases, improved margins and cost reductions which are
necessary to reverse the Company's negative results of operations.

     Cost of sales were  $1,466,692  for the nine  months  ended  July 31,  1998
compared to  $1,919,823  for the nine months ended July 31, 1997.  Cost of sales
were  $420,738 for the three months ended July 31, 1998 compared to $636,828 for
the three months ended July 31, 1997. The decrease in cost of sales for both the
nine months and three months ended July 31, 1998 is the result of the  Company's
decrease in sales volume.  The gross profit percentage for the nine months ended
July 31, 1998 was 25.9% as compared to 23.7% for the nine months  ended July 31,
1997.  The gross profit  percentage for the three months ended July 31, 1998 was
29.0% as  compared  to 23.9% for the  three  months  ended  July 31,  1997.  The
increase in gross profit  percentage  is the result of increases in sales prices
to customer and the implementation of more efficient purchasing policies.  There
can be no assurances that the improvement in Federated's gross profit percentage
can be sustained,  or that lower gross profits  associated with the reduction in
sales volume will not force  Federated to seek  protection  un the United States
Bankruptcy Code.

     Selling,  shipping and general and  administrative  ("SSG&A") expenses were
$867,033 for the nine months  ended July 31, 1998,  compared to $774,253 for the
nine months ended July 31, 1997,  an increase of $92,780 or 12.0% over the prior
year.  The increase is  primarily  the result of an increase of $5,000 in office
salaries, an increase of $108,000 in professional fees and a decrease of $22,000
in sales salaries.  For the three months ended July 31, 1998, selling,  shipping
and general and  administrative  expenses were $283,869 compared to $275,579 for
the nine months ended July 31, 1997,  an increase of $8,290 over the prior year.
The increase is primarily  the result of an increase of $27,000 in  professional
fees, a decrease of $26,000 in sales  salaries and a decrease of $5,000 in sales
expenses.  Management anticipates that further reductions in SSG&A expenses will
be necessary to reverse the Company's negative results of operations.

     Statement of Financial  Accounting Standards No. 128, "Earnings Per Share",
became effective for financial  statements for periods ending after December 31,
1997,  and  requires  presentation  of two  calculations  of earnings per common
share. "Basic"  earnings per common share equals net income divided by weighted
average  common shares  outstanding  during the period.  "Diluted"  earnings per
common share  equals net income  divided by the sum of weighted  average  common
shares  outstanding  during  the  period  plus  common  stock  equivalents.  The
Company's  Basic and Diluted  per share  amounts are the same since there are no
outstanding  common  stock  equivalents.  The Company  restated all prior period
amounts to reflect these calculations.
                                                               (6)

<PAGE>
                            FEDERATED PURCHASER, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (Unaudited)




LIQUIDITY AND CAPITAL RESOURCES

     The  Company's  liquidity  position has been and  continues to be adversely
affected by a variety of factors,  including the operating  loss of $281,901 for
the year ended October 31, 1997 and the operating  loss of $342,756 for the nine
months ended July 31, 1998.  Moreover,  the Company's  liquidity position may be
further negatively impacted to the extent that certain trends, including intense
competition  from  larger  competitors  in  the  electronics  industry  and  the
migration of certain customers, from smaller to larger distributors, continue to
decrease  the  Company's  sales  levels,  gross  profit  margins,  or both.  The
Company's  ability to satisfy its fixed costs of  operations  in the future will
depend upon management's  success in increasing sales,  improving gross margins,
reducing  operations  costs,  securing  additional  lines of credit from outside
lenders or entering into strategic  alliances.  There can be no assurances  that
the  Company's  liquidity  position will not continue to be impaired both in the
short-term and in the future. Due to Federated's  impaired  liquidity  position,
negative  financial  performance,  reliance  on cash to sustain  operations  and
certain other factors, Federated's independent auditors raised substantial doubt
regarding  Federated's  ability to  continue as a going  concern in  Federated's
annual  report  for the  year  ended  October  31,  1997.  If  Federated  is not
successful in achieving any or all of its strategic  objectives,  it may have to
seek protection under the United States Bankruptcy Code.

     Cash and cash  equivalents  increased  by $8,496 for the nine months  ended
July 31, 1998  compared  to a increase of $6,423 for the nine months  ended July
31, 1997.  For the nine months  ended July 31, 1998,  the Company used cash from
operating activities of $3,173 primarily from the loss of $342,756,  an increase
of $206,014 in accounts payable and accrued  expenses,  a decrease of $52,847 in
accounts  receivable,  a decrease  of $24,739 in  inventories  and a decrease of
$48,150 in prepaid  expenses.  For the nine  months  ended  July 31,  1997,  the
Company  generated cash from operating  activities of $568 primarily as a result
of a decrease  of  $89,821  in  accounts  receivable,  a decrease  of $35,097 in
inventories,  an increase of $59,330 in accounts  payable offset by the net loss
of $164,015 and a decrease of $29,413 in accrued expenses. The Company generated
cash of $20,000  from  investing  activities  for the nine months ended July 31,
1998 by collections on a note receivable.  The Company generated cash of $13,300
for the nine months  ended July 31,  19987 from  investing  activities  from the
$15,000  collected  on  a  note  receivable  offset  by  $1,700  in  association
membership  costs.  During the nine months ended July 31, 1998, the Company used
cash of $8,331 for payments on notes  payable and for the nine months ended July
31, 1997 used cash of $7,445 for payments on notes payable.

     Based upon the Company's  continuing  losses,  the Company has  experienced
periods of declining cash balances,  which have negatively impacted the accounts
payable balances of trade creditors. The Company has been slow in the payment of
its accounts payable and  approximately  66% of its accounts payable are over 30
days  old and  53% are  over 60 days  old as of July  31,  1998.  On open  trade
accounts  payable for unsecured  creditors,  the Company has no knowledge of any
pending  or  threatened  legal  actions  which  would  force  the  Company  into
bankruptcy.  As of July 31,  1998,  open  trade  accounts  payable  and  accrued
expenses for unsecured creditors totaled $706,477.


CAPITAL RESOURCES - WORKING CAPITAL REQUIREMENTS

     Federated  currently has no access to any outside source of capital.  While
management  continues  to seek new  sources of  financing  from other  financial
institutions,  no such  arrangements  have yet been  established.  As a  result,
management must meet  substantially all of its short-term  capital  requirements
from cash from  operations (if any) and existing cash reserves which continue to
deteriorate as a result of the Company's recurring  operating losses.  There can
be no assurances that the Company's  current cash reserves will be sufficient to
satisfy the Company's financing  requirements or that the Company's inability to
obtain  capital  from  outside  sources  will not impair its ability to continue
future operations.

     Federated  maintains  their  records on the  accrual  basis of  accounting.
Income  is earned  and  recorded  at the time of  shipment  which is when  title
passes.  Expenses  are  recorded  when  incurred.  Any  merchandise  returned by
customers in the normal course of business must be pre-approved by management.






                                                               (7)

<PAGE>
                            FEDERATED PURCHASER, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                   (Unaudited)






     In  conjunction  with the sale of all the common stock of its  wholly-owned
subsidiary,  Freedom Electronics  Corporation,  on November 14, 1994,  Federated
entered into a noncompete  agreement with the purchaser.  The $90,000 noncompete
agreement  is  being  recognized  into  income  over the  four-year  term of the
agreement based upon monthly installments received.

     The Company's  balance sheet at July 31, 1998 reflects  working  capital of
$17,412 as compared to $344,129 at July 31, 1997, which represents a decrease of
$326,717.

     The Company'  stockholders'  equity  amounted to $125,250 at July 31, 1998,
equivalent  to a book  value  per  common  share of $.08.  As of July 31,  1997,
stockholders'  equity amounted to $585,892 equivalent to a book value per common
share of $.36.

     On June 22,  1998,  Wise  Components,  Inc.  notified  the  Company  of its
intention  to cease  negotiations  whereby  Federated  would  acquire all of the
outstanding shares of Wise Components, Inc.







































                                                               (8)
<PAGE>
PART II - OTHER INFORMATION

                            FEDERATED PURCHASER, INC.
                                OTHER INFORMATION
                             JULY 31, 1998 AND 1997

                                   (Unaudited)



Item 6 - Exhibits and reports on Form 8-K

(a)      Exhibits

         None

(b)      Reports on Form 8-K


     The Company was not  required to report any  material,  unusual  charges or
credits to income pursuant to Item 10(a) or a change in independent  accountants
pursuant  to Item 12 of Form 8-K for the nine  months  ended July 31, 1998 other
than which has been reported.

     Form 8-K filed on November 30, 1994 in regard to the divestiture of Freedom
Electronics Corp.

     Form 8-K filed on December 20, 1994 in regard to the change in registrant's
certifying accountant.

     There were no securities of the Company sold by the Company during the nine
months ended July 31, 1998,  which were not registered  under the Securities Act
of 1933, in reliance upon an exemption  from  registrations  provided by Section
4(2) of the Act.


                                                           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.


                                           FEDERATED PURCHASER, INC.
                                                 (Registrant)




                                             /s/ Harry J. Fallon
                                         Harry J. Fallon, President and
                                         Principal Accounting Officer



12/11/98
Date












                                                               (9)