SECURITIES AND EXCHANGE COMMISSION
Washington, DC   20549

Form 10-Q



 
(X)		QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 
EXCHANGE ACT OF 1934

	OR

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


For Quarter Ended November 28, 1997	Commission File Number:  0-45


	SHELDAHL, INC.
	(exact name of registrant as specified in its charter)



            Minnesota                   	41-0758073
(State or other jurisdiction of	      (IRS Employer Identification Number)
incorporation or organization)		




           Northfield, Minnesota                   	55057
(Address of principal executive offices)         	(zip code)



Registrant's telephone number, including area code:  (507) 663-8000
                             

As of January 2, 1998, 9,046,480 shares of the Registrant's common stock were 
outstanding.  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:
<PAGE>


PART I: FINANCIAL INFORMATION


SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited

                                       	Three Months Ended

                                 	November 28,        	November 29,
(in thousands, 
except for per share data)           	1997                 	1996
                                    	_______	             _______


Net sales                          		$28,992	             $24,301
Cost of sales                       	 27,349            	  21,846
                                  			_______	             _______

Gross profit	                          1,643	               2,455
                                  			_______	             _______

Expenses:
Sales and marketing                   	2,400               	2,299
General and administrative            	1,850               	1,580
Research and development	                932               	1,140
Interest	                                513            	      69
                                   		_______	             _______ 

Total expenses	                        5,695	               5,088
                                    	_______	             _______

Loss before income taxes            	(4,052)             	(2,633)

Benefit for income taxes	              1,375             	    900
                                  			_______	             _______

Net loss                           		(2,677)             	(1,733)

Convertible preferred 
stock dividends	                       (187)       	            -
                                  			_______	             _______

Net loss applicable to 
common shareholders                	$(2,864)	            $(1,733)
                                  			=======	             =======

Net loss per common share           	$(0.32)             	$(0.19)
                                  			=======	             =======

Weighted average common 
shares and common share 
equivalents outstanding	               9,038	               8,913
                                  			=======	             =======
<PAGE>

SHELDAHL, INC.
CONSOLIDATED BALANCE SHEETS


                           	ASSETS
                                   	unaudited
(In thousands)                    	November 28,          	August 29,
                                      	1997	                 1997
                                    	_______	              _______
Current assets:
Cash and cash equivalents          	$  1,309            	$   5,567
Accounts receivable, net             	16,037               	15,880
Inventories                          	13,362               	13,078
Prepaid expenses and other
  current assets                        	721                  	406
Deferred taxes	                          765	                  765
                                   		_______	              _______
Total current assets               	  32,194	               35,696
                                    	_______	              _______

Construction in process	              24,373	               19,303
Land and buildings                   	27,295               	26,467
Machinery and equipment            	 115,144	              112,071
Less: accumulated
  depreciation                     	(60,966)             	(57,036)
                                   		_______	              _______

Net plant and equipment	             105,846            	  100,805
                                    	_______	              _______

Deferred taxes	                        3,562	                2,187
Other assets	                            604          	        679
                                   		_______	              _______

                                 			$142,206             	$139,367
                                  			=======	              =======

	LIABILITIES AND SHAREHOLDERS INVESTMENT

Current liabilities:
Current maturities of
  long-term debt                    	$  2,331            	$    818
Accounts payable                       	9,054               	7,309
Accrued salaries                       	1,806	               1,606
Other accruals	                         3,400             	  3,020
                                    		_______	             _______
Total current liabilities	             16,591	              12,753
                                    		_______	             _______

Long-term debt	                        42,627             	 40,869
                                    		_______	             _______

Other non-current liabilities	          2,819	               2,813
                                    		_______	             _______

Shareholders investment:
Preferred stock                           	15                  	15
Common stock                           	2,261               	2,258
Additional paid-in capital            	67,021	              66,923
Retained earnings                  	   10,872	              13,736
                                    		_______	             _______

Total shareholders investment	         80,169	              82,932
                                    		_______	             _______

                                    	$142,206            	$139,367
                                     	=======	             =======
<PAGE>

SHELDAHL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
 
	                                        	Three Months Ended

(in thousands)                      	November 28,        	November 29,
                                        	1997                	1996
                                       	_______	             _______

Operating activities:
	Net loss                             	$ (2,677)           	$ (1,733)
Adjustments to reconcile 
 net income to net cash
 provided by operating activities:
    Depreciation and amortization	         3,945               	2,072
    Deferred income taxes               	(1,375)               	(900)

Net change in other operating 
activities:
Accounts receivable                       	(157)               	3,977
Inventories                               	(284)             	(1,300)
Prepaid expenses and other
  current assets	                          (315)               	(256)
Other assets                                 	75	                  45
Accounts payable and accrued
  liabilities                             	1,014	               2,065
Other non-current liabilities	                 6	                  59
                                        	_______	             _______

Net cash provided by 
  operating activities                 	     232	               4,029
                                       	 _______	             _______

Capital expenditures, net               	(7,862)	             (9,251)
                                        	_______	             _______

Financing activities:
Borrowings under revolving
  credit facilities, net	                  3,502               	5,682
Repayments of long-term debt              	(231)               	(116)
Proceeds from stock option
  exercises	                                 101            	       -
Dividends paid on preferred stock	             -	                   -
                                        	_______	             _______

Net cash provided by
  financing activities	                    3,372	               5,566
                                        	_______	             _______

Increase (decrease) in cash             	(4,258)	                 344
Cash at beginning of period            	   5,567	                 904
                                        	_______	             _______

Cash at end of period                   	$ 1,309	            $  1,248
                                      			=======	             =======
Supplemental cash flow
information:
Income taxes paid                  	     $     2	             $   195
                                       		=======	             =======
Interest paid                           	$   715	             $   458
                                       		=======	             =======
<PAGE>

SHELDAHL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited


These condensed and unaudited consolidated financial statements have been 
prepared by the Company pursuant to the rules and regulations of the 
Securities and Exchange Commission.  In the opinion of management, these 
condensed unaudited consolidated financial statements reflect all adjustments, 
of a normal and recurring nature, necessary for a fair statement of the 
interim periods, on a basis consistent with the annual audited financial 
statements.  Certain information, accounting policies and footnote disclosures 
normally included in financial statements prepared in accordance with 
generally accepted accounting principles have been condensed or omitted 
pursuant to such rules and regulations.  Although these disclosures should be 
considered adequate, the Company strongly suggests that these condensed 
unaudited financial statements be read in conjunction with the financial 
statements and summary of significant accounting policies and notes thereto 
included in the Company's latest annual report on Form 10-K.


1)	Inventories, which are valued at the lower of first-in first-out cost or 
market, consists of (in thousands):

                          	November 28, 1997        	August 29, 1997
                           	_______________	         _______________

Raw materials                  	$  3,285               	$  3,069
Work-in-process	                   6,390                  	6,484
Finished goods	                    3,687	                  3,525
                                	_______	                _______
                                	$13,362                	$13,078
                                	=======	                =======

2)  Convertible Preferred Stock.

During the period ended November 28, 1997, the Company had 15,000 shares of 
Series B Convertible Preferred stock outstanding.  This preferred stock, 
with a stated value of $15 million, is convertible to 	common stock at 
any time at the option of the holders.  The conversion price fluctuates,
subject to a 	maximum, based on the price of the Company's common stock 
during the 30 day period immediately 	prior to conversion.  As of November 
28, 1997, the conversion price was estimated to be $15.625, 	and if 
converted in its entirety, the Series B Preferred Stock would represent 
approximately 960,000 	shares of common stock. 

In addition, the Company accrued dividends on this preferred stock of 
approximately $187,000, which 	are payable in cash or common stock, at the 
Company's option, on the date the preferred stock is 	converted into common 
stock.
<PAGE>

SHELDAHL, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
CONSOLIDATED OPERATING RESULTS AND FINANCIAL CONDITION

Three Months Ended November 28, 1997 and November 29, 1996

Sales
__________

The Company's net sales increased $4.7 million, or 19%, to $29.0 million for 
the three months ended November 28, 1997, compared to the same period one year 
ago.  The automotive market sales for the three months ended November 29, 
1997, had an increase of 23% to $20.3 million.  This increase in sales 
reflects the demand recovery from the labor unrest that affected all of fiscal 
1997 automotive market sales.

Sales to the datacom market increased 50% to $3.6 million for the three months 
ended November 28, 1997.  Sales of Novaflex HD accounted for approximately 
half of the $1.2 million increase.  The remainder of the increase in the 
datacom market is represented by increased sales of Novaclad and other 
laminated materials plus sales of $224,000 of high density substrates, trade 
name ViaThin.  Sales to all other market reflect normal quarterly demand 
fluctuations.

Markets		                 Three Months Ended
_______		                  _________________

(in thousands)	           Nov. 28,     	Nov. 29,     	Gross      	%
                           	1997         	1996       	Change    	Change
                          	_______	      _______	     _______	   _______

Automotive                 $20,298	      $16,524     	$ 3,774     	23%
Datacommunications          	3,570        	2,380	       1,190     	50%
Aerospace/Defense           	2,501        	2,357         	144      	6%
Industrial                  	2,040        	1,987          	53      	3%
Consumer	                      583	        1,053	       (470)	   (45%)
                          	_______	      _______	     _______	 _______
                          	$28,992	      $24,301	     $ 4,691	     19%
                          	=======      	=======	     =======	 =======

Gross Profit
__________

Gross profit declined to 6% of sales, or $1.6 million for the three months 
ended November 28, 1997, compared to the same period one year ago.  As 
reflected in the chart below, the Micro Products business gross loss increased 
by 150%, or $2.0 million, to $3.3 million.  The increase relates primarily to 
increased depreciation expense.  On the other hand, the combined materials and 
interconnect business units gross profit increased 32% to $5.0 million, or 
17%, of sales.  The primary reason for the increased gross profit is the 
increase in sales as explained above.

                       	November 28, 1997           	November 29, 1996
                        	_______________	             _______________

                   	Inter &	    Micro	   Total	   Inter &	    Micro	   Total
                  	Material 	Products 	Company 	Materials 	Products 	Company
                   	______	   ______	   ______	   ______   	______	   ______

Sales              	$28,768	 $   224	  $28,992	  $24,301	   $    0	  $24,301
Cost of sales       	23,780	   3,569	   27,349	   20,510	    1,336	   21,846
Gross profit         	4,988	 (3,345)    	1,643    	3,791  	(1,336)    	2,455
% of sales	             17%     	N/A	       6%	      16%      	N/A      	10%


Sales and marketing expenses increased $101,000, or 4%, from $2.3 million for 
the three months ended November 29, 1996, to $2.4 million for the three months 
ended November 28, 1997.  Sales and marketing expenses totaled 8% of sales for 
quarters ended November 28, 1997, and 9% for November 29, 1996.

General and administrative expenses increased $270,000 or 17% from $1.6 
million for the three months ended November 29, 1996, to $1.9 million for the 
three months ended November 28, 1997.  The increases were due to a variety of 
expenses including salaries, consulting, and depreciation primarily incurred 
to support improved information systems.  General and administrative expenses 
total 6% of sales for the three months ended November 28, 1997, and 6.4% of 
sales for the three months ended November 29, 1996.

The Company is aware of computer programming problems associated with the year 
2000 and has elected to install a new year 2000 compliant system which is 
expected to be in full use by early fiscal 1999. Therefore, the Company will 
not incur any significant additional costs related to year 2000 problems 
associated with certain computer programs.

Research and development expenses decreased $208,000, or 18%, from $1,140,000 
for the three months ended November 29, 1996, to $932,000 for the three months 
ended November 28, 1997.  The decrease is a combination of increased salaries 
and offset by a decline in outside consulting and testing services.  Research 
and development expenses totaled 3.2% of sales for the three months ended 
November 28, 1997, and 4.7% in sales for the three months ended November 29, 
1996.

Interest costs and activities for the noted period are detailed below (three 
months ended, in thousands):

                            	Nov. 28,    	Nov. 29,
                              	1997        	1996        	Change
                             	_______	     _______	      _______

Gross interest expense	        $  860      	$  481       	$  379
Capitalized interest           	(347)       	(412)           	65
                             	_______	     _______	      _______

Net interest                 	$   513     	$   69 	      $   444
                             	=======	    =======	       =======

During the current quarter, significantly higher borrowings accounted for the 
increase in gross interest costs.  At November 29, 1996, total borrowings were 
$27.9 million while at November 28, 1997, total borrowings were $45.0 million.

Income taxes were applied at 34% in both periods. Convertible preferred stock 
dividends were $187,000 for the three months ended November 28, 1997.  This is 
the first quarter that preferred stock dividends were recorded after the 
preferred stock offering completed in August 1997.  As a result, net loss to 
common shareholders for the three months ended November 28, 1997 was $2.9 
million, or $0.32 per share. This compares to a net loss of $1.7 million, or 
$0.19 per share, for the three months ended November 29, 1996.

Financial Condition
__________

The Company's credit lines totals $47 million.  The $12 million facility has 
been extended to expire on March 31, 1998; $35 million expires on December 31, 
1998.  Total borrowings as of November 28, 1997, were $36.0 million and $11.0 
million was available to the Company.  Interest rates on borrowings under 
these facilities averaged 8.3% on November 28, 1997. The Company is pursuing 
additional financing, and it is anticipated the revolving credit facility will 
be restructured and renewed.  The current ratio declined from 2.80 at August 
29, 1997, to 1.94 at November 28, 1997, reflecting the nearly $2 million of 
credit facility borrowings recorded as a current liability.  The Company has 
the option, subject to certain conditions, to issue up to $15 million worth of 
convertible preferred stock (Series C) under the same terms and conditions as 
the Series B Convertible Preferred.  This option expires in May 1998.  

New Accounting Pronouncements
_________

In February 1997, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards No. 128, Earnings per Share (SFAS 
128).  SFAS 128 is effective for financial statements issued for periods 
ending after December 15, 1997, including interim periods; earlier application 
is not permitted.  This statement requires restatement of all prior-period EPS 
data presented.  The Company will adopt SFAS 128 beginning in the second 
quarter of fiscal 1998.

Following is the pro forma effect of adoption of SFAS 128 on the Company's 
earnings per share:

                             	November 28, 1997	      November 29, 1996
                              	_______________        	_______________

Primary EPS as reported          	$ (0.32)                	$ (0.19)
Effect of SFAS 128            	          -	                       -
                                  	_______	                 _______

Basic EPS	                        $ (0.32)	                $ (0.19)
                                  	=======	                 =======

Fully diluted EPS                	$ (0.32)                	$ (0.19)
Effect of SFAS 128	                      -	                       -
                                 	 _______	                 _______

Diluted EPS                      	$ (0.32)                	$ (0.19)
                                  	=======                 	=======

Prospective Information
__________

Significant events are currently taking place and will continue to take place 
during the next several months. The most significant will be the expected 
production ramp up at the Micro Products business. The Company's ability to 
generate significant revenues with acceptable production costs will be 
critical.  Failure to do so will result in continued losses from this business 
unit.

Other Factors
__________

The Company has foreign currency risks from some of its international sales.  
Major contracts have "risk sharing" arrangements with the customer, allowing 
repricing in the event of long-term and/or significant foreign currency 
fluctuations.

To deal with short-term fluctuations, the Company, from time-to-time, will use 
a variety of natural and contractual hedging techniques to prudently reduce, 
but not eliminate, its exposure to foreign currency fluctuations.  Historical 
transactions have not been material in nature. The Company expects its foreign 
currency contracts to increase and will increase its hedging activities 
accordingly.  


Cautionary Statement
__________

The statements included herein which are not historical or current facts are 
forward-looking statements made pursuant to the safe harbor provisions of the 
Private Securities Reform Act of 1995.  Factors which could cause actual 
results to differ materially from those anticipated by some of the statements 
made herein include, but are not limited to, the Company's ability to achieve 
full volume production at its Micro Products facility and other factors 
detailed from time to time in the Company's SEC reports, including the report 
on Form 10-K for the year ended August 28, 1997.
<PAGE>

PART II - OTHER INFORMATION

SHELDAHL, INC. AND SUBSIDIARY
FORM 10-Q

Item 6.	Exhibits and Reports on Form 8-K

A)	Exhibits

10.1  Eighth Amendment to Amended and Restated Credit and 
Security Agreement dated November 17, 1997, among Norwest 
Bank, Harris Bank, NBD Bank and Sheldahl, Inc.

11	Statement regarding computation of earnings per share

27	Financial data schedule

B)	Reports on Form 8-K

No reports on Form 8-K were filed by the Registrant during the 
quarter ended November 28, 1997.

<PAGE>

	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.

SHELDAHL, INC.
(Registrant)


Dated:  January 9, 1998         	By	/s/ James E. Donaghy
                                    Chief Executive Officer



Dated:  January 9, 1998         	By	/s/ John V. McManus
                                    Vice President, Finance
<PAGE>