FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C.  20549


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


        For the quarter ended--            Commission File Number 0-9318
           December 30, 1995

                            SHOPSMITH, INC.
                          (Name of Registrant)

        Ohio                                       31-0811466
        (State of Incorporation)                  (IRS Employer
                                              Identification Number

        6530 Poe Avenue                       45414
        Dayton, Ohio                         (Zip Code)
        (Address of Principal
        Executive Offices)

        Registrant's Telephone 513-898-6070

          Not Applicable
        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 ____

        Indicate the number of shares outstanding of each of the
        registrant's classes of common stock as of December 30, 1995.

        Common shares, without par value:  2,657,775 shares.












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                       SHOPSMITH, INC. AND SUBSIDIARIES

                                  INDEX


                                                                 Page No.
        Part I.  Financial Information:

          Item 1.  Financial Statements

             Consolidated Balance Sheets -
              December 30, 1995 and April 1, 1995                  3-4

             Statements of Consolidated Operations and
              Accumulated Deficit- Three and Nine months
              Ended December 30, 1995 and December 31, 1994          5

             Consolidated Statements of Cash Flows
              Nine months Ended December 30, 1995 and
              December 31, 1994                                      6

             Notes to Financial Statements                         7-8

          Item 2.  Management's Discussion and Analysis
                    of Financial Condition and Results
                    of Operations                                 9-11


        Part II.  Other Information                                 12




























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<TABLE>







                           PART I.  FINANCIAL INFORMATION

        Item 1.  Financial Statements.

                          SHOPSMITH, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                 December 30,     April 1,
               ASSETS                                1995            1995
        <S>                                      <C>            <C>
        Current assets:
          Cash.............................      $     2,225    $   360,915
          Restricted cash..................          356,652        350,249
          Short-term investments...........               --        741,959
          Notes and accounts receivable:
            Trade - less allowance for
              doubtful accounts; $121,971
              at December 30 and $94,728 at
              April 1......................          331,646        451,662
          Inventories......................        1,876,620      1,734,167
          Deferred taxes...................          136,000             --
          Prepaid expenses.................          287,892        160,233
                 Total current assets......        2,991,035      3,799,185

        Property:
          Machinery, equipment & tooling...        6,831,468      6,676,156
          Leasehold improvements...........          189,265        189,265
                 Total.....................        7,020,733      6,865,421
          Less accumulated depreciation
            and amortization...............        6,412,379      6,252,420
                 Property - net............          608,354        613,001

        Deferred income taxes...............         471,000             --

        Other assets.......................            3,158          3,158

                 Total.....................      $ 4,073,547    $ 4,415,344




<FN>
                    See notes to financial statements.
</TABLE>












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<PAGE>
<TABLE>




                        SHOPSMITH, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                  December 30,      April 1,
       LIABILITIES AND SHAREHOLDERS' EQUITY          1995              1995
       <S>                                       <C>            <C>
        Current liabilities:
          Accounts payable....................   $ 1,097,844    $ 2,423,643
          Term note, current (Note 3).........            --         60,027
          Capital lease obligations -
            current...........................         9,661         13,443
          Customer advances...................        79,534         88,448
          Accrued liabilities:
            Compensation and related
              accounts........................       391,669        775,355
            Sales tax payable.................       103,920        138,975
            Reserve for restructuring.........       251,397        294,229
            Other.............................     1,031,166        922,899
              Total current liabilities.......     2,965,191      4,717,019

        Accounts payable, less current portion            --        496,649
        Term note, less current portion
          (Note 3)............................            --        421,494
        Capital lease obligations less
          current portion.....................            --          4,881

              Total liabilities...............     2,965,191      5,640,043


        Shareholders' equity:
          Preferred shares - without par
            value; authorized 500,000.........            --             --
          Common shares - without par value;
            authorized 5,000,000; outstanding
            2,657,775 at December 30 and
            2,654,566 at April 1..............     2,982,510      2,978,460
          Accumulated deficit.................    (1,874,154)    (4,203,159)
              Total shareholders' equity
                (deficit).....................     1,108,356     (1,224,699)

              Total...........................   $ 4,073,547    $ 4,415,344






<FN>
                   See notes to financial statements.
</TABLE>






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<TABLE>





                          SHOPSMITH, INC. AND SUBSIDIARIES
        STATEMENTS OF CONSOLIDATED OPERATIONS AND ACCUMULATED DEFICIT
<CAPTION>
                             Three Months Ended         Nine Months Ended
                        December 30,  December 31,  December 30,  December 31,
                             1995         1994          1995          1994
<S>                      <C>          <C>           <C>           <C>
Net sales............... $ 4,774,214  $ 5,028,163   $11,610,629   $11,802,209
Cost of products sold...   2,333,611    2,696,326     5,802,397     6,437,713
Gross profit............   2,440,603    2,331,837     5,808,232     5,364,496

Selling expenses........   1,410,813      990,787     2,985,958     2,742,738
Administrative expenses.     704,551      669,743     1,880,635     1,590,631
   Total selling and
     administrative
     expenses...........   2,115,364    1,660,530     4,866,593     4,333,369

Income from operations..     325,239      671,307       941,639     1,031,127
Interest income
   (expense)............       3,551      (23,974)       (9,966)     (102,770)
Other income (exp)- net.      10,984       31,270        19,508        54,855
Income before income
  taxes and extra-
  ordinary item.........     339,774      678,603       951,181       983,212


Income tax benefit......          --           --       607,000            --

Income before
  extraordinary item....     339,774      678,603     1,558,181       983,212

Extraordinary item-
  gain from extinguish-
  ment of debt (Note 3).     158,211           --       770,824            --

Net income..............     497,985      678,603     2,329,005       983,212

Accumulated deficit:
  Beginning of period...  (2,372,139)  (5,319,297)   (4,203,159)   (5,623,906)
  End of period......... $(1,874,154) $(4,640,694)  $(1,874,154)  $(4,640,694)

Weighted average number
  of common shares
  outstanding
  (Note 6)..............   2,691,584    2,649,733     2,690,626     2,515,490

Income per common share:
  Before extraordinary
    item................ $       .13  $       .26   $       .58   $       .39

  Extraordinary item...  $       .06  $        --   $       .29   $        --

  Net income............ $       .19  $       .26   $       .87   $       .39
<FN>
                       See notes to financial statements.
</TABLE>


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<TABLE>





                           SHOPSMITH, INC. & SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                       Nine Months Ended
                                                  December 30,   December 31,
                                                       1995          1994
        <S>                                        <C>           <C>
        Cash flows from operating activities:
          Net income............................   $2,329,005    $  983,212
          Adjustments to reconcile net
            income to cash provided by
            (required for) operating activities:
              Provision for doubtful accounts...      176,159        88,099
              Loss on disposal of properties....           --         2,985
              Depreciation & amortization.......      159,959       253,207
              Deferred income taxes.............     (607,000)           --
              Gain on extinguishment of debt....     (770,824)           --
              Cash provided by (required for)
                changes in assets & liabilities:
                  Restricted cash...............       (6,402)      (93,157)
                  Accounts receivable...........      105,013      (157,757)
                  Inventories...................     (142,453)    2,160,869
                  Other current assets..........     (127,659)      219,210
                  Other assets..................           --        38,410
                  Accounts payable & customer
                    advances....................     (722,101)     (628,867)
                  Other current liabilities.....     (514,462)   (2,161,115)
        Cash provided by (used in)
          operating activities..................     (120,765)      705,096

        Cash flows from investing activities:
          Short-term investments................      741,959            --
          Proceeds from sale of property........                      3,500
          Property additions....................     (155,312)     (232,085)
              Cash provided by (used in)
                investing activities............      586,647      (228,585)

        Cash flows from financing activities:
          Common shares issued..................        4,050       154,494
          Decrease in term loan.................     (323,310)     (325,925)
          Decrease in accounts payable long-term     (496,649)     (733,528)
          Decrease in capital leases............       (8,663)     (333,819)
              Cash used in financing
                activities......................     (824,572)   (1,238,778)

        Net decrease in cash....................     (358,690)     (762,267)

        Cash at beginning of period.............      360,915       560,570

        Cash at end of period...................   $    2,225    $ (201,697)

<FN>
                      See notes to financial statements.
</TABLE>




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                       SHOPSMITH, INC. AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS

        1.  In the opinion of management, all adjustments (consisting of
            only normal and recurring items) have been made as of
            December 30, 1995 and December 31, 1994 to present the
            financial statements fairly.  However, the results of
            operations for the three and nine months then ended are not
            necessarily indicative of results for the fiscal year.  The
            financial statements and notes are presented as permitted by
            Form 10-Q, and do not contain certain information included in
            the annual financial statements.  The financial statements
            accompanying this report should be read in conjunction with
            the financial statements and notes thereto included in the
            Annual Report to Shareholders for the year ended April 1,
            1995.

        2.  The provision for income taxes is as follows:

                           Three Months Ended           Nine months Ended
                        Dec 30, 1995  Dec 31, 1994   Dec 30, 1995  Dec 31, 1994
  Income before extra-
   ordinary item        $  339,774    $  678,603     $  951,181    $  983,212

  Provision at stat-
   utory rate of 34%       116,000       231,000        324,000       335,000

  Change in valuation     (116,000)     (231,000)      (931,000)     (335,000)
   allowance

        Net                     --            --       (607,000)           --

  Extraordinary item       158,211                      770,824

  Provision at stat-
   utory rate of 34%        54,000                      262,000

  Change in valuation
   allowance               (54,000)                    (262,000)

        Net                     --                           --

            The change to the valuation allowance for all the periods
            presented represents the realization of tax benefits of
            temporary differences which reversed during the respective
            periods except for $607,000 of the change in the nine months
            ended December 30, 1995.  This decrease in the valuation
            allowance resulted from the Company's reevaluation of the
            realizability of future income tax benefits because of its
            continued profitability.  Specifically the Company has been
            profitable from continuing operations for the past seven
            quarters and has exceeded budget estimates during this
            period.  It estimates that this profit trend will continue
            through the near future.  Therefore it believes that it is
            now more likely than not that it will realize approximately
            the $607,000 of the tax benefits previously part of the


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            valuation allowance.  If the Company is unable to generate
            sufficient taxable income in the future through operating
            results, increases in the valuation allowance will be
            required through a charge to expense.  However if it achieves
            sufficient profitability to utilize a greater portion of the
            deferred tax asset, the valuation allowance will be reduced
            through a credit to income.

        3.  In December 1994, an early lease cancellation agreement was
            reached with the lessor of the equipment and software for the
            central computer system used to control the Company's
            discontinued retail operations.  The equipment was returned
            to the lessor and the fair value of that equipment was
            deducted from the Company's remaining obligation to the
            lessor.  A $100,000 initial payment was made on the $610,000
            obligation resulting from this settlement with the remainder
            payable in monthly installments through December 1996 with
            the remaining balance due to be paid at that time.

            The agreement also provided for a discount from the face
            amount of the obligation, by making a payment to the lessor
            in advance of the agreed schedule.  Thus, in October 1995,
            the Company paid about $294,000 in satisfaction of about
            $452,000 in debt.  The resultant $158,000 gain was recorded
            as an extraordinary item.

            A $613,000 extraordinary item relating to the early payment
            of certain trade creditors was discussed in the Company's
            Form 10-Q for the quarter ended July 1, 1995.

        4.  Certain amounts in the 1994 financial statements were
            reclassified to conform to the 1995 presentation.


























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

        Results of Operations

        Net sales of $4,774,000 were recorded in the quarter ended
        December 30, 1995.  Sales in that quarter were 5.1% less than the
        $5,028,000 recorded in the same period a year ago, due primarily
        to reductions in mail and dealer sales partly offset by increases
        in demonstration sales.  Additionally, the Company, due to
        production limitations, was unable to fulfill orders generated in
        its second quarter last year on a timely basis.  This order
        backlog was eliminated in the third quarter last year thus
        increasing that period's sales.  The Company was able to fulfill
        orders on a timely basis throughout the current year and thus no
        additional sales were booked during the third quarter of the
        current year due to elimination of backlogs.  For the nine months
        to date, net sales, at $11,611,000, were down 1.6% from that same
        period a year prior.

        Increases in the proportion of sales from higher-margin selling
        channels and sales price increases caused gross margins to
        increase from 46.4% and 45.5% of net sales in the third quarter
        and first nine months of last year to 51.1% and 50.0% in the same
        periods this year.

        Selling and administrative costs rose by 27.4% and 12.3% from the
        third quarter and first nine months, respectively, of last year
        to $2,115,000 and $4,867,000 in the same respective periods in
        the current year.  As a percent of net sales, these costs
        increased from 33.0% in the first three months and 36.7% in the
        first nine months of last year to 44.3% and 41.9% in the same
        respective periods in the current year.  The additional costs
        resulted from increased  advertising in the demonstration sales
        channel, the production and mailing of a fall product catalog,
        the recruiting and training of new sales representatives.

        Reduced current-year borrowing and investment of idle funds
        caused net interest costs to change from the same period last
        year by 115% to $4,000 in interest income in the current third
        quarter from $24,000 in interest expense in the same period last
        year and decrease by 90% to $10,000, in the first nine months of
        the current year.

        The changes (see Note 2) to the deferred income tax valuation
        allowance for all the periods presented represents the
        realization of tax benefits of temporary differences which
        reversed during the respective periods except for $607,000 of the
        change in a prior quarter of the current fiscal year.  This
        decrease in the valuation allowance resulted from the Company's
        reevaluation of the realizability of future income tax benefits
        because of its continued profitability.  Specifically the Company
        has been profitable from continuing operations for the past seven
        quarters and has considerably exceeded budget estimates during
        this period.  It estimates that this profit trend will continue
        through the near future.  Therefore it believes that it is more


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        likely than not that it will realize approximately the $607,000
        of the tax benefits previously part of the valuation allowance.
        If the Company is unable to generate sufficient taxable income in
        the future through operating results, increases in the valuation
        allowance will be required through a charge to expense.  However
        if it achieves sufficient profitability to utilize a greater
        portion of the deferred tax asset, the valuation allowance will
        be reduced through a credit to income.

        As discussed in Note 3 to the Consolidated Financial Statements
        included herein, the Company availed itself of an early-payment
        discount feature of an early lease cancellation agreement that
        was reached in December 1994.  The discount amounted to $158,000
        or $.06 per share in the quarter ended December 30, 1995.  Also,
        as was discussed in the Company's 10-Q for the quarter ended July
        1, 1995, the Company availed itself in that period of an early
        payment discount feature of a voluntary payment plan that was
        approved by affected creditors in June 1994.  The discount
        amounted to $613,000 or $.23 per share and was recorded as an
        extraordinary item.  In combination, the discounts for the early
        lease cancellation agreement and the voluntary creditor payment
        plan amounted to $771,000 or $.29 per share in the nine months
        ended December 30, 1995.

        The above resulted in net income of $498,000 or $.19 per share in
        the quarter and $2,329,000 or $.87 per share in the nine months
        ended December 30, 1995.  The above results compare to net income
        of $679,000 or $.26 per share in the quarter ended December 31,
        1994 and $983,000 or $.39 per share in the nine months ended on
        that date.

        Liquidity and Capital Resources

        $121,000 of cash was used in operations in the nine months ended
        December 30, 1995.  In that period, net income, adjusted for non-
        cash items, provided cash of $1,287,000 while $1,237,000 of cash
        was used to reduce accounts payable, both in connection with the
        early payment discount provision of a voluntary vendor payment
        plan which was discussed earlier and due to normal seasonal
        fluctuations, as well as to reduce other current liabilities.  In
        the nine months ended December 31, 1994, operations provided cash
        of $705,000, principally through inventory reduction and net
        income.  $2,790,000 was used, during that period, to reduce
        accounts payable and other current liabilities.  Property
        additions were $155,000 for the first nine months of the current
        year as compared to $232,000 in the first nine months of the
        prior year.  In the first nine months of the current year,
        $742,000 was provided by the liquidation of short-term
        investments.

        $734,000 was used to reduce long-term payables in the first nine
        months last year.  Long-term payables were reduced by $497,000
        during the first nine months of the current fiscal year because
        of the satisfaction, during that period, of amounts due to
        creditors involved in the voluntary payment plan which is
        discussed above.  Additionally, $323,000 was used to pay the


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        balance of a term loan that was established in connection with an
        early computer lease cancellation agreement which is discussed
        above and in Note 3 to the Consolidated Financial Statements
        included herein.

        Net income during the first nine months increased the Company's
        net worth to a positive $1,108,000 resulting in a debt to net
        worth ratio of 2.68 to 1.  Because of the Company's negative net
        worth at the end of the first nine months of the prior fiscal
        year as well as at the end of fiscal 1995, measurement of the
        debt to equity ratio at those dates is not relevant.
        Profitability caused working capital to improve to a positive
        $26,000 at December 30, 1995 from a negative $918,000 at April 1,
        1995 and a negative $944,000 at December 31, 1994.  The resulting
        current ratio improved to 1.01 at December 30, 1995 from 0.81
        April 1, 1995 and 0.77 at December 31, 1994.


        No amount was outstanding under the revolving bank line of credit
        at December 30, 1995.  Management believes financial resources
        will be adequate to meet operating needs.





































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                           PART II.  OTHER INFORMATION

                                     -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.

                                    SHOPSMITH, INC.



                                    By /s/William C. Becker
                                          William C. Becker
                                          Vice President of Finance and
                                          Treasurer (Principal Financial
                                          and Accounting Officer)

        Date:  February 8, 1995




































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