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 
  January 3, 1998

                            SHOPSMITH, INC.
                         (Name of Registrant)

Ohio__________________            	31-0811466---------------------------		  
(State of Incorporation)            (IRS Employer Identification Number)
                                             	
                                        
6530 Poe Avenue
Dayton, Ohio  ___________           45414_______
(Address of Principal               (Zip Code)
Executive Offices)

Registrant's Telephone 937-898-6070



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 January 26, 1998.

Common shares, without par value:  2,654,375 shares.

<PAGE>

                    SHOPSMITH, INC. AND SUBSIDIARIES

                                INDEX

                                                
                                                        Page No.
Part I.  Financial information:

Item 1.  Financial Statements			
Consolidated Balance Sheets-
      January 3, 1998 and April 5, 1997        						       3-4 
					
Statements of Consolidated Operations and 
Retained Earnings (Deficit) Three and Nine 
Months Ended January 3, 1998 and December 28, 1996            5

Consolidated Statements of Cash Flows
Three and Nine Months Ended January 3,1998 and
December 28, 1996                                             6	

Notes to Financial Statements						    	                    7-8 	

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

Item 3.  Quantitative and qualitative disclosures
about market risk                                             9
				    
Part II.  Other Information								                          10


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

                                              January 3,   April 5,
                                                 1998       1997 

               ASSETS

<S>                                             <C>          <C>
Current Assets:
Cash                                             $ 416,971   $ 1,106,873 
Restricted cash                                    222,824       114,151 
Short-term investments                           1,727,301     1,513,397 
Accounts receivable:
Trade, less allowance for doubtful accounts:
$235,131 at January 3 and $342,617 at April 5      515,046       419,101 
Inventories                                      2,096,413     1,668,058 
Deferred income taxes (Note 2)                     305,000       284,000 
Prepaid expenses                                   417,585       329,902 
            Total current assets                 5,701,140     5,435,482 

Properties:
Machinery, equipment and tooling                 6,953,361     6,841,126 
Leasehold improvements                             190,835       190,835 
         Total cost                              7,144,196     7,031,961 
Less accumulated depreciation and 
amortization                                     6,662,054     6,507,780 
       Net properties                              482,142       524,181 

Deferred income taxes (Note 2)                     586,000       587,000 

Other assets                                         2,158         2,158 


Total assets                                   $ 6,771,440   $ 6,548,821 

</TABLE>

                                 Continued
<PAGE>
<TABLE>
                      SHOPSMITH,INC. AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                January 3      April 5,
                                                  1998           1997
<S>                                           <C>          <C>
   LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable                               $   665,745  $ 1,179,261 
Customer advances                                   62,722       58,940 
Accrued liabilities:
Compensation, employee benefits and
payroll taxes                                      496,641      860,994 
Sales tax payable                                  102,619      148,703 
Accrued recourse liability                         270,463      145,511 
Accrued expenses                                   483,647      413,648 
Other                                              145,972      121,018 
           Total current liabilities             2,227,809    2,928,075 


Shareholders' Equity:
Preferred shares- without par value; 
   authorized 500,000, none issued                       -            - 
Common shares- without par value;
  authorized 5,000,000; issued and
  outstanding 2,664,375 at January 3 and
  2,663,675 at April 5  (Note 4)                 2,974,075    2,993,633 
Retained earnings                                1,569,556      627,113 
            Total shareholders' equity           4,543,631    3,620,746 

Total Liabilities and Shareholders' Equity     $ 6,771,440  $ 6,548,821 
<FN>
         See notes to consolidated financial statements.
</TABLE>

<PAGE>
<TABLE>

                      SHOPSMITH, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                  Three months ended      Nine months ended
                         January 3   December 28  January 3     December 28 
                            1998        1996         1998          1996

<S>                     <C>         <C>          <C>           <C>
Net sales                $ 4,637,747 $ 4,594,688  $ 12,804,680  $11,907,964 
Cost of products sold      2,137,422   2,182,427     5,696,306    5,491,544 
Gross margin               2,500,325   2,412,261     7,108,374    6,416,420

Selling expenses           1,566,010   1,343,760     4,542,047    3,631,122 
Administrative expenses      579,852     605,750     1,719,872    1,770,626 
  Total operating expenses 2,145,862   1,949,510     6,261,919    5,401,748 
 
Income from operations       354,463     462,751       846,455    1,014,672 

Interest income, net          32,537      19,047        81,747       44,028 

Other income, net              8,258       4,459        20,886       19,917 

Income before income taxes   395,258     486,257       949,088    1,078,617 

Income tax provision           2,767           -         6,645            -   

Net income                     392,491   486,257       942,443    1,078,617 

Retained earnings:
  Beginning of period        1,177,065  (583,085)      627,113   (1,175,445)
  End of period            $ 1,569,556 $ (96,828)  $ 1,569,556  $   (96,828)

Earnings per share (Note 3):
  Basic                    $      0.14 $    0.18  $       0.34  $      0.39 
  Diluted                  $      0.14 $    0.17  $       0.33  $      0.38 
<FN>
            See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
                      SHOPSMITH,INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
                                                     Nine Months Ended
                                                    January 3  December 28 
                                                      1998        1996
<S>                                               <C>        <C>
Cash flows from operating activities:
 Net income                                        $ 942,443  $  1,078,617 
 Adjustments to reconcile net income to 
  cash provided from operating activities:
   Depreciation and amortization                     157,400       157,521 
   Provision for doubtful accounts                   139,955       177,559 
   Deferred income taxes                             (20,000)      (10,000)
   Gain from disposal of properties                                 (6,700)
   Cash provided from (required for) changes
     in assets and liabilities
        Restricted cash                             (108,673)      260,804 
        Accounts receivable                         (235,900)     (130,850)
        Inventories                                 (428,355)     (311,228)
        Other current assets                         (87,683)      (68,249)
        Other assets                                                 1,000 
        Accounts payable and customer advances      (509,734)      (59,892)
        Other current liabilities                   (190,532)   (1,241,861)
Cash used in operating activities                   (341,079)     (153,279)

Cash flows from investing activities:
    Short- term investments                         (213,904)      226,731 
    Proceeds from sale of properties                       -         6,700 
    Property additions                              (115,361)     (101,691)
Cash provided by (used in) investing activities     (329,265)      131,740 

Cash flows from financing activities:
     Common shares issued                              1,672         7,221 
     Options exercised and redeemed (Note 4)         (21,230)
     Decreases in capital leases                           -        (4,881)
Cash provided by (used in) financing activities      (19,558)        2,340 

Net increase (decrease) in cash                     (689,902)      (19,199)
Cash:
     At beginning of period                        1,106,873       560,201 
     At end of period                            $   416,971  $    541,002 
<FN>
            See notes to consolidated financial statements.
</TABLE>
<PAGE>
                   SHOPSMITH, INC. AND SUBSIDIARIES
                    NOTES TO FINANCIAL STATEMENTS

1. In the opinion of management, all adjustments (consisting of only normal
 and recurring adjustments) have been made as of January 3, 1998 and
 December 28, 1996 to present the financial statements fairly. However, the 
 results of operations for the three months 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 5, 1997.

2. The provision for income taxes is as follows:
                                 Three Months Ended      Nine Months Ended
                               1/3/98      12/28/96     1/3/98      12/28/96
Income before income taxes    $392,491    $486,257     $942,443   $1,078,617

Provision at statutory rate    147,000     166,000      335,000      367,000
Local                            2,767           -        6,645            -
Change in valuation allowance (147,000)   (166,000)    (335,000)    (367,000)

Net Provision                 $  2,767    $      -     $  6,645   $        -
  All provisions for Federal and State income taxes, calculated at statutory
 rates, have been offset by reductions in previously established valuation
 reserves related to the utilization of net operating loss carryforwards, tax 
 credit carryforwards and other timing differences.  For the three months and
 nine months ended January 3, 1998 the Company has utilized $147,000 and
 $335,000 of the $673,000 valuation reserve outstanding at the beginning of 
 the year.

3. Dual presentation of basic and diluted earnings per share is required by
 SFAS No. 128 and is effective for financial statements with periods ending
 after December 15, 1997. Basic earnings per share are computed by dividing
 net income by the weighted average number of common shares outstanding
 during the period. Diluted earnings per share reflect per share amounts that
 would have resulted if dilutive potential common stock had been converted
 into common stock. The following reconciles amounts reported in the
 financial statements:
                                        Three Months Ended  Nine Months Ended
                                         1/3/98  12/28/96  1/3/98    12/28/96
 Net income                             $392,491 $486,257 $942,443 $1,078,617

Weighted average common shares used
 to compute basic earnings per share  2,751,132 2,754,091 2,751,043 2,753,324
Effect of dilutive options               91,176    77,852    94,135    58,173
Total shares to compute diluted
 earnings per share                   2,842,308 2,831,943 2,845,178 2,811,497

Basic earnings per share               $   0.14 $    0.18 $    0.34 $    0.39
Diluted earnings per share             $   0.14 $    0.17 $    0.33 $    0.38
<PAGE>

4. On October 16, 1997, the Company announced that its Board of Directors
 had approved a plan to repurchase up to 200,000 Common Shares in market
 and other transactions from time to time.  Such transactions will be at the 
 discretion of the Company and the plan will continue indefinitely.  The
 Company repurchased 22,000 shares issued upon the exercise of a
 stock option in the third quarter. The cost of these shares amounting
 to $63,250 exceeded proceeds by $21,230.  An additional 10,000 shares
 were purchased subsequent to the balance sheet date.  This subsequent
 transaction had no significant effect on reported earnings per common
 share for the periods ending January 3, 1998.
<PAGE>



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

Results of Operations

 Net sales improved in the third quarter ended January 3, 1998 to $4,638,000
 -up slightly from the $4,595,000 reported a year ago.  Resulting gross
 margins rose by $88,000 in the third quarter as the overall gross margin
 rate improved to 53.9% from 52.5% reported for the quarter ended
 December 28, 1996.  For the year to date, net sales are $12,805,000-up by 
 $897,000 or 7.5% from the $11,908,000 reported for the nine months ended
 December 28, 1996.  Gross margins for the nine months ended January 
 3, 1998 improved by $692,000 to $7,108,000 based on favorable volume and
 profitability variances over that reported a year ago.

 Selling and administrative expenses increased to $2,146,000 in the third
 quarter ended January 3, 1998 or 10% above last year's total of $1,950,000.
 The increase relates to additional advertising and promotional effort in
 the current year and to a favorable re-evaluation of loss exposures
 (resulting in a reduction in reserves) in the preceding year.  For these same
 reasons, year to date selling and administrative costs increased to
 $6,262,000 from $5,402,000 experienced for the nine months ended December 
 28, 1996.  Interest and other income improved by $17,000 and $39,000 for the
 quarter and year to date over last year's result on the basis of continued
 overall positive cash flows and the investment of net proceeds.

 Provisions for Federal and State income taxes have been substantially
 reduced as the expense computed at statutory rates was offset by reductions
 in valuation reserves related to deferred tax amounts, including tax loss 
 carryforwards, pursuant to SFAS 109.
 
 As a result of the above, net income and basic earnings per share for the
 three months and nine months ended January 3, 1998 amounted to $392,000
 and $.14 per share and $942,000 and $.34 per share.  Net income was
 $486,000 and $.18 per share and $1,079,000 and  $.39 per share for the
 three and nine months ended December 28, 1996.

Liquidity and Capital Resources

 Operating activities consumed $341,000 of cash for the nine months ended
 January 3, 1998.  A total of $1,240,000 was generated through profitable
 operations adjusted for non-cash expenses.  Of that amount, $664,000 was
 used to expand volume- sensitive accounts receivable and inventory levels.
 Current liabilities were reduced by $700,000 since the first of the year.

 While cash declined in the nine months, working capital grew to $3,473,000
 up from $2,507,000 or 38% since the beginning of the fiscal year and more
 than double from the $1,681,000 reported a year ago.  Liquidity and
 debt/equity measures improved as a result with the current ratio improving
 to 2.56 from 1.86 at the beginning of the year and 1.82 at
 December 28, 1996.  The debt/equity ratio improved to .49 from .81 since 
 the first of the fiscal year and .70 at December 28, 1996.

Item 3. Quantitative and qualitative disclosures about market risk.

 Not applicable.
<PAGE>

PART II.  OTHER INFORMATION
Item 6. 
(a) Exhibits:
   (27) Financial Data Schedule for the period ended January 3, 1998.
(b)  Reports on Form 8-K: 
   The Company  filed a report on  Form 8-K on October 16, 1997, which
 included a press release announcing the approval of a share repurchase
 program.

                                SIGNATURES

 Pursuant to the requirements of the Securities and 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
                                          (Principal Financial and
                                          Accounting Officer)

Date:  February 11, 1998