UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                           FORM 10-QSB

(Mark One)

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

For the quarterly period ended September 30, 1996

                                OR

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

For the transition period from _______________________________________________

                        Commission file number 0-27100

                          FIELDS AIRCRAFT SPARES, INC.
             (Exact name of registrant as specified in its charter)

           UTAH                                    95-4218263
State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization                    Identification No.)

       2251-A Ward Avenue, Simi Valley, California        93005
         (Address of principal executive offices)       (Zip Code)

                                 (805) 583-0080
              (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 14 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 CORPORATE ISSUERS:

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

      Class of Stock                             Amount Outstanding
$.05 par value Common Shares                 1,248,371 Common Shares
                                              at September 30, 1996

<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.

                                TABLE OF CONTENTS

                                                         Page No.

Part I - Financial Information

    Item 1.   Consolidated Financial Statements

              Balance Sheet. . . . . . . . . . . . . . . . . . .3
              Statement of Operations. . . . . . . . . . . . . .5
              Statements of Cash Flows . . . . . . . . . . . . .7
              Statement of Shareholders' Equity. . . . . . . . .8
              Notes to Financial Statements. . . . . . . . . . .9


    Item 2.   Management's Discussion and Analysis of
              Financial Condition and Results of
              Operations . . . . . . . . . . . . . . . . . . . 17


Part II. - Other Information

    Item 1.   Legal Proceedings. . . . . . . . . . . . . . . . 21
    Item 2.   Changes in Securities. . . . . . . . . . . . . . 21
    Item 3.   Defaults upon Senior Securities. . . . . . . . . 21
    Item 4.   Submission of Matters to a Vote
              of Security Holders. . . . . . . . . . . . . . . 21
    Item 5.   Other information. . . . . . . . . . . . . . . . 21
    Item 6.   Exhibits and Reports on Form 8-K . . . . . . . . 22

<PAGE>


ITEM 1.         CONSOLIDATED FINANCIAL STATEMENTS

                           FIELDS AIRCRAFT SPARES INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                      UNAUDITED CONSOLIDATED BALANCE SHEET
                 AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995

                               ASSETS

                                                   1996                1995
  CURRENT ASSETS:
   Cash                                      $      1,074,000     $     111,000
   Accounts and other receivables,   
      less allowance for doubtful
      accounts of $10,000                           1,188,000         1,281,000
   Inventory                                        7,996,000         7,652,000
   Prepaid expenses                                   158,000           146,000

          Total current assets               $     10,416,000     $   9,190,000


  FACILITY AND EQUIPMENT:
   Land                                      $        210,000     $     210,000
   Building and building improvements               1,061,000         1,132,000
   Equipment                                          550,000           536,000

          Totals                             $      1,821,000     $   1,878,000
   Less accumulated depreciation and
      amortization                                    705,000           635,000

          Facility and equipment,
               net                           $      1,116,000     $   1,243,000


  OTHER ASSETS:
   Debt issuance costs, net of accumulated
      amortization                           $        284,000     $     420,000
   Other assets                                       155,000            81,000

          Total other assets                 $        439,000    $      501,000

             Total assets                    $     11,971,000    $   10,934,000

<PAGE>

                           FIELDS AIRCRAFT SPARES INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                      UNAUDITED CONSOLIDATED BALANCE SHEET
                 AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                   1996                1995

  CURRENT LIABILITIES:
   Accounts payable                        $        769,000     $       488,000
   Other accrued liabilities                        256,000             139,000
   Income taxes payable                               1,000               1,000
   Current portion of notes payable               6,714,000           7,905,000

          Total current liabilities        $      7,740,000     $     8,533,000



  LONG-TERM LIABILITIES                    $       294,000      $         -




  MINORITY INTEREST                        $         -          $     2,050,000




  SHAREHOLDERS' EQUITY
   Common stock                            $       310,000      $       297,000
   Additional paid-in capital                    4,803,000            1,376,000
   Retained deficit                             (1,176,000)          (1,322,000)

          Total shareholders' equity       $     3,937,000      $       351,000

             Total liabilities and
               shareholders' equity        $    11,971,000      $    10,934,000



<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995


                                                   1996                1995


  SALES                                 $           4,158,000     $   3,783,000
  COST OF SALES                                     2,097,000         1,554,000
  GROSS PROFIT                          $           2,061,000     $   2,229,000
  OPERATING EXPENSES:
    General and administrative          $           1,852,000     $   1,647,000 
  Interest                                            969,000           835,000

     Total operating expenses           $           2,821,000     $   2,482,000


  LOSS FROM OPERATIONS                  $            (760,000)    $    (253,000)
  OTHER INCOME:
    Casualty gain                       $             909,000     $        -
    Gain on exchange of debt                             -            4,759,000
    Gain on sale of subsidiary          $                -              183,000

       Total other income               $             909,000     $   4,942,000

  INCOME BEFORE PROVISION
    (CREDIT) FOR INCOME TAXES           $             149,000     $   4,689,000

  PROVISION (CREDIT) FOR INCOME
    TAXES                                               3,000           (55,000)

  NET INCOME                            $             146,000     $   4,744,000

  NET INCOME PER SHARE (fully-diluted)  $                 .09     $        3.62
  NET INCOME PER SHARE (primary)        $                 .09     $        3.62



<PAGE>


                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995



                                                     1996               1995

  SALES                                 $         1,612,000     $     1,847,000

  COST OF SALES                                     741,000             800,000

  GROSS PROFIT                          $           871,000     $     1,047,000

  OPERATING EXPENSES:
    General and administrative          $           611,000     $       679,000
  Interest                                          341,000             304,000

          Total operating expenses      $           952,000     $       983,000

  (LOSS) INCOME FROM OPERATIONS         $           (81,000)    $        64,000

  CREDIT FOR INCOME
    TAXES                               $              -        $       (55,000)


  NET (LOSS) INCOME                     $           (81,000)    $       119,000

  NET (LOSS) INCOME PER SHARE 
   (fully-diluted)                      $              (.05)    $           .10
  NET (LOSS) INCOME PER SHARE 
   (primary)                            $              (.05)    $           .10



<PAGE>




                    FIELDS AIRCRAFT SPARES, INC.
           FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

           UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
        FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995

                                                 1996         1995
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                              $        146,000     $       4,744,000
  Adjustments to reconcile net income 
    to net cash provided by (used in) 
    operating activities:
  Depreciation and amortization                    90,000                67,000
  Amortization of debt issuance costs             158,000               128,000
  Loss on sale of or damage to assets              51,000
  Gain on exchange of debt                                           (4,759,000)
  Gain on sale of subsidiary                                           (183,000)
  Decrease (increase) in accounts receivable       93,000            (1,245,000)
  (Increase) decrease in inventory               (344,000)              207,000
  Increase in prepaid expenses                    (12,000)              (76,000)
  Decrease in income tax refund receivable                              711,000
  Increase in other assets                        (74,000)              (28,000)
  Increase (decrease) in accounts payable         281,000              (370,000)
  Increase (decrease) in other accrued 
   liabilities                                    117,000              (164,000)
  Decrease in income taxes payable                                      (35,000)

 Net cash provided by (used in) 
   operating activities                  $        506,000    $       (1,003,000)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of equipment                  $        (14,000)   $         (132,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net (payments) borrowings on line 
   of credit                             $       (799,000)   $        1,506,000
  Principal payments on notes payable            (178,000)              (43,000)
  Borrowings on notes payable                      58,000                90,000
  Costs associated with issuance of 
   notes payable                                                       (424,000)
  Net proceeds from issuance of common 
   stock                                        1,390,000               250,000

  Net cash provided by financing 
   activities                           $         471,000   $         1,379,000

NET INCREASE IN CASH                    $         963,000   $           244,000

CASH, December 31, 1995 and 1994                  111,000                11,000

CASH, September 30, 1996 and 1995       $       1,074,000   $           255,000


<PAGE>



                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY 
             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
                                              COMMON STOCK

                                       SHARES                            PAID-IN        RETAINED       SHAREHOLDERS' 
                                     OUTSTANDING         AMOUNT          CAPITAL         DEFICIT         EQUITY
<S>                                  <C>            <C>             <C>            <C>              <C>          
BALANCES, December 31, 1994             944,352       $  47,000      $  1,376,000    $ (5,869,000)    $ (4,446,000)

Issuance of common stock                 40,000         250,000                                            250,000

Net income                                                                             4,744,000         4,744,000
                                       --------      ----------     -------------   -------------    -------------
BALANCES, September 30, 1995            984,352       $ 297,000      $  1,376,000   $ (1,125,000)    $     548,000
                                       ========      ==========     =============   =============    =============


BALANCES, December 31, 1995             984,352       $ 297,000      $  1,376,000   $ (1,322,000)    $     351,000

Additional paid-in capital                                              2,050,000                        2,050,000

Issuance of common stock                264,019          13,000         1,377,000                        1,390,000

Net income                                                                               146,000           146,000
                                      ---------      ----------       -----------   ------------     -------------
BALANCES, September 30, 1996          1,248,371      $  310,000       $ 4,803,000   $ (1,176,000)    $   3,937,000
                                      =========      ==========       ===========   ============     =============
</TABLE>



<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


  1.    Summary of significant accounting policies

             In the opinion of management, all adjustments (consisting of normal
  recurring  accruals)  considered  necessary for the fair  presentation  of the
  financial statements have been included.

        a.   Principles of consolidation and company background

             The consolidated Group financial statements include the accounts of
  Fields Aircraft  Spares,  Inc., a Utah  corporation,  formerly known as Fields
  Industrial Group,  Inc.,  hereafter  referred to as FASI, and its wholly-owned
  subsidiary  Fields Aircraft  Spares  Incorporated,  a California  corporation,
  (FASC) and its  wholly-owned  subsidiary  Fields  Aero  Management,  Inc.  All
  significant intercompany accounts and activity have been eliminated.

             In 1995, Fields  Industrial  Group, Inc. changed its name to Fields
 Aircraft Spares, Inc.

             The Group  distributes  new aircraft parts and equipment for use on
  international and domestic  commercial and military aircraft and purchases and
  sells parts on a brokerage basis.

        b.   Concentration of credit risk

             Substantially all of the Group's trade accounts receivables are due
  from companies in the airline and related  industries  located  throughout the
  United  States  and  internationally.   The  Group  performs  periodic  credit
  evaluations  of its  customers'  financial  condition  and  does  not  require
  collateral.  Credit  losses  relating to  customers in the airline and related
  industries  have  consistently  been  insignificant  and  within  management's
  expectations.

        c.   Concentration of sales

             For  the  nine  months  ended  September  30,  1996,  one  customer
  accounted for $287,000 of sales.

             The Group had sales to foreign  companies  that  amounted to 26% of
  total sales for the nine months ended September 30, 1996.

        d.   Inventory

             Inventory  is valued at the lower of cost or market value using the
  first-in,  first-out  method.  Where a group  of  parts  have  been  purchased
  together as a lot, the cost of the lot is allocated to the individual parts by


<PAGE>

  management,  where possible, pro rata to the list selling price at the time of
  purchase. Consistent with industry practice, inventory is carried as a current
  asset but all inventory is not expected to be sold within one year.

             e.  Facility and equipment

             Facility  and  equipment  are  recorded at cost.  Depreciation  and
  amortization  are computed using the  straight-line  method over the estimated
  useful lives of the assets which range from 3 to 25 years.

             The cost and related  accumulated  depreciation and amortization of
  assets sold or otherwise retired are eliminated from the accounts and any gain
  or loss is included in the statement of  operations.  The cost of  maintenance
  and repairs is charged to income as incurred, whereas significant renewals and
  betterments are capitalized.  Depreciation  and  amortization  expense for the
  nine months ended September 30, 1996 amounted to $90,000.

             f.  Debt issuance costs

             The  debt  issuance  costs  relate  to  the  issuance  of  the  new
  financing.  Amortization  of debt  issuance  costs for the nine  months  ended
  September 30, 1996 amounted to $158,000.

             g.  Revenue recognition

             The Group  recognizes  revenue  from all  types of sales  under the
  accrual  method of accounting  when title  transfers.  Title  transfers at the
  Group's facility.

             h.  Earnings per share

             In March 1995, FASI's shareholders  authorized the reverse split of
  its common  stock on the basis of fifty old  shares  for one new  share.  This
  reverse split was effective as of November 1995. All references  herein to the
  number of shares are after the reverse split.

             Earnings per share was  computed   using  1,598,502  and  1,312,469
  shares at September 30, 1996 and 1995.

             i.  Income taxes

             The Group files  consolidated  income tax returns.  Deferred income
  taxes relate to temporary  differences  between financial statement and income
  tax reporting of certain  accrued  expenses,  state income  taxes,  bad debts,
  inventory, and depreciation.

<PAGE>

             The Group has adopted Statement of Financial  Accounting  Standards
  No. 109,  "Accounting for Income Taxes".  SFAS 109 requires the recognition of
  deferred tax liabilities  and assets for the expected future tax  consequences
  of temporary  differences  between tax basis and financial  reporting basis of
  other  assets  and  liabilities.  The  income  tax  effect  of  the  temporary
  differences  as of September  30, 1996 and December 31, 1995  consisted of the
  following:
<TABLE>
<CAPTION>

                                                                 1996               1995

      <S>                                                 <C>                 <C>   
       Deferred tax liability resulting from
          taxable temporary differences for
          accounting for inventory                          $ (314,000)        $ (314,000)
       Deferred tax asset resulting from
          deductible temporary differences
          for allowance for doubtful accounts                    4,000              4,000
       Deferred tax asset resulting from
          deductible temporary differences
          for utilization of net operating loss
          carryforwards for income tax
          purposes.                                            849,000            921,000
       Valuation allowance resulting from the
          potential nonutilization of net operating
          loss carryforwards for income tax
          purposes                                            (539,000)          (611,000)
                                                           -----------          ----------
              Total deferred income taxes                  $    - 0 -          $    -0-
                                                           ===========         ===========
</TABLE>

          j.  Employee benefit plan

          FASC has a 401(k) Plan under  Section  401(k) of the Internal  Revenue
  Code.  The Plan  allows all  employees  who are not  covered  by a  collective
  bargaining  agreement  to defer up to 25% of their  compensation  on a pre-tax
  basis through contributions to the Plan. Contributions to the Plan by FASC are
  discretionary  and are determined by the Board of Directors.  No contributions
  were made to the Plan during the nine months ended September 30, 1996.

          k.  Uses of estimates

          The  preparation of financial  statements in conformity with generally
  accepted  accounting  principles  requires  management  to make  estimated and

<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 
  assumptions that affect certain reported amounts and disclosures. Accordingly,
  actual results could differ from these estimates.

  2. Shareholders' equity

          FASI has 50,000  shares  authorized  of its $.001 par value  preferred
  stock.  At September  30, 1996 and December 31, 1995,  there were no shares of
  preferred stock issued or outstanding. The preferred shares, if issued, may be
  granted the right to convert into common shares. On liquidation, the preferred
  shares may be entitled to share in the liquidation proceeds after satisfaction
  of creditors and prior to any  distribution to the common  shareholders to the
  extent of the  preference  determined by the Board of Directors at the time of
  issuance.

          FASI has the  following  common  stock as of  September  30,  1996 and
  December 31, 1995:

                                     September 30, 1996     December 31, 1995
          Authorized                       2,000,000             2,000,000
          Issued and outstanding           1,248,371               984,352
          Par value                             $.05                  $.05

          All of the common shares have equal voting  rights.  The common shares
  have no pre-emptive or conversion rights, no redemption or sinking provisions,
  and are not  liable for  further  call or  assessment.  Each  common  share is
  entitled to share  ratably in any assets  available  for  distribution  to the
  common shareholders upon liquidation of the Group.

          In February  1995,  the Group owed  $7,658,000  to  McDonnell  Douglas
  Corporation  (MDC).  MDC  cancelled  the debt in exchange  for  $850,000  plus
  586,862  shares  of  Series  A  convertible  preferred  stock  of  FASC.  This
  constituted  full and complete  satisfaction  of the MDC debt.  The  agreement
  provided  for the  mandatory  exchange of the Series A  convertible  preferred
  stock of FASC for 25% of the  total  common  stock of FASI on a  fully-diluted
  basis  within 10 days  following  the date the common  stock is  approved  for
  quotation on, and is quoted for trading on, the Nasdaq Stock Market as a Small
  Cap  Market  Security.  The Series A  convertible  preferred  stock  carries a
  liquidation preference of $5,000,000;  which, in the event of a liquidation of
  the Group, would be paid pro rata to the holders of the Series A shares.

          On  April   17,   1996  the   Securities   and   Exchange   Commission
  ("Commission") notified FASI that it had no further comments on the Form 10-SB
  that had been filed with the  Commission on October 30, 1995. MDC was notified
  of such  event  and  accordingly  filed a Form 3 and  Schedule  13-D  with the
  Commission  claiming  beneficial  ownership in 355,626  common  shares of FASI

<PAGE>

  based on its right to convert Series A convertible  preferred stock for 25% of
  the  common  stock of FASI on a  fully-diluted  basis.  FASI had stated to the
  Commission  in writing that upon MDC's filing of the Schedule  13-D or similar
  filing indicating  beneficial  ownership in FASI, FASI's financial  statements
  would   thereafter   reflect  the   acquisition  of  the  minority   interest.
  Accordingly, the financial statements have been modified to reflect the
  acquisition  of the minority  interest even though 25% of the common shares of
  FASI on a  fully-diluted  basis have not,  and will not,  be issued  until the
  Series A preferred shares of FASC have been converted.

          The  exchange  of the MDC  debt  for the  preferred  stock of FASC was
  accounted for as a minority interest. A gain of $4,759,000 was recorded in the
  financial statements in 1995 as a result of these transactions.

          In January 1995,  FASI sold 40,000 shares of common stock for $250,000
  ($6.25 per  share).  FASI then paid  $250,000  to FASC as  additional  paid-in
  capital.

          In September  1996, FASI sold 264,000 shares of common stock for $6.25
  per share and 132,000  warrants for $.50 each.  Each warrant allows the holder
  to  purchase  one  share of common  stock for  $6.25.  The net  proceeds  were
  $1,390,000  after  deducting  the  costs  of  underwriting  and  issuance.  An
  additional 19 common shares were issued. 

          On February 9, 1995, FASC obtained new financing from Norwest Business
  Credit,  Inc.,  (Norwest).  FASC initially had a line of credit in the maximum
  amount of  $10,000,000  with interest  payable  monthly at prime plus 2.5%. In
  August 1996 the Company  entered into a Fourth  Amendment to Credit  Agreement
  with  Norwest  which  reduced the maximum  amount  outstanding  at any time to
  $6,900,000 with monthly  reductions of $250,000 to that maximum allowed amount
  commencing  October 1996.  As of September  30, 1996,  FASC could borrow up to
  $6,900,000 against eligible accounts receivable and inventory. Although due on
  demand, it expires in February, 1998. The line of credit was partially used to
  pay the note payable to the prior lending bank and to pay $850,000 to MDC. All
  assets of the Group are pledged as collateral.

          On February 9, 1995, FASI sold 100% of the outstanding common stock of
  Fields Industrial Supply, Inc. to an unrelated party.

          As of April 30, 1996 the Group had reached a final settlement with its
  insurance  company.  Management  has  elected to record a  casualty  gain as a
  result of the January 1994 earthquake. A gain of $909,000 has been recorded in
  the  financial  statements  for the nine months ended  September 30, 1996 as a
  result of this transaction.
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 
  3. Notes payable

          The  notes  payable  at  September  30,  1996 and  December  31,  1995
  consisted of the following:

                                                            1996           1995
  Line of credit from Norwest, secured by 
    all assets of the Group, interest at
    prime plus 2.5% (10.75% at September 30,
    1996 and 10.5% at December 31, 1995) 
    payable monthly                                 $ 6,628,000     $ 7,427,000

  Note payable to bank, secured by land 
    and building,  payable monthly at $2,396
    plus interest at prime plus 2% (10.25% 
    at September 30, 1996 and 10.0% at 
    December 31, 1995), due February, 1998             323,000          457,000

  Other notes payable                                   57,000           21,000
         Total notes payable                       $ 7,008,000     $  7,905,000
  Less current portion                               6,714,000        7,905,000

        Notes payable, net of current portion      $   294,000     $      -

         Principal payment  requirements on all notes payable based on terms and
  rates in effect at September 30, 1996 are as follows:

           YEAR ENDING
          SEPTEMBER 30,                                   AMOUNT

             1997                                  $    6,714,000
             1998                                         294,000
          Thereafter                                         -

          Total  interest  expense for the nine months ended  September 30, 1996
  amounted to $969,000.  Total interest paid for the nine months ended September
  30, 1996 amounted to $695,000.




<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



4.   Provision (credit) for income taxes

          The  provision  (credit)  for income  taxes for the nine months  ended
  September 30, consisted of the following:

                                                  1996              1995
          DEFERRED
            Federal                            $    -          $  (55,000)
          CURRENT:
            State                                 3,000               -

            Total provision (credit) for
               income taxes                    $  3,000        $  (55,000)


          Total  income  taxes  paid in 1996 and 1995  amounted  to $ 3,000 each
  year. The Group has net operating loss  carryovers  available to offset future
  taxable  income.  The  amount and  expiration  date of the  carryovers  are as
  follows:

          YEAR ENDING
          DECEMBER 31,                    FEDERAL                   STATE

              2007                  $          -            $        814,000
              2008                          942,000                  750,000
              2009                          901,000                  220,000


  5. Commitments

          The Group leases  vehicles and equipment and office  facilities  under
  operating  leases.  The minimum lease payments required under operating leases
  as of September 30, 1996 are as follows:

          YEAR ENDING
          SEPTEMBER 30,                                            AMOUNT

              1997                                           $        11,000
              1998                                                    16,000
              1999                                                    14,000
            Thereafter                                                   -
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.
                FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

          Lease  expense  for the  nine  months  ended  September  30,  1996 was
$72,000.

          The  Group  has a  contract  with  a  financial  advisor  whereby  the
  financial advisor will provide  consulting  services to the Group. The minimum
  payments required under the contract as of September 30, 1996 are as follows:

           YEAR ENDING
          SEPTEMBER  30,                                          AMOUNT

              1997                                            $      45,000
              1998                                                   60,000
            Thereafter                                                  -


  6. Related party transactions

          The Group  subleases an office facility on a month to month basis from
  an entity owned by certain officers of the Group.

          In November 1995 FASI issued options to certain employees of the Group
  to acquire up to 82,525 common shares of FASI at a purchase price of $3.00 per
  share subject to certain requirements. The options must vest by November 1998.


<PAGE>


ITEM 2:     MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995


  Operations  of the Company  and its  subsidiaries  for the nine  months  ended
September 30, 1996  generated a loss of $760,000  compared to a loss of $253,000
for the  comparable  period for 1995. The increase in the operating loss for the
period is due to an  approximately  $205,000  (12.4%)  increase  in general  and
administrative  expenses, an approximately $139,000 (16.1%) increase in interest
costs  and a  reduction  in  gross  margin  percentage  as  distributorship  and
brokerage  business with its smaller margins  represent a greater  proportion of
total sales.

  Sales for the nine months ended September 30, 1996 were $4,158,000 compared to
$3,783,000 for the comparable  period of 1995, an increase of 9.9%. The increase
in sales was due primarily to an increase in distributorship transactions.

  The cost of goods sold for the nine months ended  September  30, 1996 and 1995
were $2,097,000 and $1,554,000  respectively  (approximately  50.4% and 41.1% of
sales  respectively).  The  reduction of gross margin  percentage  is due to the
increasing   proportion   of  total   sales   represented   by   brokerage   and
distributorship transactions as opposed to sales from original McDonnell Douglas
inventory.

  Total operating  expenses  increased from $2,482,000 for the nine months ended
September 30, 1995 to $2,821,000  for the nine months ended  September 30, 1996.
General and  administrative  expenses  increased  from  $1,647,000  for the nine
months ended  September 1995 to $1,852,000  for the nine months ended  September
30, 1996. This increase was due principally to increased costs of and associated
with,  the  expansion of the sales team which  resulted in the increase in sales
discussed above.

     During the nine months ended  September  30, 1996 the Company  recognized a
non-recurring  gain of $909,000 in connection with a certain casualty  insurance
gain.  During  the  same  period  of the  prior  year,  the  Company  recognized
non-recurring  gains of $4,942,000  in connection  with the exchange of debt and
sale of a  subsidiary.  Due  principally  to these  factors,  net  income of the
Company  decreased from  $4,744,000 for the nine months ended September 30, 1995
to $146,000 for the same period of 1996.

THREE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995

  Operations  of the Company and its  subsidiaries  for the three  months  ended
September 30, 1996  generated a net loss of $81,000  compared to a net profit of
$64,000 for the comparable period of 1995. The decrease in profits for the three

<PAGE>

month period is attributable to a reduction in sales and an increase in interest
expense offset by a reduction in general and administrative expenses.

  Sales for the three months ended September 30, 1996 were  $1,612,000  compared
to $1,847,000  for the comparable  period of 1995, a reduction of  approximately
12.7%.  The decrease in sales was due to a single  large sale in September  1995
which sale was not repeated in the comparable period in 1996.

  Cost of goods sold for the three  months  ended  September  1996 and 1995 were
$741,000  and  $800,000  respectively.  (Approximately  46% and  43.3%  of sales
respectively).  The slight  reduction of gross margin  percentage  is due to the
increasing   proportion   of  total   sales   represented   by   brokerage   and
distributorship transactions as opposed to sales from original McDonnell Douglas
inventory.

  Total  operating  expenses  decreased from $983,000 for the three months ended
September 30, 1995 to $952,000 for the three months ended September 30, 1996. An
approximately $68,000 (10%) reduction in general and administrative expenses was
partly offset by an approximately $37,000 (12.2%) increase in interest expenses.

  During the quarter  ended  September  30, 1995 the  Company  recognized  a tax
credit of  $55,000.  Due partly to this credit the net profit of the Company was
$119,000 for the three months ended September 30, 1995 compared to a net loss of
$81,000 for the three months ended September 30, 1996.

LIQUIDITY

  At  September  30, 1996 the Company had  working  capital  (current  assets in
excess of current  liabilities)  of  $2,676,000  compared to working  capital of
$657,000 on December 31, 1995. The increase in liquidity is due principally to a
decrease in short term bank debt and an increase in cash caused by the Company's
receipt of both the proceeds of a casualty insurance claim and the proceeds of a
placement  to  non-United  States  investors  by  means of a  private  placement
memorandum  under  Regulation S of the Securities  Act of 1933 (the "Act").  The
receipt of the  proceeds of the casualty  insurance  claim was the result of the
Company agreeing on a final  settlement with its insurance  company on its claim
following the January 17, 1994 Los Angeles  earthquake.  These  changes  coupled
with an  increase  in  distributorship  inventory  was  partially  offset  by an
increase in accounts payable and accrued liabilities.

  Operating  activities  generated $506,000 and used $1,003,000 of the Company's
cash flow for the nine months ended  September  30, 1996 and  September 30, 1995
respectively.   Increases   in  accounts   payable  and  accruals  of  $398,000,
depreciation and amortization of $248,000 and a decrease in accounts  receivable
of $93,000  generated  cash but was partly  offset by an increase of $344,000 in
inventories.

<PAGE>

  In June, 1996, the Company's subsidiary,  Fields Aircraft Spares Incorporated,
a  California  corporation  ("FAS")  entered  into a Third  Amendment  to Credit
Agreement with Norwest, whereby among other things, the interest rate payable to
Norwest was increased to prime plus 5.5%.

  In August,  1996, FAS entered into a Fourth Amendment to Credit Agreement with
Norwest  whereby,  among other  things,  the  interest  rate  payable to Norwest
increased by .5 percent per month commencing October 1996.

  FAS was in default with Norwest Business Credit Inc. ("Norwest"),  its primary
lender,  at September 30, 1996. The Loan Agreement with Norwest  required of the
Company as of June 30, 1996, to have achieved net earnings from  operations  for
the six months  ending on that date of  $150,000  whereas  the Company had a net
loss from  operations for that period of $679,000.  Norwest has indicated to the
Company  that it does not intend to take any action as a result of the  default,
but has reserved its right to take appropriate action at any time.

  The Company's  credit  facility  with Norwest  expires in February 1998 but is
payable on demand by Norwest.  Accordingly,  Norwest could require  repayment of
all  amounts  owed  by the  Company  at any  time.  The  Company  believes  that
alternative financing would be available to repay the amounts owed to Norwest if
demand for immediate  payment was made. If that were to occur, the Company could
become subject to possible action by Norwest to enforce its security interest in
the Company's assets.

CAPITAL RESOURCES

  The Company's operations to date have been primarily funded through bank loans
and vendors deferred purchase note.

  On February 7, 1995, the Company,  through FAS,  entered into a line of credit
arrangement with Norwest Business Credit, Inc. ("Norwest")  providing originally
for a line of credit in the  amount  of  $10,000,000.  At  September  30,  1996,
approximately  $6,600,000 of credit had been  extended  under the credit line of
$10,000,000.

  The Norwest credit line of $10,000,000  was initially  divided into two areas;
an  $8,000,000  inventory  line  and  a  $2,000,000  accounts  receivable  line.
Commencing  April 1995 the available  inventory  credit  reduced by $100,000 per
months. The available accounts  receivable credit could increase up to a maximum
of $10,000,000 depending on the amount of accounts receivable, but such that the
total  of  the  inventory  line  and  accounts  receivable  line  cannot  exceed
$10,000,000.

  In August 1996 the Company entered into a Fourth Amendment to Credit Agreement
with  Norwest  which  reduced  the  maximum  amount  outstanding  at any time to

<PAGE>

$6,900,000  with monthly  reductions of $250,000 to that maximum  allowed amount
commencing October 1996.

  During the quarter  ended  September  30,  1996,  the Company  began a private
placement  transaction  by means of separate  private  placement  memorandum  to
non-United States persons pursuant to Regulation S of the Act. A gross amount of
$1,716,000 of equity capital was raised in the third quarter of 1996 pursuant to
that  placement,  which after  brokerage  and issuance  costs  resulted in a net
infusion of capital of $1,390,000.  An additional $182,000 has been raised under
the private placement  memorandum  subsequent to September 30, 1996. The private
placement  provides for a maximum gross amount of $2,600,000 to be raised by the
Company in equity sales.  There is no assurance that the Company will be able to
raise the maximum amount.

  The  Company  is  seeking  to  acquire  other  companies  in similar or allied
businesses.  Any such  acquisition  will only be undertaken  following a careful
analysis of the potential  acquisition,  its potential,  any potential synergism
with the  Company's  existing  business  and the capital  needs of the  acquired
products compared to the capital needs and resources of the Company. There is no
assurance that any acquisitions will be successfully completed.

FORWARD-LOOKING STATEMENTS

  Statements  regarding the Company's  expectations as to its capital  resources
and certain other information  presented in this Form 10-QSB constitute  forward
looking  statements  within the  meaning of the  Private  Securities  Litigation
Reform Act of 1995.  Although the Company  believes  that its  expectations  are
based on  reasonable  assumptions  within  the  bounds of its  knowledge  of its
business and operations,  there can be no assurance that actual results will not
differ  materially from its  expectations.  In addition to matters affecting the
economy and the Company's industry  generally,  factors which could cause actual
results  to differ  from  expectations  include,  but are not  limited  to,  the
following: (i) the Company's ability to obtain alternative debt financing may be
adversely  affected by its past technical defaults on its current debt financing
and its  uncertainty  of future  profitability;  (ii) the  Company's  ability to
acquire  other  businesses  in similar  or allied  businesses  may be  adversely
affected if the Company is not able to raise  additional  capital and obtain any
necessary debt financing;  and (iii) the Company's  ability to raise  additional
capital may be  adversely  affected by its lack of trading  volume,  its lack of
listing on an exchange and the Company's uncertainty of future profitability.

<PAGE>


                           PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS.

       None

ITEM 2.CHANGES IN SECURITIES.

       None

ITEM 3.DEFAULTS UPON SENIOR SECURITIES.

       The  Company's  subsidiary,   Fields  Aircraft  Spares  Incorporated,   a
       California  corporation  ("FAS")  was in default  with  Norwest  Business
       Credit Inc.  ("Norwest"),  its primary lender, at September 30, 1996. The
       Loan Agreement with Norwest  required of the Company as of June 30, 1996,
       to have achieved net earnings from  operations  for the six months ending
       on that  date  of  $150,000  whereas  the  Company  had a net  loss  from
       operations  for that period of  $679,000.  Norwest has  indicated  to the
       Company  that it does not  intend  to take any  action as a result of the
       default,  but has  reserved its right to take  appropriate  action at any
       time. The Company's credit facility with Norwest expires in February 1998
       but is payable on demand by Norwest.  Accordingly,  Norwest could require
       repayment of all amounts owed by the Company at any time.



ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

       None

ITEM 5.OTHER INFORMATION.

       On November 5, 1996,  Nasdaq  informed  the  Company  that the  Company's
       application  for  listing  on the  Nasdaq  SmallCap  Market  could not be
       approved  as  submitted.   The  Company  intends  to  submit   additional
       information to Nasdaq after its  independent  accountants  have completed
       their audit of the December 31, 1996 financial  statements with a view to
       having its  application  reconsidered.  There is no assurance that Nasdaq
       will be willing to  reconsider  the  Company's  application  and that the
       application will be approved even if it is reconsidered.

<PAGE>


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

       (a)  Exhibits

            Exhibit 27 - Financial Data Schedule

            Those  exhibits  previously  filed with the  Securities and Exchange
            Commission  as  required  by  Item  601  of   Regulation   S-K,  are
            incorporated  herein by reference in accordance  with the provisions
            of Rule 12b-32.

       (b)  Reports on Form 8-K

            There have been no  reports on Form  8-K  filed  during  the quarter
            for which this report is filed.

<PAGE>


                                    SIGNATURE


          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.



Date: November 13, 1996


                                   FIELDS AIRCRAFT SPARES, INC.



                                   By: /s/ Alan M. Fields
                                      Alan M. Fields, President and Principal
                                      Executive Officer



                                   By: /s/ Lawrence J. Troyna
                                      Lawrence J. Troyna, Principal Financial
                                      Officer