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

                                FORM 10-Q



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


For the Quarter Ended  September 30, 1998     Commission File Number 0-12283


                               ZONIC CORPORATION
               (Exact name of Registrant as specified in its charter)



           Ohio                                      31-0791199
          -----                                      ----------
   (State of Incorporation)          (I.R.S. Employer Identification Number)

   50 West Technecenter Drive, Milford, Ohio           45150-9777
   -----------------------------------------           ----------
     (address of principal executive offices)          (Zip Code)


Registrant's telephone number, including area code:  (513) 248-1911
                                                     --------------


                              Not Applicable
                              --------------
(Former name, address or 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 _________

The total number of shares outstanding of the issuer's common shares, 
without par value, as of the date of this report, follow:



                                  3,044,136
                                  ---------

                                   Page 1
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Part I  Financial Information
Item 1.  Financial Statements

STATEMENT OF OPERATIONS
(unaudited)

                                      Three Months Ended     Six Months Ended

                                      9/30/98   9/30/97     9/30/98   9/30/97

Products and service revenues        $623,983  $479,033  $1,066,566  $820,795

Cost of products and services sold    215,994   172,592     388,641   314,746
Selling and administrative expenses   256,824   308,893     508,211   582,595
Research and development expenses 
   and software construction and
   product enhancement amortization    49,842    96,210     103,831   198,757
                                      -------    ------     -------   -------
                                      522,660   577,695   1,000,683 1,096,098
                                      -------   -------   --------- ---------
Operating profits (loss)              101,323   (98,662)     65,883  (275,303)

Interest expense, net                  (2,856)  (48,524)     (5,240)  (91,320)
Foreign currency loss                       -         -           -      (583)
                                       ------   -------     -------   -------

Income (loss) before taxes             98,467  (147,186)     60,643  (367,206)

Provision for income taxes                  -         -           -         -
                                       ------   -------      ------   -------
Net income (loss)                      98,467  (147,186)     60,643  (367,206)

Less: Dividend payable on 
      preferred shares                (13,528)        -     (13,528)        -
                                       ------   -------      ------   -------
Net income (loss) available 
      to common shareholders         $ 84,939 $(147,186)    $47,115 $(367,206)
                                     ======== ==========    ======= =========

Basic and diluted earnings (loss) 
      per share                        $ 0.03   $ (0.05)     $ 0.02   $ (0.12)

Weighted average shares outstanding 3,044,136  3,044,136  3,044,136 3,044,136 


The accompanying notes are an integral part of these financial statements.
                                     Page 2
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<PAGE>
Item 1 - Financial Statements  (continued)

BALANCE SHEETS
As of September 30, 1998 & March 31, 1998
                                             (unaudited)
                                            September 30         March 31
ASSETS                                            1998             1998
Current Assets
     Cash                                    $   80,418       $   79,408
     Receivables
          Trade                                 145,783          248,519
          Related parties                         4,599            1,708
                                              ---------        ---------
     Total receivables                          150,382          250,227
     Inventories 
          Finished products                      79,390          144,718
          Work in process                       133,807           49,111
          Raw material                           83,535           71,766
                                             ----------        ---------
     Total inventories                          296,732          265,595
     Prepaid expenses                            26,677            3,734
                                             ----------        ---------
          Total Current Assets                  554,209          598,964

Property and Equipment-at Cost 
     Furniture and office equipment             447,692          452,417
     Machinery and plant equipment              602,232          597,022
     Software construction and 
          product enhancement                 2,203,070        2,203,070
                                              ---------        ---------
                                              3,252,994        3,252,509
     Less accumulated depreciation and 
          amortization                        3,176,394        3,151,876
                                              ---------        ---------
                                                 76,600          100,633
                                              ---------        ---------
               Total Assets                  $  630,809       $  699,597
                                             ==========       ==========

LIABILITIES
Current Liabilities
     Short-term notes payable and current maturities of
          long-term debt                     $   39,005       $   42,365
     Accounts payable - trade                   721,808          728,062
     Accounts payable - related parties          27,209            4,223
     Dividend payable                            13,528                -
     Deferred income                            291,776          365,258
     Accrued liabilities
          Salaries and wages                    122,096          108,947
          Property and payroll taxes             43,894           54,684
          Commissions                            82,336           95,066
          Other                                  32,375           31,986
                                               --------         --------
               Total Accrued Liabilities        280,701          290,683
                                                -------          -------
               Total Current Liabilities      1,374,027        1,430,591

Long-Term Obligations, 
     Less Current Maturities                     12,595           30,186

Deferred rent                                    76,537          118,285

SHAREHOLDERS' DEFICIT
     Preferred shares                         2,400,000        2,400,000
     Common shares                               61,674           61,674
     Additional paid-in capital               5,727,881        5,727,881
                                              ---------        ---------
                                              8,189,555        8,189,555

     Accumulated deficit                     (9,021,905)      (9,069,020)
                                             ----------       ----------
         Total Shareholders' Deficit           (832,350)        (879,465)
                                             ----------        ---------
               Total Liabilities and 
                    Shareholders' Deficit   $   630,809      $   699,597
                                            ===========      ===========

The accompanying notes are an integral part of these financial statements.

                                    Page 3
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<PAGE>
Item 1 - Financial Statements  (continued)

STATEMENT OF SHAREHOLDERS' DEFICIT
For the six months ended September 30, 1998
(unaudited)

                                          Additional
                    Common    Preferred      Paid-in  Accumulated
                    Shares       Shares      Capital       Deficit        Total
Balance,
   March 31, 1998  $61,674   $2,400,000   $5,727,881   $(9,069,020)  $(879,465)

Net income 
   for the period        -            -            -        60,643      60,643

Dividend payable 
   on preferred 
   shares                -            -            -       (13,528)    (13,528)
                   -------   ----------   ----------   -----------   ---------
Balance, 
   September 30, 
   1998            $61,674   $2,400,000   $5,727,881   $(9,021,905)  $(832,350)
                   =======   ==========   ==========   ============  ==========


The accompanying notes are an integral part of these financial statements.

                                      Page 4
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<PAGE>
Item 1 - Financial Statements  (continued)

STATEMENTS OF CASH FLOWS
For the six months ended September 30,
(unaudited)
                                                         1998          1997
Cash provided (used) by operations
    Net income (loss) for period                    $  60,643    $ (367,206)
    Adjustments to reconcile net loss to cash 
               from operations
        Depreciation and amortization                  10,388        10,875
        Amortization of software construction
               and product enhancements                19,659        70,000
        Amortization of note receivable 
               from shareholder                             -       (30,000)
        Provision for obsolete inventory               12,000        18,000
        Amortization of deferred income 
               and deferred rent                     (110,920)      (97,652)
        Foreign currency loss and other                     -           583

    Increase (decrease) in cash due to changes in
        Accounts receivable                            99,845       197,524
        Inventories                                   (43,137)      (36,873)
        Prepaid expenses                              (22,943)      (23,029)
        Accounts payable                               16,732        84,280
        Accrued liabilities                            (9,982)      (35,745)
        Accrued rent                                        -       (64,079)
        Deferred income                                (4,310)       22,283
                                                      -------       -------

            Net cash provided (used) by operations     27,975      (251,039)

Cash used in investment activities
        Purchase of equipment                          (6,014)       (6,225)
        Increase in software construction and 
               product enhancements                         -       (42,203)
                                                     --------      --------

          Net cash used in investment activities      (6,014)      (48,428)

Cash provided (used) by financing activities
        Additions to debt obligations                       -        75,000
        Payments on debt obligations                  (20,951)       (5,178)
                                                     --------       -------

          Net cash provided (used) by 
               financing activities                   (20,951)       69,822

Increase (decrease) in cash                             1,010      (229,645)
Cash - beginning of period                             79,408       259,494
                                                     --------      --------

Cash - end of period                                $  80,418    $   29,849
                                                    =========    ==========

Interest paid during period                         $   5,637    $   59,382
                                                    =========    ==========

The accompanying notes are an integral part of these financial statements.

                                       Page 5

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Item 1 - Financial Statements  (continued)
Notes to Financial Statements

1.   Presentation of Information

In the opinion of management, the accompanying unaudited financial statements
reflect all adjustments (consisting of only normal recurring adjustments) 
necessary to present fairly Zonic Corporation's (the Company) financial 
position at September 30, 1998 and the results of operations for the three 
and six month periods ended September 30, 1998 and 1997 and its cash flows 
for the six month periods ended September 30, 1998 and 1997.  The results of 
operations for the interim periods are not necessarily indicative of results 
to be expected for a full year.

The financial statements are summarized and should be read in conjunction with 
the annual report to shareholders and Form 10-K for the year ended March 31, 
1998. Certain reclassifications have been made to amounts shown for the prior 
year to conform to current year classifications.

2.  New Standards

The Company implemented Statement of Financial Accounting Standards (SFAS) 
No. 130, "Reporting Comprehensive Income" during the first quarter of the 
current year.  Under the provisions of this Statement, all changes in equity 
that result from recognized transactions and other economic events of the 
period other than transactions with owners in their capacity as owners are 
reported as comprehensive income.  As required by the statement, 
comprehensive income should be reported as net income and other comprehensive 
income with a total amount displayed in the financial statements.  Since the 
Company has no items of other comprehensive income during the current year, 
comprehensive income is not reported.

The Company will implement Statement of Financial Accounting Standards (SFAS) 
No. 131, "Disclosures about Segments of an Enterprise and Related Information" 
in the annual financial statements of the current year.  This statement requires
disclosure of certain information for each operating segment of a business 
enterprise.  Specific criteria is included in this statement to determine 
reportable segments of the business.  The Company has a single reportable 
segment.  Revenues and the loss for this segment are reported in the 
accompanying Statement of Operations. Adoption of the statement will not 
impact the reported results of operations of the Company and will not require
additional disclosure.

3.  Year 2000 Issues

The Company defines Year 2000 compliance as proper functionality, or 
performance of a system, process, or equipment that is not adversely affected
by dates prior to, during, and after the year 2000.  Due to memory 
constraints, early programmers represented years by the last two digits of 
the century.  Thus the year 1970 is represented by the number "70" in many 
older software programs.  At the turn of the century, the year will become 
"00" and the computer or system will interpret this as the year 1900 and not 
the year 2000.  Many systems have electronic components that utilize a date 
to control the function it serves.  Most computer software, including the 
Company product offerings, utilize date identification.

                                        Page 6

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The Company has initiated a comprehensive review and evaluation of all relevant
internal and external systems, processes, and third party providers to 
determine their compliance or progress toward Year 2000 compliance.  This 
review is to be completed by the end of 1998.  If a system, process or third 
party provider is deemed significant to the operations of the Company and 
Year 2000 compliance is in question, the Company will develop a contingency 
plan to address the issue. At this time the Company has not encountered nor 
anticipates any significant Year 2000 issues requiring a contingency plan.

The Company's product offerings utilize date reference for the identification 
of printed and stored data.  A date reference problem will result in stored 
data being tagged with an incorrect date, or printed data indicating an 
incorrect date. The Company has determined that certain legacy products will 
not be reviewed for Year 2000 compliance.  All current products will be 
Year 2000 compliant.  This information has been provided to the Company's 
clients and the information is available on the company's WEB site.

At this time the review process is 75% complete and the Company has discovered 
no material Year 2000 compliance issues.  The Company has not incurred nor 
anticipates any additional significant expenses as a result of its on-going 
Year 2000 work.


4.  Dividend Payable on Preferred Stock

The Class B Preferred Stock of the Company includes an annual dividend equal to
20% of the Company's annual after-tax earnings excluding non-recurring earnings
as defined and charges effective with the year ended March 31, 1998. The 
Company has recorded a dividend payable during the current three month period 
equal to 20% of year-to-date net income as defined.  No amount was recorded 
during the first quarter of fiscal 1999 as the Company had a net loss for that 
period.  This amount will be adjusted each quarter therafter to equal 20% of 
the then current year-to-date net income.
                        
                                           Page 7
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<PAGE>
Item 2 - Management's Discussion and Analysis of Financial Condition and 
         Results of Operations

Special Cautionary Notice Regarding Forward-Looking Statements

Certain of the matters discussed under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operation" may constitute 
forward-looking statements for purposes of the Securities Act of 1933 and the 
Securities Exchange Act of 1934, as amended, and as such may involve known and 
unknown risks, uncertainties and other factors which may cause the actual 
results, performance or achievements of the Company to be materially 
different from future results, performance or achievements expressed or 
implied by such forward-looking statements.  Important factors that could 
cause the actual results, performance or achievement of the Company to differ
materially from the Company's expectations include, without limitation, the 
following:  1) the Company is unable to improve existing products or 
develop new products which satisfy needs in the Company's markets; 2) the 
Company is unable to penetrate new markets; 3) the Company is unable to 
retain existing personnel or hire additional personnel; 4) the industries the 
Company serves experience less rapid growth than anticipated; 5) the Company is
unable to obtain supplies on a timely basis from its limited number of 
suppliers; 6) new competitors enter the markets the Company serves or 
existing competitors increase their marketing efforts; 7) the Company is 
unable to obtain additional debt or equity financing on favorable terms, if 
at all, to satisfy its cash requirements.  All written or oral forward-
looking statements attributable to the Company are expressly qualified in 
their entirety by such factors.


Results of Operations

Product and Services Revenue increased by $144,950, or 30% for the three months
ended September 30, 1998, when  compared to the prior year period.  Sales 
increased in the Company's Medallion and 7000 Series product lines, but were 
partially offset by decreases in the WCA and MMS product lines.  The increase 
in Medallion revenue was due to sales to a company under an OEM distribution 
agreement and the increase in 7000 Series revenue was from sales under an 
order for eight systems received during the fourth quarter of fiscal 1998. 
For the six months ended September 30, 1998, revenue increased by $245,771 or
30% when compared to the same period of the prior year. Besides revenue 
increases in Medallion and 7000 Series products for the six month period, 
revenue also increased in WCA products as the result of sales made 
during the first quarter of the current year.  These increases were partially 
offset by declines in consulting, extended warranty service and MMS product 
revenue attributable to the continuing slow down in orders resulting from the 
Company's sale of its Zeta technology and software to A&D Company, Ltd (A&D) in
fiscal 1997.

Order backlog amounted to $300,000 at September 30, 1998 compared with 
$362,000 at September 30, 1997. The decrease was due to a decline in Medallion 
orders during the current three month period and as a result of the Company 
increasing its inventory of Medallion products throughout the current year 
which reduced the amount of time to fill orders from stock. The prior year also
included several orders for manufacturing applications of Medallion-based 
products. This decrease has been substantially offset by the four remaining 
units from the eight system Series 7000 order received during the fourth 
quarter of fiscal 1998.  These remaining units will be shipped throughout 
fiscal 1999.  

                                      Page 8

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Costs of products and services sold were 35% and 36% respectively of products 
and services revenues for the three and six months ended September 30, 1998 
versus 36% and 38% respectively for the same periods of the prior year.  The 
decrease in costs was due mainly to higher profit margins on Medallion product 
sales resulting from add-on software and equipment options and reduced 
production costs.


Selling and administrative expenses decreased $52,069 and $74,384 or 17% and 
13% respectively during the current three and six month periods versus the same
prior year periods.  This decrease was due mainly to lower rent and other 
facility related costs and lower professional services expense.  A decrease in 
sales commission expense during the current three month period as a result of 
fewer sales commissionable to sales representatives offset an increase earlier 
in the current year.  These decreases were partially offset by higher sales 
promotion costs during the current three month period eliminating a decrease 
earlier in the current year and higher travel expenses.  Selling and 
administrative expenses were 41% and 48% respectively of products and service 
revenues for the current three and six month periods versus 64% and 71% 
respectively for the same periods of the prior year.

Research and development expenses and software construction amortization was 
$49,842 and $103,831, respectively, for the three and six month periods ended 
September 30, 1998 versus $96,210 and $198,757, respectively, for the same 
periods of the prior year. These decreases were due to less amortization 
expense as a result of a decrease in capitalized software construction and 
product enhancement costs during the past year and a decline in the level of 
Medallion research and development costs versus the prior year.  See Software 
Construction and Product Development under Liquidity and Capital Resources.

Interest expense was $2,856 and $5,240, respectively, for the three and six 
month periods ended September 30, 1998 versus $48,524 and $91,320, 
respectively, for the same periods ended September 30, 1997.  This decrease 
was due to significantly less borrowings during the current year resulting 
from the retirement of outstanding current and long-term debt using proceeds 
from the sale of preferred stock to A&D in fiscal 1998.

Income tax expense was $33,479 and $20,619, respectively, for the three and six
months ended September 30, 1998 was offset by net operating loss carryforwards.
At March 31, 1998, loss carryforwards totaling $6.3 million and tax credits of 
$646,000 were available to offset future income taxes.  No benefit from the 
Company's deferred tax assets has been provided at this time.

Liquidity & Capital Resources
Software Construction and Product Development

The Company's total unamortized software construction and product enhancement 
costs at September 30, 1998 and March 31, 1998 were $24,724 and $44,383, 
respectively. No costs were capitalized for software construction and product
enhancement projects during the current six month period compared to $42,203 
for the prior year period. 

                                        Page 9
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<PAGE>
Working Capital and Cash Flow

The Company's working capital improved from a negative $831,627 at March 31, 
1998 to a negative $819,818 at September 30, 1998.  The current ratio declined 
slightly from .42 at March 31, 1998 to .40 at September 30, 1998.  The change
in working capital was due primarily to a decrease in deferred income which was
substantially offset by a decline in accounts receivable.

The Company's cash flows from operations amounted to $27,975 for the six 
months ended September 30, 1998. Payments on long-term debt totaled $20,951. 
There was no investment in software construction and product enhancement 
activities during the current period. 

The Company has experienced some improvement in its cash flow resulting from 
its operating profit during the current period, but continues to experience 
cash flow problems as current liabilities exceed current assets. The Company 
continues to seek additional working capital through debt or equity financing 
from public or private sources to reduce current liabilities and to sustain 
its operations.  There can be no assurance that the Company will be able to 
obtain additional financing on favorable terms, if at all, from any source.  

PART II - Other Information

None

Item 6:  Exhibits and Reports on Form 8-K

     Exhibit 11 - Computation of earnings per common share - see Statements of 
Operations

     Reports on Form 8-K  - None

                                      Page 10

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                                       SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.

ZONIC CORPORATION



By:_/s/ James B. Webb_______________
    James B. Webb
    President and Chief Executive Officer



By:_/s/ John H. Reifschneider__________
    John H. Reifschneider
    Controller
    


Dated:  November 5, 1998

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