SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                           FORM 10-K

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1998
                               OR
                                
[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
                                
For the transition period from_____________ to ____________

                 Commission file number 0-16345

                SED INTERNATIONAL HOLDINGS, INC.
     (Exact name of Registrant as specified in its charter)

                  DELAWARE                         22-271544
        (State or other jurisdiction           (I.R.S. Employer
       of incorporation or organization)       Identification No.)

4916 North Royal Atlanta Drive, Atlanta, Georgia         30085
    Address of principal executive offices)           (Zip Code)

Securities registered pursuant to Section 12(b) of the Act:

                              NONE

Securities registered pursuant to Section 12(g) of the Act:

                  COMMON STOCK, $.01 PAR VALUE
                        (Title of Class)
                                
                  COMMON STOCK PURCHASE RIGHTS
                        (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.    Yes [X]     No [  ]
<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrants's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendments to this Form 10-K.  [  ]

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was $35,168,788 as of September 14, 1998 based upon the last
sale price of the Common Stock as reported on the Nasdaq National Market on
that day.

There were 9,613,603 shares of Common Stock, $.01 par value, outstanding at
September 14, 1998.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Annual Report to Stockholders for the fiscal year ended
June 30, 1998 are incorporated by reference into Part II.

Part III incorporates information by reference from the Registrant's
definitive proxy statement for the 1998 annual meeting of stockholders
presently scheduled to be held on November 10, 1998, which proxy statement
will be filed no later than 120 days after the close of the Registrant's
fiscal year ended June 30, 1998.
<PAGE>
                             PART I

Item 1.   BUSINESS

     (a) General Development of Business

     SED International Holdings, Inc., a Delaware corporation and its
wholly owned operating subsidiary, SED International, Inc., a Delaware
corporation ("SED International"), were incorporated in 1986 to take over
the operations of the business of the Registrant's predecessor, Southern
Electronics Distributors, Inc., which was engaged in the wholesale
distribution of consumer electronics products. As used herein, the term
"Registrant" means SED International Holdings, Inc. and its subsidiaries,
including SED International, unless the context otherwise indicates.

     The Registrant is a leading international distributor of microcomputer
products, including personal computers, printers and other peripherals and
networking products throughout the United States and Latin America. The
Registrant offers to an active base of over 13,000 reseller customers a
broad inventory of more than 3,500 products from approximately 130 vendors,
including such market leaders as Hewlett-Packard, Seagate, Maxtor, Western
Digital, Microsoft, Intel, Creative Labs, Acer, Epson and Canon, through a
dedicated and highly motivated sales force.  The Registrant distributes
products in the United States from its strategically located warehouses in
Atlanta, Georgia, Miami, Florida and City of Industry, California, as well
as its Harrisburg, Pennsylvania warehouse that opened in April 1998.  The
Registrant services Latin America through its wholly-owned subsidiaries SED
Magna Distribuidora Ltda. in Sao Paulo, Brazil and SED International de
Colombia Ltda., Inc. in Bogota, Colombia.  The Registrant's net
sales increased to $892.6 million in fiscal 1998 from $646.3 million in
fiscal 1997, and the Registrant had a net loss of $0.3 million in fiscal
1998 compared to net earnings of $7.9 million in fiscal 1997.

     The Registrant also distributes wireless telephone products in the
United States and to Latin America. The Registrant is a direct distributor
of wireless telephone products for Motorola, Mitsubishi, Audiovox and
Advanced Fox, and an indirect distributor for other leading wireless
telephone product vendors such as Ericsson, Nokia and NEC. In fiscal 1998,
the Registrant's net sales of microcomputer products generated
approximately 88.0% of the Registrant's total net sales and wireless
telephone products represented the remaining 12.0%. 

     On December 1, 1997, the Registrant began leasing an approximately
12,900 square foot distribution facility in Tambore, Brazil.  The Tambore,
facility serves as a distribution center for SED Magna Distribuidora Ltda.,
a wholly owned subsidiary of the Registrant.  Monthly payments for the
lease will total approximately $12,000.  The lease will expire on December
31, 1998, unless the Registrant elects to exercise its option to renew the
lease for an additional one-year period.
<PAGE>
     On December 1, 1997, the Registrant began leasing an approximately
4,300 square foot administrative center and sales office in Sao Paulo,
Brazil.  The Sao Paulo, Brazil facility serves as an administrative center
and sales office for SED Magna Distribuidora Ltda., a wholly owned
subsidiary of the Registrant.  Monthly payments for the lease totaled
approximately $18,000 for the first month of the lease, after which the
rent decreased to approximately $11,000 for each of the next three months
of the lease, then decreased to approximately $7,000 for the following
three months of the lease.  The remaining lease payments will total
approximately $12,000 for each of the remaining six months of the lease. 
Pursuant to its terms, the lease will expire on March 31, 1999 unless the
Registrant elects to exercise its option to renew the lease for an
additional one-year period.

     On March 1, 1998, the Registrant began leasing an approximately
102,000 square foot distribution facility in Harrisburg, PA.  Payments for
the lease will total approximately $33,000 for each of the twenty-four
months during the period beginning April 1, 1998 and ending March
31, 2000, approximately $34,000 for each of the twelve months during the
period beginning April 1, 2000 and ending March 31, 2001, approximately
$36,000 for each of the twelve months during the period beginning April 1,
2001 and ending March 31, 2002, and approximately $35,000 for each of the
twelve months beginning April 1, 2002 and ending March 31, 2003.  The
average amount of payments for the lease for each of the sixty months
during the period beginning April 1, 1998 and ending March 31, 2003 will be
approximately $34,000.

     On December 1, 1997, the Registrant began leasing an approximately
18,000 square foot administrative center and sales office in Bogota,
Colombia.  The Bogota center serves as a sales office and distribution
facility for SED International de Colombia Ltda.  Monthly payments for
the lease totaled approximately $4,000 for the first month of the lease,
after which the rent increased to approximately $6,000 for each of the
remaining thirty-four months of the lease. Pursuant to its terms, the lease
will expire on November 30, 2000 unless the Registrant elects to
exercise its option to renew the lease for an additional three-year period.

     The Registrant is in the process of relocating its channel assembly
center from its previous location in Stone Mountain, Georgia to the same
premises as its distribution facility in Tucker, Georgia.  The Stone
Mountain lease is scheduled to terminate on September 30, 2000
and provides for lease payments of approximately $12,000 per month.  The
Registrant may terminate the lease upon completion of each year of the
lease by paying any unamortized brokers' fee with respect to the lease.

     (b)  Financial Information about Industry Segments

     The Registrant operates in only one business segment.

     (c)  Narrative Description of Business
<PAGE>
1.   Products and Vendors

     The Registrant offers its customers a broad inventory of more than
3,500 products from approximately 130 vendors, including such market
leaders as Hewlett-Packard, Seagate, Maxtor, Western Digital, Microsoft,
Intel, Creative Labs, Acer, Epson and Canon. The Registrant is a
direct distributor of wireless telephone products for Motorola, Mitsubishi,
Audiovox and Advanced Fox, and an indirect distributor for other leading
wireless telephone product vendors such as Ericsson, Nokia and NEC. 
Microcomputer related products accounted for $785.7 million
or 88.0% of the Registrant's net sales for fiscal 1998, $588.4 million or
91.0% of net sales in fiscal 1997, and $429.4 million or 91.7% of net sales
in fiscal 1996, which included sales of mass storage products, printers and
other imaging products, microprocessing and memory chips, monitors, modems,
networking products, notebook and personal computers and accessories.
Approximately $106.9 million or 12.0% of the Registrant's net sales for
fiscal 1998, $58.0 million or 9.0% of net sales for fiscal 1997, and $38.9
million or 8.3% of net sales for fiscal 1996 consisted of wireless
telephone products such as handheld cellular telephones and accessories.
The Registrant continually evaluates its product mix and inventory levels
and maintains flexibility by adjusting its product offerings based on
demand. The Registrant's vendors generally warrant the products distributed
by the Registrant and allow the return of defective products.

     Generally, the Registrant's authorized distributor agreements with its
microcomputer and wireless telephone products vendors permit the Registrant
to sell these vendors' products in the United States and in designated
countries in Latin America. The Registrant will continue to seek
to expand the geographical scope of its distributor arrangements, which may
include acquiring or partnering with companies that already have the
distribution rights of a particular vendor in a specified country.

     As a distributor, the Registrant incurs the risk that the value of its
inventory will be affected by industry-wide forces. Rapid technological
change is commonplace in the microcomputer and wireless industries and can
quickly diminish the marketability of certain items, whose functionality
and demand decline with the appearance of new products. These changes,
coupled with price reductions by vendors, may cause rapid obsolescence of
inventory and corresponding valuation reductions in that inventory. 
Accordingly, the Registrant seeks provisions in its vendor agreements
common to industry practice which provide price protections or credits for
declines in inventory value and the right to return unsold inventory. No
assurance can be given, however, that the Registrant can negotiate such
provisions in each of its contracts or that such industry practice will
continue.

     The Registrant purchases goods from approximately 130 vendors and has
negotiated favorable terms from certain vendors by purchasing a substantial
volume of those vendors' products. In fiscal 1998, products purchased from
Hewlett-Packard, Seagate and Maxtor accounted for 19.1%, 11.1% and 8.3%,
respectively, of the Registrant's total purchases and the loss of any one
of these three vendors could materially adversely affect the financial
condition of 
<PAGE>
the Registrant. The percentage of goods purchased by the Registrant from
Hewlett-Packard increased to 19.1% during fiscal 1998 from 11.5% during
fiscal 1997 as a result of the acquisition of distribution rights for
certain Hewlett-Packard products in the United States in June 1997.  There
can be no assurance that the Registrant will be able to maintain its
existing vendor relationships or secure additional vendors as needed. The
Registrant's vendor relationships typically are non-exclusive and subject
to annual renewal, terminable by either party on short notice, and contain
territorial restrictions that limit the countries in which the Registrant
is permitted to distribute the products. The loss of a major vendor, the
deterioration of the Registrant's relationship with a major vendor, the
loss or deterioration of vendor support for certain Registrant-provided
services, the decline in demand for a particular vendor's product, or
the failure of the Registrant to establish good relationships with major
new vendors could have a material adverse effect on the Registrant's
business, financial condition or results of operations.

     Product orders typically are processed and shipped from the
Registrant's distribution facilities on the same day an order is received
or, in the case of orders received after 6:00 p.m., on the next business
day. The Registrant relies almost entirely on arrangements with independent
shipping companies for the delivery of its products to United States
customers. Products distributed to the Latin American markets are delivered
to the foreign purchasers or their agents or representatives at the
Registrant's Sao Paulo Brazil and Bogota, Colombia facilities. 
Generally, the Registrant's inventory level of products has been adequate
to permit the Registrant to be responsive to its customers' purchase
requirements. From time to time, however, the Registrant experiences
temporary shortages of certain products as its vendors experience
increased demand or manufacturing difficulties with respect to their
products, resulting in smaller allocations of such products to the
Registrant.

2.   Sales and Marketing

     The Registrant's sales are generated by a telemarketing sales force,
which consisted of approximately 186 persons on June 30, 1998 in sales
offices located in Atlanta, Georgia, Miami, Florida, Carlsbad, California,
City of Industry, California, S o Paulo, Brazil and Bogota, Colombia.  Of
the total number of salespersons at June 30, 1998, 43 persons focused on
sales to customers for export to Latin America and on sales in Brazil and
Colombia, substantially all of whom are fluent in Spanish or Portuguese.
The Registrant's Atlanta sales office maintains a separate telemarketing
sales force for the sale of wireless telephone products to retailers and
wireless telephone carriers and their authorized agents located throughout
the United States and Latin America.

     Members of the sales staff are trained through intensive in-house
sales training programs, along with vendor-sponsored product seminars. This
training allows sales personnel to provide customers with product
information and to use their marketing expertise to answer customers'
questions about important new product considerations, such as compatibility
and capability, while offering advice on which products meet specific
performance and price criteria. The Registrant's salespeople are able to
analyze quickly the Registrant's extensive inventory through a
<PAGE>
sophisticated management information system and recommend the most
appropriate cost-effective systems and hardware for each customer--whether
a full-line retailer or an industry-specific reseller.

     The domestic sales force is organized in teams generally consisting of
two to four people. The Registrant believes that teams provide superior
customer service because customers can contact one of several people.
Moreover, the long-term nature of the Registrant's customer relationships
is better served by teams that increase the depth of the relationship and
improve the consistency of service. It has been the Registrant's experience
that the team approach results in superior customer service and better
employee morale.

     Compensation incentives are provided to the Registrant's salespeople,
thus encouraging them to increase their product knowledge and to establish
long-term relationships with existing and new customers. Customers can
telephone their salespersons using a toll-free number provided by the
Registrant. Salespeople initiate calls to introduce the Registrant's
existing customers to new products and to solicit orders. In addition,
salespeople seek to develop new customer relationships by using targeted
mailing lists, vendor leads and telephone directories of various cities.

     The telemarketing salespersons are supported by a variety of marketing
programs. For example, the Registrant regularly sponsors shows for its
resellers where it demonstrates new product offerings and discusses
industry developments. Also, the Registrant's in-house marketing
staff prepares catalogs that list available microcomputer and wireless
telephone products and routinely produces marketing materials and
advertisements. In addition, the in-house marketing staff publishes other
direct mail pieces promoting specials and new products, which can be
ordered directly through salespeople or through the Registrant's Internet
web page providing 24-hour access to on-line order entry. The Registrant's
web page provides customers secured access to place orders and review
product specifications at times that are convenient to them. Customers also
can determine inventory availability and pricing on a real-time basis and
in the near future verify the status of previously placed orders through
hyperlinks to certain independent shipping companies.

     The Registrant prides itself on being service oriented and has a
number of on-going value-added services intended to benefit both the
Registrant's vendors and its resellers. For example, the Registrant is
committed to training its salespeople to be technically knowledgeable
about the products they sell. This core competency supplements the
sophisticated technical support and configuration services also provided by
the Registrant.  Salespeople who are knowledgeable about the products they
sell often can assist in the configuration of microcomputer systems
according to specifications given by the resellers. The Registrant
believes that its salesperson's ability to listen to a reseller's needs and
recommend a cost-efficient solution strengthens the relationship between
the salesperson and his or her reseller and promotes customer loyalty to a
vendor's products.  In addition, the Registrant provides such other
value-added services as new product demonstrations and technical education
programs for
<PAGE>
resellers, order fulfillment and electronic ordering, and informational
assistance through the Registrant's web page.

     Management continually evaluates the Registrant's product mix and the
needs of its customers in order to minimize inventory obsolescence and
carrying costs. The Registrant's rapid delivery terms are available to all
of its customers, and the Registrant seeks to pass through its shipping and
handling costs to its customers. The Registrant offers various credit terms
including open account, prepay, credit card and COD to qualifying
customers. The Registrant closely monitors customers' creditworthiness
through its on-line computer system which contains detailed information on
each customer's payment history and other relevant information. In
addition, the Registrant participates in national and international credit
associations that exchange credit rating information on customers of
association members. In most markets, the Registrant utilizes various
levels of credit insurance to control credit risks and enable the
Registrant to extend higher levels of credit. The Registrant establishes
reserves for estimated credit losses in the normal course of business.

3.   Customers

     The Registrant serves an active, nonexclusive customer base over
13,000 resellers of microcomputer and wireless telephone products.
Resellers includes value-added resellers, corporate resellers and
retailers. The Registrant believes the multi-billion dollar microcomputer
and wireless telephone wholesale distribution industries serve customers
primarily on a nonexclusive basis, which provides the Registrant with
significant growth opportunities. During fiscal 1998, no single customer
accounted for more than 3.0% of the net sales of the Registrant.
The Registrant believes that most of its customers rely on distributors as
their principal source of microcomputer and wireless telephone products.

4.   Competition

     The microcomputer and wireless telephone distribution industries are
highly competitive, both in the United States and in Latin America. 
Competition in these industries is typically characterized by pricing
pressures, product availability and potential obsolescence, speed and
accuracy of delivery, effectiveness of sales and marketing programs, credit
availability, ability to tailor specific solutions to customer needs,
quality of product lines and services, and availability of technical
support and product information. Additionally, the Registrant's ability to
compete favorably is principally dependent upon its ability to control
inventory and other operating costs, react timely and appropriately to
short-and long-term trends, price competitively its products, increase its
net sales and maintain economies of scale. In the early 1990s, the United
States microcomputer industry moved toward open sourcing pursuant to which
vendors authorized multiple distributors to sell to resellers on equal
terms rather than relying on exclusive relationships. As a result, the
competitive environment has become more intense, leading to accelerating
industry consolidation and declining gross margins.
<PAGE>
     The Registrant's competitors include regional, national and
international microcomputer and wireless distributors, many of which have
substantially greater technical, financial and other resources than the
Registrant, as well as vendors that sell directly to resellers and large
resellers that sell to other resellers. Major competitors include Ingram
Micro, Inc., Merisel, Inc. and Tech Data Corporation in the United States,
and CHS Electronics, Inc. in Latin America.

5.   Employees

     As of June 30, 1998, the Registrant had 537 full-time employees, 186
of whom were engaged in telemarketing and sales, 187 in administration and
164 in shipping. The Registrant also utilized 36 part-time employees at
such date.  Management believes the Registrant's relations with its
employees are good and the Registrant has never experienced a strike or
work stoppage. There is no collective bargaining agreement covering any of
the Registrant's employees.

6.   Seasonality

     The Registrant's sales currently are not subject to material seasonal
fluctuations although no assurance can be given that seasonal fluctuations
will not develop, especially during the holiday season in the United States
and Latin America. See "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations--Quarterly Data;
Seasonality."

7.   Financial Information about Foreign and Domestic Operations and Export 
     Sales

     For the fiscal years ended June 30, 1996 and 1997, approximately 37%
and 45%, respectively, of the Registrant's net sales were to customers for
export principally into Latin America.  These customers historically have
been serviced through the Registrant's Miami, Florida warehouse facility
with sales denominated in U.S. dollars.  During the fiscal year ended
June 30, 1998 the Registrant began selling directly to customers in Brazil
and Colombia through the Registrant's facilities in Sao Paulo, Brazil and
Bogota, Colombia with sales denominated in the respective local currencies
of these two locations.  Approximately 41% of the Registrant's net sales in
the fiscal year ended June 30, 1998 consisted of sales to customers for
export principally into Latin America and direct sales to customers in
Brazil and Colombia.  See also note 9 to the consolidated financial
statements of the Registrant on page 23 of the Registrant's 1998 Annual
Report to Stockholders incorporated herein by reference for certain
additional information concerning the Registrant's domestic and foreign
operations.

Item 2.   PROPERTIES

     The Registrant maintains its executive offices at 4916 North Royal
Atlanta Drive in Tucker, Georgia, where 93 of its sales employees are also
located. The Registrant leases its executive, administrative and sales
office from Royal Park Company, a Georgia general partnership comprised of
certain minority stockholders of the Registrant. The lease expires in
<PAGE>
October 1999 after an 8-year term and supersedes the original 15-year lease
entered into in 1984 between the Registrant's predecessor and Royal Park
Company. The facility consists of approximately 30,000 square feet, with an
annual rental of approximately $176,000 through October 1, 1999, subject to
increase based upon periodic changes in the Consumer Price Index. The
Registrant has a right of first refusal to purchase the facility should it
be offered for sale. The Registrant believes that the lease is on terms non
less favorable than those available from unaffiliated parties.

     The Registrant maintains warehouse facilities in Atlanta, Georgia,
City of Industry, California, Miami, Florida , Harrisburg, Pennsylvania, S
o Paulo, Brazil and Bogota, Colombia.  The Registrant's distribution
facility in Atlanta, Georgia consists of approximately 100,000 square feet
subject to a lease expiring January 31, 1999. The Registrant also leases
additional warehouse and sales office space near its executive,
administrative and sales office in Atlanta. The Registrant believes there
is sufficient additional warehouse and sales office space available
for lease at reasonable prices near its principal facility in the event the
Registrant's growth plans so require.

     On January 10, 1996, the Registrant amended the lease pertaining to
its sales and distribution facility, located in the Beacon Centre
Technology Park in Miami, Florida to allow the Registrant to relocate such
facility to another building within the Beacon Centre complex having a
leased space of approximately 31,200 square feet (the "Relocation Space").
The monthly rent for the Relocation Space is approximately $17,000 and the
term of the lease pertaining thereto expires on March 31, 2001. On July 24,
1996, the Registrant executed an amendment to the lease which allowed the
Registrant to expand the space subject to the lease by approximately 30,000
square feet (the "Expansion Space"). The monthly rent for the Expansion
Space is approximately $17,000 and the lease term pertaining thereto
expires on March 31, 2001. The aggregate monthly rent for the Miami
facility is, therefore, $34,000.

     On April 1, 1997, the Registrant began leasing an approximately
50,000- square foot facility in City of Industry, California. The City of
Industry facility serves as a distribution center for the Registrant.
Payments under the lease will total approximately $18,000 for each of the
first thirty-six months of the lease and will then increase to $19,669 per
month. Pursuant to its terms, the lease will expire on March 31, 2002,
unless the Registrant elects to exercise its option to renew the lease for
one additional five-year period. 

     On December 1, 1997, the Registrant began leasing an approximately
12,900 square foot distribution facility in Tambore, Brazil.  The Tambore,
facility serves as a distribution center for SED Magna Distribuidora Ltda.,
a wholly owned subsidiary of the Registrant.  Monthly payments for the
lease will total approximately $12,000.  The lease will expire on December
31, 1998, unless the Registrant elects to exercise its option to renew the
lease for an additional one-year period.

     On December 1, 1997, the Registrant began leasing an approximately
4,300 square foot administrative center and sales office in Sao Paulo,
Brazil.  The Sao Paulo, Brazil facility serves 
<PAGE>
as an administrative center and sales office for SED Magna Distribuidora
Ltda., a wholly owned subsidiary of the Registrant.  Monthly payments for
the lease totaled approximately $18,000 for the first month of the lease,
after which the rent decreased to approximately $11,000 for each of
the next three months of the lease, then decreased to approximately $7,000
for the following three months of the lease.  The remaining lease payments
will total approximately $12,000 for each of the remaining six months of
the lease.  Pursuant to its terms, the lease will expire on March 31, 1999
unless the Registrant elects to exercise its option to renew the lease for
an additional one-year period.

     On March 1, 1998, the Registrant began leasing an approximately
102,000 square foot distribution facility in Harrisburg, PA.  Payments for
the lease will total approximately $33,000 for each of the twenty-four
months during the period beginning April 1, 1998 and ending March
31, 2000, approximately $34,000 for each of the twelve months during the
period beginning April 1, 2000 and ending March 31, 2001, approximately
$36,000 for each of the twelve months during the period beginning April 1,
2001 and ending March 31, 2002, and approximately $35,000 for each of the
twelve months beginning April 1, 2002 and ending March 31, 2003.  The
average amount of payments for the lease for each of the sixty months
during the period beginning April 1, 1998 and ending March 31, 2003 will be
approximately $34,000.

     On December 1, 1997, the Registrant began leasing an approximately
18,000 square foot administrative center and sales office in Bogota,
Colombia.  The Bogota center serves as a sales office and distribution
facility for SED International de Colombia Ltda.  Monthly payments for
the lease totaled approximately $4,000 for the first month of the lease,
after which the rent increased to approximately $6,000 for each of the
remaining thirty-four months of the lease. Pursuant to its terms, the lease
will expire on November 30, 2000 unless the Registrant elects to
exercise its option to renew the lease for an additional three-year period.

     The Registrant is in the process of relocating its channel assembly
center from its previous location in Stone Mountain, Georgia to the same
premises as its distribution facility in Tucker, Georgia.  The Stone
Mountain lease is scheduled to terminate on September 30, 2000
and provides for lease payments of approximately $12,000 per month.  The
Registrant may terminate the lease upon completion of each year of the
lease by paying any unamortized brokers' fee with respect to the lease.

     The Registrant believes that suitable replacement facilities can be
obtained on comparable terms if lease extentions are not negotiated. The
Registrant anticipates that additional space will be required as business
expands and believes that it will be able to obtain suitable space as
needed.

Item 3.   LEGAL PROCEEDINGS

     The Registrant is involved in litigation relating to claims arising
out of its operations in the normal course of business. The Registrant is
not currently engaged in any legal proceedings that are expected,
individually or in the aggregate, to have a material adverse effect on the
Registrant.
<PAGE>

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     
     Not applicable.

Item 4(A). EXECUTIVE OFFICERS OF THE COMPANY
     
     The executive officers of the Registrant, their ages and their present
positions are as follows:
 
Name                Age   Position

Gerald Diamond      60   Chairman of the Board, Chief Executive Officer and
                         Director of the Registrant and SED International

Ray D. Risner       53   President, Chief Operating Officer and Director of
                         the Registrant and SED International 

Larry G. Ayers      52   Vice President-Finance, Chief Financial Officer,
                         Secretary and Treasurer of the Registrant and SED
                         International

Mark Diamond        33   Executive Vice President and Director of the
                         Registrant and SED International

Jean Diamond        57   Vice President of SED International

Harvey R. Linder    49   Vice President, General Counsel and Assistant
                         Secretary of the Registrant and SED International

Brian D. Paterson   29   Senior Vice President-Purchasing and Marketing of
                         the Registrant and SED International

     Gerald Diamond.  Mr. Diamond has been a director of the Registrant
since 1980 and currently serves as Chairman of the Board and Chief
Executive Officer of the Registrant and SED International. He was elected
President and Chairman of the Board of the Registrant and SED International
in June 1986 and has served in two or more capacities as Chairman of the
Board, Chief Executive Officer and President of the Registrant and SED
International from that time up until May 1995. Mr. Diamond founded the
predecessor to the Registrant and served as its President and Treasurer
from July 1980 through July 1986. Mr. Diamond has been in the
electronics-related business for over 35 years. Mr. Diamond is the husband
of Jean Diamond and the father of Mark Diamond.

     Ray D. Risner.  Mr. Risner has been a director of the Registrant since
November 1994 and has served as President and Chief Operating Officer of
the Registrant since May 1995. Mr. Risner served as Executive Vice
President-Administration from February 1995 to May 1995. He has served as
President and Chief Operating Officer of SED International since May 1995.
Mr. Risner served as Vice Chairman of RJM Group, Inc., a private investment
advisory firm, from 1989 to 1994. From 1987 to 1989, he served as Vice
President, Financial Administration of RJR
<PAGE>
Nabisco, Inc. Mr. Risner is also a trustee and Vice Chairman of The
National Faculty and a member of the Board of American Red Cross Chapter,
Atlanta, Georgia.
 
     Larry G. Ayers. Mr. Ayers was elected Vice President-Finance,
Secretary and Treasurer of the Registrant in August 1986 and Chief
Financial Officer in November 1989. He was elected Vice President-Finance
and Treasurer of SED International in June 1986, Secretary in August
1986 and Chief Financial Officer in November 1989. Mr. Ayers served as Vice
President-Finance of the predecessor to the Registrant from May 1986
through July 1986, and as an independent financial consultant from
September 1985 through May 1986. Mr. Ayers served as the Treasurer of Aaron
Rents, Inc., a furniture rental and sales company, from 1982 through
September 1985 and as an accountant with Touche Ross & Co., a national
accounting firm, from 1970 through 1982.
 
     Mark Diamond.  Mr. Diamond has been a director of the Registrant since
September 1996. He has been employed by the Registrant in various
capacities since January 1987. In June 1995, Mr. Diamond was elected
Executive Vice President of the Registrant and in August 1995 was elected
Executive Vice President of SED International.  Mark Diamond is the son of
Gerald Diamond and Jean Diamond.

     Jean Diamond.  Ms. Diamond was elected Vice President of SED
International in August 1994.  From 1986 to August 1994, she served as
Manager of Credit of SED International. Jean Diamond is the wife of Gerald
Diamond and the mother of Mark Diamond.

     Harvey R. Linder.  Mr. Linder was elected Vice President, General
Counsel and Assistant Secretary of the Registrant and SED International
effective December 1, 1997.  Mr. Linder served as Vice President, General
Counsel and Secretary of Orion Management Services, Inc. from November 1996
to July 1997.  Mr. Linder served as Vice President, General Counsel
and Secretary of Laroche Industries Inc. from 1986 through 1996.  From 1975
through 1986 Mr. Linder held various positions with U.S. Steel, including
Superintendent of Employee Relations of USS Clairton Works and Director of
Employee Relations for the U.S. Steel Agri-Chemicals Division.

     Brian D. Paterson.  Mr. Paterson has served as Senior Vice President -
Purchasing/Marketing of the Registrant and SED International since August
1997.  Mr. Paterson has been employed by SED International since July 1992
and served in various capacities, most recently as Vice President -
Purchasing, from October 1995 to August 1997.  Mr. Paterson is the
son-in-law of Gerald Diamond and Jean Diamond.
<PAGE>
                                
                                PART II

Item 5.   MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS

     Information regarding the range of high and low sales prices for the
common stock of the Registrant for each full quarterly period for fiscal
1998 and 1997 as reported by the Nasdaq National Market ("Nasdaq") and the
number of holders of common stock of the Registrant (including individual
participants in securities position listings) is incorporated by reference
to "Price Range of Common Stock" on the inside back cover of the
Registrant's 1998 Annual Report to Stockholders.

     The Registrant has never declared or paid cash dividends on its Common
Stock. The Registrant currently intends to retain earnings to finance the
growth and development of its business and does not anticipate paying cash
dividends in the foreseeable future. Future policy with respect to payment
of dividends on the Common Stock will be determined by the Board of
Directors based upon conditions then existing, including the Registrant's
earnings and financial condition, capital requirements and other relevant
factors. SED International, the earnings of which would be the primary
source of any dividend payments, and the Registrant are parties to a
revolving credit agreement which contains certain financial covenants that
may impact the Registrant's ability to pay dividends should it choose to do
so. See "Item 7. Management's Analysis of Financial Condition and Results
of Operations-Liquidity and Capital Resources."

Item 6.   SELECTED FINANCIAL DATA

     Selected financial information about the Registrant is incorporated
herein by reference to "Selected Income Statement Data" and "Selected
Balance Sheet Data" on page 1 of the Registrant's 1998 Annual Report to
Stockholders.

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

     Information and a discussion regarding the Registrant's financial
condition and results of operations are incorporated herein by reference to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 10 through 14 of the Registrant's 1998 Annual Report
to Stockholders.

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The consolidated financial statements of the Registrant, notes
thereto, and independent auditors' report thereon are incorporated herein
by reference to pages 15 through 24 of the Registrant's 1998 Annual Report
to Stockholders.
<PAGE>
Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE

     None.
<PAGE>
                            PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

     Information regarding the Registrant's directors is incorporated
herein by reference to the section of the Registrant's Proxy Statement for
the Annual Meeting of Stockholders scheduled for November 10, 1998 (the
"Proxy Statement") entitled "Proposal 1 - Election of Directors."

     Information regarding the Registrant's executive officers is
incorporated herein by reference to Item 4(A) of Part I of this Form 10-K.

Item 11.  EXECUTIVE COMPENSATION

     Information regarding the Registrant's compensation of its executive
officers and directors is incorporated herein by reference to the sections
of the Proxy Statement entitled "Proposal 1 -Election of Directors" and
"Executive Compensation."

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

     Information regarding the security ownership of certain beneficial
owners and management of the Registrant is incorporated by reference to the
section of the Proxy Statement entitled "Ownership of Shares".

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information regarding certain relationships and related transactions
is incorporated herein by reference to the section of the Proxy Statement
entitled "Compensation Committee Interlocks and Insider Participation."
<PAGE>
                            PART IV

Item 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
          ON FORM 8-K

     (a)  The following documents are filed as part of this Report:

          1.   Financial Statements. The following financial statements and
               the report of the Registrant's independent auditors thereon,
               are filed herewith.

               - Independent Auditors' Report
 
               - Consolidated Balance Sheets at June 30, 1997 and 1998
 
               - Consolidated Statements of Earnings for the years ended
                 June 30, 1996, 1997 and 1998
                                  
               - Consolidated Statements of Stockholders' Equity for the
                 years ended June 30, 1996, 1997 and 1998

               - Consolidated Statements of Cash Flows for the years ended
                 June 30, 1996, 1997 and 1998
 
               - Notes to Consolidated Financial Statements
 
          2.   Financial Statement Schedules.
               - Schedules:

                         Schedule                Description
                            II         Valuation and Qualifying Accounts

               Schedules other than the Schedule presented are omitted
               because the information required is not applicable or the
               required information is shown in the consolidated financial
               statements or notes thereto.

          3.   Exhibits Incorporated by Reference or Filed with this
               Report.

Exhibit                                
Number           Description

3.1       Restated Certificate of Incorporation of SED International
          Holdings, Inc. (the "Registrant").+
3.2       Amended and Restated By-Laws of the Registrant.(1)
<PAGE>
4.1       See Exhibits 3.1 and 3.2 for provisions of the Certificate of
          Incorporation, as amended, and Amended and Restated By-Laws of
          the Registrant defining rights of holders of Common Stock of the
          Registrant.
4.2       Form of Rights Agreement, dated as of October 31, 1996 between
          the Registrant and National City Bank (2)
10.1      Form of Lease Agreement dated as of January 1, 1991 between Royal
          Park Registrant and SED International, Inc. (Formerly Southern
          Electronics Distributors, Inc.) ("SED International")(3)
10.2      Lease Agreement dated May 16, 1990 between The Equitable Life
          Assurance Society of the United States and SED International(4),
          as amended March 20,1992.(5)
10.3      Lease Agreement dated September 16, 1989 between Industrial
          Distribution Group, Inc.  and SED International(6), as amended
          August 19, 1991.(7)
10.4      Lease Agreement dated January 15, 1992 between SED International
          and RW Building One Associates.(8)
10.5      Southern Electronics Corporation 1986 Stock Option Plan dated
          September 3, 1986, together with related forms of Incentive Stock
          Option Agreement and NonQualified Stock Option Agreement.(9)/*/
10.6      Form of First Amendment dated September 14, 1989 to Southern
          Electronics Corporation 1986 Stock Option Plan.(10)/*/
10.7      Second Amendment dated November 7, 1989 to Southern Electronics
          Corporation 1996 Stock Option Plan.(11)/*/
10.8      Third Amendment dated July 17, 1992 to Southern Electronics
          Corporation 1986 Stock Option Plan.(12)/*/
10.9      Southern Electronics Corporation 1988 Restricted Stock Plan,
          together with related form of Restricted Stock Agreement.(13)/*/
10.10     First Amendment dated November 7, 1989 to Southern Electronics
          Corporation 1988 Restricted Stock Plan.(14)/*/
10.11     Second Amendment dated July 17, 1992 to Southern Electronics
          Corporation 1988 Restricted Stock Plan.(15)/*/
10.12     Form of Southern Electronics Corporation 1991 Stock Option Plan,
          together with related forms of Incentive Stock Option Agreement
          and NonQualified Stock Option Agreement.  (16) /*/
10.13     First Amendment dated July 17, 1992 to Southern Electronics
          Corporation 1991 Stock Option Plan.(17)/*/
10.14     Second Amendment dated August 30, 1996 to Southern Electronics
          Corporation 1991 Stock Option Plan.(18)
10.17     Form of NonQualified Stock Option Agreement dated as of August
          28, 1992 between the Registrant and Cary Rosenthal.(19)/*/
10.18     Form of NonQualified Stock Option Agreement dated as of August
          28, 1992 between the Registrant and G. William Speer.(20)/*/
<PAGE>
10.19     Employment Agreements dated November 7, 1989, between the
          Registrant, SED International and each of Gerald Diamond and Jean
          Diamond (21)/*/, each as amended by form of Amendment No. 1 dated
          September 24, 1991.(22)/*/
10.20     SED International, Inc. Savings Plan effective as of January 1,
          1991, together with Savings Plan Trust and Savings Plan Adoption
          Agreement.(23)/*/
10.21     Form of Indemnification Agreement entered into with each of the
          directors and officers of the Registrant and SED
          International.(24)/*/
10.22     Form of Indemnification Agreement entered into with each of the
          directors and officers of the Registrant and the Registrant.(25)
10.23     Lease Agreement dated November 1992 between H.G. Pattillo and
          Elizabeth M. Pattillo and SED International.(26)
10.24     Lease Agreement dated August 9, 1993 between New World Partners
          Joint Venture and SED International and Addendum I thereto
          ("NWPJV Lease"). (27)
10.25     Second Addendum to NWPJV Lease dated January 10, 1996 among New
          World Partners Joint Venture, New World Partners Joint Venture
          Number Two and SED International. (28)
10.26     Third Addendum to NWPJV Lease dated July 24, 1996 between New
          World Partners Joint Venture Number Two and SED International.
          (29)
10.27     Amendment to Lease for 4775 N. Royal Atlanta Drive.(30)
10.28     Form of NonQualified Stock Option Agreement dated as of May 21,
          1993 between the Registrant and Cary Rosenthal (see Exhibit
          10.17)./*/
10.29     Form of NonQualified Stock Option Agreement dated as of May 21,
          1993 between the Registrant and G. William Speer (see Exhibit
          10.18)./*/
10.30     Form of NonQualified Stock Option Agreement, dated as of
          September 13, 1994 between the Registrant and Cary Rosenthal (see
          Exhibit 10.18)./*/
10.31     Form of NonQualified Stock Option Agreement dated as of September
          13, 1994 between the Registrant and G. William Speer (see Exhibit
          10.18)./*/
10.32     Form of NonQualified Stock Option Agreement for Directors.(31)
10.34     1995 Formula Stock Option Plan, together with related form of
          NonQualified Stock Option Agreement.(32)
10.35     Agreement and Plan of Reorganization dated December 14, 1995,
          among USC Acquisition Corporation, U.S. Computer of North
          America, Inc. and David Steiner.(33)
10.36     Adoption Agreement for Swerdlin & Registrant Regional Prototype
          Standardized 401(k) Profit Sharing Plan and Trust, as amended.
          (34)
10.37     Third Amendment dated September 12, 1996 to the Southern
          Electronics Corporation Stock Option Plan (35)
10.38     Industrial Real Estate Lease (Multi-Tenant Facility) dated as of
          March 6, 1997, between Majestic Realty Co. and Patrician
          Associates, Inc., as landlord (the "Landlord"), and SED
          International, as Tenant, together with Option to Extend Term
          dated as of March 26, 1997, between the Landlord and SED
          International, as Tenant.  (36)
<PAGE>
10.39     Asset Purchase Agreement dated as of June 27, 1997, between SED
          International and Globelle, Inc.  (37)
10.40     Lease Agreement made August 11, 1997, between Gwinnett
          Industries, Inc. and SED International. (38)
10.41     Amended and Restated Credit Agreement dated as of August 13, 1997
          among the Registrant and SED International, as Borrowers,
          Wachovia Bank, N.A. and National City Bank of Columbus, as Banks,
          and Wachovia Bank, N.A., as Agent. (39)
10.42     First Amendment to Amended and Restated Credit Agreement dated as
          of September 22, 1997 among the Registrant and SED International,
          as Borrowers, Wachovia Bank, N.A. and National City Bank of
          Columbus, as Banks, and Wachovia Bank, N.A., as Agent. +
10.43     Second Amendment to Amended and Restated Credit Agreement dated
          as of October 15, 1997 among the Registrant and SED
          International, as Borrowers, Wachovia Bank, N.A. and National
          City Bank of Columbus, as Banks, and Wachovia Bank, N.A., as
          Agent. (40)
10.44     Third Amendment to Amended and Restated Credit Agreement dated as
          of January 8, 1998 among the Registrant and SED International, as
          Borrowers, Wachovia Bank, N.A. and National City Bank of
          Columbus, as Banks, and Wachovia Bank, N.A., as Agent. (41)
10.45     Lease Agreement made February 3, 1998, between First Industrial
          Harrisburg, L.P. and SED International. +
10.46     Fourth Amendment to Amended and Restated Credit Agreement dated
          as of June 30, 1998 among the Registrant and SED International,
          as Borrowers, Wachovia Bank, N.A. and National City Bank of
          Columbus, as Banks, and Wachovia Bank, N.A., as Agent. +
10.47     Fifth Amendment to Amended and Restated Credit Agreement dated as
          of June 30, 1998 among the Registrant and SED International, as
          Borrowers, Wachovia Bank, N.A. and National City Bank of
          Columbus, as Banks, and Wachovia Bank, N.A., as Agent. +
10.48     Second Amendment to Employment Agreement effective July 1, 1998
          between SED International and Gerald Diamond. +
10.49     Second Amendment to Employment Agreement effective July 1, 1998
          between SED International and Jean Diamond. +
11        Statement regarding computation of per share earnings. +
13        Form of SED International Holdings, Inc. 1998 Annual Report to
          Stockholders (only the portions incorporated by reference into
          this report are deemed "filed" with the Securities and Exchange
          Commission). +
21        Subsidiaries of the Registrant. +
23        Independent Auditors' Consent. +
24        Power of Attorney.  See signature page to this Registration
          Statement.
27        Financial Data Schedule. +
-------------------- 
+  Filed herewith.
/*/Management contract or compensatory plan or arrangement with one or more
directors or executive officers.
<PAGE>
(1)  Incorporated herein by reference to exhibit of same number to
     Registrant's Registration Statement ("Registration Statement") on Form
     S1, filed September 5, 1986 (Reg. No. 338494).
(2)  Incorporated herein by reference to Exhibit 7 to the Registrant's
     Current Report on Form 8-K dated October 30, 1996.
(3)  Incorporated herein by reference to exhibit of same number to
     Registrant's Annual Report on Form 10K for the fiscal year ended June
     30, 1991 (SEC File No. 016345) ("1991 Form 10K").
(4)  Incorporated herein by reference to Exhibit 10.8 to Registrant's
     Annual Report on Form 10K for the fiscal year ended June 30, 1990 (SEC
     File No. 016345) ("1990 Form 10K").
(5)  Incorporated herein by reference to Exhibit 10.5 to Registrant's
     Annual Report on Form 10K for the fiscal year ended June 30, 1992 (SEC
     File No. 016345) ("1992 Form 10K").
(6)  Incorporated herein by reference to Exhibit 10.9 to Registrant's 1990
     Form 10K.
(7)  Incorporated herein by reference to Exhibit 10.6 to Registrant's
     Registration Statement. 
(8)  Incorporated herein by reference to Exhibit 10.7 to Registrant's 1992
     Form 10K.
(9)  Incorporated herein by reference to Exhibit 10.12 to Registrant's
     Registration Statement.
(10) Incorporated herein by reference to Exhibit 10.22 to Registrant's
     Annual Report on Form 10K for the fiscal year ended June 30, 1988 (SEC
     File No. 016345).
(11) Incorporated herein by reference to Exhibit 10.25 to Registrant's 1990
     Form 10K.
(12) Incorporated herein by reference to Exhibit 10.12 to Registrant's 1992
     Form 10K.
(13) Incorporated herein by reference to Exhibit 10.21 to Registrant's
     Annual Report on Form 10K for the fiscal year ended June 30, 1988 (SEC
     File No. 016345).
(14) Incorporated herein by reference to Exhibit 10.26 to Registrant's 1990
     Form 10K.
(15) Incorporated herein by reference to Exhibit 10.15 to Registrant's 1992
     Form 10K.
(16) Incorporated herein by reference to Annex A to Registrant's definitive
     Supplemental Proxy Statement dated October 18, 1991 (SEC File No.
     016345).
(17) Incorporated herein by reference to Exhibit 10.17 to Registrant's 1992
     Form 10K.
(18) Incorporated herein by reference to Appendix A to Registrant's Proxy
     Statement pertaining to Registrant's 1995 Annual Meeting of
     Stockholders dated October 1, 1995 (SEC File No. 016345).
(19) Incorporated herein by reference to Exhibit 10.18 to Registrant's 1992
     Form 10K.
(20) Incorporated herein by reference to Exhibit 10.19 to Registrant's 1992
     Form 10K.
(21) Incorporated herein by reference to Exhibit 6(a) to Registrant's
     Quarterly Report on Form 10Q for the quarterly period ended December
     31, 1989 (SEC File No. 016345).
(22) Incorporated herein by reference to Exhibit 10.13 to Registrant's 1991
     Form 10K.
(23) Incorporated herein by reference to Exhibit 10.15 to Registrant's 1991
     Form 10K.
(24) Incorporated herein by reference to Exhibit 10.16 to Registrant's 1991
     Form 10K.
(25) Incorporated herein by reference to Registrant's Annual Report on Form
     10-K for the fiscal year ended June 30, 1995 (SEC File No. 016345)
     ("1995 Form 10K").
(26) Incorporated herein by reference to Exhibit 10.24 to Registrant's
     Annual Report on Form 10K for the fiscal year ended June 30, 1993 (SEC
     File No. 016345) ("1993 Form 10K").
(27) Incorporated herein by reference to Exhibit 10.25 to Registrant's 1993
     Form 10K.
<PAGE>
(28) Incorporated herein by reference to Exhibit 10.32 to Registrant's
     Annual Report on Form l0K for the fiscal year ended June 30, 1996 (SEC
     File No. 016345) ("1996 Form 10K").
(29) Incorporated herein by reference to Exhibit 10.33 to Registrant's 1996
     Form 10K.
(30) Incorporated herein by reference to Exhibit 10.26 to Registrant's 1995
     Form 10K.
(31) Incorporated herein by reference to Exhibit 10.29 to Registrant's 1995
     Form 10K.
(32) Incorporated herein by reference to Appendix B to Registrant's Proxy
     Statement pertaining to Registrant's 1995 Annual Meeting of
     Stockholders dated October 1, 1995 (SEC File No. 016345).
(33) Incorporated herein by reference to Exhibit 2 to Registrant's Current
     Report on Form 8K filed with the SEC on December 28, 1995 (SEC File
     No. 016345).
(34) Incorporated herein by reference to Exhibit 10.41 to Registrant's 1996
     Form 10K.
(35) Incorporated herein by reference to Appendix A to Registrant's Proxy
     Statement pertaining to Registrant's 1996 Annual Meeting of
     Stockholders dated October 1, 1996 (SEC File No. 016345).
(36) Incorporated herein by reference to Exhibit 10.2 to the Registrant's
     Quarterly Report on Form 10-Q for the quarterly period ended March 31,
     1997 (SEC File No. 016345).
(37) Incorporated herein by reference to the Registrant's Current Report on
     Form 8-K dated June 27, 1997.
(38) Incorporated herein by reference to Exhibit 10.40 to Registrant's
     Annual report on Form 10K for the fiscal year ended June 30, 1997 (SEC
     File No. 016345) ("1997 Form 10K").
(39) Incorporated herein by reference to Exhibit 10.41 to Registrant's 1997
     Form 10K. 
(40) Incorporated herein by reference to Exhibit 10.1 to the Registrant's
     Quarterly Report on Form 10-Q for the quarterly period ended December
     31, 1997 (SEC File No. 016345).
(41) Incorporated herein by reference to Exhibit 10.1 to the Registrant's
     Quarterly Report on Form 10-Q for the quarterly period ended March 31,
     1998 (SEC File No. 016345).

(b)  Reports on Form 8-K.

No reports on Form 8-K were filed by the Registrant during the quarter
ended June 30, 1998.
<PAGE>
SED INTERNATIONAL HOLDINGS, INC.
AND SUBSIDIARIES

<TABLE>
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
----------------------------------------------------------------------------------------------------------------------------
          A                                          B           C                   D              E                  F
                                                Balance at   Charged to                          Charged          Balance at
                                                 Beginning   Costs and                           to Other             End
       Description                               of Period    Expenses          Deductions1      Accounts2         of Period
-----------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>           <C>               <C>                <C>             <C>
Year ended June 30, 1996;
  allowance for doubtful accounts. . . . . . . $  845,000    $1,642,000        $(1,846,000)       $500,000        $1,141,000
Year ended June 30, 1997;
       allowance for doubtful accounts . . . .  1,141,000     1,391,000         (1,430,000)                        1,102,000
Year ended June 30, 1998;               
       allowance for doubtful accounts . . . .  1,102,000     5,911,000         (4,813,000)        162,000         2,362,000
</TABLE> 


1    Deductions represent actual write-offs of specific accounts receivable
     charged against the allowance account, net of amounts recovered.
2    Represents balances of acquired business.
<PAGE>
<PAGE>
SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                   SED INTERNATIONAL HOLDINGS, INC.
 
Date: September 28, 1998           By:   /s/ Larry G. Ayers   
                                   Larry G. Ayers
                                   Vice President - Finance, Chief
                                   Financial Officer, Secretary and
                                   Treasurer

                       POWER OF ATTORNEY
                                
     KNOW ALL MEN BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints Gerald Diamond, Ray D. Risner, and
Larry G. Ayers and any of them as his true and lawful attorneys-in-fact,
each acting alone, with full powers of substitution and resubstitution, for
him and in his name, place and stead, in any and all capacities, to sign
any and all amendments to the Annual Report on Form 10-K of Southern
Electronics Corporation, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission and other appropriate agencies, granting unto said
attorneys-in-fact, and any of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact, or any of them, or their substitutes, each acting alone,
may lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated this 28th day of September,
1998.


                                   /s/ Gerald Diamond                       
               
                                   Gerald Diamond
                                   Chairman of the Board, Chief Executive
                                   Officer and Director
                                   (principal executive officer)

<PAGE>



                                   /s/ Larry G. Ayers                       
                   
                                   Larry G. Ayers
                                   Vice President - Finance, Chief
                                   Financial Officer, Secretary and
                                   Treasurer
                                   (principal financial and accounting 
                                   officer)


                                   /s/ Stewart I. Aaron          
                                   Stewart I. Aaron
                                   Director


                                   /s/ Joel Cohen                
                                   Joel Cohen
                                   Director


                                   /s/ Mark Diamond               
                                   Mark Diamond
                                   Director
     

                                   /s/ Ray D. Risner             
                                   Ray D. Risner
                                   Director


                                   /s/ Cary Rosenthal                       
                                   Cary Rosenthal
                                   Director
<PAGE>