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


                             FORM 10-Q


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

For the quarterly period ended November 30, 1996

                 or

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

For the transition period from ___ to ___



               MEDICUS SYSTEMS CORPORATION
 ------------------------------------------------------
 (Exact name of registrant as specified in its charter)

           Delaware                        36-4056769
 ------------------------------        ------------------               
(State or other jurisdiction of         (I.R.S. Employer
 incorporation or organization)        Identification No.)

 One Rotary Center, Suite 1111
   Evanston, Illinois  60201            (847) 570-7500
 ------------------------------        ------------------
   (Address of principal                 (Registrant's 
     executive offices)                  telephone No.)                   

Commission File Number 0-27614



   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.

[X] Yes  [ ] No

   There were 6,477,173 shares of common stock outstanding 
as of January 10, 1997.

                  PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.
                                 
                    MEDICUS SYSTEMS CORPORATION
                          BALANCE SHEETS


                            November 30,     May 31,
ASSETS                         1996           1996
======                     ------------   -----------
Current assets              (Unaudited)
Cash and cash equivalents $    824,709   $    765,312
Short-term investments       5,406,862      7,705,380
Accounts receivable and             
  unbilled services,           
  net of allowance for
  doubtful accounts
  of $1,245,360 and
  $1,222,463                12,114,084      9,664,422
Due from Managed Care        
  Solutions, Inc.              132,047        647,408
Inventories                    219,436        235,398
Prepaid and deferred        
  income taxes               1,581,385      2,423,746
Prepaid expenses and other     991,903        709,394
                          ------------   ------------       
                            21,270,426     22,151,060
                          ------------   ------------
                                   
Property and equipment, net          
  of accumulated 
  depreciation of       
  $3,200,102 and
  $2,854,135                 1,851,923      1,950,581
Software, net of                     
  accumulated                        
  amortization of  
  $3,272,040             
  and $2,900,540             3,692,022      3,051,387
Installment accounts                 
  receivable due after 
  one year, net of             
  unearned interest
  of $122,323
  and $147,963                 371,253        398,897
Deferred income taxes          108,128        227,635
                          ------------   ------------
                          $ 27,293,752   $ 27,779,560
                          ============   ============
                                   

LIABILITIES AND STOCKHOLDERS' EQUITY
====================================
Current liabilities                
  Accounts payable        $  1,560,619   $    188,777
  Accrued compensation         176,476        828,857
  Accrued restructuring     
    charge                     881,180      1,527,461
  Other accrued 
    liabilities              1,103,228      1,719,829
  Deferred revenue           4,782,013      5,313,399
                          ------------   ------------         
                             8,503,516      9,578,323
                          ------------   ------------
                                   
Stockholders' equity               
  Common stock $.01 par:              
    Authorized - 10,000,000             
    shares
    Issued - 6,472,246 
    and 6,456,447 shares        64,722         64,564
  Capital in excess of 
    par value               21,973,370     21,880,994
  Treasury stock, at 
    cost - 7,002 shares        (62,418)       (62,418)
  Unrealized loss on 
    short-term                      
    investments                (25,686)       (18,361)
  Accumulated deficit       (3,159,752)    (3,663,542)
                          ------------   ------------         
                            18,790,236     18,201,237
                          ------------   ------------
                          $ 27,293,752   $ 27,779,560
                          ============   ============   
                          
         The accompanying notes are an integral 
               part of these statements.
<PAGE>
                                   
                    MEDICUS SYSTEMS CORPORATION
                       STATEMENTS OF INCOME
                            (Unaudited)


                             Three Months Ended
                           -----------------------
                           November 30, November 30,
                              1996         1995
                           -----------  -----------
Revenues                          
  Software products and   
    services              $ 2,246,083  $ 2,934,901  
  Maintenance and support  
    services                2,876,744    2,466,937
  Contract services         2,579,100    2,759,445
                          -----------  -----------
                            7,701,927    8,161,283
                                  
Costs and expenses                
  Software products and   
    services                  699,548      951,371   
  Maintenance and support     
    services                1,386,150    1,677,022
  Contract services         2,424,919    2,591,603
                          -----------  -----------
                            4,510,617    5,219,996
                                   
  Marketing, general and   
    administrative          2,232,201    2,427,313
  Research and development    775,640      396,552
                          -----------  -----------        
                            7,518,458    8,043,861
                          -----------  -----------
                                  
Operating income              183,469      117,422
                                  
  Interest and other                 
    income                    155,303      161,517
                          -----------  -----------    
Income before income taxes    338,772      278,939
                                  
  Income tax expense          127,198       90,849
                          -----------  -----------        
Net income                $   211,574  $   188,090
                          ===========  ===========
                                  
Earnings per share        $      0.03  $      0.03            
                          ===========  ===========
                             
Weighted average                  
  common and common
  equivalent shares 
  outstanding               6,496,990    6,438,275
                          ===========  ===========

         The accompanying notes are an integral 
               part of these statements.
<PAGE>
                    
                    MEDICUS SYSTEMS CORPORATION
                       STATEMENTS OF INCOME
                            (Unaudited)


                               Six Months Ended
                           -----------------------
                           November 30, November 30,
                              1996         1995
                           -----------  -----------
Revenues                          
  Software products and   
    services              $ 4,035,044  $ 6,061,468  
  Maintenance and support  
    services                5,257,787    4,823,937
  Contract services         5,102,692    5,757,087
                          -----------  -----------
                           14,395,523   16,642,492
                                  
Costs and expenses                
  Software products and   
    services                1,180,274    2,007,544   
  Maintenance and support     
    services                2,240,087    3,178,668
  Contract services         4,783,269    5,464,859
                          -----------  -----------
                            8,203,630   10,651,071
                                   
  Marketing, general and   
    administrative          4,263,893    4,560,928
  Research and development  1,380,940      921,736
                          -----------  -----------        
                           13,848,463   16,133,735
                          -----------  -----------
                                  
Operating income              547,060      508,757
                                  
  Interest and other                 
    income                    275,397      321,570
                          -----------  -----------    
Income before income taxes    822,457      830,327
                                  
  Income tax expense          318,667      302,210
                          -----------  -----------        
Net income                $   503,790  $   528,117
                          ===========  ===========
                                  
Earnings per share        $      0.08  $      0.08            
                          ===========  ===========
                             
Weighted average                  
  common and common
  equivalent shares 
  outstanding               6,485,121    6,442,763
                          ===========  ===========

         The accompanying notes are an integral 
               part of these statements.

<PAGE>
                                  
                    MEDICUS SYSTEMS CORPORATION
                     STATEMENTS OF CASH FLOWS
                            (Unaudited)


                                  Six Months Ended
                             -------------------------
                             November 30,  November 30,
                                 1996         1995
                             -----------   -----------
Cash flows from                   
operating activities
  Net income               $   503,790   $   528,117
  Adjustments to reconcile           
    to net cash from
    operating activities:
      Depreciation of 
       property and
       equipment               345,967       339,319  
      Amortization of 
       software                371,500       677,133
      Deferred income 
       taxes                   119,507        30,322
      Accrued restructuring       
       charge                 (646,281)          --
      Changes in certain 
       current assets
       and current liabilities:
        Accounts receivable 
         and unbilled 
         services           (2,436,604)   (5,051,590)
        Due from Managed 
         Care Solutions, Inc.  515,361      (814,816)
        Prepaid income taxes   842,361           --
        Accounts payable       755,241      (520,983)
        Accrued compensation  (652,381)     (257,685)
        Deferred revenue      (531,386)    3,493,697
      Other, net              (233,865)    1,248,300
                           -----------   -----------
                            (1,046,790)     (328,186)
                           -----------   -----------
            
Cash flows from investing activities
  Additions to property and   
   equipment                  (247,309)     (291,863) 
  Additions to software     (1,012,135)   (1,033,374)
  Proceeds from maturity of  
   short-term investments    3,594,793     3,733,377
  Proceeds from sale of     
   short-term investments   58,588,023    36,500,000
  Purchases of short-term            
   investments             (59,896,661)  (39,693,492)
                           -----------   -----------   
                             1,026,711      (785,352)
                           -----------   -----------       
                           
Cash flows from financing activities
  Sale of common stock          79,476           --
  Purchase of treasury stock       --       (532,500)
  Reissuance of treasury stock     --        541,423
  Dividends paid                   --       (383,579)
                           -----------   -----------      
                                79,476      (374,656)
                           -----------   -----------       
                           
Net increase (decrease)  
  in cash and cash
  equivalents                   59,397    (1,488,194) 
Cash and cash                     
  equivalents, beginning   
  of period                    765,312     2,556,016
Cash and cash              -----------   ----------- 
  equivalents, end         
  of period                $   824,709   $ 1,067,822
                           ===========   ===========

         The accompanying notes are an integral 
               part of these statements.

<PAGE>
                    MEDICUS SYSTEMS CORPORATION
                   NOTES TO FINANCIAL STATEMENTS
                            (Unaudited)


Note 1 - Basis of presentation

   Prior to March 1, 1996, the Company's
predecessor (the "Predecessor Corporation")
operated a software and related services
business and a small managed care business.
In connection with a series of transactions 
which occured March 1, 1996, the Predecessor
Corporation formed a new Delaware subsidiary,
Medicus Systems Software, Inc., to which it
transferred all of its assets and liabilities
excluding only the defined assets and
liabilities of its managed care business. In
turn, the stock of this newly-formed
subsidiary was distributed on a share-for-
share basis to the stockholders of the
Predecessor Corporation (the "Distribution"),
the name of the subsidiary was changed to
Medicus Systems Corporation ("the Company"),
and the name of the Predecessor Corporation
was changed to Managed Care Solutions, Inc.
("MCS").  The Company is liable for all
obligations of the Predecessor Corporation
except those specifically related to the
Predecessor Corporation's managed care
business.
   
   Although the Company is, in substance,
the Predecessor Corporation's successor, the
financial statements of the Company for the 
quarter and six months ended November 30, 
1995 have been prepared as if the Company 
had operated as a free-standing entity 
for all the periods presented (excluding 
certain incremental corporate expenses 
that would have been incurred had 
it operated on a stand-alone basis).  
Accordingly, the financial statements 
include those assets, liabilities,
revenues and expenses directly attributable
to the Company's operations and exclude those
specifically related to the managed care
business.  The Company believes this
presentation most fairly represents its
financial condition, results of operations
and changes in stockholders' equity and cash
flows. The financial statements included
herein for periods prior to the Distribution
do not necessarily reflect what the financial
position and results of operations of the
Company would have been had it operated as a
stand-alone entity during the periods
covered, and may not be indicative of future
operations or financial position.
   
   The Company and MCS signed a services
agreement, pursuant to which the Company (i)
will make available to MCS certain services,
including tax, accounting, data processing,
cash management, employee benefits,
monitoring, operational, supervisory,
insurance purchasing and claims
administration consulting services, and (ii)
provide certain financial services to MCS,
including analysis and advice regarding
potential financial transactions (including
but not limited to proposed issuances of debt
or equity securities, proposed merger or
asset acquisition or sale transactions and
dividend, stock split or similar
transactions), assistance in budget and
forecast preparation, relations with
financial analysts, financial press, and
investors, and crisis management and control.
Such services commenced on March 1, 1996, and
shall continue for one year.  MCS will pay
the Company $700,000 for such services.  In
order to compensate the Company for fixed
costs incurred in making such services
available, MCS will be obligated to pay such
fees whether or not it elects to utilize the
services.  MCS will also reimburse the
Company for its out-of-pocket expenses in
connection therewith.  The services agreement
also provides that the Company will not be
liable for any losses or damages suffered in
respect of services to be performed
thereunder, other than by reason of its
willful misconduct or gross negligence in
performing such services.  Marketing, general
and administrative expenses were reduced by
$175,000 in the quarter and $350,000 in the six
months ended November 30, 1996 as a result of 
this agreement.

   In management's opinion, the financial
statements of the Company reflect all
adjustments (consisting only of normal
recurring adjustments) considered necessary
for a fair presentation of the operating results 
for the quarter and six months ended November 30, 
1996. Certain reclassifications have been made in
the prior period financial statements to
conform to the current period presentation.
These reclassifications had no effect on
previously reported total assets, total
liabilities, equity or results of operations.

   Operating results for the interim periods
are not necessarily indicative of the results
to be expected for the full year. The
financial information included herein should
be read in conjunction with the financial
statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for
the year ended May 31, 1996.
<PAGE>                                 
                    MEDICUS SYSTEMS CORPORATION
             NOTES TO FINANCIAL STATEMENTS, Continued
                            (Unaudited)


Note 2 - Earnings per share

   Earnings per common share have been
computed by dividing net income by the
weighted average of common stock and common
stock equivalents outstanding during the
period.  Common stock equivalents include
shares issuable on the exercise of stock
options and the warrant (when dilutive),
using the treasury method from the date of
grant.

Note 3 - Dividends

   The Predecessor Company declared
quarterly dividends of $0.03 in the first
two quarters of fiscal year 1996.  The Board of 
Directors of the Company has determined not to
pay dividends on the Common Stock in the
foreseeable future.

Note 4 - Accrued restructuring charge

   During fiscal 1996, the Company recorded
a charge as a result of efforts to
restructure its businesses to focus on its
core products and services.  The components
of the remaining restructuring reserve are as
follows:
   
                               November 30,      May 31,
                                   1996           1996
                               -----------     -----------
     Product line exit costs   $   210,375     $   410,375
     Severance (1 officer and  
       3 employees)                670,805       1,117,086
                               -----------     -----------
                               $   881,180     $ 1,527,461
                               ===========     ===========
   
   During the quarter ending November 30,
1996, the Company reduced its reserve for 
future severance obligations by
$124,716, due to favorable settlements with  
two of its employees, and paid $134,767 in
severance benefits.  During the six months ended
November 30, 1996, the Company reduced its reserve
for continuing operations on product line exit costs
by $200,000, as a result of negotiations with its
customers, paid $321,565 in severance benefits, and 
reduced its reserve for future severance obligations
by $124,716.

Note 5 - Subsequent Event

   On January 3, 1997, the Company announced that its 
Board of Directors approved the repurchase of 1,000,000 
shares of Common Stock and 500 shares of Voting Preferred
Stock from its founder, Richard C. Jelinek.  The Company
will pay Mr. Jelinek $4,500,000 in cash and $2,000,000
in 8% two-year promissory notes, and will issue to Mr.
Jelinek 400,000 warrants to purchase Common Stock at
$8.00 per share.  The repurchase is subject to approval
of the Company's stockholders at the Annual Meeting of
Stockholders in March, 1997.  

<PAGE>
Item 2.  Managment's Discussion and Analysis of
         Financial Condition and Results of Operations

            MEDICUS SYSTEMS CORPORATION
               RESULTS OF OPERATIONS

   The Company's quarterly operating results
historically have varied depending upon such
factors as the timing of significant sales
and the timing of new product introductions.
Consequently, the results for any one quarter
may not be indicative of future operating
results.

   The following table sets forth for the
periods indicated (i) the percent of revenues
represented by certain line items in the
Company's Statements of Income and (ii) the
percentage change in each line item from the
prior year period.

                        Percent of Revenues   
                        -------------------   
                        Three Months Ended    Percentage 
                        -------------------    Increase
                        Nov. 30,   Nov. 30,   (Decrease)
                         1996       1995     1995 to 1996
                         ----       ----     ------------              
Revenues                             
  Software products and  
   services                29%        36%         (23%)
  Maintenance and support
   services                37         30           17
  Contract services        34         34           (7)
                         ----       ----
                          100        100           (6)
                         ----       ----      
Costs and expenses                   
  Software products and  
   services (1)            31         32          (26)   
  Maintenance and support 
   services (1)            48         68          (17)      
  Contract services (1)    94         94           (6)
                         ----       ----
                           59         64          (14)

  Marketing, general and                
   administrative          29         30           (8)
  Research and          
   development             10          5           96      
                         ----       ----
                           98         99           (7)
                         ----       ----             

Operating income            2          1           56
  Interest and other      
   income                   2          2           (4)  
                         ----       ----      

Income before income taxes  4          3           21
  Income taxes              1          1           40
                         ----       ----      
Net income                  3%         2%          12
                         ====       ====
_____________
(1)   Shown as a percent of related revenues.


   The Company's revenues are derived from
three sources: (1) license fees and the
related services for licensing the Company's
proprietary software products; (2)
maintenance and support services related to
such software products; and (3) contract
services.


                        Percent of Revenues   
                        -------------------   
                          Six Months Ended    Percentage 
                        -------------------    Increase
                        Nov. 30,   Nov. 30,   (Decrease)
                         1996       1995     1995 to 1996
                         ----       ----     ------------              
Revenues                             
  Software products and  
   services                28%        36%         (33%)
  Maintenance and support
   services                37         29            9
  Contract services        35         35          (11)
                         ----       ----
                          100        100          (14)
                         ----       ----      
Costs and expenses                   
  Software products and  
   services (1)            29         33          (41)   
  Maintenance and support 
   services (1)            43         66          (30)      
  Contract services (1)    94         95          (12)
                         ----       ----
                           57         64          (23)

  Marketing, general and                
   administrative          30         27           (7)
  Research and          
   development              9          6           50      
                         ----       ----
                           96         97          (14)
                         ----       ----             

Operating income            4          3            8
  Interest and other      
   income                   2          2          (14)  
                         ----       ----      

Income before income taxes  6          5           (1)
  Income taxes              2          2            5
                         ----       ----      
Net income                  4%         3%          (5)
                         ====       ====
_____________
(1)   Shown as a percent of related revenues.


   The Company's revenues are derived from
three sources: (1) license fees and the
related services for licensing the Company's
proprietary software products; (2)
maintenance and support services related to
such software products; and (3) contract
services.

<PAGE>
                    MEDICUS SYSTEMS CORPORATION
                  RESULTS OF OPERATIONS, Continued


Software products and services

   Revenues decreased 23% to $2.2 million 
for the quarter and 33% to $4.0 million
for the six months, primarily due to the 
continued weakness in the Company's 
primary markets and product lines.  
Also contributing to the decline were
delays in the release of certain Windows-
based products and continued competition in
many markets.  Costs and expenses for the
quarter and six months decreased 26% and
41%, respectively, compared to the corresponding 
prior year periods, and as a percentage of related
revenues, decreased to 31% from 32% for the quarter 
and to 29% from 33% for the six months.  The
decrease resulted primarily from lower
personnel and service-related expenses
associated with product lines discontinued
during the latter part of fiscal 1996 and
lower labor costs resulting from a reduction
in service-related personnel for continuing
product lines.  Additionally, costs and
expenses for the quarter include the effect 
of the Company's decision to reduce its 
reserve for future severance obligations by
$25,000, due to a favorable settlement with
one of its employees, and for the six months,
include the effect of the Company's decision 
to reduce its reserve for continuing obligations
on product line exit costs by $200,000, 
as a result of favorable negotiations with
its customers.

Maintenance and support services

   Revenues increased 17% to $2.9 for the quarter 
and 9% to $5.3 million for the six months,
primarily due to the larger base of licensed
products and modest price increases,
partially offset by the loss of maintenance
revenue from product lines which were
discontinued during the latter part of fiscal
1996.  Costs and expenses for the quarter and
six months decreased 17% and 30%, respectively,
compared to the corresponding prior year
periods, and as a percentage of related
revenues, decreased to 48% from 68% for the quarter,
and to 43% from 66% for the six months.
The decrease resluted primarily from lower 
labor and operating costs associated 
with product lines that were discontinued 
in the third and fourth quarters of 
fiscal 1996.  Also, the decrease reflected
lower labor costs resulting from personnel
shifts to development activities from
maintenance and support services.

Contract services

   Revenues decreased 7% to $2.6 million for
the quarter and 11% to $5.1 million for the six 
months, primarily due to lower revenues 
from the contract to manage the information systems
functions at Bethesda, Inc. in Cincinnati,
Ohio.  Additionally, the prior year period
includes revenues from the Drake Center
contract, which expired in February, 1996.
Costs and expenses for the quarter and six months 
decreased 6% and 12%, respectively, compared 
to the corresponding prior year periods, and as a
percentage of related revenues, remained consistent
at 94% for the quarter and decreased to 94% from 95% 
for the six months, primarily reflecting the 
decreased expenses associated with the
Bethesda, Inc. contract and the elimination
of expenses associated with the Drake Center
contract.

Marketing, general and administrative

   Expenses decreased 8% to $2.2 million for the 
quarter and 7% to $4.3 million for the six months.
Costs and expenses in for the quarter and six 
months ended November 30, 1996 include the effect of
$175,000 and $350,000, respectively, in administrative 
fees the Company received as a result of the services
agreement with MCS.  Additionally, cost and expenses
for the quarter include the effect of the Company's
decision to reduce its reserve for future severance
obligations by $100,000, due to favorable settlements
with two of its employees.
<PAGE>

                    MEDICUS SYSTEMS CORPORATION
                  RESULTS OF OPERATIONS, Continued


Research and development

   Actual research and development expenses
increased 22% to $1.2 million for the quarter
and 8% to $2.3 million for the six months.
Research and development costs presented in
the accompanying financial statements for the
quarter and six months were $776,000 and $1,381,000,
respectively, compared to $397,000 and $922,000 in 
the corresponding prior year periods.  The Company
did not obtain funding from clients under
development service agreements during the
quarter and six months ended November 30, 1996, 
compared to $139,000 and $311,000 obtained 
in the corresponding prior year periods, 
for its research and development
efforts.  These development service
agreements provide for retention of ownership of
the products developed by the Company and for 
payment of royalties of up to 5% of future 
license fees to the clients.  The Company also
capitalized software development costs of
$476,000 and $947,000 during the quarter and
six months, respectively, compared to $487,000 and
$928,000 in the corresponding prior year periods, 
reflecting increased investment in the development of
new products and significantly enhanced
functionality of current products.  Actual
research and development expenditures were
56% and 58% of software products and services
revenues for the quarter and six months,
respectively, compared to 35% and 36% in 
the corresponding prior year periods.

During the first six months of fiscal 1997, the
Company's development efforts were focused on
the Resource Case Management System, and the
Clinical Data Systems and the Decision 
Support Systems product lines.  During 
the first six months of fiscal 1996,
the Company was engaged in several
development projects, including the Resource
Case Management System, Medicus
Architecture (MACH 1) and the Decision Support
Systems product lines.

Interest and other income

   Interest and other income decreased 4%
to $155,000 for the quarter and 14% to $275,000
for the six months, primarily due to lower average
cash balances.

Income taxes

   The Company's effective tax rate was
37.5% for the quarter and 38.7% for the
six months, compared to 32.6% and 36.4% for 
the corresponding prior periods.  The Company 
plans to utilize net tax operating losses carried 
forward from the prior year to offset taxable 
income in the current year to the fullest extent 
possible.


FINANCIAL CONDITION

   Working capital generated by operations
increased $194,000 during the first six months 
of fiscal 1997.  The Company currently has no 
long-term debt, and, as of November 30, 1996, 
the Company held approximately $825,000 in cash 
and cash equivalents and $5.4 million in short-term
investments.

   During the quarter, the Company billed its clients
in advance for the year's maintenance and support 
services provided on its software products.  This 
resulted in an increase in the accounts receivable 
balance during the period and will cause an increase
in cash balances in subsequent months as the related 
accounts receivable are collected.

   The Company announced that its Board of Directors
approved the repurchase of 1,000,000 shares of
Common Stock and 500 shares of Voting Preferred
Stock from its founder, Richard C. Jelinek.  The Company
will pay Mr. Jelinek $4,500,000 in cash and $2,000,000
in 8% two-year promissory notes, and will issue to 
Mr. Jelinek 400,000 warrants to purchase Common Stock
at $8.00 per share.  The repurchase is subject to
approval of the Company's stockholders at the
Annual Meeting of Stockholders in March, 1997.

   As a result of the management's commitment to expand 
its products and services, the Company continually 
evaluates for acquisition various businesses and products
complementary to its current operations.  The Company
expects to finance any such investments through cash on
hand, cash generated from operations and the issuance
of additional shares of Common Stock.

   The Company's current commitments consist primarily
of lease obligations for office space.  The Company
believes that it has sufficient financial resources,
including cash on hand generated from operations, to
meet ordinary capital needs for the foreseeable future
as well as to fund the acquisition of Richard C. Jelinek's
Common and Voting Preferred Stock.
<PAGE>                    
                    
                    PART II - OTHER INFORMATION
                                 

Item 5.  Other Information

   On January 3, 1997, the Company announced that its 
Board of Directors approved the repurchase of 1,000,000
shares of Common Stock and 500 shares of Voting Preferred
Stock from its founder, Richard C. Jelinek.  In addition,
the Company announced the Mr. Jelinek will step down as
Chairman of the Company, but will remain a director, and
that John P. Kunz will join the Board of Directors.  
A copy of the announcement is filed as an exhibit and 
listed in the Exhibit Index below.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

              Exhibit 27 - Financial Data Schedule
              Exhibit 99 - Press Release Announcing 
                           Stock Repurchase From Founder
                           and Board Changes

         (b)  Reports on Form 8-K

              The Company did not file any reports 
              on Form 8-K during the quarter.

<PAGE>
                            SIGNATURES


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




                     MEDICUS SYSTEMS CORPORATION
                     ---------------------------
                            (Registrant)




January 14, 1997                    /s/  Patrick C. Sommers
----------------                    -----------------------
                                        Patrick C. Sommers
                                          President
                                   (Chief Executive Officer)




January 14, 1997                    /s/  William W. Cowan
----------------                    ---------------------
                                        William W. Cowan
                                         Vice President
                                   (Chief Financial Officer)