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 OCTOBER 3, 1998
                                    OR
               _ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
                     THE SECURITIES EXCHANGE ACT OF 1934

                             Commission file number 0-17955

                                  SEARS DC CORP.
                (Exact name of registrant as specified in its charter)

  Delaware                                  36-3533346
   (State of Incorporation)          (I.R.S. Employer Identification No.)

      3711 Kennett Pike
     Greenville, Delaware                               19807
  (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code: 302/888-3114

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 and (2) has been subject to such filing requirements for the past 
90 days.

Yes   X                 No___

As of October 31, 1998, the Registrant had 1,000 shares of common stock 
outstanding, all of which were held by Sears, Roebuck and Co.

Registrant meets the conditions set forth in General Instruction H(1) (a) 
and (b) of Form 10-Q and is therefore filing this Form with a reduced 
disclosure format.

<PAGE>

                            SEARS DC CORP.
                INDEX TO QUARTERLY REPORT ON FORM 10-Q
                  13 AND 39 WEEKS ENDED OCTOBER 3, 1998

 
                                                                Page
Part I  - Financial Information.                                        
     Item 1. Financial Statements

     Statements of Income (unaudited) -   
     13 and 39 Weeks Ended October 3, 1998 
     and September 27, 1997                                       1

     Statements of Financial Position - 
     October 3, 1998 (unaudited),  
     September 27, 1997 (unaudited),
     and January 3, 1998                                          2

     Statements of Cash Flows (unaudited) - 
     39 Weeks Ended October 3, 1998 and 
     September 27, 1997                                           3

     Notes to Financial Statements (unaudited)                    4

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations                     5


Part II - Other Information.

Item 6. Exhibits and Reports on Form 8-K                          7

<PAGE>

-1-

                       PART I. FINANCIAL INFORMATION
                       ITEM I. FINANCIAL STATEMENTS
                             SEARS DC CORP.
                          STATEMENTS OF INCOME
                              (Unaudited)


<TABLE>

<CAPTION>
                                     3 Weeks Ended          39 Weeks Ended
                                   Oct. 3,  Sept. 27,      Oct. 3,  Sept.27,
(thousands, except ratios)           1998      1997          1998      1997
<S>                                  <C>     <C>             <C>      <C>
Revenues
 Earnings on notes of Sears          $7,551  $9,937          $24,931  $37,379

Expenses
 Interest and related expenses        7,499   9,866           24,727    37,130
 Operating expenses                      15      21               81        63
  Total expenses                      7,514   9,887           24,808    37,193
  
Income before income taxes               37      50              123       186

Income taxes                             12      17               43        64

Net income                           $   25  $   33          $    80  $   122        

Ratio of earnings to fixed charges    1.005   1.005           1.005    1.005
 
2

<FN>
See notes to financial statements.
</FN>
</TABLE>

<PAGE>
-2-

<TABLE>

                                     SEARS DC CORP.
                              STATEMENTS OF FINANCIAL POSITION
<CAPTION>

                                                 (Unaudited)       

                                     Oct. 3,            Sept. 27,       Jan. 3,
(thousands, except share data)       1998               1997            1998

<S>                                  <C>                <C>             <C>  

Assets
   Cash and cash equivalents         $     58           $     55        $     54
   Notes of Sears                     340,884            469,371         459,455
   Interest receivable and    
      other assets                        645                942             853 
 Total assets                        $341,587           $470,368        $460,362

Liabilities
   Medium-term notes                 $334,780           $444,780        $443,780
   Interest payable and 
      other liabilities                 1,576             20,470          11,431
 Total liabilities                    336,356            465,250         455,211

   
Stockholder's Equity
   Common stock, par value 
   $1.00 per share,1,000 shares 
   authorized and outstanding               1                  1               1  
   Capital in excess of par                 7                  7               7  
   Retained income                      5,223              5,110           5,143
 Total stockholder's equity             5,231              5,118           5,151  

 Total liabilities and 
   stockholder's equity              $341,587           $470,368        $460,362  



<FN>
See notes to financial statements.
</FN>
</TABLE>

<PAGE>
     -3-

<TABLE>
                                             SEARS DC CORP.
                                       STATEMENTS OF CASH FLOWS
                                             (Unaudited)
<CAPTION>

                                                           39 Weeks Ended

                                                     Oct. 3,        Sept. 27,
(thousands)                                          1998           1997
<S>                                                  <C>            <C>     

CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income                                           $   80         $  122
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
     Net change in interest receivable 
      and other assets and interest 
      payable and other liabilities                  (9,647)         4,129
      Net cash provided by (used in) 8
       operating activities                          (9,567)         4,251  

CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in notes of Sears                           118,571        329,849        
  Net cash provided by investing 
    activities                                       118,571        329,849 

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of medium-term notes                      (109,000)      (334,100)   
      Net cash used in financing 
       activities                                    (109,000)      (334,100)   


Net increase in cash and cash equivalents                   4               -       

Cash and cash equivalents at beginning 
  of period                                                54              55  

Cash and cash equivalents at end 
  of period                                          $     58       $      55  


<FN>
See notes to financial statements.
</FN>
</TABLE>

<PAGE>                                      
      -4-


                                       SEARS DC CORP.
                               NOTES TO FINANCIAL STATEMENTS
                                       (Unaudited)



Financial Statements 
Sears DC Corp. ("SDC"), a wholly-owned subsidiary of Sears, Roebuck and Co. 
("Sears"), is principally engaged in borrowing in domestic and foreign debt 
markets and lending the proceeds of such borrowings to Sears and certain 
direct and indirect subsidiaries of Sears in exchange for their unsecured 
notes.      

Under an agreement between SDC and Sears, the interest rate paid by Sears 
on its unsecured notes is designed to produce earnings sufficient to cover 
SDC's fixed charges at least 1.005 times.  Required payments of principal 
and interest to SDC under the Sears borrowing agreement are intended to be 
sufficient to allow SDC to make timely payments of principal and interest 
to the holders of its securities.  

Certain information and footnote disclosures normally included in financial 
statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted.  The significant accounting 
policies used in the presentation of these financial statements are 
consistent with the summary of significant accounting policies set forth 
in SDC's Annual Report on Form 10-K for the fiscal year ended January 3,
1998, and these financial statements should be read in conjunction with the 
financial statements and notes found therein.  The interim financial 
statements reflect all adjustments (consisting only of normal recurring 
accruals) which are, in the opinion of management, necessary for a fair 
statement of the results for the interim periods presented.  The results of 
operations for the interim periods should not be considered indicative of 
the results to be expected for the full year.

The medium-term notes are not redeemable except for notes having a stated 
maturity at the time of issue of more than seven years which may be redeemed 
under certain circumstances in the event of declining Discover Card 
receivables.  Selected details of SDC's borrowings are shown below.

<TABLE>
<CAPTION>
(millions)                                                                          
                                                     Oct. 3,        Sept. 27,                                
                                         
                                                     1998           1997
<S>                                                  <C>            <C>                                      
                  
7.81% to 9.26% medium-term notes due through 2012    $334.8         $444.8        

At October 3, 1998, medium-term note maturities for the next five years and 
thereafter are as follows:

Remaining      1998     $       2.3
               1999           119.5
               2000             0.0
               2001           135.5
               2002            24.7
Thereafter                     52.8
     Total                    334.8

</TABLE>

<PAGE>
 -5-


                               ITEM 2. SEARS DC CORP.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                13 AND 39 WEEKS ENDED OCTOBER 3, 1998 AND SEPTEMBER 27, 1997


Financial Condition:
SDC has invested funds in the promissory notes of Sears, which pay interest 
sufficient to cover SDC's fixed charges at least 1.005 times, and in highly 
liquid short-term investments.  

The $335 million in outstanding medium-term notes as of October 3, 1998 are 
not redeemable prior to their stated maturity except for notes having a 
stated maturity at the time of issue of more than seven years which may be 
redeemed under certain circumstances in the event of declining Discover Card 
receivables of Sears' former subsidiary, Dean Witter, which is now a part of 
Morgan Stanley Dean Witter & Co.  


Results of Operations:
Revenues decreased 24.0% to $7.6 million and 33.3% to $24.9 million for the
13 and 39 weeks ended October 3, 1998, respectively, from the comparable 1997
periods, primarily as a result of the decrease in the average amount of 
medium term notes outstanding during 1998 compared to 1997.  The decrease in 
the average amount of medium term notes outstanding led to interest and
related expenses decreasing 24.0% to $7.5 million and 33.4% to $24.7 million
for the 13 and 39 weeks ended October 3, 1998, respectively, from the
comparable 1997 periods.  Earnings covered fixed charges 1.005 times for the
13 weeks and 39 Weeks ended October 3, 1998 and September 27, 1997,
respectively.  


<PAGE>                                
-6-

Year 2000:                                

As a wholly-owned subsidiary of Sears, SDC uses Sears information systems
and equipment to support its operations.  Sears has implemented a 
comprehensive risk-based plan designed to make its corporate-wide operations 
Year 2000 compliant.  Sears has established a corporate project office, which
reports to an executive management team, to oversee, monitor and coordinate
the corporate-wide 2000 effort.  The Sears plan focuses on three areas: (i) 
information systems, (ii) business management and (iii) vendor relations.  Of
these three areas, only information systems and business management are 
applicable to SDC.  The Sears plan generally covers four stages: (i)
inventory,(ii) assessment, (iii) remediation and (iv) testing and
certification. Sears is utilizing both internal and external resources to
complete its Year 2000 initiatives.  

The information systems area includes Sears proprietary and third party
computer systems and related hardware, software and data and telephone 
networks. Approximately 50% of Sears information systems are presently 
Year 2000 compliant.  Remediation of the majority of Sears remaining systems 
is in process, with substantial completion anticipated by mid-1999.  The 
testing and certification stage for these areas is targeted to be largely 
completed by mid-1999.  

The business management area includes equipment and systems that contain 
embedded computer technology such as elevators and security systems.  Sears
assessment of these systems is nearing completion.  Based on assurances from
third parties, these systems present little Year 2000 exposure or risk.  

Sears is developing contingency plans, such as alternative sourcing and 
identifying what actions would need to be taken if a critical system or 
service provider were not Year 2000 compliant.  Sears expects these plans
to be finalized by July 1999.  

Despite Sears significant effort to make its systems and facilities 
Year 2000 compliant, the ability of third party service providers, and 
certain other third parties, including governmental entities and utility
companies, to be Year 2000 compliant is beyond the control of Sears.  
Accordingly, neither Sears nor SDC can give any assurances that the systems
of other companies on which Sears systems rely will be timely converted
or compatible with Sears systems.  The failure of these entities to comply 
on a timely basis could have a material adverse effect on Sears and SDC.  
At the present time, SDC does not expect Year 2000 issues to have a material 
adverse effect on its financial performance.  SDC has not and will not bear 
any expenses in connection with the Year 2000 effort.  

The foregoing statements relating to Sears and SDC's expectations as to their
Year 2000 efforts are forward looking and are made in reliance on the safe 
harbor provisions of the Private Securities Litigation Reform Act of 1995.  
They are based on Sears and SDC's best estimates and may be updated as 
additional information becomes available.  These statements are also based on
assumptions about many important factors, including the technical skills of 
employees and independent contractors and the representations and
preparedness of third parties.  While SDC believes that these assumptions are
reasonable,SDC cautions that it is impossible to predict the impact of
certain facts that could cause actual results to differ from expected
results.  

<PAGE>
       -7-


PART II. OTHER INFORMATION




Item 6.   Exhibits and Reports on Form 8-K.

          (a)     Exhibits.

                  An Exhibit Index has been filed as part of this Report on 
                  Page E-1.

          (b)     Reports on Form 8-K.

                  None

      
<PAGE>
-8-

      
SIGNATURE

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

      
Sears DC Corp.
(Registrant)


November 9, 1998                

/s/ William K. Phelan                        
William K. Phelan
Vice President and Controller

(Principal Accounting Officer 
 and Authorized Officer of Registrant)
    
  
<PAGE>


                                    E-1
                               EXHIBIT INDEX
                               SEARS DC CORP.
                     13 AND 39 WEEKS ENDED OCTOBER 3, 1998


Exhibit No.

3.1   Certificate of Incorporation of Discover Credit Corp. dated January 9, 
      1987 [Incorporated by reference to Exhibit 3(a) to Form 10 of the 
      Registrant ("Form 10")*]

3.2   Amendment to Certificate of Incorporation of Discover Credit Corp.
      dated April 9, 1987 [Incorporated by reference to Exhibit 3(b) to 
      Form 10*]

3.3   Certificate of Amendment of Certificate of Incorporation dated 
      May 21, 1993 to change the name of Discover Credit Corp. to Sears 
      DC Corp.  [Incorporated by reference to exhibit 3 (c) to Form 10-K 
      of the Registrant for the fiscal year ended December 28, 1996*]      

3.4   By-laws of Sears DC Corp., as amended to February 6, 1996 
      [Incorporated by reference to exhibit 3 (c) to Form 10-K of the 
      Registrant for the fiscal year ended December 30, 1995*]

4     Registrant hereby agrees to furnish the Commission, upon  request, 
      with the instruments defining the rights of holders of long-term debt 
      of the Registrant with respect to which the total amount of securities 
      authorized does not exceed 10% of the total assets of the Registrant

27    Financial Data Schedule

[FN]        
_____________________   
*Sec File No. 0-17955
</FN>