UNITED STATES
                                
               SECURITIES AND EXCHANGE COMMISSION
                                
                     Washington, D.C.  20549
                                
                            FORM 10-Q
                                
                                
                           (Mark One)
                                
 [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                                
For the period ended September 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  0-16230

                                
            STRUCTURAL DYNAMICS RESEARCH CORPORATION
     (Exact name of registrant as specified in its charter)

       Ohio                                   31-0733928
(State or other jurisdiction of           (I.R.S. Employer
incorporation or organization)            Identification No.)


             2000 Eastman Drive, Milford, Ohio 45150
            (Address of principal executive offices)
                           (Zip Code)


                         (513) 576-2400
      (Registrant's telephone number, including area code)

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 [  ]

      As  of  October 31, 1998, there were 36,369,573  shares  of 
the Registrant's Common Stock without par value issued and
outstanding.

<PAGE>
                 PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements.

<TABLE>
    STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
              Consolidated Statement of Operations
                           (Unaudited)
              (in thousands, except per share data)

<CAPTION>
                               Three Months          Nine Months
                              Ended September 30,   Ended September 30,
                             1998         1997      1998       1997
<S>                         <C>          <C>       <C>        <C>
Revenue:                                                     
 Software licenses          $ 43,886     $40,429   $123,315   $123,824
 Software maintenance and  
  services                    57,933      46,309    164,758    132,456
    Total revenue            101,819      86,738    288,073    256,280

Cost of revenue:                                             
 Cost of licenses              7,819       6,555     23,103     18,726
 Cost of maintenance and 
  services                    32,794      24,454     90,940     70,414
    Total cost of revenue     40,613      31,009    114,043     89,140
Gross profit                  61,206      55,729    174,030    167,140

Operating expenses:                                          
 Selling and marketing        29,146      25,355     84,649     75,066
 Research and development     16,164      11,586     49,381     38,612
 General and administrative    4,503       3,835     13,186     12,899
 Purchased in-process                                     
  research and development                                      20,850
    Total operating  
     expenses                 49,813      40,776    147,216    147,427
Operating income              11,393      14,953     26,814     19,713

Other income, net              4,144       1,211     10,830      2,871
Income before income taxes    15,537      16,164     37,644     22,584
Income tax expense             5,199       3,412     11,865      9,366
        Net income          $ 10,338     $12,752   $ 25,779   $ 13,218

Net income per share:                                        
        Basic               $    .29     $   .36   $    .71   $    .38
        Diluted                  .28         .34        .67        .36

Pro forma net income 
 Income before income
  taxes as reported                       16,164                22,584
 Pro forma income tax 
  expense                                  3,759                10,729
      Pro forma net income               $12,405              $ 11,855

Pro forma net income
 per share:
  Basic                                  $   .35              $    .34
  Diluted                                    .33                   .33
                                                              
Comprehensive income                    $ 12,116     $12,071   $ 27,393   $ 10,813
</TABLE>
See accompanying notes to consolidated financial statements.

<TABLE>


    STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
                   Consolidated Balance Sheet

                         (in thousands)

<CAPTION>

                                  September 30,    December 31,
                                       1998         1997
                                   (unaudited)
<S>                                 <C>           <C>
Assets
Current assets: 
 Cash and cash equivalents           $132,625     $ 81,056
 Marketable securities                 13,362       13,030
 Trade accounts receivable, net        83,748       88,954
 Other accounts receivable              8,129       17,815
 Prepaid expenses                      10,951        9,082
  Total current assets                248,815      209,937

Marketable securities                  13,046       14,925
                                                      
Property and equipment, at cost:                      
 Computer and other equipment          59,682       57,364
 Office furniture and equipment        19,077       16,983
 Leasehold improvements                 7,732        6,685
                                       86,491       81,032
                                                      
 Less accumulated depreciation and    
   amortization                        61,452       56,405
        Net property and equipment     25,039       24,627

Computer software construction       
 costs, net                            32,118       31,610
Other assets                           16,986       12,097
                                                      
               Total assets          $336,004     $293,196
                                                      
</TABLE>

See accompanying notes to consolidated financial statements.



<TABLE>
    STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
                   Consolidated Balance Sheet
                                
              (in thousands, except per share data)
<CAPTION>
  
                                            September 30,     December 31,
                                                 1998             1997
Liabilities and Shareholders' Equity          (unaudited)    
<S>                                          <C>               <C> 
Current liabilities:                                  
 Accounts payable                            $ 12,064          $ 12,230
 Accrued expenses                              40,772            39,590
 Accrued income taxes                           3,855             9,182
 Deferred revenues                             51,708            46,606
        Total current liabilities             108,399           107,608
        
Other long-term liabilities                     7,482             7,751
                                                      
Shareholders' equity:                                 
 Common stock, stated value $.0069 per share
   Authorized 100,000 shares;                         
   outstanding shares -                   
   36,291 and 35,654 net of 1,452 and
   1,500 shares in treasury                       252               248
 Capital in excess of stated value            129,021           114,132
 Retained earnings                             92,914            67,135
 Foreign currency translation adjustment       (2,231)           (3,667)
 Unrealized holding gain (loss) on      
  investments                                     167               (11)
    Total shareholders' equity                220,123           177,837
    Total liabilities and
     shareholders' equity                    $336,004          $293,196
                                
</TABLE>
See accompanying notes to consolidated financial statements.

                                
                                
<TABLE>
                                
    STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
         Condensed Consolidated Statement of Cash Flows
                           (Unaudited)
                                
                         (in thousands)
<CAPTION>


                                                  Nine Months Ended
                                                     September 30,
                                                  1998           1997

<S>                                             <C>             <C>
Net cash provided by operating activities       $ 63,144        $ 58,616
Cash flows from investing activities:                     
   Sales, (purchases) of marketable      
     securities, net                               1,725          (2,723)
   Additions to property and equipment, net       (9,246)         (9,497)
   Additions to computer software        
     construction costs                          (12,815)         (7,746)
   Sale of test business                           1,809
   Acquisition of Metaphase Technology, Inc.                     (28,050)
   Net cash used in investing activities         (18,527)        (48,016)
                                                          
Cash flows from financing activities:                     
   Stock issued under employee benefit   
    plans                                          6,410           9,938
   Repayment of long term debt                      (894)           (152)
   Distributions of S corporation                                   (254)
   Net cash provided by financing  
     activities                                    5,516           9,532
                                                          
Effect of exchange rate changes on cash            1,436          (2,426)
Increase in cash and cash equivalents             51,569          17,706
                                                          
Cash and cash equivalents:                                
   Beginning of period                            81,056          72,026
   End of period                                $132,625        $ 89,732
                                                          
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>

    STRUCTURAL DYNAMICS RESEARCH CORPORATION AND SUBSIDIARIES
           Notes to Consolidated Financial Statements
                           (Unaudited)
              (in thousands except per share data)

(1)  Basis of Presentation

The accompanying unaudited consolidated financial statements have
been   prepared  by  the  Company  pursuant  to  the  rules   and
regulations  of  the  Securities  and  Exchange  Commission.   As
permitted  by the rules of the Securities and Exchange Commission
applicable  to  quarterly reports on Form 10-Q, these  notes  are
condensed  and  do  not  contain  all  disclosures  required   by
generally  accepted accounting principles.   In  the  opinion  of
management,  these financial statements contain  all  adjustments
(consisting   of   only  normal  recurring  adjustments,   unless
otherwise  noted)  necessary  to  present  fairly  the  Company's
financial  position, results of operations and cash flows  as  of
the  dates  and  for  the  periods  indicated.   These  financial
statements  should be read in conjunction with  the  Consolidated
Financial  Statements and related notes included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.

(2)  Pro Forma Net Income and Pro Forma Net Income Per Share

In   1997,  the  Company  acquired  Computer  Aided  Systems  for
Engineering  ("CASE") which was an S corporation for  income  tax
reporting  purposes  prior  to the acquisition.   Pro  forma  net
income and pro forma net income per share reflect the tax expense
that would have been reported if CASE  had been a C corporation.

(3)  Comprehensive Income

In  June  1997, the Financial Accounting Standards Board ("FASB")
issued  Statement  of  Financial  Accounting  Standards  No.  130
("SFAS"   No.  130),  "Reporting  Comprehensive  Income,"   which
establishes  standards for reporting and display of comprehensive
income   and   its  components  in  the  consolidated   financial
statements.  Comprehensive income includes net income as well  as
other  changes  in  shareholder equity, except changes  resulting
from  shareholders' investments in the Company and  distributions
to  shareholders.   SFAS No. 130 is effective for  the  Company's
reporting periods beginning in 1998 with comparative amounts  for
prior  years.  Comprehensive income, net of tax, is  reported  on
the consolidated statement of operations.

(4)  Earnings Per Share

Basic  earnings per common share and dilutive earnings per  share
are  computed  using the weighted average number  of  common  and
dilutive common equivalent shares outstanding during the  period,
respectively.   Dilutive common equivalent shares are  calculated
using  the  treasury stock method and consist of  dilutive  stock
option grants.

The  reconciliations of amounts used for the  basic  and  diluted
earnings per share calculations are as follows:

<PAGE>
<TABLE>



                          Three Months          Nine Months
                         Ended September 30,   Ended September 30,
                         1998       1997        1998        1997

<S>                      <C>       <C>         <C>        <C>
Net income (numerator)   $10,338   $12,752     $25,779    $13,218

Weighted average                                             
outstanding:
  Common shares (basic   
   denominator)           36,270    35,433      36,095     35,138
  Dilutive employee stock 
  options                    956     1,752       2,309      1,273
Common stock and dilutive                                    
common stock equivalents
(diluted denominator)     37,226    37,185      38,404     36,411

Earnings per share:                                          
   Basic                 $   .29   $   .36     $   .71    $   .38
   Diluted               $   .28   $   .34     $   .67    $   .36
</TABLE>

(4)  Earnings Per Share - Continued

Options to purchase 1,625 and 560 shares of common stock for  the
three  and  nine month periods ended at September  30,  1998  and
1,084 shares of common stock for the three and nine month periods
ended September 30, 1997, respectively, were not included in  the
computation  of dilutive earnings per share because the  options'
exercise  price  was  greater than the average  market  price  of
common shares for the periods.

(5)  Taxes

Based  on the Company's historical tax position, as well  as  the
Company's current and anticipated mix of domestic and foreign pre-
tax  accounting  income,  tax credits and  deductions  from  non-
qualified  stock  option exercises over the next  four  years,  a
valuation allowance is provided against deferred tax assets  when
the Company believes it is more likely than not that the deferred
tax  assets  will  not  be  realized.  These  factors  cause  the
effective  tax  rate to differ from the expected statutory  rate.
Additionally, in the first quarter of 1998, the Company  and  the
Internal Revenue Service settled an audit of the Company for  the
years  1987 through 1994, and agreed that the Company was  due  a
refund  of  $1,751 in tax relating to the (previously  disclosed)
restatement  of  its 1994 and prior financial  statements.   This
refund  was  received and recorded as a benefit  to  tax  expense
during the period ending March 31, 1998.

(6)  New Accounting Pronouncements

Revenue Recognition

In  August  1997,  the  American Institute  of  Certified  Public
Accountants ("AICPA") issued Statement of Position ("SOP")  97-2,
"Software   Revenue   Recognition,"  which   is   effective   for
transactions occurring in the Company's fiscal year  which  began
January  1,  1998.   In March 1998, the AICPA  issued  SOP  98-4,
"Deferral of the effective date of a provision of SOP 97-2".  SOP
98-4 allows companies to defer adoption of certain provisions  of
SOP  97-2  related  to vendor-specific objective  evidence.   The
adoption of SOP 97-2 in the quarter ended March 31, 1998 did  not
have a significant impact on the Company's financial condition or
results of operations.

Segments of an Enterprise

In  June  1997,  FASB  issued SFAS No.  131,  "Disclosures  about
Segments  of  an  Enterprise  and  Related  Information,"   which
establishes  standards for the way that public  companies  report
selected  information about operating segments.  It also includes
standards  for  related disclosures about products and  services,
geographic  areas, and major customers.  SFAS No. 131 applies  to
the  Company's  annual reporting for 1998 and  quarterly  reports
thereafter.   The  Company  is evaluating  the  effects  of  this
standard on its reporting of financial information.

Derivatives and Hedging Activities

In June 1998, FASB issued SFAS No. 133 "Accounting for Derivative
Instruments  and  Hedging Activities."  SFAS No. 133  establishes
accounting  and  reporting standards for derivative  instruments,
including  forward foreign exchange contracts,  and  for  hedging
activities.  It requires that an entity recognize all derivatives
as  either  assets or liabilities in the statement  of  financial
position  and  measure  those instruments  at  fair  value.   The
accounting for gain and losses from changes in the fair value  of
a  particular derivative will depend on the intended use  of  the
derivative. SFAS No. 133 is effective for the Company's financial
reporting  beginning in 2000 and cannot be applied  retroactively
to  financial  statements of prior periods.  The  Company  enters
into  forward foreign exchange contracts to hedge certain foreign
currency denominated receivables.  The Company has not determined
the  impact  that SFAS No. 133 will have on the  results  of  its
operations or financial position.

(7)  Subsequent Event

In  October 1998, the Company announced a definitive agreement to
acquire privately-held Imageware Corporation ("Imageware") of Ann
Arbor, Michigan for approximately $31 million in cash.  Imageware
is  a  developer of free form surface modeling and 3D  inspection
software   tools  for  the  automotive,  aerospace  and  consumer
products  industries.  The Company plans to integrate Imageware's
surfacing technologies into I-DEAS software, while improving  its
stand-alone  capabilities and links to other  CAD  systems.   The
transaction,  which  will be accounted  for  as  a  purchase,  is
expected  to  be  completed during the  Company's  fourth  fiscal
quarter,  subject  to  the approval of Imageware's  shareholders.
The  purchase price will be paid from the Company's present  cash
balances.  Upon closure, the Company expects to record a one-time
charge  against  earnings  to write off in-process  research  and
development,  which has no alternative future  use  and  has  not
reached  technological feasibility.  The amount of the charge  is
not  known  at  this  time.  The historic  operating  results  of
Imageware   are  not  material  to  the  Company's   consolidated
operations.

Item  2.   Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations.
(in thousands)

Structural Dynamics Research Corporation is a leading supplier of
enterprise  product development solutions through  its  suite  of
Mechanical  Design  Automation  ("MDA")  software,  Product  Data
Management  ("PDM") software and related services.   The  Company
provides  software  tools and related services  to  manufacturers
worldwide  to  optimize the entire product  development  process,
reducing  cost  while  streamlining the development  process  and
managing  product  information.   The  Company  markets  its  MDA
software under the brand name I-DEAS" and its PDM software  under
the brand name Metaphase".

Certain  statements  in this Form 10-Q are  forward  looking  and
involve risks and uncertainties, including the economic stability
of  the  Asia-Pacific region, the impact of competitive  products
and  pricing,  the  management of growth,  and  the  other  risks
detailed  from  time  to  time in the  Company's  Securities  and
Exchange Commission reports.  The Company's results could  differ
materially from those results described herein.  Forward  looking
information should be evaluated in the context of these and other
factors  some of which are described in more detail  in  "Factors
That May Affect Future Results".

Revenue

The  Company's consolidated net revenue increased 17% and 12% for
the  three and nine months ended September 30, 1998, compared  to
the  corresponding periods of 1997.  Revenue growth  was  led  by
strong  sales of software maintenance and services in  all  major
geographic  regions.  For the three month period ended  September
30, 1998 and 1997, revenue in North America accounted for 45% and
46%,   Europe  32%  and  34%,  and  Asia  Pacific  23%  and  20%,
respectively,  of  consolidated revenues.   For  the  nine  month
period  ended  September  30, 1998 and  1997,  revenue  in  North
America  accounted for 45% and 51%, Europe 33% and 30%  and  Asia
Pacific  22%  and  19%,  respectively. The  Company  expects  the
international  market to continue to account  for  a  significant
portion of revenue in future periods.

Total  software license revenue increased 9% for the three months
ended  September 30, 1998 compared to the same period last  year.
I-DEAS   and   Metaphase  license  revenue  grew  8%   and   12%,
respectively,  for  the three month period  ended  September  30,
1998.   The  growth  was  driven by orders  from  the  automotive
industry and a $7 million I-DEAS sale to MTS Systems Corporation.
For  the  nine  months  ended  September  30,  1998,  I-DEAS  and
Metaphase license revenue was approximately equal to the previous
year  period.  License revenue growth in Europe and Asia  Pacific
offset declines in North America.  The North America decline  was
attributed  to a few large, automotive orders in 1997  which  did
not recur in 1998 to the same magnitude.

Software maintenance and service revenue increased 25% to $57,933
for  the  three  months  ended September 30,  1998,  and  24%  to
$164,758  for the nine months ended September 30, 1998,  compared
to the corresponding periods of last year.  The growth was due to
more  maintenance contracts and implementation engagements  being
generated  from  a  larger, worldwide  customer  base.   Services
revenue  growth  remained the strongest in Europe  due  to  large
implementation   projects  for  I-DEAS  and   Metaphase   license
customers.

Expenses

The  costs  of  revenue consists principally  of  the  staff  and
related  costs  associated  with the generation  and  support  of
software  service  revenue, amortization of capitalized  software
construction  costs,  royalty fees paid to  third  parties  under
licensing  agreements  and  the  cost  of  distributing  software
products.   The  cost of licenses increased  19%  for  the  three
months  ended  September  30, 1998, to  18%  of  license  revenue
compared  to  16%  of license revenue for the corresponding  1997
period.   For the nine months ended September 30, 1998, the  cost
of  licenses increased 23% to 19% of license revenue compared  to
15%  of  license revenue for the corresponding 1997 period.   The
relative  and absolute increase from the prior year  periods  was
primarily  due to increased royalty fees.  The cost  of  services
and maintenance represented 57% and 55% of the associated revenue
for  the three and nine months ended September 30, 1998, compared
to  53% for the corresponding 1997 periods.  Cost of services and
maintenance increased, particularly in Europe, due to the hiring,
training,  labor  and third party consulting expenses  associated
with  expanding resources to meet the growing demand for software
implementation, training services and post license sales support.

Selling  and  marketing expenses consist of the costs  associated
with  the  worldwide sales and marketing staff,  advertising  and
product  localization. Selling and marketing  expenses  increased
15%  and  13%  for the three and nine months ended September  30,
1998, respectively, from the corresponding 1997 periods.  Selling
and  marketing expenses represented 29% of revenue for the  three
and   nine   months  ended  September  30,  1998  and   for   the
corresponding  periods  in 1997.  The higher  expense  level  was
primarily  a  result of increased headcount in the  direct  sales
force  and  incremental  expenditures  for  new  advertising  and
marketing  campaigns.  Selling and marketing expenses during  the
remaining  months  of  1998 are expected to increase  because  of
continued   spending  for  the  new  advertising  and   marketing
campaigns and an increased level of sales staff.

Research  and development expenses consist primarily of salaries,
benefits, computer equipment costs and facilities associated with
the  product  development  staff, and  exclude  costs  which  are
capitalized in accordance with Statement of Financial  Accounting
Standards  No.  86.  Research and development expenses  increased
40%  and 28% for the three and nine month periods ended September
30, 1998, respectively, compared to the corresponding periods  in
1997.  The increase in research and development expense for  1998
as  compared to 1997 is primarily a result of increased headcount
of  product developers. The expiration of certain customer funded
research and development projects also resulted in higher expense
for  1998  periods.   Research and development  expense  excluded
capitalized internal software costs of $3,896 and $9,565 for  the
three  and  nine  months ended September 30,  1998,  compared  to
$3,239  and  $7,697 for the corresponding periods in  1997.   The
amount  of  capitalized software development cost may vary  among
periods depending on the stage of development being performed  on
future  product  releases.  The Company expects  to  continue  to
devote a substantial level of resources to product development.

Expenses (continued)

General  and administrative expenses consist of costs  associated
with   the   corporate,  finance,  legal,  human   resource   and
administrative   staffs.  General  and  administrative   expenses
increased  to  $4,503  for the three months ended  September  30,
1998, compared to $3,835 for the three months ended September 30,
1997.   These  expenses increased to $13,186 for the nine  months
ended September 30, 1998, compared to $12,899 for the nine months
ended  September  30,  1997. General and administrative  expenses
represent  4%  of  revenue  for the  three  month  periods  ended
September 30, 1997 and 1998 and 5% of revenue for the nine  month
periods then ended.

During  the three months ended March 31, 1997, a one-time  charge
of  $20,850  was  recorded to write off in-process  research  and
development  acquired  in the purchase of  Metaphase  Technology,
Inc. ("MTI") that did not have an alternative future use and  had
not  reached technological feasibility.  The Company acquired the
remaining  stock  of  MTI, and certain  assets  of  Control  Data
Systems, Inc.'s global PDM software sales and support business in
January  1997.   The  purchase  price  of  approximately  $33,000
included cash and a stock warrant.  The acquisition was accounted
for using the purchase method.

Other income, net

Other  income  included a net gain of $2,745 from  the  September
1998 sale of certain equipment, customer consulting contracts and
customer  support  contracts associated with the  Company's  test
software business to MTS Systems Corporation ("MTS").  Under  the
same  agreement,  the  Company also sold a  perpetual,  exclusive
license  to MTS for I-DEAS test software for $7,000.  MTS assumed
responsibility for the continued development of test software and
for  servicing  the  consulting and  customer  support  contracts
acquired  from the Company.  The Company retained  the  right  to
sell  test software products and enhancements as provided by MTS.
Net  cash  inflow to the Company from the agreement  was  $8,809,
which  was  net  of  payments to MTS for  pre-  billed,  customer
support contracts for which MTS assumed responsibility.

Other  income included $2,590 received from insurance settlements
during   the  nine  month  period  ended  September   30,   1998.
Additionally,  $670  of  interest income received  on  a  federal
income tax refund was recorded during the period ended March  31,
1998.  Other income also increased due to more interest earned on
increased balances in interest-bearing accounts since last  year.
Other   income   included  $205  and  $80  in  1998   and   1997,
respectively, for equity in earnings of ESTECH, a joint venture.


Taxes

In  recent years, a substantial portion of deferred tax  benefits
relating  to  temporary  differences was offset  by  a  valuation
allowance because of doubt regarding the ultimate realization  of
the  benefits.  This caused the effective tax rate to differ from
the expected statutory rate.  The factors, which necessitated the
establishment of a complete valuation allowance are not  expected
to  be  entirely present in the future.  The Company has begun  a
process  to  reduce the valuation allowance over approximately  a
two  year  time  frame  based  on current  facts  and  forecasted
circumstances.   The  Company  will  continue  to  monitor   this
situation and adjust the valuation allowance as appropriate.

Comprehensive Income


The  differences  between  net income  and  comprehensive  income
(loss) were primarily due to unrealized gains and losses from the
translation  of  foreign subsidiaries' balance sheets  into  U.S.
dollars.   Net  foreign currency translation losses  occurred  in
1997  because  the U.S. dollar strengthened against  the  foreign
currencies   of   the  subsidiaries.   In  1998,  these   foreign
currencies  gained relative to the U.S. dollar which resulted  in
translation gains.

Liquidity and Capital Resources

The  Company generated $63,144 of cash from operating  activities
during  the  nine months ended September 30, 1998.  At  September
30,  1998,  the Company had cash and investments of  $159,033  as
compared  to  $109,011 at December 31, 1997.  The  Company's  net
working capital was $140,416 at September 30, 1998.  In addition,
the  Company  has  an unused unsecured bank  line  of  credit  of
$15,000.   During  1998,  the Company  paid  $894  to  completely
extinguish  a  long-term  note, which  it  assumed  in  the  1997
acquisition  of  CASE.  The Company does not have  any  long-term
debt  or  current commitments for material capital  expenditures,
other than the acquisition of Imageware Corporation.

In  September 1998, the Company's Board of Directors  approved  a
stock  repurchase program.  The Company may purchase up to  three
million   shares  of  its  own  stock  in  the  open  market   at
management's  discretion.   The purchases  will  be  funded  from
available  working  capital and used to offset  the  issuance  of
shares under existing employee stock plans.

The  existing  sources of liquidity and funds anticipated  to  be
generated  from operations are expected to provide adequate  cash
to  fund the Company's projected requirements for the foreseeable
future.

Acquisition of Imageware

In  October 1998, the Company announced a definitive agreement to
acquire privately-held Imageware Corporation ("Imageware") of Ann
Arbor, Michigan for approximately $31 million in cash.  Imageware
is  a  developer of free form surface modeling and 3D  inspection
software   tools  for  the  automotive,  aerospace  and  consumer
products  industries.  The Company plans to integrate Imageware's
surfacing technologies into I-DEAS software, while improving  its
stand-alone  capabilities and links to other  CAD  systems.   The
transaction,  which  will be accounted  for  as  a  purchase,  is
expected  to  be  completed during the  Company's  fourth  fiscal
quarter,  subject  to  the approval of Imageware's  shareholders.
The  purchase price will be paid from the Company's present  cash
balances.  Upon closure, the Company expects to record a one-time
charge  against  earnings  to write off in-process  research  and
development that has no alternate future use and has not  reached
technical feasibility.  The amount of the charge is not known  at
this  time.  The historic operating results of Imageware are  not
material to the Company's consolidated operations.

Factors That May Affect Future Results

The  historical results of operations and financial  position  of
the  Company  are not necessarily indicative of future  financial
performance.    The   Company's   results   and   forward-looking
statements  are  subject  to  certain  risks  and  uncertainties,
including  but  not limited to those discussed below  that  could
cause future results to differ materially from those projected.

Market Growth

The  Company  derives most of its revenues from selling  software
products and services to the high-end users of the product design
markets.   Market  growth  and  the Company's  ability  to  match
resource levels with market growth rates will directly impact its
future operating results.  In recent months, actual market growth
rates    for   high-end,   MDA   license   sales   within   North

Factors That May Affect Future Results (continued)

America deteriorated relative to beginning of the year forecasts.
MDA  market growth may have slowed due to preferences  among  new
users  for  lower priced, mid-range products and strong  capacity
within  the installed base of seats already sold.  If MDA  market
growth  rates continue to decline, the Company's license  revenue
growth,  as well as maintenance and services revenue growth,  may
be less than previously expected.

Expense Management

The  Company's operating expense levels are planned, in part,  on
expected  revenue  growth.   The  Company's  expense  levels  are
generally  committed in advance and, in the near term, relatively
small  portions  of  the Company's expenses  vary  with  revenue.
Accordingly,  future operating results will be  impacted  by  the
Company's  ability  to  convert operating outlays  into  expected
revenue  growth  at profitable margins.  If future  revenues  are
less than expected, net income may be disproportionately affected
since  expenses are relatively fixed. In the recent  months,  the
Company has taken initiatives to expand, train and reorganize its
sales  infrastructure.  Future results could be affected  by  the
ability of the expanded sales infrastructure to generate expected
revenue growth.

Product Distribution

Besides  its own sales force, the Company relies on distributors,
representatives and value-added resellers to market a significant
portion  of  its  products.  The loss of a major  customer  or  a
reduction   in   orders  from  a  major  customer,   distributor,
representative or value-added reseller, could have a  significant
impact  on  the results of operations in any particular  quarter.
Historically, a significant portion of the Company's  revenue  is
generated  from  shipments in the last month of  a  quarter.   In
addition, higher volumes of orders have been experienced  in  the
fourth quarter.  The concentration of orders makes projections of
quarterly financial results difficult.  If customers delay  their
orders  or  a  disruption in the Company's  distribution  occurs,
quarterly results of operations in any particular quarter may  be
negatively impacted. The Company usually ships software  licenses
within  one  to  two  weeks after receipt of  a  customer  order.
Typically,  orders exist at the end of a quarter which  have  not
been shipped; however, the value of such orders is not indicative
of revenue results for any future period.

Competition

The software industry is highly competitive.  The entire industry
may  experience pricing and margin pressure which could adversely
affect  the  Company's operating results and financial  position.
The Company's success is dependent on its ability to continue  to
develop,  enhance and market new products to meet its  customers'
sophisticated needs within competitive pricing structures and  in
a  timely  manner.  As product development cycles become shorter,
product   quality,  performance,  reliability,   ease   of   use,
functionality,   breadth  and  integration   may   be   impacted.
Therefore,  customer  preference for the Company's  new  products
cannot be assured.  The Company's success also depends in part on
its  ability  to  attract  and retain  technical  and  other  key
employees  who  are in great demand, to protect the  intellectual
property rights of its products and to continue key relationships
with product development partners.


International Business

A   significant  portion  of  the  Company's  revenues  is   from
international  markets.   As a result,  the  Company's  financial
results   could   be   impacted  by  weakened  general   economic
conditions,  differing  technological  advances  or  preferences,
volatile foreign exchange rates and government trade restrictions
in  any  country in which the Company does business.  The Company
has  invested  sizable  resources in  the  Asia  Pacific  region,
particularly  in Japan and South Korea.  Economic instability  in
this  region  could lead to an adverse impact  on  the  Company's
operation results and financial position.

Factors That May Affect Future Results (continued)

Year 2000

The Year 2000 causes uncertainties about whether computer systems
and  other  equipment with date sensitive hardware  or  software,
will appropriately recognize and process dates beyond 1999.   The
failure of software programs, computer hardware and equipment  in
this  regard could result in business interruptions and adversely
affect  the Company's operating results.  The Company  has  taken
measures  to address its exposure to these potential date-related
failures.

The  Company's  major exposures to date-related failures  include
product  liability  for the software programs which  it  markets.
The  Company's primary software offerings, (I-DEAS Master  Series
and  Metaphase  Enterprise), store dates in  a  full,  four-digit
format.   The  Company has conducted extensive testing  of  these
software    offerings,   including   integrated    third    party
functionality, for Year 2000 compliance ("compliance").  Based on
testing  to date, I-DEAS Master Series 5 and Metaphase Enterprise
2.3  and their respective subsequent releases, properly recognize
and  process  dates  beyond  1999 when the  underlying  operating
system of the host machine provides full date information to  the
software.  The Company has tested, and will continue to test, its
code  for  new products and enhancements to ensure compliance  in
future  software  releases.  Potential  causes  of  failure  will
continue  to  be  rectified in a timely  manner.   Compliance  of
product  versions prior to I-DEAS Master Series 5  and  Metaphase
Enterprise  2.3 is not completely known; however,  if  there  are
issues of non-compliance, current customers of such products  can
upgrade  to  achieve  Year 2000 compliance.  While  the  software
products  were  developed  to  be compliant,  customizations  and
modifications  to  the products are the responsibilities  of  the
customer  and  may not necessarily be compliant.   To  date,  the
Company   is   not  aware  of  any  customer  customizations   or
modifications  which result in significant date-related  failures
of otherwise compliant software.

The  Company  relies  on  third parties  for  telecommunications,
electricity,  banking,  shipping  and  other  essential  business
operations.   Additionally,  its information  systems  depend  on
computer hardware, software, and other equipment also supplied by
third  parties.  To  reduce  the  uncertainty  and  mitigate  the
consequences  of the Year 2000, the Company has  adopted  a  Year
2000  conversion  approach  with five  basic  phases:  Awareness,
Assessment,  Renovation,  Validation,  and  Implementation.   The
approach  is  being  applied throughout the  Company  and  is  in
differing phases among areas of exposure.  The Company is in  the
process  of  identifying the critical suppliers of  services  and
systems and assessing which, if any, areas pose significant risks
of  business  interruption.  So far, no significant  deficiencies
have   been  identified.   The  Company's  enterprise  management
information  system,  SAP R/3, is Year 2000  compliant  based  on
representations from its supplier, SAP AG.

At  this  time, the Company expects the conversion to  Year  2000
compliance  to  be  completed in 1999.  The  total  cost  of  any
modifications necessary to achieve compliance is not expected  to
be  material  to  operating results.  The  Company's  policy,  in
accordance with Generally Accepted Accounting Procedures,  is  to
expense  as incurred the cost of maintenance and modification  to
existing  systems, and to capitalize the cost of any new software
or  hardware  and  amortize that cost over the  assets  estimated
useful lives.

While  the Company has taken measures to reduce the risk of date-
related  failures, it cannot eliminate the potential for business
interruption  or  product  failure  due  to  third   party   non-
compliance.   Additionally,  Year  2000  interruptions   in   the
Company's customer base could reduce or delay sales. With respect
to  contingency plans, the Company has not developed  contingency
plans  at this time to handle significant failures.  The  Company
will address contingency planning in 1999 for the most reasonably
likely worst case scenarios.

Factors That May Affect Future Results (continued)

Euro Conversion

On January 1, 1999, eleven of the fifteen member countries of the
European  Union (the "participating countries") are scheduled  to
establish fixed conversion rates between their existing sovereign
currencies  (the  "legacy currencies")  and  the  euro  currency,
adopting  the euro as their common legal currency on  that  date.
The legacy currencies are scheduled to remain legal tender in the
participating  countries as denominations  of  the  euro  between
January  1,  1999  and January 1, 2002.  During  this  transition
period, public and private parties may pay for goods and services
using  either  the  euro  or the participating  country's  legacy
currency  on  a  "no  compulsion, no prohibition"  basis  whereby
recipients must accept euros or the legacy currency as offered by
the payor.  A currency translation process known as triangulation
will  dictate how legacy currencies will be converted to the euro
and  other  legacy currencies.  Beginning January  1,  2002,  the
participating countries will issue new euro-denominated bills and
coins  and replace the legacy currencies as legal tender in  cash
transactions by July 1, 2002.

Because  the  Company  conducts  a  significant  portion  of  its
business   in   Europe,  including  subsidiaries  in   six   euro
participating  countries, its business  and  operations  will  be
effected  by  the euro conversion.  Management is addressing  the
euro  conversion, but its impact on future operating  results  is
uncertain.  Management expects the conversion to increase  cross-
border  competition for its products within Europe due to  easier
price  transparency for customers.  While management expects  the
total  unit  price  of  product and  taxes  charged  to  European
customers to converge over time, the impact on the total revenues
and  the  mix  of  revenues  among its European  subsidiaries  is
uncertain.    Additionally,  increased  cross-border  competition
could  effect  the  Company's  labor  cost  and  eventually   its
allocation of resources within Europe.

The   Company  is  implementing  an  upgrade  to  its  management
information  system which includes the ability to  simultaneously
record  transactions  in euros, perform the  prescribed  currency
conversion  computations and convert legacy currency  amounts  to
euro.   The  impact  of the conversion on the Company's  currency
risk  and  taxable income is not expected to be significant.   In
regard  to contracts denominated in legacy currencies, management
has  not  identified any third party or customer contracts  whose
performance might be considered unenforceable due to  a  currency
substitution.    Management  will   continue   to   monitor   for
significant contracts which may be void due to the conversion.

Stock Market Volatility

The trading price of the Company's stock, like other software and
technology  stocks,  is  subject to significant  volatility.   If
revenues   or   earnings   fail  to  meet  securities   analysts'
expectations, there could be an immediate and significant adverse
impact on the trading price of the Company's stock.  In addition,
the  Company's  stock  price may be affected  by  broader  market
factors that may be unrelated to the Company's performance.



                   PART II.  OTHER INFORMATION
                                
Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits

     4.   Rights Agreement between the Company and Harris Trust &  
          Savings Bank, dated August 10, 1998 (this exhibit is  
          incorporated herein by reference to the Company's report
          on Form 8-K filed August 6, 1998).
      
      27. Financial  data  schedule  for  the   period   ended
          September 30, 1998, filed herewith.

(b)   The Company filed a Form 8-K on August 6,  1998  to
      report the adoption of a Shareholder Rights Plan that

      replaced the Company's prior Shareholder Rights Plan  which
      expired  at the conclusion of its ten year term.  Like  the
      expired   Plan,   the   new  Plan  grants   the   Company's
      shareholders  certain rights to purchase additional  common
      stock  in  the  event  of an unsolicited  attempt  to  gain
      control of the Company.



                                
                                
                            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.


                                STRUCTURAL DYNAMICS RESEARCH
                                CORPORATION




Date:  November 11, 1998        By: /s/ Jeffrey J. Vorholt
                                  Jeffrey J. Vorholt,
                                  Vice President,
                                  Chief Financial Officer and
                                  Treasurer



                                *  Pursuant to the last
                                     sentence of General Instruction
                                   G to Form 10-Q, Mr. Jeffrey J.
                                   Vorholt has executed this
                                   Quarterly Report on Form 10-Q
                                   both on behalf of the
                                   registrant and
                                   in his capacity as its
                                   principal financial and
                                   accounting officer.