[CONFORMED COPY]

                            FORM 10-QSB

                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

              Quarterly Report under Section 13 or 15(d)
               of the Securities Exchange Act of 1934

For Quarter Ended:       September 30, 2004
Commission File Number:	 0-4728

                 ARROW-MAGNOLIA INTERNATIONAL, INC.

 (Exact name of small business issuer as specified in its charter)

                               Texas

  (State or other jurisdiction of incorporation or organization)

                             75-0408335

               (I.R.S. Employer Identification No.)

               2646 Rodney Lane, Dallas, Texas 75229

              (Address of principal executive offices)

                         (972) 247-7111

          (Issuer's telephone number, including area code)

Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 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

Number of common shares outstanding as of September 30, 2004:

          Common Stock, $0.10 par value, 3,401,491 shares

<PAGE>


                    ARROW-MAGNOLIA INTERNATIONAL, INC.
                              September 30, 2004

                           TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION.


Item 1.  	Financial Statements                          Page

     Arrow-Magnolia International, Inc.
     Condensed Balance Sheets as of September 30, 2004
     (unaudited) and December 31, 2003.			           3

     Arrow-Magnolia International, Inc.
     Condensed Statements of Income for the Nine and Three
     Month Periods Ended September 30, 2004 and 2003
     (unaudited).			                                   4

     Arrow-Magnolia International, Inc.
     Condensed Statements of Cash Flows for the Nine
     Month Periods Ended September 30, 2004 and 2003
     (unaudited).				                             5

     Notes to Condensed Financial Statements (unaudited).        6

Item 2.	Management's Discussion and Analysis or
        Plan of Operation.                                       7

Item 3. Controls and Procedures                                  8



                PART II.  OTHER INFORMATION.


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

Signatures                                                       8

Certifications Pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002                                                8

<PAGE>
                    ARROW-MAGNOLIA INTERNATIONAL, INC.
                        CONDENSED BALANCE SHEETS
                 SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
<TABLE>
                                      September 30,   December 31,
                                          2004            2003
                                       -----------    -----------
                                       (unaudited)
<S>                                      <C>             <C>
Assets
Current assets:

   Cash and cash equivalents            $2,948,985     $2,471,288
   Short-term investments                  300,000        300,000
   Trade accounts receivable, less
     allowance for doubtful
     accounts of $220,378 in 2004 and
     $413,105 in 2003                    1,972,602      1,766,411
   Inventories                             974,445        856,725
   Refundable income taxes                   8,793        271,385
   Deferred income taxes                   114,500        180,300
   Other assets                            327,010        210,282
                                       -----------    -----------
        Total current assets            $6,646,335     $6,056,391

Property and equipment - cost            5,320,752      5,122,123
Accumulated depreciation                (2,509,507)    (2,086,522)
Intangible assets, net                     113,035        113,035
Other assets, at cost                          850            850
                                       -----------    -----------
        Total assets                    $9,571,465    $9,205,877
                                       ===========    ===========
        Liabilities and stockholders' equity

Current liabilities:

   Accounts payable                       $721,927       $619,368
   Accrued liabilities                     172,407        116,708
   Accrued sales tax                        52,684        259,305
                                       -----------    -----------
        Total current liabilities         $947,018       $995,381

Environmental remediation liability         89,030         79,932
Deferred income taxes                      142,300         40,800
Deferred compensation                      104,500        104,500
                                       -----------    -----------
        Total liabilities               $1,282,848     $1,219,613
                                       -----------    -----------
Stockholders' equity:
   Preferred stock - par value $.10;
     authorized 500,000 shares; none
     issued                             $        -     $        -
   Common stock - par value $.10;
     authorized 10,000,000 shares;
     issued 3,414,991 and 3,414,991
     shares in 2004 and 2003,
     respectively                          341,499        341,499
   Additional paid-in capital            5,668,154      5,668,154
   Retained earnings                     2,340,432      2,038,079
   Less cost of 13,500 shares of common
     stock in treasury                     (61,468)       (61,468)
                                       -----------     ----------
       Total stockholders' equity       $8,288,617     $7,986,264
                                       -----------     ----------
       Total liabilities and
         stockholders' equity           $9,571,465     $9,205,877
                                       ===========     ==========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
                 ARROW-MAGNOLIA INTERNATIONAL, INC.
                  CONDENSED STATEMENTS OF INCOME
   FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
                      Nine months ended       Three months ended
                        September 30,            September 30,
                   ----------------------  -----------------------
                      2004        2003        2004        2003
                   (unaudited) (unaudited) (unaudited) (unaudited)
                   ----------  ----------  ----------  ----------
<S>                 <C>         <C>           <C>        <C>
Net sales          $9,391,671  $9,684,060  $3,246,460  $3,237,813
Cost of sales       5,267,599  $5,711,200   1,802,012   2,068,549
                   ----------  ----------  ----------  ----------
  Gross profit     $4,124,072  $3,972,860  $1,444,448  $1,169,264

General and
  administrative
  expenses          3,672,134   4,196,228   1,203,184   1,143,578
                   ----------  ----------  ----------  ----------
Income (loss)
before other
income (expense)     $451,938   $(223,368)   $241,264     $25,686
                   ----------  ----------  ----------  ----------
Other income (expense)
 Interest income      $17,715      $9,720     $10,988      $3,490
 Interest expense           -      (8,902)          -           -
 Other income               -         500           -          (3)
                   ----------  ----------  ----------  ----------
 Total other
 income (expense)     $17,715      $1,318     $10,988      $3,487
                   ----------  ----------  ----------  ----------
Income (loss) before
  income taxes       $469,653   $(222,050)   $252,252     $29,173
                   ----------  ----------   ---------  ----------
Provision for income
  taxes:
   Current           $      -    $(99,200)   $      -     $(1,700)
   Deferred (benefit) 167,300      12,200      95,500       2,900
                   ----------  ----------  ----------  ----------
                     $167,300    $(87,000)    $95,500      $1,200
                   ----------  ----------  ----------  ----------
Net income (loss)    $302,353   $(135,050)   $156,752     $27,973
                   ==========  ==========  ==========  ==========
Earnings (loss) per
common share:
   Basic                $0.09      $(0.04)      $0.05       $0.01
                   ==========  ==========  ==========  ==========
   Diluted              $0.08         n/a       $0.04       $0.01
                   ==========  ==========  ==========  ==========
Weighted average common
   shares outstanding:
   Basic            3,401,491   3,295,287    3,401,491   3,363,475
                   ==========  ==========   ==========  ==========
   Diluted          3,627,048         n/a    3,622,917   3,618,420
                   ==========  ==========   ==========  ==========
</TABLE>
See accompanying notes to condensed financial statements.

                      ARROW-MAGNOLIA INTERNATIONAL, INC.
                      CONDENSED STATEMENTS OF CASH FLOWS
     FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
                                       2004             2003
                                     -----------      -----------
                                     (unaudited)      (unaudited)
<S>                                     <C>               <C>
Cash flows from operating activities:

   Net income                           $302,353        $(135,050)

   Adjustments to reconcile net
      income (loss) to net cash
      provided (used) by operating
      activities:
    Depreciation and amortization        422,985          368,723
    Deferred income taxes                167,300           12,200
    Provision for doubtful accounts     (192,727)          (4,388)
    Gain on sale of assets                     -             (500)
    Tax benefit of exercised options           -           77,357

   Changes in operating assets and
      liabilities:
      Receivables                        (13,464)         365,094
      Inventories                       (117,720)        (126,122)
      Prepaid income taxes               262,592           22,589
      Other assets                      (116,728)         (77,154)
      Accounts payable                   102,559          292,713
      Accrued expenses                  (150,922)          14,786
      Environmental remediation liability 10,098          (20,921)
                                      ----------      -----------
         Net cash (used) provided by
           operating activities        $ 676,326        $ 789,327
                                      ----------      -----------
Cash flows from investing activities:

   Proceeds from sale of assets                -              500
   Acquisition of property and
     equipment                          (198,629)        (407,030)
                                      ----------      -----------
         Net cash (used) by
            investing activities       $(198,629)       $(406,530)
                                      ----------      -----------
Net increase (decrease) in cash and
  cash equivalents                     $ 477,697        $ 382,797

Cash and cash equivalents:

   Beginning of period                 2,471,288       $1,867,281
                                      ----------       ----------
   End of period                      $2,948,985       $2,250,078
                                      ==========       ==========
</TABLE>
See accompanying notes to condensed financial statements.

<PAGE>



                ARROW-MAGNOLIA INTERNATIONAL, INC.
             NOTES TO CONDENSED FINANCIAL STATEMENTS
                           (Unaudited)

(1)  Basis of presentation

The quarterly financial information included herein is unaudited;
however, such information reflects all adjustments (consisting
solely of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair statement of results for the
interim period.

(2)  Earnings per share

The Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 128, Earnings Per Share, during
1997 and retroactively restated all per share amounts. SFAS No.
128 reporting requirements replace primary and fully-diluted
earnings per share (EPS) with basic and diluted EPS.  Basic EPS
is calculated by dividing net income (available to common
stockholders) by the weighted average number of common shares
outstanding for the period.  Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock.

(3)  Environmental remediation

The Company has engaged an environmental consultant to review the
nature and extent of any contamination by regulated chemicals
released from the Company's property. In September 2002, the
consultant issued a draft Affected Property Assessment Report
("APAR") that partially defined the extent of migration of
contaminants on Arrow's property and adjoining properties to the
Texas Commission on Environmental Quality ("TCEQ") under the
Voluntary Cleanup Program("VCP"). The Company submitted its final
APAR in April 2004 and a Response Action Plan ("RAP") in May 2004
in which the Company requested continued monitoring of the site for
three years to assess the stability of the affected zone and
monitored natural attenuation of the contamination with controls
to prevent use of the affected groundwater. The TCEQ has indicated
preliminary acceptance of this proposal, but has requested
additional information on some of the data submitted.

At December 31, 2000, the Company established a reserve for
environmental remediation of $250,000; the Company has expended
$171,218 since the reserve was created. Based upon the terms of
the RAP, the Company increased the amount of its reserve for
environmental contamination by $12,068 to $91,000 during the
quarter ended June 30, 2004.

<Page>

(4)   Pro forma information related to stock options

The Company accounts for its stock-based employee compensation
plans under the recognition and measurement principles of APB
Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations.  No stock based employee compensation
cost is reflected in net income, as all options granted under
those plans had an exercise price equal to the market of the
underlying common stock on the date of grant.

The following table illustrates the effect on net income and
earnings per share if the company had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting
for Stock-Based Compensation, to stock-based employee compensation.

		           Nine Months Ended   Three Months Ended
		             September 30,        September 30,
                           -----------------   ------------------
		               2004       2003      2004       2003
                       ----------  ---------  --------  ---------
Net earnings (loss),
  as reported           $302,353   $(135,050) $156,752   $27,973

Deduct: Total stock-based
  employee compensation
  expense determined under
  fair value based method
  for all awards, net
  of tax effect           (6,892)    (19,551)    (2,298)   (6,517)
                       ----------  ---------  ---------  --------
Pro forma net
  income (loss)          $295,461  $(154,601)  $154,454  $ 21,456
                       ==========  =========  =========  ========

Earnings (loss) per
  common share:
 Basic-as reported      $   0.09    $ (0.04)   $  0.05   $   0.01
                       ==========  =========  =========  ========
 Basic-pro forma        $   0.09    $ (0.05)   $  0.05   $   0.01
                       ==========  =========  =========  ========
 Diluted-as reported    $   0.08        n/a    $  0.04   $   0.01
                       ==========  =========  =========  ========
 Diluted-pro forma      $   0.08        n/a    $  0.04   $   0.01
                       ==========  =========  =========  ========

(5)  Subsequent Event

On October 7, 2004, Arrow-Magnolia International, Inc. (the "Company")
entered into an Agreement and Plan of Merger with Arrow Acquisition
L.P., a newly formed entity established by David Tippeconnic for the
merger transaction ("Acquisition"), pursuant to which Acquisition has
agreed to merge with and into the Company. Under the Agreement and Plan
of Merger,shareholders in the Company would receive $1.60 per share in
exchange for their shares and holders of in-the-money rights to acquire
shares would receive for each share underlying their rights the spread
between $1.60 and the exercise price.  The transaction is subject to
numerous conditions and contingencies, including assertion of appraisal
rights by holders of no more than 5% of outstanding stock, arrangement
of satisfactory financing, shareholder approval of the merger and other
matters set forth in the Agreement and Plan of Merger.  Four of the
largest shareholders, including Estelle Shwiff, Mark Kenner and Fred
Kenner, who collectively hold a majority of the Company's outstanding
stock, have agreed to vote in favor of the merger. No assurance can be
given that the transaction will be successfully completed.

<Page>

Item 2. Management's Discussion and Analysis or Plan of Operation.

Material Changes in Financial Condition.

The Company's working capital (total current assets less total
current liabilities) which was $4,836,778 as of December 31, 2003,
increased to $5,363,487 as of September 30, 2004. The increase in
working capital was primarily the result of an increase in
accounts receivable and inventory levels.

The Company's cash flow from operating activities for the nine
months generated $676,326 as amounts used to fund inventory and
accounts receivable were partially offset by increased accounts
payable and accruals and a decrease in prepaid income taxes. A
total of $198,629 was also utilized as investments to acquire
property and equipment (primarily spray systems at customer sites).
The resulting increase in cash for the nine months of 2004 was
$477,697, as compared to an increase of $382,797 during the first
nine months of 2003.

The Company believes that its present financing is adequate for
its capital needs for the foreseeable future.


Material Changes in Results of Operations

Net sales revenue for the nine months ended September 30, 2004
decreased to $9,391,671 from $9,684,060 or 3.0%, from the same period
of 2003. Net sales revenue for the third quarter of 2004 increased to
$3,246,460 from $3,237,813 from the third quarter of 2003. The decline
in net sales revenue for the first nine months can be attributed to
a decline in commercial construction activity and very severe weather
that effected a large part of the Company's marketing area during
the first quarter of 2003.  The increase in sales for the third
quarter of 2004 versus the third quarter of 2003 is due to a general
improvement in economic activity in the quarter.

Cost of sales as a percentage of net sales decreased to 56.1% of
net sales for the nine months ended September 30, 2004 as compared to
58.9% of net sales for the same period of 2003. Cost of goods
decreased to 55.5% of net sales in the third quarter of 2004 as
compared to 63.9% for the third quarter of 2003. The decrease can be
attributed to increased product prices to offset increases in the
cost of oil-related raw materials and a change in the warranty policy
for spare parts.

As a result of the pricing and policy actions by the company, gross
profit increased to $4,124,076 from $3,972,860 for the nine months
ended September 30, 2004 versus the comparable period of fiscal 2003.
Gross profit for the third quarter of 2004 increased to $1,444,448
from $1,169,264 for the third quarter of 2003.

General and administrative expenses decreased by $524,094, from
$4,196,228 for the nine months ended September 30, 2003 to
$3,672,134 for the nine months ended September 30, 2004. The primary
cause for the decrease in expenses is the $542,500 charge to the bad
debt reserve in the second quarter of 2003.  General and
administrative expenses increased $59,606, or 5.2%, to $1,203,184 for
the third quarter of 2004 from $1,143,578 for the third quarter of
2003.

Other income and expense for the first nine months of 2004 was
income of $17,715 versus an income of $1,319 for the first nine
months of 2003. This increase is the result higher interest rates
on higher invested balances and no interest expense.  Other income
and expense was income of $10,988 for the third quarter of 2004 and
income of $3,487 for the third quarter of 2003. The increase of
$7,560 can be attributed to higher interest rates and higher invested
balances during the quarter.

As a result of these factors, the net profit is $302,353 for the
first nine months of 2004 , versus a net loss of $135,050 for the
comparable period of fiscal 2003. Net earnings for the third quarter
of 2004 is $156,752 versus $27,973 for the third quarter of 2003.

<Page>

Item 3.   Controls and Procedures

	The Company's Chief Executive Officer and Chief Financial
Officer have conducted an evaluation of the effectiveness of
disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based on that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the disclosure controls
and procedures are effective in ensuring that all material
information required to be filed in this quarterly report has been
made known to them in a timely fashion. There have been no
significant changes in internal controls, or in factors that
could significantly affect internal controls, subsequent to the
date the Chief Executive Officer and Chief Financial Officer
completed their evaluation.

                         Part II.  OTHER INFORMATION

Item 6.   Exhibits and Reports.

     (a) Exhibit 14.  Code of Ethics


SIGNATURE

	Pursuant to the requirement of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                ARROW-MAGNOLIA INTERNATIONAL, INC.



Date:  November 9, 2004        By: /s/Mark Kenner
                                   -------------------------------
                                   Mark Kenner, Chairman and Chief
                                   Executive Officer


Date:  November 9, 2004        By: /s/Fred Kenner
                                   -------------------------------
                                   Fred Kenner, President and
                                   Chief Financial Officer

                       CERTIFICATIONS PURSUANT TO
                             SECTION 302 OF
                     THE SARBANES-OXLEY ACT OF 2002

I, Mark Kenner, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Arrow-
Magnolia International, Inc.;

2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:

<Page>

a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):

a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: November 9, 2004

                                   /s/Mark Kenner
                                   ---------------------------
                                   Mark Kenner, Chief Executive
                                   Officer

I, Fred Kenner, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Arrow-
Magnolia International, Inc.;

2. Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;

4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

<Page>

5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):

a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: November 9, 2004

                                   /s/Fred Kenner
                                   --------------------------
                                   Fred Kenner, Chief Financial
                                   Officer