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:       June 30, 1998
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 June 30, 1998:

              Common Stock, $0.10 par value, 2,689,757 shares
PAGE
<PAGE>
                    ARROW-MAGNOLIA INTERNATIONAL, INC.
                               June 30, 1998

                             TABLE OF CONTENTS
 
                      PART I. FINANCIAL INFORMATION.


Item 1.   Financial Statements                              Page

     Arrow-Magnolia International, Inc. and Subsidiary      2
     Condensed Consolidated Balance Sheets as of 
     June 30, 1998 (unaudited) and December 31, 1997.

     Arrow-Magnolia International, Inc. and Subsidiary      3
     Condensed Consolidated Statements of Income for 
     the Three and Six Months Ended June 30, 1998 and
     1997 (unaudited).
     
     Arrow-Magnolia International, Inc. and Subsidiary      4
     Condensed Consolidated Statements of Cash Flows 
     for the Six Months Ended June 30, 1998 and 
     1997 (unaudited).

     Notes to Condensed Consolidated Financial              5
     Statements (unaudited).

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



                       PART II.  OTHER INFORMATION.

Item 4.   Submission of Matters to a Vote of
          Security Holders                                  9


Item 6.   Exhibits and Reports on Form 8-K                  9
PAGE
<PAGE>
             ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY
                  Condensed Consolidated Balance Sheets 
                    June 30, 1998 and December 31, 1997

<TABLE>                                   June 30,   December 31,
            Assets                        1998        1997
                                                      (unaudited)
<S>                                      <C>           <C>   
Current assets:
  Cash                                  $2,178,887     1,878,919  
  Short-term investments                   300,000       300,000  
  Trade accounts receivable, less 
     allowance for doubtful
     accounts of $288,900 in 1998 
     and $346,900 in 1997                3,317,316     2,773,352  
  Inventories                              680,856       601,157  
   Deferred income taxes                    98,225       117,946  
   Other assets                             19,924        26,632
                                         ---------     --------- 
     Total current assets                6,595,208     5,698,006

Property and equipment, net                755,356       738,916
Intangible assets, net                     134,283       137,318
Note receivable                             40,000        40,000
Deferred income taxes                       29,912        29,912
Other assets                                 2,700         2,700
                                         ---------     ---------
                                        $7,557,459     6,646,852
                                         =========     =========
      Liabilities and Stockholders' Equity

Current liabilities:
  Note payable                          $  600,000             -
  Current installments of long-term debt    32,121       101,361
  Accounts payable                         691,085       571,426
  Accrued liabilities                      191,401       216,324
  Income taxes payable                     141,974       140,281
                                         ---------     ---------
     Total current liabilities           1,656,581     1,029,392

Note payable                                     -       600,000
Deferred compensation                      104,500       104,500
                                         ---------     ---------
     Total liabilities                   1,761,081     1,733,892
                                         ---------     ---------
Stockholders' equity:
  Preferred stock - par value $.10; 
  authorized 500,000
  shares; none issued                            -             -
 Common stock - par value $.10; 
  authorized 10,000,000
  shares; 2,689,757 shares issued 
  and outstanding in 1998
  and 2,681,392 shares issued and 
  outstanding in 1997                     268,976        268,139
Additional paid-in capital              2,823,419      2,776,182
Retained earnings                         955,639      1,868,639
Stock dividend to be issued (note 4)    1,748,344              - 
                                        ---------      ---------
     Total stockholders' equity         5,796,378      4,912,960
                                        ---------      ---------
Commitments 
                                        $7,557,459     6,646,852  
                                        ==========     =========      
</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
PAGE
<PAGE>
               ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY

                  Condensed Consolidated Statements of Income 

               Six and three months ended June 30, 1998 and 1997

<TABLE>
            Six months ended June 30   Three months ended June 30
                    1998           1997      1998      1997 
               (unaudited)    (unaudited) (unaudited) (unaudited)
<S>                 <C>             <C>      <C>       <C>
                        
Net sales           $7,429,538     6,085,891 3,799,339 3,314,188 
Cost of sales        4,045,868     3,375,275 2,068,108 1,853,486
                     ---------     --------- --------- ---------
     Gross profit    3,383,670     2,710,616 1,731,231 1,460,702 

General and 
administrative    
expenses             2,108,447     1,801,969 1,103,557   871,862 
                     ---------     --------- ---------   -------
    Operating income 1,275,223       908,647   627,674   588,840 
                     ---------     --------- ---------   -------
Other income (expenses): 
   Interest expense    (28,547)      (33,673)  (14,024)  (16,853)
   Other income         52,554        35,167    35,203    17,940 
                       -------       --------  --------  --------
     Other income 
     (expenses), net    24,007         1,494    21,179     1,087 
                        ------        ------   -------    ------
     Income before 
     income taxes    1,299,230       910,141   648,853   589,927 
              
Income taxes:
  Current              444,165       404,321   272,912   235,231 
  Deferred income 
  tax expense      
 (benefit)              19,721       (22,234)  (42,887)  (14,146)
                      --------       --------  --------  --------
     Net income       $835,344       528,054   418,828   368,842 
                      ========       =======   =======   =======
Earnings per common share:
   Basic               $   .28           .18       .14       .13 
                      ========       =======    ======    ======   
   Diluted            $    .25           .16       .12       .11 
                      ========       =======    ======    ====== 
Weighted average common 
shares outstanding:
   Basic             2,954,666     2,871,475 2,956,060 2,871,475 
                     =========     ========= ========= =========
   Diluted           3,373,624     3,298,838 3,376,341 3,299,928 
                     =========     ========= ========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
PAGE
<PAGE>
               ARROW-MAGNOLIA INTERNATIONAL, INC, AND SUBSIDIARY

                Condensed Consolidated Statements of Cash Flows 

                    Six months ended June 30, 1998 and 1997
<TABLE>

                                        1998           1997       
                                        (unaudited)   (unaudited)
<S>                                     <C>       <C>
Cash flows from operating activities:
   Net income                           $835,344       528,054    
   Adjustments to reconcile net income 
    to net cash used in operating 
    activities:
      Depreciation and amortization       71,035        73,274    
      Deferred income tax expense 
       (benefit)                          19,721       (22,234)   
      Provision for doubtful accounts    244,796        65,395    
      Compensation expense from issuance 
       of common stock, stock
       options and warrants               36,886       104,500
      Change in operating assets and 
        liabilities:
          Receivables                   (788,760)   (1,057,178)
          Inventories                    (79,699)     (104,554)
          Other assets                      6,708       (95,394)
          Accounts payable                119,659        294,790  
          Accrued liabilities            (24,923)       (42,178)
          Income taxes payable            10,302        (73,625)
                                        ---------     ----------
               Net cash provided by 
               (used in) operating 
               activities                451,069       (329,150)
                                        --------      ----------
Cash flows from investing activities:
  Purchase of short-term investments    (200,000)             -   
  Proceeds from maturity of short-term 
    investments                          200,000              -   
  Acquisition of property and equipment  (84,440)       (99,182)
                                        ---------      ---------
               Net cash used in 
               investing activities      (84,440)       (99,182)
                                        ---------      ---------
Cash flows from financing activities:
  Repayments of note payable                   -        (50,000)  
  Proceeds from common stock issuance      2,579              - 
  Repayments of long-term debt           (69,240)       (58,240)
                                        ---------      ---------
               Net cash used in 
               financing activities      (66,661)      (108,240)
                                        ---------      ---------
Net decrease in cash                     299,968       (536,572)
Cash at beginning of period            1,878,919       1,755,000
                                       ---------       --------- 
Cash at end of period                 $2,178,887       1,218,428 
                                       =========       =========
   </TABLE>
See accompanying notes to unaudited condensed consolidated
financial statements.
PAGE
<PAGE>
            ARROW-MAGNOLIA INTERNATIONAL, INC. AND SUBSIDIARY
                                    
 Notes to Unaudited Condensed Consolidated Financial Statements
                                    
                             June 30, 1998 

(1)  Basis of Presentation

The June 30, 1998 condensed consolidated financial statements
(unaudited) include the accounts of Arrow-Magnolia International,
Inc., and its Chemco Chemical Company Division, and its
wholly-owned subsidiary, Bio/Dyne Chemical Company, an inactive
corporation.  All significant intercompany balances and
transactions have been eliminated.

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 and may not be indicative of results for the full
year.  Certain items in the 1997 condensed consolidated financial
statements have been adjusted to reflect the actual timing of
certain transactions as described in the Company's December 31,
1997 annual report on Form 10-KSB.

        
(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
shareholders) 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. 
Both basic and diluted EPS have been restated for all periods
presented for the effects of the common stock dividend as
discussed in note 4.


(3)  Newly Adopted Accounting Pronouncements

On January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." 
This statement establishes standards for reporting the components
of comprehensive income and requires that all items that are
required to be recognized under accounting standards as
components of comprehensive income be included in a financial
statement that is displayed with the same prominence
as other financial statements.  Comprehensive income includes net
income as well as certain items that are reported directly within
a separate component of shareholders' equity and bypass net
income.  The adoption of Statement 130 did not have a material
impact on the Company's financial condition or results of
operations.
<PAGE>

(4)  Stock Dividend to be Issued

On May 21, 1998, the Company declared a 10% common stock dividend
for shareholders of record as of July 14, 1998.  The declarations
for the post-balance sheet issuance of common stock under the
stock dividend has been deducted from retained earnings and
reflected in the Company's unaudited June 30, 1998 condensed
consolidated balance sheet as a separate component of
stockholders' equity.  On July 14, 1998, $26,898 and $1,721,446
was transferred from the stock dividend to be issued account to
common stock and additional paid-in capital, respectively.
PAGE
<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 $4,668,614 as of December 31,
1997, increased to $4,938,627 as of June 30, 1998.   The
increase in working capital was primarily the result of growth in
cash and trade accounts receivable as a result of improved sales
in the quarter, largely offset by increased accounts payable
incurred in connection with increased sales and reclassification
of the Company's debt to its secured lender to current
liabilities because its due date of May 1, 1999 is within one
year of the quarter end.

The Company's cash flow from operations for the quarter provided
$451,069 as funds generated from earnings and management of
accounts payable exceeded cash used to support additional growth,
primarily to fund increased accounts receivable and inventory. 
Funds were also utilized to acquire property and equipment and to
reduce debt.  The resulting increase in cash for the quarter was
$299,968.  

Currently, the Company is evaluating whether to construct an
additional 30,000 square feet of warehouse space to its existing
facilities and should have more than adequate funds on
hand to complete this addition if the Company concludes that it
is desirable.  The Company believes that its present financing is
also otherwise adequate for its capital needs for the
foreseeable future.
 
Material Changes in Results of Operations

Net sales for the six months ended June 30, 1998 increased to
$7,429,538 from $6,085,891, or 22.1%, from the same period of
1997 and to $3,799,339 from $3,314,188, or 14.6%, in the second
quarter of 1998 as compared to the corresponding period of 1997. 
These increases are primarily attributable to the extension of
sales coverage through the addition of sales personnel under an
ongoing hiring program which included the acquisition of Darsan,
Inc. and Southwest Supply & Environmental in May 1997. 

Cost of sales as a percentage of net sales improved modestly to
54.6% of net sales for the six months ended June 30, 1998 as
compared to 55.5% of net sales for the same period of 1997. For
the second quarters of 1998 and 1997, cost of goods sold was
54.4% and 55.9%, respectively.  Cost of goods sold has improved
as a result of better absorption of fixed costs through the
Company's larger volume of sales.

As a result, gross profit increased by 28.4% to $3,383,670 from
$2,710,616 for the six months ended June 30, 1998 versus the
comparable period of fiscal 1997 and by 18.5% to $1,731,231 from
$1,460,702 for the second quarters of 1998 and 1997,
respectively.  

General and administrative expenses increased by 26.6% and 17.0%
for the comparable three month and six month periods,
respectively.  This increase reflects expenses associated with
supporting the Company's growing sales organization.
<PAGE>  
As a result of these factors, net income increased dramatically
for the comparable six months periods to $835,344 from $528,054,
or 58.2%, and for the comparable second quarters of 1998 and 1997
to $418,828 from $368,842, or 13.6%.

Year 2000 Issue

In 1996, the Company developed a plan to deal with the Year 2000
problem and began converting its computer systems to be Year 2000
compliant. During 1997, the Company began the conversion of its
computer systems.  The Year 2000 problem is the result of
computer programs being written using two digits rather than four
to define the applicable year.  The Company is expending all
costs associated with these systems as the costs are incurred. 
The Company does not expect to incur any material costs during
the conversion of its computer system. 
PAGE
<PAGE>

                        Part II.  OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Security Holders.

The annual meeting of shareholders of Arrow-Magnolia
International, Inc. was held on May 21, 1998, at which time the
shareholders were asked to vote upon election of Directors and
approval of the declaration of a 10% stock dividend.

All nominees identified in the Company's proxy materials were
elected.  The votes in such election were tabulated as follows:

     Nominees                 For            Against

     Morris Shwiff            2,350,554      1,421
     Mark Kenner              2,351,754        221
     Fred Kenner              2,351,854        121
     Robert D. DeRosier       2,351,854        121
     Clifton R. Duke          2,351,754        221

The votes to approve the dividend were tabulated as follows:

     For            Against   Abstain   Broker's Non Vote

     2,348,775      500       0         2,700

Therefore, as contemplated, a 10% stock dividend was distributed
on August 1, 1998 to shareholders of record as of July 15, 1998.


Item 6.   Exhibits and Reports.

     (a)  None

PAGE
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                                 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:  August 14, 1998           By:   /s/ Morris Shwiff       
                                        Morris Shwiff, President
                                        and Principal Executive
                                        Officer




Date:   August 14, 1998           By:  /s/ Fred Kenner           
                                        Fred Kenner, Vice
                                        President,
                                        Secretary and Treasurer;
                                        the Principal Financial
                                        and Accounting Officer