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                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                 Washington, DC 20549

                                      FORM 10-Q

(Mark One)

/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

    For The Quarterly Period Ended October 31, 1996 or

/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

    For the transition period from _________________ to _________________




Commission File Number:  1-4488


                                     MESABI TRUST
                (Exact name of registrant as specified in its charter)




              NEW YORK                                13-6022277
    (State or other jurisdiction of      (I.R.S. Employer Identification No.)
    incorporation or organization)


                          IN CARE OF BANKERS TRUST COMPANY,
                            CORPORATE TRUST & AGENCY GROUP
                                     P.O. BOX 318
                                CHURCH STREET STATION
                               NEW YORK, NEW YORK 10015
                       (Address of principal executive offices)



                                    (212) 250-6519
                 (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 December 12, 1996, there were 13,120,010 Units of Beneficial Interest in
Mesabi Trust outstanding.


                                          1

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                            PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements  (Note 1)




<TABLE>
<CAPTION>

                                                           THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                OCTOBER 31,                   OCTOBER 31,

                                                           1996            1995          1996           1995
                                                           ----            ----          ----           ----
<S>                                                      <C>           <C>            <C>            <C>
A.  Condensed Statements of Income
   Revenues:

     Royalty income                                      $2,682,750    $1,415,617      $4,650,447    $2,804,438
     Interest income                                         11,992        13,020          29,307        30,815
                                                         ----------    ----------      ----------    ----------
                                                         $2,694,742    $1,428,637      $4,679,754    $2,835,253

   Expenses                                                  72,123        82,109         244,761       267,295
                                                         ----------    ----------      ----------    ----------
   Net income                                            $2,622,619    $1,346,528      $4,434,993    $2,567,958
                                                         ----------    ----------      ----------    ----------
                                                         ----------    ----------      ----------    ----------

   Weighted average number                               13,120,010    13,120,010      13,120,010    13,120,010
    of units outstanding

   Net income per unit  (Note 2)                         $ 0.199895    $ 0.102631      $ 0.338033    $ 0.195728

   Distributions declared
    per unit                                             $ 0.19        $ 0.09          $ 0.275       $ 0.155

</TABLE>






SEE NOTES TO FINANCIAL STATEMENTS.


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B.  Condensed Balance Sheets


Assets:                                OCTOBER 31, 1996      JANUARY 31, 1996
                                       ----------------      ----------------

    Cash                                 $     21,014        $      9,183

    U.S. Government securities,
     at cost (which approximates
     market)                                2,989,504           2,145,588

    Accrued income                            862,521             127,419
    Prepaid insurance                           6,771               3,938
                                         ------------        ------------
                                         $  3,879,810        $  2,286,128
                                         ------------        ------------


    Fixed property, including
     intangibles, at nominal values:

    Amended Assignment of
     Peters Lease                        $          1        $          1

    Assignment of Cloquet Lease                     1                   1

    Certificate of beneficial
     interest for 13,120,010
     units of Land Trust                            1                   1
                                         ------------        ------------
                                         $          3        $          3
                                         ------------        ------------

                                         $  3,879,813        $  2,286,131
                                         ------------        ------------
                                         ------------        ------------

Liabilities, Unallocated
Reserve and Trust Corpus:

    Liabilities:
     Distribution payable                $  2,492,802        $  1,574,401
     Accrued expenses                          18,615              55,979
                                         ------------        ------------
                                         $  2,511,417        $  1,630,380

    Deferred income                                --             114,345
    Unallocated reserve  (Note 3)           1,368,393             541,403
    Trust Corpus                                    3                   3
                                         ------------        ------------
                                         $  3,879,813        $  2,286,131
                                         ------------        ------------
                                         ------------        ------------




SEE NOTES TO FINANCIAL STATEMENTS.


                                          3


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C.  Condensed Statements of Cash Flows

<TABLE>
<CAPTION>


                                                                        NINE MONTHS ENDED
                                                                           OCTOBER 31,
                                                               --------------------------------
                                                                      1996             1995
                                                                      ----             ----
<S>                                                            <C>                 <C>
Cash flows from operating
activities:
        Royalties received                                     $  3,791,103        $  2,364,055
        Interest received                                            39,204              22,706
        Expenses paid                                              (284,958)           (299,394)
                                                               ------------        ------------
        Net cash provided by
         operating activities                                  $  3,545,349        $  2,087,367
                                                               ------------        ------------

Cash flows from investing
 activities:
        Sales and redemptions of
           U.S. Government
           securities                                          $  3,979,726        $  3,348,123
        Purchases of U.S.
         Government securities                                   (4,823,642)         (4,704,429)
                                                               ------------        ------------

        Net cash (used in) investing
         activities                                            $   (843,916)       $ (1,356,306)
                                                               ------------        ------------

Cash flows from financing
  activities:
        Net cash (used in) financing
         activities, distributions
         to Unitholders                                        $ (2,689,602)       $ (2,164,802)
                                                               ------------        ------------

Net increase (decrease)
        in cash                                                $     11,831        $ (1,433,741)
Cash, beginning of year                                               9,183           1,442,627
                                                               ------------        ------------
Cash, end of quarter                                           $     21,014        $      8,886
                                                               ------------        ------------
                                                               ------------        ------------

Reconciliation of net income
  to net cash provided by
  operating activities:
        Net income                                             $  4,434,993        $  2,567,958
        (Increase) in accrued
          income                                                   (735,102)           (398,896)
        (Increase) in prepaid insurance                              (2,833)             (3,375)
        (Decrease) in
          accrued expenses                                          (37,364)            (28,723)
        (Decrease) in deferred income                              (114,345)            (49,597)
                                                               ------------        ------------
        Net cash provided by
         operating activities                                  $  3,545,349        $  2,087,367
                                                               ------------        ------------
                                                               ------------        ------------


</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.


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<PAGE>

                                     MESABI TRUST
                            NOTES TO FINANCIAL STATEMENTS


    Note 1.   The financial statements included herein have been prepared
              without audit (except for the balance sheet at January 31, 1996)
              in accordance with the instructions to Form 10-Q pursuant to the
              rules and regulations of the Securities and Exchange Commission.
              Certain information and footnote disclosures normally included in
              financial statements prepared in accordance with generally
              accepted accounting principles have been condensed or omitted
              pursuant to such rules and regulations.  In the opinion of the
              Trustees, all adjustments, consisting only of normal recurring
              adjustments, necessary for a fair statement of (a) the results of
              operations for the three and nine months ended October 31, 1996
              and 1995, (b) the financial position at October 31, 1996 and
              January 31, 1996, and (c) the cash flows for the nine months
              ended October 31, 1996 and 1995, have been made.

    Note 2.   Earnings per unit are based on weighted average number of units
              outstanding during the period (13,120,010 units).

    Note 3.   The Trustees attempt to maintain approximately $500,000 of liquid
              assets as part of an Unallocated Reserve.  The Unallocated
              Reserve consists of these liquid assets and accrued revenue
              (primarily royalties not yet received).  At October 31, 1996, the
              Unallocated Reserve was represented by $505,872 in unallocated
              cash and U.S. Government securities, and $862,521 of accrued
              revenue primarily representing royalties not yet received by the
              Trust but anticipated to be received in January 1997 from
              Northshore as part of the royalty due for the fourth calendar
              quarter, based upon reported lessee shipping activity for the
              month of October 1996.


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<PAGE>


ITEM 2.   TRUSTEES' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS.

FORWARD-LOOKING INFORMATION

     Certain statements contained in this document are forward-looking,
including specifically those statements estimating calendar year 1996 production
or shipments.  All such forward-looking statements are based on input from the
lessee/operator.  The Trust has no control over the operations and activities of
the lessee/operator except within the framework of current agreements.  Actual
results could differ materially from those indicated in such statements.  For
important factors that could cause actual results to differ materially, see
"Important Factors Affecting Mesabi Trust," below.

BACKGROUND

     Leasehold royalty income constitutes the principal source of revenue to
Mesabi Trust.  Royalty rates are determined by the terms of Mesabi Trust's
leases and assignments of leases.  Overriding royalties are determined by both
the volume and selling price of iron ore products sold.  Fee royalties payable
to Mesabi Land Trust, a Minnesota land trust of which Mesabi Trust is the sole
beneficiary ("Mesabi Land Trust"), are based on the amount of crude ore mined,
which crude ore is used to produce iron ore products.

     Northshore Mining Corporation ("Northshore") is obligated as lessee to pay
Mesabi Trust base overriding royalties, in varying amounts constituting a
percentage of the gross proceeds of shipments from Silver Bay, Minnesota of
pellets produced from Mesabi Trust lands or, to a limited extent, other lands,
ranging from 2-1/2% of the gross proceeds for the first one million tons of
pellets so shipped annually to 6% of the gross proceeds for all pellets shipped
in excess of 4 million tons annually.  In addition, Northshore is obligated to
pay to Mesabi Trust royalty bonuses constituting a percentage of the gross
proceeds of pellets shipped from Silver Bay, Minnesota for sale at prices above
a threshold price (which is adjusted on an annual basis for inflation and
deflation and is $36.62 for calendar year 1996), ranging from 1/2 of 1% of the
gross proceeds on all tonnage shipped for sale at prices between the threshold
price and $2.00 above the threshold price, to 3% of the gross proceeds on all
tonnage shipped for sale at prices $10.00 or more above the threshold price.
Generally, the obligation of Northshore to pay base overriding royalties and
royalty bonuses with respect to the sale of pellets accrues upon the shipment of
those pellets from Silver Bay.  Northshore also is obligated to pay to Mesabi
Trust a minimum advance royalty in equal quarterly installments, which is
credited against certain base overriding royalties and royalty bonuses.  The
amount of advance royalties payable is subject to adjustment for inflation and
deflation and is $610,335 for calendar year 1996.  Northshore is obligated to
make quarterly royalty payments in January, April, July and October of each
year.  In the case of base overriding royalties and royalty bonuses, these
quarterly payments are to be made whether or not the related proceeds of sale
have been received by Northshore by the time such payments become due.

     Due to a combination of factors, shipments from quarter to quarter or from
year to year fluctuate greatly.  These factors include the normal reduction of
Great Lakes shipping activity during the winter months, and reduced pellet sales
resulting from adverse economic conditions affecting the steel industry
generally.

IMPORTANT FACTORS AFFECTING MESABI TRUST

     Under the Agreement of Trust, the activities of the Trust are limited to
the collection of income, the payment of expenses and liabilities, the
distribution of net income and the protection and


                                          6

<PAGE>


conservation of the assets held.  The Trustees are specifically prohibited from
entering into or engaging in any business.  This prohibition applies
irrespective of whether the conduct of business activities is deemed by the
Trustees to be necessary or proper for the preservation and protection of the
Trust Estate.

     Accordingly, the income of the Trust is highly dependent upon the 
activities and operations of its assignee/lessee, Northshore, and the terms 
and conditions of the Amended Assignment Agreements.  The Trust and the 
Trustees have no control over the operations and activities of Northshore 
except within the framework of current agreements.

     Due to winter weather, and the increasing royalty percentages based on
tonnage shipped in a calendar year, results for a particular quarter are
typically not indicative of results for future quarters or the year as a whole.
Factors which can impact the results of the Trust in any quarter or year
include:

    1.   SHIPPING CONDITIONS IN THE GREAT LAKES.  Shipping activity by
         Northshore is dependent upon when the Great Lakes shipping lanes
         freeze for the winter months (typically in January) and when they
         re-open in the spring (typically late-March or April).  Base
         overriding royalties to Mesabi Trust are based on shipments made in a
         calendar quarter.  If there is little or no shipping activity in the
         first calendar quarter, the Trust only receives the minimum royalty
         for that period.

    2.   OPERATIONS OF NORTHSHORE.  Since the primary portion of the Trust's
         revenues are from the shipments of iron ore product by Northshore,
         Northshore's processing and shipping activities directly impact the
         Trust's revenues in any quarter or year.  Shipments by Northshore are
         impacted by a myriad of factors, including economic conditions in the
         iron ore industry, pricing by competitors, long-term customer
         contracts or arrangements by Northshore or its competitors,
         availability of ore boats, production at Northshore's mining
         operations, and production at the pelletizing/processing facility.  If
         any pelletizing line becomes idle for any reason, production (and
         shipments) could be adversely impacted.

    3.   INCREASING ROYALTIES.  As described elsewhere, the royalty percentage
         paid to the Trust increases as the aggregate tonnage of iron ore
         products shipped in any calendar year increases.  Assuming a
         consistent sales price per ton throughout a calendar year, shipments
         of iron ore product later in the year generate a higher royalty to the
         Trust.

    4.   PERCENTAGE OF MESABI TRUST ORE.  As described elsewhere, Northshore
         has the ability to process and ship iron ore product from lands other
         than Mesabi Trust lands. In certain circumstances, the Trust may be
         entitled to royalties on those other shipments, but not in all cases.


    In general, the Trust will receive higher royalties (assuming all other
    factors are equal) if a higher percentage of shipments are from Mesabi
    Trust lands.  For calendar year 1996, Northshore has advised the Trustees
    that 98% or more of shipments will come from Mesabi Trust lands.  This
    compares to percentages of 90.6%, 88.3% and 87.8% in calendar years 1995,
    1994, and 1993, respectively.

COMPARISON OF THREE MONTHS ENDED OCTOBER 31, 1996 AND OCTOBER 31, 1995

         Mesabi Trust's net income increased to $2,622,619 for the fiscal
quarter ended October 31, 1996, as compared to net income of $1,346,528 for the
fiscal quarter ended October 31,


                                          7

<PAGE>

1995.  The increase in royalty income was primarily due to increased pellet
shipments and at a higher average price, a higher percentage of shipments from
Mesabi Trust lands, and increased crude ore production (increasing the amount of
fee royalty income).  Mesabi Trust's gross income for the fiscal quarter ended
October 31, 1996 was $2,694,742, consisting of $2,601,982 in overriding royalty
income, $80,768 in fee royalty income and $11,992 in interest income, as
compared to gross income of $1,428,637 for the fiscal quarter ended October 31,
1995.  Mesabi Trust's expenses for the fiscal quarter ended October 31, 1996
were $72,123.  This compares to expenses for the fiscal quarter ended October
31, 1995 of $82,109.

COMPARISON OF NINE MONTHS ENDED OCTOBER 31, 1996 AND OCTOBER 31, 1995

         Mesabi Trust's gross income for the nine months ended October 31, 1996
was $4,679,754, an increase of $1,844,501 from the gross income of $2,835,253
for the nine months ended October 31, 1995.  The increase in royalty income was
primarily due to increased pellet shipments and at a higher average price, a
higher percentage of shipments from Mesabi Trust lands, increased crude ore
production (increasing the amount of fee royalty income) and a decrease in the
deferred income amount as compared to the comparable period.  The amount of
royalty income is directly dependent upon shipments and selling price and the
applicable royalty rate.  Interest income was higher in the 1995 period.
Expenses of $244,761 for the nine months ended October 31, 1996 decreased
$22,534 from expenses of $267,295 for the nine months ended October 31, 1995.
The increased income and decreased expenses resulted in net income of $4,434,993
for the nine months ended October 31, 1996, as compared to net income of
$2,567,958 for the nine months ended October 31, 1995.

         Mesabi Trust's Unallocated Reserve aggregated $1,368,393 at October
31, 1996, as compared with $1,009,714 at October 31, 1995.  At October 31, 1996,
the Unallocated Reserve was represented by $505,872 in unallocated cash and U.S.
Government securities, and $862,521 of accrued revenue primarily representing
royalties not yet received by the Trust but anticipated to be received in
January 1997 from Northshore as part of the royalty due for the fourth calendar
quarter, based upon reported lessee shipping activity for the month of October
1996.

         The Trustees have been advised by Northshore that Northshore 
currently estimates its calendar year 1996 shipments to be more than 4.0 
million tons, an increase from 1995 shipments of 3.6 million tons.  The 
increase, in large part, is due to the full year impact of an iron ore 
expansion project (the reactivation of a previously idle pelletizing line) 
which was completed in mid-June 1995.  In addition, Northshore has advised 
that a higher percentage of its calendar year 1996 shipments will be of iron 
ore products from Mesabi Trust lands than during the past several years, 
which will result in increased royalties to Mesabi Trust.  See "Important 
Factors Affecting Mesabi Trust" above.

                                          8

<PAGE>

                             PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES.

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

ITEM 5.  OTHER INFORMATION.

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.


         27.1  Financial Data Schedule   .......................Filed herewith.


<PAGE>

                                      SIGNATURES

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

                                                   MESABI TRUST
                                       ----------------------------------------
                                                 (Registrant)

                                       By BANKERS TRUST COMPANY
                                          Corporate Trustee
                                       Principal Administrative Officer and
                                       duly authorized signatory:*


Date:  December 13, 1996               By:  /s/ Matthew J. Seeley
                                          -------------------------------------
                                                Name: Matthew J. Seeley
                                                Title: Vice President

*   There are no directors
    or executive officers of
    the registrant.

                                     10

<PAGE>

    EXHIBIT INDEX

    Item No.            Description
    --------            -----------
    27.1           Financial Data Schedule.................Filed herewith.




                                          11