SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended July 31, 1997
Commission File Number: 0-5105


 MILASTAR CORPORATION
(Exact name of registrant as specified in its charter)


                 DELAWARE
                13-2636669
       (State or other jurisdiction of
             (I.R.S. Employer
      incorporation or organization)
             Identification No.)

                     
    No. 9 Via Parigi, Palm Beach, Florida
                   33480
 (Address of principal executive offices)
                (Zip code)

                     
Registrant's telephone number, including area code (561) 655-9590


                Not Applicable
Former name, former address and former fiscal year, if changed since last
report.


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          

At July 31, 1997, 2,738,264 shares of common stock of the Registrant were
issued and outstanding. 



MILASTAR CORPORATION AND SUBSIDIARIES



                    PART I

Item 1.  Financial Statements

    The condensed financial statements included herein have been prepared
by Milastar Corporation (the "Company") without audit, 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. However, the Company believes
that the disclosures are adequate to make the information presented not
misleading.  It is suggested that these condensed financial statements be 
read in conjunction with the financial statements and the notes thereto 
included in the Company's annual report on Form 10-K for the fiscal year ended
April 30, 1997.

    The condensed financial statements included herein, which are unaudited,
include, in the opinion of management, all adjustments (consisting only of 
normal recurring accruals) necessary to present fairly the financial position 
and results of operations of the Company for the periods presented.


<TABLE>
<CAPTION>
              MILASTAR CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS

                              ASSETS
                                                                  July 31,        April 30,  
                                                                    1997             1997    
<S>
Current assets:                                               <C>              <C>   
  Cash and cash equivalents. . . . . . . . . . . . . . .          243,000           71,000
  Accounts receivable:
  Trade, less allowance for doubtful accounts of $40,000
   (July 31, 1997) and $35,000 (April 30, 1997). . . . .        1,205,000        1,151,000
   Other . . . . . . . . . . . . . . . . . . . . . . . .            9,000            9,000
  Inventory. . . . . . . . . . . . . . . . . . . . . . .          181,000          185,000
  Prepaid expenses and other . . . . . . . . . . . . . .          168,000          153,000
    Total current assets . . . . . . . . . . . . . . . .        1,806,000        1,569,000

Property, plant and equipment:
   Land. . . . . . . . . . . . . . . . . . . . . . . . .          199,000          199,000
   Buildings and improvements. . . . . . . . . . . . . .          766,000          742,000
   Equipment . . . . . . . . . . . . . . . . . . . . . .        6,476,000        6,337,000
                                                                7,441,000        7,278,000
   Less accumulated depreciation . . . . . . . . . . . .       (2,995,000)      (2,825,000)
                                                                4,446,000        4,453,000
Other assets:
  Non-compete agreements . . . . . . . . . . . . . . . .           65,000           71,000


   Total assets. . . . . . . . . . . . . . . . . . . . .        6,317,000        6,093,000
</TABLE>
<TABLE>
<CAPTION>
               LIABILITIES AND STOCKHOLDERS' EQUITY
<S>
Current liabilities:                                          <C>              <C>                                       
   Notes payable to stockholders . . . . . . . . . . . .          165,000          165,000
   Current maturities of long-term debt. . . . . . . . .          342,000          342,000
   Accounts payable. . . . . . . . . . . . . . . . . . .          286,000          426,000
   Income taxes payable. . . . . . . . . . . . . . . . .          118,000          119,000
   Accrued payroll and benefits. . . . . . . . . . . . .          265,000          243,000
   Accrued real estate taxes . . . . . . . . . . . . . .           51,000           68,000
   Other accrued liabilities . . . . . . . . . . . . . .          184,000          130,000
      Total current liabilities. . . . . . . . . . . . .        1,411,000        1,493,000

Long-term debt, less current maturities. . . . . . . . .        1,163,000        1,072,000

      Total liabilities. . . . . . . . . . . . . . . . .        2,574,000        2,565,000

Stockholders' equity:
   Preferred stock, $1.00 par value; authorized 
     5,000,000 shares, none issued . . . . . . . . . . .           
   Common stock,  $.05 par value;  Authorized 7,500,000 
     shares, issued and outstanding 2,728,264 shares at 
     July 31, 1997 and April 30, 1997. . . . . . . . . .          137,000          137,000 
   Note receivable from officer. . . . . . . . . . . . .          (20,000)         (20,000)
   Additional paid-in capital. . . . . . . . . . . . . .        1,666,000        1,666,000 
   Retained earnings . . . . . . . . . . . . . . . . . .        1,960,000        1,745,000 
      Total stockholders' equity . . . . . . . . . . . .        3,743,000        3,528,000 
  
    Total liabilities and stockholders' equity . . . . .        6,317,000        6,093,000 
</TABLE>
<TABLE>
<CAPTION>
                   MILASTAR CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                        Three Months Ended July 31,
                                (Unaudited)

                                                                  1997             1996      

<S>                                                           <C>              <C>               
   Net Sales. . . . . . . . . . . . . . . . . . . . . .         2,241,000        1,856,000
   Cost of Sales. . . . . . . . . . . . . . . . . . . .         1,496,000        1,379,000

   Gross margin . . . . . . . . . . . . . . . . . . . .           745,000          477,000
   Selling general and administrative expenses. . . . .           489,000          450,000
   Amortization of non-compete agreement. . . . . . . .             6,000           20,000

   Operating income . . . . . . . . . . . . . . . . . .           250,000            7,000 

   Other income (expense):
     Dividend and interest income . . . . . . . . . . .             2,000            3,000 
     Interest expense . . . . . . . . . . . . . . . . .           (35,000)         (34,000)
     Net loss on sale of property and equipment . . . .                                (10,000)     
   Total other income (expense) . . . . . . . . . . . .           (33,000)         (41,000)

   Income (loss) before provision for income taxes. . .           217,000          (34,000)
   Provision for income taxes . . . . . . . . . . . . .             2,000         

   Net income (loss). . . . . . . . . . . . . . . . . .           215,000          (34,000)

   Net income (loss) per common share . . . . . . . . .               .08             (.01)

   Weighted average number of common shares
     outstanding during the period. . . . . . . . . . .         2,738,264        2,738,264       
</TABLE>
<TABLE>
<CAPTION>
              MILASTAR CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF CASH FLOWS
                   Three Months Ended July 31,
                           (Unaudited)

                                                          
                                                                    1997             1996
<S>            
CASH FLOWS FROM OPERATING ACTIVITIES:                         <C>              <C>
  Net income (loss) . . . . . . . . . . . . . . . . . .           215,000          (34,000)
  Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization. . . . . . . . . . . .           176,000          171,000
   Net loss on sale of property and equipment . . . . .                             10,000 

  Changes in operating assets and liabilities:
   Accounts receivable. . . . . . . . . . . . . . . . .           (54,000)         (39,000) 
   Inventory. . . . . . . . . . . . . . . . . . . . . .             4,000           29,000  
   Prepaid supplies and other assets. . . . . . . . . .           (15,000)         (11,000) 
   Accounts payable and accrued expenses. . . . . . . .           (82,000)        (162,000) 
   Income tax refund, net . . . . . . . . . . . . . . .                            118,000  

   Net cash provided by operating activities. . . . . .           244,000           82,000  

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property, plant and equipment . . . . .          (163,000)        (554,000)
   Proceeds from sale of property and equipment . . . .                            245,000 

   Net cash used in investing activities. . . . . . . .          (163,000)        (309,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from bank line of credit. . . . . . . . . .                             25,000 
   Repayments on bank line of credit. . . . . . . . . .                            (85,000)
   Proceeds from issuance of long-term debt . . . . . .           155,000          373,000 
   Principal payments on long-term debt . . . . . . . .           (64,000)         (45,000)
   Proceeds from issuance of note payable-stockholder .                              6,000 

   Net cash provided by financing activities. . . . . .            91,000          274,000

NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS. . . . . . . . . . . . . . . . . . . . .           172,000           47,000 
CASH AND CASH EQUIVALENTS BALANCE AT BEGINNING
   OF YEAR. . . . . . . . . . . . . . . . . . . . . . .            71,000          144,000 
CASH AND CASH EQUIVALENTS BALANCE AT END OF
   THE FIRST QUARTER. . . . . . . . . . . . . . . . . .           243,000          191,000 

Supplemental disclosures of cash flow information:
  Cash paid during the first quarter for:
    Interest. . . . . . . . . . . . . . . . . . . . . .            33,000           75,000 

    Income taxes. . . . . . . . . . . . . . . . . . . .             2,000            2,000 
</TABLE>

MILASTAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Nature of business  Milastar Corporation ("Milastar" and sometimes the
"Company") is primarily involved in selling special metallurgical and secondary
metal processing services to a diversified list of customers located in the 
greater Midwest and New England regions who manufacture a wide variety of end-
products and depend upon out- sourcing of specialized processing of their metal
components.  The Company extends credit to many of its customers. 

  Principles of consolidation The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries, Flame Metals
Processing Corporation ("Flame Metals"), Milastar Services Corporation and
Flame Metals' wholly owned subsidiary New England Metal Treating Corporation
("New England Metal").  In consolidation, all significant intercompany accounts
and transactions are eliminated.

  Cash and cash equivalents The Company considers cash equivalents to
include all investments purchased with an original maturity of 90 days or less.

  Marketable securities and other investments On May 1, 1994 the
Company adopted the provisions of Statement of Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities (Statement
115).  Under Statement 115, the Company classifies its debt and equity 
securities in one of three categories: trading, available-for-sale, or 
held-to-maturity.  Trading securities are bought and held principally for the
purpose of selling them in the near term.  Held-to-maturity securities are 
those securities in which the Company has the ability and intent to hold the 
security until maturity.  All other securities not included in trading or 
held-to-maturity are classified as available-for-sale.  Trading and 
available-for-sale securities are recorded at fair value.  Held-to-maturity 
securities are recorded at amortized cost, adjusted for the amortization or 
accretion of premiums of discounts.  Unrealized holding gains and losses on 
trading securities are included in earnings.  Unrealized holding gains and 
losses on available-for-sale securities are excluded from earnings and are
reported as a separate component of stockholders' equity until realized.  
Transfers of securities between categories are recorded at fair value at the 
date of transfer.  A decline in the market value of any available-for-sale or
held-to-maturity security below cost that is deemed other than temporary is 
charged to earnings resulting in the establishment of a new cost basis for 
the security.  At April 30, 1994 marketable securities were carried at the 
lower of aggregate cost or market.

  Inventory Inventory is carried at cost as determined by the First-In-First-
Out (FIFO) method.

  Prepaid supplies Prepaid supplies are expensed as used.

  Property, plant and equipment Property, plant and equipment are carried
at cost.  Depreciation is computed using the straight-line method.  When assets
are retired or otherwise disposed of, the cost and related depreciation are 
removed from the accounts, and any gain or loss is reflected in income for 
the period.  The cost of maintenance and repairs is charged to income as 
incurred, whereas significant renewals and betterments are capitalized and 
deductions are made for retirements resulting from the renewals or betterments.

  The estimated useful lives of the fixed assets are as follows:

   Buildings. . . . . . . . 35 years
   Equipment. . . . . . . . 5 to 12
years
   Vehicles . . . . . . . . 3 to 5 years


  Other assets Other assets are comprised of a four-year non-compete
agreement which is being amortized over 48 months using the straight-line
method.

  Income taxes  The Company accounts for income taxes under Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (Statement 109). 
Statement 109 requires the use of the asset and liability method of accounting 
for income taxes.  Under the asset and liability method of Statement 109, 
deferred tax assets and liabilities are recognized for the estimated future 
tax consequences attributable to differences between the financial statement 
carrying amounts of existing assets and liabilities and their respective tax 
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
in effect for the year in whichthose temporary differences are expected to be 
recovered or settled.  Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.

  Accounting estimates   The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and 
liabilities and disclosure of contingent assets and liabilities at the date 
of the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimates.

  Fair value of financial instruments   The Company's financial instruments
are recorded on its balance sheet.  The carrying amount for cash, accounts
receivable, accounts payable, and accrued expenses approximates fair value due
to the immediate or short-term maturity of these financial instruments.  The 
fair value of notes receivable and notes payable approximate their carrying 
value.

  Impairment of long-lived assets and long-lived assets to be disposed of   The
Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-lived Assets and the Long-lived Assets to be Disposed Of
(SFAS No. 121), on May 1, 1996.  SFAS No. 121 requires that long-lived assets
and certain identifiable intangibles be reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may 
not be recoverable.  Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows 
expected to be generated by the asset.  If such assets are considered to be 
impaired, the impairment to be recognized is measured by the amount by which 
the carrying amount of the assets exceeds the fair value of the assets.  Assets
to be disposed of are reported at the lower of the carrying amount or fair value
less costs to sell. 

Adoption of SFAS No. 121 had no impact on the Company's financial position
or results of operations.

  Stock-based compensation   The Company adopted SFAS No. 123,
Accounting for Stock-Based Compensation, which permits entities to recognize
as expense over the vesting period the fair value of all stock-based awards 
on the date of grant on May 1, 1996.  Alternatively, SFAS No. 123 allows 
entities to continue to apply the provisions of APB Opinion No. 25, Accounting
for Stock Issued to Employees, and provide certain pro forma information.  APB 
Opinion No. 25 requires that compensation expense be recorded on the date of 
grant only if the current market price of the underlying stock exceeds the 
exercise price.  The Company has elected to continue to apply the provisions
of  APB Opinion No. 25 and provide the pro forma disclosure provisions of 
SFAS No. 123.


2  MARKETABLE SECURITIES AND OTHER INVESTMENTS

  Marketable securities and other investments consists of common stock and
were being used to invest excess cash until an appropriate acquisition or 
operating need arises.  In accordance with Statement 115, at July 31, 1996, 
marketable securities and other investments were classified as available-for-
sale and as such unrealized gains and losses were reported as a separate 
component of stockholders' equity until realized.  Dividend income, interest 
income, and prepayment losses on debt securities are accrued as earned.  The 
Company uses specific identification to determine the fair value of 
marketable securities and other investments.  

  Marketable securities and other investments were comprised of the following
at July 31:

                                    Description             1997          1996  

          Firstar Bank Shares       Common Stock         $             $ 5,000

                   Total cost                                            5,000

             Gross unrealized 
                holding gains                                           36,000
                       
                   Fair Value                            $             $41,000


  Prior to the adoption of Statement 115, the Company recorded unrealized
gains and losses in accordance with Statement of Financial Accounting Standards
No. 12, Accounting for Certain Marketable Securities. 


3  RELATED PARTY TRANSACTIONS

       Notes Receivable

       In fiscal 1993, with the encouragement of the Company, Michael McGurk,
President, Chief Operating Officer and a director of the Company bought 15,000
shares of Milastar Class A Common Stock and entered into a note agreement with
the Company to finance this purchase.  The note of $20,000 is dated August 15,
1992 and bears interest at 50 basis points over NYC Prime adjustable upward or
downward at the end of each six-month period, which interest rate is subject to
an 8% "cap" during the life of the loan.  Interest on the principal is payable 
each year on the anniversary date of the note.  The principal portion of the 
note that was originally due on August 15, 1995 has been extended until 
August 15, 1997.  The Company is holding Mr. McGurk's 15,000 shares of Milastar
Class A Common Stock as collateral for the note. Total interest income related 
to this note for the fiscal quarters ended July 31, 1997 and 1996 amounted to 
$600 and $500, respectively.

       Notes Payable

       During fiscal 1995 the Company entered into a series of note payable
transactions, which at July 31, 1997 had a balance of $71,000, including accrued
interest, payable to J. Russell Duncan, Chairman of the Board and a director of
the Company.  The notes bear a interest rate of 8% and are payable on demand. 
The Company classifies the notes payable as a current liability.  Total interest
expense related to the notes payable for the fiscal quarters ended July 31, 1997
and 1996 was $1,500 and $4,400, respectively.

       During fiscal 1996 the Company entered into a $100,000 note payable to L.
Michael McGurk, President, Chief Operating Officer and a director of the
Company.  The note bears an interest rate of 8.7% and is payable on demand. 
The Company classifies the note payable as a current liability.  Total interest
expense related to this note payable for both fiscal quarters ended 
July 31, 1997 and 1996 was $2,100.

4  INCOME TAXES

       The Company has provided for current income taxes on earnings at the
appropriate statutory state and federal rates applicable to such earnings, and
any deviation is solely the result of book/tax differences arising mainly 
from the recognition of tax depreciation expense.


5  EARNINGS PER COMMON SHARE

       The computation of earnings per share is as follows:

                                  
                                                  Three Months Ended July  31,
 
                                                         
                                                       1997           1996
 
Weighted average number of shares of series
  A Common stock outstanding                        2,738,264      2,738,264

Dilutive effect of stock options after 
 application of treasury stock method
 
Weighted average number of shares of Class A
 common stock outstanding during the period         2,738,264      2,738,264


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

Results of Operations

     Three Months Ended July 31, 1997 Compared to Three Months Ended July
31, 1996.  The Company recorded sales of $2,241,000 during the first quarter of
fiscal 1998 as compared to $1,856,000 for the same period last year, a $385,000
(21%) increase.  The sales increase was primarily attributable to additional
capacity as a result of the installation of a new continuous mesh belt furnace. 

     Cost of sales of $1,496,000 (67% of net sales) increased $117,000 (8%) from
$1,379,000 (75% of net sales) for the same period a year earlier.  The decrease
relative to sales is the result of improved labor efficiencies and the 
absorption of fixed costs.  Gross margin increased to $745,000 as compared to 
$477,000 for the prior year first quarter.

     Selling, general and administrative (SG&A) expenses of $489,000 (22% of
net sales) increased $39,000 (9%) from $450,000 (24% of net sales) recorded
during the first quarter of fiscal 1997.  The decrease in SG&A expenses as a
percentage of sales is the result of management's continued focus on overhead
costs.  Management's goal is to reduce or hold constant SG&A expenses while
increasing sales.

     The Company recorded operating income of $250,000 in the first quarter of
fiscal 1998 as compared to operating income of $7,000 recorded in the prior year
first quarter.  The improvement in operating performance was primarily due to
a combination of increased sales and reduction of cost of sales as a percentage
of sales.  Management continues to reduce labor costs relative to sales and 
strives to increase the Company's revenue per employee.

     Total other income (expense) amounted to $33,000 expense in the first
quarter of fiscal 1998 as compared to other income (expense) of $41,000 expense
in the first quarter of last year.  The other income in the current first 
quarter was primarily due to interest expense.

     The Company recorded net income of $215,000 in the first quarter of fiscal
1998 as compared to  a $34,000 net loss in the prior year first quarter.  Net
income in the current first quarter was primarily due to increased sales and a
reduction of cost of sales as a percentage of sales.




                   PART II

Items 1 thru 5

     No response to these items is furnished, since in each case the appropriate
     response would be either not applicable or none.

Item 6.      Exhibits and Reports on Form 8-K

   (a)       Exhibits:  None

   (b)       Reports on Form 8-K:  None

    MILASTAR CORPORATION AND SUBSIDIARIES
                       


                S I G N A T U R E


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


MILASTAR CORPORATION



/s/ J.RUSSELL DUNCAN
J. Russell Duncan
Chairman of the Board 
and Chief Executive Officer

Dated:
August 29, 1997
<PAGE>