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 January 31, 1996    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 (407) 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 January 31, 1996, 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, 1995.

    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
                                                  January 31,                          April 30,  
                                                      1996                                      1995             
<S>                                                                      <C>                      <C>
Current assets:
  Cash and cash equivalents. . . . . . . . . . . . . .                      199,000                  365,000
  Marketable securities and other investments, at fair value . . . . . .     35,000                   25,000
  Accounts receivable:
   Trade, less allowance for doubtful accounts of $33,000
   (January 31, 1996) and $26,000 (April 30, 1995) . . . . . . .            694,000                1,070,000
   Other . . . . . . . . . . . . . . . . . . . . . . .                        6,000                    4,000
  Inventory. . . . . . . . . . . . . . . . . . . . . .                      175,000                  192,000
  Prepaid expenses and other . . . . . . . . . . . . .                      221,000                  255,000
    Total current assets . . . . . . . . . . . . . . .                    1,330,000                1,911,000

Property, plant and equipment:
  Land . . . . . . . . . . . . . . . . . . . . . . . .                      199,000                  199,000
  Buildings and improvements . . . . . . . . . . . . .                      651,000                  605,000
  Equipment. . . . . . . . . . . . . . . . . . . . . .                    4,561,000                4,178,000
                                                                          5,411,000                4,982,000
   Less accumulated depreciation . . . . . . . . . . .                  (2,324,000)              (1,962,000)
                                                                          3,087,000                3,020,000
Other assets:
  Non-compete agreement. . . . . . . . . . .                                 44,000                   86,000
  Building held for sale, net of valuation allowance .                      268,000                  298,000

    Total assets . . . . . . . . . . . . . .                              4,729,000                5,315,000


               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Note payable  (shareholder). . . . . . . . . . . . .                      171,000                  345,000
  Current maturities of long-term debt . . . . . . . .                       59,000                   59,000
  Accounts payable . . . . . . . . . . . . . . . . . .                      337,000                  483,000
  Income taxes payable . . . . . . . . . . . . . . . .                        5,000                    5,000
  Accrued payroll and benefits . . . . . . . . . . . .                      130,000                  201,000
  Accrued real estate taxes. . . . . . . . . . . . . .                       93,000                  145,000
  Other accrued liabilities. . . . . . . . . . . . . .                      229,000                  172,000
    Total current liabilities. . . . . . . . . . . . .                    1,024,000                1,410,000

Long-term debt, less current maturities. . . . . . . .                       35,000                   40,000

    Total liabilities. . . . . . . . . . . . . . . . .                    1,059,000                1,450,000

Stockholders' equity:
  Preferred stock, $1.00 par; auth 5,000,000 shares, none issued                                              
  Common stock,  $.05 par; auth 7,500,000 shares, issued and
   outstanding 2,728,264 shares at 1/31/96 and 4/30/95 . . . . .            137,000                  137,000 
  Note receivable from officer . . . . . . . . . . . .                     (20,000)                 (20,000)
  Unrealized holding gains on marketable securities. . . . . . .             30,000                   20,000 
  Additional paid-in capital . . . . . . . . . . . . .                    1,666,000                1,666,000 
  Retained earnings. . . . . . . . . . . . . . . . . .                    1,857,000                2,062,000 
   Total stockholders' equity. . . . . . . . . . . . .                    3,670,000                3,865,000 
    
    Total liabilities and stockholders' equity . . . . . . . . .          4,729,000                5,315,000
</TABLE>
<TABLE>
<CAPTION>
             MILASTAR CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)


                                            Three Months Ended                           Nine Months Ended
                                                January 31,                                 January 31,       
                                           1996              1995                 1996                     1995       

<S>                                     <C>              <C>                   <C>                      <C>       
Net Sales . . . . . . . . . . .          1,374,000        1,644,000             5,020,000                4,859,000
Cost of Sales . . . . . . . . .          1,180,000        1,327,000             3,867,000                3,967,000

Gross margin. . . . . . . . . .            194,000          317,000             1,153,000                  892,000
Selling general and admin expenses .       405,000          438,000             1,276,000                1,362,000
Amortization of non-comp agreement .        14,000           14,000                42,000                   42,000

Operating income (loss) . . . .          (225,000)        (135,000)             (165,000)                (512,000)

Other income (expense):
Dividend and interest income. .              4,000          146,000                14,000                  428,000
Interest expense. . . . . . . .            (8,000)         (94,000)              (24,000)                (303,000)
Unrealized loss on bdg held for sale                                             (30,000)       
Net gain (loss) on sale of mkt sec. .                     (115,000)                                      (143,000)
Total other income (expense). .            (4,000)         (63,000)              (40,000)                 (18,000)

Income (loss) before income taxes . .    (229,000)        (198,000)             (205,000)                (530,000)
Provision (benefit) for income taxes. .                                                   

Net income (loss) . . . . . . .          (229,000)        (198,000)             (205,000)                (530,000)

Net income (loss) per common share. .        (.08)            (.07)                 (.07)                    (.19)

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

                                                                         
                                                      1996                        1995            
<S>                                                   <C>                     <C>           
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss). . . . . . . . . . . . . .         (205,000)               (530,000)
  Adjustments to reconcile net income to net cash
   provided by operating activities:
   Depreciation and amortization . . . . . . .           404,000                 360,000
   Net gain (loss) on sale of mkt securities. .                                  143,000
   Unrealized market loss on bldg held for sale. . .      30,000                     

  Changes in operating assets and liabilities:
   Accounts receivable . . . . . . . . . . . .           374,000               (172,000)
   Inventory . . . . . . . . . . . . . . . . .            17,000                (71,000)
   Prepaid supplies and other assets . . . . .            34,000                   4,000 
   Accounts payable and accrued expenses . . .         (212,000)               (109,000)

  Net cash provided (used) by operating act. .           442,000               (375,000)

  CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property, plant and equipment.         (429,000)               (621,000)
   Proceeds from sale of mkt securities and other 
    investments (classified as available-for-sale) .                           5,173,000

  Net cash provided (used) by investing activities     (429,000)               4,552,000 

  CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of long-term debt. .            47,000                        
   Principal payments on long-term debt. . . .          (52,000)                (36,000) 
   Reduction of note payable - repo. . . . . .                               (4,662,000)
   Proceeds from issuance of NP - shareholder.                                   500,000 
   Reduction of note payable - shareholder . .         (174,000)                             

  Net cash used by financing activities. . . .         (179,000)             (4,198,000)

  NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS . . . . . . . . . . . . . . . .         (166,000)                (21,000)
  CASH AND CASH EQUIVALENTS BALANCE AT
   BEGINNING OF YEAR . . . . . . . . . . . . .           365,000                 247,000 
  CASH AND CASH EQUIVALENTS BALANCE AT
    END OF THE SECOND QUARTER. . . . . . . . .           199,000                 226,000 

  Supplemental disclosures of cash flow information:
   Cash paid during the first three quarters for:
    Interest . . . . . . . . . . . . . . . . .             5,000                 301,000 

    Income taxes . . . . . . . . . . . . . . .                                        
</TABLE>

          MILASTAR CORPORATION AND SUBSIDIARIES

    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of consolidation The consolidated financial statements
include the accounts of the Company and its wholly owned subsidiaries,
Flame Metals Processing Corporation which was acquired in May 1985,
Northwest Engineering Labs, Inc. which was acquired in October 1988 and
Milastar Services Corporation.  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 which have virtually no risk of loss of value of the principal amount of
the investment.

  Marketable securities and other investments   Marketable securities as
of January 31, 1996, consist of equity securities.  The Company adopted the
provisions of Statement of Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities (Statement 115) on  May
1, 1994.  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.

  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 deduction is 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 two five-year non-
competition agreements which are being amortized over 60 months using the
straight-line method and the Minneapolis building which is being held for
sale.  

       Income taxes   In February 1992, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes."  Statement 109 requires a change from the
deferred method of accounting for income taxes of APB Opinion 11 to 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 which
those 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.

       Effective May 1, 1992, the Company adopted Statement 109 and has
reported the cumulative effect of that change in the method of accounting for
income taxes in the 1993 consolidated statement of earnings.

2      MARKETABLE SECURITIES AND OTHER INVESTMENTS

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

       Marketable securities and other investments was comprised of the
following at January 31, 1996 and 1995:

Description                             1996                  1995        

Sears Mtg. Securities
ARM (Reverse Repurchase Agreement)   5,234,000

First Colonial Bank Shares
Common Stock                             5,000                5,000
                                                    
Total cost                               5,000            5,239,000

Gross unrealized holding losses                                

Gross unrealized holding gains          30,000               22,000

Fair value                              35,000            5,261,000


3      RELATED PARTY TRANSACTIONS

       The Company entered into two Note Agreements during fiscal 1993.  The
first note of $76,000 was dated October 1, 1992, beared interest at 8.0% and
was due in 48 monthly installments commencing June 1, 1994.  The note was
between the Company and Sound Techniques, Inc., a Subchapter S
Corporation wholly-owned by J. Russell Duncan, chairman of the Board and
a director of the Company.  Lance H. Duncan, the son of J Russell Duncan
and a director of the Company is President of Sound Techniques, Inc.  The
note resulted from advances to and payments by the Company on behalf of
Sound Techniques, Inc.  On April 18, 1995 the entire balance of the note,
which consisted of  $76,000 in principal and $17,000 in interest, was paid by
Sound Techniques, Inc.

       The second note is between the Company and L. Michael McGurk,
President, Chief Operating Officer and a director of the Company who, with
the encouragement of the Company, bought 15,000 shares of Milastar Class
A Common Stock and entered into a note with the Company.  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 these notes for the quarters ended
January 31, 1996 and January 31, 1995 was $500 and $300, respectively.

4      NOTE PAYABLE

       On April 1, 1992 and June 18, 1993 the Company entered into two
reverse repurchase agreements ("Repos") to finance an Adjustable Rate
Mortgage ("ARM") portfolio aggregating $6,205,000 and $8,059,000,
respectively.  Each ARM was leveraged at a financing to equity ratio of
approximately 9:1.  Accordingly, the Company invested $635,000 and
$604,000 and entered into note payables for $5,570,000 and $7,455,000,
respectively.  The interest rate charged on the notes was the London Interbank
Offered Rate (LIBOR) and ranged from 3.75% to 4.56%.  Each ARM, which
was pledged as collateral against the respective note payable, earned interest
at the LIBOR rate plus 135 basis points and such interest was paid monthly. 
As of April 30, 1995 the Company has liquidated all of the reverse
agreements and the associated notes payable.  Total interest expense related
to these notes for the quarters ended January 31, 1996 and January 31, 1995
was $0 and $86,000, respectively.

       During fiscal 1995 the Company entered into a series of notes payable
totaling $345,000 payable to J. Russell Duncan, Chairman of the Board and
a Director of the Company.  The notes bear an interest rate of 8% and are
payable on demand.  The Company classifies the notes payable as a current
liability.  The balance of the note as of January 31, 1996 and January 31,
1995 was $171,000 and $345,000, respectively.  Total interest expense
related to this note for the quarters ended January 31, 1996 and January 31,
1995 was $5,000 and $8,000, respectively.

5      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.

6      EARNINGS PER COMMON SHARE

       The computation of earnings per share is as follows:

                                                    Three Months Ended
                                                       January  31,             
                                                    1996          1995     

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 January 31, 1996 Compared to Three Months Ended
January 31, 1995.  The Company recorded sales of $1,374,000 during the
third quarter of fiscal 1996 as compared to $1,644,000 for the same period
last year, a $270,000 (16%) decrease.  The decrease is primarily attributable
to a softening economy.  Several of the Company's key manufacturing
customers have experienced lower bookings which have in turn translated
into reduced out sourcing of heat treating orders.

     Cost of sales of $1,180,000 (86% of net sales) decreased $147,000 (11%)
from $1,327,000 (81% of net sales) for the same period a year earlier.  The
decreased cost of sales is the result of reduced labor and decreased industrial
gas usage which was accomplished through the purchase and installation of cost
saving processing equipment.  Gross margin decreased to $194,000 compared to
$317,000 in the prior year third quarter.

     Selling, general and administrative expenses of $405,000 (29% of net
sales) decreased $33,000 (8%) from $438,000 (27% of net sales) recorded
during the third quarter of fiscal 1995.  The decrease is primarily the result
of reductions in payroll expenses.  Management's goal is to reduce or hold
constant selling and G&A expenses while increasing sales.

     The Company recorded an operating loss of $225,000 in the third quarter
of fiscal 1996 as compared to an operating loss of $135,000 recorded in the
prior year third quarter.  The loss was primarily caused by lower sales
revenues.  Management, in reaction, continues to selectively increase prices
and trim expenses while concurrently implementing sales building programs
focused upon enlisting new accounts and getting additional business from
existing clients.

     Total other expense amounted to $4,000 in the third quarter of fiscal 1996
compared to other expense of $63,000 in the third quarter of last year.  The
decrease was primarily due to the absence of losses sustained on sales of
equity securities during late fiscal 1995.
         
     Nine Months Ended January 31, 1996 Compared to Nine Months Ended
January 31, 1995.  The Company recorded sales of $5,020,000 during the
first three quarters of fiscal 1996 as compared to $4,859,000 for the same
period last year, a $161,000 (3%) increase.  The slight increase is primarily
attributable to improved equipment utilization and the addition of new
customer accounts.

     Cost of sales of $3,867,000 (77% of net sales) decreased $100,000 (3%)
from $3,967,000 (82% of net sales) for the same period a year earlier.  The
decreased cost of sales, both in total dollars and as a percent of sales, is the
result of improved labor efficiency, decreased supply usage and the
absorption of fixed costs.  Gross margin improved significantly to $1,153,000
compared to $892,000 in the prior year first three quarters.

     Selling, general and administrative expenses of $1,276,000 (25% of net
sales) decreased $86,000 (6%) from $1,362,000 (28% of net sales) recorded
during the first three quarters of fiscal 1996.  The decrease is primarily the
result of  reductions in payroll expenses.  The reduction of selling and G&A
expenses, with a 3% increase in sales, is the result of management's focus on
overhead expenses.

     The Company recorded operating loss of $165,000 in the first three
quarters of fiscal 1996 as compared to an operating loss of $512,000 recorded
in the same period last  year.  While the operating loss is disappointing, it is
a considerable improvement over the prior year three quarters.

     Total other expense amounted to $40,000 in the first three quarters of
fiscal 1996 compared to other expense of $18,000 in the same period last
year.  The decrease was a primarily due to a combination of the absence of
the differential on interest income and interest expense on the repo holdings
which were sold in late fiscal 1995 and losses sustained on sales of equity
securities during the first three quarters of fiscal 1995.

         
                         
Liquidity and Capital Resources

     At January 31, 1996, the Company's working capital was $306,000
compared to $501,000 at April 30, 1995 and the ratio of current assets to
current liabilities was 1.3 to 1 and 1.4 to 1, respectively.  Cash, marketable
securities and other investments and current receivables represented 70%
(76% at April 30, 1995) and 19% (27% at April 30, 1995) of total current
assets and total assets, respectively.  During the first three quarters of
fiscal 1996 cash provided by operating activities amounted to $442,000 compared
to $375,000 used in the first three quarters of fiscal 1995. Cash requirements
for the first three quarters of fiscal 1996 were funded primarily from
operations.


                      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, thereunto duly authorized.


MILASTAR CORPORATION



/s/ J. RUSSELL DUNCAN        
J. Russell Duncan
Chairman of the Board  (Chief Executive
and Principal Financial and Accounting Officer)

Dated: February 29, 1996