SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10 QSB

OMB Approval
OMB Number XXXX-XXXX
Expires Approval Pending
Estimated Average Burden Hours Per Response 1.0.


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

                      for the Quarter Ended August 29, 1998

              For the Transition Period from_________ to _________
                          Commission File Number 0-5109


                            MICROPAC INDUSTRIES, INC.




        Delaware                                        75-1225149
 ------------------------                     ---------------------------------
 (State of Incorporation)                     (IRS Employer Identification No.)

 905 E. Walnut, Garland, Texas                          75040
                                                        -----------------------
(Address of Principal Executive Office)                 (Zip Code)

Registrant's Telephone Number, including Area Code      (972) 272-3571
                                                        -----------------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  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.


Yes      X                                              No
    -----------                                            -----------


At  November  30,  1997 and August 29,  1998,  there  were  3,627,151  shares of
registrant's  common stock  outstanding.  On these dates,  the aggregate  market
value of Common  Stock could not be  determined  since  there is no  established
public trading market for the Company's Common Stock.

<PAGE>



                            MICROPAC INDUSTRIES, INC.

                                   FORM 10-QSB

                                 August 29, 1998

                                      INDEX

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                               Condensed  Statements  of  Income  for the  three
                                 months and six months ended August 29, 1998 and
                                 August 30, 1997
                               Condensed Balance Sheets
                               Condensed Statements of Cash Flows
                               Notes to Condensed Financial Statements

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

PART II - OTHER INFORMATION

         ITEM 1          LEGAL PROCEEDINGS
         ITEM 2          CHANGES IN SECURITIES
         ITEM 3          DEFAULTS UPON SENIOR SECURITIES
         ITEM 4          SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ITEM 5          OTHER INFORMATION
         ITEM 6          EXHIBITS AND REPORTS ON FORM 8-K


SIGNATURES


<PAGE>


<TABLE>

<CAPTION>


                            MICROPAC INDUSTRIES, INC.
                            STATEMENTS OF OPERATIONS
                                   (unaudited)


PART I - FINANCIAL INFORMATION

ITEM 1 - Financial Statement

                                                             Statement of Income            Statement of Income
                                                            for three months ended             Year-to-date
                                                          8/29/98         8/30/97         8/29/98         8/30/97
                                                       ------------    ------------    ------------    ------------ 
<S>                                                   <C>              <C>             <C>             <C>     

Sales, Net of Returns & Allowances                     $  2,874,529    $  3,785,685    $  8,978,433    $ 10,996,408

Cost of Goods Sold                                       (2,187,333)     (2,714,718)     (6,762,542)     (8,006,612)
                                                       ------------    ------------    ------------    ------------  

    Gross Margin                                            687,196       1,069,967       2,215,891       2,989,796

Selling, General & Administrative Expense                  (551,802)       (630,530)     (1,717,783)     (1,942,713)
                                                       ------------    ------------    ------------    ------------    

    Pre-Tax Income                                          135,394         439,437         498,108       1,047,083

Provision for Income Taxes                                  (47,400)       (149,407)       (174,349)       (356,008)
                                                       ------------    ------------    ------------    ------------



    Net Income                                         $     87,994    $    290,030    $    323,759    $    691,075
                                                       ============    ============    ============    ============

Net Income Per Share                                   $        .02    $        .08    $        .09    $        .19


Dividends per Share                                            --              --              --              --


Weighted Average Number of Shares                         3,627,151       3,627,151       3,627,151       3,627,151

</TABLE>


These  statements  reflect all adjustments  which, in the opinion of management,
are necessary for fair statement of the results for the interim period.


<PAGE>


<TABLE>

<CAPTION>


                            MICROPAC INDUSTRIES, INC.
                                  BALANCE SHEET
                                   (Unaudited)

                                     ASSETS

CURRENT ASSETS                                                      8/29/98      11/30/97       8/30/97     11/30/96
                                                               ------------    ----------    ----------   ----------
<S>                                                            <C>             <C>           <C>          <C>     

     Cash                                                      $    273,225    $  106,200    $  423,707   $        0
     Investments less than one year                               1,796,359     1,542,919     1,137,727      304,250
     Receivables, net of allowance for doubtful accounts of       1,586,432     2,412,443     2,100,070    2,372,387
     $57,088 on August 29, `98 and $88,264 on August 30, `97

     Inventories:
         Raw materials                                            1,858,774     1,559,788     1,394,229    2,135,951
         Work-in process                                          1,122,147     1,147,572     1,200,180    1,634,940
     Prepaid expenses and other current assets                       90,802        63,371       (9,636)       35,735
     Deferred income tax                                            301,951       301,951       325,951      325,951
                                                                    -------       -------       -------      -------

                   Total current assets                           7,029,689     7,134,245     6,572,230    6,809,215

PROPERTY, PLANT AND EQUIPMENT, at cost:
     Land                                                            80,000        80,000        80,000       80,000
     Buildings                                                      497,924       497,924       497,924      497,924
     Facility improvements                                          692,487       694,705       709,068      694,705
     Machinery and equipment                                      4,463,840     4,335,347     4,284,362    4,178,198
     Furniture and fixtures                                         392,994       379,667       347,033      319,122
                                                                    -------       -------       -------      -------

                   Total property, plant, and equipment           6,127,244     5,987,643     5,918,387    5,769,949


         Less accumulated depreciation                          (4,851,282)   (4,663,958)   (4,678,563)  (4,514,106)
                                                               ------------  ------------   -----------   ---------

     Net property, plant and equipment                            1,275,963     1,323,686     1,239,824    1,255,843
                                                                  ---------     ---------     ---------    ---------

                   Total assets                                  $8,305,652    $8,457,930    $7,812,054    8,065,058
                                                                 ==========    ==========    ==========    =========


                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                              $391,719      $806,795      $404,654   $1,261,553
     Accrued payroll                                                372,667       343,500       354,260      286,528
     Accrued professional fees                                       71,330        64,552        64,173       71,712
     Other accrued liabilities                                       82,059       226,166       166,313      174,631
     Income taxes payable                                           157,337       110,137        81,127      220,179
                                                                    -------       -------        ------      -------

                   Total current liabilities                      1,075,113     1,551,150     1,070,528    2,014,603

DEFERRED INCOME TAXES                                                89,948        89,948       150,948      150,948

SHAREHOLDERS' EQUITY
     Common stock ($.10 par value) 10,000,000                       362,715       362,715       362,715      362,715
       authorized, 3,627,151 outstanding)
     Paid-in capital                                                885,540       885,540       885,540      885,540
     Retained earnings                                            5,892,336     5,568,577     5,342,323    4,651,252
                                                                  ---------     ---------     ---------    ---------

                   Total shareholders' equity                     7,140,591     6,816,832     6,590,578    5,899,507
                                                                  ---------     ---------     ---------    ---------

                   Total liabilities and shareholders' equity    $8,305,652    $8,457,930    $7,812,054   $8,065,058
                                                                 ==========    ==========    ==========   ==========


</TABLE>


These  statements  reflect all adjustments  which, in the opinion of management,
are necessary for fair statement of the results for the interim period.



<PAGE>


<TABLE>

<CAPTION>

                            MICROPAC INDUSTRIES, INC.
                             STATEMENTS OF CASH FLOW
                                   (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:                    8/29/98        8/30/97
                                                       -----------    -----------
<S>                                                    <C>            <C>    

     Net Income                                        $   323,759    $   691,072
     Adjustments to reconcile net income to
         cash from operating activities:
             Depreciation and amortization                 187,324        164,457
         Changes in current assets and liabilities:
             Accounts receivable                           826,011        272,317
             Inventories                                  (273,560)     1,176,481
             Prepaid expenses & other current assets       (27,431)        45,371
             Income taxes                                   47,201       (139,051)
             Accounts payable                             (415,076)      (856,900)
             Payroll & withholdings                         29,167         67,732
             Accrued liabilities                          (137,329)       (15,857)
                                                       -----------    -----------

         Net cash from operating activities                560,066      1,405,622
                                                       ===========    ===========


CASH FLOWS FROM INVESTING ACTIVITIES:

        Additions to property, plant and equipment        (139,601)      (148,438)
                                                       -----------    -----------
         Net cash from investing activities               (139,601)      (148,438)

Net increase (decrease) in cash                            420,465      1,257,184

Cash at beginning of period                              1,649,119        304,250
                                                       -----------    -----------

Cash at end of period                                  $ 2,069,584    $ 1,561,434
                                                       ===========    ===========
</TABLE>


These  statements  reflect all adjustments  which, in the opinion of management,
are necessary for fair statement of the results for the interim period.



<PAGE>



                            MICROPAC INDUSTRIES, INC.
ITEM 2           MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


1.   Sales for the third  quarter and year to date 1998 totaled  $2,874,529  and
     $8,978,433  respectively and represent  decreases of ($911,156) compared to
     the third  quarter  of 1997 and  ($2,017,975)  compared  to the first  nine
     months of fiscal 1997. Sales were down for the comparable quarters and year
     to date due to order  reschedules  from a major customer,  brought about by
     the turndown of the Asian economy, and due to reduced requirements for some
     of the Company's standard products.

2.   Cost of sales for the third quarter  totaled 76.1% of net sales compared to
     71.7 % for the same  quarter  in  1997.  Cost of  sales  increased  for the
     quarter primarily due to increased  manufacturing overheads as a percentage
     of net  sales.  Year to date  1998 cost of sales  total  75.3% of net sales
     compared to 72.8% for the first nine months of 1997. Changes in product mix
     combined with reduced sales for the current  periods caused the increase in
     cost of sales  expenses  as a  percentage  of net sales for the  comparable
     periods  of 1997.  Manufacturing  overhead  expenses  are  being  addressed
     through personnel reductions and controls of other indirect fixed expenses.

3.   Selling, general and administrative expenses for the comparable quarters of
     1998 and 1997  totaled  approximately  19.2%  and 16.6%  respectively.  The
     increased percentage for the third quarter is attributed to decreased sales
     for the comparable  quarters of 1998 versus 1997.  Actual dollars  expensed
     for the quarter were approximately  ($79,000) less in 1998 versus 1997. The
     reduction  for the quarter is related to  interest  income  generated  from
     company  investments  and a  reduction  in travel  expenses  for  corporate
     personnel.  Year-to-date  1998, SG&A totaled 19.1% of revenues  compared to
     17.7%  for the same  nine  month  period  of  1997.  Selling,  general  and
     administrative  dollars expensed for the comparable periods were ($152,000)
     less in 1998 versus 1997. Interest income and lower travel expense resulted
     in the lower cost for the comparable periods.

4.   Income  per  share  for  the  third  quarter  and  year-to-date   1998  was
     approximately  $.02 and $.08 per share  respectively,  compared to $.09 and
     $.19  per  share  for the  same  periods  in 1997.  Reduced  sales  for the
     comparable periods,  combined with constant manufacturing overhead expenses
     were the  primary  factors in reduced  profits  for the third  quarter  and
     year-to-date.

5.   Third quarter and year to date new orders totaled $1,450,000 and $8,404,000
     compared to $3,585,000 and $9,595,000  for the same  respective  periods of
     1997. Lack of new orders for the quarter and year to date are attributed to
     reduced  requirements  from one of the Company's  major customers which has
     been impacted by the Asian economy and due to reduced  bookings for some of
     the Company's  standard  products.  The  Government's  "Commercial  Off The
     Shelf"  program may be  affecting  some of the military  bookings,  but the
     Company  continues to believe that there is a need for the high reliability
     testing required for many of the products the Company supplies.

6.   Backlog total on August 29, 1998 was approximately  $6,486,000  compared to
     $6,349,000  for the quarter ended August 29, 1997.  The backlog  reflects a
     higher percentage of space, aerospace and military products compared to the
     prior year.  Shipments of a significant amount of the backlog are estimated
     to be made within the next twelve (12) months.


7.   Raw material inventories increased approximately $299,000 from November 30,
     1997 due to: (1) product being brought in the first quarter 1998 to support
     shipments to a primary  customer which has since detained  shipments due to
     the Asian  economy,  and (2) product being brought in for a major  contract
     which  has a long  cycle  time  and  is not  shippable  until  November  or
     December.  Work in process  has  decreased  approximately  ($25,000)  since
     November 30, 1997.

8.   Net accounts  receivable has decreased  ($826,000) since November 30, 1997.
     The reduction is due to decreased sales.  Day's sales for the third quarter
     of 1998 average approximately 48 days.


<PAGE>



9.   Assets, year to date, decreased approximately  ($152,000) since fiscal year
     ended  November  30,  1997.  The  majority of the  decrease  was in current
     assets.  Accounts  receivable  decreased  approximately   ($826,000)  while
     inventories and cash and cash equivalents  increased $274, 000 and $420,000
     respectively.

     Liabilities,  year to date through period nine have decreased approximately
     ($476,000).  The  reduction  was due  primarily to  reductions  of accounts
     payable and accrued  liabilities.  A strong  positive cash flow allowed for
     the  reduction  of  accounts  payable  and  accrued   liabilities  and  the
     strengthening of the Company's financial ratios.

     Shareholders'   equity  through  period  nine  1998  total  $7,141,000  and
     represents an increase of approximately  $324,000 for the first nine months
     1998.

10.  Cash and cash  equivalents  have  increased  for the nine  month  period to
     $2,070,000  compared to $1,649,000  as of November 30, 1997.  The Company's
     financial  position remains strong enabling the Company to finance on-going
     operating  costs as well as new product  development  activities for growth
     through its own cash reserves.

11.  Year 2000  compliance  is scheduled  to be completed by March 1, 1999.  The
     re-programming  of  internally   generated  programs  has  been  completed.
     External  software  packages for  accounting  have been  updated  while the
     updated  software  for  payroll  has been  acquired  and will be  installed
     October  1998.  Testing  has been done on all  software  issues  except for
     payroll  which has not been  installed  at this time.  Hardware  issues are
     being  addressed by purchasing  new PC's or updating the existing PC's with
     the necessary hardware updates.  Currently the Company is approximately 70%
     complete on hardware  issues.  All hardware  issues  including  file server
     update  should be completed by January 31, 1999.  The Company is requesting
     its major suppliers provide the status of their compliance to the year 2000
     problem and  determine the effect it might have on their ability to provide
     on going service and products.


<PAGE>


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
      

        The Company is  not involved  in any material  current or pending  legal
        proceedings,  other than  ordinary routine litigation  incidental to its
        business.

ITEM 2. CHANGES IN SECURITIES

        None

ITEM 3. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

        None

ITEM 4. OTHER INFORMATION

        None

ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K

        None




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 duly authorized.

                            MICROPAC INDUSTRIES, INC.


10-5-98                                          /s/  Nicholas Nadolsky
Date                                             -------------------------------
                                                      Nicholas Nadolsky       
                                                      Chairman of the Board/CEO


10-05-98                                        /s/   Dave Hendon
Date                                            --------------------------------
                                                      Dave Hendon
                                                      Controller