UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934



|For the quarter ended July 31, 2003 | Commission File Number: 0-5105
|----------------------------------- | ------------------------------

MILASTAR CORPORATION

(Exact name of registrant as specified in its charter)

|DELAWARE

(State or other jurisdiction of incorporation or organization)               | 13-2636669

(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------------------- | ------------------------------------------------
|                                                                                       |                                                 
|7317 West Lake Street, Minneapolis, MN 55426

(Address of principal executive offices) | (952) 929-4774

(Telephone number)              

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. YesX No

At September 10, 2003, 2,723,264 shares of common stock of the Registrant were issued and outstanding.

MILASTAR CORPORATION AND SUBSIDIARIES

PART I

Item 1. Financial Statements

The condensed consolidated 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 accounting principlesgenerally accepted in the United States of Americahave 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. Operating results for the three months ended July 31, 2003 are not necessarily indicative of the results that may be expected for the year
ending April 30, 2004. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended April 30, 2003.

The condensed consolidated 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 consolidated financial position and results of operations of the Company for
the periods presented.

|MILASTAR CORPORATION AND SUBSIDIARIES
|-------------------------------------
|CONSOLIDATED BALANCE SHEETS          
|                                     
|ASSETS                               

|                                    | **July 31, 2003**

**(Unaudited)** |  | **********April 30,2003**

**(Audited)**
|----------------------------------- | ---------------------------------- |  | ----------------------------------------
|Current assets:                     |                                    |  |                                         
|Cash                                | $ 102,000                          |  | $ 9,000                                 
|Accounts and other receivables, net | 1,153,000                          |  | 1,197,000                               
|Inventory                           | 166,000                            |  | 205,000                                 
|Prepaid supplies and other          | 311,000                            |  | 289,000                                 
|Total current assets                | 1,732,000                          |  | 1,700,000                               
|                                    |                                    |  |                                         
|Property, plant and equipment:      |                                    |  |                                         
|Land                                | 420,000                            |  | 420,000                                 
|Buildings and improvements          | 3,088,000                          |  | 3,051,000                               
|Equipment                           | 9,619,000                          |  | 9,496,000                               
|                                    | 13,127,000                         |  | 12,967,000                              
|Less accumulated depreciation       | (5,156,000)                        |  | (4,931,000)                             
|                                    | 7,971,000                          |  | 8,036,000                               
|                                    |                                    |  |                                         
|Total assets                        | $ 9,703,000                        |  | $ 9,736,000                             

|LIABILITIES AND STOCKHOLDERS' EQUITY
|------------------------------------

|Current liabilities:                                                  |             |  |            
|--------------------------------------------------------------------- | ----------- |  | -----------
|Current maturities of long-term debt                                  | $ 890,000   |  | $ 890,000  
|Line of credit - Bank                                                 | 50,000      |  | --         
|Accounts payable                                                      | 556,000     |  | 644,000    
|Accrued payroll and benefits                                          | 356,000     |  | 277,000    
|Accrued real estate taxes                                             | 65,000      |  | 87,000     
|Other accrued liabilities                                             | 77,000      |  | 71,000     
|Total current liabilities                                             | 1,994,000   |  | 1,969,000  
|                                                                      |             |  |            
|Long-term debt, less current
maturities                               | 2,663,000   |  | 2,881,000  
|                                                                      |             |  |            
|Total liabilities                                                     | 4,657,000   |  | 4,850,000  
|                                                                      |             |  |            
|Stockholders' equity:                                                 |             |  |            
|Common stock, $.05 par value;
authorized 7,500,000 shares, issued
and |             |  |            
|outstanding 2,723,264 shares at July
31, 2003 and April 30, 2003      | 136,000     |  | 136,000    
|Additional paid-in capital                                            | 1,647,000   |  | 1,647,000  
|Retained earnings                                                     | 3,263,000   |  | 3,103,000  
|Total stockholders' equity                                            | 5,046,000   |  | 4,886,000  
|                                                                      |             |  |            
|Total liabilities and stockholders'
equity                            | $ 9,703,000 |  | $ 9,736,000

See accompanying notes to condensed consolidated financial statements

|MILASTAR CORPORATION AND SUBSIDIARIES
|-------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS
|Three Months Ended July 31,          
|(Unaudited)                          

|                                               | **2003**    |  | **********2002**
|---------------------------------------------- | ----------- |  | ----------------
|                                               |             |  |                 
|Net sales                                      | $ 2,595,000 |  | $ 2,236,000     
|Cost of sales                                  | 1,826,000   |  | 1,636,000       
|                                               |             |  |                 
|Gross profit                                   | 769,000     |  | 600,000         
|Selling, general and administrative
expenses   | 548,000     |  | 470,000         
|Amortization of non-compete
agreements         | --          |  | 22,000          
|                                               |             |  |                 
|Operating income                               | 221,000     |  | 108,000         
|                                               |             |  |                 
|Other expense:                                 |             |  |                 
|Net loss on disposal of property and
equipment | (20,000)    |  | (15,000)        
|Interest expense                               | (41,000)    |  | (50,000)        
|Total other expense                            | (61,000)    |  | (65,000)        
|                                               |             |  |                 
|Income before income taxes                     | 160,000     |  | 43,000          
|Income tax expense                             | --          |  | 2,000           
|                                               |             |  |                 
|Net income                                     | $ 160,000   |  | $ 41,000        
|                                               |             |  |                 
|Net income per common share -
basic            | $ 0.06      |  | $ 0.02          
|Weighted average shares outstanding
- basic    | 2,723,264   |  | 2,723,264       
|                                               |             |  |                 
|Net income per common share -
diluted          | $ 0.06      |  | $ 0.01          
|Weighted average shares outstanding
- diluted  | 2,856,406   |  | 2,891,133       

See accompanying notes to condensed consolidated financial statements

|MILASTAR CORPORATION AND SUBSIDIARIES
|-------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|Three Months Ended July 31,          
|(Unaudited)                          

|                                                   | **2003**  |  | **********2002**
|-------------------------------------------------- | --------- |  | ----------------
|CASH FLOWS FROM
OPERATING ACTIVITIES:              |           |  |                 
|Net income                                         | $ 160,000 |  | $ 41,000        
|Adjustments to reconcile net income
to net cash    |           |  |                 
|flows from operating activities:                   |           |  |                 
|Depreciation and amortization                      | 224,000   |  | 244,000         
|Net loss on disposal of property and
equipment     | 20,000    |  | 15,000          
|                                                   |           |  |                 
|Changes in operating assets and
liabilities:       |           |  |                 
|Accounts and other receivables                     | 44,000    |  | 4,000           
|Inventory                                          | 39,000    |  | 36,000          
|Prepaid supplies and other                         | (22,000)  |  | (75,000)        
|Accounts payable and accrued
expenses              | (25,000)  |  | 23,000          
|Net cashflows fromoperating
activities             | 440,000   |  | 288,000         
|                                                   |           |  |                 
|CASH FLOWS FROM INVESTING
ACTIVITIES:              |           |  |                 
|Purchases of property, plant and
equipment         | (179,000) |  | (526,000)       
|Net cashflows frominvesting
activities             | (179,000) |  | (526,000)       
|                                                   |           |  |                 
|CASH FLOWS FROM FINANCING
ACTIVITIES:              |           |  |                 
|Net proceeds from bank line of credit              | 50,000    |  | --              
|Principal payments of long-term debt               | (218,000) |  | (212,000)       
|Proceeds from issuance of long-term
debt           | --        |  | 500,000         
|Net cashflows fromfinancing
activities             | (168,000) |  | 288,000         
|                                                   |           |  |                 
|NETINCREASEIN CASH                                 | 93,000    |  | 50,000          
|CASH, BEGINNING OF YEAR                            | 9,000     |  | 69,000          
|CASH, END OFFIRST QUARTER                          | $ 102,000 |  | $ 119,000       
|                                                   |           |  |                 
|                                                   |           |  |                 
|Supplemental disclosures of cash
flow information: |           |  |                 
|Cash paid during the first quarter for:            |           |  |                 
|Interest                                           | $ 41,000  |  | $ 50,000        
|                                                   |           |  |                 
|Income taxes                                       | $ --      |  | $ --            
|                                                   |           |  |                 

See accompanying notes to condensed consolidated financial statements

MILASTAR CORPORATION AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1 CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of Milastar Corporation (the "Company") reflect the financial position and results of operations of the Company
and its wholly owned subsidiaries, after elimination of all material intercompany transactions and balances.

The consolidated financial statements as of July 31, 2003 and for the three month periods ended July 31, 2003 and July 31, 2002, included herein are
unaudited and have been prepared by the Company 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 accounting principlesgenerally accepted in
the United States of Americahave been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures
are adequate to make the information presented not misleading. The interim financial statements reflect all adjustments (consisting of normal recurring
accruals) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods. These consolidated financial
statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's 2003 Annual Report
to Shareholders and incorporated by reference in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission. The
result of operations for the interim period should not be considered indicative of the results to be expected for the entire year.

2 SIGNIFICANT ACCOUNTING POLICIES

*Stock-Based Compensation -*In accordance with Accounting Principles Board (APB) Opinion No. 25 and related interpretations, the Company uses the
intrinsic value-based method for measuring stock-based compensation cost which measures compensation cost as the excess, if any, of quoted market
price of the Company's common stock at the grant date over the amount the employee must pay for the stock. The Company's general policy is to grant
stock options at fair value at the date of grant. Consistent with Statement of Financial Accounting Standards (SFAS) No. 123 "Accounting for
Stock-Based Compensation", the Company did not have any pro forma compensation costs associated with the options outstanding for the three months
ended July 31, 2003 or 2002.3 INCOME PER COMMON SHARE

The following table presents a reconciliation of the denominators used in the computation of net income per common share - basic and net income per
common share - diluted for the quarters ended July 31, 2003 and 2002:

|                                                                                                                                      |  |  |  |  |           | Three Months
Ended July
31, |             
|------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  | --------- | --------------------------- | ------------
|                                                                                                                                      |  |  |  |  | 2003      |                             | ********2002
|Weighted shares
outstanding -
basic                                                                                                   |  |  |  |  | 2,723,264 |                             | 2,723,264   
|Weighted shares
assumed upon
exercise of stock
options                                                                                |  |  |  |  | 133,142   |                             | 167,869     
|Weighted shares
outstanding -
diluted                                                                                                 |  |  |  |  | 2,856,406 |                             | 2,891,133   
|                                                                                                                                      |  |  |  |  |           |                             |             
|Options excluded
from the net
income per share
calculations
because their
exercise prices
were greater than
the average
market price. |  |  |  |  | 420,832   |                             | 420,832     

4 BANK CREDIT LINE

The Companyhas a revolving line of credit with its bank, which permits borrowings of up to $500,000 and bears interest at the bank's reference rate
which was 4.0% at July 31, 2003. At July 31, 2003, borrowings under this agreement were $50,000.

5 INCOME TAXES

At July 31, 2003, the Company hasfederal net operating loss carryforwards of approximately $1,012,000 and state net operating losses of $2,171,000
which, if not used, will begin to expire in 2010. Future changes in the ownership of the Company may place limitations on the use of these
carryforwards.The Company has recorded a full valuation allowance against the deferred tax asset due to the uncertaintyof realizing the related benefits.The net income for the quarters ended July 31, 2003 and 2002 were favorably impacted by the utilization of prior net operating losses, thus a provision
for income taxes of approximately 40% was not recorded.

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

Results of Operations

Three Months Ended July 31, 2003 as Compared with the Three Months Ended July 31, 2002. The Company recorded sales of $2,595,000 during the first
quarter of fiscal year 2004 as compared with $2,236,000 for the same period last year, a $359,000 (16%) increase. The increase was primarily attributable
to additional work received from existing customers.

Cost of sales of $1,826,000 (70% of net sales) during the first quarter of fiscal year 2004 increased $190,000 (12%) from $1,636,000 (73% of net sales) for
the same period a year earlier. The increase was primarily attributable to increased labor and utility costs. Gross margin increased to $769,000 as compared
with $600,000 for the prior year first quarter. The increase in gross margin was primarily attributable to higher sales without a corresponding increase in
fixed expenses during the period ended July 31, 2003.

Selling, general and administrative (SG&A) expenses of $548,000 (21% of net sales) increased $78,000 (17%) from $470,000 (21% of net sales) for the
same period a year earlier. The change in SG&A expenses is primarily due to an increase in the provision for incentive compensation. SG&A expenses are
expected to remain at or below the current level.

The Company recorded operating income of $221,000 in the first quarter of fiscal 2004 as compared with operating income of $108,000 recorded in the
prior year first quarter.The increase in operating income in the first quarter of fiscal year 2004 is primarily attributable to higher salesand gross profit
margin.

Total other expense amounted to $61,000 in the first quarter of fiscal 2004 as compared with other expense of $65,000 in the first quarter of last year.
Other expense in both first quarters relates primarily to interest expense, which decreased $9,000 due to a reduction in interest rates and long-term debt.

The Company recorded net income of $160,000 in the first quarter of fiscal 2004 as compared with net income of $41,000 in the prior year first quarter.

*Liquidity and Capital Resources*

At July 31, 2003, the Company had negative working capital of $262,000 compared with $269,000 of negative working capital at April 30, 2003. Cash and
accounts receivables represented 72% (71% at April 30, 2003) and 13% (12% at April 30, 2003) of total current assets and total assets, respectively. During
the first quarter of fiscal 2004, net cash flows from operating activities amounted to $440,000 compared to $288,000 in the first quarter of fiscal 2003.
Working capital requirements for the first quarter of fiscal 2004 was funded primarily from available cash, cash generated from operations and short-term
borrowings under the line of credit. The Company believes anticipated cash flows from operations, issuance of long-term debt and its line of credit will be
adequate to satisfy projected operating requirements through at least the next twelve months.

*Critical Accounting Policies*

The Company's estimates related to certain assets and liabilities are an integral part of the consolidated financial statements. These estimates are considered
critical to the consolidated financial statements because they require subjective and complex judgements.

*(a) Revenue Recognition* - The Company's revenues are recognized when products are shipped to unaffiliated customers. The Securities and Exchange
Commission's Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition" provides guidance on the application of accounting principles generally
accepted in the United States of America to selected revenue recognition issues. The Company has concluded that its revenue recognition policy is
appropriate and in accordance with accounting principles generally accepted in the United States of America and SAB No. 101.

*(b) Allowance for Uncollectible Accounts Receivable* -The Company records an allowance for accounts receivable which are potentially uncollectible.
The allowance is established by estimating the amounts that are potentially uncollectible based on a review of customer accounts, age of the receivable, the
customer's financial condition and industry, and general economic conditions. Results could be materially different if economic conditions deteriorated for
the Company's customers.

*(c) Long-Lived Assets* - Property and equipment, are depreciated over their useful lives. Useful lives are based on management's estimates of the period
that the assets will generate revenue. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The Company believes no impairment changes need to be recorded as of July 31, 2003.

*(d) Valuation Allowance* - In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, tax carryover periods available, and tax planning strategies in making this assessment.

*Forward-Looking Statements*

Certain statements contained in Management's Discussion and Analysis and elsewhere in the 10-QSB are forward-looking statements. These statements
may discuss, among other things, expected growth, future revenues and future performance. The forward-looking statements are subject to risks and
uncertainties, including, but not limited to, competitive pressures, inflation, consumer debt levels, currency exchange fluctuations, trade restrictions,
changes in tariff and freight rates, capital market conditions and other risks indicated in the Company's filings with the Securities and Exchange
Commission. Actual results may materially differ from anticipated results described in these statements.

Item 3. Controls and Procedures.

The Company carried out an evaluation, under the supervision and with the participation of the Company's management, of the effectiveness as of July
31, 2003, of the Company's disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based
upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective in alerting them in a timely basis to material information relating to the Company required to be disclosed in the Company's
periodic SEC reports. There have been no significant changes in the Company's internal controls or in other factors which could significantly affect
internal controls subsequent to the date the Company carried out its evaluation.

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:

31.1 Certification of the Chief Executive Officer pursuant to 13a-14 and 15d-14

31.2 Certification of the Chief Financial Officer pursuant to 13a-14 and 15d-14

32 Certification pursuant to 18 U.S.C. section 1350

(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                  | /s/ DENNIS J. STEVERMER                      
|-------------------------------------- | ---------------------------------------------
|J. Russell Duncan                      | Dennis J. Stevermer                          
|Chairman of the Board, Chief Executive | Vice President Treasurer, Principal Financial
|Officer and Director                   | and Accounting Officer                       

Dated: September 12, 2003