FORM 10-Q

                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

(Mark One)
[ X ]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

     For quarterly period ended:  March 31, 1998

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

     For the transition period from _________to_________.

                   Commission file number:  0-8358  

                       Micro General Corporation
        (Exact name of registrant as specified in its charter)

          Delaware                          95-2621545
    (State or other jurisdiction of       (I.R.S. Employer
     incorporation or organization)        Identification Number)
                                   
    14711 Bentley Circle, Tustin, California               92780
    (Address of principal executive offices)               (Zip Code)

                           (714) 731-0557
         Registrant's telephone number, including area code

    Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months  (or for such shorter periods 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 [   ]

The number of shares outstanding of Common Stock, $.05 Par Value - 1,949,666 
shares as of March 31, 1998.
<PAGE>
                                                                           

                           MICRO GENERAL CORPORATION
                   FORM 10-Q - QUARTER ENDED MARCH 31, 1998
                               TABLE OF CONTENTS

  PART I. FINANCIAL INFORMATION

  Item 1.   Financial Statements.

            Balance Sheets -- March 31, 1998 (unaudited) and December 31, 1997

            Statements of Earnings -- Three months ended March 31, 1998
                and March 31, 1997 (unaudited)

            Statements of Cash Flows --Three months ended March 31, 1998
                and March 31, 1997 (unaudited)

            Notes to Financial Statements

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

  PART II.  OTHER INFORMATION

  Item 4.   Other Information

  Item 6.   Exhibits and Reports on Form 8-K.

  SIGNATURES


  All other schedules are omitted as the required information is inapplicable 
  or the information is presented in the financial statements or notes thereto.

<PAGE>
                                       MICRO GENERAL CORPORATION
                                              Balance Sheets
                                   March 31, 1998 and December 31, 1997
<TABLE>                                             
<CAPTION>                                                  
                                                       March 31, 1998     December 31,
                          Assets (Note 6)                (unaudited)          1997
                                                       --------------     --------------
<S>                                                    <C>                  <C>
  Current assets:
    Cash                                                $     178,065     $     318,845
    Accounts and notes receivable, less allowance for
      doubtful receivables and sales returns of $17,677
      at 3/31/98 and $16,141 at 12/31/97                      187,617            97,223
    Inventories (note 2)                                    1,116,352           853,033
    Prepaid expenses                                          239,881           264,970
                                                         -------------    --------------
       Total current assets                                 1,721,915         1,534,071

    Equipment and improvements, net (note 3)                  204,178           209,351
    Other assets, net (note 4)                              1,363,876         1,096,115
                                                         -------------    --------------
                                                           $3,289,969     $   2,839,537
                                                         =============    ==============

                        Liabilities and Shareholders' Deficiency
  Current liabilities:
    Notes payable(note 6)                                  $  850,000     $     850,000
    Accounts payable                                          523,833           163,455
    Accrued expenses                                          180,739           203,791
    Deferred revenue                                           27,856             6,112
                                                         -------------    --------------
       Total current liabilities                            1,582,428         1,223,358
                                                         _____________    ______________

    Long-term debt(note 6)                                  2,750,000         2,750,000
  Shareholders' deficiency:
    Preferred stock, $.05 par value; 1,000,000 
     shares authorized no shares issued and 
     outstanding at 3/31/98 and 12/31/97.                          --                --
    Common stock, $.05 par value; 10,000,000 shares 
      authorized 1,949,666 shares issued and outstanding 
      at 3/31/98 and 1,949,666 shares at 12/31/97.             97,483            97,483
    Additional paid-in capital                              4,176,370         4,176,370
    Accumulated deficit                                    (5,316,312)       (5,407,674)
                                                        --------------     -------------
       Total shareholders' deficiency                      (1,042,459)       (1,133,821)
                                                        ______________     _____________

    Commitments and contingencies (note 7)              --------------     -------------
                                                          $ 3,289,969      $  2,839,537
                                                        ==============     =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
                        MICRO GENERAL CORPORATION
                          Statements of Earnings
        For the Three Months Ended March 31, 1998 and March 31, 1997
                                (unaudited)
                                                         March 31,         March 31,
                                                            1998             1997
                                                        -------------     -------------
<S>                                                     <C>               <C>    
Revenues:     
 Product sales, net of returns of $18,563 in 1998       $    278,974      $    152,295
   $36,390 in 1997
 Service and rate revenues (note 7)                          754,847           887,756
                                                       --------------     -------------
      Total revenues                                       1,033,821         1,040,051

Cost of sales:
 Net product sales                                           274,674           248,256
 Service and rate revenues                                   178,125           257,496
                                                       --------------     -------------
      Total cost of sales                                    452,799           505,752
                                                       --------------     -------------
      Gross profit                                           581,022           534,299
 
Operating expenses:
 Selling, general and administrative                         380,789           350,825
 Engineering and development                                  22,683           101,208
 Provision for doubtful receivables                            1,500             6,000
                                                       --------------     -------------
      Total operating expenses                               404,972           458,033
                                                       --------------     -------------
      Operating profit                                       176,050            76,266

Interest expense, net                                        (83,888)          (31,876)
                                                       --------------     -------------
Earnings before income taxes                                  92,162            44,390

Income taxes  (note 5)                                           800               800
                                                       --------------     -------------
      Net earnings                                     $      91,362      $     43,590
                                                       ==============     =============
Earnings per common share:
  Basic                                                $        0.05      $       0.02
  Diluted                                                       0.05              0.02
                                                       ==============     =============
Weighted average common shares used in computing
  per share amounts:
    Basic                                                  1,949,666         1,949,584
    Diluted                                                2,017,104         1,951,930
                                                       ==============     =============
</TABLE>
See accompanying notes to financial statements.

<PAGE>
<TABLE>
<CAPTION>

                      MICRO GENERAL CORPORATION
                      Statements of Cash Flows
    For the Three Months Ended March 31, 1998 and March 31, 1997
                             (unaudited)

                                                            March 31,        March 31,
                                                              1998              1997
                                                         --------------    -------------
<S>                                                      <C>               <C>
Cash flows from operating activities:
  Net earnings                                           $     91,362      $    43,590 
  Adjustments to reconcile net earnings to net
    cash provided by operating activities:
  Depreciation and amortization                                23,513           23,903 
  Provision for losses on accounts receivable
    and sales returns, net of write-offs                        1,535           (6,437)
  Change in assets and liabilities:
    (Increase) decrease in accounts receivable                (91,929)          17,495 
    (Increase) decrease in inventories                       (263,319)         145,990 
    (Increase) decrease in prepaid expenses                    25,089         (103,656)
    Increase in accounts payable                              360,378            3,506 
    Increase in deferred rate revenue                          21,744           18,390 
    Decrease in  accrued expenses                             (23,052)         (36,077)
                                                         --------------    -------------
        Total adjustments                                      53,959           63,114 
                                                         --------------    -------------
    Net cash provided by operating activities                 145,321          106,704 
 
Cash flows used in investing activities--
    capital expenditures                                     (286,101)         (69,262)
 
Cash flows provided by financing activities common 
    stock proceeds, net                                            --              688 
                                                         --------------     ------------
Net increase (decrease) in cash                              (140,780)          38,130 
 
Cash - beginning of period                                    318,845          413,533 
                                                         --------------     ------------
Cash - end of period                                     $    178,065       $  451,663 
                                                         ==============     ============
 
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Interest                                             $     84,750       $   35,625
                                                         ==============     ============
    Income taxes                                         $        800       $      800
                                                         ==============     ============
</TABLE>
See accompanying notes to financial statements
<PAGE>
Note 1.  Summary of Significant Accounting Policies

  General

	The operations of Micro General Corporation (the "Company") consist of the 
design, manufacture and sale of computerized parcel shipping systems, postal 
scales and piece-count scales.

      This Quarterly Report on Form 10-Q contains forward looking statements, 
which are subject to known and unknown risks, uncertainties and other factors 
which may cause the actual results, performance and achievements of the Company 
to be materially different from future results, performance or achievements 
expressed or implied by such forward looking statements.

      The financial information included in this report has been prepared in 
accordance with generally accepted accounting principles and the instructions to
Form 10-Q and Article 10 of Regulation S-X. All adjustments, consisting of 
normal recurring accruals considered necessary for a fair presentation, have 
been included.  This report should be read in conjunction with the Company's 
1997 Annual Report on Form 10-K for the year ended December 31, 1997.  The  
results of operations for the three months ended March 31, 1998, are not 
necessarily indicative of results that may be expected for any other interim 
period or for the full year ending December 31, 1998.

Earnings per share
   
	Effective December 31, 1997, the Company adopted Statement of Financial 
Accounting Standards No.,128, "Earnings per Share" (SFAS No. 128).  This 
statement replaces the previously reported primary and fully diluted earnings 
per share with basic and diluted earnings per share.  Unlike primary earnings 
per share, basic earnings per share excludes any dilutive effects of options and
convertible securities.  Diluted earnings per share is very similar to the 
previously reported fully diluted earnings    per share.  All earnings per share
amounts for all periods have been restated to conform to the SFAS No.128 
requirement.

Reclassification

	Certain amounts in the 1997 financial statements have been reclassified to 
conform to the 1998 presentation.

Note 2.  Inventories

	Inventories are comprised of the following:
<TABLE>
<CAPTION>
                                        March 31, 1998  December 31, 1997
                                        --------------  -----------------
         <S>                               <C>                  <C>
         Parts & supplies                  $   906,195          $ 646,594
         Purchased finished goods              182,016            180,738
         Consigned inventory                    28,141             25,701
                                         -------------  -----------------
                                            $1,116,352          $ 853,033
                                         =============  =================
</TABLE>
Note 3.  Equipment and Improvements

         Equipment and improvements are as follows:
<TABLE>
<CAPTION>
                                         March 31, 1998  December 31, 1997
                                         --------------  -----------------
        <S>                               <C>                 <C>
        Production equipment and tooling  $    464,750        $   454,501 
        Office furniture and equipment         670,828            667,026 
        Leasehold improvements                  24,786             24,246 
                                         --------------   -----------------
                                             1,160,364          1,145,773 
        Less accumulated depreciation
         and amortization                     (956,186)          (936,422)
                                         ---------------   ----------------  
                                           $   204,178        $   209,351 
                                         ===============   ================
</TABLE>
Note 4.  Other Assets

Other assets are as follows:
<TABLE>
<CAPTION>
                                       Estimated     March 31,   December 31,
                                      Useful Life      1998          1997
                                    --------------  ------------  ------------
<S>                                    <C>          <C>           <C>      
Software development costs               5 years    $1,326,376    $1,054,865 
Excess cost of assets purchased over
  fair market value                     15 years       232,531       232,531 
Deferred loan fees and commitment fees   5 years        50,000        50,000 
License rights                          10 years        41,382        41,382 
Other intangible assets                 15 years        23,388        23,388 
                                                    -----------   -----------   
                                                     1,673,677     1,402,166 
Less accumulated amortization                         (309,801)     (306,051)
                                                    -----------   -----------
                                                    $1,363,876    $1,096,115 
                                                    ===========   ===========
</TABLE>

	During July 1996, the Company reached the technological feasibility stage 
of software development on the Meter Project, which, in accordance with 
Statement of Financial Accounting Standard No. 86, "Accounting for the Costs of 
Computer Software to be Sold, Leased, or Otherwise Marketed," is the point after
which qualified software development costs may be capitalized.  The amounts 
capitalized at March 31, 1998 and December 31, 1997, are mainly comprised of 
salary expense, departmental overhead and an allocation of other indirect costs.
All such capitalized costs were incurred subsequent to the achievement of 
technological feasibility.

Note 5.  Income Taxes

	Income tax expense for the three months ended March 31, 1998 and March 31, 
1997 represents state minimum tax.

      The expected income tax expense computed by multiplying earnings before 
income tax expense by the statutory Federal income tax rate of 34% differs from 
the actual income tax expense as follows:
<TABLE>
<CAPTION>
                                                      March 31,       March 31, 
                                                         1998           1997     
                                                    ------------    ------------
   <S>                                              <C>             <C>
   Expected tax expense                             $    31,335     $    15,092 
   Effect of net operating loss carryforward
     not recognized for financial statement purposes    (36,335)        (22,092)
   Nondeductible amortization of the excess cost of 
     assets purchased over fair market value              5,000           7,000 
   State income taxes                                       800             800 
                                                    ------------    -------------
                                                    $       800     $       800 
                                                    ============    =============
</TABLE>

	At March 31, 1998, the Company had available net operating loss 
carryforwards of approximately $4,551,000 and $1,734,000 for Federal and state 
income tax purposes, respectively.  If not used to offset future taxable income,
the net  operating loss carryforwards will expire at various years between 2006
and 2012.  The  Company also has investment tax credit and research and 
experimentation credit carryforwards aggregating approximately $75,000 which 
expire during the period 1998 to 2002.  

Note 6.  Notes Payable/Long-Term Debt

	On August 1, 1996, the Company entered into a $3 million financing 
agreement which provided additional funding primarily for the retirement of bank
debt, operations, and to fund the Company's ongoing development of a series of 
high-level security postage meters designed to comply with the new United States
Postal Service ("USPS") proposed regulations.  Two 9.5%, five-year convertible 
notes were made available, one in the amount of $1 million and one in the amount
of $2 million, and are held by Cal West Service Corporation ("CalWest"), a 
California corporation, and Dito Caree L.P. Holding ("Dito Caree"). At December 
31, 1997, all amounts had been advanced on these notes.  As      stipulated in 
the note agreements, a maximum of 85% of these borrowings must be used to fund 
the Meter Project and the remaining 15% may be used for operations.  Amendment 
to the 85%/15% split is at the sole discretion of the noteholders.  At December 
31, 1997, the Company was not in compliance with this stipulation but did obtain
waivers from both note holders. 

The debt, secured by the assets of the Company, can be converted at the 
noteholder's option into 1,334,438 shares of the Company's common stock at 
prices ranging from $2.00 to $2.50 per share.  In conjunction with the 
$3,000,000 financing agreement, the Company paid a 1% commitment fee to the 
noteholders.  This fee amounted to $20,000, and $10,000 to Dito Caree and 
CalWest, respectively, and is being amortized over the term of the notes.

	Repayment of the notes is on an interest-only basis for the first two 
years, with principal and interest payments for the remaining three years of the
term.

	On November 25, 1997, the Company entered into a $600,000 financing 
agreement which provided additional funding to be used by the Company for cash 
flow purposes.  Two 9.00% notes were issued in the amount of $400,000 and 
$200,000 and are held by Dito Caree and CalWest, respectively.  In conjunction 
with these notes, the Company issued to the note holders, two detachable warrant
certificates,  in the amount of 100,000 shares to Dito Caree and  in the amount 
of 50,000 shares to CalWest, giving the note holders the right to purchase 
150,000 shares of the Company's common stock at $1.50 per share.  The warrants 
can be exercised any time between November 25, 1997 and November 25, 2002.  
Interest on the two notes is payable quarterly.  The Company has the right to 
prepay all or a portion of the interest and principal due on the notes anytime 
prior to the due date of May 31, 1998.  All payments must be allocated two-
thirds to Dito Caree and one-third to CalWest. 
       On April 8, 1998, an amendment to the Loan Agreement dated November 25, 
1997 was executed, extending the due date to October 31, 1998.  All other terms 
remain in effect.               

       Principal maturities of the notes payable and long-term debt are as 
follows:

                         1998   $   850,000
                         1999     1,000,000
                         2000     1,000,000
                         2001       750,000
                                -----------  
                         Total  $ 3,600,000
                                ===========

	On April 8, 1998, the Company entered into a $750,000 financing agreement 
which provided additional funding to be used by the Company for cash flow 
purposes.  Two 9.00% notes were issued in the amount of $500,000 and $250,000 
and are held by Dito Caree and CalWest, respectively.  In conjunction with these
notes, the Company issued to the note holders, two detachable warrant 
certificates, in the amount of 125,000 shares to Dito Caree and in the amount of
62,500 shares to CalWest, giving the note holders the right to purchase 187,500 
shares of the Company's common stock at $1.50 per share.  The warrants can be 
exercised any time between April 8, 1998 and April 7, 2003.  Interest on the two
notes is payable quarterly.  The Company has the right to prepay all or a 
portion of the interest and principal due on the notes anytime prior to the due 
date of October 1,       1998.  All payments must be allocated two-thirds to 
Dito Caree and one-third to CalWest. 

Note 7.  Commitments and Contingencies

	Noncancellable operating lease commitments consisted principally of the 
leases for the Company's manufacturing and administrative facility in California
and the research and development facility in Connecticut through 2001.  In 
December 1996, the Company entered into a four-year lease agreement for a new 
manufacturing and administrative facility in California, and in turn entered 
into an agreement to sublease the old California facility for the same lease 
term and same lease payments.  Sublease income is shown below as a reduction to 
total future lease payments.  On March 16, 1998, the Company entered into an 
agreement to extend the lease on their Connecticut facility through March 31, 
2001.  At March 31, 1998, the Company was committed to the following 
noncancellable operating lease payments:

           Year ending December
              1998 (nine months)     $ 160,591 
              1999                     128,314 
              2000                     101,593 
              2001                      36,126 
                                     ----------
                                       426,624 
               Less sublease income   (115,752)
                                     ----------
                                     $ 310,872 
                                     ==========
              
	The Company has a license agreement with Pitney Bowes which enables the 
Company to manufacture and sell certain products.  The license agreement expires
in 2004.  Annual expenses for the license agreement are not significant.

	From time to time, the United State Postal Service  ("USPS") and/or the 
United Parcel Service ("UPS") change their rates.  For a fee, the Company 
provides its customers with programmable memory chips with the new tariffs which
can be inserted into the Company's products.  In some instances, customers 
prepay a fee to the Company which assures they will receive new programmable 
memory chips for all rate changes which occur within a predetermined period.  In
other instances, customers incur a fee for each time they decide to procure a 
new programmable memory chip.  The Company experienced a UPS rate change during 
the three months ended March 31, 1998 and March  31, 1997.  Recorded revenues 
from rate changes totaled approximately $728,687 and $883,378 for the three 
months ended March 31, 1998 and March 31, 1997, respectively.  Gross profit from
rate     change totaled $567,225 and $650,372, respectively, for these same 
periods.

Note 8.  Subsequent Event

	On April 1, 1998, the Company's Board of Directors approved a plan to 
acquire ACS Systems, Inc. a wholly-owned subsidiary of Fidelity National 
Financial, Inc.  The transaction is valued at $6.9 million and will involve the 
issuance of  approximately 4.6 million shares of Micro General common stock, 
subject to a fairness opinion with respect to the value of such shares.  The 
transaction is subject to a definititive agreement expected to be signed by 
early May 1998.  This acquisition is expected to provide adequate liquidity for 
the remainder of 1998.

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

Results of Operations

     Total net product sales increased $126,679 or 83% for the three months 
ended March 31, 1998 (AQ1 1998@) compared to the three months ended March 31, 
1997 (AQ1 1997@) while service and rate change revenues decreased $132,909 or 
15% for the same period in 1997.  The increase  in net product sales is due to 
both an increase in the retail channel of $20,161 or 107% and an increase in the
dealer channel of $106,518 or 81% as compared to Q1 1997.  For Q1 1998 and Q1 
1997, service and rate change revenues represented approximately 73% and 85% of 
total revenue, respectively.  The decrease in rate change revenues for Q1 1998 
as compared to Q1 1997, was primarily due to the decline in the Company's 
installed base as more scale based systems are replaced by service provider free
systems and computer-based systems.  In Q1 1998 the increase in the retail 
channel is a direct result of establishing more retail distribution to increase 
sales in this channel.  The dealer channel sales also shows an increase in Q1 
1998 as compared to the prior year.  Initial shipments of the Shipper LinkJ 
product in Q1 1998, along with increased sales of the Company's computer-based 
Eagle Best Rate Shipper software for Windows and DOS, were the major components 
of the increase in dealer-based product sales.

     Q1 1998 cost of sales for product sales increased $26,418 or 11% as 
compared to the same period in 1997.  The increase was due to an increase in 
overall product sales.  Through expense reduction for product labor and 
overhead, the gross margin on product sales was a positive $4,300 or 1.5%.    
The Q1 1998 service and rate change revenue product costs decreased $79,371 or 
31% as compared to the same period in 1997.  This decrease is due to the lower 
costs of  material needed to support the UPS rate change in Q1 1998.  The 
overall cost of goods decrease of $52,953 or 11% is due to a decrease in rate 
change revenue product costs.  Gross margin Q1 1998 was 56% compared to 51% for 
the same period the prior year.

     Operating expenses of the Company in Q1 1998 of $404,972 represented a 12% 
decrease as compared to Q1 1997.   This decrease is a combination  of a 9% 
increase in selling, general and administrative expense and a 78% decrease in 
engineering and development expense.  The decrease in engineering and 
development expense is due to a deferral of approximately $155,681 in expense 
related to the Meter Project. While expenses are expected to remain relatively 
constant in the selling, general and administrative departments, expenses will 
increase in the research and development area as final development continues on 
the Company's postage meter project due for submission to the United States 
Postal Service in the near future.  The Company's postage meter, previewed at 
the National Postal Forum in March 1998, was well received by the Company's 
dealers and representatives of the United States Postal Service.

     Interest expense for the Company in Q1 1998 increased $52,012 as compared 
to Q1 1997.  This increase is due to the interest associated with various 
outstanding financial agreements of the Company(see Note 6).

     The increase in Q1 1998 net earnings of $47,772 or 110% as compared to the 
same period in 1997, is primarily due to increased product sales as well as a 
reduction in expenses associated with rate change revenue and operating 
expenses, excluding interest expense. 

Financial Condition, Liquidity and Capital Resources

     The Company's ability to generate cash, during the first three months of 
1998, depended largely on rate change revenue.  The Company's March 31, 1998 
cash balances decreased $140,780 from December 31, 1997.  The decrease is 
primarily attributable to the purchases of inventory, meter project expenses, 
and interest payments.  The Company's March 31, 1998 net accounts receivable 
balance increased $90,394 or 93% from December 31, 1997 levels.  This increase 
is due to an increase in product sales for the Q1 1998 period.

     Working capital was $139,487 at March 31, 1998 as compared to $310,713 at 
December 31, 1997.  The Company's current ratio at March 31, 1998 was 1.1 as 
compared to 1.3 at December 31, 1997.   The decrease in working capital is due 
to a $360,378 or 221% increase in accounts payable as compared to the balance at
December 31, 1997.  This increase is a result of purchases in support of the 
Meter project and material need for the Q1 1998 UPS rate change.

     The Company's total inventories increased $263,319 or 31% at March 31, 1998
as compared to December 31, 1997.  The increase in inventory is related to the 
purchase of rate change product during the first quarter of 1998.

     The Company has had available liquidity through multiple financial 
instruments. Two convertible notes, totaling $3 million, entered into on August 
1, 1996,  provided additional funding primarily for the retirement of bank debt,
operations, and to fund the Company's ongoing development of a series of high-
level security postage meters designed to comply with the new United States 
Postal Service proposed regulations.  At March 31, 1997, the Company was in 
compliance with or had obtained waivers in reference to all financial covenants 
associated with the convertible notes. The two note agreements entered into on 
November 25, 1997, totaling $600,000 and amended on April 8, 1998, provided 
additional funding for operations.  The Company also obtained two additional 
funding agreements on April 8, 1998, totaling $750,000, which will provide 
funding for operations (note 6).
 
     Current liquidity is being funded through product sales, service and rate 
change revenues, and the most recent funding agreements.

     The Company's investments in capital expenditures during Q1 1998  were not 
material.

     The Company does not engage in any significant off balance sheet financing.

Inflation

The effect of inflation on operating results has, historically, been 
insignificant.

Year 2000 

     Many computer programs use only the last two digits of a year to store or 
process dates.  This is the case with the accounting program used by the 
Company.  As a result, the programs may treat dates after 1999 as earlier than 
dates before 2000.  This could adversely affect routines such as calculating 
depreciation or aging accounts receivable.  The Company is currently assessing 
the issue and will correct this defect in the Company's program.  The Company 
expects the defect will be corrected without material cost before the year 2000.
The Company's products are not impacted by the year 2000 change over.  The 
Company's customers, suppliers and service providers may use computer programs 
with similar defects which, to the extent not corrected, may adversely affect 
the Company's operations, such as the receipt of supplies,  services, purchase 
orders and payments of accounts receivable.     

     While the Year 2000 considerations are not expected to materially impact 
the Company's internal operations, they may have an effect on some customers and
suppliers, and thus indirectly affect the Company.  It is not possible to 
quantify the aggregate cost to the Company with respect to customers and 
suppliers with Year 2000 problems, although the Company does not anticipate it 
will have a material adverse impact on its business.


Subsequent Event

On April 1, 1998, the Company's Board of Directors approved a plan to acquire 
ACS Systems, Inc. a wholly-owned subsidiary of Fidelity National Financial, Inc.
The transaction is valued at $6.9 million and will involve the issuance of  
approximately 4.6 million shares of Micro General common stock, subject to a 
fairness opinion with respect to the value of such shares.  The transaction is 
subject to a definititive agreement expected to be signed by early May 1998.  
This acquisition is expected to provide adequate liquidity for the remainder of 
1998.

<PAGE>
ITEM 5.	OTHER INFORMATION

None.

ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K
         a.	Exhibits (listed by numbers corresponding to the Exhibit Table of 
            Item 601 of Regulation S-K):
		       11.	Computation of earnings (loss) per share is not provided as 
             the calculation can be clearly determined from the material 
             contained in Item 1 of Part I.

         b. The Company did not file any reports on Form 8-K during the three 
            months ended March 31, 1998.
<PAGE>
MICRO GENERAL CORPORATION
FORM 10-Q -- QUARTER ENDED MARCH 31, 1998
PART II - SIGNATURES

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 hereunto duly authorized.


                                     MICRO GENERAL CORPORATION
       

Date:  May 11, 1998                    /s/   Thomas E. Pistilli 
                                     ------------------------------       
                                     Thomas E. Pistilli
                                     President
                                     Chief Executive Officer
                                     Chief Financial Officer


                                       /s/ Linda I. Morton         
                                     -------------------------------      
                                     Linda I. Morton
                                     Controller