<PAGE> 1
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                  FORM 10-K/A
(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934.   
For the fiscal year ended September 30, 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:  001-10382

                      VALLEY FORGE SCIENTIFIC CORP.
          (Exact name of registrant as specified in its charter)

     PENNSYLVANIA                                     23-2131580
(State or other jurisdiction of                     (I.R.S. employer
 incorporation or organization)                     identification no.)

                136 Green Tree Road, Oaks, Pennsylvania 19456
           (Address of principal executive offices and zip code)
                           Telephone: (610) 666-7500
           (Registrant's telephone number, including area code)   

Securities registered pursuant to Section 12(b) of the Act:

                                       Name of Each Exchange
Title of Each Class                    on which Registered

Common Stock, no par value             Boston Stock Exchange
     
Securities registered pursuant to Section 12(g) of the Act: None

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 _____

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
or Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.   X   

The aggregate market value of voting stock held by non-affiliates of the
registrant, computed by reference to the closing bid and ask prices as
reported by the NASDAQ system on November, 18, 1998 as $23,962,360.

At December 21, 1998 there were 8,229,384 shares of the Registrant's
Common Stock outstanding.

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                             PART III


Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The directors and executive officers of the Company are as follows:

                                             
                                                                       Director
Name                Age             Position(s)                        Since  
----                ---             -----------                        --------
Jerry L. Malis       66    Chairman of the Board and President         1980
Thomas J. Gilloway   61    Executive Vice President, Secretary,        1984
                           Treasurer and Director   
Leonard I. Malis     79    Director                                    1989
Bruce A. Murray      62    Director                                    1992
Bernard H. Shuman    74    Vice President and Director                 1994
Robert H. Dick       55    Director                                    1997

               
     Jerry L. Malis has served as President or Vice-President and a Director
of the Company since its inception in March 1980. As of June 30, 1989,
Mr. Malis was elected as Chairman of the Board of the Company.  He has
published over fifty articles in the biological science, electronics and
engineering fields, and has been issued twelve United States patents.
Mr. Malis coordinates and supervises the development, engineering and
manufacturing of the Company's products and is in charge of the daily
business operations of the Company. He devotes substantially all his business
time to the business of the Company.

     Thomas J. Gilloway has been Executive Vice President and a Director of the
Company since December 1984, and as of June 30, 1989 was appointed Secretary
and Treasurer of the Company. From the Company's inception in March 1980 to
December 21, 1984, Mr. Gilloway served in capacities as a Vice-President and
Treasurer.  Mr. Gilloway received his undergraduate degree from LaSalle
University in 1959 and his graduate degree from Temple University in 1963. Prior
to his involvement with the Company, Mr. Gilloway was employed in a marketing
capacity for Scott Paper Company, C.R. Bard, Inc., and CheckPoint Systems as
Director of Marketing. He is involved with marketing, regulatory and contract
administration matters for the Company and devotes substantially all his
business time to the business of the Company.

     Leonard I. Malis, M.D., a consultant to the Company since its inception in
March 1980, has been a director since June 30, 1989.  Dr. Malis was Professor
and Chairman of the Department of Neurosurgery at Mount Sinai School of
Medicine, New York, New York, from 1971 until 1993, and is currently Professor
and Chairman Emeritus at Mount Sinai School of Medicine.  Dr. Malis designed
and built the first commercial bipolar coagulator in 1955, and his original
units were the standard in neurosurgery for many years. Dr. Malis has been
issued five United States patents and has designed and trademarked over one
hundred instruments. He has published over one hundred articles in medical
journals and reviews and is the author of a textbook on neurosurgery.

     Bruce A. Murray has been a director of the Company since October 14, 1992. 
He is a Managing Member of The Change Management Group, LLC, a management
consulting company; and a Principal of Adair & Murray Associates, Inc., a
management consulting company.  From 1991 to May 1993, he was a senior
consultant with the management consulting firm of Rath and Strong.  From 1984
to August 1991, Mr. Murray held positions within the Pfizer Hospital Products
Group, as Director of Engineering-Surgical Products, Corporate Vice
President - Research and Development, and Senior Vice President and Business
Manager - Surgical Products.  He has also held senior management positions with
Valleylab, Inc., Picker Corporation Electronics Division, Ball Brothers
Research Corporation and IIT Research Institute.  Mr. Murray received both his
B.S. in Engineering and his M.B.A. from the Illinois Institute of Technology,
and is an adjunct instructor in business strategies at the University of
Colorado.

     Bernard H. Shuman has been a director and Vice President of the Company
since September 1, 1994.   Mr. Shuman is currently Vice President-Technology.
Prior to September 1, 1994, Mr. Shuman served as President and director of
Diversified Electronic Corporation ("Diversified"), a specialty electronics
manufacturer which merged into the Company on August 31, 1994.

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     Robert H. Dick has been a director of the Company since 1997. He is the
principal of R. H. Dick & Company, Inc., an investment banking firm. From April
1996 to 1998, he was a partner  in Boles & Company, an investment banking firm.
He was President, CEO and CFO of two Boles & Company clients: BioMagnetic
Therapy Systems, Inc. (from September 1995 to April 1996) and Pharmx, Inc.
(from May 1994 to May 1995).   From April 1987 to May 1994, Mr. Dick served as
Vice President-International for Codman & Shurtleff, Inc., a Johnson & Johnson
subsidiary, where he was responsible for new business development and sales and
marketing in non-U.S. markets.  Mr. Dick has also held other business
development and sales and marketing positions with Codman & Shurtleff, Inc.,
and product management positions with USCI Surgical Products, a division of
C.R. Bard.

     Jerry L. Malis and Dr. Leonard I. Malis are brothers.  The Company's
executive officers are elected annually by the Company's directors and shall
continue to serve until their successors are elected and qualified.  

Item 11.  EXECUTIVE COMPENSATION.

     The following table sets forth the compensation paid by the Company
to its executive officers for the three fiscal years ended September 30, 1998. 

<TABLE>
                       SUMMARY COMPENSATION TABLE 
<S>                           <C>                <C>                      <C>                      
                                                                        Number of Shares
                                                                        of Common Stock
Name and                                                                Underlying
Principal Position          Fiscal Year         Salary(1)               Options Granted
-----------------------------------------------------------------------------------

Jerry L. Malis,             1998                $188,949                   ---
  President                 1997                 179,951                   ---
                            1996                 163,592                   ---

Thomas J. Gilloway          1998                $161,278                   ---
  Executive Vice President  1997                 153,598                   ---
                            1996                 139,634                   ---

Bernard H. Shuman           1998                $105,000                   ---
  Vice President-Technology 1997                 105,000                   ---
                            1996                 105,000                  25,000
                       
------------                          
              
(1)  Non-cash compensation did not exceed the lesser of $50,000 or 10% of the cash
    compensation for the named individual.
                       
</TABLE>                       

     Effective July 1, 1994, the Company entered into employment agreements
with Jerry L. Malis, President, and Thomas J. Gilloway, Executive Vice
President for a term of 63 months. The agreements provide for annual base
salaries to Mr. Malis and Mr. Gilloway of $148,720 and $126,940, respectively,
in 1994, with annual base salary increases of 10% commencing on October 1, 1994.
For the year ended September 30, 1996, Messrs. Malis and Gilloway waived their
right to the 10% increase of base salary. For the year ended September 30, 1998,
Messrs. Malis and Gilloway waived their right to a full 10% increase of base
salary, opting to reduce the annual base salary increase from 10% to 5% .
The agreements also provide that Messrs. Malis and Gilloway may each receive
such other cash and stock bonuses as may be

                               -3-

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determined from time to time by the Board of Directors.  The employment
agreements may be terminated for cause.  In addition, the agreements provide
that in the event of a change of control (as defined in the Securities Exchange
Act of 1934) of the Company, the employee may terminate his employment for
"good reason" and shall be entitled to receive a payment equal to the lesser
of (i) 2.99 times the employee's average annual compensation (including bonuses,
if any) during the three years preceding the date of termination; or (ii) the
compensation payable for the remaining term of the agreement.  The term "good
reason" includes the assignment to the employee of duties inconsistent with
the employee's then position, a relocation of the Company's office more than
30 miles from the Company's present offices, a failure of the Company to
continue in effect any benefit or compensation plan, depriving the employee of
any fringe benefit, or the failure of any successor entity to assume the
employment agreement.
                       
     On August 31, 1994, the Company entered into an employment agreement with
Bernard H. Shuman, Vice President-Technology, for a term of 59 months. The
agreement provides for an annual salary to Mr. Shuman of $50,000 for the period
from September 1, 1994 to July 31, 1995, and a salary of $105,000 for each
twelve month period thereafter.  The agreement provides that Mr. Shuman may
receive additional compensation and benefits as may be determined from time to
time by the Board of Directors.  The agreement provides for certain death and
disability benefits. The employment agreement may be terminated for cause.
                       

                            Directors' Compensation

     Directors of the Company do not receive any compensation for their
services as members of the Board of Directors, but Directors who are not
officers of the Company are entitled to reimbursement for expenses incurred
in connection with their attendance at meetings and are entitled to participate
in the Company's Stock Option Plan. In November 1997, each director who
was not an employee of the Company (except Leonard I. Malis) received a
grant of stock options to purchase 2,000 shares of Common Stock pursuant to 
the Company's Stock Option Plan.


                     401(k) Plan and Profit-Sharing Plan

     Effective January 1, 1990, the Company adopted a 401(k) Plan and Profit
Sharing Plan that covers full-time employees who have attained age 21 and
have completed at least one year of service with the Company. Under the
401(k) Plan, an employee may contribute an amount up to 25% of his
compensation to the 401(k) Plan on a pre-tax basis not to exceed $10,000 per
year (adjusted for cost of living increases). Amounts contributed to the 401(k)
Plan are non-forfeitable. 

     Under the Profit Sharing Plan, a participant in the plan  participates in
the Company's contributions to the Plan as of December 31 in any year, with
allocations to individual accounts based on annual compensation. An employee
does not fully vest an interest in the plan until completion of three
years of employment. The Board of Directors determines the Company's
contributions to the plan on a discretionary basis. The Company has not made
any contributions to date.

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Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT.

     The following table sets forth as of December 24, 1998, certain information
with respect to the beneficial ownership of Common Stock, by each person known
to the Company to own beneficially 5% or more of the outstanding Common Stock,
by each director and nominee, and by all officers and directors as a group.
          
                                   Amount of
Name and Address of                Beneficial                      Percentage
Beneficial Owners (1)              Ownership                       Owned
---------------------              ----------                      -----------
      
Jerry L. Malis (2)(3)              1,282,276                       15.3%
Thomas J. Gilloway(2)(7)           1,001,375                       12.0%
Dr. Leonard I. Malis(2)              882,242                       10.7%
Bernard H. Shuman(2)(4)              126,467                        1.5%
Bruce A. Murray(2)(5)                 13,500                         *
Robert H. Dick(2)(6)                   4,000                         *
All officers and directors
as a group (6 persons)             3,309,860                       38.6%     

-----------
* less than 1%

     (1)  Except as indicated in the footnotes to this table, the persons named
          in the table have sole voting and investment power with respect to all
          shares of Common Stock shown as beneficially owned by them.
     (2)  The mailing address of Messrs. Malis, Gilloway, Shuman, Murray and
          Dick and Dr. Malis, directors of the Company, is 136 Green Tree Road,
          P.O. Box 1179, Oaks, Pennsylvania 19456-1179.
     (3)  Includes 150,000 shares issuable to Mr. Malis subject to options
          exercisable currently or within 60 days.
     (4)  Includes 25,000 shares issuable to Mr. Shuman subject to options
          exercisable currently or within 60 days and includes 101,467 shares
          held in The Bernard H. Shuman Living Trust, a trust in which Mr.
          Shuman holds voting and dispositive control.
     (5)  Includes 13,500 shares issuable to Mr. Murray subject to options
          exercisable currently  or within 60 days.
     (6)  Includes 4,000 shares issuable to Mr. Dick subject to options
          exercisable currently or within 60 days.
     (7)  Includes 150,000 shares issuable to Mr. Gilloway subject to options
          exercisable currently or within 60 days and includes 250,000 shares
          held in the Gilloway Family, L.P., a limited partnership  in which
          Mr. Gilloway is a general partner and possesses voting and
          dispositive control.


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Since the late 1960's, Dr. Leonard I. Malis, a director of the Company,
on an individual basis, has been a party to royalty arrangements with Johnson
& Johnson Professional, Inc. ("J&J"), formerly known as Codman & Shurtleff,
Inc., a principal customer of the Company. Dr. Malis has developed and in the
future may develop passive hand instruments for J&J with no pecuniary
benefits to the Company. 
  
     The Company has entered into a five year lease commencing on July
1, 1995 for approximately 4,200 square feet of office and warehouse space at
a base monthly rent of $4,618 with GMM Associates, a Pennsylvania general
partnership, whose partners are Jerry L. Malis, Thomas J. Gilloway and
Leonard I. Malis, principal shareholders, directors and/or officers of the
Company.  The related expense for this lease for the year ended September 30,
1998 was $54,899.  The Company believes the rental payments reflect fair
rental value for the space. 

     For fiscal 1998, the Company paid legal fees and costs in the amount
of $77,673 to Hale & Schenkman, a law firm in which the son-in-law of Jerry
L. Malis is a partner.

                               -5-

<PAGE> 6

     In fiscal 1998, the Company retained R. H. Dick & Company, Inc.,an
investment banking and business consulting company, owned by Robert H.
Dick, a director of the Company, to perform investment banking and business
consulting services for the Company.

                                  PART IV

Item 14   EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM
          8-K

     c.   Exhibits

          (10)      Material Contracts

                   (r)     Consulting Agreement between the
                           Company and R. H. Dick & Company, Inc.
          

                               -6-


<PAGE>  7   

                               SIGNATURES

     Pursuant to the requirements of the Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized on this 26th day of January, 1999. 

                            VALLEY FORGE SCIENTIFIC CORP.



                      By:   /s/ Jerry L. Malis
                            -------------------------
                            Jerry L. Malis, President




                               -7-

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                      VALLEY FORGE SCIENTIFIC CORP.
                      Form 10-K for the year ended
                            September 30, 1998

                            INDEX TO EXHIBITS*


Exhibit Number           Description                                Page Number


10(r)               Consulting Agreement between the Company
                    and R. H. Dick & Company, Inc.
                                        


                    Only exhibits actually filed are listed.




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