SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549
                                   
                               FORM 10-Q
                                   
              Quarterly Report Under Section 13 or 15(d)
                of the Securities Exchange Act of 1934


    For the Quarter
Ended September 27, 1998             Commission File Number 0-13433

                           MILTOPE GROUP INC.
---------------------------------------------------------------------
        (Exact Name of Registrant as Specified in its Charter)



            Delaware                                  11-2693062
----------------------------------              ----------------------
   (State or other jurisdiction                  (I.R.S. Employer
of incorporation or organization)                Identification No.)


 500 Richardson Road South
       Hope Hull, AL                                  36043
----------------------------------              ----------------------
    (Address of principal                             (Zip Code)
     executive offices)


   Registrant's telephone number, including area code (334) 284-8665
                                                     -----------------
                            Not Applicable
----------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since
last report


    Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90
days.

    Yes   X                   No
        -----               ------
    Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.  Outstanding at November 10, 1998: 5,871,523 shares of Common
Stock, $.01 par value.

<PAGE)
<TABLE>
                    PART I - FINANCIAL INFORMATION
                  MILTOPE GROUP INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                              (unaudited)

                                         September 27,       December 31,
                                             1998                1997
                                         --------------      ------------  
ASSETS
<S>                                        <C>              <C>       
CURRENT ASSETS:                                   
  Cash                                     $   136,000       $   443,000
  Accounts receivable                        5,293,000         9,977,000
  Inventories                               17,144,000        14,703,000
  Deferred income taxes                        345,000           345,000
  Other current assets                         221,000           242,000
                                           -----------       -----------
    Total current assets                    23,139,000        25,710,000
PROPERTY AND EQUIPMENT - at cost:          -----------       -----------
  Machinery and equipment                    7,387,000         7,177,000
  Furniture and fixtures                     1,582,000         1,561,000
  Land, building and improvements            8,101,000         8,021,000
                                           -----------       -----------
    Total property and equipment            17,070,000        16,759,000
  Less accumulated depreciation              8,242,000         7,101,000
                                           -----------       -----------
    Property and equipment - net             8,828,000         9,658,000
                                           -----------       -----------
DEFERRED INCOME TAXES                        3,516,000         2,240,000
OTHER ASSETS                                   930,000           841,000
                                           -----------       -----------
TOTAL                                      $36,413,000       $38,449,000
                                           ===========       ===========
LIABILITIES AND STOCKHOLDERS'EQUITY

CURRENT LIABILITIES:                              
  Accounts payable                         $ 2,593,000       $ 4,437,000
  Accrued expenses                             774,000         1,351,000
  Current maturities of long-term debt         300,000           270,000
                                           -----------       -----------
    Total current liabilities                3,667,000         6,058,000
LONG-TERM DEBT                              13,805,000        11,251,000
                                           -----------       -----------
    Total liabilities                       17,472,000        17,309,000
                                           -----------       -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:                             
Common stock - $.01 par value;                    
  20,000,000 shares authorized;                                
  6,811,112 shares outstanding at               
  September 27, 1998 and 
  December 31, 1997                             68,000            68,000
Capital in excess of par value              20,264,000        20,264,000
Retained earnings                           12,855,000        15,054,000
                                           -----------       -----------
                                            33,187,000        35,386,000
Less treasury stock at cost                 14,246,000        14,246,000
                                           -----------       -----------
    Total stockholders' equity              18,941,000        21,140,000
                                           -----------       -----------
TOTAL                                      $36,413,000       $38,449,000
                                           ===========       ===========
See Notes To Condensed Consolidated Financial Statements
</TABLE>
<PAGE>
<TABLE>
                  MILTOPE GROUP INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (unaudited)
                                   
                                               Thirty-Nine Weeks Ended
                                           -------------------------------
                                           September 27,     September 28,
                                               1998             1997
                                           -------------     -------------
<S>                                        <C>               <C>
NET SALES                                  $ 18,792,000      $ 29,360,000
                                           ------------      ------------
COSTS AND EXPENSES:                          
 Cost of sales                               15,072,000        22,354,000
  Selling, general and administrative         5,036,000         4,562,000
  Engineering, research and development       1,578,000           944,000
                                           ------------      ------------
   Total                                     21,686,000        27,860,000
                                           ------------      ------------
INCOME (LOSS) FROM OPERATIONS                (2,894,000)        1,500,000
                                 
INTEREST EXPENSE -  net                         581,000           578,000
                                           ------------      ------------
INCOME (LOSS) BEFORE  INCOME TAXES           (3,475,000)          922,000
                            
INCOME TAX BENEFIT                            1,276,000           600,000
                                           ------------      ------------
NET  INCOME (LOSS)                         $ (2,199,000)     $  1,522,000
                                           ============      ============
BASIC AND DILUTED                            
   NET INCOME (LOSS) PER SHARE             $       (.37)     $        .26
WEIGHTED AVERAGE SHARES                    ============      ============
   OUTSTANDING                                5,872,000         5,872,000
                                           ============      ============
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
                  MILTOPE GROUP INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (unaudited)
                                   
                
                                                Thirteen Weeks Ended
                                          --------------------------------
                                          September 27,      September 28,
                                              1998               1997
                                          -------------      -------------
<S>                                       <C>                <C>
NET SALES                                 $  5,409,000       $  8,326,000
                                          ------------       ------------
COSTS AND EXPENSES:                           
  Cost of sales                              4,684,000          6,161,000
                                     
  Selling, general and administrative        1,489,000          1,354,000
                                 
  Engineering, research and development        434,000            516,000
                                          ------------       ------------
   Total                                     6,607,000          8,031,000         
                                          ------------       ------------
INCOME (LOSS) FROM OPERATIONS               (1,198,000)           295,000

INTEREST EXPENSE -  net                        235,000            190,000
                                          ------------       ------------
INCOME (LOSS) BEFORE  INCOME TAXES          (1,433,000)           105,000
                            
INCOME TAX BENEFIT                             530,000            600,000
                                          ------------       ------------
NET  INCOME (LOSS)                        $   (903,000)      $    705,000
                                          ============       ============
BASIC AND DILUTED                             
   NET INCOME (LOSS) PER SHARE            $       (.15)      $        .12
                                          ============       ============
WEIGHTED AVERAGE SHARES                       
OUTSTANDING                                  5,872,000          5,872,000
                                          ============       ============
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
                  MILTOPE GROUP INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1998 AND SEPTEMBER 28, 1997
                              (unaudited)
                                   
                                                   
                                                            September 27,      September 28,
                                                                1998               1997 
OPERATING ACTIVITIES:                                       -------------      -------------
<S>                                                         <C>                <C>     
Net income (loss)                                           $ (2,199,000)      $  1,522,000
  Adjustments to reconcile net income (loss) to net cash                
  provided by (used in) operating activities:
 
  Depreciation and amortization                                1,194,000          1,212,000
   Provision for slow-moving and obsolete inventories            656,000            485,000
   Provision for doubtful accounts receivable                      5,000             85,000
   Gain on sale of investment available for sale                       -           (313,000)
   Deferred income taxes                                      (1,276,000)                 -
   Write-down of fixed assets                                    (36,000)                 -
   Change in operating assets and liabilities:            
      Accounts receivable                                      4,678,000          2,585,000
      Inventories                                             (3,097,000)        (1,595,000)
      Other current assets                                        21,000           (416,000)
      Other assets                                              (106,000)          (310,000)
      Accounts payable and accrued expenses                   (2,421,000)        (1,970,000)
                                                            ------------       ------------
        Cash provided by (used in) operating activities       (2,581,000)         1,285,000
INVESTING ACTIVITIES:                                       ------------       ------------
  Purchase of property and equipment                            (310,000)        (1,353,000)
  Proceeds from sale of investment available for sale                  -            410,000
                                                            ------------       ------------
        Cash used in investing activities                       (310,000)          (943,000)
FINANCING ACTIVITIES:                                       ------------       ------------
  Proceeds (payments) from revolving credit loan - net         2,786,000           (201,000)
  Payments of other long-term debt                              (202,000)          (180,000)
  Exercise of stock options                                            -             11,000
                                                            ------------       ------------
        Cash provided by (used in) financing activities        2,584,000           (370,000)
                                                            ------------       ------------
NET DECREASE IN CASH                                           (307,000)            (28,000)
CASH, BEGINNING OF PERIOD                                       443,000             128,000
                                                            -----------        ------------
CASH, END OF PERIOD                                         $   136,000        $    100,000
                                                            ===========        ============
SUPPLEMENTAL DISCLOSURE:                           
   Cash payments made for:                         
      Income taxes                                          $    67,000        $     11,000
                                                            ===========        ============
      Interest                                              $   544,000        $    608,000
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING                 ===========        ============
AND FINANCING ACTIVITIES
  Change in unrealized appreciation on investment available               
  for sale                                                  $         -        $    489,000
                                                            ===========        ============
</TABLE>
See Notes To Condensed Consolidated Financial Statements
<PAGE>
                  MILTOPE GROUP INC. AND SUBSIDIARIES
                                   
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              (unaudited)

1.     Financial  Statements  -  In  the  opinion  of  management,  the
accompanying  unaudited  condensed  consolidated  financial  statements
contain  all  adjustments  necessary (consisting  of  only  normal  and
recurring  accruals) to present fairly the financial  position  of  the
Company and its subsidiaries as of September 27, 1998 and December  31,
1997  and  the results of operations and cash flows for the thirty-nine
and thirteen weeks ended September 27, 1998 and September 28, 1997.

The  results  for the thirty-nine weeks ended September  27,  1998  and
September 28, 1997 are not necessarily indicative of the results for an
entire  year.   It  is  suggested  that  these  consolidated  financial
statements be read in conjunction with the Company's Annual  Report  on
Form 10-K for the fiscal year ended December 31, 1997.

Effective  January  1,  1998, the Company  adopted  the  provisions  of
Statement  of  Financial Accounting Standards (SFAS) No. 130  Reporting
Comprehensive   Income.   The  statement  requires  the   addition   of
comprehensive  income  and  its  components  in  the  Company's  annual
financial  statements.   Other  comprehensive  income  (loss)  includes
unrealized  investment  gains and losses, which  are  not  included  in
income under current accounting principles.  Total comprehensive income
(loss) for the quarters ended September 27, 1998 and September 28, 1997
were:
<TABLE>
                                        September 27, 1998      September 28, 1997
                                        ------------------      ------------------               
<S>                                        <C>                     <C>
Net Income (loss)                          $ (2,199,000)           $ 1,522,000
Other Comprehensive Income                            -                308,000
                                           ------------            -----------
Total Comprehensive Income (loss)          $ (2,199,000)           $ 1,830,000
                                           ============            ===========
</TABLE>
2.     Inventories - Net

Inventories consist of the following:
<TABLE>
                                        September 27, 1998      December 31, 1997
                                        ------------------      -----------------
<C>                                        <C>                    <C>                                                       
Purchased parts and                     
  Subassemblies                            $ 11,520,000           $ 10,019,000
Work-in-process                               5,624,000              4,684,000
                                           ------------           ------------
Total                                      $ 17,144,000           $ 14,703,000
                                           ============           ============
</TABLE>

3.     Income  Taxes - The income tax benefit in 1998 is calculated
using  the estimated year end effective tax rate for 1998.  The  income
tax provision in the third quarter of 1997 was completely offset by the
utilization of the Company's net operating loss carryforward.

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  following  discussion includes certain forward looking  statements
which are affected by important factors including, but not limited  to,
actions of competitors, termination of contracts at the convenience  of
the United States government, customer funding variations in connection
with multi-year contracts and follow-on options that could cause actual
results to differ materially from forward looking statements.

GENERAL
-------
      The  following  discussion and analysis presents certain  factors
affecting  the  Company's results of operations for the thirteen  weeks
and  thirty-nine  weeks ended September 27, 1998, as  compared  to  the
thirteen weeks and thirty-nine weeks ended September 28, 1997.

RESULTS OF OPERATIONS
---------------------

Thirteen  weeks  ended  September 27, 1998 compared to  thirteen  weeks
ended September 28, 1997
------------------------------------------------------------------------

      Net  sales for the thirteen weeks ended September 27, 1998 (third
quarter of 1998) were $5,409,000 compared to net sales for the thirteen
weeks  ended  September 28, 1997 (third quarter of 1997) of $8,326,000.
The  decrease  in  sales was primarily attributable  to  a  decline  in
military  sector  sales and a decline in Internet terminal  sales.  The
Company  recently received follow-on delivery orders from the  US  Army
valued  at $2.0 million for the SPORT program. The Company's management
anticipates delivery of these orders in fourth quarter 1998 and receipt
of  additional  orders  for this program during the  remainder  of  the
contract period through year 2001.

      The  gross  margin percentage for the third quarter of  1998  was
13.4% as compared with 26.0% for the same period in 1997.  The decrease
is attributable to lower sales volume and a less favorable product mix.

     Selling, general and administrative expenses for the third quarter
of  1998 increased 10.0% from the third quarter of 1997, to $1,489,000.
These expenses as a percent of sales were 27.5% in the third quarter of
1998 compared to 16.3% for the similar period in 1997.  The increase as
a percent of sales was attributable to lower sales volume and increased
expenses  related to employee severance and restructure costs  incurred
as a result of streamlining actions taken to improve the Company's long
term competitiveness.

      Company  sponsored engineering, research and development expenses
for the third quarter of 1998 decreased 15.9% from the third quarter of
1997,  to $434,000.  These expenses as a percentage of sales were  8.0%
in the third quarter of 1998 compared to 6.2% for the similar period in
1997.   The  increase as a percent of sales was attributable  to  lower
sales volume.

      Interest  expense, net of interest income, was  $235,000  in  the
third  quarter of 1998 compared to $190,000 for the similar  period  in
1997.  The increase reflects increased debt compared to the prior year.

      Net  loss for the third quarter of 1998 was $903,000 compared  to
net  income  of $705,000 in the third quarter of 1997.  The  basic  and
diluted  net  loss per share was $0.15 for the third  quarter  of  1998
compared to the basic and diluted net income per share of $0.12 for the
similar period in 1997 based on a weighted average of 5,872,000  shares
of the Company's common stock outstanding for the third quarter of 1998
and  1997.   The  decrease  in earnings was primarily  attributable  to
increased expenses and decreased sales.

<PAGE>
Thirty-nine  weeks  ended  September 27, 1998 compared  to  thirty-nine
weeks ended September 28, 1997
-----------------------------------------------------------------------

      Net  sales  for  the thirty-nine weeks ended September  27,  1998
(first nine months of 1998) were $18,792,000 compared to net sales  for
the  thirty-nine weeks ended September 28, 1997 (first nine  months  of
1997) of $29,360,000.  The decrease in sales was primarily attributable
to  a  decline  in  military sector sales and  a  decline  in  Internet
terminal sales. The Company recently received follow-on delivery orders
from  the  US  Army valued at $2.0 million for the SPORT  program.  The
Company's  management anticipates delivery of these  orders  in  fourth
quarter  1998 and receipt of additional orders for this program  during
the remainder of the contract period through year 2001.

      The gross margin percentage for the first nine months of 1998 was
19.8%  as compared with 23.9% for the same period in 1997. The decrease
is attributable to lower sales volume and a less favorable product mix.

      Selling,  general and administrative expenses for the first  nine
months  of 1998 increased 10.4% from the first nine months of 1997,  to
$5,036,000.   These expenses as a percent of sales were  26.8%  in  the
first  nine months of 1998 compared to 15.5% for the similar period  in
1997.  The  increase  as a percent of sales was attributable  to  lower
sales  volume and increased expenses related to employee severance  and
restructure costs incurred as a result of streamlining actions taken to
improve the Company's long term competitiveness.

      Company  sponsored engineering, research and development expenses
for  the first nine months of 1998 increased 67.2% from the first  nine
months of 1997 to $1,578,000.  These expenses as a percentage of  sales
were  8.4%  in the first nine months of 1998 compared to 3.2%  for  the
similar  period  in  1997.   The increase as  a  percent  of  sales  is
primarily  attributable  to  lower  sales  volume,  increased  expenses
related  to  employee  severance and restructure  costs  and  increased
amounts  of  research and development for in-flight  entertainment  and
cabin workstation products.

      Interest  expense, net of interest income, was $581,000  for  the
first  nine months of 1998 compared to $578,000 for the similar  period
in  1997.   The increase reflects increased debt compared to  the  same
period of the prior year.

     Net loss for the first nine months of 1998 was $2,199,000 compared
to  net  income of $1,522,000 in the first nine months  of  1997.   The
basic  and  diluted  net loss per share was $0.37 for  the  first  nine
months  of  1998  as compared to the basic and diluted net  income  per
share  of  $0.26  for the similar period in 1997 based  on  a  weighted
average  of  5,872,000 shares of the Company's common stock outstanding
for  the  first nine months of 1998 and 1997.  The decrease in earnings
was primarily attributable to increased expenses and decreased sales.

<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
      Working  capital approximated $19,472,000 at September  27,  1998
compared  to  $19,652,000  at December 31, 1997.   Accounts  receivable
decreased  approximately  $4,684,000 as a result  of  decreased  sales.
Inventories increased approximately $2,441,000 primarily as a result of
the   SPORT   contract.    Accounts  payable  decreased   approximately
$1,844,000 reflecting normal payment terms and the lower sales  volume.
Accrued  expenses  decreased approximately  $577,000  as  a  result  of
decreased employee related accrued liabilities.

     A $15 million revolving credit agreement, at the Company's option,
bears  interest  at the bank's reference rate (8.50% at  September  27,
1998  and  December 31, 1997), or at a rate equaling the  London  Inter
Bank  Offered Rate (5.39% and 5.81% at September 27, 1998 and  December
31,  1997,  respectively) plus 2.0%.  If for any day the  total  amount
advanced, regardless of the interest rate option, exceeds $10  million,
an additional .25% is added to the interest rate.  The revolving credit
facility  is  scheduled to mature on May 31, 1999, at  which  time  the
outstanding  amount  would be converted into a  term  loan  payable  in
twelve  equal quarterly installments.  However, at the request  of  the
Company,  the  bank  may  extend  the revolving  credit  agreement  for
successive  one-year periods based upon a review of the previous  year-
end  audited consolidated financial statements.  The Company's accounts
receivable,  contract rights and inventories are pledged as  collateral
to the agreement.

YEAR 2000 ISSUES
----------------
Year 2000 Issue

As has been widely publicized, many computer and digital storage
systems express dates using only the last two digits of the year and
will thus require remediation or replacement to accommodate the year
2000 and beyond in order to avoid malfunction and resulting widespread
business disruption.

The Company has underway a Year 2000 project to identify the programs
and infrastructure that could be affected by Year 2000 issues and is
implementing a plan to resolve those problems identified, on a timely
basis. The plan will require the Company to devote a considerable
amount of internal resources and hire external resources to assist with
the implementation and monitoring of the plan. The Company currently
estimates that the total cost of its Year 2000 project will not exceed
$225,000 over the life of the project and should not cause a materially
adverse effect on the Company's financial condition and results of
operations. The time spent by employees of the Company on the Year 2000
project has been and will be expensed as incurred with hardware
replacements being capitalized where appropriate. The Company does not
anticipate any other significant costs as a result of the Year 2000
issue.

The Year 2000 project includes all management information systems which
support ongoing business functions, other systems with computer based
controls such as telecommunications, building environmental and
security management and all suppliers and customers with which the
Company has a material business relationship .

Management of the Company believes it has an effective program in place
to resolve the Year 2000 Issue on a timely basis. However, it is not
possible to anticipate all possible future outcomes, especially when
third parties are involved. In the event certain third parties are not
able to resolve their own Year 2000 issues, there could be
circumstances in which the Company would be unable to receive customer
orders, manufacture, test and ship products, invoice customers or
collect payments.  As part of its Year 2000 project, the Company will
solicit written assurances from its customers and suppliers that they
will be prepared for the Year 2000 issue. Additionally, the Company
will audit and test third party systems for Year 2000 compliance on a
periodic basis throughout the project life. However, there can be no
certainty of total compliance from any or all of the third parties the
Company deals with.

The Company has not yet seen the need for any widespread contingency
plans to be developed for the Year 2000 issue, but this will be
continuously monitored as the Company gains more information about the
compliance programs of its suppliers and customers. Additionally, some
risks of the Year 2000 issue are beyond the control of the Company and
its suppliers and customers. The Company does not believe it can
develop a contingency plan that will totally shield the Company from an
economic ripple effect throughout the entire economy should others fail
to resolve their own Year 2000 problems.

The costs of the Company's Year 2000 project and the timeliness of the
completion of the project are based on management's best estimates, and
reflect assumptions regarding the availability and cost of personnel
trained in this area, the compliance plans of third parties and other
uncertainties. However, due to the complexity and pervasiveness of the
Year 2000 issue and in particular the uncertainty of third party
compliance programs, there can be no assurances given that these
estimates will be achieved, and actual results could differ materially
from those anticipated.

<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 1 - Legal Proceedings

     The  Company,  from  time  to time,  is  a  party  to  pending  or
     threatened  legal  proceedings  and  arbitrations.    Based   upon
     information presently available, and in light of legal  and  other
     defenses  available to the Company, management does  not  consider
     liability  from  any  threatened  or  pending  litigation  to   be
     material.

Item 6 - Exhibits and Reports on Form 8-K

       (a) Exhibits
           --------
            27.  Financial Data Schedule

       (b) Reports on Form 8-K
           -------------------
             None



<PAGE>
                           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 thereunto duly authorized.



                                   MILTOPE GROUP INC.


                                   By: /s/ James E. Matthews
                                      ------------------------------------
                                       James E. Matthews,
                                       President  and  Chief  Executive Officer
                                      (Principal Executive Officer)



Dated:  November 10, 1998