U.S. SECURITIES AND EXCHANGE COMMISSION

                           Washington, DC  20549


                                FORM 10-QSB



             X  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE


                      SECURITIES EXCHANGE ACT OF 1934


             For the quarterly period ended: December 31, 1998



                TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE


                               EXCHANGE ACT

                        Commission file No. 0-13167


                             TM CENTURY, INC.
        (Name of small business issuer as specified in its charter)


     Delaware                                              73-1220394
   (State of incorporation)                  (IRS Employer Identification  No.)


   2002 Academy, Dallas, Texas                                            75234
   (Address of principal executive offices)                          (Zip Code)

   Issuer's telephone number:                                    (972) 406-6800


   Check whether the issuer (1) filed all reports required  to be filed
   by Section 13 or 15(d) of the Exchange Act during the  past 12 months
   (or for such shorter period that the registrant was required to file
   such reports), and (2) has been subject to such filing requirements
   for the past 90 days. Yes   X   No___


   The number  of issuer's  shares of  Common  Stock outstanding  as  of
   December 31, 1998 was 2,483,193.

   Transitional Small Business Disclosure Format (check one): Yes___  No X


<PAGE>
<TABLE>
                                 TM Century, Inc.
                                  Balance Sheets
            As of December 31, 1998 (Unaudited) and September 30, 1998
         
                                      ASSETS
       <S>                                                              <C>                 <C>
                                                                 December 31, 1998   September 30, 1998
                                                                 _________________   __________________
   CURRENT ASSETS
     Cash                                                        $     286,401       $     348,957
     Accounts receivable, less allowance for doubtful accounts         671,095             763,653
       of $225,470 and $230,000 respectively
     Inventories, net                                                  557,290             612,992
     Prepaid expenses and other current assets                          41,409              29,837
                                                                 _________________   __________________
           TOTAL CURRENT ASSETS                                      1,556,195           1,755,439
   
   PROPERTY AND EQUIPMENT                                            2,509,739           2,508,394
     Less accumulated depreciation                                  (1,910,167)         (1,879,587)
                                                                 _________________   __________________
           NET PROPERTY AND EQUIPMENT                                  599,572             628,807
   
   INVENTORIES - NONCURRENT, net                                       165,071             178,397
   OTHER ASSETS                                                         18,260              18,260
                                                                 _________________   __________________
     TOTAL ASSETS                                                $   2,339,098       $   2,580,903
                                                                 =================   ==================
                                                     
        
           
                       LIABILITIES AND STOCKHOLDERS' EQUITY
                 
   CURRENT LIABILITIES
     Accounts payable                                            $      65,784       $     100,050
     Accrued expenses                                                  175,466             233,836
     Current portion of obligation under capital lease                  82,156             122,212
     Deferred revenue                                                  138,109             108,694
     Customer deposits                                                  17,858              17,858
                                                                 _________________   __________________
           TOTAL CURRENT LIABILITIES                                   479,373             582,650
      
   OBLIGATIONS UNDER CAPITAL LEASE                                        -                  6,407
   CUSTOMER DEPOSITS - NONCURRENT                                      179,703             176,943
   COMMITMENTS AND CONTINGENCIES                                       385,000             385,000
                                                                 _________________   __________________
           TOTAL LIABILITIES                                         1,044,076           1,151,000
   
   STOCKHOLDERS' EQUITY
     Common stock, $.01 par value; authorized 7,500,000 shares;         29,705              29,705
       2,970,481 shares issued; and 2,483,193 shares outstanding
     Paid-in capital                                                 2,275,272           2,275,272
     Treasury stock - at cost, 487,288                              (1,291,227)         (1,291,227)
     Retained earnings                                                 281,272             416,153                                 
                                                                 _________________   __________________
           TOTAL STOCKHOLDERS' EQUITY                                1,295,022           1,429,903
                                                                 _________________   __________________
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $   2,339,098       $   2,580,903
                                                                 =================   ==================
</TABLE>             
<PAGE>   
<TABLE>
                             TM Century, Inc.
        Statements of Operations and Retained Earnings (Unaudited)
          For The Three Months Ended December 31, 1998 and 1997
            
                    <S>                                  <C>                 <C>
                                                         1998                1997
                                                   ________________    ________________
   REVENUES                                        $   1,489,768       $   1,674,087
    
     Less  Commissions                                   287,021             306,560
                                                   ________________    ________________
        NET REVENUES                                   1,202,747           1,367,527
  
   COSTS AND EXPENSES
     Production, Programming, and Technical Costs        518,261             535,035
     General and Administrative                          558,650             541,523
     Selling Costs                                       173,217             275,496
     Depreciation                                         81,000              84,000
     Reduction in Carrying Value of Inventories            6,000                -
                                                   ________________    ________________
        TOTAL                                          1,337,128           1,436,054
                                                   ________________    ________________
   OPERATING LOSS                                       (134,381)            (68,527)
      
   OTHER INCOME (EXPENSE)
     Interest income                                       1,551               1,679
     Interest expense                                     (2,051)             (5,160)
                                                   ________________    ________________
        TOTAL                                               (500)             (3,481)
                                                   ________________    ________________
   NET LOSS                                        $    (134,881)      $     (72,008)
                                                   ================    ================

   RETAINED EARNINGS, BEGINNING OF PERIOD          $     416,153       $   1,194,205
                                                   ================    ================

   RETAINED EARNINGS, END OF PERIOD                $     281,272       $   1,122,197
                                                   ================    ================

   BASIC AND DILUTED LOSS PER COMMON SHARE         $       (0.05)      $       (0.03)
                                                   ================    ================
                                       
   WEIGHTED AVERAGE NUMBER OF BASIC
   AND DILUTED COMMON SHARES OUTSTANDING               2,483,193           2,483,193
                                                   ================    ================
</TABLE>                                      
<PAGE>   
<TABLE>   
                                    TM Century, Inc.
                          Statements of Cash Flows (Unaudited)
                  For the Three Months Ended December 31, 1998 and 1997
                    <S>                                                    <C>              <C>
                                                                           1998            1997
                                                                       _____________   _____________
   OPERATING ACTIVITIES
         Net loss                                                      $ (134,881)     $  (72,008)
         Adjustments to reconcile net income to                                
         net cash provided by (used in) operating activities                       
            Depreciation                                                   81,000          84,000
            Amortization                                                   64,444          71,100
            Provision for doubtful accounts                                (4,530)         12,000
            Reduction in carrying value of inventories                      6,000            -

         Increase (decrease) in cash from changes in operating assets
         and liabilities:
               Trade accounts receivable                                   97,088         (90,340)
               Inventories                                                 (1,416)        (81,864)
               Prepaid expenses                                           (11,572)        (18,555)
               Accounts payable and accrued expenses                      (92,636)         45,435
              Deferred revenue                                             29,415         (24,759)
              Customer deposits                                             2,760           1,753
                                                                       _____________   _____________
                                                           
         NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                  35,672         (73,238)
   
   INVESTING ACTIVITIES
         Purchases of property and equipment                              (51,765)        (25,118)
                                                                       _____________   _____________
         NET CASH USED IN INVESTING ACTIVITIES                            (51,765)        (25,118)
         
   FINANCING ACTIVITIES
         Principal payments on capital lease obligations                  (46,463)        (43,354)
                                                                       _____________   _____________
         NET CASH USED IN FINANCING ACTIVITIES                            (46,463)        (43,354)
      
   NET DECREASE IN CASH                                                   (62,556)       (141,710)

   CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                       348,957         294,333
                                                                       _____________   _____________
   CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $  286,401      $  152,623
                                                                       =============   =============
                                                                
   Supplemental disclosures of cash flow information:
   
      Cash paid for interest                                           $    2,051      $    5,160
                                                                       =============   =============
</TABLE>                                                             
<PAGE>   
                              TM CENTURY INC.

                   NOTES TO INTERIM FINANCIAL STATEMENTS

                        December 31, 1998 AND 1997


   1.  BASIS OF PRESENTATION


   The interim financial statements of TM Century, Inc. (the  "Company")
   at December 31,  1998, and for  the three months  ended December  31,
   1998 and 1997, are unaudited, but include all adjustments (consisting
   only of  normal recurring  adjustments) which  the Company  considers
   necessary for a fair  presentation.  The  September 30, 1998  balance
   sheet was derived from  the balance sheet  included in the  Company's
   audited financial statements  as filed on  Form 10-KSB  for the  year
   ended September 30,  1998.   Certain amounts  previously reported  in
   prior interim financial statements have been reclassified to  conform
   to the 1998 presentation.

   The accompanying  unaudited  interim  financial  statements  are  for
   interim periods and do not include all disclosures normally  provided
   in annual financial  statements, and  should be  read in  conjunction
   with the Company's  audited financial statements.   The  accompanying
   unaudited interim  financial statements  for the  three months  ended
   December 31, 1998 are not necessarily indicative of the results which
   can be expected for the entire fiscal year.

   2.  INCOME TAXES

   Deferred income  taxes are  provided, when  applicable, on  temporary
   differences between the recognition of income and expense for tax and
   for financial  accounting purposes  in accordance  with Statement  of
   Financial Accounting  Standards  No.  109 ("SFAS  109").    Temporary
   differences  which  give  rise   to  deferred  taxes  include   basis
   differences of property and  equipment, accelerated tax  depreciation
   in excess of book depreciation, and valuation allowances provided  in
   excess of amounts deductible for tax purposes.  Under the  provisions
   of SFAS 109, recognition of deferred tax assets is permitted for such
   amounts which can be carried forward to future periods.

   The Company as  of September 30,  1998 reduced the  net deferred  tax
   asset to zero due to the Company experiencing four consecutive  years
   of losses.  Realization is dependent on generating sufficient taxable
   income prior  to  expiration  of  the  loss  carryforwards.    As  of
   September 30, 1998, the Company had net operating loss  carryforwards
   of approximately $1.5 million expiring in 2008 through 2010 available
   to offset future taxable income.
<PAGE>
   3.  LONG-TERM DEBT AND LEASE OBLIGATIONS

   Effective February 28, 1998, the Company's Line of Credit was renewed
   through February  28, 1999  for  the lesser  of  either; 80%  of  the
   Company's domestic  accounts and  chattel paper  (excluding  Accounts
   over 90 days old, chattel paper with installments or other sums  more
   than 90 days past  due, and accounts and  chattel paper due from  any
   person or entity  not domiciled  in the  United States,  or from  any
   shareholder, officer  or  employee),  or  $500,000.    The  Company's
   $500,000 revolving Line of Credit with a bank grants a first lien and
   security interest in and upon  all accounts, chattel paper,  contract
   rights, general intangibles and  deposit accounts.  Borrowings  under
   the Line of  Credit bear a  fluctuating interest rate  of prime  plus
   1.5%, payable monthly.   The Line  of Credit, which  bears an  annual
   commitment fee of 0.5% of the unused amounts, is renewable  annually,
   subject to the  consent of both  parties.  No  borrowings were  drawn
   under the Line of Credit during the quarter.  In conjunction with the
   Company's leasing arrangement discussed below, the availability under
   the Company's Line of Credit was reduced from $500,000 to $300,000.

   In May 1996, the Company entered  into a capital lease agreement  for
   the financing of the  upgrade of its  computer hardware and  software
   systems.  The total cost of the  project as of December 31, 1998,  is
   approximately  $529,000,  although  no  additional  costs  have  been
   incurred since December 31, 1996.  The lease is backed by a  $200,000
   letter of  credit  which must  be  renewed annually  subject  to  the
   renewal of the  Company's Line  of Credit.   The  requirement of  the
   letter of credit will be reviewed on an annual basis.  The lease  has
   a term  of  three  years  and contains  an  option  to  purchase  the
   equipment at its  fair market value  or renew the  lease at its  fair
   market rental  value  at the  end  of the  initial  term.   Based  on
   borrowing  rates  currently  available  to  the  Company  on  similar
   arrangements, the fair value of the lease agreement approximates  the
   carrying value.
<PAGE>
   4.  EARNINGS PER SHARE

   In February, 1997, the Financial Accounting Standards Board  ("FASB")
   issued Statement No. 128, "Earnings per Share", effective for periods
   ending after  December  15,  1997.   Basic  earnings  per  share  are
   calculated  on  the   weighted  average  number   of  common   shares
   outstanding during each period.  Diluted  earnings per share are  not
   materially  different than  basic earnings per share.   The following
   table provides a reconciliation  between basic  and  diluted earnings
   per share, in accordance with FASB 128:
<TABLE>
                    <C>                                      <S>           <S> 
                                                           Three Months Ended
                                                              December 31
                                                        ____________________________
            
                                                           1998           1997
                                                        ____________    ____________
                  
   Net Loss                                             $  (134,881)    $   (72,008)
   
   Weighted Average Number of Shares Outstanding
         Basic                                            2,483,193       2,483,193
         Dilutive effect of common stock equivalents              0               0               
         Diluted                                          2,483,193       2,483,193
                                                        ____________    ____________
   Earnings Per Share:
         Basic and Diluted Net Loss                     $     (0.05)    $     (0.03)
</TABLE>
<PAGE>

   5.  LEGAL PROCEEDINGS

   The Company has  been advised  by a  State taxing  authority of  its'
   intention to audit the sales tax records of the Company for  business
   done in such tax jurisdiction. The Company does not believe that  the
   results of such audit  will have a material  impact on the  financial
   position of the Company.

   On May 22,  1998, the Company  received a letter  from the  Recording
   Industry Association of  America, Inc.  (RIAA) alleging  that it  was
   illegally duplicating sound recordings of the RIAA's member companies
   in its Mobile Beat  Series I and II  and Mobile Beat Holiday  Series.
   The RIAA alleged substantial damages in the amount of $76,000,000 and
   stated that it would consider a pre-complaint settlement.

   Following receipt of the letter, the Company and its counsel met with
   RIAA's counsel on June 30,  1998.  At this  meeting, the RIAA made  a
   demand for $3 million to settle  the dispute.  RIAA was advised  that
   the Company's  financial  position  could not  support  such  a  cash
   settlement.

   On July 14, 1998  the Company entered into  a Tolling Agreement  with
   the RIAA.   On  July 24,  1998, it  formally responded  to the  RIAA.
   Since then, Disctronics, one of  the companies that manufactures  CDs
   for the Company's GoldDisc line, contacted the Company and advised it
   that Disctronics  had been  contacted by  the RIAA  and told  not  to
   duplicate any  sound recordings  in the  GoldDisc Series  unless  the
   Company could supply written license agreements.

   By letter dated  August 4,  1998, RIAA  advised the  Company that  it
   would bring suit unless a  meaningful settlement offer was  proffered
   by the  Company by  August  10, 1998.    In September  mediation  was
   undertaken with no settlement resulting.

   In October 1998, the Company filed suit for declaratory judgment  and
   tortuous interference  with respect  to Disctronics.   The  suit  was
   later dismissed without prejudice by agreement.

   Thus far no discovery has been undertaken.  The Company believes that
   it has a meritorious defense to  many of the claims asserted, but  it
   is possible that  it will  not prevail if  the matter  is brought  to
   litigation.   Any  significant  cash amount  paid  in  settlement  or
   awarded in  judgment  would likely  have  an adverse  effect  on  the
   Company.

   In management's opinion the likelihood of an unfavorable outcome  and
   an estimate of the  amount or range of  any potential loss cannot  be
   determined.  However, the Company has recorded a reserve for possible
   loss of $385,000 as of September 30, 1998 on the terms of its  latest
   settlement offer based on annual payments of $50,000 over a period of
   eleven years.    The recorded  reserve  reflects a  discount  of  the
   settlement offer using a discount rate of 8% per annum.
<PAGE>


                             TM CENTURY, INC.

                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

               FINANCIAL CONDITION AND RESULTS OF OPERATION

   TM  Century,  Inc.  (the  "Company")  is  engaged  primarily  in  the
   creation,  production,  marketing,  and  worldwide  distribution   of
   compact disc  music  libraries, production  libraries,  morning  show
   services, and  station  identification jingles,  for  radio  stations
   worldwide.

   Forward-Looking Statements
   __________________________

   This Quarterly Report contains  forward-looking statements about  the
   business, financial  condition  and  prospects of  the  Company  that
   reflect assumptions made by management and management's beliefs based
   on information currently available  to it.  The  Company can give  no
   assurance that  the expectations  indicated by  such  forward-looking
   statements will  be realized.   If  any of  management's  assumptions
   should prove  incorrect, or  if any  of the  risks and  uncertainties
   underlying such expectations should materialize, the Company's actual
   results may differ  materially from those  indicated by the  forward-
   looking statements.

   The key factors that  are not within the  Company's control and  that
   may have a direct bearing on  operating results include, but are  not
   limited to, continued  maturation of the  domestic and  international
   markets for compact disc technology;  acceptance by the customers  of
   the  Company's  existing  and  any  new  products  and  formats;  the
   development by competitors of products using improved or  alternative
   technologies and the potential  obsolescence of technologies used  by
   the Company;  the continued  availability of  software, hardware  and
   other products obtained by the Company from third parties; dependence
   on distributors,  particularly in  the international  market, and  on
   third parties engaged to replicate the Company's products on  compact
   discs; the  retention  of employees;  the  success of  the  Company's
   current  and  future  efforts  to  reduce  operating  expenses;   the
   effectiveness of  new  marketing  strategies;  and  general  economic
   conditions.  Additionally, the  Company may not  have the ability  to
   develop new products cost-effectively.  There may be other risks  and
   uncertainties that management is not able to predict.

   When used  in  this  Quarterly  Report,  words  such  as  "believes",
   "expects",  "intend",   "plans",   "anticipates",   "estimates"   and
   similar  expressions   are  intended   to  identify   forward-looking
   statements, although there may be certain forward-looking  statements
   not accompanied by such expressions.  All forward-looking  statements
   are intended to be covered by the safe harbor created by Section  21E
   of the Securities Exchange Act of 1934.
<PAGE>
   LIQUIDITY AND CAPITAL RESOURCES

   The Company relies upon current sales of music libraries and  jingles
   on terms of cash upon delivery for operating liquidity.  Liquidity is
   also provided by  cash receipts  from customers  under contracts  for
   production libraries and weekly music service contracts having  terms
   of up  to four  years.   The Company  is obligated  to provide  music
   updates throughout the contract terms for both production library and
   weekly music service contracts.   Sales of music libraries,  jingles,
   and the payments  under production library  and weekly music  service
   contracts  will  provide  in  the  opinion  of  management,  adequate
   liquidity to meet operating requirements at least through the end  of
   fiscal 1999.
   
   During the quarter ended December 31, 1998, approximately $83,600 was
   spent for  the purchase  of property  and equipment  and for  product
   development costs for new music libraries, music library updates, and
   jingles.  Funds  for operating  needs, new  product development,  and
   capital expenditures for the period were provided from cash reserves.
   The Company's expenditures for  property, equipment, and  development
   of new products are discretionary.  Product development  expenditures
   are expected to be approximately $180,000 in fiscal 1999.
   Management anticipates  that  cash  flow  from  operations  and  cash
   reserves will be  sufficient to  meet these  capital requirements  at
   least through the end of fiscal year 1999.  The Company has no  other
   significant commitments for capital expenditures in fiscal 1999.

   The Company has  been advised  by a  State taxing  authority of  its'
   intention to audit the sales tax records of the Company for  business
   done in such tax jurisdiction. The Company does not believe that  the
   results of such audit  will have a material  impact on the  financial
   position of the Company.

   The Company  has assessed  its Year  2000  issues and  determined  an
   immaterial effect  exists  on  any  operating  systems  hardware  and
   software.  The Company converted  its main operating software  system
   that is Year 2000 compatible in March, 1998 and the consultant who is
   responsible for creating the in-house Contract Administration  System
   indicated there would be  minimal  Year 2000  issues.  The  Company's
   vendor purchased accounting system consultant believes the accounting
   system is Year 2000 compatible.  In addition, the Company's Microsoft
   Windows  NT   consultant  confirmed   that  the   Company's   network
   environment  is  Year  2000   compliant.    The  Company's   in-house
   programmer analyst also believes there are no major Year 2000  issues
   for the Company.   Furthermore the Company's assessment  incorporates
   existing vendors and suppliers relationships and management  believes
   there would be no material effect on the Company's business,  results
   of operations, or financial  condition if they  do not timely  become
   Year 2000  compliant.   The  most  reasonably likely  worst  scenario
   estimates the cost to be approximately $50,000 to deal with any  Year
   2000 issues.  It  is anticipated that any  necessary funds will  come
   from operations and cash reserves.
<PAGE>

   RESULTS OF CONTINUING OPERATIONS

   Comparison of the three-month Periods Ended December 31,1997 and 1998
   _____________________________________________________________________

   Revenues declined approximately $184,000 or 11.0% in the  three-month
   period ended December 31, 1998 as compared to the same period for the
   previous year.  The revenue decrease was primarily due to a  decrease
   in revenues  in the  weekly HitDisc  and GoldDisc  music services  of
   $348,000.   Offsetting  these  decreases were  revenue  increases  in
   production libraries of  $54,000, radio  Jingles of  $77,000 and  the
   Comedy service of $38,000.  The Comedy revenue increase is due to  an
   increase in the amount of the advertising revenue being allocated  to
   Comedy from barter sales.

   Revenues of  weekly HitDisc  and  GoldDisc music  services  decreased
   $101,000 and $247,000 respectively, or 31.1% as compared to the  same
   period previous year.   The decrease  in compact  disc music  library
   revenues was due to  a decrease in weekly  and recurrent music  sales
   for domestic and international customers.  As the compact disc  music
   library  market  matures,  sales  of  compact  discs  are   generated
   primarily from  changes  in  music formats  or  sales  of  new  music
   libraries or formats  rather than  from conversions  to compact  disc
   music delivery  technology.    The  market  for  compact  disc  music
   libraries to broadcast customers has  reached a substantial level  of
   maturity in the  United States, which  is the market  from which  the
   Company derives most  of its music  library revenues.   A decline  in
   revenues from music  library sales  may result  in a  proportionately
   greater decline in operating  income because music libraries  provide
   higher  margins  than  the   Company's  other  products.     However,
   management believes the introduction of new products will  counteract
   the declines in revenues from existing music libraries.  New products
   include  pre-recorded   music  (GoldDrive)   provided  to   equipment
   manufacturers of hard drive systems  which was introduced during  the
   fiscal year  1997.   Renewals and  new sales  growth are  subject  to
   customer acceptance of the new products.

   Production library revenues increased  $54,000, or 24.1%.   Increases
   in production library revenue is due  to the substantial increase  in
   advertising/barter arrangements for the  Company's sales and  imaging
   libraries.  Even though production  library revenues may decline  due
   to the expiration of  three-year contracts, management believes  that
   production libraries will continue to generate a significant  portion
   of  overall  revenues  from   sales  of  existing  products   through
   advertising/barter arrangements  and  sales  of new  products.    The
   Company introduced two  new music libraries  during fiscal year  1997
   and one at the beginning of fiscal year 1998, and continued sales  of
   pre-1997 music libraries.  Sales and new sales growth are subject to
   customer acceptance of the new products.

   Revenues for Jingles increased $77,000 or  42.6% primarily due to  an
   increase in demand for  custom Jingles compared  to the same  quarter
   last year.

   Commissions decreased $19,500  or 6.4%,  and is  proportional to  the
   decrease in  commissioned  sales.    As  a  percentage  of  revenues,
   commissions increased  from 18.3%  to 19.3%  due  to changes  in  the
   revenue structure where a greater percentage of revenue is on barter.
<PAGE>
   Production, programming  and  technical costs  decreased  $17,000  or
   3.1%, and as a percentage of  revenue increased from 32.0% to  34.8%.
   The increase as a percentage of  revenues is primarily due to  higher
   salaries and benefits for production libraries.

   Selling costs decreased  $102,000 or 37.1%,  and as  a percentage  of
   revenues decreased from 16.5% to 11.6%.  The decrease in expenses  is
   primarily due to a reduction in sales salaries as a result of changes
   in sales force  and in-house commission  plans.  Selling  costs as  a
   percentage of selling  and commission costs  decreased from 47.3%  to
   37.6% and  is  due to  a  reduction  in the  number  of  commissioned
   contract sales compared to the same quarter last year.

   General and administrative  costs decreased  $17,000 or  3.2% and  is
   primarily  due  to  the  Company's  continued  efforts  in   reducing
   operating expenses.

   Depreciation decreased $3,000 or  3.6% and is  primarily due to  more
   depreciable assets are nearing the end of their depreciable years and
   being partially offset  by increases in  production equipment in  the
   first and second quarters of fiscal year 1998.

<PAGE>
                        PART II. OTHER INFORMATION

   Item 1. Legal proceedings

   The Company has  been advised  by a  State taxing  authority of  its'
   intention to audit the sales tax records of the Company for  business
   done in such tax jurisdiction. The Company does not believe that  the
   results of such audit  will have a material  impact on the  financial
   position of the Company.

   On May 22,  1998, the Company  received a letter  from the  Recording
   Industry Association of  America, Inc.  (RIAA) alleging  that it  was
   illegally duplicating sound recordings of the RIAA's member companies
   in its Mobile Beat  Series I and II  and Mobile Beat Holiday  Series.
   The RIAA alleged substantial damages in the amount of $76,000,000 and
   stated that it would consider a pre-complaint settlement.

   Following receipt of the letter, the Company and its counsel met with
   RIAA's counsel on June 30,  1998.  At this  meeting, the  RIAA made a
   demand for $3 million to settle the dispute.  RIAA  was advised  that
   the Company's  financial  position  could not  support  such  a  cash 
   settlement.

   On July 14, 1998  the Company entered into  a Tolling Agreement  with
   the RIAA.   On  July 24,  1998, it  formally responded  to the  RIAA.
   Since then, Disctronics, one of  the companies that manufactures  CDs
   for the Company's GoldDisc line, contacted the Company and advised it
   that Disctronics  had been  contacted by  the RIAA  and told  not  to
   duplicate any  sound recordings  in the  GoldDisc Series  unless  the
   Company could supply written license agreements.

   By letter dated  August 4,  1998, RIAA  advised the  Company that  it
   would bring suit unless a  meaningful settlement offer was  proffered
   by the  Company by  August  10, 1998.    In September  mediation  was
   undertaken with  no  settlement  resulting.   In  October  1998,  the
   Company filed suit for declaratory judgment and tortuous interference
   with respect to Disctronics.   The suit  was later dismissed  without
   prejudice by agreement.

   Thus far no discovery has been undertaken.  The Company believes that
   it has a meritorious defense to  many of the claims asserted, but  it
   is possible that  it will  not prevail if  the matter  is brought  to
   litigation.   Any  significant  cash amount  paid  in  settlement  or
   awarded in  judgment  would likely  have  an adverse  effect  on  the
   Company.

   In management's opinion the likelihood of an unfavorable outcome  and
   an estimate of the  amount or range of  any potential loss cannot  be
   determined.  However, the Company has recorded a reserve for possible
   loss of $385,000 as of September 30, 1998 on the terms of its  latest
   settlement offer based on annual payments of $50,000 over a period of
   eleven years.    The recorded  reserve  reflects a  discount  of  the
   settlement offer using a discount rate of 8% per annum.
<PAGE>
   Item 2. Changes in securities - Not applicable.

   Item 3. Defaults upon senior securities - Not applicable.

   Item 4. Submission of matters to a vote of security holders - Not
           applicable.

   Item 5. Other information - Not applicable.

   Item 6. Exhibits and Reports on Form 8-K - Not applicable

   (a) Exhibits
   10. Material Contracts:  None.
   27.1   Financial Data Schedule

   (b) Reports on Form 8-K
   No reports on Form 8-K were filed by the Company during the three
   month period ending December 31, 1998.
<PAGE>

                                SIGNATURES

   In accordance  with Section  13 or  15(d) of  the Exchange  Act,  the
   registrant caused  this report  to be  signed on  its behalf  by  the
   undersigned thereunto duly authorized.

                                      Dated: February 10, 1999

                                      TM CENTURY, INC.

                                      BY:/s/Roger A. Holeman

                                      Roger A. Holeman
                                      Chief Financial Officer
                                      (Principal Accounting Officer)


                                      BY:/s/Neil W. Sargent

                                      Neil W. Sargent
                                      Chief Executive Officer
                                      (Principal Executive Officer)