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, 1996



               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:    
  (214) 247-8850


  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, 1996 was 2,527,393.


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

  <PAGE>

                              TM CENTURY INC.

                   NOTES TO INTERIM FINANCIAL STATEMENTS

                        DECEMBER 31, 1996 AND 1995

  1.  BASIS OF PRESENTATION

  The interim financial  statements of TM Century,  Inc. (the Company)
  at December 31, 1996, and for the three months ended December 31, 1996
  and 1995, are unaudited, but include  all adjustments (consisting only
  of normal recurring adjustments) which the Company considers necessary
  for a  fair presentation.   The September 30,  1996 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, 1996.   Certain  amounts previously  reported in  prior
  interim financial statements have been reclassified  to conform to the
  1996 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, 1996 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 has net operating loss carryforwards of approximately $1.1
  million available  to offset  future taxable  income expiring  in 2008
  through  2009.   The Company  has  recorded a  deferred  tax asset  of
  $173,000  after deduction  of  a valuation  allowance  of $317,000  to
  reduce  the total  deferred tax  asset  because it  is  likely that  a
  portion  of the  tax  asset  will not  be  realized.   Realization  is
  dependent on generating sufficient taxable  income prior to expiration
  of the loss carryforwards. Management believes  it is more likely than
  not that  the non-reserved portion of  the deferred tax asset  will be
  realized.  The amount of the deferred tax asset considered realizable,
  however, could  be reduced  in the  near term  if estimates  of future
  taxable income  during the carryforward  period are reduced.   Certain
  provisions of  the tax law may  limit the net operating  loss, capital
  loss and credit carryforwards available for  use in any given tax year
  in the event of a significant change in ownership interest.
  <PAGE>
  3.  LONG-TERM DEBT AND LEASE OBLIGATIONS

  The Company has a $300,000 revolving  Line of Credit with a bank which
  provides  a  negative  pledge on  all  accounts  receivable,  contract
  rights, and  inventory of the Company.   Borrowings under the  Line of
  Credit bear  a fluctuating interest rate  of prime plus  1.5%, payable
  monthly.  The Line of Credit, which bears a commitment fee of 0.5% per
  annum, is renewable annually, subject to  the consent of both parties.
  The Line of Credit is expected to be renewed on February 28, 1997.  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 Line of Credit was reduced from $300,000 to
  $100,000.

  In  May 1996  the  Company  entered into  a  lease  agreement for  the
  financing of an upgrade of its computer hardware and software systems.
  During  the  quarter,  the remaining  $100,000  was  financed  of  the
  $550,000 project. 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.



                             TM CENTURY, INC.

                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

               FINANCIAL CONDITION AND RESULTS OF OPERATION


  TM Century,  Inc. is  engaged primarily  in the  creation, production,
  marketing, and worldwide distribution of compact disc music libraries,
  production   libraries,  station   identification  jingles,   computer
  software used  in music scheduling and  specialized computer equipment
  and software for radio stations.

  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.
  <PAGE>
  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,  the Company's  ability  to  develop new  products  cost-
  effectively; continued  maturation of  the domestic  and international
  markets for  compact disc technology;  acceptance by 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.   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, intends, 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.


  LIQUIDITY AND CAPITAL RESOURCES

  The Company relies upon current sales of music libraries, jingles, and
  specialized  computer equipment  and software  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 one  month to  four
  years.  The  Company is obligated to provide  music updates throughout
  the contract terms for weekly music service contracts.  Sales of music
  libraries, jingles,  and specialized  computer equipment  and software
  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 1997.

  During the quarter, approximately $6,000 was spent for the purchase of
  property and equipment and for product  development costs for software
  development, new  music libraries, and  music library updates.   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 $100,000 in fiscal 1997.  Management anticipates that
  cash flow  from operations, cash  reserves, and funds  available under
  the Company's line of credit will  be sufficient to meet these capital
  requirements at least through the end of fiscal year 1997.
  <PAGE>
  In  May 1996  the  Company  entered into  a  lease  agreement for  the
  financing of an upgrade of its computer hardware and software systems.
  During  the  quarter,  the remaining  $100,000  was  financed  of  the
  $550,000  project.   The  Company  is  required  to repay  the  amount
  financed in  equal monthly payments  of principal and  interest during
  the  term  of   the  lease.    Monthly  payments  on   the  lease  are
  approximately $16,000.   The term of  the lease is three years and the
  lease is backed by a letter of credit  in the amount of $200,000.  The
  letter  of  credit  reduces  the   availability  under  the  Company's
  revolving  Line  of Credit  from  $300,000  to $100,000.    Management
  anticipates that cash  flow from operations and cash  reserves will be
  sufficient to  meet these  capital requirements.   The Company  has no
  other significant commitments for capital expenditures in fiscal 1997.

  The Company's revolving Line of Credit with a bank provides a negative
  pledge on all  accounts receivable, contract rights,  and inventory of
  the Company.   Borrowings under the Line of Credit  bear a fluctuating
  interest  rate of  prime plus  1.5%,  payable monthly.    The Line  of
  Credit, which bears  a commitment fee of 0.5% per  annum, is renewable
  annually, subject to the consent of  both parties.  The Line of Credit
  is expected  to be renewed on  February 28, 1997.   No borrowings were
  drawn under  the Line of  Credit during the  quarter and  no long-term
  borrowing  is anticipated  in the  foreseeable future  at the  current
  levels of business operation.

  On December 19, 1996, the Board  of Directors by resolution authorized
  the Company to  purchase up to 50,000 shares of  its common stock, and
  on January 27, 1997, authorized the  Company to purchase an additional
  25,000  shares of  its common  stock  on the  open  market or  through
  privately negotiated  transactions, from time to  time, dependent upon
  market conditions, through December 31, 1997.  As of January 31, 1996,
  the Company had  purchased 52,000 shares of which 9,800 were purchased
  during  the first  quarter.    Such  purchases which  were made  at an
  average price of  $.75 per share, were funded by  cash reserves of the
  Company.  Future purchases are expected  to be funded by cash reserves
  of the Company.

  Inventories decreased approximately $160,000 compared to the September
  30, 1996  balance due  to the  amortization of  production development
  costs of  approximately $80,000  and the  depletion of  inventory from
  stock of approximately $80,000.

  RESULTS OF CONTINUING OPERATIONS

  Revenues  declined approximately  4%  or $75,000  in  the three  month
  period ended December 31, 1996 as  compared to the same period for the
  previous year.   The decrease was due primarily to  a decline in music
  scheduling software sales  of approximately $138,000 and  a decline in
  production  library sales  of $70,000  related  to expired  three-year
  contracts.   These  declines  were offset  by  increases  in sales  of
  compact disc music libraries of approximately $80,000 and increases of
  approximately $80,000 for a weekly comedy service.
  <PAGE>
  The  decline in  software sales  was  due to  the  termination of  the
  Company's agreement with it's supplier of computer software in January
  1996.  The Company is currently  marketing a music scheduling software
  produced by  another supplier.   The Company expects  that it  will be
  able to build  its customer base for its software  used in programming
  music sequences and for automated music playback systems over the next
  five years.

  The decrease in production library revenue resulted primarily from the
  expiration of  three-year contracts entered  into by the  Company with
  customers in  prior years.  The  decrease in revenues resulted  from a
  reduced  demand  for  new contracts  and  the  nonrenewal  of  expired
  contracts in the United States.   Although production library revenues
  may  continue to  decline as  additional three-year  contracts expire,
  management  believes  that  production   libraries  will  continue  to
  generate a significant  portion of overall revenues from  sales of new
  products as well as existing products.   Renewals and new sales growth
  are subject to customer acceptance of the new products.

  As the compact disc music library market continues to mature, sales of
  compact discs  are generated primarily  from changes in  music formats
  rather  than   from  conversions  to   compact  disc   music  delivery
  technology.   Management  believes that  the decline  in compact  disc
  music library revenues may continue as  the compact disc music library
  market  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.  International markets  have not  yet reached
  maturity for  compact disc  technology.  Sales  of music  libraries in
  international markets increased during the quarter.

  The increase in  revenue from weekly comedy services  is due primarily
  to  barter arrangements  whereby revenues  are derived  from obtaining
  commercial airtime  from radio  stations in  exchange for  such weekly
  services  and marketing  such airtime  to advertisers.     The Company
  expects to market other products using  similar barter arrangements in
  the future.   Revenues from such  barter arrangements are  expected to
  continue to increase in the future.

  On February  9, 1996 the  Company entered into  a five  year marketing
  agreement  with Electronic  Data  Systems  Corporation (EDS),  which
  provides  the  Company with  the  exclusive  right to  distribute  and
  sublicense  the EDS  CoSTAR_  hard disk  audio  storage and  retrieval
  system to radio stations within the United States and its territories.
  The agreement  provides exclusive distribution  rights to  the Company
  through  December   31,  2000,  subject  to   meeting  certain  annual
  performance goals.  Progress on development needs  and support systems
  necessary to market  the product in the U.S. continues  to be delayed.
  The  CoSTAR  system  is  not  expected  to  impact  revenues  in  the
  foreseeable future.

  Selling  and commission  costs as  a percentage  of revenue  increased
  $77,000 and as  a percentage of revenues increased to  32% from 25% of
  revenue due  primarily to convention  expense incurred of  $25,000 and
  increases in commissions and sales management  costs of $50,000 due to
  changes in sales force and commission plans.
  <PAGE>
  General and  administrative costs increased $100,000  due primarily to
  an  increase in  provisions  for state  and  local  taxes and  related
  expenses of  $40,000,   an increase  in rent expense  on the  lease of
  Company's headquarters of $12,000, and an  increase in personnel costs
  of $40,000.

  Depreciation   increased  approximately   $40,000  due   primarily  to
  depreciation expense for computer hardware and software acquired under
  capital leases.

                        PART II. OTHER INFORMATION

  Item 1. Legal proceedings - Not applicable.

  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

  (a) Exhibits
  Material Contracts:
  None

   (b) Reports on Form 8-K
  No reports on Form 8-K were filed by the Company during the period
  October 1, 1996 through December 31, 1996.

                                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 14, 1997

                                     TM CENTURY, INC.


                                     BY:/s/Janette L. Williams
                                     Janette L. Williams
                                     Chief Accounting Officer
                                     (Principal Accounting Officer)


                                     BY:/s/Neil W. Sargent
                                     Neil W. Sargent
                                     Chief Executive Officer
                                     (Principal Executive Officer)





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