UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q



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

                For the quarterly period ended January 31, 1998

                                       OR

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

         For the transition period from _____________ to ______________

                         Commission file number 0-27022

                            OPTICAL CABLE CORPORATION
             (Exact name of registrant as specified in its charter)

                 Virginia                              54-1237042
(State or other jurisdiction of incorporation       (I.R.S. Employer  
             or organization)                      Identification No.)
                                                   

                              5290 Concourse Drive
                            Roanoke, Virginia 24019
          (Address of principal executive offices, including zip code)

                                 (540) 265-0690
              (Registrant's telephone number, including area code)

                                      N/A
   (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.
(1) Yes X  No     (2) Yes X   No 
       ---   ---         ---     ---

         As of March 9,  1998,  38,364,612  shares  of the  registrant's  Common
Stock, no par value, were outstanding.  Of these outstanding shares,  36,000,000
shares were held by Robert Kopstein,  Chairman of the Board, President and Chief
Executive Officer of the registrant.


<PAGE>

                           OPTICAL CABLE CORPORATION
                                FORM 10-Q INDEX
                      THREE MONTHS ENDED JANUARY 31, 1998



                                                                            PAGE

PART I.  FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                  Condensed Balance Sheets - January 31, 1998
                   and October 31, 1997 .......................................2

                  Condensed Statements of Income - Three Months
                   Ended January 31, 1998 and 1997 ............................3

                  Condensed Statement of Changes in Stockholders'
                   Equity - Three Months Ended January 31, 1998 ...............4

                  Condensed Statements of Cash Flows - Three Months
                   Ended January 31, 1998 and 1997 ............................5

                  Condensed Notes to Condensed Financial Statements .........6-8

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS .....................9-11

PART II. OTHER INFORMATION

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K ...........................12



<PAGE>

                         PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            OPTICAL CABLE CORPORATION
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                  ASSETS                                               JANUARY 31,       OCTOBER 31,
                                                                          1998              1997
                                                                          ----              ----
<S>                                                                  <C>               <C>          
Current assets:
  Cash and cash equivalents                                        $  2,489,726      $     985,807
  Trade accounts receivable, net of allowance for doubtful
    accounts of $269,500 at January 31, 1998 and $307,400
    at October 31, 1997                                               8,715,313          9,931,276
  Other receivables                                                     575,282            540,102
  Due from employees                                                      6,459              3,534
  Inventories                                                        12,353,867         12,019,443
  Prepaid expenses                                                      123,249            121,046
  Deferred income taxes                                                 136,822             81,484
                                                                   ------------      -------------
       Total current assets                                          24,400,718         23,682,692

Other assets, net                                                        46,702             50,953
Property and equipment, net                                          11,415,423         11,480,433
                                                                   -----------       -------------
       Total assets                                                $ 35,862,843      $  35,214,078
                                                                   ============      =============


                  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses                            $  2,683,708      $   2,593,256  
  Accrued compensation and payroll taxes                                609,026            612,736  
  Income taxes payable                                                  981,254            564,999  
                                                                   ------------      -------------  
       Total current liabilities                                      4,273,988          3,770,991  

Deferred income taxes                                                    88,365             64,382  
                                                                   ------------      -------------  
       Total liabilities                                              4,362,353          3,835,373  
                                                                   ------------      -------------  
                                                                                                    
Stockholders' equity:                                                                               
   Preferred stock, no par value, authorized 1,000,000 shares;                                      
     none issued and outstanding                                              -                  -  
   Common stock, voting; no par value, authorized 50,000,000                                        
     shares; issued and outstanding 38,486,318 shares at                                            
     January 31, 1998 and 38,675,416 shares at October 31, 1997      16,892,929         18,594,116  
   Retained earnings                                                 14,607,561         12,784,589  
                                                                   ------------      -------------  
       Total stockholders' equity                                    31,500,490         31,378,705
Commitments and contingencies

                                                                   ------------       ------------- 
       Total liabilities and stockholders' equity                  $ 35,862,843      $  35,214,078 
                                                                   ============      ============= 
</TABLE>


      See accompanying condensed notes to condensed financial statements.

                                       2


<PAGE>


                            OPTICAL CABLE CORPORATION
                         CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                                                   JANUARY 31,
                                                        --------------------------------
                                                              1998               1997
                                                              ----               ----
<S>                                                     <C>              <C>            
Net Sales                                               $   11,873,115   $    12,491,311
Cost of goods sold                                           6,804,207         7,139,646
                                                        --------------  ----------------
      Gross profit                                           5,068,908         5,351,665

Selling, general and administrative expenses                 2,283,226         2,138,576
                                                        --------------   ---------------
      Income from operations                                 2,785,682         3,213,089

Other income (expense):
    Interest income                                             26,609             5,160
    Interest expense                                                 -           (10,201)
    Other, net                                                  (3,419)           (4,178)
                                                        --------------    --------------
      Other income (expense), net                               23,190            (9,219)
                                                        --------------    --------------
      Income before income tax expense                       2,808,872         3,203,870

Income tax expense                                             985,900         1,123,509
                                                        --------------    --------------
      Net income                                        $    1,822,972    $    2,080,361
                                                        ==============    ==============
Earnings per share (note 5):
    Earnings per common share                           $        0.047    $        0.054
                                                        ==============    ==============

    Earnings per common share - assuming
      dilution                                          $        0.047    $        0.053
                                                        ==============    ==============
</TABLE>








       See accompanying condensed notes to condensed financial statements.

                                        3

<PAGE>


                            OPTICAL CABLE CORPORATION
             CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED JANUARY 31, 1998
                                    ----------------------------------------------------------------
                                                                                          
                                            Common Stock                                  Total
                                            ------------               Retained        Stockholders'
                                    Shares           Amount            Earnings           Equity
                                    ------           ------            --------           ------
<S>                               <C>              <C>               <C>               <C>         
Balances at October 31, 1997      38,675,416       $18,594,116       $ 12,784,589      $ 31,378,705

Net income                                 -                 -          1,822,972         1,822,972
Repurchase of common stock          (189,098)       (1,701,187)                 -        (1,701,187)
                                  ----------      ------------       ------------      ------------

Balances at January 31, 1998      38,486,318      $ 16,892,929       $ 14,607,561      $ 31,500,490
                                  ==========      ============       ============      ============
</TABLE>





















       See accompanying condensed notes to condensed financial statements.

                                        4


<PAGE>


                            OPTICAL CABLE CORPORATION
                         CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  THREE MONTHS ENDED
                                                                                      JANUARY 31,
                                                                                -----------------------
                                                                                1998               1997
                                                                                ----               ----

<S>                                                                        <C>                  <C>       
Cash flows from operating activities:
   Net income                                                              $1,822,972           $2,080,361
   Adjustments to reconcile net income to net cash provided
     by operating activities:
      Depreciation and amortization                                           187,385              172,975
      Bad debt expense (recovery)                                             (37,900)              30,000
      Deferred income taxes                                                   (31,355)             (18,512)
      (Increase) decrease in:
         Trade accounts receivable                                          1,253,863              744,000
         Other receivables                                                    (35,180)            (370,574)
         Due from employees                                                    (2,925)              (2,650)
         Inventories                                                         (334,424)             731,396
         Prepaid expenses                                                      (2,203)             (57,899)
      Increase (decrease) in:
         Accounts payable and accrued expenses                                306,637           (3,104,935)
         Accrued compensation and payroll taxes                                (3,710)             (75,174)
         Income taxes payable                                                 416,255            1,027,021
                                                                           ----------           ----------
               Net cash provided by operating activities                    3,539,415            1,156,009

Cash flows from investing activities:
  Purchase of property and equipment                                         (334,309)          (2,147,441)
                                                                           ----------           ----------
               Net cash used in investing activities                         (334,309)          (2,147,441)

Cash flows from financing activities:
  Net payments on notes payable                                                     -             (383,000)
  Repurchase of common stock                                               (1,701,187)                   -
                                                                           ----------           ----------
               Net cash used in financing activities                       (1,701,187)            (383,000)
                                                                           ----------           ----------
Net increase (decrease) in cash and cash equivalents                        1,503,919           (1,374,432)

Cash and cash equivalents at beginning of period                              985,807            1,677,739
                                                                           ----------           ----------
Cash and cash equivalents at end of period                                 $2,489,726           $  303,307
                                                                           ==========           ==========
</TABLE>






       See accompanying condensed notes to condensed financial statements.

                                        5



<PAGE>

                           OPTICAL CABLE CORPORATION
               CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS
                      THREE MONTHS ENDED JANUARY 31, 1998
                                  (Unaudited)


(1)      GENERAL

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
reporting  information  and the  instructions  to Form  10-Q and  Article  10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
notes  required  by  generally  accepted  accounting   principles  for  complete
financial  statements.  In the opinion of management,  all material  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating  results for the three months ended
January  31, 1998 are not  necessarily  indicative  of the  results  that may be
expected for the fiscal year ending  October 31, 1998.  The unaudited  condensed
financial statements and condensed notes are presented as permitted by Form 10-Q
and do  not  contain  certain  information  included  in  the  Company's  annual
financial statements and notes. For further information,  refer to the financial
statements  and notes thereto  included in the  Company's  annual report on Form
10-K for the fiscal year ended October 31, 1997.


(2)      INVENTORIES

Inventories at January 31, 1998 and October 31, 1997 consist of the following:

                                                 JANUARY 31,         OCTOBER 31,
                                                   1998                 1997
                                                   ----                 ----

Finished goods                                  $ 5,139,757        $ 4,854,697
Work in process                                   2,816,917          1,976,970
Raw materials                                     4,344,234          5,125,044
Production supplies                                  52,959             62,732
                                                -----------        -----------
                                                $12,353,867        $12,019,443
                                                ===========        ===========


(3)      NOTES PAYABLE

On  February  25,  1998,  the Company  and its bank  executed a loan  commitment
letter,  which renewed its $5 million secured revolving line of credit available
for general  corporate  purposes  and its $10 million  secured line of credit to
fund potential acquisitions, mergers or joint ventures. The lines of credit bear
interest  at 1.50  percent  above the  monthly  LIBOR rate and are  equally  and
ratably  secured  by  the  Company's  accounts   receivable,   contract  rights,
inventory,   furniture  and  fixtures,   machinery  and  equipment  and  general
intangibles.  The lines of credit  will  expire on  February  28,  1999,  unless
renewed or extended.

                                                                     (Continued)

                                        6

<PAGE>



                           OPTICAL CABLE CORPORATION
               CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS

                                  (Unaudited)


(4)       STOCKHOLDERS' EQUITY

On October 29, 1997, the Company's Board of Directors  authorized the repurchase
of up to $5  million  of the  Company's  common  stock in the open  market or in
privately  negotiated  transactions.  During the three months ended  January 31,
1998, the Company repurchased 189,098 shares of its common stock for $1,701,187.

Subsequent  to  January  31,  1998  and  through  March  9,  1998,  the  Company
repurchased 181,956 additional shares of its common stock in connection with its
share repurchase program.


(5)       EARNINGS PER SHARE

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting Standards No. 128, Earnings per Share (SFAS No. 128). SFAS
No. 128  establishes  new standards for  computing and  presenting  earnings per
share (EPS) and applies to entities with publicly held common stock or potential
common stock. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also  requires dual  presentation  of basic and diluted EPS on the
face of the income  statement for all entities with complex  capital  structures
and requires a reconciliation  of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.

Basic EPS  excludes  dilution  and is computed by dividing  income  available to
common stockholders by the weighted-average  number of common shares outstanding
for the period.  Diluted EPS reflects the potential dilution that could occur if
securities or other  contracts to issue common stock were exercised or converted
into common  stock or resulted in the  issuance of common stock that then shared
in the earnings of the entity.

SFAS No. 128 was required to be adopted by the Company at January 31, 1998. SFAS
No.  128 also  requires  restatement  of all  prior-period  EPS data  previously
presented.  The following is a reconciliation of the numerators and denominators
of the basic and diluted EPS computations for the periods presented:

<TABLE>
<CAPTION>
                                                           
                                                                  Net                            
                                                                Income       Shares     Per Share
          THREE MONTHS ENDED JANUARY 31, 1998                 (Numerator)(Denominator)   Amount
          -----------------------------------                ------------------------------------
 <S>                                                           <C>          <C>          <C>   
          Earnings per common share                           $1,822,972   38,607,240   $  0.047
                                                                                        ========
          Effect of dilutive stock options                            --      311,728
                                                              ----------   ----------
          Earnings per common share - assuming dilution      $ 1,822,972   38,918,968   $  0.047
                                                             ===========   ==========   ========

          
          THREE MONTHS ENDED JANUARY 31, 1997
          -----------------------------------
          Earnings per common share                         $  2,080,361   38,675,416   $  0.054
                                                                                        ========
          Effect of dilutive stock options                            --      350,680
                                                            ------------   ----------
          Earnings per common share - assuming dilution     $  2,080,361   39,026,096   $  0.053
                                                            ============   ==========   ========


                                                                                      (Continued)
</TABLE>


                                       7
<PAGE>




                           OPTICAL CABLE CORPORATION
               CONDENSED NOTES TO CONDENSED FINANCIAL STATEMENTS

                                  (Unaudited)


(5)       (CONTINUED)

Stock  options that could  potentially  dilute basic EPS in the future that were
not included in the  computation of diluted EPS because to do so would have been
antidilutive  for the periods  presented  totaled  238,500 for the three  months
ended January 31, 1998.

On March 5, 1998,  stock  options  totaling  60,250  shares of common stock were
exercised.









                                       8

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS 

GENERAL

Except  for the  historical  data set forth  herein,  the  following  discussion
contains certain forward-looking  information.  The Company's actual results may
differ  materially  from these  projected  results.  Factors that could cause or
contribute to such differences  include,  but are not limited to, level of sales
to key  customers,  actions  by  competitors,  fluctuations  in the price of raw
materials, the Company's dependence on a single manufacturing facility,  ability
to protect its  proprietary  manufacturing  technology,  dependence on a limited
number of suppliers and technological changes and introductions of new competing
products.

RESULTS OF OPERATIONS

Net Sales

Net sales  consists  of gross sales of  products,  less  discounts,  refunds and
returns.  Net sales decreased 4.9 percent to $11.9 million in first quarter 1998
from $12.5 million for the same period in 1997.  This decrease was  attributable
to the  completion of shipments for a large  international  military  project in
first  quarter 1997 and the delay of large  potential  domestic  orders in first
quarter 1998 due to adverse weather conditions or economic uncertainty.

Gross Profit Margin

Cost of goods sold  consists of the cost of  materials,  compensation  costs and
overhead related to the Company's manufacturing operations.  The Company's gross
profit margin (gross profit as a percentage of net sales)  declined  slightly to
42.7  percent in first  quarter 1998 from 42.8  percent in first  quarter  1997.
During first quarter 1998,  sales from orders  $50,000 or more  approximated  18
percent compared to 26 percent for first quarter 1997. In addition, during first
quarter  1998 and  1997,  net sales to  distributors  approximated  52  percent.
Discounts on large orders and on sales to  distributors  are  generally  greater
than for sales to the Company's other customer base.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses consist of the compensation costs
(including  sales  commissions)  for  sales  and  marketing  personnel,   travel
expenses,  customer  support  expenses,  trade show expenses,  advertising,  the
compensation cost for administration,  finance and general management personnel,
as well as legal  and  accounting  fees.  Selling,  general  and  administrative
expenses as a percentage  of net sales were 19.2  percent in first  quarter 1998
compared to 17.1  percent in first  quarter  1997.  This higher  percentage  was
primarily the result of the fact that net sales for first quarter 1998 decreased
4.9  percent  compared  to  first  quarter  1997,  while  selling,  general  and
administrative expenses increased 6.8 percent.

Income Before Income Tax Expense

Income before income tax expense  decreased 12.3 percent to $2.8 million for the
three  months  ended  January 31,  1998  compared to $3.2  million for the three
months ended January 31, 1997. This was primarily due to decreased sales volume.


                                                                     (Continued)

                                       9

<PAGE>

Income Tax Expense

Income tax expense  decreased  $138,000 to $986,000  for the three  months ended
January 31, 1998 compared to $1.1 million for the same period in 1997 due to the
decrease in income before income tax expense.  The Company's  effective tax rate
remained  unchanged  at 35.1 percent  during the three months ended  January 31,
1998 and 1997.

Net Income

Net income for first quarter 1998 was $1.8 million  compared to $2.1 million for
first  quarter 1997.  Despite a decrease in income tax expense of $138,000,  net
income decreased  $257,000 due to the $395,000  decrease in income before income
tax expense.

FINANCIAL CONDITION

Total assets at January 31, 1998 were $35.9 million, an increase of $649,000, or
1.8 percent from October 31, 1997. This increase was primarily due to a decrease
of $1.2 million in trade accounts receivable  resulting from the decreased sales
volume  during the  quarter as  compared to fourth  quarter  1997,  offset by an
increase of $1.5 million in cash and cash equivalents.

Total  stockholders'  equity at  January 31,  1998  increased  $122,000 in first
quarter 1998 with net income retained,  offset by the repurchase of common stock
in the amount of $1.7 million accounting for the increase.

LIQUIDITY AND CAPITAL RESOURCES

During the first quarter of fiscal years 1998 and 1997,  the  Company's  primary
capital  needs  have  been to fund  working  capital  requirements  and  capital
expenditures as needed.  The Company also repaid some bank  indebtedness  during
the first quarter of fiscal year 1997. The Company's primary source of financing
has been cash  provided from  operations.  The Company  maintains  bank lines of
credit;  however,  there were no balances  outstanding under the lines as of the
end of fiscal year 1997 or the first quarter of fiscal year 1998.

On  February  25,  1998,  the Company  and its bank  executed a loan  commitment
letter,  which renewed its $5 million secured revolving line of credit available
for general  corporate  purposes  and its $10 million  secured line of credit to
fund potential acquisitions,  mergers or joint ventures. The lines of credit are
equally and  ratably  secured by the  Company's  accounts  receivable,  contract
rights, inventory,  furniture and fixtures,  machinery and equipment and general
intangibles.  The lines of credit  will  expire on  February  28,  1999,  unless
renewed or  extended.  As of the date  hereof,  the  Company  has no  additional
material  sources of  financing.  The Company  believes  that its cash flow from
operations and available lines of credit will be adequate to fund its operations
for at least the next twelve months.

On October 29, 1997, the Company's Board of Directors  authorized the repurchase
of up to $5  million  of the  Company's  common  stock in the open  market or in
privately  negotiated  transactions.  Through  January 31, 1998, the Company has
repurchased  $1.7 million of the Company's  common stock.  The repurchases  were
funded through cash flows from operating activities.  The Company intends to use
excess working capital and other sources as appropriate to finance the remaining
share repurchase program.



                                                                     (Continued)
                                       10

<PAGE>


Cash flows from operations were  approximately  $3.5 million and $1.2 million in
first quarter 1998 and 1997,  respectively.  Cash flows from operations in first
quarter 1998 were primarily provided by operating income and a decrease in trade
accounts  receivable  of $1.3 million.  For first quarter 1997,  cash flows from
operations  were primarily  provided by operating  income and decreases in trade
accounts  receivable  of  $744,000  and  inventories  of  $731,000,  offset by a
decrease in accounts payable and accrued expenses of $3.1 million.

Net cash used in investing activities was for expenditures related to facilities
and  equipment and was $334,000 and $2.1 million in first quarter 1998 and 1997,
respectively.  The  Company's  expansion  of  its  headquarters  facilities  was
substantially  completed as of January 31,  1997. As of January 31, 1998,  there
are no material commitments for additional capital expenditures.

Net cash used in  financing  activities  was $1.7  million and $383,000 in first
quarter 1998 and 1997,  respectively.  The net cash used in financing activities
for first  quarter 1998 included  $1.7 million  related to the Company's  common
stock  repurchase  program.  The net cash used in financing  activities in first
quarter 1997  consisted of repayment  of debt  outstanding  under the  Company's
lines of credit of $383,000.



                                       11
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K


          (a)  Exhibits  required  by Item 601 of  Regulation  S-K for the three
               months ended January 31, 1998.

               (27)  Financial Data Schedule.

          (b)  Reports  on  Form  8-K  filed   during  the  three  months  ended
               January 31, 1998.

               None.






                                       12

<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.


                                  OPTICAL CABLE CORPORATION
                                        (Registrant)



Date:  March 13, 1998             /s/Robert Kopstein
                                  --------------------------
                                  Robert Kopstein
                                  Chairman of the Board, President and
                                  Chief Executive Officer



Date:  March 13, 1998              /s/Kenneth W. Harber
                                   -------------------------
                                   Kenneth W. Harber
                                   Vice President of Finance, Treasurer
                                    and Secretary
                                   (principal financial and accounting officer)