<PAGE>   1
                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

(X)      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

                  For the quarterly period ended June 30, 1997

                                       or

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

                  Commission file number:   33-29035


                            K & F INDUSTRIES, INC.
          (Exact name of Registrant as specified in its charter)


          DELAWARE                                        34-1614845
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)


     600 THIRD AVENUE, NEW YORK, NEW YORK                               10016
  (Address of principal executive offices)                            (Zip Code)



Registrant's telephone number including area code      (212) 297-0900



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


As of August 1, 1997, there were 553,344 shares of Class A common stock
outstanding and 458,994 shares of Class B common stock outstanding. All of the
Class A common stock of the Company except one share is owned by the Chairman of
the Company, all of the Class B common stock is owned by Loral Space &
Communications Ltd. and all of the preferred stock except 44,999 shares is owned
by four limited partnerships of Lehman Brothers Holdings Inc.



<PAGE>   2
                          PART I. FINANCIAL INFORMATION
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         June 30,                     December 31,
                                                                           1997                           1996
                                                                 -------------------------      -------------------------
<S>                                                              <C>                            <C>
ASSETS:
Current Assets:
  Cash and cash equivalents                                                   $  3,710,000                    $ 1,508,000
  Accounts receivable, net                                                      37,382,000                     36,032,000
  Inventory                                                                     69,757,000                     68,334,000
  Deferred tax asset                                                             1,698,000                      1,411,000
  Other current assets                                                             404,000                        586,000
                                                                 -------------------------      -------------------------
Total current assets                                                           112,951,000                    107,871,000
                                                                 -------------------------      -------------------------

Property, plant and equipment                                                  140,027,000                    136,900,000
  Less, accumulated depreciation and amortization                               71,552,000                     66,914,000
                                                                 -------------------------      -------------------------
                                                                                68,475,000                     69,986,000
                                                                 -------------------------      -------------------------

Deferred charges, net of amortization                                           24,273,000                     24,674,000
Cost in excess of net assets acquired, net of
  amortization                                                                 192,370,000                    196,446,000
Intangible assets, net of amortization                                          18,524,000                     20,138,000
                                                                 -------------------------      -------------------------
                                                                              $416,593,000                   $419,115,000
                                                                 =========================      =========================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
Current Liabilities:
  Accounts payable, trade                                                     $ 11,284,000                   $ 11,253,000
  Current portion of senior term loan                                            5,500,000                      6,000,000
  Interest payable                                                               5,909,000                      6,689,000
  Other current liabilities                                                     48,594,000                     49,740,000
                                                                 -------------------------      -------------------------
Total current liabilities                                                       71,287,000                     73,682,000
                                                                 -------------------------      -------------------------

Postretirement benefit obligation other
  than pensions                                                                 75,949,000                     75,439,000
Other long-term liabilities                                                     19,470,000                     16,300,000
Senior term loan                                                                31,000,000                     34,000,000
Senior revolving loan                                                           31,000,000                     13,000,000
11 7/8% senior secured notes due 2003                                           70,000,000                    100,000,000
10 3/8% senior subordinated notes due 2004                                     140,000,000                    140,000,000

Stockholders' Deficiency:
  Preferred stock, $.01 par value-authorized,
    1,050,000 shares; issued and outstanding,
    1,027,635 shares (liquidation preference of
    $60,110,000)                                                                    10,000                         10,000
  Common stock, Class B, $.01 par value-
    authorized, 460,000 shares; issued and
    outstanding, 458,994 shares (liquidation
    preference of $26,848,000)                                                       5,000                          5,000
  Common stock, Class A, $.01 par value-
    authorized, 2,100,000 shares; issued and
    outstanding, 553,344 shares                                                      6,000                          6,000
  Additional paid-in capital                                                   155,350,000                    155,350,000
  Deficit                                                                     (166,798,000)                  (178,147,000)
  Adjustment to equity for minimum pension
    liability                                                                  (10,649,000)                   (10,649,000)
  Cumulative translation adjustment                                                (37,000)                       119,000
                                                                 -------------------------      -------------------------
Total stockholders' deficiency                                                 (22,113,000)                   (33,306,000)
                                                                 -------------------------      -------------------------
                                                                              $416,593,000                   $419,115,000
                                                                 =========================      =========================
</TABLE>

                 See notes to consolidated financial statements.

                                        2
<PAGE>   3
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          Six Months Ended
                                                  -----------------------------------------------------------------
                                                            June 30,                             June 30,
                                                             1997                                  1996
                                                  ---------------------------           ---------------------------
<S>                                               <C>                                   <C>
Sales                                                            $146,174,000                          $136,489,000
Costs and expenses                                                110,797,000                           108,375,000
Amortization                                                        5,152,000                             5,203,000
                                                  ---------------------------           ---------------------------
Operating income                                                   30,225,000                            22,911,000
Interest and investment income                                        121,000                               118,000
Interest expense                                                  (15,707,000)                          (19,450,000)
                                                  ---------------------------           ---------------------------
Income before income taxes and
  extraordinary charge                                             14,639,000                             3,579,000
Income tax provision                                               (1,577,000)                             (220,000)
                                                  ---------------------------           ---------------------------
Income before extraordinary charge                                 13,062,000                             3,359,000
Extraordinary charge from early
  extinguishment of debt, net of tax                               (1,713,000)                                   --
                                                  ---------------------------           ---------------------------
Net income                                                       $ 11,349,000                           $ 3,359,000
                                                  ===========================           ===========================
</TABLE>

                 See notes to consolidated financial statements.

                                        3
<PAGE>   4
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         Three Months Ended
                                                  -----------------------------------------------------------------
                                                            June 30,                             June 30,
                                                             1997                                  1996
                                                  ---------------------------           ---------------------------
<S>                                               <C>                                   <C>
Sales                                                             $73,564,000                           $71,537,000
Costs and expenses                                                 55,599,000                            53,874,000
Amortization                                                        2,581,000                             2,601,000
                                                  ---------------------------           ---------------------------
Operating income                                                   15,384,000                            15,062,000
Interest and investment income                                         68,000                                48,000
Interest expense                                                   (7,739,000)                           (9,620,000)
                                                  ---------------------------           ---------------------------
Income before income taxes and
  extraordinary charge                                              7,713,000                             5,490,000
Income tax provision                                                 (940,000)                             (220,000)
                                                  ---------------------------           ---------------------------
Income before extraordinary charge                                  6,773,000                             5,270,000
Extraordinary charge from early
  extinguishment of debt, net of tax                               (1,713,000)                                   --
                                                  ---------------------------           ---------------------------
Net income                                                        $ 5,060,000                           $ 5,270,000
                                                  ===========================           ===========================
</TABLE>

                 See notes to consolidated financial statements.

                                        4
<PAGE>   5
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES

                      Consolidated Statements OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               Six Months Ended
                                                            -------------------------------------------------------
                                                                    June 30,                       June 30,
                                                                      1997                           1996
                                                            ------------------------       ------------------------
<S>                                                         <C>                            <C>
Cash flow from operating activities:
 Net income                                                             $ 11,349,000                    $ 3,359,000
 Adjustments to reconcile net income
  to net cash provided by operating activities:
   Depreciation and amortization                                           9,790,000                      9,448,000
   Non-cash interest expense - amortization
    of deferred financing charges                                            733,000                        798,000
   Deferred income taxes                                                   1,290,000                             --
   Extraordinary charge from early
    extinguishment of debt                                                 1,713,000                             --
   Changes in assets and liabilities:
    Accounts receivable, net                                              (1,436,000)                       543,000
    Inventory                                                             (1,493,000)                    (6,170,000)
    Other current assets                                                     182,000                        600,000
    Accounts payable, interest payable, and
     other current liabilities                                            (1,895,000)                     9,257,000
    Postretirement benefit obligation other than
     pensions                                                                510,000                     (1,587,000)
    Other long-term liabilities                                            3,170,000                      2,438,000
                                                            ------------------------       ------------------------
 Net cash provided by operating
  activities                                                              23,913,000                     18,686,000
                                                            ------------------------       ------------------------

Cash flows from investing activities:
 Capital expenditures                                                     (3,127,000)                   (11,343,000)
 Deferred charges                                                         (1,500,000)                      (212,000)
                                                            ------------------------       ------------------------
 Net cash used in investing activities                                    (4,627,000)                   (11,555,000)
                                                            ------------------------       ------------------------

Cash flows from financing activities:
 Payments of senior term loan                                             (3,500,000)                            --
 Payments of senior revolving loan                                       (21,000,000)                   (16,000,000)
 Payments of long-term debt                                              (30,000,000)                      (343,000)
 Borrowings under senior revolving loan                                   39,000,000                     13,000,000
 Premiums paid on early extinguishment of debt                            (1,584,000)                            --
                                                            ------------------------       ------------------------
 Net cash used by financing activities                                   (17,084,000)                    (3,343,000)
                                                            ------------------------       ------------------------
Net increase in cash and cash
  equivalents                                                              2,202,000                      3,788,000

Cash and cash equivalents, beginning of
  period                                                                   1,508,000                      3,178,000
                                                            ------------------------       ------------------------

Cash and cash equivalents, end of period                                 $ 3,710,000                    $ 6,966,000
                                                            ========================       ========================

Supplemental cash flow information:
 Cash interest paid during period                                        $15,754,000                    $18,832,000
                                                            ========================       ========================
</TABLE>

                 See notes to consolidated financial statements.

                                        5
<PAGE>   6
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



1.        The accompanying unaudited consolidated financial statements have been
          prepared by K & F Industries, Inc. and Subsidiaries (the "Company")
          pursuant to the rules of the Securities and Exchange Commission
          ("SEC") and, in the opinion of the Company, include all adjustments
          (consisting of normal recurring accruals) necessary for a fair
          presentation of financial position, results of operations and cash
          flows. Certain information and footnote disclosures normally included
          in financial statements prepared in accordance with generally accepted
          accounting principles have been condensed or omitted pursuant to such
          SEC rules. The Company believes that the disclosures made are adequate
          to make the information presented not misleading. The consolidated
          statements of operations for the three and six months ended June 30,
          1997 are not necessarily indicative of the results to be expected for
          the full year. It is suggested that these financial statements be read
          in conjunction with the audited financial statements and notes thereto
          included in the Company's December 31, 1996 Transition Report on Form
          10-K.

2.        On June 1, 1997, the Company redeemed $30 million aggregate principal
          amount of 11 7/8% Senior Notes at a redemption price of 105.28% of the
          principal amount thereof. In connection therewith, the Company
          recorded an extraordinary charge of $1,713,000 (net of income tax
          benefit of $553,000) for the write-off of unamortized financing costs
          and redemption premiums.

3.        Receivables are summarized as follows:

<TABLE>
<CAPTION>
                                                       June 30,             December 31,
                                                         1997                  1996
                                                      ------------         ------------
<S>                                                   <C>                  <C>
          Accounts receivable, principally
            from commercial customers                 $ 34,848,000         $ 34,086,000
          Accounts receivable, on U. S
           Government and other long-term
           contracts                                     2,869,000            2,359,000
          Allowances                                      (335,000)            (413,000)
                                                      ------------         ------------
                                                      $ 37,382,000         $ 36,032,000
                                                      ============         ============
</TABLE>

4.        Inventory consists of the following:

<TABLE>
<CAPTION>
                                                     June 30,         December 31,
                                                       1997               1996
                                                   -----------        -----------
<S>                                                <C>                <C>
          Raw materials and work-in-process        $44,909,000        $46,742,000
          Finished goods                            12,593,000         10,821,000
          Inventoried costs related to U.S.
            Government and other long-term
            contracts                               12,255,000         10,771,000
                                                   -----------        -----------
                                                   $69,757,000        $68,334,000
                                                   ===========        ===========
</TABLE>

                                        6
<PAGE>   7
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



          The Company customarily sells original wheel and brake equipment below
          cost as an investment in a new airframe which is expected to be
          recovered through the subsequent sale of replacement parts. These
          commercial investments (losses) are recognized when original equipment
          is shipped. Losses on U.S. Government contracts are immediately
          recognized in full when determinable.

          Inventory is stated at average cost, not in excess of net realizable
          value. In accordance with industry practice, inventoried costs may
          contain amounts relating to contracts with long production cycles, a
          portion of which will not be realized within one year.

5.   Other current liabilities consist of the following:

<TABLE>
<CAPTION>
                                                           June 30,         December 31,
                                                             1997               1996
                                                         -----------        -----------
<S>                                                      <C>                <C>
          Accrued payroll costs                          $13,991,000        $15,170,000
          Accrued taxes                                    7,336,000          6,504,000
          Accrued costs on long-term contracts             6,325,000          5,744,000
          Accrued warranty costs                           7,317,000          6,695,000
          Customer credits                                 5,253,000          7,483,000
          Postretirement benefit obligation other
            than pensions                                  2,000,000          2,000,000
          Other                                            6,372,000          6,144,000
                                                         -----------        -----------

                                                         $48,594,000        $49,740,000
                                                         ===========        ===========
</TABLE>

6.   Contingencies

          Until recently, the Company's Aircraft Braking Systems subsidiary had
          been purchasing substantially all of the carbon for its carbon brakes
          under supply arrangements with Hitco Technologies, Inc. ("Hitco").
          Hitco is no longer supplying carbon to Aircraft Braking Systems and,
          as described below, Aircraft Braking Systems and Hitco are in
          litigation. The Company has developed an alternate supplier for
          certain programs and also has expanded its carbon manufacturing
          facility in Akron, Ohio. The Company believes it has sufficient
          sources of carbon to meet all of its expected requirements for brake
          production at the current level of business.

          On December 15, 1995, Aircraft Braking Systems commenced an action in
          the Court of Common Pleas, Summit County, Ohio against Hitco after
          Hitco threatened to breach existing supply contracts unless prices
          were renegotiated. Hitco had been the principal supplier of carbon
          used by Aircraft Braking Systems for its carbon brakes. Hitco claimed
          that Aircraft Braking Systems breached the supply arrangements by
          electing to begin to expand its own carbon production facility. The
          Aircraft Braking Systems' complaint, as amended, seeks damages in
          excess of $47


                                        7
<PAGE>   8
                     K & F INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)



          million for various breaches of the contracts, injunctive relief and
          specific performance requiring Hitco to perform its obligations
          pursuant to existing contracts and purchase orders. Hitco has
          counterclaimed in the matter seeking, among other things, damages up
          to $130 million for the alleged breach by Aircraft Braking Systems of
          alleged long-term contracts to purchase carbon. Hitco was enjoined
          from refusing to perform its obligations pursuant to existing
          contracts and purchase orders without change in terms. Through January
          1997, Hitco continued to supply carbon to the Company, although Hitco
          failed to acknowledge certain purchase orders, and Hitco alleges that
          its obligation to supply carbon to Aircraft Braking Systems expired on
          December 13, 1996. Aircraft Braking Systems has sought to hold Hitco
          in contempt of the court's injunction. Hitco's motion for an
          injunction seeking to require that the Company turn over technology
          allegedly jointly developed and owned under the prior contractual
          arrangements, has been denied. The case is presently scheduled for
          trial in January, 1998.

          In related actions, a suit filed by Hitco in Superior Court, Los
          Angeles County, California against Aircraft Braking Systems seeking
          substantially the same relief as is asserted in the Ohio action has
          been stayed. Hitco also filed suit in the Federal District Court in
          the Northern District of Ohio for damages and injunctive relief
          against a third party claiming that such party, in supplying certain
          carbon to Aircraft Braking Systems, has acquired trade secrets of
          Hitco from Aircraft Braking Systems and has misappropriated trade
          secrets and technology developed under the same research and
          development contracts between Hitco and Aircraft Braking Systems which
          are the subject of the Ohio case and the California case. Aircraft
          Braking Systems has been granted leave to intervene and the other
          party has moved to dismiss the Federal action.

          Management intends to vigorously advocate its interests in all
          lawsuits, to seek dismissal of the California action and to proceed in
          the Ohio case to enforce the preliminary injunction and otherwise to
          protect Aircraft Braking Systems' carbon supply as well as to seek
          damages from Hitco. Based upon the proceedings to date, advice of
          counsel and its own assessment of the matters in dispute, management
          does not expect the outcome of the litigation to be unfavorable to the
          Company.

          There are various lawsuits and claims pending against the Company
          incidental to its business. Although the final results in such suits
          and proceedings cannot be predicted with certainty, in the opinion of
          management, the ultimate liability, if any, will not have a material
          adverse effect on the Company.


                                        8
<PAGE>   9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
        OF OPERATIONS AND FINANCIAL CONDITION


Comparison of Results of Operations for the Six Months Ended June 30, 1997 and
June 30, 1996

Sales for the six months ended June 30, 1997 totaled $146,174,000 reflecting an
increase of $9,685,000 or 7.1% compared with $136,489,000 for the same period in
the prior year. This increase was due to higher sales of wheels and brakes for
commercial transport and general aviation aircraft of $13,660,000, primarily on
the Fokker Fo-100, F-27 and F-28, Canadair Regional Jet, McDonnell Douglas MD-90
and Lear programs. Partially offsetting this increase were lower military sales
of $3,975,000 primarily on the F-16 program.

Operating income increased 31.9% or $7,314,000 to $30,225,000 or 20.7% of
sales for the six months ended June 30, 1997 compared with $22,911,000 or 16.8%
of sales for the same period in the prior year. Operating margins increased
primarily due to the overhead absorption effect relating to the higher sales
volume, a favorable sales mix whereby commercial sales, with higher margins,
composed a greater percentage of total sales, lower costs relating to
litigation and lower independent research and development costs relating to the
MD-90 program and carbon research. Partially offsetting this increase were
higher shipments of original equipment to airframe manufacturers at or below
the cost of production.
                                                                               
Interest expense, net decreased $3,746,000 for the six months ended June 30,
1997 compared with the same period in the prior year. This decrease was due to
lower interest rates on outstanding debt as a result of the refinancing in
August 1996 of the 13 3/4% Senior Subordinated Debentures with 10 3/8% Senior
Subordinated Notes and borrowings under the Amended and Restated Credit
Agreement.

The Company's effective tax rate of 8.3% for the six months ended June 30, 1997
and the effective rate of 6.1% for the same period in the prior year differs
from the statutory rate of 35% due to partial utilization of tax net operating
losses and the change in the valuation allowance. The increase in the effective
rate in 1997 is primarily due to a greater portion of the change in the
valuation allowance being applied to reduce goodwill.

Approximately 400 hourly employees of the Company's Aircraft Braking Systems
subsidiary are represented by the United Auto Workers' Union. Aircraft Braking
Systems has not had a ratified collective bargaining agreement since August 10,
1991, but has operated under Company implemented terms and conditions of
employment. The Company is currently involved in discussions with union
representatives regarding a new collective bargaining agreement. The Company
believes that, whether or not a satisfactory agreement is reached, there will be
no material disruption to the business of Aircraft Braking Systems.

Comparison of Results of Operations for the Three Months Ended June 30, 1997 and
June 30, 1996

Sales for the three months ended June 30, 1997 totaled $73,564,000 reflecting an
increase of $2,027,000 or 2.8% compared with $71,537,000 for the same period in
the prior year. This increase was due to higher sales of wheels and brakes for
commercial transport and general aviation aircraft of $2,601,000, primarily on
the McDonnell Douglas MD-90 and Fokker F-27 and F-28 programs partially offset
by lower military sales.

Operating income increased $322,000 to $15,384,000 or 20.9% of sales for the
three months ended June 30, 1997 compared with $15,062,000 or 21.1% of sales for
the same period in the prior year. Operating margins decreased primarily


                                        9
<PAGE>   10
due to higher shipments of original equipment to airframe manufacturers at or
below the cost of production partially offset by the overhead absorption effect
relating to the higher sales volume.

Interest expense, net decreased $1,901,000 for the three months ended June 30,
1997 as compared with the same period in the prior year. This decrease was due
to lower interest rates on outstanding debt as a result of the refinancing in
August 1996 of the 13 3/4% Senior Subordinated Debentures with 10 3/8% Senior
Subordinated Notes and borrowings under the Amended and Restated Credit
Agreement.

The Company's effective tax rate of 7.1% for the three months ended June 30,
1997 and the effective rate of 4.0% for the same period in the prior year
differs from the statutory rate of 35% due to partial utilization of tax net
operating losses and the change in the valuation allowance. The increase in the
effective rate in 1997 is primarily due to a greater portion of the change in
the valuation allowance being applied to reduce goodwill.

Liquidity and Financial Condition

The Company expects that its principal use of funds for the next several years
will be to fund capital expenditures, make investments in new airframes (which
were $14.2 million and $13.0 million for the six months ended June 30, 1997 and
1996, respectively) and pay interest and principal on indebtedness. The
Company's primary source of funds for conducting its business activities and
servicing its indebtedness has been cash generated from operations. In addition,
the Company has a $70 million revolving loan facility, maturing August 14, 2001
with availability determined by reference to a borrowing base of eligible
accounts receivable and inventory. At June 30, 1997, the Company had $34.4
million available to borrow under the revolving loan facility.

On June 1, 1997, the Company redeemed $30 million aggregate principal amount of
11 7/8% Senior Notes at a redemption price of 105.28% of the principal amount
thereof. In connection therewith, the Company recorded an extraordinary charge
of $1,713,000 (net of income tax benefit of $553,000) for the write-off of
unamortized financing costs and redemption premiums. The Company used borrowings
under the revolving loan facility to effect such redemption.


                                       10
<PAGE>   11
                           PART II - OTHER INFORMATION



Item 6.  Exhibits and Reports on Form 8-K


(a)       Exhibits.

          None

(b)       Reports on Form 8-K.

          There were no reports on Form 8-K for the three months ended June 30,
          1997.


                                       11
<PAGE>   12
                                   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.




                                                   K & F INDUSTRIES, INC.
                                                   ----------------------
                                                        Registrant




                                                     DIRKSON R. CHARLES
                                                     ------------------
                                                     Dirkson R. Charles
                                                  Chief Financial Officer
                                                            and
                                                  Registrant's Authorized
                                                          Officer



Dated: August 14, 1997


                                       12