<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 March 31, 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 May 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>
                                                                                March 31,        December 31,
                                                                                  1997              1996
                                                                             -------------      -------------
<S>                                                                          <C>                <C>
ASSETS:
Current Assets:
  Cash and cash equivalents                                                  $   3,995,000      $   1,508,000
  Accounts receivable, net                                                      39,043,000         36,032,000
  Inventory                                                                     68,383,000         68,334,000
  Deferred tax asset                                                             1,515,000          1,411,000
  Other current assets                                                             548,000            586,000
                                                                             -------------      -------------
Total current assets                                                           113,484,000        107,871,000
                                                                             -------------      -------------

Property, plant and equipment                                                  138,326,000        136,900,000
  Less, accumulated depreciation and amortization                               69,231,000         66,914,000
                                                                             -------------      -------------
                                                                                69,095,000         69,986,000
                                                                             -------------      -------------

Deferred charges, net of amortization                                           25,565,000         24,674,000
Cost in excess of net assets acquired, net of
  amortization                                                                 194,282,000        196,446,000
Intangible assets, net of amortization                                          19,331,000         20,138,000
                                                                             -------------      -------------
                                                                             $ 421,757,000      $ 419,115,000
                                                                             =============      =============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY:
Current Liabilities:
  Accounts payable, trade                                                    $  11,937,000      $  11,253,000
  Current portion of senior term loan                                            5,000,000          6,000,000
  Interest payable                                                               5,325,000          6,689,000
  Other current liabilities                                                     51,160,000         49,740,000
                                                                             -------------      -------------
Total current liabilities                                                       73,422,000         73,682,000
                                                                             -------------      -------------

Postretirement benefit obligation other
  than pensions                                                                 75,189,000         75,439,000
Other long-term liabilities                                                     17,812,000         16,300,000
Senior term loan                                                                32,500,000         34,000,000
Senior revolving loan                                                           10,000,000         13,000,000
11 7/8% senior secured notes due 2003                                          100,000,000        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                                                                     (171,858,000)      (178,147,000)
  Adjustment to equity for minimum pension
    liability                                                                  (10,649,000)       (10,649,000)
  Cumulative translation adjustment                                                (30,000)           119,000
                                                                             -------------      -------------
Total stockholders' deficiency                                                 (27,166,000)       (33,306,000)
                                                                             -------------      -------------
                                                                             $ 421,757,000      $ 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>
                                           Three Months Ended
                                     --------------------------------
                                        March 31,         March 31,
                                          1997              1996
                                     --------------   ---------------
<S>                                   <C>               <C>
Sales                                 $ 72,610,000      $ 64,952,000

Costs and expenses                      55,198,000        54,501,000

Amortization                             2,571,000         2,602,000
                                      ------------      ------------

Operating income                        14,841,000         7,849,000

Interest and investment income              53,000            70,000

Interest expense                        (7,968,000)       (9,830,000)
                                      ------------      ------------

Income (loss) before income taxes        6,926,000        (1,911,000)

Income tax provision                      (637,000)             --
                                      ------------      ------------

Net income (loss)                     $  6,289,000      $ (1,911,000)
                                      ============      ============
</TABLE>



                See notes to consolidated financial statements.

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                    ---------------------------------
                                                        March 31,        March 31,
                                                          1997             1996
                                                     --------------    -------------
<S>                                                  <C>               <C>
Cash flow from operating activities:
 Net income (loss)                                   $  6,289,000      $ (1,911,000)
 Adjustments to reconcile net income (loss)
  to net cash provided by operating activities:
   Depreciation and amortization                        4,888,000         4,661,000
   Non-cash interest expense - amortization
    of deferred financing charges                         372,000           410,000
   Deferred income taxes                                  533,000              --
   Changes in assets and liabilities:
    Accounts receivable, net                           (3,093,000)        1,162,000
    Inventory                                            (116,000)       (3,942,000)
    Other current assets                                   38,000           224,000
    Accounts payable, interest payable, and
     other current liabilities                            740,000         4,318,000
    Postretirement benefit obligation other than
     pensions                                            (250,000)       (1,072,000)
    Other long-term liabilities                         1,512,000         1,671,000
                                                     ------------      ------------
 Net cash provided by operating
  activities                                           10,913,000         5,521,000
                                                     ------------      ------------

Cash flows from investing activities:
 Capital expenditures                                  (1,426,000)       (7,075,000)
 Deferred charges                                      (1,500,000)         (212,000)
                                                     ------------      ------------
 Net cash used in investing activities                 (2,926,000)       (7,287,000)
                                                     ------------      ------------

Cash flows from financing activities:
 Payments of senior term loan                          (2,500,000)             --
 Payments of senior revolving loan                    (11,000,000)       (9,000,000)
 Borrowings under senior revolving loan                 8,000,000        10,000,000
                                                     ------------      ------------
 Net cash (used) provided by financing
  activities                                           (5,500,000)        1,000,000
                                                     ------------      ------------

Net increase (decrease) in cash and cash
  equivalents                                           2,487,000          (766,000)

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

Cash and cash equivalents, end of period             $  3,995,000      $  2,412,000
                                                     ============      ============

Supplemental cash flow information:
 Cash interest paid during period                    $  8,960,000      $ 12,601,000
                                                     ============      ============
</TABLE>



                See notes to consolidated financial statements.

                                        4
<PAGE>   5
                     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 statement of
    operations for the three months ended March 31, 1997 is 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.  Effective June 1, 1997, the Company will redeem $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 will
    record an extraordinary charge of approximately $2.3 million for the
    write-off of unamortized financing costs and redemption premiums.

3.  Receivables are summarized as follows:

<TABLE>
<CAPTION>
                                          March 31,        December 31,
                                            1997               1996
                                         ------------      ------------
<S>                                      <C>               <C>
Accounts receivable, principally
 from commercial customers               $36,296,000       $34,086,000

Accounts receivable, on U. S
 Government and other long-term
 contracts                                 3,099,000         2,359,000

Allowances                                  (352,000)         (413,000)
                                         -----------       -----------

                                         $39,043,000       $36,032,000
                                         ===========       ===========
</TABLE>


4.  Inventory consists of the following:


<TABLE>
<CAPTION>
                                          March 31,        December 31,
                                            1997               1996
                                        ------------       ------------
<S>                                      <C>               <C>
Raw materials and work-in-process        $45,457,000       $46,742,000

Finished goods                            11,402,000        10,821,000

Inventoried costs related to U.S.
  Government and other long-term
  contracts                               11,524,000        10,771,000
                                         -----------       -----------

                                         $68,383,000       $68,334,000
                                         ===========       ===========
</TABLE>




                                        5
<PAGE>   6
                     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>
                                                March 31,      December 31,
                                                  1997             1996
                                              ------------    --------------
<S>                                            <C>             <C>
Accrued payroll costs                          $16,088,000     $15,170,000
Accrued taxes                                    7,694,000       6,504,000
Accrued costs on long-term contracts             7,075,000       5,744,000
Accrued warranty costs                           7,195,000       6,695,000
Customer credits                                 5,425,000       7,483,000
Postretirement benefit obligation other
  than pensions                                  2,000,000       2,000,000
Other                                            5,683,000       6,144,000
                                               -----------     -----------

                                               $51,160,000     $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 facility is producing carbon and is expected to be fully
         operational during the second quarter of calendar year 1997. 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



                                        6
<PAGE>   7
                     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, and Hitco has sought an injunction
         requiring that the Company turn over technology allegedly jointly
         developed and owned under the prior contractual arrangements. These
         motions have not been decided by the court, nor has the court set a
         trial date.

         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.


                                        7
<PAGE>   8
ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                       OF OPERATIONS AND FINANCIAL CONDITION


Comparison of Results of Operations for the Three Months Ended March 31,
1997 and March 31,1996

Sales for the three months ended March 31, 1997 totaled $72,610,000 reflecting
an increase of $7,658,000 or 11.8% compared with $64,952,000 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 $11,058,000, primarily
on the Fokker Fo-100, McDonnell Douglas MD-80, Canadair Regional Jet and Lear
programs. Partially offsetting this increase were lower military sales of
$3,400,000 primarily on the F-16 program.

Operating income increased 89.1% to $14,841,000 or 20.4% of sales for the three
months ended March 31, 1997 compared with $7,849,000 or 12.1% 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, comprised a greater
percentage of total sales and lower costs relating to litigation.

Interest expense, net decreased $1,845,000 for the three months ended March 31,
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.

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.

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 $7.5 million and $7.3 million for the three months ended March 31, 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 March 31, 1997, the Company had $54.9
million available to borrow under the revolving loan facility.

Effective June 1, 1997, the Company will redeem $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 will record an
extraordinary charge of approximately $2.3 million for the write-off of
unamortized financing costs and redemption premiums. The Company will use
borrowings under the revolving loan facility to effect such redemption.

                                        8
<PAGE>   9
                           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 March 31,
          1997.

                                        9
<PAGE>   10
                                   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




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



Dated:    May 14, 1997

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