FORM 10-Q
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

(Mark One)
|X|      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1997

                                       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 0-19835

                                DAY RUNNER, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                               95-3624280
 (State or other jurisdiction                              (I.R.S. Employer
    of incorporation or organization)                   Identification Number)

                               15295 Alton Parkway
                            Irvine, California 92618
              (Address and zip code of principal executive offices)

                                 (714) 680-3500
              (Registrant's telephone number, including area code)

         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|_|

         Indicate the number of shares outstanding of each of the  registrant's
classes of Common Stock, as of the latest practicable date:

                                              Number of Shares Outstanding
            Class                                at November 11, 1997
-------------------------------          -------------------------------------
Common Stock, $0.001 par value                          5,635,804

<PAGE>


                                                            

                                DAY RUNNER, INC.

                                      INDEX


                                                                  Page Reference

COVER PAGE...............................................................1

INDEX    ................................................................2

PART I -- FINANCIAL INFORMATION

         Item 1.     Consolidated Financial Statements

                     Consolidated Balance Sheets
                       September 30, 1997 and June 30, 1997..............3

                     Consolidated Statements of Income
                       Three Months Ended September 30, 1997 and 1996.....4
                     Consolidated Statements of Cash Flows
                       Three Months Ended September 30, 1997 and 1996.....5

                     Notes to Consolidated Financial Statements...........6

         Item 2.     Management's Discussion and Analysis of
                     Financial Condition and Results of Operations........9

PART II -- OTHER INFORMATION

         Item 6.     Exhibits and Reports on Form 8-K....................13

SIGNATURES...............................................................15


<PAGE>


PART I -- FINANCIAL INFORMATION
Item 1.  Consolidated Financial Statements.
<TABLE>
<CAPTION>
                        
                         DAY RUNNER, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

                                     ASSETS
                                                                                         September 30,     June 30,
                                                                                           1997            1997
                                                                                          (unaudited)      (audited)
                                                                                          -----------      ---------
<S>                                                                                     <C>                <C>    
Current assets:
     Cash and cash equivalents.......................................................    $   8,080        $  15,550
     Accounts receivable (less allowances for doubtful accounts and sales returns
          and other allowances of $10,912 and $8,664 at September 30, 1997 and
          June 30, 1997, respectively)...............................................       24,646           22,303
     Inventories.....................................................................       28,845           23,406
     Prepaid expenses and other current assets.......................................        2,378            2,409
     Deferred income taxes...........................................................        6,386            6,386
                                                                                          --------         --------
          Total current assets.......................................................       70,335           70,054
                                                                                         ---------        ---------

Property and equipment -- At cost:
     Machinery and equipment.........................................................       11,103           10,316
     Data processing equipment and software..........................................        6,041            5,863
     Leasehold improvements..........................................................        1,975            1,838
     Vehicles........................................................................          167              214
                                                                                         ---------        ---------
          Total......................................................................       19,286           18,231
     Accumulated depreciation and amortization.......................................      (10,628)          (9,543)
                                                                                         ---------        ---------
     Property and equipment -- net...................................................        8,658            8,688
                                                                                         ---------        ---------
Other assets.........................................................................          562              138
                                                                                         ---------        ---------
Total assets.........................................................................    $  79,555        $  78,880
                                                                                         =========        =========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Lines of credit.................................................................     $    376        $     452
     Accounts payable................................................................       11,116            8,320
     Accrued expenses................................................................       11,849            9,500
     Income taxes payable............................................................        2,770            1,049
     Current portion of capital lease obligations....................................           17               23
                                                                                          --------         --------
          Total current liabilities..................................................       26,128           19,344
                                                                                         ---------        ---------
Long-term liabilities:
     Capital lease obligations.......................................................           30               52
                                                                                         ---------        ---------
Stockholders' equity:
     Preferred stock (1,000,000 shares authorized, $0.001 par value; no shares issued
         or outstanding).............................................................
     Common stock (14,000,000 shares authorized, $0.001 par value; 6,458,978 and
         6,364,429  issued  ...and   5,598,084  and  5,851,329   outstanding  at
         September 30,
          1997 and June 30, 1997, respectively)......................................            6                6
     Additional paid-in capital......................................................       24,937           23,759
     Retained earnings...............................................................       53,520           49,168
     Cumulative translation adjustment...............................................           40               92
     Treasury stock:  at cost (860,894 and 513,100 shares at September 30, 1997 and
         June 30, 1997, respectively)................................................      (25,106)         (13,541)
                                                                                         ---------        ----------
          Total stockholders' equity.................................................       53,397           59,484
                                                                                         ---------        ---------
Total liabilities and stockholders' equity...........................................    $  79,555        $  78,880
                                                                                         =========        =========

     See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                        DAY RUNNER, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                    (In thousands, except per share amounts)


                                                                                               Three Months Ended
                                                                                                   September 30,
                                                                                                 1997       1996
                                                                                                 ----       ----

<S>                                                                                          <C>           <C>    
Sales...................................................................................      $  38,138   $  33,549
Cost of goods sold......................................................................         18,032      15,964
                                                                                              ---------   ---------
Gross profit............................................................................         20,106      17,585
                                                                                              ---------   ---------

Operating expenses:
     Selling, marketing and distribution................................................          9,302       7,988
     General and administrative.........................................................          3,764       3,394
                                                                                              ---------   ---------
       Total operating expenses.........................................................         13,066      11,382
                                                                                              ---------   ---------

Income from operations..................................................................          7,040       6,203
Net interest income.....................................................................             95         210
                                                                                              ---------   ---------

Income before provision for income taxes................................................          7,135       6,413
Provision for income taxes..............................................................          2,783       2,565
                                                                                              ---------   ---------
Net income..............................................................................      $   4,352   $   3,848
                                                                                              =========   =========

Earnings per common and common equivalent share.........................................      $   0.70    $   0.57
                                                                                              ========    ========

Weighted average number of common and common
     equivalent shares..................................................................          6,256       6,710
                                                                                              =========   =========
</TABLE>

     See accompanying notes to consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


                        DAY RUNNER, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)

                                                                                           Three Months Ended
                                                                                               September 30,
                                                                                             1997        1996
                                                                                             ----        ----
<S>                                                                                     <C>           <C>
Cash flows from operating activities:
    Net income....................................................................        $  4,352     $ 3,848
    Adjustments to reconcile net income to net cash provided by (used in)
      operating activities:
       Depreciation and amortization..............................................           1,074         756
       Provision for losses on accounts receivable................................                         113
       Changes in operating assets and liabilities:
          Accounts receivable.....................................................          (1,931)     (1,187)
          Inventories.............................................................          (4,160)      2,202
          Prepaid expenses and other current assets...............................              40         193
          Income taxes receivable.................................................                       1,930
          Accounts payable........................................................           2,063        (601)
          Accrued expenses........................................................           1,938         864
          Income taxes payable....................................................           1,719         654
                                                                                         ---------   ---------
             Net cash provided by operating activities............................           5,095       8,772
                                                                                         ---------   ---------
Cash flows from investing activities:
    Purchase of business..........................................................            (318)
    Acquisition of property and equipment.........................................            (897)     (1,291)
    Other assets..................................................................             (38)          5
                                                                                         ----------  ---------
         Net cash used in investing activities....................................          (1,253)     (1,286)
                                                                                         ----------  ----------
Cash flows from financing activities:
    Net repayment under lines of credit...........................................            (888)
    Repayment of capital lease obligations........................................             (33)
    Net proceeds from issuance of common stock....................................           1,178         219
    Repurchase of common stock....................................................         (11,565)
                                                                                         ----------  ---------
         Net cash (used in) provided by financing activities......................         (11,308)        219
                                                                                         ----------  ---------
Effect of exchange rate changes in cash...........................................              (4)         (8)
                                                                                         ----------  ----------
Net (decrease) increase in cash and cash equivalents..............................          (7,470)      7,697
Cash and cash equivalents at beginning of period..................................          15,550      19,765
                                                                                         ---------   ---------
Cash and cash equivalents at end of period........................................       $   8,080   $  27,462
                                                                                         =========   =========
     See accompanying notes to consolidated financial statements.

</TABLE>
<PAGE>



                        DAY RUNNER, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (Information relating to the three months ended
                    September 30, 1997 and 1996 is unaudited)


1.  BASIS OF PRESENTATION AND ACCOUNTING POLICIES

         The accompanying  consolidated  balance sheet as of September 30, 1997,
consolidated  statements  of income and cash flows for the  three-month  periods
ended  September  30,  1997  and 1996  are  unaudited  but,  in the  opinion  of
management,  include all adjustments  consisting of normal,  recurring  accruals
necessary for a fair  presentation of the financial  position and the results of
operations  for such  periods.  Certain  information  and  footnote  disclosures
normally included in financial  statements prepared in conformity with generally
accepted accounting principles have been omitted pursuant to the requirements of
the Securities and Exchange  Commission,  although the Company believes that the
disclosures included in the financial statements included herein are adequate to
make the information therein not misleading.  The financial  statements included
herein should be read in  conjunction  with the Company's  audited  consolidated
financial  statements  for the year ended June 30, 1997,  and the notes thereto,
which are included in the Company's Annual Report on Form 10-K.

         The results of operations for the three months ended September 30, 1997
and 1996 are not  necessarily  indicative  of the results  for a full year.  The
seasonality of the Company's  financial results and the  unpredictability of the
factors  affecting  such  seasonality  make the  Company's  quarterly and yearly
financial results difficult to predict and subject to significant fluctuation.

2.  INVENTORIES

         Inventories consist of the following (in thousands):

                                            September 30,           June 30,
                                                1997                  1997
                                                ----                  ----

         Raw materials...................  $    8,170             $   10,204
         Work in process.................         454                    426
         Finished goods..................      20,221                 12,776
                                           ----------             ----------
                  Total..................  $   28,845             $   23,406
                                           ==========             ==========

3.  LINES OF CREDIT

         Effective  September 1, 1997,  the Company  amended its primary  credit
agreement with a bank to allow the Company to borrow up to  $15,000,000  under a
line of credit through November 1, 1997 and open commercial letters of credit or
open  standby  letters  of  credit  up to  $15,000,000,  with the  aggregate  of
borrowing and letters of credit not to exceed $15,000,000.  On November 1, 1997,
this credit  agreement was further amended to allow for borrowing under the line
of credit  through  February 1, 1998.  Commercial  letters of credit and standby
letters  of credit may be issued for a term not to exceed 180 days and shall not
expire  subsequent to August 1 and May 1, 1998,  respectively.  At September 30,
1997, the Company had no amounts  outstanding  under this line of credit but had
outstanding secured letters of credit totaling approximately $1,000,000.

         Under this credit agreement,  borrowings are collateralized by accounts
receivable,  inventories  and  certain  other  assets and bear  interest  at the
Company's election either at the bank's prime rate (8.50% at September 30, 1997)
or at LIBOR  (5.65625% at September 30, 1997) plus 1.75%.  The credit  agreement
requires  the Company to maintain  total debt to tangible  net worth of not more
than 1.5 to 1, to maintain certain specified operating ratios and to obtain the
bank's approval to declare or pay dividends in excess of $200,000.

         The  Company  also  has  a  credit  agreement  with  a  Canadian  bank.
Borrowings under this line of credit, which is used for working capital purposes
by the Company's Canadian subsidiary,  may not exceed Canadian $1,000,000,  bear
interest at the bank's prime rate (4.75% at September  30, 1997) and are due and
payable on demand.  Prior to October 17,  1997,  borrowings  under the line bore
interest at the bank's prime rate plus 0.50%. At September 30, 1997,
approximately US $376,000 was outstanding under this line of credit.

4.  STOCKHOLDERS' EQUITY

         During the three months ended  September 30, 1997,  certain  directors,
officers and employees  exercised  options and warrants to purchase an aggregate
of 94,549 shares of the Company's Common Stock for an aggregate of approximately
$1,178,000.

 5. TREASURY STOCK

         During  the  three  months  ended   September  30,  1997,  the  Company
repurchased  347,794  shares from certain  officers  and  directors at a cost of
$33.25 per share for an aggregate of approximately $11,565,000.

6.  EARNINGS PER SHARE

         Earnings per share  information is computed using the weighted  average
number of shares of common  stock  outstanding  and dilutive  common  equivalent
shares from stock options and  warrants.  In computing  earnings per share,  the
Company  used the  modified  treasury  stock  method for the three  months ended
September 30, 1997 and 1996.

7.   ACQUISITIONS

         On  July  29,  1997,   the  Company   purchased  the  stock  of  Ultima
Distribution  Inc.,  which was the  distributor  of the  Company's  products  in
Canada, for approximately $318,000. In addition, contingent payments may be paid
over the next two years,  based on Ultima's  operating  performance  during that
period.

         On  October  1,  1997,  the  Company  purchased  substantially  all the
operating assets of Ram Manufacturing,  Inc., a Little Rock, Arkansas developer,
manufacturer  and  marketer  of  wall  boards.   The  cash  purchase  price  was
approximately  $2,400,000,  and the Company  also  assumed  certain  liabilities
totaling approximately $3,000,000. In addition,  contingent payments may be paid
over the next three years,  based upon Ram's operating  performance  during that
period.

8.   STATEMENTS OF CASH FLOW

        The net cash used to purchase Ultima Distribution Inc. on July 29, 1997
was used as follows (in thousands):

              Working capital                                          $   227
              Property, plant and equipment                               (150)
              Cost in excess of net assets of company acquired            (395)
                                                                     ----------
              Net cash used to acquire business                        $  (318)
                                                                     ==========


         Supplemental disclosure of cash flow information (in thousands):

                                                Three Months Ended September 30,
                                                   1997               1996
                                                ------------------------------

             Cash paid during the period for:
               Interest                           $   52          $   29     
               Income taxes                       $1,007




<PAGE>



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

         The following  discussion  should be read in  conjunction  with, and is
qualified in its entirety by, the  Consolidated  Financial  Statements and Notes
thereto  included  elsewhere in this Quarterly  Report.  Historical  results and
percentage   relationships  among  any  amounts  included  in  the  Consolidated
Financial  Statements  are not  necessarily  indicative  of trends in  operating
results for any future period.

         Since  the  Company's  introduction  of the  first  Day  Runner  System
organizer in 1982, the Company's revenues have been generated by sales primarily
of organizers  and planners and  secondarily of refills.  Recently,  much of the
Company's  growth  has  resulted  from  sales of  related  organizing  products,
virtually  all of which have been  introduced  within the last three years.  The
Company focuses its product  development,  sales and marketing efforts primarily
on the office products and mass market channels. The office products channel and
the mass market channel  accounted for 47.0% and 41.3%,  respectively,  of first
quarter fiscal 1998 sales.

RESULTS OF OPERATIONS

         The  following  table  sets  forth,  for  the  periods  indicated,  the
percentages that income statement items bear to sales and the percentage  change
in the dollar amounts of such items.
<TABLE>
<CAPTION>

                                                                                                       Percentage
                                                                               Percentage                Change
                                                                                of Sales                  Three
                                                                             Three Months Ended       Months Ended
                                                                               September 30,          September 30,
                                                                           1997           1996        1996 to 1997
                                                                          ------        ----------    -------------
<S>                                                                      <C>            <C>             <C>       
Sales..................................................................   100.0%          100.0%          13.7%
Cost of goods sold.....................................................    47.3            47.6           13.0
                                                                          -----           -----
Gross profit...........................................................    52.7            52.4           14.3
                                                                          -----           -----
Operating expenses:
    Selling, marketing and distribution................................    24.4            23.8           16.4
    General and administrative.........................................     9.9            10.1           10.9
                                                                          -----          ------
       Total operating expenses........................................    34.3            33.9           14.8
                                                                          -----           -----
Income from operations.................................................    18.4            18.5           13.5
Net interest income....................................................     0.3            0.6           (54.8)
                                                                           ----            ----
Income before provision for income taxes...............................    18.7            19.1           11.3
Provision for income taxes.............................................     7.3             7.6            8.5
                                                                           ----            ----
Net income.............................................................    11.4%           11.5%          13.1
                                                                           ====           =====
</TABLE>

<PAGE>

         The  following  tables  set  forth,  for  the  periods  indicated,  the
Company's  approximate sales by product category and distribution channel and as
a percentage of total sales.
<TABLE>
<CAPTION>


                                                                    Three Months Ended September 30,
Product Category:                                                            1997       1996
-----------------                                                            ----       ----
                                                                    (unaudited; dollars in thousands)
<S>                                                      <C>           <C>           <C>            <C>   
Organizers and planners..............................     $ 21,188       55.6%        $  21,061       62.8%
Refills..............................................       10,875       28.5            10,444       31.1
Related organizing products..........................        6,075       15.9             2,044        6.1
                                                          --------      -----         ---------      -----
    Total............................................     $ 38,138      100.0%        $  33,549      100.0%
                                                          ========      =====         =========      =====
</TABLE>



<TABLE>
<CAPTION>
                                                                    Three Months Ended September 30,
Distribution Channel:                                                        1997       1996
---------------------                                                        ----       ----
                                                                    (unaudited; dollars in thousands)
<S>                                                    <C>              <C>           <C>           <C>  
Office products......................................   $   17,924       47.0%        $  17,783       53.0%
Mass market..........................................       15,750       41.3            12,480       37.2
Foreign customers....................................        2,415        6.3             1,364        4.1
Other................................................        2,049        5.4             1,922        5.7
                                                        ----------       -----        ---------      ------
    Total............................................   $   38,138      100.0%        $  33,549      100.0%
                                                        ==========      =====         =========      =====
</TABLE>


THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH
THE THREE MONTHS ENDED SEPTEMBER 30, 1996

         SALES.  Sales consist of revenues  from gross product  shipments net of
allowances  for  returns,  rebates and credits.  In the first  quarter of fiscal
1998, sales increased by $4,589,000,  or 13.7%,  primarily  because of increased
sales of related organizing  products.  In the quarter ended September 30, 1997,
sales of related  organizing  products grew by $4,031,000,  or 197.2%;  sales of
refills (which include calendars and accessories) grew by $431,000, or 4.1%; and
sales of organizers and planners grew by $127,000,  or 0.6%.  Product sales were
primarily to office products customers and secondarily to mass market customers.
Sales to mass market  customers grew by $3,270,000,  or 26.2%;  sales to foreign
customers grew by $1,051,000,  or 77.1%;  sales to the office products customers
grew by $141,000, or 0.8%; and sales to miscellaneous customers grouped together
as "other" increased by $127,000, or 6.6%.

         GROSS PROFIT.  Gross profit is sales less cost of goods sold,  which is
comprised of materials,  labor and manufacturing  overhead.  Gross profit may be
affected by, among other  things,  product mix,  production  levels,  changes in
vendor and customer  prices and discounts,  sales volume and growth rate,  sales
returns,  purchasing  and  manufacturing   efficiencies,   tariffs,  duties  and
inventory  carrying costs.  Gross profit as a percentage of sales increased from
52.4% in the first  quarter  of fiscal  1997 to 52.7% in the  first  quarter  of
fiscal 1998.

     OPERATING  EXPENSES.  Total operating expenses increased by $1,684,000,  or
14.8%,  in the first  quarter of fiscal 1998  compared with the first quarter of
fiscal  1997 and  increased  as a  percentage  of  sales  from  33.9% to  34.3%.
Primarily  because of higher  personnel costs and secondarily  because of higher
promotional  display  costs,   selling,   marketing  and  distribution  expenses
increased  by  $1,314,000  and from  23.8% to 24.4% as a  percentage  of  sales.
General and administrative  expenses  increased by $370,000,  but decreased from
10.1%  to 9.9% as a  percentage  of sales  primarily  because  of the  Company's
increased ability to absorb fixed costs as a result of higher sales.

    NET INTEREST INCOME.  Primarily  because of a decrease in the Company's cash
available for short-term investment resulting from the Company's repurchase of
common stock,  net interest  income in the first quarter of fiscal 1998 compared
with the first  quarter of fiscal 1997  decreased  by $115,000  and from 0.6% to
0.3% as a percentage of sales.

         INCOME TAXES.  Primarily  because of the improved  financial results of
the Company's  Hong Kong  subsidiary,  the Company's  first quarter  fiscal 1998
effective  tax rate was  39.0%,  compared  with  40.0% for the first  quarter of
fiscal 1997.

SEASONAL FLUCTUATIONS

         The Company  has  historically  experienced  and expects to continue to
experience  significant  seasonal  fluctuations in its sales and other financial
results that it believes  have  resulted and will  continue to result  primarily
from its  customers'  and users'  buying  patterns.  These buying  patterns have
typically  adversely  affected  orders for the  Company's  products in the third
quarter of each fiscal year.

         Although it is  difficult to predict the future  seasonality  of sales,
the Company  believes that future  seasonality  should be influenced at least in
part  by  customer  and  user  buying  patterns   similar  to  those  that  have
historically affected the Company. Quarterly financial results are also affected
by new product  introductions  and line extensions,  the timing of large orders,
changes  in  product  sales  or  customer  mix,  vendor  and  customer  pricing,
production levels,  supply and manufacturing  delays, large customers' inventory
management and general industry and economic conditions.  The seasonality of the
Company's  financial results and the  unpredictability  of the factors affecting
such  seasonality  make the  Company's  quarterly and yearly  financial  results
difficult to predict and subject to significant fluctuation.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash and cash equivalents at September 30, 1997 decreased
to  $8,080,000  from  $15,550,000  at June 30,  1997.  In the three months ended
September  30, 1997,  net cash of $5,095,000  provided by operating  activities,
offset net cash of $1,253,000 and $11,308,000  used in investing  activities and
financing activities, respectively. Of the $5,095,000 net amount provided by the
Company's  operating   activities,   $4,352,000  was  provided  by  net  income,
$2,063,000  was  provided by an increase in  accounts  payable,  $1,938,000  was
provided by an increase in accrued  expenses,  and $1,719,000 was provided by an
increase in income taxes  payable,  which  amounts were  partially  offset by an
increase of $4,160,000 in inventories and an increase of $1,931,000 in accounts
receivable.  Of the  $1,253,000  net  amount  used  in the  Company's  investing
activities,  $897,000 was used to acquire primarily  machinery and equipment and
secondarily  computer  equipment  and  software and $318,000 was used to acquire
Ultima  Distribution  Inc. Of the  $11,308,000  net amount used in the Company's
financing  activities,  $11,565,000  was used to  repurchase  347,794  shares of
Common Stock from certain  officers and  directors,  which amount was  partially
offset by  $1,178,000  that was  provided by the  issuance of Common  Stock upon
exercise of then-outstanding stock options and warrants.

         Primarily  because of the  Company's  increased  sales of certain dated
products,  the timing of such sales and the  payment  terms  customary  for such
products,  accounts  receivable  (net) at September 30, 1997  increased by 10.5%
from the fiscal 1997  year-end  amount.  Compared  with the  September  30, 1996
amount,  accounts  receivable  (net) increased by 9.5% primarily  because of the
growth  in sales.  The  average  collection  period of  accounts  receivable  at
September  30, 1997 was 47 days,  compared  with 47 and 45 days at June 30, 1997
and September 30, 1996, respectively.

         Inventories  at September  30, 1997  increased by 23.2% from the fiscal
1997  year-end  amount and by 62.1%  compared with the September 30, 1996 amount
primarily  because of continuing  expansion of  distribution of new and recently
introduced products and the Company's anticipated growth in sales.

         At September 30, 1997, Day Runner had no amounts  outstanding under its
primary  $15,000,000  bank  line but had used  the  line to  secure  outstanding
letters of credit of  approximately  $1,000,000,  which reduced the availability
under  the line to  approximately  $14,000,000.  Borrowings  under  this line of
credit bear interest at the  Company's  election at either the bank's prime rate
or at LIBOR plus 1.75%.  Effective  November 1, 1997,  the Company  amended this
credit  agreement  to be due and  payable  on  February  1,  1998,  except  that
commercial  letters  of credit  and  standby  letters of credit may be issued to
expire no later  than  August 1 and May 1,  1998,  respectively.  (See Note 3 to
Consolidated Financial Statements.)

     The  Company's  Canadian line of credit  allows  for  borrowings  of up to
Canadian $1,000,000 (approximately US $784,000). Borrowings bear interest at the
Canadian  bank's prime rate and are due and payable on demand.  Prior to October
17, 1997,  borrowings under the line bore interest at the bank's prime rate plus
0.50%. At September 30, 1997,  approximately Canadian $519,000 (approximately
US $376,000)  was  outstanding  under  this  line  of  credit,  which  reduced
the availability  under  the  line  to  approximately Canadian $481,000
(approximately US $348,000). (See Note 3 to Consolidated Financial Statements.)

        The Company has not incurred  significant  losses or gains from foreign
currency exchange rate fluctuations.  The continuing  expansion of the Company's
international  operations could, however,  result in larger gains or losses as a
result of fluctuations in foreign currency exchange rates as those  subsidiaries
conduct business in whole or in part in foreign currencies.

         The Company believes that cash flow from operations, vendor credit, its
existing  working  capital  and its bank line of credit  will be  sufficient  to
satisfy the Company's anticipated cash requirements at least through the next 12
months.  Nonetheless,  the  Company  may seek  additional  sources of capital as
necessary or appropriate for corporate  finance purposes or to otherwise finance
the Company's growth or operations; however, there can be no assurance that such
funds if needed will be available on favorable terms, if at all.

FORWARD LOOKING STATEMENTS

         With the exception of the actual reported  financial  results and other
historical  information,  the statements made in the Management's Discussion and
Analysis of Financial  Condition and Results of Operations and elsewhere in this
quarterly  report  are  forward  looking   statements  that  involve  risks  and
uncertainties   that  could  affect  actual  future  results.   Such  risks  and
uncertainties  include,  but are not limited to:  timing and size of orders from
large customers, timing and size of orders for new products,  competition, large
customers' inventory management,  general economic conditions, the health of the
retail  environment,  supply constraints,  supplier  performance and other risks
indicated in the Company's filings with the Securities and Exchange Commission.


<PAGE>

PART II --OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

        (a)        Exhibits

           3.1     Certificate of Incorporation of the Registrant, as amended(1)

           3.2     Bylaws of the Registrant, as amended(2)

          10.1     1998 Officer Bonus Plan

          10.2     Form of Stock Purchase Agreement dated August 27, 1997
                   and Schedule of Sellers

          10.3     Form of Warrant  dated  August 19,  1997 to  purchase
                   shares of the  Registrant's  Common  Stock  issued to
                   certain  officers  of the  Company  and  Schedule  of
                   Warrants(3)

          10.4     Credit  Agreement dated as of May 1, 1993 between the
                   Registrant    and   Wells   Fargo   Bank,    National
                   Association,   including  Line  of  Credit   Note(4),
                   Assumption and Consent to Merger  Agreement  dated as
                   of  June  30,  1993(5),  First  Amendment  to  Credit
                   Agreement  dated as of December 15,  1993(5),  Second
                   Amendment  to  Credit  Agreement  dated  as of May 1,
                   1994,   including  Line  of  Credit  Note(6),   Third
                   Amendment to Credit  Agreement dated as of October 1,
                   1994,  including  Line  of  Credit  Note(7),   Fourth
                   Amendment to Credit  Agreement dated as of October 2,
                   1995,  including  Revolving  Line of Credit Note(8) ,
                   Fifth  Amendment  to  Credit  Agreement  dated  as of
                   November 1, 1996,  including Revolving Line of Credit
                   Note (9), Sixth  Amendment to Credit  Agreement dated
                   as of September 1, 1997,  including Revolving Line of
                   Credit  Note(3)  and  Letter  Agreement  dated  as of
                   November 1, 1997

           11.1     Statement of Computation of Earnings per Share

           27.1     Financial Data Schedule

        (b)      Reports on Form 8-K
     
No reports on Form 8-K were filed by the Company  during the quarter  ended
September 30, 1997.


(1)  Incorporated by reference to the Registrant's Transition Report on Form 
     10-K (File No. 0-19835) filed with the Commission on September 27, 1994.
(2)  Incorporated by reference to the Registrant's Current Report on Form 8-K
     (File No. 0-19835) filed with the Commission on August 5, 1993.
(3)  Incorporated  by reference to the  Registrant's  Annual Report on Form 10-K
     (File No.  0-19835)  filed  with the  Commission  on  September  29,  1997.
(4)  Incorporated  by reference  to the  Registrant's  Quarterly  Report on Form
     10-Q (File No. 0-19835) filed with the Commission on August 16, 1993.
(5)  Incorporated  by reference to the Registrant's  Annual Report on  Form 10-K
     (File  No. 0-19835) filed with the  Commission on March 30, 1994.
(6)  Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
     (File  No. 0-19835) filed with the Commission on May 16, 1994.
(7)  Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
     (File  No. 0-19835)filed with the Commission on November 14, 1994.
(8)  Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
     (File  No. 0-19835) filed with the Commission on November 13, 1995.
(9)  Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q
     (File No.  0-19835)filed with the Commission on November 13, 1996.


<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.


                                                     Date:  November 13, 1997
                                Day Runner, Inc.



                                         By:   /s/ MARK A. VIDOVICH
                                               --------------------------
                                                Mark A. Vidovich
                                                Chairman of the Board and
                                                Chief Executive Officer




                                        By:   /s/ DENNIS K. MARQUARDT
                                              --------------------------
                                               Dennis K. Marquardt
                                               Executive Vice President, Finance
                                                 & Administration and
                                                Chief Financial Officer