U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB


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

                 For the quarterly period ended October 31, 1998


[   ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from _______________ to ____________________

                         Commission file number 1-14244


                         GLAS-AIRE INDUSTRIES GROUP LTD.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


           NEVADA                                                 84-1214736
 ------------------------------                              -------------------
(State or other jurisdiction of                                 (IRS Employer
incorporation  or  organization)                             Identification No.)


                 3137 GRANDVIEW HIGHWAY, VANCOUVER, B.C. V5M 2E9
                 -----------------------------------------------
                     (Address of principal executive office)

                                 (604) 435-8801
                            --------------------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has  been  subject  to such  filing  requirements  for the  past  90  days.
                             Yes    X       No
                                 -------       -------

Number of shares outstanding of the issuer's Common Stock:

           Class                                 Outstanding at October 31, 1998
-----------------------------                    -------------------------------
Common Stock, $0.01 par value                               1,593,469



<PAGE>

                         Glas-Aire Industries Group Ltd.

                                      INDEX
                                      -----


                                                                            Page
                                                                            ----
PART I.       FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Condensed Balance Sheets -
                October 31, 1998 and January 31, 1997                         1

              Consolidated Condensed Statement of Operations
                for the three months ended October 31, 1998 and 1997,
                and for the nine months ended October 31, 1998 and 1997       2

              Consolidated Condensed Statement of Cash Flow 
                for the three months ended October 31, 1998 and 1997
                and for the nine months ended October 31, 1998 and 1997       3

              Notes to Consolidated Condensed Financial Statements          4-5

     Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations               6-8

PART II.      OTHER INFORMATION

     Item 6.  Exhibits and Reports on Form 8-K                                9


SIGNATURES                                                                    9

                                      -ii-
<PAGE>

                                              

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------
                         Glas Aire Industries Group Ltd.
                      Consolidated Condensed Balance Sheet

                                                     October 31,     January 31,
                                                        1998            1998
                                                     (Unaudited)      (Audited)
                                                     -----------      ---------
Assets

Current
     Cash and Equivalents                            $ 2,213,808    $ 1,645,953
     Accounts receivable                               1,125,430      1,200,451
     Inventories                                         640,121        772,780
     Prepaid Expenses                                     16,939         19,095
                                                     -----------    -----------
                                                       3,996,298      3,638,279
Fixed assets                                           1,553,360      1,408,816
                                                     -----------    -----------
                                                     $ 5,549,658    $ 5,047,095
                                                     ===========    ===========

Liabilities and Shareholders' Equity

Current
     Bank indebtedness                               $      --      $      --
     Accounts Payable and accrued liabilities            617,476        460,680
     Incomes taxes payable                                99,621         92,464
     Current portion - capital lease                      45,130           --
                                                     -----------    -----------
                                                         762,227        553,144
Long Term Debt
Obligation Under Capital Lease                            74,852           --
Deferred Income Taxes                                    281,327        281,327
                                                     -----------    -----------
                                                       1,118,406        834,471
                                                     -----------    -----------
Shareholders' Equity
     Share capital                                        15,875         15,875
     Contributed surplus                               3,462,334      3,462,334
     Treasury stock                                     (294,705)      (235,163)
     Retained earnings                                 1,409,170      1,045,962
     Cumulative translation adjustment                  (161,422)       (75,384)
                                                     -----------    -----------
                                                       4,431,252      4,212,624
                                                     -----------    -----------
                                                     $ 5,549,658    $ 5,047,095
                                                     ===========    ===========


                                       1
<PAGE>
<TABLE>
<CAPTION>


                                            Glas Aire Industries Group Ltd.
                                   Consolidated Condensed Statement of Operations
                                                     (Unaudited)


                                                   Three Months Ended                      Nine Months Ended
                                             October 31,         October 31,         October 31,         October 31,
                                                 1998               1997                1998                1997
                                             -----------         -----------         -----------         -----------

<S>                                          <C>                 <C>                 <C>                 <C>        
Sales                                        $ 1,909,250         $ 1,899,446         $ 4,763,578         $ 4,882,063
Cost of sales                                  1,241,307           1,365,662           3,153,330           3,418,431
                                             -----------         -----------         -----------         -----------
Gross profit                                     667,943             533,784           1,610,248           1,463,632
                                             -----------         -----------         -----------         -----------
Expenses
     Depreciation                                 47,464              44,039             138,440             119,298
     Research and development                    117,516              90,035             303,488             310,714
     Selling and distribution                    104,634             107,505             279,033             306,014
     General and administrative                  123,243             127,121             327,325             354,924
     Provision for profit sharing                 29,101              16,655              60,651              43,200
     Interest                                    (22,362)            (17,494)            (49,701)            (59,268)
                                             -----------         -----------         -----------         -----------
                                                 399,596             367,861           1,059,236           1,074,882
                                             -----------         -----------         -----------         -----------
Income from operations                           268,347             165,923             551,012             388,750
Income taxes - current                           102,967              63,643             187,806             136,062
Income taxes - deferred                             --                  --                  --                  --   
                                             -----------         -----------         -----------         -----------
Net Income (loss) for the period             $   165,380         $   102,280         $   363,206         $   252,688
                                             -----------         -----------         -----------         -----------
Net income per share of common stock         $       .11         $       .07         $       .25         $       .17
Weighted average common shares
       outstanding                             1,458,301           1,509,021           1,458,301           1,509,021
                                             -----------         -----------         -----------         -----------



                           See accompanying notes to consolidated financial statements

                                                       2
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                 Glas Aire Industries Group Ltd.
                                          Consolidated Condensed Statement of Cash Flows
                                                         (Unaudited)

                                                                     Three Months Ended                     Nine Months Ended
                                                               October 31,        October 31,        October 31,        October 31,
                                                                   1998              1997                1998               1997
                                                                   ----              ----                ----               ----

Increase (decrease) in cash
Cash flows from:
Operating Activities
<S>                                                            <C>                <C>                <C>                <C>        
     Income from operations                                    $   165,380        $   102,280        $   363,206        $   252,688
     Depreciation                                                   47,464             44,039            138,440            119,298
     Deferred income taxes                                                             (3,916)                               (8,174)
     Net change in non-cash working capital                         47,567            394,000            373,790             21,996
     Cumulative translation adjustment                             (54,952)           (19,026)           (86,037)           (34,840)
                                                               -----------        -----------        -----------        -----------
        Net cash (used in) operating activities                    205,459            517,377            789,399            350,968
                                                               -----------        -----------        -----------        -----------

Financing Activities
     Increase in obligation under capital lease                                          --              161,569               --
     Repayment of capital lease                                    (15,811)              --              (41,588)              --
     Purchase of treasury stock                                    (46,354)              --              (58,542)           (88,687)
     Share offering expenses                                                             --                                    --
     Increase (decrease) in bank indebtedness                                        (279,373)                             (110,100)
     Common stock                      
                                                               -----------        -----------        -----------        -----------
        Net cash (used in) financing activities                    (62,165)          (279,373)            61,439           (198,787)
                                                               -----------        -----------        -----------        -----------

Investing Activities
     Proceeds from sale of fixed assets                                                                                      15,340
     Purchase of capital assets                                      8,960              8,841           (282,983)          (416,291)
     Deferred development costs
                                                               -----------        -----------        -----------        -----------
     Net cash used in investing activities                           8,960              8,841           (282,983)          (400,951)
                                                               -----------        -----------        -----------        -----------

Decrease in cash during the period                                 152,254            246,845            567,855           (248,770)

Cash and equivalents, beginning of period                        2,061,554          1,624,317          1,645,953          2,119,932
                                                               -----------        -----------        -----------        -----------

Cash and equivalents, end of period                            $ 2,213,808        $ 1,871,162        $ 2,213,808        $ 1,871,162
                                                               -----------        -----------        -----------        -----------

Changes in non-cash working capital
     Accounts receivable                                       $   (43,993)       $   217,722        $    75,021        $  (164,328)
     Inventories                                                   (13,061)           144,316            132,659            (58,408)
     Prepaid expense                                                18,502             10,734              2,157            126,609
     Accounts payable and accrued liabilities                       58,161            (32,165)           156,796             43,495
     Income taxes payable                                           27,958             53,393              7,157             74,628
                                                               -----------        -----------        -----------        -----------
                                                               $    47,567        $   394,000        $   373,790        $    21,996
                                                               ===========        ===========        ===========        ===========



                                                       See accompanying notes

                                                                 3
</TABLE>

<PAGE>
                                                


                         Glas Aire Industries Group Ltd.
               Notes to Consolidated Condensed Financing Statement

                                October 31, 1998

1.   In the opinion of management,  the  accompanying  unaudited,  consolidated,
     condensed financial statements contain all adjustments  (consisting of only
     those  which are normal and  recurring  in nature)  necessary  to  present,
     fairly,  the  financial  position of the Company as of October 31, 1998 and
     the results of  operations  as well as cash flows for the  three-month  and
     nine-month periods ended October 31, 1998 and 1997.

2.   These  financial  statements  include  the  accounts of the company and its
     wholly-owned  subsidiaries,  Multicorp Holdings Inc.,  Glas-Aire Industries
     Ltd.,  Glas-Aire  Industries,  Inc., and 326362 B.C. Ltd. All inter-company
     transactions have been eliminated.

     These financial statements have been prepared in accordance with accounting
     principles   generally   accepted  in  the  United   States.   For  further
     information,  refer to the Company's  consolidated financial statements for
     the fiscal year ended  January 31, 1998 and footnotes  thereto  included in
     the  Company's  Annual Report on Form 10-KSB for the year ended January 31,
     1998, filed with the Securities and Exchange Commission.

3.   Certain  comparative  figures from the prior year have been reclassified to
     conform with the current year's presentation.

4.   Inventories by component are as follows:

                                                 October 31,         October 31,
                                                    1998                1997
                                                    ----                ----
     Raw materials                                $386,959            $410,018
     Work-in-progress                               71,875             159,458
     Finished goods                                158,443              97,951
     Supplies                                       22,844              19,404
                                                  --------            --------
                                                  $640,121            $686,831
                                                  --------            --------

5.   Bank Indebtedness

                                                 October 31,         October 31,
                                                    1998                1997
                                                    ----                ----
     Revolving bank loan                          $      0            $      0

     The revolving bank loan is a Cdn. $1,000,000  overdraft facility,  which is
     due on demand  and bears  interest  at  Canadian  bank  prime  rates (6.5 %
     January 31, 1998,  7 % October 31, 1998) plus 1/2%.  This line of credit is
     renewable annually.

     The following have been provided as collateral for these loans:

     (a)  general assignments of accounts receivable and inventories.

     (b)  a Cdn.  $2,000,000  demand debenture  granting a first fixed charge on
          certain  equipment and a floating  charge over all other assets of the
          Company.

     (c)  an unlimited  guarantee by the Company and its  subsidiary,  Glas-Aire
          Industries Ltd.

                                       4
<PAGE>


6.   Income  (loss) per share is  calculated  by dividing the  weighted  average
     number of shares of Common  Stock  outstanding  each period into the income
     (loss) for the period.  Warrants  outstanding were anti-dilutive.  Treasury
     stock  held  by  the  Company  is not  included  in the  number  of  shares
     outstanding

7.   On May 2, 1996, the Company issued 680,000 shares of its common stock in an
     underwritten  public  offering.  As a result,  the  Company  had a total of
     1,593,469  shares of its Common Stock issued and outstanding at October 31,
     1998.



                                       5
<PAGE>


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

Three Months Ended October 31, 1998 vs Three Months Ended October 31, 1997

     The Company's  sales  increased by 0.52% to $1,909,250 for the three months
ended  October 31,  1998,  compared to  $1,899,446  for the three  months  ended
October 31, 1997. This increase was due primarily to (i) new sales of $65,000 or
3.4%  generated by new  customers,  (ii) a decrease in sales of $75,000 or 3.92%
due  to  an  interruption  in  the  manufacture  of a  high  volume  product  to
accommodate a major design change requested by the Company's  largest  customer,
(iii) a  temporary  shortage  of  acrylic in  October  because of an  unforeseen
capacity problem experienced by one of Company's suppliers.

     Cost of sales for the three  months ended  October 31,  1998,  decreased by
9.11% to $1,241,307 from $1,365,662 for the three months ended October 31, 1997.
This  decrease  resulted  from (i) a decline in  materials  cost of 4.12% due to
usage of raw materials  remaining  from the previous  year,  (ii) a reduction in
direct  labor and  overhead  charges by 0.79%,  (iii) a reduction  in repair and
maintenance and lower freight cost of 1.75%, and (iv) a gain in foreign exchange
by 2.45%.  This yielded a gross profit  margin of 34.98%,  an  improvement  from
28.1% for the three month period ended October 31, 1997.

     Depreciation  expense  increased by 7.78% from $44,039 for the three months
ended  October 31, 1997, to $47,464 for the three months ended October 31, 1998.
This increase was the result of adding new equipment into service.

     Expenses for research and development  increased by 30.52% from $90,035 for
the three months ended  October 31, 1997, to $117,516 for the three months ended
October  31,  1998.  This  increase  was due to (i) an increase of 11.13% in the
number of engineering personnel conducting in-house activities, (ii) an increase
of 11.49% in usage of outside contractors to accommodate an increase in research
and  development  activities,  (iii) an increase  of 7.9% in travel  expenses to
Japan which were deferred from the previous quarter.

     Selling and distribution  expenses decreased by 2.67% from $107,505 for the
three  months  ended  October 31, 1997 to $104,634  for the three  months  ended
October 31, 1998.  This decrease was  primarily due to (i) decreased  travel and
promotional  expenses related to the Company's marketing efforts (these expenses
are deferred to November  1998) and (ii) an increase in commission  expenses due
to an increase in sales.

     General and  administrative  expenses  decreased by 3.05% from $127,121 for
the three months ended  October 31, 1997, to $123,243 for the three months ended
October 31, 1998, as a result of an increase of 7% in consulting fees and travel
expenses  related to the Company's  evaluation.  Excluding these  expenses,  the
general and  administrative  expenses were actually lower by 10.5% from the same
period in 1997, a result of (i) a decrease in the number of persons  employed in
administration by 12.8% and (ii) additional maintenance support fees paid to the
EDI program as required by our major customers.

     Provision for profit  sharing  increased  from $16,655 for the three months
ended  October 31, 1997, to $29,101 for the three months ended October 31, 1998,
as a result of the increase in profit.

                                       6
<PAGE>


     Interest income (net of interest expense)  increased by 27.83% from $17,494
for the three  months ended  October 31,  1997,  to $22,362 for the three months
ended October 31, 1998.  The Company had more cash on deposit  earning  interest
during the period, which offset the increase of approximately $2,690 in interest
expenses from the lease cost of the CNC MILLING Machine Centre,  resulting in an
overall increase in interest income.

     The Company's income from operations increased 61.73% from $165,923 for the
three  months  ended  October 31,  1997,  to $268,347 for the three months ended
October 31, 1998. This increase in income resulted  primarily from lower cost of
sales and savings on operating costs.

     The Company  accrued  income  taxes of $63,643 for the three  months  ended
October 31, 1997,  to $102,967 for the three months ended October 31, 1998, as a
result of the increase in taxable income.

     As a result of the foregoing, net income increased 61.69% from $102,280 for
the three months ended  October 31, 1997, to $165,380 for the three months ended
October 31, 1998.

Nine Months Ended October 31, 1998 vs Nine Months Ended October 31, 1997

     The Company's  sales  decreased by 2.43% to $4,763,578  for the nine months
ended October 31, 1998, compared to $4,882,063 for the nine months ended October
31, 1997. This decrease was due (i) primarily to a general decline in automotive
sales,  particularly to non-U.S. based manufacturers during the first quarter of
1998,  (ii) an  interruption  in the  manufacture  of a high  volume  product to
accommodate a major design change  requested by the Company's  largest  customer
and (iii) a temporary  shortage of acrylic in October  because of an  unforeseen
capacity problem experienced by one of Company's suppliers.

     Cost of sales for the nine months  ended  October 31,  1998,  decreased  by
7.76% to $3,153,330  from $3,418,431 for the nine months ended October 31, 1997.
This improvement  resulted from (i) a decrease in materials cost of 3.12% due to
usage of raw  materials  remaining  from the previous  year,  (ii) a decrease in
direct labor and overhead charges of 1.17%, (iii) a decrease of 1.45% on freight
and deliveries,  and (iv) a gain on foreign exchange of approximately 2.02%. The
gross  profit  margin  increased  by 3.82% to 33.8%  for the nine  months  ended
October 31, 1998, from 29.98% for the nine month period ended October 31, 1997.

     Depreciation  expense increased by 16.05% from $119,298 for the nine months
ended  October 31, 1997, to $138,440 for the nine months ended October 31, 1998.
This increase was the result of adding new equipment into service.

     Expenses for research and development  decreased by 2.33% from $310,714 for
the nine months ended  October 31,  1997,  to $303,488 for the nine months ended
October 31, 1998.  This decrease was due to (1) the inclusion of technology  fee
of  $24,570  in the  previous  year by 7.9%,  (ii) an  increase  of 1.74% in the
numbers of engineering  personnel  conducting  in-house  activities and (iii) an
increase of 2.83% in usage of outside  contractors to accommodate an increase in
research and development activities.

     Selling and distribution expenses decreased by 8.82%, from $306,014 for the
nine months  ended  October 31,  1997,  to  $279,033  for the nine months  ended
October 31, 1998.  This decrease was  primarily  due to (i) a  combination  of a
reduction in sales commissions of 3.32% in 1998 due to the Company's elimination
of a sales agent,  which  resulted in the direct  involvement  by the  Company's
staff with one of its major  customers,  (ii) a decrease in  warranty  claims of
$12,000,  or 3.92%  relating  to 1996  sales,  and (iii) a decrease  of 3.05% in
travel expenses related to the Company's  marketing efforts deferred to November
1998.

                                       7
<PAGE>


     General and  administrative  expenses  decreased by 7.78% from $354,924 for
the nine months ended  October 31,  1997,  to $327,325 for the nine months ended
October  31,  1998,  as a  result  of (i) an  increase  of  2.8% or  $10,000  in
consulting and travel expenses related to the evaluation of the Company,  (ii) a
decrease in the number of persons employed in administration of 4.53% or $19,600
and  (iii) a gain on  foreign  exchange  of 4.08%  and a  reduction  in  general
administration costs of 1.97%

     Provision for profit  sharing  increased by 40.4% from $43,200 for the nine
months ended  October 31, 1997, to $60,651 for the nine months ended October 31,
1998, as a result of the increase in profit.

     Interest income (net of interest expense)  decreased by 16.14% from $59,268
for the nine months ended October 31, 1997, to $49,701 for the nine months ended
October 31, 1998. This decrease  occurred  primarily because (i) the Company had
more cash on deposit  earning  interest,  resulting  in an increase of 13.72% in
interest income,  (ii) an increase of approximately  12.48% in interest expenses
from the lease cost of the CNC Milling Machine  Centre,  and (iii) the incurring
of interest  penalties of $10,300 or 17.38% related to the PST (Provincial Sales
Tax) audit performed for the years 1992 to 1997.

     The Company's income from operations  increased by 41.74% from $388,750 for
the nine months ended  October 31,  1997,  to $551,012 for the nine months ended
October 31, 1998.  This  increase in income was  primarily due to lower costs of
sales, savings on operating cost and gain on foreign exchange.

     The Company  accrued  income  taxes of $136,062  for the nine months  ended
October 31, 1997, to $187,806 for the nine months ended  October 31, 1998.  This
was the result of the increase in income from higher revenue.

     As a result of the foregoing,  net income increased by 43.74% from $252,688
for the nine months  ended  October 31,  1997,  to $363,206  for the nine months
ended October 31, 1998.

Financial Condition and Liquidity

     Working  capital was  $3,234,071 at October 31, 1998 compared to $3,085,135
at January 31,  1998.  For the nine months  ended  October  31,  1998,  net cash
provided  from  operating  activities  totaled  $789,399  including  income from
operations  of  $363,206,  depreciation  of $138,440,  a cumulative  translation
adjustment  of  $(86,073)  and a net  change  in  non-cash  working  capital  of
$373,790. Net cash used in financing activities was $61,439, which resulted from
an increase in obligation under capital lease of $161,569,  repayment of capital
lease of $41,588 and the repurchase of treasury stock for $58,542. Net cash used
in investing  activities was $282,983,  primarily as a result of the purchase of
capital assets. Over the nine months ended October 31, 1998, changes in non-cash
working  capital  occurred as follows:  (i)  accounts  receivable  decreased  by
$75,021  primarily  due  to  increased  collection  efforts,   (ii)  inventories
decreased by $132,659 as a result of the usage of raw materials  remaining  from
the previous year,  (iii) prepaid  expenses  decreased by $2,157,  (iv) accounts
payable and accrued liabilities increased by $156,796 as a result of deferral of
payment until November,  and (v) income taxes payable increased by $7,157 due to
higher profit. During the next three months the company anticipates making total
capital  expenditures  of  approximately  $85,000 as  follows:  (i)  $30,000 for
machinery  and  equipment,  (ii) $35,000 for leasehold  improvements,  and (iii)
$20,000 for the QS9000 (Quality Control Certification) process.

                                       8
<PAGE>



                                                              3RD QUARTER FILING
                                               FILING DUE DATE DECEMBER 15, 1998



PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

a)   Exhibits: There are no exhibits for the quarter ended October 31, 1998.

b)   Reports  on Form 8-K:  There were no reports on Form 8-K filed for the nine
     months ended October 31, 1998.


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:   December 12, 1998                       GLAS-AIRE INDUSTRIES GROUP LTD.
        -----------------



                                                /s/ Alex Ding
                                                --------------------------------
                                                Alex Ding, President



                                       9