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

                                 FORM 10-Q

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

   For the quarterly period ended                          July 25, 1998
                                                               
                                       OR

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

   For the transition period from          -      to            -

   Commission File Number 1-6071

                             RYMER FOODS INC.

 Incorporated in the State of Delaware        IRS Employer Identification
                                                    No. 36-1343930

                         4600 South Packers Avenue
                                 Suite 400
                          Chicago, Illinois 60609
                               773/927-7777

   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      

   APPLICABLE ONLY  TO REGISTRANTS  INVOLVED IN  BANKRUPTCY  PROCEEDINGS
   DURING THE PRECEDING FIVE YEARS:

   Indicate by check mark whether the registrant has filed all documents
   and reports required to be  filed by Section 12,  13 or 15(d) of  the
   Securities Exchange Act  of 1934  subsequent to  the distribution  of
   securities under a plan confirmed by a court.

                          Yes   X        No      

   Registrant had 4,300,000  shares of  common stock  outstanding as  of
   September 2, 1998.

                     This report consists of 12 pages.

                                    1.
<PAGE>
<TABLE>
                      PART I - FINANCIAL INFORMATION
                                (Unaudited)
   ITEM 1.  Financial Statements

                     RYMER FOODS INC. AND SUBSIDIARIES
                        Consolidated Balance Sheets


                                                                       
                                                July 25,    October 25,
                                                  1998         1997   
                                                     (in thousands)

   <S>                                          <C>         <C>
                       ASSETS
   Current Assets:
     Receivables, net                           $  1,893    $  1,406
     Inventories                                   3,194       4,304
     Other                                           285         193
        Total Current Assets                       5,372       5,903

   Property, Plant and Equipment:
     Leasehold improvements                          965         958
     Machinery and equipment                         839         811
                                                   1,804       1,769
     Less accumulated depreciation
      and amortization                               451          44
                                                   1,353       1,725
   Other:
     Assets held for sale or lease                  -            800
     Other                                           125          43
                                                $  6,850    $  8,471

             LIABILITIES AND STOCKHOLDERS' EQUITY

   Current Liabilities:
     Bank borrowings                            $  1,577    $  1,394
     Accounts payable                                476         368
     Accrued liabilities                           1,320       1,669
        Total Current Liabilities                  3,373       3,431

   Deferred Employee Benefits                        128         130
                                                   3,501       3,561
   Commitments and Contingencies

   Stockholders' Equity:
     Common stock, $0.04 par - 20,000,000 shares
      authorized; 4,300,000 shares outstanding       172         172
     Additional paid-in capital                    4,851       4,851
     Accumulated deficit                         ( 1,674)    (   113)
        Total Stockholders' Equity                 3,349       4,910
                                                $  6,850    $  8,471

   See accompanying notes.
                                    2.
</TABLE>
<PAGE>
<TABLE>
                     RYMER FOODS INC. AND SUBSIDIARIES
                   Consolidated Statements of Operations
                                (Unaudited)


                                                                   
                             Thirteen Weeks Ended   Thirty-Nine Weeks Ended
                                       Predecessor          Predecessor
                                        Company               Company      
                             July 25,   July 26,    July 25,  July 26,
                               1998       1997        1998      1997  
                               (in thousands except per share data)

   <S>                        <C>       <C>         <C>       <C>
   Net sales                  $ 8,265   $ 8,295     $ 21,794  $ 26,011
   Cost of sales                7,522     7,849       20,422    23,807

   Gross profit                   743       446        1,372     2,204

   Selling, general and
    administrative expenses       920     1,047        2,848     3,247
   Restructuring Costs            -         672          -         672 
          

    Operating loss               (177)   (1,273)      (1,476)   (1,715)

   Interest expense                53       695          136     2,284
   Other income                    (4)     -             (51)      (18)

   Net loss                   $  (226)  $(1,968)    $ (1,561) $ (3,981)

   Per common share data:

    Basic:

     Net loss                 $ (0.05)  $   *       $ (0.36)  $   *  


    Diluted:

    Net loss                 $  (0.05)  $   *       $  (0.36) $   *   

   * Earnings per share as it relates to the predecessor company is  not
   meaningful due to the Company's reorganization.

   See accompanying notes.
                                    3.
</TABLE>
<PAGE>
<TABLE>

                     RYMER FOODS INC. AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                                (Unaudited)

                                                                       
                                                  Thirty-Nine Weeks Ended  
                                                               Predecessor
                                                                 Company
                                                July 25, 1998  July 26, 1997
                                                       (in thousands)
   <S>                                               <C>       <C>
   CASH FLOWS FROM OPERATIONS
     Loss from continuing operations                 $(1,561)  $ (3,981)
     Non-cash adjustments to loss:
       Depreciation and amortization                     407        498
       Amortization of other assets                      -           58
       Provision for bad debts                            45         90
     Payment-in-kind interest on Senior Notes            -          523
     Net (increase) decrease to accounts receivable     (532)     1,012
     Net decrease (increase) to inventories            1,110     (1,324)
     Net (increase) to other current and
       long-term assets                                 (174)       (52)
     Net (decrease) increase to accounts
      payable and accrued expenses                      (223)     1,629
     Net cash flows from operating activities of
      continuing operations                             (928)    (1,547)
     Net cash flows from operating activities of
      discontinued operations                           (131)      (184)
      Net cash flows from operating activities        (1,059)    (1,731)

   CASH FLOWS FROM INVESTING ACTIVITIES
     Capital expenditures                                (36)      (456)
     Repayment on Note from the sale
      of Rymer Seafood                                   -          950
     Proceeds from the sale of Plant City                800        - 
     Other                                               -          (20)
     Net cash flows from investing activities            765        474

   CASH FLOWS FROM FINANCING ACTIVITIES
     Change in cash overdraft                            111       (226)
     Repayments under line-of-credit facility        (24,878)   (21,761)
     Borrowings under line-of-credit facility         25,061     23,244 
     Net cash flows from financing activities            294      1,257

   Net change in cash and cash equivalents               -          -   
   Cash and cash equivalents at beginning of year        -          -   
   Cash and cash equivalents at end of third quarter $   -     $    -   
   Supplemental cash flow information:
     Interest paid                                   $    53   $     79
     Income taxes paid, net of refunds               $   -     $     10

   See accompanying notes.
                                    4.
</TABLE>
<PAGE>
                     RYMER FOODS INC. AND SUBSIDIARIES
                Notes to Consolidated Financial Statements

   1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        The accompanying  unaudited  consolidated  financial  statements
        have been prepared in accordance  with the instructions to  Form
        10-Q and therefore do not include all information and  footnotes
        necessary for a fair presentation of financial position, results
        of operations,  and  cash  flows in  conformity  with  generally
        accepted accounting principles.  The year-end balance sheet data
        was derived  from audited  financial  statements, but  does  not
        include  all   disclosures   required  by   generally   accepted
        accounting principles.   The Company operates  on a fiscal  year
        which ends on the last Saturday  in October.  References in  the
        following notes to years and  quarters are references to  fiscal
        years and fiscal  quarters.  For  further information, refer  to
        the Consolidated  Financial  Statements  and  footnotes  thereto
        included in Rymer Foods Inc.'s (the Company's or Rymer's) Annual
        Report on Form 10-K for the fiscal year ended October 25, 1997.

        In  accordance  with  the  AICPA  Statement  of  Position  90-7,
        Financial Reporting  by  Entities in  Reorganization  Under  the
        Bankruptcy Code, the Company adopted fresh-start reporting as of
        September 20, 1997.  In accordance with fresh-start  accounting,
        the gain  on discharge  of debt  resulting from  the  bankruptcy
        proceedings was reflected on the predecessor Company's financial
        statements  for  the  period  ended  September  20,  1997.    In
        addition, the accumulated deficit of the predecessor Company  at
        September 20, 1997, was eliminated,  and at September 21,  1997,
        the reorganized  Company's  financial  statements  reflected  no
        beginning retained  earnings  or  deficit.    In  addition,  the
        Company's capital structure  was recast in  conformity with  its
        approved Plan.

        Because  of  the  application  of  fresh-start  reporting,   the
        financial statements for  the periods  after the  reorganization
        are not comparable  in any respect  to the financial  statements
        for the periods prior to reorganization.

        In management's opinion,  the consolidated financial  statements
        include all  normal  recurring  adjustments  which  the  Company
        considers necessary for a fair  presentation of the results  for
        the period.  Operating results  for the fiscal period  presented
        are not  necessarily  indicative  of the  results  that  may  be
        expected for the entire fiscal year.

   2.   GOING CONCERN

        The accompanying  consolidated  financial statements  have  been
        prepared assuming the Company will continue as a going concern.

        In the fiscal year  1997, the Company reported  a net loss  from
        continuing operations  of  $4.9  million, the  fifth  loss  from
        continuing operations before extraordinary item in the last  six
        years.
<PAGE>
        These conditions  raise substantial  doubt about  the  Company's
        ability to  continue operating  as a  going concern.   The  1998
        consolidated financial statements do not include any adjustments
        that might result from the outcome of these uncertainties.

        Management  believes  that  the  Company's  future  success   is
        dependent upon reversing its sales decline and on the  continual
        containment of  operating  costs.   The  Company continues  to  
        pursue new sales opportunities  while controlling its  operating
        costs.

   3.   INVENTORIES
        Inventories are  stated principally  at the  lower of  first-in,
        first-out cost or  market.   The composition  of inventories  at
        July 25, 1998 and October 25, 1997 was (in thousands):

                                                                      
                             July 25, 1998   October 25, 1997
        Raw material             $ 1,546         $ 2,651
        Finished goods             1,648           1,653
             Total               $ 3,194         $ 4,304

   4.   BORROWINGS
        Long-term debt consists of the following (in thousands):

                                                July 25,  October 25,
                                                  1998       1997    
             Banks, with interest of 2%        
              over prime in 1998 and 1 1/2%      $ 1,577  $ 1,394
                   over prime in 1997

             Other                                  -        -  
                                                   1,577    1,394
             Less amounts classified as current    1,577    1,394
                                                 $   -    $   -   

        The prime rate applicable to the Company's outstanding bank note
        payable was 8.5% at both July 25, 1998 and October 25, 1997.

        The Company's Rymer  Meat subsidiary had  total lines of  credit
        available of $2.6 million at July  25, 1998 and $2.4 million  at
        October 25,  1997,  of  which  $1.1  million  and  $1.0  million
        respectively, was unused.

        On April 23, 1998, the Company entered into a new loan agreement
        with FINOVA Capital Corporation.   The new agreement provides  a
        credit facility of  up to $4  million for the  Company based  on
        borrowing base  availability calculations.   The  new  agreement
        replaces the credit facility previously outstanding with LaSalle
        National Bank.   The  FINOVA credit  agreement contains  certain
        restrictive covenants  which,  among  other  things,  limit  the
        amount of indebtedness that can be  incurred by the Company  and
        requires the maintenance  of certain financial  ratios.   During
        the quarter ending  July 25, 1998,  the Company  was in  default
        under certain covenants.  FINOVA has  agreed to waive the  event
        of default as of July 25, 1998.
<PAGE>
        Substantially all of the Company's property, plant and equipment
        and current assets are pledged as collateral under the new  loan
        agreement

   5.   INCOME TAXES
        The Company provides  for income  taxes in  accordance with  the
        provisions of Statement  of Financial  Accounting Standards  No.
        109, "Accounting for  Income Taxes" (SFAS  109).  The  Company's
        deferred tax asset  is related primarily  to its operating  loss
        carryforward for tax reporting purposes which approximated $18.0
        million at July   25, 1998  and October 25,  1997.  The  Company
        recorded a valuation allowance amounting to the entire  deferred
        tax asset balance because the Company's financial condition, its
        lack of a history  of consistent earnings, possible  limitations
        on the use of carryforwards, and the expiration dates of certain
        of the net operating loss carryforwards give rise to uncertainty
        as to whether the deferred tax asset is realizable.

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

   Cautionary Statement
   The statements  in  this Form  10-Q,  included in  this  Management's
   Discussion and  Analysis, that  are forward  looking are  based  upon
   current   expectations  and  actual  results may  differ  materially.
   Therefore, the inclusion of  such forward looking information  should
   not  be  regarded  as  a  representation  by  the  Company  that  the
   objectives or plans of the Company will be achieved.  Such statements
   include, but are not limited to, the Company's expectations regarding
   the operations  and  financial condition  of  the Company.    Forward
   looking statements  contained  in this  Form  10-Q included  in  this
   Management's Discussion  and  Analysis  involve  numerous  risks  and
   uncertainties that could  cause actual results  to differ  materially
   including, but  not  limited  to,  the  effect  of  changing  general
   economic conditions,  business  conditions  and demand  in  the  meat
   industry, the Company's ability to maintain its lending arrangements,
   or if necessary, access  external sources of  capital.  In  addition,
   the Company's future  results of operations  and financial  condition
   may be adversely impacted by various factors primarily, the level  of
   the Company's sales.  Certain of  these factors are described in  the
   description of  the  Company's  business,  operations  and  financial
   condition contained  in  this Form  10-Q.   Assumptions  relating  to
   budgeting,  marketing,  product  development  and  other   management
   decisions are subjective  in many  respects and  thus susceptible  to
   interpretations and periodic revisions based on actual experience and
   business developments, the impact of which  may cause the Company  to
   alter its marketing, capital expenditure or other budgets, which  may
   in turn  affect  the  Company's financial  position  and  results  of
   operations.

   General
   The Company's consolidated results  from operations are generated  by
   its meat processing operation.  The Company's common stock  currently
   trades under the symbol RFDS on the over-the-counter bulletin board.
<PAGE>
   First Three Quarters of 1998 versus First Three Quarters of 1997
   Consolidated sales  for the  first three  quarters of  1998 of  $21.8
   million decreased  from the  first three  quarters  of 1997  by  $4.2
   million or 16%.  Sales decreased primarily due to lower sales  volume
   as a  result  of increased  competition  and overall  lower  consumer
   consumption in the Company's market segments.

   As compared to  1997, consolidated cost  of sales  decreased by  $3.4
   million or 14%.  As a percentage of sales, the gross margin decreased
   to 6.3% as  compared to 8.5%  in 1997 due  mainly to  the decline  in
   sales.

   The Company's hourly work force has declined by approximately 16%  at
   the end of the first three quarters of 1998 versus 1997.

   Selling, general and administrative expenses decreased by $399,000 or
   12.3% in 1998 as compared to 1997.  Administrative expenses decreased
   by $608,000.   Reductions  in salaries  and related  expenses due  to
   headcount reductions contributed  to the majority  of the decrease.  
   Selling expenses  increased by  $209,000 primarily  due to  increased
   marketing expenditures and additions to the Company's sales force.

   Interest Expense
   Interest expense  decreased by  $2.1 million  or 94%  as compared  to
   1997.  This decrease is due  to the Company's eliminating its  Senior
   Notes.  During the first three quarters of 1997, the Company incurred
   Senior Note interest of  $2.1 million.  No  Senior Note interest  was
   recorded during 1998 as the Notes  were converted into equity  during
   the Company's Chapter 11 restructuring.

   Income Taxes
   In both 1998 and 1997, no provision for income taxes was recorded due
   to the loss from continuing operations.

   Third Quarter of 1998 versus Third Quarter of 1997
   Consolidated sales  for the  third quarter  of 1998  of $8.3  million
   equalled those from the third quarter of 1997.

   As compared to  1997, consolidated cost  of sales  decreased by  $0.3
   million or  4.2%.    As  a percentage  of  sales,  the  gross  margin
   increased to  9.0%  as  compared  to  5.4%  in  1997  due  mainly  to
   operational efficiencies.

   Selling, general and administrative expenses decreased by $127,000 or
   12.1% as  compared to  1997.   Administrative expenses  decreased  by
   $262,000 due to headcount reductions  versus 1997.  Selling  expenses
   increased  by   $135,000  primarily   due  to   increased   marketing
   expenditures and additions to the Company's sales force.

   Interest Expense
   Interest expense decreased by $642,000 or 92.4% as compared to  1997.
   This  decrease is due  to the Company's  restructuring of its  Senior
   Notes.  During the third quarter of 1997, the Company incurred Senior
   Note interest of $0.6  million.  No senior  note was recorded  during
   1998 as the Notes were converted into equity during the
   Company's restructuring.
<PAGE>
   Income Taxes
   In both 1998 and 1997, no provision for income taxes was recorded due
   to the loss from continuing operations.

   Liquidity and Capital Resources
   The Company makes sales  primarily on a seven  to thirty day  balance
   due basis.   Purchases from  suppliers have  payment terms  generally
   ranging from wire transfer at time of shipment to fourteen days.

   On April 23, 1998, the Company entered into a new loan agreement with
   FINOVA Capital  Corporation.   The new  agreement provides  a  credit
   facility of up to $4 million for the Company based on borrowing  base
   availability calculations.   The  new agreement  replaces the  credit
   facility  previously  outstanding  with  LaSalle  National Bank.  The
   FINOVA   credit  agreement  contains  certain  restrictive  covenants
   which, among other things, limit the amount of indebtedness that  can
   be incurred by the  Company and requires  the maintenance of  certain
   financial ratios.   During  the quarter  ending  July 25,  1998,  the
   Company was in default under certain covenants.  FINOVA has agreed to
   waive the event of default as of July 25, 1998.

   As discussed  in Note  2 to  the Consolidated  Financial  Statements,
   there is substantial doubt about the Company's ability to continue as
   a going concern.

   The Company had total  lines of credit available  of $2.6 million  at
   July 25, 1998  and $2.4 million  at October 25,  1997, of which  $1.1
   million and $1.0 million, respectively, was unused.

   The Company anticipates spending  approximately $300,000 for  capital
   expenditures in 1998.   The  expenditures are  primarily for  planned
   improvements  at  the  Meat  operation.     There  are  no   specific
   commitments outstanding related to these planned expenditures.   Such
   capital expenditures  will  be  financed with  cash  from  operations
   and/or bank borrowings.

   The Company's main  computer system  and software  are not  currently
   Year 2000 compliant.  The Year  2000 issue is the result of  computer
   programs being written using  two digits rather  than four to  define
   the applicable year.   Any of  the Company's  computer programs  that
   have date sensitive software may recognize  a date using "00" as  the
   year 1900 rather than the year 2000.   This could result in a  system
   failure  or  miscalculations   causing  disruptions  of   operations,
   including, but  not  limited to,  a  temporary inability  to  process
   transactions, invoices or other similar normal business activities.

   Based on a recent assessment, the Company has determined that it will
   need to modify  a significant  portion of  its software  so that  its
   computer system will properly utilize data beyond December 31,  1999.
   The  Company plans on completing its  Year 2000 modifications by  the
   end of its fourth quarter of fiscal 1998 utilizing internal resources
   for all  program  changes.    As  a  result,  the  Company  does  not
   anticipate any  material  costs to  complete  its Year  2000  program
   modifications.
<PAGE>
   Seasonality
   The quarterly  results  of  the  Company  are  affected  by  seasonal
   factors.  Sales are usually lower in the fall and winter.

   Impact of Inflation
   Raw materials are  subject to fluctuations  in price.   However,  the
   Company does not  expect such fluctuations  to materially impact  its
   competitive position.



<PAGE>

                   RYMER FOODS INC. AND SUBSIDIARIES
                      PART II - OTHER INFORMATION


    Item 6.    Exhibits and Reports on Form 8-K

      (a)    Exhibits filed:

      11     Computations  of earnings  per  share  are
             included in  the Notes to Condensed  Consolidated          
             Financial Statements included in Item 1 of this Form 10-Q.

             Exhibits incorporated by reference:

      13.1   Annual Report on  Form 10-K of Rymer  Foods
             Inc. for  the fiscal year ended  October 25, 1997          
             (incorporated by reference).


      21.1   Subsidiaries of the Company.  (Incorporated by
             reference to Exhibit 22 to the Annual Report of
             Form 10-K of Rymer Foods Inc. for the fiscal year
             ended October 25, 1997.)

      27      Financial Data Schedule (EDGAR filing)

      (b)     Reports on Form 8-K:

               None

<PAGE>

                           RYMER FOODS INC.
                               SIGNATURE


    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.

                                                    RYMER FOODS INC.
                                                    (Registrant)


                                    By  /s/  Edward M. Hebert       
                                       Edward M. Hebert, Senior Vice
                                       President, Chief Financial
                                       Officer and Treasurer

    Date:  September 8, 1998