UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549



                                  10-QSB



                Quarterly Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934



FOR QUARTER ENDED      July 31, 1997        COMMISSION FILE NO.  0-8512
                    ------------------                          --------


                            MONARCH AVALON, INC.
------------------------------------------------------------------------
    (Exact name of small business issuer as specified in its charter)


          Delaware                                52-1073628
----------------------------------      -------------------------------
 (State or other jurisdiction of       (IRS Employer Identification No.)
        incorporation)


        4517 Harford Road, Baltimore, Maryland                  21214
------------------------------------------------------        ---------
       (Address of principal executive offices)               (Zip Code)


Issuer's telephone number, including area code           410-254-9200
                                                     -------------------

                              Not applicable
------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.


Check  whether  the issuer (1) has filed all reports required  to  be  filed  by
Section  13 or 15(d) of the Securities Exchange Act of 1934 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 [   ]

As  of  July  31, 1997, the number of shares outstanding of the issuer's  common
stock was 1,619,820 shares.


Transitional Small Business Issue Format (check one): YES [   ] NO [ X ]
<PAGE>
<TABLE>
                       PART I.      FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

                      MONARCH AVALON, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

                                                   (000's Omitted)
<CAPTION>
                                                July 31,    April 30,
                                                  1997        1997
                                               -----------  ----------
<S>                                              <C>          <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                     $1,665       $2,131
   Investments (at lower of cost or market)         148          148
   Accounts receivable, net                       1,097        1,213
   Inventories, net                               2,152        2,070
   Other current assets                             334          134
                                                --------     --------
           TOTAL CURRENT ASSETS                   5,396        5,696

PROPERTY AND EQUIPMENT                            4,553        4,494
   Less allowance for depreciation               (3,934)      (3,921)
                                                --------     --------
                                                    619          573
OTHER ASSETS AND DEFERRED CHARGES                    49           43
                                                --------     --------
TOTAL ASSETS                                     $6,064       $6,312
                                                --------     --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                              $  441       $  459
   Accrued expenses                                 307          281
   Deferred subscription revenues                   617          617
                                                --------     --------
           TOTAL CURRENT LIABILITIES              1,365        1,357

STOCKHOLDERS' EQUITY
   Preferred Stock - par value $.01 per share:
      Authorized 100,000 shares; no shares
      issued
   Common Stock - par value $.25 per share:
      Authorized 3,000,000 shares; shares
      issued - 2,109,985; shares outstanding
      1,619,820 on July 31, 1997 and
      April 30, 1997                               527           527
   Capital surplus                               3,378         3,378
   Retained earnings                               916         1,172
                                               --------      --------
                                                 4,821         5,077
   Treasury stock at par - shares
      outstanding 490,165 on July
      31, 1997 and April 30, 1997                 (122)         (122)
                                               --------      --------
                                                 4,699         4,955
                                               --------      --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $6,064        $6,312
                                               --------      --------
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>

                   MONARCH AVALON, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>
                                             Three Months Ended
                                                  July 31,
                                            ----------------------

                                               1997       1996
                                               ----       ----

                                  (000's omitted, except per share data)

<S>                                          <C>        <C>
Net sales                                    $ 1,628    $ 1,177
Cost of goods sold                             1,178        940
                                             -------    -------
Gross profit                                     450        237

Selling, general and
  administrative expenses                        616        365

Research and development                         113         92
                                             -------    -------
   Operating expenses                            729        457
                                             -------    -------

Loss from operations                            (279)      (220)

Other income, net                                 23         43
                                             -------    -------
Loss before income taxes                        (256)      (177)

Provision for income taxes                         0          0
                                             -------    -------
Net loss                                        (256)      (177)
                                             -------    -------
Loss per share                               $  (.16)   $  (.11)
                                             -------    -------

Weighted average shares
  outstanding                               1,619,820  1,620,170
                                            ---------  ---------
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
                    MONARCH AVALON, INC. AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


<CAPTION>
                                                    Three Months Ended
                                                         July 31,
                                                    ------------------
                                                     1997         1996
                                                     ----         ----
                                                      (000's omitted)

<S>                                                <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss from operations                        $ (256)      $ (177)
                                                   -------      -------
   Adjustments to reconcile net loss
   to net cash provided by operating
   activities:
      Depreciation and amortization                    13           36
      Unrealized loss on investments                    0            0
      Changes in accounts receivable,
       inventories, other assets, accounts
      payable, accrued expenses and
      deferred subscription revenue                  (164)        (132)
                                                   -------      -------
   Net cash used in operating activities             (407)        (273)
                                                   -------      -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment               (59)          (18)
                                                   -------       -------
   Net cash used in investing activities             (59)          (18)
                                                  -------       -------
Net decrease in cash and cash equivalents           (466)         (291)

Cash and cash equivalents at beginning of
   period                                          2,131         1,966
                                                  -------       -------
Cash and cash equivalents at end of period        $1,665        $1,675
                                                  -------       -------

<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
                      MONARCH AVALON, INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE A - BASIS OF PRESENTATION

The  accompanying  unaudited consolidated financial statements  include  Monarch
Avalon,  Inc. ("Monarch") and its wholly-owned subsidiaries, Girls'  Life,  Inc.
and  Creampuffs Inc. (Monarch, Girls' Life Inc. and Creampuffs Inc. collectively
referred  to herein as "the Company") have been prepared in accordance with  the
instructions  to  Form  10-QSB and do not include all  of  the  information  and
disclosures  required by generally accepted accounting principles  for  complete
financial statements.  In the opinion of management, all adjustments (consisting
of  normal  recurring  accruals and charges) considered  necessary  for  a  fair
presentation  have  been included.  All material intercompany  balances  between
Monarch  and its subsidiaries have been eliminated in consolidation.   Operating
results  for the three months ended July 31, 1997 are not necessarily indicative
of  the  results that may be expected for the year ending April 30,  1998.   For
further  information, reference should be made to the financial  statements  and
notes included in the Company's annual report on Form 10-KSB for the fiscal year
ended April 30, 1997.

NOTE B - ACCOUNTS RECEIVABLE

Accounts receivable are net of the following allowances:

                               July 31, 1997          April 30, 1997
                              ---------------        ----------------
                                         (000's Omitted)

Doubtful accounts                 $139                    $139
Customer returns                   194                     194
                                  ----                    ----
                                  $333                    $333
NOTE C - INVENTORIES

For  quarterly  reporting  purposes,  Monarch  values  inventory  using  both
perpetual  records  and  physical  counts,  while  at  year-end  values   are
determined solely on the basis of physical counts.

The major components of inventories consist of the following:

                                July 31,1997        April 30, 1997
                               --------------      ----------------
                                        (000's omitted)

Raw materials                    $  822               $  752
Work in progress                    115                  112
Finished goods                    1,215                1,206
                                 ------               ------
                                 $2,152               $2,070

The  above  components are shown net of lower of cost of market  reserves  of
$350,000  at  July  31,  1997 and April 30, 1997.   The  Company  values  its
inventories at the lower of cost (first-in, first-out) or market.
<PAGE>
ITEM II              MONARCH AVALON, INC. AND SUBSIDIARIES

                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF

                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For  purposes of this discussion references to "fiscal 1998" are to  the  fiscal
year  ending April 30, 1998, and references to "fiscal 1997" are to  the  fiscal
year ended April 30, 1997.

RESULTS OF OPERATIONS

Monarch  consists of two divisions, games and printing. Girls' Life,  Inc.  ,  a
wholly-owned  subsidiary, publishes a magazine. Creampuffs, Inc., a wholly-owned
subsidiary, had no business transacted for the three months ended July 31,  1997
or for the year ended April 30, 1997.

Sales  of  products  in the games division, primarily board games  and  software
games  designed  for  use  on microcomputers, are somewhat  seasonal  in  nature
because of increased retail game sales during the Christmas season, while  sales
of  the  Company's other products (envelopes, printing and graphic arts services
and  Girls' Life magazine) are not seasonal. The timing of new releases  of  the
Company's games also may affect sales in the game division.

RESULTS FOR THE FIRST QUARTER OF FISCAL YEAR 1998 AND 1997

Net  sales increased by $451,000 or 38% in the first quarter of fiscal  1998  as
compared  to  the  first quarter of fiscal 1997.  Sales in  the  games  division
increased by $200,000 or 37% in the first quarter of fiscal 1998 compared to the
first  quarter of fiscal 1997 as a result of the increase in the number  of  new
releases of computer games in the first quarter of fiscal 1998 compared  to  the
first  quarter in 1997.  Sales in the printing division increased by $64,000  in
the  first  quarter of fiscal 1998 or 13% from the first quarter of fiscal  1997
due  to  the  increase of new customers.  Sales of Girls' Life magazine  in  the
first  quarter  of  fiscal 1998 increased by $187,000 or  147%  from  the  first
quarter  of  fiscal 1997. The increase in sales of Girls' Life magazine  relates
primarily to the increase in promotional and direct mailing advertising  of  the
magazine and increased revenue from newstand sales and advertising.

Gross  profit  increased by $213,000 or 90% during the first quarter  of  fiscal
1998  compared to the first quarter of fiscal 1997.  Consolidated  gross  margin
was  28% of net sales during the first quarter of fiscal 1998 as compared to 20%
during the first quarter of fiscal 1997.  The increase in gross margin primarily
related  to  increases in game sales overall and increases in  publishing  sales
which carry higher gross margins than printing sales.

Operating expenses were 45% of net sales in the first quarter of fiscal 1998  as
compared to 39% in the first quarter of fiscal 1997.  Operating expenses for the
first  quarter of fiscal 1998 increased by $272,000 or 59% from the same  period
in  fiscal  1997,  primarily because of higher advertising, royalty  and  salary
expenses associated with computer game sales.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

At  July  31,  1997, the Company has cash and cash equivalents of  approximately
$1,665,000,  a  decrease of $466,000 from the amount at  April  30,  1997.   The
decrease  resulted  from cash used in operations of $407,000  and  purchases  of
equipment in the amount of $59,000. The Company's cash and cash equivalents  are
subject  to  variation  based upon the timing of receipts  and  the  payment  of
payables.

At July 31, 1997, the Company has no debt with third party lenders.




                      PART II. OTHER INFORMATION


ITEMS 1 THROUGH 5
NONE / NOT APPLICABLE

ITEM 6.  EXHIBITS AND REPORTS FOR FORM 8-K

(a)      Exhibits

         Number                 Description
         ------                 -----------

          3                     Amended and Restated Bylaws

         27                     Financial Data Schedule

(b)      Reports on Form 8-K

         The Company did not file any reports on Form 8-K during
         the three months ended July 31, 1997.
<PAGE>
                                   SIGNATURES

In  accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                          MONARCH AVALON, INC.




Date     9/15/96                          By  /s/ A. Eric Dott
                                          -----------------------------
                                          A. Eric Dott
                                          Chariman of the Board




Date     9/15/97                          /s/ A. Eric Dott
                                          -----------------------------
                                          A. Eric Dott
                                          Chairman of the Board
                                          (Principal Executive Officer)




Date     9/15/97                          /s/ Marshall Chadwell
                                          -----------------------------
                                          Marshall Chadwell
                                          Chief Financial Officer
                                          (Principal Accounting and
                                              Financial Officer)

<PAGE>
                                 EXHIBIT INDEX

           Exhibit No.       Description
           -----------       -----------

            3                Amended and Restated Bylaws

           27                Financial Data Schedule