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    OCTOBER 31, 1996        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 October 31, 1996, 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 SUBSIDIARY
           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
                                        
<CAPTION>
                                               October 31,    April 30,
                                                  1996          1996
                                               -----------  -----------
<S>                                             <C>          <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                    $1,625,398   $1,966,425
   Investments (at lower of cost or market)        124,195      124,195
   Accounts receivable, net                      1,416,100      848,604
   Inventories, net                              2,108,562    1,941,306
   Other current assets                            127,164      117,542
                                                ----------   ----------
           TOTAL CURRENT ASSETS                  5,401,419    4,998,072

PROPERTY AND EQUIPMENT                           4,684,895    4,645,639
   Less allowance for depreciation              (4,179,820)  (4,112,320)
                                                ----------   ----------
                                                   505,075      533,319
OTHER ASSETS AND DEFERRED CHARGES                   23,296       24,468
                                                ----------   ----------
TOTAL ASSETS                                    $5,929,790   $5,555,859
                                                ----------   ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                             $  479,005   $  297,793
   Accrued expenses                                417,177      228,014
   Deferred subscription revenues                  323,634      253,345
                                                ----------   ----------
           TOTAL CURRENT LIABILITIES             1,219,816      779,152

STOCKHOLDERS' EQUITY
   Preferred Stock - par value $.01 per share:
      Authorized 200,000 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 October 31, 1996 and
      1,620,170 on April 30, 1996                  527,497      527,497
   Capital surplus                               3,378,363    3,379,063
   Retained earnings                               926,655      992,600
                                                ----------   ----------
                                                 4,832,515    4,899,160
   Treasury stock at par - 490,165 on
      October 31, 1996 and 489,815 on
      April 30, 1996                              (122,541)    (122,453)
                                                ----------   ----------
                                                 4,709,974    4,776,707
                                                ----------   ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $5,929,790   $5,555,859
                                                ----------   ----------
<FN>
See notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
                        MONARCH AVALON, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<CAPTION>
                                Three Months Ended     Six Months Ended
                                    October 31,           October 31,
                                ---------------------------------------

                                 1996       1995       1996       1995
                                 ----       ----       ----       ----

                                 (000's omitted, except per share data)

<S>                            <C>        <C>        <C>        <C>
Net sales                      $ 2,503    $ 1,774    $ 3,680    $ 3,309
Cost of goods sold               1,584      1,216      2,524      2,359
                               -------    -------    -------    -------
Gross profit                       919        558      1,156        950

Selling, general and
  administrative expenses          731        474      1,096        918

Research and development            93         96        186        193
                               -------    -------    -------    -------
   Operating expenses              824        570      1,282      1,111
                               -------    -------    -------    -------

Income (loss) from operations       95        (12)      (126)      (161)

Other income, net                   17         16         60         29
                               -------    -------    -------    -------
Income (loss) before income        112          4       ( 66)      (132)
   taxes
Provision for income taxes           0          0          0          0
                               -------    -------    -------    -------
Net income (loss)                  112          4       ( 66)      (132)
                               -------    -------    -------    -------
Income (loss) per share        $  0.07    $     0    $ (0.04)   $ (0.08)
                               -------    -------    -------    -------

Weighted average shares
  outstanding                 1,619,961  1,620,170  1,620,065  1,620,170
                              ---------  ---------  ---------  ---------
<FN>
See notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
                    MONARCH AVALON, INC. AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


<CAPTION>
                                                   Six Months Ended
                                                      October 31,
                                                   ----------------
                                                  1996             1995
                                                  ----             ----
                                                     (000's omitted)

<S>                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) from operations            $ ( 66)          $ (132)
                                                -------          -------
   Adjustments to reconcile net income
   (loss) to net cash provided by
   operating activities:
      Depreciation and amortization                 72              133
      Unrealized loss on investments                 0                2
      Changes in accounts receivable,
      inventories, other assets, accounts
      payable, accrued expenses and
      deferred subscription revenue               (303)              77
                                                ------           ------
   Net cash used in operating activities          (297)              80
                                                ------           ------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment             (43)             (20)
   Cash proceeds from disposal of property
      and equipment                                  0              100
                                                ------           ------
   Net cash provided by (used in)                  (43)              80
      investing activities


CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of treasury stock                      ( 1)               0
                                                ------           ------
   Net cash provided by (used in)                  ( 1)               0
      financing activities

                                                ------           ------
Net decrease in cash and cash equivalents         (341)               0

Cash and cash equivalents at beginning of
   period                                        1,966            1,628
                                                ------           ------
Cash and cash equivalents at end of period      $1,625           $1,788
                                                ------           ------

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

             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 subsidiary,  Girls'  Life,  Inc.
(Monarch  and Girls' Life 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  subsidiary  have  been
eliminated  in  consolidation.  Operating results for  the  three  months  ended
October  31,  1996  are not necessarily indicative of the results  that  may  be
expected for the year ending April 30, 1997.  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, 1996.

NOTE B - ACCOUNTS RECEIVABLE

Accounts receivable are net of the following allowances:

                              October 31, 1996    April 30, 1996
                              ----------------    --------------
                                         (000's omitted)

Doubtful accounts                    $135                  $135
Customer returns                      172                    41
                                     ----                  ----
                                     $307                  $176
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:

                              October 31,1996        April 30, 1996
                              ---------------        --------------
                                        (000's omitted)

Raw materials                    $ 1,042               $  910
Work in progress                      32                  114
Finished goods                     1,035                  917
                                 -------               ------
                                 $ 2,109               $1,941

The  above  components are shown net of lower of cost of market  reserves  of
$350,000  at  October 31, 1996 and April 30, 1996.  The  Company  values  its
inventories at the lower of cost (first-in, first-out) or market.
<PAGE>
ITEM II              MONARCH AVALON, INC. AND SUBSIDIARY

                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For  purposes of this discussion references to "fiscal 1997" are to  the  fiscal
year  ending April 30, 1997, and references to "fiscal 1996" are to  the  fiscal
year ended April 30, 1996.

RESULTS OF OPERATIONS

Monarch  consists of two divisions, games and printing. Girls' Life,  Inc.  ,  a
wholly-owned subsidiary, publishes a magazine.

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 SECOND QUARTER OF FISCAL YEAR 1997 AND 1996

Net  sales increased by $729,000 or 41% in the second quarter of fiscal 1997  as
compared  to  the  second quarter of fiscal 1996.  Sales in the  games  division
increased  by $465,000 or 50% in the second quarter of fiscal 1997  compared  to
the  second quarter of fiscal 1996 as a result of the increase in the number  of
new releases of computer games in the second quarter of fiscal 1997 compared  to
the second quarter in 1996.  The allowance for customer returns was increased by
$131,000  for  the  quarter  because of the new releases  sold.   Sales  in  the
printing division increased by $69,000 in the second quarter of fiscal  1997  or
10% from the first quarter of fiscal 1996.  Sales of Girls' Life magazine in the
second  quarter of fiscal 1997 accounted for $353,000 or 14% of total net  sales
as  compared to $159,000 or 10% of total sales for the second quarter of  fiscal
1996.   Subscriptions, newstand sales and advertising revenues from Girls'  Life
have continued to increase.

Gross  profit increased by $361,000 or 65% during the second quarter  of  fiscal
1997  compared to the second quarter of fiscal 1996.  Consolidated gross  margin
was 37% of net sales during the second quarter of fiscal 1997 as compared to 31%
during  the  second  quarter  of  fiscal 1996.  The  increase  in  gross  margin
primarily relates to the  increase in computer game sales.

Operating expenses were 33% of net sales in the second quarter of fiscal 1997 as
comparted  to 32% in the second quarter of fiscal 1996.  Operating expenses  for
the  second  quarter of fiscal 1997 increased by $254,000 or 45% from  the  same
period  in  fiscal  1996,  primarily  because  of  higher  advertising  expenses
associated with computer game sales and higher promotional costs for Girls' Life
magazine.
<PAGE>
RESULTS FOR THE FIRST SIX MONTHS OF FISCAL YEAR 1997 AND 1996


Net  sales increased by $371,000 or 11% in the six months ended October 31, 1996
as  compared to the same period in fiscal 1996.  Sales in the game division  for
the first six months of fiscal 1997 increased by $210,000 or 12% compared to the
same  period  in  fiscal 1996 as a result of new computer game releases  in  the
first and second quarters of fiscal 1997. Sales in the printing division for the
first  six months of fiscal 1997 decreased by $18,000 or 1% from the same period
in  fiscal  1996.  Sales of Girls' Life magazine of $480,000 in the  six  months
ended  October 31, 1996 accounted for 13% of total net sales during the  period,
compared to $302,000 or 9% for the same period in fiscal year 1996.

Gross  profit increased by $206,000 or 22% during the first six months of fiscal
1997 compared to the same period in fiscal 1996.  Consolidated gross margin  was
31%  of net sales during the six month period ended October 31, 1996 as compared
to  29%  for  the same period during fiscal 1996.  The increase in gross  margin
primarily  related to increases in game sales overall, which carry higher  gross
margins than printing sales.

Operating expenses increased $171,000 or 15% for the first six months of  fiscal
1997  as  compared  to  the  same  period in fiscal  1996.   Operating  expenses
represented 35% and 34% of net sales for the six months ended October  31,  1996
and 1995, respectively.  The increase in operating expenses primarily relates to
higher  advertising  expenses associated with computer games  sales  and  higher
promotional costs for Girls' Life magazine.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

At  October 31, 1996, the Company has cash and cash equivalents of approximately
$1,625,000,  a  decrease of $341,000 from the amount at  April  30,  1996.   The
decrease  resulted  from  cash  used in operations  of  $297,000,  purchases  of
equipment  in  the amount of $43,000 and the purchase of treasury stock  in  the
amount  of  $1,000.   The  Company's cash and cash equivalents  are  subject  to
variation based upon the timing of receipts and the payment of payables.

At October 31, 1996, the Company has no debt with third party lenders.
<PAGE>
                           PART II. OTHER INFORMATION
                                        
                                        

ITEMS 1 THROUGH 3 AND 5
NONE / NOT APPLICABLE


Item 4.   Submission of Matters to a Vote of Security Holders.
                                        

         The annual meeting of stockholders was held on October 4, 1996.

         Results of the voting on the election of directors:

Directors                       FOR                    WITHHELD
---------                       ---                    --------

A. Eric Dott                 1,111,460                  45,718
David F. Gonano              1,111,610                  45,568
Jackson Y. Dott              1,157,178                       0
Helen Delich Bentley         1,110,235                  46,943




         Results of the voting on grant of stock options to Helen Delich
Bentley, David F. Gonano and Jackson Y. Dott:

                       FOR                 AGAINST              WITHHELD
                       ---                 -------              --------

                     900,983               114,674                1,760

          Results  of  the  voting on the ratification  of  the  appointment  of
Deloitte & Touche LLP as the independent accountants for the fiscal year  ending
April 30, 1997:

                       FOR                 AGAINST              WITHHELD
                       ---                 -------              --------

                    1,151,725               47,653                1,760

         There were no broker non-votes on these matters.
<PAGE>
                      PART II. OTHER INFORMATION (CONTINUED)


ITEM 6.  EXHIBITS AND REPORTS FOR FORM 8-K

(a)          Exhibits

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

             27.                     Financial Data Schedule

(b)          Reports on Form 8-K

             No reports have been filed on Form 8-K during this
             quarter.
<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     12/16/96                     By  /s/ A. Eric Dott
                                          -----------------------------
                                          A. Eric Dott
                                          Chariman of the Board




Date     12/16/96                         /s/ A. Eric Dott
                                          -----------------------------
                                          A. Eric Dott
                                          Chairman of the Board
                                          (Principal Executive Officer)




Date     12/16/96                         /s/ Marshall Chadwell
                                          -----------------------------
                                          Marshall Chadwell
                                          Chief Financial Officer
                                          (Principal Accounting and
                                              Financial Officer)