UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

 (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

                For the Quarterly Period Ended September 30, 2004

                                       OR


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

For the transition period from _______________________to_______________________


                         Commission File Number 0-11688


                          AMERICAN ECOLOGY CORPORATION
                          ----------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                     DELAWARE                             95-3889638
                     --------                             ----------
          (State or other jurisdiction of              (I.R.S. Employer
          incorporation or organization)            Identification Number)

                Lakepointe Centre I,
             300 E. Mallard, Suite 300
                     Boise, Idaho                           83706
                     ------------                           -----
          (Address of principal executive offices)        (Zip Code)


                                 (208) 331-8400
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
                                  Yes [X]   No [_]

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).
                                  Yes [_]   No [X]

At November 4, 2004 Registrant had outstanding 17,380,203 shares of its Common
Stock.


<PAGE>
<TABLE>
<CAPTION>
                               AMERICAN ECOLOGY CORPORATION
                          QUARTERLY REPORT ON FORM 10-Q FOR THE
                          THREE MONTHS ENDED SEPTEMBER 30, 2004


                                    TABLE OF CONTENTS


                              PART I.  FINANCIAL INFORMATION


                                                                                     PAGE
<S>                                                                                  <C>

Item 1. Financial Statements

        Consolidated Balance Sheets
         (Unaudited)                                                                    4

        Consolidated Statements of Operations
         (Unaudited)                                                                    5

        Consolidated Statements of Cash Flows
         (Unaudited)                                                                    6

        Notes to Consolidated Financial Statements                                      7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of
        Operations                                                                     16

Item 3. Quantitative and Qualitative Disclosures About Market Risk                     27

Item 4. Controls and Procedures                                                        28

                                PART II. OTHER INFORMATION


Item 1. Legal Proceedings                                                              28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                    29

Item 3. Defaults Upon Senior Securities                                                29

Item 4. Submission of Matters to a Vote of Security Holders                            29

Item 5. Other Information                                                              29

Item 6. Exhibits                                                                       30

        Signatures                                                                     30
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
OFFICERS
--------
<S>                                             <C>
Stephen A. Romano                               CORPORATE OFFICE
Chief Executive Officer, President and Chief    ----------------
Operating Officer                               Lakepointe Centre I
                                                American Ecology Corporation
                                                300 East Mallard Drive, Suite 300
James R. Baumgardner                            Boise, Idaho 83706
Senior Vice President, Chief Financial Officer  (208) 331-8400
Treasurer and Secretary                         (208) 331-7900 (fax)
                                                www.americanecology.com
                                                -----------------------
Michael J. Gilberg
Vice President and Controller
                                                COMMON STOCK
                                                ------------
Steven D. Welling                               American Ecology Corporation's common stock
Vice President, Sales & Marketing               trades on the Nasdaq National Market under the
                                                symbol ECOL.
John M. Cooper
Vice President and Chief Information Officer
                                                FINANCIAL REPORTS
                                                -----------------
DIRECTORS                                       A copy of American Ecology Corporation
---------                                       Annual and Quarterly Reports, as filed on Form 10-K
Rotchford L. Barker, Chairman                   and 10-Q with the Securities and Exchange
Independent Businessman                         Commission, may be obtained by writing:
                                                Lakepointe Centre I
David B. Anderson                               300 E. Mallard, Suite 300
President, Highland Capital Enterprises Corp.   Boise, Idaho 83706
                                                or at www.americanecology.com
Roy C. Eliff                                          -----------------------
Independent Businessman
                                                TRANSFER AGENT
                                                --------------
Edward F. Heil                                  American Stock Transfer & Trust Company
Independent Businessman                         59 Maiden Lane
                                                New York, New York 10038
Stephen A. Romano                               (718) 921-8289
Chief Executive Officer, President and Chief    or at www.amstock.com
Operating Officer                                     ---------------

General Jimmy D. Ross                           AUDITOR
U.S. Army, Retired                              -------
                                                Moss Adams LLP
Stephen M. Schutt                               1001 Fourth Avenue, Suite 2900
Vice President, Nuclear Fuel Services, Inc.     Seattle, WA  98154
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
PART I.  FINANCIAL INFORMATION
------------------------------
ITEM 1.  FINANCIAL STATEMENTS.

                                            AMERICAN ECOLOGY CORPORATION
                                             CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED) ($ IN 000'S EXCEPT PER SHARE AMOUNTS)

                                                                            September 30, 2004    December 31, 2003
                                                                           --------------------  -------------------
<S>                                                                        <C>                   <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                                $             9,712   $            6,674
  Short term investments                                                                 4,989                   --
  Receivables, net                                                                       8,328               12,596
  Prepayments and other                                                                  1,263                1,051
  Deferred income taxes                                                                  1,323                3,222
  Assets held for sale or closure                                                           43                  938
                                                                           --------------------  -------------------
    Total current assets                                                                25,658               24,481

Property and equipment, net                                                             27,445               28,317
Facility development costs                                                               6,478                6,478
Other assets                                                                               655                  731
Prepaid income taxes                                                                       225                   --
Deferred income taxes                                                                   16,284                5,062
Assets held for sale or closure                                                             --                1,557
                                                                           --------------------  -------------------
    Total assets                                                           $            76,745   $           66,626
                                                                           ====================  ===================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Current portion of long term debt                                        $             1,456   $            1,475
  Accounts payable                                                                       2,016                1,678
  Accrued liabilities                                                                    6,446                4,788
  Dividend payable on common stock                                                       4,345                   --
  Accrued closure and post closure obligation, current portion                           1,828                1,828
  Current liabilities of assets held for sale or closure                                   111                1,907
                                                                           --------------------  -------------------
    Total current liabilities                                                           16,202               11,676

Long term debt                                                                           3,099                4,200
Long term accrued liabilities                                                              474                  454
Accrued closure and post closure obligation, excluding current portion                   9,294                9,296
Liabilities of assets held for sale or closure, excluding current portion                   --                4,649
                                                                           --------------------  -------------------
    Total liabilities                                                                   29,069               30,275
                                                                           --------------------  -------------------

Commitments and contingencies

Shareholders' equity:
  Convertible preferred stock, 1,000,000 shares authorized
  Common stock, $.01 par value, 50,000,000 authorized,
    17,380,203 and 17,033,118  shares issued and outstanding                               174                  170
  Additional paid-in capital                                                            50,316               54,824
  Accumulated deficit                                                                   (2,814)             (18,643)
                                                                           --------------------  -------------------
    Total shareholders' equity                                                          47,676               36,351
                                                                           --------------------  -------------------

Total Liabilities and Shareholders' Equity                                 $            76,745   $           66,626
                                                                           ====================  ===================
<FN>
See notes to consolidated financial statements.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                           AMERICAN ECOLOGY CORPORATION
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   (UNAUDITED)
                                      ($ IN 000'S EXCEPT PER SHARE AMOUNTS)

                                                                   Three Months Ended       Nine Months Ended
                                                                      September 30,            September 30,
                                                                   2004         2003         2004        2003
                                                                -----------  -----------  ----------  -----------
<S>                                                             <C>          <C>          <C>         <C>
Revenue                                                         $   12,929   $   17,324   $  40,629   $   40,115
Direct operating costs                                               7,396       10,383      22,457       22,423
                                                                -----------  -----------  ----------  -----------

Gross profit                                                         5,533        6,941      18,172       17,692
Selling, general and administrative expenses                         2,967        3,302       8,417       11,088
                                                                -----------  -----------  ----------  -----------
Operating income                                                     2,566        3,639       9,755        6,604

Interest income                                                         52          312         133          334
Interest expense                                                        48           60         146          219
Loss on write off of Ward Valley facility development costs             --           --          --       20,951
Other income                                                             9           20          74          113
                                                                -----------  -----------  ----------  -----------

Income (loss) before income tax and discontinued operations          2,579        3,911       9,816      (14,119)
Income tax expense (benefit)                                           884           18      (9,290)          73
                                                                -----------  -----------  ----------  -----------

Income (loss) before discontinued operations                         1,695        3,893      19,106      (14,192)
Gain (loss) from discontinued operations - El Centro Landfill           --          (15)         --        4,945
Gain (loss) from discontinued operations - Oak Ridge Facility           (1)        (400)      1,068       (2,429)
                                                                -----------  -----------  ----------  -----------

Net income (loss)                                                    1,694        3,478      20,174      (11,676)
Preferred stock dividends                                               --           --          --           64
                                                                -----------  -----------  ----------  -----------

Net income (loss) available to common shareholders              $    1,694   $    3,478   $  20,174   $  (11,740)
                                                                ===========  ===========  ==========  ===========

Basic earnings (loss) from continuing operations                       .10          .23        1.12         (.86)
Basic earnings (loss) from discontinued operations                     .00         (.02)        .06          .15
                                                                -----------  -----------  ----------  -----------
Basic earnings (loss) per share                                 $      .10   $      .21   $    1.18   $     (.71)
                                                                ===========  ===========  ==========  ===========

Diluted earnings (loss) from continuing operations                     .10          .22        1.08         (.86)
Diluted earnings (loss) from discontinued operations                   .00         (.02)        .06          .15
                                                                -----------  -----------  ----------  -----------
Diluted earnings (loss) per share                               $      .10   $      .20   $    1.14   $     (.71)
                                                                ===========  ===========  ==========  ===========

Dividends paid per common share                                 $       --   $       --   $      --   $       --
                                                                ===========  ===========  ==========  ===========
<FN>
See notes to consolidated financial statements.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                      AMERICAN ECOLOGY CORPORATION
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (UNAUDITED, $ IN 000'S)

                                                                        Nine Months Ended September 30,
                                                                        -------------------------------
                                                                               2004           2003
                                                                           -------------  -------------
<S>                                                                        <C>            <C>
Cash flows from operating activities:
  Net income (loss)                                                        $     20,174   $    (11,676)
  Adjustments to reconcile net income to net
    cash provided by operating activities:
  Depreciation, amortization, and accretion                                       4,508          5,324
  Income from discontinued operations                                            (1,068)        (2,516)
  Deferred tax asset                                                             (9,323)            --
  Write off of Ward Valley project                                                   --         20,951
Changes in assets and liabilities:
  Receivables                                                                     4,268         (2,907)
  Other assets                                                                     (152)          (758)
  Closure and post closure obligation                                              (773)          (803)
  Income taxes payable                                                             (226)           716
  Accounts payable and accrued liabilities                                        2,016          3,011
                                                                           -------------  -------------
    Net cash provided by operating activities                                    19,424         11,342

Cash flows from investing activities:
  Capital expenditures                                                           (2,964)        (4,941)
  Proceeds from sale of assets                                                      116             --
  Transfers from cash to short tem investment                                    (4,989)            --
                                                                           -------------  -------------
    Net cash used in investing activities                                        (7,837)        (4,941)

Cash flows from financing activities:
  Payments of indebtedness                                                       (1,120)        (2,667)
  Retirement of series D preferred stock                                             --         (6,406)
  Retirement of common stock warrants                                            (5,500)            --
  Stock options exercised                                                           996          3,671
                                                                           -------------  -------------
    Net cash used in financing activities                                        (5,624)        (5,402)
                                                                           -------------  -------------

Increase in cash and cash equivalents                                             5,963            999
Net cash provided by (used in) discontinued operations                           (2,925)         5,369
Cash and cash equivalents at beginning of period                                  6,674            135
                                                                           -------------  -------------
Cash and cash equivalents at end of period                                 $      9,712   $      6,503
                                                                           =============  =============

Supplemental disclosures of cash flow information:
Cash paid during the year for:
  Interest                                                                 $        146   $        219
  Income taxes paid                                                                 274             96
Non-cash investing and financing activities:
  September 30 accrual of common stock dividend payable October 15, 2004   $      4,345             --
  Assets acquired through capital lease                                              --            167
<FN>

See notes to consolidated financial statements.
</TABLE>


                                        6
<PAGE>
AMERICAN ECOLOGY CORPORATION
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

NOTE 1.  BASIS OF PRESENTATION

In  the opinion of management, the accompanying unaudited consolidated financial
statements  contain  all adjustments and disclosures necessary to present fairly
the  financial  position,  results  of  operations,  and  cash flows of American
Ecology  Corporation  and  its  wholly-owned subsidiaries (the "Company"). These
financial  statements and notes should be read in conjunction with the financial
statements  and  notes included in the Company's 2003 Annual Report on Form 10-K
for  the  year  ended  December 31, 2003, filed with the Securities and Exchange
Commission.

Certain  reclassifications of prior quarter amounts have been made to conform to
current  quarter  presentation,  none  of  which  affect previously recorded net
income.

NOTE  2.  EARNINGS  PER  SHARE

Basic  earnings  per  share are computed based on net income available to common
shareholders and the weighted average number of common shares outstanding during
the  quarter.  Diluted earnings per share reflect the assumed issuance of common
shares  for  outstanding  options and conversion of warrants. The computation of
diluted  earnings per share does not assume exercise or conversion of securities
whose  exercise  price  is greater than the average common share market price as
the  assumed  conversion  of these securities would increase earnings per share.
The computation of diluted loss per share does not assume exercise or conversion
of  any  securities  as the assumed conversion of securities would decrease loss
per  share.

<TABLE>
<CAPTION>
                                                                    Three Months Ended       Nine Months Ended
                                                                 ------------------------  ----------------------
                                                                       September 30,           September 30
                                                                 ------------------------  ----------------------
             ($in thousands except per share amounts)               2004         2003        2004        2003
                                                                 -----------  -----------  ---------  -----------
<S>                                                              <C>          <C>          <C>        <C>
Income (loss) before discontinued operations                     $    1,695   $    3,893   $  19,106  $  (14,192)
Income (loss) from operations of discontinued segments                   (1)        (415)      1,068       2,516
                                                                 -----------  -----------  ---------  -----------
Net income (loss)                                                     1,694        3,478      20,174     (11,676)
Preferred stock dividends                                                --           --          --          64
                                                                 -----------  -----------  ---------  -----------
Net income (loss) available to common shareholders               $    1,694   $    3,478   $  20,174  $  (11,740)
                                                                 ===========  ===========  =========  ===========

Weighted average shares outstanding-
  Common shares                                                      17,257       16,974      17,183      16,473
 Effect of dilutive shares
  Chase Bank Warrants                                                    --          732          --          --
  Stock Options                                                         527          172         488          --
                                                                 -----------  -----------  ---------  -----------

Average shares                                                       17,784       17,878      17,671      16,473
                                                                 ===========  ===========  =========  ===========

Basic earnings (loss) per share from continuing operations       $      .10   $      .23   $    1.12  $     (.86)
Basic earnings (loss) per share from discontinued operations            .00         (.02)        .06         .15
                                                                 -----------  -----------  ---------  -----------
Basic earnings (loss) per share                                  $      .10   $      .21   $    1.18  $     (.71)
                                                                 ===========  ===========  =========  ===========

Diluted earnings (loss) per share from continuing operations     $      .10   $      .22   $    1.08  $     (.86)
Diluted earnings (loss) per share from discontinued operations          .00         (.02)        .06         .15
                                                                 -----------  -----------  ---------  -----------
Diluted earnings (loss) per share                                $      .10   $      .20   $    1.14  $     (.71)
                                                                 ===========  ===========  =========  ===========
</TABLE>

NOTE 3.  EQUITY

On  August  31, 2004 the Company declared a dividend of $.25 per common share to
stockholders  of record on September 30, 2004 and payable October 15, 2004.  The
dividend  was  paid  out  of  cash  on  hand  and  totaled  $4,345,000.

On  June  29, 2004 an affiliate of the Company subject to Section 16 of the 1934
Securities  and  Exchange  Act  (the


                                        7
<PAGE>
"Act")  and  covered  by  the  Company's  Insider  Trading Policy (the "Policy")
engaged  in  an  open market stock transaction (the "Transaction") prohibited by
the  Act  under  Section  16(b), commonly referred to as the "short swing profit
rule"  and  in  violation  of the Policy. Upon notification of the stock sale on
June  29,  the  Company  determined  the Transaction was in violation of Section
16(b),  notified  the  affiliated party on the same day and, consistent with the
remedies  prescribed  by  Section  16(b), sought disgorgement of the short-swing
profit  realized  on  the  Transaction. On July 9, 2004 the Company received and
deposited approximately $45,000 representing full disgorgement. These funds were
recorded  as  Additional  Paid  in  Capital  as  of  July  9,  2004.

On February 17, 2004 the Company redeemed a warrant to purchase 1,349,843 shares
of common stock at $1.50 a share for $5,500,000. The closing market price of the
Company's  common  stock  at  February  17, 2004 was $6.99. The warrant had been
issued  in  1998  to  the  Company's former bank as part of a debt restructuring
agreement.  The  redeemed  warrant,  which  represented  approximately 8% of the
Company's shares outstanding, has been surrendered and will not be reissued. The
warrant  redemption reduced the Company's cash on hand by $5,500,000 and reduced
Additional  Paid in Capital by a like amount, with no effect on the Statement of
Operations.

NOTE  4.  OPERATING  SEGMENTS

The  Company  operates  within  two  segments, Operating Disposal Facilities and
Non-Operating Disposal Facilities, based on its internal reporting structure and
nature  of  services offered. The Operating Disposal Facility segment represents
facilities accepting hazardous and radioactive waste. The Non-Operating Disposal
Facility  segment  represents facilities that are not accepting hazardous and/or
radioactive  waste  or  are  proposed  new  disposal  facilities that are now in
litigation  or  subject  to  settlement  agreement  implementation.

On  December 27, 2002, the Company discontinued commercial operations at its Oak
Ridge  Processing  and Field Services segment, which aggregated, volume-reduced,
and  performed  remediation  and  other  services  on radioactive material. This
segment  excludes  processing  at  the  Company's disposal facilities. All prior
segment information has been restated in order to report results as discontinued
operations.  On  June  30,  2004  the  Company  sold  substantially  all  of the
Processing and Field Services assets to Toxco, Inc. who also assumed the related
environmental  liabilities.

Effective  December  31,  2002,  the  Company classified the El Centro municipal
landfill  as  an  asset  held  for sale due to the expected sale of the facility
which  occurred  on  February  13,  2003. All prior segment information has been
restated  in  order  to  present  the  operations  of  the El Centro landfill as
discontinued  operations.

Income  taxes are assigned to Corporate, but all other items are included in the
segment  where  they originated. Inter-company transactions have been eliminated
from  the  segment  information  and  are  not  significant  between  segments.

Summarized financial information concerning the Company's reportable segments is
shown  in  the  following  table  ($  in  thousands).

<TABLE>
<CAPTION>
                                             Operating     Non-Operating     Discontinued
                                              Disposal       Disposal       Processing and
                                             Facilities     Facilities      Field Services    Corporate     Total
<S>                                         <C>           <C>              <C>               <C>          <C>
THREE MONTHS ENDED SEPTEMBER 30, 2004
--------------------------------------
Revenue                                     $    12,923   $            6   $            --   $       --   $ 12,929
Direct operating cost                             7,289              107                --           --      7,396
                                            ------------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                               5,634             (101)               --           --      5,533
S,G&A                                             1,395                1                --        1,571      2,967
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                     4,239             (102)               --       (1,571)     2,566
Interest expense (income)                           (14)              --                --           10         (4)
Other income (expense)                               (1)              --                --           10          9
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
and discontinued operations                       4,252             (102)               --       (1,571)     2,579
Income tax expense                                   --               --                --          884        884


                                        8
<PAGE>
Discontinued operations                              --               --                (1)          --         (1)
                                            ------------  ---------------  ----------------  -----------  ---------
Net Income (loss)                                 4,252             (102)               (1)      (2,455)     1,694
                                            ============  ===============  ================  ===========  =========
Depreciation, amortization, and accretion   $     1,470   $            1   $            --   $        8   $  1,479
Capital Expenditures                        $       570   $           --   $            --   $       --   $    570
Total Assets                                $    35,751   $        6,534   $            43   $   34,417   $ 76,745
THREE MONTHS ENDED SEPTEMBER 30, 2003
-------------------------------------
Revenue                                     $    17,319   $            5   $            --   $       --   $ 17,324
Direct operating cost                            10,260              123                --           --     10,383
                                            ------------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                               7,059             (118)               --           --      6,941
S,G&A                                             1,820                1                --        1,481      3,302
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                     5,239             (119)               --       (1,481)     3,639
Interest expense (income)                             1               --                --         (253)      (252)
Other income                                         (1)              21                --           --         20
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
and discontinued operations                       5,237              (98)               --       (1,228)     3,911
Income tax expense                                   --               --                --           18         18
Discontinued operations                             (15)              --              (400)          --       (415)
                                            ------------  ---------------  ----------------  -----------  ---------
Net Income (loss)                                 5,222              (98)             (400)      (1,246)     3,478
                                            ============  ===============  ================  ===========  =========
Depreciation, amortization, and accretion   $     1,495   $            4   $            --   $       10   $  1,509
Capital Expenditures                        $     1,790   $           --   $            --   $       --   $  1,790
Total Assets                                $    41,021   $        6,517   $         4,099   $   16,724   $ 68,361

                                             Operating     Non-Operating     Discontinued
                                              Disposal       Disposal       Processing and
                                             Facilities     Facilities      Field Services    Corporate     Total
NINE MONTHS ENDED SEPTEMBER 30, 2004
------------------------------------
Revenue                                     $    40,576   $           53   $            --   $       --   $ 40,629
Direct operating cost                            22,127              330                --           --     22,457
                                            ------------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                              18,449             (277)               --           --     18,172
S,G&A                                             3,766               25                --        4,626      8,417
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                    14,683             (302)               --       (4,626)     9,755
Interest expense (income)                           (39)              --                --           52         13
Other income (expense)                               17               19                --           38         74
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
and discontinued operations                      14,739             (283)               --       (4,640)     9,816
Income tax expense (benefit)                         --               --                --       (9,290)    (9,290)
Discontinued operations                              --               --             1,068           --      1,068
                                            ------------  ---------------  ----------------  -----------  ---------
Net Income (loss)                                14,739             (283)            1,068        4,650     20,174
                                            ============  ===============  ================  ===========  =========
Depreciation, amortization, and accretion   $     4,479   $            5   $            --   $       24   $  4,508
Capital Expenditures                        $     2,932   $           --   $            --   $       32   $  2,964
Total Assets                                $    35,751   $        6,534   $            43   $   34,417   $ 76,745
NINE MONTHS ENDED SEPTEMBER 30, 2003
------------------------------------
Revenue                                     $    40,055   $           60   $            --   $       --   $ 40,115
Direct operating cost                            22,071              352                --           --     22,423
                                            ------------  ---------------  ----------------  -----------  ---------
Gross profit (loss)                              17,984             (292)               --           --     17,692
S,G&A                                             5,477            1,802                --        3,809     11,088
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) from operations                    12,507           (2,094)               --       (3,809)     6,604
Interest expense (income)                            39               --                --         (154)      (115)


                                        9
<PAGE>
Other Income (expense)                               28               85                --           --        113
Write off of Ward Valley facility                    --           20,951                --           --     20,951
                                            ------------  ---------------  ----------------  -----------  ---------
Income (loss) before income tax
 and discontinued operations                     12,496          (22,960)               --       (3,655)   (14,119)
Income tax expense (benefit)                         --               --                --           73         73
Discontinued operations                           4,945               --            (2,429)          --      2,516
                                            ------------  ---------------  ----------------  -----------  ---------
Net Income (loss)                                17,441          (22,960)           (2,429)      (3,728)   (11,676)
                                            ============  ===============  ================  ===========  =========
Depreciation, amortization, and
accretion                                   $     5,398   $            6   $            --   $       30   $  5,434
Capital Expenditures                        $     5,853   $           23   $           451   $       --   $  6,327
Total Assets                                $    41,021   $        6,517   $         4,099   $   16,724   $ 68,361
</TABLE>


NOTE  5.  STOCK  OPTION  PLANS

The  Company  has  two  stock-based  compensation plans, which are accounted for
under  the  recognition  and  measurement  principles  of  APB  Opinion  No. 25,
Accounting  for  Stock  Issued  to  Employees  and  related  Interpretations. No
stock-based employee compensation cost is reflected in net income. The following
table illustrates the effect on net income and earnings per share if the Company
applied  the  fair  value  recognition  provisions  of  FASB  Statement No. 123,
Accounting  for  Stock-Based  Compensation,  to stock-based compensation for the
three  and  nine  months  ended  September  30,  2004  and  2003:

<TABLE>
<CAPTION>
($in thousands)                                                      Three Months Ended        Nine Months Ended
                                                                  ------------------------  -----------------------
                                                                     2004         2003         2004         2003
                                                                  -----------  -----------  -----------  ----------
<S>                                                               <C>          <C>          <C>          <C>
Net income (loss), as reported                                    $    1,694   $    3,478   $   20,174   $ (11,676)
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards, net of
related tax effects                                                      (94)        (127)        (708)       (885)
                                                                  -----------  -----------  -----------  ----------
Pro forma net income (loss)                                       $    1,600   $    3,351   $   19,466   $ (12,561)
                                                                  ===========  ===========  ===========  ==========

EARNINGS (LOSS) PER SHARE:
   Basic - as reported                                            $      .10   $      .21   $     1.18   $    (.71)
                                                                  ===========  ===========  ===========  ==========
   Basic - pro forma                                              $      .09   $      .20   $     1.13   $    (.77)
                                                                  ===========  ===========  ===========  ==========
   Diluted - as reported                                          $      .10   $      .20   $     1.14   $    (.71)
                                                                  ===========  ===========  ===========  ==========
   Diluted - pro forma                                            $      .09   $      .19   $     1.10   $    (.77)
                                                                  ===========  ===========  ===========  ==========
</TABLE>

The stock option plan summary and changes during the three and nine months ended
September  30  are  as  follows:

<TABLE>
<CAPTION>
                                                                    Three Months Ended        Nine Months Ended
                                                                 ------------------------  ------------------------
                                                                    2004         2003         2004         2003
                                                                 -----------  -----------  -----------  -----------
<S>                                                              <C>          <C>          <C>          <C>
Options outstanding, beginning of period                          1,091,281    1,470,724    1,266,281      753,150
Granted                                                                  --           --       57,500      813,724
Exercised                                                          (167,573)          --     (345,073)     (68,500)
Canceled                                                                 --       (2,000)     (55,000)     (29,650)
                                                                 -----------  -----------  -----------  -----------
Options outstanding, end of period                                  923,708    1,468,724      923,708    1,468,724
                                                                 ===========  ===========  ===========  ===========

Weighted average exercise price of options, beginning of period  $     4.05   $     3.90   $     3.90   $     3.42
Weighted average exercise price of options granted               $       --   $       --   $     9.20   $     4.30
Weighted average exercise price of options exercised             $     2.59   $       --   $     2.69   $     1.68
Weighted average exercise price of options canceled              $       --   $     2.30   $    10.13   $     7.35
Weighted average exercise price of options, end of period        $     4.31   $     3.90   $     4.31   $     3.90

Options exercisable at end of period                                618,368      936,692      618,368      936,692
                                                                 ===========  ===========  ===========  ===========


                                       10
<PAGE>

Options available for future grant at end of period                 507,176      418,776      507,176      418,776
                                                                 ===========  ===========  ===========  ===========
</TABLE>

The following table summarizes information about the stock options outstanding
under the Company's option plans as of September 30, 2004:

<TABLE>
<CAPTION>
                       Weighted average                      Weighted                        Weighted
Range of exercise   remaining contractual     Number     average exercise     Number     average exercise
price per share          life(years)        outstanding   priceper share    exercisable   priceper share
------------------  ----------------------  -----------  -----------------  -----------  -----------------
<S>                 <C>                     <C>          <C>                <C>          <C>
1.00 - $1.47                          3.1       37,500  $            1.32       37,500  $            1.32
1.60 - $2.25                          4.1       38,500  $            2.14       38,500  $            2.14
2.42 - $3.50                          7.9      266,109  $            2.87      157,318  $            2.78
3.75 - $5.00                          7.1      384,846  $            4.29      257,923  $            4.19
6.50                                  8.4      139,253  $            6.50       69,627  $            6.50
9.20                                  9.6       57,500  $            9.20       57,500  $            9.20
                                            -----------                     -----------
                                                923,708                         618,368
                                            ===========                     ===========
</TABLE>

As  of  September 30, 2004, the 1992 Stock Option Plan for Employees had options
outstanding  to  purchase  575,208  common  shares with 188,976 shares remaining
available  for  issuance  under option grants. As of September 30, 2004 the 1992
Stock  Option  Plan  for  Directors  had options outstanding to purchase 348,500
common  shares with 318,200 shares remaining available for issuance under option
grants.

The  fair  value  of  each  option  grant  is  estimated using the Black-Scholes
option-pricing  model  with  the following weighted-average assumptions used for
grants  during  the  nine  months  ended  September  30:

<TABLE>
<CAPTION>
                                                              2004        2003
                                                           ----------  -----------
<S>                                                        <C>         <C>
          Expected volatility                                     73%      83-105%
          Risk-free interest rates                              4.72%   3.75-4.25%
          Expected lives                                    10 years     10 years
          Dividend yield                                           0%           0%
          Weighted-average fair value of options granted
          during the quarter (Black-Scholes)               $      --   $       --
</TABLE>

NOTE 6.  INCOME TAXES

The Company has historically recorded a valuation allowance for certain deferred
tax  assets due to inherent uncertainties regarding future operating results and
limitations on utilization of acquired net operating loss carry forwards for tax
purposes.  The  realization  of a significant portion of net deferred tax assets
is based in part on the Company's estimate of the timing of reversals of certain
temporary  differences  and  on  the  generation  of  taxable income before such
reversals.

Following  the  June  30,  2004  sale  of  the discontinued Oak Ridge Processing
Facility,  management reassessed the valuation allowance and determined that all
of  the  Company's  deferred  tax  assets  would  likely  be  utilized  prior to
expiration.  The  following  income tax (benefit) expense was recognized for the
three  and  nine  months  ended  September  30,  2004:

<TABLE>
<CAPTION>
                                                      Three Months Ended       Nine Months Ended
                                                    ----------------------  ----------------------
                                                       2004        2003        2004        2003
                                                    ----------  ----------  -----------  ---------
<S>                                                 <C>         <C>         <C>          <C>
Current state income tax expense                    $       48  $       18  $       48   $      73
Deferred federal income tax expense                        836          --       3,716          --


                                       11
<PAGE>
Reversal of deferred tax asset valuation allowance          --          --     (13,054)         --
                                                    ----------  ----------  -----------  ---------
Income tax (benefit) expense                        $      884  $       18  $   (9,290)  $      73
                                                    ==========  ==========  ===========  =========
</TABLE>

The  Company's  deferred  tax  asset is primarily composed of net operating loss
carryforwards of approximately $40,000,000 which begin to expire in 2006.

NOTE 7.  LITIGATION

Significant  developments  have  occurred  on  the following legal matters since
December  31,  2003:

US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In  May  2000, subsidiary US Ecology, Inc. sued the State of California, et. al.
("the  State")  for  monetary  damages  exceeding $162 million stemming from the
State's  alleged  abandonment  of  the  Ward  Valley low-level radioactive waste
("LLRW")  disposal  project.  On  March  26,  2003,  the Superior Court issued a
decision against the Company. Based on the uncertainty of recovery following the
Superior  Court's  adverse  decision,  the  Company  wrote  off  the $20,951,000
deferred  site  development  asset  on  March  31,  2003.

In  June  2003,  the Company filed a notice of appeal with the California Fourth
Appellate  District Court. The opening appellate brief was filed March 15, 2004.
The  State's  Respondents'  Brief  was  filed  on  October 15, 2004. The Company
expects  its  reply  brief  to be filed in 2004, and that oral arguments will be
held  in  early  to  mid  2005.  No assurance can be given that the Company will
prevail  on  appeal  or  reach  a  settlement  to  recover  any  portion  of its
investment.

ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action  was  brought  in  federal  court  in  December of 1999 by electric
utilities  that generate low-level radioactive waste ("LLRW") within the Central
Interstate  Low-Level  Radioactive  Waste  Compact ("CIC") to obtain declaratory
relief and damages. In September 2002, the US District Court for the District of
Nebraska entered judgment against Nebraska in favor of the CIC for $153 million,
including approximately $50 million for prejudgment interest. Of this amount, US
Ecology's share was $6.2 million plus $6.1 million for prejudgment interest. The
State  of  Nebraska subsequently appealed. On February 18, 2004, the Eighth U.S.
Circuit Court of Appeals affirmed the District Court ruling.  On April 21, 2004,
the Eighth Circuit Court of Appeals denied Nebraska's petition for rehearing. On
July 16, 2004, the State of Nebraska petitioned the U.S. Supreme Court to review
the  Court  of  Appeals'  judgment.

On August 9, 2004 Nebraska and the CIC entered into a settlement under which the
State  agreed  to make four equal payments of $38.5 million to the CIC beginning
August  1,  2005  and  annually  thereafter  for  three  years. The $154 million
settlement reflects a principal amount of $140.5 million, plus interest of 3.75%
compounded  annually  and beginning August 1, 2004. The principal may be reduced
to  $130 million if Nebraska and the CIC negotiate suitable access to a proposed
future  Texas LLRW disposal site. Settlement payments are subject to legislative
appropriation.  Should the Nebraska legislature fail to appropriate the required
payments,  the  CIC  retains  rights  to pursue enforcement by any and all legal
remedies available. Under the settlement, Nebraska waived any claim to sovereign
immunity  in a suit brought to enforce payment. The State also agreed to dismiss
its  petition  for  U.S.  Supreme  Court  review.

The  Company continues to maintain a $6.5 million asset on its balance sheet and
anticipates  recording  a  settlement  gain  in Other Income when it and the CIC
agree  on  the  Company's  specific  share  of  the  settlement  and  payment
arrangements.  The  Company  continues  to maintain the proposed Butte, Nebraska
LLRW  disposal  site  for development in the event Nebraska does not fulfill its
settlement  obligations.  Work  to  maintain  the  Butte  site  and  licensing
information is being performed by the Company under a contract with the CIC.

No  assurance  can  be  given that the Nebraska legislature will appropriate the
required payments or that the CIC will timely pay US Ecology's fair share of the
proceeds.  The  Company  believes,  however,  that  it  is  more not likely than


                                       12
<PAGE>
not  that  the  State  will make the required payments and that the Company will
obtain  its  fair  share  from  the  CIC  based on a specific amount and payment
arrangements  to  be  determined  in  future  discussions  with  the  CIC.

NOTE 8.  COMMITMENTS AND CONTINGENCIES

Effective  January  1,  2003,  the  Company  established  the  American  Ecology
Corporation  Management  Incentive  Plan ("MIP"). The Plan provides for selected
participants  to  receive  bonuses  based  on  pre-tax  operating income levels.
Bonuses under the plan are to be paid out over three years with a maximum in any
one  year  of  $1,125,000  in  bonuses  if  pre-tax  operating  income  exceeds
$12,000,000  including  all  costs for the MIP. During the three and nine months
ended  September 30, 2004, the Company accrued $267,000 and $881,000 for the MIP
to  be  paid  to  the  selected participants if pre-tax operating income exceeds
$12,000,000  for  2004.

The July 1, 2004 fire at the Company's Robstown, Texas facility damaged Property
and  Equipment  with  a net book value of $675,000.  As of September 30, 2004 an
impairment  had not yet been recognized pending more detailed information on the
amount  of  the  impairment.  See  Note 12 for further information regarding the
fire  and  related  insurance  coverages.

NOTE 9.  CLOSURE AND POST CLOSURE OBLIGATIONS

Closure and post closure obligations are recorded when environmental assessments
and/or  remedial efforts are probable, and the costs can be reasonably estimated
consistent  with Statement of Financial Accounting Standards ("SFAS") No. 5 with
the  liability  calculated in accordance with SFAS No. 143. The Company performs
periodic  reviews  of  both  non-operating  and operating facilities and revises
accruals for estimated post-closure, remediation and other costs when necessary.
The  Company's recorded liabilities are based on best estimates of current costs
and  are  updated  periodically  to  reflect  current  technology,  laws  and
regulations,  inflation  and  other  economic  factors.

Changes  to  reported closure and post closure obligations were as follows ($ in
thousands):

<TABLE>
<CAPTION>
                                  Accrued Closure and      Closure Obligation of Assets    Total Closure and Post
                                Post Closure Obligation      Held for Sale or Closure       Closure Obligations
                               -------------------------  ------------------------------  ------------------------
<S>                            <C>                        <C>                             <C>
January 1, 2004 obligation     $                 11,124   $                       4,621   $                15,745
Accretion of obligation                             771                              34                       805
Payment of obligation                              (709)                            (44)                     (753)
Adjustment of obligation                            (64)                         (4,611)                   (4,675)
                               -------------------------  ------------------------------  ------------------------
September 30, 2004 obligation  $                 11,122   $                          --   $                11,122
                               =========================  ==============================  ========================
</TABLE>

At  September  30,  2004, $81,000 of pledged cash and investment securities were
legally restricted for purposes of meeting closure and post closure obligations.

NOTE  10.  DISCONTINUED  OPERATIONS

On  June  30, 2004, the Company transferred substantially all the primary assets
and  liabilities  of  its  discontinued Oak Ridge Tennessee processing and field
services  operations to Toxco, Inc ("Toxco"). The Company transferred $2,060,000
in  Property  and $1,650,000 in Cash to Toxco in exchange for Toxco's assumption
of $4,640,000 of Closure and Other Liabilities.  The Company recorded a $930,000
gain on the sale which is included as a Gain from discontinued operations in the
Consolidated  Statements  of  Operations.

As of September 30, 2004, "Assets held for sale or closure" consisted of certain
assets  and  liabilities  (e.g.  trade  payables and accrued liabilities) of the
discontinued  Oak Ridge operations which were retained by the Company subsequent
to  the  June  30, 2004 sale. Accordingly, the revenue, costs, expenses and cash
flows  for the Oak Ridge operation have been excluded from results of continuing
operations  results  and  reported as "Gain (loss) from discontinued operations"
and "Net cash provided by (used in) discontinued operations". Prior periods have
been restated to reflect the discontinued operations. The assets and liabilities
of  discontinued operations included within the consolidated balance sheet as of
September  30,  2004  are  as  follows  ($  in  thousands):


                                       13
<PAGE>
<TABLE>
<CAPTION>
                                             Discontinued Operations
                                      September 30, 2004   December 31, 2003
<S>                                   <C>                  <C>
Current assets
--------------
    Current assets                    $                43  $              386
    Property & equipment, net                          --                 552
                                      -------------------  ------------------
                                                       43                 938
                                      ===================  ==================
Non-current assets
------------------
    Property, plant & equipment, net                   --               1,508
    Other                                              --                  49
                                      -------------------  ------------------
                                                       --               1,557
                                      ===================  ==================
Current liabilities
-------------------
    Accounts payable & accruals                       111               1,870
    Current portion long term debt                     --                  37
                                      -------------------  ------------------
                                                      111               1,907
                                      ===================  ==================
Non-current liabilities
-----------------------
    Closure/post closure obligations                   --               4,621
    Long-term debt                                     --                  23
    Other                                              --                   5
                                      -------------------  ------------------
                                                       --               4,649
                                      ===================  ==================
</TABLE>

Operating  results for the discontinued operations were as follows for three and
nine  months  ending  September  30:

<TABLE>
<CAPTION>
($in thousands)                           Processing and Field    El Centro Disposal    Total Discontinued
                                          Services Operations          Facility             Operations
<S>                                      <C>                     <C>                   <C>
Three months ending September 30, 2004
--------------------------------------
Revenues, net                            $                  --   $                --   $                --
Operating income (loss)                                     (1)                   --                    (1)
Net income (loss)                                           (1)                   --                    (1)
Basic earnings (loss) per share                            .00                   .--                   .00
Diluted earnings (loss) per share                          .00                   .--                   .00

Three months ending September 30, 2003
--------------------------------------
Revenues, net                            $                 (22)  $                (7)  $               (29)
Operating income (loss)                                   (556)                  (15)                 (571)
Net income (loss)                                         (400)                  (15)                 (415)
Basic earnings (loss) per share                           (.02)                 (.00)                 (.02)
Diluted earnings (loss) per share                         (.02)                 (.00)                 (.02)

Nine months ending September 30, 2004
-------------------------------------
Revenues, net                            $                  --   $                --   $                --
Operating income (loss)                                    138                    --                   138
Net income (loss)                                        1,068                    --                 1,068
Basic earnings (loss) per share                            .06                   .--                   .06
Diluted earnings (loss) per share                          .06                   .--                   .06

Nine months ending September 30, 2003
-------------------------------------
Revenues, net                            $               1,997   $               462   $             2,459
Operating income (loss)                                 (2,349)                   59                (2,290)
Net income (loss)                                       (2,429)                4,945                 2,516
Basic earnings (loss) per share                           (.14)                  .29                   .15
Diluted earnings (loss) per share                         (.14)                  .29                   .15
</TABLE>


                                       14
<PAGE>
Costs  incurred at the Oak Ridge facility during the three and nine months ended
September  30,  2004  and  2003  are  summarized  as  follows:

<TABLE>
<CAPTION>
($in thousands)                                                        Three Months        Nine Months
                                                                     ----------------  -----------------
                                                                       2004     2003     2004      2003
                                                                     -------  -------  --------  -------
<S>                                                                  <C>      <C>      <C>       <C>
Net operating costs in excess of previous accruals                   $   21   $   400  $   163   $   828
Additional impairment of property and equipment                          --        --       --       225
Accounts receivable collected in excess of valuation allowance           (9)       --     (274)       --
Gain on sale of facility                                                 --        --     (930)       --
Increase (decrease) in estimated cost to dispose of removed waste       (11)       --      (27)    1,376
                                                                     -------  -------  --------  -------

Net loss (income) for the three and nine months ended September 30   $    1   $   400  $(1,068)  $ 2,429
                                                                     =======  =======  ========  =======
</TABLE>

Cost  adjustments  for  Oak  Ridge facility on-site activities and removed waste
disposal  liabilities  are  as  follows:

<TABLE>
<CAPTION>
($in thousands)            December 31, 2003  Cash Payments   Adjustments   September 30, 2004
                           -----------------  --------------  ------------  ------------------
<S>                        <C>                <C>             <C>           <C>
Waste disposal liability                 623           (485)          (27)                 111
On-site discontinued
operation cost liability                 442           (469)           27                   --

                           December 31, 2002  Cash Payments   Adjustments   September 30, 2003
                           -----------------  --------------  ------------  ------------------

Waste disposal liability               1,827         (3,089)        3,923                2,661
On-site discontinued
operation cost liability               1,800         (2,296)          828                  332
</TABLE>

The adjustments represent differences between the estimated costs accrued at
December 31, actual costs incurred during the first nine months, and changes in
estimated future costs for disposition of previously removed waste.

NOTE 11. SHORT TERM INVESTMENTS

In  April  2004,  the  Company began investing cash not needed for operations in
quasi governmental securities such as securities issued by the Federal Home Loan
Bank.  The  Company  classifies  investments  with  a  maturity  on  the date of
purchase  greater than 30 days but less than one year as Short term investments.

NOTE 12. PARTIAL SERVICE INTERRUPTION AT ROBSTOWN, TEXAS FACILITY

Hazardous  waste  treatment  operations at the Company's Robstown Texas facility
were  suspended  following a July 1, 2004 fire in the facility's waste treatment
building.  Treatment  revenue  previously  represented  approximately 50% of the
Texas  facility's  revenue.  Direct disposal operations, which continued without
interruption  after  the  fire,  generate the balance of the facility's revenue.
While  the  Company  is  insured  for property and equipment damage and business
interruption,  insurance deductibles, operational upgrades, and loss of customer
business  will  continue  to  negatively  impact  the Texas facility's financial
performance.  The  Company  is  seeking to restore limited treatment services in
late  2004,  but  currently  does  not expect a complete resumption of treatment
service  until  late  in  the  first  half  of  2005.

The  Robstown facility received a June 2004 notice of enforcement from the Texas
regulatory  agency  regarding its operations which was later expanded to address
the  July  1,  2004  fire.  On  September  27,  2004  the  Texas  Commission  on
Environmental  Quality  ("TCEQ")  proposed  an  agreed  order  which included an
administrative  penalty  of  $138,000.  This  amount  has been recognized by the
Company  in  the  quarter  ended  September  30,  2004.

The  July  1,  2004 fire damaged Property and Equipment with a net book value of
$675,000.  Due  to  the  incomplete  information  available  to  the  Company, a
detailed  estimate  of the impairment is not yet available and no impairment has
been recognized.  The Company has ceased depreciating the Property and Equipment
involved  in  the  fire.


                                       15
<PAGE>
The  Company  recently  filed  a  claim under the property insurance. Due to the
incomplete  information  and  uncertainties  regarding  the  cost  of  restoring
treatment  services, no estimate of the amount of property insurance proceeds is
currently  available  and  no amount for property insurance has been recognized.

The  Company  has  also filed $769,000 in claims under its business interruption
insurance  policy  for  July,  August  and  September 2004 Texas operations. The
insurance  carrier  has  not  yet  responded  to  the  claims.  The Company does
anticipate  recognizing  the  value  of  the  claims after the insurance carrier
begins  accepting  them  or  confirms  the  amounts.

NOTE 13. SUBSEQUENT EVENTS

On  November  1,  2004,  without  action  taken  by  either  the Company, or the
Company's  CFO  or Controller, the employment agreements with the two executives
were automatically extended to December 31, 2005 in accordance with the February
2003  employment  agreements.  As  of  November 1, 2004 the commitment for three
employment  contracts  is  for  aggregate  minimum  annual  salaries of $484,000
through  December  31,  2005.

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

This document contains forward-looking statements that involve known and unknown
risks  and  uncertainties  which  may  cause actual results in future periods to
differ materially from those indicated herein.  These risks include, but are not
limited  to,  the  impact  of the fire at the Robstown, Texas facility including
insurance  company acceptance of the related claims, compliance with and changes
to  applicable  laws,  regulations and permits, enforcement actions, exposure to
and  results of litigation, access to capital, access to insurance and financial
assurances,  new  technologies, competitive environment, labor disputes, general
economic  conditions,  and  loss or diminution of major contracts. The Form 10-K
for  the  year  ending December 31, 2003 contains additional risk factors and an
expanded  disclosure  of  these risks.  When the Company uses words like "will",
"may,"  "believes,"  "expects," "anticipates," "should," "estimates," "project,"
"plans,"  their  opposites  and  similar  expressions,  the  Company  is  making
forward-looking  statements.  These  terms  are  most  often  used in statements
relating  to  business  plans,  strategies,  anticipated benefits or projections
about  the  anticipated  revenues,  earnings  or  other aspects of our operating
results.  The  Company  makes these statements in an effort to keep stockholders
and  the  public  informed  about  our  business  based  on management's current
expectations  about future events. Such statements should be viewed with caution
and  are  not  guarantees of future performance or events. As noted elsewhere in
this  report,  our  business  is  subject  to  uncertainties,  risks  and  other
influences,  many  of which the Company has no control over. Additionally, these
factors, either alone or taken together, could have a material adverse effect on
the  Company  and  could change whether any forward-looking statement ultimately
turns  out  to be true. The Company undertakes no obligation to publicly release
updates  or  revisions  to these statements.  The following discussion should be
read  in  conjunction with the audited consolidated financial statements and the
notes thereto filed on Form 10-K for the year ending December 31, 2003.

Unless otherwise described, changes discussed relate to the increase or decrease
from  the three and nine month periods ended September 30, 2003 to the three and
nine  month  periods  ended  September  30,  2004.

INTRODUCTION
------------

The  Company  is  a  hazardous, PCB, industrial and radioactive waste management
company  providing transportation, treatment and disposal services to commercial
and  government entities including, but not limited to nuclear power plants, oil
refineries,  chemical  manufacturing plants, steel mills, the U.S. Department of
Defense,  biomedical  facilities,  universities  and  research institutions. The
majority  of its revenues are derived from fees charged for use of the Company's
four fixed waste disposal facilities. The Company's offers a diverse, nationally
unique  service  mix. The Company and its predecessors have been in business for
52  years.

A significant portion of the Company's revenue is attributable to discrete waste
clean-up  projects  ("Event  Business")  which  vary  substantially  in size and
duration.  The one-time nature of Event Business necessarily creates variability
in  revenue  and  earnings.  This,  combined  with  variability in the Company's
service  mix,  can  produce  large  quarter  to


                                       16
<PAGE>
quarter  swings.  Management's  strategy  is to continue expanding its recurring
customer business ("Base Business") while simultaneously securing both large and
small  Event  Business  projects.  When the Company's Base Business covers fixed
costs, much of the Event Business revenue falls through to the bottom line. This
strategy  takes  advantage  of  the  largely  fixed cost nature of the business.

OVERALL COMPANY PERFORMANCE
---------------------------

The  Company's  financial  performance,  as measured by operating income for the
nine  months ended September 30, 2004, was substantially improved over the first
nine months of 2003. Management believes this is the result of focused execution
of  its  business  plan and a generally stronger economy. Quarter to quarter and
year-to-date  to  year-to-date  comparisons  are  difficult  due to the material
effect of several events. These include significant litigation expenses in early
2003  and  a  related  asset  write off, costs to prepare and sell the Company's
former  Oak Ridge, Tennessee low-level radioactive waste processing operation, a
related  gain  on the subsequent Oak Ridge asset sale in 2004, a gain on sale of
the  El  Centro landfill assets in early 2003, the impact of a July 1, 2004 fire
in  the Texas facility's waste treatment building, and the recognition of income
tax  expense  and  reversal of the valuation allowance on the Company's deferred
tax assets in 2004. These events are discussed in more detail below.

     Ward  Valley  Litigation  Expenses:  Following  an adverse California state
     -----------------------------------
court  decision  in  March  2003,  the Company wrote off $20,951,000 of facility
development costs. This is reported as Loss on write off of Ward Valley facility
development  costs  in  the Consolidated Statement of Operations. Litigation and
related  costs  totaling  $0  and  $1,786,000 were incurred and included in SG&A
during the three and nine months ending September 30, 2003. Briefing is underway
on  the  Company's  appeal  of  the Ward Valley ruling. Minimal appeal costs are
expected  based  on  a fixed price plus success contingency legal representation
agreement  entered  into  and  paid  in  July  2003.

Sale  of  El  Centro: In February 2003, the Company sold the El Centro municipal
---------------------
waste  landfill  to  Allied Waste and recognized a $4,909,000 gain on sale. This
gain  was included in discontinued operations during the quarter ended March 31,
2003.

Oak  Ridge  Asset  Disposition:  In  December  2002,  the  Company  discontinued
-------------------------------
operations  at  its  former Oak Ridge facility. During the three and nine months
ended  September  30,  2003,  the  Company  incurred  $400,000  and  $2,429,000,
respectively,  for  costs  in  excess of prior reserves to remove waste from the
facility  and  prepare  the  facility  for sale. This primarily reflected actual
costs  which  became  known  when  specific  wastes  were  shipped  off-site  to
third-party  service  providers.

On  June  30, 2004 the Company sold substantially all of its Oak Ridge assets to
Toxco,  Inc  ("Toxco").  Toxco  received  $1,650,000  in  cash and $2,060,000 in
property  and  equipment.  In  return,  Toxco  assumed  $4,625,000  in estimated
environmental  and  other  liabilities.  The Company recorded a $930,000 gain on
sale of the facility which is included in the results of discontinued operations
for  the  quarter  ended  June  30,  2004.

Income  Tax  Expense:  During 2002, the Company evaluated its deferred tax asset
---------------------
and  offsetting  valuation  allowance  and  determined that it was probable that
sufficient  taxable  income  would  be  generated  to  utilize $8,284,000 of the
deferred  tax  asset  in  the  foreseeable  future. During 2003, the $20,951,000
write-off  of  Ward Valley facility development costs resulted in a book and tax
loss  for  2003. As a result, no portion of the deferred tax asset was utilized.
Based  on  re-evaluation  of  year-to-date  2004 pre-tax income, expectations of
continued  profitability,  and  sale  of  the  Oak Ridge facility, the remaining
valuation  allowance  was  reversed at June 30, 2004. This resulted in an income
tax expense (benefit) of $884,000 and ($9,290,000) for the three and nine months
ended September 30, 2004.  As of September 30, 2004, the Company's balance sheet
reflects  $17,607,000  in  deferred  tax  assets.

Texas  Facility  Fire:  On  July  1, 2004 a fire occurred in the waste treatment
----------------------
building  at  the  Company's  Robstown,  Texas  facility,  after which treatment
operations  were  suspended.  Waste  treatment  revenue  previously  comprised
approximately  50%  of  the  facility's  revenue  prior to the fire. The Company
currently  anticipates restoring limited treatment in late 2004 followed by full
restoration  of  treatment  services late in the first half of 2005. Discussions
are underway with the State of Texas regarding the approval of a new building at
the  facility.  The  Company  has  fully  expensed all fire related costs at the
facility  since  the  fire,  including  a $138,000 penalty proposed by the Texas
Commission  on  Environmental  Quality.  Due  to  the  uncertainty  surrounding
treatment  service  restoration  and


                                       17
<PAGE>
business  interruption  and  property  insurance  proceeds,  no  impairment  or
insurance proceeds has been recognized as of September 30, 2004.

CRITICAL  ACCOUNTING  POLICIES
------------------------------

In  preparing  the  financial  statements,  management  makes many estimates and
assumptions  that  affect  the  Company's  financial  position  and  results  of
operations.  Accounting  for  the  July  1,  2004  Texas fire, Disposal Facility
Accounting, Accounting for Discontinued Operations, Litigation, and Income Taxes
involve  subjective  judgments,  estimates  and  assumptions  that  would likely
produce  a  materially  different financial position and result of operations if
different  judgments,  estimates,  or  assumptions were used.  These matters are
discussed  below.

ACCOUNTING FOR THE JULY 1, 2004 TEXAS FIRE
On  July 1, 2004 the fire in the waste treatment building resulted in a property
claim  due  to Property and Equipment damaged in the fire.  Due to uncertainties
regarding  restoration  of  treatment  services  and how the Company's insurance
carrier will respond to the property and business interruption insurance claims,
no  proceeds  have  been  recorded  as  of  September  30,  2004.

As  of  September  30,  2004 the Company estimates that the maximum property and
equipment  impairment  due  to  the fire would have been $675,000 if the damaged
assets were fully impaired.  As of September 30, 2004 the Company estimates that
the  maximum business interruption claim would have been $769,000 if the Company
had  a  better  basis  to  identify  payment  from the insurance carrier.  As of
September  30,  2004  the  Company estimates that the maximum property insurance
claim  would  have been $1,200,000 if the Company had a better basis to identify
payment  from  the  insurance  carrier.

DISPOSAL  FACILITY  ACCOUNTING
In  general  terms,  a  disposal  cell  development asset exists for the cost of
building  usable  disposal  space  and  a  closure liability exists for closing,
maintaining  and  monitoring  the disposal unit once this space has been filled.
Major  assumptions  and  judgments used to calculate cell development assets and
closure  liabilities  are  as  follows:

-    Personnel  and  equipment  costs  incurred  to construct disposal cells are
     capitalized  as  a  cell  development  asset.

-    The  cell  development  asset  is amortized as each available cubic yard of
     disposal  space  is  filled.  Periodically  updated independent engineering
     survey  and  inspection  reports are used to determine the remaining volume
     available.  These  reports take into account waste volume, compaction rates
     and  space  reserved for capping filled cells. Additionally, changes in the
     estimated  useful  lives  of  the  cells  or related expansion plans have a
     direct  effect  on  the  amortization expense related to those cells during
     future  periods.

-    The closure liability is the present value based on a current cost estimate
     prepared by an independent engineering firm of the costs to close, maintain
     and  monitor  filled  disposal  units.  Management  estimates the timing of
     payment,  accretes the current cost estimate by an estimated cost of living
     (1.5%),  and  then discounts (9.3%) the accreted current cost estimate back
     to  a  present  value.  The  final  payments  of  the closure liability are
     estimated  as  being paid in 2056 based upon current permitted capacity and
     estimated  future  annual  usage.

ACCOUNTING  FOR  DISCONTINUED  OPERATIONS
Accounting  for discontinued operations requires numerous subjective and complex
judgments,  estimates  and  assumptions that materially affect financial results
and  position  of  discontinued  operations.

At  December  27,  2002,  the  Company  discontinued commercial operation of its
former  Processing  and Field Services business segment in Oak Ridge, Tennessee.
The  discontinued operations were accounted for under Emerging Issues Task Force
("EITF")  Issue  No. 94-3 Liability Recognition for Certain Employee Termination
Benefits  and  Other Costs to Exit an Activity (including Certain Costs Incurred
in  a  Restructuring).  EITF 94-3 requires a liability to be recognized when the
decision  to  exit  the  segment  was  made. EITF 94-3 was chosen as the guiding
literature  rather  than  Statement  of  Financial  Accounting Standards No. 146
Accounting  for Costs Associated with Exit or Disposal Activities (FAS 146). The
latter  requires  a liability to be recognized at the time that the liability is
incurred.  FAS  146  is required for exit activities entered into after December
31,  2002  but  was  optional  for  exit  activities  prior  to


                                       18
<PAGE>
December  31,  2002.  Approximately  $442,000  of expenses were recognized as of
December  31,  2003  under  EITF  94-3 that would not have been recognized until
incurred had the Company adopted FAS 146 prior to December 27, 2002.  During the
three  and  nine  months  ended  September,  2004,  the  Company incurred $0 and
$442,000  of  the  expenses  recognized under EITF 94-3 as of December 31, 2003.

During  the  three and nine months ended September 30, 2004, the Company reduced
the  allowance  for doubtful accounts of its former Oak Ridge business by $9,000
and  $274,000.  This  reflected  collection  of accounts receivable in excess of
previous allowances for doubtful accounts. At September 30, 2004 the Company was
continuing  efforts to collect the remaining $32,000 of accounts receivable, all
of  which  is  included  in  its  allowance  for  doubtful  accounts.

LITIGATION

The  Company  is  involved  in litigation requiring estimates of timing and loss
potential  whose  disposition  is controlled by the judicial process. During the
quarter  ended  March  31,  2003,  the  Company  wrote off $20,951,000 due to an
adverse State trial court decision which cast substantial doubt on the Company's
ability  to  recover  its  investment  in  the  Ward Valley, California disposal
project.  Briefing  is  underway  of  the  Company's appeal of the trial court's
ruling.

The  U.S.  District  Court for the District of Nebraska entered judgment against
the  State  of  Nebraska  in  favor  of the Central Interstate Compact and other
plaintiffs  including the Company. The Company's share of the judgment was $12.3
million.  The  Company carries $6.5 million on its balance sheet for capitalized
facility  development  costs.  The  State of Nebraska subsequently appealed this
judgment.  On  February  18,  2004,  the  Eighth  U.S.  Circuit Court of Appeals
affirmed  the  District Court ruling. On April 21, 2004 the Eighth Circuit Court
of  Appeals  denied  Nebraska's  subsequent  request  for  a  Court  of  Appeals
rehearing.  On  July  16, 2004 the State of Nebraska petitioned the U.S. Supreme
Court  to  review  the  Court  of  Appeals  judgment.

On August 9, 2004 Nebraska and the CIC entered into a settlement under which the
State  agreed  to make four equal payments of $38.5 million to the CIC beginning
August  1,  2005  and  annually  thereafter  for  three  years. The $154 million
settlement reflects a principal amount of $140.5 million, plus interest of 3.75%
compounded  annually  and beginning August 1, 2004. The principal may be reduced
to  $130 million if Nebraska and the CIC negotiate suitable access to a proposed
future  Texas LLRW disposal site. Settlement payments are subject to legislative
appropriation.  Should the Nebraska legislature fail to appropriate the required
payments,  the  CIC  retains  rights  to pursue enforcement by any and all legal
remedies available. Under the settlement, Nebraska waived any claim to sovereign
immunity  in a suit brought to enforce payment. The State also agreed to dismiss
its  petition  for  U.S.  Supreme  Court  review.

The  Company continues to maintain a $6.5 million asset on its balance sheet and
anticipates  recording  a  settlement  gain  in Other Income when it and the CIC
agree  on  the  Company's  specific  share  of  the  settlement  and  payment
arrangements.  The  Company  continues  to maintain the proposed Butte, Nebraska
LLRW  disposal  site  for development in the event Nebraska does not fulfill its
settlement  obligations.  Work  to  maintain  the  Butte  site  and  licensing
information  is  being  performed  by the Company under a contract with the CIC.

No  assurance  can  be given that the Company will recover its investment in the
California  project,  or  that  the  Nebraska  legislature  will appropriate the
required  payments  and  the  CIC will timely pay US Ecology's fair share of the
proceeds.  The  Company  believes  that  it is more not likely than not that the
State  of  Nebraska  will  make  the required payments and that the Company will
obtain  its  fair  share  from  the  CIC  based on a specific amount and payment
arrangements  to  be determined in future discussions with the CIC. The decision
to accrue costs or write off assets is based on specific facts and circumstances
pertaining  to  each  case and management's evaluation of present circumstances.

INCOME  TAXES
The Company has historically recorded a valuation allowance against its deferred
tax  assets  in  accordance with FAS 109, Accounting for Income Taxes. This past
valuation  allowance reflected management's past belief that due to a history of
tax  losses,  uncertainty regarding the disposition of the Oak Ridge assets, and
prospects  for  the  Company's


                                       19
<PAGE>
business  at that time, it would likely not utilize portions of the deferred tax
assets  prior  to  their  expiration.  The  valuation  allowance  was  based  on
management's  contemporaneous  evaluation  of whether it is more likely than not
that  the  Company  will  be  able  to  utilize some, or all of the deferred tax
assets.  During  2002, the Company assessed the valuation allowance and reversed
approximately $8,284,000 of the valuation allowance that the Company expected to
utilize  in the foreseeable future. During 2003, the Company did not have tax or
book  income due to the write-off of the Ward Valley facility development asset.
As  a  result,  the  Company did not utilize the deferred tax asset. At June 30,
2004,  the  Company  reassessed the valuation allowance based on the sale of its
Oak  Ridge assets, 2004 year-to-date pretax income, and projections of continued
profitability  and  reversed  the  remaining  valuation allowance. This reversal
resulted in an income tax expense (benefit) of $884,000 and $(9,290,000) for the
three  and  nine  months  ended  September  30,  2004.

RESULTS  OF  OPERATIONS
-----------------------

The following table presents, for the periods indicated, the operating costs as
a percentage of revenues in the consolidated income statement:

<TABLE>
<CAPTION>
                                        Three Months Ended September 30   Nine Months Ended September 30
                                        -------------------------------   ------------------------------
($in 000's)                                   2004            2003             2004               2003
                                        --------------  --------------  ----------------  -----------------
                                           $       %       $       %       $        %         $        %
                                        -------  -----  -------  -----  --------  ------  ---------  ------
<S>                                     <C>      <C>    <C>      <C>    <C>       <C>     <C>        <C>
Revenue                                  12,929          17,324          40,629             40,115
Direct operating costs                    7,396  57.2%   10,383  59.9%   22,457    55.3%    22,423    55.9%
                                        -------         -------         --------          ---------

Gross profit                              5,533  42.8%    6,941  40.1%   18,172    44.7%    17,692    44.1%
SG & A                                    2,967  22.9%    3,302  19.1%    8,417    20.7%    11,088    27.6%
                                        -------         -------         --------          ---------

Income from operations                    2,566  19.8%    3,639  21.0%    9,755    24.0%     6,604    16.5%

Interest income                              52   0.4%      312   1.8%      133     0.3%       334     0.8%
Interest expense                             48   0.4%       60   0.3%      146     0.4%       219     0.5%
Loss on write off of Ward Valley             --   0.0%       --   0.0%       --     0.0%    20,951    52.2%
Other income                                  9   0.1%       20   0.1%       74     0.2%       113     0.3%
                                        -------         -------         --------          ---------

Net income (loss) before income taxes     2,579  19.9%    3,911  22.6%    9,816    24.2%   (14,119)  -35.2%
Income tax expense (benefit)                884   6.8%       18   0.1%   (9,290)  -22.9%        73     0.2%
                                        -------         -------         --------          ---------

Net income (loss) before discontinued
operations                                1,695  13.1%    3,893  22.5%   19,106    47.0%   (14,192)  -35.4%
                                        =======         =======         ========          =========
</TABLE>

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
------------------------------------------------------------

REVENUE
-------

For the three months ended September 30, 2004, the Company reported consolidated
revenue  of  $12,929,000,  a  25% decrease from the $17,324,000 reported for the
same  period  in 2003. Hazardous waste disposal volumes decreased 5% and Average
Selling  Price  ("ASP")  decreased  12%  from  the  same  quarter last year. The
decrease  in  waste  volume  was largely attributable to a fire at the Company's
Robstown, Texas facility where waste receipts were off 61% from the same quarter
last  year  due  to  the  suspension  of treatment services. The decrease in ASP
reflects  an  increased percentage of revenue from lower priced services and the
suspension  of higher priced treatment services at the Robstown, Texas facility.
Also  contributing  to  the  quarterly  revenue  decline  was  a 59% decrease in
transportation  revenue  from the same quarter last year. Transportation revenue
decreased  to  $2,142,000  during  the  third  quarter of 2004. During the three
months  ending  September 30, 2004 and 2003, revenue from a contract between the
Company's  Idaho  facility  and  the  U.S. Army Corps of Engineers accounted for
$4,727,000  and $4,225,000 or 37% and 24% of revenue, respectively. The Army and
other federal agencies continue to ship waste under a recently renewed five year
contract  to  the  Company's Grand View, Idaho facility. During the three months
ending  September  30,  2003,  $5,400,000  or  31%  of  revenue represented work
performed  under  one  contract  for  a


                                       20
<PAGE>
New Jersey hazardous waste clean-up project.

Operating  Disposal  Facilities
-------------------------------

At  the  Richland,  Washington  LLRW disposal facility revenue increased for the
three  months  ended  September  30,  2004  from  the same period in 2003 due to
slightly increased shipments during 2004. For 2004, the Washington Utilities and
Transportation  Commission  has approved a revenue requirement of $5,476,000 for
the  Richland  facility's  rate-regulated low-level radioactive waste interstate
compact  business, of which $1,282,000 of this revenue was recorded in the three
months  ended  September  30,  2004.

At  the  Grand View, Idaho disposal facility, slightly lower waste volumes and a
15% decrease in ASP from the same quarter last year pushed revenue lower. During
the  third  quarter of 2003, the facility received $5,400,000, or 31% of revenue
from  a  large  New  Jersey  hazardous  waste clean-up project. During the third
quarter  of  2004 the facility obtained new business to offset approximately 20%
of  the  2003 project revenue, but was unable to make up all of the lost revenue
in  the  third  quarter  of  2004.  However, revenue from the U.S. Army Corps of
Engineers  was  up  12%  over  the  same  quarter  last  year.

At  the  Beatty,  Nevada  hazardous  treatment  and  disposal  facility, revenue
increased  7% for the three months ended September 30, 2004 from the same period
in  2003.  The  increased  revenue  reflects  a  44%  increase  in waste volumes
partially  offset  by  a 26% decrease in ASP. The increased volume was from both
remediation  projects  and  increased activity from base business customers. The
lower  ASP  resulted  from  a  higher  percentage  of  waste  being generated by
lower-priced  remediation  projects.

At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
decreased 40% for the three months ended September 30, 2004 from the same period
in  2003.  The decreased revenue reflects a lower volume and ASP received at the
site following the July 1, 2004 fire in the facility's waste treatment building.
On-site  waste  treatment  was  suspended  following  the  fire, however, direct
disposal  services  continued  without  interruption.  Small  volumes  of  waste
requiring  treatment  are  still  being  received  at  the  Texas  facility  for
trans-shipment  to the Company's Beatty, Nevada or Grand View, Idaho facilities.

DIRECT OPERATING COSTS
----------------------

For  the  three  months  ended September 30, 2004, consolidated direct operating
costs decreased 25% to $7,396,000 compared to $10,383,000 for the same period in
2003.  This primarily reflects decreased transportation costs.  Relative revenue
direct  operating  costs also decreased from 60% of revenue in the third quarter
of  2003  to  57%  for  the  same  quarter  this  year.

Operating  Disposal  Facilities
-------------------------------

Direct  costs  at  the Richland, Washington; Robstown, Texas; and Beatty, Nevada
facilities  essentially  remained  flat  from  the  same  quarter last year. The
decrease in consolidated direct operating costs was largely driven by a decrease
in  direct  costs at the Grand View, Idaho facility of $2,893,000. $3,140,000 of
the  decrease  in  direct  operating  costs  at  Grand View was due to decreased
transportation  costs,  primarily  on  a  large  New  Jersey remediation project
completed  in  the  fourth  quarter  of  2003.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur  current  period  expenses  for  the
accretion  of  engineering,  laboratory  and other contractor expenses and labor
costs  required to meet the Company's obligations subsequent to operational use.
For  the  three  months  ended September 30, 2004 and 2003, the Company reported
$22,000 and $8,000 of expenses on proposed development projects, and $87,000 and
$114,000  of  costs in 2004 and 2003 to remediate or close facilities subsequent
to  use.

GROSS  PROFIT
-------------


                                       21
<PAGE>
Lower  quarterly  revenue  contributed  to  a  20%  decrease  in gross profit to
$5,533,000  compared with a gross profit of $6,941,000 for the same quarter last
year  even  while gross profit relative to revenue increased 3% from 40% to 43%.
During the third quarter of 2003 the Company was performing the large New Jersey
hazardous  waste  project  and  recognized  $5,400,000  of relatively low margin
revenue.  Large  remediation  projects can increase earnings substantially while
simultaneously  decreasing  gross  margins,  particularly  when  low  margin
transportation  services  are bundled with treatment and disposal services. This
is  consistent  with the largely fixed cost nature of the disposal business, and
the  operating  leverage gained by increased waste throughput. The Company seeks
to maximize contribution margin and gross profit by controlling direct costs and
increasing  waste  volumes.

SELLING, GENERAL AND ADMINISTRATIVE COSTS (SG&A)
------------------------------------------------

For  the  three  months  ended  September 30, 2004, the Company reported SG&A of
$2,967,000 (23% of revenue), a 10% decrease from the $3,289,000 (19% of revenue)
for  the  same  three months of 2003. This decrease is primarily the result of a
$235,000  accrual  for  the  termination  of  an  employment contract during the
quarter ended September 30, 2003 which did not recur in 2004.

Also,  the  Company  incurred  costs  during  2003  to  upgrade  and  centralize
information  and  accounting systems. The cost of these business system upgrades
was  largely born in 2003, while the savings and efficiencies are being realized
in  2004.  The  result  is  improved  management access to timely, more detailed
information  at  a  lower  cost.

Operating  Disposal  Facilities
-------------------------------

During  the quarter ended September 30, 2004, Operating Disposal Facilities SG&A
decreased  $425,000.  Business  re-engineering,  cost  containment,  and
centralization  of  certain  functions  at  the  Boise  corporate  office  which
outweighed  the  recognition  of the $138,000 proposed administrative penalty in
Texas.

Corporate
---------
During  the  quarter ended September 30, 2004, Corporate SG&A increased $90,000.
This  primarily  reflects  $267,000  accrued  for  the Management Incentive Plan
("MIP")  to  be paid to selected participants if the Company's pre-tax operating
income  exceeds  $12,000,000 including MIP costs. MIP and other costs related to
the  centralization  of certain functions at the corporate office were offset by
2003  payroll  and  benefits  costs  for  a  terminated  employment  contract of
$235,000.  The  Company continues its efforts to minimize Corporate SG&A through
optimization  of  the centralized information and accounting systems and ongoing
spending  controls.

The  Company  is  currently  preparing  to  comply  with  the  internal  control
requirements  of  Section  404  of  the  Corporate  Reform  Act  of 2002 (a.k.a.
Sarbanes-Oxley)  and  has  retained  independent  consultants and contractors to
assist  in  this  effort.  The  Company  spent approximately $100,000 during the
quarter  ended September 30, 2004 and expects to devote substantial resources to
this  effort in the fourth quarter of 2004 as well. Costs and resources required
to  comply  with  Section  404  may  increase  significantly.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur primarily legal costs to protect the
Company's  investment  in  disposal  site  development  projects in Ward Valley,
California  and  Butte,  Nebraska. For the three months ended September 30, 2004
and 2003, the Company reported $1,000 and $1,000 of SG&A expenses, respectively,
at  Non  Operating  Disposal  Facilities.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
-----------------------------------------------------------

REVENUE
-------

For  the nine months ended September 30, 2004, the Company reported consolidated
revenue of $40,629,000, a 1% increase over the $40,115,000 reported for the same
period  in 2003. Two of four disposal facilities generated higher revenue during
the  first  three  quarters of 2004 while the other two generated lower revenue.
The  overall  higher  revenue resulted from increased waste volumes and slightly
lower  average  selling  price  ("ASP")  for  the  Company's


                                       22
<PAGE>
treatment  and  disposal  services.  At  the  three  hazardous  waste  disposal
facilities,  volumes  increased  7%  over  the  same  nine months last year. The
increase in waste volume resulted from an increase in both recurring (or "Base")
business  and  project (or "Event") work performed during the period. The slight
decrease  in  year-to-date  2004  ASP  reflected  a  less favorable mix of niche
treatment  and  disposal  business  and  a large, lower priced project performed
during  the first half of 2003. Year-to-date transportation revenue increased 7%
from the same nine months last year, reaching $7,977,000. During the nine months
ending  September  30,  2004 and 2003, revenue from the Grand View, Idaho site's
contract  with  the  U.S.  Army Corps of Engineers accounted for $13,693,000 and
$12,083,000  or 34% and 30% of revenue, respectively. The Army and other federal
agencies  continue  to  ship waste under this contract, which was renewed by the
Army  for  five  years  in  the  second  quarter  of  2004.

Operating  Disposal  Facilities
-------------------------------
At  the Richland, Washington LLRW disposal facility revenue increased 4% for the
nine months ended September 30, 2004 from the same period in 2003. This increase
in  revenue  was  due  to  slightly  higher  shipments  of  material that is not
regulated by the Washington Utilities and Transportation Commission ("WUTC") for
rate  purposes.  The  WUTC has approved a 2004 revenue requirement of $5,476,000
for  the  Richland  facility's  rate-regulated  low-level  radioactive  waste
interstate compact business. $3,875,000 of this revenue was recorded in the nine
months  ended  September  30,  2004.

At  the Grand View, Idaho disposal facility, the 2003 New Jersey hazardous waste
project was partially replaced by other projects during 2004, causing a decrease
in  revenue  of  5%  from  the same nine months last year. During the first nine
months  of 2004, the facility disposed of 13% more waste volume than in the same
period  last  year  but  performed  less  work  under higher dollar/lower margin
percentage  bundled transportation and disposal projects. Management expects the
U.S.  Army Corps of Engineers and other federal agencies to continue shipping to
the  Idaho  facility  under  the  five  year  contract  extension.

At  the  Beatty,  Nevada  hazardous  treatment  and  disposal  facility, revenue
increased  28% for the nine months ended September 30, 2004 from the same period
in  2003.  The increased revenue was due to a 53% increase in waste volume while
average  prices  decreased by 9%. The increased volume was from both remediation
projects  and  increased  shipments  from base business customers. The lower ASP
resulted  from a higher percentage of waste from remediation projects and wastes
not requiring specialized treatment services (e.g. direct disposal wastes).

At  the  Robstown,  Texas  hazardous  treatment  and  disposal facility, revenue
decreased  5%  for the nine months ended September 30, 2004 from the same period
in  2003.  The facility was consistently profitable each month of 2004 until the
July  1,  2004  fire. The decreased revenue year to date reflects a lower volume
and  priced  mix  of  wastes  received  at  the facility following suspension of
treatment services following the July 1, 2004 fire in the facility's containment
building. Small volumes of waste requiring treatment are still being received at
the  facility  for trans-shipment to the Company's Beatty, Nevada or Grand View,
Idaho  facilities.

DIRECT OPERATING COSTS
----------------------

For  the  nine  months  ended  September 30, 2004, consolidated direct operating
costs increased slightly to $22,457,000 (55% of revenue) compared to $22,423,000
(58%  of  revenue)  for  the  same period in 2003. This primarily reflected a 7%
increase in disposal volumes. Direct operating costs decreased slightly relative
to revenue, reflecting a decrease in low margin transportation services provided
in  conjunction  with  disposal  services.  The Company continues its efforts to
minimize  direct  costs through improved operational efficiency and ongoing cost
controls  pending  restoration  of  treatment  services.

Operating  Disposal  Facilities
-------------------------------

Direct  costs at all four disposal facilities essentially remained flat from the
same  nine  months  last  year  with no facility having more than a 6% change in
direct  costs.  During  the  nine  months  ended  September 30, 2004 the Company
reduced  the costs of additives used to treat waste, resulting in lower variable
costs  for  certain  waste  streams.

Non  Operating  Disposal  Facilities
------------------------------------


                                       23
<PAGE>
Non  Operating  Disposal  Facilities  incur  current  period  expenses  for  the
accretion  of  engineering,  laboratory  and other contractor expenses and labor
costs  required to meet the Company's obligations subsequent to operational use.
For  the  nine  months  ended  September 30, 2004 and 2003, the Company reported
$44,000  and  $32,000  in  expenses  on the California and Nebraska matters, and
$286,000 and $320,000 in costs to remediate and/or monitor facilities subsequent
to  operational  use.

GROSS  PROFIT
-------------

Slightly  higher  revenue  and direct costs allowed the Company to generate a 3%
increase  in  gross profit, pushing gross profit to $18,172,000, compared with a
gross  profit  of  $17,692,000  for  the  same  nine months last year. Increased
disposal volumes were offset by decreased depreciation and accretion expenses as
the  disposal  facilities  produced  comparable earnings contribution due to the
largely  fixed  cost  nature  of  the  disposal business. Gross margin decreased
slightly to 41% of revenue compared to 44% of revenue due to the interruption of
treatment  services at the Robstown, Texas facility where revenue declined by 5%
and  direct  costs  increased  4%.

SELLING, GENERAL AND ADMINISTRATIVE COSTS (SG&A)
------------------------------------------------

For  the  nine  months  ended  September  30, 2004, the Company reported SG&A of
$8,417,000  (21%  of  revenue),  a  24%  decrease  from  the $11,088,000 (28% of
revenue)  for  the  same  nine  months  of  2003. The decrease in SG&A primarily
resulted  from  a  $1,995,000 decrease in legal expenses incurred in 2003. Legal
expenses  for  the  first  nine  months  of 2004 dropped to $180,000 compared to
$2,135,000  in  the first nine months of 2003. The Company has resolved multiple
lawsuits,  reducing  legal  fees and freeing up management time and resources to
focus  on  other  matters.

The Company incurred costs during 2003 to upgrade and centralize information and
accounting  systems. The cost of these business system upgrades was largely born
in  2003,  while  the  savings  and efficiencies are being realized in 2004. The
primary  benefit  is  management access to more timely and detailed information.

Operating  Disposal  Facilities
-------------------------------

During  the  nine months ended September 30, 2004, Operating Disposal Facilities
SG&A  decreased  $1,711,000  due  to  business reorganizations, cost containment
efforts and centralization of certain functions at Corporate.

Corporate
---------

During  the  nine  months  ended  September  30,  2004, Corporate SG&A increased
$817,000.  This  includes  $881,000  accrued  for  the Management Incentive Plan
("MIP")  to  be paid to selected participants if the Company's pre-tax operating
income exceeds $12,000,000 including all costs associated with the MIP. Included
in  the 2003 Corporate SG&A is $235,000 in payroll and benefits for a terminated
employment  contract.  The remaining increase in Corporate SG&A represents costs
previously  borne  by  the  Operating  Disposal  Facilities  and now assigned to
Corporate.

The  Company  is currently in the process of complying with the internal control
requirements  of  Section  404  of  the  Corporate  Reform  Act  of 2002 (a.k.a.
Sarbanes-Oxley).  The  Company  is investing a significant effort into complying
with  the  requirements  of Section 404 and has retained independent consultants
and  contractors  to  assist  in  this  effort.  The Company spent approximately
$100,000  during  the  quarter  ended  September  30, 2004 and expects to devote
substantial resources to this effort in the fourth quarter of 2004.

Non  Operating  Disposal  Facilities
------------------------------------

Non  Operating  Disposal  Facilities  incur primarily legal costs to recover the
Company's  investment  in  disposal  site  development  projects in Ward Valley,
California and Butte, Nebraska. For the nine months ended September 30, 2004 and
2003,  the  Company  reported  $22,000  and  $1,802,000  of  SG&A  expenses,
respectively,  at  Non Operating Disposal Facilities. Substantially all of these
expenses  were  legal costs associated with the Butte, Nebraska and Ward Valley,
California  matters.


                                       24
<PAGE>
COMPARISON OF THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
---------------------------------------------------------------------

INTEREST INCOME
---------------

For  the  three  and  nine  months  ended September 30, 2004, the Company earned
$52,000  and  $133,000 of interest income, a decrease from $312,000 and $334,000
in  the  same  period  of  2003. During the quarter ended September 30, 2003 the
Company received a Federal tax refund plus interest of $302,000. During 2004 the
Company  has  maintained  substantially  higher  cash  and short term investment
balances.  The Company typically earns minimal income based on prevailing market
rates  on  short  term  investments and does not anticipate significant interest
income  in  2004.  Beginning  in the quarter ended June 30, 2004, the Company is
investing in short term debt instruments of quasi governmental institutions such
as the Federal Home Loan Bank.  These investments have had maximum maturities of
approximately  three  months  and are expected to earn a slightly higher rate of
return than the previous investments in overnight securities.

INTEREST  EXPENSE
-----------------

For  the  three  and  nine months ended September 30, 2004, the Company reported
interest  expense of $48,000 and $146,000, compared to $60,000 and $219,000 from
the  corresponding  periods  in  2003. This reflects a reduction in average debt
outstanding  by  $1,900,000  from  the  nine months ending September 30, 2003 to
2004,  offset  by  slightly higher interest rates. The interest rate paid on the
outstanding  term  loan  was  fixed  at 3.81%. This rate will be effective until
November 18, 2004 at which time the Company and the bank will reset the interest
rate.  Additional  reductions  in  interest  expense  may occur as debt balances
continue to be paid down, however, the Company may experience increased interest
expense  if  interest rates materially increase. At September 30, 2004, the line
of  credit  had  a  zero  balance.

OTHER INCOME (LOSS)
-------------------

Other Income is composed of the following ($ in thousands):

<TABLE>
<CAPTION>
                                                      Three Months Ended September 30,     Nine Months Ended September 30,
                                                            2004               2003              2004              2003
                                                    --------------------  --------------  ------------------  --------------
<S>                                                 <C>                   <C>             <C>                 <C>
Data processing services                                             10               --                  44               8
Cash receipts for sale or rent of property rights                    --               20                  22             100
Other miscellaneous income, net                                      (1)              --                   8               5
                                                    --------------------  --------------  ------------------  --------------

Total other income (loss)                           $                 9   $           20  $               74  $          113
                                                    ====================  ==============  ==================  ==============
</TABLE>

INCOME TAXES
------------

The components of the income tax provision (benefit) were as follows (in
thousands):

<TABLE>
<CAPTION>
                                                        Three Months Ended       Nine Months Ended
                                                    ------------------------  ----------------------
                                                        2004         2003        2004        2003
                                                    ------------  ----------  ----------  ----------
<S>                                                 <C>           <C>         <C>         <C>
State income tax expense                            $         48  $       18  $      48   $       73
Federal income tax expense                                   836          --      3,716           --
Reversal of deferred tax asset valuation allowance            --          --    (12,931)          --
                                                    ------------  ----------  ----------  ----------
Income tax (benefit) expense                        $        884  $       18  $  (9,290)  $       73
                                                    ============  ==========  ==========  ==========
</TABLE>

The  tax effects of temporary differences between income for financial reporting
and  income  taxes give rise to deferred tax assets and liabilities. The Company
has  historically recorded a valuation allowance for certain deferred tax assets
due  to  uncertainties  regarding  future  operating results, and limitations on
utilization  of acquired net operating loss carry forwards for tax purposes. The
potential  realization  of  a  significant portion of net deferred tax assets is
based  in  part on the Company's estimates of the timing of reversals of certain
temporary  differences  and  on  the  generation  of  taxable income before such
reversals.  In  2002,  the  Company reevaluated the deferred tax asset valuation


                                       25
<PAGE>
allowance,  determined  it  was  then more likely than not that a portion of the
deferred tax asset would be realizable, and decreased a portion of the valuation
allowance  related  to  its  operating  facilities.

During 2003, the $20,951,000 write-off of Ward Valley facility development costs
resulted  in a book as well as tax loss for 2003. As a result, no portion of the
deferred  tax  asset  was utilized. Based on the Company's $7,237,000 first half
2004  pre-tax  income,  $836,000  and $3,716,000 of gross income tax expense was
recognized  during the three and nine months ended September 30, 2004.  The June
30,  2004  sale of the Company's Oak Ridge assets prompted a reassessment of the
valuation  allowance.  Based  on  disposition  of  the  Oak  Ridge  assets  and
management's expectation of continued profitability, the Company determined that
the  deferred  tax  asset  would  be  utilized  in its entirety and no valuation
allowance  was  warranted.  Accordingly  the  remaining  valuation allowance was
reversed  by  a  gross  income  tax  benefit  of  $12,931,000.

The  net  operating  loss  carry forward at September 30, 2004 was approximately
$40,000,000.  Of this net operating loss carry forward, approximately $2,115,000
is  limited  by the net operating loss limitation rules of Internal Revenue Code
Section  382  and  begins  to  expire  in  2006.  The remaining unrestricted net
operating loss carry forward expires at various dates between 2010 and 2020. Due
to  the  Company's  net  operating  loss  carry  forwards, income tax expense of
approximately  2%  of  pretax income tax expense is expected to be paid in cash.
Approximately  32% of remaining pretax income tax expense will be offset against
the  net  operating  loss  carry  forwards.

The  Company  will  continue  to  assess  the deferred tax asset as circumstance
dictate,  but  at  least  annually.

SEASONAL EFFECTS
----------------

Operating  revenues  are  generally lower in the winter months and higher in the
summer  and fall when more short duration, one-time remediation projects tend to
occur.  However, both treatment and disposal revenue are generally more affected
by  large multi-year clean-up projects, the national economy, government funding
levels  and  base  business  production  than  seasonality.

CAPITAL RESOURCES AND LIQUIDITY
-------------------------------

At September 30, 2004, cash and cash equivalents totaled $9,712,000, an increase
of  $3,038,000  from  December  31, 2003 due to the Company's positive operating
cash  flow. The increase in cash was reduced by an investment in slightly longer
term  quasi governmental obligations such as Federal Home Loan Bank instruments.
This  will increase interest income yields by approximately 50%. As of September
30,  2004,  short  term  investments of $4,989,000 had been made using staggered
maturities  of  approximately  three  months.

During  the  first  nine  months  of  2004, the Company's days sales outstanding
("DSO") decreased to 56 days compared to 68 days at December 31, 2003. Continued
improvement  in  cash and receivable balances is an ongoing management priority.

As  of  September  30,  2004 the Company's liquidity, as measured by the current
ratio,  was  1.6  to  1.0.  The  debt  to  equity  ratio decreased to 0.6:1.0 at
September  30,  2004.  The primary changes to working capital and debt to equity
ratio  were  caused  by a payment of $5,500,000 in cash to redeem a common stock
warrant  and a dividend accrued on common stock for $4,345,000, partially offset
by  the  first  three quarters of 2004 earnings and reversal of the deferred tax
asset  valuation  allowance.  The  debt  to  equity  ratio  is  defined as total
liabilities  divided  by  stockholders  equity.

SOURCES  OF  CASH

On September 30, 2004, the Company had an $8,000,000 revolving line of credit in
place  with Wells Fargo Bank in Boise, Idaho maturing June 15, 2005. The line of
credit  is  secured by the Company's accounts receivable. At September 30, 2004,
the  outstanding  balance  on the revolving line of credit was $-0-. The Company
borrows  and  repays  according to business demands and availability of cash and
currently  reserves $3,258,000 of the line of credit for a letter of credit used
as  collateral  for  an  insurance  policy.

Company  operations  have  produced  a  three  year rolling quarterly average of
approximately  $2,500,000  a  quarter  in


                                       26
<PAGE>
cash  flow.  Management  expects  2004 quarterly cash flow from operations to be
higher  on  average.  The  $9,712,000  in cash on hand at September 30, 2004 was
comprised  of  investments which were not required for operations of $9,272,000,
bank  balances of $1,074,000, and a net checks outstanding amount of ($634,000).

USES OF CASH

On  August  31, 2004 the Company declared a dividend of $.25 per common share to
stockholders  of  record on September 30, 2004 and payable October 15, 2004.  On
October  15,  2004  the  $4,345,000  dividend  was  paid  out  of  cash on hand.

On February 17, 2004 the Company redeemed a warrant to purchase 1,349,843 shares
of common stock at $1.50 a share for $5,500,000. The closing market price of the
Company's  common  stock  of  February  17, 2004 was $6.99. The warrant had been
issued in 1998 to its former bank as part of a debt restructuring agreement. The
redeemed  warrant,  which  represented  approximately 8% of the Company's shares
outstanding,  has  been  surrendered  and  will  not  be  reissued.  The warrant
redemption  reduced  the  Company's  cash  on  hand  by  $5,500,000  and reduced
additional  paid-in-capital by a like amount, with no effect on the Statement of
Operations.

Management  expects  its  capital  spending between $5,000,000 and $6,500,000 in
2004.  The  Company  is  making  capital  improvements at its Grand View, Idaho,
Beatty,  Nevada  and  Robstown,  Texas  facilities  to  increase  operational
efficiency.  Substantial  2004  capital  spending  is  allocated  to  the  Texas
hazardous  waste facility for restoration of treatment services following a July
1, 2004 fire incident in the Texas facility's waste treatment building.  Initial
estimates  of the cost of a replacement treatment building at the Texas facility
are  approximately  $1,200,000,  which will be offset by any proceeds paid under
the  property  insurance.  The  Company  expects  2005  capital  spending  to be
significantly higher to implement its high volume, diverse service mix strategy.

Treatment  performed  in  the  Texas facility's containment building represented
approximately  50%  of  the  Texas  facility's revenue prior to the fire. Direct
disposal  operations  continue without interruption and generated the balance of
the  facility's  revenue.  The  precise costs of the fire cannot be estimated at
this  time.  While  the  Company  carries  property  and  business  interruption
insurance,  significant  cash  usage  will  likely  be  required to meet ongoing
operational needs and to contract for the capital improvements needed to restore
treatment  services  prior  to  the  receipt  of insurance proceeds. The Company
believes  that  it can fully restore treatment services during the first half of
2005.

The  Company's  Oak  Ridge  facility required cash of $2,925,000 during the nine
month  period ending on the September 30, 2004. Most of the cash was used to pay
Toxco,  Inc.  $1,650,000  for  assuming  the facility's environmental and future
closure  liabilities,  with the remainder being used to pay operational expenses
and  for  waste  disposal.  At  September 30, 2004 the Company expects to pay an
additional $111,000 during 2004, primarily for disposition of waste removed from
the  facility  following  discontinuation  of  commercial  operations.

The  Company  believes  that cash on hand, short term investments, and cash flow
from  operations,  augmented  as needed by periodic borrowings under the line of
credit,  will be sufficient to meet the Company's cash needs for the foreseeable
future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The  Company  does not maintain equities, commodities, derivatives, or any other
instruments  for  trading  or  any  other  purposes,  and  does  not  enter into
transactions  denominated  in  currencies  other  than  the  U.S.  Dollar.

The  Company  has  minimal interest rate risk on investments or other assets, as
management  takes a preservation of capital approach to investments and does not
hold  long  term or speculative investments. At September 30, 2004 approximately
$14,300,000 was held in investment accounts whose maturity ranged from overnight
to  three  months.  Together  these items earn interest at approximately 1%, and
comprise  19%  of  assets.

The  Company  does have interest rate risk on debt instruments. In October 2002,
the  Company  substantially


                                       27
<PAGE>
refinanced  the  8.25%  fixed  rate  $8,500,000  Industrial  Revenue Bond with a
$7,000,000  five year term loan from the Company's primary lender. The term loan
provides  for  a  variable interest rate of the bank's prime rate or an offshore
rate plus an applicable margin based on the Company's performance.  At September
30,  2004 the interest rate incurred on the term loan had increased from 3.5% at
December  31,  2003 to 3.81% on the outstanding term loan balance of $4,433,000.
The  term loan interest expense is currently fixed at 3.81% through November 18,
2004.  A  hypothetical  increase  of  1% in interest rates would increase annual
interest  expense  paid  by  the  Company  by  approximately  $37,000.

ITEM 4.   CONTROLS AND PROCEDURES.

(a)  As  of  the  end  of  the  period covered by this quarterly report, Company
management,  under  the  direction  of  the  Chief  Executive  Officer and Chief
Financial  Officer, carried out an evaluation of the effectiveness of the design
and  operation  of  the Company's disclosure controls and procedures pursuant to
Rule  13a-14  of the Securities Exchange Act of 1934 (Exchange Act).  Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer believe
that  the  Company's  disclosure controls and procedures are effective in timely
alerting  them to material information required to be disclosed in the Company's
Exchange  Act  filings.

(b)  The  Company  maintains  a system of internal controls that are designed to
provide reasonable assurance that its records and filings accurately reflect the
transactions  engaged  in. For the quarter ending September 30, 2004, there were
no  significant  changes  to  internal  controls  or in other factors that could
significantly  affect  these  internal  controls.

PART II  OTHER INFORMATION.
---------------------------
ITEM 1.  LEGAL PROCEEDINGS.

Significant  developments  have  occurred  on  the following legal matters since
December  31,  2003:
US ECOLOGY, INC. V. THE STATE OF CALIFORNIA, ET AL., CASE NO.GIC747562, SUPERIOR
---------------------------------------------------
COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN DIEGO

In  May  2000, subsidiary US Ecology, Inc. sued the State of California, et. al.
("the  State")  for  monetary  damages  exceeding $162 million stemming from the
State's  alleged  abandonment  of  the  Ward  Valley low-level radioactive waste
("LLRW")  disposal  project.  On  March  26,  2003,  the Superior Court issued a
decision against the Company. Based on the uncertainty of recovery following the
Superior  Court's  adverse  decision,  the  Company  wrote  off  the $20,951,000
deferred  site  development  asset  on  March  31,  2003.

In  June  2003,  the Company filed a notice of appeal with the California Fourth
Appellate  District Court. The opening appellate brief was filed March 15, 2004.
The  State's  Respondents'  Brief  was  filed  on  October 15, 2004. The Company
expects  its  reply  brief  to be filed in 2004, and that oral arguments will be
held  in  early  to  mid  2005.  No assurance can be given that the Company will
prevail  on  appeal  or  reach  a  settlement  to  recover  any  portion  of its
investment.

ENTERGY  ARKANSAS,  INC.  ET  AL, CENTRAL INTERSTATE LOW-LEVEL RADIOACTIVE WASTE
--------------------------------------------------------------------------------
COMMISSION  AND  US  ECOLOGY,  INC. ("PLAINTIFFS") V. STATE OF NEBRASKA, ET AL.,
------------------------------------------------------------------------------
CASE NO. 4:98CV3411, U.S. DISTRICT COURT, DISTRICT OF NEBRASKA

This  action  was  brought  in  federal  court  in  December of 1999 by electric
utilities  that generate low-level radioactive waste ("LLRW") within the Central
Interstate  Low-Level  Radioactive  Waste  Compact ("CIC") to obtain declaratory
relief and damages. In September 2002, the US District Court for the District of
Nebraska entered judgment against Nebraska in favor of the CIC for $153 million,
including approximately $50 million for prejudgment interest. Of this amount, US
Ecology's share was $6.2 million plus $6.1 million for prejudgment interest. The
State  of  Nebraska subsequently appealed. On February 18, 2004, the Eighth U.S.
Circuit Court of Appeals affirmed the District Court ruling.  On April 21, 2004,
the Eighth Circuit Court of Appeals denied Nebraska's petition for rehearing. On
July 16, 2004, the State of Nebraska petitioned the U.S. Supreme Court to review
the  Court  of  Appeals'  judgment.

On August 9, 2004 Nebraska and the CIC entered into a settlement under which the
State  agreed  to make four equal payments of $38.5 million to the CIC beginning
August  1,  2005  and  annually  thereafter  for  three  years.  The  $154


                                       28
<PAGE>
million  settlement reflects a principal amount of $140.5 million, plus interest
of  3.75% compounded annually and beginning August 1, 2004. The principal may be
reduced  to  $130 million if Nebraska and the CIC negotiate suitable access to a
proposed  future  Texas  LLRW  disposal site. Settlement payments are subject to
legislative  appropriation.  Should the Nebraska legislature fail to appropriate
the  required  payments, the CIC retains rights to pursue enforcement by any and
all legal remedies available. Under the settlement, Nebraska waived any claim to
sovereign  immunity  in a suit brought to enforce payment. The State also agreed
to  dismiss  its  petition  for  U.S.  Supreme  Court  review.

The  Company continues to maintain a $6.5 million asset on its balance sheet and
anticipates  recording  a  settlement  gain  in Other Income when it and the CIC
agree  on  the  Company's  specific  share  of  the  settlement  and  payment
arrangements.  The  Company  continues  to maintain the proposed Butte, Nebraska
LLRW  disposal  site  for development in the event Nebraska does not fulfill its
settlement  obligations.  Work  to  maintain  the  Butte  site  and  licensing
information  is  being  performed  by the Company under a contract with the CIC.
No  assurance  can  be  given that the Nebraska legislature will appropriate the
required payments or that the CIC will timely pay US Ecology's fair share of the
proceeds.  The  Company  believes,  however, that it is more not likely than not
that  the State will make the required payments and that the Company will obtain
its  fair share from the CIC based on a specific amount and payment arrangements
to  be  determined  in  future  discussions  with  the  CIC.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On February 17, 2004 the Company redeemed a warrant to purchase 1,349,843 shares
of  common stock at $1.50 a share for $5,500,000. The warrant had been issued in
1998  to its former bank as part of a debt restructuring agreement. The redeemed
warrant, which represented approximately 8% of the Company's shares outstanding,
has  been  surrendered  and  will  not  be  reissued.

On  August  31,  2004 the Company declared a $.25 a common share annual dividend
for  recordholders  as  of  September  30,  2004, payable October 15, 2004.  The
Company  paid  $4,345,000  out of cash on hand on October 15, 2004 to our common
stockholders  for  this  dividend.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5.  OTHER INFORMATION.

On  June  30,  2004,  the  Company's  unaffiliated  market  capitalization  was
$134,000,000.  As  the  Company's unaffiliated market capitalization was greater
than  $75,000,000  at  the end of its second quarter, the Company will become an
accelerated  filer  with  the  SEC  effective  January  1,  2005,  provided such
requirements  are  not  modified  by  the  SEC.

Due  to  the  increase  in the Company's unaffiliated market capitalization, the
Company  is  now required to comply with Section 404 of the Corporate Reform Act
of  2002  (a.k.a.  Sarbanes-Oxley)  during  2004.  Section 404 requires that the
Company  design,  document, implement and test internal controls consistent with
guidelines issued by the Public Company Accounting Oversight Board ("PCAOB") and
the  Committee  of Sponsoring Organizations of the Treadway Commission ("COSO").
The  Company  is  investing  a  significant  effort  into  complying  with  the
requirements  of  Section  404  and  has  retained  independent  consultants and
contractors  to  assist in this effort. The Company spent approximately $100,000
during  the  quarter ended September 30, 2004, and expects to continue to devote
substantial  resources  to  this  effort  for  the  rest  of 2004. The costs and
resources  required may increase significantly. Given the scope and requirements
of Section 404 and the recent date of the commencement of this compliance effort
based  on  the  Company's  increased  market capitalization, no assurance can be
given  that  the


                                       29
<PAGE>
Company  will  have  all  of  its  internal  controls  designed,  documented,
implemented,  and  tested  in  time  for  its  external  auditors to perform the
independent  tests  required  under  current  rules  and  regulations.

On July 30, 2004 the Company terminated Mellon Investor Services as its transfer
agent and, as of August 2, 2004, engaged American Stock Transfer & Trust Company
("AST")  as  the transfer agent for Company stock. The Company believes that AST
will  increase  the  level  of service for our shareholders while decreasing the
cost  of  transfer  agent  services  to  the  Company.

ITEM 6.  EXHIBITS.

  The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>
       Exhibit No.  Description

       -----------------------------------------------------------------------------------------------------
<C>                 <S>
          31.1      Certifications of September 30, 2004 Form 10-Q by Chief Executive Officer dated November
                    4, 2004
       -----------------------------------------------------------------------------------------------------
          31.2      Certifications of September 30, 2004 Form 10-Q by Chief Financial Officer dated November
                    4, 2004
       -----------------------------------------------------------------------------------------------------
          32.1      Certifications of September 30, 2004 Form 10-Q by Chief Executive Officer dated November
                    4, 2004
       -----------------------------------------------------------------------------------------------------
          32.2      Certifications of September 30, 2004 Form 10-Q by Chief Financial Officer dated November
                    4, 2004
       -----------------------------------------------------------------------------------------------------
</TABLE>

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.


                          AMERICAN ECOLOGY CORPORATION
                          (Registrant)


Date:  November 4, 2004   By: /s/ Stephen A. Romano
                          --------------------------------
                          Stephen A. Romano
                          President, Chief Executive Officer and Chief Operating
                          Officer

Date:  November 4, 2004   By:/s/ James R. Baumgardner
                          ---------------------------
                          James R. Baumgardner
                          Senior Vice President, Chief Financial Officer,
                          Secretary and Treasurer


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                            EXHIBIT INDEX

Exhibit  Description
-------  -----------
<C>      <S>
  31.1   Certifications of September 30, 2004 Form 10-Q by Chief Executive Officer dated November 4,
         2004
  31.2   Certifications of September 30, 2004 Form 10-Q by Chief Financial Officer dated November 4,
         2004
  32.1   Certifications of September 30, 2004 Form 10-Q by Chief Executive Officer dated November 4,
         2004
  32.2   Certifications of September 30, 2004 Form 10-Q by Chief Financial Officer dated November 4,
         2004
</TABLE>


                                       31
<PAGE>