FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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


For Quarter Ended:   January 31, 1998

Commission File Number:   2-90422-C


                         Infinite Graphics Incorporated
             (Exact Name of Registrant as Specified in Its Charter)

             Minnesota                                41-0956693
      (State of Jurisdiction)                (IRS Employer Identification)

               4611 East Lake Street, Minneapolis, Minnesota 55406
                    (Address of Principal Executive Officer)
                                   (Zip Code)


                                  612-721-6283
              (Registrant's Telephone Number, Including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__    No ____

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                  2,652,525 common shares as of March 13, 1998

                            Total number of pages: 11

                           Exhibit index on page:  11

<PAGE>


PART 1 - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                         INFINITE GRAPHICS INCORPORATED
                           BALANCE SHEETS (Unaudited)

<TABLE>
<CAPTION>
                                                                   January 31,1998    April 30, 1997
                                                                   ---------------    --------------
                            ASSETS
<S>                                                                <C>             <C>        
CURRENT ASSETS:
      Accounts receivable, less allowance for doubtful accounts      $ 1,029,321       $ 1,390,198
           of $36,659 and $104,441, respectively
      Inventories                                                    $   154,406       $   162,952
      Prepaid assets and other                                       $    61,991       $    36,312
                                                                     -----------       -----------
        Total current assets                                         $ 1,245,718       $ 1,589,462

Property, Plant and Equipment (net)                                  $   747,102       $   691,002

Capitalized Software Costs, less accumulated amortization of         $ 1,066,822       $ 1,022,628
   $6,308,753 and $5,819,399, respectively

   OTHER ASSETS                                                      $    15,194       $    30,025

                                                                     -----------       -----------
                                                                     $ 3,074,836       $ 3,333,117
                                                                     ===========       ===========
              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Revolving credit agreement                                        $   342,648       $   427,291
   Trade accounts payables                                           $   443,514       $   317,451
   Accrued salaries, vacations, and employee withholdings            $   287,738       $   310,962
   Other accrued expenses                                            $   238,680       $   317,772
   Deferred revenue                                                  $   139,132       $   259,308
   Current portion long-term debt                                    $    39,764       $   175,096
   Current portion capitalized lease obligations                     $    33,393       $    43,054
                                                                     -----------       -----------
      Total current liabilities                                      $ 1,524,869       $ 1,850,934

LONG-TERM DEBT, less current portion                                 $   412,641       $     7,395

CAPITAL LEASE OBLIGATIONS, less current                              $    86,191       $   111,465

STOCKHOLDERS' EQUITY:
   Common stock, no par value, authorized 10,000,000 shares,         $ 4,136,697       $ 4,112,947
      issued and outstanding 2,652,575 and 2,462,575 at January
      31, 1998 and April 30, 1997, respectively
   Accumulated deficit                                               ($3,085,562)      ($2,749,624)
                                                                     -----------       -----------
      Total stockholders' equity                                     $ 1,051,135       $ 1,363,323
                                                                     -----------       -----------

                                                                     $ 3,074,836       $ 3,333,117
                                                                     ===========       ===========
</TABLE>

See notes to financial statements

<PAGE>


                         INFINITE GRAPHICS INCORPORATED
                      STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
                                              Three Month Period              Nine Month Period
                                               Ended January 31               Ended January 31
                                             1998           1997            1998            1997
                                         ---------------------------    ---------------------------
<S>                                      <C>             <C>            <C>             <C>        
REVENUES:
  Net sales                              $ 1,171,703     $ 1,492,061    $ 3,782,748     $ 4,217,525
  Other income                           $     2,936     $     5,489    $     2,936     $    68,489
                                         ---------------------------    ---------------------------
                                         $ 1,174,639     $ 1,497,550    $ 3,785,684     $ 4,286,014

COSTS AND EXPENSES:
  Cost of products sold                  $   844,543     $   872,547    $ 2,499,402     $ 2,548,281
  Selling, general and administrative    $   435,134     $   472,443    $ 1,337,059     $ 1,287,755
  Research and development costs         $    86,669     $    82,812    $   215,125     $   243,333
  Interest                               $    23,569     $    30,551    $    70,036     $    85,762
                                         ---------------------------    ---------------------------
      Total costs and expenses           $ 1,389,915     $ 1,458,353    $ 4,121,622     $ 4,165,131
                                         ---------------------------    ---------------------------

OPERATING (LOSS) INCOME                  ($  215,276)    $    39,197    ($  335,938)    $   120,883

EQUITY IN INCOME OF JOINT VENTURE                        $     3,678                    $    16,257
                                         ---------------------------    ---------------------------

NET (LOSS) INCOME                        ($  215,276)    $    42,875    ($  335,938)    $   137,140
                                         ===========================    ===========================

NET (LOSS) INCOME PER SHARE:
  Basic                                  ($     0.08)    $      0.02    ($     0.13)    $      0.06
                                         ---------------------------    ---------------------------
  Diluted                                ($     0.08)    $      0.02    ($     0.13)    $      0.05
                                         ===========================    ===========================

WEIGHTED AVERAGE COMMON SHARES
  AND SHARES ASSUMED OUTSTANDING:
  Basic                                    2,625,727       2,382,575      2,516,959       2,363,097
                                         ---------------------------    ---------------------------
  Diluted                                  2,625,727       2,761,041      2,516,959       2,704,957
                                         ---------------------------    ---------------------------
</TABLE>

See notes to financial statements.

<PAGE>


                         INFINITE GRAPHICS INCORPORATED
                             STATEMENT OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        Nine Months
                                                                      Ended January 31
                                                                     1998          1997
                                                                  ----------    ---------
<S>                                                               <C>           <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                               ($335,938)    $ 137,140
  Adjustments to reconcile net (loss) income to net cash flows
   provided by operating activities:
  Depreciation and amortization                                   $ 696,698     $ 698,135
  Equity in income of joint venture                                             ($ 16,257)
  Changes in assets and liabilities:
    Accounts receivable                                           $ 360,877     $   8,804
    Inventories                                                   $   8,546     ($ 38,114)
    Prepaid expenses and other and other assets                   ($ 10,848)    ($ 58,406)
    Deferred revenue                                              ($120,176)    ($ 60,168)
    Accounts payable, accruals and other accrued expense          $  23,747     $  48,494
                                                                  ---------     ---------
                                                                  $ 622,906     $ 719,628

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for capitalized software                           ($533,548)    ($447,336)
  Other capital expenditures                                      ($263,444)    ($132,508)
  Purchase of joint venture interest, net of cash acquired                      ($ 52,500)
                                                                  ---------     ---------
                                                                  ($796,992)    ($632,344)

CASH FLOWS FROM FINANCING ACTIVITIES:
  (Decrease) increase in revolving credit borrowings              ($ 84,643)    $  70,794
  Payments on long-term principal and principal payments
    on capital lease obligations                                  ($215,469)    ($164,078)
  Proceeds from exercise of stock warrants and options            $  23,750     $   6,000
  Proceeds from long-term debt                                    $ 450,448
                                                                  ---------     ---------
                                                                  $ 174,086     ($ 87,284)

Net increase in cash and cash equivalents                         $       0     $       0

Cash and cash equivalents at beginning of period                  $       0     $       0
                                                                  ---------     ---------

Cash and cash equivalents at end of period                        $       0     $       0
                                                                  =========     =========


INVESTING ACTIVITIES NOT AFFECTING CASH:
  Capitalized lease obligation incurred for lease of equipment                  $ 140,725
                                                                                ---------
</TABLE>

See notes to financial statements.

<PAGE>


PART 1 - FINANCIAL INFORMATION (CONTINUED)

NOTES TO FINANCIAL STATEMENTS

NOTE A:
The Balance Sheet as of January 31, 1998 and the Statements of Operations for
the three and nine months ended January 31, 1998 and 1997 and the Statements of
Cash Flows for the nine months ended January 31, 1998 and 1997 have been
prepared by Infinite Graphics Incorporated without audit. In the opinion of
management, these statements reflect all adjustments, consisting of only normal
accruals and adjustments, necessary for the fair statement of the periods
presented. The Balance Sheet as of April 30, 1997 has been derived from the
audited Balance Sheet included in the Company's April 30, 1997 Annual Report to
Shareholders. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes included in the
Company's April 30, 1997 Annual Report to Shareholders.

The financial statements have been prepared on a going-concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the Company's balance sheet as of
January 31, 1998, current liabilities exceed its current assets by $279,000.

During fiscal 1998, the Company will continue to emphasize its high-end
precision graphics services, including software for that application, and will
work with third parties and partners for a return on its software assets in
other markets.

NOTE B:
Effective December 15, 1997, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share." Net income per share
for the three and nine months ended January 31, 1998 have been restated for the
adoption of SFAS No. 128.

Basic net (loss) income per share is computed by dividing net (loss) income by
the weighted average number of common shares outstanding. Diluted net income per
share assumes the exercise of stock options and warrants using the treasury
stock method. Diluted net loss per share is the same as basic loss per share due
to the antidilutive effect of the assumed exercise of stock options and
warrants.

NOTE C:
On October 24, 1997, the Company entered into a revolving credit agreement (the
Agreement), a mortgage note (the Mortgage Note), and an equipment note (the
Equipment Note). The Agreement and Mortgage Note replaced existing financing
agreements.

The Agreement, at the lender's discretion, allows the Company to borrow 75% of
its eligible services receivable and a certain percentage of its eligible
software receivables, up to $750,000, as defined. The original advance rate
pertaining to eligible software receivables is 70% until January 30, 1998, when
the advance rate is based on the Company's operations for rolling six-month
periods. The advance rate range is from 0% to 70%. In addition the total of all
eligible software receivables outstanding at any one time shall not exceed
$500,000. Interest on outstanding borrowings is payable monthly and is the
greater of prime plus 4.5%, never to be readjusted below 10%, or a minimum

<PAGE>


monthly interest charge of $2,500. The interest rate as of January 31, 1998 is
13%. In the event of default, as determined at the lender's discretion, the
interest rate increases to the greater of prime plus 9.5%, never to be
readjusted below 15%, or a minimum monthly interest charge of $2,900. The
Agreement also requires payment of a $1,500 quarterly administrative fee. The
Agreement terminates the earlier of a date determined at the lender's
discretion, the Company terminates the Agreement, or October 12, 1999. If
approved by the lender and the Company, the termination date may be extended for
nine months. If the Agreement is terminated by the Company, the Company is
required to pay a prepayment charge of $2,500 multiplied by the number of
calendar months from the prepayment date to October 23, 1999, unless the funds
used to prepay the Agreement are borrowed from Riverside Bank then no prepayment
charge is due.

The Mortgage Note provided for a $250,000 term loan and interest payable at the
bank's reference rate, as defined, plus 2% (10.5% at January 31, 1998). The
Company is required to make monthly principal and interest payments in an amount
necessary to fully amortize the principal balance over a period of ten years.
The Mortgage Note matures on October 15, 2000. Monthly principal and interest
payments are currently $3,385. A portion of the Mortgage Note proceeds,
$112,000, was used to pay an existing mortgage.

The Equipment Note provides for a $700,000 line of credit for the purchase of
machinery, equipment, furniture, and fixtures and the balance outstanding as of
January 31, 1998 is $197,037. The term of the Equipment Note is from October 24,
1997 to October 24, 2004. Interest on borrowings under the Equipment Note is
payable at prime plus 2%, and is adjusted quarterly if the prime rate changes.
The bank writes individual term notes under the Equipment Note after purchases
are made and advances are requested and submitted by the Company. The individual
term notes require the Company to make monthly principal and interest payments
in an amount necessary to fully amortize the principal balance from the date of
the borrowings to October 24, 2004.

Borrowings under the Agreement, Mortgage Note, and Equipment Note are secured by
substantially all of the Company's assets and personally guaranteed by the
Company's Chief Executive Officer. The Agreement, Mortgage Note, and/or
Equipment Note contain various restrictive covenants relating to a net loss of
no more than $100,000 for each succeeding six month period beginning January 31,
1998, limitations on additional indebtedness and capital expenditures, prohibits
dividend payments, and other matters.

On October 29, 1997, the Company entered into an agreement with General Electric
Capital Corporation to lease equipment costing approximately $1,100,000. The
term of the lease will be for five years with an initial payment of $54,000 in
October 1997, $56,000 due upon acceptance of the equipment, and monthly payments
thereafter of $20,168. Firm acceptance of the equipment is planned for March or
April 1998.

NOTE D:
During the nine months ended January 31, 1998, stock warrants to purchase
190,000 shares of common stock were exercised at prices of $.125 per share.

<PAGE>


NOTE E:
On February 27, 1998, the Company sold an exclusive license to use, market and
distribute the Company's PAR/ICE, ParCAM, and CheckMate (PAR for Design)
software products; sold a nonexclusive license to certain other CAD/CAM
products, including those known as 2100, ProCADD, ProFLEX and ProCHEM; and sold
certain assets of its software systems business to Global MAINTECH Corporation
(Global MAINTECH). The Company, however, has retained the right to use all of
this software in its own business. The Company has also agreed that for a period
of five years it will not distribute, market, promote or provide to any third
parties software that is competitive with the software with respect to which
Global MAINTECH was granted an exclusive license. As consideration for the grant
of the license and the sale of the software systems division assets to Global
MAINTECH, the Company received $500,000 on February 27, 1998, and may receive
additional payments totaling not more than $3,500,000 on or before June 1999,
depending on the level of profit performance of the licensed software.

At the present time, management believes the above transaction will be
recognized as a disposal of a business in the fourth quarter of fiscal 1998. The
following summarizes certain financial information of the Company's system
software segment:

                     Nine Month Period                     Year Ended
                     Ended January 31,                     April 30,
                  1998             1997              1997              1996
             -------------------------------------------------------------------
Net Sales      $1,194,000       $1,349,000        $1,802,000        $1,883,000


<PAGE>


PART 1 - FINANCIAL INFORMATION (CONTINUED)

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

THREE MONTHS ENDED JANUARY 31, 1998 COMPARED TO THREE MONTHS ENDED JANUARY 31,
1997

Operations for the three months ended January 31, 1998 resulted in sales of
$1,172,000 compared to $1,492,000 for the same period last year or a 21 percent
decrease. Engineering Services accounted for $778,000 compared to sales of
$930,000 for the same period last year or a 16 percent decrease. Systems sales
were $394,000 compared to sales of $562,000 for the same period a year ago or a
30 percent decrease. The decrease in Engineering Services sales of $152,000 is
mainly attributable to a change in the PWB (printed wiring board) phototooling
marketplace. The decrease in System sales of $168,000 is attributable to delays
in repackaging and releasing the Company's CAM products.

The decrease in sales was the primary contributor to the gross margin decreasing
to 28 percent for the three months ended January 31, 1998 compared to 42 percent
for the same period last year.

The Company's total selling, general and administrative (S, G & A) expenses were
$435,000 and $472,000 for the three months ended January 31, 1998 and 1997,
respectively. S, G & A decreased because of salaries and related expenses,
reduced travel and general cost saving measures. Research and development costs
were $87,000 compared to $83,000, or a 5 percent increase. The increase is
primarily attributable to the development of a new CAM product. Interest expense
for three months ended January 31, 1998 was $24,000 compared to $31,000 for the
same period last year or a 23% decrease. The decrease in the interest expense is
primarily attributable to lower borrowings on the Company's line of credit.

The Company's portion of equity in joint venture for the three months ended
January 31, 1997 related to the operations of the Joint Venture, which was
acquired in November 1996. The operations of the former Joint Venture are now
included in the individual line items in the statements of operations.

The Company had a net loss of $215,000 for three months ended January 31, 1998,
compared to net income of $43,000 for the three months ended January 31, 1997.
The net loss is attributable to decreased sales.

<PAGE>


NINE MONTHS ENDED JANUARY 31, 1998 COMPARED TO NINE MONTHS ENDED JANUARY 31,
1997

Operations for the nine months ended January 31, 1998 resulted in sales of
$3,783,000 compared to $4,218,000 for the same period last year or a 10 percent
decrease. Engineering Services accounted for $2,589,000 compared to sales of
$2,869,000 for the same period last year or a 10 percent decrease. Systems sales
were $1,194,000 compared to sales of $1,349,000 for the same period a year ago
or a 12 percent decrease. The decrease in Engineering Services sales of $280,000
is attributable to two customers adding in house capabilities, a third customer
going out of business early in the year. The continued trend of doing routine
phototooling internally has and will continue to reduce this type of service
sales. System sales decreased due to late completion of new revisions of
software.

The decrease in sales was the primary contributor to the gross margin decreasing
to 34 percent for the nine months ended January 31, 1998 compared to 40 percent
for the same period last year.

The Company's total selling, general and administrative (S, G & A) expenses for
the nine months ended January 31, 1998 was $1,337,000 compared to $1,288,000 for
the same period last year, an increase of $49,000 or 4 percent. S, G & A
increased early in the year because of increases in salary, travel, and
promotion expenses related to additional employees. Research and development
costs were $215,000 compared to $243,000, or a 12 percent decrease. The decrease
is primarily attributable to the Company capitalizing costs relating to the
development of a new CAM product. Interest expense for nine months ended January
31, 1998 was $70,000 compared to $86,000 for the same period last year or an 18%
decrease. The decrease in the interest expense is primarily attributable to
lower borrowings on the Company's line of credit during nine months ended
January 31, 1998.

The Company's portion of equity in joint venture for the nine months ended
January 31, 1997 related to the operations of the Joint Venture, which was
acquired in November 1996. The operations of the former Joint Venture are now
included in the individual line items in the statements of operation.

The Company had a net loss of $336,000 for nine months ended January 31, 1998,
compared to net income of $137,000 for the nine months ended January 31, 1997.
The net loss of is attributable to decreased sales.

Liquidity. The Company's cash flow from operations was $623,000 for the nine
months ended January 31, 1998, compared to $720,000 for the same period last
year. The largest components of cash flow from operations for nine months ended
January 31, 1998 were depreciation and amortization of $697,000 and the decrease
in accounts receivable of $361,000. The largest component of cash flow from
operations for nine months ended January 31, 1997 was depreciation and
amortization of $698,000.

Cash provided from planned operations and availability under the Company's
revolving credit agreement are estimated to be sufficient to support the
Company's expected cash needs for the remainder of fiscal 1998 and through
fiscal 1999. On October 24, 1997 the Company entered into a revolving credit
agreement, a mortgage note, and an equipment note as described in Note C to the
Financial Statements. As of January 31, 1998, current liabilities exceed current
assets by $279,000.

<PAGE>


Capital Resources: The Company has invested primarily in equipment and
improvements essential for present operations in fiscal 1998, but plans to
increase its investment in capital resources for future operations over the next
two or three years by obtaining additional debt and/or equity financing. The
Company's capital expenditures for equipment, automation improvements and new
opportunities during fiscal 1998 are expected to be approximately $2,000,000 of
which the Company has secured financing of $1,938,000. The Company anticipates
that additional financing will be derived from planned operations, leases and
obtaining additional debt and/or equity financing. If the Company does not
achieve its operations plan it could restrict planned business growth.

The Company's cash flows used in investing activities was $797,000 and $632,000
for the nine months ended January 31, 1998 and 1997, respectively. For the nine
months ended January 31, 1998 it consisted primarily of expenditures for
capitalized software of $534,000 and $263,000 for other capital expenditures.
For the nine months ended January 31, 1997 it consisted primarily of
expenditures for capitalized software of $447,000 and $133,000 for other capital
expenditures and $52,000 relating to the purchase of the joint venture interest.

The Company's cash flows provided by financing activities was $174,000 for the
nine months ended January 31, 1998 compared to cash flows used by financing
activities of $87,000 during the same period last year. Cash flows provided by
financing activities for the nine months ended January 31, 1998 consisted of
proceeds from long-term debt of $450,000 partially offset by payments of
$215,000 on long-term debt and principal payments on capital lease obligations.
The largest components of cash flows used in financing activities for the nine
months ended January 31, 1997 consisted of payments on long-term debt and
principal payments on capital lease obligations of $164,000 and an increase of
$71,000 in the revolving credit agreement.

Other Items. Inflation has not had any significant impact upon the Company's
results of operation.

Securities Litigation Reform Act. Except for the historical information
contained herein, the matters discussed in this report are forward-looking
statements which involve risks and uncertainties, including but not limited to
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, products, services and prices, and other factors
discussed in the Company's filings with the Securities and Exchange Commission.

<PAGE>


PART 2 - OTHER INFORMATION


Item 1.       Legal Proceedings
              None

Item 2.       Change in Securities
              None

Item 3.       Defaults Upon Senior Securities
              None

Item 4.       Submission of Matter to a Vote of Security Holders
              None

Item 5.       Other Information
              On February 27, 1998, the Company sold an exclusive license to
              use, market and distribute the Company's PAR/ICE, ParCAM, and
              CheckMate (PAR for Design) software products; sold a nonexclusive
              license to certain other CAD/CAM products, including those known
              as 2100, ProCADD, ProFLEX and ProCHEM; and sold certain assets of
              its software systems business to Global MAINTECH Corporation
              (Global MAINTECH). The Company, however, has retained the right to
              use all of this software in its own business. The Company has also
              agreed that for a period of five years it will not distribute,
              market, promote or provide to any third parties software that is
              competitive with the software with respect to which Global
              MAINTECH was granted an exclusive license. As consideration for
              the grant of the license and the sale of the software systems
              division assets to Global MAINTECH, the Company received $500,000
              on February 27, 1998, and may receive additional payments totaling
              not more than $3,500,000 on or before June 1999, depending on the
              level of profit performance of the licensed software.

Item 6.       Exhibits and Reports on Form 8-K
              Exhibit 10.1, License and Asset Purchase Agreement dated 2/27/98
                 with Global MAINTECH Corporation
              Exhibit 27 - Financial Data Schedule (for SEC use only)

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.


March 13,1998                            by  /s/ CLIFFORD F. STRITCH, JR.
                                             ----------------------------
                                             Clifford F. Stritch, Jr.
                                             Chief Executive Officer
                                             Chief Financial Officer