SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549
                                   FORM 10-KSB
                                  ANNUAL REPORT
                        PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For  the  fiscal  year  ended  December  31,  1997           Commission File No.
                                                             1-13261
                          Dynacraft Golf Products, Inc.

             (Exact name of registrant as specified in its charter)
     OHIO                                                            31-1040532
--------------------------------------------------------------------------------
(State  or  other  jurisdiction of          (I.R.S. Employer Identification No.)
incorporation  of  organization)

98  James  Street
Newark,  Ohio                                            43055
---------------------------                   ----------------------------------
(address  of  principal  executive  offices)          (zip  code)

Registrant's  telephone  number,  including  area  code:          (740) 344-1191
Securities  registered  pursuant  to  Section  12  (b)  of  the  Act:  NONE
Securities  registered  pursuant  to  Section  12 (g) of the Act: COMMON SHARES,
                                                             WITHOUT  PAR  VALUE

Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding 12 months (or for such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.

Yes___X_____                    No___________.

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will be contained, to
the  best  of  the  registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in  Part III of this Form 10-KSB or any
amendment  to  this  Form  10-KSB

Issuer's  revenues  for  its  most  recent  fiscal  year:  $20,024,374.

The  aggregate  market  value  of  voting  stock  held  by  nonaffiliates of the
registrant's  common stock computed by reference to the price at which stock was
sold  or the average bid and asked price of such stock, as of March 31, 1998 was
$0.

The  number  of shares outstanding of the registrant's common stock, as of March
31,  1998  was  2,033,746.

                                     PART I

     This  Form  10-KSB  contains forward looking statements which involve risks
and  uncertainties.    The Company's actual results could differ materially from
those  anticipated  in  those  forward-looking statements as a result of certain
factors,  including but not limited to those  set  forth  elsewhere  in  this
Form  10-KSB.

ITEM  1.          DESCRIPTION  OF  BUSINESS

Background

     The  Dynacraft  Companies  include Dynacraft Golf Products, Inc.,  Pal Joey
Custom  Golf  Inc.  (which  includes Pal Joey Pro Shop as a division), Dynacraft
Real Estate Holding Inc. and Diamond Golf International Limited.  Dynacraft Golf
Products,  Inc. owns 100% of all the companies, except Diamond Golf, in which it
is  a  51%  owner.

     The Dynacraft Companies help golfers customize their clubs and equipment to
their  own  personal specifications.  Our customers can design clubs with unique
combinations  of loft, lie, weight, face angle, grip type and size, shaft length

<PAGE>

and  flex  and  cosmetics.  We contract production of our own clubheads and work
with  major  shaft and grip companies to be within the golf industry's standards
of tolerances.  Customer service includes a lifetime warranty on clubheads and a
return/replacement  policy  on  any  product.

     Dynacraft  Golf  Products,  Inc.  ("Dynacraft")  is  the parent company and
successor  to  a business founded in 1980.  It is one of the large U.S. supplier
of  components  for individuals who make clubs for themselves and other golfers.
Dynacraft  does  not sell finished clubs.  We also educate our customers through
the  Dynacraft  Clubmaking Institute, the golf industry's premier clubmaking and
fitting  class  facility, and maintains a full-time technical staff.  We believe
that our Internet site is the largest of any golf component company and includes
a technical chat room and tutorial for online questions and answers.  We publish
an  annual  catalog  of  over  150  pages  and  a  quarterly  customer magazine,
Clubmakers'  Quarterly..

     Pal  Joey  Custom Golf Inc. ("Pal Joey") was created in 1981 to build clubs
to  specific  customer  requirements  for  resale.    Our  market  includes golf
professionals,  green grass golf shops and specialty off-course golf stores.  We
believe  that  quality, fast turnaround time and the Company's lifetime warranty
provide Pal Joey with a competitive advantage.  We have also contracted sourcing
and  assembly  functions  for  golf  stores.

     Pal  Joey  Pro  Shop, a division of Pal Joey, opened in 1982 as a store for
golfers  to visit for custom clubs and other equipment and golf accessories.  It
provides  the Company with a model for possible expansion into additional retail
store  operations.

     Diamond  Golf International Limited ("Dynacraft Europe") serves Europe with
both  component  Dynacraft clubs and finished Pal Joey Customer Clubs.  Begun as
an  acquisition  in  1991,  it  is  one  of  the  component suppliers in Europe.
Dynacraft Europe operates on the same Dynacraft principles of customer education
and  technical  service,  provided  by  mail  order  and on-site custom fitting.

Public  Offering

     On  November  25,  1997,  the Company's Registration Statement on Form SB-2
covering  the  offering of up to 700,000 Common Shares was declared effective by
the  Securities  and  Exchange  Commission  and  the  Company commenced a public
offering  of  its  Common  Shares.    The offering is being sold directly by the
Company  on  a best efforts basis at a price of $5.00 per share for a minimum of
300,000  ($1,500,000)  and  a maximum of 700,000 shares ($3,500,000).  All funds
are  being  held  in  escrow  until  the  earliest to occur of (1) acceptance of
subscription  for  the minimum, (2) May 31, 1998, or (3) the date upon which the
Company terminates the Offering prior to the subsription of the minimum.  In the
event that the minimum is not reached by May 31, 1998 (or the Company terminates
the  Offering  before  then),  the  escrowed  funds  will  be  returned  to  the
subscribers  with  interest  and  without  any  deduction  for  expenses

General

     DYNACRAFT  GOLF  PRODUCTS,  INC.

     Dynacraft  Golf  Products, is one of the largest supplier of component golf
club  equipment and supplies for clubmaking.  The business was started by Joseph
Altomonte, Sr. in his garage.  Dynacraft has grown into a component company with
a  presence  in Europe and distributorships in Japan, Canada and Australia.  The
company  offers  its worldwide customers a wide selection of club heads, shafts,
grips,  tools,  and  accessories.

     Dynacraft  strives  for quality and playability in its wide variety of head
designs.    All  clubheads  adhere to the industry's standards for tolerances of
such  specifications  as loft, lie, weight, face angle and cosmetics.  Heads can
even  be  modified  for  unique  fitting  situations  prior  to  shipment to the
customer.  Nearly all products are developed, tested and reviewed, not only by a
team  of  our  technical  experts, but by average, better than average and below
average  golfers  prior  to  market  introduction. We work closely not only with
foundries  that  produce  our  clubheads  (visits are made as needed to overseas
foundry suppliers), but with major shaft companies such as True Temper, Rapport,
Fenwick,  and  Aldila  to  develop  shafts that best match current head designs.
Dynacraft-branded  grips  are  produced  to specifications to allow customers to
completely  customize their Dynacraft purchases. We maintain a lifetime warranty
on  all  of  our  golf club heads and offer what we believe to be the industry's
most  comprehensive  return/replacement  policy  on  any  product  we  sell.

     Dynacraft  offers  a  full  range  of clubmaking and fitting classes in our
Dynacraft  Clubmaking  Institute  (DCI).    The  DCI  educates  both  novice and
experienced  clubmakers  as  well as industry experts.  Coupled with a full-time
technical  staff, the DCI and Dynacraft provide education and information to the
clubmaker.    Our internet includes, not only information about our products and
services,  but  also  a technical forum and tutorial where customers may receive
answers  to  their  questions  via  the  Internet.

     Dynacraft  offers  a  complementary  magazine  to  its  active  customers.
Clubmakers'  Quarterly  is  published  at  least  four times a year and includes
up-to-date technical information provided by the technical staff as well as  new
products  and sale items.  We publish our full line catalog once each year, with
over  150  pages  showcasing  all the products we have developed and carry, in a

<PAGE>

design  and  presentation  that  have  won  numerous awards.  We have a complete
accessory  line  of   products with the Dynacraft logo, including golf bags in a
variety  of  sizes  and  styles,  hats,  umbrellas,  towels,  and  apparel.

     Dynacraft  offers  its customers a toll free telephone order line, customer
service  line and technical information line.  The order line is staffed fifteen
hours  a  day,  while  the  other lines are staffed for nine hours per day.  The
Shipping  Department  runs  two  shifts when needed to offer timely and accurate
fulfillment.    Orders are shipped the same day they are received in most cases;
most  orders are shipped within 24 hours.  The Customer Service Department deals
with  special  order  items,  unique customer requests and any consumer problems
that  may  arise.    All  Customer  Service  and  Sales  Representatives receive
technical  training  at the DCI in an effort to make them the most knowledgeable
staff  in  the  business.

     PAL  JOEY  CUSTOM  GOLF

     Founded in 1981, Pal Joey Custom Golf Inc. offers its customers custom made
and  fitted  golf  equipment  at  reasonable  prices.  Pal Joey Custom Golf is a
wholesale  operation  selling finished goods under the Pal Joey brand name.  The
models  are  unique  to  Pal Joey and are custom made to order.  The custom made
club  market, while in its infancy in the early 1980's, has grown rapidly in the
mid-1990's,  and  we  believe  that Pal Joey is positioned for a rapid growth in
this  area.    Clubs  manufactured  at  Pal  Joey are built to specific customer
requirements.    The  clubs  are  typically sold to golf professionals, to green
grass  golf shops, or to upscale off-course golf stores.  Our turnaround time is
as  short  as five days.  We offer a lifetime warranty on all Pal Joey clubheads
and  have  among  the  most  comprehensive repair/replacement policy in the club
manufacturing  industry.

Since  fall  1995,  Pal  Joey has provided sourcing and assembly work, through a
sales  representative, to a significant percentage of the franchises of Pro Golf
of America, one of the largest off-course golf store chains in North America and
Pro  Golf of America has recommended Pal Joey products to its franchisees.  Such
sales  represented  approximately 16.0% of the Company's total sales in 1996 and
approximately  22.7% of the Company's total sales in 1997.  We also have several
other  smaller  assembly  and/or  sourcing  customers.  No other customer of the
Company  accounts  for  more  than .8% of the Company's sales in any of the past
three years, except one and they accounted for approximately 4% of the Company's
total  1996  sales.  Pal Joey's 1996 sales increased 85% over 1995 and it's 1997
sales  increased  30%  over  1996.

     PAL  JOEY  PRO  SHOP

     The  Pal  Joey Pro shop was opened as a division of Pal Joey Custom Golf in
1982,  allowing  local  customers  to  purchase  custom  made golf equipment and
accessories.     It is located on the Dynacraft property and includes a showroom
and  two  custom  fitting areas.  We offer custom fitting, which may include Pal
Joey  labeled  shafts,  grips and heads, and prompt delivery in the Central Ohio
area, with some custom-made items deliverable within 24 hours.  The Pal Joey Pro
Shop  also  carries  an  inventory of brand name clubs such as Cobra, Cleveland,
Callaway,  and  other  golf  equipment,  attire  and  accessories.   This retail
location  has  generated sales of nearly one million dollars in each of the past
three  years.

     DIAMOND  GOLF  INTERNATIONAL  LIMITED

     An  acquisition  of Diamond Golf was begun in 1991 and completed by 1993 to
broaden  Dynacraft's  presence  in  Europe.  Its trade name changed to Dynacraft
Europe  in  1998.    One  of  the two largest component suppliers in Europe, the
company  serves  the whole of Europe with the same component Dynacraft clubs and
completed  Pal  Joey  Custom  clubs,  as well as many of the same shafts, grips,
tools  and accessories available from the parent.   Dynacraft Europe offers both
mail  order  and  custom  fitting  on-site.

     Dynacraft  Europe  also  stresses  the  education of the clubmaker and golf
professional and is staffed to accommodate technical questions, customer service
situations,  warehouse  and  order  entry.  Chris Treacy, President of Dynacraft
Europe  travels  throughout  Europe  providing  quality  education to interested
customers.

     DYNACRAFT  REAL  ESTATE  HOLDING  INC.

     The  Dynacraft  Real  Estate  Holding  Inc.  "DREHI"  includes  all  of the
properties  owned  by the Company.  These include five commercial buildings, one
of  which  houses Pal Joey Custom Golf and the Pal Joey Pro Shop  The other four
buildings  are  used  by  Dynacraft, one for Customer Service and order entry; a
building  for  office  staff,  marketing  and  design;  a shipping and receiving
warehouse; and the Dynacraft Clubmaking Institute.   All of the buildings are in
fine  working  order.

     DREHI  also  includes five rental properties, all of which are consistently
occupied.  The  rental properties generate monthly revenue for the company.  All
are  well-maintained  and  are  considered  to  be  in  fine  condition.

THE  CUSTOMER

     The Company's customers are those who actively enjoy the game of golf along
with  the  opportunity  to construct their own equipment for that game.  Many of
these  individuals become skilled enough in the assembly process to begin making
clubs  for sale to others and they often become full time clubmakers.  Golf Shop
Operations,  the  leading  industry publication,  estimated that 500,000 persons
purchased a golf club component part (head, shaft and/or grip) in 1996.  Of that
number,  approximately  3,500  are full time clubmakers, with some type of store
front  or  retail space, who earn their living through the trade.  Approximately
300,000  are  hobbyists  who  may  work  exclusively  on their own clubs and the
remaining  approximately  200,000  are  part-time  clubmakers.    These  people
typically  work  a  "nine  to five" job, but supplement their income by building
golf  clubs.   They may work from their basements or garages and normally do not
have  a  retail  location.

     Currently  the  Company maintains a complete customer file of approximately
65,000  customers.    This  number includes any customer who has placed an order
with  the  Company  within  the  past  five years. We mail approximately 100,000
catalogs  a year to our customers and to people who come to us from magazine and
Internet  catalog  requests or from word of mouth referrals. Dynacraft's "active
customer"  list  includes  approximately  20,000  names  of  customers  who have
purchased  products  during the past calendar year.  That list has been steadily
growing  at  over  5%  per  year.

     Pal Joey is a wholesaler, selling to those in the golf business.  Its Sales
Representatives  regularly  call  on golf course pro shops throughout the United
States and it maintains several "house accounts" that are serviced by telephone.
The  Company  maintains approximately 2,500 "active" pro shop accounts. Pal Joey
has  recently  had  rapid  growth  in accounts from off-course stores and buying
groups,  including  Pro  Golf  Discount,  Sam's  Golf,    and  Jumbo  Sports.

     Since  fall 1995, Pal Joey has provided sourcing and assembly work, through
a  sales  representative,  to a significant percentage of the franchisees of Pro
Golf  of  America,  one  of  the  largest  off-course golf store chains in North
America  and  Pro  Golf  of  America  has  recommended  Pal Joey products to its
franchisees.   Such sales represented approximately 16.0% of the Company's total
sales  in  1996  and  approximately  22.7% of the Company's total sales in 1997.
While  Pal Joey could still provide such sales to individual franchisees, if Pro
Golf  of  America  ceased  to recommend Pal Joey's products or ceased to provide
marketing  support,  it  could  have an adverse effect on the Company.  No other
customer  of  the Company accounted for more than .08% of the Company's sales in
any  of the past three years, except one and they accounted for approximately 4%
of  the  Company's  total  1996  sales.

CUSTOMER  LOYALTY

     Most  clubmakers and retailers prefer to do business with a "one stop shop"
where  they  may  buy  all of the products and services required to assemble and
market a golf club.  We try to use the top foundries to produce their club heads
and  to  distribute  only  nationally recognized, high quality heads, shafts and
grips.    We  believe our toll free telephone technical service and the Internet
technical  support  are  among  the  best in the industry.  Dynacraft Clubmaking
Institute  attendees  form a growing core of customers.  In a high percentage of
cases,  former  students  have  increased  their  purchases  after attending the
schools.    All  of  these  serve  to  promote  customer  loyalty and additional
purchases.

MARKETING  AND  STRATEGIC  DIRECTION
     The  Company  will  strive  for  continued  growth,  service  and  customer
satisfaction.    Our  marketing  and  strategic  directions  include:

     For Dynacraft Golf Products:  (1) gather information from current customers
and  non-customers  on  market  share,  market  growth,  issues,  demographics,
psychographics and perceptions of Dynacraft; (2) study trends in club design and
club  technology,  so that we can be a leader in new technology and club design,
positioning  Dynacraft  as  a  leading  edge  innovator; (3) extend our customer
training, making a nationwide program; and (4) increase our international market
share.

Beginning  in  March  1998,  Dynacraft  and  Ohio  State University will act as
partners  in  the  design  and  development of a golf club with state of the art
performance characteristics.  The project goal is the development and testing of
a  new  metal  wood  model  that  will  feature  verfiable playing advantages as
compared  to current woods on the market today.  Design, materials and cosmetics
will  be  determined  through  computer  modeling, CAD design, and metallurgical
analysis.    A  finished  product  from  this  joint  effort  could be ready for
distribution  in  late  1998.

Dynacraft also formed an Advisory Staff of clubmakers for 1998.  It is comprised
of  eight  accomplished  clubmakers from various parts of the country.  At their
first  meeting  in  February,  they  discussed  topics  such  as  head  design,
advertising,  technical  support  and marketing in an effort to provide feedback
for  improved  customer  service  and  products.

     For  Pal Joey:  (1) introduce new sets and specialty clubs and add customer
services  requested  by  the  market;  (2)  gain  market  share  in the PGA golf
professional  ("green  grass")  segment; (3) acquire more targeted private label
accounts;  (4)  hire  and train an in-house sales force to serve key accounts in
the  private  label,  retail  and  "concrete" golf shop markets and (5) consider
increasing  the  number  of  Pro  Shop  retail  outlets  in  Central  Ohio.

COMPETITION
     Dynacraft competes for customers who want more customization of their clubs

<PAGE>

than  found  in  sets sold through most golf and sports stores.  During the past
ten  years,  this  segment  of the golf market has been dominated by a few major
players, such as Callaway Golf Company, Cobra, Karsten Manufacturing Corporation
(Ping), Taylor-Made Golf Company and Titleist.  Many of these companies began as
small,  one-club  companies.    For  example,  Callaway  began as a single wedge
company  less  than  15  years  ago.   Odyssey, which sells a putter as its only
product,  has  grown rapidly over just the past two years.  Karsten, which began
in  the  early  1960's with a single putter that made a "ping" noise when stuck,
has  grown  to  worldwide  acceptance.    Products selling well recently include
oversized  titanium  drivers,  oversize  irons,  specialty  wedges  and uniquely
designed  putters.

     Dynacraft  sells  a  high percentage of its products to custom club makers.
Pal  Joey  wholesales  custom made clubs to the retailers' specifications.  Both
companies  have products unique to their markets.  For example, Dynacraft offers
a  full line of titanium woods and offers many variations on wedges, each suited
to specific player needs.  The use of exotic materials, such a beryllium copper,
carbon  steel and tungsten, position Dynacraft in specialty niches of the custom
component  market.   Pal Joey offers forged titanium drivers for less than $150,
compared  to  some  competitors'    prices  of  $650.  Pal Joey is also actively
pursuing  the  "one  of  a  kind" club market, by experimenting with face insert
wedges  and  tungsten-titanium  irons, each of which will be custom made for the
retailer.

     For  Dynacraft  Products:    Competition  for Dynacraft is principally from
other  component  suppliers,  which have grown in number from 10 in 1982 to over
120 in 1996.  Dynacraft's main competition comes from three sources:  Golfsmith,
located  in  Austin,  Texas  which  is  the largest golf club component company;
Golfworks,  in  Newark,  Ohio,  and  the  combination  of  a  number  of smaller
"knock-off"  component  companies.

     For  Pal  Joey  products.    Pal  Joey's  prime  competition  comes  from
approximately  225  small  golf  club  companies  located  throughout the United
States.    Both  Pal  Joey  and  many  of  these  companies have staffs of sales
representatives  visiting  golf  shops  on  a  regular basis and competition for
business  is  intense.    Some  of  the  more competitive brands to Pal Joey are
MacGregor  Golf,  Albany,  Georgia; Dunlop in Greenville, South Carolina; Wilson
from  Morton  Grove, Illinois; and Spalding in Chicopee, Massachusetts.   All of
these  companies  have  recently  offered  lower  pricing  in  order  to  stay
competitive.  During the past couple of years, as custom fitting has experienced
a great growth, many large companies, such as Slazenger, Hogan, Henry-Griffitts,
Zevo,  to name a few, have capitalized on the custom fitting segment of the golf
market.  Pal Joey is able to effectively compete with these entities by offering
the  ability  to  custom  make clubs designed to meet particular customer needs.

     The Pal Joey Pro Shop's main competition comes from discount golf stores in
the  greater  Columbus,  Ohio,  area.  There are a number of on-course pro shops
within  a  50 mile radius of the Pal Joey Pro Shop, but most do not stock a wide
selection  of  equipment, nor do many offer any type of custom fitting.  The Pal
Joey  Pro  Shop  maintains  its  position with little direct competition through
prompt  service,  custom  fitting,  delivery  and  fair  pricing.

EMPLOYEES

     As of March 31, 1998, The Company employs 83 people.  Dynacraft includes 42
full  time  and  8 part time seasonal workers.  Pal Joey Custom Golf includes 27
full time and no part time/seasonal employees.  The Pal Joey Pro Shop has 4 full
time  and 2 part time employee.  The Company employs temporary staff as the need
arises  and  the  Company  believes  that  its  relations with its employees are
excellent.    The  Company's  work  force  is  not  unionized.

TRADEMARKS

     The  Company  currently  owns  12  trademarks.   These are set to expire at
various  times  between  2000  and 2009.  The Company currently intends to renew
each such trademark prior to its expiration. Dynacraft aggressively and actively
preserves  its  rights  to  all  trademarked  and  patented  material. Among the
trademarked names held by the company and used on golf equipment, including club
heads  are:    Dynacraft,  Pal  Joey,  the  Pal  Joey Kangaroo logo, Copperhead,
Genesis,  Accusteel,  Greyshadow,  On  Line,  Outback,  TD-1000  and Topaz.  The
company  also  has  trademarked  its  shaft  fitting system, the Dynacraft Shaft
Fitting  Index  (DSFI).   The Company is also under license agreement to use the
following  names:    Big  Johnson,  ESS,  and  Mad  Dog.    All of the Company's
trademarks  are  registered as property of either Dynacraft Golf Products, Inc.,
or  Pal  Joey Custom Golf Inc.  Dynacraft owns U.S. Patent #5,333,871 related to
the  non-fibrous  injection  molding  process  for  golf  iron  heads.

ENVIRONMENTAL

     Dynacraft  learned  that an Ohio Department of Transportation (ODOT) garage
located  geographically  upstream  from its property dumped paint, solvents, and
other  materials  and  has  contaminated the water table under Dynacraft's land.
Although  there  are  no  recognizable concerns or issues with current Dynacraft
operations  as  a  result of this act, Dynacraft's future ability to utilize its
real  estate  to  secure  loans  could  be  impaired  until the contamination is
removed.  Because of this, Dynacraft is participating in Ohio's Voluntary Action
Program  ("VAP")  and  is  investigating  the extent of the contamination of its
groundwater  and  reporting  to  the  Ohio  EPA.   It currently appears that the

<PAGE>

migration of contamination from the ODOT property is limited in scope.  Once its
site  assessment  is  complete,  Dynacraft  intends to request that the Ohio EPA
commit  that  it will take "no further action" against Dynacraft, its successors
and  assigns,  because of the residual contamination on Dynacraft's property and
will  consider it "clean".  The Company has filed a legal action against ODOT to
recover  the  assessment  and remediation costs of its participation in VAP.  At
present,  however,  the total costs of this project cannot be estimated with any
degree  of  certainty and there is no assurance that the Company will be able to
recover such costs from ODOT.  If the Company is unable to recover such costs or
if  the  migration  of  contaminants  is greater than presently believed and the
Company  were  to  be  held  liable  by  a  third  party in connection with such
migration,  it  could  have  a  material  adverse  effect  on  the  company.

ITEM  2.    Description  of  Property.

PROPERTIES/FACILITIES

     The  Company  owns  five  commercial/industrial  facilities and five single
family  residences  on  3.36  acres  in Newark, Ohio.  The commercial/industrial
properties  include  60,745  sq.  ft.,  broken  down  as  follows:

<TABLE>
<CAPTION>
<S>                        <C>
  Office                   25,076 sq. ft.
  Retail                    4,440 sq. ft.
  Manufacturing/Warehouse  15,550 sq. ft.
  Warehouse                15,679 sq. ft.
                           --------------
  TOTAL                    60,745 sq. ft.
                           ==============
</TABLE>


     All  of the buildings are in close proximity.  There are separate buildings
for sales and customer service; marketing and administration; training, research
and  development;  warehouse  and product showroom; manufacturing, warehouse and
pro  shop.

     All  public  utilities, including water, sewer, gas, electricity and public
telephone  are  available  to the property through local utility companies.  The
five  single  family  residences  are rented primarily by employees and generate
monthly  rental  income  to  the  Company.

     In summary, the property located within the Center of the City of Newark in
an  area that is primarily residential in nature.  It benefits from its location
being  in  close  proximity  to two interstate highways, commercial development,
shopping  facilities  and employment centers.  All of the real estate is pledged
as  collateral  on  two  bank  loans.   See Note D to the Company's Consolidated
Financial  Statements.

<PAGE>

ITEM  3.    Legal  Proceedings

     The  Company  is not currently involved in any material litigation or legal
proceedings other than with ODOT as described above under "Environmental" and is
not aware of any material litigation or proceeding pending or threatened against
it.

ITEM  4.    Submission  of  Matters  to  a  Vote  of  Security-Holders

     None.
                                     PART II

ITEM  5.    Market  For  Common  Equity  And  Related  Stock  Holder  Matters

     The  Company's  Common Shares have been approved for listing on the Chicago
Stock  Exchange  upon the closing of the Company's initial public offering.  The
public offering price per share of Common Shares is $5.00.  However, the Company
has  not  yet  closed  on its direct public offering and therefore the Company's
Common  Shares  are not currently traded and have no public market price.  As of
March  31,  1998,  there  were  5 record holders of the Company's Common Shares.

     The  Company's loan agreement with its bank restricts the Company's ability
to  pay dividends.  Therefore, future dividends, if any, will depend on the bank
lifting  that  restriction,  the  Company's  profitability, financial condition,
capital  requirements  and  other  considerations  determined  by  the  Board of
Directors.

ITEM 6.  Management's Discussion and Analysis of Financial Condition and Results
of  Operation.

GENERAL  BACKGROUND

The  business  (which  later  became known as Dynacraft Golf Products, Inc.) was
started  in 1980 by Joseph A. Altomonte, Sr.  He began the business after a long
career  in the golf industry with Faultless Golf Ball Company and its successive

<PAGE>

owners,  including Rawlings Sporting Goods Division, ATO.  The business began in
Mr. Altomonte's garage with the purchase of component golf parts and assembly of
finished  clubs.

The  component  parts  distribution and sales to custom golf clubmakers became a
corporation  named Dynacraft Golf Products, Inc.  The assembly of finished clubs
eventually  evolved  into  a  separate  company, Pal Joey Custom Golf, Inc.  The
corporate  separation  of  Dynacraft  and  Pal  Joey  was  a function of serving
separate markets.  Dynacraft sells to custom clubmakers who sell a finished club
to  the golfer.  Pal Joey is a clubmaker selling finished clubs to pro shops and
distributors  for  resale.    The  same products are not sold by both companies.
Later,  Pal  Joey  Pro  Shop,  a  division of Pal Joey, was formed to serve as a
retail  store  for  finished clubs and other golf accessories.  In October 1990,
Pal  Joey,  became  a  wholly-owned  subsidiary  of  Dynacraft.

Dynacraft received a 50% equity investment from its principal Taiwanese clubhead
component  supplier,  Dynamic  Precision  Casting  Mfg.  Co,  LTD.

     In  mid 1990, Mr. Altomonte sought greater employee ownership of Dynacraft.
To  achieve  this  he  personally  made  an  offer to buy out the four Taiwanese
investors  for  $1  million  dollars.  Except for the owner of Dynamic, Chinneng
Lin, who kept an interest which was converted to 100 shares of $1,000 par value,
noncumulative  preferred  stock,  the  investors  accepted  the  cash offer.  In
January  1991  the  Dynacraft  ESOP  came  into  existence.

In 1992, Dynacraft completed the purchase of a 51% interest in Diamond Golf  for
$221,209.   Diamond Golf is an England based component parts distributor serving
Europe.

During  1994,  in  a  series of transactions, Dynacraft issued 51,462 new Common
Shares  to  the  partners of J & J Enterprises, and acquired all the real estate
previously  leased  to  the  Company  by  J  &  J  Enterprises  at a value, less
outstanding  debt,  of $214,269 or $4.16 per share.  J & J Enterprises was owned
equally  by  Joseph  Altomonte,  Sr.  and  Jr

OVERVIEW

The  Company intends to apply approximately $300,000 of the net proceeds of the
offering  to  improve and expand its assembly facilities, approximately $120,000
for  research  and  development  ($30,000  if  only  the  minimum  is  reached),
approximately  $620,000 for market research and advertising activities ($607,500
if  only  the  minimum  is  reached),  approximately  $150,000 for upgrading the
inventory  system  ($75,000  if  only  the  minimum  is  reached), approximately
$425,000 to be set aside to fund the repurchase of ESOP shares ($225,000 if only
the  minimum  is reached) and approximately $430,000 to repay shareholders loans
(none  if  only the minimum is reached).  The remaining $1,192,500 (none if only
the  minimum  is reached) will be used for working capital and general corporate
purposes.


     Throughout  most  of Dynacraft's history the market for component parts has
grown  at  double digit rates.  This changed in 1993 and the market has declined
since.  Dynacraft's component sales have fallen from a high of $18.3 million and
a net income of $550,000 to $12.4 million and net income of $39,500 between 1993
and  1997.    Management  projects  1998  sales will remain at the 1997 level or
slightly  less.  However, Dynacraft's market share remains as one of the largest
in  the  industry.

     During  that  same period of time Pal Joey's sales have increased from $4.3
million  to $6.7 million and its projected 1998 sales of assembled clubs is $7.5
million.    These  increases  have  offset  the  drop  in  component  sales.

     The  primary  investment  risk  for  the  Dynacraft  Companies is inventory
management and cost controls.  The Company's major investment is in inventories.
Over or under buying certain items is one of the primary risks to profitability.
Also, both the economy and weather can affect retail and component sales of golf
equipment.    In 1995, Dynacraft staffed for a down sales year and further staff
and  expense  cuts  were  made  in  the  fall  of  1996  as sales remained flat.
Management believes that these staffing and expense cuts have helped the Company
return  to  profitability  in 1997 as have the sales gains recorded by Pal Joey.
Control  of  expenses  in  line  with  sales performance has become a management
priority  during  this  current  period and is expected to continue to be in the
future.

RESULTS  OF  OPERATIONS

Year  Ended  December  31,  1997  compared  to  Year  Ended  December  31,  1996

     Net  Sales

     Consolidated  net  sales increased by $564,745 or 2.9% from $19,459,629 for
the  year  ending  December 31, 1996 to $20,024,374 for the year ending December
31, 1997.  Net sales of assembled custom clubs accounted for the majority of the
increase,  primarily because of servicing new accounts that started in mid 1996.
This  was offset by a $758,372 decline in sales of component golf club equipment
and  supplies  and  a  decline  in  Pal  Joey  Pro  Shop  sales  of  $21,568.

     Gross  Profit

     Consolidated  gross  profit  increased by $621,339 or 11.8% from $5,248,931

<PAGE>

for the year ending December 31, 1996 to $5,870,270 for the year ending December
31,  1997.   This improvement was the result of minor price increases and better
control  of  the  inventory  and  associated  costs.

     Other  Operating  Revenue

     Consolidated  other  operating  revenue  decreased to $271,805 for the year
ended  December  31,  1997  compared to $399,367 for the year ended December 31,
1996.

     Advertising  and  golf  school  revenue  were  lower by some $148,313.  The
primary  reasons  for  this  was  that  the  Digest that the Company's suppliers
advertise  in  was reduced from a monthly publication to a quarterly publication
and  the  1997  school tuition was lowered in an effort to attract more students
who  hopefully  later  on  would  become  customers.

     Selling  and  Administrative  Expenses

     Consolidated selling and administrative expenses decreased by $459,547 from
$6,059,312  for  the  year  ending  December 31, 1996 to $5,599,765 for the year
ended  December  31,  1997.  The staff and expense cuts initiated in the fall of
1996  were  felt  in  1997  as  over  all  administrative  expenses were down by
approximately  $749,000.   This decrease was offset by an increase in commission
and  royalty  expense  of  approximately  $290,000 because of increased Pal Joey
sales  over  the  prior  period.

     Other  Income  or  (Deductions)

     Consolidated other income or (deductions) increased $61,987 from $(216,489)
for  the year ending December 31, 1996 to $(278,476) for the year ended December
31,  1997.    Consolidated  interest  expense  was  lower  during this period as
compared  to the same period of last year by some $51,535 because a new business
loan  agreement  was  entered  into.    This  decrease was offset by the cost of
environmental  remediations  of  $79,669  (see  Part  I  -  Environmental).

Year  Ended  December  31,  1996  compared  to  Year  Ended  December  31,  1995

     Net  Sales

     Consolidated  net  sales  were  $19,459,629  for  1996, an increase of 2.6%
compared  to  consolidated net sales of $18,963,572 in 1995.  Management's focus
in 1996 was not necessarily to increase overall sales, but rather was to explore
ways to start to reposition the Company for growth and profitability in 1997 and
future  years.  The component sales decrease of approximately $2,000,000 in 1996
and  approximately  $750,000  in  1997  was  offset  by the increase in sales of
assembled  clubs  by  Pal  Joey.

Gross  Profit

     Consolidated  gross  profit  was  $5,248,931  for  1996, a decrease of 4.8%
compared  to consolidated gross profit of $5,511,028 in 1995.  This decrease was
attributable  to a decrease in component sales gross profit of $977,433 which is
the  result of the increasing Taiwan dollar exchange rate, price competition and
shorter product life cycles resulting in more out-of-date inventory which had to
be  sold  at  smaller  margins.  That decrease was partially offset by increased
gross  profit  of  Pal  Joey  because  of  increased  sales  volume.

     Other  Operating  Revenue

     Consolidated  other  operating  revenue  decreased  to  $399,367  for  1996
compared  to  $487,653  in  1995.    The primary reason for the decrease is that
school  attendance  was  lower  in 1996 and advertising income was down due to a
reduction  in  the  number  of  publications  produced  in  1996.


     Selling  and  Administrative  Expenses

     Consolidated selling and administrative expenses for 1996 increased 5.5% to
$6,059,312  compared  to  $5,747,157  in  1995.   This increase resulted from an
increase  in the commission and royalty expense due to increased Pal Joey sales;
bad  debt  write  offs; professional fees; and utilities and telephone increases
due  to  more  volume  and rate hikes.  Those increases were partially offset by
significant  decreases  in  salaries  and  wages  and  advertising and marketing
expenses.

     Other  Income  or  (Deduction)

     Consolidated  other  income  or (deduction) was decreased to $(216,489) for
1996  compared  to  $(265,646) in 1995.  Lower interest expense because of a new
business  loan  agreement  was  offset  by an increase in interest income and an
increase  in  the  equity  in  net  earnings  of  Diamond  Golf.

LIQUIDITY  AND  CAPITAL  RESOURCES

At  December 31, 1997 the Company had working capital of $2,155,168 as compared
to  working  capital  of  $2,236,526  at  December  31,  1996.  This decrease is
primarily due to an increase in accounts receivable which was offset by a larger
reduction  in  trade  accounts  payable.


<PAGE>


     For  the year ended December 31, 1997, the Company had net cash provided by
operating  activities  of  $557,362,  consisting  primarily  of  net  earnings,
depreciation  and  amortization,  and  a  decrease  in  accounts  payable.

     Investing  activities  provided  $65,966  of  cash  flow primarily from the
proceeds  of  the  repayment  of  Dynacraft  Europe's  note  receivable.

     Through  the  repayment  of debt and deferred offering costs related to the
Company's  direct  public  offering $679,363 of cash was consumed.  Overall cash
decreased  $56,035.

     For  the year ended December 31, 1996, the Company had net cash provided by
operating  activities of $483,258, despite a net loss of $498,545.  This was the
result primarily of an increase in trade accounts payable which the Company used
as  a  source  of  financing.

     Investing  activities  consumed  $63,127  of  cash  flow primarily from the
purchase  of  fixed  assets.  Because of the loan refinancing, repayment of debt
caused  only  $122,939 of cash to be consumed.  Overall cash increased $297,192.

     The  Company  had accounts receivable, less allowance for doubtful accounts
of  $1,430,208  at  December  31, 1997.  Pal Joey's net accounts receivable were
$1,055,531 of that total as they have provided extended payment terms to a large
franchise  account  in  order  to encourage initial purchases of its clubs.  Pal
Joey  does  not  anticipate that it will continue to extend such liberal payment
terms.  However, as it continues to expand its activities, it may do so again in
order  to  increase  its  market  exposure.

     In  June  1996,  the Company entered into a seven year loan with Huntington
National  Bank  which  provided  for a $1,860,315 term loan at the U.S. Treasury
constant  maturities  rate  (8.100%  as  of  December  31,  1997) secured by the
Company's  accounts receivable and inventories, a second mortgage on real estate
and personal guarantees of Joseph A. Altomonte, Sr. and Joseph A. Altomonte, Jr.
The  Loan Agreement contains certain financial and operating covenants including
compliance  with  certain  financial  ratios,  and  restrictions on, among other
things,  the  Company's  ability  to pay cash dividends.  The proceeds from this
loan  were  used to payoff two revolving line of credit agreements that had been
established  at  $2,450,000.

From  1993  to  1996,  the  Company's  internally  generated  cash  flow was not
sufficient  to finance operations.  This has restricted the Company's ability to
conduct  its  business  as  anticipated.    As  a  result,  the Company has been
substantially  dependent  upon  loans  from its current shareholders in order to
maintain  its  operations.    Upon  the  closing  of the Maximum Offering, these
shareholders  will  have  approximately  $430,000  of  that  debt  repayed.

     The Company believes that the minimum net proceeds of the offering together
with  internally  generated  cash  flow  and  borrowing  availability  will  be
sufficient  to  meet  its  operating  working  capital  and capital expenditures
requirements  through  the next twelve months.  In the event the Company's plans
require more capital than is presently anticipated, the Company's remaining cash
balances  may  be  consumed and additional sources of liquidity, such as debt or
equity  financings,  may  be  required  to  meet capital needs.  There can be no
assurances  that  additional  capital  beyond  the amounts the Company currently
requires  will  be  available  on  reasonable  terms,  if  at  all.

SEASONALITY
     The  Company's  need  for  working  capital  is  seasonal with the greatest
requirements for working capital occuring from approximately October through the
end  of  February  each  year.  This period is when sales are the lowest and the
inventories  need  to  be  built  up  to  provide  product  for shipment for the
spring/summer  selling  season.    The  Company's  sales from March to September
represent  approximately  70%  of  the  Company's  yearly  sales.

CURRENCY  FLUCTUATIONS
     Dynacraft  Europe,  a  51% owned company in England, maintains its books of
account  in  British Pounds.  The Company accounts for this investment under the
equity  method.    For  consolidation  purposes, net profit or loss of Dynacraft
Europe  is  converted to U.S. dollars at the average month end exchange rate for
the  year.

     All export sales by the Company are U.S. dollar denominated, and ordinarily
there  is  no  currency  exchange  rate  problem for the Company.  However, with
respect  to  export  sales  to  Dynacraft Europe, they may be at risk. Dynacraft
Europe  maintains  its  account with the Company in British pounds, but owes the
Company  in  U.S.  dollars.   At the end of every accounting period, the debt is
adjusted  to  pounds by multiplying the indebtedness by the closing dollar pound
exchange  rate  to  ensure  that  the  account has sufficient pounds to meet its
dollar  obligation.  This remeasurement is either income or expense in Dynacraft
Europe's  financial  statement

YEAR 2000 COMPLIANCE
     The Company  will  continue to make  certain  investments  in its software
systems and applications  to  ensure  the  Company is year 2000 compliant.  The
financial impact to the Company to ensure year 2000 compliance has not been and
is not anticipated to be material  to  its  financial  position  or  results of
operations.

<PAGE>


ITEM  7.    Financial  Statements

     The financial statements of the Company are included (with an index listing
all  such  statements) in a separate financial section at the end of this Annual
Report  on  Form  10-KSB.

ITEM  8.    Changes  In  and  Disagreements  With  Accountants on Accounting and
Financial  Disclosure.

     NONE.

                                    PART III

ITEM  9.    Directors,  Executive  Officers,  Promoters  and  Control  Persons.

EXECUTIVE  OFFICERS  AND  DIRECTORS

     The  executive  officers  and  directors  are  as  follows:

<TABLE>
<CAPTION>
NAME                      AGE                     POSITION
------------------------  ---  -----------------------------------------------
<S>                       <C>  <C>
Joseph A. Altomonte, Sr.   73  Chairman of the Board and Director
Joseph A. Altomonte, Jr.   41  Chief Executive Officer and Director
Jeff Jackson               40  President, Dynacraft, and Director
Jack Kehl                  57  President, Pal Joey, and Director
Duane R. Egeland           59  Chief Financial Officer and Director
Chris Treacy               53  President of Diamond Golf International Limited
                                and Director
</TABLE>


     The  size  of  the  Board  of Directors has been increased to 9 and will be
divided  into  three  classes  each consisting of approximately one-third of the
total number of directors.  After the subscriptions for the minimum is achieved,
the  existing  directors  will  fill  the  vacancies  in the Board of Directors.

     The  members  of  the  Board of Directors hold office until the next annual
meeting  of  stockholders  or  until  their  successors  have  been  elected and
qualified.    Officers are appointed by, and serve at the pleasure of, the Board
of  Directors.   The Company expects to add three additional Directors, who will
have  no  affiliation  with the Company, shortly after the subscriptions for the
minimum  is  reached.  The  following  is a description of the Company's current
Directors  and  executive  officers.

Joseph  A.  Altomonte,  Sr.

     Mr.  Joseph  Altomonte,  Sr.,  is Chairman of the Board of the Company.  He
founded  what is now known as Dynacraft in 1980 and has acted as Chairman of the
Board  since  that  time.    Mr.  Altomonte  presides  over all of the Dynacraft
entities,  including  Dynacraft,  Pal  Joey,  the  Pal  Joey  Pro  Shop  and
Diamond/Dynacraft.

     Mr. Altomonte has been in the golf business for over 35 years, beginning in
a  sales  position  with  the  Faultless  Golf  Company.  He was responsible for
signing  such legendary PGA Tour stars as Lee Trevino, Jerry Heard and Lee Elder
to  their  first endorsement contracts with Faultless. Australian PGA rookie Bob
Shaw  and  LPGA  star  Cynthia  Sullivan  were also signed by Mr. Altomonte.  He
became  Executive  Vice  President  of  Faultless in 1971 and continued with the
company during their subsequent acquisitions by Abbott Laboratories and Rawlings
Sporting  Goods  Company.

     In  1980,  Mr.  Altomonte started Dynamic Golf in the basement of his home.
The  name of the operation was changed to Dynacraft Golf Products in 1982.  As a
result of his efforts, Mr. Altomonte was awarded an Honorable Mention in 1985 by
Governor  George  Voinovich  as  Ohio  Small  Businessman  of  the  Year.

Joseph  Altomonte,  Jr.

     Joseph  Altomonte, Jr., has been Chief Executive Officer of the since 1993.
Prior  to that position, Mr. Altomonte served as President of Pal Joey Golf from
1981-1992,  a  company  he  helped  start  in  1981.

     Mr.  Altomonte  was  chosen  in  a  nationwide  search  to  be  a  Sales
Representative  for the prestigious Ernie Sabayrac Organization, better known as
Izod,  in  1977.    Later he was Vice President of a major golf retail franchise
located  in  Miami,  Florida,  from  1977-78.

     Mr.  Altomonte attended Ashland College, Ohio University and The Ohio State
University  majoring  in  Political  Science  and  Art.

Jeff  Jackson

     Jeff  Jackson  has  been  the  President  since the fall of 1996.  Prior to
holding that position, he was Executive Vice President of Dynacraft from 1993 to
1996.    He  joined  Dynacraft  in  1991  as  Product  Manager.  As President of
Dynacraft,  Mr.  Jackson oversees the day-to-day operations of the all facets of

<PAGE>

the  company,  including  product  development, technical support, the Dynacraft
Clubmaking  Institute,  as  well  as  sales,  customer  service  and purchasing.

     Mr. Jackson is a respected author and speaker in the golf industry.  He has
written  two  complete  texts,  "The  Modern  Guide  to  Clubmaking"  and "Total
Clubfitting."    He  has  developed  a  video  program of each.  He is a regular
contributor  to  many  United  States'  golf  publications, including Golf Tips,
Junior  Golf  Magazine,  Golf  For  Women,  Tee  Time  Golf,  The  Professional
Clubmakers'  Society  Journal,  and  to  the international journals, Clubmaker's
Digest and Golf The Scientific Way.  He is a frequent speaker at PGA educational
seminars,  the  Canadian  Clubmaking  Symposium  and at the Dynacraft Clubmaking
Institute.    In  1997,  Mr.  Jackson  was  named  Educational Presenter for the
Australian  PGA.

     Mr.  Jackson  graduated  from  Western  Maryland  College  in  1979  with a
Bachelor's  Degree  and  received  his  Master's  Degree  from  Frostburg  State
University  in  1983.

Jack  Kehl

     Jack  Kehl has been President of Pal since the fall of 1996.  Prior to that
position,  he  was  Vice  President  of  Sales  for Pal Joey since rejoining the
Company  in  1995.    As  President of Pal Joey, Mr. Kehl is responsible for all
day-to-day  operations  including  sales,  customer  service,  manufacturing,
accounting,  and  other  divisions.  Since rejoining Pal Joey, Mr. Kehl has been
instrumental  in  increasing  sales from $2.8 million in 1995 to $5.3 million at
the  close  of  1996.

     Mr.  Kehl  has  been involved in sales and marketing for over 35 years.  Of
those  years,  32 have been in the golf and/or sporting goods fields.  From 1990
to 1995, he was Vice President and Co- Manager of PGI Golf in Loudonville, Ohio,
a  major  golf  ball  supplier  to  the  industry.

     During  his  tenure  in  the  golf  industry, Mr. Kehl has worked with such
companies  as  Faultless,  Rawlings  and Abbott Labs.  He has been involved with
sales  team  development  and  sales  force  management,  promotional  program
development  and  implementation, international market development, domestic and
international purchasing, product marketing strategies, advertising support, and
product  costing  and  pricing.

     Mr.  Kehl  attended  Ashland University in Ashland, Ohio, and has completed
the  American  Management  Association's  School  of  Marketing  Program.

<PAGE>

Duane  R.  Egeland

     Duane  R.  Egeland  , a CPA, is the Chief Financial Officer of the Company.
He  joined the Company in the fall of 1996.  As CFO, Mr. Egeland coordinates all
financial  functions for the Dynacraft Companies, including Diamond/Dynacraft in
England.

     Prior  to  joining  the  Company, Mr. Egeland was associated with the Knoll
Group  Management  Company,  concentrating on commercial real estate development
and apartment management.  Prior to his tenure with the Knoll Group in 1991, Mr.
Egeland was a self-employed financial and business advisor to companies involved
in  real  estate  development  and  management in Atlanta, Georgia.  During this
time,  he  advised  international  investors  concerning  American  investment
opportunities.    He  also  became  registered  with the National Association of
Securities  Dealers and the Commission as a Financial and Operational Principal.
Prior to selling it in 1986, Mr. Egeland owned a general securities firm, Harwin
Securities,  Inc., which did private placements.  Mr. Egeland acted as a general
partner  of Belmont Towers Limited Partnership which owned 240 condominium units
in  Texas  and  developed  townhouse units in Pensacola, Florida, and a shopping
center  in  Nashville,  Tennessee.

     Mr.  Egeland  was  an  associate of the Chicago office of the international
public accounting firm of Laventahl and Horwath, becoming a partner in 1967.  In
1969  he  became the managing partner of the firm's Cleveland office and in 1979
assumed  similar  responsibilities for the Houston office.  In 1981, he sold his
interest  back  to  the  firm.

Chris  Treacy

     Chris  Treacy  is  President  of  Diamond  Golf  International,  Limited, a
position  he  has held since Dynacraft acquired a 51% ownership in that business
in  1991.    As such he is responsible for all facets of the European operation,
including,  but  not  limited  to,  sales  and  customer  service,  advertising,
purchasing,  inventory  management,  and  education.

     Prior  to  1991,  Mr.  Treacy was owner operator of Diamond Golfworks along
with  his  wife  and  son,  a position he held since 1978.  Immediately prior to
that,  Mr.  Treacy  was  a golf course manager whose duties included operating a
golf  course  pro  shop  and  a  green fee operation.  Mr. Treacy has operated a
repair  stand  at  numerous British Open Championships and is well known to golf
professionals in Europe as well as in the United States.  He has done repair and
custom club work for such pros as Tom Watson, Brian Barnes, and Tony Jacklin, to
name a few.  He introduced a teaching facility to all of Europe, specializing in
teaching pros and clubmakers the craft of making and repairing all types of golf

<PAGE>

clubs.    Mr.  Treacy  currently  travels  throughout  Europe  offering expanded
versions  of  these  instructional curricula for those interested in clubmaking.

     Mr.  Treacy  has  authored  numerous  articles  in  European  publications
concerning  the  assembly,  fitting  and  repair of golf clubs.  He is a regular
contributor to the international journal, Clubmaker's Digest and has assisted in
                                          ------------------
authoring at least two international texts, "The Modern Guide to Clubmaking" and
"Total  Clubfitting."

AUDIT  COMMITTEE
     The  Board  of  Directors  intends  to  appoint an audit committee of three
non-management  directors.    The  Audit  Committee's  responsibilities  include
reviewing  the results and scope of the audit and other services provided by the
Company's  independent  accountants and all transactions between the Company and
any  of  its  officers,  directors  or  principal  stockholders.

DIRECTOR  COMPENSATION
     The  Company intends to compensate non-employee directors $500 per Board or
committee  meeting  attended  plus  any  out  of  pocket  expenses.

ITEM  10.    Executive  Compensation

     The  following  table  sets  forth,  for  the  year ended December 31, 1997
compensation,  including salary, bonuses and certain other compensation, paid by
the  Company  to  its  Chief Executive Officer and each other executive officers
whose  annual  compensation  exceeded  $100,000.

<TABLE>
<CAPTION>
                                   ANNUAL  COMPENSATION  ALL  OTHER
NAME AND PRINCIPAL POSITION           SALARY    BONUS   COMPENSATION
-----------------------------------  --------  -------  ------------
<S>                                  <C>       <C>      <C>
Joseph A. Altomonte, Sr.
 Chairman of the Board of Directors
  December 31, 1997                  $115,000  $41,750            --

Joseph A. Altomonte, Jr.
  Chief Executive Officer
  December 31, 1997                  $115,000  $69,600            --
</TABLE>

<PAGE>

ITEM  11.    Security  Ownership  of  Certain  Beneficial Owners and Management.

     The  following table shows the beneficial ownership of the Company's common
stock  as  of  March  31, 1998 and as adjusted to reflect the sale of the shares
being  offered, for (i) each director and executive officer of the Company, (ii)
each  shareowner  known  by  the  Company  to own beneficially 5% or more of the
outstanding shares of its common stock and (iii) all directors and officers as a
group for each class of capital stock of the Company.  The Company believes that
the  beneficial  owners  of  the common stock listed below, based on information
they  furnished,  have  sole  investment  and  voting  power  over their shares.

COMMON  STOCK:

<TABLE>
<CAPTION>
DIRECTORS,                           SHARES          PERCENTAGE OF COMMON SHARES OUTSTANDING:
EXECUTIVE OFFICERS                                   ---------------------------------------
AND 5% SHAREHOLDERS                 BENEFICIALLY  BEFORE OFFERING   MINIMUM SOLD   MAXIMUM SOLD
                                    OWNED
-------------------------------  ------------  ----------------  -------------  -------------
<S>                              <C>           <C>               <C>            <C>
Joseph A. Altomonte, Sr. (1)(2)       968,110            47.60%         41.48%         35.41%
Joseph A. Altomonte, Jr. (3)(4)       684,723            33.67%         29.34%         25.05%
Dynacraft Employee Stock              380,913            18.73%         16.32%         13.93%
  Ownership Plan

All directors and executive         1,652,833            81.27%         70.82%         60.46%
  officers as a group
  (6 persons) (5)
<FN>


(1)       Includes 87,100 Common Shares held in the Joseph A. Altomonte, Sr. 1994 Irrevocable
Trust,  Ruth  E.  Altomonte,  Trustee.

(2)        Does not include, as of December 31, 1996, 15,650.6181 Common Shares issuable from
the  ESOP  at  the  close  of  the  plan  year  in  which  the  ESOP  Loan is repaid in full.

(3)          Includes  7,800  Common  Shares  owned  by  his  wife  Gretchen  Altomonte.

(4)        Does not include, as of December 31, 1996, 14,068.8964 Common Shares issuable from
the  ESOP  at  the  close  of  the  Plan  year  in  which  the  ESOP  Loan is repaid in full.

(5)      Does not include, as of December 31 1996 35,538.8641 Common Shares issuable from the
ESOP  at  the  close  of  the  Plan  year  in  which  the  ESOP  Loan  is  repaid  in  full.
</TABLE>


ITEM  12.    Certain  Relationships  and  Related  Transactions.

In  June  1996,  two  shareholders,  Joseph  A.  Altomonte,  Sr.  and  Joseph A.
Altomonte,  Jr.  each  personally borrowed $250,000 from Huntington Bank.  These
borrowed  funds were in turn loaned to the Company, to help pay off the existing
line  of  credit,  at  the  same  terms  as  those of the banks, namely, monthly
installments  of  $4,102  each  which  includes  interest at an interest rate of
9.625%  and  a  final  payment  due  June  1,  2001.

In  November 1996 to help fund negative cash flow, Joseph A. Altomonte, Sr. also
lent  the  Company  $326,554,  taking  back three promissory notes.  Interest on
$200,000  is  at prime plus 1%; at 7% on $90,770 and 7.2% on $35,784.  All three
notes  are  due  on  demand.

Again  in January 1997 to help fund negative cash flow, Joseph A. Altomonte, Sr.
lent  the  Company $52,500 at 8.25% interest.  The principle of this note is due
on  demand and was repaid in September 1997 by reducing shareholders receivables
in  a  like  amount.

     In  May  1997,  the  Company  arranged for an Irrevocable Standby Letter of
Credit  from Huntington National Bank for 58,000 British pounds or approximately
94,000 US dollars to be used to facilitate the acquisition of a loan for Diamond
Golf International Limited from Lloyds Bank.  The proceeds of the loan are to be
used  to  repay  Dynacraft's  advance to them of $92,980 plus unpaid interest of
$688  and  then Dynacraft will reduce the principal balance on its existing term
note  with  Huntington  National  Bank  by  a  like  amount.  The balance of the
Irrevocable  Standby Letter of Credit is to be reduced each three months by 1/12
of  the  original  amount  and  expires  in  May  2000.  The Letter of Credit is
guaranteed  by  Joseph  A.  Altomonte,  Sr.  and  Joseph  A. Altomonte, Jr., who
received  no  consideration  for  their  guarantee.

     The  Company  believes that each of the foregoing transactions are on terms
no  less  favorable  to  the Company than could be obtained from unrelated third
Parties.

     All future transactions between the Company and its officers, directors and
principal shareowners and their affiliates will be approved by a majority of the
disinterested  Directors, who do not have an interest in the transaction and who
had  access,  at  the  Company's  expense, to the Company's or independent legal
Counsel,  and  will  be  on terms no less favorable to the Company than could be
obtained  from  unrelated  third  parties.

<PAGE>

                                     PART IV

ITEM  13.    Exhibits  and  Reports  on  Form  8-K

(a)          Exhibits

<TABLE>
<CAPTION>


EXHIBIT
NUMBER                                        DESCRIPTION
-------  -------------------------------------------------------------------------------------
<S>      <C>
*3.1     Form of Second Amended and Restated articles of Incorporation
*3.2     Form of Code of Regulations
*4.1     Form of common stock certificate
*9       Lock in Agreement for Shares of the Common Shares of Dynacraft Golf Products, Inc.
*10.1    Bank One-Letter of Agreement-June 4, 1996
*10.2    Huntington National Bank-June 20, 1996
         a) Loan Agreement
         b) Commercial Loan Note
         c) Guarantor:     Joseph A. Altomonte, Sr. and
         Joseph A. Altomonte, Jr.
         d) Security Agreement: Dynacraft Golf Products, Inc. and
         Pal Joey Custom Golf, Inc.
         e) Commercial Loan Note and Subordination Agreement:
         Joseph A. Altomonte, Sr. and
         Joseph A. Altomonte, Jr.
*10.3    Letter of Credit Agreement and Irrevocable Stanby Letter of Credit
*10.4    Modification to June 20, 1996 Loan Agreement
*10.5    Four Shareholder Promissory Notes
*10.6    401(k) Profit Sharing Plan and Trust
*10.7    Employees Stock Ownership Plan and Amendments
*18.     Letter on change in accounting principles
**21.     Subsidiaries of Registrant
**23.1   Consent of Wilson, Shannon & Snow, Inc.
**27     Financial Data Schedule
**99.3   Approval letter from the Chicago Stock Exchange, dated September 29, 1997.
-------

<FN>

-          Previously  filed  with the Securities and Exchange Commission as an Exhibit to the
Company's  Registration  Statement  on  Form  SB-2,  Amendment  No. 2 (File No. 333-31501) and
incorporated  herein  by  reference.

**  Filed  herewith.

(b)          Reports  on  Form  8-K

No  reports  are  filed  on  Form  8-K  during  the  quarter  ended  December  31,  1997.
</TABLE>

<PAGE>


                                   SIGNATURES

     In  accordance  with  Section 13 or 15(d) 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,  in the City of Newark, Ohio, on
March  30,  1998.

                                   By:  /s/  Joseph  A.  Altomonte,  Jr.
                                             ---------------------------
                                             Joseph  A.  Altomonte,  Jr.
                                             Chief  Executive  Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed  below by the following persons on behalf of the registrant in
the  capabilities  and  on  the  dates  stated.

<TABLE>
<CAPTION>

<S>                           <C>                                 <C>
SIGNATURE                     TITLE                               DATE
----------------------------  ----------------------------------  --------------


/s/_Joseph A. Altomonte, Sr.  Chairman of the Board, Director     March 30, 1998
----------------------------
JOSEPH A. ALTOMONTE, SR.



/s/_Joseph A. Altomonte, Jr.  Chief Executive Officer, Director   March 30, 1998
----------------------------
JOSEPH A. ALTOMONTE, JR       Principal Executive Officer



/s/ Jeff Jackson              President of Dynacraft,  Director   March 30, 1998
----------------------------
JEFF JACKSON



/s/ Jack Keh                  President of Pal Joey, Director     March 30, 1998
----------------------------
JACK KEHL



/s/ Duane R. Egeland          Chief Financial Officer, Director   March 30, 1998
----------------------------
DUANE R. EGELAND              Principal Financial and Accounting
Officer



/s/ Chris Treacy              President of Diamond Golf,          March 30, 1998
----------------------------
CHRIS TREACY                  Director
</TABLE>



<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>


                PAGE
----------------------------------------------
<S>                                             <C>
Independent Auditor's Report                    F-1

Consolidated Balance Sheet                      F-2

Consolidated Statements of Operations           F-4

Consolidated Statement of Stockholders' Equity  F-5

Consolidated Statements of Cash Flows           F-6

Notes to Consolidated Financial Statements      F-7
</TABLE>

<PAGE>

                          INDEPENDENT AUDITORS' REPORT



Board  of  Directors
Dynacraft  Golf  Products,  Inc.  and  Subsidiary


We  have  audited the accompanying consolidated balance sheets of Dynacraft Golf
Products,  Inc. (an Ohio corporation) and Subsidiary as of December 31, 1997 and
1996,  and  the  related  consolidated  statements  of operations, stockholders'
equity  and  cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an  opinion  on  these  financial  statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audits  provide  a  reasonable  basis  for  our opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  consolidated financial position of Dynacraft Golf
Products,  Inc.  and  Subsidiary  as  of  December  31,  1997  and 1996, and the
consolidated  results  of  its  operations and its cash flows for the years then
ended  in  conformity  with  generally  accepted  accounting  principles.

As  described in Note L to the financial statements, in 1996 the Company changed
its  method  for valuing inventory from lower of average cost or market to lower
of  absorption  costing  or  market.



/s/  Wilson,  Shannon  &  Snow,  Inc.
Wilson,  Shannon  &  Snow,  Inc.


Newark,  Ohio
February  19,  1998



                                       F-1

<PAGE>


<TABLE>
<CAPTION>

                  Dynacraft Golf Products, Inc. and Subsidiary
                           CONSOLIDATED BALANCE SHEET

                                                December 31
                                                ------------
ASSETS                                        1997         1996
                                          ------------  ----------
<S>                                       <C>           <C>
CURRENT ASSETS
  Cash                                    $    241,157  $  297,192
  Accounts and notes receivable
    Trade - net of allowance for
      doubtful accounts of $55,110 in
      1997 and $75,868 in 1996               1,430,208   1,363,445
    Stockholders and employees                   4,919      52,889
    Diamond Golf                                     0      96,125
    Other                                      154,325      68,806
  Inventories
    Raw materials                            1,604,941   1,262,855
    Finished goods                           2,026,052   2,362,138
  Prepaid expenses                             321,074     331,483
                                          ------------  ----------

                    Total current assets     5,782,676   5,834,933


PROPERTY AND EQUIPMENT - AT COST
  Buildings and improvements                 1,961,576   1,961,576
  Equipment, furniture and fixtures          1,222,525   1,290,786
  Vehicles                                      13,084      25,318
                                          ------------  ----------
                                             3,197,185   3,277,680
    Less accumulated depreciation            1,865,087   1,821,584
                                          ------------  ----------
                                             1,332,098   1,456,096
  Land                                          73,220      73,220
                                          ------------  ----------
                                             1,405,318   1,529,316

OTHER ASSETS                                   408,882     235,309
                                          ------------  ----------

                                          $  7,596,876  $7,599,558
                                          ============  ==========

</TABLE>

                                       F-2

<PAGE>


<TABLE>
<CAPTION>

                  Dynacraft Golf Products, Inc. and Subsidiary
                           CONSOLIDATED BALANCE SHEET


                                                            December 31
                                                            -------------
LIABILITIES AND STOCKHOLDERS' EQUITY                     1997          1996
                                                     -------------  -----------
<S>                                                  <C>            <C>
CURRENT LIABILITIES
  Current maturities of long-term debt               $    521,571   $  515,134
  Current portion of capital leases                        12,441       47,484
  Accounts payable - trade                              3,066,725    2,876,415
  Accrued liabilities                                     205,968      159,374
                                                     -------------  -----------

      Total current liabilities                         3,806,705    3,598,407


LONG-TERM DEBT
  Notes payable, net of current maturities              2,190,693    2,808,915
  Capital lease obligations, net of current portion        15,055       27,776
                                                     -------------  -----------
      Total long-term debt                              2,205,748    2,836,691
                                                     -------------  -----------

      Total liabilities                                 6,012,453    6,435,098


OBLIGATION TO REPURCHASE STOCK
  Preferred stock                                         100,000      100,000
  ESOP stock                                              (32,650)    (325,907)
                                                     -------------  -----------
                                                           67,350     (225,907)

STOCKHOLDERS' EQUITY
  Common stock                                                500          500
  Additional paid-in capital                              229,295      229,295
  Retained earnings                                     1,736,755    1,472,921
  Repurchase obligation - ESOP                           (449,477)    (312,349)
                                                     -------------  -----------
                                                        1,517,073    1,390,367
                                                     -------------  -----------

                                                     $  7,596,876   $7,599,558
                                                     =============  ===========
<FN>

The  accompanying  notes  are  an  integral  part  of  this  statement.

</TABLE>


                                       F-3

<PAGE>


<TABLE>
<CAPTION>

                  Dynacraft Golf Products, Inc. and Subsidiary
                      CONSOLIDATED STATEMENT OF OPERATIONS

                                                        Year ended December 31
                                                        ----------------------
                                                         1997          1996
                                                     ------------  ------------
<S>                                                  <C>           <C>
Sales                                                $20,024,374   $19,459,629
Cost of goods sold                                    14,154,104    14,210,698
                                                     ------------  ------------

      Gross profit                                     5,870,270     5,248,931

Other operating revenue                                  271,805       399,367
Selling and administrative expenses                   (5,599,765)   (6,059,312)
                                                     ------------  ------------

      Operating profit (loss)                            542,310      (411,014)

Other income or (deductions)
  Interest income                                         18,232        33,514
  Interest expense                                      (219,051)     (270,586)
  Environmental remediation                              (79,669)            0
  Gain on sale of fixed assets                             4,872         1,954
  Equity in net (loss) earnings of Diamond Golf           (2,860)       18,629
                                                     ------------  ------------
                                                        (278,476)     (216,489)
                                                     ------------  ------------

      Net earnings (loss) before income taxes and
           cumulative effect of a change in
           accounting principle                          263,834      (627,503)

Income taxes - currently refundable                            0        23,147
                                                     ------------  ------------

      Net earnings (loss) before cumulative effect
           of a change in accounting principle           263,834      (604,356)

Cumulative effect on prior years of an
  accounting change                                            0       105,811
                                                     ------------  ------------

      NET EARNINGS (LOSS)                            $   263,834   $  (498,545)
                                                     ============  ============

Earnings (loss) per common share before cumulative
  effect of a change in accounting principle         $      0.13   $     (0.30)

Earnings per common share on cumulative effect
  on prior years of an accounting change                    0.00          0.06
                                                     ------------  ------------

Net earnings (loss) per common share                 $      0.13   $     (0.24)
                                                     ============  ============

<FN>

The  accompanying  notes  are  an  integral  part  of  this  statement.

</TABLE>


                                       F-4

<PAGE>



<TABLE>
<CAPTION>

                           Dynacraft Golf Products, Inc. and Subsidiary
                          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


                                      Common Stock          Additional                 ESOP
                                     ------------
                                       Shares                Paid-in     Retained     Repurchase
                                     Outstanding   Amount    Capital     Earnings     Obligation
                                     -----------  --------  ---------  ------------  ------------
<S>                                  <C>          <C>       <C>        <C>           <C>
Balance at December 31, 1995           2,033,746  $    500  $ 229,295  $ 1,971,466   $  (323,776)

Net (loss) for the year                        0         0          0     (498,545)            0

Change in fair value of ESOP shares            0         0          0            0        11,427
                                     -----------  --------  ---------  ------------  ------------

Balance at December 31, 1996           2,033,746       500    229,295    1,472,921      (312,349)

Net earnings for the year                      0         0          0      263,834             0

Change in fair value of ESOP shares            0         0          0            0      (137,128)
                                     -----------  --------  ---------  ------------  ------------

Balance at December 31, 1997           2,033,746  $    500  $ 229,295  $ 1,736,755   $  (449,477)
                                     ===========  ========  =========  ============  ============

<FN>

The  accompanying  notes  are  an  integral  part  of  this  statement.

</TABLE>

                                       F-5

<PAGE>



<TABLE>
<CAPTION>

                    Dynacraft Golf Products, Inc. and Subsidiary
                        CONSOLIDATED STATEMENT OF CASH FLOWS


                                                             Year ended December 31
                                                             ----------------------
                                                              1997         1996
                                                           ----------  ------------
<S>                                                        <C>         <C>
Cash flows from operating activities
  Net earnings (loss) for the year                         $ 263,834   $  (498,545)
  Adjustments to reconcile net earnings (loss) to
  net cash provided by operating activities
    Depreciation and amortization                            151,705       173,533
    (Gain) on sale of fixed assets                            (4,872)       (1,954)
    Equity in net loss (earnings) of Diamond Golf              2,860       (18,629)
  Changes in assets and liabilities
    Accounts and notes receivable                            (97,478)        1,495
    Inventories                                               (6,000)     (270,350)
    Prepaid expenses                                          10,409      (157,369)
    Other assets                                                   0       (19,346)
    Book overdrafts                                                0      (100,024)
    Accounts payable                                         190,310     1,370,178
    Accrued liabilities                                       46,594         4,269
                                                           ----------  ------------

      Net cash provided by operating activities              557,362       483,258

Cash flows from investing activities
  Proceeds from sale of fixed assets                               0         2,100
  Purchases of fixed assets                                  (27,014)      (83,813)
  Payments received on notes receivable                       92,980        18,586
                                                           ----------  ------------

      Net cash provided by (used in) investing activities     65,966       (63,127)

Cash flows from financing activities
  Deferred offering costs                                   (179,197)            0
  Lines of credit payable - net                                    0    (2,260,315)
  Principal payments on long-term debt                      (608,531)     (567,787)
  Principal payments on capital leases                       (47,764)      (37,859)
  Principal payments on note payable guarantee - ESOP        156,129       156,130
  Proceeds from issuance of long-term debt                         0     2,586,892
                                                           ----------  ------------

      Net cash (used in) financing activities               (679,363)     (122,939)
                                                           ----------  ------------

Net (decrease) increase in cash                              (56,035)      297,192

Cash at beginning of year                                    297,192             0
                                                           ----------  ------------

Cash at end of year                                        $ 241,157   $   297,192
                                                           ==========  ============

<FN>

The  accompanying  notes  are  an  integral  part  of  this  statement.

</TABLE>

                                       F-6

<PAGE>

<TABLE>
<CAPTION>

                  Dynacraft Golf Products, Inc. and Subsidiary
                CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED


                                                     Year ended December 31
                                                     ----------------------
                                                         1997       1996
                                                       --------  ----------
<S>                                                    <C>       <C>
Supplemental Cash Flow Disclosures
-----------------------------------------------------

Cash paid (refunded) during the year for:
  Interest                                             $232,091  $ 271,046
                                                       ========  ==========

  Income taxes                                         $      0  $(211,423)
                                                       ========  ==========


Supplemental Schedule of Noncash Financing Activities
-----------------------------------------------------

  Equipment acquired by capital lease agreement        $      0  $  11,025
                                                       ========  ==========
  Advance to Diamond Golf paid from proceeds
    from issuance of long-term debt                    $      0  $  99,980
                                                       ========  ==========

  Sale of fixed asset to stockholder
    Payment of debt                                    $  3,254  $       0
    Increase in stockholder account receivable            3,689          0
                                                       --------  ----------

                                                       $  6,943  $       0
                                                       ========  ==========

<FN>

The  accompanying  notes  are  an  integral  part  of  this  statement.
</TABLE>

                                       F-7

<PAGE>




                  Dynacraft Golf Products, Inc. and Subsidiary
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  A  -  ORGANIZATION  AND  ACCOUNTING  POLICIES

     Dynacraft Golf Products, Inc. (the Company) is a supplier of component golf
club equipment (golf clubheads, shafts, grips and other accessory golf products)
to  clubmakers through its catalog and showroom. The Subsidiary, Pal Joey Custom
Golf,  Inc.,  is  a  wholesaler  of finished golf clubs to golf distributors for
resale. Through its Pro Shop Division it is a retailer of golf equipment, attire
and  accessories.

     Consolidation
     -------------

     The  consolidated  financial  statements  include the accounts of Dynacraft
Golf  Products, Inc. and its wholly-owned subsidiary, Pal Joey Custom Golf, Inc.
Pal  Joey Custom Golf, Inc. includes the accounts of its wholly-owned subsidiary
Dynacraft  Real Estate Holdings, Inc.  All significant intercompany transactions
have  been  eliminated.

     Cash  Equivalents
     -----------------

     For  purposes  of  the  statement  of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three months or
less to be cash equivalents. There were no cash equivalents at December 31, 1997
and  1996.

     The  Company  maintains  its cash in bank deposit accounts which, at times,
may  exceed federally insured limits. The Company has not experienced any losses
in  such  accounts.  The  Company  believes it is not exposed to any significant
credit  risk  on  cash  and  cash  equivalents.

     Inventories
     -----------

     Inventory  consists primarily of golf clubs, golf clubheads, shafts, grips,
golf  attire and accessories valued at the lower of absorption costing or market
which  approximates  the  first-in,  first-out  (FIFO)  method.

     Advertising  Costs
     ------------------

     The  Company's  policy  is to expense advertising costs as incurred, except
for  catalog  expenses  which  are capitalized and amortized over their expected
period  of  future  benefits,  twelve  months.

     At  December  31,  1997,  $198,654  of  advertising  costs were reported as
prepaid  assets  and  $180,495  at  December  31,  1996. Advertising expense was
$301,050  and  $287,016  for  the  years  ended  December  31,  1997  and  1996,
respectively.


                                       F-8

<PAGE>


                  DYNACRAFT GOLF PRODUCTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED


NOTE  A  -  ORGANIZATION  AND  ACCOUNTING  POLICIES  -  CONTINUED

     Revenue  Recognition
     --------------------

     Revenue  is  recognized  when  orders  are  shipped.

     Reclassifications
     -----------------

     Certain reclassifications have been made to the December 31, 1996 financial
statements  to  conform  with  the  December  31,  1997  financial  statement
presentation.  Such  reclassifications  have  had  no  effect  on  net income as
previously  reported.

     Property  and  Equipment
     ------------------------

     Major  improvements  and additions to property and equipment are charged to
the  property  accounts while replacements, maintenance and repairs which do not
improve  or  extend  the  life  of  the  assets  are  expensed  currently.

     Upon  the  sale  or  retirement  of  property  and equipment, the costs and
related  accumulated  depreciation  are eliminated from the respective accounts.

     Depreciation
     ------------

     Depreciation  is  provided  in  amounts  sufficient  to  relate the cost of
depreciable  assets  to  operations  over  their  estimated  services  lives,
principally  on  the  declining-balance  method.

     Estimates
     ---------

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect  the reported amounts of assets and liabilities at the
date  of  the  financial  statements  and  the  reported amounts of revenues and
expenses  during  the  reporting  period. Actual results could differ from those
estimates.

     Income  Taxes
     -------------

     The  Company  provides  for  income  taxes  in accordance with Statement of
Financial  Accounting  Standards  (SFAS)  No.  109, Accounting for Income Taxes,
which  requires  the  use  of the asset and liability approach of accounting for
deferred  income  taxes.  Under this method, deferred tax assets and liabilities
are  determined based on the difference between the financial statement carrying
amounts  of  assets  and  liabilities  and  their  respective  tax  bases.


                                       F-9

<PAGE>


                  DYNACRAFT GOLF PRODUCTS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED

NOTE  A  -  ORGANIZATION  AND  ACCOUNTING  POLICIES  -  CONTINUED

     Significant  Customers
     ----------------------

     One  group  of customers represent in excess of 19% and 16% of consolidated
sales  in  the  years  ended  December  31,  1997  and  1996,  respectively.

NOTE  B  -  ACCUMULATED  DEPRECIATION

     A summary of the accumulated depreciation, including methods and lives, was
as  follows  at  December  31:

<TABLE>
<CAPTION>


                                       Live
  Classification        Method        (Years)     1997        1996
-----------------  -----------------  -------  ----------  ----------
<S>                <C>                <C>      <C>         <C>
  Buildings and
    improvements   Straight-line        10-31  $  789,359  $  713,575

  Equipment,
    furniture and  Straight-line and
    fixtures       declining-balance    5 - 7   1,063,751   1,089,120

  Vehicles         Declining-balance   5 - 10      11,977      18,889
                                               ----------  ----------
                                               $1,865,087  $1,821,584
                                               ==========  ==========
</TABLE>


NOTE  C  -  LEASE  OBLIGATIONS

     The  Company  leases  equipment  under various operating leases expiring in
1998  -  1999  and  also leases equipment on a short-term basis as needed. Total
rent  expense  for  the  years  ended December 31, 1997 and 1996 was $15,170 and
$15,905,  respectively.

     The  Company  is  leasing  computer and other equipment under capital lease
agreements.  These  assets  are  recorded  as  equipment  on  the balance sheet.

<TABLE>
<CAPTION>

<S>                           <C>
    Equipment                 $ 364,913
    Accumulated depreciation    343,179
                              ---------

                              $  21,734
                              =========
</TABLE>

                                      F-10
<PAGE>



                 DYNACRAFT  GOLF  PRODUCTS,  INC.  AND  SUBSIDIARY
             NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS    -  CONTINUED


NOTE  C  -  LEASE  OBLIGATIONS  -  CONTINUED

     Future  minimum  lease  payments  under  capital  leases, together with the
present  value  of  the  minimum lease payments as of December 31, 1997, were as
follows:

<TABLE>
<CAPTION>

Year                                               Amount
--------                                           ------
<S>                                      <C>       <C>
1998                                             $ 14,899
1999                                               13,315
2000                                                2,854
                                                  --------
31,068
    Less: Amounts representing interest    3,572
                                          --------

    Present value of net lease payments    27,496
    Current portion                                12,441
                                                  --------

    Long-term portion                            $ 15,055
                                                  ========
</TABLE>

NOTE  D  -  LONG-TERM  DEBT

<TABLE>
<CAPTION>

  Long-term debt consisted of the following at December 31:
                                                               1997      1996
                                                             --------  --------
<S>                                                          <C>       <C>
  Note payable to a bank in 60 monthly principal
    and interest payments of $243 at an interest
    rate of 7.11% collateralized by a truck.                 $      -  $  3,916

  ESOP note payable to a bank due in monthly
    installments of $13,011 plus interest at
    prime plus 1% (currently 9.50%). The
    monthly installment increases to $20,872
    plus interest on March 31, 1998. Final
    payment due December 31, 1999. Collateralized
    by inventory, equipment, accounts receivable
    and real estate                                           482,127   638,256

</TABLE>

                                      F-11

<PAGE>


                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED

<TABLE>
<CAPTION>


<S>                                                       <C>         <C>
NOTE D - LONG-TERM DEBT - CONTINUED

  Note payable to a bank in monthly installments
    of $7,861 plus interest at prime plus 1%
    (currently 9.50%). Final payment due March 30,
    1998. Collateralized by property and
    equipment                                                 12,367     106,705

  Note payable to a bank in monthly installments of
    $29,344 plus interest at the U.S. Treasury constant
    maturities rate (currently 8.100%). Final payment
    due June 20, 2003. Collateralized by cash, accounts
    receivable inventory, intangibles, equipment, and
    real estate.                                           1,480,329   1,781,808

  Subordinated note payable to a stockholder in
    monthly installments of $4,102 which includes
    interest at an interest rate of 9.625%. Final
    payment due June 1, 2001.                                205,411     233,407

  Subordinated note payable to a stockholder in
    monthly installments of $4,102 which includes
    interest at an interest rate of 9.625%. Final
    payment due June 1, 2001.                                205,476     233,407

  Note payable to a stockholder on demand.
    Interest is at prime plus 1% (currently 9.50%).
    This note is currently subordinate to bank debt
    whose final payment is due June 20, 2003.                200,000     200,000

  Note payable to a stockholder on demand. Interest
    is at 7.20%. This note is currently subordinate to
    bank debt whose final payment is due June 20, 2003.       35,784      35,784

  Note payable to a stockholder on demand. Interest
    is at 7.00%. This note is currently subordinate to
    bank debt whose final payment is due June 20, 2003.       90,770      90,770
                                                          ----------  ----------
                                                           2,712,264   3,324,049
    Less current maturities                                  521,571     515,134
                                                          ----------  ----------

  Long-term portion                                       $2,190,693  $2,808,915
                                                          ==========  ==========
</TABLE>


                                      F-12

<PAGE>


                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED

NOTE  D  -  LONG-TERM  DEBT  -  CONTINUED

<TABLE>
<CAPTION>

     As  of  December  31,  1997,  long-term  debt  matures  as  follows:

Year              Amount
----            ----------
<S>             <C>
1998            $  521,571
1999               544,222
2000               326,540
2001               487,248
2002               296,808
    Thereafter     535,875
                ----------
                 2,712,264
                ==========
</TABLE>

     At  December  31, 1997 the Company had a $93,000 letter of credit agreement
with  a  bank.  The letter of credit was used to facilitate the acquisition of a
loan  for Diamond Golf International Limited. The letter of credit expires April
1,  2000.

NOTE  E  -  RELATED  PARTY  TRANSACTIONS

     The  Company is related to Dynamic Precision Casting Manufacturing Company,
Ltd.  (Dynamic)  since  one  of  the  Company's preferred stockholders is also a
stockholder  in  Dynamic. During the years ended December 31, 1997 and 1996, the
Company  purchased  products  from  Dynamic  totaling  $1,922,378 and $2,351,155
respectively.  At December 31, 1997 and 1996 the Company had accounts payable to
Dynamic  of  $871,096  and  $838,167,  respectively.

     The  Company  has  advances of $4,919 to employees at December 31, 1997 and
$52,889  to stockholders and employees at December 31, 1996, respectively, which
are  receivable  upon  demand.

NOTE  F  -  STOCKHOLDERS'  EQUITY

     At  December  31,  1997, the Company had 3,500,000 common shares authorized
without par value with 2,033,746 shares issued and outstanding, of which 380,913
are  shares  in  the  Company's  ESOP.  In  addition, the Company has 100 shares
authorized,  issued  and outstanding of Class A preferred stock with a par value
of  $1,000  per  share  noncumulative and a liquidating preference of $1,000 per
share.  The  Company  is  obligated  to  redeem  these shares upon demand of the
stockholder.  Because  of  this  obligation  these  shares  have been classified
outside  of  permanent  equity.


                                      F-13

<PAGE>


                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED


NOTE  G  -  PROFIT  SHARING  PLAN

     The Company has a 401(k) profit sharing plan. All employees are eligible to
participate  on January 1 or July 1 following six months of service. The Company
currently  matches  25% of the employee contributions to the plan. Contributions
were  $13,292  and  $33,022  for  the  years  ended  December 31, 1997 and 1996,
respectively.

NOTE  H  -  EMPLOYEE  STOCK  OWNERSHIP  PLAN

     On  January  1,  1991,  the Company established an employee stock ownership
plan  (ESOP)  for  purposes  of  assisting  employees  who  retire.

     Under  the  plan,  a  stockholder sold to the ESOP 380,913 shares of common
stock for $1,500,000 during 1991. The purchase price was based upon an appraisal
performed  by  an independent appraiser. In order to have the funds available to
acquire the Dynacraft Golf Products, Inc. stock, the Company borrowed $1,500,000
from  a  bank  and  loaned  it  to  the  ESOP  (see  Note  D).

     The  recording  of  the  note  payable  amount is offset by a corresponding
reduction  of  stockholders'  equity.  Both  amounts  are  reduced  by principal
payments  made  during  the year. At December 31, 1997 and 1996, the outstanding
principal  balance  was  $482,127  and  $638,256,  respectively.

     Contributions  to  the plan are at the discretion of management but may not
exceed  15%  of  total  participants' compensation paid or accrued: compensation
includes  regular  and overtime wages, salary, bonuses, commissions, and amounts
deferred  under a salary reduction agreement. Compensation is limited to amounts
established  in  IRC  Section  415(d).

     Under  the  ESOP  agreement,  each employee who has completed six months of
service  may participate in the plan. Participating employees of the Company are
able  to  acquire  shares  of the Company stock allocated to them based on their
annual  compensation.  The  shares  are  held  by a trustee and allocated to the
employees  based  on  principal  payments made by the Company on the outstanding
loan.

     All  Company  stock  held by the ESOP is included in the earnings per share
calculation.  The  payment of dividends is restricted by current loan covenants.

                                      F-14

<PAGE>


                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED

NOTE  H  -  EMPLOYEE  STOCK  OWNERSHIP  PLAN  -  CONTINUED


     The  total amounts contributed to the ESOP for the years ended December 31,
1997  and  1996,  were  $210,515  and  $229,449,  respectively,  with  $156,129
representing  the  principal  portions which were allocated to the participants'
accounts.

<TABLE>
<CAPTION>

     The  following  summarizes  the  ESOP  shares  at  December  31:

                               1997     1996
                              -------  -------
<S>                           <C>      <C>
    Committed to be released  380,913  380,913
    Released                  287,794  243,196
    Suspended                  93,119  137,717
</TABLE>


     The  Company  is  obligated to repurchase and has a first offer requirement
for  those  shares  issued  to employees by the ESOP unless the Company's shares
become  publicly traded, then the first offer requirement does not apply. Due to
this  repurchase obligation, the fair market value of the ESOP shares along with
the  related  debt is classified outside of the permanent equity. The obligation
to  repurchase  ESOP  shares  will  vary  depending  on fair market value of the
shares.  As  the  fair  market  value  increases,  additional  amounts  will  be
reclassified  out  of  stockholders'  equity  and  increase  the  obligation  to
repurchase  shares.  Conversely,  as  the  fair  market  value  decreases,  the
obligation  to  repurchase will also decrease. The values of the ESOP shares for
the  year  ended December 31, 1997 and 1996 are $1.18 and $.82 per share and are
based  upon  the  fair  market  value as determined by an independent appraiser.

     The balance of the ESOP shares classified out of permanent equity consisted
of  the  following  at  December  31:

<TABLE>
<CAPTION>

                                             1997        1996
                                           ---------  ----------
<S>                                        <C>        <C>
    Fair market value of the ESOP shares
      repurchase obligation                $449,477   $ 312,349
    Less: Debt related to the acquisition
      of the ESOP shares                    482,127     638,256
                                           ---------  ----------

                                           $(32,650)  $(325,907)
                                           =========  ==========
</TABLE>


                                      F-15

<PAGE>


                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED

NOTE  I  -  INVESTMENT  IN  FOREIGN  COMPANY

     The  Company  has  a 51% (32,845 shares) ownership interest in Diamond Golf
International  Limited  (Diamond  Golf). Diamond Golf is a limited company under
English  law in Great Britain, which engages in the sale of golf club components
and  other  golfing-related  items  throughout  the  countries  of  the European
Economic  Community.

     The  Company's investment in Diamond Golf is accounted for under the equity
method.  The Company's investment was $212,032 and $214,892 at December 31, 1997
and  1996, respectively. The Company's equity in the (loss) gain of Diamond Golf
International  Limited was $(2,860) and $18,629 for the years ended December 31,
1997 and 1996, respectively. Diamond Golf had total assets of $409,237 and total
liabilities  of  $371,356  at  December  31, 1997. Net (loss) for the year ended
December  31,  1997  was $(5,606). The lack of the consolidation of Diamond Golf
does  not  materially  impact  the  Company's  financial  statements.

     During  the  years  ended  December  31,  1997  and  1996, the Company sold
$285,950 and $275,973, respectively, of products to Diamond Golf. As of December
31,  1997 and 1996, the Company had accounts receivable from Diamond Golf in the
amount  of  $86,682  and  $100,883, respectively. In addition, the Company had a
short-term  note  receivable from Diamond Golf in the amount of $96,125 in 1996.

NOTE  J  -  INCOME  TAXES

     Deferred income taxes reflect the impact of "temporary differences" between
the  amounts of assets and liabilities for financial reporting purposes and such
amounts  as  determined  by  tax  regulations.  These  temporary differences are
determined  in  accordance  with  SFAS  No.  109.

     The components of deferred taxes consisted of the following at December 31:

<TABLE>
<CAPTION>

                                         1997         1996
                                      -----------  ----------
<S>                                   <C>          <C>
    Bad debt                          $   22,000   $  30,300
    Inventories                           59,200      60,000
    Net operating loss carryforwards     148,600     275,700
    Contribution carryforwards             4,200      15,000
    Officer wages                          2,400       1,800
    Depreciation                          (6,100)       (700)
                                      -----------  ----------
      Total deferred tax assets          230,300     382,100

      Less valuation allowance          (230,300)   (382,100)
                                      -----------  ----------

      Net deferred income taxes       $        -   $       -
                                      ===========  ==========
</TABLE>


                                      F-16

<PAGE>



                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED


NOTE  J  -  INCOME  TAXES  -  CONTINUED

     Due  to  the uncertainty surrounding the realization of these favorable tax
attributes  in  future tax returns, all of the net deferred tax assets have been
fully  offset  by  a  valuation  allowance.

     Operating  loss  carryforwards  expire  as  follows:  $371,587  in  2011.
Charitable  contribution  carryforwards  expire  as  follows: $4,290 in 1999 and
$4,610  in  2000  and  $1,500  in  2001.

     The  principal  items accounting for the difference in expected tax expense
on  income  before income taxes computed at the United States statutory rate was
as  follows  at  December  31:

<TABLE>
<CAPTION>


                                                             1997        1996
                                                           ---------  ----------
<S>                                                        <C>        <C>
  Computed expense at 35% of pretax income                 $ 92,300   $(182,600)
  Valuation allowance for net operating loss carryforward   (93,800)    169,400
  Refund of prior years' tax from carryback of net
    operating losses                                              -      23,147
  Nondeductible dues                                          8,700       9,600
  IRC Section 263A adjustment                                 1,500     (16,300)
  Adjustment to allowance for bad debts                      (7,300)     18,000
  Nondeductible meals                                        10,400       9,000
  Earnings on foreign subsidiary                              1,000      (6,500)
  Contribution carryforward                                 (10,000)          -
  Other                                                       1,200           -
  Depreciation difference                                    (4,000)       (600)
                                                           ---------  ----------

                                                           $      -   $  23,147
                                                           =========  ==========
</TABLE>


     During  the  year ended December 31, 1996 a settlement was reached with the
Internal  Revenue  Service  regarding  an  examination  of the Company's federal
income  tax  returns  for  1990,  1991  and 1992. The Company accrued $42,911 at
December  31,  1995  for  taxes  due  on the settlement. Total actual additional
taxes,  penalties  and  interest  paid  in  1996  amounted  to  $56,411.

NOTE  K  -  CONTINGENCIES

     During  the year ended December 31, 1995 it was discovered that the site of
the  Company's  manufacturing,  warehousing and office facility contained ground
water that was deemed to be contaminated. The contamination appears to have come
from  a  neighboring  property owned by the State of Ohio. The Company is taking
legal action against the State of Ohio for reimbursement of legal fees and other
costs  relating  to  this  matter.  The  costs  incurred  during the year ending
December  31,  1997  amounts  to  $79,669.  No  amounts have been accrued on the
balance  sheet  for  the  clean  up  as the cost is not yet estimable, nor is it
probable  that  the  Company  will  be  required  to  pay  for  any  clean  up.


                                      F-17

<PAGE>




                  Dynacraft Golf Products, Inc. and Subsidiary
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  - CONTINUED

NOTE  L  -  CHANGE  IN  ACCOUNTING  PRINCIPLE

     During  the year ended December 31, 1996 the Company changed its method for
valuing  inventory  from  lower of average cost or market to lower of absorption
costing  or  market.  Absorption  costing  is  preferable  to  average  cost for
manufacturing  and  warehousing  business.

     The  effect  of  this  change  in 1996 income is an increase of $73,149. In
addition  to this effect, a cumulative effect of the accounting change for prior
periods  of  $105,811  is  recognized in the current year. The total increase in
income  from  the  accounting  change  is  $178,960.

NOTE  M  -  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

     The  following  presents  the  carrying  amounts of the Company's financial
instruments at December 31, 1997 and 1996. FASB Statement 107, Disclosures About
Fair  Values  of  Financial  Instruments,  defines  fair  value  of  financial
instruments  as  the  amount  at  which  the  instrument could be exchanged in a
current  transaction  between  willing  parties.

     Accounts  receivable  stockholders  and  employees,  account  receivable  -
Diamond  Golf, and accounts receivable - other: The carrying amounts approximate
fair  value  because  of  the  short  maturity  of  these  instruments.

     Notes  payable  and  capital  lease  obligations:  The  carrying  amounts
approximate  fair  value.  Several of the notes payable have interest rates that
are  adjusted  annually. The notes that are not adjusted annually are either due
in  the short-term or have rates that are similar to the current rates available
to  the  Company.

NOTE  N  -  STOCK  SPLIT

     The  Board  of  Directors  authorized  a  13-for-1  stock  split,  thereby
increasing  the  number of issued and outstanding shares to 2,033,746. The stock
split  took  effect on August 14, 1997 and all shares referred to in this report
have been adjusted to reflect that split. Additionally the Company's Articles of
Incorporation  were  amended  to  authorize  3,500,000  shares  of common stock.

NOTE  O  -  PUBLIC  STOCK  OFFERING

     During the year ended December 31, 1997, the Company offered 700,000 shares
for  sale  in an initial public stock offering. A minimum of 300,000 shares must
be  sold  to  complete  the  offering.  Until  the  minimum is fully subscribed,
purchases  will  be  deposited  into  an  escrow  account. If the minimum is not
subscribed, all deposits to the escrow account will be refunded. The minimum has
not  been  fully  subscribed  as  of  the  date  of  this  report.

     The  Company  has  accumulated  $179,197  of  costs relating to the initial
public stock offering as of December 31, 1997. These costs have been recorded on
the  balance  sheet as other assets. When the minimum is fully subscribed, these
costs  will be offset against the proceeds of the stock offering. If the minimum
is  not  fully  subscribed,  the  costs  will  be  expensed.


                                      F-18
<PAGE>