SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


     QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934



For Quarter Ended June 30, 1998                    Commission File Number 0-7475
-------------------------------                    -----------------------------


                            PHOTO CONTROL CORPORATION
                            -------------------------
             (Exact Name of Registrant as Specified in its Charter)


Minnesota                                                     41-0831186
---------                                                     ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)


4800 Quebec Avenue North, Minneapolis, Minnesota                    55428
------------------------------------------------                    -----
    (Address of Principal Executive Offices)                      (Zip Code)


Registrant's Telephone Number  (612) 537-3601


--------------------------------------------------------------------------------
    (Former name, former address, and former fiscal year if changes
since last report.)


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 twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


Yes __X__   No ____


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.

         Class                                      Outstanding at July 15, 1998
--------------------------------------              ----------------------------
Common Stock, par value $.08                                1,604,163 Shares

<PAGE>


                            PHOTO CONTROL CORPORATION
                                      INDEX


PART I                                                              Page Number
------                                                              -----------

       ITEM 1:   Financial Information

                   Consolidated Balance Sheet -
                     June 30, 1998 and December 31, 1997                 3

                   Consolidated Statement of Operations -
                     Six Months and Three Months Ended
                     June 30, 1998 and 1997                              4

                   Consolidated Statement of Cash Flows -
                     Six Months Ended June 30, 1998 and 1997             5

                   Notes to Consolidated Financial
                     Statements                                          6

      ITEM 2:      Management's Discussion and Analysis
                     of Financial Condition and Results of
                     Operations                                          7


PART II
-------

         ITEM 4:   Results of Vote of Security Holders                   9

         ITEM 6:   Exhibits and Reports on Form 8-K                      9

<PAGE>


                            PHOTO CONTROL CORPORATION
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                    JUNE 30            DECEMBER 31
                                                      1998                1997
                                                  ------------        ------------
<S>                                               <C>                 <C>         
                     ASSETS
Current Assets
   Cash                                           $     41,243        $    808,169
   Accounts Receivable                               1,247,066             505,373
   Other Receivables                                     2,700               2,700
   Inventories                                       4,860,206           4,322,603
   Prepaid Expenses                                    152,081             201,899
                                                  ------------        ------------
         Total Current Assets                        6,303,296           5,840,744
                                                  ------------        ------------

Investments and Other Assets
   Cash Value of Life Insurance                        275,460             261,966
   Deferred Income Taxes                               200,000             200,000
                                                  ------------        ------------
         Total Investments and Other Assets            475,460             461,966
                                                  ------------        ------------

Plant and Equipment
   Land and Building                                 2,222,349           2,204,871
   Machinery and Equipment                           3,443,154           3,303,719
   Accumulated Depreciation                         (3,719,732)         (3,629,310)
                                                  ------------        ------------
         Total Plant and Equipment                   1,945,771           1,879,280
                                                  ------------        ------------
                                                  $  8,724,527        $  8,181,990
                                                  ============        ============

      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Note to Bank                                   $    600,000
   Accounts Payable                                    480,260             288,724
   Accrued Payroll and Employee Benefits               359,543             270,214
   Accrued Expenses                                    201,484             114,908
                                                  ------------        ------------
         Total Current Liabilities                   1,641,287             673,846
                                                  ------------        ------------


Deferred Compensation                                  582,074             540,312
                                                  ------------        ------------

Stockholders' Equity
   Common Stock                                        128,333             128,333
   Additional Paid-In Capital                        1,393,484           1,393,484
   Retained Earnings                                 4,979,349           5,446,015
                                                  ------------        ------------
         Total Stockholders' Equity                  6,501,166           6,967,832
                                                  ------------        ------------
                                                  $  8,724,527        $  8,181,990
                                                  ============        ============
</TABLE>

          See accompanying notes to consolidated financial statements.

<PAGE>


                            PHOTO CONTROL CORPORATION

                      CONSOLIDATED STATEMENT OF OPERATIONS

                                   (unaudited)

<TABLE>
<CAPTION>
                                              THREE MONTHS                          SIX MONTHS
                                              ENDED JUNE 30                        ENDED JUNE 30
                                              -------------                        -------------

                                         1998               1997               1998               1997
                                         ----               ----               ----               ----
<S>                                  <C>                <C>                <C>                <C>         
Net Sales                            $  3,151,947       $  2,440,797       $  5,098,993       $  4,687,439
Cost of Sales                           2,331,294          1,855,188          4,138,583          3,694,507
                                     ------------       ------------       ------------       ------------
Gross Profit                              820,653            585,609            960,410            992,932

Expenses
   Marketing & Administrative             445,078            737,653            977,027          1,558,173
   Research, Development & Eng            208,841            257,142            439,457            553,262
   Interest                                10,592             14,859             10,592             24,006
                                     ------------       ------------       ------------       ------------
                                          664,511          1,009,654          1,427,076          2,135,441
                                     ------------       ------------       ------------       ------------

Income(Loss)Before Income Tax             156,142           (424,045)          (466,666)        (1,142,509)

Income Tax Benefit                                                                                (194,000)
                                     ------------       ------------       ------------       ------------

Net Income (Loss)                    $    156,142       $   (424,045)      $   (466,666)      $   (948,509)
                                     ============       ============       ============       ============

Net Income(Loss)Per Common
  Share                              $        .10       $       (.26)      $       (.29)      $       (.59)
                                     ============       ============       ============       ============
</TABLE>

          See accompanying notes to consolidated financial statements.

<PAGE>


                            PHOTO CONTROL CORPORATION

                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        SIX MONTHS
                                                                       ENDED JUNE 30
                                                                       -------------

                                                                   1998              1997
                                                                   ----              ----
<S>                                                          <C>                <C>          
Cash flows from operating activities:
     Net(Loss)from operations                                $   (466,666)      $   (948,509)
     Items not affecting cash-
         Depreciation                                             162,000            186,436
         Deferred compensation                                     75,000             18,666
         Loss on sale of equipment                                 14,645              1,090
     Payment of deferred compensation                             (33,238)           (12,312)
     Change in:
              Receivables                                        (741,693)          (101,105)
              Inventories                                        (537,603)          (131,699)
              Prepaid Expenses                                     49,818             99,370
              Accounts Payable                                    191,536            354,101
              Accrued Expenses                                    175,905             22,626
                                                             ------------       ------------
                  Net cash used by operating activties         (1,110,296)          (511,336)
                                                             ------------       ------------

Cash flows from investing activities:
     Additions to plant and equipment                            (259,270)          (154,513)
     Additions to cash value of life insurance                    (13,494)           (13,493)
     Proceeds from sale of equipment                               16,134             23,111
                                                             ------------       ------------
                  Net cash used in investing activities          (256,630)          (144,895)
                                                             ------------       ------------

Cash flow from financing activities:
     Repayment of long-term debt                                                     (68,705)
     Borrowing on line of credit                                  600,000            400,000
     Proceeds from bank notes                                                         45,725
                                                             ------------       ------------

                  Net cash used in financing activities           600,000            377,020
                                                             ------------       ------------

Change in cash                                                   (766,926)          (279,211)
Cash at beginning of period                                       808,169            736,031
                                                             ------------       ------------

Cash at end of period                                        $     41,243       $    456,820
                                                             ============       ============
</TABLE>

           See Accompanying notes to consolidated financial statements

<PAGE>


                            PHOTO CONTROL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  JUNE 30, 1998

                                   (UNAUDITED)


NOTE 1

         Notes to financial statements presented herein do not include all the
         footnotes normally presented in the Company's annual report to
         stockholders.

         The accompanying financial statements reflect, in the opinion of
         management, all normal and recurring adjustments necessary to a fair
         presentation of financial position, results of operations, and cash
         flows for the interim periods. The results for interim periods are not
         necessarily indicative of results to be expected for the year.

NOTE 2

         Inventories are analyzed as follows:

                                              JUNE 30         DECEMBER 31
                                                1998             1997
                                                ----             ----


                  Raw Materials             $3,126,824        $2,666,732

                  Work in Progress             988,935           492,833

                  Finished Goods               744,447         1,163,038
                                            ----------        ----------

                                            $4,860,206        $4,322,603
                                            ==========        ==========

NOTE 3

         Net Income per common share is computed based on the weighted average
         number of common shares outstanding and the potentially dilutive
         effective of stock options during the respective periods. Stock option
         dilution is computed under the Treasury Stock method using the average
         market price of the Company's common stock.

<PAGE>


                            PHOTO CONTROL CORPORATION

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                       CONDITION AND RESULTS OF OPERATION


RESULTS OF OPERATIONS

Sales for the second quarter ended June 30, 1998 were $3,152,000, an increase of
29.1% from the same quarter in the prior year. Sales for the six months ended
June 30, 1998 were $5,099,000, an increase of 8.8% over the same period in the
prior year. Lighting sales increased $572,000 for the second quarter and
$284,000 for the year to date period, as compared to the same periods in the
prior year. In October 1997, the manufacturing of the lighting product line was
moved from California to Minnesota. Because of the inefficiencies associated
with the move, certain sales backlog was not shipped in 1997 and the first
quarter of 1998. However, production exceeded demand in the second quarter and
substantially all past due backlog was shipped. The camera product line accounts
for an increase in sales of $280,000 for the second quarter and $522,000 for the
year to date period, as compared to the same periods in the prior year. A new
zoom lens camera was introduced with shipments beginning in June 1997. Because
of customers' long lead times for product evaluation, orders of the new zoom
lens cameras have progressed at a slower rate than anticipated. However, the
sales demand is improving in 1998. Sales of the third product line, printers,
decreased by $141,000 for the second quarter and $395,000 for the year to date
period, as compared to the same periods in the prior year. The sales trend for
the printer line continues to decline because the photographic printer market
continues to experience consolidation and excess capacity.

The gross profit margin for the second quarter of 1998 increased to 26.0% from
24.0% in the second quarter of 1997. The gross profit margin for the six months
ended June 30, 1998 decreased to 18.8% from 21.1% in the prior year period. The
decline for the six months is attributable to the inefficient production of the
lighting equipment line as a result of the move from California to Minnesota.
However, beginning in the second quarter margins improved, a trend that
management expects to continue.

Marketing and administrative expenses decreased as a percentage of sales to
14.1% for the second quarter of 1998 from 30.2% for the second quarter of 1997
and decreased to 19.2% for the first six months of 1998 from 33.3% for the same
period in 1997. Marketing and administrative expenses decreased $292,000 for the
second quarter of 1998 as compared to the second quarter of 1997 and decreased
$581,000 for the first six months of 1998 compared to the same period in 1997.
Research, development and engineering expense decreased by $48,000 for the
second quarter of 1998 compared to the second quarter of 1997 and decreased by
$114,000 for the first six months of 1998 compared to the same period of 1997.
The decreases reflect staff reductions as a result of consolidation of
operations in Minnesota.

<PAGE>


As a result of decreased outstanding debt, interest expense decreased by $4,000
in the second quarter of 1998 compared to the second quarter of 1997 and
decreased $13,000 for the first six months of 1998 compared to the same period
in 1997.


LIQUIDITY & CAPITAL RESOURCES

Cash decreased $767,000 to $41,000 since December 31, 1997. Operations for the
six months ended June 30, 1998 resulted in $1,110,000 of negative cash flow. In
addition, $259,000 was spent on capital equipment.

At June 30, 1998 the company had borrowed $600,000 under the line of credit. The
Company can borrow up to $1,500,000 under its line of credit. The line is
unsecured, at the prime rate of interest and renewed annually in May.

The Company believes that its cash flow from future operations and available
borrowing capacity will be sufficient to finance operations and capital
requirements.


FACTORS THAT MAY AFFECT FUTURE RESULTS

Statements included or incorporated by reference in this Quarterly Report on
Form 10-Q which are not historical in nature are identified as "forward looking
statements" for the purposes of the safe harbor provided by Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. The Company cautions readers that forward looking
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, capital needs,
interest costs, and income, are subject to certain risks and uncertainties that
could cause actual results to differ materially from those indicated in the
forward looking statements. The risks and uncertainties include, but are not
limited to, economic conditions, product demand and industry capacity,
competitive products and pricing, manufacturing efficiencies, new product
development and market acceptance, the regulatory and trade environment, and
other risks indicated in filings with the Securities and Exchange Commission.

<PAGE>


ITEM 4.  RESULTS OF VOTE OF SECURITY HOLDERS

At the annual meeting of stockholders held on May 7, 1998 the following matters
were approved by the Company's stockholders:

         1.       Set the number of directors at six (6). The voting results
                  were: 1,361,299 For, 35,275 Against and 8,619 Abstained.

         2.       Elected Messrs.Leslie A. Willig and George A. Kiproff to the
                  Board of Directors for a three-year term or until the election
                  and qualification of a respective successor.

                  The voting results were as follows:

                                            FOR           TO WITHHOLD AUTHORITY
                  Leslie A. Willig       1,378,126                27,067
                  George A Kiproff       1,377,970                27,223

                  Messrs.James R. Loomis, John R. Helmen, Thomas J. Cassady, and
                  Joe M. Kilgore are directors of the Company whose terms of
                  office continued after the annual meeting of stockholders.

ITEM 6.  EXHIBIT AND REPORTS ON FORM 8-K

A.  Exhibits - 27 Financial Data Schedule
B.  Reports on Form 8-K - None

                             PHOTO CONTROL CORPORATION
                                    (Registrant)

------------------           ---------------------------------------------------
       Date                  J. R. Helmen, President and Chief Executive Officer

------------------           ---------------------------------------------------
       Date                  C. R. Jackels, Vice President-Finance