U. S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB


(Mark One)
/X/     Quarterly  report under Section 13 or 15(d) of the  Securities  Exchange
        Act of 1934

        For the quarterly period ended OCTOBER 31, 1998.

/ /     Transition report under Section 13 or 15(d) of the Exchange

        Act For the transition period from ________________ to _________________

        Commission file number _____________

                            THE MILLBROOK PRESS INC.
              (Exact Name of Small Business Issuer in Its Charter)


DELAWARE                                                   06-1390025
(State or Other Jurisdiction of                            (I.R.S. Employer
Incorporation or Organization)                             Identification No.)

                      2 Old New Milford Road, P.O. Box 335
                              Brookfield, CT 06804
                    (Address of principal executive offices)
                                 (203) 740-2220
                (Issuer's Telephone Number, Including Area Code)

--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

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

     Yes /X/               No  / /

                       APPLICABLE ONLY TO CORPORATE ISSUES

State the number of share  outstanding of each of the issuer's classes of common
equity, as of October 31, 1998

                  3,455,000 shares of Common Stock outstanding
--------------------------------------------------------------------------------

Transitional Small Business Disclosure Format (check one):

Yes / /         No   /X/
<PAGE>
                            THE MILLBROOK PRESS, INC.
                              INDEX TO FORM 10-QSB
                                October 31, 1998



PART I.  FINANCIAL INFORMATION

  Item 1.    Financial Statements

             Statements of Operations for the three months
             ended October 31, 1998 and 1997

             Balance Sheet as of October 31, 1998

             Statements of Cash Flows for three months
             ended October 31, 1998 and 1997

             Notes to Financial Statements


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

PART II.  OTHER INFORMATION

  Item 6.    Exhibits and Reports on Form 8 - K

<PAGE>
                            THE MILLBROOK PRESS INC.
                            Statements of Operations


                                                   Three Months Ended October 31
                                                       1998              1997

Net revenues                                        $4,815,000        $3,971,000

Cost of sales                                        2,465,000         2,044,000
                                                     ---------         ---------

Gross profit                                         2,350,000         1,927,000

Operating expenses:
  Selling and marketing                              1,533,000         1,243,000
  General and administrative                           419,000           433,000
                                                       -------           -------
  Total operating expenses                           1,952,000         1,676,000
                                                     ---------         ---------

Operating income                                       398,000           251,000
  Interest expense                                      93,000                 0
                                                        ------                 -

Net income                                             305,000           251,000
                                                       =======           =======

Earnings per share (basic and diluted)                   $0.09             $0.07
                                                         =====             =====

Weighted Average Number of Shares Outstanding        3,455,000         3,523,391
                                                     =========         =========

<PAGE>
                                 Millbrook Press
                                  Balance Sheet
                                October 31, 1998


Assets

Current Assets:
Cash                                                       $86,000
Accounts Receivable, net                                 5,965,000
Inventory                                                6,628,000
Prepaid Expense and Other Assets                           400,000
Royalty Advances, net                                      857,000
                                                       -----------
Total Current Assets                                    13,936,000

Plant Costs, net                                         4,237,000
Royalty Advances, net                                      626,000
Fixed Assets, net                                          237,000
Goodwill, net                                            3,288,000
                                                       -----------
Total Assets                                           $22,324,000
                                                       ===========
Liabilities and Stockholder's Equity

Current Liabilities:
Accounts Payable and Accrued Expenses                  $ 3,352,000
Notes Payable to Bank                                    4,636,000
Royalties Payable                                           84,000
                                                       -----------

Total Current Liabilities                                8,072,000
                                                       ===========
Stockholder's Equity:
Common stock, par value $.01, 12,000,000
shares authorized, 3,455,000 shares issued
and outstanding                                             35,000
Additonal Paid in Capital                               17,556,000
Accumulated Deficit                                     (3,339,000)
                                                       -----------
Total stockholder's Equity                              14,252,000
                                                       -----------
Total Liabilities &
Equity                                                 $22,324,000
                                                       ===========

<PAGE>
                               THE MILLBROOK PRESS
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                    Three Months Ended October 31

                                                                      1998               1997
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                 <C>                  <C>      
Net income                                                          $305,000             $251,000

Add (deduct) to reconcile net income to net cash flow:
Depreciation and amortization                                        435,000              347,000
Changes in accounts receivable                                    (1,020,000)            (916,000)
Changes in inventory                                                  80,000             (212,000)
Changes in prepaid expense and other assets                           89,000              358,000
Changes in accounts payable & accrued expenses                      (225,000)             (40,000)
                                                                   ---------             ---------

Cash used in operations                                             (336,000)            (212,000)
                                                                   ---------             ---------

CASH FLOWS USED IN INVESTING ACTIVIES:
Capital expenditures                                                  (20,000)            (18,000)
Plant costs                                                          (353,000)           (390,000)
                                                                     ---------           ---------

Cash used in investing activities                                    (373,000)           (408,000)
                                                                     ---------           ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit                                    761,000            331,000
                                                                       -------            -------

Cash provided by financing activities                                  761,000            331,000
                                                                       -------            -------

Net increase/(decrease) in cash                                         52,000           (289,000)

Cash at beginning of period                                             34,000            323,000
                                                                        ------            -------
Cash at end of period                                                  $86,000            $34,000
                                                                       -------            -------
Supplemental disclosure:
Interest paid                                                          $93,000                 $0
                                                                       -------                 --
</TABLE>

<PAGE>
THE MILLBROOK PRESS INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 1998

Basis of Presentation

The  financial  statements of The  Millbrook  Press Inc. (the Company)  included
herein have been prepared without audit pursuant to the rules and regulations of
the Securities and Exchange Commission (SEC). In the opinion of management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial position, results of operations and changes in cash
flows for all period  presented  have been made.  The results of the October 31,
1998 interim  period are not  necessarily  indicative of the results that may be
expected for the full year.

Certain information and footnote  disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted.  These  financial  statements  should be read in
conjunction  with the audited  financial  statements  and notes  thereto for the
fiscal year ended July 31, 1998.

Initial Public Offering

The Company  completed its initial  public  offering  (IPO) on December 23, 1996
whereby  the  Company  issued  and sold  1,955,000  shares of  Common  Stock and
received  net  proceeds  of  approximately  $7,093,000.  In  addition,  all  the
Company's  outstanding  preferred stock,  including accrued preferred dividends,
was converted into 473,692 shares of common stock.  The Company used some of the
proceeds  from  the  offering  to  repay  bank and  bridge  loans.  Prior to the
effectiveness of the IPO, the Company filed an Amended and Restated  Certificate
of Incorporation with the State of Delaware whereby its authorized capital stock
increased to 13,000,000 shares, consisting of 12,000,000 shares of Common Stock,
$0.01 par value per share and  1,000,000  shares of Preferred  Stock,  $0.01 par
value per share.

Stock Option Plan

The Company has reserved 675,000 shares of common stock under its  non-qualified
1994 Stock Option Plan ("Option  Plan") which provides that the Stock Option and
Compensation  Committee of the Board of  Directors,  may grant stock  options to
eligible employees,  officers,  directors of the Company or its affiliates.  The
number of shares  reserved  for  issuance  is adjusted  in  accordance  with the
provisions  of the  Option  Plan.  All  stock  options  granted  by the  Company
generally expire seven years after the grant date. Stock options  generally vest
50% in one year  from the  date of grant  and 25% in each of the next two  years
from the date of grant.  However,  50% of all non-vested  stock options  granted
prior to the IPO vested on December  17,  1997 and the balance of such  unvested
options vest on December 17, 1998.


<PAGE>
Earning Per Share

In December 1997, the company adopted Statement of Financial Accounting Standard
(SFAS 128) "Earning Per Share".  SFAS 128 presents  earning per share on a Basic
and Diluted  basis.  The  computation  of Basic  earnings  per share is based on
income  available  to common  stockholders  and the weighted  average  number of
common shares  outstanding during the three-month  period.  Diluted earnings per
share reflects the potential dilution that could occur if dilutive stock options
were exercised resulting in the issuance of common stock that then shared in the
earnings of the Company.  The following  table details the  computation of Basic
and Diluted earnings per share for the three-month period.

                                                 For the three months ended
                                                        October 31

                                                  1998             1997
                                                  ----             ----


Net Income                                      $305,000        $251,000


Basic & Diluted Shares                         3,455,000       3,523,391

Basic & Diluted EPS                               $0.09           $0.07

Notes Payable to Bank

As of October 31, 1998, the Company had available a $7,500,000 revolving line of
credit with People's Bank and the Company had $4,636,000  outstanding under this
line. The reason for the increase in the debt is the acquisition of Twenty-First
Century Books and increased working capital needs.

Taxes

No federal  income taxes have been  provided for the three months ended  October
31, 1998 and 1997 due to the Company's net operating loss carryforwards.

The Company  anticipates fully utilizing all of its remaining net operating loss
carryforwards during the current fiscal year.

<PAGE>
Item 2.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations


OVERVIEW

         General

The Company is a publisher of children's  fiction and non-fiction books, in both
hardcover and paperback,  for the the school and library market and the consumer
market. Since its inception,  the Company has published more than 1100 hardcover
and 500 paperback  books under its  Millbrook,  Copper Beech,  and  Twenty-First
Century imprints.  The Company's books have been placed on numerous  recommended
lists by libraries,  retail  bookstores  and  educational  organizations.  Books
published under the Millbrook  imprint have evolved from  information  intensive
school  and  library  books  to  include  its  current  mix of  highly  graphic,
consumer-oriented books. Therefore,  many of its books can be distributed to the
school and public library market as hardcover  books while being  simultaneously
distributed to the consumer market as either  hardcover or paperback  books. The
majority of Copper  Beech books are  published  to both the consumer and library
markets.  Twenty-First  Century  Books titles are  published  primarily  for the
library  market.  As a result,  the  Company is better  able to fully  exploit a
book's sales potentital.  However, the Company has incurred significant expenses
relating to the establishment of the infrastructure which can enable the Company
to sell books to the consumer  market  and/or  develop  books that can appeal to
both the school and public library market and consumer market.

         Consumer Market Compared to the School and Public Library Market

As the Company sells more of its products in the consumer market, the results of
operations  and  its  financial   condition   could  be  influenced  by  certain
distinctions  between  the  consumer  market and the  school and public  library
market.  It is generally more  difficult to collect  receivables in the consumer
market than in the school and library market.  Sales to the consumer market have
a higher  return  rate than sales to the school  and public  library  market and
accordingly  the Company  will need to deduct a higher  reserve for returns from
its gross sales.  Sales to the consumer  market have a lower gross profit margin
than sales to the school and library market  because  consumer sales have higher
sales discounts and  promotional  allowances than sales to the school and public
library market.

         Variability in Quarterly Results

A substantial  portion of the  Company's  business is highly  seasonal,  causing
significant  variations  in operating  results  from quarter to quarter.  In the
school and library  market,  net sales tend to be lowest in the second  calendar
quarter and highest in the third calendar  quarter,  as schools purchase heavily
in  anticipation  of opening in September.  The consumer market also tends to be
highly  seasonal and, given the importance of holiday gifts, a large  proportion
of net sales can occur in the third  calendar  quarter  in  anticipation  of the
holiday gift season.  The  Company's  current and future net sales and operating
results will reflect these seasonal factors.

         Sales Incentives and Returns

In  connection  with  the  introduction  of new  books,  many  book  publishers,
including the Company,  discount  prices of existing  products,  provide certain
promotional  allowances  and  credits or give other  sales  incentives  to their
customers.


<PAGE>

The Company intends to continue such practices in the future.  In addition,  the
practice in the publishing industry is to permit customers including wholesalers
and retailers to return merchandise.  Most books not sold may be returned to the
Company for credit.  The rate of return  also can have a  significant  impact on
quarterly  results  since  certain  wholesalers  returned  large  quantities  of
products  at one time  irrespective  of  marketplace  demand for such  products,
rather than  spreading out the returns over the course of the year.  The Company
computes  net sales by  concurrently  deducting a reserve  for returns  from its
gross sales.  Return  allowance may vary as a percentage of gross sales based on
actual  return  experience.  The  Company  believes  that as gross  sales to the
consumer  market  increase as a proportion  of its overall  sales,  returns will
constitute a greater proportion of net sales.  Although the Company believes its
reserves have been adequate to date,  there can be no assurance  that returns by
customers in the future will not exceed  historically  observed  percentages  or
that the level of returns  will not exceed the amount of reserves in the future.
In the event that the amount  reserved  proves to be  inadequate,  the Company's
operating results will be adversely affected.

RESULTS OF OPERATIONS

Net  sales  for the first  quarter  ended  October  31,  1998 were $4.8  million
compared to $4.0 million for the same period last year. Increased sales resulted
from  significant  increases  in  consumer  and school and  library  sales.  The
increasing  size of the Company's  backlist,  the  introduction of the Company's
beginning  reader  program and the  addition  of Magic  Attic  Press  titles are
largely  responsible  for  the  consumer  sales  increase.  The  acquisition  of
Twenty-First  Century  Books in  December,  1997  and  continuing  increases  in
existing imprints were responsible for the growth in the library market.

Gross profit  margin for the first  quarter  ended  October 31, 1998 amounted to
$2.4 million,  or 49% of net sales compared to $1.9 million, or 49% of net sales
for the same period last year.

Selling and  marketing  expenses for the quarter ended October 31, 1998 were 32%
of net sales  compared  to 31% of net sales for the  quarter  ended  October 31,
1997.  These expenses  increased due to the higher  fulfillment  cost related to
higher sales and initial Magic Attic marketing expenses.

General and  administrative  expenses  decreased  by $14,000 to $419,000 for the
quarter  ended  October 31, 1998  compared  to  $433,000  for the quarter  ended
October 31, 1997.

During the quarter ended October 31, 1998,  the Company had operating  income of
$398,000 compared with operating income of $251,000 for the same period in 1997.
The  increase  in  operating  income is due to higher  sales  which  offset  the
increase in selling and marketing expenses compared to net sales.

Net Income for the first quarter ended October 31, 1998 was $305,000 compared to
net income of $251,000 for the same period in 1997.


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

As of October 31, 1998, the Company had available a $7,500,000 revolving line of
credit  with  People's  Bank.  The line of credit  restricts  the ability of the
Company  to  obtain  working  capital  in the form of  indebtedness  other  than
indebtedness incurred in the ordinary course of the Company's business, to grant
security  interest  in the  assets of the  Company  or to pay  dividends  on the
Company's securities.

As of October 31, 1998, the Company had $4,636,000  outstanding under this line.
This debit increased due to the acquisition of Twenty-First Century Books and to
meet working capital needs.

As of October 31, 1998, the Company had cash and working  capital of $86,000 and
$5,864,000,  respectively, as opposed to cash and working capital of $34,000 and
$6,895,000,  respectively,  as of October 31, 1997. This decrease was due to the
acquistion of Twenty-First Century Books.

Inventory of finished goods totaled $6,628,000 and $5,148,000 at October 31,1998
and October 31, 1997  respectively.  The higher level of inventory is due to the
acquisition of  Twenty-First  Century Books,  the  introduction of the beginning
reader  program,  and the  increasing  size of our trade and school and  library
backlist.  The increase in Accounts Receivable of $2,225,000 from the prior year
is due to increased sales.

Based on its current  operating  plan,  the Company  believes  that its existing
resources  together  with cash  generated  from  operations  and cash  available
through its credit line will be sufficient to satisfy the Company's contemplated
working capital requirements through approximately July 31, 1999. However, there
can be no assurance that the Company's  working  capital  requirements  will not
exceed its  available  resources or that these funds will be  sufficient to meet
the Company's longer-term cash requirements for operations.  Accordingly, either
before or after July 31, 1999,  the Company may seek  additional  funds  through
debt or equity financing.

FORWARD-LOOKING STATEMENTS

This Form 10-QSB contains certain forward-looking  statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the  safe  harbors   created   hereby.   Investors   are   cautioned   that  all
forward-looking  statements  involve risks and  uncertainty,  including  without
limitation, the Company's future cash resources and liquidity and the ability of
the Company to fully exploit a book's sales  potential in the school and library
and  consumer  markets.  Although  the  Company  believes  that the  assumptions
underlying the forward-looking  statements contained herein are reasonable,  any
of the assumptions could be inaccurate, and therefore, there can be no assurance
that the  forward-looking  statements included in this Form 10-QSB will prove to
be  accurate.  In  light  of  the  significant  uncertainties  inherent  in  the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and plans of the Company will be achieved.

YEAR 2000 DISCLOSURE

The year 2000 Issue is the result of computer  programs  being written using two
digits  rather  than four to  define  the year.  Any of the  Company's  computer
programs  that have  date-sensitive  software may recognize a date using "00" as
the year 1900  rather  than  2000.  This  could  result in a system  failure  or
miscalculation causing disruption of operations; including among other things, a
temporary inability to process transactions, send invoices, or engage in similar
normal business activities.



                                       3
<PAGE>

Based upon a recent  assessment,  the Company determined that it was required to
upgrade or replace certain portions of its software so that its computer systems
will properly  utilize dates beyond December 31, 1999.  During 1998, the Company
continued its implementation of computer hardware and software that is Year 2000
compliant.  Resources were devoted to the  installation of computer  systems and
training  related to the new system.  It is expected that the new system will be
fully installed and operation during 1999.

The Company  presently  believes  that with  upgrades of existing  software  and
conversions to new software,  the Year 2000 Issue can be mitigated.  However, if
such upgrades and conversions are not made, or are not completed or available in
time, the Year 2000 Issue could have a material  impact on the operations of the
Company.  Furthermore, the Company could be adversely affected by the failure of
various third parties,  such as customers and suppliers,  to remediate their own
Year 2000 Issue.  Although the Company has initiated formal  communications with
its significant  suppliers and large customers to determine the potential impact
on the Company, it has not completed its preliminary assessment.


<PAGE>

PART II. OTHER INFORMATION

Exhibits and reports on Form 8-K

            (a)   Exhibits
                  Exhibit 27--Financial Data Schedule

            (b)   Form 8-K--None


<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                      THE MILLBROOK PRESS, INC.
                                      (Registrant)



December 15, 1998                     By: /s/ Satish Dua
                                          --------------------------------------
                                      Satish Dua
                                      Vice President and Chief Financial Officer