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 January 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 January 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
                                JANUARY 31, 1998



PART I.  FINANCIAL INFORMATION

    Item 1.    Financial Statements

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

               Balance Sheet as of January 31, 1998

               Statement  of  Stockholder's  Equity for the three and six months
               ended  January 31, 1998  Statements  of Cash Flows for six months
               ended January 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

<PAGE>
                            THE MILLBROOK PRESS INC.
                            Statements of Operations


<TABLE>
<CAPTION>
                                                                            Six months ended            Three months ended
                                                                               January 31                    January 31
                                                                          1998           1997            1998         1997
                                                                          -----          -----           -----        ----

<S>                                                                      <C>           <C>            <C>           <C>      
Net Sales                                                                7,212,000     6,215,000      3,240,000     2,949,000

Cost of Sales                                                            3,689,000     3,378,000      1,644,000     1,636,000
                                                                        ----------    ----------     ----------    ----------

Gross Profits                                                            3,523,000     2,837,000      1,596,000     1,313,000

Operating expenses:
     Selling and marketing                                               2,373,000     2,197,000      1,129,000     1,058,000
    General and administrative                                             860,000     1,176,000        427,000       785,000
                                                                        ----------    ----------     ----------    ----------
   Total operating expenses                                              3,233,000     3,373,000      1,556,000     1,843,000

Operating income (loss)                                                    290,000      (536,000)        40,000      (530,000)
Interest Expense                                                            38,000       173,000         38,000        92,000

Net income (loss)                                                          252,000      (708,000)         2,000      (620,000)
Preferred dividend accrued                                                       0      (284,000)             0      (104,000)
                                                                        ----------    ----------     ----------    ----------
Net income (loss) available to common stockholders                         252,000      (992,000)         2,000      (724,000)
                                                                        ----------    ----------     ----------    ----------

Net income(loss) per share after preferred dividend requirements
(Basic and Diluted)                                                     $     0.07    ($    0.64)    $     0.00    ($    0.35)
</TABLE>


<PAGE>
                                 Millbrook Press
                                  Balance Sheet
                                January 31, 1998


Cash                                                               $     19,000
Accounts Receivable, net                                              3,996,000
Inventory                                                             7,418,000
Prepaid Expense and Other Assets                                        580,000
Royalty Advances, net                                                   910,000
                                                                   ------------
Total Current Assets                                                 12,923,000

Plant Costs, net                                                      4,493,000
Royalty Advances, net                                                   100,000
Fixed Assets, net                                                       256,000
Goodwill, net                                                         2,960,000
Other Assets                                                             21,000

Total Assets                                                       $ 20,753,000
                                                                   ============

Accounts Payable and Accrued expenses                              $  3,560,000
Notes payable to bank                                                 3,392,000
Royalties Payable                                                       250,000
                                                                   ------------
Current Liabilities                                                   7,202,000

Capital Stock                                                            35,000
Additional Paid in Capital                                           17,556,000
Accumulated Deficit                                                  (4,040,000)
                                                                   ------------
Total Equity                                                         13,551,000
                                                                   ------------

Total Liabilities &
Equity                                                             $ 20,753,000
                                                                   ============



<PAGE>
<TABLE>
<CAPTION>
                                                                                            Statement of Stockholders' Equity
                                                                                       Three and six month ended January 31, 1998

                                                                                             Additional
                                              Preferred Stock             Common Stock       Paid - in    Accumulated
                                           Shares         Amount    Shares        Amount      Capital       Deficit         Total
<S>                   >                       <C>      <C>        <C>            <C>        <C>           <C>            <C>        
------------------------------------------------------------------------------------------------------------------------------------
Balance at July 31, 1997                      0        $    0     3,455,000      $ 35,000   $17,556,000   ($4,292,000)   $13,299,000
Net income                                                                                                    250,000        250,000
------------------------------------------------------------------------------------------------------------------------------------
Balance at October 31, 1997                   0             0     3,455,000      $ 35,000   $17,556,000   ($4,042,000)   $13,549,000
------------------------------------------------------------------------------------------------------------------------------------
Net income                                                                                                      2,000          2,000
------------------------------------------------------------------------------------------------------------------------------------
Balance at January 31, 1998                   0             0     3,455,000      $ 35,000   $17,556,000   ($4,040,000)   $13,551,000
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>
                               THE MILLBROOK PRESS
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             Six months ended
                                                                                     January 1998          January 1997
                                                                                     ------------          ------------
<S>                                                                                   <C>                  <C>        
CASH FLOW  FROM OPERATING ACTIVITIES:
Net income (loss)                                                                       252,000              (708,000)

Add (deduct) to reconcile net income to net cash flow:
Depreciation and amortization                                                           722,000               567,000
Changes in assets & liabilities (net of effect of acquisition):
Accounts receivable                                                                  (1,171,000)             (732,000)
Inventory                                                                            (1,724,000)             (703,000)
Prepaid expenses and other                                                              (11,000)              122,000
Payables & accrued expenses                                                           1,342,000              (281,000)
                                                                                     ----------             --------- 

CASH FLOW USED IN OPERATIONS:                                                          (590,000)           (1,735,000)

CASH FLOW USED IN INVESTING ACTIVITIES:
Capital expenditures                                                                    (41,000)              (34,000)
Plant costs                                                                          (1,052,000)             (692,000)
Acquisition of business                                                              (2,013,000)                    0
                                                                                     ----------             --------- 
Cash used in investing activities                                                    (3,106,000)             (726,000)

CASH FLOW FROM FINANCING ACTIVITIES
Net borrowings under lines of credit                                                  3,392,000            (3,135,000)
Proceeds from sale of capital stock                                                           0             7,225,000
                                                                                     ----------             --------- 
Cash provided by financing activities                                                 3,392,000             4,090,000

Net increase (decrease) in cash                                                        (304,000)            1,629,000

Cash at beginning of period                                                             323,000               134,000
                                                                                     ----------             --------- 

Cash at end of period                                                                    19,000             1,763,000
                                                                                     ----------             --------- 

Supplemental disclosure:
Interest Expense Paid                                                                    38,000                41,000
                                                                                     ----------             --------- 

</TABLE>

<PAGE>
THE MILLBROOK PRESS INC.
NOTES TO FINANCIAL STATEMENTS
January 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 periods  presented  have been made. The results of the January 31,
1998 interim  period is 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, 1997.

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 ten years after the grant date.  Stock options  generally vest
50% one year from the date of grant and 25% 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) No. 128 "Earning Per Share". SFAS No. 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 - and six- month  periods.  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 - and
six-month periods.

<TABLE>
<CAPTION>
                                                  For the six months ended            For the three months ended
                                                       January 31, 1998                     January 31, 1998
                                                                            
                                                  1998                1997              1998              1997
                                                  ----                ----              ----              ----

<S>                                           <C>                 <C>               <C>               <C>         
Net Income (Loss) .......................     $   252,000         $  (992,000)      $     2,000       $  (724,000)

Shares
Basic Shares ............................       3,455,000           1,541,085         3,455,000         2,055,862
Effect of Dilutive Stock Options ........          43,835                --              15,342              --
Diluted Shares ..........................       3,498,835           1,541,085         3,470,342         2,055,862
</TABLE>


<TABLE>
<CAPTION>
                                                 For the six months ended             For the three months ended
                                                     January 31, 1998                      January 31, 1998

                                                  1998                1997              1998              1997
                                                  ----                ----              ----              ----

<S>                                               <C>                <C>                <C>              <C>   
Basic and Diluted EPS                             $.07               $(.64)             $0.00            $(.35)
</TABLE>

Acquistion

On December 5, 1997 the Company  completed an  acquisition  to purchase  certain
assets of  Twenty-First  Century  Books,  a division  of Henry Holt & Co.,  Inc.
("Holt").  The  purchase  was  effective  as of  December  1,  1997.  Under  the
agreement, the Company paid Holt $2,013,000 for the assets.

Notes Payable to Bank

The Company has  available a $4,000,000  revolving  line of credit with People's
Bank. As of January 31, 1998, the Company had $3,392,000  outstanding under this
line. The reason for the increase in the debt is the acquisition of 21st Century
Books and to meet working capital needs.

<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 consumer and school and public  library (S&L)
markets. Since its inception,  the Company has published more than 800 hardcover
and 340 paperback books under Millbrook and Copper Beech 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. As a result,  the Company is better able to
fully  exploit a book's  sales  potential.  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 the  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  expects its future net sales and  operating
results will reflect these seasonal factors.



<PAGE>
            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.  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, and the Company gives credit. The rate of return
also  can  have  a  significant   impact  on  quarterly  results  since  certain
wholesalers  have in the past returned large  quantities of products at one time
irrespective of marketplace demand for such products,  rather than spreading out
the returns  during 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  second  quarter  ended  January  31,  1998 were $3.2  million
compared to $2.9 million for the same period last year. Increased sales resulted
from  significant  increases in S&L sales due to the acquisition of 21st Century
Books and a special  sale of 40,000  units to  Reading's  Fun,  a display  sales
company, and a sale of 135,000 units to Scholastic Book Fairs. Net sales for the
six months ended January 31, 1998 increased by 16% compared with the same period
in 1997, primarily due to the increase in S& L sales and special sales.

Gross profit margin increased to 49% for the quarter ended January 31, 1998 from
45% for the quarter ended January 31, 1997.  The increase in gross profit margin
for the quarter ended  January 31, 1998 resulted from lower paper,  printing and
binding cost as a  percentage  of sales  compared  with the same period in 1997.
Gross margin for the six months ended January 31, 1998  increased by 3% compared
with same period in 1997.

Although selling and marketing expenses have increased due to the Company's goal
of selling to all channels  effectively,  selling and marketing expenses for the
quarter  ended  January 31, 1998  decreased  to 35% of net sales from 36% of net
sales for the quarter ended January 31, 1997;  these expenses for the six months
ended January 31, 1998 decreased 2% compared with the same period in 1997.  This
decrease  is due to higher  sales and lower  warehousing  cost  because of a new
contract.

General and administrative  expenses decreased to $427,000 for the quarter ended
January 31, 1998  compared with $785,000 for the quarter ended January 31, 1997.
This decrease is largely due to IPO related expenses in December,  1996. For the
six months ended January 31, 1998 



<PAGE>
general and administrative expenses decreased by 27% due to IPO related expenses
in the second quarter ended January 31, 1997.

During the quarter ended  January 31, 1998 the Company had  operating  income of
$40,000 compared with an operating loss for the same period in 1997 of $530,000.
The increase in operating income is due to increased sales,  lower cost of sales
and lower general and administrative  expenses. For the six months ended January
31, 1998 the operating  income was $290,000  compared to a $536,000 loss for the
same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company has  available a $4,000,000  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
January 31, 1998,  the Company had $3,392,000  outstanding  under this line. The
reason for the increase in the debt is the acquisition of 21st Century Books and
to meet working capital needs.

As of January 31, 1998, the Company had cash and working  capital of $19,000 and
$5,721,000,  respectively,  as opposed to cash and working capital of $1,763,000
and  $7,192,000,  respectively,  as of Janury 31, 1997. This decrease was due to
the acquistion of Twenty-First Century Books.

Inventory of finished goods totaled $7,418,000 and $4,179,000 at January 31,1998
and January 31, 1997  respectively.  The higher  level of inventory is due to an
increase in the number of  backlist  trade and school and  library  titles.  The
acquisition of 21st Century Books also contributed to the increase in inventory.
The increase in Accounts  Receivable of $1,171,000 from the prior year is due to
increased sales.

Based on its current  operating plan, the Company  anticipates that its existing
resources  together  with  cash  generated  from  operations,  if  any,  will be
sufficient to satisfy the Company's  contemplated  working capital  requirements
through approximately July 31, 1998. However, there can be no assurance that the
Company's working capital 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, 1998, the Company may
seek additional funds from borrowings or 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  
<PAGE>
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.


PART II. OTHER INFORMATION

All items required hereunder have been omitted because they are inapplicable.


                                   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)



March 13, 1998                    By:/s/ Satish Dua
                                     --------------------------
                                     Satish Dua
                                     Vice President and Chief Financial Officer