SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                            FORM 10-Q

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



               For the quarter ended May 31, 1998

                 Commission file number 0-14973

                           UNICO,INC.                     
     (Exact name of Registrant as specified in its charter)



            New Mexico                              85-0270072   

     (State of Incorporation)                (IRS Employer ID #)


Registrant's telephone number, including area code   (510) 668-
4990  

Securities registered pursuant to Section 12(g) of the Act:

                   $.20 par value common stock
                        (Title of class)



     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        .



     On June 30, 1998, there were 7,149,428 shares of
Registrant's $0.20 par value common stock outstanding, and 5,474
shares of the Registrant's Series A Preferred stock outstanding.

1
<PAGE>
                                   INDEX
                          TO REPORT ON FORM 10-Q
                              FOR UNICO, INC.


Item in Form 10-Q                                           Page

PART I:  FINANCIAL INFORMATION

Item 1.  Financial statements

      Consolidated balance sheets as of May 31, 1998
      and February 28, 1998                                   3

      Consolidated statements of operations for the three 
      month periods ended May 31, 1998 and 1997               5

      Consolidated statements of cash flows for the
      three months ended May 31, 1998 and 1997                6

      Notes to consolidated financial statements              7

Item 2.  Managements discussion and analysis of financial
      condition and results of operations.                    8


PART II:  OTHER INFORMATION

Item 1.  Legal Proceedings                                    11

Item 4.  Submission of Matters to a Vote of Security Holders  11

Item 5.  Other Information                                    11

Item 6.  Exhibits and Reports on Form 8-K                     11

2
<PAGE>
<TABLE>
<CAPTION>
UNICO, INC.
Consolidated Balance Sheets




                                                                       May 31,          February 28,
                                                                        1998                1998    
                                                                     (Unaudited)
<S>                                                                 <C>                 <C>
ASSETS

CURRENT ASSETS
   Cash and cash equivalents                                        $ 1,112,882         $ 1,236,506 
   Accounts receivable                                                   67,561              22,059 
   Accounts and accrued interest receivable 
     from related parties                                                    56               2,390 
   Inventories                                                           20,861              20,861 
   Notes receivable from related parties                                 81,353             102,026 
   Tax refund receivable                                                 29,167               6,567 
        TOTAL CURRENT ASSETS                                          1,311,880           1,390,409 

PROPERTY AND EQUIPMENT
   Land, buildings and improvements                                     434,327             434,327 
   Equipment                                                            164,930             164,930 
   Refinery equipment                                                 1,183,333           1,183,333 
   Co-generation equipment                                              290,298             290,298 
   Oil and gas properties                                               894,400             894,400 
   Property, plant and equipment (gross)                              2,967,288           2,967,288 
   Accumulated depreciation & depletion                              (1,993,642)         (1,960,679)
                                                                        973,646           1,006,609 

OTHER ASSETS
   Notes receivable                                                       8,024               8,383 
   Other assets (net)                                                   167,866             167,866 
   Investment in Chatfield Dean                                         600,500             600,500 
                                                                        776,390             776,749 

                                                                                                    
                                                                    $ 3,061,916         $ 3,173,767 
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>

Consolidated Balance Sheets - Continued





                                                                       May 31,          February 28,
                                                                        1998                1998    
                                                                     (Unaudited)

<S>                                                                <C>                  <C>
LIABILITIES AND STOCKHOLDERS EQUITY

CURRENT LIABILITIES
   Trade accounts payable                                          $     74,042         $    62,553 
   Taxes other than income                                                3,174               9,156 
   Other accrued expenses                                                   -                   -   
   Income taxes payable                                                     250              25,024 
       TOTAL CURRENT LIABILITIES                                         77,466              96,733                     


DEFERRED TAXES PAYABLE, net of current portion                           54,000              58,250 

STOCKHOLDERS' EQUITY
   Preferred stock, $0.01 par value,
     authorized 8,000,000 shares, 
     none outstanding                                                       -                   -   
   Common stock, $0.20 par value,
     authorized 50,000,000 shares,
     issued 1,129,308
     shares                                                             225,862             225,862 
   Additional paid in capital                                         2,213,837           2,213,837 
   Less: Treasury stock 3,699 shares                                     (9,016)             (9,016)
   Retained earnings                                                    499,767             588,101 
                                                                      2,930,450           3,018,784 
                                                                                                    
                                                                    $ 3,061,916         $ 3,173,767 


<FN>
See notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
UNICO, INC.
Consolidated Statements of Income



                                                                       May 31,             May 31,  
                                                                        1998                1997    
<S>                                                                 <C>                 <C>
REVENUES
   Natural gas sales                                                $    59,708         $    39,552 
   Electrical capacity and energy                                           -                   -                       
   Processing and terminalling agreements                                   -                   -   
   Petroleum product sales                                                  -                   -   
   Rent and other income                                                  4,328               3,105 
                                                                         64,036              42,657 
COSTS AND EXPENSES
   Cost of sales                                                         46,509              21,942 
   General and administrative                                           113,854              79,932 
   Depletion, depreciation and amortization                              32,963              28,842 
   Interest, net                                                        (14,107)             (5,745)
                                                                        179,219             124,971 
INCOME (LOSS) FROM CONTINUING OPERATIONS 
  BEFORE INCOME TAXES                                                  (115,184)            (82,314)
  
   Provision (benefit) for income taxes  
    Current                                                             (22,600)            (22,905)
    Deferred                                                             (4,250)             (3,925)
                                                                        (26,850)            (26,830)

    NET INCOME (LOSS) FROM 
      CONTINUING OPERATIONS                                             (88,334)            (55,484)

DISCONTINUED OPERATIONS

   Income from operations related to the investment
     in IC Partners, Ltd. (Less applicable income 
     taxes of $129,647 for 1998.                                            -               251,669 

   NET INCOME (LOSS)                                                $   (88,334)        $   196,185 

WEIGHTED AVERAGE NUMBER OF 
  SHARES OUTSTANDING                                                  1,129,308             986,590 

BASIC AND FULLY DILUTED EARNINGS PER SHARE
   Net income (loss) from continuing operations                     $     (0.08)        $     (0.06)
   Net income (loss) from discontinued operations                          0.00                0.26 
   Net income (loss) per share                                      $     (0.08)        $      0.20 




<FN>
See notes to consolidated financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
UNICO, INC.
Consolidated Statements of Cash Flows


                                                                         For the three months ended 
                                                                       May 31,             May 31,  
                                                                        1998                1997    
                                                                     (Unaudited)         (Unaudited)
<S>                                                                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                                   $   (88,334)        $   196,185                     
Adjustments to reconcile net income 
  to cash provided by operating activities:
   Depreciation, depletion and amortization                              32,963              28,842 
   Deferred income taxes                                                 (4,250)             (3,850)
   (Income) loss on investment in partnership                               -              (265,590)
   Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                         (43,168)            100,990 
     Increase (decrease) in accounts payable
       and accrued expenses                                               5,507             (27,090)
   Decrease in refundable deposits                                          -                 1,000 
   Income tax refunds received                                              -                14,759 
   Increase (decrease) in income taxes accrued                          (47,374)            106,000 
NET CASH FLOW PROVIDED, (USED) BY OPERATING ACTIVITIES                 (144,656)            151,246 

CASH FLOWS FROM INVESTING ACTIVITIES:
   Increase in notes receivable                                         (55,000)            (55,332)
   Collections on notes receivable                                       76,032               -     
NET CASH FLOW PROVIDED (USED) BY INVESTING ACTIVITIES                    21,032             (55,332)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on long term debt                                               -                (2,148)
NET CASH FLOW USED BY FINANCING ACTIVITIES                                  -                (2,148)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                    $  (123,624)        $    93,766 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      1,236,506             349,055 

CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $ 1,112,882          $  442,821 
<FN>
See notes to consolidated financial statements.
</TABLE>
6
<PAGE>

Notes to Consolidated Financial Statements

   The consolidated balance sheet as of May 31, 1998, the consolidated
statement of income for the three month periods ended May 31, 1998 and
1997, and the consolidated statement of cash flows for the three month
periods ended May 31, 1998 and 1997, have been prepared by the Company,
without audit. 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 at May 31,
1998, and for all periods presented have been made.

   The Company's financial statements for the period May 31, 1998 have been
prepared on a going concern basis which contemplates the realization of
assets and the settlement of liabilities and commitments in the normal
course of business.  Several of the Company's revenue sources have
substantially declined over the past year.  Management recognizes that the
Company must generate additional resources to replace its existing
depleting revenue base.  The Company has positive working capital and
positive stockholders' equity at May 31, 1998.  The Company also has no
debt service requirements at May 31, 1998.  The Company's current declining
revenue stream would allow the Company to sustain operations on an ongoing
basis for at least the next fiscal year.  Management's plans to enhance its
revenue base include consideration of the sale of its refinery in Fredonia,
Arizona, with a possible continued equity participation, acquisition of
additional refinery equipment in other locations through a private
placement offering, the sale of its interest in Sand Creek Chemical Limited
Partnership, or other business transactions which would generate sufficient
resources to assure continuation of the Company's operations.

   Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principals have been condensed or omitted.  It is suggested that
these consolidated financial statements be read in conjunction with the
Company's Form 10-K, filed with the Securities and Exchange Commission. 
The results of operations for the period ended May 31, 1998, are not
necessarily indicative of operating results for the full year.

Discontinued Operations

   Effective as of September 1, 1997, the Company sold its interest in IC
Partners Limited.  Accordingly all operations associated with the
investment in and the operation of Sand Creek Chemical Ltd. are reported as
discontinued operations for all periods presented.

Subsequent Events

   On June 30, 1998 and effective as of June 1, 1998, the Company issued
5,476,200 shares of its $.20 par value common stock and 5,474 shares of its
Series A Convertible Preferred Stock to the shareholders of Starlicon Group
International, Inc. ("SGI"), in exchange for 100% of the outstanding stock
of Starlicon International Corporation ("Starlicon").  Starlicon, located
in Fremont California, markets computer peripherals under the Paradise
brand name as well as certain generic computer components.

   In accordance with the Stock Purchase Agreement dated February 21, 1998
between the Company and SGI and as amended by the Novation Agreement dated
June 30, 1998, all of the assets of Unico, Inc. will be transferred to its
wholly owned subsidiary Intermountain Refining Co., Inc. ("IRC"), and will
continue to be managed by, and at the sole discretion of, IRC's present
management which includes William N. Hagler, President and Chairman, and
Rick L. Hurt, Secretary, Treasurer and Director.  In addition, upon the

7
<PAGE>
occurrence of certain events relating to Unico seeking and obtaining a new
listing with Nasdaq, but no sooner than November 30, 1998 and no later than
April 1, 1999, the Board of Directors of IRC, may, at their sole
discretion, consider a transaction involving IRC's stock, assets or
business prospects including a transaction that contemplates a distribution
of IRC's stock or assets to the holders of Unico Common Stock, exclusive of
holders who received stock issued in conjunction with the Starlicon
acquisition or who are issued Unico stock subsequent to June 1, 1998.

   Mr. Hagler and Mr Hurt have resigned as officers and directors of Unico
but were reappointed as Assistant Executive Vice President and Assistant
Secretary respectively on a temporary basis for purposes of transferring
the assets of Unico to IRC.  Mr. Hagler and Mr. Hurt also entered into
consulting agreements with the Company to provide for the orderly
implementation of the Starlicon acquisition.  In addition to nominal hourly
fees to be paid for such consulting services, the Company issued warrants
to purchase 100,000 and 50,000 shares of Unico common stock to Mr. Hagler
and Mr. Hurt respectively.  The warrants have an exercise price of $1.40
per share and have certain rights as to registration and anti-dilution.

   In conjunction with the acquisition, the Company will issue 547,619
shares of its common stock to Azemuth, Inc., a company controlled by Mr.
Ike Suri and an affiliate of Starlicon, as compensation for consulting
services performed in connection with the acquisition. 


Item 2.   Managements Discussion and Analysis of Financial
          Condition and Results of Operations.

Business

   The Company was incorporated under the laws of the State of New Mexico
in April, 1979.  Company resources are segmented into four categories of
business; petroleum product refining and processing, electrical energy
production, natural gas production, and methanol production.  Currently,
refining and processing and electrical energy production are performed by
the Company's wholly-owned subsidiary, Intermountain Refining, Co., Inc.
("IRC"), while natural gas production is carried-out by the Company under
the name Unico Resources.  Until September 1, 1997, through its wholly-
owned subsidiary, Intermountain Chemical, Inc., the Company manages and
operates a methanol production facility, owned by others, in Commerce City,
Colorado.  Through its wholly owned subsidiary GTGI, the Company maintained
a limited partnership interest in the general partner of the methanol
production facility.  The investment in the facility was sold effective as
of September 1, 1997.

Refining

   The Company in the past refined low-cost, heavy crude oil and other low
gravity refined products into diesel fuel, fuel oils, and asphalt which
were generally marketed on a wholesale basis in the Intermountain region. 
IRC experienced a sharp reduction in the availability of crude oil from
it's traditional sources and has operated it's refinery only on a limited
basis during the past four years.  The Company is hopeful that a long term
solution to the supply shortage can be resolved but thus far has been
unsuccessful in locating raw materials that would allow the economic
operation of the facility.  In addition, IRC periodically provides certain
asphalt terminalling services wherein IRC receives a fixed monthly fee and
reimbursement of certain operating expenses directly related to the service
provided.

Co-Generation

   The co-generation plant is capable of producing up to 3,000 kilowatts of
electrical energy that has been sold to an electric company in the local
area.  Additionally, when the refinery is operating the plant produces all
electricity and a portion of the steam used in the refining process thereby

8
<PAGE>
contributing some savings in refinery operating costs.  In 1997 the
Company's electric customer terminated its electric purchase agreement with
the Company and the co-generation plant has been idled pending
identification of alternative uses for this resource.

Natural Gas Production

   The Company has an interest in and operates 19 natural gas wells located
in the Hugoton basin in Southwestern Kansas.  Natural gas and helium
produced is sold, under exclusive contract, to K.N. Energy, of Lakewood,
Colorado.


Methanol Production 

   In July, 1988, the Company initiated a project to construct a 250 ton
per day methanol production facility in the Denver, Colorado area.  The
facility converted natural gas into chemical grade methanol which was
marketed to refiners and chemical distributors.  Until September 1, 1997,
the Company, through its subsidiary IC, was the managing general partner of
Sand Creek Chemical Limited Partnership ("SCCLP") which performed all
production and marketing operations  associated with the facility.  IC held
the general partnership interest in IC Partners Limited, ("IC-PL"), the
general partner of SCCLP.  The facility is owned by Fleet Bank, formerly
Shawmut Bank Connecticut, who leases the facility to SCCLP under a fifteen
year operating lease. Construction and start-up testing of the facility was
substantially completed in October 1993 and the facility is currently
operating near design capacity.  The Company provided management,
accounting and personnel services to the facility and had been active in
the completion of construction of the project.  The Company has received
various payments and expense reimbursements associated with its services
and activities on the project.

In December 1994, the Company, through a newly formed wholly-owned
subsidiary Gas Technologies Group, Inc. ("GTGI"), acquired a limited
partnership interest in IC-PL.  The Company has received allocations of
SCCLP income and losses in accordance with its various interests in IC-PL.

Effective as of September 1, 1997, IC-PL sold all of its interest in SCCLP
to an unrelated third party and then dissolved.  Both IC and GTGI received
cash distributions upon the dissolution of ICPL. Effective as of February
28, 1998, both IC and GTGI were liquidated into the Company.  Operations
related to the Company's investment in IC-PL are reflected as discontinued
operations in the Company's financial statements effective for the year
ended February 28, 1998.


Results of Operations

   Quarter ended May 31, 1998 compared to quarter ended May 31, 1997

   Total revenues for the current year quarter increased to $64,000, up 50%
from $43,000 during the same period last year.  Earnings from continuing
operations declined to a loss of $88,000, down 59% from a loss of $55,000
experienced during the first quarter last year.  Cash flow decreased to a
use of $124,000 during the current quarter, down 232% from $94,000 last
year.

   The increase in revenues is attributed to a substantial increase in
revenues from natural gas production coupled with a slight increase in
office space rental income.  The increase in natural gas revenues is
attributed to a 7% increase in production over the same period last year
coupled with a 41% increase in gas prices realized.

9
<PAGE>
   Operating income (loss) by industry segment, before allocation of
general corporate overhead for the first quarter of 1999 compared to the
same period during 1998 is as follows:
                                         Increase 
       Segment                  1999         1998   (Decrease)

   Refining                 $  (6,500) $   (7,500)  $   1,000 
   Electrical generation       (2,700)     (3,100)        400 
   Gas production               4,600      11,700      (7,100)
   Corporate overhead 
     and other               (110,600)    (83,400)    (27,200)
                            $(115,200) $  (82,300)  $ (32,900) 



   The decline in refining losses is attributed to reduced employment and
maintenance costs associated with the idling of the refining facility.  It
is anticipated that the refinery facility can be maintained at relatively
low cost in the future.  The decline in electrical generation income is
also attributed to the idling of the facility pending identification of
alternative utilization of the generators.  As with the refinery, it is
anticipated that the generation facility can be maintained in an idled mode
a very small cost.  The decline in gas production earnings is attributed to
a substantial increase in well equipment and down hole repairs experienced
during the current year compared to those experienced last year.  With the
substantial improvement in gas prices in the current year and the
completion of significant repairs during the spring, it is anticipated that
gas production activities will demonstrate a marked improvement during the
summer and fall months.  The increase in general and administrative costs
is attributed to increased professional services costs related to the
Starlicon acquisition and renovations performed on the Registrants
Farmington New Mexico office building. 

Liquidity and Capital Resources

   The Registrant had cash and cash equivalents of $1,113,000 as of May 31,
1998 compared with $1,237,000 at the beginning of the current year
representing a $124,000 decrease during the current quarter.  The decrease
consists of $144,000 use from operations offset by a $21,000 collection on
the note receivable from Red Hills Manufacturing, Inc.

   Presently, capital requirements are viewed to be minimal as the
Registrants has relatively little debt and management believes that cash
flow from ongoing operations will be adequate to meet cash demands in the
near future.  Longer term however, it is recognized that the Registrant
will need to utilize its resources and develop additional sources of cash
flow to avoid depletion of current working capital.

   Sources of cash flow in the coming months are estimated to consist of
approximately $10,000 per month from natural gas production, rental income
of $1,500 per month and $5,000 from interest income.  The Registrant will
also receive approximately $30,000 from terminalling services during of
summer months.  Monthly cash outflows for ongoing overhead are presently
estimated to be approximately $22,000 per month.

   Estimated working capital and cash flow requirements associated with the
subsequently acquired Starlicon International Corporation, (see Item 5(a)
of this report), have not as yet been identified. Under the terms of the
acquisition agreement, cash and working capital associated with the
Registrant's operations prior to the acquisition are not available to fund
cash and working capital requirements of Starlicon.

10
<PAGE>
Inflation, Deflation and Changing Prices

   The results of operations and capital expenditures will continue to be
affected by inflation, deflation and changing prices.  Prices of natural
gas, and generator fuel could have a materially adverse effect on the
Registrant's operations.  Management is unable to predict the full impact
of these factors on the results of operations or working capital.

Impact of Year 2000

   The Company has reviewed the potential impact of Year 2000 issues and
believes that the cost to replace and or modify equipment, computer
hardware, and computer software will not be material and that Year 2000
issues will not have a material impact on the Company's ability to operate
into the next century.


PART II: OTHER INFORMATION

Item 1.     Legal Proceedings

   (a)      With respect to the complaint filed by the Registrant in the
            United States District Court for the Central District of
            California entitled Unico, Inc. v. Starlicon Group, Inc.,
            Starlicon International Corporation, et al, Case No. CV 98-3990
            DT (Shx), seeking the Court's confirmation of the Registrant's
            unilateral rescission of the Starlicon acquisition, as
            previously reported in the Registrants Form 10-K filed for the
            year ended February 28, 1998, on June 30, 1998 the parties
            entered into a Novation agreement wherein the terms of the
            subject acquisition of Starlicon were revised and made
            effective as of June 1, 1998. The Registrant will withdraw its
            complaint upon completion of certain documentation provided for
            in the Novation agreement. 

            
Item 4.     Submission of Matters to a Vote of Security Holders

   (a)      During the period covered by this report, there were no
            submissions of any matters to a vote of security holders,
            through the solicitation of proxies or otherwise.


Item 5.     Other Information

   (a)      On June 30, 1998, and effective as of June 1, 1998, the
            Registrant acquired all of the outstanding stock of Starlicon
            International Corporation. This transaction is discussed in
            more detail in the Registrant's Form 8-K dated June 30, 1998
            and filed with the Commission on July 14, 1998, incorporated
            herein by reference, and as discussed in the Notes to the
            Registrant's Financial Statements for the quarter ended May 31,
            1998 filed herein as part of this report on Form 10-Q.


Item 6.     Exhibits and Reports on Form 8-K

   (b)      There were no submissions on Form 8-K during the period covered
            by this report except as follows:

            (1) June 30, 1998 reporting the acquisition of Starlicon
                International Corporation as discussed in Item 5(a) of this
                Form 10-Q and in the Notes to the Registrant's Financial
                Statements for the quarter ended May 31, 1998 as filed with
                this report.

11
<PAGE>

                                SIGNATURES


   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 and in capacities and on the dates indicated:



                                UNICO, INC.



By:    Rick L. Hurt               Date:   July 15, 1998      
     Rick L. Hurt, 
     Assistant Secretary


12