<PAGE>1
                  U.S. Securities and Exchange Commission
                          Washington D. C., 20549

                                Form 10-QSB

                                (Mark One)
( X )       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
       THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended September 30, 1997

(    ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
       EXCHANGE ACT
  For the transition period from__________ to ___________.

Commission file number  0-20924
                                          
                                         
                       Reconditioned Systems, Inc.
    (Exact name of small business issuer as specified in its
charter)
       
       Arizona                                 86-0576290
(State or other jurisdiction of incorporation or organization)    
     
(IRS Employer Identification No.)

444 West Fairmont, Tempe, Arizona 85282
                  (Address of principal executive offices)

   602-968-1772
(Issuer's telephone number)

  
_________________________________________________________________
(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_____.

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:   As
of November 6, 1997, the number of shares outstanding of the
Registrant's common stock was 1,473,950.

<PAGE> 2



                       PART 1 - FINANCIAL STATEMENTS
Item 1
------












                         RECONDITIONED SYSTEMS, INC.


                        Unaudited Financial Statements

                              September 30, 1997



























                                     2


<PAGE> 3
<TABLE>

             RECONDITIONED SYSTEMS, INC.
_________________________________________________________________

                   BALANCE SHEETS
            September 30, 1997 and 1996
                    (Unaudited)
_________________________________________________________________
<S>                                              <C>              <C>
                                                 1997                   1996
                                                 ----                   ----
                           ASSETS                 
Current Assets:
  Cash and cash equivalents                    $  370,443          $  257,829
  Accounts receivable - trade, net of allowance
       for doubtful accounts of $47,500 and
       $24,938, respectively                      981,920             592,551
  Inventory                                     1,039,441           1,027,066
  Prepaid expenses and other current assets        39,444             200,965
                                                  ------              -------
       Total current assets                     2,431,248           2,078,411

Property and Equipment; net of accumulated
       depreciation of $366,278 and            
       $301,731 respectively                      162,748             205,231

Other Assets                                       15,763              42,950
                                                   ------              ------
                                               $2,609,759          $2,326,592
                                               ==========          ==========

LIABILITIES AND STOCKHOLDERS  EQUITY
            Current Liabilities:
  Revolving line of credit (Note 2)            $       -           $  527,374
  Current maturities of long-term debt              45,075             49,049
  Accounts payable                                 443,781            308,900
  Customer deposits                                198,783              8,291
  Accrued expenses and other current liabilities   222,688            130,041
                                                   -------            -------
       Total current liabilities                   910,327          1,023,655

Long-Term Debt, less current maturities             13,522             58,298

Stockholders  Equity                             1,685,910          1,244,639
                                                 ---------          ---------
                                                $2,609,759         $2,326,592
                                                ==========         ==========
</TABLE>
                                      3<PAGE>
<PAGE> 4
<TABLE>                              
                         RECONDITIONED SYSTEMS, INC.
         _________________________________________________________________

                           STATEMENT OF OPERATIONS
    For the Three Month and Six Month Periods Ended September 30, 1997 and 1996
                                 (Unaudited)
        __________________________________________________________________

                                       Three Months Ended             Six Months Ended
                                           September 30,                 September 30,
                                         1997           1996          1997             1996 
                                     ----------     -----------    ----------     ----------     
<S>                                  <C>            <C>            <C>            <C>
Sales                                $2,245,816     $1,408,927     $4,513,178     $3,296,414
Cost of sales                         1,707,851      1,060,075      3,396,014      2,513,108
                                      ---------      ---------      ---------      ---------
Gross profit                            537,965        348,852      1,117,164        783,306

Selling & administrative expenses       371,688        295,327        792,157        600,313
                                        -------        -------        -------        -------  
Income  from operations                 166,277         53,525        325,007        182,993
                                        -------         ------        -------        -------
Other income (expense):
  Interest income                           181          3,210            352          4,532
  Interest expense                       (4,565)       (29,681)       (18,160)       (59,659)
  Other                                    (815)           (28)         2,687              0
                                        -------        -------        -------         -------
                                         (5,199)       (26,499)       (15,121)       (55,127)
                                         -------      ---------       --------        -------

Net income                              $161,078        $27,026       $309,886       $127,866
                                        ========        ========      ========       ========

Primary earnings per common 
and common equivalent share                $0.09          $0.02          $0.19          $0.08
                                         ========        ========       =========     =======

Primary weighted average number
     of shares outstanding              1,654,571       1,569,430      1,625,729     1,522,805
                                        =========       =========      =========     =========

</TABLE>









                                         4<PAGE>
<PAGE> 5
<TABLE>                                  
                             RECONDITIONED SYSTEMS, INC.
_____________________________________________________________________________________

                          STATEMENT OF STOCKHOLDERS  EQUITY
For the Year Ended March 31, 1997 and the Six Month Period Ended September 30, 1997
                                     (Unaudited)
_____________________________________________________________________________________






                    Common     Common    Preferred   Preferred    Retained    Treasury
                     Stock      Stock        Stock       Stock    Earnings       Stock      Total
                    Shares     Amount       Shares      Amount    (Deficit) (134 Shares)
                    ------     ------    ---------   ----------   ---------  ----------     ------
<S>                 <C>        <C>       <C>         <C>          <C>        <C>            <C>
Balance at
March 31,
1996              1,621,300 $2,489,143      555,555   $2,156,717 $(3,465,318)   $(3,754)  $1,176,788

Conversion of
Preferred Stock
to Common
Stock, net of
costs of $58,878  7,222,215  2,097,839     (555,555)  (2,156,717)          0          0      (58,878)

Reverse Split of
Common Stock     (7,369,565)         0            0            0           0          0            0

Net income                -          0            -            0     258,114          0      258,114
                 -----------  ---------   ----------  ----------    --------     -------    ---------
Balance at 
March 31, 1997    1,473,950  $4,586,982           -            0  $(3,207,204)   $(3,754) $1,376,024

Net income                -           0           -            0      309,886          0     309,886
                 ----------- ----------    ----------  ---------   -----------   --------  ---------   

Balance at 
September  30,
1997              1,473,950  $4,586,982             0           0 $(2,897,318)    $(3,754) $1,685,910



</TABLE>






















                                     5<PAGE>
<PAGE> 6
<TABLE>
                          RECONDITIONED SYSTEMS, INC.
_____________________________________________________________________________________

                           STATEMENT OF CASH FLOWS
For the Three Month and Six Month Periods Ended September 30, 1997 and 1996
                                 (Unaudited)
_____________________________________________________________________________________


                             Three Months Ended             Six Months Ended
                                    September 30,                September 30,
                                  1997           1996        1997         1996   
                                  ----           ----        ----         ----
<S>                               <C>           <C>          <C>          <C>        

Cash and cash equivalents
provided (used) by operating
activities                        389,566       249,257       710,879     (3,550)

Cash and cash equivalents
used by investing
activities                         (7,288)      (15,838)      (13,507)   (20,795)

Cash and cash equivalents
provided (used) by financing
activities                       (141,467)     (169,530)     (469,053)   181,476
                                 ---------    ---------      ---------   -------
Increase in cash
and cash equivalents              240,811        63,889       228,319    157,131

Cash and cash equivalents,
beginning of period               129,632       193,940       142,124    100,698
                                 --------       --------      -------    --------

Cash and cash equivalents,
end of period                     370,443       257,829       370,443    257,829
                                 ========      ========       =======    =======
</TABLE>
                                             6<PAGE>
<PAGE> 7
               
                         RECONDITIONED SYSTEMS, INC.
                        Notes to Financial Statements
                                (Unaudited)
  
_________________________________________________________________
                                  Note 1.
               Summary of Significant Accounting Policies
  
_________________________________________________________________

Basis of Presentation:
   The unaudited financial statements include only the accounts   
   and transactions of the Company.
     
Interim Financial Statements:
     The unaudited interim financial statements include all       
     adjustments (consisting of normal recurring accruals) which,
     in the opinion of management, are necessary in order to make
     the financial statements not misleading.  Operating results
     for the six months ended September 30, 1997, are not
     necessarily indicative of the results that may be expected
     for the entire year ending March 31, 1998.  These financial
     statements have been prepared in accordance with the
     instructions to Form 10-QSB and do not contain certain
     information required by generally accepted accounting
     principles.  These statements should be read in conjunction
     with financial  statements and notes thereto included in the
     Company's Form 10-KSB for the year ended March 31, 1997.
     
Earnings Per Common and Common Equivalent Share:
     The computation of earnings per share is based on the net
     income and the weighted average number shares of common
     stock and common stock equivalents outstanding for each
     period.  Certain stock options outstanding are considered
     common stock equivalents during the quarters and periods
     ended September 30, 1997 and 1996, and were accounted for
     under the Treasury Stock method.  In addition, certain
     warrants which were outstanding during the periods ended
     September 30, 1997 and 1996 are not included in the
     computation of earnings per share for those quarters because
     their effect would be antidilutive.  Fully diluted earnings
     per share were not materially different from primary
     earnings per share.  The earnings per share and the weighted
     average number of shares outstanding for the quarter ended
     and period ended September 30, 1996 give retroactive effect
     to the conversion of preferred stock to common stock and the
     reverse split of common stock which were effective on August
     12, 1996.
_________________________________________________________________
                                    
                                 Note 2.
                        Revolving Line of Credit
   
_________________________________________________________________
On July 30, 1997, the Company terminated its line of credit
agreement with Norwest Business Credit, Inc. and entered into a
line of credit agreement with M&I Thunderbird Bank.  Under this
new $1,000,000 revolving line of credit agreement, which is
effective through July 31, 1998, interest is payable at the
bank's base rate plus 2%.  Borrowings on the line of credit may
not exceed 75% of eligible accounts receivable and 30% of
eligible inventory up to $300,000.  The line of credit is
collateralized by accounts receivable, inventory, property and
equipment, and intangibles.  The agreement contains various
covenants by the Company, including covenants that the Company
will maintain certain net worth thresholds and ratios, will meet
certain debt service coverage ratios, and will not enter into or
engage in various types of agreements or business activities
without approval from M&I Thunderbird Bank.

                                     7<PAGE>
<PAGE> 8
Item 2.   Management's Discussion and Analysis of Operations
------------------------------------------------------------
The statements contained herein which are not historical facts
may constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Exchange Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as
amended, and are subject to the safe harbors created thereby. 
These forward-looking statements involve risks and uncertainties,
including, but not limited to, the risk that the Company may not
be able to continue to increase sales, maximize its production
capacity and maintain adequate inventory levels at an acceptable
cost.  In addition, the Company's business, operations and
financial condition are subject to substantial risks which are
described in the Company's reports and statements filed from time
to time with the Securities and Exchange Commission.  These
reports and statements include the Company's Annual Report on
Form 10-KSB for the fiscal year ended March 31, 1997.

Results of Operations
---------------------
For the Quarter Ended September 30, 1997 and 1996
-------------------------------------------------


<TABLE>
                      Summary Statement of Operations (Unaudited)
                                For the Three Months Ended
  
                      September 30,     September 30,      
                              1997               1996      Change
                      -------------     -------------      ------
<S>                      <C>               <C>           <C>
  Sales                  $2,245,816        $1,408,927    $836,889
    
  Cost of sales           1,707,851         1,060,075     647,776
    
  Gross profit              537,965           348,852     189,113
    
  Selling & administrative
  expenses                  371,688           295,327      76,361
  
  Income from operations    166,277            53,525     112,752
    
  Other income (expense)     (5,199)          (26,499)     21,300
    
  Net income               $161,078           $27,026    $134,052
  
  </TABLE>
  
Reconditioned Systems, Inc. ("RSI" or the "Company") reported
sales of $2,245,816 for the three month period ended September
30, 1997 (hereinafter the "reporting quarter").  This represents
a 59.4% increase over sales for the three month period ended
September 30, 1996 (hereinafter the "comparable quarter"). 
This improvement was primarily attributable to additions to the
wholesale sales staff and increased marketing efforts focusing on
the development of wholesale markets within the Western United
States.  Wholesale sales increased by $1,058,060 or 297% over the
comparable quarter.  Retail sales in the Phoenix and Tucson
markets were down $221,172 or 21% from the comparable period.  
Historically, sales were approximately 50% wholesale
and 50% retail. In an effort to improve retail sales, management 
is currently seeking to hire and train additional salespeople.  
In addition, the Company decided to close the Tucson sales office and is 
considering opening retail storefronts in various markets, offering both new 
and remanufactured modular furniture lines.
  
The Company's gross profit margin for the reporting and
comparable quarters remained fairly consistent at 24% and 24.8%,
respectively.  Although the Company's wholesale sales prices are
lower than those offered to retail customers, the Company was
able to maintain a consistent gross profit margin. This was
accomplished through gains in economies of scale and increased
operating efficiency as a result of a significant increase in the
Company's average order size.  The Company's average wholesale
order is larger than the average retail sale.  In addition, the
Company was closer to meeting its optimum production capacity.
  
Selling and administrative expenses for the reporting quarter
were 16.6%, compared to 21.0% for the comparable quarter.  The
4.4% improvement primarily resulted from a lower overall
percentage of fixed expenses and the wholesale/retail mix of
those sales.  The Company's retail and wholesale departments
operate independently and under different compensation
agreements.  Current wholesale sales compensation approximates
3.5% of wholesale sales revenues.  By comparison, retail sales
compensation approximates 11% of retail sales revenues.
                                   8<PAGE>
<PAGE> 9
Other income and expenses, which primarily consisted of interest
expense, improved by 80.4% over the comparable quarter.  The
Company's increased sales and improved financial stability
enabled management to acquire new financing with lower borrowing
rates on its revolving line or credit.  In addition, the Company
paid off its line of credit during the reporting quarter through
improved cash flows, thereby eliminating its interest expense
associated with the revolving credit line.
  
The Company's 496% increase in net income over the comparable
quarter is primarily a result of increased sales revenues and
lower borrowing rates as discussed above.
  
  For the Six Month Period Ended September 30, 1997 and 1996
  ----------------------------------------------------------
<TABLE>
                Summary Statement of Operations (Unaudited)
                                 For the Six Months Ended
  
                      September 30,    September 30,  
                               1997             1996    Change
                      -------------    -------------   ----------  
  <S>                   <C>               <C>          <C>
  Sales                 $4,513,178        $3,296,414   $1,216,764
  
  Cost of sales          3,396,014         2,513,108      882,906
  
  Gross profit           1,117,164           783,306      333,858
  
  Selling & administrative
  expenses                 792,157           600,313      191,844
  
  Income from operations   325,007           182,993      142,014
  
  Other income (expense)  (15,121)           (55,127)      40,006
  
  Net income             $309,886           $127,866     $182,020
</TABLE>  
  
The Company's operating results for the six month period ended
September 30, 1997 (hereinafter the "reporting period") were
influenced by the same factors affecting the results for the
reporting quarter, as were discussed in the narrative above.
Wholesale sales represented 56% of the sales revenues earned
during the reporting period, an increase of $1,254,946 or 95%
compared to the wholesale sales during the six month period ended
September 30, 1996 (hereinafter the "comparable period").  Retail
sales decreased by $38,183 or 2% during the reporting period in
comparison to the comparable period.
  
Income Taxes
------------
As of March 31, 1997, the Company had federal loss carryforwards
of approximately $2,990,000 and state loss carryforwards of
approximately $2,790,000.  The federal loss carryforwards expire
through March 31, 2011 and the state loss carryforwards expire
through March 31, 2001.  If the Company is profitable before
these loss carryforwards expire, it will benefit from them at
statutory rates.  During the quarters ended September 30, 1997
and 1996, the Company benefited in the approximate amount of
$120,000 and $40,000 from these loss carryforwards.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                 9
  
<PAGE> 10

Financial Condition and Liquidity
---------------------------------
The primary factors affecting the Company's financial condition
and liquidity are the results of operations, collection period
and rate of inventory turns.  The Company's operations during the
reporting period generated cash from operating activities of
$710,879 to finance the Company's 36% sales growth and reduce the
Company's revolving credit and long-term debt balances by
$469,053.  As of the date of this report, the Company had no
outstanding balance and $1,000,000 of availability on its
operating line of credit.  In addition, the Company was in
compliance with all loan covenants associated with this revolving
line of credit.  The Company's average days sales in accounts
receivable increased from 32 days in the comparable period to 40
in the reporting period.  This compares to 38 days as of December
31, 1996, 51 days as of March 31, 1997 and 41 days as of June 30,
1997.  Since the Company hopes to maintain an average collection
period of 30 to 40 days, the current collection period of 40 days
is consistant with managment's goals.  The increase in the
collection period was offset by improved inventory turns from 4.2
in the comparable period to 6.1 in the reporting period and the
Company's strong operating results. Management believes cash flow
from current operations and the availability on the Company's
$1,000,000 credit line will provide adequate funds to sustain the
Company's growth in sales without the need for additional outside
capital.
  
Management's Plans
------------------
This reporting quarter marks the eighth consecutive profitable
quarter following the Company's restructuring and downsizing. 
During the month of October, 1997, the Company had monthly sales
in excess of $1 million for the first time.  Management hopes to
continue to maintain and build on its recent successes by
continuing to pursue the further development of its wholesale
customer base within the Western region of the United States and
opening retail storefronts in various markets within the same region.  In
addition, now that the Company has strengthened its financial
condition and liquidity, management believes a conservative
acquisition program is a viable alternative for additional growth
and increased share value.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                  10<PAGE>
<PAGE> 11                                
                    PART II - OTHER INFORMATION
                                 
Item 1.  Legal Proceedings
--------------------------
The Company is not party to any pending legal proceeding other
than routine litigation incidental to the business.
  
Item 2.  Changes in Securities
------------------------------
Effective June 30, 1997, the Company's Class B Warrants expired.
  
Item 3.  Defaults Upon Senior Securities
----------------------------------------
None.
  
Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
All three proposals were passed at the meeting and the following
table provides the voting results:
<TABLE>  
Proposal      Shares Eligible  Voted For  Voted Against Abstentions Broker Non-Votes
--------      ---------------  ---------  -------------  ----------  --------------   
<S>                 <C>        <C>         <C>           <C>          <C>
1 - Election of 
      directors     1,473,950  1,100,477             0          784                0

2 - Stock
  option plan       1,473,950    934,723         1,816          200          164,522
  
3-Appointment
  of auditors       1,473,950  1,101,261             0            0                0 
  
</TABLE>  
  
Item  5. Other Information
--------------------------
None.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                  11<PAGE>
<PAGE> 12                                
                                 
                                  
Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------
(a)  The following exhibits are filed herewith pursuant to Regulation S-B:
<TABLE>  
  No.          Description                                            Reference
  ---          -----------                                            ---------
<S>            <C>                                                         <C> 
  3.1          Amended and Restated Articles of Incorporation              (2)
  3.2          Amended and Restated Bylaws                                 (2)
  4.1          Form of Stock Certificate                                   (1)
  4.5          Registration Rights Agreements                              (3)
  *4.9         Options issued to Wayne R. Collignon                        (4)
  *4.10        Options issued to Dirk D. Anderson                          (4)
  *4.11        Amendment to Options issued to Wayne Collignon              (6)
  *4.12        Amendment to Options issued to Dirk Anderson                (6)
  *4.13        Options issued to Wayne R. Collignon                        (6)
  *4.14        Options issued to Dirk D. Anderson                          (6)
  *4.15        Options issued to Scott W. Ryan                             (6)
  *4.16        Options issued to Scott W. Ryan                             (6)
  10.1         Lease Agreement, dated April 12, 1990 between Boston
               Safe Deposit and Trust Company, as Lessor, and Registrant
               as Lessee                                                   (1)
  *10.21       Employment Agreement between Registrant and Wayne Collignon (4)
  *10.22       Employment Agreement between Registrant and Dirk Anderson   (4)
  10.23        Third amendment to the Lease between Registrant, as Lessee,
               and Newhew Associates, as Lessor                            (4)
  *10.25       Amendment to Employment Agreement between Registrant and
               Wayne Collignon                                             (5)
  *10.26       Amendment to Employment Agreement between Registrant and
               Dirk Anderson                                               (5)  
  10.29        Loan documents between Registrant and M&I Thunderbird Bank  (7)
  
  (1) Filed with Registration Statement on Form S-18, No. 33-51980-LA, under Securities Act of 1933, as      
      declared effective on December 17, 1992.
  (2) Filed with the Company s definitive proxy statement on July 10, 1996
  (3) Filed with Form 10-KSB on July 13, 1995
  (4) Filed with Form 10-KSB on July 2, 1996
  (5) Filed with Form 10-QSB on November 14, 1996
  (6) Filed with Form 10-KSB on June 26, 1997
  (7) Filed herewith
  </TABLE>
  (b)  Reports on Form 8-K:
  No reports were filed on Form 8-K during the quarter ended September 30, 1997.

  
                                       12<PAGE>
<PAGE> 13                        

  
SIGNATURES
  
In accordance with the requirements of the Exchange Act, the registrant caused 
this report to be signed on its behalf by the undersigned, thereunto duly 
authorized.
  
  
  Reconditioned Systems, Inc.
  
  
  Date:   November 14, 1997        /S/ Wayne R. Collignon
                                   ________________________________ 
                                   Wayne R. Collignon, President and CEO
  
  
  Date:   November 14, 1997        /S/ Dirk D. Anderson
                                   _________________________________
                                   Dirk D. Anderson, CFO
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  















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