SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                              FORM 10-Q

(Mark One)
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE    
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998

                                  OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE   
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to ________________

Commission File Number: 001-10382

                    VALLEY FORGE SCIENTIFIC CORP.
        (Exact name of registrant as specified in its charter)

        PENNSYLVANIA                                         23-2131580
 (State or other jurisdiction of                          (I.R.S. employer
 incorporation or organization)                           identification no.)

            136 Green Tree Road, Oaks, Pennsylvania 19456
        (Address of principal executive offices and zip code)
                      Telephone: (610) 666-7500   

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 _____

At February 11, 1999 there were 8,232,009 shares outstanding of the
Registrant's no par value Common Stock.


        

                    VALLEY FORGE SCIENTIFIC CORP.

                          INDEX TO FORM 10-Q

                          DECEMBER 31, 1998
 


                                                                    
                                                                          Page
                                                                        Number

Part I - Financial Information

 Item 1.  Financial Statements:

         Balance Sheets - December 31, 1998 and September 30, 1998.         1

         Statements of Operations for the three months
          ended December 31, 1998 and December 31, 1997.                    2
                  
         Statements of Cash Flows for the three months
          ended December 31, 1998 and December 31, 1997.                    3

         Notes to Financial Statements.                                     4

 Item 2. Management's Discussion and Analysis of Financial Condition        5
         and Results of Operations.

Part II - Other Information                                                 8
            
                                      (i)

<PAGE 1>
<TABLE>
       

            VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARIES
 
                            BALANCE SHEETS
 
<S>                                                 <C>                 <C>
                                                 DECEMBER 31,       SEPTEMBER 30,
                                                     1998                 1998  
                                                 -----------        -------------
                                                  (UNAUDITED)           (AUDITED)  
ASSETS
Current Assets:
   Cash and cash equivalents                      $ 1,084,971         $   873,757
   Accounts receivable                                704,792             911,158
   Inventory                                        1,150,019           1,204,980
   Prepaid items and other current assets             133,140              68,996
   Recoverable income taxes                             4,636               4,636
   Current portion of deferred income tax benefit     162,689             152,983
                                                    ---------           ---------
      Total Current Assets                          3,240,247           3,216,510
 
Property, Plant and Equipment, net                    233,561             229,687
Intangible Assets, net                                730,621             753,542
Other Assets                                            4,472               4,472
                                                    ---------           ---------
      Total Assets                                 $4,208,901          $4,204,211
                                                    =========           =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable and accrued expenses           $  162,231          $  160,607
   Income taxes payable                                 9,534                 513
                                                    ---------           ---------
      Total Current Liabilities                       171,765             161,120
 
Deferred Income Taxes Payable                          18,900              18,445
                                                    ---------           ---------
      Total Liabilities                               190,665             179,565
                                                    ---------           ---------
Commitments and Contingencies
 
Stockholders' Equity:
   Preferred stock                                       -                   -   
   Common stock (no par, 10,000,000 shares
    authorized, 8,229,384 shares issued and 
    outstanding at December 31, 1998 and
    September 30, 1998)                             4,055,558           4,055,558
   Retained earnings (deficit)                        (37,322)            (30,912)
                                                    ---------           ---------
      Total Stockholders' Equity                    4,018,236           4,024,646
                                                    ---------           ---------
      Total Liabilities and Stockholders' Equity   $4,208,901          $4,204,211
                                                    =========           =========

                                      -1-

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<PAGE 2>
<TABLE>

            VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARIES
 
                       STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED DECEMBER 31, 
                             (UNAUDITED)
<S>                                                    <C>                  <C> 
                                                      1998                 1997    
                                                      ----                 ----
Net Sales                                          $  952,452          $  836,447
Cost of Sales                                         497,886             444,633
                                                    ---------           ---------
Gross Profit                                          454,566             391,814
 
Other Costs:
  Selling, general and administrative                 369,648             381,995
  Research and development                             78,331              86,940
  Amortization                                         22,920              22,555
                                                    ---------           ---------
      Total Other Costs                               470,899             491,490
                                                    ---------           ---------
Income (loss) from Operations                         (16,333)            (99,676)
 
Other Income:
  Interest income                                       9,694               7,402
                                                    ---------           ---------
Income (loss) Before Income Taxes                      (6,639)            (92,274)
 
Provision for (Benefit of) Income Taxes                  (229)            (31,303)
                                                    ---------           ---------
Net Income (Loss)                                  $   (6,410)         $  (60,971)
                                                    =========           =========
 
Earnings (Loss) per Share:
   Basic earnings (loss) per common share          $     (.00)         $     (.01)
                                                    ==========          ==========
   Diluted earnings (loss) per common share        $     (.00)         $     (.01)
                                                    ==========          ==========
   Basic common shares outstanding                  8,229,384           8,229,384
 
   Diluted common shares outstanding                8,229,384           8,229,384

                                      -2-

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<PAGE 3>
<TABLE>

            VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARIES
 
                       STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED DECEMBER 31,
                             (UNAUDITED)
 
<S>                                                     <C>                 <C>
                                                       1998                1997
                                                       ----                ----
Cash Flows from Operating Activities:
  Net income (loss)                                $   (6,410)         $  (60,971)
  Adjustments to reconcile net income (loss) to net
   cash provided by operating activities:
    Depreciation and amortization                      31,623              34,091
 
    Changes in assets and liabilities, net of
     effect from:
      (Increase) decrease in accounts receivable      206,366             145,158
      (Increase) decrease in inventory                 54,961              10,872
      (Increase) decrease in recoverable income
       taxes                                             -                 (7,240)
      (Increase) decrease in deferred income
       tax benefit                                     (9,706)            (15,744)
      (Increase) decrease in other assets                -                   -   
      (Increase) decrease in prepaid items and
       other current assets                           (64,144)            (28,376)
      Increase (decrease) in accounts payable and
       accrued expenses                                 1,624              57,810
      Increase (decrease) in income taxes payable       9,021                -  
      Increase (decrease) in deferred income taxes        455              (8,320)
                                                    ---------           ---------
        Net cash provided by operating activities     223,790             127,280
                                                    ---------           ---------
    Cash Flows from Investing Activities:
      Purchase of property, plant and equipment       (12,576)             (4,834)
                                                    ---------           ---------
        Net cash used in investing activities         (12,576)             (4,834)
                                                    ---------           ---------
    Net Increase in Cash and Cash Equivalents         211,214             122,446
 
    Cash and Cash Equivalents, beginning of period    873,757             632,904
                                                    ---------           ---------
    Cash and Cash Equivalents, end of period       $1,084,971          $  755,350
                                                    =========           =========
 
Supplemental Disclosures of Cash Flow Information:
 Cash paid during the period for:
  Income taxes                                     $     -             $     -    
                                                    =========           =========   

                                      -3-

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<PAGE 4>


            VALLEY FORGE SCIENTIFIC CORP. AND SUBSIDIARIES
 
                    NOTES TO FINANCIAL STATEMENTS
                          DECEMBER 31, 1998
 
 
 
1.   Valley Forge Scientific Corp. ("VFSC") is engaged in the business of
     developing, manufacturing and selling medical devices and products.
     On August 18, 1994, VFSC formed a wholly-owned subsidiary, Diversified
     Electronics Company, Inc. ("DEC"), a Pennsylvania corporation, in order
     to continue the operations of Diversified Electronic Corporation, a
     company which was merged with and into VFSC on August 31, 1994.  In
     January 1993, VFSC formed a wholly-owned subsidiary, Valley Consumer
     Products, Inc. ("VCP") to market specific product lines.  During 1996,
     VCP commenced initial operations and began marketing the CPR mask system
     developed by VFSC. During the second quarter of fiscal year 1998 the
     Company entered into a license agreement for the manufacture and
     distribution of the CPR Mask.  Collectively, VFSC, DEC and VCP are referred
     to herein as the "Company".  The accompanying financial statements
     consolidate the accounts of the parent company and its wholly-owned
     subsidiaries.  All significant intercompany accounts and transactions have
     been eliminated in consolidation.
 
2.   The September 30, 1998 balance sheet data was derived from audited
     financial statements but does not include all disclosures required by
     generally accepted accounting principles.  In the opinion of management,
     the accompanying unaudited financial statements contain all adjustments
     necessary to present fairly the financial position as of December 31, 1998
     and the statements of operations for the three months ended December 31,
     1998 and 1997 and the statements of cash flows for the three months ended
     December 31, 1998 and 1997.
 
     The statements of operations for the three months ended December 31, 1998
     and 1997 are not necessarily indicative of results for the full year.
 
     While the Company believes that the disclosures presented are adequate to
     make the information not misleading, these financial statements should be
     read in conjunction with the financial statements and accompanying notes
     included in the Company's Annual Report on Form 10-K for the fiscal year
     ended September 30, 1998.
 
3.   Earnings per share are based on the weighted average number of common
     shares outstanding including common stock equivalents.

                                      -4-
<PAGE 5>
                       


                                   
                    VALLEY FORGE SCIENTIFIC CORP.
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS



Results of Operations

        Results of Operations for the Three Months Ended December
31, 1998 Compared to the Three Months Ended December 31, 1997.
 
        Sales of $952,452 for the three months ended December 31,
1998 were 14% greater than sales of $836,447 for the corresponding
period in fiscal 1998. Johnson & Johnson Professional, Inc. ("J&J"),
the Company's principal customer, accounted for 90% of sales in the
first quarter of fiscal 1999 and 97% in corresponding period in
1998. Sales to J&J during the last quarter of the calendar year are
traditionally at lower levels than during other calendar quarters.
In addition, in the 1999 calendar year, J&J has agreed to purchase a
minimum of $5,000,000 of the Company's products pursuant to an
amendment to a distribution agreement entered into in September 1998.

        Bipolar electrosurgical instruments and irrigation systems
accounted for 61% of sales, and disposable C/T Sets and bipolar
cords accounted for 35% of sales, in the first quarter of fiscal 1999.
Disposable instrumentation sales, which  principally reflected sales
in the field of gynecology, accounted for  4% of sales in the first
quarter of fiscal 1999.
        
        On October 8, 1998, the Company entered into a supply and
distribution agreement with Garfield Refining Company for the sale
of the Company's Bi-Dent bipolar generator and disposable
instrumentation and accessory products in the field of Dentistry.
Marketing efforts are ongoing and sales under this agreement are
expected to commence in the third quarter of fiscal 1999.

        Gross profit was $454,566 for the first quarter of fiscal
1999 ( 48% of sales), as compared to gross profit of $391,814 (47%
of sales) for corresponding quarter in fiscal 1998.

        Selling, general and administrative expenses for the first
quarter of fiscal 1999 decreased slightly  to $369,648 as compared
to $381,995 for corresponding quarter in fiscal 1998.  The Company
continued its commitment to research and development with
expenditures of $78,331 in the first quarter of fiscal 1999,
representing a slight decrease from the corresponding quarter in
fiscal 1998. Research and development included the development of
the Malis Bipolar Lesion Generator and disposable lesion electrodes,
which the Company is preparing for sale to J&J. 

        The Company  incurred  a loss from operations of $16,333 for
the first quarter of fiscal 1999, as compared to a loss from
operations of $99,676 for the corresponding period in fiscal 1998. 
The Company's benefit of income taxes was $229 for the first quarter
of fiscal 1999, as compared to $31,303 for the corresponding period
in fiscal 1998. 

         As a result of the foregoing, net loss was $6,410 ($.00 per
share) for the three months ended December 31, 1998, as compared to
a net loss of $60,971($.01 per share) for the three months ended
December 31, 1997. 

                                      -5-
<PAGE 6>

Liquidity and Capital Resources

        The primary measures of the Company's liquidity are cash
balances (including short-term investments), accounts receivable and
inventory balances, as well as its borrowing ability.  During the
three months ended December 31, 1998, the Company's working capital
increased by $13,092 to $3,068,482.

        The Company provided $223,790 from operating activities for
the first three months of fiscal 1999 principally from a decrease in
accounts receivable and inventory of $206,366 and $54,961,
respectively, offset by an increase in prepaid items and other current
assets of $64,144. The decrease in accounts receivable and inventory
reflected normal business conditions.

        Investing activities for the first three months of fiscal
1999 used a total of $12,576 for the purchase of property and
equipment.  As a result of the foregoing, cash increased by $211,214
in the first three months of fiscal 1999, resulting in a balance of
$1,084,971 in the Company's cash and cash equivalents at December
31, 1998.

        The Company has no long-term debt.  The Company believes it
has available all funds needed for operations, research and
development and capital expenditures as they may arise in the
future.  However, should it be necessary, the Company believes it
could borrow adequate funds at competitive rates and terms.

         
FORWARD LOOKING STATEMENTS

        The information provided in this report may contain forward
looking statements or statements which arguably imply or suggest
certain things about the Company's future. These include, but are
not limited to statements about: (1) any competitive advantage the
Company may have as a result of its installed base  of
electrosurgical generators in the field of neurosurgery; (2) the
Company's belief that its products exceed industry standards or
favorably compete with other companies' new technological
advancements; and (3) the anticipated success of certain recently
introduced products or products scheduled to be released in the near
future for use in neurosurgery, other surgical disciplines, and the
dental market. These statements are based on assumptions that the
Company believes are reasonable, but a number of factors could cause
the Company's actual results to differ materially from those
expressed or implied by these statements. Investors are advised to
review the Additional Cautionary Statements section below for more
information about risks that could affect the financial results of
the Company.

ADDITIONAL CAUTIONARY STATEMENTS

Competition and Risk of Obsolescence from Technological Advances

         The markets in which the Company's products compete are
characterized by continuing technical innovation and increasing
competition.  Some surgical procedures which utilize or could
utilize the Company's products could potentially be replaced or
reduced in importance by alternative medical procedures or new drugs
which may adversely affect the Company's business.

Product Acceptance and New Products

         The Company's growth depends in part on the acceptance of
its products in the marketplace, the market penetration achieved by
the companies which the Company has contracted with, and relies on, 

                                      -6-
<PAGE 7>

to distribute its products, and its ability to introduce new and
innovative products that meet the needs of medical professionals. 
There can be no assurance that the Company will be able to continue
to introduce new and innovative products or that the products the
Company introduces, or has introduced, will be widely accepted by
the marketplace, or that companies which the Company has contracted
to distribute its products will achieve market penetration in the
surgical disciplines and markets outside of neurosurgery.  The
failure of the Company to continue to introduce new products or gain
wide spread acceptance of its products would adversely affect the
Company's operations. 

Government Regulation

         The process of obtaining and maintaining required
regulatory approvals is lengthy, expensive and uncertain.  Although
the Company has not experienced any substantial regulatory delays to
date, there is no assurance that delays will not occur in the
future, which could have a significant adverse effect on the
Company's ability to introduce new products on a timely basis. 
Regulatory agencies periodically inspect the Company's manufacturing
facilities to ascertain compliance with "good manufacturing
practices" and can subject approved products to additional testing
and surveillance programs.  Failure to comply with applicable 
regulatory requirements can, among other things, result in fines,
suspensions of regulatory approvals, product recalls, operating
restrictions and criminal penalties.  While the Company believes
they are currently in compliance, if the Company fails to comply
with regulatory requirements, it could have an adverse effect on the
Company's results of operations and financial condition.
         
Uncertainties within the Health Care Markets

         Political, economic and regulatory influences are
subjecting the health care industry in the United States to rapid,
continuing and fundamental change.  Although Congress has not passed
comprehensive health care reform legislation to date, it is believed
that Congress, state legislatures and the private sector will
continue to review and assess alternative health care delivery and
payment systems.  Responding to increased costs and to pressure from
the government and from insurance companies to reduce patient
charges, health care providers have demanded, and in many cases
received, reduced prices on medical devices and instrumentation.  These
customers are expected to continue to demand lower prices in the future.  The
Company cannot predict what impact the adoption of any federal or
state health care reform measures, private sector reform or market
forces may have on its business.  However, pricing pressure is
expected to continue to adversely affect profit margins.

Product Liability Risk

         The Company's products involve a risk of product liability.
 Although the Company maintains product liability insurance at
coverage levels which it believes are adequate, there is no
assurance that, if the Company were to incur substantial liability
for product liability claims, insurance would provide adequate
coverage against such liability.

                                      -7-
<PAGE 8>


                    VALLEY FORGE SCIENTIFIC CORP.



PART II. OTHER INFORMATION

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDING

        None.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K        


        (a)     Exhibits

                None.
        
        (b)     Reports on Form 8-K

                The Registrant did not file any reports on Form 8-K
                during the quarter ended December 31, 1998.

                                      -8-

<PAGE 9>

                    VALLEY FORGE SCIENTIFIC CORP.

                              SIGNATURES


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



                
                                 VALLEY FORGE SCIENTIFIC CORP.


Date:   February 12, 1999        By: /s/ Jerry L. Malis                       
                                     Jerry L. Malis, President
                                     (principal financial officer)