U.S. SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C.  20549
                                
                                
                          FORM 10 - QSB
                                
                                
       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934
                                
        For the Quarterly Period Ended November 30, 1996.
                                
                 Commission file number 0-10783
                                
                                
                     BSD MEDICAL CORPORATION
                                
                                
           DELAWARE                         75-1590407
   (State of Incorporation)      (IRS Employer Identification Number)



     2188 West 2200 South
     Salt Lake City, Utah                          84119
(Address of principal executive offices)         (Zip Code)

Registrant's telephone number:  (801) 972-5555


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 [  ]


Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.


            Class                 Outstanding as of February 27, 1997
 Common stock, $.01 Par Value                16,176,980



Transitional Small Business Disclosure Format (Check  one): Yes[  ]  No[X]

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           BSD MEDICAL CORPORATION
                                      
                    Condensed Consolidated Balance Sheets
                                 (Unaudited)

                        Assets                          Nov. 30,     Aug. 31,
                                                          1996         1996
                                                        _________   _________
Current assets:                                                         
  Cash and cash equivalents                             $ 535,279   $ 381,746
  Receivables:                                                             
    Trade accounts, net of allowance for doubtful         137,271     130,175
     receivables of $10,000
    Related party, net of allowance for doubtful           23,054      23,054
     receivables of $26,200
    Other, net of allowance for doubtful receivables            -     500,000
     of $20,494
                                                        _________   _________
Total net receivables                                     160,325     653,229
                                                        _________   _________
Inventories:                                                             
  Raw materials                                           150,339     223,139
  Work-in-process                                         318,891     233,856
  Finished goods                                           74,102      74,071
                                                        _________   _________
Total inventories                                         543,332     531,066
                                                        _________   _________
Prepaid expenses and other assets                          25,900      34,975
                                                        _________   _________
Total current assets                                    1,264,836   1,601,016
                                                        _________   _________
Property and equipment:                                                 
  Furniture and fixtures                                  297,743     297,743
  Equipment                                               519,249     473,099
  Building, net of reserve for potential impairment       233,766     233,766
   of $181,534                                          _________   _________

Total property and equipment                            1,050,758   1,004,608
                                                                         
Less accumulated depreciation and amortization            757,873     752,205
                                                        _________   _________
Net property and equipment                                292,885     252,403
                                                        _________   _________
Long-term receivables                                     106,820     106,820
                                                                         
Other assets, at cost, less accumulated                                 
 amortization of $199,961 at Nov. 30, 1996 and             62,771      67,742
 $194,990 at Aug. 31, 1996                              _________   _________
                                                                         
                                                       $1,727,311  $2,027,981
                                                        =========   =========

See accompanying notes to financial statements.
                                      
<PAGE>                                      
                                      
                                      
                                      
                                                                            
                                      
         Liabilities and Stockholders' Equity                               

Current liabilities:                                                 
  Notes payable                                        $   11,624  $   17,250
  Current installments of obligation under 
   capital lease                                           35,394      46,554
  Current installments of obligation under 
   long-term debt                                          19,579      25,817
  Accounts payable                                        128,050      89,230
  Accrued payroll and commissions                          48,090      74,060
  Customer deposits                                        53,227     141,871
  Warranty reserves                                        30,367      36,524
  Accrued expenses                                         90,390     107,490
  Current income tax payable                               70,000      70,000
                                                        _________   _________
Total current liabilities                                 486,721     608,796
                                                                         
Obligation under capital lease, excluding current         106,370     106,370
 installments
Obligation under long-term debt, excluding current         64,162      64,162
 installments
Deferred revenue                                          186,771     186,771
Related party deferred revenue                            335,141     335,141
                                                        _________   _________
Total liabilities                                       1,179,165   1,301,240
                                                                  
Stockholders' equity:                                                 
  Preferred stock, $1.00 par value; authorized 
   10,000,000 shares; none issued and outstanding 
   (liquidation value $100 per share)                           -           -
  Common stock, $.01 par value; authorized 
   20,000,000 shares; issued and outstanding 
   16,176,980 shares                                      161,770     161,770
  Additional paid-in capital                           20,430,243  20,341,418
  Accumulated deficit                                 (19,243,799)(18,912,164)
  Common stock in treasury 67,428 shares, at cost         (14,867)    (14,867)
  Deferred compensation                                  (785,201)   (849,416)
                                                        _________   _________
Net stockholders' equity                                  548,146     726,741
                                                                         
Commitments and contingencies                           _________   _________
                                                                        
                                                       $1,727,311 $ 2,027,981
                                                        =========   =========
<PAGE>

                           BSD MEDICAL CORPORATION
                                      
               Condensed Consolidated Statements of Operations
                                 (Unaudited)
                  Quarters ended November 30, 1996 and 1995



                                                       Nov. 30      Nov. 30
                                                         1996        1995
                                                     __________   __________
Product sales                                       $    73,051   $  111,689
Grant and license revenue                               118,666      107,708
                                                     __________   __________
Total revenues                                          191,717      219,397

Costs and expenses:                                  __________   __________
  Cost of product sales                                  93,565      101,499
  Research and development                               99,035       82,926
  Selling, general, and administrative                  334,761      110,202
                                                     __________   __________
Total costs and expenses                                527,361      294,627
                                                     __________   __________
Operating income (loss)                                (335,644)     (75,230)
                                                                      
Other income (expense):                                               
  Interest income                                         5,735          194
  Gain on settlement of accounts payable                  4,738            -
  Interest expense                                       (6,764)      (1,201)
  Other, net                                                301       32,600

Total other income                                        4,010       31,592

Net income (loss)                                      (331,634)     (43,638)
                                                                              
Net income (loss) per common and common 
  equivalent share                                  $      (.02)      (.0004)
                                                                      
Weighted average number of shares outstanding        17,297,067   17,188,102


See accompanying notes to financial statements.
<PAGE>

                           BSD MEDICAL CORPORATION
                                      
               Condensed Consolidated Statements of Cash Flows
                                 (Unaudited)
                  Quarters ended November 30, 1996 and 1995
                                      
                                      
Increase (Decrease) in Cash and Cash Equivalents         Nov. 30  Nov. 30
________________________________________________           1996     1995
                                                        _________   _________
Cash flows from operating activities:                             
  Net income (loss)                                    $ (331,634)    (43,638)
  Adjustments to reconcile net income (loss) to
   net cash provided by operating activities:                        
     Depreciation and amortization                        163,678       8,733
     Gain on settlement of accounts payables               (4,738)          -
     Changes in assets and liabilities:                                  
       Receivables                                        492,905      33,430
       Inventories                                        (12,266)     14,489
       Prepaid expenses and other assets                    9,075       8,250
       Accounts payable                                    43,558     (23,635)
       Accrued payroll and commissions                    (25,970)     19,161
       Customer deposits                                  (88,644)     88,060
       Warranty reserves                                   (6,155)     (4,525)
       Accrued expenses                                   (17,100)    (48,917)
                                                        _________   _________
Net cash provided by operating activities                 222,709      51,408
                                                        _________   _________
Cash used in investing activities - additions to                  
 property, plant, and equipment                           (46,150)     (2,414)
                                                        _________   _________
Cash flows from financing activities:                              
  Net proceeds from (payments on) short-term 
   notes payable                                           (5,626)    (21,584)
  Principal payments on capital lease obligation          (11,160)     (7,086)
  Principal payments on long-term debt obligation          (6,239)     32,217
                                                        _________   _________
Net cash used in financing activities                     (23,025)      3,547
                                                        _________   _________
                                                                   
Increase in cash and cash equivalents                  $  153,533      52,541
Cash and cash equivalents, beginning of period            381,746      46,124
                                                        _________   _________
Cash and cash equivalents, end of period               $  535,279      98,665
                                                        =========   =========
Supplemental Disclosure of Cash Flow Information
________________________________________________
Cash paid during the period for interest                 $6,764    1,201
                                      
<PAGE>

                     BSD MEDICAL CORPORATION
      Notes to Condensed Consolidated Financial Statements

Note 1.  Basis of Presentation

    The   Condensed   Consolidated  Balance   Sheet   as   of   November   30,
1996,   and   the   Condensed  Consolidated  Statements  of   Operations   and
the    Condensed   Consolidated   Statements   of   Cash    Flow    for    the
quarters   ended   November   30,   1996,  and   November   30,   1995,   have
been   prepared   by   the  Company  without  audit.   In   the   opinion   of
management,    all   adjustments   to   the   books   and   accounts    (which
include    only   normal   recurring   adjustments)   necessary   to   present
fairly   the   financial   position,  results  of  operations,   and   changes
in   financial   position   of  the  Company  as   of   November   30,   1996,
have been made.

    Certain   information   and   footnote   disclosures   normally   included
in    financial    statements   prepared   in   accordance   with    generally
accepted    accounting   principles   have   been   condensed   or    omitted.
The   results  of  operations  for  the  period  ended  November   30,   1996,
are   not   necessarily  indicative  of  the  results  to  be   expected   for
the full year.

Note 2. Net Income (Loss) Per Common Share

    Net   loss   per  common  share  for  the  quarters  ended  November   30,
1996,   and   November   30,  1995,  are  based  on   the   weighted   average
number of shares outstanding during the respective periods.

Note 3. Federal Income Taxes

   No  provision  has  been made for income tax  expense  in  the
November   30,   1996,  financial  statements  because   of   the
utilization of operating loss carry forwards.


ITEM  2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

   Total assets decreased from $2,027,981 at August 31, 1996,  to
$1,727,311  at  November  30, 1996, a decrease  of  $300,670,  or
14.83%,   due  to  the  following  factors.   Operating  expenses
increased  because  of  an increase in overhead,  purchases,  and
personnel required to build, ship, and support new product  lines
(specifically  to  complete  the  Company's  current  backlog  of
unfilled orders of $1,225,141) and to support the efforts on  the
Small Business Innovation Research (SBIR) grant project funded by
the  National Cancer Insitutute (NCI).  Receivables  at  November
30,  1996,  decreased due to receipt of $500,000, included  as  a
receivable at August 31, 1996, which was offset by an increase in
cash  at  November 30, 1996.  Cash was increased by $153,533,  an
increase  of  40.22%, primarily caused by funds received  from  a
patent  license agreement, and current liabilities were decreased
(see below).

   Trade  accounts receivable increased $7,096, a slight increase
of  5.45%,  caused  by  periodic  business  fluctuations.   Total
inventories increased by $12,267, a slight increase of 2.31%, due
to periodic business fluctuations.

   Total current liabilities decreased by $122,075, a decrease of
20.05%.   The  decrease  was primarily  caused  by  decreases  in
customer  deposits, accrued payroll and commissions, and  accrued
expenses.

  The Company has historically expended more cash in the course of
its business than it has generated from operations and has had  to
rely  primarily  upon cash provided by private placements  of  its
equity securities to meet cash requirements.  However, BSD has not
had  an  outside  capital infusion since 1989.   Even  though  the
market  for BSD's cancer hyperthermia equipment has been  severely
adversely impacted as a result of factors discussed in the  fiscal
1996   10-KSB, the   Company  anticipates  a  change   to   stable
profitability  in  the  future (see Part II,  Item  6,  Management
Discussion  and  Current Status of Financial Condition,  1996  10-
KSB).

   The Company's current backlog of unfilled customer orders as of
November 30, 1996, was $1,225,141.  A $335,000 deposit has already
been  collected by the Company for this backlog.  The Company also
has  long  term  receivables for field service  contracts,  as  of
November 30, 1996, of $106,820.


Fluctuations in Operating Results

    Due   to  risks  associated  with  international  operations,
budgeting  considerations of the Company's customers, the  nature
of  the  medical capital equipment market, the inability  of  the
Company to predict the timing of various approvals required  from
the Food and Drug Administration and other governmental agencies,
the  relatively  large  per unit sales prices  of  the  Company's
products,  the  typical fluctuations in the  mix  of  orders  for
different  systems and system configurations,  the  limited  unit
sales  volumes, the Company's limited cash resources, changes  in
Medicare    and   other   third-party   reimbursement   policies,
competition, and other factors, the Company's sales and operating
results  historically have varied (and will  likely  continue  to
vary)  greatly  on  a quarter-to-quarter and year-to-year  basis.
For  these  and  other reasons, the results of operations  for  a
particular fiscal period may not be indicative of results  to  be
expected for any other period.

Results of Operations:

Three Months ended November 30, 1996

   Net  Sales  for  the  three months ended  November  30,  1996,
decreased by $38,638, a decrease of 34.59% as compared  with  the
three  months  ended November 30, 1995, due to  typical  periodic
fluctuations  in  sales (see Fluctuations  in  Operating  Results
above).

   Gross  profit  decreased from $10,190  in  the  quarter  ended
November  30,  1995, to a loss of $20,514 in  the  quarter  ended
November 30, 1996, as a result of an increase in production costs
required   to   build,  ship,  and  support  new  product   lines
(specifically  to  complete  the  Company's  current  backlog  of
unfilled orders of $1,225,141).

   Selling,  General  and  Administrative Expenses  increased  by
$224,559,   an  increase  of  203.77%,  as  compared   with   the
corresponding  three months in the previous year.   The  increase
was  primarily  caused  by  the  vesting  of  options  issued  to
employees  and non-employees to purchase shares of the  Company's
common  stock  (which have been recorded as deferred compensation
and amortized over the vesting period of the options), as well as
some increase in operating expenses.

  Research and Development Expenses increased by $16,109, an
increase of 19.43%.  The increase was caused by higher personnel
costs required to support the efforts on the Research and
Development SBIR grant project funded by NCI and the
aforementioned vesting of options issued to employees to purchase
shares of the Company's common stock.

   Total Operating Expenses increased by $232,734, an increase of
78.99%,  as compared with the corresponding three months  in  the
previous fiscal year.  This increase was primarily caused by  the
vesting of options issued to employees to purchase shares of  the
Company's  common  stock  and  the  aforementioned  increase   in
production costs.

   The  Operating  Loss for the three months ended  November  30,
1996,  increased by $260,414, an increase of 346.16%, as compared
with  the corresponding three months in the previous fiscal year.
This  increase was primarily caused by the aforementioned options
issued  to  employees to purchase shares of the Company's  common
stock  as  well  as  an  increase  in  overhead,  purchases,  and
personnel required to build, ship, and support new product  lines
(specifically  to  complete  the  Company's  current  backlog  of
unfilled orders of $1,225,141).

   Interest Expense in the three months ended November 30,  1996,
was  $6,764, as compared with the $1,201 of Interest  Expense  in
the  three  months  ended November 30, 1995.   The  increase  was
caused by typical periodic business fluctuations.

   The  Net Loss of $331,634 for the quarter ending November  30,
1996, was an increase of $287,996, as compared with the net  loss
of  $43,638 for the quarter ending November 30, 1995, an increase
of  659.97%.   The  primary  reason for  this  increase  was  the
aforementioned vesting of options issued to employees to purchase
shares   of   the  Company's  common  stock  as   well   as   the
aforementioned increases in production costs.


PART II - OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

   In  order to provide a new financial structure for growth, BSD
has  retained Ambient Capital Group, Inc., to identify,  provide,
and  evaluate  suitable financing arrangements for  the  Company.
Ambient  has  also  been retained to obtain a  private  round  of
financing  which  will allow BSD to accelerate product  approvals
from  the FDA and increase marketing efforts.  The agreement with
Ambient,  dated  November  26,  1996,  was  for  12  months,   is
cancelable after 6 months, and included the issuance of  warrants
for BSD common stock to Ambient Capital.

ITEM  6.  EXHIBITS  AND REPORTS ON FORM 8-K

(a)  Exhibits

  The following exhibits are filed as part of this report:

Exhibit                           Description
Number
_______________________________________________________________

 10   Terms  of Engagement between BSD Medical Corporation  and
      Ambient Capital dated November 26, 1996.
      
 27   Financial Data Schedule.


b) Reports on Form 8-K -- During the quarter, no reports on  Form
   8-K were filed by the Company.



<PAGE>

SIGNATURE


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


                              BSD MEDICAL CORPORATION



Date: February 27, 1997     by: /s/  Paul F. Turner
                                Paul F. Turner
                                Chairman of the Board, Acting President,
                                and Senior Vice President of Research