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 May 31, 1998
                                
                 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 July 10, 1998
 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                           May 31,           Aug. 31,
                  ------                            1998               1997
Current assets:                                  ----------        ----------
  Cash and cash equivalents                    $  3,130,845       $    43,681
  Receivables                                       525,242           406,874
  Inventories                                       595,185           542,226
  Prepaid Expenses                                    5,125            20,500
  Deposits                                            7,968             6,850
                                                 ----------        ----------
    Total current assets                          4,264,365         1,020,131
                                                 ----------        ----------

Property and equipment, net                          56,759           280,396
Long-term trade receivables                          77,080            68,480
                                                 ----------        ----------
                                               $  4,398,204       $ 1,369,007
                                                 ----------        ----------

   Liabilities and Stockholders' Equity                                   
   ------------------------------------
Current liabilities:                                                      
  Current portion of long-term debt                   7,299           251,723
  Current portion of deferred revenue                28,585            82,850
  Accounts payable                                  151,783           323,918
  Accrued expenses                                  179,676           207,913
                                                 ----------        ----------
    Total current liabilities                       367,343           866,404
                                                 ----------        ----------

Long-term debt                                       64,549            89,697
Deferred revenue                                    370,808           104,733
                                                 ----------        ----------
                                                    435,357           194,430
                                                 ----------        ----------
    Total liabilities                               802,700         1,060,834
                                                 ----------        ----------

Stockholders' equity:                                                         
  Common stock, $.01 par value; authorized                            
   20,000,000 shares; issued and outstanding        161,770           161,770
   16,176,980 shares
  Additional paid-in capital                     20,413,575        20,413,575
  Accumulated deficit                           (16,649,238)      (19,784,689)
  Deferred compensation                            (311,366)         (463,246)
  Common stock in treasury 243,928 shares, at       (19,237)          (19,237)
   cost                                          ----------        ----------
                                                                    
    Net stockholders' equity                      3,595,504           308,173
                                                 ----------        ----------
                                               $  4,398,204       $ 1,369,007
                                                 ==========        ==========
<PAGE>

                           BSD MEDICAL CORPORATION
                                      
               Condensed Consolidated Statements of Operations
                                 (Unaudited)
                Periods ended May 31, 1998, and May 31, 1997



                                        Three Months            Nine Months
                                           Ended:                  Ended:
                                     May 31,     May 31,     May 31,    May 31,
                                      1998        1997        1998       1997
                                    --------    --------    --------   --------
Product sales                      $ 763,300      34,690  $1,524,155    265,790
Grant and license revenue                  -      70,947     133,173    355,127
                                    --------    --------    --------   --------
    Total revenues                   763,300     105,636   1,657,328    620,917
                                    --------    --------    --------   --------
Costs and expenses:                                                 
  Cost of product sales              269,293      75,464     579,114    266,848
  Research and development           110,728     167,282     254,951    345,443
  Selling, general, and              186,642     369,407     781,686    926,647
   administrative
                                    --------    --------    --------   --------
    Total costs and expenses         566,663     612,152   1,615,752  1,538,938
                                    --------    --------    --------   --------
    Operating income (loss)          196,637    (506,516>     41,576   (918,021>
                                                                     
Other income (expense):                                              
  Interest income                      3,549       1,402       7,536     10,511
  Settlement of litigation         2,950,000           -   2,950,000          -
  Interest expense                    (1,203)     (4,830)     (7,446)   (18,070>
  Other, net                         102,238        (642)    143,785     10,062
                                    --------    --------    --------   --------
    Total other income (expense)   3,054,583      (4,070)  3,093,875      2,502
                                    --------    --------    --------   --------
    Net income (loss)            $ 3,251,220    (510,586>  3,135,451   (915,519>
                                    ========    ========    ========   ========

Primary net income (loss) per                                              
 common and common equivalent 
 share                           $       .20        (.03) $      .19       (.05)
                                    ========    ========    ========   ========
Fully diluted net income (loss) 
 per common and common 
 equivalent share                $       .19           -  $      .18          -
                                    ========    ========    ========   ========
Weighted average number of shares                                    
 outstanding                       
   Primary                        16,177,000  16,177,000  16,177,000 16,177,000
                                  ==========  ==========  ========== ==========
   Fully diluted                  17,087,000           -  17,287,000          -
                                  ==========  ==========  ========== ==========


See accompanying notes to financial statements.
<PAGE>

                           BSD MEDICAL CORPORATION
                                      
               Condensed Consolidated Statements of Cash Flows
                                 (Unaudited)
              Nine Months ended May 31, 1998, and May 31, 1997
                                      
                                      
Increase (Decrease) in Cash and Cash Equivalents          May 31,      May 31,
                                                           1998         1997
                                                        ----------   ----------
Cash flows from operating activities:                              
  Net income (loss)                                    $ 3,135,451     (915,519>
                                                         
Adjustments to reconcile net income (loss) to net cash               
 provided by operating activities:                                  
  Depreciation and amortization                             14,150      339,226
  Gain on settlement of accounts payables                   (7,103)      (8,742)
  Deferred compensation                                    151,880            -
  Issuance of treasury stock as bonus                            -          630
  Deferred gain on sale of asset                          (276,293>           -
  Recognized gain on sale of asset                         (49,191)           -
  (Increase) decrease in:                                              
    Receivables                                           (126,968>     574,077
    Inventories                                            (52,959>     (39,591)
    Prepaid expenses and deposits                           14,257       17,375
  Decrease (Increase) in:                                             
    Accounts payable                                      (165,032>     117,040
    Accrued expenses                                       (28,237>    (196,942>
    Deferred Income                                        240,049          676
                                                        ----------   ----------
      Net cash provided by (used in) 
       operating activities                              2,850,004     (111,769)
                                                        ----------   ----------
                                                                     
Cash flows from investing activities:                               
  Purchase of property and equipment                        (5,286)     (52,474)
  Proceeds from sale of fixed asset                        446,545            -
                                                        ----------   ----------
                                                           441,259      (52,474)
Cash flows from financing activities:                                  
  Net proceeds from (payments on) short-term 
   notes payable                                          (170,500)     (17,250)
  Principal payments on capital lease obligation           (12,659)     (34,268)
  Principal payments on long-term debt obligation          (20,940)     (19,144)
                                                        ----------   ----------
      Net cash used in financing activities               (204,099)     (70,662)
                                                        ----------   ----------

Increase in cash and cash equivalents                  $ 3,087,164     (234,905)
Cash and cash equivalents, beginning of period              43,681      381,746
                                                        ----------   ----------
Cash and cash equivalents, end of period               $ 3,130,845      146,841
                                                        ==========   ==========

Supplemental Disclosure of Cash Flow Information
------------------------------------------------
  Cash paid for interest during period                 $     1,203       18,070
                                                                   
                                      
<PAGE>

                     BSD MEDICAL CORPORATION
      Notes to Condensed Consolidated Financial Statements

Note 1. Basis of Presentation

    The   Condensed   Consolidated  Balance  Sheet  as  of   May   31,   1998,
and   the   Condensed   Consolidated  Statements   of   Operations   for   the
three    months   and   nine   months   ended   May   31,   1998,   and    the
Condensed    Consolidated   Statements   of   Cash   Flow   for    the    nine
months   ended   May  31,  1998,  and  May  31,  1997,  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 May 31, 1998, 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  May  31,   1998,   are
not   necessarily   indicative  of  the  results  to  be  expected   for   the
full year.

Note 2.  Net Income (Loss) Per Common Share

    Net   Income  (Loss)  per  common  share  for  the  quarters   ended   May
31,   1998,   and   May   31,  1997,  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  May
31,  1998, financial statements because of the reduction  in  the
valuation allowance for deferred taxes.

Note 4.  Lease Agreement

   On  December 5, 1997, the Company signed a new lease agreement
for  the  Company's facilities with a new owner.  The  new  owner
paid  $700,000  to BSD for the Company's option to  purchase  the
building.   As part of the agreement, the Company will lease  the
building  from the new landlord for an annual rental  expense  of
$78,396.  The Company also has an option to purchase the building
after  18  months for $775,000.  This transaction resulted  in  a
deferred gain of $325,513.  As of May 31, 1998, $49,721  of  this
gain  has  been  recognized, leaving a deferred gain  balance  of
$276,293.


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

Liquidity and Capital Resources

   Total assets increased from $1,369,007 at August 31, 1997,  to
$4,398,204 at May 31, 1998, an increase of $3,029,197, or 221.27%
due  to  an  increase in cash.  Cash increased by  $3,087,164  an
increase  of 7,067.52 % primarily due to settlement of litigation
with Urologix, Inc., (see Part II, Item I).

    Receivables  increased  $118,368,  an  increase  of   29.09%,
primarily  due  to  an  increase  in  sales.   Total  inventories
increased by $52,959, an increase of 9.77% due to normal periodic
fluctuations.

   Total current liabilities decreased by $499,061, a decrease of
57.60%.  The decrease was primarily caused by payment in full  of
notes  payable,  and  reductions in  accounts  payable,  deferred
income, and accrued expenses.

   The  Company  has  long  term receivables  for  field  service
contracts, as of May 31, 1998, of $77,080.

  Fluctuations in Operating Results

   The  Company's  sales and operating results historically  have
varied (and will likely continue to vary) greatly on a quarter-to-
quarter  and  a  year to year basis due to risks associated  with
international   operations;  budgeting  considerations   of   the
Company's customers; the nature of the medical capital  equipment
market;  the  ability  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.   For
these  and  other  reasons,  the  results  of  operations  for  a
particular fiscal period may not be indicative of results for any
other period.

Results of Operations:

Nine Months ended May 31, 1998

   Product Sales increased from $265,790 in the nine months ended
May  31,  1997,  to $1,524,155 in the nine months ended  May  31,
1998, an increase of $1,258,365, or 473.44% due to orders for the
Company's  new product line, the BSD-2000/3D/MR, and orders  from
TherMatrx,  Inc.  for  products.   (The  first  BSD  2000/3D  was
installed  in  August 1997.  In May 1998, BSD  installed  the  MR
portion  of this system at the first site and began compatibility
testing between the treatment and imaging systems.  As of May 31,
1998,  BSD had received total orders of $1,631,978 for  sales  of
this new product line.)

   Gross  profit on product sales increased from a loss of $1,058
in the nine months ended May 31, 1997, to a profit of $945,041 in
the nine months ended May 31, 1998, as a result of an increase in
product sales.

   Selling,  General and Administrative Expenses  decreased  from
$926,647  in  the nine months ended May 31, 1997, to $781,686  in
the  nine  months ended May 31, 1998, a decrease of $144,961,  or
15.64%.   The  decrease  was primarily caused  by  a  significant
decrease in deferred compensation (due to the vesting of a  large
number  of  stock options), and a decrease in legal  expense,  as
compared to the same period last year.

   Research and Development Expenses decreased from $345,443  for
the  nine  months  ended May 31, 1997, to $254,951  in  the  nine
months  ended May 31, 1998, a decrease of $90,492, or 26.20%  due
to  a  reduction in costs required for the BSD-2000/3D/MR product
line development.

   Total Operating Expenses increased by $76,814, an increase  of
4.99%,  primarily caused by increased cost of sales  due  to  the
aforementioned increase in product sales.

   The Operating Income increased from a loss of $918,021 in  the
nine  months  ended May 31, 1997, to a profit of $41,576  in  the
nine months ended May 31, 1998.  This increase was caused by  the
aforementioned increase in product sales and decrease in Selling,
General and Administrative expenses.

   Interest  Expense in the nine months ended May 31,  1997,  was
$18,070, as compared with the $7,446 of Interest Expense  in  the
nine  months  ended  May 31, 1998.  The decrease  was  caused  by
typical periodic business fluctuations.

   The  Net  Income for the nine months ending May 31, 1998,  was
$3,135,451, as compared with a Net Loss of $915,519 for the  nine
months  ending  May  31,  1997.  The  primary  reasons  for  this
increase  were the aforementioned increases in product  sales  as
well as receipt of proceeds from settlement of litigation.

Three Months ended May 31, 1998

   Product Sales increased from $34,690 in the three months ended
May  31,  1997,  to $763,300 for the three months ended  May  31,
1998,  an increase of $728,610, or 2,100.35%.  This increase  was
due  to increased orders for the Company's new product line,  the
BSD-20003D/MR System and orders from TherMatrx for products.

  Gross profit was $494,007 in the quarter ended May 31, 1998, as
compared to a loss of $40,774 in the quarter ended May 31,  1997,
as a result of the aforementioned increase in sales.

   Selling,  General  and  Administrative Expenses  decreased  by
$182,765,   a   decrease  of  49.48%,  as   compared   with   the
corresponding  three months in the previous year.   The  decrease
was primarily caused by a decrease in legal expense.

   Research  and  Development Expenses decreased  by  $56,554,  a
decrease of 33.81% due to a reduction in costs required  for  the
BSD-2000/3D/MR product line development.

   Total  Operating Expenses decreased by $45,489, a decrease  of
7.43%,  as  compared with the corresponding three months  in  the
previous fiscal year.  This decrease was primarily caused by  the
aforementioned  decreases in Selling, General and  Administrative
expenses and Research and Development expenses.

   Operating Income for the three months ended May 31, 1998,  was
$196,637, as compared with the Operating Loss of $506,516 for the
corresponding period in the previous fiscal year.  This  increase
was  primarily caused by the aforementioned increase  in  product
sales   combined   with   decreases  in  Selling,   General   and
Administrative expenses and Research and Development expenses.

   Interest  Expense in the three months ended May 31, 1997,  was
$4,830,  as compared with the $1,203 of Interest Expense  in  the
three  months  ended May 31, 1998.  The decrease  was  caused  by
typical business fluctuations.

   The  Net  Income  for  the quarter ended  May  31,  1998,  was
$3,251,220,  as  compared with the Net Loss of $510,586  for  the
quarter  ending  May  31,  1997.  The  primary  reason  for  this
increase   was  the  aforementioned  settlement  of   litigation,
decreases in operating expenses, and higher product sales.


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

   On  May 26, 1998, Urologix, Inc., BSD Medical Corporation, and
TherMatrx,  Inc. jointly announced that they had entered  into  a
Settlement   Agreement  resolving  their  current  litigation   -
Urologix, Inc. v. BSD Medical Corporation, et al., Case No. 4-96-
647 (see Form 8K filed June 4, 1998).

ITEM  6. EXHIBITS  AND REPORTS ON FORM 8-K

(a)  Exhibits

  The following exhibit is filed as part of this report:

Exhibit                           Description
Number
 27                    Financial Data Schedule.

b) Reports  on Form 8-K - The Company filed a report on Form  8-K
   on  June  4, 1998, which reported a joint settlement agreement
   between   Urologix,   Inc.,   BSD  Medical   Corporation   and
   TherMatrx, Inc.




<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:  July 10, 1998            /s/  Paul F. Turner
                                --------------------------------
                                Paul F. Turner
                                Chairman of the Board, Acting President,
                                 and  Senior  Vice  President  of Research