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 January 31, 1998.
  
  [ ]  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: 0-16787
  
  
                       INTERNATIONAL YOGURT COMPANY
          (Exact name of registrant as specified in its charter)
  
  
            Oregon                                         91-0989395     
    
  (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                       Identification Number)
  
  
  5858 N.E. 87th Avenue 
    Portland, Oregon                                          97220
  (Address of Principal                                     (Zip Code)
     Executive Office)
  
                              (503) 256-3754  
           (Registrant's telephone number, including area code.)
  
  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
       
  The number of shares outstanding of the registrant's common stock, as of
the latest practicable date is:
  
                       Class:  Common stock outstanding at 
                     January 31, 1998:    2,251,793    shares
  
  
  
  
  
  
  
  

                         INTERNATIONAL YOGURT COMPANY

                                   CONTENTS
  
  
           Page
PART I     FINANCIAL INFORMATION:
  
   Item 1.  Financial Statements                                 3 - 7

      Balance Sheet as of January 31, 1998,                      3
      (unaudited) and October 31, 1997

      Statements of Operations for the                           4
      Three Months  ended January 31, 1998 and 1997
      (all unaudited)

      Statements of Cash Flows for the                           5
      Three Months ended January 31, 1998 and 1997
      (all unaudited)

      Notes to Financial Statements                              6-7

   Item 2.  Management's Discussion and Analysis of              8-10
            Financial Condition and Results of
            Operations


PART II     OTHER INFORMATION 

   Item 1.  Legal Proceedings                                    11

   Item 2.  Changes in Securities                                11

   Item 3.  Defaults upon Senior Securities                      11

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

   Item 5.  Other Information                                    11

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

SIGNATURES                                                       12

<PAGE>
 PART 1.   FINANCIAL INFORMATION
 Item 1.   Financial Statements
 
                            INTERNATIONAL YOGURT COMPANY
                                    BALANCE SHEETS
                                                                
                                                  January 31, October 31,
                                                      1998        1997     
                 ASSETS                                 (unaudited)
 Current assets
      Cash and cash equivalents                  $   378,138  $   414,194
      Accounts receivable, net                       604,162      828,860
      Inventories                                  1,933,289    1,808,201
      Equipment held for resale, net                  23,083       23,083
      Other current assets                           319,001      306,269
   Total current assets                            3,257,673    3,380,607
 
 Fixed assets, net                                 1,944,787    1,918,956
 Deferred tax asset                                  284,000      284,000
 Intangible and other long-term assets, net          231,099      227,030
                                                 $ 5,717,559  $ 5,810,593
 
   LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities
      Note payable to bank                        $ 1,321,000 $  1,337,000
      Current portion of long-term debt                45,097       38,329
      Current obligations under capital lease          36,862       36,862
      Accounts payable                                842,988      928,942
      Other accrued liabilities                        60,470       60,567
   Total current liabilities                        2,306,417    2,401,700
 Long-term debt payable to related parties
     and others, less current portion                 185,378      159,549
 Long term obligations under
     capital lease, less current portion               55,022       63,426
          Total liabilities                         2,546,817    2,624,675
 Shareholders' equity
     Common stock, nor par value,          
     30,000,000 shares authorized;
     2,273,793 shares issued                        4,750,100    4,710,850
  Accumulated deficit                              (1,532,162)  (1,477,736)
  Less common stock in treasury, 22,000 shares        (47,196)     (47,196)
      Net shareholders' equity                      3,170,742    3,185,918
 
                                                  $ 5,717,559 $  5,810,593
 
 The accompanying notes are an integral part of the financial statements.
 










                       INTERNATIONAL YOGURT COMPANY
                         STATEMENTS OF OPERATIONS
                               (unaudited)
                                      
          For the three months ended January  31, 1998 and 1997
 
 
                                                      1998          1997 
   
 
Sales                                              $1,613,935     $1,508,113
                                              
 Cost of sales                                       1,118,913     1,100,560
 
      Gross profit                                     495,022       407,553
 
 Selling and marketing expenses                        271,557       231,971
 
 General and administrative expenses                   252,796       243,226
 
      Loss from operations                             (29,331)      (67,644)
 
 Other income (expenses):
      Interest income                                    4,473         4,198
      Interest expense                                 (37,598)      (35,200)
      Other, net                                         8,028           -    

         Loss before income taxes                      (54,428)      (98,646)
 
 Provision for income taxes                                -             -   
         Net loss                                    $ (54,428)     $(98,646)
 
 Basic net loss per share                            $  (.02)       $ (.04)
 
 Diluted net loss per share                          $  (.02)       $ (.04)
 
 
  The accompanying notes are an integral part of the financial statements.



















                         INTERNATIONAL YOGURT COMPANY
                           STATEMENTS OF CASH FLOWS
                                       
             For the three months ended January 31, 1998 and 1997
                                  (Unaudited)
                                        
                                                         1998         1997    
 
 Increase (decrease) in cash and cash equivalents
 Cash flows from operating activities:
 Net loss                                          $ (54,428)    $ (98,646)
 Adjustments to reconcile net 
 loss to net cash provided by
 operating activities:
        Depreciation                                  64,208        74,209
        Gain on sale of equipment                     (8,028)          -      
 
        Change in assets and liabilities
        Accounts receivable                          224,698       143,728
        Inventories                                 (125,088)      157,079
        Other assets                                 (16,801)      (73,937)
        Accounts payable                             (85,954)     (477,248)
        Other accrued liabilities                    (    95)      (39,965)
 
        Net cash (used) provided by                   (1,488)     (314,780)
             operating activities

 
 Cash flows from investing activities:
    Expenditures for plant and equipment             (82,011)      (33,538)
        Net cash used in investing activities        (82,011)      (33,538)
 
 Cash flows from financing activities:
        Net increase (decrease) in line of credit    (16,000)      251,000
    Proceeds from bank equipment financing            42,179        15,000
    Proceeds from issuance of stock                   39,250           -    
    Principal payments on long term debt
       and capital leases                            (17,986)      (29,111)
        Net cash provided by (used in)                47,443       236,889
             financing activities
        Net decrease in cash and equivalents         (36,056)     (111,429)
 Cash and equivalents, beginning of period           414,194       511,787
 Cash and equivalents, end of period               $ 378,138      $400,358
 
 
  The accompanying notes are an integral part of the financial statement.











                         INTERNATIONAL YOGURT COMPANY
                         NOTES TO FINANCIAL STATEMENTS
                                        
 
 Note A - Basis of Presentation
 
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01
of Regulation S-X.  Accordingly, they do not include all of the information 
and footnotes required by generally accepted accounting principles for
complete financial statements.  In the opinion of management, all
adjustments, which consist of normal recurring accruals, considered
necessary for a fair presentation have been included.  Operating results for
the quarter ended January 31, 1998 are not necessarily indicative of the
results that may be expected for the year ending October 31, 1998.  For
further information, refer to the financial statements, and footnotes
thereto, included in the Corporation's annual report on Form 10-K for the
year ended October 31, 1997.


Note B - Inventories

Inventories consist of                      January 31,     October  31,
                                               1998         1997        
  
Finished goods                               $1,563,839       $1,451,729
Raw materials                                   186,963          171,893
Packaging materials and supplies                182,487          184,579
                                             $1,933,289       $1,808,201


Note C - Earnings per share

Earnings per share are calculated as follows for the three months ended
January 31, 1998 and 1997:
                                  Three Months Ended January 31, 1998
                                 Net Loss      Shares      Per-Share
                                (Numerator)  (Denominator)  Amount

  Basic (loss) per share:
       Net loss                    ($54,428)   2,241,499     ($.02)

  Effect of dilutive securities        -           -             -  
  Diluted (loss) per share         ($54,428)   2,241,499     ($.02)

Options to purchase 131,000 shares at prices from $1.71 to $2.31 were
excluded from the diluted loss per share calculation, even though the
average price for the quarter was higher than the exercise prices, because
the effect would have been antidilutive.






NOTES TO FINANCIAL STATEMENTS - Continued


                                     Three Months Ended January 31, 1997
                                      Net Loss      Shares      Per-Share
                                    (Numerator)  (Denominator)    Amount

  Basic (loss) per share:
       Net loss                       ($98,646)     2,233,793      ($.04)

  Effect of dilutive securities            -             -             -  
  Diluted (loss) per share            ($98,646)     2,233,793      ($.04)

Options to purchase 128,000 shares at prices from $1.54 to $2.12 were
excluded from the diluted loss per share calculation, even though the average
price for the quarter was higher than the exercise prices, because the effect
would have been antidilutive.










































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

  Results of Operations. 

The following discussion includes forward-looking statements within the
meaning of the "safe-harbor" provisions of the Private Securities Litigation
Reform Act of 1995.  Such forward-looking statements are based on the beliefs
of the Company's management and on assumptions made by and information
currently available to management.  All statements other than statements of
historical fact, regarding the Company's financial position, business
strategy and plans and objectives of management for future operations of the
Company are forward-looking statements.  When used herein, the words
"anticipate," "believe," "estimate," "expect," and "intend" and words or
phrases of similar meaning, as they relate to the Company or management, are
intended to identify forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. Forward-looking statements are subject to certain risks
and uncertainties, which could cause actual results to differ materially from
those indicated by the forward-looking statements.  These risks and
uncertainties include the Company's ability to maintain or expand its
distribution abilities, including the risk of disruptions in the
transportation system and relationships with brokers and distributors. 
Further, actual results may be affected by the Company's ability to compete
on price and other factors with other manufacturers and distributors of
frozen dessert products; customer acceptance of new products; general trends
in the food business as they relate to customer preferences for the Company's
products; and the Company's ability to obtain raw materials and produce
finished products in a timely manner, as well as its ability to develop and
maintain its co-packing relationships and strategic alliances.  In addition,
there are risks inherent in dependence on key customers, the loss of which
could materially adversely affect the Company's operations.  The reader is
advised that this list of risks is not exhaustive and should not be construed
as any prediction by the Company as to which risks would cause actual results
to differ materially from those indicated by the forward-looking statements.

The Company's sales for the first fiscal quarter ending January 31, 1998 were
$1,613,935, up 7.1% compared to the corresponding quarter in 1997.  The
increased sales during 1998 were primarily the result of increases in
warehouse clubs, food service and international business.      

The Company historically incurs a loss during the winter months.  This year's
first quarter loss of $54,428 represented a 45% improvement compared with
$98,646 in 1997.  The improved results in the first quarter reflect a
continuation of the favorable upward trends for the Company.  

The driving forces behind the favorable trends continue to be the outstanding
quality of the Company's products, new product development capabilities, the
business relationships with its brokers and distributors, and the Company's
manufacturing and distribution systems.  The strategy implemented late last
year to have the Company's own regional sales managers has enabled the
Company to better support its brokers and distributors, and pave the way for
introducing new products.  This has contributed to the turnaround in food
service sales trends and the improved results for the quarter.   


The Company has recently developed a line of fruit smoothies which are
expected to contribute to future sales.  In March, the Company's fruit
smoothies will be introduced throughout the Coffee People chain.  Coffee
People and YOCREAM  personnel collaborated on unique recipes for this
healthy and zestful beverage that is being used by consumers as a breakfast
or lunch substitute.

YOCREAM  line of fruit smoothies, which are adaptable to both blender and
dispenser operation, are also being test marketed by other national food
operators.

The Company's gross profit margin increased to 30.7% during the quarter,
compared to 27.1% in the corresponding quarter in 1997.  The improved results
are consistent with recent trends.

Selling and  marketing expenses in the first quarter increased from 15.4% to
16.9% of sales.  The increase in such expenses in 1998 primarily related to
payroll and travel costs related to the addition of regional sales managers,
and increased sales activity.   

General and administrative expenses decreased, as a percentage of sales,
from 16.2% to 15.7% of sales for the quarter.   General and administrative
expenses have remained relatively fixed due to management's efforts to
control such expenses.    
 
The loss from operations decreased from approximately 4.5% to 1.9% of sales. 
An operating loss for the first quarter has been normal due to the seasonal
nature of the Company's business, and is not an indicator of the expected
results for the year.      

  Liquidity and Capital Resources.

The company has financed its operations and expansion from bank loans,
operating leases, capital leases, capital investment by its founders, private
and public securities offerings and internally generated funds.  

As of January 31, 1998, the Company's total borrowings under its bank line of
credit were $1,321,000, against a collateral base of  approximately
$1,329,600.  At January 31, 1998 the Company had cash funds available
aggregating $378,138 which were available to reduce bank borrowings.  The
current level of borrowings is consistent with the season of the year and
compares with $1,190,000 at January 31, 1997.  Interest is at 1% over the
bank's basic commercial lending rate. Total borrowings under this line are
payable upon demand and limited to 65% of eligible accounts receivable and
30% of eligible inventory, plus loan insurance provided by a governmental
agency, up to an aggregate maximum of $1,700,000.  The bank is currently in
the process of renewing the line which matures May 1, 1998.  The new line is
expected to provide for an increase in borrowing limits and provide a
$300,000 credit facility for equipment financing.

Accounts receivable at January 31, 1998 were $604,162, which reflects a 27.1%
decrease compared to October 31, 1997.  The decrease is primarily
attributable to the seasonal decline in sales compared to October 1997.  The
current level compares with $604,955 at January 31, 1997.

Inventory increased to $1,933,289 at January 31, 1998.  This 7% increase is
primarily due to a higher level of finished goods inventory.    
The Company believes its existing assets, bank lines, and revenues from
operations will be sufficient to fund the Company's operations for at least
the next twelve months.  The Company expects its bank line to be renewed or
replaced at maturity. In the event that the Company's bank lines were not
renewed or replaced, the Company would need to curtail operations
substantially, seek additional capital, or both. <PAGE>
PART II.  OTHER INFORMATION

Item 1.   Legal  Proceedings

     The Company is not involved in any material pending legal proceedings,
     other than non-material legal proceedings occurring in the ordinary 
     course of business.



Item 2.   Changes in Securities

      None.



Item 3.   Defaults Upon Senior Securities

      None.



Item 4.   Submission of Matters to Vote of Security Holders

      None.  



Item 5.   Other Information

      None


Item 6.  Exhibits and Reports on Form 8-K

      A.   Exhibits
      
             Exhibit 27 - Financial Data Schedule is filed herewith

      B.   Reports on Form 8-K - not applicable                 
      
<PAGE>
                                  SIGNATURES


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

  Registrant:

                      INTERNATIONAL YOGURT COMPANY



Date:    March 17, 1998              By     /s/  John N. Hanna                
        
                                           John N. Hanna, Chairman of the
                                           Board, and Chief Executive Officer


Date:     March 17, 1998               By:    /s/ W. Douglas Caudell          
                                             W. Douglas Caudell, Chief        
                                             Financial Officer