UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.   20549

                                     FORM 10-Q


  [   X  ]        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended:                            December 31, 1995

                                        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:                                              0-16749

                                   CERBCO, Inc.
              (Exact name of registrant as specified in its charter)

                       Delaware                              54-1448835
           (State or other jurisdiction of                (I.R.S. Employer
            incorporation or organization)               Identification No.)

        3421 Pennsy Drive, Landover, Maryland                  20785
       (Address of principal executive offices)              (Zip Code)


           Registrant's telephone and fax numbers, including area code:
            301-773-1784 (tel)
            301-322-3041 (fax)
            301-773-4560 (24-hour public information FaxVault System)

  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
            -----------                       -----------


  As of February 2, 1996, the following number of shares of each of the issuer's
  classes of common stock were outstanding:

                  Common Stock                     1,157,001
                  Class B Common Stock               310,955
                    Total                          1,467,956<PAGE>





                               PART I - FINANCIAL INFORMATION

  Item 1.  Financial Statements

  <TABLE>
                                        CERBCO, Inc.
                       CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                                        (unaudited)
  <CAPTION>
                                    For the three months          For the six months
                                        ended Dec. 31                ended Dec. 31
                                       1995           1994           1995           1994

  Sales
  <S>                           <C>            <C>            <C>            <C>        
    Sales of products            $8,851,746     $8,066,037    $17,387,540    $14,826,200
    Sales of services
      and supplies                2,758,998      2,358,970      5,241,211      4,457,465
                                 ----------     ----------     ----------     ----------
  TOTAL SALES                    11,610,744     10,425,007     22,628,751     19,283,665
                                 ----------     ----------     ----------     ----------
  Costs and Expenses:
    Cost of products sold         6,251,842      5,763,513     12,149,834     10,592,870
    Cost of services and
      supplies                    1,368,056      1,156,545      2,608,722      2,156,687
    Selling, general and
      administrative
      expenses                    2,092,665      2,098,577      4,200,022      3,914,408
      Total Costs and            ----------     ----------     ----------     ----------
        Expenses                  9,712,563      9,018,635     18,958,578     16,663,965
                                 ----------     ----------     ----------     ----------
  Operating Profit                1,898,181      1,406,372      3,670,173      2,619,700
  Investment Income                  50,193         51,901        120,786         95,632
  Equity in Earnings of
    Unconsolidated Affiliate        170,571        239,732        356,522        413,377
  Interest Expense                  (2,207)        (8,770)        (6,632)       (20,925)
  Other Income - net                 15,878         19,440         90,560         35,320
  Earnings Before Incomes        ----------     ----------     ----------     ----------
    Taxes and Non-Owned
    Interests                     2,132,616      1,708,675      4,231,409      3,143,104
  Provision for Income
    Taxes                           907,000        798,000      1,742,000      1,447,000
  Earnings Before                ----------     ----------     ----------     ----------
    Non-Owned Interests           1,225,616        910,675      2,489,409      1,696,104
  Non-Owned Interests in
    Earnings of
      Consolidated
      Subsidiaries                  693,439        580,456      1,366,415      1,025,224
  Earnings from Continuing       ----------     ----------     ----------     ----------
    Operations                      532,177        330,219      1,122,994        670,880
  Discontinued Operations:
    Gain on disposal of
    discontinued operations               0        147,701              0        147,701
                                 ----------     ----------     ----------     ----------
  NET EARNINGS                     $532,177       $477,920     $1,122,994       $818,581
                                 ==========     ==========     ==========     ==========
  Net Earnings per Share
    of Common Stock:
    Earnings from continuing
      operations                       $.37           $.23           $.77           $.46
    Estimated gain on
      disposal                            0            .10              0            .10
                                     ------         ------         ------         ------
      Net Earnings per Share           $.37           $.33           $.77           $.56
                                     ======         ======         ======         ======

  See notes to consolidated financial statements.
  </TABLE>
  <PAGE>
  <TABLE>
                                        CERBCO, Inc.

                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                        (unaudited)

  <CAPTION>
                                                                 As of
                                                     Dec. 31, 1995     June 30, 1995
  ASSETS

  Current Assets:
    <S>                                                <C>               <C>        
    Cash and cash equivalents                           $4,413,461        $5,197,549
    Temporary investments                                1,474,300         1,760,950
    Accounts receivable                                  8,858,654         6,386,343
    Inventories                                          2,992,007         2,832,003
    Prepaid and refundable taxes                            87,963            53,568
    Deferred income taxes                                   82,000            82,000
    Prepaid expenses and other                             399,868           325,013
                                                       -----------       -----------
      Total Current Assets                              18,308,253        16,637,426
                                                       -----------       -----------
  Property, Plant and Equipment - at cost
    less accumulated depreciation of
    $9,650,228 at December 31, 1995 and
    $9,094,562 at June 30, 1995                          9,657,688         9,556,139
                                                       -----------       -----------
  Other Assets:
    Excess of acquisition cost over value
      of net assets acquired - net of
      accumulated amortization of $1,535,574
      at December 31, 1995 and $1,455,921 at
      June 30, 1995                                      4,808,315         4,887,968
    Investment in unconsolidated affiliate               1,838,248         1,481,726
    Cash surrender value of life insurance                 440,767           254,060
    Deferred income taxes                                   27,000            27,000
    Deposits and other                                     123,286           135,761
                                                       -----------       -----------
      Total Other Assets                                 7,237,616         6,786,515
                                                       -----------       -----------
        Total Assets                                   $35,203,557       $32,980,080
                                                       ===========       ===========

  See notes to condensed consolidated financial statements.
  </TABLE>
  <PAGE>
  <TABLE>

                                        CERBCO, Inc.

                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                        (unaudited)
  <CAPTION>
                                                                  As of
                                                     Dec. 31, 1995     June 30, 1995
  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current Liabilities:
    <S>                                                <C>               <C>        
    Accounts payable and accrued
      liabilities                                       $3,798,527        $3,952,543
    Deferred revenue                                       504,649           479,858
    Current portion of long-term debt                       14,883            19,015
    Current portion of capital lease
      obligations                                           23,334            34,156
                                                       -----------       -----------
      Total Current Liabilities                          4,341,393         4,485,572
                                                       -----------       -----------
  Long-Term Liabilities:
    Long-term debt (less current portion
      shown above)                                               0             5,104
    Capital lease obligations (less current
      portion shown above)                                  29,794            37,129
    Deferred income taxes                                  900,000           985,000
    Accrued supplemental executive
      retirement plan liability                            135,858            99,672
                                                       -----------       -----------
      Total Long-term Liabilities                        1,065,652         1,126,905
                                                       -----------       -----------
        Total Liabilities                                5,407,045         5,612,477
                                                       -----------       -----------
  Commitments and Contingencies

  Non-Owned Interests in Consolidated
    Subsidiaries                                        13,653,759        12,367,344
                                                       -----------       -----------
  Stockholders' Equity:
    Common stock, $.10 par value
      Authorized:  3,500,000 shares
      Issued and outstanding:
        1,157,001 shares (at Dec. 31, 1995)                115,700
      Issued and outstanding:
        1,150,989 shares (at June 30, 1995)                                  115,099
    Class B Common stock (convertible),
      $.10 par value
      Authorized:  700,000 shares
      Issued and outstanding:
        310,955 shares (at Dec. 31, 1995)                   31,096
      Issued and outstanding:
        310,967 shares (at June 30, 1995)                                     31,096
    Additional paid-in capital                           7,431,953         7,413,054
    Retained earnings                                    8,564,004         7,441,010
                                                       -----------       -----------
      Total Stockholders' Equity                        16,142,753        15,000,259
                                                       -----------       -----------
        Total Liabilities and
          Stockholders' Equity                         $35,203,557       $32,980,080
                                                       ===========       ===========

  See notes to condensed consolidated financial statements.
  </TABLE>

  <PAGE>
  <TABLE>
                                        CERBCO, Inc.

                      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (unaudited)
  <CAPTION>
                                                     For the six months ended Dec. 31
                                                            1995              1994

  Cash Flows from Operating Activities:
    <S>                                                <C>               <C>        
    Earnings from continuing operations                 $1,122,994          $670,880
    Gain on disposal                                             0           147,701
                                                       -----------       -----------
    Net earnings                                         1,122,994           818,581
    Adjustments to reconcile net earnings
      to net cash provided by (used in)
        operations:
      Depreciation and amortization                        744,496           659,534
      Amounts provided by non-owned
        interests                                        1,366,415         1,025,224
      Deferred income taxes                                (85,000)           47,000
      Equity in (earnings) loss of
        unconsolidated affiliate                          (356,522)         (413,377)
      Increase in other assets                            (182,232)         (110,162)
      Increase in long-term liabilities                     36,186            31,745
      Changes in operating assets and
        liabilities:
        (Increase) decrease in accounts
          receivable                                    (2,472,311)         (705,307)
        (Increase) decrease in inventories                (160,004)         (639,885)
        Increase (decrease) in other
          current assets                                  (109,250)            5,103
        Increase (decrease) in accounts
          payable and accrued expenses                      75,362             3,112
        Increase (decrease) in income
          taxes payable                                   (131,734)           89,989
        Increase (decrease) in deferred
          revenue                                           24,791            (3,191)
    Net Cash Provided by (Used in)                     -----------       -----------
      Operating Activities                                (126,809)          808,366
                                                       -----------       -----------
  Cash Flows from Investing Activities:
    Capital expenditures, net                             (758,392)         (613,544)
    Redemption (purchase) of temporary
      investments - net                                    286,650          (699,870)
                                                       -----------       -----------
    Net Cash Used in Investing Activities                 (471,742)       (1,313,414)
                                                       -----------       -----------
  Cash Flows from Financing Activities:
    Proceeds from revolving lines of credit,
      capital lease
      obligations and long-term borrowings                       0         2,150,000
    Principal payments on revolving lines
      of credit, capital lease
      obligations and long-term borrowings                 (27,393)       (2,734,575)
    Proceeds from exercise of stock options                 19,499            12,375
    Dividends paid                                        (177,643)         (148,036)
                                                       -----------       -----------
    Net Cash Used in Financing Activities                 (185,537)         (720,236)
                                                       -----------       -----------
  Net Decrease in Cash and Cash Equivalents               (784,088)       (1,225,284)
  Cash and Cash Equivalents at Beginning
    of Period                                            5,197,549         2,215,624
  Cash and Cash Equivalents at End of                  -----------       -----------
    Period                                              $4,413,461          $990,340
                                                       ===========       ===========
  Supplemental disclosure of cash flow
    information:
    Interest paid                                           $6,632           $20,925
    Income taxes paid                                   $2,002,377        $1,155,673


  See notes to condensed consolidated financial statements.
  </TABLE>

  <PAGE>

                                   CERBCO, Inc.

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (unaudited)

  1.    Financial Information

        The accompanying condensed consolidated financial statements include the
  accounts of CERBCO, Inc. ( CERBCO ); its majority-owned subsidiary, Capitol
  Copy Products, Inc. ( Capitol Copy ); and its majority-controlled subsidiary,
  Insituform East, Incorporated ( Insituform East ).  The Condensed Consolidated
  Balance Sheet as of December 31, 1995, the Condensed Consolidated Statements
  of Earnings for the three months and six months ended December 31, 1995 and
  1994, and the Condensed Consolidated Statements of Cash Flows for the six
  months ended December 31, 1995 and 1994 have been prepared by the Company
  without audit.  The Condensed Consolidated Balance Sheet as of June 30, 1995
  (unaudited) has been derived from the Company s June 30, 1995 audited
  financial statements.  In the opinion of management, all adjustments (which
  include only normal recurring adjustments) necessary to present fairly the
  financial position, results of operations and cash flows at December 31, 1995
  and for all periods presented have been made.

        These statements have been prepared in accordance with the instructions
  to Form 10-Q and therefore do not necessarily include all information and
  footnotes necessary to a presentation of the financial position, the results
  of operations and the cash flows in conformity with generally accepted
  accounting principles.  Certain information and footnote disclosures normally
  included in financial statements prepared in accordance with generally
  accepted accounting principles have been condensed or omitted.  It is
  suggested that these condensed financial statements be read in conjunction
  with the audited financial statements and notes thereto included in the CERBCO
  annual report on Form 10-K for the fiscal year ended June 30, 1995.  Operating
  results for interim periods are not necessarily indicative of operating
  results for an entire fiscal year.

  2.    Earnings Per Share

        Earnings per share data have been computed based upon the weighted
  average number of common shares outstanding and common share equivalents
  outstanding (when dilutive) during each period.  The following numbers of
  shares have been used in the computations:

                       For the three months              For the six months
                          ended Dec. 31                    ended Dec. 31
                       1995           1994              1995         1994

                     1,462,869      1,458,092         1,462,413    1,457,774
                     =========      =========         =========    =========

  3.    Accounts Receivable

  <TABLE>
        Accounts receivable consist of:
  <CAPTION>
                                                Dec. 31, 1995    June 30, 1995
  <S>                                              <C>              <C>       
  Due from municipal and commercial
    customers                                      $8,729,944       $6,195,486
  Miscellaneous                                       183,710          245,857
                                                   ----------       ----------
                                                    8,913,654        6,441,343
  Less: Allowance for doubtful accounts               (55,000)         (55,000)
                                                   ----------       ----------
                                                   $8,858,654       $6,386,343
                                                   ==========       ==========
  </TABLE>

  4.    Inventories

  <TABLE>
        Inventories consist of:
  <CAPTION>
                                                Dec. 31, 1995    June 30, 1995

  <S>                                              <C>              <C>       
  Pipeline rehabilitation materials                  $910,027       $1,111,202
  Copier and facsimile equipment                    1,582,524        1,274,977
  Copier and facsimile supplies                       208,723          172,908
  Copier and facsimile parts                          290,733          272,916
                                                   ----------       ----------
                                                   $2,992,007       $2,832,003
                                                   ==========       ==========
  </TABLE>

  5.    Discontinued Operations

        On March 31, 1991, the Company adopted a formal plan to discontinue the
  operations and dispose of the assets and liabilities of its defense contract
  services segment conducted through its wholly-owned subsidiary, CERBERONICS,
  Inc. ("CERBERONICS").  On June 30, 1991, CERBERONICS ceased all operations. 
  From that date, the Company processed accounts receivable and other open items
  pertaining to CERBERONICS's final contracts.  During the quarter ended
  December 31, 1994, the Company obtained payment of $147,701 pertaining to
  several former contracts.  These payments are shown as a gain on disposal of
  discontinued operations in the accompanying Condensed Consolidated Statements
  of Earnings.  There are no material open items remaining that pertain to other
  former contracts of CERBERONICS.

  6.    Equity in Insituform East

        At December 31, 1995, CERBCO beneficially held 1,100,000 shares of
  Insituform East Common Stock and 296,141 shares of convertible Insituform East
  Class B Common Stock representing approximately 27.1% of the Common Stock,
  99.5% of the Class B Common Stock, 32.0% of the total equity and 57.7% of the
  total voting power of all outstanding classes of Insituform East common
  stock.   Holders of Class B Common Stock, voting separately as a class, have
  the right  to elect the remaining members of the Board of Directors after
  election of not less than 25% of such members by holders of shares of Common
  Stock, voting separately as a class.

        From time to time, Insituform East issues additional shares of stock as
  a result of stock dividends and exercised stock options.  Changes in capital
  structure resulting from such additional stock issues decrease CERBCO s equity
  ownership.  No such changes in capital structure occurred during the six
  months ended December 31, 1995.  If all the options outstanding at December
  31, 1995 were exercised, the resulting percentages of CERBCO s equity
  ownership and total voting power would be 29.0% and 54.3%, respectively.

        From time to time, Insituform East purchases shares of its common stock
  for treasury.  Changes in capital structure resulting from such stock
  purchases increase CERBCO s equity ownership.  Insituform East did not
  purchase any shares during the six months ended December 31, 1995.

  7.    Equity in Capitol Copy

        At December 31, 1995, CERBCO beneficially held 800 shares, and Capitol
  Copy s president held 400 shares, of Capitol Copy Class B Stock, representing
  66 2/3% and 33 1/3%, respectively, of the one outstanding class of Capitol
  Copy stock.

  8.    Accounts Payable and Accrued Liabilities
  <TABLE>
        Accounts payable and accrued liabilities consist of:
  <CAPTION>
                                               Dec. 31, 1995     June 30, 1995
  <S>                                             <C>               <C>       
  Accounts payable                                $1,412,955        $1,366,338
  Accrued compensation and related
    expenses                                       1,914,340         1,885,596
  Dividends payable                                   80,000           177,643
  Income taxes payable                               391,232           522,966
                                                  ----------        ----------
                                                  $3,798,527        $3,952,543
                                                  ==========        ==========
  </TABLE>

  9.    Contingencies

        In March 1990, the controlling stockholders of the Company, George Wm.
  Erikson and Robert W. Erikson (together, the "Eriksons"), executed a letter of
  intent and subsequently executed four amendments thereto (collectively
  referred to herein as the "Letter of Intent") with Insituform Technologies,
  Inc. ("ITI") to effect a sale of their controlling interest in the Company to
  ITI for $6,000,000 (the "Proposed Transaction").  The Proposed Transaction, if
  consummated, would have had the effect of making ITI the controlling
  stockholder of the Company, and, indirectly, of each of the Company's three
  direct subsidiaries at the time, Insituform East, Capitol Copy, and
  CERBERONICS.  In September 1990, the Eriksons informed the Company that the 
  Letter of Intent had expired without consummation of any transaction, that it
  would not be further extended, that negotiations had ceased, and that the
  Eriksons had no further intention at the time of pursuing the proposed sale of
  their controlling interest in the Company to ITI.

        In August 1990, a complaint against the Company and the Eriksons was
  filed in the Delaware Court of Chancery (the "Delaware Complaint") by two
  stockholders of the Company, on their own behalf and derivatively on behalf of
  the Company, which sought (i) damages against the individual defendants for
  alleged breach of fiduciary duties in an amount not less than $6,000,000,
  together with interest thereon from March 12, 1990; (ii) to permanently enjoin
  the Eriksons from completing any transaction with ITI similar in substance to
  the Proposed Transaction; (iii) a declaration of the invalidity of the 1982
  authorization for and issuance of the Company's Class B Common Stock, and,
  therefore, of the entitlement of holders of Class B Common Stock to elect any
  members of the Company's Board; (iv) a declaration of the invalidity of the
  1990 election of the Company's directors and the issuance of new proxy
  materials that fully and fairly disclose all facts which plaintiffs claim are
  material to the election of such directors; (v) an award to the plaintiffs of
  their costs of bringing the action, including reasonable attorneys' fees; and
  (vi) an award to plaintiffs of such further relief as the Court of Chancery
  deemed appropriate.  In addition, the Delaware Complaint asserted a claim
  against the individual defendants alleging that the Company had forgone a
  corporate opportunity by the continued failure to pursue a transaction with
  ITI.

        All but one of the plaintiffs' claims subsequently were dismissed.  The
  claim remaining in the litigation was plaintiffs' allegation that the Proposed
  Transaction was an opportunity belonging to the Company and that the Eriksons
  breached their duty to the Company by precluding the Company from taking
  advantage of that opportunity so that the Eriksons might have a chance to do
  so.  Trial in this matter was held beginning February 21, 1995.

        Following post-trial briefing and argument, Chancellor Allen issued an
  opinion on August 9, 1995, in which he ruled in favor of the Eriksons.  The
  court determined that, while the Eriksons failed in certain limited respects
  to meet the standards of loyalty required of them under Delaware corporate
  law, that "deviation from proper corporate practice" neither caused injury to
  CERBCO nor resulted in any substantial gain to the Eriksons.  The Court also
  found that the Eriksons met their burden of showing that their conduct was
  "wholly fair to the corporation."  With the decision, all of the plaintiffs'
  claims have been resolved in favor of CERBCO and/or the Eriksons.

        On August 25, 1995, the Court of Chancery issued its Memorandum and
  Order on Final Judgment and a corresponding Final Order and Judgment, which
  latter document formally entered judgment in favor of the Eriksons and denied
  in toto the plaintiffs' request for legal fees and expenses totaling
  $1,513,499.  The Court concluded that the litigation conferred no substantial
  benefit on CERBCO, so that it would be inappropriate to require CERBCO and its
  stockholders to share the costs that plaintiffs incurred.

        Plaintiffs filed a Notice of Appeal with the Delaware Supreme Court on
  August 30, 1995.  Briefing was completed on December 6, 1995.    Oral argument
  was held on January 18, 1996.  The parties are now awaiting the Delaware
  Supreme Court's decision.

        In January 1993, a separate lawsuit against the partners in the law firm
  of Rogers & Wells and the Company, arising out of the subject matter of the
  Delaware litigation, was filed in the District of Columbia (the "D.C.
  Complaint").  The plaintiffs are the same two stockholders, and a former
  director of the Company, and have alleged that Rogers & Wells breached its
  duty of loyalty and care to the Company by representing allegedly conflicting
  interests of the Eriksons in the Proposed Transaction with ITI.  The
  plaintiffs also claim that Rogers & Wells committed malpractice by allegedly
  making misrepresentations to the Company's Board and allegedly failing to
  properly inform the Company's Board.  The plaintiffs claim that the conduct of
  Rogers & Wells caused the Company to lose an opportunity to sell its control
  of Insituform East to ITI, caused the Company to incur substantial expense,
  and unjustly enriched Rogers & Wells.  The D.C. Complaint seeks to recover
  from Rogers & Wells (i) damages in an amount equal to all fees paid to Rogers
  & Wells, (ii) damages in an amount not less than $6,000,000 for the loss of
  the opportunity for the Company to sell its control of Insituform East to ITI,
  and (iii) punitive damages.  Although the D.C. Complaint states that it was
  filed on behalf of the Company, management does not believe that Rogers &
  Wells should be sued on any of the claims set forth in the complaint.

        Motions to dismiss this case by the Company and Rogers & Wells were
  denied, but a stay in the proceedings was granted until after the Delaware
  trial.  After the Court of Chancery's August 9, 1995 opinion was rendered, the
  parties to the Superior Court action filed status reports.  On November 13,
  1995, plaintiffs agreed to a stay in the Superior Court action pending the
  outcome of the appeal to the Delaware Supreme Court.  The Superior Court will
  set a date for status reports some time in the future.

        Management believes there are valid defenses to all of plaintiffs'
  allegations in each of the above actions and that ultimate resolution of these
  matters will not have a material effect on the financial statements. 
  Accordingly, no provision for these contingencies has been reflected therein.

        On April 18, 1995, Insituform Mid-America, Inc. ("IMA") acquired the
  pipeline rehabilitation business of ENVIROQ Corporation ("Enviroq"), including
  Enviroq's 42.5% interest in MIDSOUTH Partners which is held through Enviroq's
  special purpose subsidiary, E-Midsouth, Inc.   Under the MIDSOUTH Partners'
  Partnership Agreement, it is an event of default if, among other things, a
  change in the control of any partner occurs without the prior written consent
  of all the other partners.  The IMA acquisition of Enviroq, which resulted in
  a change in the control of Enviroq and E-Midsouth, Inc., was made without the
  prior written consent of the Partnership's two other partners, special purpose
  subsidiaries of Insituform East and Insituform Technologies, Inc. ("ITI").

        The Partnership Agreement grants non-defaulting partners the right to
  require compliance with the agreement, enjoin any breach, seek dissolution of
  the partnership, replace Management Committee appointees of the defaulting
  partner, or exercise any combination of these rights and other remedies.  As
  previously reported, Insituform East has filed with the American Arbitration
  Association a demand for arbitration alleging a breach of the Partnership
  Agreement by E-Midsouth, Inc. and intends to seek one or more of the foregoing
  remedies, including replacement of a Management Committee appointee of E-
  Midsouth, Inc.

        Separately, on April 4, 1995, ITI affiliated companies initiated action
  against Enviroq and IMA in Tennessee Chancery Court regarding ITI's rights as
  licensor to withhold consent to the assignment of Insituform and NuPipe
  license agreements.  Simultaneously with the initiation of its suit, ITI
  entered into agreements with IMA and Enviroq to postpone, through April 30,
  1995 (subsequently extended), the Tennessee court proceedings as well as any
  other assertion by ITI of its rights under Insituform and NuPipe license
  agreements and its rights under the MIDSOUTH Partners' Partnership Agreement. 
  Concurrently, representatives of ITI and IMA were engaged in discussions and
  negotiations regarding a potential merger of these two companies.

        On May 24, 1995, ITI and IMA jointly announced that they had entered
  into a definitive agreement providing for the combination of ITI and IMA
  which, when completed on October 25, 1995, resulted in IMA becoming a wholly-
  owned subsidiary of ITI.  The ITI acquisition of IMA, which resulted in a
  second change in the control of Enviroq and E-Midsouth, Inc., was made without
  the prior written consent of one of the Partnership's partners, the special
  purpose subsidiary of Insituform East.

        On November 17, 1995 Insituform East sought to amend its demand for
  arbitration alleging, among other things, a breach of the Partnership
  Agreement by ITI's special purpose subsidiary, Insituform California, Inc.
  ("ICI") in connection with ICI's wrongfully seeking to deny Insituform East's
  special purpose subsidiary the rights and remedies to which it is entitled as
  a non-defaulting partner under the Partnership Agreement.  On November 27,
  1995, the arbitrators granted Insituform East's request to amend and added ICI
  as a respondent party.  The evidentiary hearing is scheduled for March 4-6,
  1996.

        Although the Company cannot, at this time, predict the outcome of the
  matters described herein, any potential outcome that resulted in the loss by
  the Company of its ability to recognize its share of the results of operations
  of MIDSOUTH Partners could have a material adverse effect on the future
  earnings of the Company.  In this regard, ITI has informed Insituform East
  that should it achieve management control of MIDSOUTH Partners, ITI will
  promptly terminate the partnership and contemporaneously terminate the
  licenses to MIDSOUTH Partners.  The Company has asserted that ITI does not
  have the right to terminate the licenses to MIDSOUTH Partners under these
  circumstances.

        CERBCO is involved in other contingencies, none of which could, in the
  opinion of management, materially affect the Company's financial position or
  results of operations.

  10.   Segment Data and Reconciliation

        CERBCO s operations are classified into two principal industry
  segments:   pipeline rehabilitation and copier equipment products and
  services.  The following is a summary of pertinent industry segment
  information.  General corporate expenses include items which are of an
  overall holding company nature and are not allocated to the segments.

  <TABLE>
  <CAPTION>
  (in thousands)                            For the three          For the six
                                             months ended         months ended
                                               Dec. 31              Dec. 31
                                          1995       1994       1995       1994
  Sales to Unaffiliated Customers:
    <S>                                 <C>        <C>       <C>        <C>    
    Pipeline rehabilitation             $6,263     $5,324    $12,472    $10,219
    Copier equipment products
      and services                       5,348      5,101     10,157      9,065
                                       -------    -------    -------    -------
      Total Sales                      $11,611    $10,425    $22,629    $19,284
                                       =======    =======    =======    =======
  Earnings Before Income Taxes:
    Pipeline rehabilitation               $864       $608     $1,665       $992
    Copier equipment products
      and services                       1,193      1,076      2,275      2,083
    Corporate holding company
      expenses - net                      (159)      (277)      (270)      (455)
                                       -------    -------    -------    -------
      Operating Profit                   1,898      1,407      3,670      2,620
    Equity in earnings of
      unconsolidated affiliate             170        239        356        413
    Other income                           106        112        291        211
    Other expenses                         (42)       (49)       (86)      (101)
                                       -------    -------    -------    -------
      Earnings Before Income
        Taxes                           $2,132     $1,709     $4,231     $3,143
  Net Earnings (Loss)                  =======    =======    =======    =======
    Contribution by Segment:
    Pipeline rehabilitation               $213       $174       $425       $293
    Copier equipment products
      and services                         479        414        925        797
    Corporate holding company             (160)      (258)      (227)      (419)
      Earnings from Continuing         -------    -------    -------    -------
        Operations                         532        330      1,123        671
    Discontinued operations                  0        148          0        148
                                       -------    -------    -------    -------
      Net Earnings                        $532       $478     $1,123       $819
                                       =======    =======    =======    =======
  </TABLE>

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

  Overview and Outlook

        The Company recognized consolidated earnings from continuing operations
  and net earnings of $532,177 ($.37 per share) for the second quarter of fiscal
  year 1996, as compared to consolidated earnings from continuing operations of
  $330,219 ($.23 per share) and net earnings of $477,920 ($.33 per share) for
  the second quarter of fiscal year 1995.  The Company recognized consolidated
  earnings from continuing operations and net earnings of $1,122,994 ($.77 per
  share) for the first six months of fiscal year 1996, as compared to
  consolidated earnings from continuing operations of $670,880 ($.46 per share)
  and net earnings of $818,581 ($.56 per share) for the first six months of
  fiscal year 1995.  Sales and earnings at the midpoint of the current year were
  each records for the Company.  The continued upsurge in comparable period
  results is attributable both to increases in the earnings contributions from
  the Company s two operating subsidiaries, each of which is in a separate
  industry segment, and to a material decrease in parent holding company
  expenses.

        Insituform East, the Company s pipeline rehabilitation segment,
  continued to experience improved results in the first six months of fiscal
  year 1996 from the combined impact of increased demand met with expanded
  production capabilities, sales awards obtained at normal margins, installation
  performance in line with cost estimates and continuing favorable operating
  results from MIDSOUTH Partners.  While there can be no assurances regarding
  future operating performance, based on the volume and mix of Insituform East's
  present and expected backlog of customer orders, the favorable results
  experienced for the previous fiscal year are presently anticipated for fiscal
  year 1996.  Insituform East has expanded its production capabilities during
  the current fiscal year to increase its Insituform process capacity and to
  further expand its ability to provide complimentary products and services to
  its trenchless rehabilitation customers.  Severe winter weather conditions
  significantly impeded January and early February 1996 operations, and
  additional severe weather could further affect installation performance during
  the remainder of the third quarter.  Accordingly, depressed operating results
  are presently expected for the three months ending March 31, 1996. 
  Nevertheless, the Company continues to anticipate favorable operating results
  for the full fiscal year ending June 30, 1996, in line with full year
  operating results realized for the previous fiscal year.

        Capitol Copy, the Company s copy machine products and services segment,
  continued to experience increased sales and earnings in the first six months
  of fiscal year 1996, as a result of continued increases in both its copier
  equipment sales, and service and supply activities.  While again there can be
  no assurances, the favorable operating results experienced by Capitol Copy
  during the last fiscal year are presently anticipated for fiscal year 1996. 
  In July 1995, Capitol Copy expanded its territory to include the contiguous
  Baltimore metropolitan area.  The Company has estimated it will take
  approximately four years to adequately develop the additional territory. 
  During this period, Capitol Copy presently anticipates lower margins and
  increased expenses approximately offset by increased total sales. 
  Accordingly, Capitol Copy's net earnings for the current year should not be
  significantly impacted by this development effort.

        CERBCO s current earnings remain impacted by legal fees and expenses
  related to the demands made of, and derivative litigation being continued
  against, the Company by two associated, minority stockholders in connection
  with the unconsummated private sale of a controlling interest in the Company
  abandoned in September 1990.  In August 1995, a Final Order and Judgment was
  rendered by the Court in the Delaware derivative litigation in favor of the
  defendants which has been appealed to the Delaware Supreme Court by
  plaintiffs.  In the first six months of fiscal year 1996, CERBCO experienced
  total unallocated corporate holding company expenses in the amount of
  approximately $270,000, of which approximately $97,000 were legal fees and
  expenses in connection with the derivative litigation.  From inception in 1990
  through December 31, 1995, such legal fees and expenses have totaled in excess
  of $2.0 million.  In addition, in August 1995, plaintiffs in the Delaware
  derivative litigation asserted a new claim, directly against the Company, for
  $1,513,499 for their legal fees and expenses in the unsuccessful Delaware
  suit, subsequently denied in the Court's Final Order and Judgment, but
  reasserted in plaintiffs' appeal.  The Company cannot, of course, predict the
  outcome of pending litigation, including appeals.  Any outcome from the appeal
  resulting in an award to plaintiffs of their counsel fees and expenses could
  have a material adverse effect on the earnings of the Company.  For additional
  information on the status of this litigation, see Part I, Item 1, "Notes to
  Condensed Consolidated Financial Statements (unaudited) - Note 9. 
  Contingencies."

        As discussed further in Part I, Item 1, "Notes to Condensed Consolidated
  Financial Statements (unaudited) - Note 9.  Contingencies," the Company filed
  a demand for arbitration in connection with the acquisition of control of a
  42.5% interest in MIDSOUTH Partners by Insituform Mid-America, Inc. on April
  18, 1995.  On November 27, 1995, the arbitrators granted the Company's request
  to amend this demand in connection with the October 25, 1995 acquisition of
  control of this 42.5% interest in MIDSOUTH Partners by Insituform
  Technologies, Inc. ("ITI") and related actions taken by Insituform California,
  Inc., ITI's special purpose subsidiary.  Although the Company cannot, at this
  time, predict the eventual outcome of these matters and their impact on the
  Company's interest in the Partnership, any potential outcome that resulted in
  the loss by the Company of its ability to recognize its share of the results
  of operations of MIDSOUTH Partners could have a material adverse effect on the
  future earnings of the Company.

  Results of Operations

  Second Quarter ended 12/31/95 Compared with Second Quarter ended 12/31/94

        Consolidated sales increased $1.2 million (11.4%) in the second quarter
  of fiscal year 1996 as compared to the second quarter of fiscal year 1995. 
  Insituform East's pipeline rehabilitation sales increased $0.9 million (17.6%)
  to $6.3 million, primarily due to expanded production capabilities and a
  strong workable backlog of customer orders in fiscal year 1996.  Sales of
  copier equipment products and services by Capitol Copy increased $0.2 million
  (4.8%) to $5.3 million.  Equipment sales decreased 5.5% due to increased
  competition in the marketplace.  Service and supply revenues increased 17.0%
  primarily as a result of a customer base that continues to expand.

        Consolidated operating profit increased $0.5 million (34.9%) in the
  second quarter of fiscal year 1996 as compared to the second quarter of fiscal
  year 1995.  Insituform East's cost of sales increased 19.3%, a slightly
  greater percentage increase than the increase in its sales.  This gave that
  subsidiary a gross profit margin of 29.7% of sales for the second quarter of
  fiscal year 1996, compared to a gross profit margin of 30.7% of sales for the
  second quarter of fiscal year 1995, as Insituform process sales in both
  quarters were primarily of normal margin work.  However, Insituform East's
  operating profit increased $0.3 million (42.1%) as a result of a 2.9% decrease
  in its selling, general and administrative expenses.  Capitol Copy's operating
  profit increased $0.1 million (11.0%), due to an increase in its overall gross
  profit margin from 36.7% to 40.0% in comparable periods as margins on sales of
  equipment returned to more normal levels.  Capitol Copy's selling, general and
  administrative expenses increased 17.8%, a greater percentage increase than
  its increase in sales primarily due to increased selling costs associated with
  incentive programs and its new Baltimore office, which partially offset its
  increased gross profit margin.  Sales revenues attributable to the new
  Baltimore territory for the second quarter of fiscal year 1996 were
  approximately $260,000, and exceeded total costs and expenses in that
  territory by approximately $6,000.  The parent company's operating loss
  decreased approximately $118,000 (-42.6%), primarily as a result of a decrease
  in unallocated corporate legal expenses.

        Insituform East's equity in the operating results of MIDSOUTH Partners
  decreased 28.9% from pretax earnings of $239,732 for the second quarter of
  fiscal year 1995 to pretax earnings of $170,571 for the second quarter of 1996
  primarily as a result of reduced comparable period sales and gross profit
  margins.  The Partnership's sales decreased 13.6% from $2.6 million to $2.2
  million for the comparable three month periods.  The Partnership's gross
  profit margin decreased from 32.7% of sales for the second quarter of fiscal
  year 1995 to 31.3% of sales for the second quarter of fiscal year 1996
  primarily as a result of the mix of work performed, to include increased
  manhole and lateral reconstruction work, collateral services generally
  performed at gross margins lower than those realized for Insituform process
  installations.

  Six Months ended 12/31/95 Compared with Six Months ended 12/31/94

        Consolidated sales increased $3.3 million (17.3%) in the first six
  months of fiscal year 1996 as compared to the first six months of fiscal year
  1995.  Insituform East's sales increased $2.3 million (22.0%) to $12.5
  million, primarily due to increased demand met with expanded production
  capabilities and a strong workable backlog.  Capitol Copy's sales increased
  $1.1 million (12.0%) to $10.2 million, as equipment sales increased 6.7% and
  service and supply revenues increased 17.6%.

        Consolidated operating profit increased $1.1 million (40.1%) in the
  first six months of fiscal year 1996 as compared to the first six months of
  fiscal year 1995.  Insituform East's cost of sales increased 18.4%, a smaller
  percentage increase than the increase in its sales and, as a result, its gross
  profit margin increased from 28.2% of sales to 30.3% of sales in comparable
  periods.  This increase in gross profit as a percentage of sales is due
  primarily to the mix of work performed.  During the first quarter of fiscal
  year 1995, Insituform East provided additional collateral services to
  customers at gross profit margins lower than margins normally realized for
  Insituform process installations.  Insituform East's selling, general and
  administrative expenses increased 12.1%, also a smaller percentage increase
  than the increase in its sales, resulting in a $0.7 million (67.8%) increase
  in its operating profit.  Because a substantial portion of Insituform East's
  costs are semi-fixed in nature, increases in period sales at normal margins
  typically leverage positive operating results significantly.  Capitol Copy's
  operating profit increased $0.2 million (9.2%).  Capitol Copy's cost of sales
  increased 12.2%, and as a result, its gross profit margin remained
  approximately level in comparable periods at 40.2% versus 40.3%.  Capitol
  Copy's selling, general and administrative expenses increased 15.4%.  Sales
  revenues attributable to the new Baltimore territory for the first six months
  of fiscal year 1996 were approximately $409,000, and total costs and expenses
  exceeded revenues in that territory by approximately $13,000.  The parent
  company's operating loss decreased approximately $185,000 (-40.7%), primarily
  as a result of a decrease in unallocated corporate legal expenses.

        Insituform East's equity in the earnings of MIDSOUTH Partners decreased
  13.7% from pretax earnings of $413,377 for the first six months of fiscal year
  1995 to pretax earnings of $356,522 for the first six months of fiscal year
  1996, primarily as the result of reduced gross profit margins associated with
  collateral services performed.  Although comparable period sales increased
  7.1% from $4.4 million to $4.7 million, the Partnership's gross profit margin
  decreased from 33.6% of sales for the first six months of fiscal year 1995 to
  29.8% of sales for the first six months of fiscal year 1996 primarily as a
  result of the mix of work.

  Liquidity and Capital Resources

        The Company s operating activities used $0.1 million in cash during the
  first six months of fiscal year 1996 as compared to providing $0.8 million in
  the first six months of fiscal year 1995.  The decrease in cash is primarily
  due to an increase in Insituform East's accounts receivable resulting from a
  temporary delay in billings and collections for several larger projects
  performed during the first six months of fiscal year 1996.

        Net cash in the amount of $0.5 million was used in investing activities
  in the first six months of fiscal year 1996 due to capital expenditures by
  Insituform East to expand its production capabilities offset by the purchase
  by the parent holding company of temporary investments.  Net cash in the
  amount of $1.3 million was used in investing activities in the first six
  months of fiscal year 1995 primarily due to the purchase by the parent holding
  company of temporary investments and capital expenditures by Insituform East.

        Net cash used in financing activities was approximately $0.2 million and
  $0.7 million in the first six months of fiscal years 1996 and 1995,
  respectively.  The primary use of such funds in the first six months of fiscal
  year 1996 was the payment of dividends by Insituform East.  The primary use of
  such funds in the first six months of fiscal year 1995 was paydowns on Capitol
  Copy s line of credit and the payment of dividends by Insituform East.

        CERBCO believes that its two principal operating subsidiaries,
  Insituform East and Capitol Copy, have existing open bank lines of credit or
  borrowing potential against unencumbered assets sufficient to meet the
  respective cash flow requirements of each operating company.  Insituform East
  has available as undrawn the amount of $3.0 million on its individual line of
  credit.  Capitol Copy and the parent holding company, CERBCO, do not have
  separate bank lines of credit, but have cash reserves in excess of $1.7
  million and $2.8 million, respectively, which are believed to be adequate to
  meet their respective cash flow requirements in the foreseeable future,
  including continuing legal fees and expenses of the parent in connection with
  the stockholder litigation now on appeal to the Delaware Supreme Court.  The
  Company cannot, of course, predict the outcome of pending litigation,
  including appeals.  Any outcome that resulted in an award to plaintiffs of
  their legal fees and expenses, however, could have a material adverse effect
  on the future liquidity of the Company.

                            PART II - OTHER INFORMATION

  Item 1.     Legal Proceedings

        The only material pending legal proceedings to which the Company is a
  party or any such legal proceedings contemplated of which the Company is aware
  are (a) a previously disclosed lawsuit in which judgment was rendered in favor
  of the Company but subsequently appealed to the Delaware Supreme Court by
  plaintiffs (the  Delaware Complaint ), and (b) a previously disclosed lawsuit
  pending in the Superior Court of the District of Columbia (the  D.C.
  Complaint ) [see Part I, Item 1,  Notes to Condensed Consolidated Financial
  Statements (unaudited) - Note 9.  Contingencies ].

  Item 2.     Changes in Securities

        Not applicable.

  Item 3.     Defaults upon Senior Securities

        Not applicable.

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

        Not applicable.

  Item 5.     Other Information

        Not applicable.

  Item 6.     Exhibits and Reports on Form 8-K

  (a)   Exhibits:

        27 - Financial Data Schedule
        99 - CERBCO, Inc. Consolidating Schedules: Statement of Earnings
  Information for the three months ended December 31, 1995; Statement of
  Earnings Information for the six months ended December 31, 1995; Balance Sheet
  Information and Consolidating Elimination Entries as of December 31, 1995.

  (b)   Reports on Form 8-K:

        No reports on Form 8-K were filed during the three months ended December
  31, 1995.

                                    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.

  Date:  February 13, 1996

                                         CERBCO, Inc.
                                         (Registrant)

                                         /s/ ROBERT W. ERIKSON
                                         Robert W. Erikson
                                         President


                                         (Principal Financial Officer)


                                         /s/ ROBERT F. HARTMAN
                                         Robert F. Hartman
                                         Vice President & Controller
                                         (Principal Accounting Officer)


  <PAGE>

                        Exhibits to CERBCO, Inc. Form 10-Q




            Exhibit 27.      CERBCO, Inc. Financial Data Schedule

            Exhibit 99.      CERBCO, Inc. Consolidating Schedules:
                             Statement of Earnings Information for the
                             Three Months Ended December 31, 1995;
                             Statement of Earnings Information for the
                             Six Months Ended December 31, 1995;
                             Balance Sheet Information; and
                             Consolidating Elimination Entries as of
                             December 31, 1995.<PAGE>