PAGE 1
FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 1996

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

         For transition period from                   to
                                    -----------------    ------------------

                        Commission File Number  1-1543
                                               --------

                     DAYTON AND MICHIGAN RAILROAD COMPANY
- ---------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)

          Ohio                                              31-6005583
- ---------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                         Identification No.)

500 Water Street, Jacksonville, FL.                               32202
- ---------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code      (904) 359-3100
                                                   ------------------------

No Change

(Former name, former address and former fiscal year, if changed since last
report.)

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 April 26, 1996: 48,066.18 shares

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H (1) (a) AND
(b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

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DAYTON AND MICHIGAN RAILROAD COMPANY

                                     INDEX




PART I.  FINANCIAL INFORMATION                             Page Number

Item 1.  Financial Statements.

1.  Statement of Earnings -
      Quarters Ended March 29, 1996 and March 31, 1995           3

2.  Statement of Cash Flows -
      Quarters Ended March 29, 1996 and March 31, 1995           4

3.  Statement of Financial Position -
      At March 29, 1996 and December 31, 1995                    5


Notes to Financial Statements                                    6


PART II.   OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                        7

Signature                                                        7

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DAYTON AND MICHIGAN RAILROAD COMPANY
STATEMENT OF EARNINGS

                                                    (Unaudited)
                                                   Quarters Ended
                                               ----------------------
                                               March 29,     March 31,
                                                 1996          1995
                                               --------      --------

Income
  Rental Income                                $28,851       $21,935
  Interest Income                               17,635        15,835
  Gain on Disposition of Properties             17,783           ---
                                               -------       -------
Earnings before Income Taxes                    64,269        37,770

Income Tax Expense                              16,662         9,792
                                               -------       -------
Net Earnings                                    47,607        27,978

Dividends on Preferred Stock                     8,068         8,068
                                               -------       -------
Earnings Available to Common Shareholders      $39,539       $19,910
                                               =======       =======

Average Common Shares Outstanding                9,420         9,420
                                               =======       =======

Earnings Per Common Share                      $  4.20       $  2.11
                                               =======       =======

Dividends Per Common Share                     $  .875       $  .875
                                               =======       =======

See accompanying Notes to Financial Statements.

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PAGE 4

DAYTON AND MICHIGAN RAILROAD COMPANY
STATEMENT OF CASH FLOWS

                                                    (Unaudited)
                                                   Quarters Ended
                                               ----------------------
                                               March 29,     March 31,
                                                 1996          1995
                                               --------      --------

OPERATING ACTIVITIES

  Net Earnings                                 $ 47,607     $ 27,978
  Gain on Disposition of Properties             (17,783)         ---
                                               --------     --------
    Cash Provided by Operating Activities        29,824       27,978
                                               --------     --------
INVESTING ACTIVITIES

  Proceeds from Property Dispositions            17,783          ---
  Advances to CSX Transportation, Inc.          (31,296)     (11,667)
                                               --------     --------
    Cash Used by Investing Activities           (13,513)     (11,667)
                                               --------     --------
FINANCING ACTIVITIES

  Cash Dividends Paid - Preferred                (8,068)      (8,068)
                      - Common                   (8,243)      (8,243)
                                               --------     --------
    Cash Used by Financing Activities           (16,311)     (16,311)
                                               --------     --------

  Change in Cash and Cash Equivalents               ---          ---

CASH AND CASH EQUIVALENTS

  Cash and Cash Equivalents at
    Beginning of Period                             ---          ---
                                               --------     --------
  Cash and Cash Equivalents at
    End of Period                              $    ---     $    ---
                                               ========     ========

See accompanying Notes to Financial Statements.

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DAYTON AND MICHIGAN RAILROAD COMPANY
STATEMENT OF FINANCIAL POSITION

                                        (Unaudited)
                                         March 29,       December 31,
                                           1996              1995
                                        ----------       ------------

ASSETS

  Land and Improvements                 $   679,682       $   681,006

  Advances to CSXT                        1,201,837         1,169,216
                                        -----------       -----------
     Total Assets                       $ 1,881,519       $ 1,850,222
                                        ===========       ===========

SHAREHOLDERS' EQUITY

  Preferred Stock, Non Voting Par
    Value $50; Authorized 74,000 Shares;
    Issued and Outstanding
    24,225 Shares                       $ 1,211,250       $ 1,211,250
  Common Stock, Par Value $50;
    Authorized 60,000 Shares; Issued
    and Outstanding 48,066.18 Shares      2,403,309         2,403,309
  Retained Deficit                       (1,733,040)       (1,764,337)
                                        -----------       -----------
     Total Shareholders' Equity         $ 1,881,519       $ 1,850,222
                                        ===========       ===========

See accompanying Notes to Financial Statements.

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PAGE 6
DAYTON AND MICHIGAN RAILROAD COMPANY

NOTES TO FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

In the opinion of management, the accompanying financial statements contain all adjustments necessary to present fairly the company's financial position as of March 29, 1996 and December 31, 1995, and the results of its operations and its cash flows for the quarters ended March 29, 1996 and March 31, 1995, such adjustments being of a normal recurring nature.

While management believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the company's latest Form 10-K.

NOTE 2. LEASE AGREEMENT

The company has no operations. Its property is leased in perpetuity to CSX Transportation, Inc. (CSXT) and is maintained and operated by, for and in the name of CSXT. As rent, CSXT pays the company's income taxes, administrative expenses, and guaranteed dividends on the company's 3-1/2% common and 8% preferred stock on shares held by other than CSXT. Interest income is earned on amounts due from CSXT based on returns earned by CSX Corporation, parent company of CSXT, on its short-term investment portfolio.

NOTE 3. EARNINGS PER SHARE

Earnings per common share are computed after giving effect to preferred stock dividend requirements and are based on the weighted average number of common shares outstanding, excluding shares held by CSXT.

NOTE 4. CASH AND CASH EQUIVALENTS

All of the company's cash has been advanced to CSXT for investment purposes. Future cash requirements of the company will be funded by CSXT.

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DAYTON AND MICHIGAN RAILROAD COMPANY

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(b) Reports on Form 8-K

1. None.

SIGNATURE

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.

DAYTON AND MICHIGAN RAILROAD COMPANY
(Registrant)

                                      /s/ JAMES L. ROSS
                                      ------------------------------------
                                      James L. Ross
                                      (Principal Accounting Officer)

Dated:  May 13, 1996

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ARTICLE 5
EPS is computed after dividends on preferred stock of $8,068. Earnings available to common shareholders is $39,539.
MULTIPLIER: 1


PERIOD TYPE 3 MOS
FISCAL YEAR END DEC 27 1996
PERIOD END MAR 29 1996
CASH 0
SECURITIES 0
RECEIVABLES 0
ALLOWANCES 0
INVENTORY 0
CURRENT ASSETS 0
PP&E 679,682
DEPRECIATION 0
TOTAL ASSETS 1,881,519
CURRENT LIABILITIES 0
BONDS 0
COMMON 2,403,309
PREFERRED MANDATORY 0
PREFERRED 1,211,250
OTHER SE (1,733,040)
TOTAL LIABILITY AND EQUITY 1,881,519
SALES 0
TOTAL REVENUES 64,269
CGS 0
TOTAL COSTS 0
OTHER EXPENSES 0
LOSS PROVISION 0
INTEREST EXPENSE 0
INCOME PRETAX 64,269
INCOME TAX 16,662
INCOME CONTINUING 47,607
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET INCOME 47,607
EPS PRIMARY 4.20
EPS DILUTED 0