Mail Stop 7010

      April 4, 2006


Mr. Henry G. Schopfer, III
Chief Financial Officer
Peerless Mfg. Co.
2819 Walnut Hill Lane
Dallas, Texas 75229

	RE:	Form 10-K for the year ended June 30, 2005
		Form 10-Q for the quarter ended December 31, 2005
		File No. 0-5214

Dear Mr. Schopfer:

	We have reviewed your response letter dated March 30, 2006
and
have the following additional comments.  If you disagree with our
comment, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.


FORM 10-K FOR THE YEAR ENDED JUNE 30, 2005

General

1. Where a comment below requests additional disclosures or other
revisions to be made, please show us in your supplemental response
what the revisions will look like.  With the exception of the
comments below that specifically request an amendment, all other
revisions may be included in your future filings.


Item 7.  Management`s Discussion and Analysis

Results of Operations - Segments, page 15

2. We note your response to prior comment 4.  Given that the
corrections result in an approximately 11% decrease in your net
loss
for the year ended June 30, 2005 and a 15% decrease in net loss
for
the quarter ended December 31, 2004, it is unclear how you
determined
that the corrections were not material to past-presented financial
information, trends in earnings, or to the most current projected
results for the current fiscal year.  Please file an amendment to
your Form 10-K to revise your financial statements or explain to
us
in greater detail why these amounts are not quantitatively
material.
In addition, we do not understand why you did not record the
catch-up
adjustment in the quarter ended September 30, 2004, which would
have
been the beginning of your fiscal year, if you believed the
amounts
were immaterial.  Had you done this, it appears that the
significance
of the correction would be even greater in that quarter.  We
remind
you of the requirements of Item 4.02(a) of Form 8-K.  We also
remind
you that if you file your restated Form 10-K you should
appropriately
address the following:
* an explanatory paragraph in the reissued audit opinion,
* full compliance with APB 20, paragraphs 36 and 37,
* fully update all affected portions of the document, including
MD&A,
selected financial data, and quarterly financial data, and
* updated certifications.

Item 9A.  Controls and Procedures, page 54

3. We note your response to prior comment 6.  Your definition of
disclosure controls and procedures should include the entire
definition of disclosure controls and procedures per Rules 13a-
15(e)
and 15d-15(e) of the Exchange Act.  In addition to your proposed
disclosure, please also continue to state that your disclosure
controls and procedures were effective in ensuring that all
material
information required to be filed in the Form 10-K was made known
to
your Chief Executive Officer and Chief Financial Officer in a
timely
fashion.

*    *    *    *

	Please respond to these comments within 10 business days, or
tell us when you will provide us with a response.  Please provide
us
with a supplemental response letter that keys your responses to
our
comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review.  Please file your
supplemental response on EDGAR as a correspondence file.  Please
understand that we may have additional comments after reviewing
your
responses to our comments.

      If you have any questions regarding these comments, please
direct them to Nudrat Salik, Staff Accountant, at (202) 551-3692
or,
in her absence, to the undersigned at (202) 551-3769.


							Sincerely,





							Rufus Decker
							Accounting Branch Chief
Mr. Henry G. Schopfer, III
April 4, 2006
Page 1 of 3




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

         DIVISION OF
CORPORATION FINANCE