SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K


CURRENT REPORT


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


Date of Report (date of earliest event reported): January 15, 1999

                    Sheldahl, Inc.
   (Exact name of Registrant as specified in its charter)


           Minnesota		             	   0-45       		    41-0758073
(State or other jurisdiction	     	(Commission     		(I.R.S. Employer
      of incorporation)		         	File Number)	    Identification No.)


          1150 Sheldahl Road
         Northfield, Minnesota					              55057
(Address of principal executive offices)			    (Zip Code)


Registrant's telephone number, including area code: (507) 663-8000



Item 5.  Other Events

	This filing is being made for the purpose of updating the Risk Factors of 
Sheldahl, Inc. (the Company) set forth in the Company's documents on file with 
the Securities and Exchange Commission and to provide investors with cautionary 
statements regarding any forward-looking statements that may be made from time 
to time by the Company in its filings with the Securities and Exchange 
Commission, press releases and other public statements.

RISK FACTORS

	In connection with the "safe harbor" provisions of the Private Securities 
Litigation Reform Act of 1995, the Company wishes to caution investors that the 
Company has made and makes forward-looking statements regarding the intent, 
belief or current expectations of the Company and its management. Prospective 
investors are cautioned that any such forward-looking statements involve risks 
and uncertainties, and that the actual results may differ materially from those 
in the forward-looking statements as a result of various uncertainties and 
risks, including those set forth below. These uncertainties and risks in some 
cases have affected the Company's actual results and could cause the Company's 
results to differ materially from those expressed in such forward-looking 
statements.

Liquidity and Possible Need for Additional Financing

	The impact of improving performance from the Company's Northfield 
operations along with reduced capital spending, a strengthened balance sheet 
from the new credit facility, and the proceeds from the Series D Preferred 
Stock should provide adequate liquidity to fund operations over the next 
nine to twelve months.  Liquidity would significantly deteriorate if the 
anticipated improvement in the Company's Northfield operations is not 
realized or the ramp up of revenue from Micro Products extends beyond the 
third quarter of fiscal 1999.  Management believes with planned operating 
improvements that the Company has adequate liquidity to provide 
uninterrupted support for its business operations during fiscal 1999.  
Nevertheless, the Company is in the process of seeking additional debt or 
equity capital to ensure the necessary capital to support the ongoing 
operations of the Company.  This is based on the uncertainty of achieving 
expected improved operating results, including realizing significant sales 
growth in fiscal 1999 from the Company's Micro Products business, and is 
necessary to meet the covenants under the Company's credit and security 
agreement.  The Company is required to raise additional equity capital 
of $5 million by February 26, 1999 and another $5 million of equity capital 
by August 27, 1999.  In the event the Company is unable to raise the 
capital, the Company would be in technical default under its credit and 
security agreement enabling the Company's lenders to require immediate 
repayment of the borrowings under the credit and security agreement.  If 
the Company does not achieve its projected operating results and/or it does 
not have borrowings available under its current credit and security 
agreement, management believes that it has options available to obtain 
necessary additional new capital, including the issuance of additional new 
debt or additional new equity financing.  There can be no assurance, 
however, that the Company will be successful in its attempt to issue 
additional debt or to raise additional capital on terms acceptable to the 
Company.

Minimal Cash Flow

	Cash flow requirements to fund restructuring charges taken during fiscal 
1998 are expected to be approximately $5.5 million in fiscal 1999 as employee 
severance and plant shut down costs are paid.  Therefore, the overall cash flow 
from operations is expected to be minimal or negative over the first half of 
fiscal 1999 with borrowing levels increasing under the existing credit facility 
to fund both operations and the reduced levels of capital expenditures.  During 
the second half of fiscal 1999, sales levels are projected to increase as 
greater production volume is generated at the Longmont facility covering an 
increasing portion of fixed costs and increasing cash flow thus reducing the 
growth in debt financing.  There can be no assurance that the projected sales 
level during the second half of fiscal 1999 will be achieved.

Market Acceptance of New Products of Micro Products' Business

	A significant portion of the Company's anticipated future success in the 
data communication market and a significant portion of future revenue growth of 
the Company will depend on market acceptance of its Novaclad-based ViaArray and 
Via-Thin products as marketed by the Company's Micro Products business.  
Although the Company believes that these products have attractive performance 
characteristics and utility in a potentially broad range of products, sales of 
its Novaclad-based products will depend on the Company's ability to (i) 
convince potential customers that the advantages and applications of these 
products justify the expense and production changes necessary to 
incorporate the Company's products into the customer's manufacturing 
process; (ii) work with designers of integrated circuit (IC) packages and 
electronics to incorporate these products;  (iii) qualify these products 
for inclusion in the customer's products within the time requirements of 
the customer's design cycle and (iv) produce sufficient quantities of 
these products in a timely manner.  Moreover, these products will compete 
with certain other thin film laminates or alternative materials offered by 
other manufacturers and such materials may achieve wider market acceptance 
than the Company's products.  Failure of the Company's Novaclad-based 
ViaArray and Via-Thin products to achieve timely or sufficient market 
acceptance has had and will continue to have a material adverse effect on 
the Company's results of operations until efficient volume production and 
related sales revenue is achieved.

Development of Micro Products Business; Utilization of Longmont Facility

	The Company originally expected to commence production in the Longmont 
Facility in April 1996.  However, the realization of full volume production has 
been delayed, initially due to late deliveries of certain production equipment 
as a result of financial difficulties of a supplier, Micro Plating Systems, 
Inc., as well as a longer than anticipated installation period and more 
recently due to a far more rigorous and lengthy process qualification and 
product acceptance (validation) by the Company's customers and their 
customers.  During the last eighteen months, the Company has identified 
additional equipment suppliers so that the design and delivery of future 
key production equipment can be improved.  As of the date hereof, Texas 
Instruments and Vitesse Semiconductor have qualified ViaThin substrates 
for their operations.  Shipments of small volume production orders have 
begun and the Company expects that their initial orders will lead to 
larger orders from these and other customers as demonstrated by new 
designs and prototype orders currently in process from these and other 
customers. The adverse financial impact with respect to developing the Micro 
Products business has been and will continue to be significant.  In 1998, the 
Micro Products business resulted in a pretax loss prior to restructuring costs 
and impairment charges of $19.4 million as compared with a $15.5 million and 
$6.0 million loss in 1997 and 1996, respectively.  Such significant losses are 
expected to continue until efficient volume production and related sales 
revenue is achieved.  As of October 30, 1998, the Longmont Facility was 
operating at less than 5% of stated production capacity with projected 
breakeven at 45% of factory utilization or some $24 million to $26 million 
of annual revenue of ViaThin and ViaArray products.  Breakeven volume at 
Longmont is not expected until the fourth quarter of fiscal 1999 at the 
earliest, and the fourth quarter of fiscal 2000 at the latest.  There can 
be no assurance, however, that validation problems or difficulties will 
not materialize once full volume production has commenced or that the 
Company will be able to achieve breakeven production in the time specified.

Dependence on Automotive Market  

	Sales to the automotive market as a percentage of total sales were 
approximately 67.5% in fiscal 1997 and 68.7% in fiscal 1998.  The Company's 
production of component products for the automotive market fluctuates as 
automotive manufacturers begin production of new models and end production of 
others.  A decrease in the number of the Company's electronic components 
included in new models could have a material adverse effect on the Company's 
results of operations.  A general downturn in the automotive market, such 
as the General Motors labor strike, could have and has had a material 
adverse effect on the demand for the electronic components supplied by 
the Company to its customers in the automotive market.  For example, 
during the Company's fiscal 1998 fourth quarter, the Company's sales to 
the automotive market were adversely impacted by the General Motors strike 
by an amount equal to approximately $2.0 million.  In addition, as the 
automotive industry continues to qualify and reduce the number of 
suppliers and demand higher performance products at a lower cost, there 
can be no assurance that the Company will be able to maintain its current 
sales volumes at existing profit margins to automotive manufacturers and 
their suppliers.

Customers' Product Obsolescence and Standards

	The Company supplies component products primarily to the automotive 
electronics and data communication markets.  Substantially all of the products 
in these markets which incorporate the Company's component products are subject 
to technological obsolescence, performance standards and pricing requirements.  
The Company's future success in these markets will depend upon its ability to 
(i) work closely with manufacturers to design end products or applications 
which incorporate the Company's products and achieve market acceptance, 
(ii) develop technologies to meet the evolving market requirements of its 
customers, (iii) continue to deliver high-performance, cost-effective 
products and (iv) expand its sales and marketing efforts domestically and 
internationally.  There can be no assurance that the Company will continue 
to meet the current qualification requirements of its major customers, 
meet new qualification requirements imposed by its customers or continue 
to be selected as a supplier by new customers.

Capital Intensive Business

	The Company's business is capital intensive.  In the past four years, the 
Company has invested approximately $112 million in total capital expenditures, 
including approximately $65.6 million in the Longmont Facility.  In order to 
remain competitive, the Company must continue to make significant expenditures 
for capital equipment, expansion of operations and research and development.  
The Company has had initial success with introducing its Novaclad-based 
products but further penetration is required.  If the Company is successful 
in its Novaclad-based products, it may be required to make additional 
capital investments to increase manufacturing capacity before sufficient 
positive cash flow can be derived from the initial investment in the
Longmont Facility.  Presently, however, capital expenditure plans in 
fiscal 1999 are planned at $7 million, significantly lower than in the 
recent past.  Reduced capital spending, along with anticipated improving 
cash flow from operations, funds available under its credit and security 
agreement, and proceeds from future sales of additional equity capital are 
expected to provide adequate funds to meet these needs of the Company.  
There can be no assurance, however, that the Company will have adequate 
funds to support its capital expenditure plans in fiscal 1999 or that the 
Company will be able to raise additional equity capital on terms 
acceptable to the Company.

Customer Concentration 

	The Company's customer base is concentrated.  The Company's ten largest 
customers for the 1998 fiscal year accounted for approximately 64.1% of net 
sales, and 15.4%, 10.2% and 10.3% of the Company's net sales during fiscal 1998 
were to Motorola, Inc., Ford Motor Company and Siemens, respectively.  The 
Company expects that sales to a relatively small number of customers will 
continue to account for a significant portion of sales for the foreseeable 
future, and the loss of, or a significant decline in orders from, one of the 
Company's key customers could have a material adverse effect on the Company's 
results of operations.

Variability of Quarterly Results

	Historically, the Company's quarterly results of operations have 
fluctuated significantly primarily because of the timing of orders from its 
larger customers and mix of products manufactured and sold, as impacted from 
time to time by work stoppages in the automotive industry and other broad 
economic events.  Due to this and the inherent uncertainty associated with the 
development of new products and production facilities, the Company expects that 
its quarterly results of operations will continue to be subject to significant 
fluctuations.

Intense Competition

	The Company's business is highly competitive with principal competitive 
factors being product quality, price, distribution and service.  The Company 
believes its vertical integration, which allows it to control product quality 
and manufacturing efficiencies better than many of its competitors, is a 
competitive advantage.  Sheldahl's competitors include materials suppliers, 
flexible and rigid circuit manufacturers, as well as electronics manufacturers 
who produce their own materials and interconnect systems.  Some of the 
Company's competitors have substantially greater financial and other 
resources than the Company.  The Company's primary competitors with 
respect to its flexible printed circuitry and interconnect systems include 
Pressac Limited (a U.K. company) and Parlex Corp. in the automotive 
electronics market and Mektec Corp., Fujikura Ltd. (a Japanese company) 
and ADFlex Solutions, Inc. in the datacommunications market.  The 
Company's primary competition for its laminate materials includes Rogers 
Corporation and GTS Flexible Materials, Ltd. (a U.K. company).  
Specifically addressing the Company's high-density ViaArray (formerly ViaGrid) 
and ViaThin products, the Company offers not only a unique via generation 
capability along with Novaclad-based material, but the products provide two 
layers of copper for increased linear inches of circuit traces while 
maintaining an equal or smaller physical size to the substrate when 
compared to competitor's one metal layer product such as that supplied by 
3M.  Additionally, IBM has chosen to exit the two metal tape business and 
their leading customer, Vitesse, is converting to use Sheldahl's ViaThin.  
Therefore, the Company feels it has a competitive advantage or strength 
versus its major competitors with its ViaArray and ViaThin products. 
Although the Company believes performance and price characteristics of 
its Novaclad-based products will provide competitive solutions for its 
customers' needs, there can be no assurance that its customers will not 
choose other technologies due to such customers' familiarity with the 
competing  technology, the financial resources of the supplier or the ease of 
incorporating alternative technology into customers' manufacturing processes.  
In addition, there can be no assurance that other competitors will not 
enter the markets served by the Company.  The Company's results may be 
adversely affected by the actions of its competitors, including the 
development of new technologies, the introduction of new products or the 
reduction of prices.  There also can be no assurance that the Company will 
be able to take actions necessary to maintain its competitive position.

Possible Volatility of Stock Price

	Factors such as unexpected market activity in the Company's Common Stock, 
announcements by the Company or its competitors, fluctuations in the Company's 
operating results, general conditions in the automotive and data communication 
markets or the worldwide economy, and changes in earnings or estimates by 
analysts could cause the price of the Company's Common Stock to fluctuate, 
perhaps substantially.  Also, prices for many technology company stocks, 
including the Common Stock, may fluctuate widely for reasons that are not 
always related to the operating performance of such companies.     

	Sales of substantial amounts of the Company's Common Stock in the public 
market or the prospect of such sales could materially and adversely affect the 
market price of the Common Stock. As of December 1, 1998, the Company had 
outstanding 10,890,729 shares of Common Stock, 913 shares of Series B Preferred 
Stock, 32,917 shares of Series D Preferred Stock convertible into 5,352,358 
shares of Common Stock, and warrants to purchase 496,982 shares of Common 
Stock. The number of shares of Common Stock issuable upon conversion of the 
Series B Preferred Stock changes depending upon the lowest sale prices of 
the Common Stock during the applicable measurement period immediately 
preceding the date of conversion. There is no minimum conversion price and 
thus no maximum number of shares of Common Stock into which the Series B 
Preferred Stock may be converted.  In addition, as of December 1, 1998, 
the Company had granted options to purchase 1,472,813 shares of Common 
Stock under its 1987 Stock Option Plan, 1994 Stock Option Plan, and 
Employee Stock Purchase Plan  (collectively, the "Stock Option Plans"). 
Almost all of the Company's outstanding shares of Common Stock may be 
sold without substantial restrictions.  All of the shares purchased under the 
Stock Option Plans are available for sale in the public market, subject in some 
cases to volume and other limitations.
 
	Sales in the public market of substantial amounts of Common Stock, 
including sales of Common Stock issued upon conversion of the Series B 
Preferred Stock or the Series D Preferred Stock, or the perception that 
such sales could occur, could depress prevailing market prices for the 
Common Stock. The conversion terms of the Series B Preferred Stock, which 
allow holders of the Series B Preferred Stock to convert their shares of 
Series B Preferred Stock into shares of Common Stock at a discount to the 
current market price of the Common Stock, and then immediately resell such 
shares at market prices, could result in downward pressure on the price of 
the Common Stock, making it difficult for a sustained rise in the price of 
the Common Stock to occur, if such a rise occurs at all.  For example, if 
the holders of the 913 shares of the Company's Series B Preferred Stock 
were to have requested conversion as of December 1, 1998, such shares would 
convert into shares representing 1.4% of the Company's currently 
outstanding Common Stock, or 147,656 shares of Common Stock on such date, 
which includes 8,795 shares representing dividends related to such 
shares.
 
	The existence of the private warrants and any other options or warrants 
may prove to be a hindrance to future equity financing by the Company. Further, 
the holders of such warrants and options may exercise them at a time when the 
Company would otherwise be able to obtain additional equity capital on terms 
more favorable to the Company.

Reliance on Specialized Manufacturing Facilities

	The Company has separate manufacturing and assembly facilities, certain of 
which perform processes dependent upon products produced at its other 
facilities.  The Company's flexible laminates are produced at facilities in 
Longmont and Northfield, Minnesota and further processed into printed 
circuitry in a separate facility, also located in Northfield, Minnesota.  
In addition, the Company also fabricates ViaArray and ViaThin at the 
Longmont Facility.  Further assembly is performed at one facility in South 
Dakota, two in Mexico and one in Canada.  Delays or disruption at its 
flexible laminate facility may result in an insufficient supply of 
materials for its flexible printed circuitry facility and its assembly 
facilities.  The Company's Novaclad-based ViaArray and Via-Thin 
products will be manufactured primarily at the Longmont Facility.  
Each of these facilities contains or will contain specialized equipment 
which may not be quickly replaceable.  While the Company carries business 
interruption insurance, any natural or other event affecting any one of 
these facilities or the manufacturing equipment could materially and 
adversely affect the Company's position in its markets and results of 
operations.

Dependence on Certain Suppliers

	The Company qualifies strategic suppliers through a Vendor Certification 
Program, which limits the number of suppliers to those who provide the Company 
with the best total value and quality.  The Company closely monitors product 
quality and delivery schedules of its supply base.  Certain raw materials used 
by the Company in the manufacture of its products are currently obtained from 
single sources.  The Company has not historically experienced significant 
problems in the delivery of these raw materials.  The Company currently depends 
on one supplier for its polyimide supply, which serves as the base material for 
the Company's Novaclad family of products.  This supplier currently 
manufacturers this polyimide film in the United States and Japan through 
multiple production lines.  There have been no interruptions of supply from 
this vendor over the last three years.  The Company continues to evaluate 
other sources of supply for polyimide film as well as other single sourced 
raw materials.  Although the Company believes that other manufacturers' 
products are available, there can be no assurance that any interruption in 
supply from these vendors would not have a material adverse effect on the 
Company's operations.

Dependence on Key Personnel

	The Company's business is dependent on the efforts and abilities of its 
executive officers and key personnel, especially in the development, marketing 
and manufacturing of its Novaclad-based ViaArray and Via-Thin products.  The 
Company's continued success will also depend on its ability to continue to 
attract and retain qualified employees.  The loss of services of any key 
personnel could have a material adverse effect on the Company.  The Company 
does not have key-person life insurance on any of its employees.

Dividends

	Pursuant to its current credit and security agreement, the Company is 
restricted from declaring or paying cash dividends without the consent of the 
Company's lenders.   The Company has never declared or paid any dividends 
on its Common Stock.  The Company currently intends to retain any earnings 
for use in its operations and expansion of its business and therefore does 
not anticipate paying any cash dividends in the foreseeable future.

Patents, Trademarks and Proprietary Rights  

	The Company's success depends, to a large extent, on its ability to 
maintain a competitive proprietary position in its product areas.  The Company 
has received certain patents with respect to its products and processes and has 
several other patent applications pending.  There can be no assurance that 
patents will be issued on the basis of the Company's applications, that any 
patent issued to the Company will not be challenged, invalidated or 
circumvented or that the rights granted under any patent will provide 
significant benefits to the Company.   The Company is aware of a patent 
which may cover certain plated through holes of double-sided circuits made 
of the Company's Novaclad material.  Although no claims have been made 
against the Company under this patent, the owner of the patent may attempt 
to construe the patent broadly enough to cover certain Novaclad products 
manufactured currently or in the future by the Company.  The Company 
believes that prior commercial art and conventional technology, including 
certain patents of the Company, exist which would allow the Company to 
prevail in the event any such claim is made under this patent.  
Any action commenced by or against the Company could be time consuming and 
expensive and could result in requiring the Company to enter into a license 
agreement or cease manufacture of any products ultimately determined to 
infringe such patent.  In addition to patent protection, the Company also 
attempts to protect its trademarks through registration and proper use.  
The Company also attempts to protect its proprietary information as trade 
secrets by taking security precautions at its facilities.  Further, the 
Company maintains confidentiality through the use of secrecy or 
confidentiality agreements and other measures intended to prevent the 
public dissemination of trade secret information.  There can be no 
assurance that these steps will prevent misappropriation of the Company's 
proprietary rights or that third parties will not independently develop 
functionally equivalent or superior non-infringing technology.

Environmental Matters  

	The Company is subject to various federal, state and local environmental 
laws relating to the Company's operations.  The Company's manufacturing and 
assembly facilities are registered with the U.S. Environmental Protection 
Agency and are licensed, where required, by state and local authorities.  
The Company has agreements with licensed hazardous waste transportation and 
disposal companies for transportation and disposal of its hazardous wastes 
generated at its facilities.  The Longmont Facility has been specifically 
designed to reduce water usage in the manufacturing process and employs a 
sophisticated waste treatment system intended to substantially reduce 
discharge streams.  Compliance with federal and state environmental laws 
and regulations did not have a material effect on the Company's capital 
expenditures, earnings or competitive position during fiscal 1998.  
Similarly, fiscal 1999 capital expenditures to comply with such laws and 
regulations are not expected to be material.  The Company believes it is 
in material compliance with federal and state environmental laws and 
regulations.  As of August 28, 1998, the Company was not involved in any 
significant specific action, legal or regulatory, regarding environmental 
regulations.  An inadvertent mishandling of materials or similar incident, 
however, could adversely affect the operations of the Company and result 
in costly administrative or legal proceedings.  In addition, future 
environmental regulations could add to overall costs of doing business.

Anti-Takeover Provisions

	The Company's Articles of Incorporation and the Minnesota Business 
Corporation Act include certain anti-takeover provisions.  These provisions, 
including the power to issue additional stock and to establish separate classes 
or series of stock, may, in certain circumstances, deter or discourage takeover 
attempts and other changes in control of the Company not approved by the 
Board.  In addition, in June 1996, the Board of Directors of the Company 
adopted a Rights Agreement (the Rights Agreement), commonly called a 
poison pill.  Pursuant to the terms of the Rights Agreement, one right (a 
Right) was issued in respect of each share of the Company's Common Stock 
outstanding.  Such Rights also attach to each share of Common Stock issued 
subsequent to the adoption of the Rights Agreement, including the Shares 
offered hereby.  Each Right entitles the holder thereof to purchase a 
fraction of a share of the Company's Series A Preferred Stock or, in 
certain instances, Common Stock of the Company or stock of an Acquiring 
Person (as defined below) in the event that (i) a third party or a group 
(an Acquiring Person) acquires beneficial ownership of 15% or more of 
the Common Stock or (ii) a tender offer or exchange offer that would 
result in a person or group becoming an Acquiring Person is commenced.  On 
July 30, 1998, the Company amended Section 1(a) of the Rights Agreement to 
provide that when applied to Molex Incorporated (Molex) and any of its 
affiliated parties the 15% threshold for beneficial ownership shall be 
22%.  The Company increased this threshold with respect to Molex in 
connection with Molex's investment in the Series D Preferred Stock which 
otherwise would have resulted in Molex triggering provisions of the Rights 
Agreement.  The Rights Agreement will be in effect through June 2006 and 
could have the effect of discouraging tender offers or other transactions 
which could result in shareholders receiving a premium over the market 
price of Common Stock.



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.


						Sheldahl, Inc.



						By    /s/ John V. McManus                                             
						     John V. McManus, Vice President-Finance

Dated: January 15, 1999.