==============================================================================


               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549-1004

                                  FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2005
                               -------------

                                      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 01-15739
                                              --------

                           REUNION INDUSTRIES, INC.
            ------------------------------------------------------
            (Exact name of Registrant as specified in its charter)

        DELAWARE                                       06-1439715
------------------------                  ------------------------------------
(State of Incorporation)                  (I.R.S. Employer Identification No.)

                        11 STANWIX STREET, SUITE 1400
                       PITTSBURGH, PENNSYLVANIA  15222
         ------------------------------------------------------------
         (Address of principal executive offices, including zip code)

                                (412) 281-2111
             ----------------------------------------------------
             (Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.    Yes   X   No
                                                      -----    -----

At August 1, 2005, 16,656,519 shares of common stock, par value $.01 per
share, were outstanding.

                             Page 1 of 36 pages.


==============================================================================



               FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

	This report contains certain forward-looking statements within the 
meaning of Section 27A of the Securities Act and Section 21E of the Exchange 
Act that are intended to be covered by the safe harbors created thereby.  The 
forward-looking statements contained in this report are enclosed in brackets  
[ ] for ease of identification.  Note that all forward-looking statements 
involve risks and uncertainties.  Factors which could cause the future results 
and shareholder values to differ materially from those expressed in the 
forward-looking statements include, but are not limited to, the strengths of 
the markets which the Company serves, the Company's ability to generate 
liquidity and the Company's ability to service its debts and meet financial 
covenants.  Although the Company believes that the assumptions underlying the 
forward-looking statements contained in this report are reasonable, any of the 
assumptions could be inaccurate and, therefore, there can be no assurances 
that the forward-looking statements included or incorporated by reference in 
this report will prove to be accurate.  In light of the significant 
uncertainties inherent in the forward-looking statements included or 
incorporated by reference herein, the inclusion of such information should not 
be regarded as a representation by the Company or any other person that the 
Company's objectives and plans will be achieved.  In addition, the Company 
does not intend to, and is not obligated to, update these forward-looking 
statements after filing and distribution of this report, even if new 
information, future events or other circumstances have made them incorrect or 
misleading as of any future date.


                                     - 2 -



                           REUNION INDUSTRIES, INC.

                                    INDEX

                                                                      Page No.
                                                                      --------
PART I.   FINANCIAL INFORMATION

          Item 1.  Financial Statements

          Condensed Consolidated Balance Sheets at 
            June 30, 2005 (unaudited) and December 31, 2004               4

          Condensed Consolidated Statements of Operations and
            Comprehensive Income (Loss) for the three and six  
            Months ended June 30, 2005 and 2004 (unaudited)               5

          Condensed Consolidated Statements of Cash Flows for the 
            six months ended June 30, 2005 and 
		2004 (unaudited)                                              6

          Notes to Condensed Consolidated Financial Statements            7

          Item 2.  Management's Discussion and Analysis of 
                     Financial Condition and Results of Operations       19

          Item 3.  Quantitative and Qualitative Disclosures
                     About Market Risk                                   30

          Item 4.  Controls and Procedures                               30


PART II.  OTHER INFORMATION

          Item 1.  Legal Proceedings                                     30

	    Item 2.  Unregistered Sales of Equity Securities and
                     Use of Proceeds						 30

	    Item 4.  Submission of Matters to a Vote of Security
                     Holders								 31

          Item 6.  Exhibits and Reports on Form 8-K                      31


SIGNATURES                                                               32

CERTIFICATIONS                                                           33

                                     - 3 -



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                    REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                    AT JUNE 30, 2005 AND DECEMBER 31, 2004
                                (in thousands)
 
                                               At June 30,     At December 31,
                                                     2005                2004
                                          ---------------      --------------
                                              (unaudited)   
     ASSETS:                                                
Cash and cash equivalents                        $  1,109            $  1,146
Receivables (net of allowance of 
  $223 and $202, respectively)                     14,497              12,768
Advances to employees                                  11                  26
Inventories, net                                    8,894               9,300
Other current assets                                1,528               1,832
Current assets of discontinued operations             323               3,216
                                                 --------            --------
     Total current assets                          26,362              28,288
                                                            
Property, plant and equipment, net                  7,516               9,374
Property, plant and equipment, held for sale        3,453               2,911
Due from related parties                              904                 919
Goodwill, net                                      10,994              10,994
Other assets, net                                   3,681               4,110
                                                 --------            --------
Total assets                                     $ 52,910            $ 56,596
                                                 ========            ========
     LIABILITIES AND STOCKHOLDERS' DEFICIT:
Current maturities of debt                       $    642            $    645
Revolving credit facilities                        13,775              14,485 
Trade payables                                      8,106               9,300
Accrued interest                                    7,850               5,663
Due to related parties                                 21                 285
Other current liabilities                           4,454               5,680
Notes payable                                       4,161               4,161
Notes payable - related parties                       500                 500
Current liabilities of discontinued operations        727                 827
                                                 --------            --------
     Total current liabilities                     40,236              41,546
                                                            
Long-term debt                                     34,314              35,628
Other liabilities                                   3,509               3,759
Non-current liabilities of discontinued 
    Operations                                        916                 916 
                                                 --------            --------
     Total liabilities                             78,975              81,849

Minority interests                                    262                 330
                                                            
Commitments and contingent liabilities                  -                   -

Stockholders' deficit                             (26,327)            (25,583)
                                                 --------            --------
Total liabilities and stockholders' deficit      $ 52,910            $ 56,596
                                                 ========            ========

    See accompanying notes to condensed consolidated financial statements.

                                     - 4 -
 


                           REUNION INDUSTRIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        AND COMPREHENSIVE INCOME (LOSS)
           FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
           (in thousands, except per share information)(unaudited)

                                    Three Months Ended      Six Months Ended
                                     June 30,   June 30,   June 30,   June 30,
                                        2005       2004       2005       2004
                                    --------   --------   --------   --------
Sales                               $ 19,460   $ 17,538   $ 36,756   $ 33,358
Cost of sales                         14,612     14,136     29,134     26,728
                                    --------   --------   --------   --------
  Gross profit                         4,848      3,402      7,622      6,630
Selling, general & administrative      2,373      2,210      4,631      4,529
Gain on debt extinguishments                       (470)         -     (3,540)
Other (income), net                       (4)      (204)       (13)      (283) 
                                     -------   --------    -------   -------- 
  Operating profit                     2,479      1,866      3,004      5,924
Interest expense, net                  2,145      1,975      4,264      3,754
                                     -------   --------    -------   --------
Income (loss) from continuing 
  operations before income taxes
  and minority interests                 334       (109)    (1,260)     2,170

Provision for income taxes                11          -         11          -
                                     -------   --------    -------   --------
Income (loss) from continuing 
  operations before minority
  interests                              323       (109)    (1,271)     2,170

Minority interests                        71        113        144        211
                                     -------    -------    -------   --------
Income (loss) from continuing
  operations                             252       (222)    (1,415)     1,959
Gain on disposal of discontinued
  operations, net of tax of $-0-           -          -        370          -
Income (loss) from discontinued 
  operations, net of tax of $-0-           -       (180)       (77)       (12)
                                     -------    -------    -------   --------

Net and comprehensive income (loss)  $   252    $  (402)  $ (1,122)  $  1,947
                                     =======    =======    =======    =======
Earnings (loss) applicable to  
  common stockholders                $   252    $  (402)  $ (1,122)  $  1,947
                                     =======    =======    =======    =======
  Basic earnings (loss) per share:
Continuing operations                $  0.02    $ (0.01)  $  (0.09)  $   0.12
Discontinued operations                    -      (0.01)      0.02       0.00
                                     -------    -------    -------    -------
Income (loss) per share - basic      $  0.02    $ (0.02)  $  (0.07)  $   0.12
                                     =======    =======    =======    =======
Weighted average shares 
  outstanding - basic                 16,317     16,279     16,298     16,279
                                     =======    =======    =======    =======
  Diluted income (loss) per share:
Continuing operations                $  0.01  $   (0.01)  $  (0.09)  $   0.10
Discontinued operations                    -      (0.01)      0.02       0.00
                                      ------    -------    -------    -------
Income (loss) per share - diluted    $  0.01  $   (0.02)  $  (0.07)  $   0.10
                                     =======    =======    =======    =======
Weighted average shares 
  outstanding - diluted               19,673     16,279     16,298     18,829
                                     =======    =======    =======    =======
    See accompanying notes to condensed consolidated financial statements.
                                     - 5 -
                                     
                   REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                (in thousands)
                                 (unaudited)

                                         
							                 Six Months Ended
                                                               June 30,
                                                           2005        2004
                                                         --------    --------
Cash used in operating activities                        $ (1,423)   $ (1,935)
                                                         --------    --------
  Cash flow from investing activities:
Capital expenditures                                         (216)       (588)
Proceeds from asset sales                                   3,680           - 
                                                         --------    --------
Cash (used in) provided by investing activities             3,464        (588)
                                                         --------    --------
  Cash flow from financing activities:
Net change in revolving credit facility                      (752)      1,024
Issuance of debt                                                -       3,000
Repayments of debt                                         (1,387)       (345)
Payments of deferred financing costs                            -        (310) 
                                                         --------    --------
Cash provided by financing activities                      (2,139)      3,369
                                                         --------    --------
                                                                   
Net increase in cash and cash equivalents                     (98)        846
Less: Change in cash of discontinued operations                61         (49) 
Cash and cash equivalents, beginning of period              1,146         656
                                                         --------    --------
Cash and cash equivalents, end of period                 $  1,109    $  1,453
                                                         ========    ========

Interest paid                                            $  1,401    $  1,052
                                                         ========    ========

     Non-cash financing activity:
Debt extinguishments                                     $      -    $  3,540
                                                         ========    ========
Conversion of guarantee and interest fees to
common stock                                             $    378    $      -
                                                         ========    ======== 


    See accompanying notes to condensed consolidated financial statements.

                                    - 6 -





                  REUNION INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              JUNE 30, 2005


NOTE 1:  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements 
have been prepared in accordance with accounting principles generally accepted 
in the United States for interim financial information and with the 
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they 
do not include all of the information and footnotes required by accounting 
principles generally accepted in the United States for complete financial 
statements.  In the opinion of management, all normal recurring adjustments 
considered necessary for a fair statement of the results of operations have 
been included.  The results of operations for the six months ended June 30, 
2005 are not necessarily indicative of the results of operations for the full 
year.  When reading the financial information contained in this Quarterly 
Report, reference should be made to the financial statements, schedule and 
notes contained in Reunion's Annual Report on Form 10-K for the year ended 
December 31, 2004.

Going Concern

     These condensed consolidated financial statements have been prepared on a 
going concern basis, which contemplates the realization of assets and the 
satisfaction of liabilities in the normal course of business.  At June 30, 
2005, the Company had a deficiency in working capital of $13.9 million, a loss 
from continuing operations for the six months then ended of $1.4 million and a 
deficiency in assets of $26.3 million. These conditions raise substantial 
doubt about the Company's ability to continue as a going concern.  These 
condensed consolidated financial statements do not include any adjustments 
that might result from the outcome of this uncertainty. 

     Over the past several years, the Company has taken steps to improve its 
liquidity and defer the principal maturities of a significant portion of its 
debt.  The Company is investigating other recapitalization scenarios in an 
effort to provide additional liquidity and extinguishments or deferrals of 
debt obligations.  Although the Company believes that it can accomplish these 
plans, no assurances exist that it will.  Failure to accomplish these plans 
could have an adverse impact on the Company's liquidity, financial position 
and future operations. (See Note 2: RECENT DEVELOPMENTS - Sale of Assets and 
NapTech Settlement.)

Recent Accounting Pronouncements

	In December 2004, the FASB issued SFAS 123R, "Share Based Payment." SFAS 
123R is a revision to SFAS 123 and supersedes APB 25, "Accounting for Stock 
Issued to Employees," and amends SFAS 95, "Statement of Cash Flows." This 
statement requires a public entity to expense the cost of employee services 
received in exchange for an award of equity instruments. This statement also 
provides guidance on valuing and expensing these awards, as well as disclosure 
requirements of these equity arrangements. This statement is effective for the 
first interim reporting period that begins after January 1, 2006. 
	SFAS 123R permits public companies to choose between the following two 
adoption methods:
1.  A "modified prospective" method in which compensation cost is recognized 
beginning with the effective date (a) based on the requirements of SFAS 123R 
for all share-based payments granted after the effective date and (b) based on 
the requirements of Statement 123 for all awards granted to employees prior to 
the effective date of SFAS 123R that remain unvested on the effective date, or
                                    - 7 -
2.  A "modified retrospective" method which includes the requirements of the 
modified prospective method described above, but also permits entities to 
restate based on the amounts previously recognized under SFAS 123 for purposes 
of pro forma disclosures either (a) all prior periods presented or (b) prior 
interim periods of the year of adoption
     Reunion currently accounts for share-based payments to employees using 
APB 25's intrinsic value method and, as such, recognizes no compensation 
expense for employee stock options. The impact of the adoption of SFAS 123R on 
Reunion cannot be predicted at this time because it will depend on levels of 
share-based payments granted in the future. There would have been no material 
impact on reported results of operations and earnings per share had the 
Company applied the fair value provisions of SFAS 123 to share-based payments.
     The adoption of SFAS 123R's fair value method may have an impact, 
possibly material, on Reunion's future results of operations but no material 
impact on overall financial position. SFAS 123R also requires the benefits of 
tax deductions in excess of recognized compensation expense, if any, to be 
reported as a financing cash flow, rather than as an operating cash flow as 
required under current literature. This requirement may reduce net operating 
cash flows and increase net financing cash flows in the consolidated statement 
of cash flows of periods after adoption. Due to timing of the release of SFAS 
123R and the choice between the two adoption methods, the Company is still 
analyzing the ultimate impact that this new pronouncement may have on its 
results of operations.

     On March 29, 2005, the Staff of the Securities and Exchange Commission 
(SEC or the Staff) issued Staff Accounting Bulletin No. 107, "Share-Based 
Payment" (SAB 107).  Although not altering any conclusions reached in SFAS 
123R, SAB 107 provides the views of the Staff regarding the interaction 
between SFAS 123R and certain SEC rules and regulations and, among other 
things, provide the Staff's views regarding the valuation of share-based 
payment arrangements for public companies.  Reunion intends to follow the 
interpretative guidance on share-based payment set forth in SAB 107 during the 
Company's adoption of SFAS 123R.

Stock Based Compensation

	In June, 2005, ten year options to purchase 500,000 shares of the 
Company's common stock and five year options to purchase 300,000 shares of the 
Company's common stock, all pursuant to the Company's 2004 Stock Option Plan, 
were awarded to various officers, employees and directors.  One third of such 
options vest immediately and the remaining options vest equally over a two 
year period.  The Company has elected to follow Accounting Principles Board 
Opinion No. 25, "Accounting for Stock Issued to Employees" and related 
interpretations in accounting for stock options and awards.  Accordingly, no 
compensation costs for stock options is included in operating results since 
all awards were made at exercise prices at or above their fair value on the 
dates of grants. If the Company had applied the fair value recognition 
provisions of SFAS No. 123R for the three and six month periods ended June 30, 
2005, using the Black-Scholes option pricing model assuming a risk free 
discount rate of 6%, no dividend yield, expected volatility of 99% and an 
expected option life of 3 years, pro forma earnings and per share amounts 
would have been as follows (in thousands, except for per share amounts) 
(unaudited):



                                  - 8 -









						      3-Mos. Ended          6-Mos. Ended
                                        ---------------        --------------
					          2005       2004        2005      2004
				               -----      -----       -----     -----

Net income (loss) as reported         $  252    $  (402)   $ (1,122)  $ 1,947
Deduct: Total stock-based employee
        compensation determined under
        fair value method for stock
        options, net of tax              (30)         -         (30)        -
                                      ------    -------    --------   -------
Pro forma income (loss) applicable 
     to common stockholders           $  222    $  (402)   $ (1,152)  $ 1,947
                                      ======    =======    ========   =======
Basic income (loss) per 
     share, as reported               $ 0.02    $ (0.02)   $  (0.07)  $  0.12
                                      ======    =======    ========   =======
Basic income (loss) per
     share, pro forma                 $ 0.01    $ (0.02)   $  (0.07)  $  0.12
                                      ======    =======    ========   =======
Diluted income (loss) per 
     share, as reported               $ 0.01    $ (0.02)   $  (0.07)  $  0.10
                                      ======    =======    ========   =======
Diluted income (loss) per
     share, pro forma                 $ 0.01    $ (0.02)   $  (0.07)  $  0.10
                                      ======    =======    ========   =======
  
  

NOTE 2:  RECENT DEVELOPMENTS

NapTech Settlement

     On April 26, 2005 a judgment was entered in Louisiana in favor of Shaw 
Naptech, Inc. ("Naptech") against various parties, including the Company.  On 
July 8, 2005, the Company entered into a Settlement Agreement with Naptech 
pursuant to which the Company paid NapTech $1.65 million in settlement of the 
Company's indebtedness to NapTech of approximately $5.1 million under a 
promissory note and the related judgment. As a result of the NapTech 
settlement, Reunion will recognize a gain on debt extinguishment of 
approximately $3.4 million in the third quarter of 2005.

	In connection with the NapTech settlement, Wachovia Bank, National 
Association ("Wachovia") made a $3.1 million supplemental loan to Reunion 
under its existing $25 million loan facility, thereby increasing the total 
amount of the supplemental loan portion of the facility to $6.1 million.  
Reunion used $1.65 million of this additional supplemental loan to make the 
Reunion Settlement Payment to NapTech and will use the balance of the loan 
proceeds for inventory purchases and to support letters of credit that may be 
issued for it under the Wachovia facility.  Wachovia required, as a condition 
to making the additional supplemental loan, that LC Capital Master Fund, Ltd. 
("LCC") purchase an additional $3.1 million junior participation interest in 
the Wachovia loan facility, and LCC did so, thereby increasing its junior 
participation interest in the facility to $6.1 million.  LCC in turn 
simultaneously sold a 50% interest in its junior participation interest to 
WebFinancial Corporation ("Web").

	To induce LCC to purchase the additional junior participation interest 
in the Wachovia loan facility and to induce Web to purchase a 50% interest in 
such junior participation interest, Reunion issued two warrants, one to LCC 
and one to Web, to purchase, in each case, 387,500 shares of the Company's 
common stock at a price of $0.01 per share.  These warrants are exercisable at 
anytime until July 12, 2010.  The value of these warrants is estimated to be 
$85,000 using the Black-Scholes pricing model.

                                   - 9 -

	Reunion's indebtedness under the Wachovia loan facility, including the 
supplemental loans, is secured by liens on substantially all of Reunion's 
assets.
	
13% Senior Notes

	On February 3, 2005, the Company announced that it was unable to make a 
$2,928,000 interest payment by February 2, 2005 to the holders of the 13% 
Senior Notes.  Holders of more than 80% of the principal amount of such Senior 
Notes entered into a Standstill Agreement with the Company, pursuant to which 
such  holders agreed that they would not exercise and will cause the Trustee 
not to exercise any remedies provided for in the Indenture under which the 
Senior Notes were issued, or any other agreements related to such notes, 
with respect to this payment default or with respect to a potential event of 
default if the Company fails to make the next scheduled interest payment due 
April 1, 2005.   In the Standstill Agreement, such holders agreed to defer the 
$2,928,000 of interest not paid, plus any interest that is not paid on the 
next regularly scheduled due date of April 1, 2005, to December 2006.  On 
April 1, 2005 the Company was unable to make this scheduled interest payment.

     On August 1, 2005 the Company was unable to make the scheduled July 1, 
2005 interest payment of $0.7 million to the holders of the Senior Notes and 
thus an event of default has occurred under the Indenture ("Indenture 
Default") under which the Senior Notes were issued. With an Indenture Default, 
holders of more than 25% of the principal amount of the Senior Notes may, by 
written notice to the Company and to the Trustee, declare the principal of and 
accrued but unpaid interest on all the Senior Notes to be immediately due and 
payable (the "acceleration"). However, under a previous Intercreditor and 
Subordination Agreement, the Senior Note holders can not commence any action 
to enforce their liens on any collateral for a 180 day period beginning after 
the date of receipt by Wachovia, the senior secured lender, of a written 
notice from the Senior Note holders informing Wachovia of such Indenture 
Default and demanding the acceleration.  At this date, neither the Company nor 
Wachovia has received written notice of any acceleration. 

Defaults and Waivers Under Revolving and Term Loan Credit Facility

     On December 3, 2003, the Company entered into a revolving and term loan 
credit facility with Wachovia (formerly, Congress Financial Corporation). The 
Wachovia facility requires Reunion to comply with financial covenants and 
other covenants, including a minimum amount of earnings before interest, 
taxes, depreciation and amortization (EBITDA) and a minimum fixed charge 
coverage ratio.  In November 2004, Wachovia and the Company entered into an 
amendment of the revolving and term loan credit facility wherein Wachovia 
eliminated the fixed charge coverage ratio and reduced the monthly minimum 
EBITDA covenant going forward.  Under the November 2004 amendment, the Company 
was required to maintain new minimum monthly amounts of EBITDA of $280,000 in 
November 2004, $290,000 in December 2004, $350,000 in January 2005, $280,000 
in February 2005 and $300,000 per month thereafter.  In January 2005, the 
Company failed to meet the minimum monthly amount, when it had an EBITDA loss 
for the month of $39,000.  Wachovia has waived this EBITDA shortfall.

	As described above under "Naptech Settlement", in April 2005, Naptech 
secured a judgment against the Company.  The judgment obtained by Naptech 
constituted a cross default under the Wachovia Loan Agreement.  Such default 
was waived by Wachovia.
                                 
	As described above under "13% Senior Notes", the Company failed to make 
the required July 1, 2005 interest payment to the Senior Note holders.  This 
failure constituted a cross default under the Wachovia Loan Agreement.  Such 
default has been waived by Wachovia and the Company is currently not in 
default under the Wachovia Loan Agreement
                                     

                                   - 10 -


Sale of Assets

     The Company's management, having reevaluated the Company's ability to 
service its debt and meet future obligations, is investigating the sale of 
certain assets in order to generate liquidity. These asset sales may take one 
or more forms including, but not limited to, the sale of one or more divisions 
or piecemeal sales of assets including real estate, buildings, machinery and 
equipment and/or intangibles.  The Company's management cannot provide any 
assurances that any asset sales will occur or, if asset sales do occur, that 
such sales will generate sufficient liquidity for the Company. 

	During the first quarter of 2005, the Company did sell all of the assets 
and liabilities of its leaf spring manufacturing segment, located in Miami, 
OK, to an unrelated entity for $792,000.  Of this amount, $250,000 was used to 
pay down the private capital fund note payable secured by the real property, 
$41,000 was used to pay down the Wachovia term loan secured by the machinery 
and equipment and the remaining amount was used to reduce the borrowings under 
the revolving credit facility. The Company recorded a loss of $318,000 on such 
sale which was provided for in the Company's 2004 year.

	Additionally, during the first quarter of 2005, the Company sold certain 
of the receivables, inventory and intangibles of its thermoset plastics 
operation ("Rostone") located in Lafayette, IN, along with certain of its 
machinery and equipment.  The sale of such assets was accomplished in two 
separate transactions, with the sale of certain of the Company's compounding 
operation assets being sold to one unrelated entity and the sale of certain of 
the Company's molding operation assets being made to a different unrelated 
entity. At the time of such sale, the Company entered into tolling or 
manufacturing agreements with such buyers under which the Company agreed to 
operate the compounding and molding operations at its Lafayette, IN facility 
for a limited time until the buyers could move such operations to different 
geographical locations.  The buyers agreed to reimburse the Company for all 
expenses in connection with these activities.  The sale of the selected assets 
noted above was for approximately $2.9 million.  Of this amount, $712,000 was 
used to pay down the Wachovia term loan secured by the machinery and equipment 
and the remaining amount was used to reduce the borrowings under the revolving 
credit facility.  The Company recorded a gain of approximately $370,000 on 
such sales. The Company plans to sell the remaining assets of the Rostone 
business during 2005.  

Insurance Receipt

     During the second quarter of 2005, the Company received a business 
interruption insurance advance payment of approximately $600,000 related to a 
plant accident at the pressure vessel segment plant in the first quarter of 
2005 which was classified to cost of sales.  [An additional final settlement 
is expected.]                                   













                                 - 11 -





                                  
NOTE 3:  LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

                                               At June 30,        December 31,
                                                     2005                2004
                                          ---------------      --------------
                                              (unaudited)
Wachovia revolving credit facility               $ 10,898            $ 11,650
Junior participation to revolving credit
  Facility (net of warrant value of $123
  and $165, respectively)                           2,877               2,835
Wachovia term loan                                  1,405               2,539
Note payable due December 1, 2006                   3,950               4,200
Note payable due December 5, 2006 (net of 
  warrant value of $56 and $71, respectively)       3,445               3,429
13% senior notes (net of warrant value 
  of $153 and $207, respectively)                  21,860              21,806
Notes payable                                       8,451               8,451
Notes payable - related parties                       500                 500
Capital leases and other                                6                   9
                                                 --------            --------

  Total long-term debt                             53,392              55,419
Classified as current                             (19,078)            (19,791)
                                                 --------            --------
  Long-term debt                                 $ 34,314            $ 35,628
                                                 ========            ========

	Pursuant to EITF 95-22, "Balance Sheet Classification of Borrowings 
Outstanding under Revolving Credit Agreements that Include both a Subjective 
Acceleration Clause and a Lock-Box Arrangement are Deemed to be Current", the 
Company has classified its Wachovia revolving credit obligations, including 
the junior participation, within current liabilities as the Wachovia agreement 
contains language that implies that Wachovia has a subjective acceleration 
clause that it could invoke at any time to accelerate the debt and includes a 
required lock-box arrangement.


NOTE 4:  INVENTORIES

Inventories are comprised of the following (in thousands):

                                               At June 30,     At December 31,
                                                     2005                2004
                                              -----------      --------------
                                              (unaudited)   
Raw material                                     $ 3,088             $ 3,760
Work-in-process                                    2,676               2,775
Finished goods                                     3,130               2,765
                                                 --------            --------
  Inventories                                    $ 8,894             $ 9,300
                                                 ========            ========

	Inventories are valued at the lower of cost or market, cost being 
determined on the first-in, first-out method.  The above amounts are net of 
inventory reserves of $889 and $682 at June 30, 2005 and December 31, 2004,  
respectively.


NOTE 5:  STOCKHOLDERS' DEFICIT AND EARNINGS PER SHARE

     The following represents a reconciliation of the change in stockholders'
deficit for the six month period ended June 30, 2005 (in thousands):

                                    - 12 -

                                                     Accum-
                          Par    Capital             ulated
                         Value     in                 Other
                           of    Excess    Accum-    Compre-
                         Common  of Par    ulated    hensive
                         Stock   Value     Deficit    Loss       Total
                         ------  -------  --------  --------   --------
At January 1, 2005         $163  $27,866  $(51,710) $ (1,902)  $(25,583)
  Activity (unaudited):
Stock issuance                4      374         -         -        378
Net loss                      -        -    (1,122)        -     (1,122)
                           ----  -------  --------  --------   --------
At March 31, 2005          $167  $28,240  $(52,832) $ (1,902)  $(26,327)
                           ====  =======  ========  ========   ========
                               
	At the June 21, 2005 Board of Directors meeting, approval was granted 
for the Company to enter into settlement agreements with two officers of the 
Company.  Under such settlement agreements, the officers agreed to forgive 
$309,960 of guarantee fees and interest owed to them and to convert an 
additional $68,040 of such fees and interest into 378,000 shares of common 
stock of the Company. Such conversion added $378,000 to the Company's equity. 
  
     The computations of basic and diluted earnings (loss) per common share 
EPS (LPS) for the three and six month periods ended June 30, 2005 and 2004 are 
as follows (in thousands, except per share amounts)(unaudited):

                                                  Net
                                                Income               EPS
                                                (Loss)    Shares    (LPS)
                                               --------  --------  -------
     Three months ended June 30, 2005:
Income applicable to common stockholders, 
  weighted average shares outstanding 
  and basic LPS                                $    252    16,317  $  0.02
                                                                   =======
Dilutive effect of stock options and warrants               3,356    
                                               --------  --------
Income applicable to common stockholders, 
  shares outstanding and diluted LPS           $    252    19,673  $  0.01
                                               ========  ========  =======

     Three months ended June 30, 2004:
Loss applicable to common stockholders, 
  Weighted average shares outstanding 
  and basic EPS                                $   (402)   16,279  $ (0.02)
                                                                   =======
Dilutive effect of stock options and warrants                   -     
                                               --------  -------- 
Loss applicable to common stockholders, 
  shares outstanding and diluted LPS           $   (402)   16,279  $ (0.02)   
                                               ========  ========  =======

     Six months ended June 30, 2005:
Loss applicable to common stockholders, 
  weighted average shares outstanding 
  and basic LPS                                $ (1,122)   16,298  $ (0.07)
                                                                   =======
Dilutive effect of stock options and warrants                   -
                                               --------  --------
Loss applicable to common stockholders, 
  shares outstanding and diluted LPS           $ (1,122)   16,298  $ (0.07)
                                               ========  ========  =======



                                    - 13 -



     Six months ended June 30, 2004:
Income applicable to common stockholders, 
  Weighted average shares outstanding 
  and basic EPS                                $  1,947    16,279  $  0.12
                                                                   =======  
Dilutive effect of stock options and warrants               2,550   
                                               --------  --------  
Income applicable to common stockholders, 
  shares outstanding and diluted LPS           $  1,947   18,829  $   0.10
                                               ========  ========  =======

     At June 30, 2005 and 2004, the Company's stock options outstanding 
totaled 1,414,000 and 614,000, respectively.  Such options included a dilutive 
component of 12,308 and 11,194 shares for the three and six month periods 
ended June 30, 2005, respectively, and a dilutive component of 183,577 and 
191,133 shares for the three and six month periods ended June 30, 2004, 
respectively.   At June 30, 2005 and 2004, outstanding warrants to purchase 
the Company's common totaled 4,073,249 and 3,929,286, respectively.  Such 
warrants included a dilutive component of 3,344,217 and 3,369,781 shares for 
the three and six month periods ended June 30, 2005, respectively, and a 
dilutive component of 2,378,798 and 2,379,787 shares for the three and six 
month periods ended June 30, 2004, respectively.  Because the Company had a 
loss from operations for the six month period ended June 30, 2005 and for the 
three month period ended March 31, 2004, inclusion of options and warrants has 
an anti-dilutive effect on LPS.  
                                     
NOTE 6:  COMMITMENTS AND CONTINGENT LIABILITIES


     The Company is and has been involved in a number of lawsuits and 
administrative proceedings, which have arisen in the ordinary course of 
business of the Company and its subsidiaries. Other than the Naptech 
Settlement as described in Note 2: Recent Developments, there have been no 
major changes in such lawsuits from that reported in the Company's Annual 
Report on Form 10-K for the year ended December 31, 2004. 

Product Warranties

     The Company provides for warranty claims at its cylinders segment.  
Amounts accrued are estimates of future claims based on historical claims 
experience or a management estimate related to a specifically identified 
issue.  The Company reevaluates its product warranty reserve quarterly and 
adjusts it based on changes in historical experience and identification of new 
or resolution of prior specifically identified issues.  A tabular 
reconciliation of the product warranty reserve for the six month periods ended 
June 30, 2005 and 2004 follows (in 000's):

                                                          June 30,
     Description                                     2005        2004
     ------------------------------------------    --------    --------
       Beginning balance                           $    100    $    211
     Add: Provision for estimated future claims          76          72
     Deduct: Cost of claims                             (59)        (49)
                                                   --------    --------
       Ending balance                              $    117    $    234
                                                   ========    ========






                                    - 14 -




NOTE 7:  OPERATING SEGMENT DISCLOSURES

     The following represents the disaggregation of financial data (in
thousands)(unaudited):
                                                      Capital     Total
                               Net Sales  EBITDA(1)   Spending  Assets(2)
                               ---------  ---------  ---------  ---------
Three months ended and 
  at June 30, 2005:
------------------------                                         At 06/30
  Metals:                                                        --------
Pressure vessels                $  6,803   $  1,991   $     22   $ 15,198
Cylinders                          5,397        547         12      7,945
Grating                            1,963        270         10      3,699
                                --------   --------   --------   --------
  Subtotal Metals                 14,163      2,808         44     26,842

Plastics                           5,297        682         35      8,365
Corporate and other                    -       (573)         -     13,927
Discontinued operations                -          -          -      3,776
                                --------   --------   --------   --------
  Totals                        $ 19,460      2,917   $     79   $ 52,910
                                ========              ========   ========
Depreciation                                   (438)
Interest expense, net                        (2,145)
                                           --------
  Income from continuing operations before
   income taxes and minority interests     $    334
                                           ========


Three months ended June 30, 2004  
  and at December 31, 2004:
--------------------------------                                  At 12/31
  Metals:                                                        --------
Pressure vessels                $  5,872   $  1,015   $    200   $ 13,505
Cylinders                          4,402        188        119      8,472
Grating                            2,582        325          -        645
                                --------   --------   --------   --------
  Subtotal Metals                 12,856      1,528        319     23,772

Plastics                           4,682        641        119      8,935
Corporate and other                    -       (333)         -     15,440
Discontinued operations                -          -         17      6,105
                                --------   --------   --------   --------
  Totals                        $ 17,538      1,836   $    455   $ 54,252
                                ========              ========   ========
Gain on extinguishment of debt                  470
Depreciation                                   (440)
Interest expense, net                        (1,975)
                                           --------
  Loss from continuing operations 
    before income taxes                    $   (109)
                                           ========







                                    - 15 -





                                                      Capital     
                               Net Sales  EBITDA(1)   Spending                
                               ---------  ---------  ---------  
Six months ended June 30, 2005: 
------------------------------                                        
  Metals:                                                       
Pressure vessels                $ 12,055   $  2,380   $    127  
Cylinders                         10,659        961         23 
Grating                            3,814        482         11  
                                --------   --------   --------  
  Subtotal Metals                 26,528      3,823        161   

Plastics                          10,228      1,214         55  
Corporate and other                    -     (1,212)         -  
Discontinued operations                -          -          - 
                                --------   --------   --------  
  Totals                        $ 36,756      3,825   $    216  
                                ========              ========  
Depreciation                                   (821)
Interest expense, net                        (4,264)
                                           --------
  Loss from continuing operations before
   income taxes and minority interests     $ (1,260)
                                           ========

Six months ended June 30, 2004:  
-------------------------------                                 
  Metals:                                                       
Pressure vessels                $ 10,372   $  1,884   $    208  
Cylinders                          9,277        487        169  
Grating                            4,643        608          -  
                                --------   --------   --------  
  Subtotal Metals                 24,292      2,979        377  

Plastics                           9,066      1,135        156  
Corporate and other                    -       (851)        11  
Discontinued operations                -          -         44  
                                --------   --------   --------  
  Totals                        $ 33,358      3,263   $    588  
                                ========              ========  

Gain on extinguishment of debt                3,540
Depreciation                                   (879)
Interest expense, net                        (3,754)
                                           --------
  Loss from continuing operations 
    before income taxes                    $  2,170
                                           ========


(1) EBITDA is presented as it is the primary measurement used by management 
    in assessing segment performance and not as an alternative measure of
    operating results or cash flow from operations as determined by accounting
    principles generally accepted in the United States, but because it is a
    widely accepted financial indicator of a company's ability to incur and
    service debt.

(2) Corporate and other assets at June 30, 2005 and at December 31, 2004
    includes $8.0 million of goodwill that relates to the Company's pressure
    vessels segment.  For evaluation purposes under SFAS No. 142,
    this goodwill is included in the carrying value of the pressure vessels
    segment.  At June 30, 2005 and December 31, 2004, goodwill of $1.5        
    million is recorded at each of pressure vessels and cylinders.

                                   - 16 -
NOTE 8:   DISCONTINUED OPERATIONS 
     
	At June 30, 2005, the assets and liabilities of discontinued operations 
are comprised of the remaining assets and liabilities of the Rostone business 
and the Company's land and buildings in Milwaukee, WI that are held for sale. 
Such assets and liabilities are as follows (in thousands):
                                                     
     CURRENT ASSETS:
Cash and cash equivalents                            $     10      
Inventories, net                                          249           
Other current assets                                       64           
                                                     --------      
     Total current assets                            $    323                 
                                                     ========      
     CURRENT LIABILITIES:
Trade payables                                       $    602      
Other current liabilities                                 125      
                                                     --------      
     Total current liabilities                       $    727      
                                                     ========      
     OTHER ASSETS:
Property, plant and equipment, held for sale         $  3,453      
                                                     ========      
     OTHER LIABILITIES:
Other liabilities                                    $    916      
                                                     ========      

	Results of discontinued operations for the quarter and six months ended 
June 30, 2005 relate primarily to Rostone while the results of discontinued 
operations for the quarter and six months ended June 30, 2004 include both 
Rostone and the Company's springs segment.  A summarization of such results is 
as follows (in thousands): 


     
3-months ended June 30, 2005         3-months ended June 30, 2004
---------------------------------    ---------------------------------
Net sales                 $ 1,071    Net sales                $  3,098
Loss before taxes               -    Loss before taxes            (180)



6-months ended June 30, 2005         6-months ended June 30, 2004
---------------------------------    ---------------------------------
Net sales                 $ 2,909    Net sales                $  6,125
Loss before taxes             (77)   Loss before taxes             (12)       
                          









                                   - 17 -


NOTE 9:  COMPONENTS OF BENEFIT COSTS   

     The following tables present the components of net periodic benefit costs 
for Metals pension and Metals and Corporate Executive Payroll other 
postretirement plans for the three and six month periods ended June 30, 2005 
and  2004 (000's)(unaudited):

                                        Pension              Postretirement
                                   ------------------      ------------------
                                     3-months ended          3-months ended
                                   ------------------      ------------------
                                        June 30,                June 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $   53      $   35      $   27      $    6
Interest cost                          57          52          28           9
  Amortization of:
Prior service cost                      4           5           -           -
Unrecognized net loss (gain)           16          11          18           2
Unrecognized net obligation             -           -          12           4
Expected return on plan assets        (55)        (45)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $   75      $   58      $   85      $   21
                                   ======      ======      ======      ======


                                        Pension              Postretirement
                                   ------------------      ------------------
                                     6-months ended          6-months ended
                                   ------------------      ------------------
                                        June 30,                June 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $  106      $   70      $   54      $   12
Interest cost                         114         105          56          18
  Amortization of:
Prior service cost                      8          10           -           -
Unrecognized net loss (gain)           32          22          36           4
Unrecognized net obligation             -           -          24           8
Expected return on plan assets       (110)        (90)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $  150      $  117      $  170      $   42
                                   ======      ======      ======      ======


     In May 2005, the Company made a required payment of $383,602 to the 
Metals pension plan.

                                    
     The following tables present the components of net periodic benefit costs 
for Plastics pension and other postretirement plans for the three and six 
month periods ended June 30, 2005 and 2004 (000's)(unaudited):






                                   - 18 -


                                        Pension              Postretirement
                                   ------------------      ------------------
                                     3-months ended          3-months ended
                                   ------------------      ------------------
                                        June 30,                June 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $    -      $    -      $    -      $   15
Interest cost                          56          56          12          31
  Amortization of:
Unrecognized net loss (gain)           15          17           -           4
Expected return on plan assets        (71)        (43)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $    -      $   30      $   12      $   50
                                   ======      ======      ======      ======


                                        Pension              Postretirement
                                   ------------------      ------------------
                                     6-months ended          6-months ended
                                   ------------------      ------------------
                                        June 30,                June 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $    -      $    -      $    -      $   30
Interest cost                         112         112          24          62
  Amortization of:
Unrecognized net loss (gain)           30          34           -           8
Expected return on plan assets       (142)        (86)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $    -      $   60      $   24      $  100
                                   ======      ======      ======      ======



     The Company expects to contribute $363,000 to the Plastics pension plan 
in September 2005.

                

PART I.   FINANCIAL INFORMATION

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

     The following discussion and analysis is provided to assist readers in 
understanding financial performance during the periods presented and 
significant trends which may impact future performance.  It should be read in 
conjunction with the consolidated financial statements and accompanying notes 
included elsewhere in this Form 10-Q and in conjunction with our annual report 
on Form 10-K for the year ended December 31, 2004.

GENERAL

     The Company owns and operates industrial manufacturing operations that 
design and manufacture engineered, high-quality products for specific customer 
requirements, such as large-diameter seamless pressure vessels, hydraulic and 
pneumatic cylinders, grating and precision plastic components. 

                                    - 19 -

RESULTS OF OPERATIONS

Three Months Ended June 30, 2005 Compared to 
  Three Months Ended June 30, 2004

     Net sales, gross margins and EBITDA percentages for the three months 
ended 2005 and 2004 are as follows.  The percentages of EBITDA to net sales 
exclude corporate and other EBITDA.  Including corporate and other EBITDA, the 
percentages of consolidated EBITDA to net sales for the three month periods 
ended June 30, 2005 and 2004 are 15.0% and 10.5%, respectively ($'s in 000's):

                       Net Sales        Gross Margin       EBITDA
                 --------------------  --------------  --------------
                    2005       2004     2005    2004    2005    2004
                 ---------  ---------  ------  ------  ------  ------
Pressure vessels $   6,803  $   5,872   35.6%   20.5%   29.3%   17.3%
Cylinders            5,397      4,402   19.0%   16.7%   10.1%    4.3%
Grating              1,963      2,582   22.9%   26.3%   13.8%   12.6% 
Plastics             5,297      4,682   18.0%   18.6%   12.9%   13.7%
                 ---------  ---------  ------  ------  ------  ------
  Totals         $  19,460  $  17,538   24.9%   19.4%   17.9%   12.4%
                 =========  =========  ======  ======  ======  ======

     Net sales for the second quarter of 2005 were up 11.0% from the second 
quarter of 2004.  Such increase reflects sales increases at all of the 
domestic operations which offset reduced sales of grating at our Chinese joint 
venture. The increase in domestic sales is primarily the result of improving 
orders in 2005 over 2004 at all divisions which produced a 50% increase in the 
April 1, 2005 combined backlogs over April 1, 2004.  The increased April 1, 
2005 backlog in the pressure vessel segment not only reflects improving 
orders, but also a residual effect from the January 2005 accident discussed in 
the first quarter filing that negatively impacted operations in that first 
quarter. The decrease in grating sales reflects the impact of additional 
competition from local Chinese businesses, [which situation is expected to 
continue throughout the year.]

     Gross margin as a percentage of sales in the second quarter of 2005 
compared to the same quarter in 2004 increased to 24.9% from 19.4%. This 
increase reflects gross margin increases in the pressure vessel and cylinders 
segments which offset decreases in the grating and plastics segments. Pressure 
vessel gross margin as a percentage of sales increased to 35.6% in 2005 from 
20.5% in 2004 due primarily to two factors.  One was the receipt in the second 
quarter of a business interruption insurance advance payment of approximately 
$600,000 related to the plant accident noted in the Company's first quarter 
filing. The second factor is the 16% increase in pressure vessel sales in 2005 
over 2004 which generated improved efficiencies of operation.  The increase in 
cylinder gross profit margin reflects the benefits in operations as a result 
of a 22% increase in cylinder sales in 2005 over 2004.  The decrease in gross 
margin in the grating segment reflects the negative impact from reduced sales 
as noted above.  The decrease in the gross margin in the plastics segment is 
primarily due to a more favorable product mix in 2004, higher plant 
inefficiencies in 2005 related to new molds and higher material costs that 
have yet to be passed on to customers.  

     Management evaluates the Company's segments based on EBITDA, a measure of 
cash generation, which is presented, not as an alternative measure of 
operating results or cash flow from operations as determined by accounting 
principles generally accepted in the United States, but because it is a widely 
accepted financial indicator of a company's ability to incur and service debt 
and due to the close relationship it bears to Reunion's financial covenants in 
its borrowing agreements.  EBITDA and EBITDA as a percentage of sales was 
higher in the second quarter of 2005 compared to 2004 primarily due to the 
same factors affecting gross profit margin discussed above.  A reconciliation 
of EBITDA to operating income for the three months ended June 30, 2005 and 
2004 by segment and corporate and other is as follows (000's)(unaudited):

                                   - 20 -

                               Operating    Deprec-   
                                  Profit     iation     EBITDA
                               ---------  ---------    ---------
2005:
-----
Pressure vessels                $  1,854   $    137    $  1,991
Cylinders                            511         36         547
Grating                              218         52         270
Plastics                             479        203         682
Corporate and other                 (583)        10        (573)
                                --------   --------    --------
  Totals                        $  2,479   $    438    $  2,917
                                ========   ========    ========
2004:
-----
Pressure vessels                $    868   $    147    $  1,015
Cylinders                            138         50         188
Grating                              325          -         325
Plastics                             408        233         641
Corporate and other                 (343)        10        (333)
                                --------   --------    --------
  Totals                           1,396   $    440    $  1,836
                                           ========    ========
Gain on debt extinguishment          470 
                                --------
  Operating profit               $ 1,866
                                ========  

                                     
Selling, General and Administrative

     Selling, general and administrative (SGA) expenses for the second quarter 
of 2005 were $2.4 million, an increase of $163,000 from the expenses for the 
second quarter of 2004.  This increase reflects the net of $262,000 in 
additional divisional expense offset partially by a reduction of $99,000 in 
corporate expense.  Of the divisional increase, $190,000 was in the pressure 
vessel segment and related primarily to an increase in sales commissions due 
to an increase in foreign sales. The majority of the other increase was in the 
cylinder segment and reflects additional professional fees for legal and 
employment related issues.  The decrease in corporate expenses reflects 
reductions in both staff and operating expenses.  As a percentage of sales, 
SGA expenses decreased to 12.2% for the second quarter of 2005 compared to 
12.6% for the second quarter of 2004 as overall expenses increased slower than 
the overall increase in sales. [The Company continues to look for ways to cut 
costs in all areas.]   

Gain on Debt Extinguishments

     There were no gains on debt extinguishments in the second quarter of 
2005.  There were $470,000 of such gains in the second quarter of 2004. Of 
this amount, $262,000 was related to the SFSC Settlement and $208,000 was 
related to the 13% Senior Note second Consent Solicitation, all as more fully 
described in the Company's December 31, 2004 annual filing on Form 10-K.
 
     [The Company is currently investigating other recapitalization scenarios 
that include, among other things, the use of additional private capital fund 
financing to repurchase at discounts some portion or all of our senior and 
unsecured subordinated notes payable. See Note 2: Recent Developments - 
Naptech Settlement.]   

Other Income, net

     Other income, net for the second quarter of 2005 was $4,000, compared to 
other income, net of $204,000 for the second quarter of 2004. There were no 
significant offsetting items of other income and expense in the 2005 period.
                                   - 21 -
Significant items in the 2004 period included other income of $331,000, 
relating to an adjustment of the Louisiana environmental reserve, and other 
expense of $171,000, related to the costs to complete the consolidation of the 
cylinder operations into one facility in Libertyville, IL. There were no other 
individually significant items in the second quarter of 2004.
                  
Minority Interests

     Minority interests for the second quarter in 2005 and 2004 was $71,000 
and $113,000, respectively.  These amounts represent the income during the 
quarter allocated to the minority ownerships of the Company's consolidated 
foreign grating joint venture.  Minority interests are calculated based on the 
percentage of minority ownership.  From a balance sheet perspective, minority 
interest was reduced by the minority ownership of the 2005 declared dividend. 

Interest Expense
 
     Interest expense for the second quarter of 2005 was $2.145 million 
compared to $1.975 million for the second quarter of 2004.  The significant 
interest increases were $108,000 for interest accrued on the Senior Note 
interest that the Company was not able to make in January of 2005, as 
discussed earlier under Note 2 to the financial statements "RECENT 
DEVELOPMENTS", $100,000 for a higher level of amortization of deferred 
financing costs and estimated warrant value and $62,000 for interest expensed 
in connection with the May 2004 supplemental loan to the Wachovia credit 
facility as described in Company's December 31, 2004 filing on form 10-K. 
Offsetting a portion of these increases was a $108,000 decrease in interest 
expense as a result of the SFSC Settlement as referred to above in the caption 
"Gain on Debt Extinguishments". The remaining net increase in expense is due 
to an increase in interest rates in the 2005 period over the 2004 period.

Income Taxes

     There was a tax provision of $11,000 in the second quarter of 2005 
compared to no tax provision in the second quarter of 2004.  This provision is 
at the Company's Chinese subsidiary, whose tax holiday ended in April, 2005.  
The Company has net operating loss carryforwards for federal tax return 
reporting purposes totaling $64.1 million at December 31, 2004.  The years in 
which such net operating losses expire are as follows (000's):
                        Year ending December 31:   		
                        ------------------------------
                        2007                  $  6,067    
                        2008                       609   
                        2009                     3,235  
                        2010                     2,520  
                        After 2010              51,666  


     [The Company may be able to utilize its loss carryforwards against 
possible increased future profitability.]  However, management has determined 
to fully reserve for the total amount of net deferred tax assets as of June 
30, 2005 [and to continue to do so during 2005 until management can conclude 
that it is more likely than not that some or all of our loss carryforwards can 
be utilized.]



Six Months Ended June 30, 2005 Compared to 
  Six Months Ended June 30, 2004

     Net sales, gross margins and EBITDA percentages for the six months ended 
2005 and 2004 are as follows.  The percentages of EBITDA to net sales excludes 
corporate and other EBITDA.  Including corporate and other EBITDA, the 
percentages of consolidated EBITDA to net sales for the six month periods 
ended June 30, 2005 and 2004 are 10.4% and 9.8%, respectively ($'s in 000's):

                                   - 22 -





                       Net Sales        Gross Margin       EBITDA
                 --------------------  --------------  --------------
                    2005       2004     2005    2004    2005    2004
                 ---------  ---------  ------  ------  ------  ------
Pressure vessels $  12,055  $  10,372   25.7%   20.5%   19.7%   18.2%
Cylinders           10,659      9,277   17.4%   17.6%    9.0%    5.2%
Grating              3,814      4,643   24.1%   23.8%   12.6%   13.1% 
Plastics            10,228      9,066   17.1%   17.7%   11.9%   12.5%
                 ---------  ---------  ------  ------  ------  ------
  Totals         $  36,756  $  33,358   20.7%   19.9%   13.7%   12.3%
                 =========  =========  ======  ======  ======  ======

     Net sales for the first half of 2005 were up 10.2% from the first half of 
2004.  Such increase reflects sales increases at all of the domestic 
operations which offset reduced sales of grating at our Chinese joint venture. 
The increased domestic sales primarily is the result of the 54% increase in 
the domestic backlog going into the 2005 year over the backlog that existed 
going into the 2004 year and increased orders in the first half of 2005 over 
the first half of 2004. Pressure vessels sales would have been even higher in 
the first half were it not for a plant accident in January 2005 that crippled 
that plant's heat treating operation, preventing this division from completing 
and shipping product for a period in excess of five weeks, which negatively 
impacted the division's ability to take on additional new business. The 
decrease in grating sales reflects the impact of additional competition from 
local Chinese businesses, [which situation is expected to continue throughout 
the year.]

     Gross margin as a percentage of sales in the first half of 2005 compared 
to the first half of 2004 increased to 20.7% from 19.9%. This increase 
primarily reflects the gross margin increase in the pressure vessel segment, 
while the other segments approximated the prior year margins. Pressure vessel 
gross margin as a percentage of sales increased to 25.7% in 2005 to 20.5% in 
2005 due primarily to two factors.  One was the receipt in the second quarter 
of a business interruption insurance advance payment of approximately $600,000 
related to the plant accident noted in the Company's first quarter filing. The 
second factor is the 16% increase in pressure vessel sales in 2005 over 2004 
which generated improved efficiencies of operation. Cylinder gross margin 
decreased slightly as a percentage of sales from 17.6% in 2004 to 17.4% in 
2005 due primarily to a more favorable product mix in 2004 and plant 
inefficiencies in 2005 combined with higher material costs that have yet to be 
passed on to customers. Plastics gross margin decreased from 17.7 % in 2004 to 
17.1% in 2005 due primarily to a more favorable product mix in 2004, higher 
plant inefficiencies in 2005 related to new molds and higher material costs 
that have yet to be passed on to customers.  Grating gross margins increased 
to 24.1% in 2005 from 23.8% in 2004 as the division focused more on profitable 
job opportunities as opposed to sales revenue dollars. 

     Management evaluates the Company's segments based on EBITDA, a measure of 
cash generation, which is presented, not as an alternative measure of 
operating results or cash flow from operations as determined by accounting 
principles generally accepted in the United States, but because it is a widely 
accepted financial indicator of a company's ability to incur and service debt 
and due to the close relationship it bears to Reunion's financial covenants in 
its borrowing agreements.  EBITDA and EBITDA as a percentage of sales was 
higher in the first half of 2005 compared to 2004 primarily due to the same 
factors affecting gross profit margin discussed above.  A reconciliation of 
EBITDA to operating income for the six months ended June 30, 2005 and 2004 by 
segment and corporate and other is as follows (000's)(unaudited):

                                   - 23 -


                               Operating    Deprec-   
                                  Profit     iation     EBITDA
                               ---------  ---------    ---------
2005:
-----
Pressure vessels                $  2,108   $    272    $  2,380
Cylinders                            891         70         961
Grating                              427         55         482
Plastics                             811        403       1,214
Corporate and other               (1,233)        21      (1,212)
                                --------   --------    --------
  Totals                        $  3,004   $    821    $  3,825
                                ========   ========    ========
2004:
-----
Pressure vessels                $  1,590   $    294    $  1,884
Cylinders                            388         99         487
Grating                              608          -         608
Plastics                             670        465       1,135 
Corporate and other                 (872)        21        (851)
                                --------   --------    --------
  Totals                           2,384   $    879    $  3,263
                                           ========    ========
Gain on debt extinguishment        3,540
                                --------
  Operating profit               $ 5,924
                                ========  

                                     
Selling, General and Administrative

     Selling, general and administrative (SGA) expenses for the first half of 
2005 were $4.6 million, up $102,000 from the expenses for the first half of 
2004.  This increase reflects the net of $211,000 in additional divisional 
expense offset partially by a reduction of $109,000 in corporate expense. Of 
the divisional increase, $203,000 was in the pressure vessel segment and 
related primarily to an increase in sales commissions due to an increase in 
foreign sales.  The decrease in corporate expenses reflects reductions in both 
staff and operating expenses. As a percentage of sales, SGA expenses decreased 
to 12.6% for the first half of 2005 compared to 13.6% for the first half of 
2004 as, even with higher sales, the majority of the Company's domestic 
divisions recorded lower expenses in 2005 than in 2004. [The Company continues 
to look for ways to cut costs in all areas.]   


Gain on Debt Extinguishments

     There were no gains on debt extinguishments in the first half of 2005.  
There were $3.5 million of such gains in the first half of 2004. Of this 
amount, $3.3 million was related to the SFSC Settlement and $0.2 million was 
related to the 13% Senior Note second Consent Solicitation, all as more fully 
described in the Company's December 31, 2004 annual filing on Form 10-K.
 
     [The Company is currently investigating other recapitalization scenarios 
that include, among other things, the use of additional private capital fund 
financing to repurchase at discounts some portion or all of our senior and 
unsecured subordinated notes payable. See Note 2: Recent Developments - 
Naptech Settlement.]   


Other Income

     Other income for the first half of 2005 was $13,000, compared to other 
income of $283,000 for the first half of 2004. There were no significant 
offsetting items of other income and expense in the 2005 period.
Significant items in the 2004 period included other income of $331,000, 
                                   - 24 -
relating to an adjustment of the Louisiana environmental reserve, and other 
expense of $288,000, related to the costs to complete the consolidation of the 
cylinder operations into one facility in Libertyville, IL. There were no other 
individually significant items in the second half of 2004.
                               
Minority Interests

     Minority interests for the first half of 2005 and 2004 were $144,000 and 
$211,000, respectively.  These amounts represent the income during the period 
allocated to the minority ownerships of the Company's consolidated foreign 
grating joint venture.  Minority interests are calculated based on the 
percentage of minority ownership.  From a balance sheet perspective, minority 
interest was reduced by the minority ownership of the 2005 declared dividend. 

Interest Expense
 
     Interest expense for the first half of 2005 was $4.264 million compared 
to $3.754 million for the first half of 2004.  The significant interest 
increases were $238,000 for a higher level of amortization of deferred 
financing costs and estimated warrant value, $199,000 for interest accrued on 
the Senior Note interest that the Company was not able to make in January of 
2005, as discussed earlier under Note 2 to the financial statements "RECENT 
DEVELOPMENTS", and $175,000 for interest related to the May 2004 supplemental 
loan to the Wachovia credit facility as described in Company's December 31, 
2004 filing on form 10-K. Offsetting a portion of these increases was a 
$110,000 decrease in interest expense as a result of the SFSC Settlement as 
referred to above in the caption "Gain on Debt Extinguishments". The remaining 
net increase in expense is due to an increase in interest rates in the 2005 
period over the 2004 period.

Income Taxes

     There was a tax provision of $11,000 in the first half of 2005 compared 
to no tax provision in the first half of 2004.  This provision is at the 
Company's Chinese subsidiary, whose tax holiday ended in April, 2005.  The 
Company has net operating loss carryforwards for federal tax return reporting 
purposes totaling $64.1 million at December 31, 2004.  The years in which such 
net operating losses expire are as follows (000's):
                        Year ending December 31:   		
                        ------------------------------
                        2007                  $  6,067    
                        2008                       609   
                        2009                     3,235  
                        2010                     2,520  
                        After 2010              51,666  


     [The Company may be able to utilize its loss carryforwards against 
possible increased future profitability.]  However, management has determined 
to fully reserve for the total amount of net deferred tax assets as of June 
30, 2005 [and to continue to do so during 2005 until management can conclude 
that it is more likely than not that some or all of our loss carryforwards can 
be utilized.]









                                    - 25 -





LIQUIDITY AND CAPITAL RESOURCES

General

     The Company manages its liquidity as a consolidated enterprise.  The 
operating groups of the Company carry minimal cash balances.  Cash generated 
from group operating activities generally is used to repay borrowings under 
revolving credit arrangements, as well as other uses (e.g. corporate 
headquarters expenses, debt service, capital expenditures, etc.).  Conversely, 
cash required for group operating activities generally is provided from funds 
available under the same revolving credit arrangements.

Recent Events

NapTech Settlement

     On April 26, 2005 a judgment was entered in Louisiana in favor of Shaw 
Naptech, Inc. ("Naptech") against various parties, including the Company.  On 
July 8, 2005, the Company entered into a Settlement Agreement with Naptech 
pursuant to which the Company paid NapTech $1.65 million in settlement of the 
Company's indebtedness to NapTech of approximately $5.1 million under a 
promissory note and the related judgment. As a result of the NapTech 
settlement, Reunion will recognize a gain on debt extinguishment of 
approximately $3.4 million in the third quarter of 2005.

	In connection with the NapTech settlement, Wachovia Bank, National 
Association ("Wachovia") made a $3.1 million supplemental loan to Reunion 
under its existing $25 million loan facility, thereby increasing the total 
amount of the supplemental loan portion of the facility to $6.1 million.  
Reunion used $1.65 million of this additional supplemental loan to make the 
Reunion Settlement Payment to NapTech and will use the balance of the loan 
proceeds for inventory purchases and to support letters of credit that may be 
issued for it under the Wachovia facility.  Wachovia required, as a condition 
to making the additional supplemental loan, that LC Capital Master Fund, Ltd. 
("LCC") purchase an additional $3.1 million junior participation interest in 
the Wachovia loan facility, and LCC did so, thereby increasing its junior 
participation interest in the facility to $6.1 million.  LCC in turn 
simultaneously sold a 50% interest in its junior participation interest to 
WebFinancial Corporation ("Web").

	To induce LCC to purchase the additional junior participation interest 
in the Wachovia loan facility and to induce Web to purchase a 50% interest in 
such junior participation interest, Reunion issued two warrants, one to LCC 
and one to Web, to purchase, in each case, 387,500 shares of the Company's 
common stock at a price of $0.01 per share.  These warrants are exercisable at 
anytime until July 12, 2010.

	Reunion's indebtedness under the Wachovia loan facility, including the 
supplemental loans, is secured by liens on substantially all of Reunion's 
assets.
	

13% Senior Notes

	On February 3, 2005, the Company announced that it was unable to make a 
$2,928,000 interest payment by February 2, 2005 to the holders of the 13% 
Senior Notes.  Holders of more than 80% of the principal amount of such Senior 
Notes agreed to enter into a Standstill Agreement with the Company, pursuant 
to which such  holders agreed that they would not exercise and will cause the 
Trustee not to exercise any remedies provided for in the Indenture under which 
the Senior Notes were issued, or any other agreements related to such notes, 
with respect to this payment default or with respect to a potential event of 
default if the Company fails to make the next scheduled interest payment due 
April 1, 2005.   In the Standstill Agreement, such holders agreed to defer the 

                                  - 26 -
$2,928,000 of interest not paid, plus any interest that is not paid on the 
next regularly scheduled due date of April 1, 2005, to December 2006.  On 
April 1, 2005 the Company was unable to make this scheduled interest payment.

     On August 1, 2005 the Company was unable to make the scheduled July 1, 
2005 interest payment of $0.7 million to the holders of the Senior Notes and 
thus an event of default has occurred under the Indenture ("Indenture 
Default") under which the Senior Notes were issued. With an Indenture Default, 
holders of more than 25% of the principal amount of the Senior Notes may, by 
written notice to the Company and to the Trustee, declare the principal of and 
accrued but unpaid interest on all the Senior Notes to be immediately due and 
payable (the "acceleration"). However, under a previous Intercreditor and 
Subordination Agreement, the Senior Note holders can not commence any action 
to enforce their liens on any collateral for a 180 day period beginning after 
the date of receipt by Wachovia, the senior secured lender, of a written 
notice from the Senior Note holders informing Wachovia of such Indenture 
Default and demanding the acceleration.  At this date, neither the Company nor 
Wachovia has received written notice of any acceleration. 


Defaults and Waivers Under Revolving and Term Loan Credit Facility

     On December 3, 2003, the Company entered into a revolving and term loan 
credit facility with Wachovia (formerly, Congress Financial Corporation). The 
Wachovia facility requires Reunion to comply with financial covenants and 
other covenants, including a minimum amount of earnings before interest, 
taxes, depreciation and amortization (EBITDA) and a minimum fixed charge 
coverage ratio.  In November 2004, Wachovia and the Company entered into an 
amendment of the revolving and term loan credit facility wherein Wachovia 
eliminated the fixed charge coverage ratio and reduced the monthly minimum 
EBITDA covenant going forward.  Under the November 2004 amendment, the Company 
was required to maintain new minimum monthly amounts of EBITDA of $280,000 in 
November 2004, $290,000 in December 2004, $350,000 in January 2005, $280,000 
in February 2005 and $300,000 per month thereafter.  In January 2005, the 
Company failed to meet the minimum monthly amount, when it had an EBITDA loss 
for the month of $39,000.  Wachovia has waived this EBITDA shortfall.

	As described above under "Naptech Settlement", in April 2005, Naptech 
secured a judgment against the Company.  The judgment obtained by Naptech 
constituted a cross default under the Wachovia Loan Agreement.  Such default 
was waived by Wachovia.

	As described above under "13% Senior Notes", the Company failed to make 
the required July 1, 2005 interest payment to the Senior Note holders.  This 
failure constituted a cross default under the Wachovia Loan Agreement.  Such 
default has been waived by Wachovia and the Company is currently not in 
default under the Wachovia Loan Agreement
                                     

Sale of Assets

     The Company's management, having reevaluated the Company's ability to 
service its debt and meet future obligations, is investigating the sale of 
certain assets in order to generate liquidity. These asset sales may take one 
or more forms including, but not limited to, the sale of one or more divisions 
or piecemeal sales of assets including real estate, buildings, machinery and 
equipment and/or intangibles.  The Company's management cannot provide any 
assurances that any asset sales will occur or, if asset sales do occur, that 
such sales will generate sufficient liquidity for the Company. 

	During the first quarter of 2005, the Company did sell all of the assets 
and liabilities of its leaf spring manufacturing segment, located in Miami, 
OK, to an unrelated entity for $792,000.  Of this amount, $250,000 was used to 
pay down the private capital fund note payable secured by the real property, 
$41,000 was used to pay down the Wachovia term loan secured by the machinery 

                                  - 27 -
and equipment and the remaining amount was used to reduce the borrowings under 
the revolving credit facility. The Company recorded a loss of $318,000 on such 
sale which was provided for in the Company's 2004 year.

	Additionally, during the first quarter of 2005, the Company sold certain 
of the receivables, inventory and intangibles of its thermoset plastics 
operation ("Rostone") located in Lafayette, IN, along with certain of its 
machinery and equipment.  The sale of such assets was accomplished in two 
separate transactions, with the sale of certain of the Company's compounding 
operation assets being sold to one unrelated entity and the sale of certain of 
the Company's molding operation assets being made to a different unrelated 
entity. At the time of such sale, the Company entered into tolling or 
manufacturing agreements with such buyers under which the Company agreed to 
operate the compounding and molding operations at its Lafayette, IN facility 
for a limited time until the buyers could move such operations to different 
geographical locations.  The buyers agreed to reimburse the Company for all 
expenses in connection with these activities.  The sale of the selected assets 
noted above was for approximately $2.9 million.  Of this amount, $712,000 was 
used to pay down the Wachovia term loan secured by the machinery and equipment 
and the remaining amount was used to reduce the borrowings under the revolving 
credit facility.  The Company recorded a gain of approximately $370,000 on 
such sales. The Company plans to sell the remaining assets of the Rostone 
business during 2005.  

SUMMARY OF 2005 ACTIVITIES

     Cash and cash equivalents totaled $1.1 million at both June 30, 2005 and 
2004 as cash from investing activities of $3.5 million basically offset cash 
used in operating and financing activities.  Cash and cash equivalents at the 
end of a period generally represents lockbox receipts from customers.  The 
domestic portion of the cash, $0.7 million, will be applied to our Wachovia 
revolving credit facility as the funds clear the banking system.

Operating Activities

     Operating activities used $1.4 million in cash in the first half of 2005 
as an increase of $1.7 million in receivables from continuing operations and 
the payment of trade payables were only partially funded by amortization and 
an increase in other liabilities.

Investing Activities

     Investing activities generated $3.5 million as the sales of the springs 
segment and Rostone, as described above, were offset by capital expenditures 
of $0.2 million.

Financing Activities

     The Company made scheduled repayments of the Wachovia term loan totaling 
$318,000.  Additionally, in connection with the sale of the springs segment 
and the Rostone business, as described above, the Company paid an additional 
$1.1 million on its existing non-revolving credit debt.  Revolving credit 
facility borrowings decreased $0.8 million during the first half of 2005, 
primarily the result of the asset sales described above.  


FACTORS THAT COULD AFFECT FUTURE RESULTS

Reunion's vendors may restrict credit terms

     We have corrected many vendor-related problems with liquidity generated 
from the refinancing and from asset sales.  However, another period of tight 
liquidity could result in key vendors restricting or eliminating the extension 
of credit terms to us.  If this would happen, our ability to obtain raw 
materials would be strained significantly and our ability to manufacture 
products would be reduced.
                                   - 28 -

Reunion's bank financing is subject to financial covenants

     We are currently not in default on our bank financing and senior notes.  
However, our bank financing is subject to monthly financial and other 
covenants, and we have failed to meet such covenants on several occasions, for 
which we were able to obtain default waivers.  If our operations do not 
improve during 2005, we may fail to meet one or more financial or other 
covenants. If this would happen, we would be in default on our bank 
obligations and, subject to the terms of the loan and security agreement, all 
of our bank loans would be due and payable. Although it may be possible to 
negotiate additional waivers of defaults, no assurances can be given that we 
would be able to do so.
              
Reunion operates in highly competitive mature, niche markets

     Our products are sold in highly competitive mature, niche markets and we 
compete with companies of varying size, including divisions and subsidiaries 
of larger companies that have financial resources that exceed ours.  This 
combination of competitive and financial pressures could cause us to lose 
market share or erode prices, which could negatively impact our financial 
position and results of operations. 

Reunion's past performance could impact future prospects

     Because of losses suffered by the Company over the past several years, 
potential or current customers may decide not to do business with us.  If this 
were to happen, our sales may not increase or may decline.  If sales do not 
increase, or we experience a decline in sales, our ability to cover costs 
would be further reduced, which could negatively impact our financial position 
and results of operations.

Reunion is a going concern  

     The financial statements have been prepared on a going concern basis, 
which contemplates the realization of assets and the satisfaction of 
liabilities in the normal course of business.  At June 30, 2005, the Company 
has a deficiency in working capital of $13.9 million, a loss from continuing 
operations for the six months then ended of $1.4 million and a deficiency in 
assets of $26.3 million.  These conditions raise substantial doubt about the 
Company's ability to continue as a going concern.  The financial statements do 
not include any adjustments to reflect the possible future effects on the 
recoverability and classification of assets or the amounts and classifications 
of liabilities that may result from the outcome of this uncertainty. 

       We successfully refinanced our bank debt in December 2003 and have 
extinguished a significant portion of our obligations under various debt 
instruments over the past year.  These steps have improved liquidity and 
deferred the principal maturities on a significant portion of our debt.  
However, on February 3, 2005, we announced that we were unable to make a 
$2,928,000 interest payment by February 2, 2005 to the holders of the Senior 
Notes.  Holders of more than 80% of the principal amount of the Senior Notes 
agreed to enter into a Standstill Agreement with the Company.  Pursuant to 
such Standstill Agreement, holders agreed that they would not exercise and 
will cause the Trustee not to exercise any remedies provided for in the 
Indenture under which the Senior Notes were issued, or any other agreements 
related to the Senior Notes, with respect to this payment default or with 
respect to a potential Event of Default if the Company fails to make the next 
scheduled interest payment due April 1, 2005.   In the Standstill Agreement, 
such holders agreed to defer payment of the interest not paid by February 2, 
2005, and any interest that is due April 1, 2005 and not paid, to December 
2006. However, on July 1, 2005, the Company was again unable to make a 
required interest payment to the holders of the Senior Notes as more fully 
described in Note 2: Recent Developments - 13% Senior Notes.  


                                    - 29 -
     The Company is investigating other recapitalization scenarios in an 
effort to provide additional liquidity and extinguishments or deferrals of 
debt obligations.  Although we believe we can accomplish these plans, no 
assurances exist that we will.  Failure to accomplish these plans could have 
an adverse impact on the Company's liquidity, financial position and future 
operations.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk

     There have been no significant changes in the market risk factors which
affect the Company since the end of the preceding fiscal year.

Item 4. Controls and Procedures

      As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as 
amended, Reunion's management, including its Chief Executive Officer and Chief 
Financial Officer, conducted an evaluation as of the end of the period covered 
by this report, of the effectiveness of Reunion's disclosure controls and 
procedures as defined in Rule 13a-15(e). Based on that evaluation, the Chief 
Executive Officer and Chief Financial Officer concluded that Reunion's 
disclosure controls and procedures were effective as of the end of the period 
covered by this report. As required by Rule 13a-15(d), Reunion's management, 
including its Chief Executive Officer and Chief Financial Officer, also 
conducted an evaluation of Reunion's internal control over financial reporting 
to determine whether any changes occurred during the quarter that have 
materially affected, or are reasonably likely to materially affect, Reunion's 
internal control over financial reporting. Based on that evaluation, 
corrective action has been initiated in the Plastics operations to address the 
deterioration of controls noted in the Company's latest annual report filing 
on Form 10-K.  No other deterioration or changes were noted.   

      It should be noted that any system of controls, however well designed 
and operated, can provide only reasonable, and not absolute, assurance that 
the objectives of the system will be met. In addition, the design of any 
control system is based in part upon certain assumptions about the likelihood 
of future events. 


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

     The Company in involved in various legal proceedings and environmental 
matters.  See "Item 1. Financial Statements, Note 6: Commitments and 
Contingent Liabilities."

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

      On June 21, 2005, the Board of Directors approved settlement agreements 
between the Company and two officers of the Company.  In such settlement 
agreements, the officers agreed to forgive $309,960 of guarantee fees and 
interest owed to them and to convert an additional $68,040 of such fees and 
interest into 378,000 shares of common stock of the Company.  No cash was 
involved in this conversion.

	The issuance of such shares is exempt from registration under Section 
4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated by 
the Securities and Exchange Commission under such Act, based on the following: 
(1) this transaction is a private placement, (2) each officer has had access 
to the same kind of information about the Company that would be included in a 
registration statement covering the shares issued, (3) each officer has 
represented to the Company that he is an "accredited investor" with the 
meaning of Rule 501(a) of Regulation D and (4) the shares issued may not be 
sold or transferred in the absence of an effective registration statement 
under the Act covering such securities or an applicable exemption from such 
registration.
                                   - 30 -


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

     At the Company's Annual Meeting held on June 21, 2005, the stockholders 
elected seven directors for a term ending at the next Annual Meeting.  The 
votes, in thousands of shares, on the election of directors were as follows:

		Nominee                      Voted For         Withheld
		--------------------         ---------         --------
		Thomas N. Amonett              14,134             116
		Charles E. Bradley, Sr.        14,115             134
		Kimball J. Bradley             14,133             116
		Thomas L. Cassidy              14,125             124
		David E. Jackson               14,136             113
		Joseph C. Lawyer               14,135             114
            John G. Poole                  14,135             114

Item 6.   Exhibits and Reports on Form 8-K

          (b)  Reports on Form 8-K
               -------------------
			Company filed a Current Report on Form 8-K dated and filed on 
July 13, 2005 to announce that the Company had entered into a 
Settlement Agreement with Shaw Naptech, Inc regarding the 
Company's indebtedness to Shaw Naptech, Inc. in the approximate 
amount of $5.1 million under a promissory note and related 
judgment.
			Company filed a Current Report on Form 8-K dated and filed on 
August 3, 2005 to announce that the Company had failed to make a 
required interest payment of $715,423 to the holders of its 13% 
Senior Notes. 
                   
          (c)  Exhibits
               --------

               Exhibit No.  Exhibit Description
               -----------  -------------------
                   31.1     Certification of Chief Executive Officer 
                            pursuant to Section 302 of the Sarbanes-Oxley 
                            Act of 2002

                   31.2     Certification of Chief Financial Officer 
                            pursuant to Section 302 of the Sarbanes-Oxley 
                            Act of 2002

                   32.1     Certification pursuant to 18 U.S.C. 1350, as
                            adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002

                   32.2     Certification pursuant to 18 U.S.C. 1350, as
                            adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002


                                   - 31 -  



                                  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, thereto duly authorized.

Date:  August 12, 2005                     REUNION INDUSTRIES, INC.
       -----------------                          (Registrant)

                                     By: /s/  Charles E. Bradley, Sr.
                                         -------------------------------
                                              Charles E. Bradley, Sr.
                                                Chairman and Chief
                                                Executive Officer




                                     By: /s/    John M. Froehlich
                                         -------------------------------
                                                John M. Froehlich
                                         Executive Vice President, Finance
                                           and Chief Financial Officer
                                     (chief financial and accounting officer)



                           


                                    - 32 -





                                                                  EXHIBIT 31.1
                                  CERTIFICATION

I, Charles E. Bradley, Sr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Reunion Industries,
Inc.;

2. Based on my knowledge, this report does not contain any untrue statement 
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this
   report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material
   respects the financial condition, results of operations and cash flows
   of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
   (a) Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by 
   others within those entities, particularly during the period in which
   this report is being prepared;
   (b) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end
   of the period covered by this report based on such evaluation; and
   (c) Disclosed in this report any change in the registrant's internal
   control over financial reporting that occurred during the registrant's most
   recent fiscal quarter (the registrant's fourth fiscal quarter in the
   case of an annual report) that has materially affected, or is reasonably
   likely to materially affect, the registrant's internal control over
   financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, 
   to the registrant's auditors and the audit committee of the registrant's
   board of directors (or persons performing the equivalent functions):
   (a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and
   (b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.

Date:  August 12, 2005

/s/ Charles E. Bradley, Sr.                       
-------------------------------------
    Chief Executive Officer




                                    - 33 -



                                                                  EXHIBIT 31.2
                                  CERTIFICATION

I, John M. Froehlich, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Reunion Industries,
Inc.;

2. Based on my knowledge, this report does not contain any untrue statement 
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this
   report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material
   respects the financial condition, results of operations and cash flows
   of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
   (a) designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by 
   others within those entities, particularly during the period in which
   this report is being prepared;
   (b) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end
   of the period covered by this report based on such evaluation; and
   (c) Disclosed in this report any change in the registrant's internal
   control over financial reporting that occurred during the registrant's most
   recent fiscal quarter (the registrant's fourth fiscal quarter in the
   case of an annual report) that has materially affected, or is reasonably
   likely to materially affect, the registrant's internal control over
   financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, 
   to the registrant's auditors and the audit committee of the registrant's
   board of directors (or persons performing the equivalent functions):
   (a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and
   (b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.

Date:  August 12, 2005

/s/ John M. Froehlich                 
-------------------------------------
    Chief Financial Officer




                                    - 34 -



                                                                  EXHIBIT 32.1

                             REUNION INDUSTRIES, INC.
                  SARBANES-OXLEY ACT SECTION 906 CERTIFICATION

In connection with this quarterly report on Form 10-Q of Reunion Industries, 
Inc. for the quarter ended June 30, 2005, I, Charles E. Bradley, Sr., Chief 
Executive Officer of Reunion Industries, Inc., hereby certify pursuant to 18 
U.S.C. Section 1350, as adopted pursuant to Section 906 Of the Sarbanes-Oxley 
Act of 2002, that:

1. this Form 10-Q for the quarter ended June 30, 2005 fully complies
   with the requirements of section 13(a) or 15(d) of the Securities Exchange
   Act of 1934; and

2. the information contained in this Form 10-Q for the quarter ended
   June 30, 2005 fairly presents, in all material respects, the financial
   condition and results of operations of Reunion Industries, Inc. for the
   periods presented therein.


Date: August 12, 2005

/s/ Charles E. Bradley, Sr.                    
---------------------------
Chief Executive Officer

                                     






                                    - 35 -



                                                                  EXHIBIT 32.2

                             REUNION INDUSTRIES, INC.
                  SARBANES-OXLEY ACT SECTION 906 CERTIFICATION

In connection with this quarterly report on Form 10-Q of Reunion Industries, 
Inc. for the quarter ended June 30, 2005, I, John M. Froehlich, Chief 
Financial Officer of Reunion Industries, Inc., hereby certify pursuant to 18 
U.S.C. Section 1350, as adopted pursuant to Section 906 Of the Sarbanes-Oxley 
Act of 2002, that:


1. this Form 10-Q for the quarter ended June 30, 2005 fully complies 
   with the requirements of section 13(a) or 15(d) of the Securities Exchange
   Act of 1934; and

2. the information contained in this Form 10-Q for the quarter ended
   June 30, 2005 fairly presents, in all material respects, the financial
   condition and results of operations of Reunion Industries, Inc. for the
   periods presented therein.


Date: August 12, 2005

/s/ John M. Froehlich                 
---------------------------
Chief Financial Officer

               

                                    - 36 -