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


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

                             Page 1 of 37 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  
            September 30, 2005 (unaudited) and December 31, 2004 		  4

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

          Condensed Consolidated Statements of Cash Flows for the 
            nine months ended September 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       20

          Item 3.  Quantitative and Qualitative Disclosures
                     About Market Risk                                   31

          Item 4.  Controls and Procedures                               31


PART II.  OTHER INFORMATION

          Item 1.  Legal Proceedings                                     31

          Item 3.  Defaults Upon Senior Securities				 31

	    Item 6.  Exhibits and Reports on Form 8-K                      32


SIGNATURES                                                               33

CERTIFICATIONS                                                           34

                                     - 3 -



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                    REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   AT SEPTEMBER 30, 2005 AND DECEMBER 31, 2004
                                (in thousands)
 
                                          At September 30,     At December 31,
                                                     2005                2004
                                          ---------------      --------------
                                              (unaudited)   
     ASSETS:                                                
Cash and cash equivalents                        $  1,525            $  1,146
Receivables (net of allowance of 
  $195 and $202, respectively)                     11,934              12,768
Advances to employees                                   3                  26
Inventories, net                                    9,087               9,300
Other current assets                                3,257               1,832
Current assets of discontinued operations             461               3,216
                                                 --------            --------
     Total current assets                          26,267              28,288
                                                            
Property, plant and equipment, net                  7,229               9,374
Property, plant and equipment, held for sale        3,376               2,911
Due from related parties                              932                 919
Goodwill, net                                      10,994              10,994
Other assets, net                                   3,421               4,110
                                                 --------            --------
Total assets                                     $ 52,219            $ 56,596
                                                 ========            ========
     LIABILITIES AND STOCKHOLDERS' DEFICIT:
Debt in default						 $ 42,342            $      -
Current maturities of debt                              5                 645
Revolving credit facilities                             -              14,485 
Trade payables                                      7,085               9,300
Accrued interest                                    7,014               5,663
Due to related parties                                 77                 285
Other current liabilities                           6,257               5,680
Notes payable                                           -               4,161
Notes payable - related parties                       500                 500
Current liabilities of discontinued operations        285                 827
                                                 --------            --------
     Total current liabilities                     63,565              41,546
                                                            
Long-term debt                                      8,240              35,628
Other liabilities                                   3,500               3,759
Non-current liabilities of discontinued 
    Operations                                        910                 916 
                                                 --------            --------
     Total liabilities                             76,215              81,849

Minority interests                                    323                 330
                                                            
Commitments and contingent liabilities                  -                   -

Stockholders' deficit                             (24,319)            (25,583)
                                                 --------            --------
Total liabilities and stockholders' deficit      $ 52,219            $ 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 NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
            (in thousands, except per share information)(unaudited)

                                    Three Months Ended     Nine Months Ended
                                     Sept.30,   Sept.30,   Sept.30,   Sept.30,
                                        2005       2004       2005       2004
                                    --------   --------   --------   --------
Sales                               $ 17,294   $ 17,101   $ 54,050   $ 50,459
Cost of sales                         14,204     14,070     43,338     40,798
                                    --------   --------   --------   --------
  Gross profit                         3,090      3,031     10,712      9,661
Selling, general & administrative      2,131      2,135      6,762      6,664
Gain on debt extinguishments          (3,450)         -     (3,450)    (3,540)
Other (income), net                      (28)      (379)       (41)      (662) 
                                     -------   --------    -------   -------- 
  Operating profit                     4,437      1,275      7,441      7,199
Interest expense, net                  2,287      2,033      6,551      5,787
                                     -------   --------    -------   --------
Income (loss) from continuing 
  operations before income taxes
  and minority interests               2,150       (758)       890      1,412

Provision for income taxes                35          -         46          -
                                     -------   --------    -------   --------
Income (loss) from continuing 
  operations before minority
  interests                            2,115       (758)       844      1,412

Minority interests                        62        115        206        326
                                     -------    -------    -------   --------
Income (loss) from continuing
  operations                           2,053       (873)       638      1,086
Gain on disposal of discontinued
  operations, net of tax of $-0-           -          -        370          -
(Loss) from discontinued 
  operations, net of tax of $-0-        (130)       (60)      (207)       (72)
                                     -------    -------    -------   --------

Net and comprehensive income (loss)  $ 1,923    $  (933)  $    801   $  1,014
                                     =======    =======    =======    =======
Earnings (loss) applicable to  
  common stockholders                $ 1,923    $  (933)  $    801   $  1,014
                                     =======    =======    =======    =======
  Basic earnings (loss) per share:
Continuing operations                $  0.12    $ (0.05)  $   0.04   $   0.06
Discontinued operations                 0.00      (0.01)      0.01       0.00
                                     -------    -------    -------    -------
Income (loss) per share - basic      $  0.12    $ (0.06)  $   0.05   $   0.06
                                     =======    =======    =======    =======
Weighted average shares 
  outstanding - basic                 16,657     16,279     16,419     16,279
                                     =======    =======    =======    =======
  Diluted income (loss) per share:
Continuing operations                $  0.10  $   (0.05)  $   0.03   $   0.05
Discontinued operations                (0.01)     (0.01)      0.01       0.00
                                      ------    -------    -------    -------
Income (loss) per share - diluted    $  0.09  $   (0.06)  $   0.04   $   0.05
                                     =======    =======    =======    =======
Weighted average shares 
  outstanding - diluted               20,798     16,279     20,202     18,798
                                     =======    =======    =======    =======
    See accompanying notes to condensed consolidated financial statements.
                                     - 5 -
                                     
                   REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                                (in thousands)
                                 (unaudited)

                                         
							                Nine Months Ended
                                                             September 30,
                                                           2005        2004
                                                         --------    --------
Cash (used in) provided by operating activities          $     78    $ (2,935)
                                                         --------    --------
  Cash flow from investing activities:
Capital expenditures                                         (276)       (717)
Proceeds from asset sales                                   3,680           - 
                                                         --------    --------
Cash (used in) provided by investing activities             3,404        (717)
                                                         --------    --------
  Cash flow from financing activities:
Net change in revolving credit facility                    (2,854)      1,815
Issuance of debt                                            3,100       3,000
Repayments of debt                                         (3,197)       (514)
Dividend paid to China minority interest                     (213)          - 
Payments of deferred financing costs                            -        (418) 
                                                         --------    --------
Cash provided by financing activities                      (3,164)      3,883
                                                         --------    --------
                                                                   
Net increase in cash and cash equivalents                     318         231
Less: Change in cash of discontinued operations                61         (47) 
Cash and cash equivalents, beginning of period              1,146         656
                                                         --------    --------
Cash and cash equivalents, end of period                 $  1,525    $    840
                                                         ========    ========

Interest paid                                            $  2,271    $  1,627
                                                         ========    ========

     Non-cash financing activity:
Debt extinguishments                                     $  3,450    $  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
                              SEPTEMBER 30, 2005


NOTE 1:  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements of 
Reunion Industries, Inc. and its subsidiaries (collectively, "Reunion" or the 
"Company") 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 nine months 
ended September 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 September 
30, 2005, the Company had a deficiency in working capital of $37.3 million, a 
loss from continuing operations before gain on debt extinguishment for the 
nine months then ended of $2.8 million and a deficiency in assets of $24.3 
million. Additionally, as described below in "Recent Developments", we are 
currently in default under our 13% Senior Notes, our loan agreement with 
Wachovia Bank and a note payable to a private fund lender (LCC). 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:
                             - 7 -

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
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 annually 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. 123 for the three and nine month periods ended 
September 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          9-Mos. Ended
                                        ---------------        --------------
					          2005       2004        2005      2004
				               -----      -----       -----     -----

Net income (loss) as reported         $ 1,923   $  (933)   $    801   $ 1,014
Deduct: Total stock-based employee
        compensation determined under
        fair value method for stock
        options, net of tax                 -         -         (30)        -
                                       ------   -------    --------   -------
Pro forma income (loss) applicable 
     to common stockholders           $ 1,923   $  (933)   $    771   $ 1,014
                                       ======   =======    ========   =======
Basic income (loss) per 
     share, as reported               $  0.12   $ (0.06)   $   0.05   $  0.06
                                       ======   =======    ========   =======
Basic income (loss) per
     share, pro forma                 $  0.12   $ (0.06)   $   0.05   $  0.06
                                       ======   =======    ========   =======
Diluted income (loss) per 
     share, as reported               $  0.09   $ (0.06)   $   0.04   $  0.05
                                       ======   =======    ========   =======
Diluted income (loss) per
     share, pro forma                 $  0.09   $ (0.06)   $   0.04   $  0.05
                                       ======   =======    ========   =======
    

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 recognized 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 is using 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. The $85,000 was shown as a 
discount on the debt and will be amortized as interest expense over the life 
of the debt
                                - 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 
Company's 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 failed to make the next scheduled interest payment due 
April 1, 2005 (which the Company did not make).   In the Standstill Agreement, 
such holders agreed to defer such interest payments to December 2006. 

     The Company also failed to make the interest payments on the Senior Notes 
that were due on July 1 and October 1, 2005, each in the amount of $0.7 
million.  As a result, events of default have 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 an 
Intercreditor and Subordination Agreement entered into in December 2003 among 
Wachovia, the holders of the Senior Notes and certain other lenders, the 
holders of approximately 95% of 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 the Wachovia Loan Facility and the LCC Debt

     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 is in default 
with respect to such notes.  This default also constitutes a cross default 
under the Company's loan and financing agreements with each of Wachovia and 
LCC. Such defaults have not been waived by Wachovia or LCC and the Company is 
currently in default under the Wachovia Loan Agreement and under its note 
payable to a private capital fund, LCC.
                                     

                                   - 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 a division 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.   

Insurance Receipt

     During the second quarter of 2005, the Company received a business 
interruption insurance 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 $114,000 was received in 
the third quarter of 2005 which was also classified to cost of sales.         
                           













                                 - 11 -



                                  
NOTE 3:  DEBT IN DEFAULT AND LONG-TERM DEBT

	The Company is in default on its 13% senior notes, its Wachovia bank 
financing (including the junior participation portion thereof) and its note 
payable to a private capital fund, LCC.

Debt in default consists of the following (in thousands):

                                          At September 30,
									2005
                                          ----------------
                                               (unaudited) 
Wachovia revolving credit facility               $  8,796
Junior participation portion of the
  revolving credit facility (net of 
  warrant value of $160)                            5,940               
Wachovia term loan                                  1,246               
Note payable due December 5, 2006 (net of 
  warrant value of $44)                             3,456
13% senior notes (net of warrant value 
  of $126)                                         21,887
Note payable						    1,017
								 --------

  Total debt in default					 $ 42,342
                                                 ========

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

                                          At September 30,        December 31,
                                                     2005                2004
                                          ---------------      --------------
                                              (unaudited)
Wachovia revolving credit facility               $      -            $ 11,650
Junior participation portion of the 
  revolving credit facility (net of 
  warrant value of $165)                                -               2,835
Wachovia term loan                                      -               2,539
Note payable due December 1, 2006                   3,950               4,200
Note payable due December 5, 2006 (net of 
  warrant value of $71)                                 -               3,429
13% senior notes (net of warrant value 
  of $207)                                              -              21,806
Notes payable                                       4,290               8,451
Notes payable - related parties                       500                 500
Capital leases and other                                5                   9
                                                 --------            --------

  Total long-term debt                              8,745              55,419
Classified as current                                (505)            (19,791)
                                                 --------            --------
  Long-term debt                                 $  8,240            $ 35,628
                                                 ========            ========

	

                                      - 12 -










NOTE 4:  INVENTORIES

Inventories are comprised of the following (in thousands):

                                          At September 30,     At December 31,
                                                     2005                2004
                                              -----------      --------------
                                              (unaudited)   
Raw material                                     $ 4,795             $ 3,760
Work-in-process                                    1,788               2,775
Finished goods                                     2,504               2,765
                                                 --------            --------
  Inventories                                    $ 9,087             $ 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 $893 and $682 at September 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 nine month period ended September 30, 2005 (in thousands):

                                   
                                                     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
Warrant issuances             -       85         -         -         85
Net loss                      -        -       801         -        801
                           ----  -------  --------  --------   --------
At September 30, 2005
  (unaudited)              $167  $28,325  $(50,909) $ (1,902)  $(24,319)
                           ====  =======  ========  ========   ========
                               
	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. 

	In July 2005, in connection with the borrowing under the $3.1 million 
additional junior participation interest, the Company issued two warrants, one 
to LCC and one to Web.  The value of these warrants was estimated to be 
$85,000 using the Black-Scholes pricing model.  Such amount was recorded as 
original issue discount with an increase to paid-in-capital and is being 
amortized to interest expense using the effective interest method of 
amortization.
   
     The computations of basic and diluted earnings (loss) per common share 
EPS (LPS) for the three and nine month periods ended September 30, 2005 and 
2004 are as follows (in thousands, except per share amounts)(unaudited):



                                    - 13 -


                                                  Net
                                                Income               EPS
                                                (Loss)    Shares    (LPS)
                                               --------  --------  -------
     Three months ended September 30, 2005:
Income applicable to common stockholders, 
  weighted average shares outstanding 
  and basic EPS                                $  1,923    16,657  $  0.12
                                                                   =======
Dilutive effect of stock options and warrants               4,141    
                                               --------  --------
Income applicable to common stockholders, 
  shares outstanding and diluted EPS           $  1,923    20,798  $  0.09
                                               ========  ========  =======

     Three months ended September 30, 2004:
Loss applicable to common stockholders, 
  Weighted average shares outstanding 
  and basic LPS                                $   (933)   16,279  $ (0.06)
                                                                   =======
Dilutive effect of stock options and warrants                   -     
                                               --------  -------- 
Loss applicable to common stockholders, 
  shares outstanding and diluted LPS           $   (933)   16,279  $ (0.06)   
                                               ========  ========  =======


     Nine months ended September 30, 2005:
Income applicable to common stockholders, 
  weighted average shares outstanding 
  and basic EPS                                $    801    16,419  $  0.05
                                                                   =======
Dilutive effect of stock options and warrants               3,783
                                               --------  --------
Income applicable to common stockholders, 
  shares outstanding and diluted EPS           $    801    20,202  $  0.04
                                               ========  ========  =======


     Nine months ended September 30, 2004:
Income applicable to common stockholders, 
  Weighted average shares outstanding 
  and basic EPS                                $  1,014    16,279  $  0.06
                                                                   =======  
Dilutive effect of stock options and warrants               2,519   
                                               --------  --------  
Income applicable to common stockholders, 
  shares outstanding and diluted EPS           $  1,014    18,798  $  0.05
                                               ========  ========  =======

     At September 30, 2005 and 2004, the Company's stock options outstanding 
totaled 1,370,000 and 614,000, respectively.  Such options included a dilutive 
component of 23,037 and 174,184 shares for the three and nine month periods 
ended September 30, 2005, respectively, and a dilutive component of 157,044 
shares for the nine month period ended September 30, 2004.   At September 30, 
2005 and 2004, outstanding warrants to purchase the Company's common totaled 
4,935,989 and 2,429,323, respectively.  Such warrants included a dilutive 
component of 4,118,286 and 3,608,239 shares for the three and nine month 
periods ended September 30, 2005, respectively, and a dilutive component of 
2,375,330 shares for the nine month period ended September 30, 2004.  Because 
the Company had a loss from operations for the three month period ended 
September 30, 2004, inclusion of options and warrants has an anti-dilutive 
effect on LPS.  


                                     - 14 -
          
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 nine month periods 
ended September 30, 2005 and 2004 follows (in 000's):

                               
        
                                                       September 30,
     Description                                     2005        2004
     ------------------------------------------    --------    --------
       Beginning balance                           $    100    $    211
     Add: Provision for estimated future claims         127          82
     Deduct: Cost of claims                            (114)        (77)
                                                   --------    --------
       Ending balance                              $    113    $    216
                                                   ========    ========


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 September 30, 2005:
------------------------                                         At 09/30
  Metals:                                                        --------
Pressure vessels                $  5,371   $    590   $      5   $ 15,002
Cylinders                          5,104        478         34      7,282
Grating                            1,954        155          -      3,919
                                --------   --------   --------   --------
  Subtotal Metals                 12,429      1,223         39     26,203

Plastics                           4,865        612         21      8,171
Corporate and other                    -       (501)         -     14,008
Discontinued operations                -          -          -      3,837
                                --------   --------   --------   --------
  Totals                        $ 17,294      1,334   $     60   $ 52,219
                                ========              ========   ========
Gain on extinguishment of debt                3,450
Depreciation                                   (347)
Interest expense, net                        (2,287)
                                           --------
  Income from continuing operations before
   income taxes and minority interests     $  2,150  
                                           ========

                                       - 15 -

Three months ended September 30, 2004  
  and at December 31, 2004:
------------------------------------                             At 12/31
  Metals:                                                        --------
Pressure vessels                $  5,777   $    972   $     77   $ 15,403
Cylinders                          4,473        (24)        29      8,452
Grating                            2,449        331          -      4,013
                                --------   --------   --------   --------
  Subtotal Metals                 12,699      1,279        106     27,868

Plastics                           4,402        566         16      8,000
Corporate and other                    -       (141)         -     14,601
Discontinued operations                -          -          7      6,127
                                --------   --------   --------   --------
  Totals                        $ 17,101      1,704   $    129   $ 56,596
                                ========              ========   ========
Depreciation                                   (429)
Interest expense, net                        (2,033)
                                           --------
  Loss from continuing operations 
    before income taxes                    $   (758)
                                           ========


                                                      Capital     
                               Net Sales  EBITDA(1)   Spending                
                               ---------  ---------  ---------  
Nine months ended September 30, 2005: 
------------------------------------                                        
  Metals:                                                       
Pressure vessels                $ 17,426   $  2,970   $    132  
Cylinders                         15,763      1,439         57 
Grating                            5,768        637         11  
                                --------   --------   --------  
  Subtotal Metals                 38,957      5,046        200   

Plastics                          15,093      1,826         76  
Corporate and other                    -     (1,713)         -  
Discontinued operations                -          -          - 
                                --------   --------   --------  
  Totals                        $ 54,050      5,159   $    276  
                                ========              ========  
Gain on extinguishment of debt                3,450
Depreciation                                 (1,168)
Interest expense, net                        (6,551)
                                           --------
  Loss from continuing operations before
   income taxes and minority interests     $    890
                                           ========









                                      - 16 -







Nine months ended September 30, 2004:  
------------------------------------                                 
  Metals:                                                       
Pressure vessels                $ 16,149   $  2,856   $    285  
Cylinders                         13,750        463        198  
Grating                            7,092        939          -  
                                --------   --------   --------  
  Subtotal Metals                 36,991      4,258        483  

Plastics                          13,468      1,701        172  
Corporate and other                    -       (992)        11  
Discontinued operations                -          -         51  
                                --------   --------   --------  
  Totals                        $ 50,459      4,967   $    717  
                                ========              ========  

Gain on extinguishment of debt                3,540
Depreciation                                 (1,308)
Interest expense, net                        (5,787)
                                           --------
  Loss from continuing operations 
    before income taxes                    $  1,412
                                           ========

(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 September 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 September 30, 2005 and December 31, 2004, goodwill of $1.5   
    million is recorded at each of pressure vessels and cylinders.


NOTE 8:   DISCONTINUED OPERATIONS 
     
	At September 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                                          300           
Other current assets                                      151           
                                                     --------      
     Total current assets                            $    461                 
                                                     ========      
     CURRENT LIABILITIES:
Trade payables                                       $    280      
Other current liabilities                                   5      
                                                     --------      
     Total current liabilities                       $    285      
                                                     ========      
     OTHER ASSETS:
Property, plant and equipment, held for sale         $  3,376      
                                                     ========      
     OTHER LIABILITIES:
Other liabilities                                    $    910      
                                                     ========      

                                     - 17 -
 	Results of discontinued operations for the three and nine months ended 
September 30, 2005 relate primarily to Rostone while the results of 
discontinued operations for the three and nine months ended September 30, 2004 
include both Rostone and the Company's springs segment.  A summarization of 
such results is as follows (in thousands): 


     
3-months ended September 30, 2005    3-months ended September 30, 2004
---------------------------------    ---------------------------------
Net sales                 $     -    Net sales                $  3,337
Loss before taxes            (130)   Loss before taxes             (60)



9-months ended September 30, 2005    9-months ended September 30, 2004
---------------------------------    ---------------------------------
Net sales                 $ 2,909    Net sales                $  9,462
Loss before taxes            (207)   Loss before taxes             (72)       
                          

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 nine month periods ended September 30, 
2005 and  2004 (000's)(unaudited):

                                        Pension              Postretirement
                                   ------------------      ------------------
                                     3-months ended          3-months ended
                                   ------------------      ------------------
                                        Sept. 30,               Sept. 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $   53      $   35      $   27      $    6
Interest cost                          57          53          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      $   59      $   85      $   21
                                   ======      ======      ======      ======








                                   - 18 -











                                        Pension              Postretirement
                                   ------------------      ------------------
                                     9-months ended          9-months ended
                                   ------------------      ------------------
                                        Sept. 30,               Sept. 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $  159      $  105      $   81      $   18 
Interest cost                         171         158          84          27
  Amortization of:
Prior service cost                     12          15           -           -
Unrecognized net loss (gain)           48          33          54           6
Unrecognized net obligation             -           -          36          12
Expected return on plan assets       (165)       (135)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $  225      $  176      $  255      $   63
                                   ======      ======      ======      ======


     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 nine 
month periods ended September 30, 2005 and 2004 (000's)(unaudited):


                                        Pension              Postretirement
                                   ------------------      ------------------
                                     3-months ended          3-months ended
                                   ------------------      ------------------
                                        Sept. 30,               Sept. 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
                                   ======      ======      ======      ======













                                     - 19 -





                                        Pension              Postretirement
                                   ------------------      ------------------
                                     9-months ended          9-months ended
                                   ------------------      ------------------
                                        Sept. 30,               Sept. 30,
                                   ------------------      ------------------
                                    2005        2004        2005        2004
                                   ------      ------      ------      ------
Benefits earned during year        $    -      $    -      $    -      $   45
Interest cost                         168         168          36          93
  Amortization of:
Unrecognized net loss (gain)           45          51           -          12
Expected return on plan assets       (213)       (129)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $    -      $   90      $   36      $  150
                                   ======      ======      ======      ======

     In October 2005, the Company made a required payment of $362,691 to the 
Plastics pension plan.
               

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. 


RESULTS OF OPERATIONS

Three Months Ended September 30, 2005 Compared to 
  Three Months Ended September 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 September 30, 2005 and 2004 are 7.7% and 10.0%, respectively ($'s in 
000's):
                       Net Sales        Gross Margin       EBITDA
                 --------------------  --------------  --------------
                    2005       2004     2005    2004    2005    2004
                 ---------  ---------  ------  ------  ------  ------
Pressure vessels $   5,371  $   5,777   17.1%   21.3%   11.0%   16.8%
Cylinders            5,104      4,473   17.2%    9.5%    9.4%   (0.5%)
Grating              1,954      2,449   20.9%   24.9%    7.9%   13.5% 
Plastics             4,865      4,402   18.2%   17.4%   12.6%   12.9%
                 ---------  ---------  ------  ------  ------  ------
  Totals         $  17,294  $  17,101   17.9%   17.7%   10.6%   10.8%
                 =========  =========  ======  ======  ======  ======
                                    - 20 -
     Net sales for the third quarter of 2005 were up slightly from the third 
quarter of 2004.  Such increase reflects sales increases in our cylinders and 
plastics segments offset, for the most part, by reduced sales in our pressure 
vessel and grating segments. The increases in the cylinder and plastics 
segments primarily reflects the higher backlog of these operations at June 30, 
2005 compared to June 30, 2004.  Orders during the latter months of the 2005 
third quarter have slowed somewhat and backlogs at these two operations have 
declined approximately 20% in total from June 2005 to September 2005.  [The 
Company considers this decline temporary and does not expect this trend to 
continue.]  The decrease in pressure vessel sales is attributable to both a 
vendor delay in the manufacture and delivery of raw material as well as a 
scheduled summer shut down of the plant. The backlog at the pressure vessel 
segment continues to grow and, compared to comparable periods in 2004, was up 
50% at June 30, 2005 and up 37% at September 30, 2005. 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 third quarter of 2005 also 
increased slightly compared to the same quarter in 2004.  This increase 
reflects the same pattern as the increase discussed above regarding net sales. 
Gross margin increases in the cylinder and plastics segments were offset, for 
the most part, by decrease in gross margin in the pressure vessel and grating 
segments. The increases in gross margin percentage at the cylinder and 
plastics segments are primarily attributable to the increases in sales which 
generated improved efficiencies at those segments.  The decrease in gross 
margin percentage at the cylinder segment primarily reflects the negative 
impact from decreased sales resulting from a delay in the delivery of raw 
material which also caused operating inefficiencies.  Offsetting these 
negative impacts at the cylinder segment was the receipt of an additional 
business interruption insurance payment of $114,000 related to a plant 
accident noted in the Company's first quarter filing.  The decrease in gross 
margin in the grating segment reflects the negative impact from reduced sales 
as noted above.  

     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 
slightly lower in the third quarter of 2005 compared to 2004 primarily due to 
a higher amount of other income in 2004 as discussed below.  A reconciliation 
of EBITDA to operating income for the three months ended September 30, 2005 
and 2004 by segment and corporate and other is as follows (000's)(unaudited):

                               Operating    Deprec-   
                                  Profit     iation     EBITDA
                               ---------  ---------    ---------
2005:
-----
Pressure vessels                $    460   $    130    $    590
Cylinders                            440         38         478
Grating                              187        (32)        155
Plastics                             412        200         612
Corporate and other                 (512)        11        (501)
                                --------   --------    --------
  Totals                             987   $    347    $  1,334
                                           ========    ========
Gain on debt extinguishment        3,450 
                                --------
  Operating profit              $  4,437
                                ========                                   



                                    - 21 -
2004:
-----
Pressure vessels                $    825   $    147    $    972
Cylinders                            (69)        45         (24)
Grating                              331          -         331
Plastics                             339        227         566
Corporate and other                 (151)        10        (141)
                                --------   --------    --------
  Totals                        $  1,275   $    429    $  1,704
                                ========   ========    ========
  
                                     
Selling, General and Administrative

     Selling, general and administrative (SGA) expenses for the third quarter 
of 2005 were $2.1 million, virtually the same as the expenses for the third 
quarter of 2004.  There were no significant variances in expenses from the 
current quarter of 2005 to the comparable quarter of 2004.  Changes in segment 
expense for the comparable quarters are mainly due to changes in volume in the 
applicable segment.  As a percentage of sales, SGA expenses decreased to 12.3% 
for the third quarter of 2005 compared to 12.5% for the same quarter of 2004 
as overall expenses remained constant with the slight increase in sales. [The 
Company continues to look for ways to cut costs in all areas.]   

Gain on Debt Extinguishments

     There was a $3.4 million gain on extinguishment of debt in the third 
quarter of 2005 but no such gain in the comparable 2004 quarter. The gain was 
related to the NapTech settlement as more fully described in Note 2: Recent 
Developments.
 
     [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.]   

Other Income, net

     Other income, net for the third quarter of 2005 was $28,000, compared to 
other income, net of $379,000 for the third quarter 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 $270,000, 
relating to an adjustment of the Louisiana environmental reserve and $50,000 
relating to the repayment of a previously written off advance.
                  
Minority Interests

     Minority interests for the third quarter in 2005 and 2004 was $62,000 and 
$115,000, 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.   

Interest Expense
 
     Interest expense for the third quarter of 2005 was $2.3 million compared 
to $2.0 million for the third quarter of 2004.  The significant interest 
increases were $191,000 for interest accrued on the Senior Note interest that 
the Company was not able to make in January, April and July of 2005, as 
discussed earlier under Note 2: Recent Developments, $104,000 for interest 
expensed in connection with the July 2005 supplemental loan to the Wachovia 
credit facility as described earlier under Note 2: Recent Developments - 
NapTech Settlement and $62,000 related to a higher level of amortization of 
deferred financing costs and estimated warrant value. Offsetting a portion of 


                                    - 22 -
these increases was a $119,000 decrease in interest expense as a result of the 
NapTech settlement as referred to above in the caption "Gain on Debt 
Extinguishments". The remaining net increase in expense is primarily due to an 
increase in interest rates in the 2005 period over the 2004 period.

Income Taxes

     There was a tax provision of $35,000 in the third quarter of 2005 
compared to no tax provision in the third 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 
September 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.]


Nine Months Ended September 30, 2005 Compared to 
  Nine Months Ended September 30, 2004

     Net sales, gross margins and EBITDA percentages for the nine 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 nine month periods 
ended September 30, 2005 and 2004 are 9.5% and 9.8%, respectively ($'s in 
000's):

                       Net Sales        Gross Margin       EBITDA
                 --------------------  --------------  --------------
                    2005       2004     2005    2004    2005    2004
                 ---------  ---------  ------  ------  ------  ------
Pressure vessels $  17,426  $  16,149   23.0%   21.8%   17.0%   17.7%
Cylinders           15,763     13,750   17.3%   15.0%    9.1%    3.4%
Grating              5,768      7,092   23.0%   24.2%   11.0%   13.2% 
Plastics            15,093     13,468   17.5%   17.6%   12.1%   12.6%
                 ---------  ---------  ------  ------  ------  ------
  Totals         $  54,050  $  50,459   19.8%   19.1%   12.7%   11.8%
                 =========  =========  ======  ======  ======  ======

     Net sales for the first nine months of 2005 were up $3.6 million, 7.1%, 
from the comparable period in 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 nine months of 2005 were it not for both 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, as well as a third quarter vendor 

                                 - 23 -

delay in the manufacture and delivery of raw material. [The increase in 
cylinder sales over the prior year for the fourth quarter of 2005 is not 
expected to continue due to a slow down in orders late in the third quarter.  
The Company does not believe that this is any indication of a trend in the 
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 nine months of 2005 
compared to the first nine months of 2004 increased to 19.8% from 19.1%. This 
increase reflects increases in the gross margin percentage in the pressure 
vessel and cylinder segments offset, to some extent, by a decrease of 1.2% in 
the gross margin percentage in the grating segment and a slight overall 
decrease in margin percentage in the plastic segment  The increases in the 
pressure vessel and cylinder margins as a percentage of sales are primarily 
due to the increased sales in those segments over the prior year which 
generated improved efficiencies of operation.  The pressure vessel margin 
increase would have been larger were it not for the unreimbursed costs and 
inefficiencies resulting from the plant accident in the first quarter of 2005 
as noted above.  Although approximately $714,000 has been received from 
business interruption insurance, the Company calculates that this amount does 
not cover the costs incurred and opportunities lost. The decrease in grating 
gross margin percentage is primarily the result of the decrease in sales as 
noted above.  The decrease in gross margin percentage in the plastics segment 
is 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.  

     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 nine months 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 nine months ended September 30, 2005 and 
2004 by segment and corporate and other is as follows (000's)(unaudited):

                                   
                               Operating    Deprec-   
                                  Profit     iation     EBITDA
                               ---------  ---------    ---------
2005:
-----
Pressure vessels                $  2,568   $    402    $  2,970
Cylinders                          1,331        108       1,439
Grating                              614         23         637
Plastics                           1,223        603       1,826
Corporate and other               (1,745)        32      (1,713)
                                --------   --------    --------
  Totals                           3,991   $  1,168    $  5,159
                                           ========    ========
Gain on debt extinguishment        3,450
                                --------
  Operating profit              $  7,441
                                ========  







                                       - 24 -

2004:
-----
Pressure vessels                $  2,415   $    441    $  2,856
Cylinders                            319        144         463
Grating                              939          -         939
Plastics                           1,009        692       1,701 
Corporate and other               (1,023)        31        (992)
                                --------   --------    --------
  Totals                           3,659   $  1,308    $  4,967
                                           ========    ========
Gain on debt extinguishment        3,540
                                --------
  Operating profit               $ 7,199
                                ========  

                                     
Selling, General and Administrative

     Selling, general and administrative (SGA) expenses for the first nine 
months of 2005 were $6.8 million, up $98,000 from the expenses for the first 
nine months of 2004.  This increase reflects the net of $187,000 in additional 
divisional expense offset partially by a reduction of $89,000 in corporate 
expense. Of the divisional increase, $234,000 was in the pressure vessel 
segment and related primarily to an increase of $153,000 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 12.5% for the first nine months of 2005 
compared to 13.2% for the first nine months of 2004 as, even with higher 
sales, and excluding the increase in sales commissions, the Company 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 was a $3.4 million gain on extinguishment of debt in the first nine 
months of 2005 compared to $3.5 million of gains on extinguishment on debt in 
the first nine months of 2004. The gain in 2005 was related to the NapTech 
settlement as more fully described in Note 2: Recent Developments.  Of the 
gains in 2004, $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.]   


Other Income

     Other income for the first nine months of 2005 was $41,000, compared to 
other income of $662,000 for the first nine months 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 $601,000, 
relating to an adjustment of the Louisiana environmental reserve, other 
expense of $288,000, related to the costs to complete the consolidation of the 
cylinder operations into one facility in Libertyville, IL. and other income of 
$50,000 relating to the repayment of a previously written off advance.  There 
were no other significant items in the 2004 period.
                               




                                     - 25 -

Minority Interests

     Minority interests for the first nine months of 2005 and 2004 were 
$206,000 and $326,000, 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 and paid dividend. 

Interest Expense
 
     Interest expense for the first nine months of 2005 was $6.6 million 
compared to $5.8 million for the first nine months of 2004.  The significant 
interest increases were $390,000 for interest accrued on the Senior Note 
interest that the Company was not able to make in January, April and July of 
2005, as discussed earlier under Note 2: Recent Developments, $278,000 for 
interest expensed in connection with the May 2004 supplemental loan to the 
Wachovia credit facility (as described in the Company's December 31, 2004 
filing on form 10-K) and the July 2005 supplemental loan to the Wachovia 
credit facility (as described earlier under Note 2: Recent Developments - 
NapTech Settlement) and $300,000 related to a higher level of amortization of 
deferred financing costs and estimated warrant value. Offsetting a portion of 
these increases was a $120,000 decrease in interest expense as a result of the 
NapTech Settlement and a $111,000 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 primarily due to an 
increase in interest rates in the 2005 period over the 2004 period.

Income Taxes

     There was a tax provision of $46,000 in the first nine months of 2005 
compared to no tax provision in the first nine months 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 
September 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.]


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.

                                   - 26 -
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 recognized a gain on debt extinguishment of $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 
Company's 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 failed to make the next scheduled 
interest payment due April 1, 2005 (which the Company did not make).   In the 
Standstill Agreement, such holders agreed to defer such interest payments to 
December 2006.

      The Company also failed to make the interest payments on the Senior 
Notes that were due on July 1 and October 1, 2005, each in the amount of $0.7 
million. As a result, events of default have 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 an 
Intercreditor and Subordination Agreement entered into in December 2003 among 

                                    - 27 -

Wachovia, the holders of the Senior Notes and certain other lenders, the 
holders of approximately 95% of the Senior Notes may 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 the Wachovia Loan Facility and the LCC Debt

     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 is in default 
with respect to such notes.  This default also constitutes a cross default 
under the Company's loan and financing agreements with each of Wachovia and 
LCC. Such defaults have not been waived by Wachovia or LCC and the Company is 
currently in default under the Wachovia Loan Agreement and under its note 
payable to a private capital fund, LCC.

                                    
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 a division 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 

                                  - 28 -

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 $1.5 million and $1.1 million at 
September 30, 2005 and December 31, 2004, respectively.  This increase of $0.4 
million primarily resulted from the use of $3.1 of cash in financing 
activities being more than offset by $3.5 million in cash from investing and 
operating activities. Cash and cash equivalents at the end of a period 
generally represents lockbox receipts from customers.  The domestic portion of 
the cash, $0.8 million, will be applied to our Wachovia revolving credit 
facility as the funds clear the banking system.

Operating Activities

     Operating activities provided $78,000 in cash in the first nine months of 
2005 as reductions in receivables and inventories from continuing operations 
combined with depreciation and amortization to offset the payment of trade 
payables.

Investing Activities

     Investing activities generated $3.4 million as the sales of the springs 
segment and Rostone, as described above, were offset by capital expenditures 
of $0.3 million.

Financing Activities

     The Company used $3.1 million in financing activities during the first 
nine months of 2005.  Payments of debt included $477,000 in scheduled 
repayments of the Wachovia term loan, additional repayments of $1.1 million on 
existing non-revolving credit debt in connection with the sale of the springs 
segment and the Rostone business, as described above, and repayments of $1.7 
million in connection with the NapTech settlement as described above in Note 2 
to the financial statements.  As described in the NapTech settlement, the 
Company entered into an additional $3.1 million supplemental loan.  In 
addition, there were $2.9 million of repayments of the revolving credit 
facility borrowings. The Company's China subsidiary paid a dividend in 2005, a 
portion of which went to that subsidiary's minority interest owners.


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.


                                  - 29 -


Reunion's bank financing is currently in default

     We are currently in default on our senior notes and bank financing, which 
has caused cross default provisions in other debt.  There are a number of 
standstill provisions that exist in a previously executed Intercreditor and 
Subordination Agreement that generally prohibit the senior note holders and 
other lenders from commencing any action against the Company until a certain 
specified time after notification to our senior bank lender, Wachovia.  At 
this time, no such notification has been received by Wachovia or the Company. 
However, any such notification would have adverse consequences on the 
liquidity, financial position and operations of the Company.  Although the 
Company is investigating the possibility of obtaining waivers of these 
defaults from its various lenders, no assurances exist that such waivers can 
be obtained.  
              
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 September 30, 2005, the 
Company has a deficiency in working capital of $37.3 million, a loss from 
continuing operations before gain on debt extinguishment for the nine months 
then ended of $2.8 million and a deficiency in assets of $24.3 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, as described above in "Recent Events" and in Note 2 of Notes to 
Consolidated Financial Statements in Part I of this Report, we are currently 
in default under our 13% Senior Notes, our loan agreement with Wachovia Bank 
and a note payable to a private fund lender (LCC).

     As noted above, the Company is investigating other recapitalization 
scenarios and possible asset sales 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.


                                - 30 -

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 implemented in the Plastics operations to correct 
the weaknesses in plant reporting and supervision responsibilities 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" in Part I of this Report.


Item 3.   Defaults Upon Senior Securities

	The Company is in default on its 13% Senior Notes, which has resulted in 
cross defaults under its Wachovia loan agreement and a note payable to a 
private fund lender (LCC).  See "Item 1. Financial Statements, Note 2: Recent 
Developments - 13% Senior Notes" In Part I of this Report.







                                  - 31 -













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


   



                                    - 32 -                                  



                                  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:  November 11, 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)



                           


                                    - 33 -





                                                                  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:  November 11, 2005

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




                                    - 34 -



                                                                  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:  November 11, 2005

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




                                    - 35 -



                                                                  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 September 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 September 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
   September 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: November 11, 2005

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

                                     






                                    - 36 -



                                                                  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 September 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 September 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
   September 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: November 11, 2005

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

               

                                    - 37 -