<ARTICLE>                                           7
<LEGEND>
     THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM FORM 10Q FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY 
REFERENCE TO SUCH FINANCIAL STATEMENTS. 
</LEGEND>
<CIK>                         0000225648
<NAME>                        DANIELSON HOLDING CORPORATION
<MULTIPLIER>                                   1000
<CURRENCY>                                     U.S. DOLLARS
       
                             
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                              DEC-31-1998
<PERIOD-START>                                 JAN-01-1998
<PERIOD-END>                                   SEP-30-1998
<EXCHANGE-RATE>                                1
<DEBT-HELD-FOR-SALE>                           113,353
<DEBT-CARRYING-VALUE>                          0
<DEBT-MARKET-VALUE>                            0
<EQUITIES>                                     12,715
<MORTGAGE>                                     0
<REAL-ESTATE>                                  0
<TOTAL-INVEST>                                 132,249
<CASH>                                         573
<RECOVER-REINSURE>                             27,853 <F1>
<DEFERRED-ACQUISITION>                         2,237
<TOTAL-ASSETS>                                 180,505
<POLICY-LOSSES>                                98,111
<UNEARNED-PREMIUMS>                            13,651
<POLICY-OTHER>                                 0
<POLICY-HOLDER-FUNDS>                          267
<NOTES-PAYABLE>                                0
<PREFERRED-MANDATORY>                          0
<PREFERRED>                                    0
<COMMON>                                       1,559
<OTHER-SE>                                     58,003 <F2>
<TOTAL-LIABILITY-AND-EQUITY>                   180,505
<PREMIUMS>                                     41,460
<INVESTMENT-INCOME>                            6,251
<INVESTMENT-GAINS>                             195
<OTHER-INCOME>                                 676
<BENEFITS>                                     29,448
<UNDERWRITING-AMORTIZATION>                    7,153
<UNDERWRITING-OTHER>                           9,869
<INCOME-PRETAX>                                1,772
<INCOME-TAX>                                   61
<INCOME-CONTINUING>                            1,711
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   1,711
<EPS-PRIMARY>                                  0.11 <F3>
<EPS-DILUTED>                                  0.11 <F4>
<RESERVE-OPEN>                                 85,762
<PROVISION-CURRENT>                            29,240
<PROVISION-PRIOR>                              208
<PAYMENTS-CURRENT>                             10,555
<PAYMENTS-PRIOR>                               25,620
<RESERVE-CLOSE>                                79,035
<CUMULATIVE-DEFICIENCY>                        (940)
<FN>
<F1> INCLUDES REINSURANCE RECOVERABLES ON UNPAID LOSSES OF 19,075 AND 
REINSURANCE RECOVERABLES ON PAID LOSSES OF 8,778.
<F2> INCLUDES TREASURY STOCK OF 66.
<F3> REPRESENTS EARNINGS PER SHARE - BASIC.
<F4> REPRESENTS EARNINGS PER SHARE-DILUTED.
</FN>