Mail Stop 3-6

March 2, 2005




Michael J. Pudil, President & CEO
WSI Industries, Inc.
213 Chelsea RD
Monticello, Minnesota, 55362


Re:	WSI Industries, Inc.
	Form 10-K for the fiscal year ended August 29, 2004
	File No. 0-27892

Dear Mr. Pudil:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

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

Form 10-K for the Fiscal Year Ended August 29, 2004

Management`s Discussion & Analysis of Financial Condition and
Results
of Operations - Page 7

Results of Operations - Page 8

1. With respect to your discussion of the reasons for changes in
revenues, please respond to the following comments:

(A) Please revise future filings to quantify the amount of
revenues
from each of your major markets. We note the disclosure on page 2.
Please reconcile that disclosure with your disclosure on page 8.
(B) Please tell us and explain in future filings the significant
reasons for the increase in sales to the recreational vehicle
market.
(C) Supplementally and in future filings, please quantify, to the
extent practicable, and discuss the reasons for all significant
changes in revenues, including offsetting factors such as the
decline
in sales to the aerospace and avionics market over the past three
years.
(D) Please tell us and disclose in future filings the significant
components of your other revenue. That is, the revenue that is not
derived from the recreational vehicle or aerospace and avionics
markets. It appears that revenues from this group were 7%, 11%,
and
15% of sales in 2004, 2003, and 2002. Tell us and disclose in
future
filings the significant reasons for the decline in this market.
(E) Please see Item 303 (A)(3) of Regulation S-K, SAB Topic 13.B
and
Release 33-8350.

2. Discuss uncertainties surrounding the realization of the
deferred
tax asset and material assumptions underlying your determination
that
the net asset will be realized. If the asset`s realization is
dependent on material improvements over present levels of
consolidated pre-tax income, material changes in the present
relationship between income reported for financial and tax
purposes,
or material asset sales or other nonroutine transactions, describe
these assumed future events, quantified to the extent practicable,
in
MD&A.  For example, disclose the minimum annualized rate by which
taxable income must increase during the NOL carryforward period if
realization of the benefit is dependent on taxable income higher
than
currently reported.  Also, if significant objective negative
evidence
indicates uncertainty regarding realization of the deferred asset,
identify the countervailing positive evidence relied upon by
management in its decision not to establish a full allowance
against
the asset.

3. Please respond to the following comments regarding information
on
your Website:

(A) We note from your website that you enter into multi-year
agreements with your customers that include design engineering and
other services. Please tell us and disclose in the notes to your
financial statements in future filings the significant terms of
these
agreements. Supplementally explain how you consider these terms in
your recognition of revenues and expenses under these agreements.
(B) Please tell us and disclose in future filings the nature of
the
new recreational vehicle market program that may result in a 20%
increase in sales.



Controls and Procedures - Page 11

4. We note your statement that your chief executive officer and
your
chief financial officer have concluded the controls and procedures
"are effective in ensuring that material information related to
the
Company is made known to them by others within the company."  It
does
not appear that your certifying officers have reached a conclusion
that your disclosure controls and procedures are effective.
Please
revise to address your officers` conclusions regarding the
effectiveness of your disclosure controls and procedures. Please
similarly revise your November 28, 2004 Form 10-Q.

5. We note your disclosure that "there have been no significant
changes in internal controls..."  Please revise your disclosure to
remove the word significant and to discuss all changes in your
internal control over financial reporting that have materially
affected, or that are reasonably likely to materially affect, your
internal control over financial reporting, as required by Item
308(c)
of Regulation S-B, as amended effective August 13, 2003. Please
similarly revise your November 28, 2004 Form 10-Q.

Consolidated Financial Statements and Schedule - Page 16

Note 1. Summary of Significant Accounting Policies - Page 22

6. Please respond to the following comments regarding your
inventories policies:

(A) Tell us and revise the notes to your financial statements in
future filings to explain your accounting policies with respect to
how you value inventories at the lower of cost or market and how
you
determine reserves for excess and obsolete inventories.
(B) Tell us and revise your discussion in future filings to
disclose
how often you perform you inventory valuation analysis.
(C) Tell us why you reduce your obsolescence allowance if actual
or
expected requirements are significantly greater than your
established
reserves. Cite the accounting literature you relied upon in
concluding that it is appropriate to write-up inventory after it
has
been written down. Tell us the amounts of any write-ups in the
periods presented and through the latest interim period.
(D) Supplementally quantify the remaining balance of inventory
items
previously written-down or written-off and tell us the significant
components of that balance. In future filings please provide
similar
disclosure in MD&A as long as a significant balance of such items
remains on hand.  Disclose in MD&A (if true) that no significant
sales of such items have occurred to date.  Alternatively,
disclose
the impact of these sales on gross profit margin for the period.
Finally, disclose when and how you will dispose of the remaining
items and/or the fact that you have no set timeline for the sale
of
scrapping of these items.
(E) With reference to Schedule II, please tell us and disclose in
future filings the nature of the deductions and why you refer to
these amounts as net. Also tell us the nature and status of the
inventory written down. We note that you made no provision for
this
inventory in 2003 or 2004, the balance is still $409,249 as of
August
29, 3004, and the reserve represents 31% of your gross inventory
balance.

7. If material, please revise to your financial statements to
reflect
the adoption of SFAS 144, or tell us why no restatement is
required.

8. Please respond to the following comments regarding your revenue
recognition policies:

(A) Please tell us and disclose in future filings why you refer to
net sales in your consolidated statements of income.
(B) Please tell us and disclose in future filings how you
considered
the criteria in SAB Topic 13.A.1 in your revenue recognition
policy.
(C) Please tell us why you believe it is appropriate to only
review
your bad debt allowance at the end of each year. Cite the
accounting
literature upon which you relied.

Note 11. Goodwill and Intangible Assets - Page 29

9. Please respond to the following comments regarding your
goodwill:

(A) Please tell us the nature of your organization costs. Tell us
why
these costs are properly capitalized. Cite the accounting
literature
upon which you relied.
(B) Please tell us and revise future filings to disclose how and
when
you assess the impairment of goodwill and how your accounting
policies comply with SFAS 142, including paragraphs 19 - 22.
(C) Please tell us and disclose in future filings your number of
reporting units. See paragraphs 30 - 31 of SFAS 142.
(D) We note that your market capitalization is significantly less
than your net assets. Under paragraph 23 of SFAS 142, quoted
market
prices in active markets are the best evidence of fair value and
should be used as the basis for measurement if available. Please
tell
us how you considered paragraph 23 of SFAS 142 and why. Tell us
and
disclose in future filings why, given this indication of
impairment,
that you believe your goodwill is not impaired. Tell us and
disclose
the significant assumptions used in your valuation.

Form 10-Q for the Quarterly Period Ended November 28, 2004

10. Please revise your future filings on Form 10-Q to respond to
any
applicable comments above related to your Form 10-K.

Management`s Discussion & Analysis of Financial Condition and
Results
of Operations - Page 9

11. Please tell us why you discuss certain prior year
reclassifications in your critical accounting policies. Tell us
the
nature and amount of and reasons for the reclassifications.

12. Please tell us why you added revenue recognition to your
critical
accounting policies. We note that revenue recognition was not a
critical accounting policy in your August 29, 2004 Form 10-K.

       As appropriate, please amend your (future filings) filing
and
respond to these comments within 10 business days or tell us when
you
will provide us with a response.  You may wish to provide us with
marked copies of the amendment to expedite our review.  Please
furnish a cover letter with your amendment that keys your
responses
to our comments and provides any requested supplemental
information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* The company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* Staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do n0t foreclose the
Commission from taking any action with respect to the filing; and

* The company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.


	Any questions you may have regarding these comments may be
directed to Louis Canant at (202) 942-1897 or to me at (202) 942-
2861.  You may also contact Daniel Gordon, Branch Chief, at (202)
942-2813.


								Sincerely,


		 Kaitlan Tillan
          								Accounting
Reviewer

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Mr. Michael J. Pudil, President & CEO
WSI Industries, Inc.
Page 6