A hybrid kinetic-fluid model is developed which is relevant to lower hybrid spikelets observed in the topside auroral ionosphere [Vago et al., 1992; Erikson et al., 1994>. In contrast to previous fluid models [Shapiro et al., 1995; Tam and Chang, 1995; Seyler, 1994; Shapiro et al., 1993> our linear low frequency plasma response is magnetized and kinetic. Fluid theory is used to incorporate the nonlinear wave coupling. Performing a linear stability analysis, we calculate the growth rate for the modulational instability, driven by a lower hybrid wave pump. We find that both the magnetic and kinetic effects inhibit the modulational instability. ¿ American Geophysical Union 1995