This week's book giveaway is in the Mac OS forum. We're giving away four copies of a choice of "Take Control of Upgrading to Yosemite" or "Take Control of Automating Your Mac" and have Joe Kissell on-line! See this thread for details.
It looks like you're reading a text file. Especially if you're interested in reading the file line by line, then using a BufferedReader will be easier and faster than reading the file character by character.
Another problem is that you're directly casting bytes read from the file to characters. That only works if the file contains ASCII text (it might fail if the file actually contains text in another character encoding). I won't go into that though, it's a more advanced subject.