FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark One)

(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

                                       OR

(  )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period                        to
                          ----------------------    ---------------------------

Commission file number 1-11394
                       -------

                             MEDTOX SCIENTIFIC, INC.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                        95-3863205
-------------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporated or organization)                          Identification No.)

402 West County Road D, St.Paul, Minnesota                  55112
-------------------------------------------------------------------------------
(Address of principal executive offices)                  (Zip Code)

Registrant's telephone number including area code:              (651) 636-7466
------------------------------------------------------------------------------

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

The number of shares of Common Stock, $.15 par value, outstanding as of May 4,
2001, was 3,528,121.


<PAGE>


                             MEDTOX SCIENTIFIC, INC.

                                      INDEX

                                                                           Page

Part I  Financial Information:

        Item 1:  Financial Statements (Unaudited)

                 Consolidated Statements of Operations - Three
                 Months Ended March 31, 2001 and 2000 ..............          3

                 Consolidated Balance Sheets - March 31, 2001
                 and December 31, 2000 ..............................         4

                 Consolidated Statements of Cash Flows - Three
                 Months Ended March 31, 2001 and 2000 ..............          5

                 Notes to Consolidated Financial Statements...........        6

        Item 2:

                 Management's Discussion and Analysis of
                 Financial Condition and Results of Operations ........      12

        Item 3:

                 Quantitative and Qualitative Disclosure
                 About Market Risk ......................................    18

Part II Other Information ................................................   19
                 Signatures ...............................................  20


<PAGE>


Item 1:  FINANCIAL STATEMENTS (UNAUDITED)

                             MEDTOX SCIENTIFIC, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                           Three Months Ended
                                      March 31, 2001  March 31, 2000
                                      --------------  --------------
<S>                                  <C>             <C>
REVENUES:
   Laboratory service revenues           $  9,304      $  8,285
   Product sales                            2,302         1,391
                                         ---------     ---------
                                           11,606         9,676
COST OF REVENUES:
  Cost of services                          6,395         5,541
  Cost of sales                             1,053           563
                                         ---------     ---------
                                            7,448         6,104
                                         ---------     ---------

GROSS PROFIT                                4,158         3,572

OPERATING EXPENSES:
   Selling, general and administrative      3,140         2,798
   Research and development                   315           249
                                         ---------     ---------
                                            3,455         3,047
                                         ---------     ---------

INCOME FROM OPERATIONS                        703           525

OTHER INCOME (EXPENSE):
   Interest expense                          (240)         (228)
   Other expense, net                         (25)            -
                                         ---------      --------
                                             (265)         (228)
                                         ---------      --------

NET INCOME                               $    438      $    297
                                         =========     =========

BASIC EARNINGS PER COMMON SHARE          $   0.12      $   0.10
                                         =========     =========

DILUTED EARNINGS PER COMMON SHARE        $   0.12      $   0.10
                                         =========     =========
</TABLE>

<PAGE>





                                            MEDTOX SCIENTIFIC, INC.
                                          CONSOLIDATED BALANCE SHEETS
                                (In thousands, except share and per share data)
                                                    (Unaudited)
<TABLE>
<CAPTION>

                                                    March 31,    December 31,
                                                      2001          2000
                                                   ----------    ------------
<S>                                              <C>           <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                       $       -     $     213
   Accounts receivable:
    Trade, less allowance for doubtful
    accounts ($968 in 2001 and $1,131
    in 2000)                                           8,846         7,873
   Other                                                 340           264
                                                   ---------     ---------
             Total accounts receivable                 9,186         8,137
   Inventories                                         2,879         3,052
   Prepaid expenses and other                          1,239           830
                                                   ---------     ---------
             Total current assets                     13,304        12,232
EQUIPMENT AND IMPROVEMENTS, NET                       11,880         5,211
GOODWILL, net of accumulated amortization of
$4,645 in 2001 and $4,438 in 2000                     12,084        12,291
OTHER ASSETS, net of accumulated amortization
of $12 in 2001 and $7 in 2000                            285           290
                                                   ---------     ---------
TOTAL ASSETS                                       $  37,553     $  30,024
                                                   =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Checks written in excess of bank balances       $     285     $       -
   Line of credit                                      3,967         3,724
   Accounts payable                                    2,558         2,819
   Accrued expenses                                    3,194         3,213
   Accrued restructuring costs                            10           160
   Current portion of long-term debt                   2,190         1,579
   Current portion of capital leases                     221           221
                                                   ----------    ---------
             Total current liabilities                12,425        11,716
LONG-TERM DEBT                                         8,860         2,480
LONG-TERM PORTION OF CAPITAL LEASES                      352           418

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par value;
    authorized shares,  50,000;  none
    issued and outstanding                                -              -
   Common  stock,  $0.15 par  value;
    authorized  shares,  7,400,000;
    issued  and outstanding
    shares, 3,537,152 in 2001 and 3,508,151
    in 2000                                              531           526
   Additional paid-in capital                         65,439        65,422
   Deferred stock-based compensation                   (426)         (472)
   Accumulated deficit                              (49,452)      (49,890)

   Treasury stock                                      (176)         (176)
                                                   ---------     ---------
             Total stockholders' equity               15,916        15,410
                                                   ---------     ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $  37,553     $  30,024
                                                   =========     =========
</TABLE>

<PAGE>



                             MEDTOX SCIENTIFIC, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                           March 31, 2001  March 31, 2000
                                                         ----------------  ----------------
<S>                                                     <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                               $      438        $      297
   Adjustments to reconcile net income to net
    cash used in operating activities:
      Depreciation and amortization                                620               558
      Provision for losses on accounts receivable                   46                36
      Deferred compensation                                         45                 -
      Changes in operating assets and liabilities:
         Accounts receivable                                   (1,095)           (1,322)
         Inventories                                               173             (217)
         Prepaid expenses and other current assets               (409)             (130)
         Accounts payable and accrued expenses                   (280)               285
         Accrued restructuring costs                             (150)              (64)
                                                            ----------        ----------
                Net cash used in operating activities            (612)             (557)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                       (7,076)             (775)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase in checks written in excess of bank balances          285                 -
    Net proceeds from sale of common stock                          22                 2
    Net borrowings on line of credit                               243               906
    Proceeds from long-term debt                                 7,278             3,526
    Principal payments on long-term debt                         (287)           (2,088)
    Principal payments on capital leases                          (66)              (60)
                                                            ----------        ----------
              Net cash provided by financing activities          7,475             2,286
                                                            ----------        ----------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                 (213)               954

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                   213               576
                                                            ----------        ----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                   $       -        $    1,530
                                                             =========        ==========

SUPPLEMENTAL NONCASH ACTIVITIES:
    Additions to capital leases                              $       -        $       44

</TABLE>

<PAGE>


                             MEDTOX SCIENTIFIC, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2001

NOTE A - BASIS OF PRESENTATION

The  accompanying   unaudited   consolidated   financial  statements  of  MEDTOX
Scientific, Inc. (the "Company") have been prepared in accordance with generally
accepted  accounting  principles 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 notes  required by  generally  accepted
accounting principles. In the opinion of management, all adjustments (consisting
only  of  normal  recurring   adjustments)   considered  necessary  for  a  fair
presentation  of  financial  condition  and  results  of  operations  have  been
included.  Operating results for the three-month period ended March 31, 2001 are
not  necessarily  indicative  of the results that may be attained for the entire
year. These consolidated financial statements should be read in conjunction with
the  consolidated  financial  statements  and the notes thereto  included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.

Reclassifications:   Certain  reclassifications  have  been  made  to  the  2000
financial statements to conform with the 2001 presentations.


Comprehensive Income:  Comprehensive income is a measure of all nonowner changes
in stockholders'  equity and includes such items as net income,  certain foreign
currency translation items, minimum pension liability  adjustments,  and changes
in the value of available-for-sales securities. For the three months ended March
31, 2001 and 2000,  comprehensive  income for the Company was  equivalent to net
income as reported.

Derivative  Instruments and Hedging Activities:  On January 1, 2001, the Company
adopted  SFAS  No.  133,  Accounting  for  Derivative  Instruments  and  Hedging
Activities,  as amended  by SFAS No.  138,  Accounting  for  Certain  Derivative
Instruments and Certain Hedging Activities.  SFAS No. 133 establishes accounting
and reporting  standards for derivative  instruments and for hedging activities.
It requires that all  derivatives,  including those embedded in other contracts,
be  recognized  as  either  assets  or  liabilities  and  that  those  financial
instruments  be measured at fair value.  The  accounting for changes in the fair
value of derivatives  depends on their intended use and designation.  Management
has reviewed the  requirements of SFAS No. 133 and has determined that they have
no free-standing or embedded derivatives.  All contracts that contain provisions
meeting the definition of a derivative also meet the  requirements  of, and have
been designated as, normal  purchases or sales.  The Company's  policy is to not
use  free-standing  derivatives  and to not enter into contracts with terms that
cannot be designated as normal purchases or sales.

NOTE B - DEBT

In January 1998, the Company entered into a Credit Security Agreement (the Wells
Fargo Credit  Agreement)  with Wells Fargo Business  Credit (Wells  Fargo).  The
Wells Fargo Credit Agreement, as amended as of March 31, 2001, consists of (i) a

<PAGE>

term loan of $3.185 million bearing interest at prime + 1.25%;  (ii) a revolving
line of credit,  payable on demand,  of not more than $6.0 million or 85% of the
Company's eligible trade accounts receivable bearing interest at prime + 1%; and
(iii) a capex note of up to $3.5 million for the  purchase of capital  equipment
bearing interest at prime + 1.25% and (iv)  availability of letters of credit in
amounts  not to exceed  the  lesser of  $300,000  (less  outstanding  letters of
credit)  or the  unborrowed  portion  of the  revolving  line  of  credit  (less
outstanding letters of credit).

Effective March 31, 2001 the Company and Wells Fargo Business Credit amended the
Credit Agreement.  The amended Wells Fargo Credit Agreement provided the Company
i) an increase in the capex note from $2.45 million to $3.5 million, and ii) the
ability to use letters of credit issued under the revolving credit facility.

NOTE C - SEGMENTS

The Company has two reportable segments: Lab Services and Product Sales. The Lab
Services segment consists of MEDTOX Laboratories, Inc. Services provided include
forensic  toxicology,   clinical  toxicology,  heavy  metals  analyses,  courier
delivery, and medical surveillance. The Product Sales segment consists of MEDTOX
Diagnostics,  Inc.  Products  manufactured  include  easy to  use,  inexpensive,
on-site drug tests such as PROFILE(R)-II,  EZ-SCREEN(R), and VERDICT(R)-II.  The
Company's  reportable segments are strategic business units that offer different
products and services.  They are managed  separately  as each business  requires
different products, services and marketing strategies.

In  evaluating  financial  performance,  management  focuses  on net income as a
segment's measure of profit or loss.

Segment Information
(In thousands)
                                              Three months ended
                                       March 31, 2001    March 31, 2000
                                       --------------    --------------

Laboratory Services:
   Revenues                              $   9,304         $    8,285
   Interest expense                            227                209
   Depreciation and amortization               590                544
   Segment income                              293                285
   Segment assets                           34,046             26,430
   Expenditures for segment assets           6,980                772

Product Sales:
   Revenues                                  2,302              1,391
   Interest expense                             13                 19
   Depreciation and amortization                30                 14
   Segment income                              145                 12
   Segment assets                            3,507              2,692
   Expenditures for segment assets              96                  3



<PAGE>
                                              Three months ended
                                       March 31, 2001    March 31, 2000
                                       --------------    --------------

Total:
   Revenues                                 11,606             9,676
   Interest expense                            240               228
   Depreciation and amortization               620               558
   Segment income                              438               297
   Segment assets                           37,553            29,122
   Expenditures for segment assets           7,076               775



NOTE D - INVENTORIES

Inventories consisted of the following:
(In thousands)
                                        March 31,     December 31,
                                          2001           2000
                                      -----------    -------------

Raw materials                         $      828      $        910
Work in process                              371               322
Finished goods                               314               373
Supplies                                   1,366             1,447
                                      -----------     ------------
                                      $    2,879      $      3,052
                                      ===========     ============

NOTE E - PURCHASE OF BUILDING

The administrative offices and laboratory operations for the Laboratory Services
segment of the Company's  business are located primarily in a 53,576 square foot
facility in St. Paul,  Minnesota.  On March 16, 2001 the Company  purchased  the
entire  three  building  complex  with a total of  129,039  square  feet,  which
included the 53,576  square feet  formerly  leased by the  Company's  Laboratory
Services segment.  The purchasing entity was New Brighton Business Center LLC, a
wholly owned limited liability company,  established by the Company for the sole
purpose of purchasing the entire three building complex.  The selling entity was
PHL-OPCO, LP a Delaware limited partnership,  which was an unrelated third party
who had operated the facility as its landlord  until the sale of the property to
the Company.  The purchase price,  exclusive of expenses and closing costs,  was
$6.35 million and was financed by a mortgage loan from  Principal Life Insurance
Company of Des Moines, Iowa in the amount of $6.2 million. The mortgage loan has
a term of ten years and is being repaid based on a 20-year amortization schedule
with a balloon  payment at the end of the ten year term.  The  interest  rate is
fixed at an annual rate of 7.23% for the first five years at which time the rate
will be  renegotiated  by the parties.  The facility  includes other  commercial
tenants who have  individual  leases that range from 4 years to less then 1 year
in duration. The current annual rent paid by such third party tenants, excluding
their pro-rata share of operating expenses, is approximately $431,000 per year.

<PAGE>

The following components of the Company's rental activities were reported net in
other income (expense) in the Consolidated Statement of Operations:
(In thousands)
                                                           Three months ended
                                                              March 31, 2001

Gross rental income                                             $   58
Operating and administrative expenses                              (42)
                                                                -------
Net rental income before intercompany elimination                   16
Elimination of intercompany rental income                          (41)
                                                                -------
Net rental loss                                                 $  (25)
                                                                =======


NOTE F - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
common share: (Dollars in thousands, except per share amounts)

                                                      Three months ended
                                                March 31, 2001   March 31, 2000


Net income (A)                                   $        438     $       297
                                                 ============     ===========
Weighted average number of basic common
    shares outstanding (B)                          3,523,235       2,904,478
Dilutive effect of stock options and warrants
    computed based on the treasury stock method
    using average market price                        147,474         139,621
                                                 ------------     -----------
Weighted average number of diluted
    common shares outstanding (C)                   3,670,709       3,044,099
                                                 ============     ===========
Basic earnings per common share (A/B)            $       0.12     $      0.10
                                                 ============     ===========
Diluted earnings per common share (A/C)          $       0.12     $      0.10
                                                 ============     ===========

Options and warrants to purchase 890,815 and 125,512 shares of common stock were
outstanding  during the first three months of 2001 and 2000,  respectively,  but
were not  included in the  computation  of diluted  earnings  per share as their
exercise prices were greater than the average market price of the common shares.


NOTE G - CONTINGENCIES

In February 1999,  the Company  settled a claim of patent  infringement  brought
against  the  Company  by United  States  Drug  Testing  Laboratories  on August
20,1996.  The Company,  while denying any infringement,  has settled the case by
paying United States Drug Testing Laboratories $17,500 and issuing United States
Drug  Testing  Laboratories  2,500  shares  of common  stock.  The  Company  had
previously  accrued for this  contingency.  Accordingly,  the settlement of this
matter did not affect  results of  operations  for the year ending  December 31,
1999. Under the MEDTOX Laboratories acquisition agreement, pursuant to which the

<PAGE>

Company  originally  acquired MEDTOX  Laboratories,  Inc., the sellers of MEDTOX
Laboratories,  Inc.  agreed to remain  liable  for any and all  damages  for any
patent  infringement  which was alleged to have occurred prior to the closing of
the Company's purchase of MEDTOX  Laboratories,  Inc. The acquisition  agreement
also  provided for the sellers to indemnify  and hold the Company  harmless from
and against any  damages,  loss,  liability  or  expense,  including  reasonable
attorneys'  fees and court costs in connection with any  infringement  which was
alleged to have occurred  before the closing  date. It is the Company's  opinion
that it is entitled to recover $79,000 in damages from the sellers in accordance
with the above referenced provisions of the acquisition  agreement.  The parties
have agreed that the matter may be arbitrated in Minneapolis,  Minnesota  rather
than in Chicago as required by the original  acquisition  agreement.  Management
expects this matter will be resolved prior to the end of calendar year 2001.

In January 1997,  the Company filed suit in Federal  District Court in Minnesota
against  Morgan  Capital  LLC,  David  Bistricer  and  Alex  Bistricer  alleging
violation of Section 16b of the  Securities and Exchange Act of 1934 and seeking
recovery of more than $500,000 in short-swing  profits.  Messrs.  David and Alex
Bistricer  are former  directors  of the  Company.  On August 4, 1997,  the U.S.
District  Court  dismissed the Company's  complaint and on October 29, 1997, the
Company  filed an appeal of that  decision to the United States Court of Appeals
for the Eighth  Circuit.  On July 21,  1998,  the Eighth  Circuit  reversed  the
District Court dismissal and remanded the case to the District Court. On June 3,
1999 the U.S.  District  Court found that Morgan  Capital had  violated  Section
16(b) and ordered  Morgan  Capital to pay the Company  damages of $551,000  plus
interest.  On or about September 30, 2000 the parties entered into a Stipulation
and Mutual  Release  dismissing  with  prejudice  all  claims and  counterclaims
between the parties  regarding the transaction  other then the Company's Section
16(b) claim against the former stockholder,  Morgan Capital. The parties entered
into this Stipulation along with an Escrow Agreement requiring Morgan Capital to
deposit into escrow  72,500  shares of publicly  registered  common stock of the
Company as collateral to secure  payment by Morgan Capital of the judgment to be
entered in favor of the Company in the amount of $675,000 plus any post-judgment
interest.  The Federal  District  Court  entered  such  judgment in favor of the
Company on October 17, 2000.  Morgan Capital  subsequently  appealed the Federal
District  Court's  decision to the Eighth Circuit Court of Appeals.  The parties
have completed and filed their respective  appeal briefs with the Eighth Circuit
Court of Appeals.  The parties are now awaiting the scheduling of oral arguments
which should occur  sometime in 2001.  The Company has not recorded a receivable
for this amount due to the uncertainty of this matter.

In March 2000,  the Company was served with a copy of a complaint  filed against
the Company in the Circuit Court of Cook County, Illinois, by the Plaintiff, The
Methodist Medical Center of Illinois. The Plaintiff is alleging that the Company
interfered with various contractual relationships of the Plaintiff in connection
with the  referral  of certain  customers  to the  Company  by other  defendants
previously  sued by the  Plaintiff in the same  action.  The Company has filed a
cross  claim  against  the  other  defendants  in the  litigation  based on such
defendants'  contractually  obligation  to  indemnify  the  Company  against any
damages,  costs or expense  (including  attorney  fees) incurred by the Company,
arising  out of  any  claim  of  contractual  interference  by  the  Company  in
connection with the referral of the customers to the Company by such defendants.
The  parties  are now  engaged  in  pretrial  discovery  while at the same  time
settlement  negotiations are underway between the parties. While it is too early

<PAGE>

to be confident as to the ultimate  resolution  of this matter,  in light of the
nature  of  plaintiff's  claims,  the  nature  of the  discovery  to  date,  the
co-defendants  indemnification  obligation  and the  relative  positions  of the
parties  during  the  settlement  discussion,  management  does not  expect  the
ultimate  resolution  of this matter to have a material  impact on the Company's
financial condition or results of operations.

In January  2001,  the Company was contacted by counsel for one of the Company's
shareholders  who had  purchased  stock in the  Company's  private  placement in
August 2000. The  shareholder's  counsel  expressed the view that the decline in
the  Company's  stock in December was  directly  attributable  to the  Company's
announcement of a charge to earnings in the fourth quarter due to the bankruptcy
filings of two of its  customers.  Counsel  asserted  that since the  bankruptcy
filing by one of the customers had occurred  prior to the closing of the private
placement,  the  Company  should  have  disclosed  the  fact of that  filing  in
connection  with the  private  placement.  The  Company  is unable to  ascertain
whether the shareholder will pursue the matter through litigation.

<PAGE>

Item 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

               Cautionary Statement Identifying Important Factors
             That Could Cause the Company's Actual Results to Differ
               From Those Projected in Forward Looking Statements

In  connection  with the "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform  Act of  1995,  readers  of this  document  and any  document
incorporated by reference  herein,  are advised that this document and documents
incorporated  by  reference  into  this  document  contain  both  statements  of
historical facts and forward looking statements.  Forward looking statements are
subject to certain risks and uncertainties,  which could cause actual results to
differ  materially  from those  indicated  by the  forward  looking  statements.
Examples  of forward  looking  statements  include,  but are not  limited to (i)
projections  of revenues,  income or loss,  earnings or loss per share,  capital
expenditures,  dividends,  capital  structure and other  financial  items,  (ii)
statements of the plans and objectives of the Company or its management or Board
of  Directors,  including  the  introduction  of new  products,  or estimates or
predictions  of actions  by  customers,  suppliers,  competitors  or  regulatory
authorities,   (iii)  statements  of  future  economic  performance,   and  (iv)
statements of assumptions  underlying  other statements and statements about the
Company or its business.

This document and any documents  incorporated by reference  herein also identify
important  factors which could cause actual  results to differ  materially  from
those indicated by the forward looking statements. These risks and uncertainties
include  price  competition,   the  decisions  of  customers,   the  actions  of
competitors,  the  effects  of  government  regulation,  possible  delays in the
introduction of new products,  customer acceptance of products and services, and
other  factors which are described  herein and/or in documents  incorporated  by
reference herein.

The cautionary  statements  made pursuant to the Private  Litigation  Securities
Reform Act of 1995 above and elsewhere by the Company should not be construed as
exhaustive or as any admission regarding the adequacy of disclosures made by the
Company prior to the effective date of such Act. Forward looking  statements are
beyond the  ability of the  Company  to  control  and in many cases the  Company
cannot predict what factors would cause results to differ  materially from those
indicated by the forward looking statements.


General

MEDTOX Scientific,  Inc. (formerly EDITEK,  Inc.), a Delaware  corporation,  was
organized  in  September  1986  to  succeed  the  operations  of  a  predecessor
California   corporation.   MEDTOX   Scientific,   Inc.  and  its   wholly-owned
subsidiaries,  MEDTOX  Laboratories,  Inc.,  MEDTOX  Diagnostics,  Inc., and New
Brighton  Business  Center  LLC are  referred  to herein as "the  Company".  The
Company is engaged primarily in two distinct,  but very much related businesses.
The business of manufacturing and distribution of diagnostic  devices is carried
on by MEDTOX Diagnostics,  Inc. from its facility in Burlington,  North Carolina

<PAGE>

and the business of forensic and  clinical  laboratory  services is conducted by
MEDTOX Laboratories, Inc. at its facility in St. Paul, Minnesota.

The Company has two reportable segments:  "Laboratory Services" conducted by the
Company's  wholly owned  subsidiary,  MEDTOX  Laboratories,  Inc. and  "Products
Sales" conducted by the Company's wholly owned  subsidiary  MEDTOX  Diagnostics,
Inc. Laboratory Services include forensic toxicology,  clinical toxicology,  and
heavy metal analyses as well as logistics,  data, and overall program management
services. Product Sales include sales of a variety of on-site screening products
and  contract  manufacturing.  For the  quarter  ended  March 31, 2001 and 2000,
Laboratory Services revenue accounted for 80% and 86% of the Company's revenues,
respectively.  Revenue from Product Sales accounted for 20% and 14% of the total
revenues  of the  Company  for the  quarter  ended  March  31,  2001  and  2000,
respectively.

Results of Operations

The Company  achieved record revenues and net income for the first quarter ended
March 31, 2001.  Revenues for the first  quarter of 2001  increased 20% over the
first quarter of 2000, driven by sales of the PROFILE(R)-II  Test System and the
expanding  VERDICT(R)-II  product line, as well as increased  sample volume from
the  Company's  occupational  health,  wellness  and esoteric  testing  clients.
Selling,  general,  and  administrative  expenses  in the first  quarter of 2001
decreased as a percentage  of sales to 27% from 29% in the same quarter in 2000,
reflecting  efforts taken to reorganize  the  laboratory  operations  and reduce
operating  costs.  The  following  table  sets  forth the  percentages  of total
revenues  represented by certain items  reflected in the Company's  Consolidated
Statements of Operations:

                                                 Three months ended,
                                          March 31, 2001    March 31, 2000
-----------------------------------------------------------------------------
   Revenues                                   100.0%             100.0%
   Cost of revenues                            64.2               63.1
   Operating expenses:
      Selling, general, and administrative     27.1               28.9
      Research and development                  2.7                2.6
                                            ----------         ----------
                                               29.8               31.5
   Other expense                                2.2                2.3
                                            ----------         ----------
   Net income                                   3.8%               3.1%
                                            ==========         ==========


Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000

Revenues

Revenues  increased  20% to $11.6  million for the three  months ended March 31,
2001, driven by a $1.0 million,  or 12% increase in Laboratory Services revenues
and a $0.9 million, or 66% increase in Product Sales revenues.

The growth in Laboratory  Services  revenues was primarily due to a 22% increase

<PAGE>

in the number of laboratory  tests  performed.  Sample volume from the Company's
occupational  health,  wellness  and  esoteric  testing  clients  increased  40%
compared to the first quarter of 2000.  The Company's  research and  development
group  continues to improve and add to the over 900  proprietary  bio-analytical
assays that have been  developed.  In the past,  these tests have  largely  been
marketed to hospitals,  clinics and other laboratories.  However, more recently,
the Company has increased its efforts to apply the assay  development  skills to
the  bio-analytical  needs of the  pharmaceutical  market.  Despite  the overall
favorable  sales trend within the Laboratory  operations,  the average price per
testing  specimen  declined  9%. The  erosion in the  average  price per testing
specimen  stemmed from  competitive  market  conditions,  which  restricted  the
average  price that the Company  could charge new  customers.  In addition,  the
slowing economy and the Company's  planned  emphasis on the  PROFILE(R)-II  Test
System  for  on-site   drugs-of-abuse  (DAU)  screening  slowed  the  growth  of
laboratory DAU sample volume.

The Product Sales segment  achieved  higher  revenues due to increased  sales of
substance abuse testing products and agricultural diagnostic products, partially
offset  by a  slight  reduction  in sales of  contract  manufacturing  services.
Product sales from substance  abuse testing  products,  which  incorporates  the
EZ-SCREEN(R),  PROFILE(R)-II  and  VERDICT(R)-II  on-site  test  kits and  other
ancillary  products  for the  detection  of abused  substances,  increased  $0.9
million to $1.9 million in the first quarter of 2001. This growth  reflected the
sales and  marketing  efforts  for the  Company's  second-generation  test kits,
PROFILE(R)-II and VERDICT(R)-II. The VERDICT(R)-II was developed for the prison,
probation, parole and rehabilitation markets. The VERDICT(R)-II product line now
consists  of 18  different  configurations  to detect  from one to five drugs of
abuse. The Company continues to develop new products in this area, including the
PROFILE(R)-ER   device.   The   PROFILE(R)-ER   device  is  an   on-site,   nine
drugs-of-abuse  panel,  targeted at hospital laboratories for emergency response
screening  in  drugs-of-abuse  overdose  situations.  The Company  received  FDA
approval  for  its  PROFILE(R)-ER  device  and  for  10  configurations  of  its
VERDICT(R)-II  product  in January  2001.  A small  amount of the  PROFILE(R)-ER
product was shipped in the first quarter of 2001.

Product sales from agricultural  diagnostic  products  increased 30% to $146,000
primarily  as a result  of  increased  purchases  by the USDA for the  Company's
products. The USDA's needs for the Company's products vary from year-to-year and
sales to the USDA are  expected  to  fluctuate  accordingly.  Sales of  contract
manufacturing services, microbiological and associated products decreased 10% to
$265,000  due to  decreased  revenues  from both  historical  customers  and new
customers.

Gross profit

Consolidated  gross  margin was 35.8% for the three  months ended March 31, 2001
compared  to 36.9% for the three  months  ended  March 31,  2000,  reflecting  a
decline in both Laboratory Services gross margin and Product Sales gross margin.

Laboratory  Services gross margin was 31.3% for the three months ended March 31,
2001,  down from 33.1% for the three months ended March 31, 2000. The erosion of
the gross margin was primarily attributable to a 9% decline in the average price
per testing specimen. The drop in the average price per testing specimen stemmed
from competitive market conditions,  which restricted the average price that the

<PAGE>

Company could charge new customers.

Gross  margin from  Product  Sales  declined to 54.3% for the three months ended
March 31, 2001 from 59.5% for the three months ended March 31, 2000,  reflecting
increased  material  and  labor  costs  due  to  new  product  introduction  and
manufacturing  scale  up of the  newly  released  PROFILE(R)-ER,  as well as new
products within the PROFILE(R)-II and VERDICT(R)-II product lines.

Selling, general and administrative expenses

Selling,  general and  administrative  expenses were $3.1  million,  or 27.1% of
revenues  in the first  quarter of 2001,  compared  to $2.8  million or 28.9% of
revenues  in the first  quarter  of 2000.  The  decrease  in the  percentage  of
revenues  reflects  efforts taken to reorganize  the  laboratory  operations and
reduce overall  operating  costs.  The increase in the absolute dollar amount of
selling,  general and  administrative  expenses was  attributable  to the higher
revenue level in the first quarter of 2001.

Research and development expenses

Research and development expenses increased by 27% in the first quarter of 2001,
principally due to higher expenses  associated with new product  development for
on-site and other ancillary products in the Product Sales segment.

Other expense

Other expense consisted primarily of interest expense, which remained relatively
stable  from the first  quarter  of 2000 to the  first  quarter  of 2001.  Other
expense in the first  quarter of 2001 also  included a loss of $25,000  from the
Company's rental activities.

Net income

In the first  quarter of 2001,  the Company  recorded net income of $0.4 million
compared to $0.3  million in the first  quarter of 2000.  This  improvement  was
driven by a 20%  increase in  consolidated  revenues and a reduction in selling,
general, and administrative expenses as a percentage of revenues.

Laboratory  Services  net income of $0.3  million  in the first  quarter of 2001
remained  consistent with the first quarter of 2000. Although revenues increased
12%, this  improvement was offset by a reduced gross margin,  which was impacted
by a reduction in the average price per specimen.

Product  Sales net income was $145,000 in the first  quarter of 2001 compared to
$12,000  in  the  first  quarter  of  2000.   This   improvement  was  primarily
attributable to the growth in sales.

Liquidity and Capital Resources

The working capital requirements of the Company have been funded primarily by

<PAGE>

cash received from bank financing and the sale of equity securities.

Net cash used in operating activities was $0.6 million in both the first quarter
of 2001 and 2000.

Net cash used in investing activities,  consisting of capital expenditures,  was
$7.1  million in the first  quarter of 2001,  up from $0.8  million in the first
quarter of 2000. In the first quarter of 2001,  the Company  purchased the three
building,  129,039  square  foot  complex  in St.  Paul,  Minnesota,  where  the
Company's  laboratory  segment  formerly leased 53,576 square feet. The purchase
price,  exclusive  of expenses  and  closing  costs,  was $6.35  million and was
financed by a mortgage loan from Principal Life Insurance Company of Des Moines,
Iowa in the amount of $6.2  million.  The mortgage  loan has a term of ten years
and is being  repaid  based on a 20-year  amortization  schedule  with a balloon
payment at the end of the ten-year term. The interest rate is fixed at an annual
rate of  7.23%  for the  first  five  years  at  which  time  the  rate  will be
renegotiated by the parties.  The facility includes other commercial tenants who
have individual  leases that range from 4 years to less then 1 year in duration.
The  current  annual  rent paid by such third  party  tenants,  excluding  their
pro-rata share of operating  expenses,  is approximately  $431,000 per year. See
Note E of Notes to Consolidated Financial Statements.

Net cash  provided by financing  activities of $7.5 million in the first quarter
of 2001 was  principally  associated  with proceeds  received under the mortgage
loan  discussed  above and the  Company's  credit  agreement for the purchase of
capital equipment.  Net cash provided by financing activities of $2.3 million in
the first quarter of 2000 primarily  represented proceeds from the renegotiation
of the  Company's  term debt  which were used to fund the  Company's  operations
during the first quarter of 2000 and pay down the line of credit, which occurred
in the second quarter of 2000.

In January 1998, the Company entered into a Credit Security Agreement (the Wells
Fargo Credit  Agreement)  with Wells Fargo Business  Credit (Wells  Fargo).  The
Wells Fargo Credit Agreement, as amended,  consists of (i) a term loan of $3.185
million  bearing  interest at prime + 1.25%;  (ii) a  revolving  line of credit,
payable  on  demand,  of not more  than  $6.0  million  or 85% of the  Company's
eligible trade accounts  receivable  bearing interest at prime + 1%; and (iii) a
capex note of up to $3.5 million for the purchase of capital  equipment  bearing
interest at prime + 1.25% and (iv)  availability of letters of credit in amounts
not to exceed the lesser of $300,000 (less outstanding letters of credit) or the
unborrowed portion of the revolving line of credit (less outstanding  letters of
credit).

The Company is relying on expected positive cash flow from operations,  its line
of  credit,  and  capex  note to fund  its  future  working  capital  and  asset
purchases.  The  amount  of  credit  on the  revolving  line of  credit is based
primarily  on the  receivables  of the  Company  and,  as such,  varies with the
accounts receivable, and to a lesser degree, the inventory of the Company. As of
March 31, 2001, the Company had total borrowing  capacity of $5.3 million on its
line of credit,  of which $4.0 million was borrowed,  leaving a net availability
of $1.3 million as of March 31, 2001.

In the short term, the Company believes that the aforementioned  capital will be
sufficient to fund the Company's  planned  operations  through 2001. While there
can be no assurance  that the  available  capital will be sufficient to fund the
future  operations of the Company beyond 2001, the Company  believes that future

<PAGE>

profitable  operations,  as well as access to additional capital through debt or
equity  financings,  will be the primary means for funding the operations of the
Company for the long term.

The  Company  continues  to  follow  a  plan  which  includes  (i)  aggressively
monitoring and  controlling  costs,  (ii)  increasing  revenue from sales of the
Company's  existing  products and  services  (iii)  developing  new products and
services,   as  well  as  (iv)  continuing  to  selectively  pursue  synergistic
acquisitions to increase the Company's critical mass.  However,  there can be no
assurance that costs can be controlled, revenues can be increased, financing may
be obtained,  acquisitions successfully consummated, or that the Company will be
profitable.

Impact of Inflation and Changing Prices

The impact of inflation  and changing  prices on the Company has been  primarily
limited to salary,  laboratory and operating supplies and rent increases and has
not been  material  to date to the  Company's  operations.  In the  future,  the
Company  may not be able to  increase  the  prices of  laboratory  testing by an
amount  sufficient  to cover the cost of  inflation,  although  the  Company  is
responding to these  concerns by refocusing the  laboratory  operations  towards
higher margin testing (including clinical and pharmaceutical  trials) as well as
emphasizing the marketing, sales and operations of the Product Sales business.

Seasonality

The Company believes that the laboratory testing business is subject to seasonal
fluctuations in pre-employment  screening.  These seasonal  fluctuations include
reduced volume in the summer months,  year-end holiday periods,  and other major
holidays.  In addition,  inclement  weather may have a negative impact on volume
thereby reducing net revenues and cash flow.


<PAGE>


Item 3            QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
                  MARKET RISK.

Market  risk is the risk that the  Company  will  incur  losses  due to  adverse
changes in interest rates or currency  exchange rates and prices.  The Company's
primary market risk exposures are to changes in interest rates.  During 2000 and
through March 31, 2001,  the Company did not have sales  denominated  in foreign
currencies nor did it have any  subsidiaries  located in foreign  countries.  As
such,  the  Company  is not  exposed to market  risk  associated  with  currency
exchange rates and prices.

The Company had $575,000 of subordinated  notes outstanding as of March 31, 2001
and December 31, 2000, at a fixed  interest  rate of 12% per annum.  The Company
also had capital leases at various fixed rates. In addition,  at March 31, 2001,
the Company had a $6.2 million mortgage loan payable to Principal Life Insurance
Company at a fixed  annual  rate of 7.23% for the first five years at which time
the rate will be  renegotiated by the parties.  These financial  instruments are
subject to interest  rate risk and will  increase or decrease in value if market
interest rates change

The Company had approximately  $8.0 million and $7.0 million  outstanding on its
line of credit and long-term debt issued under the Wells Fargo Credit  Agreement
as of March 31, 2001 and  December 31,  2000,  respectively.  The debt under the
Wells Fargo Credit Agreement is held at variable interest rates. The Company has
cash flow exposure on its committed and uncommitted line of credit and long-term
debt due to its variable prime rate pricing.  At March 31, 2001 and December 31,
2000,  a 1% change in the prime rate would not  materially  increase or decrease
interest expense or cash flows.


<PAGE>


PART II  OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS.   See Part I, Note G

ITEM 2   CHANGES IN SECURITIES.  Inapplicable

ITEM 3   DEFAULTS ON SENIOR SECURITIES.  Inapplicable

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
         Inapplicable

ITEM 5   OTHER INFORMATION.  Inapplicable

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K.

         a. Exhibits:

         10.55    Nova Building Lease dated March 28, 2001 by and between
                  Samuel C. Powell and Karen G. Powell and MEDTOX Diagnostics,
                  Inc.

         10.56    Amendment  No.1 to Nova  Building  Lease dated April 1, 2001
                  by and between  Samuel C.  Powell and Karen G. Powell and
                  MEDTOX Diagnostics, Inc.

         10.57    Amended and  Restated  Credit and  Security  Agreement  dated
                  March 31, 2001 by and among  MEDTOX  Scientific,  Inc.,
                  MEDTOX Laboratories,  Inc., MEDTOX Diagnostics, Inc.,
                  Consolidated Medical Services, Inc. and Wells Fargo Business
                  Credit, Inc.

         b. Reports on Form 8-K:   Inapplicable


<PAGE>



                                   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 thereunto duly authorized.


         Signature              Title                                   Date
-------------------------------------------------------------------------------

/s/ Richard J. Braun    President, Chief Executive Officer, and    May 11, 2001
---------------------   Chairman of the Board of Directors
Richard J. Braun        (Principal Executive Officer)


/s/ Kari L. Golembeck   Controller (Principal Accounting Officer)  May 11, 2001
---------------------
Kari L. Golembeck