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 September 30, 2000

                                       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 November
13, 2000, was 3,506,716.

<PAGE>



                             MEDTOX SCIENTIFIC, INC.

                                      INDEX

                                                                           Page

Part I  Financial Information:

        Item 1:  Financial Statements

                 Consolidated Balance Sheets - September 30, 2000
                 and December 31, 1999 .......................................3

                 Consolidated Statements of Operations - Three
                 and Nine Months Ended September 30, 2000 and 1999......      5

                 Consolidated Statements of Cash Flows - Nine
                 Months Ended September 30, 2000 and 1999..........           6

                 Notes to Consolidated Financial Statements............       7
        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 ...............................................    18

                  Item 2:

                           Changes in Securities.......................      18

                  Signatures .............................................   20


<PAGE>

Item 1:  FINANCIAL STATEMENTS
<TABLE>

                             MEDTOX SCIENTIFIC, INC.
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)
                                   (Unaudited)
<CAPTION>
                                                                   September 30,         December 31,
                                                                      2000                   1999
<S>                                                               <C>                   <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                        $      -            $       576

   Accounts receivable:
         Trade, less allowance for doubtful
           accounts ($335 in 2000 and $274 in 1999)                     9,970                 6,982
         Other                                                            169                   125
                                                                       ------                 -----
                                                                       10,139                 7,107
   Inventories:
         Raw materials                                                    818                   462
         Work in process                                                  528                   230
         Finished goods                                                   305                   126
         Supplies                                                       1,432                   978
                                                                       ------                 -----
                                                                        3,083                 1,796

   Prepaid expenses and other current assets                              591                   815
                                                                       ------                ------
         Total current assets                                          13,813                10,294

EQUIPMENT AND IMPROVEMENTS:
    Furniture and equipment                                            15,781                12,820
    Leasehold improvements                                              1,670                 1,354
                                                                       ------                ------
                                                                       17,451                14,174
    Less accumulated depreciation and amortization                    (12,301)              (11,358)
                                                                       ------                ------
                                                                        5,150                 2,816

GOODWILL, net of accumulated amortization of
    $4,220 in 2000 and $3,568 in 1999                                  12,509                13,161

OTHER ASSETS                                                              295                     -
                                                                   -----------          -------------
TOTAL ASSETS                                                       $   31,767           $    26,271
                                                                   ============         =============
</TABLE>


<PAGE>
<TABLE>

                                               MEDTOX SCIENTIFIC, INC.
                                             CONSOLIDATED BALANCE SHEETS
                                               (Dollars in thousands)
                                                    (Unaudited)

<CAPTION>
                                                                                 September 30,         December 31,
                                                                                     2000                  1999
<S>                                                                            <C>                   <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Checks written in excess of bank balances                                      $    368              $      -
   Line of credit                                                                    3,140                 4,208
   Accounts payable                                                                  2,366                 3,682
   Accrued expenses                                                                  1,487                 1,554
   Current portion of restructuring accrual                                            160                   384
   Current portion of long-term debt                                                 1,427                 1,236
   Current portion of capital leases                                                   186                   186
                                                                                  --------               -------
         Total current liabilities                                                   9,134                11,250

LONG TERM PORTION OF RESTRUCTURING ACCRUAL                                               -                    85

LONG-TERM DEBT                                                                       2,912                 1,737

LONG-TERM PORTION OF CAPITAL LEASES                                                    517                   409

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par value; authorized shares, 50,000;
     none issued and outstanding                                                        -                     -
   Common stock, $ .15 par value; authorized  shares, 7,400,000; issued
     and outstanding shares, 3,506,025 in 2000 and 2,904,410 in 1999                   526                   436
   Additional paid-in capital                                                       64,928                59,859
   Accumulated deficit                                                             (46,074)              (47,329)
   Treasury stock                                                                     (176)                 (176)
                                                                                  -----------           ---------
        Total stockholders' equity                                                  19,204                12,790
                                                                                  -----------           ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $ 31,767              $ 26,271
                                                                                  ===========           ==========
</TABLE>

<PAGE>
<TABLE>

                             MEDTOX SCIENTIFIC, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands except per share amounts)
                                   (Unaudited)
<CAPTION>

                                                    Three Months Ended                          Nine Months Ended
                                                       September 30,                              September 30,
                                                 2000                 1999                  2000                 1999
<S>                                           <C>                 <C>                 <C>                   <C>
Revenues
   Laboratory services                         $ 9,206              $ 7,944              $ 26,951             $ 23,204
   Product sales                                 2,367                1,130                 5,614                2,857
                                               -------              -------              --------             --------
                                                11,573                9,074                32,565               26,061

Cost of services                                 6,164                5,283                17,798               15,508
Cost of sales                                      687                  623                 2,059                1,579
                                               -------              -------              --------             --------
                                                 6,851                5,906                19,857               17,087
                                               -------              -------              --------             --------
          Gross profit                           4,722                3,168                12,708                8,974

Operating expenses
   Selling, general and administrative           3,735                2,401                 9,882                6,675
   Research and development                        265                  198                   820                  618
   Interest and financing costs                    245                  220                   751                  595
   Other non-recurring                               -                    -                     -                 (164)
                                                ------               ------                ------               ------
                                                 4,245                2,819                11,453                7,724
                                                ------               ------                ------               ------
Net income                                         477                  349                 1,255                1,250
                                               =======               =======               ======               ======

Basic earnings per common share                 $ 0.15               $ 0.12                $ 0.42               $ 0.43
                                              ========              =======                =======              ======

Diluted earnings per common share               $ 0.14               $ 0.12                $ 0.39               $ 0.42
                                              ========             ========               =======               ======
</TABLE>

<PAGE>
<TABLE>

                         MEDTOX SCIENTIFIC, INC.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                          (Dollars in thousands)
                               (Unaudited)
<CAPTION>
                                                                                      Nine Months Ended
                                                                                        September 30,
                                                                                  2000                1999
<S>                                                                            <C>                <C>
Operating activities
Net income                                                                       $ 1,255            $ 1,250
   Adjustments to reconcile net income to net cash (used in) provided
      by operating activities:
      Depreciation and amortization                                                1,729              1,625
      Gain on sale or retirement of equipment                                        (35)                 -
      Deferred compensation                                                           33
      Changes in operating assets and liabilities:
         Accounts receivable                                                      (3,032)            (1,302)
         Inventories                                                              (1,287)               (40)
         Prepaid expenses and other current assets                                   224               (376)
         Other assets                                                                (52)                 -
         Accounts payable, accrued expenses and other                             (1,383)              (499)
         Restructuring accruals                                                     (309)              (546)
                                                                                 --------            -------
Net cash (used in) provided by operating activities                               (2,857)               112

Investing activities
    Purchases of equipment and improvements                                       (3,100)              (712)
    Proceeds from sale of equipment                                                   35                  -
    Payment for acquisition of business                                              (75)                 -
                                                                                 -------             -------
Net cash used in investing activities                                             (3,140)              (712)

Financing activities
    Checks in excess of bank balance                                                 368               (142)
    Net proceeds from sale of common stock                                         4,949                  2
    Net proceeds from line of credit, term loans and notes payable                51,474             28,875
    Principal payments on capital lease obligations                                 (193)              (170)
    Principal payments on line of credit, term loans and notes payable           (51,177)           (27,678)
                                                                                 -------             ------
Net cash provided by financing activities                                          5,421                887
                                                                                 -------             ------
Increase (decrease)  in cash and cash equivalents                                   (576)               287
Cash and cash equivalents at beginning of period                                     576                  -
                                                                                 -------           --------
Cash and cash equivalents at end of period                                       $    -            $    287
                                                                                 =======           =========


Supplemental noncash activities:
    Additions to capital leases                                                  $   301           $     58
    Acquistions:
          Fair value of assets acquired                                              252                  -
          Cash paid                                                                  (75)                 -
          Common stock issued                                                       (177)                 -
                                                                                 -------           ---------
                                                                                 $    -            $      -
                                                                                 =======           =========
</TABLE>

<PAGE>


                             MEDTOX SCIENTIFIC, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000

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 nine-month period ended September 30, 2000
are not  necessarily  indicative  of the results  that may be  attained  for the
entire year. These interim  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, 1999.

Earnings  Per Share:  Basic  earnings  per share is computed on the basis of the
weighted average number of common shares outstanding. Diluted earnings per share
is  computed  on the basis of the  weighted  average  number  of  common  shares
outstanding plus the effect of outstanding  stock options and warrants using the
"treasury stock" method.

In thousands, except share and per share amounts
<TABLE>
<CAPTION>

                                            Three Months Ended                Nine Months Ended
                                               September 30,                   September 30,
                                             2000          1999              2000          1999
                                        -----------------------------   -----------------------------
<S>                                       <C>            <C>              <C>              <C>
Net income (A)                                  $  477        $  349           $ 1,255       $ 1,250

Weighted average number of shares
of common stock outstanding (B)              3,237,177     2,903,298         3,019,884     2,902,709

Dilutive effect of stock options
and warrants                                  233,456       123,171           192,272        99,304
                                              --------      --------          --------       ------

Common stock and common                     3,470,633     3,026,469         3,212,156     3,002,013
stock equivalents (C)                       ==========    ==========        ==========    =========


Net income per share:
Basic (A/B)                                      $ .15         $ .12             $ .42         $ .43
                                                 =====         =====             =====         =====
Diluted (A/C)                                    $ .14         $ .12             $ .39         $ .42
                                                 =====         =====             =====         =====
</TABLE>
<PAGE>


Options  and  warrants  to  purchase  1,090,759  shares  of  common  stock  were
outstanding at September 30, 2000. Of these, 472,801 were dilutive for the three
and nine months ended September 30, 2000 and included in the  computation  above
while the remaining options and warrants 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. Options to purchase 392,458 shares of
common stock were  outstanding  at September  30,  1999.  Of these,  221,500 and
182,500  were  dilutive  for the  three and nine  months,  and  included  in the
computation  above  while  the  remaining  options  were  not  included  in  the
computation of diluted  earnings per share as their exercise prices were greater
than the average market prices of the common shares.

Reclassification:  Certain reclassifications have been made to the 1999
financial statements to conform with the 2000 presentations.


Accounting for  Derivatives:  In June 1998, the Financial  Accounting  Standards
Board released SFAS No. 133 "Accounting for Derivatives  Instruments and Hedging
Activities",  which will be effective for the Company beginning January 1, 2001.
SFAS No. 133 establishes  new accounting and reporting  standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities.  The Company plans to adopt such standard
when required and does not anticipate that it will have a material impact on the
Company's financial position or results of operations.

Revenue  Recognition:  In December 1999, the Securities and Exchange  Commission
("SEC") issued Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition in
Financial  Statements".  SAB No. 101 summarizes certain of the SEC staff's views
in  applying  generally  accepted  accounting  principles  to  selected  revenue
recognition  issues.  SAB No. 101 is to be  implemented  by the Company no later
than the fourth quarter of fiscal 2000. The Company plans to adopt such standard
when required and does not anticipate that it will have a material impact on the
Company's financial position or results of operations.

<PAGE>

NOTE B - ACQUISITION

In August 2000, the Company purchased customer lists and certain other assets of
National  Medical Review  Offices,  Inc.  ("NMRO"),  a  Minnesota-based  company
specializing   in  specimen   collection   services.   The  purchase   price  of
approximately  $252,000  included an initial payment of $75,000 in cash plus the
issuance of 15,152 shares of the Company's common stock at $11.69 per share. The
Company  accounted  for its  acquisition  of NMRO using the  purchase  method of
accounting.  The following  table  summarizes  the fair value of the NMRO assets
acquired:

         Equipment                  $    9,000
         Non-compete agreement          21,000
         Customer lists                222,000
                                    ----------
                                    $  252,000
                                    ==========

The Company  intends to depreciate the  equipment,  non-compete  agreement,  and
customer lists on a straight-line  basis over periods of five, three, and twenty
years, respectively.

NOTE C - DEBT

On January 14, 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
$3,185,000,  bearing interest at prime + 1.25%: (ii) an overadvance term loan of
up to $700,000, bearing interest at prime + 3%; (iii) a revolving line of credit
equal  to the  lesser  of  $6,000,000  or 85% of the  Company's  eligible  trade
accounts  receivable,  bearing  interest at prime + 1%, and (iv) a note of up to
$2,450,000,  for the purchase of capital  equipment  bearing interest at prime +
1.25%.

Effective September 29, 2000 the Company and Wells Fargo Business Credit amended
the Credit Agreement. The amended Wells Fargo Credit Agreement consists of (i) a
decrease  in the  overadvance  term loan from  $1,350,000  to  $700,000  (ii) an
increase in the note for the purchases of capital  equipment from  $1,800,000 to
$2,450,000  (iii) an increase in allowable  capital  expenditures for the twelve
month period ending December 31, 2000 from $3,000,000 to $5,000,000,  and (iv) a
waiver of compliance concerning salaries for the 12 month period ending December
31, 2000.

The Company has received $575,000 from private  placements of subordinated debt.
The notes  require  payment of the  principal  amounts  on  December  31,  2001.
Interest at 12% per annum is paid  semi-annually  on June 30 and December 31. In
connection  with the  issuance of the  subordinated  notes,  the Company  issued
warrants to purchase a number of shares of common stock equal to 25% of the face
amount of the  subordinated  notes  divided  by an  exercise  price of $3.25 per
share.

<PAGE>

The Company has  determined the value of the warrants at the dates of the grants
to be $56,000.  The value of the warrants has been  accounted  for as additional
paid-in  capital and deducted  from the principal of the  subordinated  notes as
discount on debt issued.

The funds  received  from the  Wells  Fargo  Credit  Agreement  and the  private
placements of  subordinated  debt were used to fund the working capital needs of
the Company.

NOTE D - PRIVATE EQUITY PLACEMENT

During  the third  quarter  of 2000,  the  Company  completed  a private  equity
placement  through the sale,  exclusively  to accredited  investors,  of 550,000
units at a gross aggregate price of $5,500,000, or $10.00 per unit, resulting in
net proceeds of approximately  $4,877,800 after deducting agents' commissions of
$550,000  and other  estimated  expenses.  Each unit  consisted  of one share of
common stock and one warrant to purchase one additional share of common stock at
an exercise  price of $12.50.  In  connection  with the private  placement,  the
Company also issued warrants to the placement agent to purchase 55,000 shares of
common  stock at an  exercise  price of  $12.50  per  share.  The  warrants  are
currently exercisable and expire five years from the date of issuance.

NOTE E - SEGMENTS

The Company has two  reportable  segments:  Product Sales and Lab Services.  The
Product Sales segment includes 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).   The  Lab  Services  segment  includes  MEDTOX
Laboratories,  Inc..  Services  provided include forensic  toxicology,  clinical
toxicology, heavy metals analyses, courier delivery, and medical surveillance.

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

Segment Information
     (Dollars in thousands)

                                      Three Months Ended             Nine Months Ended
                                         September 30,                  September 30,
                                       2000           1999            2000           1999
                              -------------- --------------  -------------- --------------
<S>                             <C>              <C>            <C>            <C>
Laboratory Services:
   Net Sales                          9,206          7,944          26,951         23,204
   Segment Income (Loss)               (56)            302             648          1,245
   Segment Assets                    27,937         23,775          27,937         23,775

Product Sales:
   Net Sales                          2,367          1,130           5,614          2,857
<PAGE>

   Segment Income                       533             47             607              5
   Segment Assets                     3,830          1,918           3,830          1,918

Total:
   Net Sales                         11,573          9,074          32,565         26,061
   Income                               477            349           1,255          1,250
   Total Assets                      31,767         25,693          31,767         25,693

</TABLE>

NOTE F - 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,  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.   Under  the  MEDTOX  Laboratories  acquisition
agreement,   pursuant  to  which  the   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 as a result of the settlement  with United States
Drug Testing  Laboratories  in 1999. The Company has initiated steps to commence
an arbitration proceeding against the sellers seeking payment of the $79,000.

On January  31,  1997,  the  Company  filed suit in  Federal  District  Court in
Minnesota  against a  majority  stockholder  ("Morgan  Capital")  and two former
outside  directors  alleging  violation of Section 16(b) of the  Securities  and
Exchange Act of 1934 and seeking  recovery of more than $500,000 in  short-swing
profits.  On June 3, 1999 the U.S.  District Court found that Morgan Capital had
violated  Section 16(b) and ordered the defendants 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
Section 16(b) claim against the former stockholder,  Morgan Capital,  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
<PAGE>

District  Court  entered  such  judgment  in favor of the Company on October 17,
2000.  Morgan Capital must now appeal the Federal  District  Court's decision to
the  Eighth  Circuit  Court  of  Appeals  before  November  20,2000,  or pay the
judgment,  or attempt to  negotiate  a final  settlement  of the matter with the
Company.  The Company has not recorded a  receivable  for this amount due to the
continuing uncertainty of the matter.

On March 10,  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
parties  are now  engaged  in  pretrial  discovery  and it is too  early in that
process to develop any sense at to how the matter might  ultimately be resolved.
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.  For this reason, 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.


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.
<PAGE>

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.


Introduction

MEDTOX  Scientific,  Inc. and its subsidiaries,  MEDTOX  Laboratories,  Inc. and
MEDTOX  Diagnostics,  Inc.,  are  referred  to herein as "the  Company".  MEDTOX
Laboratories,  Inc.  is a  toxicology  laboratory  which was founded in 1984 and
provides  forensic  toxicology,  clinical  toxicology,  heavy  metals  analyses,
courier delivery and medical  surveillance.  MEDTOX Diagnostics,  Inc. develops,
manufactures  and markets on-site  diagnostic and screening tests which are used
to detect substances in humans,  foodstuffs,  animals, feed and the environment.
The  Company is  transitioning  these  operating  units  into a broader  service
organization by coupling the underlying  laboratory  analysis and  point-of-care
devices  with  logistics   management,   data  management  and  overall  program
management services.

The Company has two reportable segments:  Laboratory Services and Product Sales.
Laboratory Services include forensic toxicology,  clinical toxicology, and heavy
metal analyses as well as courier  services,  medical data, and overall  program
management  services.  Product  Sales  include a variety  of  on-site  screening
products.

The Company commenced operations as Environmental Diagnostics, Inc. in June 1983
and until 1986 was a development  stage  company.  The Company became engaged in
the manufacture and sale of Conventional  Biodiagnostic  Products as a result of
its acquisition of Granite Technological Enterprises,  Inc. in 1986. The Company
entered the  laboratory  testing  market when it completed  the  acquisition  of
Princeton Diagnostic  Laboratories of America,  Inc., (PDLA) in 1994. On January
30, 1996 the Company,  then known as EDITEK,  Inc., completed the acquisition of
MEDTOX. In 1997, the Company changed its name to MEDTOX Scientific, Inc.
<PAGE>

Three Months Ended September 30, 2000 Compared to Three Months Ended September
30, 1999

Laboratory Services

Revenues from Laboratory  Services for the three months ended September 30, 2000
were  $9,206,000 as compared to $7,944,000 for the three months ended  September
30, 1999. The increase of $1,262,000 or 15.9% was primarily  attributable  to an
8.4% increase in both net revenue per laboratory test and the number of tests.

The gross margin from the revenues  generated from the  laboratory  services was
33.0% for the three  months  ended  September  30,  2000 as  compared to a gross
margin of 33.5% for the same period in 1999.  The slight decline in gross margin
was  primarily  attributable  to a one-time  reduction in net  revenues  from an
increase in pass through expenses  incurred on behalf of our clients and paid to
third-party  collection  sites,  partially offset by the increase in net revenue
per laboratory test noted above.

Selling,  general  and  administrative  expenses  for  the  three  months  ended
September 30, 2000 were  $2,757,000  compared to $2,070,000 for the three months
ended  September  30,  1999.  The  increase  of  $687,000  or  33.2% in 2000 was
primarily  the result of increased  salaries  and sales  expenses as the Company
continues to upgrade the management team and sales force.

Interest and financing costs for the Laboratory  Services  segment  increased to
$226,000 for the three months ended  September 30, 2000 from $205,000 during the
same  period of 1999,  reflecting  higher debt  levels and  increasing  interest
rates.

As a result of the above, net income (loss) for the Laboratory  Services segment
of the Company  for the three  months  ended  September  30, 2000 was  ($56,000)
compared to the net income of $302,000 for the three months ended  September 30,
1999.

Product Sales

Revenues  from  Product  Sales for the three  months  ended  September  30, 2000
increased  109.5% to $2,367,000  as compared to $1,130,000  for the three months
ended  September 30, 1999. The increase was primarily  attributable to continued
growth of the VERDICT(R) and PROFILE(R) product lines.

Product sales from substance  abuse testing  products,  which  incorporates  the
EZ-SCREEN  PROFILE(R)-II and VERDICT(R)-II on-site test kits and other ancillary
products for the detection of abused substances,  increased 168.0% to $1,946,000
for the three months-ended  September 30, 2000 compared to sales of $726,000 for
the same period in 1999.  The increase in product  sales is primarily due to the
sales and  marketing  efforts  for the  Company's  second-generation  test kits,
PROFILE(R)-II  and  VERDICT(R)-II.  The  Company is  continuing  to develop  new

<PAGE>

products in this area and plans to introduce  its  Emergency  Room (ER) panel in
the latter part of 2000.

Product sales from agricultural  diagnostic  products decreased 51.5% to $82,000
for the three months ended  September 30, 2000 compared to $169,000 in 1999. The
primary reason for the decrease of $87,000 was the result of decreased purchases
by the USDA of the  Company's  products.  The  USDA's  needs  for the  Company's
products  vary from  quarter to quarter  and sales to the USDA are  expected  to
fluctuate accordingly.

Sales  of  contract  manufacturing  services,   microbiological  and  associated
products  increased  44.3% to $339,000 for the three months ended  September 30,
2000 compared to $235,000 in 1999.  This  increase was due to increased  revenue
from both historical and new customers.

Gross margins from Product  Sales for the three months ended  September 30, 2000
were 71.0% compared to 44.9% for the three months ended  September 30, 1999. The
improvement  in gross margin was  primarily  due to an  increased  mix of higher
margin products and efficiencies gained in the production facility.

Selling, general and administrative expenses for Products Sales during the three
months ended September 30, 2000 were $978,000 compared to $331,000 for the three
months  ended  September  30,  1999.  The  increase  of  $647,000  or 195.5% was
primarily the result of increased  expenses as the Company  continues to upgrade
the management team and sales force.  The increased sales level also contributed
to the higher selling, general and administrative expenses.

Research and  development  expenses  incurred for Product Sales during the three
months ended  September  30, 2000 were  $150,000 as compared to $115,000 for the
same period in 1999.  The increase of $35,000 or 30.4% was  primarily the result
of the costs  associated  with new product  development  efforts for on-site and
other ancillary products.

As a result of the  above,  net  income  for the  Product  Sales  segment of the
Company for the three months ended September 30, 2000 was $533,000,  compared to
$47,000 for the three months ended September 30, 1999.

Nine Months Ended September 30, 2000 Compared to Nine Months Ended September
30, 1999

Laboratory Services

Revenues from  Laboratory  Services for the nine months ended September 30, 2000
were  $26,951,000 as compared to $23,204,000 for the nine months ended September
30, 1999. The increase of $3,747,000 or 16.2% was primarily  attributable  to an
8.4%  increase in laboratory  tests and a 9.2%  increase in average  revenue per
test.
<PAGE>

The gross margin from the revenues generated from Laboratory  Services was 34.0%
for the nine months  ended  September  30, 2000 as compared to a gross margin of
33.2% for the same period in 1999.

Selling, general and administrative expenses for the nine months ended September
30, 2000 were  $7,529,000  compared  to  $5,819,000  for the nine  months  ended
September 30, 1999. The increase of $1,710,000 or 29.4% was primarily the result
of increased salaries and sales expenses as the Company continues to upgrade the
management team and sales force.

Interest and financing costs for the Laboratory  Services  segment  increased to
$694,000 for the nine months ended  September 30, 2000 from $547,000  during the
same  period of 1999,  reflecting  higher debt  levels and  increasing  interest
rates.

As a result of the above, net income for the Laboratory  Services segment of the
Company for the nine months ended  September 30, 2000 was $648,000,  compared to
the net income of $1,245,000 for the nine months ended September 30, 1999.

Product Sales

Revenues  from  Product  Sales for the nine  months  ended  September  30,  2000
increased  96.5% to  $5,614,000  as compared to  $2,857,000  for the nine months
ended  September 30, 1999. The increase was primarily  attributable to continued
growth of the VERDICT(R) and PROFILE(R) product lines.

Product sales from substance  abuse testing  products,  which  incorporates  the
EZ-SCREEN  PROFILE(R)-II and VERDICT(R)-II on-site test kits and other ancillary
products for the detection of abused substances,  increased 145.4% to $4,258,000
for the nine months ended  September 30, 2000 compared to sales of $1,735,000 in
1999.  The increase in product sales is primarily due to the sales and marketing
efforts  for  the  Company's  second-generation  test  kits,  PROFILE(R)-II  and
VERDICT(R)-II.

Product sales from agricultural  diagnostic products decreased 12.9% to $344,000
for the nine months ended  September 30, 2000 compared to $395,000 in 1999.  The
primary reason for the decrease of $51,000 was the result of decreased purchases
by the USDA for the  Company's  products.  The  USDA's  needs for the  company's
products  vary from  quarter to quarter  and sales to the USDA are  expected  to
fluctuate accordingly.

Sales  of  contract  manufacturing  services,   microbiological  and  associated
products  increased  39.2% to $1,012,000 for the nine months ended September 30,
2000 compared to $727,000 in 1999.  This increase was due to increased  revenues
from both historical customers and new customers added in 2000.

Gross  margins from Product  Sales for the nine months ended  September 30, 2000
were 63.3%  compared to 44.7% for the nine months ended  September 31, 1999. The

<PAGE>

increase in gross margin was  primarily due to an increased mix of higher margin
products and efficiencies gained in the production facility.

Selling,  general and administration expenses for Products Sales during the nine
months ended  September 30, 2000 were  $2,353,000,  compared to $856,000 for the
nine months ended  September 30, 1999.  The increase of $1,497,000 or 174.9% was
primarily the result of increased  expenses as the Company  continues to upgrade
the management team and sales force.  The increased sales level also contributed
to the higher selling, general and administrative expenses.

Research and  development  expenses  incurred for Product  Sales during the nine
months ended  September  30, 2000 were  $538,000 as compared to $371,000 for the
same period in 1999.  The increase of $167,000 or 45.0% was primarily the result
of the costs  associated  with new  product  development  for  on-site and other
ancillary products.

For the nine  months  ended  September  30,  2000,  the Product  Sales  segment
incurred  interest and financing costs of $57,000 as compared to $48,000 for the
same period in 1999. The increase of $9,000 or 18.8% was primarily the result of
higher debt levels and increasing interest rates.

As a result of the  above,  net  income  for the  Product  Sales  segment of the
Company for the nine months ended  September  30, 2000 was $607,000  compared to
the net income of $5,000 for the nine months ended September 30, 1999.


Material Changes in Financial Condition

Laboratory Services

As of  September  30, 2000 net  accounts  and notes  receivable  for  Laboratory
Services  were  $8,433,000  compared to  $6,318,000  at December 31, 1999.  This
increase of $2,115,000 or 33.5% was primarily the result of higher sales for the
quarter ended September 30, 2000 as compared to quarter ended December 31, 1999.

Inventories  for  Laboratory  Services  were  $1,432,000  at September  30, 2000
compared to $978,000 at December 31, 1999.  The increase of $454,000 or 46.4% is
primarily  attributable to additional  supplies (forms,  labels,  and collection
kits)  shipped  to new and  existing  collection  sites to  support a  projected
increase in sales volume in 2001.  During the quarter,  the Company also revised
its assumptions for calculating  off-site  inventory located at collection sites
throughout  the United  States.  The revised  assumptions  reduced the amount of
expected scrap  inventory and changed the projected time that a collection  site
uses the collection kits from three months to twelve months.

<PAGE>

Product Sales

At  September  30,  2000,  net  accounts   receivable  for  Product  Sales  were
$1,706,000, compared to $789,000 at December 31, 1999. This increase of $917,000
or 116.2% was primarily  due to higher sales in the quarter ended  September 30,
2000 as compared to the quarter ended December 31, 1999.

Inventories  were  $1,651,000  at  September  30,  2000  compared to $818,000 at
December 31, 1999. The increase of $833,000, or 101.8% is primarily attributable
to the increase in forecasted sales for the fourth quarter of 2000.

Liquidity and Capital Resources

Cash received from  operations and debt financing have been the primary  sources
of funding for the working capital requirements of the Company. At September 30,
2000, the Company had total  availability of $6,000,000 on its line of credit of
which $3,140,000 was borrowed, leaving a net availability of $2,860,000.

During  the third  quarter  of 2000,  the  Company  completed  a private  equity
placement  through the sale,  exclusively  to accredited  investors,  of 550,000
units at a gross aggregate price of $5,500,000, or $10.00 per unit, resulting in
net proceeds of approximately  $4,877,800 after deducting agents' commissions of
$550,000  and other  estimated  expenses.  Each unit  consisted  of one share of
common stock and one warrant to purchase one additional share of common stock at
an exercise price of $12.50.

The Company believes that the aforementioned  capital will be sufficient to fund
the Company's planned  operations through the remainder of 2000. While there can
be no assurance that the available capital will be sufficient to fund the future
operations of the Company  beyond 2000,  the Company  believes  that  consistent
profitable  earnings,  as well as access to debt and equity, will be the primary
basis for funding the operations of the Company for the long term.

The  Company  continues  to  follow a plan  which  includes  (i)  continuing  to
aggressively monitor and control costs and (ii) increasing revenue from sales of
the  Company's  products,  services,  and  research and  development  contracts.
However, there can be no assurance that costs can be controlled, revenues can be
increased,  financing  may be obtained,  or that the Company will continue to be
profitable.


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

<PAGE>

primary market risk exposures are to changes in interest rates.  During 1999 and
through  September  30,  2000,  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 September 30,
2000 and December  31,  1999,  at a fixed  interest  rate of 12% per annum.  The
Company  also had  capital  leases  at  various  fixed  rates.  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  $6.7 million and $6.6 million  outstanding on its
line of credit and long-term debt issued under the Wells Fargo Credit  Agreement
as of September 30, 2000 and December 31, 1999, 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 September 30, 2000 and December
31,  1999,  a 1% change in the prime  rate  would  not  materially  increase  or
decrease interest expense or cash flows.


PART II  OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS.   See Part I, Note F
------   ------------------

ITEM 2   CHANGES IN SECURITIES.

In the third quarter of 2000 the Company  completed a private  equity  placement
through the sale of 550,000 units at a gross aggregate  price of $5,500,000,  or
$10.00 per unit,  resulting in net proceeds of  approximately  $4,877,800  after
deducting  agents'  commissions of $550,000 and other estimated  expenses.  Each
unit  consisted  of one share of common  stock and one warrant to  purchase  one
additional  share of common stock at an exercise  price of $12.50.  The warrants
are currently exercisable and expire five years from the date of issuance.

The sale of  securities  was made to  "accredited  investors" as defined in Rule
501(a) of  Regulation  D and in reliance on  Regulation D and Section 4(2) under
the  Securities  Act of 1933,  as  amended.  Miller  Johnson  & Kuehn,  Inc.  of
Minneapolis,  MN  acted as the  Company's  agent in the  private  placement.  In
connection  with the  private  placement,  the  Company  also  issued  five-year
warrants to the placement  agent to purchase 55,000 shares of common stock at an
exercise price of $12.50 per share.  As part of the financing,  the Company also
entered  into a  Registration  Rights  Agreement,  pursuant to which the Company
agreed to file a registration  statement on Form S-3 within 30 days covering the
resale of shares of the Company's  common stock issued in the third quarter 2000
and the shares to be issued pursuant to the warrants.
<PAGE>

The  Company  intends to use the net  proceeds  from this  offering  for general
working capital purposes,  including  product and capacity  expansion to support
the  Company's   increasing  sales  and  to  take  advantage  of  new  expansion
opportunities  that have been  presented  to the Company.  Until such time,  the
proceeds were used to repay  $4,929,000  on its  outstanding  revolving  line of
credit with Wells Fargo Business Credit.

In August 2000,  the Company closed on the purchase of certain assets from NMRO,
Inc. in exchange  for $75,000 in cash plus 15,152  shares of common stock of the
Company at $11.69 per share.  The sale of  securities  was made  pursuant  to an
exemption  from  registration  under  Regulation  D and  Section  4(2) under the
Securities Act of 1933, as amended.



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:   Exhibit 27 - Financial Data Schedule
                  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.


Date:    November 14, 2000


                                 MEDTOX SCIENTIFIC, INC.



                                 By: /s/ Richard J. Braun
                                     ------------------------------------------
                                     Richard J. Braun, Chief Executive Officer


                                 By: /s/ James B. Lockhart
                                     ------------------------------------------
                                     James B. Lockhart, Chief Financial Officer