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, 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 May 3,
2000, was 2,905,411.
<PAGE>

                             MEDTOX SCIENTIFIC, INC.

                                      INDEX

                                                                           Page

Part I            Financial Information:

                  Item 1:  Financial Statements (Unaudited)

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

                           Consolidated Statements of Operations - Three
                           Months Ended March 31, 2000 and 1999............  5

                           Consolidated Statements of Cash Flows - Three
                           Months Ended March 31, 2000 and 1999............  6

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

                  Item 2:

                           Management's Discussion and Analysis of
                           Financial Condition and Results of Operations .  11

                  Item 3:

                           Quantitative and Qualitative Disclosure
                           About Market Risk............................    15

Part II           Other Information ......................................  16

                           Signatures ....................................  17

<PAGE>

Item 1:  FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>

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

                                                         March 31, 2000     December 31, 1999

                                                        ------------------------------------------

<S>                                                  <C>                  <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                             $     1,530         $     576
   Accounts receivable:
         Trade, less allowance for doubtful
           accounts ($317 in 2000 and $274 in 1999)            8,293             6,982
         Other                                                   100               125
                                                        -------------------------------
                                                               9,923             7,683
   Inventories:
         Raw materials                                           590               462
         Work in process                                         401               230
         Finished goods                                          160               126
         Supplies                                                862               978
                                                        -------------------------------
                                                               2,013             1,796

   Prepaid expenses and other                                    945               815
                                                        -------------------------------
         Total current assets                                 12,881            10,294

EQUIPMENT AND IMPROVEMENTS:
    Furniture and equipment                                   13,470            12,820
    Leasehold improvements                                     1,526             1,354
                                                        -------------------------------
                                                              14,996            14,174
    Less accumulated depreciation
         and amortization                                    (11,704)          (11,358)
                                                        -------------------------------
                                                               3,292             2,816
GOODWILL, net of accumulated amortization of
    $3,780 in 2000 and $3,568 in 1999                         12,949            13,161
                                                        -------------------------------
Total assets                                             $    29,122       $    26,271
                                                        ==============================
</TABLE>


<PAGE>
<TABLE>



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

<CAPTION>

                                                                  March 31, 2000     December 31, 1999
                                                               ------------------------------------------
<S>                                                        <C>                 <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Line of credit                                             $      5,114       $     4,208
   Accounts payable                                                  3,977             3,682
   Accrued expenses                                                  1,544             1,554
   Current portion of restructuring accrual                            405               384
   Current portion of long-term debt                                 1,354             1,236
   Current portion of capital leases                                   186               186
                                                                ------------------------------------------
         Total current liabilities                                  12,580            11,250

LONG TERM PORTION OF RESTRUCTURING ACCRUAL                              -                 85

LONG-TERM DEBT                                                       3,060             1,737

LONG-TERM PORTION OF CAPITAL LEASES                                    393               409

STOCKHOLDERS' EQUITY:
   Common stock, $ .15 par value:
      Authorized - 7,400,000 shares in 2000 and 1999;
      Issued and outstanding -
      2,904,969 shares in 2000
      and 2,904,410 shares in 1999                                     436               436

   Additional paid-in capital                                       59,861            59,859
   Accumulated deficit                                             (47,032)          (47,329)

  Treasury stock                                                      (176)             (176)
                                                               ------------------------------------------
        Total stockholders' equity                                  13,089            12,790

                                                               ------------------------------------------
Total liabilities and stockholders' equity                      $   29,122       $    26,271
                                                               ==========================================
</TABLE>
<PAGE>
<TABLE>


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

                                                          Three Months Ended

                                                   March 31, 2000    March 31, 1999
                                              ---------------------------------------------------
<S>                                         <C>                   <C>
Revenues

   Laboratory service revenues                 $         8,285      $     7,050
   Product sales                                         1,391              785
                                              --------------------------------------------
                                                         9,676            7,835

Cost of services                                         5,541            4,839
Cost of sales                                              563              407
                                              --------------------------------------------
                                                         6,104            5,246
                                              --------------------------------------------
          Gross profit                                   3,572            2,589

Operating expenses

   Selling, general and administrative                   2,798            2,020
   Research and development                                249              233
   Interest and financing costs                            228              176
                                              --------------------------------------------
                                                         3,275            2,429
                                              --------------------------------------------
Net income                                                 297              160
                                              ============================================

Basic earnings per common share                            .10              .06
                                              ============================================

Diluted earnings per common share                          .10              .06
                                              ============================================
</TABLE>

<PAGE>
<TABLE>


                                        MEDTOX SCIENTIFIC, INC.
                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (Dollars in thousands)
                                              (Unaudited)

                                                                      Three Months Ended
                                                              March 31, 2000         March 31, 1999
                                                          ----------------------------------------------
<S>                                                      <C>                   <C>
Operating activities
Net income
   Adjustments  to  reconcile  net  income  to net cash     $       297         $       160
   (used in)  provided  by operating activities:
     Depreciation and amortization                                  558                 553
     Changes in operating assets and liabilities:
         Accounts receivable                                     (1,286)             (1,204)
         Inventories                                               (217)                (90)
         Prepaid expenses and other                                (130)               (165)
         Accounts payable, accrued expenses and other               285                 854
         Restructuring accruals                                     (64)                (42)
                                                          -----------------------------------------
Net cash (used in) provided by operating activities                (557)                 66

Investing activities
    Purchases of equipment and improvements                        (775)                (77)


Financing activities
    Checks in excess of bank balance                                  -                (142)
    Net proceeds from sale of common stock                            2                   2
    Net proceeds from line of credit, term loans
      and notes payable                                          15,287               7,727
    Principal payments on capital lease obligations                 (60)                (29)
    Principal payments on line of credit, term loans
       and notes payable                                        (12,943)             (6,848)
                                                          -----------------------------------------
Net cash provided by financing activities                         2,286                 710
                                                          -----------------------------------------
Increase  in cash and cash equivalents                              954                 699
Cash and cash equivalents at beginning of period                    576                  -
                                                          -----------------------------------------

Cash and cash equivalents at end of period                 $      1,530         $       699
                                                          =========================================


Supplemental noncash activities

During the three  months  ended March 31, 2000 and March 31,  1999,  the Company
entered   into  capital   lease   agreements   totaling   $44,000  and  $58,300,
respectively.
</TABLE>


<PAGE>

                             MEDTOX SCIENTIFIC, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 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 three-month period ended March 31, 2000 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, 1999.

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 using the "treasury stock" method.

In thousands, except share and per share amounts

                                             Three months ended

                                       March 31, 2000    March 31, 1999

Net Income (A)                              $297               $160

Weighted average number of shares        2,904,478          2,875,288
of common stock outstanding (B)

Dilutive effect of stock options           139,621             16,000
                                        ----------         ----------

Common stock and common                  3,044,099          2,891,288
stock equivalents (C)

Net income per share:

         Basic (A/B)                       $ .10              $ .06
                                           =====              =====
         Diluted (A/C)                     $ .10              $ .06
                                           =====              =====

<PAGE>

Reclassification: Certain reclassifications have been made to the 1999 financial
statements to conform with the 2000 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, 2000 and 1999,  comprehensive  income for the Company was  equivalent to net
income as reported.

Accounting for  Derivatives:  In June 1997, 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 has not yet  completed its
analysis of the effect,  if any,  this  standard  will have on future  operating
results.

NOTE B - 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 as of March 31, 2000 consists of (i)
a term  loan  of  $3,185,000,  bearing  interest  at  prime  +  1.25%:  (ii)  an
overadvance term loan of up to $1,350,000, bearing interest at prime + 4%; (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  $1,800,000,  for the  purchase  of  capital  equipment
bearing interest at prime + 1.25%.

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.

The Company has  determined  the value of the warrants at the date 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.
<PAGE>

NOTE C - SEGMENTS

     The Company has two  reportable  segments:  Product Sales and Lab Services.
The  Product  Sales  segment is made up  entirely  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).  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.

Segment Information
     (Dollars in thousands)

                                                 Three months ended
                                        March 31, 2000        March 31, 1999

Laboratory  Services:
    Net Sales                                   8,285                 7,050
    Segment Income                                285                   233
    Segment Assets                             26,430                24,598

Product Sales:
    Net Sales                                   1,391                   785
    Segment Income (Loss)                          12                   (73)
    Segment Assets                              2,692                 1,685

Total:
    Net Sales                                   9,676                 7,835
    Income                                        297                   160
    Segment Assets                             29,122                26,283

NOTE D - 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

<PAGE>

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 made a formal demand on the
sellers and plans to commence an arbitration  proceeding  against the sellers if
payment is not made.

         On January 31, 1997,  the Company filed suit in Federal  District Court
in Minnesota  against a majority  stockholder  and two former outside  directors
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.  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 the defendants had violated
Section 16(b) and ordered the defendants to pay the Company  damages of $551,000
plus interest.  It is likely that the defendants will appeal the decision to the
Court of Appeals.  The Company has not recorded a receivable for this amount due
to the 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.  There is
currently  pending before the court,  a motion to dismiss the complaint  against
the  Company  on the basis  that the  Plaintiff  has  failed to state a cause of
action  against  the  Company,   since,  among  other  things,  the  contractual
relationship in question  appears to have been terminated prior to the time that
the Company  became  involved with the customers in question.  In addition,  the
other  defendants  in the action are  contractually  obligated to indemnify  the
Company against any damages 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 these reasons,  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.

<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.

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

<PAGE>

provides forensic toxicology,  clinical  toxicology,  and heavy metals analyses.
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  logistics,  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.

Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999
-------------------------------------------------------------------------------

Laboratory Services

Revenues from Laboratory Services for the three months ended March 31, 2000 were
$8,285,000 as compared to $7,050,000  for the three months ended March 31, 1999.
The  increase  of  $1,235,000  or 17.5% was  primarily  attributable  to a 12.4%
increase in net revenue per laboratory test and a 6.0% increase in the number of
tests.

The gross margin from the revenues  generated from the  laboratory  services was
33.1% for the three months ended March 31, 2000 as compared to a gross margin of
31.4% for the same period in 1999.  The  increase in gross  margin is  primarily
attributable to increased net revenue per test.

Selling,  general and  administrative  expenses for the three months ended March
31, 2000 were $2,174,000 compared to $1,739,000 for the three months ended March
31, 1999.  The increase of $435,000 or 25.0% in 2000 was primarily the result of
increased wages and sales expenses. As a percentage of sales,  selling,  general
and administrative expenses were 26.2% for the three months ended March 31, 2000
compared to 24.7% for the same period in 1999.

The  Laboratory  Services  segment  for the three  months  ended  March 31, 2000
incurred interest and financing costs of $209,000, compared to costs of $159,000
incurred  during the three months ended March 31, 1999  primarily as a result of
higher debt levels.
<PAGE>

As a result of the above, the net income for the Laboratory  Services segment of
the Company for the three months ended March 31, 2000 was $285,000,  compared to
the net income of $233,000 for the three months ended March 31, 1999.

Product Sales

Revenues from Product Sales for the three months ended March 31, 2000  increased
77.2% to $1,391,000 as compared to $785,000 for the three months ended March 31,
1999. The increase was primarily  attributable  to increased  sales of substance
abuse testing products.

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  119.9% to $983,000
for the three  months-ended March 31, 2000 compared to sales of $447,000 for the
same period in 1999.  The increase in product sales is primarily due to a strong
response  to the  introduction  of the  Company's  second-generation  test kits,
PROFILE(R)-II  and  VERDICT(R)-II.  The  Company is  continuing  to develop  new
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 27.1% to $113,000
for the three  months  ended  March 31, 2000  compared to $155,000 in 1999.  The
primary reason for the decrease of $42,000 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  63.0% to $295,000 for the three months ended March 31, 2000
compared to $181,000 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 March 31, 2000 were
59.5%  compared to 48.2% for the three months ended March 31, 1999. The increase
in gross  margin from  product  sales was due to higher  marginal  profit at the
increased sales volumes.

Selling, general and administrative expenses for Products Sales during the three
months  ended March 31, 2000 were  $624,000  compared to $281,000  for the three
months  ended March 31, 1999.  The increase of $343,000 or 122.1% was  primarily
the result of increased sales expense associated with higher sales volume.

Research and  development  expenses  incurred for Product Sales during the three
months  ended March 31, 2000 were  $172,000 as compared to $153,000 for the same

<PAGE>

period in 1999. The increase of $19,000 or 12.4% was primarily the result of the
costs associated with new product development efforts.

As a result of the above,  the  Product  Sales  segment net income for the three
months ended March 31, 2000 was  $12,000,  compared to the net loss of ($73,000)
for the three months ended March 31, 1999.

Material Changes in Financial Condition
---------------------------------------

Laboratory Services

As of March 31, 2000 the cash balance for  Laboratory  Services  was  $1,485,000
compared to $513,000 as of  December,  31,  1999.  This  increase of $972,000 or
189.5% was due to the deposit of the proceeds from the Company's  refinancing of
its term debt with Wells Fargo Business Credit on March 31, 2000.

As of March 31, 2000 net accounts and notes  receivable for Laboratory  Services
were  $7,272,000  compared to $6,318,000 at December 31, 1999.  This increase of
$954,000 or 15.1% was primarily the result of higher sales for the quarter ended
March 31, 2000 as compared to quarter ended December 31, 1999.

Inventories were $862,000 at March 31, 2000 compared to $978,000 at December 31,
1999.  The  decrease  of  $116,000,  or  11.9%  is  largely  attributable  to  a
stockpiling  of  additional  inventory  at December 31, 1999 in order to protect
against potential delivery problems from key suppliers due to "Year 2000" issues
that did not materialize.

Prepaid expenses and other assets were $746,000 at March 31, 2000 as compared to
$669,000 at December 31, 1999. This increase of $77,000 or 11.5% is attributable
to annual insurance and maintenance contract fees paid during the quarter.

At March 31, 2000,  Laboratory Services had total debt obligations of $8,722,000
compared to a total balance of $6,489,000 at December 31, 1999.  The increase of
$2,233,000 or 34.4% was primarily the result of increased borrowing on March 31,
2000 in  connection  with  the  Company's  refinancing.  The  proceeds  from the
refinancing 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.

Product Sales

At March 31, 2000, net accounts  receivable  for Product Sales were  $1,121,000,
compared to $789,000 at December  31, 1999.  This  increase of $332,000 or 42.1%
was  primarily  due to higher  sales in the  quarter  ended  March  31,  2000 as
compared to the quarter ended December 31, 1999.
<PAGE>

Inventories  were  $1,151,000 at March 31, 2000 compared to $818,000 at December
31, 1999. The increase of $333,000,  or 40.7% is primarily  attributable  to the
anticipation of increases in product sales in the second quarter of 2000.

Prepaid expenses and other assets were $199,000 at March 31, 2000 as compared to
$146,000 at December 31, 1999. The increase of $53,000 or 36.3% is primarily the
result of partial payments on inventory not yet received as of March 31, 2000.

At March 31,  2000,  the Product  Sales  segment had total debt  obligations  of
$806,000, compared to a total balance of $692,000 owed at December 31, 1999. The
increase of $114,000,  or 16.5%, was the result of increased  borrowing on March
31, 2000 in  connection  with the  Company's  refinancing  of its term debt with
Wells Fargo Business  Credit,  Inc. The proceeds from this  refinancing  will be
used to fund operations.

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 March 31,
2000, the Company had total  availability of $5,251,000 on its line of credit of
which  $5,114,000  was borrowed,  leaving a net  availability  of $137,000.  The
Company also has the proceeds  from the  renegotiation  of its term debt,  which
were deposited in the Company's  account on March 31, 2000. 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. 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 primary market risk exposures are to changes in interest rates. During
1999 and through March 31, 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.
<PAGE>

                  The Company had $575,000 of subordinated  notes outstanding as
of March 31, 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  $8.8  million and $6.6 million
outstanding  on its line of credit and  long-term  debt  issued  under the Wells
Fargo Credit Agreement as of March 31, 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 March
31,  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 D
------   ------------------

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: 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:    May 12, 2000


                                   MEDTOX SCIENTIFIC, INC.

                                   By:      /s/ Harry G. McCoy
                                   Harry G. McCoy, Chairman and President

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