UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(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
                                   --------------

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

For the transition period from ________________ to _______________

Commission File No.     33-55254-31
                    ---------------

                                  UNIDYN, CORP.
        (Exact name of Small Business Issuer as specified in its charter)

         NEVADA                                          87-0438639
-------------------------------               ------------------------------
(State or other jurisdiction of              (I.R.S. Employer Identification
incorporation or organization)                          Number)


1216 South 1580 West, #A
Orem, Utah                                           84058
----------------------------------------         --------------
(Address of principal executive offices)            (Zip Code)


Issuer's telephone number, including area code:      (801) 434-7250
                                                     --------------

         Indicate  by check mark  whether  the Issuer (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 Issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

         Indicate  the  number of  shares  outstanding  of each of the  Issuer's
classes of common stock, as of the latest practicable date.

                  Class                       Outstanding as of March 31, 2000
------------------------------------        ----------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK                 35,102,500 SHARES


                                        1

<PAGE>



                          PART 1. FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS


                                        2

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                         March 31,                December 31,
                                                                           2000                       1999
                                                                  ----------------------     ---------------------
ASSETS                                                                  (Unaudited)                 (Audited)
   CURRENT ASSETS
<S>                                                               <C>                        <C>
     Cash in bank                                                 $            1,067,531     $             461,239
     Accounts receivable                                                         412,546                   431,857
     Stock subscription                                                                0                   207,000
     Deferred tax benefit                                                         14,500                    14,500
     Prepaid expense                                                              11,850                    11,850
     Receivable - employees                                                       30,557                         0
     Inventory                                                                   371,736                   333,551
                                                                  ----------------------     ---------------------

                                            TOTAL CURRENT ASSETS               1,908,720                 1,459,997

PROPERTY, PLANT & EQUIPMENT                                                      558,758                   560,642

OTHER ASSETS
     Deposits and other                                                            8,184                     8,184
     Goodwill (less amortization of $21,100)                                   1,245,005                 1,266,105
     Deferred tax benefit                                                        181,500                   181,500
     Derritron Technology (less amortization
       of $22,269)                                                             3,986,131                 4,008,400
                                                                  ----------------------     ---------------------
                                                                               5,420,820                 5,464,189
                                                                  ----------------------     ---------------------

                                                                  $            7,888,298     $           7,484,828
                                                                  ======================     =====================

LIABILITIES & EQUITY
   CURRENT LIABILITIES
     Accounts payable                                             $              207,705     $             290,485
     Accrued expenses                                                             31,576                    31,835
     Loans payable                                                                     0                   314,680
     Deposits                                                                        421                    21,956
     Payable - related party                                                      89,619                   119,369
                                                                  ----------------------     ---------------------

                                       TOTAL CURRENT LIABILITIES                 329,321                   778,325

   LONG-TERM LIABILITIES
     Long-term debt and interest - related party                               1,002,300                         0
                                                                  ----------------------     ---------------------

                                               TOTAL LIABILITIES               1,331,621                   778,325

   STOCKHOLDERS' EQUITY
     Common Stock $.001 par value:
       Authorized - 100,000,000 shares
       Issued and outstanding 35,102,500 shares                                   35,103                    34,700
         (34,700,000 in 1999)
     Additional paid-in capital                                                6,882,030                 6,558,382
     Retained earnings (deficit)                                                (353,870)                  120,007
     Accumulated other comprehensive loss                                         (6,586)                   (6,586)
                                                                  ----------------------     ---------------------

                                      TOTAL STOCKHOLDERS' EQUITY               6,556,677                 6,706,503
                                                                  ----------------------     ---------------------

                                                                  $            7,888,298     $           7,484,828
                                                                  ======================     =====================
</TABLE>


                                        3

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,
                                                                                2000               1999
                                                                         -----------------   -----------------
<S>                                                                      <C>                 <C>
Net sales                                                                $         698,646   $         401,200
Cost of sales                                                                      340,978             121,588
                                                                         -----------------   -----------------

                                                           GROSS PROFIT            357,668             279,612

General and administrative expenses                                                831,545             317,055
                                                                         -----------------   -----------------
                                                                                   831,545             317,055
                                                                         -----------------   -----------------

                                                      NET INCOME (LOSS)
                                                    BEFORE INCOME TAXES           (473,877)            (37,443)

Income tax expense                                                                       0               4,564
                                                                         -----------------   -----------------

                                                      NET INCOME (LOSS)           (473,877)            (42,007)

OTHER COMPREHENSIVE LOSS
   Foreign currency translation adjustments                                              0              (6,586)
                                                                         -----------------   -----------------

                                      TOTAL COMPREHENSIVE INCOME (LOSS)  $        (473,877)  $         (48,593)
                                                                         =================   =================

Net income (loss) per weighted average share                             $            (.01)  $            (.00)
                                                                         =================   =================

Weighted average number of common shares used to
   compute net income (loss) per weighted average share                         34,901,250          32,000,000
                                                                         =================   =================
</TABLE>


                                        4

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                   Three Months Ended
                                                                                        March 31,
                                                                                2000               1999
                                                                         -----------------   -----------------

OPERATING ACTIVITIES
<S>                                                                      <C>                 <C>
   Net income (loss)                                                     $        (473,877)  $         (42,007)
   Adjustments to reconcile net income (loss) to cash provided
     (required) by operating activities:
       Depreciation and amortization                                                58,026               3,602
       Non-cash interest expense                                                    54,500                   0
       Deferred taxes                                                                    0               1,604
       Foreign currency translation                                                      0              (6,586)
   Changes in assets and liabilities:
       Accounts receivable                                                         (11,246)             99,572
       Inventory                                                                   (38,185)               (327)
       Prepaid expenses                                                                  0               4,643
       Accounts payable                                                            (82,780)            (88,360)
       Accrued expenses                                                               (259)            (30,958)
       Payable - related party                                                     (31,950)             14,799
       Deposits                                                                    (21,535)                  0
       Income taxes payable                                                              0                 (50)
                                                                         -----------------   -----------------

                                           NET CASH PROVIDED (REQUIRED)
                                                BY OPERATING ACTIVITIES           (547,306)            (44,068)

INVESTING ACTIVITIES
   Purchase of equipment / cost adjustment                                         (12,773)              8,699
                                                                         -----------------   -----------------

                                              NET CASH PROVIDED  (USED)
                                                BY INVESTING ACTIVITIES            (12,773)              8,699

FINANCING ACTIVITIES
   Sale of common stock                                                            531,051                   0
   Loan principal payments                                                        (314,680)                  0
   Loan proceeds                                                                   950,000                   0
                                                                         -----------------   -----------------

                                            NET CASH PROVIDED (USED) BY
                                                   FINANCING ACTIVITIES          1,166,371                   0
                                                                         -----------------   -----------------

                                            INCREASE (DECREASE) IN CASH
                                                   AND CASH EQUIVALENTS            606,292             (35,369)

Cash and cash equivalents at beginning of year                                     461,239             138,936
                                                                         -----------------   -----------------

                                              CASH AND CASH EQUIVALENTS
                                                       AT END OF PERIOD  $       1,067,531   $         103,567
                                                                         =================   =================

Cash paid for income taxes                                               $               0   $           2,960
Cash paid for interest                                                                 427                   0

</TABLE>


                                        5

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2000


NOTE 1:           SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
                  Accounting Methods
                  The  Company  recognizes  income  and  expenses  based  on the
                  accrual method of accounting.

                  Principals of Consolidation
                  The  financial  statements  for March  31,  2000  contain  the
                  accounts  of the  Company  and its  wholly-owned  subsidiaries
                  Derritron and Avalon Manufacturing Co.

                  The  financial  statements  for March  31,  1999  contain  the
                  accounts  of  the  Company  and  its  former   wholly-   owned
                  subsidiary, Unidyn (Europe) Limited.

                  Dividend Policy
                  The Company has not yet adopted any policy  regarding  payment
                  of dividends in cash.

                  Inventory
                  Inventory  consists  of items for  resale and is valued at the
                  lower of cost (first-in, first-out basis) or market.

                  Allowance for Uncollectible Accounts
                  The Company provides an allowance for  uncollectible  accounts
                  based upon prior experience and management's assessment of the
                  collectability of existing accounts.

                  Revenue Recognition
                  Revenue is recognized upon shipment of products.

                  Cash and Cash Equivalents
                  For financial  statement  purposes,  the Company considers all
                  highly liquid  investments with an original  maturity of three
                  months or less when purchased to be cash equivalents.

                  Earnings (loss) per share
                  Earnings  or loss per common and  common  equivalent  share is
                  computed  by  dividing  net  earnings  (loss) by the  weighted
                  average common shares outstanding during each period.

                  Estimates
                  The  preparation  of financial  statements in conformity  with
                  generally accepted  accounting  principles requires management
                  to make  estimates  and  assumptions  that affect the reported
                  amounts of assets, liabilities,  revenues, and expenses during
                  the reporting period.  Estimates also affect the disclosure of
                  contingent assets and liabilities at the date of the financial
                  statements.  Actual results could differ from these estimates.
                  Such  estimates  of  significant  accounting  sensitivity  are
                  allowance for doubtful accounts.

                  Stock Options
                  The Company has elected to follow Accounting  Principles Board
                  Opinion No. 25,  "Accounting  for Stock  Issued to  Employees"
                  (APB 25) and related  interpretations  in  accounting  for its
                  future   employee  stock  options  rather  than  adopting  the
                  alternative fair value accounting provided for under Financial
                  Accounting  Standards  Board  ("FASB") FASB Statement No. 123,
                  Accounting for Stock Based Compensation (SFAS 123).

                  Income Taxes
                  The Company  records the income tax effect of  transactions in
                  the  same  year   that  the   transactions   enter   into  the
                  determination  of income,  regardless of when the transactions
                  are recognized  for tax purposes.  Tax credits are recorded in
                  the year realized.

                  In February,  1992, the Financial  Accounting  Standards Board
                  adopted Statement of Financial  Accounting  Standards No. 109,
                  Accounting for Income Taxes,  which  supersedes  substantially
                  all  existing  authoritative  literature  for  accounting  for
                  income taxes and requires deferred tax balances to be adjusted
                  to  reflect  the tax rates in effect  when those  amounts  are
                  expected to become  payable or  refundable.  The Statement was
                  applied in the Company's  financial  statements for the fiscal
                  year commencing January 1, 1993.


                                        6

<PAGE>


                         UNIDYN, CORP. AND SUBSIDIARIES
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
                                 March 31, 2000

NOTE 2:           ORGANIZATION AND HISTORY
                  The  Company was  incorporated  under the laws of the State of
                  Utah on May 2, 1986 as Macaw  Capital,  Inc. On  December  30,
                  1993,  the Company was  dissolved  as a Utah  corporation  and
                  reincorporated as a Nevada  corporation.  On December 3, 1997,
                  the name was changed to UniDyn, Corp. The Company manufactures
                  and sells computer  products that perform vibration testing to
                  assure product stability.

NOTE 3:           FORWARD STOCK SPLIT
                  Effective December 3, 1997, pursuant to written action adopted
                  unanimously  by the Board of  Directors  and a majority of the
                  shareholders,  the Company changed its name to UniDyn,  Corp.,
                  and  approved  an  eight-for-one  forward  stock  split on the
                  Company's common stock as follows:  each outstanding share was
                  converted  into eight shares.  Before the change,  the Company
                  was authorized to issue 100,000,000  shares of $.001 par value
                  common stock;  after the forward stock split the Company shall
                  continue to be authorized to issue 100,000,000 shares of $.001
                  par value common stock.  The number of  outstanding  shares of
                  common stock affected by the forward split was 4,000,000.  The
                  number of issued and outstanding shares of common stock of the
                  Company after the forward stock split is 32,000,000.

NOTE 4:           STERLING PATENT
                  During the quarter  ended June 30,  1998,  the Company  issued
                  6,416,000 shares of restricted  common stock,  previously held
                  as  treasury  stock,  to  acquire  the  rights to  patent  the
                  Sterling  Project from  Universal.  The patent  rights will be
                  amortized  over  fifteen  years for income tax  purposes.  For
                  financial statement  purposes,  the asset has no cost basis as
                  it was acquired from Universal.

                  The Sterling Project will allow the testing of printed circuit
                  boards and other  general  electronic  devices.  Sterling will
                  allow the  electronics  manufacturer to access the workmanship
                  of their  manufactured  electronics  and improve the estimated
                  projected  life of the  printed  circuit  board or other items
                  under test.  Sterling  will reduce the  manufacturer  warranty
                  return rate.  Estimates show that the manufacturer can improve
                  the  warranty  return rate down to perhaps 1 percent  based on
                  workmanship  errors.   Sterling  will  actually  quantify  the
                  reliability  of  the   manufactured   part  and  indicate  the
                  workmanship areas of concern, even though the electronics pass
                  functional testing.

                  The  Company  has current  arrangements  with IEC  Electronics
                  (IECE)  of  New  York  to  review  the  product  for  contract
                  manufacturing at one of their facilities.  The Company expects
                  to have sales later in 2000.

NOTE 5:           DERRITRON TECHNOLOGY
                  Effective June 30, 1998, the Company issued  14,576,000 shares
                  of restricted common stock, previously held as treasury stock,
                  to acquire the business  and  associated  technology  known as
                  Derritron.  Derritron  is  a  well  known  business  involving
                  vibration   shakers  and  other   related   technology.   This
                  technology   is  perfectly   integrated   with  the  NorthStar
                  vibration  control systems  acquired from Universal  Dynamics.
                  The technology  will be amortized  over 15 years.  The Company
                  will need to spend  some money to arrange  for  production  of
                  such a massive  product  line,  even in its reduced  set.  The
                  Company  is now  making  sales  of  this  product.  With  this
                  acquisition,  the Company receives patent, products, know how,
                  drawings,   trade  name,   manufacturing   equipment,  and  an
                  established  market  presence  in England  and other  parts of
                  Europe, Asia, South America, India, and China.



                                        7

<PAGE>



ITEM 2.  MANAGEMENTS  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATIONS.

         THE  FOLLOWING  DISCUSSION  INCLUDES  FORWARD-LOOKING  STATEMENTS  WITH
RESPECT TO THE COMPANY'S FUTURE FINANCIAL PERFORMANCE. ACTUAL RESULTS MAY DIFFER
MATERIALLY  FROM  THOSE  CURRENTLY   ANTICIPATED  AND  FROM  HISTORICAL  RESULTS
DEPENDING UPON A VARIETY OF FACTORS,  INCLUDING  THOSE DESCRIBED BELOW UNDER THE
SUB-HEADING,  "BUSINESS  RISKS".  SEE ALSO THE  COMPANY'S  ANNUAL REPORT ON FORM
10-KSB FOR THE YEAR ENDED DECEMBER 31, 1999.

OVERVIEW

         UniDyn,   Corp.   (referred  to  as  "UniDyn"  or  the  "Company")  was
incorporated  in the  State  of  Utah in 1986 as  Macaw  Capital,  Inc.  and was
reincorporated  in 1993 in the  State of  Nevada.  In  December  of 1997,  Macaw
Capital,  Inc. acquired a portion of the assets of Universal  Dynamics,  Inc., a
private  manufacturer of  environmental  vibration  testing  equipment formed in
December 1989, and was renamed UniDyn,  Corp. The Common Shares of UniDyn, Corp.
are currently traded on the NASDAQ OTCBB under the symbol "UNDY".

         The  business of the Company is focused on  developing,  manufacturing,
assembling  and  distributing  specialized  engineering  products.  The  current
product  lines,  including  the vibration  stress  screening  ("VSS")  machinery
manufactured under the NorthStar and Derritron brands and the on-line inspection
products  being  developed at the Avalon  facility as the  Sterling  Product are
directed  principally  to  testing  electronic  and  mechanical  components  and
providing on-line quality control testing for printed circuit boards. In January
2000,  the  Company  introduced  and  recognized  its  first  revenues  from the
Derritron  line of products and expects to introduce  the Sterling  Product line
during the third quarter of 2000.  In addition to these  product  introductions,
the  Company  plans to continue  its  emphasis on  developing  and  distributing
specialized  engineering  and testing  products and to also  consider  ancillary
technology  opportunities  that build on its  existing  capacity as a builder of
manufacturing equipment as well as its engineering and testing capacities.

         On December 31, 1999 the Company  completed the  acquisition  of Avalon
Manufacturing  Company,  a  private  entity  based  in  Phoenix,  Arizona,  with
significant experience in providing the equipment for the manufacture of printed
circuit   boards.   The  Company  is  focusing  the   development   and  initial
manufacturing of the Sterling  Product line at the Avalon  facility.  The Avalon
technology,  including its automatic board handling machinery will be integrated
in the Sterling  production  process.  The  availability of the Avalon facility,
staff,  and assets  has been an  important  factor in  allowing  the  Company to
accelerate  the Sterling  project and to attract  engineers and other  technical
personnel for the project.

         The Company's  traditional  core business,  through its NorthStar brand
and more  recently  through the Derritron  and Avalon  lines,  offers  vibration
testing and VSS products that are used to check the integrity of printed circuit
boards and other  components for automotive and  electronics  applications.  The
NorthStar  vibration  control  system  uses a  Microsoft-based  Windows  product
acquired  in 1997  which is fully  integrated  into  the  Company's  proprietary
control system software  package.  The NorthStar and Derritron  products include
the vibration  hardware or "shaker"  units which  mechanically  vibrate the test
platform,  the  vibration  control  system which  measures  output and regulates
shaker  intensity,  and the amplifier  unit which  provides  power to the shaker
unit. The VSS products are marketed directly by the Company under the trade name
Derritron,  and are also manufactured by the Company on an OEM basis and offered
for repackaging and sale for use in the aerospace,  automotive and semiconductor
industries.

         In a production environment, the VSS test equipment can identify latent
defects  not  readily  recognizable  through  visual  inspection  or during  the
development  and design  process.  The use of on-line VSS testing for electronic
and mechanical  components,  such as printed circuit  boards,  saves rework time
during production, reduces

                                        8

<PAGE>



warranty  exposure and can enhance  product  quality and longevity.  VSS is most
effective in detecting  intermittent  defects such as loose connections,  broken
parts, cracked traces, poor solder joints and mechanical flaws.

         Through 1999,  essentially all of the Company's  revenues came from its
NorthStar line. Early in 1998, the Company acquired the production, engineering,
patents,  drawings and intellectual property and other rights and assets for the
shaker and amplifiers,  which had been  manufactured in England for more than 30
years under the trade name Derritron.  At the time of the Company's  acquisition
of Derritron,  the active production of the Derritron line had been suspended by
the prior owners.  During 1999, the Derritron  operations were  reorganized at a
facility in Riverside, California;  production at the plant commenced on January
2, 2000 and the first shipments of the Company's Derritron products were made in
the first  quarter of 2000.  During the end of the first  quarter  and in April,
2000, the Company transferred its NorthStar production to the Riverside facility
to allow the Company to offer turnkey vibration test products from its Riverside
facility.

         Currently,  the transfer of the  NorthStar  product into the  Derritron
operations  in  Riverside,  California is complete and the Company is completing
its pre-production and commercial  developments efforts for the Sterling Product
line at its Avalon  facility,  the underlying  aspects of which were  originally
acquired from Universal Dynamics in 1998. Management anticipates that commercial
production of the Sterling Product line will be undertaken  during the summer of
2000 with delivery of the first products scheduled for the third quarter of this
year. The Sterling Product has been designed as a stand alone piece of equipment
that will provide for a fully  integrated,  on-line  quality  control testing of
printed circuit boards. The Company expects to offer the product  principally on
an OEM basis, with first introductions anticipated to be made through a Japanese
consortium.  Initial production commitments are expected to increase to the rate
of  approximately  20 Sterling Units per month with  production to be scaled and
maintained,  initially based on the requirements of the Japanese  consortium and
subsequently based on market of other customers.

         As described  above,  to date,  the Company has acquired a  substantial
portion of its technology and its production  assets through  arrangements  with
third  parties.   The  Company   intends  to  continue  to  consider   strategic
acquisitions  and  to  use  its  expanding  internal  product   development  and
production  capacity  to enhance  the assets  acquired  from third  parties.  In
addition,  the Company will  continue to develop new  equipment  and  technology
internally  as  circumstances  warrant and as capital  resources  and  technical
talent are available.

RESULTS OF OPERATIONS

         For the  quarter  ended March 31,  2000  compared to the quarter  ended
March 31, 1999

         For the three months ending March 31, 2000, the Company reported,  on a
consolidated  basis, a loss of $473,877 on revenues of $698,646 as compared to a
loss of $42,007 on revenues of $401,200 for the same quarter in 1999. The losses
resulted from a combination of the investment which the Company is continuing to
make in bringing the Derritron  facility to full production,  the costs incurred
in  connection  with the transfer of the  NorthStar  operations to the Derritron
facility and the continuing  development,  engineering and other  pre-production
costs  attributable to the Sterling Products line.  Management  anticipates that
during the  remainder of the current  fiscal year,  the Company will move toward
customary  production  level  costs,  revenues  and  expenses  as the  Derritron
production expands,  the NorthStar production continues and the Sterling Product
line is introduced.

         Prior to the first quarter of 2000,  substantially all of the Company's
revenues were generated from the NorthStar product.  During the first quarter of
2000, the Company recorded revenues of approximately  $180,000 and $330,000 from
the initial shipments and services earned at the Derritron and Avalon facilities
respectively.

         While the Company's  product lines are not subject to inherent seasonal
shifts,  with the  relatively  low level of sales of the  Company's  products to
date, the Company's sales have been sensitive to small shifts in revenues and

                                        9

<PAGE>



production  which have resulted in material monthly  fluctuations.  In addition,
the  Company's  results to date have been  impacted by the  financial  effect of
acquisitions, changes in facilities, modification of operations, introduction of
new product lines and shifts in the existing customer base.

         Cost of Goods Sold. For the three months ended March 31, 2000 the costs
of goods sold was $340,978 with a gross profit margin of $357,668 as compared to
$121,588 of costs of goods sold and a $279,612 gross margin for the same quarter
of 1999,  resulting in gross  margins for the period ended March 31, 2000 of 51%
as compared to a 70% gross margin for the first  quarter in 1999 (when the sales
were primarily of the NorthStar  product).  Management  anticipates  that as its
production expands and the product mix is diversified, it will achieve a blended
gross margin of approximately 40-50% on its products, including direct labor and
customary allocated manufacturing overhead. However, until the new product lines
have been introduced,  and the Company has developed an operating history, there
is significant uncertainty about future gross margins,  particularly since gross
margins are highly  dependent on product prices,  sales volumes,  materials cost
and allocation of manufacturing overhead.

         Research and  Development.  For the three months ending March 31, 2000,
the Company's  research and development  efforts were conducted at the Company's
Engineering and Development Centers in Orem, Utah and Phoenix, Arizona. Although
the  NorthStar  production  activities  have been  transferred  to the Derritron
facility,  the research  and  development  efforts will  continue to be based in
Utah.  Research and  Development  costs were a significant  portion of the total
operations  at both the Utah  and  Arizona  facilities  and were  recorded  as a
portion of the selling, general and administrative costs.

         Selling,  General and Administrative  Costs. For the three months ended
March 31, 2000, selling,  general,  and administrative  costs were $831,545,  as
compared to $317,055 in the first quarter of 1999. The  significant  increase in
general and  administrative  cost was  attributed  to the  additional  staff and
facilities needed to establish the Derritron  facility,  the cost of the efforts
for the  development of the Sterling  Product line, and  principally to the fact
that to date, the Company has included staff,  facilities,  and related overhead
of the production managers,  engineers, research and development efforts and the
labor and overhead  costs in Orem,  Utah and  Riverside,  California as selling,
general and administrative costs and has not attributed them to the direct costs
of goods sold or the research and  development  efforts for the various  product
lines.

         The Company's  workforce consists of 44 leased personnel all located in
the United States.  Management  believes that by leasing its primary  workforce,
the Company has controlled its fixed overhead costs and has been able to provide
its staff with advantages of improved  benefits package and access to retirement
plans  which  can be  provided  through  the  larger  group  status of a leasing
arrangement.  Management  will  continue to review this  structure as conditions
require.

LIQUIDITY AND CAPITAL RESOURCES

         At March  31,  2000,  the  Company  had a total  cash  availability  of
$1,067,531  including  $950,000  which was the net proceeds of a $1 million loan
received  during the first  quarter  from a long time  UniDyn  shareholder.  The
principal  of the loan and  interest  is  payable  in full in three  years at an
annual  interest rate of 6%. The lender was granted  warrants to acquire 150,000
Common Shares at an exercise price equal to 85% of the market price on the

                                       10

<PAGE>



date of grant.  The  proceeds  of the loan are  available  for  general  working
capital requirements of the Company. Management intends to apply the proceeds of
the loan,  along with other working  capital,  to support its ongoing  operating
requirements,  to accelerate the beta testing of the Sterling  Product units and
to fund the costs  related to filing for patents,  principally  those related to
the Sterling Product line.

         Also,  during the first  quarter of 2000,  the Company  issued  402,500
Common  Shares for net cash  received  after fees of $324,051  of which  390,000
Common  Shares  were newly  issued and 12,500  Common  Shares were issued on the
exercise of previously outstanding warrants. (See Item 2 below).

         In addition, the Company intends to continue to seek additional working
capital to meet its operating  requirements  and to provide  further capital for
expansion, acquisition of strategic technologies and direct costs related to the
introduction  of the Sterling  Product line.  While  additional  capital will be
needed to maintain the growth plans of the Company and the costs  related to the
identification and protection of intellectual property through patents and other
protections,  management  believes that the working  capital now available to it
along with funds  generated from  operations  will be sufficient to meet capital
requirements  for the next 12  months  even if  substantial  additional  working
capital does not become available. However, management also believes that a lack
of  additional  working  capital over the  remainder of the current  fiscal year
would substantially curtail the roll-out of the Sterling Product line.

NEW ACCOUNTING PRONOUNCEMENTS

         The Financial  Accounting  Standards  Board has adopted several notices
with regard to the treatment of interim financial  statements.  These issues are
presented in the Company's  interim  financial  statements.  As discussed in the
notes to the  interim  financial  statements,  the  implementation  of these new
pronouncements  is not  expected  to have a  material  effect  on the  financial
statements.

YEAR 2000 STATEMENT

         The  Company  has  verified  that  all  internal  software  used in the
operations of the Company and related developments are Year 2000 compliant.  The
Company sees no risk at this time pertaining to Year 2000, and internal  company
operations.  Products currently  manufactured by the Company have also been Year
2000 verified.  All previous Company customers have the ability to purchase both
hardware  and  software  upgrades  from the  Company  which will  certify  their
products as Year 2000  compliant.  The amount of needed  hardware  and  software
depends on the associated production model in question.

                            PART 2. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         Not applicable.

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the quarter  ended March 31,  2000,  390,000  restricted  Common
Shares  were  sold at $1.00  per  share  for  $390,000  of cash.  Warrants  were
exercised  at $.60 per share from which cash of $7,500 was  received  for 12,500
shares of restricted common stock. Fees of $73,449 were paid in cash,  resulting
in net proceeds to the Company of $324,051.  The transactions were undertaken as
private  placements  without any public offering to institutions  and investors,
including  current  shareholders,  who were accredited  investors or had a prior
business  relationship with the Company.  The issuances were made in reliance on
the exemption from registration provided by rule 506 of Regulation D.

                                       11

<PAGE>



ITEM 3.           DEFAULT UPON SENIOR SECURITIES

         Not applicable.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5.           OTHER INFORMATION

         On May 2,  2000,  the  Company  announced  that it had  entered  into a
memorandum of understanding  with Clean Energy  Technologies,  Inc., a privately
held company, under which the companies would pursue a possible merger and shift
a significant portion of the Company's focus into the fuel cell energy business.
On May 5, 2000, the Company  announced  that the possible  merger plans had been
terminated by mutual  agreement,  although the companies  would  consider  other
possible  working  arrangements and UniDyn would continue to consider a possible
entry  into the fuel  cell  arena.  Copies  of the May 2 and May 5,  2000  press
releases are attached to this report as Exhibits.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
                  (a)      Exhibits
                           Press releases dated May 2 and May 5, 2000

                  (b)      Reports on Form 8-K
                           None


                                   SIGNATURES

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the Issuer has duly  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                   UNIDYN, CORP.



Dated:   May 15, 2000
                                   Ira Gentry, President and Director


                                       12

<PAGE>



Company Press Release

UniDyn Corp. Plans Merger With CET as Entry Into
Worldwide Fuel Cell Energy Business

PHOENIX--(BUSINESS  WIRE)--May 2,  2000--UniDyn  Corp,  (OTCBB:  UNDY - news), a
leading  manufacturer of "Quality Assurance Testing  Equipment"  announced today
that they have signed a Memorandum  of  Understanding  (MOU) to merge with Clean
Energy Technologies,  Inc, (CET) a privately held Nevada corporation. The merger
with CET will give  UniDyn  entry into the fuel cell energy  business  through a
worldwide  exclusive  license to use fuel cell technology being developed at the
Jet Propulsion  Laboratories  (JPL) of the  California  Institute of Technology.
UniDyn's  ability and  obligation to consummate  the  transaction  is subject to
securities and regulatory filings and UniDyn  shareholder  approval at a meeting
called for that purpose.

Separately,  CET has  reported  that it has  signed a Letter of Intent for a one
hundred million-dollar equity investment by a Korean group.

Fuel cell technology is clean and "green" producing  electricity from a chemical
reaction  involving  oxygen  and  hydrogen,   with  no  polluting  emissions  or
byproducts.  A recent  Business Week article (May 8, 2000)  indicated  that fuel
cell technology could be a major source of electricity by 2010.

When the  merger is  completed,  UniDyn  shareholders  will  hold  approximately
eighteen  million  shares of UniDyn stock (after  giving effect to a two for one
reverse stock split being  submitted to the UniDyn  shareholders  for approval).
Simultaneously,  UniDyn will seek  shareholder  approval to increase  its common
stock to 500,000,000  shares and to authorize  25,000,000  preferred shares. CET
shareholders,  with approximately  61,500,000 total shares, will receive two and
one half shares of UniDyn common stock for each CET share tendered (20% of which
shall be  registered  in the offering and the remainder of which will be offered
as restricted shares). UniDyn plans to change its name to "Fuel Cell Industries,
Inc." and its trading symbol to "FCEL".

Malcolm Bricklin,  Chairman and Chief Executive Officer of CET is expected to be
the new Chairman and CEO of the merged company.  Malcolm Bricklin,  stated,  "We
expect the merged company, Fuel Cell Industries, to become a world leader in the
fuel cell industry.  Our team is already  pursuing other fuel cell  technologies
and additional  strategic  partners.  However,  we will continue to build on the
UniDyn core business including the "Sterling" product line. We expect the Avalon
subsidiary to produce key equipment for the manufacturing of the fuel cells. The
merger will provide access to significant additional capital, which will benefit
the current UniDyn products and customers".

Ira Gentry, currently Chairman of UniDyn, is expected to become Vice Chairman of
the merged  company and the existing  UniDyn COO,  John  Provazek,  and division
officers are expected to remain in their current roles.

Ira Gentry,  UniDyn's CEO stated,  "Since our  acquisition of Avalon in December
1999,  UniDyn has been seeking new applications for the Avalon line of equipment
that manufactures printed circuit bare-board  technology.  This merger will give
us the opportunity to integrate the existing Avalon manufacturing  knowledge and
machinery with the CET fuel cell technology  environment as a basis of being one
of the first enterprises to ever mass-produce fuel cells. This equipment will be
available for our use and for sale and license to third parties worldwide,  with
royalties generated on each fuel cell produced". For more information on UniDyn,
please  visit  the  company's  Website  at  http://www.unidyn.com  or  call  The
Investors Relation Group in New York at 212-736-2650.



                                       13

<PAGE>



About UniDyn Corporation

UniDyn is a leader in the quality  assurance  testing  market  with  emphasis on
fully automated testing of printed circuit boards. UniDyn has recently completed
a corporate  reorganization in preparation for substantial  growth.  The Company
will have three  production  divisions:  the  Phoenix,  Arizona  Avalon plant to
produce the Sterling products, the Orem, Utah plant to produce the NorthStar and
MorningStar products and during the first quarter of 2000, the Los Angeles plant
to produce Derritron products. In addition,  the Company has a separate research
and development division located in Orem, Utah.

Safe Harbor  statement  under the Private  Securities  Litigation  Reform Act of
1995: Except for historical  information contained herein, the matters discussed
in this press  release are  forward-looking  statements  that involve  risks and
uncertainties,  including but not limited to economic, competitive, governmental
and technological factors affecting the Company's operations,  markets, products
and prices and other factors discussed in the Company's various filings with the
Securities and Exchange Commission.



                                       14

<PAGE>



Company Press Release

UniDyn and CET Terminate Possible Merger Plans

UniDyn Will Continue To Explore Production Of Fuel Cells And
Equipment Through Avalon

PHOENIX--(BUSINESS  WIRE)--May  5,  2000--UniDyn,  Corp.  (OTCBB:  UNDY -  news)
announced  today  that  its  memorandum  of  understanding   with  Clean  Energy
Technologies,  Inc.  ("CET")  announced on May 2 has been  terminated  by mutual
agreement.

Ira  Gentry,   UniDyn's  chairman  and  CEO,  stated,  "I  want  to  assure  our
shareholders  that our  intentions,  at all times,  are to increase  shareholder
value. Although we are no longer pursuing this transaction,  we will continue to
consider  ancillary  technologies and opportunities  that build on our Company's
product lines,  including the wide range of strategies  that are emerging in the
fuel cell arena".

A  spokesperson  for CET noted,  "Our  discussions  with UniDyn have given us an
opportunity to understand its manufacturing and engineering  talents and we hope
to  continue  to  work  with  them  through  contractual  and  other  non-equity
structures".

For  more  information  on  UniDyn,   please  visit  the  company's  Website  at
http://www.unidyn.com  or call The Investor  Relations Group,  Inc., in New York
City at 212.736.2650.

About UniDyn, Corp.

UniDyn is a leading  manufacturer of specially  engineered  production equipment
and of testing  equipment,  principally  for the  electronics  industry  and the
quality assurance testing market.  The Company has three production  facilities:
the Phoenix, Arizona Avalon plant to produce the Sterling products; the Southern
California plant to produce the Derritron and NorthStar products;  and the Orem,
Utah facility to produce the MorningStar products.  The Company also maintains a
research and development facility in Orem, Utah.

Safe Harbor  statement  under the Private  Securities  Litigation  Reform Act of
1995: Except for historical  information contained herein, the matters discussed
in this press  release are  forward-looking  statements  that involve  risks and
uncertainties,  including but not limited to economic, competitive, governmental
and technological factors affecting the Company's operations,  markets, products
and prices and other factors discussed in the Company's various filings with the
Securities and Exchange Commission.



                                       15