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 June 30, 2000

                                       OR

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

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

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

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes X No

The number of shares of Common Stock,  $.15 par value,  outstanding as of August
4, 2000, was 3,404,346.
<PAGE>

                             MEDTOX SCIENTIFIC, INC.

                                      INDEX

                                      Page

Part I  Financial Information:

        Item 1:  Financial Statements

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

           Consolidated Statements of Operations - Three
           And Six Months Ended June 30, 2000 and 1999..........       5

           Consolidated Statements of Cash Flows - Six
           Months Ended June 30, 2000 and 1999..................       6

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

        Item 2:

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

        Item 3:

           Quantitative and Qualitative Disclosure
           About Market Risk.....................................     17

Part II    Other Information ............ ........................    18

        Item 2:

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

        Item 4:

          Submission of Matters to a Vote of Securities Holders....   19

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

<PAGE>

Item 1:  FINANCIAL STATEMENTS
<TABLE>

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

                                                       June 30, 2000    December 31, 1999
                                                    -------------------------------------
                                                       (Unaudited)
<S>                                                <C>                   <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                           $       -         $      576
   Accounts receivable:
         Trade, less allowance for doubtful
           accounts ($326 in 2000 and $274 in 1999)        9,207              6,982
         Other                                                87                125
                                                       -----------------------------
                                                           9,294              7,683
   Inventories:
         Raw materials                                       645                462
         Work in process                                     320                230
         Finished goods                                      190                126
         Supplies                                          1,061                978
                                                       -----------------------------
                                                           2,216              1,796

   Prepaid expenses and other                                777                815
                                                       -----------------------------

         Total current assets                             12,287             10,294

EQUIPMENT AND IMPROVEMENTS:
    Furniture and equipment                               14,865             12,820
    Leasehold improvements                                 1,649              1,354
                                                       -----------------------------
                                                          16,514             14,174
    Less accumulated depreciation
         and amortization                                (12,073)           (11,358)
                                                       -----------------------------

                                                           4,441              2,816
GOODWILL, net of accumulated amortization of
    $3,994 in 2000 and $3,568 in 1999                     12,735             13,161
                                                       -----------------------------
Total assets                                           $  29,463           $ 26,271
                                                       =============================
</TABLE>

<PAGE>

<TABLE>


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

                                                                 June 30, 2000  December 31, 1999
                                                                ------------------------------------------
                                                                (Unaudited)
<S>                                                      <C>                  <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Checks written in excess of bank balances                  $        352        $         -
   Line of credit                                                    4,829              4,208
   Accounts payable                                                  3,293              3,682
   Accrued expenses                                                  1,586              1,554
   Current portion of restructuring accrual                            235                384
   Current portion of long-term debt                                 1,427              1,236
   Current portion of capital leases                                   186                186
                                                                -------------------------------
         Total current liabilities                                  11,908             11,250

LONG TERM PORTION OF RESTRUCTURING ACCRUAL                               -                 85

LONG-TERM DEBT                                                       3,385              1,737

LONG-TERM PORTION OF CAPITAL LEASES                                    572                409

STOCKHOLDERS' EQUITY:
   Preferred Stock, $1.00 par value:
         Authorized - 50,000 shares;
         Issued and outstanding -
         none in 2000 and none in 1999                                    -                -
   Common Stock, $ .15 par value:
         Authorized - 7,400,000 shares in 2000 and 1999;
         Issued and outstanding -
         2,937,073 shares in 2000 and
         2,904,410 shares in 1999                                      441               436
   Additional paid-in capital                                       59,884            59,859
   Accumulated deficit                                             (46,551)          (47,329)
  Treasury stock                                                      (176)             (176)
                                                                ------------------------------
        Total stockholders' equity                                  13,598            12,790
                                                                ------------------------------
Total liabilities and stockholders' equity                      $   29,463      $     26,271
                                                                ==============================

</TABLE>
<PAGE>
<TABLE>



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

                                             Three Months Ended              Six Months Ended
                                       June 30, 2000  June 30, 1999   June 30, 2000      June 30, 1999
                                        ------------------------------------------------------------------
<S>                                 <C>              <C>                <C>             <C>
Revenues

   Laboratory service revenues        $ 9,460          $ 8,210            $ 17,745         $ 15,260
   Product sales                        1,856              942               3,247            1,727
                                       ------------------------------------------------------------------
                                       11,316            9,152              20,992           16,987

Cost of services                        6,093            5,386              11,634           10,225
Cost of sales                             809              549               1,372              956
                                        -----------------------------------------------------------------
                                        6,902            5,935              13,006           11,181
                                      ------------------------------------------------------------------
          Gross profit                  4,414            3,217               7,986            5,806

Operating expenses
   Selling, general and administrative  3,349            2,254               6,147            4,274
   Research and development               306              187                 555              420
   Interest and financing costs           278              199                 506              375
   Other non-recurring                     -              (164)                  -             (164)
                                        ----------------------------------------------------------------
                                        3,933            2,476               7,208            4,905
                                        ----------------------------------------------------------------

Net income                                481              741                 778              901
                                        ================================================================

Basic earnings per common share       $   0.17          $  0.26           $   0.27         $   0.31
                                      ==================================================================
Diluted earnings per common share     $   0.16          $  0.25           $   0.26         $   0.31
                                      ==================================================================

</TABLE>

<PAGE>
<TABLE>



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

                                                                         Six Months Ended

                                                               June 30, 2000          June 30, 1999
                                                           ----------------------------------------------
<S>                                                     <C>                     <C>
Operating activities
Net income                                                 $          778         $         901
 Adjustments to reconcile net income to net cash
 (used in)provided by operating activities:
   Depreciation and amortization                                    1,141                 1,113
   Changes in operating assets and liabilities:
     Accounts receivable                                           (2,187)               (1,470)
     Inventories                                                     (420)                 (115)
     Prepaid expenses and other                                        38                  (204)
     Accounts payable, accrued expenses and other                    (357)                 (827)
     Restructuring accruals                                          (234)                 (421)
                                                            ----------------------------------------------
Net cash (used in) provided by operating activities                (1,241)               (1,023)

Investing activities
    Purchases of equipment and improvements                        (2,042)                 (529)

                                                           ----------------------------------------------
Financing activities
    Checks in excess of bank balance                                  352                   (84)
    Net proceeds from sale of common stock                             30                     2
    Net proceeds from line of credit, term loans
     and notes payable                                             31,954                19,061
    Principal payments on capital lease obligations                  (135)                 (112)
    Principal payments on line of credit, term loans
     and notes payable                                            (29,494)              (17,315)
                                                           ----------------------------------------------
Net cash provided by financing activities                           2,707                 1,552
                                                           ----------------------------------------------

Increase in cash and cash equivalents                                (576)                    -
Cash and cash equivalents at beginning of period                      576                     -
                                                           ----------------------------------------------

Cash and cash equivalents at end of period                  $           -         $           -
                                                            =============================================

Supplemental non cash activities:
During the six months ended June 30, 2000 and June 30, 1999, the Company entered
into capital lease agreements totaling $297,600 and $58,300, respectively.
</TABLE>


<PAGE>



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

NOTE A -- BASIS OF PRESENTATION

The  accompanying   unaudited   consolidated   financial  statements  of  MEDTOX
Scientific, Inc. (the "Company") have been prepared in accordance with generally
accepted  accounting  principles for interim financial  information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the  information  and notes  required by  generally  accepted
accounting principles. In the opinion of management, all adjustments (consisting
only  of  normal  recurring   adjustments)   considered  necessary  for  a  fair
presentation  of  financial  condition  and  results  of  operations  have  been
included. Operating results for the six-month period ended June 30, 2000 are not
necessarily  indicative of the results that may be attained for the entire year.
These interim  consolidated  financial  statements should be read in conjunction
with the consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.

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.
<TABLE>

In thousands, except share and per share amounts

<CAPTION>
                                                   Three months ended                 Six months ended

                                              June 30, 2000   June 30, 1999    June 30, 2000     June 30, 1999
                                              -------------   -------------    ------------     ------------
<S>                                             <C>              <C>              <C>             <C>
Net Income (A)                                          $481             $741             $778            $901

Weighted average number of shares                  2,915,610        2,903,502        2,910,044       2,902,414
of common stock outstanding (B)

Dilutive effect of stock options                     134,484           30,386          137,105          23,193
                                                  ----------        ---------        ---------       ---------

Common stock and common                            3,050,094        2,933,888        3,047,149       2,925,607
stock equivalents (C)                              =========        =========        =========       =========


Net income per share:
         Basic (A/B)                                   $ .17            $ .26            $ .27           $ .31
                                                       =====            =====            =====           =====
         Diluted (A/C)                                 $ .16            $ .25            $ .26           $ .31
                                                       =====            =====            =====           =====
</TABLE>
<PAGE>


Earnings  Per Share:  Options to purchase  438,959  shares of common  stock were
outstanding  at June 30, 2000.  Of these,  248,500 and 303,001 were dilutive for
the three and six months,  respectively,  and included in the computation  above
while the  remaining  options  were not included in the  computation  of diluted
earnings per share as their exercise prices were greater than the average market
price of the common shares.  Options to purchase  371,416 shares of common stock
were outstanding at June 30, 1999. Of these,  62,500 were dilutive for the three
and six months,  and  included  in the  computation  above  while the  remaining
options were not included in the  computation  of diluted  earnings per share as
their exercise  prices were greater than the average market prices of the common
shares.

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

Accounting for  Derivatives:  In June 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.

Revenue  Recognition:  In December 1999, the Securities and Exchange  Commission
("SEC") issued Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition in
Financial  Statements".  SAB No. 101 summarizes certain of the SEC staff's views
in  applying  generally  accepted  accounting  principles  to  selected  revenue
recognition  issues.  SAB No. 101 is to be  implemented  by the Company no later
than the fourth quarter of fiscal 2000.  The Company is currently  reviewing SAB
No. 101 and its effects on the financial  statements,  but does not expect it to
have  a  significant  effect  on  its  financial  position  or  results  of  its
operations.

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,  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%.
<PAGE>

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

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

NOTE 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.
<TABLE>

Segment Information
   (Dollars in thousands)
<CAPTION>

                            Three Months Ended                Six Months Ended
                        June 30, 2000  June 30, 1999        June 30, 2000 June 30, 1999

<S>                      <C>          <C>                   <C>              <C>
Laboratory  Services:
   Net Sales                9,460        8,210                17,745           15,260
   Segment Income             419          710                   704              943
   Segment Assets          26,488       24,189                26,488           24,189

Product Sales:
   Net Sales                1,856          942                 3,247            1,727
   Segment Income (Loss)       62           31                    74              (42)
   Segment Assets           2,975        1,616                 2,975            1,616

Total:
   Net Sales              11,316         9,152                20,992           16,987
   Income                    481           741                   778              901
   Segment Assets         29,463        25,805                29,463           25,805
</TABLE>
<PAGE>

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
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 16(b) 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.  The parties are  currently  engaged in  pre-trial  discovery on
additional claims and counterclaims between the parties regarding the same basic
transactions.  A  February  2001 trial date has been set by the court to resolve
these  remaining  matters.  It is likely that one or both parties may appeal the
results of the trial court  depending on the final  result.  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

<PAGE>

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.

NOTE E - SUBSEQUENT EVENTS

On July 31, 2000 the Company  completed a private equity  financing  through the
sale, exclusively to accredited investors, of 450,000 units at a gross aggregate
price  of  $4,500,000,  or  $10.00  per  unit,  resulting  in  net  proceeds  of
approximately  $4,040,000  after deducting  agents'  commissions of $440,000 and
other estimated  expenses.  Each unit consisted of one share of common stock and
one  five-year  warrant to purchase one  additional  share of common stock at an
exercise price of $12.50. In connection with the private placement,  the Company
also issued five-year  warrants to the placement agent to purchase 45,000 shares
of common stock at an exercise price of $12.50 per share.

On August 4, 2000 the  Company  closed on the  purchase  of certain  assets from
NMRO, Inc. in exchange for $75,000 in cash plus 15,152 shares of common stock of
the Company.

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

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

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

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

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

Introduction

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

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

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

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

Laboratory Services

Revenues from Laboratory  Services for the three months ended June 30, 2000 were
$9,460,000 as compared to  $8,210,000  for the three months ended June 30, 1999.
The  increase  of  $1,250,000  or 15.2%  was  primarily  attributable  to a 7.9%
increase in net revenue per laboratory test and a 9.8% increase in the number of
tests.

The gross margin from the revenues  generated from the  laboratory  services was
35.6% for the three  months ended June 30, 2000 as compared to a gross margin of
34.4% 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 June 30,
2000 were $2,598,000  compared to $2,009,000 for the three months ended June 30,
1999.  The  increase of $589,000  or 29.3% in 2000 was  primarily  the result of
increased  wages and sales  expenses  as the  Company  continues  to upgrade the
management team and sales force.

The  Laboratory  Services  segment  for the three  months  ended  June 30,  2000
incurred interest and financing costs of $259,000, compared to costs of $183,000
incurred  during the three months  ended June 30, 1999  primarily as a result of
higher debt levels and increasing interest rates.

As a result of the above, net income for the Laboratory  Services segment of the
Company for the three months ended June 30, 2000 was  $419,000,  compared to the
net income of  $546,000,  net of a one time gain of  $164,000  resulting  from a
favorable legal settlement, for the three months ended June 30, 1999.

Product Sales

Revenues from Product  Sales for the three months ended June 30, 2000  increased
97.0% to  $1,856,000 as compared to $942,000 for the three months ended June 30,
1999.  The  increase  was  primarily  attributable  to  continued  growth of the
VERDICT(R) and PROFILE(R) product lines.

Product sales from substance  abuse testing  products,  which  incorporates  the
EZ-SCREEN  PROFILE(R)-II and VERDICT(R)-II on-site test kits and other ancillary
products for the detection of abused  substances,  increased 136.9% to 1,329,000
for the three  months-ended  June 30, 2000 compared to sales of $561,000 for the
same period in 1999. The increase in product sales is primarily due to the sales
and   marketing   efforts  for  the  Company's   second-generation   test  kits,
PROFILE(R)-II  and  VERDICT(R)-II.  The  Company is  continuing  to develop  new

<PAGE>

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

Product sales from agricultural diagnostic products increased 109.9% to $149,000
for the three  months  ended June 30,  2000  compared  to  $71,000 in 1999.  The
primary reason for the increase of $78,000 was the result of increased 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  21.9% to $378,000  for the three months ended June 30, 2000
compared to $310,000 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 June 30, 2000 were
56.4%  compared to 41.8% for the three months ended June 30, 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 June 30, 2000 were  $751,000  compared  to $245,000  for the three
months ended June 30, 1999. The increase of $506,000 or 206.5% was primarily the
result of increased  expenses as the Company continues to upgrade the management
team and sales force.

Research and  development  expenses  incurred for Product Sales during the three
months  ended June 30, 2000 were  $216,000 as compared to $103,000  for the same
period in 1999.  The increase of $113,000 or 109.7% was  primarily the result of
the costs associated with new product  development efforts for on-site and other
ancillary products.

As a result of the  above,  net  income  for the  Product  Sales  segment of the
Company  for the three  months  ended June 30,  2000 was  $62,000,  compared  to
$31,000 for the three months ended June 30, 1999.

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

Laboratory Services

Revenues  from  Laboratory  Services for the six months ended June 30, 2000 were
$17,745,000 as compared to  $15,260,000  for the six months ended June 30, 1999.
The  increase  of  $2,485,000  or 16.3% was  primarily  attributable  to an 8.0%
increase in laboratory  tests and a 10.0%  increase in average  revenue per test
from value added services.

The gross margin from the revenues  generated from the  laboratory  services was

<PAGE>

34.4% for the six months  ended June 30, 2000 as  compared to a gross  margin of
33.0% for the same period in 1999.

Selling,  general and administrative  expenses for the six months ended June 30,
2000 were  $4,772,000  compared to $3,748,000  for the six months ended June 30,
1999.  The increase of $1,024,000 or 27.3% was primarily the result of increased
expenses  as the Company  continues  to upgrade  the  management  team and sales
force.

The Laboratory  Services segment for the six months ended June 30, 2000 incurred
interest and financing costs of $468,000, compared to costs of $342,000 incurred
during the six months ended June 30, 1999.  The increase was  primarily a result
of higher debt levels and increasing interest rates.

As a result of the above, net income for the Laboratory  Services segment of the
Company for the six months ended June 30, 2000 was $704,000, compared to the net
income of $779,000 net of a one time gain of $164,000 resulting from a favorable
legal settlement, for the six months ended June 30, 1999.

Product Sales

Revenues  from Product  Sales for the six months  ended June 30, 2000  increased
88.0% to $3,247,000 as compared to $1,727,000  for the six months ended June 30,
1999.  The  increase  was  primarily  attributable  to  continued  growth of the
VERDICT(R) and PROFILE(R) product lines.

Product sales from substance  abuse testing  products,  which  incorporates  the
EZ-SCREEN  PROFILE(R)-II and VERDICT(R)-II on-site test kits and other ancillary
products for the detection of abused substances,  increased 129.4% to $2,312,000
for the six months ended June 30, 2000  compared to sales of $1,008,000 in 1999.
The  increase  in  product  sales is  primarily  due to the sales and  marketing
efforts  for  the  Company's  second-generation  test  kits,  PROFILE(R)-II  and
VERDICT(R)-II.

Product sales from agricultural  diagnostic products increased 15.9% to $262,000
for the six months ended June 30, 2000 compared to $226,000 in 1999. The primary
reason for the increase of $36,000 was the result of increased  purchases by the
USDA for the Company's  products.  The USDA's needs for the  company's  products
vary from  quarter to quarter and sales to the USDA are  expected  to  fluctuate
accordingly.

Sales  of  contract  manufacturing  services,   microbiological  and  associated
products  increased  36.8% to  $673,000  for the six months  ended June 30, 2000
compared to $492,000 in 1999.  This increase was due to increased  revenues from
both historical customers and new customers added in 2000.
<PAGE>

Gross  margins  from  Product  Sales for the six months ended June 30, 2000 were
57.7%  compared to 44.6% for the six months ended June 30, 1999. The increase in
gross margin from product sales was due to higher overall sales of products.

Selling,  general and administration  expenses for Products Sales during the six
months  ended June 30, 2000 were  $1,375,000,  compared to $526,000  for the six
months ended June 30, 1999. The increase of $849,000 or 161.4% was primarily the
result of increased  expenses as the Company continues to upgrade the management
team and sales force.

Research and  development  expenses  incurred  for Product  Sales during the six
months  ended June 30, 2000 were  $388,000 as compared to $256,000  for the same
period in 1999.  The increase of $132,000 or 51.6% was  primarily  the result of
the  costs  associated  with new  product  development  for  on-site  and  other
ancillary products.

For the six months  ended June 30, 2000,  the Product  Sales  segment  incurred
interest  and  financing  costs of $38,000 as  compared  to $33,000 for the same
period in 1999.  The  increase  of $5,000 or 15.2% was  primarily  the result of
higher debt levels and increasing interest rates.

As a result of the  above,  net  income  for the  Product  Sales  segment of the
Company for the six months  ended June 30, 2000 was $74,000  compared to the net
loss of ($42,000) for the six months ended June 30, 1999.

Material Changes in Financial Condition

Laboratory Services

As of June 30, 2000 net accounts and notes  receivable for  Laboratory  Services
were  $7,995,000  compared to $6,318,000 at December 31, 1999.  This increase of
$1,677,000  or 26.5% was  primarily  the result of higher  sales for the quarter
ended June 30, 2000 as compared to quarter ended December 31, 1999.

At June 30, 2000,  Laboratory  Services had total debt obligations of $8,889,000
compared to a total balance of $6,489,000 at December 31, 1999.  The increase of
$2,400,000 or 37.0% was primarily the result of increased borrowing,  from which
the  proceeds  were  used  to  finance  investing  activities  such  as  capital
expenditures, primarily laboratory equipment, in the second quarter of 2000.

Product Sales

At June 30, 2000,  net accounts  receivable  for Product Sales were  $1,299,000,
compared to $789,000 at December  31, 1999.  This  increase of $510,000 or 64.6%
was primarily due to higher sales in the quarter ended June 30, 2000 as compared
to the quarter ended December 31, 1999.
<PAGE>

Inventories  were  $1,155,000  at June 30, 2000 compared to $818,000 at December
31, 1999. The increase of $337,000,  or 41.1% is primarily  attributable  to the
increase in forecasted sales for the third quarter of 2000.

At June 30,  2000,  the  Product  Sales  segment had total debt  obligations  of
$753,000, compared to a total balance of $692,000 owed at December 31, 1999. The
increase  of  $61,000,  or 8.8%,  was the  result  of  higher  debt  levels  and
increasing interest rates.

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 June 30,
2000, the Company had total  availability of $6,243,000 on its line of credit of
which $4,829,000 was borrowed, leaving a net availability of $1,414,000.

In  addition to the  Company's  present  financing  sources,  in July 2000,  the
Company  obtained  gross  proceeds of  $4,500,000  of equity  financing  through
private placement of 450,000 shares and warrants. See Note E.

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

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

Item 3             QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
------             ----------------------------------------------------------

Market  risk is the risk that the  Company  will  incur  losses  due to  adverse
changes in interest rates or currency  exchange rates and prices.  The Company's
primary market risk exposures are to changes in interest rates.  During 1999 and
through June 30,  2000,  the Company did not have sales  denominated  in foreign
currencies nor did it have any  subsidiaries  located in foreign  countries.  As
such,  the  Company  is not  exposed to market  risk  associated  with  currency
exchange rates and prices.
<PAGE>

The Company had $575,000 of subordinated  notes  outstanding as of June 30, 2000
and December 31, 1999, at a fixed  interest  rate of 12% per annum.  The Company
also had capital leases at various fixed rates. These financial  instruments are
subject to interest  rate risk and will  increase or decrease in value if market
interest rates change.

The Company had approximately  $8.9 million and $6.6 million  outstanding on its
line of credit and long-term debt issued under the Wells Fargo Credit  Agreement
as of June 30, 2000 and  December  31,  1999,  respectively.  The debt under the
Wells Fargo Credit Agreement is held at variable interest rates. The Company has
cash flow exposure on its committed and uncommitted line of credit and long-term
debt due to its variable  prime rate pricing.  At June 30, 2000 and December 31,
1999,  a 1% change in the prime rate would not  materially  increase or decrease
interest expense or cash flows.

PART II  OTHER INFORMATION

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

ITEM 2   CHANGES IN SECURITIES.

On July 31, 2000 the Company  completed a private equity  financing  through the
sale of 450,000 units at a gross  aggregate  price of $4,500,000,  or $10.00 per
unit,  resulting in net proceeds of  approximately  $4,040,000  after  deducting
agents'  commissions  of  $440,000  and  other  estimated  expenses.  Each  unit
consisted of one share of common stock and one five-year warrant to purchase one
additional  share of common  stock at an exercise  price of $12.50.  The sale of
securities  was made to  "accredited  investors"  as defined  in Rule  501(a) of
Regulation  D and in  reliance  on  Regulation  D and  Section  4(2)  under  the
Securities Act of 1933, as amended. Miller Johnson & Kuehn, Inc. of Minneapolis,
MN acted as the Company's agent in the private placement. In connection with the
private  placement,  the Company also issued five-year warrants to the placement
agent to purchase  45,000 shares of common stock at an exercise  price of $12.50
per  share.  As  part  of  the  financing,  the  Company  also  entered  into  a
Registration  Rights  Agreement,  pursuant to which the Company agreed to file a
registration  statement on Form S-3 within 30 days covering the resale of shares
of the  Company's  common  stock  issued on July 31,  2000 and the  shares to be
issued pursuant to the warrants.

The  Company  intends to use the net  proceeds  from this  offering  for general
working capital purposes,  including  product and capacity  expansion to support
the  Company's   increasing  sales  and  to  take  advantage  of  new  expansion
opportunities  that have been  presented  to the Company.  Until such time,  the
proceeds were used to repay  $4,040,000  on its  outstanding  revolving  line of
credit with Wells Fargo Business Credit on August 1, 2000.
<PAGE>

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

ITEM 3   DEFAULTS ON SENIOR SECURITIES.  Inapplicable
------   -----------------------------

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

The Annual Meeting (The "2000 Annual  Meeting") of  stockholders  of the Company
was held on May 10, 2000. At that  meeting,  Samuel C. Powell and Miles E. Efron
were  elected to serve on the Board of  Directors  of the  Company  until  their
respective successors are duly elected.

By a vote of 988,932 shares in favor, 143,780 shares against,  with 4,461 shares
abstaining,  the stockholders of the Company approved an amendment to the Equity
Compensation Plan to increase the number of shares authorized to be issued under
the Plan to 16% of the  outstanding  shares of the  Company  as set forth in the
Proxy Statement.

During the second  quarter of 2000, no other matters were submitted to a vote of
the securities holders of the Company.

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:    August 14, 2000


                                MEDTOX SCIENTIFIC, INC.




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


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