SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON, D.C.   20549-1004

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                        COMMISSION FILE NUMBER  0-020992

                                 MATHSOFT, INC.
                (Exact name of registrant as specified in its charter)

               MASSACHUSETTS                              04-2842217
       (State or other jurisdiction                  (I.R.S. Employer
   of incorporation or organization)                Identification Number)


                                 101 MAIN STREET
                       CAMBRIDGE, MASSACHUSETTS 02142-1521
   (Address, including zip code, of registrant's principal executive offices)

                                 (617) 577-1017
               (Registrant's telephone number including area code)

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  AT  LEAST  THE  PAST  90  DAYS.

                            YES   X          NO
                                 ---             ---

AS  OF  NOVEMBER 13, 2000 THERE WERE 10,695,595 SHARES OF COMMON STOCK, $.01 PAR
VALUE  PER  SHARE,  OUTSTANDING.


<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                                    FORM 10-Q


                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                                TABLE OF CONTENTS


                                                       PAGE
                                                       ----

PART  I.    FINANCIAL  INFORMATION:

     Item  1.  Consolidated  Condensed  Financial  Statements

         -  Consolidated  Condensed  Balance  Sheets  as  of
            September  30,  2000 (unaudited)  and December 31,  1999         3

         -  Consolidated  Condensed Statements of Operations for the
            Three  and  Nine Months Ended September 30, 2000
            and 1999 (unaudited)                                             5

         -  Consolidated Condensed Statements of Cash  Flows for the
            Nine Months  nded September 30, 2000 and 1999 (unaudited)        7

         -  Notes  to  Consolidated  Condensed  Financial  Statements       10

     Item  2.  Management's  Discussion  and  Analysis  of  Financial
               Condition  and  Results  of  Operations                      15

     Cautionary  Statements                                                 19

     Item  3.  Quantitative and Qualitative Disclosures about Market        23
               Risk


PART  II.   OTHER  INFORMATION:

     Item  6. Exhibits and Reports on Form 8-K                              24


SIGNATURES                                                                  25


                                        2
<PAGE>
<TABLE>
<CAPTION>
                              MATHSOFT, INC. AND SUBSIDIARIES
                           CONSOLIDATED CONDENSED BALANCE SHEETS

                                        (UNAUDITED)

                                          ASSETS

                                                             SEPTEMBER 30,   DECEMBER 31,
                                                                  2000           1999
                                                             --------------  -------------
<S>                                                          <C>             <C>
CURRENT ASSETS:
       Cash and cash equivalents                             $    3,406,291  $   7,213,035
       Accounts receivables, less reserves of
            approximately $1,044,000 at September 30, 2000
            and $1,134,000 at December 31, 1999                   6,031,116      4,743,130
       Other receivables                                          1,189,661      1,420,154
       Inventories                                                   88,417        262,760
       Prepaid expenses                                             529,168        382,291
                                                             --------------  -------------
               Total current assets                              11,244,653     14,021,370
                                                             --------------  -------------

PROPERTY AND EQUIPMENT, AT COST:
       Computer equipment and software                            6,060,980      5,265,836
       Property and equipment under capital lease                   993,043        918,042
       Furniture and fixtures                                     1,172,101      1,105,128
       Leasehold improvements                                       653,631        626,534
                                                             --------------  -------------
                                                                  8,879,755      7,915,540

       Less - Accumulated depreciation                            7,332,301      6,852,097

                                                                  1,547,454      1,063,443
                                                             --------------  -------------

NET ASSETS FROM DISCONTINUED OPERATION (NOTE 2)                           -      1,181,171

OTHER ASSETS, INCLUDING INTANGIBLES, NET                            537,408        400,921
                                                             --------------  -------------
                                                             $   13,329,515  $  16,666,905
                                                             ==============  =============
</TABLE>

The  accompanying  notes  are  an integral part of these consolidated condensed
financial  statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                              MATHSOFT, INC. AND SUBSIDIARIES
                           CONSOLIDATED CONDENSED BALANCE SHEETS

                                        (UNAUDITED)

                            LIABILITIES AND STOCKHOLDERS' EQUITY

                                                             SEPTEMBER 30,    DECEMBER 31,
                                                                   2000            1999
                                                            ---------------  --------------
<S>                                                         <C>              <C>
CURRENT LIABILITIES:
       Current portion of capital lease obligations
            and equipment financing                         $      371,952   $     383,537
       Accounts payable                                          2,517,638       2,092,644
       Accrued expenses and other current liabilities            2,595,859       2,686,032
       Deferred revenue                                          3,211,084       2,722,052
                                                            ---------------  --------------
              Total current liabilities                          8,696,533       7,884,265
                                                            ---------------  --------------

NET LIABILITIES FROM DISCONTINUED OPERATION (NOTE 2)             2,228,408               -

Capital Lease Obligations and Equipment Financing,
           Less current portion                                    152,503         148,442
                                                            ---------------  --------------
STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value -
            Authorized - 1,000,000 shares
            Issued and outstanding-none                                  -               -
       Common stock, $.01 par value-
            Authorized - 20,000,000 shares
            Issued and outstanding - 10,695,595 shares
            at September 30, 2000 and 9,931,990 shares at
            December 31, 1999                                      106,956          99,320
       Additional paid-in capital                               32,524,609      30,834,687
       Accumulated deficit                                     (29,844,299)    (22,213,919)
       Notes receivable for stock (Note 9)                        (550,000)              -
       Cumulative translation adjustment                            14,805         (85,890)
                                                            ---------------  --------------
              Total stockholders' equity                         2,252,071       8,634,198
                                                            ---------------  --------------
                                                            $   13,329,515   $  16,666,905
                                                            ===============  ==============
</TABLE>

 The  accompanying  notes  are  an integral part of these consolidated condensed
financial  statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                         MATHSOFT INC, AND SUBSIDIARIES
                                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                                   (UNAUDITED)


                                                              THREE MONTHS ENDED          NINE MONTHS ENDED
                                                                 SEPTEMBER 30,               SEPTEMBER 30,
                                                          --------------------------  --------------------------
                                                              2000          1999          2000          1999
                                                          ------------  ------------  ------------  ------------
<S>                                                       <C>           <C>           <C>           <C>
REVENUES:
  Software licenses                                       $ 4,986,515   $ 5,454,422   $16,210,625   $15,841,823
  Services and other                                        2,614,975     1,530,423     6,769,003     4,210,810
                                                          ------------  ------------  ------------  ------------
    Total revenues                                          7,601,490     6,984,845    22,979,628    20,052,633
                                                          ------------  ------------  ------------  ------------

COST OF REVENUES:
  Software licenses                                           866,722       942,950     2,819,401     2,586,700
  Services and other                                          784,569       459,873     2,074,312     1,279,373
                                                          ------------  ------------  ------------  ------------
    Total cost of revenues                                  1,651,291     1,402,823     4,893,713     3,866,073
                                                          ------------  ------------  ------------  ------------
    Gross profit                                            5,950,199     5,582,022    18,085,915    16,186,560
                                                          ------------  ------------  ------------  ------------

OPERATING EXPENSES:
  Sales and marketing                                       3,170,982     2,966,368     9,374,724     8,576,215
  Research and
      development - gross                                   2,607,801     2,404,746     7,702,818     6,957,856
  Less funded research                                     (1,137,404)   (1,242,387)   (3,651,033)   (3,430,916)
                                                          ------------  ------------  ------------  ------------
  Research and development, net                             1,470,397     1,162,359     4,051,785     3,526,940
  General and administrative                                  718,319       719,047     2,514,771     2,166,314
                                                          ------------  ------------  ------------  ------------
    Total operating expenses                                5,359,698     4,847,774    15,941,280    14,269,469
                                                          ------------  ------------  ------------  ------------

    INCOME FROM CONTINUING OPERATIONS                         590,501       734,248     2,144,635     1,917,091

Interest income, net                                           29,303         7,790       126,284        83,530
                                                          ------------  ------------  ------------  ------------

    INCOME BEFORE PROVISION FOR INCOME TAXES                  619,804       742,038     2,270,919     2,000,621

Provision for income taxes                                      5,277        28,157        50,673        60,577
                                                          ------------  ------------  ------------  ------------

    NET INCOME FROM CONTINUING OPERATIONS                     614,527       713,881     2,220,246     1,940,044
                                                          ------------  ------------  ------------  ------------

Discontinued Operations

  Loss from Operations of Discontinued Division (Note 2)   (4,134,608)     (472,697)   (9,850,623)     (672,695)
                                                          ------------  ------------  ------------  ------------
    NET (LOSS) INCOME                                     $(3,520,081)  $   241,184   $(7,630,377)  $ 1,267,349
                                                          ============  ============  ============  ============
</TABLE>

The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                                MATHSOFT  INC,  AND  SUBSIDIARIES
                          CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                            (UNAUDITED)


                                         Three Months Ended          Nine Months Ended
                                            September 30,             September 30,
                                     -------------------------  -------------------------
                                         2000         1999          2000         1999
                                     ------------  -----------  ------------  -----------
<S>                                  <C>           <C>          <C>           <C>
Basic Net Income Per Share -
Continuing Operations                $      0.06   $      0.07  $      0.21   $      0.20
                                     ============  ===========  ============  ===========
Diluted Net Income Per Share -
Continuing Operations                $      0.06   $      0.07  $      0.20   $      0.18
                                     ============  ===========  ============  ===========

Basic Net Income (loss) Per Share    $     (0.33)  $      0.02  $     (0.74)  $      0.13
                                     ============  ===========  ============  ===========

Diluted Net Income (loss) Per Share  $     (0.33)  $      0.02  $     (0.69)  $      0.12
                                     ============  ===========  ============  ===========

WEIGHTED AVERAGE NUMBER
     OF SHARES OUTSTANDING            10,673,222     9,776,138   10,379,078     9,743,123
                                     ============  ===========  ============  ===========

WEIGHTED AVERAGE SHARES
     OUTSTANDING ASSUMING DILUTION    10,760,097    10,129,377   11,115,586    10,497,960
                                     ============  ===========  ============  ===========
</TABLE>

The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements.


                                        6
<PAGE>
<TABLE>
<CAPTION>
                                  MATHSOFT, INC. AND SUBSIDIARIES
                          CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                             (UNAUDITED)


                                                                             NINE MONTHS ENDED
                                                                                 SEPTEMBER 30,
                                                                          -------------------------
                                                                              2000         1999
                                                                          ------------  -----------
<S>                                                                       <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                       $(7,630,377)  $1,267,349
  Net loss from discontinued operations                                    (9,850,623)    (672,695)
                                                                          ------------  -----------
  Net income from continuing operations                                     2,220,246    1,940,044


  Adjustments to reconcile net income from continuing operations to net
    cash (used in) provided by continuing operating activities -
     Depreciation and amortization                                            573,462      761,894
     Changes in assets & liabilities-
         Accounts receivables                                              (1,287,986)    (928,317)
         Other receivables                                                    230,493      (88,038)
         Inventories                                                          174,343      203,474
         Prepaid expenses                                                      32,227     (224,087)
         Accounts payable                                                     424,994     (673,822)
         Accrued expenses                                                     (90,173)    (307,179)
         Deferred revenue                                                     489,032      574,843
                                                                          ------------  -----------
             Net cash provided by continuing operating activities           2,766,638    1,258,812
</TABLE>

The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements


                                        7
<PAGE>
<TABLE>
<CAPTION>
                               MATHSOFT, INC. AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                         (UNAUDITED)


                                                                       Nine Months Ended
                                                                         September 30,
                                                                   --------------------------
                                                                       2000          1999
                                                                   ------------  ------------
<S>                                                                <C>           <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                 (964,215)     (403,586)
  Increase in other assets                                            (229,745)      (98,031)
                                                                   ------------  ------------
            Net cash used in investing activities                   (1,193,960)     (501,617)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on note payables                                           (185,293)      (92,644)
  Payments on capital lease obligations and equipment financing       (386,582)     (414,370)
  Borrowings on capital lease obligations and equipment financing      385,246       255,255
  Proceeds from exercise of stock options and
        Employee Stock Purchase Plan                                 1,147,556       808,501
                                                                   ------------  ------------
            Net cash provided by financing activities                  960,927       556,742

Effect of exchange rate changes on cash and cash equivalents           100,695         1,749
                                                                   ------------  ------------

Net cash used in discontinued operations                            (6,441,044)   (3,377,919)
                                                                   ------------  ------------

DECREASE IN CASH AND CASH EQUIVALENTS                               (3,806,744)   (2,062,233)
                                                                   ------------  ------------

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       7,213,035     5,706,657

CASH AND CASH EQUIVALENTS, END OF PERIOD                           $ 3,406,291   $ 3,644,424
                                                                   ============  ============
</TABLE>

The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements


                                        8
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (CONTINUED)
                                   (UNAUDITED)


                                                             NINE MONTHS ENDED
                                                                SEPTEMBER 30,
                                                          ----------------------
                                                              2000       1999
                                                          ----------  ----------
                                  SEPTEMBER 30,
SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH
     FINANCING
        Issuance  of  Note Receivable for the Exercise
            of  275,000 Common Stock Options              $  550,000  $       -
                                                          ==========  ==========



                                             NINE MONTHS ENDED
                                               SEPTEMBER 30,
                                               2000     1999
                                              -------  -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
    INFORMATION:
          Cash paid during the period for-
                Interest                      $60,355  $49,772
                                              =======  =======
                Income taxes                  $ 6,824  $20,000
                                              =======  =======

The  accompanying  notes  are  an  integral part of these consolidated condensed
financial  statements.


                                        9
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.  BASIS  OF  PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared  by  MathSoft, Inc. ("MathSoft" or the "Company") pursuant to the rules
and  regulations  of  the  Securities  and Exchange Commission regarding interim
financial  reporting.  Accordingly,  they  do not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements  and  should  be read in conjunction with the consolidated
financial  statements  and  notes  thereto  for  the  three-month and nine-month
periods  ended  September  30,  2000.  The  accompanying  consolidated condensed
financial  statements  reflect  all  adjustments  (consisting  solely of normal,
recurring  adjustments) which are, in the opinion of management, necessary for a
fair  presentation of results for the interim periods presented.  The results of
operations  for  the three-month and nine-month periods ended September 30, 2000
are not necessarily indicative of the results to be expected for the full fiscal
year.

2.  DISCONTINUED  OPERATION

On  September  30,  2000,  the  Company  discontinued  operation of its Internet
venture  FreeScholarships.com. In connection with the shutdown, the Company took
at  $1.9  million  charge  for  various  costs  related to exiting this venture.

The accompanying consolidated financial statements contain certain accounts that
have  been  reclassified  in  each  of  the  periods  presented  to reflect this
disposition  by  the  Company.  Reported revenue, costs and expenses exclude the
operating results of the Company's FreeScholarships.com business. The results of
the  Company's FreeScholarships.com business are presented on a net basis in the
consolidated  condensed  statements  of  operations  as  loss from operations of
discontinued  division.  The  division  began  web  operations in February 2000.
Operating  losses from the discontinued operation were $4,135,000 and $9,851,000
for  the  three and nine months ended September 30, 2000, respectively, and were
$473,000  and  $673,000  for the three and nine months ended September 30, 1999.

Net  assets  from  discontinued  operation  in  the  accompanying balance sheets
represent the discontinued operation of FreeScholarships.com as of September 30,
2000  and  December  31,  1999.  Components  are  as  follows:

<TABLE>
<CAPTION>
                             September 30,
                                 2000         December 31, 1999
                            ---------------  -------------------
<S>                         <C>              <C>
Cash and cash equivalents   $      836,390   $        1,231,224
Accounts receivable, net            82,270                    -
Net property and equipment          12,747              250,561
Other assets                        25,000               25,000
Accounts payable                  (939,905)            (269,505)
Other current liabilities       (2,224,316)             (56,109)
Long term liabilities              (20,594)                   -
                            ---------------  -------------------
Total                       $   (2,228,408)  $        1,181,171
                            ===============  ===================
</TABLE>

3.  INVENTORIES


                                       10
<PAGE>
Inventories  are stated at the lower of cost (first-in, first-out) or market and
consist  of  the  following:

<TABLE>
<CAPTION>
                        SEPTEMBER 30,   DECEMBER 31,
                             2000           1999
                        --------------  -------------
<S>                     <C>             <C>
Materials and supplies  $       56,467  $      82,444
Finished goods                  31,950        180,316
                        --------------  -------------
                        $       88,417  $     262,760
                        --------------  -------------
</TABLE>


                                       11
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

4.  NET  INCOME  (LOSS)  PER  SHARE

The Company reports earnings per share in accordance with SFAS No. 128, Earnings
per  Share.  Under  SFAS  No.  128,  basic net income (loss) per common share is
computed  based  on  net  income (loss) available to common stockholders and the
weighted average number of common shares outstanding during the period.  Diluted
net  income  (loss)  per share is computed by including the number of additional
common  shares that would have been outstanding if the dilutive potential common
shares  had  been  issued.

A  reconciliation  of  basic  and  diluted  shares  outstanding  is  as follows:

<TABLE>
<CAPTION>
                                  THREE MONTHS ENDED       NINE MONTHS ENDED
                                     SEPTEMBER 30,          SEPTEMBER 30,
                               ----------------------  ----------------------
                                  2000        1999        2000        1999
                               ----------  ----------  ----------  ----------
<S>                            <C>         <C>         <C>         <C>
Weighted average shares
    Outstanding                10,673,222   9,776,138  10,379,078   9,743,123

Effect of dilutive securities      86,875     353,239     736,508     754,837
                               ----------  ----------  ----------  ----------

Weighted average shares
outstanding assuming dilution  10,760,097  10,129,377  11,115,586  10,497,960
                               ==========  ==========  ==========  ==========
</TABLE>

The  following  securities  were  not included in computing diluted earnings per
share  because  their  effect  would  be  antidilutive:

<TABLE>
<CAPTION>
                        THREE MONTHS ENDED   NINE MONTHS ENDED
                           SEPTEMBER 30,       SEPTEMBER 30,
                         ------------------  ----------------
                          2000      1999      2000     1999
                         -------  ---------  -------  -------
<S>                      <C>      <C>        <C>      <C>
Antidilutive securities  772,844  1,074,761  233,961  539,511
                         =======  =========  =======  =======
</TABLE>

It  has  come to the Company's attention that in its press release dated October
19,  2000,  the release inadvertently contained the incorrect number of weighted
average  common  shares  outstanding assuming dilution for the nine months ended
September  30,  2000.  As  reported  the  number  was 10,466,000 but the correct
number  should  have been 11,116,000 shares. The diluted earnings per share from
continuing operations for the nine months ended September 30, 2000 were reported
to  be  $.21 per share but should have been $.20 per share. The diluted net loss
per share for the nine months ended September 30, 2000 was reported to be $(.73)
per  share but should have been $(.69) per share. The outstanding share balances
and earnings (loss) per share for the three months ended September 30, 2000 were
correctly  reported.  The  basic  earnings  (loss) per share for the nine months
ended  September  30,  2000  were  also  correctly  reported.

                                       12
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

5.       COMPREHENSIVE  INCOME

The Company reports comprehensive income (loss) in accordance with SFAS No. 130,
Reporting Comprehensive Income.  Under SFAS No. 130, comprehensive income (loss)
is computed as the total of net income (loss) and all other non-owner changes in
equity.

Total  comprehensive  income  is  as  follows:

<TABLE>
<CAPTION>
                              THREE MONTHS ENDED        NINE MONTHS ENDED
                                  SEPTEMBER 30,           SEPTEMBER 30,
                             ----------------------  ------------------------
                                 2000        1999        2000         1999
                             ------------  --------  ------------  ----------
<S>                          <C>           <C>       <C>           <C>
Net income (loss)            $(3,520,081)  $241,184  $(7,630,377)  $1,267,349
Cumulative translation
       adjustment                 41,663     14,187      100,695        1,750
                             ------------  --------  ------------  ----------

Comprehensive income (loss)  $(3,478,418)  $255,371  $(7,529,682)  $1,269,099
                             ------------  --------  ------------  ----------
</TABLE>


6.     SEGMENT  REPORTING  FROM  CONTINUING  OPERATIONS

The  Company's  continuing  operations  are  classified  in two primary business
segments:  (1) Engineering and Education Software Products Division and (2) Data
Analysis  Products  Division.  Summarized  financial  information  by  business
segment  for  continuing  operations  is  as  follows:


<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED   NINE MONTHS ENDED
                                          SEPTEMBER 30,       SEPTEMBER 30,
                                     --------------------  -----------------
                                        2000       1999      2000     1999
                                     ---------  ---------  -------  --------
<S>                                  <C>        <C>        <C>      <C>
                                        (IN THOUSANDS)   (IN THOUSANDS)
Segment Revenues:
    Engineering and Education
       Software Products Division    $   3,389  $   3,783  $11,570  $11,126
    Data Analysis Products Division      4,212      3,202   11,409    8,927
                                     ---------  ---------  -------  --------
           Total net revenues        $   7,601  $   6,985  $22,979  $20,053
                                     ---------  ---------  -------  --------

Segment Income:
    Engineering and Education
       Software Products Division    $       9  $     205  $   420  $   603
    Data Analysis Products Division        605        509    1,800    1,338
                                     ---------  ---------  -------  --------
           Total net income          $     614  $     714  $ 2,220  $ 1,941
                                     ---------  ---------  -------  --------
</TABLE>


                                       13
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

              Notes to Consolidated Condensed Financial Statements
                                   (Unaudited)


7.     RECLASSIFICATION  OF  AMOUNTS

Certain amounts in the financial statements for the year ended December 31, 1999
have  been  reclassified  to  conform  to  the  presentation  for  the three and
nine-month  periods  ended  September  30,  2000.

8.     NEW  ACCOUNTING  STANDARDS

The  Securities and Exchange Commission released Staff Accounting Bulletin (SAB)
No. 101, Revenue Recognition in Financial Statements, on December 3, 1999.  This
bulletin provides additional guidance on the accounting for revenue recognition,
including both broad conceptual discussions as well as certain industry-specific
guidance.  The  guidance  is effective for the quarter ending December 31, 2000.
The  Company  does  not  expect  the  adoption of SAB No. 101 to have a material
impact  on  the  Company's  results  of  operations.

In  March  1999,  the  FASB issued Interpretation No. 44, Accounting for Certain
Transactions  Involving  Stock Compensation-An Interpretation of APB Opinion No.
25.  The  interpretation  clarifies  the  application  of  Opinion 25 in certain
situations, as defined.  The interpretation is effective July 1, 2000 but covers
certain  events  that  occurred after December 15, 1998 but before the effective
date of the interpretation. The effects of applying this interpretation would be
recognized  on  a  prospective basis from the effective date.  Accordingly, upon
initial  application  of the interpretation, (a) no adjustments would be made to
the  financial  statements  for the periods before the effective date and (b) no
expense  would  be recognized for any additional compensation cost measured that
is attributable to periods before the effective date.  MathSoft expects that the
adoption  of  this  interpretation would not have any effect on the accompanying
financial  statements.

9.     NOTE  RECEIVABLE

On  June  20,  2000, the Company loaned $550,000 on a full recourse basis to its
CEO  for  the  exercise  of  the Company's common stock options.  The note bears
interest  of  8% in the first two years, and the prime rate in years thereafter,
currently  9.5%.  The  Company  has  a  security interest in up to 50% of common
shares  issued upon the exercise of the underlying stock options.  The principal
and  any accrued but unpaid interest is payable on demand at any time after June
19,  2002,  or  earlier  upon  the  occurrence  of certain specific events.  The
Company has recorded the note receivable as a reduction in stockholder equity in
the  accompanying  consolidated  financial  statements.


                                       14
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

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

The accompanying consolidated financial statements contain certain accounts that
have  been  reclassified  in  each  of  the  periods  presented  to  reflect the
disposition  by  the  Company  of  its  internet  venture  FreeScholarships.com.
Reported  revenue,  costs  and  expenses  exclude  the  operating results of the
Company's  FreeScholarships.com  business.  The  results of FreeScholarships.com
are  presented  on  a  net  basis  in  the  consolidated condensed statements of
operations  as  loss  from  operations  of  discontinued  division.

Three  Months  Ended  September  30,  2000  compared with the Three Months Ended
September  30,  1999.

RESULTS  OF  OPERATIONS

Total  net  revenues  increased  8.8% from $6,985,000 for the three months ended
September  30, 1999 to $7,601,000 for the three months ended September 30, 2000.
The  increase in total net revenues was primarily attributable to an increase in
both  license  and  service  revenue  generated  from the Data Analysis Products
Division  which  was  offset  by  a decrease in revenue from the Engineering and
Education  Software  Products  Division.

Worldwide  Data  Analysis  Products  Division  net revenues increased 31.5% from
$3,202,000  in  the  three  months ended September 30, 1999 to $4,212,000 in the
three  months  ended  September 30, 2000, and increased as a percentage of total
revenues  from  45.8%  to  55.4%.  The  increase  was  primarily attributable to
service  revenues,  which  includes  maintenance,  training  and consulting. The
increase  in  service  revenues  was  primarily  attributable  to  the continued
expansion  of  the  Data Analysis Products Division's domestic consulting group.

Worldwide  Engineering  and  Education  Software  Products Division net revenues
decreased 10.4% from $3,783,000 for the three months ended September 30, 1999 to
$3,389,000  for  the  three  months  ended  September 30, 2000.  This division's
revenues  decreased  as  a percentage of total net revenues from 54.2% to 44.6%.
The  decrease  in  net  revenue  was  primarily due to a fall off in the Mathcad
distribution  channel  and  weak  international sales caused by a strong dollar.
The  division's  sales  decrease  was partially offset by 71% growth in sales of
StudyWorks.

Total  international  net  revenues attributable to sales of all Company product
lines  decreased  15.0%  from $1,763,000 in the three months ended September 30,
1999  to  $1,498,000 in the three months ended September 30, 2000, and decreased
as  a  percentage of total revenues from 25.2% to 19.7%, respectively.  As noted
above,  the  decline  is  primarily  due to fall off in the Mathcad distribution
channel  and  a  strong  dollar.

Total  cost  of  revenues  increased  17.7%, from $1,403,000 in the three months
ended  September 30, 1999, to $1,651,000 in the three months ended September 30,
2000,  and  increased  as  a  percentage  of total revenues from 20.1% to 21.7%,
respectively.  Direct  costs  as  a  percentage  of  revenues increased as lower
margin  software  products,  such  as  StudyWorks,  and  Data  Analysis Products
Division  software services accounted for a greater portion of overall revenues.

Sales  and marketing expenses increased 6.9% from $2,966,000 in the three months
ended  September  30, 1999 to $3,171,000 in the three months ended September 30,
2000,  but  decreased  as  a  percentage  of total revenues from 42.5% to 41.7%,
respectively.  The  increase  is  primarily  attributable  to  the Data Analysis
Products  Division,  which  experienced  a 23.3% increase due to advertising and
personnel  costs.  These costs supported that division's sales growth during the
quarter.



                                       15
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

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

RESULTS  OF  OPERATIONS  (CONTINUED)

Net  research  and  development  expenses increased 26.5% from $1,162,000 in the
three  months  ended September 30, 1999 to $1,470,000 for the three months ended
September  30,  2000, and increased as a percentage of total revenues from 16.6%
to  19.3%,  respectively.  The  overall increase in net research and development
expenses  was primarily attributable to increased investments in the products in
the Data Analysis Products Division, and a decrease in research funding.  Funded
research decreased 8.5%, from $1,242,000 in the three months ended September 30,
1999  to $1,137,000 for the three months ended September 30, 2000.  The decrease
in  funded  research  is  attributable to timing differences associated with the
expiration  of  fulfilled  contracts  and  the  commencement of recently awarded
contracts.

General  and  administrative  expenses  decreased slightly, from $719,000 in the
three  months  ended  September  30,1999  to  $718,000 in the three months ended
September  30,  2000, and decreased as a percentage of total revenues from 10.3%
to  9.4%,  respectively.

Nine  Months  Ended  September  30,  2000  Compared  with  the Nine Months Ended
September  30,  1999.

RESULTS  OF  OPERATIONS

Total  net  revenues increased 14.6%, from $20,053,000 for the nine months ended
September  30, 1999 to $22,979,000 for the nine months ended September 30, 2000.
Approximately  $2.5  million  of the increase, or 84.8%, was attributable to the
Data  Analysis  Products  Division.  The  Engineering  and  Education  Software
Products  Division  contributed  to  15.2%  of  the  increase  in  revenue.

Worldwide  Data Analysis Products Division license and service revenue increased
27.8%, from $8,927,000 in the nine months ended September 30,1999 to $11,409,000
in  the  nine  months ended September 30, 2000, and increased as a percentage of
total  net  revenues  from 44.5% to 49.6%.  Service revenue increased $2,308,000
while  S-PLUS  new  license  revenues increased $174,000.  The release of S-PLUS
2000,  created a larger customer base for the division and resulted in increased
levels  of  consulting,  training  and  maintenance  revenue.

Worldwide  Engineering  and  Education  Software  Products  Division  revenues
increased  4.0%, from $11,126,000 for the nine months ended September 30,1999 to
$11,570,000  for  the  nine  months ended September 30, 2000, and decreased as a
percentage  of net revenues from 55.5% to 50.4%. This increase was primarily due
to  growth in new license revenue of StudyWorks, fueled by the June 2000 release
of  StudyWorks IV, the latest version of that product.  This offset a decline in
new  Mathcad  licenses  and  Axum  6  upgrade  licenses.


                                       16
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

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

RESULTS  OF  OPERATIONS  (CONTINUED)

Total  international revenues attributable to sales of all Company product lines
increased  3.3%  from  $5,287,000  in the nine months ended September 30,1999 to
$5,462,000  in  the  nine  months  ended  September 30, 2000, and decreased as a
percentage  of  total  revenues  from  26.4%  to  23.7%,  respectively.

Total  cost of revenues increased 26.6% from $3,866,000 in the nine months ended
September  30,  1999  to $4,894,000 in the nine months ended September 30, 2000,
and  increased  as  a  percentage  of  total  revenues  from  19.3%  to  21.3%,
respectively.  Direct  costs,  as  a  percentage  of revenue, increased as lower
margin  software  products,  such  as StudyWorks, and software services, such as
consulting,  accounted  for  a  greater  portion  of  all  sales.

Sales  and marketing expenses increased 9.3%, from $8,576,000 in the nine months
ended September 30, 1999 to $9,375,000 the nine months ended September 30, 2000,
and  decreased  as  a  percentage  of  total  revenues  from  42.8%  to  40.8%,
respectively.  The  Data Analysis Products Division experienced a 23.1% increase
due  to  advertising and personnel costs supporting that division's year to date
sales  growth.

Net  research  and  development expenses increased 14.9%, from $3,527,000 in the
first  nine  months  ended  September 30, 1999 to $4,052,000 for the nine months
ended  September  30, 2000, and remained flat as a percentage of total revenues.
The  overall  increase  in  net  research and development expenses was primarily
attributable  to increased investments in the product lines of the Data Analysis
Products Division, and was partially offset by the increase in research funding.
Funded  research  increased 6.4%, from $3,431,000 in the first nine months ended
September  30,  1999  to $3,651,000 in the first nine months ended September 30,
2000.  The increase in funded research is attributable to an increase in awarded
contracts and the related increase in personnel to fulfill those contracts.  The
Company's  Data  Analysis  Products  Division funded research department average
headcount  increased  from  34  to 41 as of September 30, 1999 and September 30,
2000  respectively.

General and administrative expenses increased 16.1%, from $2,166,000 in the nine
months ended September 30, 1999 to $2,515,000 in the nine months ended September
30,  2000,  and increased as a percentage of total revenues from 10.8% to 11.0%,
respectively.  The Company experienced an increase in general and administrative
expenses  costs  due  to increased compensation costs, insurance costs, facility
related  costs  and  unrealized  foreign  exchange  losses.


                                       17
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

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

RESULTS  OF  OPERATIONS  (CONTINUED)

LIQUIDITY  AND  CAPITAL  RESOURCES

Cash  and cash equivalents, totaling $3,406,000 at September 30, 2000, decreased
$3,807,000  during  the nine months ended September 30, 2000, from $7,213,000 at
December  31, 1999.  The negative cash flow resulted primarily from cash used in
discontinued  operations  of  $6,441,000, purchases of property and equipment of
$964,000,  increase  in other assets relating to the StudyWorksOnline website of
$230,000,  and  payments  on notes payable of $185,000, partially offset by cash
provided  by continuing operations of $2,767,000, proceeds generated by exercise
of  stock  options and stock purchases under the employee stock option and stock
purchase  plans  of  $1,148,000,  and  the effect of exchange rates of $101,000.

Cash  and  cash equivalents of $3,406,000 as of September 30, 2000 represent the
Company's  financial  reserves.

The  Company  believes  its  financial  reserves  and  cash  flows  from  future
operations  will  be  sufficient to meet its liquidity requirements for the next
twelve  months.  The  foregoing  statement is forward-looking and involves risks
and  uncertainties,  many  of  which  are  outside  the  Company's  control. The
Company's  actual  experience  may  differ materially from that discussed above.
Factors  that  might  cause  such  a difference include, but are not limited to,
those  discussed  in  "Cautionary Statements" as well as future events that have
the  effect  of  reducing  the  Company's  available  cash  balances,  such  as
unanticipated  operating  losses  or  capital  expenditures,  cash  expenditures
related  to  possible  future  acquisitions,  or  investment  in new products or
services.  The  Company  may  be  presented  from  time to time with acquisition
opportunities,  which require additional external financing, and the Company may
from  time  to  time  seek  to  obtain  additional  funds from public or private
issuances  of  equity  or  debt  securities.  There can be no assurance that any
financing  will  be  available  at  all  or  on terms acceptable to the Company.


                                       18
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

In  addition  to  the other information in this report, the following cautionary
statements  should  be  considered  carefully  in evaluating the Company and its
business.  Information  provided  by  the  Company from time to time may contain
certain  "forward-looking"  information,  as  that  term  is  defined by (i) the
Private  Securities  Litigation  Reform  Act  of  1995  (the  "Act") and (ii) in
releases  made  by  the  Securities  and Exchange Commission (the "SEC").  These
cautionary  statements  are being made pursuant to the provisions of the Act and
with  the intention of obtaining the benefits of the "safe harbor" provisions of
the  Act.

VARIABILITY  OF  QUARTERLY OPERATING RESULTS.  The Company's quarterly operating
results  may  vary significantly from quarter to quarter, depending upon factors
such  as the introduction and market acceptance of new products and new versions
of  existing  products,  the  ability  to  reduce expenses and the activities of
competitors.  Because a high percentage of the Company's expenses are relatively
fixed  in  the near term, minor variations in the timing of orders and shipments
can  cause  significant  variations in quarterly operating results.  The Company
operates  with  little  or  no  backlog  and  has  no  long-term  contracts.
Substantially  all  of its product revenues in each quarter result from software
licenses  issued  in  that  quarter,  making the Company's ability to accurately
forecast  future  revenues  and  income for any period necessarily limited.  Any
forward-looking information provided from time to time by the Company represents
only  management's  then-best  current estimate of future results or trends, and
actual  results  may  differ  materially  from  those contained in the Company's
estimates.

POTENTIAL  VOLATILITY  OF STOCK PRICE.  There has been significant volatility in
the  market  price  of  securities of technology companies, including ours.  The
Company believes factors such as announcements of new products by the Company or
its  competitors,  quarterly  fluctuations in the Company's financial results or
other  software companies' financial results, shortfalls in the Company's actual
financial  results  compared  to  results  previously forecasted by stock market
analysts,  and  general  conditions  in the software and Internet industries and
conditions  in  the financial markets could cause the market price of the common
stock  to  fluctuate  substantially.  These  market  fluctuations  may adversely
affect  the  price  of  the  Company's  common  stock.

RISKS  ASSOCIATED  WITH  ACQUISITIONS.  The  Company  has  made  a  number  of
acquisitions  and  will continue to review future acquisition opportunities.  No
assurances  can  be  given  that  acquisition  candidates  will  continue  to be
available  on  terms  and  conditions  acceptable  to the Company.  Acquisitions
involve  numerous  risks,  including,  among  other things, possible dilution to
existing shareholders, difficulties and expenses incurred in connection with the
acquisitions  and  the subsequent assimilation of the operations and services or
products  of  the  acquired  companies,  the difficulty of operating new (albeit
related) businesses, the diversion of management's attention from other business
concerns  and  the  potential loss of key employees of the acquired company.  In
the  event  that  the  operations  of  an  acquired  business  do not live up to
expectations,  the  Company may be required to restructure the acquired business
or  write-off  the  value of some or all of the assets of the acquired business.
There  can  be no assurance that any acquisition will be successfully integrated
into  the  Company's  operations.

LIMITED  OPERATING  HISTORY  IN THE INTERNET MARKET. Since 1984, the Company has
focused  on  development  of  its core software products, the Mathcad and S-PLUS
product  families.  In  1999,  the  Company  broadened  its focus to include the
development  of  courses  related  to  the  use  of  its  core


                                       19
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

software  product  families that are offered through the World Wide Web, such as
the  S-PLUS  Knowledge  Discovery  Series.  Historically, the Company's revenues
have  come  from  licenses  related  to  the  Company's  core  product families.
Although  the Company anticipates that the majority of its revenue will continue
to  come  from licenses related to its core product families, these moves toward
increased  focus  on  the  Internet have required, and will continue to require,
changes  in  personnel  and  business  processes.

INTERNET-RELATED  RISKS.  The  Company's  online  store  and  its online courses
available  through  the  World  Wide Web, such as its S-PLUS Knowledge Discovery
Series,  rely on the continued growth of the Internet.  The Company expects that
continued  consumer  concerns  regarding security, reliability, privacy, ease of
use,  and the changing regulatory environment will affect the development of the
Company's  products  and  services  connected  with  the  Internet.

SECURITY.  If the Company's web site security fails, it may damage the Company's
ability  to sell products through its online store. In addition, the Company may
be liable if security on its web sites is breached and the Company is the victim
of  credit  card  fraud.

RELIABILITY.  The  Company  uses an outside service to maintain the web servers
and  an online web store.  If these servers fail for an extended period of time,
visitors  may  turn  to  other  web  sites  and  the  brand  may  be  damaged.

PRIVACY.   Visitors  to  the  Company's  online  store  are  asked  for  certain
personally  identifying  information,  which  is then used to ship products, for
marketing  and  data collection.  No personally identifiable information is sold
or conveyed to third parties.  As attitudes regarding online privacy continue to
evolve,  there  can  be  no  assurance  that  the Company's needs for personally
identifiable  information  will  be  in line with public attitudes or government
regulations  regarding  privacy.

EASE  OF  USE.  If,  for  reasons such as failure of the Company's web  servers,
slow  modem connections or poor web site design, users of the Company's products
and  services  including  the  online  store  and  the  online  courses, find it
difficult  to  use  the  Company's products and services, the Company's revenues
could  decrease  and  its  brands  could  be  damaged.

CHANGING REGULATORY ENVIRONMENT.  Laws and regulation regarding the Internet are
becoming  more common.  Changes in laws regarding privacy, Internet access taxes
or  other  areas may require the Company to change the way it does business over
the  Internet.  For  example,  the  Company's Online Store aims its services and
products  at persons age 13 and above.  Currently, the Children's Online Privacy
Protection  Act, also known as COPPA, and the regulations enacted by the Federal
Trade  Commission, also known as the FTC, to enforce the COPPA, require that the
Company  not  collect  personally  identifiable  data  from children 12 years or
younger.  If  this law was changed and the minimum age level increased, it could
damage  the  Company's  ability  to  attract  teenage  users  to  the
StudyWorksOnline.com  web  site.  The laws governing the use of the Internet are
generally  unsettled.  There is no way to predict the ways in which existing and
new  laws  will  apply  to  Internet  commerce,  services  or  products.


                                       20
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS

RISKS  ASSOCIATED  WITH DIVESTITURES.  The Company's product offerings presently
may  be  divided between two principal software product families - those related
to  its  Mathcad  line  addressing  the  calculation  needs  of  the  technical,
professional  and  education markets, and those related to its S-PLUS offerings,
marketed  primarily  to  professionals  needing  statistical  analysis tools. In
setting  strategic goals to maximize shareholder value, the Company from time to
time considers the options of divesting itself of one software product family or
the  other,  or  product  lines  within a given family, to concentrate its focus
other  business  opportunities.  If  the Company were to consummate such a sale,
there  can  be  no  assurance  that it would receive returns from such sale that
investors  in  the  Company  would  consider  attractive.

RISKS  ASSOCIATED  WITH  DISTRIBUTION  CHANNELS.  The  Company  markets  and
distributes  its S-PLUS products in the U.S. through the Company's telesales and
outside  sales  force  and  internationally  through  third  party resellers and
distributors  and  its own sales-force.  Mathcad products are currently marketed
and  distributed  in  the  U.S.  through third party resellers and distributors,
telesales,  direct  mail and electronic methods.  Internationally, the Company's
Mathcad  products are marketed and distributed through third party resellers and
distributors.  There can be no assurance that the Company will be able to retain
its  current  resellers and distributors, or expand its distribution channels by
entering  into arrangements with new resellers and distributors in the Company's
current  markets  or  in  new  markets.

RISKS  ASSOCIATED  WITH  INTERNATIONAL  OPERATIONS.  Sales outside North America
accounted  for  approximately 23.7% and 26.4% of the Company's total revenues in
the  nine  months  ended  September  30,  2000  and  1999, respectively, and may
continue  to  represent a significant portion of the Company's product revenues.
Any decrease in sales outside North America may have a materially adverse effect
on  the  Company's  operating results.  The Company's international business and
financial  performance  may be affected by fluctuations in exchange rates and by
trade  regulations.

RELIANCE ON THIRD PARTY LICENSORS.  Maple V, a software product licensed with or
as  part  of  Mathcad,  certain  copyrighted  texts  licensed  from  third party
publishers incorporated in the Company's Electronic Books, and the S programming
language,  the  language on which all of the S-Plus products are based, are each
currently  licensed  from  a single source or limited source suppliers.  If such
licenses  are  discontinued,  there can be no assurance that the Company will be
able  to  independently develop substitutes or to obtain alternative sources or,
if  able  to be developed or obtained as needed in the future, that such efforts
would  not result in delays or reductions in product shipments or cost increases
that could have a material adverse effect on the Company's consolidated business
operations.


                                       21
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                              CAUTIONARY STATEMENTS


RAPID  TECHNOLOGICAL  CHANGE;  COMPETITION.  The  technical calculation software
market is subject to rapid and substantial technological change, similar to that
affecting  the  software industry generally.  The Company, to remain successful,
must  be  responsive  to  new  developments  in  hardware  and  chip technology,
operating  systems,  programming  technology, Internet technology and multimedia
capabilities.  In  addition,  the  Company  competes  against  numerous  other
companies,  some  of  which  have  significant  name  recognition,  as  well  as
substantially  greater  capital  resources,  marketing  experience, research and
development  staffs  and  production facilities than the Company.  The Company's
financial  results  may be negatively impacted by the failure of new or existing
products  to  be  favorably  received  by  retailers and consumers due to price,
availability,  features, other product choices or the necessity of promotions to
increase  sales  of  the  Company's  products.

UNCERTAINTIES  REGARDING  PROTECTION  OF  PROPRIETARY  TECHNOLOGY; UNCERTAINTIES

REGARDING  PATENTS.  The  Company  believes  that  while  the  mathematical
calculations  performed by the Company's software are not proprietary, the speed
and  quality  of  displaying  the  computation and the ease of use are unique to
MathSoft's products.  The Company's success will depend, in part, on its ability
to  protect  the  proprietary  aspects  of  its  products.  The Company seeks to
protect  these  proprietary  aspects  of  its  products  principally  through  a
combination  of  contract  provisions and copyright, patent, trademark and trade
secret  laws.  There  can be no assurance that the steps taken by the Company to
protect  its  proprietary rights will be adequate to prevent misappropriation of
its  technology.  Although the Company believes that its products and technology
do not infringe any existing proprietary rights of others, the use of patents to
protect  software  has  increased  and there may be pending or issued patents of
which the Company is not aware that the Company may need to license or challenge
at  significant  expense.  There can be no assurance that any such license would
be  available  on acceptable terms, if at all, or that the Company would prevail
in  any  such  challenge.

RELIANCE  ON  ATTRACTING  AND  RETAINING KEY EMPLOYEES.  The Company's continued
success  will  depend  in large part on its ability to attract and retain highly
qualified  technical,  managerial,  sales  and  marketing  and  other personnel.
Competition  for such personnel in the New England and northwestern areas of the
United  States  is intense.  The Company has non-competition agreements with its
key  management  and  technical  personnel.  There  can be no assurance that the
Company  will  be  able  to  continue  to  attract  or  retain  such  personnel.
RISKS  ASSOCIATED  WITH  NEW PRODUCTS OR SERVICES.  The Company's future revenue
growth  rate  and  earnings performance depend on a number of factors, including
the  continued  success  of  its existing products and service offerings and the
development  of  one  or  more  new  products or services. These investments may
adversely affect the Company's quarterly and annual financial results until such
time that they begin to return a profit.  Furthermore, there can be no assurance
that  these  investments  will  ever  achieve  the  desired  financial  results.


                                       22
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company develops products in the United States and sells them worldwide.  As
a  result,  the Company's financial results could be affected by factors such as
changes  in  foreign  currency  exchange  rates  or  weak economic conditions in
foreign  markets. Since the Company's sales are currently priced in U.S. dollars
and  translated into local currency amounts, a strengthening of the dollar could
make  the  Company's  products  less competitive in foreign markets. The Company
maintains  an operation in the United Kingdom, which incurs expenses denominated
in  its  local  currency.  However,  the Company believes that any change in the
exchange  rate  in the United Kingdom that affects these operating expenses will
not  have  a  material  adverse  effect  on  its  results  of  operations.

Interest  income  and  expense  are sensitive to changes in the general level of
U.S.  interest  rates,  particularly  since  the  company's  investments  are in
short-term instruments.  Based on the nature and current levels of the Company's
investments  and  debt,  however, the Company believes that there is no material
market  risk  or  exposure.

The  Company's  general  investing policy is to limit the risk of principal loss
and  ensure the safety of invested funds by limiting credit and market risk. The
Company  currently places its investments in highly liquid money market accounts
and  short-term  investments.  All  highly  liquid  investments  with  original
maturities  of  three  months  or  less  are  considered to be cash equivalents.


                                       23
<PAGE>
                        MATHSOFT, INC.  AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  Exhibits:

          27.1  Financial  Data  Schedule.

     (b)  Reports  on  Form  8-K:

The  Company  filed  a  Current  Report  on  Form  8-K  dated September 18, 2000
announcing  the  imminent  closure  of  the  FreeScholarships.com  web  site.

The  Company filed a Current Report on Form 8-K dated October 19, 2000 reporting
fiscal  third  quarter  and  year-to-date  results.


                                       24
<PAGE>
                         MATHSOFT, INC. AND SUBSIDIARIES

                                    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.


                                 MATHSOFT,  INC.



Dated: November 14, 2000        By  /s/  Charles  J.  Digate
                                ----------------------------
                                Charles  J.  Digate
                                Chairman, President and Chief Executive Officer
                                (Principal  Executive  Officer)



Dated: November 14, 2000        By  /s/  Dermot  P.  O'Grady
                                ----------------------------
                                Dermot  P.  O'Grady
                                Vice President Finance and Administration,
                                Chief Financial Officer, Treasurer, and Clerk
                                (Principal  Financial  and  Accounting  Officer)


                                       25
<PAGE>