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

                                    FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

                                            OR

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

      For the transition period from ______ to __________

                         COMMISSION FILE NUMBER: 0-8125

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


                             DETECTION SYSTEMS, INC.

             (Exact name of registrant as specified in its charter)

STATE OF NEW YORK                                            16-0958589
(State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization)                            Identification No.)

                 130 PERINTON PARKWAY, FAIRPORT, NEW YORK 14450
               (Address of principal executive offices) (Zip Code)

                                 (716) 223-4060
              (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 THE  FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X No _____

As  of  November  8,  1999  there  were  outstanding  6,349,460  shares  of  the
registrant's common stock, par value $.05 per share.

<PAGE>
                          PART I FINANCIAL INFORMATION
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                             Sept. 30, 1999    March 31, 1999
                                               (Unaudited)
<S>                                                 <C>               <C>
Assets
Current assets:
Cash and cash equivalents                           $10,980           $ 4,414
Accounts receivable, less allowance for
  doubtful accounts ($1,052 and $1,006,
  respectively)                                      24,069            20,916
Inventories, net                                     30,034            37,762
Other current assets                                  3,673             3,249
                                                     ------            ------
                                                     68,756            66,341
Fixed assets, net                                    12,749            12,420
Goodwill and other intangibles                        9,540             9,381
Other assets                                          5,387             4,670
                                                     ------            ------
                                                    $96,432           $92,812
                                                     ======            ======
Liabilities
Current liabilities:

    Short term borrowings                           $ 1,546           $ 1,416
    Current portion of long term debt                 1,919               647
    Accounts payable                                  8,667             7,076
    Accrued payroll and benefits                      1,990             1,863
    Income taxes payable                              1,950             2,108
    Other current liabilities                         3,294             4,134
                                                     ------            ------
                                                     19,366            17,244

Other liabilities                                     2,689             2,645
Long term debt                                       15,733            17,179

Shareholders' equity:
   Common stock, par value $.05 per share;
   Authorized - 12,000 shares
   Issued - 6,578 shares and 6,555 shares,
   respectively                                         329               328
Capital in excess of par value                       45,081            45,073
Other accumulated comprehensive loss                   (305)             (310)
Retained earnings                                    17,369            14,447
                                                     ------            ------
                                                     62,474            59,538
Less - Treasury stock, at cost                       (3,786)           (3,780)
  Notes receivable for stock purchases                  (44)              (14)
                                                     ------            ------
                                                     58,644            55,744
                                                     ------            ------
                                                    $96,432           $92,812
                                                     ======            ======
</TABLE>
                (See accompanying notes to financial statements)

<PAGE>
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
     Consolidated Statement of Operations and Retained Earnings (Unaudited)
                      (in thousands, except per share data)
<TABLE>
<CAPTION>

For the Three Months Ended:                  Sept. 30, 1999    Sept. 30, 1998
                                             (Current Year)   (Preceding Year)
                                             --------------   ---------------
<S>                                                 <C>               <C>
Net sales                                           $36,699           $35,455

Costs and expenses:

 Production                                          22,091            21,896
 Research and development                             2,617             1,956
 Marketing, administrative and general                9,297             9,209
                                                     ------            ------
Total costs and expenses                             34,005            33,061

Operating income                                      2,694             2,394
Other income (expense):
 Net interest expense                                  (267)             (363)
 Other expense                                          (31)              (20)
                                                     ------            ------
Income before income taxes                            2,396             2,011
Provision for income taxes                              895               781
                                                     ------            ------
Net income                                           $1,501           $ 1,230
Other comprehensive income:
 Foreign currency translation adjustment                 18               138
                                                     ------            ------
Total comprehensive income                            1,519             1,368

Retained earnings at beginning of period             15,868            10,808
Less: other comprehensive income                        (18)             (138)
                                                     ------            ------
Retained earnings at end of period                  $17,369           $12,038
                                                     ======            ======
Earnings per share

 Basic                                                $0.24             $0.19
                                                       ====              ====
 Diluted                                              $0.22             $0.18
                                                       ====              ====
</TABLE>
                (See accompanying notes to financial statements)
<PAGE>
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
     Consolidated Statement of Operations and Retained Earnings (Unaudited)
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
For the Six Months Ended:                    Sept. 30, 1999    Sept. 30, 1998
                                             (Current Year)    Preceding Year)
                                             --------------   ---------------
<S>                                                 <C>               <C>
Net sales                                           $71,465           $69,263

Costs and expenses:

 Production                                          43,055            42,934
 Research and development                             4,910             4,090
 Marketing, administrative and general               18,356            18,085
                                                     ------            ------
Total costs and expenses                             66,321            65,109

Operating income                                      5,144             4,154
Other income (expense)
 Net interest expense                                  (487)             (718)
 Other income (expense)                                   9               (62)
                                                     ------            ------
Income before income taxes                            4,666             3,374
Provision for income taxes                            1,744             1,312
                                                     ------            ------
Net income                                          $ 2,922           $ 2,062
Other comprehensive income:
 Foreign currency translation adjustment                  5                23
                                                     ------            ------
Total comprehensive income                            2,927             2,085

Retained earnings at beginning of period             14,447             9,976
Less: other comprehensive income                         (5)              (23)
                                                     ------            ------
Retained earnings at end of period                  $17,369           $12,038
                                                     ======            ======
Earnings per share

 Basic                                                $0.46             $0.33
                                                       ====              ====
 Diluted                                              $0.43             $0.30
                                                       ====              ====
</TABLE>
               (See accompanying notes to financial statements)
<PAGE>
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                Consolidated Statement of Cash Flows (Unaudited)
                            (in thousands of dollars)
<TABLE>
<CAPTION>

For the Six Months Ended September 30,                       1999        1998
                                                             ----        ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>          <C>
Net income                                                $ 2,922      $2,062
                                                            -----       -----
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                             1,450       1,829

Changes in assets and liabilities:
  Accounts receivable                                      (3,139)       (950)
  Inventories                                               7,833      (2,777)
  Accounts payable                                          1,391      (1,723)
  Accrued payroll and benefits                                117         223
  Other assets & liabilities                               (1,924)        110
                                                           ------      ------
  Total adjustments                                         5,728      (3,288)
                                                           ------      ------
  Net cash provided by (used in) operating activities       8,650      (1,226)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                   (1,416)     (1,584)
    Acquisition of businesses                                (601)       (473)
                                                           ------      ------
    Net cash used in investing activities                  (2,017)     (2,057)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from borrowings                                  130       3,322
    Principal payments on debt and
      capital lease obligations                              (174)     (1,372)
    Common stock transactions, net                            (28)        (91)
                                                            -----       -----
    Net cash (used in) provided by financing activities       (72)      1,859

Effect of exchange rates                                        5          23
                                                            -----       -----
Net increase (decrease) in cash and cash equivalents        6,566      (1,401)

Cash and cash equivalents, beginning of period              4,414       3,160
                                                            -----       -----
Cash and cash equivalents, end of period                  $10,980      $1,759
                                                            =====       =====
Cash paid during the period for:
    Interest                                              $   791      $  863
                                                              ===         ===
    Income taxes                                          $ 2,062      $  458
                                                            =====         ===
</TABLE>
                (See accompanying notes to financial statements)
<PAGE>
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
          THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
                                   (Unaudited)

NOTE 1. GENERAL

The accompanying  unaudited interim consolidated  financial statements have been
prepared in accordance  with the rules and  regulations  of the  Securities  and
Exchange Commission (SEC). The interim consolidated financial statements include
the  consolidated  accounts of Detection  Systems,  Inc. and its  majority-owned
subsidiaries  (collectively,  "the Company") with all  significant  intercompany
transactions  eliminated.   In  the  opinion  of  management,   all  adjustments
(consisting only of normal recurring adjustments) necessary for a fair statement
of the financial position,  results of operations and cash flows for the interim
periods  presented  have been made.  Certain  prior  period  balances  have been
reclassified to conform with the current period  presentation.  Certain footnote
disclosures  normally  included in financial  statements  prepared in accordance
with  generally  accepted  accounting  principles  (GAAP) have been condensed or
omitted pursuant to such SEC rules and regulations.  These financial  statements
should be read in conjunction  with the Company's Annual Report on Form 10-K for
the year ended March 31, 1999.

CASH FLOW STATEMENT - Non-cash  transactions  during the first quarter of fiscal
1999  consisted  of the  acquisition  of certain  businesses  with shares of the
Company's common stock. See Note 3.

NOTE 2.  INVENTORIES

Major classifications of inventory follow (in thousands):
<TABLE>
<CAPTION>
                                             Sept. 30, 1999    March 31, 1999
                                             --------------    --------------
<S>                                                 <C>               <C>
Component Parts                                     $10,419           $14,838
Work In Process                                       1,851             2,464
Finished Products                                    17,764            20,460
                                                     ------            ------
                                                    $30,034           $37,762
                                                     ======            ======
</TABLE>

NOTE 3.  ACQUISITIONS

FISCAL 2000  ACQUISITIONS - During the second quarter ended  September 30, 1999,
the Company acquired all of the outstanding  shares of Caetec S.r.l.  ("Caetec")
for approximately $700,000 in cash. Caetec is an Italian technology company with
a new line of fire control products.

FISCAL  1999  ACQUISITIONS  - In June  1998,  the  Company  acquired  all of the
outstanding shares of Efsec AB ("Efsec") for approximately $1,250,000, comprised
of cash and 28,161 shares of its common stock. Efsec is a Swedish distributor of
electronic security equipment with annual net sales of approximately  $3,000,000
prior to its acquisition.

In June 1998, the Company acquired all of the outstanding  stock of Alarm Center
Kft  ("Alarm  Center")  for  $135,000  in  cash.  Alarm  Center  is a  Hungarian
distributor  of  electronic   security   equipment  with  annual  net  sales  of
approximately $500,000 prior to its acquisition.

These  transactions have been accounted for as purchases and,  accordingly,  the
results  of  these  businesses  are  included  in  the  consolidated   financial
statements as of the date of acquisition.

NOTE 4 - EARNINGS PER SHARE

There are no  significant  reconciling  items between net income as presented in
the  consolidated  statement of  operations  and net income  available to common
shareholders  used in the calculation of earnings per share.  Reconciling  items
between  the  number  of shares  used in the  calculation  of basic and  diluted
earnings per share relate to deferred  compensation plans, options and warrants,
as follows (in thousands):
                                              Three months          Six months
                                             ended Sept. 30,     ended Sept. 30,
                                              1999     1998        1999     1998
                                              ----     ----        ----     ----
Weighted average number of shares
  outstanding                                6,348    6,324       6,363    6,307

Shares associated with deferred
  compensation, option and warrant plans       490      515         476      523


NOTE 5 - RESTRUCTURING

The Company recorded a restructuring charge of approximately $400,000 during the
first quarter of fiscal 1999 for severance  costs related to the  termination of
employees at the Fairport, New York and Southall, England facilities. The charge
has been included in the results from  continuing  operations and had a material
impact on operating results in the first quarter of 1999.

NOTE 6 - GEOGRAPHIC INFORMATION

The Company's  operating  structure  includes  operating  segments in the United
States,  Asia Pacific and Europe.  Management  evaluates the  performance of its
operating  segments  separately  to  monitor  the  different  factors  affecting
financial performance in the different regions.  Segment profit or loss includes
substabtially  all  of the  segment's  costs  of  production,  distribution  and
administration.  The Company  magages incoms taxes on a global basis,  thus, the
Company  evaluates  segmment performance  based on profit or loss before  income
taxes.

The following  table presents net sales and income (loss) before income taxes of
the  company's  domestic  and foreign  operations.  Net sales and income  (loss)
before income taxes of the Ccompany's  domestic operations include the impact of
export sales.  Inter-area sales are presented on a basis intended to reflect the
market value of the products as nearly as possible.

<TABLE>
<CAPTION>
For the three months ended September 30,               1999              1998
                                                       ----              ----
                                                           (in thousands)
<S>                                                 <C>               <C>
Sales to unaffiliated customers

       United States operations                     $22,435           $22,730
       Asia Pacific operations                        6,686             5,022
       European operations                            7,578             7,703
                                                    -------           -------
                                                    $36,699           $35,455
                                                    =======           =======
Sales between affiliates

       United States operations                     $ 2,209           $ 2,377
       Asia Pacific operations                        8,642            11,585
       European operations                              131                36
                                                     ------            ------
                                                    $10,982           $13,998
                                                     ======            ======
Income (loss) before income taxes

       United States operations                     $ 1,109           $ 1,795
       Asia Pacific operations                        1,827               799
       European operations                             (393)              (57)
       Eliminations                                    (147)             (526)
                                                      -----             -----
                                                    $ 2,396           $ 2,011
                                                      =====             =====


For the six months ended September 30,                 1999              1998
                                                       ----              ----
                                                           (in thousands)
Sales to unaffiliated customers

       United States operations                     $43,657           $44,429
       Asia Pacific operations                       12,339             9,796
       European operations                           15,469            15,038
                                                    -------           -------
                                                    $71,465           $69,263
                                                    =======           =======
Sales between affiliates

       United States operations                     $ 4,471           $ 4,174
       Asia Pacific operations                       15,892            19,274
       European operations                              248               126
                                                     ------            ------
                                                    $20,611           $23,574
                                                     ======            ======
Income (loss) before income taxes

       United States operations                     $ 2,179           $ 3,071
       Asia Pacific operations                        2,701             1,524
       European operations                             (598)             (376)
       Eliminations                                     384              (845)
                                                      -----             -----
                                                    $ 4,666           $ 3,374
                                                      =====             =====
</TABLE>

NOTE 7 - OTHER MATTERS

The  Company's  Board  of  Directors  has  authorized  the  repurchase of  up to
$10,000,000 of the Company's common stock.


                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

      The  Company is a  supplier  of  equipment  to the  electronic  protection
industry.  The Company designs,  manufactures and markets electronic  detection,
control and  communication  equipment  for  security,  fire  protection,  access
control and closed circuit television ("CCTV")  applications,  offering products
primarily for the  commercial and mid- to high-end  residential  portions of the
market.  From its  founding  in 1968 until 1995,  the  Company  was  primarily a
provider of  security  sensor  devices for the  domestic  market.  In 1995,  the
Company adopted a strategy designed to expand its product  offerings,  establish
an international sales presence, increase its manufacturing capacity and improve
its overall cost structure. The Company has since made ten acquisitions,  opened
six sales offices and established a manufacturing facility in Asia.

      The Company  recognizes  net sales upon shipment of products to customers.
Production expenses include materials,  direct labor and manufacturing  overhead
as well as an allocated portion of indirect overhead.  Outgoing freight, customs
and other costs associated with delivery of products to customers are classified
under marketing,  administrative and general expenses.  Research and development
expenses  include  costs  associated  with  salaries  and  benefits  for certain
engineering employees,  supplies, agency approvals,  depreciation and occupancy,
as well as charges for independent  testing and independent  contractors engaged
for specific  projects.  Marketing,  administrative and general expenses include
costs  related  to  the  Company's  sales  efforts  and  corporate  and  general
administrative functions, including costs of executive, administrative and sales
personnel,    marketing/selling   supplies,   advertising,    depreciation   and
professional fees.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentages which
certain items of income and expense bear to net sales:
<TABLE>
<CAPTION>
                                         FISCAL YEAR ENDED      THREE MONTHS      SIX MONTHS ENDED
                                             MARCH 31,            SEPT. 30,           SEPT. 30
                                            1999      1998      1999      1998      1999      1998
                                          ------    ------    ------    ------    ------    ------
<S>                                        <C>       <C>       <C>       <C>       <C>       <C>
Net sales                                  100.0%    100.0%    100.0%    100.0%    100.0%    100.0%
Costs and expenses:
 Production                                 61.7      65.6      60.2      61.7      60.2      62.0
 Research and development                    6.1       6.8       7.1       5.5       6.9       5.9
 Marketing, administrative
  and general                               25.9      23.8      25.4      26.0      25.7      26.1
                                          ------    ------    ------    ------    ------    ------
Operating income                             6.3       3.8       7.3       6.8       7.2       6.0

 Net interest expense                       (1.1)     (1.6)     (0.7)     (1.0)     (0.7)     (1.0)
 Other income (expense)                      0.1      (0.4)     (0.1)     (0.1)     --        (0.1)
                                          ------    ------    ------    ------    ------    ------
Income before income taxes                   5.3       1.8       6.5       5.7       6.5       4.9
Provision for income taxes                   2.1       0.7       2.4       2.2       2.4       1.9
                                          ------    ------    ------    ------    ------    ------
 Net income                                  3.2%      1.1%      4.1%      3.5%      4.1%      3.0%
                                          ======    ======    ======    ======    ======    ======
</TABLE>

THREE MONTHS ENDED SEPTEMBER 30, 1999  COMPARED TO  THREE MONTHS ENDED SEPTEMBER
30, 1998

      The  Company's  net sales  increased  3.5% to  $36,699,000  in the  second
quarter of fiscal 2000 from $35,455,000 in the comparable period in fiscal 1999.
The net sales of acquired  businesses  accounted  for $372,000 of this  increase
(See Note 3 to the Financial  Statements)  while sales from on-going  operations
accounted for $872,000.  Net sales during this period by the Company's  on-going
operations  have been  favorably  impacted  compared  to the year ago  period by
strong  sales  in the  Asia-Pacific  region,  which  increased  33.1%.  Sales by
on-going  operations in the United States and European  regions were  consistent
with the year ago period.  Domestic sales continue to be affected by lower sales
to one of the Company's  major  customers and by the  acquisition of some of the
Company's  domestic  customers by other businesses which are not standardized on
the Company's products.

      Production  expenses  increased  0.1% to  $22,091,000  in the fiscal  2000
period from $21,896,000 in the comparable period in fiscal 1999. As a percentage
of net sales,  production  expenses decreased to 60.2% in the fiscal 2000 period
compared  to 61.7% in the  comparable  period in fiscal  1999.  The  decrease in
production  expenses  as  a  percentage  of  net  sales  was  primarily  due  to
improvements in the Company's manufacturing cost structure.

      Research and  development  expenses  increased  33.8% to $2,617,000 in the
fiscal 2000 period from $1,956,000 in the comparable period in fiscal 1999. As a
percentage of net sales,  research and development expenses increased to 7.1% in
the fiscal 2000 period from 5.5% in the comparable  period in 1999. The increase
in research and  development  expenses in aggregate  and as a percentage  of net
sales is primarily  attributable to headcount increases to support the Company's
research and development efforts.

      Marketing,   administrative   and  general  expenses   increased  0.1%  to
$9,297,000 in the fiscal 2000 period from $9,209,000 in the comparable period in
fiscal 1999. As a percentage of net sales, marketing, administrative and general
expenses  decreased  to  25.4%  in the  fiscal  2000  period  from  26.0% in the
comparable period in fiscal 1999. The increase in marketing,  administrative and
general expenses is attributable to headcount  increases as well as expenditures
associated  with the  opening  of  offices  in Spain and  Argentina  during  the
quarter.

      Net interest expense  decreased to $267,000 in the fiscal 2000 period from
$363,000 in the comparable period in 1999, as borrowings  outstanding were lower
during the current period.

      The  Company's  effective  income tax rate for the fiscal  2000 period was
37.4% compared to 38.8% for the comparable period in fiscal 1999.

SIX MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30,
1998

      The Company's net sales  increased  3.2% to $71,465,000 in the fiscal 2000
period from  $69,263,000 in the comparable  period in fiscal 1999. The net sales
of acquired  businesses  accounted  for $922,000 of this increase (See Note 3 to
the Financial  Statements)  while sales from on-going  operations  accounted for
$1,280,000  in the fiscal  2000  period.  Net sales  during  this  period by the
Company's on-going  operations have been favorably impacted compared to the year
ago period by strong sales in the  Asia-Pacific  region,  which increased 26.0%.
Sales by on-going  operations  in the United  State and  European  regions  were
consistent  with the year ago period.  Domestic sales continue to be affected by
lower sales to one of the Company's  major  customers and by the  acquisition of
some of the  Company's  domestic  customers  by other  businesses  which are not
standardized on the Company's products.

      Production  expenses  increased  0.3% to  $43,055,000  in the fiscal  2000
period from $42,934,000 in the comparable period in fiscal 1999. As a percentage
of net sales,  production  expenses decreased to 60.2% in the fiscal 2000 period
compared to 62.0% in the  comparable  period in 1999. The increase in production
expenses was  primarily  due to a  corresponding  increase in the  Company's net
sales.  The decrease in  production  expenses as a  percentage  of net sales was
primarily  due to changes  in  product  mix and  improvements  in the  Company's
manufacturing cost structure.

      Research and  development  expenses  increased  20.0% to $4,910,000 in the
fiscal 2000 period from $4,090,000 in the comparable period in fiscal 1999. As a
percentage of net sales,  research and development expenses increased to 6.9% in
the fiscal 2000 period from 5.9% in the comparable  period in 1999. The increase
in research and  development  expenses in aggregate  and as a percentage  of net
sales is primarily  attributable to headcount increases to support the Company's
research and development efforts.

      Marketing,   administrative   and  general  expenses   increased  1.5%  to
$18,356,000 in the fiscal 2000 period from $18,085,000 in the comparable  period
in fiscal 1999. The year ago period  included a $400,000  restructuring  charge.
Excluding  the impact of this  charge,  marketing,  administrative  and  general
expenses increased 3.8%.  Approximately $400,000 of this increase relates to the
acquisition of Efsec and Alarm Center (See Note 3 to the Financial  Statements).
The remaining increase is attributable to the addition of personnel to the sales
and  marketing   departments.   As  a  percentage   of  net  sales,   marketing,
administrative and general expenses decreased to 25.7% in the fiscal 2000 period
from 26.1% in the comparable period in fiscal 1999.

      Net interest expense  decreased to $487,000 in the fiscal 2000 period from
$718,000 in the comparable period in 1999, as borrowings  outstanding were lower
during the current period.

      The  Company's  effective  income tax rate for the fiscal  2000 period was
37.4% compared to 38.9% for the comparable period in fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

      The Company  considers  liquidity  to be its ability to meet its long- and
short-term cash  requirements.  Prior to 1996, those requirements were primarily
met by cash generated by the Company's  operating  activities and cash reserves.
Since the  implementation  of the  Company's  strategy  designed  to enhance its
product  offerings,   manufacturing   capacity  and  international   operations,
particularly  its  acquisitions  and the  development of the Asia facility,  the
Company has required  external  sources of  financing  to satisfy its  liquidity
needs.

      SIX MONTHS ENDED SEPTEMBER 30, 1999. During the six months ended September
30, 1999, the Company's  operating  activities  provided $8,650,000 of operating
cash flow. Net income,  depreciation and  amortization  provided  $4,372,000.  A
decrease in inventories provided $7,833,000.  An increase in accounts receivable
used  $3,139,000,  while an increase in accounts  payable  provided  $1,391,000.
Other account changes used $1,807,000 of operating cash flow.

      During the six months ended  September  30, 1999,  cash used for investing
activities was $2,017,000 and was utilized for the acquisition of Caetec and for
capital expenditures.

      During the six months ended  September  30,  1999,  cash used by financing
activities was $72,000, primarily representing principal repayments of debt.

      CAPITAL RESOURCES. On September 30, 1999, the Company had cash balances of
$10,980,000.  On that date,  the  Company  had a  $17,000,000  revolving  credit
facility that was not drawn.  This credit  facility  bears  interest  based upon
either the  federal  funds  rate,  the prime rate or LIBOR,  each  adjusted by a
factor  which  varies  based upon the rates of funded  debt to  earnings  before
interest, tax, depreciation and amortization, and matures on July 31, 2000.

      The Company  expects to continue to pursue  expansion  and/or  acquisition
opportunities  and the  development  of new products  and  markets.  Significant
expenditures will also include continued research and development  investment in
detection,  control  and  communication  projects.  The  Company  also  plans to
continue its efforts to market its products internationally.

      The Company's  Board of Directors has  authorized  the repurchase of up to
$10,000,000 of the Company's common stock.

      The Company  believes that the  combination  of its current cash balances,
cash flows from operations and existing credit  facilities will be sufficient to
fund its planned operations during fiscal 2000.

      YEAR 2000 ISSUES. The Company has appointed a team to assess the impact of
the year 2000 on its  information  systems,  products,  and business.  This team
includes two members of senior  management  and is lead by the Vice President of
Operations. To ensure year 2000 compliance, the Company has established specific
categories to be reviewed:

      Products.  The Company places a high priority on ensuring its products are
year 2000 ready.  The Company has  completed its review of all products that are
manufactured  domestically  and at its Asia  manufacturing  facility  as well as
products purchased for resale by its domestic  businesses.  The Company believes
these  products  to be year  2000  compliant.  The  Company  is  completing  its
assessment of year 2000 compatibility of products manufactured and purchased for
resale  at  its  other  foreign  subsidiaries.   The  Company  does  not  expect
significant  issues  with year 2000  readiness  of product  sold by its  foreign
subsidiaries  as  products  sold  by  the  Company  generally  do not  use  date
information for calculations or comparisons.

      Manufacturing.  Some of the tools and  equipment  (hardware  and software)
used to develop and manufacture the Company's products are  date-sensitive.  The
Company  believes  that the  date-sensitive  tools and  equipment  used by it to
manufacture  products are now year 2000 compliant.  As a result the Company does
not expect significant interruption to its manufacturing capabilities because of
the failure of tools and/or equipment.

      Non-Manufacturing Business Applications.  The Company is in the process of
fixing and  testing all  non-manufacturing  business  applications  such as core
financial    information    and   reporting    systems,    procurement,    human
resources/payroll,  factory applications,  customer service systems, and revenue
systems, and does not expect any significant year 2000 problems in this area.

      The Company's domestic business  information systems required upgrades and
enhancements to be made year 2000  compliant.  These upgrades have been made and
are currently being tested.  Necessary upgrades to other information  technology
infrastructure  have been identified and  remediation is in process.  Testing of
year 2000 upgrades is expected to be completed prior to the year 2000.

      Most of the Company's  non-US  subsidiaries'  information  systems require
various  degrees of upgrade or  replacement  to be capable of handling year 2000
issues  (excluding  the Hong  Kong  subsidiary,  which  utilizes  the  Company's
domestic  information  system).  The  Company  has  purchased  a new  enterprise
resource  planning  system  capable of handling  the year 2000 that is currently
being implemented at its foreign  subsidiaries.  This implementation is expected
to be complete at all locations  prior to December 31, 1999. The Company expects
to be capable of handling  the year 2000 at all  locations  without  significant
interruption to business activity.

      Facilities  and  Infrastructure.  The Company has evaluated its facilities
and  infrastructure   (health,   safety  and  environment  systems,   buildings,
security/alarms/doors, desktop computers, networks) to ensure they are year 2000
compatible. Upgrades are being implemented where needed and the Company does not
expect significant  interruption to its operations because of year 2000 problems
with its facilities and infrastructure.

      Logistics.  Of importance to the Company for year 2000 is the readiness of
suppliers  and the  products  the Company  procures  from  suppliers  as well as
customers  and service  providers.  The Company has a  comprehensive  program to
identify and obtain year 2000 information from its critical suppliers, customers
and service providers. This program includes awareness letters,  questionnaires,
and a review of year 2000 web-sites.  The Company has mailed a questionnaire  to
substantially all suppliers, customers and service providers regarding year 2000
readiness.   Responses  are  currently  being  received  and  evaluated  and  no
significant issues have been noted as of the date of this report. If a supplier,
customer or service  provider is of concern  regarding year 2000 readiness,  the
Company will develop contingency plans to minimize the year 2000 risk.

      The Company  estimates that its aggregate  costs for year 2000  activities
from 1997 through 2000 will be approximately $1,000,000. External costs incurred
through September 30, 1999 were approximately  $920,000 and related primarily to
computer  hardware and software.  It is anticipated that the remaining year 2000
costs will relate to computer  software,  computer hardware and consulting fees.
The Company does not  separately  track internal costs relating to the year 2000
and they are not included in the  Company's  estimate of year 2000 costs.  These
costs do not include  estimates for potential  litigation,  which at the present
time is not viewed as a significant  risk. The Company  reviews and updates data
for costs incurred and forecasted  costs each quarter.  These costs are based on
management's  estimates,  which were  determined  based on assumptions of future
events,  some within the  Company's  control,  but some  outside  the  Company's
control.

      Management's  estimate of the costs and completion  dates are dependent on
various factors  including the availability of skilled resources and the ability
to locate and modify all relevant  software code. No amount of  preparation  and
testing can guarantee year 2000 compliance. Nevertheless, the Company recognizes
that failing to resolve its year 2000 issues on a timely basis would, in a worst
case scenario, significantly limit its ability to manufacture and distribute its
products  and  process  its daily  business  transactions  for a period of time,
especially  if such  failure  is  coupled  with  third  party or  infrastructure
failures.  Similarly, the Company could be significantly affected by the failure
of  one  or  more   significant   suppliers,   customer  or  components  of  the
infrastructure to conduct their respective operations without interruption after
1999.  Because of the  difficulty of assessing the year 2000  compliance of such
third parties,  the Company considers the potential  disruptions  caused by such
parties to present the most  reasonably  likely  worst-case  scenarios.  Adverse
effects on the Company could include business disruption,  increased costs, loss
of sales and other similar  ramifications.  However,  the Company believes it is
taking  appropriate  preventive  measures and will be successful in avoiding any
material adverse effect on the company's operations or financial condition.

      For  additional  information  regarding  the  risks  associated  with  the
Company's  compliance with year 2000, see "Risk  Factors-Year 2000" in Item 1 of
the Company's Form 10-K for the year ended March 31, 1999 which is  incorporated
herein by reference thereto.

      EURO  CONVERSION.  The Company is assessing the potential  impact that may
result  from  the  completion  of the euro  conversion  in a  number  of  areas,
including the following:  (1)  accounting  and tax; (2)  management  information
systems required to accommodate euro-denominated transactions; (3) the impact on
currency  exchange costs and currency  exchange rate risk; and (4) the impact on
existing  contracts.  There  has  been  no  significant  impact  to the  Company
resulting from the initial transition to the euro.

      DIVIDEND POLICY.  The Company is dedicated to promoting  shareholder value
through   long-term   profitability  and  growth  and  believes  that  continued
investments in future product  development  are essential to this goal. For this
reason, it has been the Company's policy to not pay cash dividends.

FORWARD-LOOKING STATEMENTS

      This quarterly report contains certain "forward-looking statements" within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section 21E of the Securities Exchange Act of 1934, as amended,  which represent
the Company's expectations or beliefs, including, but not limited to, statements
concerning  industry  performance,   the  Company's   operations,   performance,
financial condition,  growth and acquisition  strategies,  margins and growth in
sales of the Company's products.  For this purpose,  any statements contained in
this quarterly  report that are not statements of historical  fact may be deemed
to be  forward-looking  statements.  Without  limiting  the  generality  of  the
foregoing,   words  such  as  "may,"  "will,"   "expect,"   "believe,"   "plan,"
"anticipate," "intend," "could," "estimate," "continue," "goal" or "strategy" or
the negative or other variations thereof or comparable  terminology are intended
to identify forward-looking statements. These statements by their nature involve
substantial risks and  uncertainties,  certain of which are beyond the Company's
control,  and actual  results may differ  materially  depending  on a variety of
important  factors,  including those described  previously in the "Risk Factors"
section of the Company's 1999 Form 10-K for the year ended March 31, 1999.


                            PART II OTHER INFORMATION

Item 5.       Other Information

                  None

Item 6.       Exhibits and Reports for Form 8-K.

              A. Exhibits

                  See Exhibit Index

              B.  Reports on Form 8-K

              No reports on Form 8-K were filed during the quarter.


                                   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.

                                       DETECTION SYSTEMS, INC.
                                       Registrant

DATE:    November 15, 1999             By: /s/ Karl H. Kostusiak
                                       Karl H. Kostusiak, President

                                       By: /s/ Frank J. Ryan
                                       Frank J. Ryan, Vice President,
                                       Secretary and Treasurer
                                        (Principal Financial Officer)

                                       By: /s/ Christopher P. Gerace
                                       Christopher P. Gerace
                                       Vice President & Chief Accounting Officer
                                        (Principal Accounting Officer)
<PAGE>
                                  EXHIBIT INDEX
Item
NO.            EXHIBITS                       LOCATION

3(a)           Detection Systems, Inc.        Included as Exhibit 3 of this
               Certificate of                 Quarterly Report on Form 10-Q
               Incorporation as amended

3(b)           Detection Systems, Inc.        Incorporated by reference to
               By-Laws as amended             Exhibit 3(b) of the Company's 1997
                                              Annual Report on Form 10-K

10(a)          Medical reimbursement plan     Incorporated by reference to
                                              Exhibit 10(b) of the Company's
                                              1997 Annual Report on Form 10-K

10(b)          Employee stock purchase        Incorporated by reference to
               plan                           Exhibit 10 of the Company's 1994
                                              Annual Report on Form 10-K

10(c)          Fleet Amended & Restated       Included as Exhibit 10(c) of this
               Credit Facility Agreement      Quarterly Report on Form 10-Q
               dated September 30, 1998

10(d)          Deferred Compensation Plan     Incorporated by reference to
               and Deferred Bonus Plan        Exhibit 10(c) to the Company's
                                              Quarterly Report on Form 10-Q, for
                                              the quarter ended 12/31/97

10(e)          1992 Restated Stock Option     Incorporated by reference to
               Plan                           Exhibit 22 of the Company's 1995
                                              Annual Report on Form 10-K

10(f)          1997 Stock Option Plan, as     Incorporated by reference to the
               amended                        Company's Proxy Statement on Form
                                              DEF 14A filed on 7/8/99

10(g)          Non-Employee Director Stock    Incorporated by reference to
               Option Plan                    Exhibit B of the Company's Proxy
                                              Form DEF 14A filed 7/8/99

10(h)          Executive Officer Cash         Incorporated by reference to
               Bonus Plan                     Exhibit 10(h) of the Company's
                                              1999 Annual Report on Form 10-K

10(i)          Executive employment           Incorporated by reference to
               contract with Karl H.          Exhibit 10(i)of the Company's
               Kostusiak                      Quarterly Report on Form 10-Q for
                                              the quarter ended 6/30/99

10(j)          Executive employment           Incorporated by reference to
               contract with David B.         Exhibit 10(j)of the Company's
               Lederer                        Quarterly Report on Form 10-Q for
                                              the quarter ended 6/30/99

10(k)          Stock Purchase Agreements      Incorporated by reference to
               with Karl H. Kostusiak and     Exhibit 10(l) of the Company's
               David B. Lederer               1997 Annual Report on Form 10-K

11             Computation of Per Share       Included as Exhibit 11 of this
               Earnings Statement             Quarterly Report on Form 10-Q

27             Financial Data Schedule        Included as Exhibit 27 of this