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 December 31, 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  February  10,  2000  there  were  outstanding  6,343,024  shares  of  the
registrant's common stock, par value $.05 per share.

<TABLE>
<CAPTION>

                          PART I FINANCIAL INFORMATION
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                      (in thousands, except per share data)

                                                Dec. 31, 1999   March 31, 1999
                                                  (Unaudited)
Assets
Current assets:
<S>                                                           <C>           <C>
Cash and cash equivalents                                $  9,397      $  4,414
Accounts receivable, less allowance for
  doubtful accounts ($1,063 and $1,006,
  respectively)                                            24,520        20,916
Inventories, net                                           32,480        37,762
Other current assets                                        4,017         3,249
                                                         --------      --------
                                                           70,414        66,341
Fixed assets, net                                          12,654        12,420
Goodwill and other intangibles                              9,231         9,381
Other assets                                                5,763         4,670
                                                         --------      --------
                                                         $ 98,062      $ 92,812
                                                         ========      ========
Liabilities
Current liabilities:
   Short term borrowings                                 $  1,665      $  1,416
   Current portion of long term debt                        2,554           647
   Accounts payable                                         9,823         7,076
   Accrued payroll and benefits                             1,749         1,863
   Income taxes payable                                     2,474         2,108
   Other current liabilities                                2,865         4,134
                                                         --------      --------
                                                           21,130        17,244

Other liabilities                                           2,701         2,645
Long term debt                                             15,002        17,179

Shareholders' equity:
  Common stock, par value $.05 per share;
   Authorized - 12,000 shares
   Issued - 6,578 shares and 6,562 shares,
   respectively                                               329           328
Capital in excess of par value                             44,955        45,073
Other accumulated comprehensive loss                         (430)         (310)
Retained earnings                                          18,524        14,447
                                                         --------      --------
                                                           63,378        59,538
Less - Treasury stock, at cost                             (4,104)       (3,780)
  Notes receivable for stock purchases                        (45)          (14)
                                                         --------      --------
                                                           59,229        55,744
                                                         --------      --------
                                                         $ 98,062      $ 92,812
                                                         ========      ========
</TABLE>
               (See accompanying notes to financial statements)


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

For the Three Months Ended:                    Dec. 31, 1999      Dec. 31, 1998
                                                (Current Year)  (Preceding Year)
                                              --------------     ---------------
<S>                                                     <C>                <C>
Net sales                                          $ 36,333           $ 34,201

Costs and expenses:
 Production                                          21,722             21,054
 Research and development                             2,710              2,106
 Marketing, administrative and general                9,606              8,807
                                                   --------           --------
Total costs and expenses                             34,038             31,967

Operating income                                      2,295              2,234
Other income (expense):
 Net interest expense                                  (298)              (403)
 Other (expense) income                                (151)               182
                                                   --------           --------
Income before income taxes                            1,846              2,013
Provision for income taxes                              691                782
                                                   --------           --------
Net income                                         $  1,155           $  1,231
Other comprehensive income (loss):
 Foreign currency translation adjustment               (125)              (234)
                                                   --------           --------
Total comprehensive income                            1,030                997

Retained earnings at beginning of period             17,369             12,038
Less: other comprehensive income                        125                234
                                                   --------           --------
Retained earnings at end of period                 $ 18,524           $ 13,269
                                                   ========           ========
Earnings per share
 Basic                                             $   0.18           $   0.19
                                                   ========           ========
 Diluted                                           $   0.17           $   0.18
                                                   ========           ========

</TABLE>
               (See accompanying notes to financial statements)


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

For the Nine Months Ended:                  Dec. 31, 1999         Dec. 31, 1998
                                            (Current Year)      (Preceding Year)
                                                ---------             ---------
<S>                                                   <C>                   <C>
Net sales                                       $ 107,798             $ 103,464

Costs and expenses:
 Production                                        64,777                63,988
 Research and development                           7,620                 6,196
 Marketing, administrative and general             27,962                26,892
                                                ---------             ---------
Total costs and expenses                          100,359                97,076

Operating income                                    7,439                 6,388
Other income (expense)
 Net interest expense                                (785)               (1,121)
 Other (expense) income                              (142)                  120
                                                ---------             ---------
Income before income taxes                          6,512                 5,387
Provision for income taxes                          2,435                 2,094
                                                ---------             ---------
Net income                                      $   4,077             $   3,293
Other comprehensive income (loss):
 Foreign currency translation adjustment             (120)                 (211)
                                                ---------             ---------
Total comprehensive income                          3,957                 3,082

Retained earnings at beginning of period           14,447                 9,976
Less: other comprehensive income                      120                   211
                                                ---------             ---------
Retained earnings at end of period              $  18,524             $  13,269
                                                =========             =========
Earnings per share
 Basic                                          $    0.64             $    0.52
                                                =========             =========
 Diluted                                        $    0.60             $    0.48
                                                =========             =========
</TABLE>
               (See accompanying notes to financial statements)

<TABLE>
<CAPTION>
                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                Consolidated Statement of Cash Flows (Unaudited)
                            (in thousands of dollars)

For the Nine Months Ended December 31,                         1999        1998
                                                               ----        ----
Cash flows from operating activities:
<S>                                                              <C>        <C>
Net income                                                   $ 4,077    $ 3,293
                                                             -------    -------
Adjustments to reconcile net income to
  net cash provided by operating activities:
  Depreciation and amortization                                2,418      2,807

Changes in assets and liabilities:
  Accounts receivable                                         (3,518)     1,535
  Inventories                                                  5,388     (2,917)
  Accounts payable                                             2,546     (2,420)
  Accrued payroll and benefits                                  (126)        49
  Other assets & liabilities                                  (2,462)       116
                                                             -------    -------
  Total adjustments                                            4,246       (830)
                                                             -------    -------
   Net cash provided by operating activities                   8,323      2,463

Cash flows from investing activities:
   Capital expenditures                                       (2,206)    (2,250)
   Acquisition of businesses                                    (521)      (505)
                                                             -------    -------
   Net cash used in investing activities                      (2,727)    (2,755)

Cash flows from financing activities:
   Proceeds from borrowings                                      249      1,443
   Principal payments on debt and
    capital lease obligations                                   (270)    (1,666)
   Common stock transactions, net                                 77         46
   Repurchases of common stock                                  (549)        --
                                                             -------    -------
   Net cash used in financing activities                        (493)      (177)

Effect of exchange rates                                        (120)      (211)
                                                             -------    -------
Net increase (decrease) in cash and cash equivalents           4,983       (680)

Cash and cash equivalents, beginning of period                 4,414      3,160
                                                             -------    -------
Cash and cash equivalents, end of period                     $ 9,397    $ 2,480
                                                             =======    =======
Cash paid during the period for:
   Interest                                                  $ 1,159    $ 1,311
                                                             =======    =======
   Income taxes                                              $ 2,626    $   614
                                                             =======    =======
</TABLE>
               (See accompanying notes to financial statements)


                    DETECTION SYSTEMS, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
          THREE AND NINE MONTH PERIODS ENDED DECEMBER 31, 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):

                                    Dec. 31, 1999           March 31, 1999
                                   --------------           --------------
Component Parts                           $11,507                  $14,838
Work In Process                             2,468                    2,464
Finished Products                          18,505                   20,460
                                           ------                   ------
                                          $32,480                  $37,762
                                           ======                   ======

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 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     Nine months
                                                ended Dec. 31,   ended Dec. 31,

                                                1999     1998     1999    1998
                                                ----     ----     ----    ----
Weighted average number of shares
outstanding                                    6,269    6,328    6,346    6313

Shares associated with deferred
  compensation, option and warrant plans         489      504      473     513

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.  This  restructuring
program was substantially completed during the third quarter of fiscal 2000.

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
substantially  all  of the  segment's  costs  of  production,  distribution  and
administration.  The Company  manages income taxes on a global basis,  thus, the
Company  evaluates  segment  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 Company'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 December 31,             1999            1998
                                                    ----            ----
                                                       (in thousands)
Sales to unaffiliated customers
<S>                                             <C>              <C>
     United States operations                   $ 20,808         $ 20,762
     Asia Pacific operations                       6,744            5,393
     European operations                           8,781            8,046
                                                 -------          -------
                                                $ 36,333         $ 34,201
                                                 =======          =======
Sales between affiliates
     United States operations                   $  1,810         $  1,928
     Asia Pacific operations                       8,218            9,875
     European operations                             111               58
                                                  ------           ------
                                                $ 10,139         $ 11,861
                                                  ======           ======
Income (loss) before income taxes
     United States operations                   $  1,946         $  1,395
     Asia Pacific operations                         449            1,468
     European Operations                            (550)            (866)
     Eliminations                                      1               16
                                                   -----            -----
                                                $  1,846         $  2,013
                                                   =====            =====


For the Nine Months Ended December 31,              1999            1998
                                                    ----            ----
                                                     (in thousands)
Sales to unaffiliated customers
     United States operations                   $ 64,465         $ 65,191
     Asia Pacific operations                      19,083           15,189
     European operations                          24,250           23,084
                                                 -------          -------
                                                $107,798         $103,464
                                                 =======          =======
Sales between affiliates
     United States operations                   $  6,281         $  6,102
     Asia Pacific operations                      24,111           29,149
     European operations                             359              184
                                                  ------           ------
                                                $ 30,751         $ 35,435
                                                  ======           ======
Income (loss) before income taxes
     United States operations                   $  4,125         $  4,466
     Asia Pacific operations                       3,150            2,992
     European Operations                          (1,148)          (1,242)
     Eliminations                                    385             (829)
                                                   -----            -----
                                                $  6,512         $  5,387
                                                   =====            =====
</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.  As of December 31, 1999 the Company
had purchased 59,500 shares of common stock for approximately $549,000.


                    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      Three Months       Nine Months
                             Ended March 31,   Ended Dec. 31,     Ended Dec. 31
                              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     59.8     61.6     60.1     61.8
 Research and development      6.1      6.8      7.5      6.2      7.1      6.0
 Marketing, administrative
  and general                 25.9     23.8     26.4     25.7     25.9     26.0
                              ----     ----     ----     ----     ----     ----
Operating income               6.3      3.8      6.3      6.5      6.9      6.2

 Net interest expense         (1.1)    (1.6)    (0.8)    (1.1)    (0.7)    (1.1)
 Other income (expense)        0.1     (0.4)    (0.4)     0.5     (0.1)     0.1
                              ----     ----     ----     ----     ----     ----
Income before income taxes     5.3      1.8      5.1      5.9      6.1      5.2
Provision for income taxes     2.1      0.7      1.9      2.3      2.3      2.0
                              ----     ----     ----     ----     ----     ----
 Net income                    3.2%     1.1%     3.2%     3.6%     3.8%     3.2%
                               ===      ===      ===      ===      ===      ===
</TABLE>

Three Months Ended December 31, 1999 Compared to Three Months Ended December
31, 1998

    The Company's net sales  increased  6.2% to $36,333,000 in the third quarter
of fiscal 2000 from  $34,201,000  in the  comparable  period in fiscal 1999. Net
sales during the current year period have been  favorably  impacted  compared to
the year ago period by strong sales in the Asia-Pacific  region, which increased
25.1%  and by sales in the  European  region,  which  increased  9.1%.  Sales by
operations in the United States were consistent with the year ago period.
Domestic sales continue to be affected by lower sales to certain 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 3.2% to $21,722,000 in the fiscal 2000 period
from $21,054,000 in the comparable period in fiscal 1999. As a percentage of net
sales, production expenses decreased to 59.8% in the fiscal 2000 period compared
to 61.6% in the  comparable  period in fiscal 1999.  The decrease in  production
expenses as a percentage  of net sales was  primarily  due to changes in product
mix and to improvements in the Company's manufacturing cost structure.

    Research and  development  expenses  increased  28.7% to  $2,710,000  in the
fiscal 2000 period from $2,106,000 in the comparable period in fiscal 1999. As a
percentage of net sales,  research and development expenses increased to 7.5% in
the fiscal 2000 period from 6.2% 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 9.1% to $9,606,000
in the fiscal 2000 period from  $8,807,000  in the  comparable  period in fiscal
1999.  As a  percentage  of net sales,  marketing,  administrative  and  general
expenses  increased  to  26.4%  in the  fiscal  2000  period  from  25.7% 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 second
quarter of fiscal 2000.

    Net  interest  expense  decreased to $298,000 in the fiscal 2000 period from
$403,000 in the  comparable  period in 1999, as outstanding  borrowings,  net of
cash invested, 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.

Nine Months Ended December 31, 1999 Compared to Nine Months Ended December
31, 1998

    The Company's net sales  increased 4.2% to  $107,798,000  in the fiscal 2000
period from  $103,464,000  in the  comparable  period in fiscal 1999.  Net sales
during this period have been favorably  impacted compared to the year ago period
by strong sales in the Asia-Pacific  region,  which increased 25.6% and by sales
in the European  region,  which increased 5.1%.  Sales in the United States were
consistent  with the year ago period.  Domestic sales continue to be affected by
lower sales to certain  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 1.2% to $64,777,000 in the fiscal 2000 period
from $63,988,000 in the comparable period in fiscal 1999. As a percentage of net
sales, production expenses decreased to 60.1% in the fiscal 2000 period compared
to 61.8% 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  23.0% to  $7,620,000  in the
fiscal 2000 period from $6,196,000 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 6.0% 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 4.0% to $27,962,000
in the fiscal 2000 period from  $26,892,000 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  5.5%.   Approximately  $771,000  of  this  increase  relates  to  the
acquisition  of Efsec,  Alarm  Center  and Caetec  (See Note 3 to the  Financial
Statements) as well as the start up of businesses in Norway, Spain and Argentina
subsequent  to the third  quarter of fiscal  1999.  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  25.9%  in the  fiscal  2000  period  from  26.0% in the
comparable period in fiscal 1999.

    Net  interest  expense  decreased to $785,000 in the fiscal 2000 period from
$1,121,000 in the comparable period in 1999, as outstanding  borrowings,  net of
cash invested, 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.

    Nine Months Ended  December 31, 1999.  During the nine months ended December
31, 1999, the Company's  operating  activities  provided $8,323,000 of operating
cash flow. Net income,  depreciation and  amortization  provided  $6,495,000.  A
decrease in inventories provided $5,388,000.  An increase in accounts receivable
used  $3,518,000,  while an increase in accounts  payable  provided  $2,546,000.
Other account changes used $2,588,000 of operating cash flow.

    During the nine months  ended  December 31,  1999,  cash used for  investing
activities was $2,727,000 and was utilized for the acquisition of Caetec and for
capital expenditures.

    During the nine months  ended  December  31,  1999,  cash used by  financing
activities  was $493,000,  primarily  representing  repurchases of the Company's
common stock.

    Capital  Resources.  On December 31, 1999,  the Company had cash balances of
$9,397,000.  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  established  specific
categories to be reviewed.  Since January 1, 2000 the Company's mission critical
internal  computer  systems have continued to operate without  exception and the
Company  is not aware of  product  difficulties  at any of our  customer  sites;
however, the Company continues to monitor potential year 2000 issues.

    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: February 14, 2000             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)


                                  EXHIBIT INDEX

Item
No.                  Exhibits                          Location

3(a)       Detection Systems, Inc.       Incorporated by reference to
           Certificate of                Exhibit 3(a) of the Company's
           Incorporation as amended      Quarterly Report on Form 10-Q for

                                         the quarter ended 9/30/99

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    plan
                                         Incorporated by reference to Exhibit 10
                                         of the Company's  1994 Annual Report on
                                         Form 10-K

10(c)      Fleet Amended & Restated      Incorporated by reference to
           Credit Facility Agreement     Exhibit 10(c) of the Company's
           dated September 30, 1998      Quarterly Report on Form 10-Q for

                                         the quarter ended 9/30/98

10(d)      Deferred Compensation Plan    Incorporated by reference to
           and Deferred Bonus Plan       Exhibit 10(c) of 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 1997
           David B. Lederer              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
                                         Quarterly Report on Form 10-Q