<PAGE>
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549
                                  FORM 10-KSB
  (Mark One)
   [ X ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
          EXCHANGE ACT OF 1934
          For the fiscal year ended December 31, 2000

   [   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          AND EXCHANGE ACT OF 1934
          For the transition period from ___________ to ___________.

                         Commission File No. 0-14720-NY

                           CVD EQUIPMENT CORPORATION
               (Exact name of registrant as specified in charter)
                 New York                            11-2621692
         (State of incorporation)        (IRS Employer Identification No.)
                1881 Lakeland Avenue, Ronkonkoma, New York 11779
                    (Address of principal executive offices)
                                  631-981-7081
                        (Registrant's telephone number)

  Securities Registered Pursuant to Section 12 (b) of the Act:     NONE

  Securities Registered Pursuant to Section 12 (g) of the Act:

                                  Common Stock

  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, and (2) has been subject to such
  filing requirements for the past 90 days.      YES [ X ]   NO [    ]

  Check if disclosure of delinquent filers pursuant to Item 405 of Regulation
  S-B is not contained herein, and will not be contained, to the best of
  registrant's knowledge, in definitive proxy or information statements
  incorporated by reference in Part III of this Form 10-KSB or any amendment
  to this Form 10-KSB.  [X]

  The registrant's revenues for 2000 were $9,504,181

  The aggregate market value of voting stock held by non-affiliates of the
  registrant on March 1, 2001 was $5,105,275 based on a closing price of $3.50
  on that date.

  As of March 1, 2001 there were 3,001,000 shares of Common Stock, Par Value
  $.01 Per Share, Outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

  <PAGE>

  TABLE OF CONTENTS


  ITEM 1.        BUSINESS...........................................      1
                      Introduction..................................      1
                      General Development of Business...............      1
                      The Organization..............................      2
                      Information About Industry Segments...........      2
                      General Narrative Description of Business.....      2
                      Principle Products............................      3
                      Research and Development......................      4
                      Industry Overview.............................      4
                      Marketing.....................................      5
                      Patents and Copyrights........................      5
                      Competition...................................      5
                      Customers.....................................      6
                      Foreign Operations............................      6
                      Manufacturing Materials and Suppliers.........      6
                      Order Backlog.................................      7
                      Employees.....................................      7
                      Insurance.....................................      7
                      Government Regulations........................      7
                      Forward Looking Statements....................      8

  ITEM 2.        DESCRIPTION OF PROPERTIES..........................      8

  ITEM 3.        LEGAL PROCEEDINGS..................................      8

  ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS      9

  ITEM 5.        MARKET FOR THE REGISTRANT'S COMMON STOCK AND
                 RELATED SECURITY HOLDER MATTERS....................      9
                      Market Information............................      9
                      Dividends.....................................      9
                      Holders.......................................      9

  ITEM 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS ...............     10

  ITEM 7.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........     12

  ITEM 8.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.     39

  ITEM 9.        EXECUTIVE COMPENSATION.............................     40

  ITEM 10.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                 OWNER & MANAGEMENT.................................     41

  ITEM 11.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....     41

  ITEM 12.       EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND
                 REPORTS ON FORM 8-K................................     42

  <PAGE> 1
                                     PART I

  ITEM 1.  BUSINESS

  INTRODUCTION
  Statements contained in this Report on Form 10-KSB that are not historical
  facts are forward-looking statements within the meaning of Section 21E of
  the Securities Exchange Act of 1934, as amended, including without
  limitation, statements regarding industry trends, strategic business
  development, pursuit of new markets, competition, results from operations,
  and are subject to the safe harbor provisions created by that statute.  A
  forward-looking statement may contain words such as "intends",  "plans",
  "anticipates", "believes", "expect to", or words of similar import.
  Management cautions that forward-looking statements are subject to risks and
  uncertainties that could cause the Company's actual results to differ
  materially from those projected.  These risks and uncertainties include, but
  are not limited to, marketing success, product development, production,
  technological difficulties, manufacturing costs, and changes in economic
  conditions in the markets the Company serves.  The Company undertakes no
  obligation to release revisions to forward-looking statements to reflect
  subsequent events, changed circumstances, or the occurrence of unanticipated
  events.

  GENERAL DEVELOPMENT OF BUSINESS
  CVD Equipment Corporation (the "Company") was incorporated under the laws of
  New York State in October 1982.   On September 11, 1985 the Company made an
  initial public offering of 700,000 units underwritten by D. H. Blair & Co.,
  44 Wall Street, New York, New York 10005, pursuant to which it received net
  proceeds of $2,683,640.

  Between December 11 and December 15, 1998, the Company purchased at public
  auction the former inventory, tangible assets, intangible assets and
  intellectual property of Stainless Design Corporation, Saugerties, NY, for
  $672,095.

  On December 14, 1998, the Company entered into a contract with Kidco Realty
  Corp. to purchase, for $1,400,000, the facility owned by Kidco Realty Corp.
  located at 1117 Kings Highway, Saugerties, NY 12477 and formerly occupied by
  Stainless Design Corporation. On April 29, 1999, the contract closed. The
  purchase price was paid by cash funds from the Company in the amount of
  $500,000 and Kidco Realty Corp. issuing a 30 year amortization, 7% interest,
  10 year balloon, non recourse purchase money note and mortgage to the
  Company in the amount of $900,000.

  On December 23, 1998 the Company formed a new 100% owned subsidiary called
  Stainless Design Concepts, Ltd.   The new subsidiary is located at 1117
  Kings Highway, Saugerties, NY 12477.  The new subsidiary manufactures ultra
  high purity gas and chemical delivery control systems for the semiconductor
  industry. On April 23, 1999, the new subsidiary was merged into the Company
  as a wholly owned division.

  On November 5, 1999 the Company formed another division called Equipment
  Consulting Services (ECS). This new division is also located at 1117 Kings
  Highway, Saugerties, NY 12477. The new division  focuses on equipment
  consulting and the refurbished semiconductor equipment market, a 1.5
  billion-dollar industry. Our existing facilities and capabilities enables us
  to become an important player in this market.  ECS is an Associate Member of
  the Surplus Equipment Consortium / Network (SEC/N).

  <PAGE> 2

  As evidenced by the Company's development of these new divisions, our growth
  strategy is one of expansion. The Company is focused on expanding revenues
  and increasing profits. An important ingredient in our Strategic Plan is to
  be an active player in the acquisitions environment. We are always looking
  for businesses that are:
       * Synergistic in nature to our core business
       * Complementary to our existing product lines
       * Geared toward a start-up or turnaround situation
       * Opportunistic for growth and profit development

  In the year 2000, CVD Equipment Corporation was named to Deloitte & Touche's
  prestigious "Long Island Technology Fast 50" program, which ranks the 50
  fastest growing technology companies on Long Island.

       Deloitte & Touche computed all calculations for revenue growth rate
       with CVD having a five-year revenue growth rate of 101.5%.

  CVD is a leading manufacturer of critical LPCVD, UHVCVD, MOCVD, LPE, VPE and
  RTP products and services for the Semiconductor, Optoelectronic and Wireless
  Telecommunications markets. CVD is proud to be recognized as a key player
  within Long Island's growing technology sector.  CVD has gone from number 50
  in 1998 to number 28 in 1999 and with our continued growth rate we expect a
  lower ranking next year as a result of a higher growth rate.

       The Long Island Technology Fast 50 program is sponsored by Deloitte &
       Touche LLP,  The Bank of New York, the Nasdaq Stock Market, the Long
       Island Technology Center, the Long Island Association, SUNY Stony
       Brook, Idea Alley, Long Island High Technology Incubator at Stony
       Brook, Newsday, Certilman Balin Adler & Hyman,LLP, Long Island Software
       & Technology Network, and Invision.com.

  THE ORGANIZATION
  Each division, CVD, SDC and ECS has their own operating manager with sales
  and administration being handled by individual corporate managers.  Thus,
  each division operates reasonably autonomously on a day to day basis. Yet,
  there is an overall corporate coordination in the day to day administration
  of the business, in setting policy and consistently applying procedures. All
  sales are coordinated by the corporate sales manager.

  INFORMATION ABOUT INDUSTRY SEGMENTS
  The Company designs, develops, manufactures, markets, installs and services
  equipment primarily for the semiconductor industry.  The Company's products
  include (1) both batch and single substrate systems used for depositing,
  rapid thermal processing, annealing, diffusion and etching of semiconductor
  films, (2) gas and liquid flow control systems, (3) ultra high purity gas
  and chemical piping delivery systems, (4) fabricates standard and custom
  quartzware and (5) equipment consulting and refurbishing of semiconductor
  processing equipment. The Company's products are generally manufactured to
  the particular specifications of each of its customers.

  GENERAL NARRATIVE DESCRIPTION OF BUSINESS
  Semiconductor components are the fundamental electronic building blocks used
  in modern electronic equipment and systems. These components are classified
  as either discrete devices (such as transistors) or integrated circuits (in
  which a number of transistors and other elements are combined to form a more
  complicated electronic circuit).  In an integrated circuit, these elements
  are formed on a small "chip" of silicon or gallium arsenide, which is then
  encapsulated in an epoxy, ceramic, or metal package having lead wires for
  connection to a circuit board.  The Company's products are used in the
  manufacture of these components.
  <PAGE> 3
  CVD DIVISION
  Designs and manufacturers both standard and custom equipment for the
  semiconductor industry. CVD has developed a fine reputation for producing
  high quality products. CVD's equipment has leading edge technology and is
  utilized for silicon germanium, silicon carbide, and gallium arsenide
  processes. These processes are paramount in the optoelectric and wireless
  communications arena.

  SDC DIVISION
  Designs and manufactures in their Class 100 cleanroom, ultra high purity Gas
  and Chemical Delivery systems. Their field service group provides for
  contract maintenance, high purity fab and equipment installations and
  equipment removal.

  ECS DIVISION
  Provides semiconductor equipment consulting and refurbishing services. Their
  expertise crosses over many product lines as well as manufacturers,
  positioning the division to meet the changing requirements of the industry.

  PRINCIPLE  PRODUCTS

  Chemical Vapor Deposition (CVD)  - is a process which passes a gaseous
  compound over a target material surface that is heated to such a degree that
  the compound decomposes and deposits a desired layer onto substrate
  material.  The process is accomplished by combining appropriate gases in a
  reaction chamber, of the kind produced by the Company, at elevated
  temperatures (typically 300 - 1500 degrees Celsius).  The Company's Chemical
  Vapor Deposition Systems are complete and include all necessary
  instrumentation, subsystems and components.  The systems include mass flow
  controllers, bellows valves, stainless steel lines and fittings.  The
  Company provides such standard systems and also specifically engineered
  products for particular customer applications.  Some of the standard systems
  offered by the Company are for Silicon, Silicon-Germanium, Silicon Dioxide,
  Silicon Nitride, Polysilicon, Liquid Phase Epitaxial, and Metalorganic
  Chemical Vapor Deposition.

  The Company's CVD systems are available in a variety of models that can be
  used in production and laboratory research.  All models can be offered with
  total system automation, a microprocessor control system, by which the user
  can measure, predict and regulate gas flow, temperature, pressure and
  chemical reaction rates, thus controlling the process in order to enhance
  the quality of the materials produced.  The Company's standard
  microprocessor control system is extremely versatile and capable of
  supporting the Company's complete product line and most custom system
  requirements. The Company's CVD systems generally range in price from
  $100,000 to $2,500,000.

  Rapid Thermal Processing (RTP) - are used to heat semiconductor materials to
  elevated temperatures of 1000 degrees Celsius at rapid rates of up to 200
  degrees Celsius per second.  The Company's RTP systems are offered for
  implant activation, oxidation, silicide formation and many other processes.
  The Company offers system that can operate both at atmospheric or reduced
  pressures.  A specific model of the Company's RTP system is used for Thermal
  Desorption Spectroscopy which allows the semiconductor process engineer the
  ability to analyze the deposited films between the many process steps used
  in the complex fabrication process. The Company's RTP systems generally
  range in price from $75,000 to $350,000.
  <PAGE> 4
  Annealing and Diffusion Furnaces - are used for diffusion, oxidation,
  implant anneal, solder reflow and other processes.  The systems are normally
  operated at atmospheric pressure with gaseous atmospheres related to the
  process.  An optional feature of the system allows for the heating element
  to be moved away from the process chamber allowing the wafers to rapidly
  cool or be heated in a controlled environment. Our cascade temperature
  control system enables more precise control of the wafers.  The systems are
  equipped with an automatic process controller, permitting automatic process
  sequencing and monitoring with safety alarm provisions. The Company's
  Annealing and Diffusion Furnace systems generally range in price from
  $75,000 to $650,000.

  Gas and Liquid Control Systems  - standard and custom-designed gas and
  liquid control systems encompassing (1) gas cylinder storage cabinets, (2)
  custom gas and chemical delivery systems, (3) gas and liquid valve manifold
  boxes (VMB's) and (4) gas isolation boxes (GIB's) to provide safe storage
  and handling of pressurized gases and chemicals.  System design allows for
  automatic or manual control from both a local and remote location. The
  Company's Gas and Liquid Control Systems generally range in price from
  $20,000 to $350,000.

  Ultra High Purity Gas and Chemical Piping Delivery Systems - we provide
  field installation of ultra high purity piping systems within a
  semiconductor plant for the distribution of gases and chemicals to the
  assorted process tools.  As part of the field service group we also offer
  repair service work on customer equipment.

  Quartzware - we provide standard and custom fabricated quartzware used in
  the Company's equipment and other customer tools. The Company also provides
  repair and replacement of existing quartzware. Our customer quartzware spare
  parts requirements have grown substantially, especially for non-company
  related products.

  RESEARCH AND DEVELOPMENT
  The Company continues its efforts on several research and development
  projects. Our joint Silicon Carbide venture with Dow Corning has been
  extended through June 30, 2001. In addition, we continue to develop and
  customize equipment for numerous government, university and industry
  research laboratories around the world. Very often the research, design and
  development of custom equipment, which remains proprietary to the Company,
  yields new products.

  INDUSTRY OVERVIEW
  In 2000, the industry grew at an unprecedented rate. This growth was fueled
  by new end products and the drive to manufacture smaller chips on larger
  wafers - substantially reducing the cost of manufacturing. The industry
  however is historically cyclic in nature. CVD believes that it has organized
  and structured itself with the three divisions to partially compensate for
  the cyclic nature and thereby smooth out the ups and downs. The CVD division
  deals with large capital equipment, which sometimes suffers in a down cycle.
  However, the CVD division also sells to research facilities and universities
  that are not normally influenced in a significant way in a down market. The
  SDC division supplies Gas and Chemical Delivery Systems, which can be
  impacted during a down market. However, the field service group within that
  division, usually adds significant field service work in a down market. And
  finally, the ECS division is usually impacted in a positive fashion in a
  down market, as customers look for alternative ways (refurbished equipment).
  Hence, the Company believes that volatile market conditions will have less
  of an impact on the overall performance of the Company as compared to other
  semiconductor equipment manufacturers.
  <PAGE> 5
  MARKETING
  The Company's products are used in research and production applications by
  the semiconductor industry.  The Company sells its products primarily to
  semiconductor manufacturers and to institutions involved in electronic
  research such as universities, government and industrial laboratories.
  During 2000, sales of the Company's products were made by a staff of four
  employees and five sales representatives, whose activities were supported by
  a staff of nine application engineers.  During 2000 the Company continued to
  work on expanding our product offerings.

  The Company's Web Sites; www.cvdequipment.com; www.stainlessdesign.com;
  www.equipmentconsulting.com;  continue to see increased traffic. The Company
  focuses on being in the top listings on many search engines, thus increasing
  the number of hits to our web sites. The Company continuously receives
  inquiries as a result of the web sites.

  The Company has expanded it's sales efforts considerably by utilizing sales
  representatives having offices in Santa Clara, CA, Chandler, AZ,
  Albuquerque, NM, Austin, TX, Dallas, TX, Taiwan and Korea. Additional
  representatives are expected to be added during the year 2001. We expect
  that this expansion will create a wider exposure to CVD and it's product
  line.

  The Company warrants its equipment for a period of six months after shipment
  and passes along any warranties from original manufacturers of components
  used in its products.  The Company provides for its own equipment servicing
  with in-house field service personnel.  Warrantee costs are historically
  insignificant.

  PATENTS, COPYRIGHTS AND LICENSE AGREEMENTS
  The Company has developed technology related to the automatic valve shut-off
  system manufactured by the Company, which has been granted Patent No.
  4,527,715 that expires on August 27, 2002. Although the Company believes
  that the patent provides it with some competitive advantage, the Company
  does not believe the patent protection is significant to any of its current
  business operations.  Patent protection was not significant to previous
  business because the unique products offered are custom built for a
  particular customer.  As such, when reviewing the cost and time required for
  patent protection, management determined that future benefits were minimal.
  The Company believes that while patents are useful, and will be used at
  times in the future, they are not critical or valuable in many cases on an
  individual basis.  We believe the collective value of the intangible
  property of the Company is comprised of blueprints, specifications,
  technical processes, cumulative employee knowledge, experience, copyrights
  and patents.

  In August 1997, the Company signed a 5-year license agreement with IBM to
  sell equipment using IBM's patented method for low temperature, low-pressure
  chemical vapor deposition of epitaxial layers (UHV/CVD).

  During years 1999 and 2000 the Company has applied for several copyrights
  associated with the intellectual properties of the former Stainless Design
  Corporation.

  COMPETITION
  The Company's business is subject to intense competition.  The Company is
  aware of other competitors that offer a substantial number of products
  <PAGE> 6
  comparable to the Company's.  Many of the Company's competitors (including
  customers who may elect to manufacture systems for internal use) have
  financial, marketing and other resources greater than the Company's. To
  date, the Company has been able to compete in markets that include these
  competitors, primarily on the basis of price, technical performance, quality
  and delivery.

  CUSTOMERS
  The Company sells to a wide range of customers.  Sales to a single customer
  in a given year however can exceed 10%.  In 2000, two customers represented
  approximately 10% each of sales whereas in 1999, two customers represented
  approximately 13% and 14% of sales.  CVD's customers include many of the
  largest semiconductor, telecommunications, and computer companies in the
  world.  Several of these major customers are as follows:
  <TABLE>
  <C>                             <C>                               <C>
  Advanced Technology Material    Alpha Photonics                   Alpha Industries
  AMP Inc.                        Applied Material                  Bechtel Bettis Inc.
  B.F. Goodrich                   BOC                               Brookhaven National Labs
  Bruckner                        Corning Inc.                      Cree
  Dow Corning                     Hewlett Packard                   IBM
  ITT                             JDS Uniphase                      Kopin Corporation
  Lockheed Martin                 Lucent Technologies               Microchip Technology
  NASA                            Nova Crystals                     Osram
  Raytheon                        Schumacher                        SemiTool
  Sensors Unlimited               Silicon Valley Group Inc.         Thermco Systems
  Veeco
  </TABLE>

  In addition, CVD's customers include many prominent universities as follows:

  <TABLE>
  <C>                             <C>                               <C>
  Australian National University  Carnegie Mellon University        Case Western Reserve University
  Cornell University              Louisiana Tech. University        Pennsylvania State University
  Princeton University            Rensselaer Polytechnic Institute  Virginia Polytechnic Institute
  University of Albany            University of Illinois            University of California at Santa Barbara
  University of Maryland          University of Rochester           University of Wisconsin
  Yale University
  </TABLE>

  FOREIGN  OPERATIONS
  The Company's revenues derived from foreign exports were 3% and 12% in 2000
  and 1999 respectively.

  MANUFACTURING MATERIALS AND SUPPLIES
  The Company does not manufacture many components used in producing the
  Company's products.  They are purchased from unrelated third-party
  manufacturers of such equipment.  The Company has no supply contracts
  covering these components. The Company is not dependent on a principal or
  major supplier and alternate suppliers are available.  The Company does not
  use a large amount of raw or difficult to obtain materials that could cause
  a problem in production of our equipment.

  The Company has it's own fully equipped machine shop to fabricate in house,
  the most complex designed parts of our equipment. The Company recently
  purchased CNC machines for the machine shop, thus dramatically increasing
  efficiencies while significantly reducing costs in production. Similarly,
  the Company's own Quartz shop is capable of meeting our quartzware needs.

  Quality control is a fundamental critical component in our processes.
  Materials procured on the outside and/or manufactured internally undergo a
  rigorous quality control process to ensure that the parts meet or exceed the
  most stringent specifications.

  All equipment, upon final assembly, undergoes a final series of complete
  testing to ensure product performance.
  <PAGE> 7
  ORDER BACKLOG
  As of December 31, 2000 the Company's order backlog was approximately
  $5,508,802 compared to approximately $1,317,522 on December 31,1999.
  Included in the backlog are all accepted customer purchase orders. Order
  backlog is usually a reasonable management tool to indicate expected
  revenues and projected profits, however, it does not provide an assurance of
  future achievement or profits as order cancellations or delays are possible.

  EMPLOYEES
  As of December 31, 2000, the Company employed 69 full time personnel and 4
  part time personnel of which 31 were in manufacturing, 13 in engineering
  (including research and development and efforts related to product
  improvement), 9 in field service, 4 in marketing and 16 in general
  management and administration.

  The Company is not party to any collective bargaining agreement and has had
  no work stoppages.  The Company believes that its employee relations are
  good.

  INSURANCE
  Because the Company's products are used in connection with explosive,
  flammable, corrosive and toxic gases, there are potential exposures to
  personnel injury as well as property damage, particularly if operated
  without regard to the design limits of the systems and components.

  The Company endeavors to minimize its product liability exposure by
  engineering safety devices for its products, carefully monitoring incidents
  involving its products to determine areas where safety improvements may be
  made, and training programs in connection with its products.

  The Company believes that their insurance coverage is adequate. The
  following types of insurance coverage is carried by the Company:
       * Product liability
       * Property Contents
       * General Liability
       * Workers Compensation
       * Transportation
       * Directors and Officers
       * Employee Benefits Liability
       * Business Auto
       * Umbrella

  GOVERNMENT REGULATIONS
  The Company knows of no government requirements for approval for the sale of
  their products or services except in some export cases.  At that time we
  apply for the appropriate export license.  As of December 31, 2000, there
  was no pending government approvals.

  The Company knows of no existing or probable governmental regulations that
  would have a serious effect on our business.

  Cost associated with compliance to environmental laws has not been
  significant to the Company's business.
  <PAGE> 8
  FORWARD LOOKING STATEMENTS
  Certain statements in this Management's Discussion and Analysis of Financial
  Condition and Results of Operations constitute "forward looking statements"
  within the meaning of the Private Securities Litigation Reform Act of 1995.
  Such forward looking statements involve known and unknown risks,
  uncertainties and other factors which may cause the actual results,
  performance, or achievements of the Company to be materially different from
  any future results, performance, or achievements expressed or implied by
  such forward looking statements.  These forward looking statements were
  based on various factors and were derived utilizing numerous important
  assumptions and other important factors that could cause actual results to
  differ materially from those in the forward looking statements.  Important
  assumptions and other factors that could cause actual results to differ
  materially from those in the forward looking statements, include, but are
  not limited to: competition in the Company's existing and potential future
  product lines of business; the Company's ability to obtain financing on
  acceptable terms if and when needed; uncertainty as to the Company's future
  profitability, uncertainty as to the future profitability of acquired
  businesses or product lines, uncertainty as to any future expansion of the
  Company.  Other factors and assumptions not identified above were also
  involved in the derivation of these forward looking statements, and the
  failure of such assumptions to be realized as well as other factors may also
  cause actual results to differ materially from those projected.  The Company
  assumes no obligation to update these forward looking statements to reflect
  actual results, changes in assumptions or changes in other factors affecting
  such forward looking statements.


  ITEM 2.  DESCRIPTION OF PROPERTIES
  On June 1, 1991, the Company relocated its operations to its present
  location in Ronkonkoma, New York, a 20,000 square foot facility.  The
  Company signed a 5-year lease extension in 2000 that is scheduled to expire
  on July 31, 2006. Currently, the CVD division is located at this facility.
  Management feels that the property is adequately covered by insurance and is
  in good condition.

  On April 29,1999, the Company purchased for $1,400,000, a 22,000 square foot
  facility, situated on 5 acres of land located at 1117 Kings Highway,
  Saugerties, NY 12477. Currently, the SDC and ECS divisions are located at
  this facility. Management feels the property is adequately covered by
  insurance and is in good condition.


  ITEM 3.  LEGAL PROCEEDINGS
  On September 24,1999 the Company was named in a lawsuit. The nature of this
  legal proceeding focused on the intellectual property obtained during the
  purchase of assets of Stainless Design Corporation.  On November 10, 1999,
  the Company responded with a counterclaim.  It is legal counsel's belief
  that the lawsuit against CVD is without merit and that our counter-suit will
  be successful. The Company considers it's potential exposure to be
  negligible and covered by insurance.

  On  October 27, 1999, the Company initiated a lawsuit against a customer
  upon certain outstanding bills. The Company was awarded a judgement of
  $48,452 that covers the amount owed. However, the customer filed for
  bankruptcy protection and the customer's assets are in the process of being
  liquidated to help satisfy all creditors. We believe that CVD will be able
  to recover a portion of the outstanding judgement during 2001. This item is
  not considered to be material in nature.
  <PAGE> 9
  On January 26, 2000, the Company initiated a lawsuit against a customer upon
  certain outstanding bills. The customer responded with a counterclaim that
  legal counsel believes to be without merit. This action is still pending and
  is not considered to be material in nature.


  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  A shareholder's meeting was held in the third quarter of 2000 for the
  primary purpose of re-electing directors and approving the selection of our
  outside auditing firm.


  PART II

  ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND
            RELATED SECURITY HOLDER MATTERS

  PRINCIPAL MARKET
  The stock continues to be traded on the OTC Bulletin Board and reported in
  the OTC "Pink Sheets".

  STOCK PRICE INFORMATION
  The Company's common stock first began to be publicly traded on September
  11, 1985 and prior to that date the Company was privately held.  The
  following chart sets forth the high and low closing bid price of the Common
  Stock for the indicated periods.
  <TABLE>
  <CAPTION>
            Period                                 High        Low
  <C>                                            <C>         <C>

  January 1, 1999 through March 31, 1999         1.125       0.875
  April 1, 1999 through June 30, 1999            1.063       0.813
  July 1, 1999 through September 30, 1999        0.875       0.688
  October 1, 1999 through December 31, 1999      1.000       0.688
  January 1, 2000 through March 31, 2000         3.750       0.875
  April 1, 2000 through June 30, 2000            2.750       1.625
  July 1, 2000 through September 30, 2000        5.375       2.000
  October 1, 2000 through December 31, 2000      5.000       2.188
  <FN>
  The chart reflects inter-dealer prices, without retail mark-up, markdown,
  or commission and does not represent actual transactions.
  </TABLE>

  DIVIDENDS
  The Company paid no cash dividends during the period, nor does the Company
  expect to pay a cash dividend in the near future. The Company's policy has
  been to utilize cash in growing and expanding the business.

  APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK
  The number of holders of record of the Company's Common Stock as of March 1,
  2001 was approximately 400.
  <PAGE> 10

  ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

  2000 COMPARED TO 1999
  The difference in 2000 financial data when compared to 1999 is mainly
  attributed to the growth of the CVD and SDC divisions and the start-up of
  the ECS division. In 2001 we expect to see continued growth for all three
  divisions.

  New orders in 2000 totaled $9.5 million for CVD and $5.6 million for SDC and
  $0.2 million for ECS for a total of $15.3 million, which was 155% higher
  than 1999's level of new orders of $6.0 million.  The revenues produced a
  net profit of $928,679. Diluted net earnings per share were $.29 in 2000
  compared to $.05 in 1999.  In the past the Company has generally
  manufactured customized equipment.  In 1999 the Company worked on developing
  a line of standard products as a supplement to our custom systems and began
  shipping some of these products in 2000. In September 1997, the Company
  opened a Web site, www.cvdequipment.com to support the Company's marketing
  program.  In May 1999 the Company opened it's second web site,
  www.stainlessdesign.com and in November of 1999 a third wed site was added,
  www.equipmentconsulting.com.

  REVENUE
  An increase in volume resulted in revenue for the year being $9,504,181,
  which was a 79.5% increase from 1999 revenues of $5,295,859.

  The type of sales in 2000 were similar to those of 1999.  The Company
  shipped approximately 1% to government associated entities, 6% to major
  colleges and universities, 5% to research laboratories and another 88% was
  shipped to significant Fortune 500 industrial companies.

  COSTS AND EXPENSES
  In 2000, cost of revenues as a percentage of revenues decreased to 61% from
  65% in 1999. The main reason for the 4% decrease in cost of revenues as a
  percentage of sales was a decrease in payroll expenses. The Company averaged
  63 employees in 2000 compared to 51 employees in 1999. The actual cost of
  revenues increased from $3,453,307 in 1999 to $5,809,275 in 2000, an
  increase of $2,355,968. Of this increase, $1,497,618 is attributable to
  increased purchases of material and $662,721 to increases in salaries.

  Selling and shipping expense was lower by $186 in 2000 compared to 1999.
  This mainly resulted from a $96,150 increase in commissions, a $22,254
  increase in freight expense, which was offset by a decrease of $105,433 in
  salaries, and  $11,820 decrease in travel.

  General and Administrative expenses rose by $418,448 in 2000 compared to
  1999.  This resulted mainly from a $182,071 increase in salaries and
  employee benefits, an increase in depreciation of $31,025, an increase in
  legal fees of $112,070, an increase of $39,012 in shareholder's expense and
  bad debt of $55,096.

  Interest expense increased by $16,816 from 1999 to 2000 as the Company's
  average outstanding debt increased in 2000 as a result of a mortgage on the
  SDC facility.
  <PAGE> 11
  LIQUIDITY AND CAPITAL RESOURCES
  By year-end 2000, the Company's cash position increased to $600,621 from
  $91,714 at the beginning of the year. During year 2000, the Company sold the
  remaining $330,500 of securities it held at the end of 1999.

  In 2000, accounts receivable net of the allowance increased to $2,002,540
  from $1,019,771 in 1999 while inventory decreased to $454,898 from $713,762.
  The increase in receivables from 2000 to 1999 is associated with an increase
  in revenues.  The decrease in inventory in 2000 was mainly due to a decrease
  in work in process of $100,261 and a decrease in finished goods of $120,148.

  The net cash used in investing activities decreased $982,224 in 2000 mainly
  due to a reduction in capital expenditures.

  In 2001, we expect to have sufficient cash flow from operations and do not
  anticipate the need to raise additional funds.

  1999 COMPARED TO 1998
  In general, there is a material difference in the financial data from 1999
  compared to 1998. For the most part the significant differences are
  attributed to the addition of Stainless Design Concepts. Furthermore, we
  expect to see continued improvements as a result of Stainless Design
  Concepts, as well as the addition of Equipment Consulting Services.
  New orders in 1999 totaled $2.7 million for CVD and $3.3 million for SDC or
  a total of $6.0 million, which was 185.7% higher than 1998's level of $2.1
  million.  The revenues produced a net profit of $160,541. Diluted net
  earnings per share were $.05 in 1999 compared to $.03 in 1998.  In the past
  the Company has generally manufactured customized equipment.  In 1999 the
  Company worked on developing a line of standard products as a supplement to
  our custom systems. Three of the four products were introduced in January
  1999. In September 1997, the Company opened a Web site, www.cvdequipment.com
  to support the Company's marketing program.  In May 1999 the Company opened
  it's second web site, www.stainlessdesign.com and in November of 1999 a
  third wed site was added, www.equipmentconsulting.com.

  REVENUE
  An increase in volume resulted in revenue for the year being $5,295,859,
  which was a 74.4% increase from 1998 revenues of $3,037,259.

  The type of sales in 1999 was similar to those of 1998.  The Company shipped
  approximately 4% to government associated entities, 15% to major colleges
  and universities, 4% to research laboratories and another 77% was shipped to
  significant Fortune 500 industrial companies.

  COSTS AND EXPENSES
  In 1999, cost of revenues as a percentage of revenues decreased to 65% from
  72% in 1998. The main reason for the 7% decrease in cost of revenues as a
  percentage of sales was a decrease in payroll expenses prior to the
  adjustment for SDC.  The Company averaged 51 employees in 1999 compared to
  35 employees in 1998. The actual cost of revenues increased from $2,171,796
  in 1998 to $3,453,307 in 1999. This increase of $1,281,511, $706,357 is
  attributable to increased purchases of material, a $90,959 increase in
  utilities, $45,540 increase in rent expense, an increase of $238,714 in
  salaries, and a $58,859 increase in depreciation.
  <PAGE> 12
  Selling and shipping expense was higher by $407,730 in 1999 compared to
  1998.  This mainly resulted from a $363,584 increase in salaries, a $25,840
  increase in travel and increases in freight expense of $11,629.

  General and Administrative expenses rose by $507,291 in 1999 compared to
  1998.  This resulted mainly from a $20,937 increase in insurance, a $342,425
  increase in salaries and employee benefits, an increase in consulting fees
  of $53,609, an increase in depreciation of $26,175, an increase in
  professional fees of $34,223, an increase in real estate taxes of $14,392,
  and a write off of bad debt of $22,410.

  Interest expense increased by $51,287 from 1998 to 1999 since the Company's
  average outstanding debt increased in 1999 as a result of it's mortgage of
  the SDC facility.

  LIQUIDITY AND CAPITAL RESOURCES
  By year-end 1999, the Company's cash position decreased to $91,714 from
  $127,489 at the beginning of the year.  However the Company purchased
  $1,000,000 in securities available for sale in 1998. The Company divested
  itself of $650,000 in these securities during 1999. Of this, $500,000 was
  used for the purchase of the Saugerties facility.

  In 1999, accounts receivable increased to $1,019,771 from $347,126 in 1998
  while inventory increased to $713,762 from $422,280. The increase in
  receivables from 1999 to 1998 is associated with an increase in revenues.
  The increase in inventory in 1999 was mainly due to the purchase of
  inventory to fill customer orders and the work in process of $286,000.

  The net cash used in investing activities increased $39,308 in 1999 mainly
  due to capital expenditures.

  In 2000, we expect to have sufficient cash flow from operations and do not
  anticipate the need to raise additional funds.


  ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  The information called for by ITEM 7 is incorporated by reference in ITEM
  13.

  <PAGE> 13  / F-1



                           CVD EQUIPMENT CORPORATION
                                AND SUBSIDIARIES


                       CONSOLIDATED FINANCIAL STATEMENTS

                               FORM 10-KSB ITEM 7

                     Years ended December 31, 2000 and 1999

























  <PAGE> 14  / F-2
  <TABLE>
  <CAPTION>
                    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                     Page No.
  <S>                                                                <S>

  INDEPENDENT AUDITORS' REPORT ......................................  F-3


  FINANCIAL STATEMENTS:

  Consolidated balance sheets as of December 31, 2000 and 1999.......  F-4

  Consolidated statements of income and comprehensive income
       for the years ended December 31, 2000 and 1999................  F-5

  Consolidated statements of stockholders' equity for the years ended
       December 31, 2000 and 1999....................................  F-6

  Consolidated statements of cash flows for the years ended
       December 31, 2000 and 1999....................................  F-7

  Notes to consolidated financial statements.........................  F-8


  </TABLE>













  <PAGE> 15  / F-3
  F-3

  A L B R E C H T ,  V I G G I A N O ,  Z U R E C K
          &  C O M P A N Y ,  P . C .
                                                 CERTIFIED PUBLIC ACCOUNTANTS
                                                 25 SUFFOLK COURT
                                                 HAUPPAUGE, NY  11788
                                                 (631) 434-9500


                          INDEPENDENT AUDITORS' REPORT


  To the Board of Directors and Stockholders
  CVD Equipment Corporation
  Ronkonkoma, New York


  We have audited the accompanying consolidated balance sheets of CVD
  Equipment Corporation and Subsidiaries (the Company) as of December 31, 2000
  and 1999, and the related consolidated statements of income and
  comprehensive income, stockholders' equity, and cash flows for the years
  then ended.  These financial statements are the responsibility of the
  Company's management.  Our responsibility is to express an opinion on these
  financial statements based on our audits.

  We conducted our audits in accordance with generally accepted auditing
  standards.  Those standards require that we plan and perform the audit to
  obtain reasonable assurance about whether the financial statements are free
  of material misstatement.  An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and
  significant estimates made by management, as well as evaluating the overall
  financial statement presentation.  We believe that our audits provide a
  reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
  present fairly, in all material respects, the financial position of CVD
  Equipment Corporation and Subsidiaries as of December 31, 2000 and 1999 and
  the results of its operations and its cash flows for the years then ended,
  in conformity with generally accepted accounting principles.



  /s/ Albrecht, Viggiano, Zureck & Co.

  Hauppauge, New York
  March 10, 2001

  <PAGE> 16 / F-4
  F-4
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999

                                                                     2000            1999
                                                                 ------------    ------------
  <S>                                                            <C>             <C>
  ASSETS
  Current Assets
    Cash and cash equivalents                                    $   600,621     $    91,714
    Accounts receivable, net                                       2,002,540       1,019,771
    Costs and estimated earnings in excess of billings
      on uncompleted contracts                                     1,483,459         490,214
    Securities available-for-sale                                      -0-           297,000
    Inventories                                                      454,898         713,762
    Deferred income taxes                                              -0-            17,490
    Prepaid income taxes                                               -0-            12,812
    Other current assets                                              32,155          39,387
                                                                 ------------    ------------
                                            Total Current Assets   4,573,673       2,682,150

  Property, Plant and Equipment                                    2,258,512       2,204,644

  Deferred income Taxes                                              306,623         348,768

  Other Assets                                                       148,130         177,267
                                                                 ------------    ------------
                                                    Total Assets $ 7,286,938     $ 5,412,829
                                                                 ============    ============

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Accounts payable                                             $   607,777     $   171,138
    Accrued expenses                                                 685,839         284,134
    Billings in excess of costs on uncompleted contracts             146,613          67,504
    Current maturities of long-term debt                              18,135          16,936
                                                                 ------------    ------------
                                       Total Current Liabilities   1,458,364         539,712

  Long-Term Debt                                                     959,570         978,552
                                                                 ------------    ------------
                                                                   2,417,934       1,518,264
  Commitments and Contingencies
  Stockholders' Equity
    Common stock - $0.01 par value - 10,000,000 shares
      authorized; 3,000,750 and 2,918,750 shares issued
      and outstanding at December 31, 2000 and 1999, respectively     30,008          29,188
    Additional paid-in capital                                     2,848,420       2,838,990
    Retained earnings                                              1,990,576       1,061,897
    Accumulated other comprehensive income                             -0-           (35,510)
                                                                 ------------    ------------
                                      Total Stockholders' Equity   4,869,004       3,894,565
                                                                 ------------    ------------
                      Total Liabilities and Stockholders' Equity $ 7,286,938     $ 5,412,829
                                                                 ============    ============
  <FN>
  See notes to consolidated financial statements.
  </TABLE>
  <PAGE> 17 / F-5
  F-5
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                     Years ended December 31, 2000 and 1999

                                                                     2000            1999
                                                                 ------------    ------------
  <S>                                                            <C>             <C>
  Revenues
    Revenue on completed contracts                               $ 6,828,603     $ 4,069,873
    Revenue on uncompleted contracts                               2,675,578       1,225,986
                                                                 ------------    ------------
                                                  Total Revenues   9,504,181       5,295,859

  Costs of Revenues
    Costs on completed contracts                                   4,479,213       2,824,775
    Costs on uncompleted contracts                                 1,330,062         628,532
                                                                 ------------    ------------
                                         Total Costs of Revenues   5,809,275       3,453,307
                                                                 ------------    ------------
                                                    Gross Profit   3,694,906       1,842,552
                                                                 ------------    ------------
  Operating Expenses
    Selling and shipping                                             566,011         566,197
    General and administrative                                     1,726,415       1,307,967
                                                                 ------------    ------------
                                        Total Operating Expenses   2,292,426       1,874,164
                                                                 ------------    ------------
                                                                   1,402,480         (31,612)
                                                                 ------------    ------------
  Other Income (Expense)
    Interest income                                                   43,667          46,231
    Interest expense                                                 (70,492)        (53,676)
    Loss on sale of securities                                       (19,500)         (4,875)
    Other income                                                      18,014           2,130
                                                                 ------------    ------------
                                    Total Other Income (Expense)     (28,311)        (10,190)
                                                                 ------------    ------------
                                      Income (Loss) Before Taxes   1,374,169         (41,802)

  Income Tax Provision (Benefit)                                     445,490        (202,343)
                                                                 ------------    ------------
                                                      Net Income     928,679         160,541
  Other Comprehensive Income, Net of Tax
    Unrealized loss on securities                                      -0-           (47,945)
                                                                 ------------    ------------
                                            Comprehensive Income $   928,679     $   112,596
                                                                 ============    ============

  Earnings Per Share
    Basic                                                        $     0.31      $     0.06
    Diluted                                                      $     0.29      $     0.05

  Weighted Average Shares
    Basic                                                         2,963,972       2,918,750
    Diluted                                                       3,183,387       2,991,083
  <FN>
  See notes to consolidated financial statements.
  </TABLE>
  <PAGE> 18 / F-6
  F-6
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     Years ended December 31, 2000 and 1999

                                                                 Accumulated
                                                 Additional         Other                           Total
                                    Common          Paid-In      Comprehensive     Retained      Stockholders'
                                    Stock           Capital         Income         Earnings         Equity
                                 ------------    ------------    ------------    ------------    ------------
  <S>                            <C>             <C>             <C>             <C>             <C>
  Balance as of
    December 31, 1998            $    29,188     $ 2,784,060     $    12,435     $   901,356     $ 3,727,039

  Net income                                                                         160,541         160,541

  Other comprehensive
    income, net of tax:
      Unrealized loss on
        securities:

          Unrealized
            holding loss
             arising during
               the year                                              (51,211)                        (51,211)

          Less:
            reclassification
              adjustment for
                loss realized
                  in net income                                        3,266                           3,266
                                                                 ------------                    ------------
  Net unrealized loss                                                (47,945)                        (47,945)

  Total comprehensive
    income                                                                                           112,596

  Compensatory stock
    Options                                           54,930                                          54,930
                                 ------------    ------------    ------------    ------------    ------------
  Balance as of
    December 31, 1999            $    29,188     $ 2,838,990     $   (35,510)    $ 1,061,897     $ 3,894,565

  Net income                                                                         928,679         928,679

  Total comprehensive
    income                                                            35,510                          35,510

  Compensatory stock
    Options                              820           9,430                                          10,250
                                 ------------    ------------    ------------    ------------    ------------

  Balance as of
    December 31, 2000            $    30,008     $ 2,848,420     $     -0-       $ 1,990,576     $ 4,869,004
                                 ------------    ------------    ------------    ------------    ------------
  <FN>
  See notes to consolidated financial statements.
  </TABLE>
  <PAGE> 19 / F-7
  F-7
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Years ended December 31, 2000 and 1999

                                                                     2000            1999
                                                                 ------------    ------------
  <S>                                                            <C>             <C>
  Cash Flows from Operating Activities
    Net income                                                   $   928,679     $   160,541
    Adjustments to reconcile net income to net
      cash provided by operating activities:
        Deferred tax provision (benefit)                              42,145        (208,686)
        Depreciation and amortization                                269,450         232,748
        Compensatory stock options                                     -0-            54,930
        Bad debt provision                                            21,966          22,410
        Loss on sale of securities                                    19,500           4,875
        (Increase) decrease in:
          Accounts receivable                                     (1,004,735)       (695,055)
          Costs and estimated earnings in excess
            of billings on uncompleted contracts                    (993,245)        690,039
          Inventory                                                  258,864        (291,482)
          Prepaid income taxes                                        12,812          47,728
          Other current assets                                         7,232          (6,175)
          Other assets                                               (16,895)        (56,640)
        Increase (decrease) in:
          Accounts payable                                           436,639         103,982
          Accrued expenses                                           401,705         139,162
          Billings in excess of costs
            on uncompleted contracts                                  79,109          20,511
                                                                 ------------    ------------
                       Net Cash Provided By Operating Activities     463,226         218,888
                                                                 ------------    ------------

  Cash Flows from Investing Activities
    Capital expenditures                                            (277,286)     (1,574,135)
    Proceeds from sale of securities                                 330,500         645,125
                                                                 ------------    ------------
                Net Cash Provided (Used) In Investing Activities      53,214        (929,010)
                                                                 ------------    ------------
  Cash Flows from Financing Activities
    Proceeds from the exercise of options                             10,250           -0-
    Payments on short-term debt                                        -0-          (300,000)
    Proceeds from long-term debt                                       -0-           986,400
    Payments of long-term debt                                       (17,783)        (12,053)
                                                                 ------------    ------------
                Net Cash (Used) Provided By Financing Activities      (7,533)        674,347
                                                                 ------------    ------------
            Net Increase (Decrease) in Cash and Cash Equivalents     508,907         (35,775)

  Cash and Cash Equivalents at Beginning of Year                      91,714         127,489
                                                                 ------------    ------------
                        Cash and Cash Equivalents at End of Year $   600,621     $    91,714
                                                                 ============    ============
  <FN>
  See notes to consolidated financial statements.
  </TABLE>
  <PAGE> 20 / F-8
  F-8

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 1 - Summary of Significant Accounting Policies

  Description of Business

  CVD Equipment Corporation and Subsidiaries (the Company), a New York
  corporation, was organized and commenced operations in October 1982.
  Principal business activities include the manufacturing of chemical vapor
  deposition equipment, customized gas control systems, and hydrogen annealing
  and brazing furnaces, all of which are used primarily to produce
  semiconductors and other electronic components.  The Company engages in
  business throughout the United States and the world.

  Basis of Consolidation

  The consolidated financial statements include the accounts of CVD Equipment
  Corporation and its wholly-owned subsidiaries.  In December 1998, a new
  subsidiary, Stainless Design Concepts, Ltd., was formed as a New York
  corporation.  In April 1999, this subsidiary was merged into CVD Equipment
  Corporation.  The Company had one subsidiary, CVD Materials Corporation as
  of December 31, 2000.  All significant intercompany accounts and
  transactions have been eliminated in consolidation.

  Estimates

  The preparation of financial statements in conformity with generally
  accepted accounting principles requires management to make estimates and
  assumptions that affect the reported amounts of assets and liabilities and
  disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenues and expenses during the
  reporting period.  Actual results could differ from those estimates.
  Estimates are used when accounting for certain items such as long-term
  contracts, allowance for doubtful accounts, depreciation and amortization,
  taxes and warranties.

  Comprehensive Income

  In 1998, the Company adopted Statement of Financial Accounting Standards
  (SFAS) No. 130, Reporting Comprehensive Income.  Comprehensive income
  consists of net income and other comprehensive income; the latter includes
  unrealized gains and losses on available-for-sale securities and is
  presented in the Consolidated Statements of Stockholders' Equity.  The
  adoption of SFAS No. 130 had no effect on stockholders' equity.

  Inventories

  Inventories are valued at the lower of cost or market.  The Company uses a
  cost system which approximates the first-in, first-out method.

  <PAGE> 21 / F-9
  F-9

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 1 - Summary of Significant Accounting Policies (continued)

  Securities Available-For-Sale

  The Company evaluates its investment policies consistent with Financial
  Accounting Standards Board Statement (SFAS) No. 115, Accounting for Certain
  Investments in Debt and Equity Securities.  Accordingly, investment
  securities are classified as available-for-sale securities and carried at
  fair value, with temporary unrealized gains and losses reported in
  accumulated other comprehensive income as a separate component of
  stockholders' equity. Realized gains and losses on sales of securities
  classified as available-for-sale are determined using the specific
  identification method.

  Income Taxes

  The Company uses the asset and liability method of accounting for income
  taxes.  Under the asset and liability method, deferred tax assets and
  liabilities are recognized for the future tax consequences attributable to
  differences between the financial statement carrying amounts and the tax
  basis of existing assets and liabilities.  A valuation allowance is not
  considered necessary by management, since it is more likely than not that
  the deferred tax asset will be realized.  An allowance may be necessary in
  the future based on changes in economic conditions.

  Property, Plant and Equipment

  Property, plant and equipment are stated at cost less accumulated
  depreciation and amortization.  The cost of certain labor and overhead which
  is expected to benefit future periods, has been capitalized and amortized.
  Depreciation and amortization are computed by the straight-line method for
  financial purposes over the estimated useful lives of the assets.

  Software Capitalization

  In 1998, the Company adopted Statement of Position 98-1, Accounting for
  Costs of Computer Software Developed or Obtained for Internal Use.  This
  standard requires certain direct development costs associated with internal-
  use software to be capitalized including external direct costs of material
  and services and payroll costs for employees devoting time to the software
  projects.  These costs totaled $27,853 and $11,957 for the years ended
  December 31, 2000 and 1999, respectively, and are included in Other Assets.
  All software is amortized straight-line over three years.  Amortization
  expense related to software totaled $20,731 and $16,320 for the years ended
  December 31, 2000 and 1999, respectively.

  Intangible Assets

  In December 1998, the Company paid $15,000 for the right to use the trade
  name, "Stainless Design".  This amount is included in Other Assets and
  amortized straight-line over ten years.  Also in December 1998, the Company
  purchased engineering drawings for $25,000, which is included in Other
  Assets and amortized straight-line over 15 years.  As of December 31, 1999
  and 1998, the Company recorded in Other Assets a license agreement costing
  $10,000.  The license agreement is being amortized over its life of 5 years.
  Amortization expense recorded by the Company in 2000 and 1999 for these
  intangibles totaled $5,212.
  <PAGE> 22 / F-10
  F-10

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 1 - Summary of Significant Accounting Policies (continued)

  Revenue and Income Recognition

  The Company recognizes revenues and income using the percentage-of-
  completion method for complex major products while revenues from other
  products are recorded when such products are shipped.  Profits on contracts
  for complex major products are recorded on the basis of the Company's
  estimates of the percentage-of-completion of individual contracts,
  commencing when progress reaches a point where experience is sufficient to
  estimate final results with reasonable accuracy.  Under this method,
  revenues are recognized based on costs incurred to date compared with total
  estimated costs.

  The asset, "Costs and estimated earnings in excess of billings on
  uncompleted contracts," represents revenues recognized in excess of amounts
  billed.

  The liability, "Billings in excess of costs on uncompleted contracts,"
  represents amounts billed in excess of revenues earned.

  Bad Debts

  Accounts receivable are presented net of an allowance for doubtful accounts
  of $21,966 and $22,410 as of December 31, 2000 and 1999, respectively.  The
  allowance is based on prior experience and management's evaluation of the
  collectibility of accounts receivable.  Management believes the allowance is
  adequate.  However, further additions may be necessary based on changes in
  economic conditions.

  Product Warranty

  The Company records warranty costs as incurred and does not provide for
  possible future costs.  Management estimates such costs to be insignificant
  based on prior experience. However, it is reasonably possible that this
  estimate may change in the future.

  Advertising Costs

  The Company expenses advertising costs which are not expected to benefit
  future periods. Advertising expenses included in selling and shipping
  expenses were $1,938 and $3,796 in 2000 and 1999, respectively.  As of
  December 31, 2000 and 1999, the Company's capitalized advertising costs
  included in Other Assets totaled $62,681 and $59,566, respectively, to
  develop a web site and to print brochures expected to be used in the future.
  Capitalized advertising costs are amortized straight-line over three years.
  Amortization expense related to advertising costs totaled $19,855 and $9,554
  in 2000 and 1999, respectively.
  <PAGE> 23 / F-11
  F-11

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 1 - Summary of Significant Accounting Policies (continued)

  Earnings Per Share

  In February 1997, the Financial Accounting Standards Board issued SFAS No.
  128, Earnings per Share.  This pronouncement requires the reporting of two
  net income per share figures: basic net income per share and diluted net
  income per share.  Basic net income is calculated by dividing net income by
  the weighted-average number of common shares outstanding during the period.
  Diluted net income per share is computed by dividing net income by the sum
  of the weighted-average number of common shares outstanding during the
  period plus the dilutive effect of shares issuable through stock options.

  A reconciliation of the weighted-average number of common shares outstanding
  used in the calculations of basic and diluted earnings per share follows.
  <TABLE>
  <CAPTION>
                                             2000                              1999
                                     Basic         Dilutive            Basic         Dilutive
                                 ------------    ------------      ------------    ------------
  <S>                            <C>             <C>               <C>             <C>
  Weighted-average number of
    common shares outstanding      2,963,972       2,963,972         2,918,750       2,918,750
                                 ============                      ============

  Dilutive options to purchase
    common shares outstanding                        219,802                            72,333
                                                 ------------                      ------------
                                                   3,183,387                         2,991,083
                                                 ============                      ============
  </TABLE>
  The effects of 52,500 options granted in 1999 at an exercise price $1.00
  were not included in the computation of diluted earnings per share for the
  year ended December 31, 1999 because they are anti-dilutive.  The effects of
  3,500 options granted in 2000 at an exercise price of $3.25 were not
  included in the computation of diluted earnings per share for the year ended
  December 31, 2000 because they are anti-dilutive.

  Cash and Cash Equivalents

  The Company considers all highly liquid financial instruments purchased with
  a maturity of three months or less to be cash equivalents.

  The Company places most of temporary cash investments with one financial
  institution and normally exceeds the FDIC limit.  The Company has not
  experienced any losses to date resulting from this policy.

  Fair Value of Financial Instruments

  The carrying amounts of financial instruments including cash and cash
  equivalents, accounts receivable, other assets, accounts payable and accrued
  expenses, approximate fair value due to the relatively short maturity of
  these instruments.  The fair value of securities available-for-sale is
  estimated based on quoted market prices.  The carrying value of long-term
  debt approximates fair value based on borrowing rates currently available
  for loans with similar terms and maturities.
  <PAGE> 24 / F-12
  F-12
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 1 - Summary of Significant Accounting Policies (continued)

  Stock-Based Compensation

  The Company accounts for stock options as prescribed by Accounting
  Principles Board Opinion No. 25 and includes pro forma information in the
  stock-based compensation footnote, as permitted by Financial Accounting
  Standards Board Statement No. 123, Accounting for Stock-Based Compensation
  ("SFAS 123").  Accordingly, no compensation cost is recognized for stock
  options granted in 2000 and 1999 since the option exercise price is not less
  than the market price of the underlying stock on the date of grant.  In
  1999, compensation cost is recognized for stock options granted to Directors
  before December 15, 1998 based upon the fair market value of the options
  granted.  In 1999, compensation cost is also recognized for stock options
  granted to the President before December 15, 1998 at an exercise price less
  than the market price of the underlying stock on the date of the grant.

  <TABLE>
  <CAPTION>
  Note 2- Supplemental Cash Flow Information
                                                              2000            1999
                                                          ------------    ------------
  <S>                                                     <C>             <C>
  Cash paid (received) during the year for:
    Income taxes, net of refunds                          $      (794)    $   (41,384)
    Interest                                                   70,492           9,682

  Noncash investing activities:
    Unrealized gains (losses) on securities, net of tax   $     -0-       $   (47,945)
  </TABLE>
  <TABLE>
  <CAPTION>
  Note 3 - Uncompleted Contracts

  Costs, estimated earnings, and billings on uncompleted contracts are summarized as follows:
                                                              2000            1999
                                                          ------------    ------------
  <S>                                                     <C>             <C>
      Costs incurred on uncompleted contracts             $ 1,330,062     $   628,532
      Estimated earnings                                    1,633,470         606,011
                                                          ------------    ------------
                                                            2,963,532       1,234,543
      Billings to date                                     (1,626,686)       (811,833)
                                                          ------------    ------------
                                                          $ 1,336,846     $   422,710
      Included in accompanying balance sheets
        under the following captions:

        Costs and estimated earnings in excess
          of billings on uncompleted contracts            $ 1,483,459     $   490,214
        Billings in excess of costs and estimated
          earnings on uncompleted contracts                  (146,613)        (67,504)
                                                          ------------    ------------
                                                          $ 1,336,846     $   422,710
                                                          ============    ============
  </TABLE>
  <PAGE> 25 F-13
  F-13
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999
  <TABLE>
  <CAPTION>
  Note 4 - Securities Available-For-Sale

  Securities available-for-sale consist of the following:
                                                              2000            1999
                                                          ------------    ------------
  <S>                                                     <C>             <C>
  Corporate preferred bonds:
    Maturing in 2038                                      $     -0-       $   350,000
    Cost                                                  $     -0-       $   350,000
                                                          ------------    ------------
        Fair value                                        $     -0-       $   297,000
  <FN>
  At December 31, 1999, corporate preferred bonds have been categorized as
  available-for-sale and stated at fair value.  The Company recorded an
  unrealized holding loss of $51,211 for the year December 31, 1999, which is
  shown net of a deferred tax asset of $17,490 in accumulated other
  comprehensive income.  All bonds were sold during 2000.
  </TABLE>
  <TABLE>
  <CAPTION>
  Note 5 - Inventory

  Inventories consist of the following:
                                                              2000            1999
                                                          ------------    ------------
  <S>                                                     <C>             <C>
    Raw materials                                         $    80,619     $   119,074
    Work-in-process                                           186,031         286,292
    Finished goods                                            188,248         308,396
                                                          ------------    ------------
                                                          $   454,898     $   713,762
                                                          ============    ============
  </TABLE>
  <TABLE>
  <CAPTION>
  Note 6 - Property, Plant and Equipment

  Major classes of property, plant and equipment consist of the following:
                                                              2000            1999
                                                          ------------    ------------
  <S>                                                     <C>             <C>
      Land                                                $    61,620     $    61,620
      Buildings                                             1,463,551       1,463,551
      Machinery and equipment                                 819,523         633,744
      Capitalized labor and overhead                          753,239         753,239
      Furniture and fixtures                                  157,472         156,283
      Computer equipment                                      149,001         108,136
      Transportation equipment                                 99,266          50,750
      Leasehold improvements                                   47,222          46,285
                                                          ------------    ------------
                                                            3,550,894       3,273,608
      Accumulated depreciation and amortization            (1,292,382)     (1,068,964)
                                                          ------------    ------------
                                                          $ 2,258,512     $ 2,204,644
                                                          ============    ============

      Depreciation and amortization expense               $   223,418     $   201,662
                                                          ============    ============
  </TABLE>
  <PAGE> 26 / F-14
  F-14
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 7 - Short-Term Borrowings

  The Company has a line of credit facility with a bank which allows the
  Company to borrow up to $500,000 until June 1, 2001.  Interest is payable on
  any unpaid principal balance at the bank's prime rate plus 0.75%.
  Borrowings are collateralized by the Company's assets.  As of December 31,
  2000 and 1999, no amounts were outstanding on this facility.
  <TABLE>
  <CAPTION>
  Note 8 - Long-Term Debt

  Long-term debt consists of the following:
                                                              2000            1999
                                                          ------------    ------------
  <S>                                                     <C>             <C>

  KIDCO REALTY CORP.
       $900,000 purchase money mortgage secured by real
       property, building and improvements in
       Saugerties, New York; payable in equal monthly
       installments of $5,988, including interest at 7%
       per annum; entire principal comes due on May 1,
       2009.
                                                          $   884,399     $   893,977

  THE DIME SAVINGS BANK
       $86,400 note payable secured by real property
       and condominium unit in Saugerties, New York;
       payable in equal monthly installments of $846,
       including interest at 8.29% per annum until
       August 2004, when interest converts to a fixed
       rate equal to the 5-year United States Treasury
       Bill rate plus 2.86%; final payment due August
       1, 2014.
                                                               82,112          85,198

  NISSAN MOTOR ACCEPTANCE CORP.
       Collateralized by a lien on the Company's
       automobile; payable in 60 monthly installments
       of $495 including interest of 5.9% per annum;
       final payment due February 5, 2003.
                                                               11,194          16,313
                                                          ------------    ------------
                                                              977,705         995,488
       Less:  Current maturities                               18,135          16,936
                                                          ------------    ------------
                                                          $   959,750     $   978,552
                                                          ============    ============

  Future maturities of long-term debt are as follows:
                    2001     $    18,135
                    2002          20,372
                    2003          16,768
                    2004          17,105
                    2005          18,403
        2006 to maturity         886,922
                             ------------
                             $   977,705
  </TABLE>

  <PAGE> 27 / F-15
  F-15
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999
  Note 9 - Income Taxes
  <TABLE>
  <CAPTION>

  The provision (benefit) for income taxes include the following:
                                                      2000            1999
                                                  ------------    ------------
  <S>                                             <C>             <C>
          Current:
              Federal                             $   375,268     $     5,265
              State                                    28,077           1,078
                                                  ------------    ------------
                          Total current provision     403,345           6,343
                                                  ------------    ------------
          Deferred:
              Federal                                  28,793         (17,176)
              State                                    13,352        (191,510)
                                                  ------------    ------------
               Total deferred provision (benefit)      42,145        (208,686)
                                                  ------------    ------------
                                                  $   445,490     $  (202,343)
                                                  ============    ============
  </TABLE>
  The Company has a state investment tax credit carryforward of $112,892 that
  may be offset against future state tax liabilities through the year 2015 and
  other state tax credits totaling $202,619 which may be carried forward
  indefinitely.

  <TABLE>
  <CAPTION>
  The difference between the provision for income taxes at the Company's
  effective income tax rate and the federal statutory rate of 34% is as
  follows:
                                                      2000            1999
                                                  ------------    ------------
  <S>                                             <C>             <C>
          Income taxes at statutory rate          $   467,217     $   (14,213)
          State taxes                                  21,512           1,635
          Investment tax credits and other            (43,239)       (189,765)
                                                  ------------    ------------
             Provision (Benefit) for Income Taxes $   445,490     $  (202,343)
                                                  ============    ============
  </TABLE>
  <TABLE>
  <CAPTION>
  The tax effects of temporary differences giving rise to significant portions
  of deferred taxes are as follows:
                                                      2000            1999
                                                  ------------    ------------
  <S>                                             <C>             <C>
          Allowance for doubtful accounts         $     8,566     $     4,482
          Inventory capitalization                     17,081          13,743
          Capital loss carryforward                     -0-             1,306
          Compensatory stock options                      523          10,986
          Depreciation and amortization               (35,058)         (2,124)
          Investment tax credit                       315,511         320,375
                                                  ------------    ------------
                               Deferred Tax Asset $   306,623     $   348,768
                                                  ============    ============
  </TABLE>
  <PAGE> 28 / F-16
  F-16
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 10 - Stock-Based Compensation

  On June 15, 1989, the Company instituted a non-qualified stock option plan
  (the "Plan").  In connection therewith, 700,000 shares of the Company's
  common stock are reserved for issuance pursuant to options that may be
  granted under the Plan through June 3, 2004.  On June 3, 1996, the Company
  issued 84,000 options which expire ten years from the date of grant.  None
  of these options were exercisable until June 3, 1999.  The option price was
  less than the fair market value per share on the date the 1996 options were
  granted.  On April 15, 1998, 140,000 options were granted to employees under
  this Plan. Options granted in 1998 vest straight-line over a four-year
  period following the date of grant and expire five years after the date of
  grant.  On July 16, 1999, 52,500 options were granted to employees under
  this Plan. Options granted in 1999 vest incrementally over a four-year
  period following the date of grant and expire seven years after the date of
  grant.  On February 2, 2000, 242,000 options were granted to employees under
  this plan.  On May 7, 2000 and August 8, 2000, a total of 80,000 options
  were granted to employees.  On October 26, 2000, 3,500 options were granted
  to employees.  All options vest over a four-year period.  All options
  granted in 2000 expire seven years after the date of grant.  The option
  price for options granted in 1999 and 2000 is an amount per share of not
  less than the fair market value per share on the date the option is granted.
  <TABLE>
  <CAPTION>
  A summary of stock option activity related to the Company's Plan is as follows:
                                    Beginning       Granted       Exercised       Canceled        Ending
                                     Balance         During         During         During        Balance
                                   Outstanding       Period         Period         Period      Outstanding    Exercisable
                                   -----------    -----------    -----------    -----------    -----------    -----------
  <S>                              <C>            <C>            <C>            <C>            <C>            <C>
  Year ended December 31, 1999
    Number of shares                  224,000         52,500          -0-           10,000        266,500        116,500
    Weighted average exercise price
      per share                    $    0.99      $    1.00      $    -0-       $    1.51      $    0.97      $    0.51
  Year ended December 31, 2000
    Number of shares                  266,500        325,500         82,000          -0-          510,000         72,250
    Weighted average exercise price
      per share                    $    0.97      $    0.67      $    0.125     $    -0-       $    1.65      $    1.43
  </TABLE>
  <TABLE>
  <CAPTION>
  The weighted-average per share fair value of the options granted during 2000
  and 1999 was estimated as $1.37 and $0.23, respectively, on the date of
  grant using the Black-Scholes option-pricing model with the following
  weighted-average assumptions:

                                          2000            1999
                                      ------------    ------------
      <S>                             <C>             <C>
      Risk-free interest rate           5.74-6.52%           5.50%
      Expected option life                 7 years         7 years
      Expected volatility                      80%             30%
      Expected dividend yield                   0%              0%
  </TABLE>
  <PAGE> 29 / F-17
  F-17

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 10 - Stock-Based Compensation (continued)
  <TABLE>
  <CAPTION>
  The following table summarizes information about the options at December 31, 2000:

                              Options Outstanding                            Options Exercisable
        ------------------------------------------------------------    ----------------------------
                                           Weighted        Weighted                       Weighted
                                           Average         Average                        Average
          Exercise         Number         Remaining      Exercisable       Number       Exercisable
           Price         Outstanding         Life           Price        Exercisable       Price
        -------------    ------------    ------------    -----------    ------------    ------------
        <C>              <C>             <C>             <C>            <C>             <C>
        $0.13 - $1.00        54,500       5.55 years     $   0.97            7,250      $    0.76
        $1.51 - $1.75       372,000       4.76 years     $   1.67           65,000      $    1.51
        $2.00 - $2.75        80,000       6.47 years     $   2.00            -0-        $    2.00
        $3.00 - $3.25         3,500       6.50 years     $   3.25            -0-        $    3.25
  </TABLE>
  <TABLE>
  <CAPTION>
  Had compensation expense for the Company's stock-based compensation plan
  been determined consistent with SFAS 123, net income and earnings per share
  would be decreased to the pro forma amounts indicated below:

                                              2000
                                          ------------
     <S>                                  <C>
      Net income
          As reported                     $   928,679
          Pro forma                           895,118

      Earnings per share - basic
          As reported                     $     0.31
          Pro forma                             0.30

      Earnings per share - diluted
          As reported                     $     0.29
          Pro forma                             0.28
  </TABLE>
  Note 11 - 401(k) Plan

  On August 1, 1998, the Company adopted a 401(k) Plan for the benefit of all
  eligible employees.  All employees as of the effective date of the 401(k)
  Plan became eligible.  An employee who became employed after August 1, 1998,
  would become a participant after three months of continuous service.

  Participants may elect to contribute from their compensation any amount up
  to the maximum deferral allowed by the Internal Revenue Code.  Employer
  contributions are optional.  During the year ended December 31, 2000 and
  1999, the Company incurred 401(k) administrative costs totaling $1,990 and
  $1,944, respectively.  No employer contribution has been made for 2000 and
  1999.

  <PAGE> 30 / F-18
  F-18
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 12 - Concentration of Credit Risk

  Significant Customers

  The Company's sales encompass markets wherein the demands of any one
  customer may vary greatly due to changes in technology.  In 2000 and 1999,
  the Company had one significant customer, which represented approximately
  10% and 13%, respectively, of sales and 71% of the total accounts receivable
  and costs and estimated earnings in excess of billings on uncompleted
  contracts at December 31, 1999.  The Company had a second significant
  customer, which represented approximately 10% of sales in 2000, and a
  different major customer which represented approximately 14% of sales in
  1999.  No one customer was considered significant to accounts receivable and
  costs and estimated earnings in excess of billings on uncompleted contracts
  at December 31, 2000.

  Export Sales

  Export sales to unaffiliated customers represented approximately 3% and 12%
  of sales for the years ended December 31, 2000 and 1999, respectively.
  Export sales in 2000 and 1999 were primarily to customers in Asia.  All
  contracts are denominated in U.S. dollars. The Company does not enter into
  any foreign exchange contracts.

  Note 13 - Related Party Transactions

  The general counsel for the Company is also a director.  The Company
  incurred legal fees for his professional services of approximately $26,000
  and $20,000 for the years ended December 31, 2000 and 1999, respectively.
  As of December 31, 2000 and 1999, the Company owed the general counsel
  $26,000 and $20,000, respectively.

  Note 14 - Segment Reporting

  In 1999, the Company adopted SFAS 131, Disclosures about Segments of an
  Enterprise and Related Information.  As a result, Stainless Design Concepts
  ("SDC"), which was a subsidiary of the Company as of December 31, 1998,
  operated as a segment of the Company as of December 31, 1999.  SDC is the
  Company's ultra-high purity manufacturing division in Saugerties, New York.
  In November 1999, a new division called Equipment Consulting Services (ECS)
  was formed.  Operations commenced in January 2000.  ECS is the Company's
  equipment refurbishing division located in Saugerties, New York.  The
  accounting policies of SDC and ECS are the same as those described in the
  summary of significant accounting policies (see Note 1).  The Company
  evaluates performance based on several factors, of which the primary
  financial measure is earnings before taxes.  The following table presents
  certain information regarding the Company's segments at December 31, 2000
  and for the year then ended:
  <TABLE>
  <CAPTION>
                                     CVD              SDC             ECS        Eliminations    Consolidated
                                 ------------    ------------    ------------    ------------    ------------
  <S>                            <C>             <C>             <C>             <C>             <C>
  Assets                         $ 5,881,800     $ 3,097,070     $   320,309     $(2,012,241)    $ 7,286,938
                                 ============    ============    ============    ============    ============
  Revenues                       $ 5,244,358     $ 4,396,850     $    99,545     $  (236,572)    $ 9,504,181
  Interest income                     41,350           2,317           -0-             -0-            43,667
  Interest expense                       988          69,504           -0-             -0-            70,492
  Depreciation and amortization      144,998         124,452           -0-             -0-           269,450
  Capital expenditures               205,191          72,095           -0-             -0-           277,286
  Pretax earnings (loss)           1,346,371         255,987        (228,189)          -0-         1,374,169
                                 ============    ============    ============    ============    ============
  </TABLE>
  <PAGE> 31 / F-19
  F-19
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2000 and 1999

  Note 15 - Commitments and Contingencies

  Leases

  The Company rents its headquarters and operations in Ronkonkoma, New York
  under a lease expiring on July 31, 2006.  Minimum future rental commitments
  are as follows:
  <TABLE>
                <S>                                   <C>
                Year ending December 31, 2001         $   137,588
                                         2002             144,000
                                         2003             145,800
                                         2004             150,170
                                         2005             154,665
                                   Thereafter              91,777
                                                      ------------
                                                      $   824,000
                                                      ============
  </TABLE>
  Rental expense under the above operating lease totaled $130,751 and $126,942
  for 2000 and 1999, respectively.

  <PAGE> 32 / S-1
  <TABLE>
  <CAPTION>
                   INDEX TO SUPPLEMENTARY FINANCIAL SCHEDULES

                                                                     Page No.
  <S>                                                                <S>

  Independent Auditors' Report on Supplementary Information            S-2


  Supplementary Financial Schedules:


          II.    Valuation and qualifying accounts                     S-3

         III.    Amounts receivable from related parties and
                   underwriters, promoters, and employees other
                   than related parties                                S-4

          IV.    Property, plant and equipment                         S-5

           V.    Accumulated depreciation and amortization
                   of property, plant and equipment                    S-6

          VI.    Supplementary income statement information            S-7

  </TABLE>
  <PAGE> 33 / S-2
  S-2
  A L B R E C H T ,  V I G G I A N O ,  Z U R E C K
          &  C O M P A N Y ,  P . C .
                                                 CERTIFIED PUBLIC ACCOUNTANTS
                                                 25 SUFFOLK COURT
                                                 HAUPPAUGE, NY  11788
                                                 (631) 434-9500

           INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTARY INFORMATION



  To the Board of Directors and Stockholders
  CVD Equipment Corporation
  Ronkonkoma, New York


  We have audited and reported separately herein on the consolidated financial
  statements of CVD Equipment Corporation and subsidiaries (the Company) as of
  and for the years ended December 31, 2000 and 1999.

  Our audits were made for the purpose of forming an opinion on the basic
  consolidated financial statements of the Company taken as a whole.  The
  supplementary information included in Form 10-KSB, Schedules II, III, IV, V
  and VI is presented for purposes of additional analysis and is not a
  required part of the basic consolidated financial statements.  Such
  information has been subjected to the auditing procedures applied in the
  audits of the basic consolidated financial statements and, in our opinion,
  is fairly stated in all material respects in relation to the basic
  consolidated financial statements taken as a whole.




  /s/ Albrecht, Viggiano, Zureck & Co.

  Hauppauge, New York
  March 10, 2001
  <PAGE> 34 / S-3
  S-3
  <TABLE>
  <CAPTION>

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                            FORM 10-KSB, SCHEDULE II
                       VALUATION AND QUALIFYING ACCOUNTS
                     Years ended December 31, 2000 and 1999


                                                                   Additions
                                                          ----------------------------
                                           Balance at     (1) Charged     (2) Charged                       Balance
                                           Beginning      to Costs and      to Other                         at End
         Deducted from Assets              of Period        Expenses        Accounts       Deductions      of Period
  ------------------------------------    ------------    ------------    ------------    ------------    ------------
  <S>                                     <C>             <C>             <C>             <C>             <C>
  Allowance for net unrealized gains
    (losses) on securities:
       Year ended December 31, 2000       $   (53,000)    $               $               $    53,000     $     -0-

       Year ended December 31, 1999            18,340           -0-             -0-           (71,340)        (53,000)

  Allowance for doubtful accounts:
       Year ended December 31, 2000            22,410                                            (444)         21,966

       Year ended December 31, 1999             -0-            22,410           -0-             -0-            22,410


  </TABLE>
  <PAGE> 35 / S-4
  S-4
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                           FORM 10-KSB, SCHEDULE III
           AMOUNTS RECEIVABLE FROM RELATED PARTIES AND UNDERWRITERS,
              PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
                     Years ended December 31, 2000 and 1999

               Col. A                        Col. B          Col. C                  Col. D                  Col. E
  ------------------------------------    ------------    ------------    ------------    ------------    ------------
                                                                                   Deductions
                                                                          ----------------------------
                                           Balance at                        (1)            (2)            Balance at
                                           Beginning                        Amounts        Amounts           End of
           Name of Debtor                  of Period       Additions       Collected      Written off        Period
  ------------------------------------    ------------    ------------    ------------    ------------    ------------
  <S>                                     <C>             <C>             <C>             <C>             <C>
    Year ended December 31, 2000          $     -0-       $     -0-       $     -0-       $     -0-       $     -0-

    Year ended December 31, 1999          $     -0-       $     -0-       $     -0-       $     -0-       $     -0-

  </TABLE>
  <PAGE> 36 / S-5
  S-5
  <TABLE>
  <CAPTION>

                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                            FORM 10-KSB, SCHEDULE IV
                         PROPERTY, PLANT AND EQUIPMENT
                     Years ended December 31, 2000 and 1999

               Col. A                        Col. B          Col. C          Col. D          Col. E
  ------------------------------------    ------------    ------------    ------------    ------------
                                           Balance at                        Other         Balance at
                                           Beginning       Additions       Changes -         End of
            Description                    of Period        at Cost       Add (Deduct)       Period
  ------------------------------------    ------------    ------------    ------------    ------------
  <S>                                     <C>             <C>             <C>             <C>
    2000:
      Land                                $    61,620                                     $    61,620
      Building                              1,463,551                                       1,463,551
      Machinery and equipment                 633,744     $   193,779     $    (8,000)        819,523
      Capitalized labor and overhead          753,239                                         753,239
      Furniture and fixtures                  156,283           1,189                         157,472
      Computer equipment                      108,136          40,865                         149,001
      Transportation equipment                 50,750          48,516                          99,266
      Leasehold improvements                   46,285             937                          47,222
                                          ------------    ------------    ------------    ------------
                                          $ 3,273,608     $   285,286     $    (8,000)    $ 3,550,894
                                          ============    ============    ============    ============

    1999:
      Land                                $     -0-       $    61,620                     $    61,620
      Building                                  -0-         1,463,551                       1,463,551
      Machinery and equipment                 636,880           1,164     $    (4,300)        633,744
      Capitalized labor and overhead        1,032,772                        (279,533)        753,239
      Furniture and fixtures                  152,216           4,067                         156,283
      Computer equipment                       90,655          17,481                         108,136
      Transportation equipment                 50,750                                          50,750
      Leasehold improvements                   15,733          30,552                          46,285
                                          ------------    ------------    ------------    ------------
                                          $ 1,979,006     $ 1,578,435     $  (283,833)    $ 3,273,608
                                          ============    ============    ============    ============

  </TABLE>
  <PAGE> 37 / S-6
  S-6
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                            FORM 10-KSB, SCHEDULE V
   ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
                     Years ended December 31, 2000 and 1999

               Col. A                        Col. B          Col. C          Col. D          Col. E
  ------------------------------------    ------------    ------------    ------------    ------------
                                                           Additions
                                           Balance at      Charged to        Other         Balance at
                                           Beginning       Costs and       Changes -         End of
            Description                    of Period        Expenses      Add (Deduct)       Period
  ------------------------------------    ------------    ------------    ------------    ------------
  <S>                                     <C>             <C>             <C>             <C>
    2000:
      Building                            $    18,764     $    37,527                     $    56,291
      Machinery, equipment and
        capitalized labor and overhead        798,222         140,861                         939,083
      Furniture and fixtures                  132,637           3,923                         136,560
      Computer equipment                       64,493          20,056                          84,549
      Transportation equipment                 37,654          16,817                          54,471
      Leasehold improvements                   17,194           4,234                          21,428
                                          ------------    ------------    ------------    ------------
                                          $ 1,068,964     $   223,418     $               $ 1,292,382
                                          ============    ============    ============    ============
    1999:
      Building                            $     -0-       $    18,764                     $    18,764
      Machinery, equipment and
        capitalized labor and overhead        927,577         150,178     $  (279,533)        798,222
      Furniture and fixtures                  128,913           3,724                         132,637
      Computer equipment                       48,415          16,078                          64,493
      Transportation equipment                 28,923           8,731                          37,654
      Leasehold improvements                   13,007           4,187                          17,194
                                          ------------    ------------    ------------    ------------
                                          $ 1,146,835     $   201,662     $  (279,533)    $ 1,068,964
                                          ============    ============    ============    ============
  </TABLE>
  <PAGE> 38 / S-7
  S-7
  <TABLE>
  <CAPTION>
                   CVD EQUIPMENT CORPORATION AND SUBSIDIARIES
                            FORM 10-KSB, SCHEDULE VI
                   SUPPLEMENTARY INCOME STATEMENT INFORMATION
                     Years ended December 31, 2000 and 1999


                    Col A.                               Col. B
       -------------------------------        -------------------------------
                                               Charges to Costs and Expenses
                                              -------------------------------
         Item                                      2000            1999
       --------                                ------------    ------------
  <S>                                          <C>             <C>
    1. Amortization of software, advertising
        costs and other intangible assets      $    46,032     $    31,086

  </TABLE>
  <PAGE> 39
                                    PART III
  ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
  <TABLE>
  <CAPTION>
  The following sets forth, with respect to each officer and/or director,
  his/her age, present position with the Company, principal occupation during
  the past five years, other directorships, if any, and the year he/she first
  became an officer and/or a director of the Company.
                                                                  Officer/
                                          Position with           Director
  Name of Officer/Director    Age         the Company              Since
  ------------------------   -----   -------------------------   ---------
  <S>                        <C>     <C>                         <C>
  Leonard A. Rosenbaum         55     President and                 1982
                                      Chief Executive Officer
  Alan H. Temple, Jr.          67     None                          1986
  Mitchell Drucker             52     Chief Financial Officer       1999
  Sharon Canese                40     Secretary                     1998
  Martin J. Teitelbaum         51     Assistant Secretary           1985
  Conrad Gunther               52     None                          2000
  </TABLE>

  Leonard A. Rosenbaum founded the Company in October 1982 and has been its
  President, Chief Executive Officer and a Director since that date.  From
  1971 until the time of his affiliation with the Company in 1982, Mr.
  Rosenbaum was President, a Director and principal stockholder of Nav-Tec
  Industries, a manufacturer of semiconductor processing equipment similar to
  the type of equipment presently manufactured by the Company.  Nav-Tec
  Industries suspended operations, as related to the type of equipment
  presently manufactured by the Company, in 1984.  From 1966 through 1971, Mr.
  Rosenbaum was employed by a division of General Instrument, a manufacturer
  of semiconductor materials and equipment.

  Alan H. Temple, Jr. has been President, since 1977, of Harrison Homes, Inc.
  Pittsford, NY, a building and consulting firm.

  Mitchell Drucker joined the Company on April 19,1999. Prior to joining the
  CVD, Mr. Drucker was General Manager of Infoserve Corporation for a period
  of 11 years. Mr. Drucker also held the position of Vice President of Bankers
  Trust Company from 1976-1984. In addition, Mr. Drucker has had a variety of
  engagements in the manufacturing and consulting arena.

  Sharon Canese joined the Company on September 11, 1991.  Prior to joining
  CVD, Mrs. Canese was Assistant Controller of Transcontrol Corporation for a
  period of four years.  Mrs. Canese has also held the position of Financial
  Analyst  of the Financial Planning Department at Eaton Corporation/AIL
  Division from 1983 to 1987.

  Martin J. Teitelbaum was a partner in the law firm of Guberman and
  Teitelbaum, Smithtown, New York from February 1977 through December 1987.
  From January 1988 to date, Mr. Teitelbaum has been principal attorney for
  the Law Offices of Martin J. Teitelbaum.  Mr. Teitelbaum became a director
  of the Company in 1985.  From September 23, 1986 to December 31, 1986 he
  served as Corporate Secretary and served again as Corporate Secretary from
  August 1997 to February 1998.  Since January 1, 1987 he has served as the
  Assistant Secretary.  Mr. Teitelbaum serves as General Counsel to the
  Company.

  Conrad Gunther was elected to the Board of Directors at the Annual meeting
  in 2000. Mr. Gunther is president of C J Gunther & Associates. He is also a
  Managing Director of the Allied Group. Mr. Gunther also held the position of
  EVP & COO of North Fork Bancorporation. In addition, Mr. Gunther previously
  held the position of EVP and Division Manager of European American Bancorp.
  <PAGE> 40
  All directors hold office until the next annual meeting of stockholders of
  the Company or until their successors are elected and qualify.

  The Board of Directors met three times in the year 2000.  Mr. Rosenbaum,
  Mr. Temple, Mrs. Canese, Mr. Teitelbaum and Mr. Gunther attended all
  meetings.

  ITEM 10.        EXECUTIVE COMPENSATION
  Remuneration
  The following table sets forth certain information as to each of the
  Company's most highly compensated executive officers whose cash compensation
  exceeded $100,000.
  <TABLE>
  <CAPTION>
  SUMMARY COMPENSATION TABLE
      Name and Principal                      Annual        Stock Options
        Position                   Year     Compensation       Granted
  ----------------------------    ------    ------------    -------------
  <S>                             <C>       <C>             <C>
   Leonard A. Rosenbaum            2000     $   170,434         10,000
   President and Chief             1999     $   163,742          -0-
   Executive Officer               1998     $   163,742          -0-
  </TABLE>
  The Company owns life insurance on the life of Leonard A. Rosenbaum in the
  amount of $2,000,000.  The Company is the sole beneficiary of said policy.

  In June 1989, the shareholders approved a non-qualified stock option plan
  covering key employees, officers and directors.  Options will be awarded by
  the Board of Directors or by a committee appointed by the board.

  Under the plan an aggregate of 700,000 shares of common stock, $.01 par
  value of the Company are reserved for issuance or transfer upon the exercise
  of options which are granted.  Unless otherwise provided in the Option
  Agreement, an option granted under the plan shall become exercisable in 25%
  installments commencing one year from the anniversary date of the grant.
  The purchase price of the Common Stock under each option shall be no lower
  than the average bid price per share, calculated on a monthly basis, that
  the Common Stock (as reported by Nasdaq) traded during the calendar year
  immediately preceding the year in which the option is granted. The stock
  options generally expire five years after the date of grant.  The stock
  option plan shall terminate on June 30, 2004.

  In 1996 a total of 84,000 options were granted which did not vest until 1999
  at which time they vested 100%.  In 1998, 140,000 options were granted to
  employees other than executive officers or directors. The options vest at
  25% per year starting in 1999. In 1999 a total of 52,500 options were
  granted to employees other than executive officers or directors. The options
  vest at varying rates starting in 2000. In 2000 a total of 325,500 options
  were granted to employees, executive officers and directors. These options
  vest at varying rates. To date 82,250 options have been exercised under this
  plan.

  Other than the one non-qualified stock option plan, the Company has no
  pension or profit sharing plan or other contingent forms of remuneration.
  <PAGE> 41

  ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT

  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
  Set forth below is certain information concerning persons who are known by
  the Company to own beneficially more than 5% of any class of the Company's
  voting shares on March 1, 2001:
  <TABLE>
  <CAPTION>
                                          Amount & Nature
  Title Of     Name and Address Of         Of Beneficial     Percentage
  Class         Beneficial Owner             Ownership        of Class
  --------    -----------------------    -----------------    --------
  <S>         <S>                        <C>                  <C>
  Common      Leonard A. Rosenbaum         1,300,450  (1)       43.3%
  Stock       1881 Lakeland Avenue
              Ronkonkoma, NY 11779
  Common      Alan H. Temple Jr.            192,000              6.4%
  Stock       10 Harrison Circle
              Pittsford, NY 14534
  </TABLE>
  SECURITY OWNERSHIP OF MANAGEMENT
  The following table sets forth as of March 1, 2001, information concerning
  the beneficial ownership of each class of equity security by each director
  and all directors and officers of the Company as a group:
  <TABLE>
  <CAPTION>
                                          Amount & Nature
  Title Of     Name and Address Of         Of Beneficial     Percentage
  Class         Beneficial Owner             Ownership        of Class
  --------    -----------------------    -----------------    --------
  <S>         <S>                        <C>                  <C>
  Common      Leonard A. Rosenbaum         1,300,450  (1)       43.3%
  Stock       1881 Lakeland Avenue
              Ronkonkoma, NY 11779
  Common      Martin J. Teitelbaum            26,000  (2)         *
  Stock       329 Middle Country Road
              Smithtown, NY 11787
  Common      Alan H. Temple, Jr.            192,000  (3)        6.4%
  Stock       10 Harrison Circle
              Pittsford, NY 14534
  Common      Mitchell Drucker                23,900  (1)         *
  Stock       42 Blackmore Lane
              East Islip, NY 11730
  Common      All Directors and Officers   1,542,350            51.4%
  Stock       as a group (four persons)
  <FN>
  * Less than 1%
  (1) Except as noted, all shares are beneficially owned, and the sole voting
       and investment power is held by the persons named.
  (2) Shares are held by Mr. Teitelbaum's wife and beneficial ownership
       thereof is disclaimed by Mr. Teitelbaum.
  (3) Includes and aggregate of 21,000 shares held by Mr. Temple's wife, as to
       which he disclaims beneficial interest.
  </TABLE>

  CHANGES IN CONTROL
  The Company knows of no contractual arrangements that may at a subsequent
  date result in a change of Company control.

  ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  During 2000, the Company incurred approximately $26,000 in legal fees to
  Martin J. Teitelbaum a director of the Company and principal attorney for
  the law offices of Martin J. Teitelbaum.

  <PAGE> 42
                                    PART IV

  ITEM 13.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

  1.  Exhibits - The following Exhibits are filed as part of, or incorporated
            by reference into, this report on Form 10-KSB
      (3)   Articles of incorporation and by-laws
      (4)   Instruments defining the rights of holders, including indentures
      (9)   Voting trust agreement
      (10)  Material Contracts
      (11)  Statement re: Computation of per share earnings
      (13)  Annual or quarterly reports, Form 10-QSB
      (18)  Letter on change in accounting principles
      (19)  Previously unfiled documents
      (21)  Subsidiaries of registrant
      (22)  Published report regarding matters submitted to vote
      (23)  Consent of experts and counsel
      (24)  Power of Attorney
      (28)  Information from reports furnished to state insurance authorities
      (99)  Additional exhibits
            All items included by reference.

  2.  Financial Statements - The following consolidated financial statement of
            CVD Equipment Corporation and report of Independent Accountants
            are filed as part of this Report on Form 10-KSB and should be read
            in conjunction with the related notes thereto, included herein.

            The following financial statements of CVD Equipment Corporation
            are included in Part II, Item 7:

            Report of Independent Certified Public Accountants........  F-3
            Balance Sheets - December 31, 2000 and 1999...............  F-4
            Statements of Income and Comprehensive Income
                 Years Ended December 31, 2000 and 1999...............  F-5
            Statements of Stockholders Equity.........................  F-6
            Statements of Cash Flows
                 Years Ended December 31, 2000 and 1999...............  F-7
            Notes to the Financial Statements.......................  F-8-F-17

  3.  Financial Statement Schedules
            Report of Independent Certified Public Accountants........  S-2
            Schedules:
       II.  Valuation and Qualifying Accounts.........................  S-3
       III. Amounts receivable from Related Parties and Underwriters,
            Promoters, and Employees other than Related Parties,......  S-4
       IV.  Property, Plant and Equipment.............................  S-5
       V.   Accumulated depreciation and amortization of Property,
            Plant and Equipment.......................................  S-6
       VI.  Supplementary Income Statement Information................  S-7
            All other schedules are omitted because they are not applicable,
            or not required, or because information is included in the
            consolidated financial statements or notes thereto.

  <PAGE> 43

  A L B R E C H T ,  V I G G I A N O ,  Z U R E C K
          &  C O M P A N Y ,  P . C .
                                             CERTIFIED PUBLIC ACCOUNTANTS
                                                         25 SUFFOLK COURT
                                                     HAUPPAUGE, NY  11788
                                                           (631) 434-9500





  To the Board of Directors and Stockholders
  CVD Equipment Corporation



  We consent to the use of our reports included herein and to the
  reference to our firm under the heading "experts" in the Form 10-KSB.



  /s/ Albrecht, Viggiano, Zureck & Co.

  Hauppauge, New York
  March 27, 2001

  <PAGE> 44
                                   SIGNATURES


  Pursuant to the requirements of Section 13 or 15 (d) 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, this
  27th day of March 2001.

                                 CVD EQUIPMENT CORPORATION

                                 By: /s/ Leonard A. Rosenbaum
                                     Leonard A. Rosenbaum
                                     President and Chief Executive Officer


  Pursuant to the requirements of the Securities and Exchange Act of 1934,
  this report signed below by the following persons on behalf of the
  Registrant and in the capacities and on the dates indicated.


  /s/ Leonard A. Rosenbaum    President, Chief Executive Officer and Director
  Leonard A. Rosenbaum

  /s/ Alan H. Temple, Jr.     Director
  Alan H. Temple, Jr.


  /s/ Martin J. Teitelbaum    Director
  Martin J. Teitelbaum


  /s/ Mitchell Drucker        Chief Financial Officer
  Mitchell Drucker


  /s/ Sharon Canese           Secretary
  Sharon Canese


  /s/ Conrad Gunther          Director
  Conrad Gunther