================================================================================

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

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

                                    FORM 10-Q

         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 2000


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

             For the transition period from __________ to __________

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

                          Commission file number 1-8533


                             DRS Technologies, Inc.

         Delaware                                                 13-2632319
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                   5 Sylvan Way, Parsippany, New Jersey 07054
                                 (973) 898-1500

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


     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 and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                          Yes [X]                No [ ]

       As of February 9, 2001, 11,940,046 shares of DRS Technologies, Inc.
                Common Stock, $.01 par value, were outstanding.


================================================================================


<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

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

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q


<TABLE>
<CAPTION>


PART I.                  FINANCIAL INFORMATION                                                              PAGE NO.
<S>         <C>          <C>                                                                                   <C>
            ITEM 1.       Financial Statements

                          Condensed Consolidated Balance Sheets--December 31, 2000 and
                          March 31, 2000..................................................................       1

                          Condensed Consolidated Statements of Earnings--Three and Nine Months Ended
                          December 31, 2000 and 1999......................................................       2

                          Condensed Consolidated Statements of Cash Flows--Nine Months Ended December 31,
                          2000 and 1999...................................................................       3

                          Notes to Condensed Consolidated Financial Statements............................       4-9

             ITEM 2.      Management's Discussion and Analysis of Financial Condition and Results of
                          Operations......................................................................       10-17

             ITEM 3.      Quantitative and Qualitative Disclosures About Market Risk......................       18

PART II.                  OTHER INFORMATION

             ITEM 1.      Legal Proceedings...............................................................       19

             ITEM 6.      Exhibits and Reports on Form 8-K................................................       19

SIGNATURES                ................................................................................       20

</TABLE>



<PAGE>


                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>


                                                                      (IN THOUSANDS, EXCEPT SHARE DATA)
                                                                  DECEMBER 31, 2000        MARCH 31, 2000
                                                                  -----------------        --------------
                                                                    (UNAUDITED)
                                                  ASSETS
Current assets:

<S>                                                                    <C>                     <C>
     Cash and cash equivalents ..................................      $  8,570                $  3,778
     Accounts receivable, net ...................................        79,390                  80,894
     Inventories, net of progress payments ......................        76,857                  62,326
     Prepaid expenses and other current assets ..................         7,423                   6,326
     Net current assets of discontinued operations ..............             -                   5,309
                                                                       --------                --------
                 Total current assets ...........................       172,240                 158,633
                                                                       --------                --------
Property, plant and equipment, less accumulated
    depreciation and amortization of $37,091 and
    $28,033 at December 31, 2000 and March 31,
    2000, respectively ..........................................        34,070                  29,006
                                                                       --------                --------
Goodwill and related intangible assets, less
    accumulated amortization of $19,803 and
    $14,821 at December 31, 2000 and March 31,
    2000, respectively ..........................................       119,651                 125,321
                                                                       --------                --------
Deferred income taxes and other noncurrent assets ...............         5,164                   7,138
                                                                       --------                --------

                                                                       $331,125                $320,098
                                                                       ========                ========

                                   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Current installments of long-term debt .....................      $ 12,982                $  5,699
     Short-term bank debt .......................................             -                  17,781
     Accounts payable ...........................................        24,544                  28,295
     Accrued expenses and other current liabilities .............        94,867                  85,474
                                                                       --------                --------
                   Total current liabilities ....................       132,393                 137,249

Long-term debt, excluding current installments ..................        87,704                  97,695
Other noncurrent liabilities ....................................         9,653                   6,970
                                                                       --------                --------
                   Total liabilities ............................       229,750                 241,914
                                                                       --------                --------
Stockholders' equity:
Preferred Stock, no par value. Authorized
    2,000,000 shares; no shares issued at
    December 31, 2000 and March 31, 2000 ........................             -                       -
Common Stock, $.01 par value per share
     Authorized 20,000,000 shares; issued
     11,624,755 and 9,717,020 shares at
     December 31, 2000 and March 31, 2000, respectively .........           116                      97
Additional paid-in capital ......................................        65,778                  48,584
Retained earnings ...............................................        39,663                  32,047
Accumulated other comprehensive losses ..........................        (1,881)                    (86)
Treasury stock, at cost:
     440,939 shares of Common Stock at December 31, 2000
     and March 31, 2000 .........................................        (1,988)                 (1,988)

Unamortized restricted stock compensation .......................          (313)                   (470)
                                                                       --------                --------
     Net stockholders' equity ...................................       101,375                  78,184
                                                                       --------                --------
Commitments and contingencies ...................................      $331,125                $320,098
                                                                       ========                ========

</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements.

                                       1
<PAGE>




                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                      THREE MONTHS ENDED DECEMBER 31,       NINE MONTHS ENDED DECEMBER 31,
                                                      -------------------------------       ------------------------------
                                                            2000             1999               2000              1999
                                                            ----             ----               ----              ----
<S>                                                      <C>               <C>                <C>              <C>
Revenues                                                 $ 95,935          $103,570           $297,683         $ 277,469
Costs and expenses ..................................     (85,844)          (96,450)          (271,934)         (259,956)
                                                         --------          --------           --------         ---------
   Operating income .................................      10,091             7,120             25,749            17,513

Other income, net ...................................        (149)             (242)              (191)             (536)
Interest and related expenses .......................       2,618             3,424              9,262             9,503
                                                         --------          --------           --------         ---------
   Earnings from continuing operations before
      minority interests and income taxes ...........       7,622             3,938             16,678             8,546

Minority interests ..................................         375               385                970               955
                                                         --------          --------           --------         ---------
   Earnings from continuing operations before
      income taxes ..................................       7,247             3,553             15,708             7,591

Income taxes ........................................       3,768             1,433              8,092             3,063
                                                         --------          --------           --------         ---------

   Earnings from continuing operations ..............       3,479             2,120              7,616             4,528

Loss from discontinued operations, net of tax
   benefit of $149 and $312 .........................           -              (347)                 -              (727)
                                                         --------          --------           --------         ---------
   Net earnings .....................................    $  3,479          $  1,773           $  7,616         $   3,801
                                                         ========          ========           ========         =========
Earnings per share of common stock

   Basic earnings per share:
     Earnings from continuing operations ............    $   0.32          $   0.23           $   0.76         $    0.49
     Loss from discontinued operations, net of tax ..           -             (0.04)                 -             (0.08)
     Net earnings ...................................    $   0.32          $   0.19           $   0.76         $    0.41

   Diluted earnings per share:
     Earnings from continuing operations ............    $   0.28          $   0.21           $   0.66         $    0.46
     Loss from discontinued operations, net of tax ..           -             (0.03)                 -             (0.06)
     Net earnings ...................................    $   0.28          $   0.18           $   0.66         $    0.40

</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements.



                                       2
<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  (IN THOUSANDS)
                                                                          NINE MONTHS ENDED DECEMBER 31,
                                                                    ---------------------------------------
                                                                          2000                   1999
                                                                    ----------------       ----------------
<S>                                                                    <C>                     <C>
Cash flows from operating activities
     Net earnings ................................................     $  7,616                $  3,801

Adjustments to reconcile net earnings to cash
flows from operating activities:
     Net loss from discontinued operations .......................            -                     727
     Depreciation and amortization ...............................       12,456                  12,765
     Other, net ..................................................        1,311                   3,357

Changes in assets and liabilities, net of effects from
   business combinations:
     Decrease in accounts receivable .............................        4,613                   8,049
     (Increase) decrease in inventories ..........................      (11,406)                  2,435
     (Increase) decrease in prepaid expenses and other
        current assets ...........................................         (356)                  2,112
     Decrease in accounts payable                                        (4,739)                (16,767)
     Increase (decrease) in accrued expenses and other
        current liabilities ......................................       10,485                 (16,626)
     Increase (decrease) in customer advances ....................        1,813                  (9,857)
     Other, net ..................................................        1,007                     638
                                                                       --------                --------
     Net cash provided by (used in) operating activities of
        continuing operations ....................................       22,800                  (9,366)
     Net cash used in operating activities of discontinued
        operations ...............................................            -                    (407)
                                                                       --------                --------
     Net cash provided by (used in) operating activities .........       22,800                  (9,773)
                                                                       --------                --------
Cash flows from investing activities
     Capital expenditures ........................................      (10,339)                 (3,249)
     Payments pursuant to business combinations, net of
        cash acquired ............................................       (6,979)                 (8,656)
     Proceeds from sale of discontinued operations ...............        3,525                       -
     Other, net ..................................................          770                    (104)
                                                                       --------                --------
     Net cash used in investing activities of continuing
      operations .................................................      (13,023)                (12,009)
     Net cash used in investing activities of discontinued
      operations .................................................            -                    (152)
                                                                       --------                --------

     Net cash used in investing activities .......................      (13,023)                (12,161)
                                                                       --------                --------
Cash flows from financing activities
     Net borrowings of short-term debt ...........................            -                  11,542
     Net payments on long-term debt ..............................      (14,233)                 (3,715)

     Net proceeds from acquisition-related debt ..................        7,000                   8,000
     Other, net ..................................................          654                    (682)
                                                                       --------                --------
     Net cash (used in) provided by financing activities .........       (6,579)                 15,145
                                                                       --------                --------
Effect of exchange rates on cash and cash equivalents ............        1,594                    (453)
                                                                       --------                --------
Net increase (decrease) in cash and cash equivalents .............        4,792                  (7,242)
Cash and cash equivalents, beginning of period ...................        3,778                  10,031
                                                                       --------                --------
Cash and cash equivalents, end of period .........................     $  8,570                $  2,789
                                                                       ========                ========
</TABLE>



     See accompanying Notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


1. BASIS OF PRESENTATION

   In the opinion of management, the accompanying unaudited Condensed
   Consolidated Financial Statements of DRS Technologies, Inc. and Subsidiaries
   (the Company) contain all adjustments (consisting of only normal and
   recurring adjustments) necessary for the fair presentation of the Company's
   consolidated financial position as of December 31, 2000, and the results of
   operations for the three- and nine-month periods and cash flows for the
   nine-month periods ended December 31, 2000 and 1999. All significant
   intercompany balances and transactions have been eliminated. The results of
   operations for the three- and nine-month periods ended December 31, 2000 are
   not necessarily indicative of the results to be expected for the full year.

   On August 31, 2000, the Company completed the sale of its magnetic tape head
   business units located in St. Croix Falls, Wisconsin and Razlog, Bulgaria
   (see Note 2. Discontinued Operations). Accordingly, the Company has restated
   its financial statements for the periods ended December 31, 1999 to present
   the operating results of these business units as discontinued operations.

   The Company has reclassified its working capital obligations from short-term
   debt to long-term debt, excluding current installments, on the December 31,
   2000 Condensed Consolidated Balance Sheets to reflect the intent of the
   borrowings and their maturity date of October 1, 2003. Certain other items in
   the accompanying notes to the December 31, 1999 Condensed Consolidated
   Financial Statements have been reclassified to conform to the fiscal 2001
   presentation.

   Most of the Company's contracts are long-term in nature, spanning multiple
   years. The Company reviews cost performance and estimates to complete on
   these contracts at least quarterly and in many cases more frequently.
   Revisions in profit estimates are reflected in the period in which the facts,
   which require the revisions, become known. If the estimated cost to complete
   a contract changes from the previous estimate, the Company will record a
   cumulative profit adjustment. In the three- and nine-month periods ended
   December 31, 2000, the Company recorded cumulative profit adjustments of $5.2
   million and $6.3 million, respectively, on certain long-term contracts. The
   three- and nine-month periods ended December 31, 1999 include a cumulative
   profit adjustment of $2.9 million.

2. DISCONTINUED OPERATIONS

   On May 18, 2000, the Company's Board of Directors approved an agreement to
   sell the Company's magnetic tape head business units located in St. Croix
   Falls, Wisconsin, and Razlog, Bulgaria, and on August 31, 2000, the Company
   completed the sale. In fiscal 2000, in anticipation of the sale of the
   magnetic tape head business units, the Company recorded a $2.1 million
   charge, net of tax, on the disposal of these operations. Actual income from
   discontinued operations for the five months ended August 31, 2000 was
   $135,000 greater than estimated at March 31, 2000. Other costs associated
   with the disposal substantially offset the improvement in operating results
   and, as such, no adjustment to the loss on disposal of discontinued
   operations recorded at March 31, 2000 was required.

3. BUSINESS COMBINATIONS

   On June 14, 2000, a newly formed subsidiary of the Company acquired the
   assets of General Atronics Corporation for $7.5 million in cash and $4.0
   million in stock (approximately 355,000 shares of DRS Common Stock). The
   Company funded the cash portion of this acquisition through borrowings under
   its revolving line of credit. Located in Wyndmoor, Pennsylvania, and now
   operating as DRS Communications Company, LLC (DRS Communications Company),
   the company designs, develops and manufactures military data link components
   and systems, high-frequency communication modems, tactical and secure digital
   telephone components, and radar surveillance systems for U.S. and
   international militaries. DRS Communications Company is being managed as part
   of the DRS Flight Safety and Communications Group. The acquisition has been
   accounted for



                                       4
<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


   using the purchase method of accounting. The excess of costs over the
   estimated fair value of identifiable net assets acquired and the appraised
   value of certain identified intangible assets were approximately $2.6 million
   and $3.3 million, respectively, and are being amortized on a straight-line
   basis over twenty years and ten years, respectively. In connection with the
   acquisition, the Company incurred approximately $369,000 in transaction
   costs. Purchase price allocation has not yet been finalized, and actual
   purchase price allocation may differ from that used in these Condensed
   Consolidated Financial Statements. The results of the acquired business have
   been included in the Consolidated Financial Statements of the Company since
   the acquisition date.

   In the fourth quarter of fiscal 2000 the Company closed its Longmont,
   Colorado facility, which was acquired as part of the Company's acquisition of
   NAI Technologies, Inc. in the fourth quarter of fiscal 1999. Engineering and
   production performed at this facility were transferred to other DRS
   locations. Approximately $1.5 million was recorded in fiscal 2000, as an
   adjustment to acquisition cost, for costs incurred in connection with closing
   the facility. The following table reconciles the related liability at March
   31, 2000 to the liability as of December 31, 2000:


<TABLE>
<CAPTION>

                                                                               (IN THOUSANDS)
                                                         LIABILITY AT             UTILIZED              LIABILITY AT
                                                        MARCH 31, 2000           FISCAL 2001         DECEMBER 31, 2000
                                                        --------------           -----------         -----------------
<S>                                                         <C>                    <C>                      <C>
       Severance/Employee costs .......................     $1,195                 $1,195                   $ -
       Estimated lease commitments and
          related facility costs ......................        215                    215                     -
                                                            ------                 ------                   ----
       Total ..........................................     $1,410                 $1,410                   $ -
                                                            ======                 ======                   ====
</TABLE>

4. INVENTORIES

     Inventories are summarized as follows:
<TABLE>
<CAPTION>
                                                                             (IN THOUSANDS)
                                                       DECEMBER 31, 2000                       MARCH 31, 2000
                                                       -----------------                       --------------
<S>                                                          <C>                                  <C>
Work-in-process .......................................     $ 96,303                              $79,058
Raw material and finished
   goods ..............................................        6,804                               10,917
                                                            --------                              -------
                                                             103,107                               89,975
                                                            --------                              -------
Less progress payments ................................      (26,250)                             (27,649)
                                                            --------                              -------
Total .................................................     $ 76,857                              $62,326
                                                            ========                              =======
</TABLE>






   General and administrative costs included in work-in-process were
   approximately $18.6 million and $12.7 million at December 31, 2000 and March
   31, 2000, respectively. General and administrative expenses included in costs
   and expenses amounted to approximately $14.0 million and $18.4 million for
   the three-month periods ended December 31, 2000 and 1999, respectively, and
   approximately $50.7 million and $49.2 million for the nine-month periods then
   ended. Included in those amounts are expenditures for internal research and
   development amounting to approximately $2.0 million and $3.1 million for the
   fiscal quarters ended December 31, 2000 and 1999, respectively, and
   approximately $6.1 million and $6.9 million, respectively, for the nine-month
   periods then ended.



                                       5
<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


5. EARNINGS PER SHARE

   The following table presents a reconciliation of the numerators and
   denominators of basic and diluted earnings per share (EPS):

<TABLE>
<CAPTION>
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                         THREE MONTHS ENDED            NINE MONTHS ENDED
                                                             DECEMBER 31,                 DECEMBER 31,
                                                     ---------------------------   ---------------------------
                                                         2000           1999           2000           1999
                                                     ------------   ------------   ------------   ------------
<S>                                                    <C>            <C>            <C>            <C>
Basic EPS Computation
   Net earnings from continuing operations .......     $ 3,479        $ 2,120        $ 7,616        $ 4,528
   Net loss from discontinued operations, net of
      tax ........................................           -           (347)             -           (727)
                                                       -------        -------        -------        -------
   Net earnings ..................................     $ 3,479        $ 1,773        $ 7,616        $ 3,801
                                                       -------        -------        -------        -------
Weighted average common shares outstanding .......      10,734          9,276         10,030          9,266
                                                       -------        -------        -------        -------
Basic earnings (losses) per share:
   Net earnings from continuing operations .......       0.32         $  0.23        $  0.76        $  0.49
   Net loss from discontinued operations, net of
      tax ........................................           -          (0.04)             -          (0.08)
                                                       -------        -------        -------        -------
   Net earnings ..................................     $  0.32        $  0.19        $  0.76        $  0.41
                                                       =======        =======        =======        =======

Diluted EPS Computation
   Net earnings from continuing operations .......     $ 3,479        $ 2,120        $ 7,616        $ 4,528
   Interest and expenses related to convertible
      debentures .................................         124            284            560            849
                                                       -------        -------        -------        -------
   Adjusted net earnings from continuing
      operations .................................       3,603          2,404          8,176          5,377
   Net loss from discontinued operations, net of
      tax ........................................           -           (347)             -           (727)
                                                       -------        -------        -------        -------
   Adjusted net earnings .........................     $ 3,603        $ 2,057        $ 8,176        $ 4,650
                                                       -------        -------        -------        -------
Diluted common shares outstanding:
   Weighted average common shares outstanding ....      10,734          9,276         10,030          9,266
   Stock options and warrants.....................         825            146            604            151
   Convertible debentures ........................       1,140          2,162          1,702          2,162
                                                       -------        -------        -------        -------
Diluted common shares outstanding ................      12,699         11,584         12,336         11,579
                                                       -------        -------        -------        -------
Diluted earnings (losses) per share:
   Net earnings from continuing operations .......     $  0.28        $  0.21        $  0.66        $  0.46
   Net loss from discontinued operations, net of
      tax ........................................           -          (0.03)             -          (0.06)
                                                       -------        -------        -------        -------
   Net earnings ..................................     $  0.28        $  0.18        $  0.66        $  0.40
                                                       =======        =======        =======        =======
</TABLE>


     The Company's 12% Convertible Subordinated Promissory Notes (which were
     fully liquidated in the second quarter of fiscal 2000) were excluded from
     the computation of earnings per share for the year to date period ended
     December 31, 1999 as their inclusion would have been antidilutive.



                                       6
<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


6. COMPREHENSIVE EARNINGS

<TABLE>
<CAPTION>
                                                                            (IN THOUSANDS)
                                                         THREE MONTHS ENDED            NINE MONTHS ENDED
                                                             DECEMBER 31,                 DECEMBER 31,
                                                     ---------------------------   ---------------------------
                                                         2000           1999           2000           1999
                                                     ------------   ------------   ------------   ------------
<S>                                                     <C>            <C>            <C>            <C>
Comprehensive earnings
  Net earnings ..................................       $3,479         $1,773         $7,616         $3,801
  Other comprehensive (losses) earnings:
    Foreign currency translation adjustment .....          245            106         (1,795)         1,225
                                                        ------         ------         ------         ------
  Comprehensive earnings ........................       $3,724         $1,879         $5,821         $5,026
                                                        ======         ======         ======         ======
</TABLE>



7. RESTRUCTURING CHARGE

   During fiscal 2000, the Company recorded restructuring charges totaling
   approximately $2.2 million. The Company's restructuring initiatives impacted
   the Electro-Optical Systems Group (EOSG) and Flight Safety and Communications
   Group (FSCG) operating segments and DRS Corporate Headquarters. EOSG recorded
   a restructuring charge of approximately $831,000 for costs relating primarily
   to consolidating two facilities into one in Oakland, New Jersey, as of March
   31, 2000. FSCG recorded a restructuring charge of approximately $669,000 and
   $143,000 at its DRS Hadland Ltd. ("DRS Hadland") and DRS Precision Echo, Inc.
   operating units, respectively, for severance and other employee-related
   costs. The DRS Hadland restructuring charge was recorded in connection with
   the transition of the day-to-day management of DRS Hadland's operations from
   EOSG to FSCG in the second half of fiscal 2000. In addition, DRS Corporate
   Headquarters recorded a restructuring charge of approximately $560,000 for
   severance and other employee-related costs. Severance and other employee
   costs were recorded in connection with the termination of 13 employees. As of
   March 31, 2000, all terminations had occurred. In the third quarter of fiscal
   2001 the Company revised its estimate relating to its facility consolidation
   efforts in Oakland, New Jersey and recorded a charge of $525,000. At December
   31, 2000, the majority of the Severance/Employee costs liability shown below
   represents termination benefits to be paid in accordance with contractual
   terms over the next sixteen months. The following table reconciles the
   restructuring liability at March 31, 2000 to the restructuring liability as
   of December 31, 2000:


<TABLE>
<CAPTION>

                                                                                  (IN THOUSANDS)

                                                 LIABILITY AT           FISCAL 2001             UTILIZED              LIABILITY AT
                                                MARCH 31, 2000            CHARGES              FISCAL 2001         DECEMBER 31, 2000
                                                --------------         -------------           -----------         -----------------
<S>                                                  <C>                   <C>                     <C>                     <C>
     Estimated lease commitments
        and related facility costs ........         $  328                 $525                    $289                    $564
     Severance/Employee costs .............            690                   --                     332                     358
                                                    ------                 ----                    ----                    ----
     Total ................................         $1,018                 $525                    $621                    $922
                                                    ======                 ====                    ====                    ====

</TABLE>



                                       7
<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


8. OPERATING SEGMENTS

   DRS operates in three principal business segments on the basis of products
   and services offered. Each operating segment is comprised of separate and
   distinct businesses: the Electronic Systems Group (ESG), the Electro-Optical
   Systems Group (EOSG), and the Flight Safety and Communications Group (FSCG).
   All other operations are grouped in "Other." Information about the Company's
   operations in these segments for the fiscal quarters and nine-month periods
   ended December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>


                                                                                    (IN THOUSANDS)

                                                          ESG            EOSG              FSCG           Other            Total
                                                      ---------        ---------        ----------       ---------        ----------
<S>                                                   <C>              <C>              <C>              <C>              <C>
Quarter Ended December 31, 2000
      Total Revenues ..........................       $  41,912        $  36,974        $  16,778        $   2,320        $  97,984
        Intersegment Revenues .................       $    (257)       $     (19)       $  (1,773)       $    --          $  (2,049)
      External Revenues .......................       $  41,655        $  36,955        $  15,005        $   2,320        $  95,935
      Operating income (loss) .................       $   3,869        $   7,965        $    (987)       $    (756)       $  10,091
      Identifiable assets .....................       $  93,663        $ 134,076        $  81,503        $  21,883        $ 331,125
      Depreciation and amortization ...........       $     911        $   1,968        $     684        $     349        $   3,912
      Capital expenditures ....................       $     217        $   2,657        $      81        $     130        $   3,085

Quarter Ended December 31, 1999
      Total Revenues ..........................       $  54,240        $  34,403        $  13,326        $   2,157        $ 104,126
        Intersegment Revenues .................       $     (99)       $    (457)       $    --          $    --          $    (556)
      External  Revenues ......................       $  54,141        $  33,946        $  13,326        $   2,157        $ 103,570
      Operating income (loss) .................       $   4,617        $   3,707        $  (1,084)       $    (120)       $   7,120
      Identifiable assets .....................       $  98,641        $ 134,102        $  57,070        $  17,256        $ 307,069
      Depreciation and amortization ...........       $     923        $   1,777        $     828        $     674        $   4,202
      Capital expenditures ....................       $     348        $     516        $      66        $     268        $   1,198


<CAPTION>

                                                                                     (IN THOUSANDS)

                                                          ESG            EOSG              FSCG           Other            Total
                                                      ---------        ---------        ----------       ---------        ----------
<S>                                                   <C>              <C>              <C>              <C>              <C>
Nine Months Ended December 31, 2000
      Revenues ................................       $ 129,137        $ 116,321        $  47,196        $   7,138        $ 299,792
        Intersegment Revenues .................       $    (257)       $     (79)       $  (1,773)       $    --          $  (2,109)
      External Revenues .......................       $ 128,880        $ 116,242        $  45,423        $   7,138        $ 297,683
      Operating income ........................       $  10,131        $  16,917        $    (731)       $    (568)       $  25,749
      Identifiable assets .....................       $  93,663        $ 134,076        $  81,503        $  21,883        $ 331,125
      Depreciation and amortization ...........       $   2,701        $   5,822        $   2,482        $   1,451        $  12,456
      Capital expenditures ....................       $   1,731        $   6,694        $     771        $   1,143        $  10,339

Nine Months Ended December 31, 1999
      Revenues ................................       $ 139,568        $  96,349        $  36,415        $   6,332        $ 278,664
        Intersegment Revenues .................       $    (192)       $    (955)       $     (48)       $    --          $  (1,195)
      External  Revenues ......................       $ 139,376        $  95,394        $  36,367        $   6,332        $ 277,469
      Operating income (loss) .................       $  10,676        $   7,509        $     350        $  (1,022)       $  17,513
      Identifiable assets .....................       $  98,641        $ 134,102        $  57,070        $  17,256        $ 307,069
      Depreciation and amortization ...........       $   2,630        $   5,966        $   2,319        $   1,850        $  12,765
      Capital expenditures ....................       $   1,125        $   1,024        $     444        $     656        $   3,249


</TABLE>

                                       8


<PAGE>



                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)


9. CASH FLOW INFORMATION


                                           (IN THOUSANDS)
                                    NINE MONTHS ENDED DECEMBER 31,
                                    ------------------------------
                                      2000                  1999
                                    --------               -------
Cash paid for:
  Income taxes .................     $6,472               $ 6,474
  Interest .....................     $9,648               $10,197



     During the nine-months ended December 31, 2000, holders of approximately
     $13.0 million of the Company's 9% Senior Subordinated Convertible
     Debentures converted their Debentures into approximately 1.5 million shares
     of the Company's Common Stock. The Company recorded a non-cash charge of
     approximately $305,000 to interest expense in the second quarter of fiscal
     2001 in connection with certain conversions. On December 20, 2000, the
     Company called for redemption all of its 9% Senior Subordinated Convertible
     Debentures, due October 1, 2003. As of December 31, 2000, approximately
     $6.2 million of the Debentures were outstanding and classified as Current
     installments of long-term debt on the condensed consolidated balance sheet.
     The outstanding Debentures at December 31, 2000 were converted into
     approximately 696,000 shares of the Company's common stock in January 2001.

     In connection with the sale of the magnetic tape head business units, the
     Company received a $1.7 million promissory note from the buyer.

10. CONTINGENCIES

     The Company is party to various legal actions and claims arising in the
     ordinary course of its business. In Management's opinion, the Company has
     adequate legal defenses for each of the actions and claims and believes
     that their ultimate disposition will not have a material adverse effect on
     the Company's consolidated financial position or results of operations.

     In April and May 1998, subpoenas were issued to the Company by the United
     States Attorney for the Eastern District of New York seeking documents
     related to a governmental investigation of certain equipment manufactured
     by DRS Photronics, Inc. (Photronics). These subpoenas were issued in
     connection with United States v. Tress, a case involving a product
     substitution allegation against an employee of Photronics. On June 26,
     1998, the complaint against the employee was dismissed without prejudice.
     Although additional subpoenas were issued to the Company on August 12, 1999
     and May 10, 2000, to date, no claim has been made against the Company or
     Photronics. During the Government's investigation, until October 29, 1999,
     Photronics was unable to ship certain equipment related to the case,
     resulting in delays in the Company's recognition of revenues. On October
     29, 1999, Photronics received authorization to ship its first boresight
     system since the start of the investigation.

     The Company is currently involved in a dispute in arbitration with Spar
     Aerospace Limited (Spar) with respect to the working capital adjustment, if
     any, provided for in the purchase agreement between the Company and Spar
     dated as of September 19, 1997, pursuant to which the Company acquired,
     through certain of its subsidiaries, certain assets of Spar. The Company is
     also in a dispute with Raytheon Company (Raytheon) with respect to the
     working capital adjustment (not to exceed $7.0 million), if any, provided
     for in the purchase agreement between the Company and Raytheon dated as of
     July 28, 1998, pursuant to which the Company acquired, through certain
     subsidiaries, certain assets of Raytheon.


                                        9
<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS
         ----------------------------------------------------------------------

The following is Management's Discussion and Analysis of the Consolidated
Financial Condition and Results of Continuing operations of DRS Technologies,
Inc. and Subsidiaries (hereinafter, the Company or DRS) as of December 31, 2000
and for the three- and nine-month periods ended December 31, 2000 and 1999. This
discussion should be read in conjunction with the audited Consolidated Financial
Statements and related notes.

The following discussion and analysis contains certain forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements in this report are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Persons reading this report
are cautioned that risks and uncertainties are inherent to forward-looking
statements. Accordingly, the Company's actual results could differ materially
from those suggested by such forward-looking statements.

DISCONTINUED OPERATIONS

On May 18, 2000, the Company's Board of Directors approved an agreement to sell
the Company's magnetic tape head business units located in St. Croix Falls,
Wisconsin, and Razlog, Bulgaria, and on August 31, 2000, the Company completed
the sale. The sale of the magnetic tape head business represents a strategic
decision by the Company to focus its resources on its core businesses. The
Company has restated its financial statements for the three- and nine-month
periods ended December 31, 1999 to reflect these business units as discontinued
operations.

BUSINESS COMBINATIONS

On June 14, 2000, a newly formed subsidiary of the Company acquired the assets
of General Atronics Corporation for $7.5 million in cash and $4.0 million in
stock (approximately 355,000 shares of DRS Common Stock). The Company funded the
cash portion of this acquisition through borrowings under its revolving credit
facility. Located in Wyndmoor, Pennsylvania, and now operating as DRS
Communications Company, LLC (DRS Communications Company), the company designs,
develops and manufactures military data link components and systems,
high-frequency communication modems, tactical and secure digital telephone
components, and radar surveillance systems for U.S. and international
militaries. DRS Communications Company is being managed as part of the DRS
Flight Safety and Communications Group. The acquisition of DRS Communications
Company added approximately $25.9 million to the Company's backlog as of the
acquisition date. The acquisition has been accounted for using the purchase
method of accounting. The excess of costs over the estimated fair value of
identifiable net assets acquired, and the appraised value of certain identified
intangible assets were approximately $2.6 million and $3.3 million,
respectively, and are being amortized on a straight-line basis over twenty years
and ten years, respectively. In connection with the acquisition, the Company
incurred approximately $369,000 in transaction costs. Purchase price allocation
has not yet been finalized, and actual purchase price allocation may differ from
that used in these Condensed Consolidated Financial Statements. The results of
the acquired business have been included in the Consolidated Financial
Statements since the acquisition date.


                                       10
<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES


RESTRUCTURING CHARGE


During fiscal 2000, the Company recorded restructuring charges totaling
approximately $2.2 million. The Company's restructuring initiatives impacted the
Electro-Optical Systems Group (EOSG) and Flight Safety and Communications Group
(FSCG) operating segments and DRS Corporate Headquarters. EOSG recorded a
restructuring charge of approximately $831,000 for costs relating primarily to
consolidating two facilities into one in Oakland, New Jersey, as of March 31,
2000. FSCG recorded a restructuring charge of approximately $669,000 and
$143,000 at its DRS Hadland Ltd. ("DRS Hadland") and DRS Precision Echo, Inc.
operating units, respectively, for severance and other employee-related costs.
The DRS Hadland restructuring charge was recorded in connection with the
transition of the day-to-day management of DRS Hadland's operations from EOSG to
FSCG in the second half of fiscal 2000. In addition, DRS Corporate Headquarters
recorded a restructuring charge of approximately $560,000 for severance and
other employee-related costs. Severance and other employee costs were recorded
in connection with the termination of 13 employees. As of March 31, 2000, all
terminations had occurred. In the third quarter of fiscal 2001 the Company
revised its estimate relating to its facility consolidation efforts in Oakland,
New Jersey and recorded a charge of $525,000. At December 31, 2000, the majority
of the Severance/Employee costs liability represents approximately 16 months
of termination benefits to be paid in accordance with contractual obligations.
The following table reconciles the restructuring liability at March 31, 2000 to
the restructuring liability as of December 31, 2000:


<TABLE>
<CAPTION>

                                                                                  (IN THOUSANDS)
                                                 LIABILITY AT            FISCAL 2001               UTILIZED         LIABILITY AT
                                                MARCH 31, 2000             CHARGES               FISCAL 2001      DECEMBER 31, 2000
                                               ----------------          -----------             -----------      -----------------
       <S>                                         <C>                      <C>                      <C>                  <C>
       Estimated lease commitments
        and related facility costs ...........      $  328                   $525                    $289                 $564
       Severance/Employee costs ..............         690                     --                     332                  358
                                                   -------                   ----                    ----                 ----
       Total .................................     $ 1,018                   $525                    $621                 $922
                                                   =======                   ====                    ====                 ====

</TABLE>

      RESULTS OF OPERATIONS

      The Company's operating cycle is long-term and involves various types of
      production contracts and varying production delivery schedules.
      Accordingly, results of a particular quarter, or quarter-to-quarter
      comparisons of recorded revenues and earnings, may not be indicative of
      future operating results. The following comparative analysis should be
      viewed in this context.

      CONSOLIDATED SUMMARY

      Consolidated revenues for the three- and nine-month periods ended December
      31, 2000 decreased $7.6 million and increased $20.2 million, respectively,
      as compared with the corresponding prior-year periods. The decrease in
      revenues in third quarter of fiscal 2001 was due primarily to the timing
      of shipments of the Company's military display workstation products, a
      decrease in shipments of certain rugged computers and peripherals in
      Europe, decreased orders for high-speed cameras and temporarily delayed
      orders for certain mission data recording systems. The revenue growth in
      the year-to-date period ended December 31, 2000 was primarily attributable
      to increased shipments of the Company's second generation ground
      electro-optical sighting systems and infrared detectors, as well as
      increases in electro-optical contract manufacturing and engineering
      services for military display workstations. Operating income increased
      approximately 42% and 47% for the three- and nine-month periods ended
      December 31, 2000, respectively, as compared with the same periods in
      fiscal 2000. The increase in operating income in the third quarter was due
      to the impact of cumulative profit adjustments on several long-term
      contracts at the Company's Electro-Optical Systems Group, partially offset
      by certain charges at other operating segments. Most of the Company's
      contracts are long-term in nature, spanning multiple years. The Company
      reviews cost performance and estimates to complete on these contracts at
      least quarterly and in many cases more frequently. Revisions in profit
      estimates are reflected in the period in which the facts, which require
      the revisions, become known. If the estimated cost to complete a contract
      changes from the previous estimate, the Company will record a cumulative
      profit adjustment.

                                       11

<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES


      The increase in operating income in the year-to-date period ended December
      31, 2000, was substantially attributable to the overall increase in
      revenues, the net impact of the cumulative profit adjustment and charges,
      and lower operating expenses at certain operating units. Also favorably
      impacting revenue and operating income in fiscal 2001 was the inclusion of
      the operating results of the Company's fiscal 2001 acquisition of DRS
      Communications Company. See discussion of operating segments below for
      additional information.


      Interest and related expenses decreased approximately $806,000 and
      $241,000 for the three- and nine-month periods ended December 31, 2000,
      respectively, as compared with the corresponding prior-year periods. These
      decreases were primarily the result of the following: 33% and 13%
      decreases in average working capital borrowings outstanding during the
      three- and nine-month periods ended December 31, 2000, as compared with
      the corresponding prior-year periods; the favorable impact of the
      conversion of approximately $13.0 million of the Company's 9% Senior
      Subordinated Convertible Debentures (the Debentures) into approximately
      1.5 million shares of the Company's common stock. Partially offsetting the
      year-to-date decrease in interest expense is a non-cash charge of
      approximately $305,000 relating to the conversion of $8.7 million of the
      Debentures during the second quarter of fiscal 2001.

      On December 20, 2000, the Company announced its intention to redeem all of
      its 9% Senior Subordinated Convertible Debentures, due October 1, 2003. As
      of December 31, 2000, approximately $6.2 million of the Debentures were
      outstanding, all of which were converted into approximately 696,000 shares
      of the Company's common stock in January 2001.

      The provision for income taxes for the year-to-date period ended December
      31, 2000 reflected an annual estimated effective income tax rate of
      approximately 52%, versus 40% for fiscal 2000. The increase in the
      effective tax rate for fiscal 2001 was primarily due to the following: the
      continued improvement in domestic earnings, which are taxed at higher
      overall rates in comparison to the Company's foreign tax jurisdictions;
      losses in the Company's U.K. operations for which the benefit has not been
      recognized; the effect of non-deductible goodwill and the Company's
      expectation that certain domestic and foreign tax benefits recognized in
      fiscal 2000 will not be recurring in fiscal 2001. It is anticipated that
      the Company's effective tax rate will decline moderately in future years
      as the Company continues to grow and its U.K. operations return to
      profitability. Earnings before interest, income taxes, depreciation and
      amortization (EBITDA) for the three- and nine-month periods ended December
      31, 2000 were $13.8 million and $37.3 million, respectively, an increase
      of approximately 25% and 26% over the three- and nine-month periods ended
      December 31, 1999, respectively.

      OPERATING SEGMENTS

      DRS operates in three principal business segments on the basis of products
      and services offered. Each operating segment is comprised of separate and
      distinct businesses: the Electronic Systems Group (ESG), the
      Electro-Optical Systems Group (EOSG), and the Flight Safety and
      Communications Group (FSCG). All other operations are grouped in "Other."

      o    ESG is a leading provider of naval computer workstations used to
           process and display integrated combat information. ESG produces
           rugged computers and peripherals, surveillance, radar and tracking
           systems, acoustic signal processing and display equipment, and combat
           control systems for U.S. and international military organizations.
           ESG performs field service and depot level repairs for its products,
           as well as other manufacturers' systems, and also provides systems
           and software engineering support to the U.S. Navy for the testing of
           shipboard combat systems. ESG products are used on front-line
           platforms, including Aegis destroyers and cruisers, aircraft
           carriers, submarines and surveillance aircraft. ESG's products also
           are used in the U.S. Army's ongoing battlefield digitization
           programs. ESG markets directly to various U.S. Government agencies,
           including the intelligence community, and has teamed with leading
           corporations, such as General Dynamics and Lockheed Martin.

      o    EOSG produces systems and subsystems for infrared night vision and
           targeting products used in some of the U.S. Army's most important
           battlefield platforms, including the Abrams Main Battle Tank, Bradley
           Infantry Fighting Vehicle and the HMMWV scout vehicle. EOSG designs,
           manufactures and


                                       12

<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES


           markets products that allow operators to detect, identify and target
           objects based upon their infrared signatures, regardless of the
           ambient light level. This Group is also a leading designer and
           manufacturer of eye-safe laser range finders and multiple-platform
           weapons calibration systems for such diverse air platforms as the
           Apache attack helicopter and AC-130U gunship. EOSG is leveraging its
           technology base by expanding into related non-defense markets and
           manufactures electro-optical modules for a commercial device used in
           corrective laser eye surgery, as well as a digital retinal scanner
           system.

      o    FSCG is a leading manufacturer of deployable flight emergency or
           "black box" recording equipment. These complete emergency avionics
           systems combine the functionality of a crash locator beacon with a
           flight incident recorder for search, recovery and crash analysis.
           This Group uses advanced commercial technology in the design and
           manufacture of multi-sensor digital, analog and video data capture
           and recording products, as well as high-capacity data storage devices
           for harsh aerospace and defense environments. FSCG also manufactures
           shipboard communications and infrared laser warning and range finder
           displays for Canadian and other foreign navies and is a leading
           manufacturer of ultra high-speed digital imaging systems. FSCG is
           also the leading supplier of Link 11 Data Terminal Systems for NATO
           and allied international navies and manufactures and markets ship and
           ground surveillance radar and infrared imaging systems.

      o    Other includes the activities of the parent company, DRS Corporate
           Headquarters, DRS Ahead Technology, Inc. (DRS Ahead) and certain
           non-operating subsidiaries of the Company. DRS Ahead produces
           magnetic head components used in the manufacturing process of
           computer disk drives, which burnish and verify the quality of disk
           surfaces. DRS Ahead also services and manufactures video heads used
           in broadcast television equipment.


                                       13
<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

The following tables set forth, by operating segment, revenues, operating
income, and operating margin and the percentage increase or decrease of those
items as compared with the prior period:

<TABLE>
<CAPTION>

                                                             (IN THOUSANDS, EXCEPT FOR PERCENTAGES)

                                          THREE MONTHS ENDED       THREE MONTHS ENDED      NINE MONTHS ENDED       NINE MONTHS ENDED
                                             DECEMBER 31,           PERCENT CHANGES          DECEMBER 31,          PERCENT CHANGES
                                          ------------------       ------------------     -------------------      -----------------
                                          2000        1999           2000 vs. 1999         2000         1999          2000 vs. 1999
                                          ----        -----        ------------------     ------       ------      -----------------
<S>                                     <C>          <C>                <C>              <C>          <C>                <C>
ESG

External revenues .................     $41,655      $54,141            (23.1%)          $128,880     $139,376           (7.5%)

Operating income ..................     $ 3,869      $ 4,617            (16.2%)          $ 10,131     $ 10,676           (5.1%)

Operating margin ..................         9.3%         8.5%             8.9%                7.9%         7.7%           2.6%

EOSG

External revenues .................     $36,955      $33,946              8.9%           $116,242     $ 95,394           21.9%

Operating income ..................     $ 7,965      $ 3,707            114.9%           $ 16,917     $  7,509          125.3%

Operating margin ..................        21.6%        10.9%            97.4%               14.6%         7.9%          84.9%

FSCG

External revenues .................     $15,005      $13,326             12.6%           $ 45,423     $ 36,367           24.9%

Operating (loss) income ...........     $  (987)     $(1,084)             8.9%           $   (731)    $    350         (308.9%)

Operating margin ..................        (6.6%)       (8.1%)           19.1%               (1.6%)        1.0%        (267.2%)

OTHER

External revenues .................     $ 2,320      $ 2,157              7.6%           $  7,138     $  6,332           12.7%

Operating loss ....................     $  (756)     $  (120)          (530.0%)          $   (568)    $ (1,022)          44.4%

Operating margin ..................       (32.6%)       (5.6%)         (485.7%)              (8.0%)      (16.1%)         50.7%


</TABLE>
ESG: ESG's decrease in revenues for the three- and nine-month periods ended
December 31, 2000, as compared with the three- and nine-month periods ended
December 31, 1999, was due primarily to the timing of shipments of military
display workstation products and a decrease in shipments of certain rugged
computers and peripherals in the U.K. These decreases were partially offset by
increases in revenues from search and navigation radar systems and engineering
services for military display workstations. The decreases in operating income
and change in operating margin in the quarter and year-to-date periods ended
December 31, 2000, as compared to the corresponding prior periods, was driven by
the decrease in revenues and change in product mix.

EOSG: For the three- and nine-month periods ended December 31, 2000, revenues
increased by approximately $3.0 million and $20.8 million, respectively, as
compared with the three- and nine-month periods ended December 31, 1999. The
increases in revenues were driven by increased shipments of the Group's second
generation ground electro-optical sighting systems, infrared detectors and
boresighting systems, as well as increases in electro-optical contract
manufacturing. Operating income for the three- and nine-month periods ended
December 31, 2000 increased $4.3 million and $9.4 million, respectively, as
compared with the corresponding prior-year periods. These increases reflected
the favorable impact of $5.2 million and $6.3 million cumulative profit
adjustments for the three- and nine-month periods ended December 31, 2000,
respectively. Partially offsetting these net increases in operating income were
fiscal 2001 second- and third-quarter charges of approximately $880,000 for
revisions to "Estimates to Complete" on other long-term production programs and
$525,000 for additional expenses expected to be incurred in connection with a
facility that vacated during fiscal 2000, respectively. Operating income for the
three- and nine-month periods ended December 31, 1999 also included a cumulative
profit adjustment of $2.9 million. Operating income also was impacted favorably
in fiscal 2001 by increases in revenues, as discussed above, as well as the fact
that fiscal 2000 operating income for the three- and nine-month periods


                                       14

<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

ended December 31, 1999 reflects charges of $830,000 and $1.3 million,
respectively, for certain product warranty reserves and additional development
costs for a commercial product line.

FSCG: Revenues increased $1.7 million and $9.1 million for the three- and
nine-month periods ended December 31, 2000, respectively, as compared with the
corresponding prior-year periods. The increases in revenues were primarily
attributed to the acquisition of General Atronics Corporation (now operating as
DRS Communications Company) in the latter part of the first quarter of fiscal
2001, as well as continued growth in the Group's contract manufacturing and
shipboard communications businesses. These increases were partially offset by
decreased orders for the Group's high-speed cameras and temporarily delayed
orders for certain mission data recording systems. In the three- and nine-month
periods ended December 31, 2000, DRS Communications Company contributed to the
FSCG operating segment approximately $5.1 million and $13.4 million in revenues,
respectively. Operating income increased approximately $97,000 and decreased
$1.1 million in the three- and nine-month periods ended December 31, 2000,
respectively. DRS Communications Company contributed approximately $322,000 and
$1.0 million of operating income to the Group in the three- and nine-month
periods ended December 31, 2000, respectively. Exclusive of the contributions of
DRS Communications Company, the Group's operating income decreased by $225,000
and $2.1 million for the three- and nine-month periods ended December 31, 2000,
respectively. The decreases in operating income were primarily attributable to
several factors; a third quarter charge of $500,000 for additional costs
expected to be incurred in connection with the completion of the development of
a new mission data recording system for the U.S. Navy, less favorable absorption
of fixed operating expenses associated with lower production volumes for certain
mission data recording systems and high-speed cameras, and lower overall profit
margins in the Group's contract manufacturing business. Management is currently
evaluating alternatives aimed at reducing the Group's overall operating
expenses. The Group also recorded a $1.1 million charge in the third quarter of
fiscal 2001 for estimated excess inventories associated with a specific product
line which the anticipated future sales are less than previously estimated.

Other: The increase in revenues for the three- and nine-month periods ended
December 31, 2000, as compared with the corresponding prior periods, was
primarily due to increased shipments of components used to manufacture disk
drive media. This revenue growth resulted from the improvement in the computer
disk drive marketplace and improved marketing of DRS Ahead's products and
services. The increase in the operating loss for the three-months ended December
31, 2000, as compared with the corresponding prior-year period, was mainly the
result of a $500,000 charge recorded in the third quarter of fiscal 2001 for a
potential loss associated with a note receivable. The improvement in the
operating loss for the year-to-date period ended December 31, 2000, as compared
with the prior-year period, is primarily attributable to the increase in
revenues and the allocation of certain costs to the operating units, which had
previously been recorded at DRS Corporate. These favorable impacts to operating
income were partially offset by the fiscal 2001 third quarter charge discussed
above.



                                       15


<PAGE>


                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES


FINANCIAL CONDITION AND LIQUIDITY

CASH AND CASH FLOW

The following table provides cash flow data for the Company for the nine-month
periods ended December 31, 2000 and December 31, 1999:

<TABLE>
<CAPTION>
                                                                 (IN THOUSANDS)

                                                          NINE MONTHS ENDED DECEMBER 31,
                                                          ------------------------------
                                                               2000           1999
                                                          -----------      ------------
<S>                                                         <C>            <C>
Net cash provided by (used in) operating activities ...     $ 22,800       $ (9,773)
Net cash used in investing activities .................     $(13,023)      $(12,161)
Net cash (used in) provided by financing activities ...     $ (6,579)      $ 15,145

</TABLE>

Operating cash flow for the nine-months ended December 31, 2000 improved by
approximately $32.6 million as compared with the corresponding prior-year
period. This improvement primarily results from increased earnings (net of
adjustments for non-cash items), increases in certain liabilities and increased
advanced payments from customers.

Net cash used in investing activities for the nine-month period ended December
31, 2000 included approximately $7.0 million relating to the acquisition of
General Atronics Corporation and $10.3 million for capital expenditures. A $3.5
million payment received in connection with the sale of the Company's magnetic
tape head business units reduced the net cash outflows from investing
activities.

During the nine-months ended December 31, 2000, the Company paid $6.5 million in
principal payments against its two term loans with Mellon Bank. The Company also
has an $80 million (subject to a borrowing base calculation) revolving line of
credit with Mellon Bank, N.A., as agent (Mellon Bank), maturing on October 20,
2003 (Line of Credit). During the nine-month period ended December 31, 2000, the
Company borrowed approximately $40.6 million under the Line of Credit and repaid
approximately $39.8 million. Of the total $40.6 million borrowed, approximately
$7.0 million was used to acquire the net assets of General Atronics Corporation
in the latter part of the first quarter of fiscal 2001, with the balance used to
meet temporary working capital requirements. As of December 31, 2000, the
Company re-classified its entire Line of Credit borrowings as Long-term debt,
excluding current installments to reflect the intent of the borrowings and their
maturity date of October 1, 2003. Other than cash flows from operations, the
Line of Credit is the Company's primary source of liquidity. As of December 31,
2000, the Company had approximately $42.8 million available under the Line of
Credit, after satisfaction of its borrowing base requirement.

During the nine-months ended December 31, 2000, holders of approximately $13.0
million of the Company's 9% Senior Subordinated Convertible Debentures elected
to convert their Debentures into approximately 1.5 million shares of the
Company's Common Stock. As of December 31, 2000, approximately $6.2 million of
the Debentures were outstanding, all of which were converted into approximately
696,000 shares of the Company's common stock in January 2001.

The Company actively seeks to finance its business in a manner that preserves
financial flexibility, while minimizing borrowing costs to the extent
practicable. Management continually reviews the changing financial, market and
economic conditions to manage the types, amounts and maturities of the
Corporation's indebtedness. Cash and cash equivalents, internally generated cash
flow from operations and other available financing resources are expected to be
sufficient to meet anticipated operating, capital expenditure and debt service
requirements during the next twelve months and the foreseeable future.


                                       16

<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES


The Company's total debt to trailing twelve-month EBITDA improved to 2.0x at
December 31, 2000, from 3.3x at December 31, 1999. The improvement in fiscal
2001 was driven by increased earnings as well as a $33.8 million reduction in
total debt over the last twelve months.

BACKLOG

Backlog at December 31, 2000 was approximately $458.7 million as compared with
$388.1 million at March 31, 2000. The Company booked approximately $348.0
million in new orders in the first nine months of fiscal 2001.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (SFAS 133), which establishes accounting and reporting
standards for derivative instruments including certain derivative instruments
embedded in other contracts and for hedging activities. SFAS 133 requires that
an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS 133 is effective for the Company for its fiscal year beginning April 1,
2001. The Company is in the process of evaluating the potential impact of
adopting SFAS 133. Based on the Company's current use of derivatives, management
does not expect the adoption to have a material impact on the Company's results
of operations or financial position.

In December 1999, the Securities and Exchange Commission staff released Staff
Accounting Bulletin No.101, "Revenue Recognition in Financial Statements" (SAB
101) which provides guidance on the recognition, presentation and disclosure of
revenue in financial statements. DRS is required to adopt SAB 101 in the fourth
quarter of fiscal 2001. The Company does not believe that adoption of this SAB
will have a material impact on its results of operations or financial position.


                                       17

<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, the Company is exposed to market risks
relating to fluctuations in interest rates and foreign currency exchange risk.
The Company does not enter into derivatives or other financial instruments for
trading or speculative purposes.

INTEREST RATE RISK

As the Company seeks debt financing to maintain its ongoing operations and
sustain its growth, it is exposed to interest rate risk. Borrowings under the
Company's $160 million secured credit facility with Mellon Bank, N.A., as agent,
are sensitive to changes in interest rates, as such borrowings bear interest at
variable rates. In January 1998 and January 1999, the Company entered into
interest rate collar agreements (the Collar Agreements) to limit the impact of
interest rate fluctuations on cash flow and interest expense. A summary of the
interest rate collar agreements in place as of December 31, 2000 and March 31,
2000 follows:

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES


<TABLE>
<CAPTION>

                                                               (IN THOUSANDS)
                                                               NOTIONAL AMOUNT
    EFFECTIVE                   EXPIRATION            ----------------------------------    VARIABLE RATE     CEILING      FLOOR
      DATE                         DATE               DECEMBER 31, 2000   MARCH 31, 2000        BASE            RATE        RATE
    ---------                   ----------            -----------------   --------------    -------------     -------      ------
  <S>                         <C>                         <C>                <C>                <C>            <C>          <C>
  April 8, 1998 .........      January 8, 2001            $ 6,200            $ 6,200            CAD-BA*        6.35%        4.84%
  April 26, 1999 ........     January 26, 2002            $20,000            $20,000            LIBOR**        5.75%        4.80%

</TABLE>

 * - Canadian Bankers Acceptance Rate

** - London Interbank Offered Rate

The variable interest rates established under the Collar Agreements for the
Company's LIBOR and Canadian Bankers Acceptance Rate-based collars as of
December 31, 2000 were 6.76% and 5.84%, respectively.

In January 2001 the Company entered into new interest rate collar agreements
with a total notional value of $20.0 million.

FOREIGN CURRENCY EXCHANGE RISK

DRS operates and conducts business in foreign countries and as a result is
exposed to fluctuations in foreign currency exchange rates. More specifically,
our net equity is impacted by the conversion of the net assets of foreign
subsidiaries for which the functional currency is not the U.S. Dollar for U.S.
reporting purposes. The Company believes that its exposure to foreign currency
exchange risk related to its foreign operations is not material to the Company's
results of operations, cash flows or financial position. The Company, at
present, does not hedge this risk, but continues to evaluate such foreign
currency translation risk exposure.


                                       18

<PAGE>




                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

The Company is party to various legal actions and claims arising in the ordinary
course of its business. In Management's opinion, the Company has adequate legal
defenses for each of the actions and claims and believes that their ultimate
disposition will not have a material adverse effect on the Company's
consolidated financial position or results of operations.

In April and May 1998, subpoenas were issued to the Company by the United States
Attorney for the Eastern District of New York seeking documents related to a
governmental investigation of certain equipment manufactured by DRS Photronics,
Inc. (Photronics). These subpoenas were issued in connection with United States
v. Tress, a case involving a product substitution allegation against an employee
of Photronics. On June 26, 1998, the complaint against the employee was
dismissed without prejudice. Although additional subpoenas were issued to the
Company on August 12, 1999 and May 10, 2000, to date, no claim has been made
against the Company or Photronics. During the Government's investigation, until
October 29, 1999, Photronics was unable to ship certain equipment related to the
case, resulting in delays in the Company's recognition of revenues. On October
29, 1999, Photronics received authorization to ship its first boresight system
since the start of the investigation

The Company is currently involved in a dispute in arbitration with Spar
Aerospace Limited (Spar) with respect to the working capital adjustment, if any,
provided for in the purchase agreement between the Company and Spar dated as of
September 19, 1997, pursuant to which the Company acquired, through certain of
its subsidiaries, certain assets of Spar. The Company is also in a dispute with
Raytheon Company (Raytheon) with respect to the working capital adjustment (not
to exceed $7.0 million), if any, provided for in the purchase agreement between
the Company and Raytheon dated as of July 28, 1998, pursuant to which the
Company acquired, through certain subsidiaries, certain assets of Raytheon.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

   (a)   Exhibits

         27. Financial Data Schedule

   (b)   Reports on Form 8-K

         None

                                       19
<PAGE>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         DRS TECHNOLOGIES, INC.
                                               Registrant




Date: February 13, 2001                /s/ RICHARD A. SCHNEIDER
                                       -----------------------------------------
                                       Richard A. Schneider
                                       Executive Vice President, Chief Financial
                                        Officer and Treasurer






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