<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

         For the quarterly period ended August 31, 2001.

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

         For the transition period from ___________ to ____________.

                         Commission file number: 0-4957

                       EDUCATIONAL DEVELOPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

               Delaware                                         73-0750007
      (State or other jurisdiction of                        (I.R.S. Employer
      incorporation or organization)                         Identification No.)

10302 East 55th Place, Tulsa Oklahoma 74146-6515
(Address of principal executive offices)

Registrant's telephone number: (918) 622-4522

         Indicate by check mark whether the registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                Yes     X              No
                                    ---------             -----------

         As of August 31, 2001 there were 3,855,170 shares of Educational
Development Corporation Common Stock, $0.20 par value outstanding.


<PAGE>   2



EDUCATIONAL DEVELOPMENT CORPORATION



PART I. FINANCIAL INFORMATION

ITEM 1

BALANCE SHEETS

<Table>
<Caption>
                                                           August 31, 2001
                                                             (unaudited)            February 28, 2001
                                                           ---------------          -----------------

<S>                                                        <C>                       <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                               $       409,600           $       268,300
   Accounts receivable - (less
     allowances for doubtful accounts
     and sales returns: 8/31/01 - $171,200
     2/28/01 - $224,300)                                         2,549,200                 1,478,400
   Inventories - Net                                             7,541,300                 9,211,900
   Prepaid expenses and other assets                               198,000                   247,100
   Income taxes receivable                                              --                    72,600
   Deferred income taxes                                            68,000                    97,800
                                                           ---------------           ---------------
         Total current assets                                   10,766,100                11,376,100

INVENTORIES                                                        892,600                 1,005,000

PROPERTY AND EQUIPMENT
     at cost (less accumulated depreciation:
     08/31/01 - $1,409,600; 2/28/01 - $1,390,100)                  101,200                    84,200

DEFERRED INCOME TAXES                                               24,400                     6,300
                                                           ---------------           ---------------

                                                           $    11,784,300           $    12,471,600
                                                           ===============           ===============
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Note payable to bank                                    $            --           $     1,084,000
   Accounts payable                                              1,556,000                 1,703,100
   Accrued salaries and commissions                                364,400                   325,700
   Income taxes                                                     54,700                        --
   Other current liabilities                                       155,100                   118,700
                                                           ---------------           ---------------
         Total current liabilities                               2,130,200                 3,231,500

DEFERRED INCOME TAXES                                                   --                    24,300

COMMITMENTS

SHAREHOLDERS' EQUITY:
   Common Stock, $.20 par value (Authorized
     6,000,000 shares; Issued 5,429,240
     shares; Outstanding 3,855,170 and
     3,911,400 shares)                                           1,085,800                 1,085,800
   Capital in excess of par value                                4,416,100                 4,413,600
   Retained earnings                                             8,909,800                 8,270,600
                                                           ---------------           ---------------
                                                                14,411,700                13,770,000
   Less treasury shares, at cost                                (4,757,600)               (4,554,200)
                                                           ---------------           ---------------
                                                                 9,654,100                 9,215,800
                                                           ---------------           ---------------

                                                           $    11,784,300           $    12,471,600
                                                           ===============           ===============
</Table>


See notes to financial statements.



                                       2
<PAGE>   3


EDUCATIONAL DEVELOPMENT CORPORATION




STATEMENTS OF EARNINGS (UNAUDITED)

<Table>
<Caption>
                                            Three Months Ended August 31,                  Six Months Ended August 31,
                                             2001                   2000                   2001                   2000
                                         ------------           ------------           ------------           ------------

<S>                                      <C>                    <C>                    <C>                    <C>
GROSS SALES                              $  7,953,000           $  7,296,700           $ 15,236,800           $ 14,038,700
   Less discounts & allowances             (2,844,600)            (2,882,100)            (5,327,800)            (5,373,700)
                                         ------------           ------------           ------------           ------------
     Net sales                              5,108,400              4,414,600              9,909,000              8,665,000
COST OF SALES                               2,108,100              1,950,300              4,080,900              3,747,700
                                         ------------           ------------           ------------           ------------
     Gross margin                           3,000,300              2,464,300              5,828,100              4,917,300
                                         ------------           ------------           ------------           ------------
OPERATING EXPENSES:
   Operating & selling                        877,100                757,800              1,709,700              1,518,100
   Sales commissions                        1,104,600                759,700              2,137,600              1,565,300
   General & administrative                   361,700                349,100                715,900                769,300
   Interest                                     4,300                 32,200                 20,300                 66,200
                                         ------------           ------------           ------------           ------------
                                            2,347,700              1,898,800              4,583,500              3,918,900
                                         ------------           ------------           ------------           ------------

OTHER INCOME                                   12,100                  6,200                 18,700                 20,800
                                         ------------           ------------           ------------           ------------

EARNINGS BEFORE INCOME TAXES                  664,700                571,700              1,263,300              1,019,200

INCOME TAXES                                  240,900                219,000                470,000                390,400
                                         ------------           ------------           ------------           ------------

NET EARNINGS                             $    423,800           $    352,700           $    793,300           $    628,800
                                         ============           ============           ============           ============

BASIC AND DILUTED EARNINGS
   PER SHARE:
   Basic                                 $       0.11           $       0.09           $       0.20           $       0.16
                                         ============           ============           ============           ============
   Diluted                               $       0.11           $       0.09           $       0.20           $       0.16
                                         ============           ============           ============           ============


WEIGHTED AVERAGE NUMBER OF
   COMMON AND COMMON EQUIVALENT
   SHARES OUTSTANDING:
     Basic                                  3,867,091              3,940,825              3,890,899              4,004,976
                                         ============           ============           ============           ============
     Diluted                                4,028,636              3,992,270              4,017,429              4,056,717
                                         ============           ============           ============           ============

DIVIDENDS DECLARED PER
   COMMON SHARE                          $         --           $         --           $       0.04           $       0.02
                                         ============           ============           ============           ============
</Table>


See notes to financial statements.



                                       3
<PAGE>   4


EDUCATIONAL DEVELOPMENT CORPORATION




STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)

<Table>
<Caption>
                         Common Stock
                   (par value $.20 per share)                                                  Treasury Stock
                   --------------------------                                           ---------------------------
                            Number of                    Capital in                       Number
                             Shares                       Excess of       Retained          of                         Shareholders'
                             Issued         Amount        Par Value       Earnings        Shares          Amount           Equity
                           -----------    -----------    -----------    -----------     -----------     -----------    ------------

<S>                        <C>            <C>            <C>            <C>             <C>             <C>            <C>
BALANCE, MAR. 1, 2001        5,429,240    $ 1,085,800    $ 4,413,600    $ 8,270,600       1,517,840     $(4,554,200)    $ 9,215,800

Purchases of treasury
   stock                            --             --             --             --          66,900        (235,400)       (235,400)

Sales of treasury stock             --             --          2,500             --         (10,670)         32,000          34,500

Dividends paid
   ($0.04 / share)                  --             --             --       (154,100)             --              --        (154,100)

Net earnings                        --             --             --        793,300              --              --         793,300
                           -----------    -----------    -----------    -----------     -----------     -----------     -----------

BALANCE, AUG. 31, 2001       5,429,240    $ 1,085,800    $ 4,416,100    $ 8,909,800       1,574,070     $(4,757,600)    $ 9,654,100
                           ===========    ===========    ===========    ===========     ===========     ===========     ===========
</Table>



See notes to financial statements.



                                       4
<PAGE>   5


EDUCATIONAL DEVELOPMENT CORPORATION




STATEMENTS OF CASH FLOWS (UNAUDITED)

<Table>
<Caption>
                                                              Six Months Ended August 31
                                                           --------------------------------
                                                               2001                2000
                                                           ------------        ------------
<S>                                                        <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES                       $  1,626,300        $    584,600

CASH FLOWS FROM INVESTING ACTIVITIES -
   Purchases of property and equipment                          (46,000)             (2,200)
                                                           ------------        ------------

     Net cash used in investing activities                      (46,000)             (2,200)
                                                           ------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings under revolving credit agreement                2,347,000           3,876,000
   Payments under revolving credit agreement                 (3,431,000)         (3,707,000)
   Cash received from sale of treasury stock                     34,500               5,800
   Cash paid to acquire treasury stock                         (235,400)           (741,700)
   Dividends paid                                              (154,100)            (78,800)
                                                           ------------        ------------

     Net cash used in financing activities                   (1,439,000)           (645,700)
                                                           ------------        ------------

Net Increase (Decrease) in Cash and Cash Equivalents            141,300             (63,300)
Cash and Cash Equivalents, Beginning of Period                  268,300             214,300
                                                           ------------        ------------
Cash and Cash Equivalents, End of Period                   $    409,600        $    151,000
                                                           ============        ============

Supplemental Disclosure of Cash Flow Information:
   Cash paid for interest                                  $     25,900        $     62,300
                                                           ============        ============
   Cash paid for income taxes                              $    355,300        $    394,800
                                                           ============        ============
</Table>


See notes to financial statements.


                                       5
<PAGE>   6


EDUCATIONAL DEVELOPMENT CORPORATION



NOTES TO FINANCIAL STATEMENTS

Note 1 - The information shown with respect to the three months and six months
ended August 31, 2001 and 2000, which is unaudited, includes all adjustments
which in the opinion of Management are considered to be necessary for a fair
presentation of earnings for such periods. There were no adjustments, other than
normal recurring accruals, entering into the determination of the results shown
except as noted in this report. The results of operations for the three months
and six months ended August 31, 2001 and 2000, respectively, are not necessarily
indicative of the results to be expected at year end due to seasonality of the
product sales.

These financial statements and notes are prepared pursuant to the rules and
regulations of the Securities and Exchange Commission for interim reporting and
should be read in conjunction with the Financial Statements and accompanying
notes contained in the Company's Annual Report to Shareholders for the Fiscal
Year ended February 28, 2001.

Note 2 - Effective June 30, 2001 the Company signed a Second Amendment to the
Credit and Security Agreement with State Bank which provides a $3,500,000 line
of credit. This line of credit is evidenced by a promissory note in the amount
of $3,500,000 payable June 30, 2002. This note bears interest at the Wall Street
Journal prime floating rate minus 0.25% payable monthly. The note is
collateralized by substantially all the assets of the Company. There were no
borrowings under the revolving credit agreement at August 31, 2001.

Note 3 - Inventories consist of the following:

<Table>
<Caption>
                                                   August 31, 2001       February 28, 2001
                                                   ---------------       -----------------

<S>                                                <C>                    <C>
                  Current:
                    Book Inventory                 $     7,587,700        $     9,258,300
                    Reserve for Obsolescence               (46,400)               (46,400)
                                                   ---------------        ---------------

                  Inventories net - current        $     7,541,300        $     9,211,900
                                                   ===============        ===============

                  Non-current:
                    Book Inventory                 $     1,008,200        $     1,051,600
                    Reserve for Obsolescence              (115,600)               (46,600)
                                                   ---------------        ---------------

                  Inventories - non-current        $       892,600        $     1,005,000
                                                   ===============        ===============
</Table>

                  The Company occasionally purchases book inventory in
                  quantities in excess of what will be sold within the normal
                  operating cycle due to minimum order requirements of the
                  Company's primary supplier. These amounts are included in
                  non-current inventory.

Note 4- Basic earnings per share is computed by dividing net earnings by the
weighted average number of common shares outstanding during the period. Diluted
earnings per share is based on the combined weighted average number of common
shares outstanding increased, when appropriate, for the number of common shares
issuable upon exercise of stock options, computed using the treasury stock
method.








                                       6
<PAGE>   7


EDUCATIONAL DEVELOPMENT CORPORATION


The computation of weighted average common and common equivalent shares used in
the calculation of basic and diluted earnings per share ("EPS") is shown below.

<Table>
<Caption>
                                             Three Months Ended August 31,          Six Months Ended August 31,
                                                2001               2000               2001               2000
                                            ------------       ------------       ------------       ------------

<S>                                         <C>                <C>                <C>                <C>
Net Earnings                                $    423,800       $    352,700       $    793,300       $    628,800
                                            ============       ============       ============       ============

Basic EPS:
Weighted Average Shares Outstanding            3,867,091          3,940,825          3,890,899          4,004,976
                                            ============       ============       ============       ============
Basic EPS                                   $       0.11       $       0.09       $       0.20       $       0.16
                                            ============       ============       ============       ============

Diluted EPS:
Weighted Average Shares Outstanding            3,867,091          3,940,825          3,890,899          4,004,976
Assumed Exercise of Options                      161,545             51,445            126,530             51,741
                                            ------------       ------------       ------------       ------------
Shares Applicable to Diluted Earnings          4,028,636          3,992,270          4,017,429          4,056,717
                                            ============       ============       ============       ============
Diluted EPS                                 $       0.11       $       0.09       $       0.20       $       0.16
                                            ============       ============       ============       ============
</Table>

Since March 1, 1998, when the Company began its stock repurchase program,
1,607,071 shares of the Company's common stock at a total cost of $4,885,100
have been acquired. The Board of Directors has authorized purchasing up to
2,000,000 shares as market conditions warrant.

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

Certain statements contained in this Management Discussion and Analysis are not
based on historical facts, but are forward-looking statements that are based
upon numerous assumptions about future conditions that may ultimately prove to
be inaccurate. Actual events and results may materially differ from anticipated
results described in such statements. The Company's ability to achieve such
results is subject to certain risks and uncertainties. Such risks and
uncertainties include but are not limited to, product prices, continued
availability of capital and financing, and other factors affecting the Company's
business that may be beyond its control.

With the exception of the overall impact on the general economy, the tragic
events of September 11, 2001 are not currently expected to have a direct
material effect on the Company.

FINANCIAL CONDITION

The financial condition of the Company remains strong. Working capital at August
31, 2001 was $8,635,900 compared with working capital of $8,144,600 at the end
of fiscal year 2001. Accounts receivable increased 59.8% during the first six
months of fiscal year 2002. The Company's "fall special", which offered extended
payment terms, began during the second quarter and contributed to the increase
in accounts receivable. Inventory levels declined 16.7% during the first six
months of the current fiscal year. The level of inventory will fluctuate
throughout the year, depending upon sales and the timing of shipments from the
Company's principal supplier. The Company continuously monitors inventory to
assure it has adequate supplies on hand to meet sales requirements. Accounts
payable decreased 8.6% during the first six months of fiscal year 2002. The
major component of accounts payable is the amount due to the Company's principal
supplier. Increases and decreases in inventory levels as well as the timing of
the purchases and the payment terms offered by various suppliers affect the
levels of accounts payable. The Company paid off its short term bank borrowings
during the second quarter using cash generated by increased sales in the Home
Business Division.

The Company paid a dividend of $0.04 per share on August 10, 2001.

Pre-tax margins were 13.0% and 12.8% for the three months and six months ended
August 31, 2001, respectively, compared with 13.0% and 11.8% for the same
comparable periods last year.




                                       7
<PAGE>   8


EDUCATIONAL DEVELOPMENT CORPORATION



RESULTS OF OPERATIONS

Revenues - Net sales from the Home Business Division were $5,756,600 for the six
months ended August 31, 2001 compared with $4,252,900 for the six months ended
August 31, 2000, an increase of 35.4%. Sales for the three months ended August
31, 2001 were $2,953,100 versus $2,074,200 for the same three month period last
year, an increase of 42.4%. The Company attributes these increases to the
addition of new sales consultants and the retention of existing sales
consultants. The Company continues to offer new and exciting incentive programs,
travel contests and regional seminars to help stimulate sales and recruiting.
The Company also continues to offer its leadership skills program for the
supervisors. This training program is designed to help supervisors build their
business. Management is optimistic that the Home Business Division will continue
to grow.

Net sales for the Publishing Division were $2,155,300 and $4,152,400 for the
three months and six months ended August 31, 2001, respectively, compared with
$2,340,400 and $4,412,100 for the same two periods, respectively, a year ago.
The Company attributes this decline to a 45% decrease in purchasing by one of
the Company's major wholesale distributors who closed down two distribution
centers during the last six months. This wholesaler's consolidation has been
completed and their purchases have begun to return to a more normal level. The
juvenile paperback market is highly competitive. Industry sales last year were
$753 million. The Publishing Division's annual sales are approximately 1% of
industry sales. Competitive factors include product quality, price and
deliverability. National chains continue to dominate the market. The Company has
taken a very aggressive approach towards increasing sales in this market segment
by the use of cooperative advertising, joint promotional efforts and
institutional advertising in trade publications. Management believes the Company
can maintain its 1% market share.

Cost of Sales - The Company's cost of sales for the six months ended August 31,
2001 was $4,080,900, an increase of 8.9% over cost of sales of $3,747,700 for
the six months ended August 31, 2000. Cost of sales expressed as a percentage of
gross sales was 26.8% for the six months ended August 31, 2001 and 26.7% for the
same six month period a year ago. Cost of sales for the three months ended
August 31, 2001 was $2,108,100, an increase of 8.1% over cost of sales of
$1,950,300 for the same three months last year. Cost of sales expressed as a
percentage of gross sales were 26.5% and 26.7% for the periods ending August 31,
2001 and 2000 respectively.

Operating Expenses - Operating and selling expenses for the six months ended
August 31, 2001 were $1,709,700 compared with $1,518,100 for the six months
ended August 31, 2000, an increase of 12.6%. Expressed as a percentage of gross
sales, these cost were 11.2% and 10.8% for the six months ended August 31, 2001
and 2000 respectively. Operating and selling expenses for the three months ended
August 31, 2001 were $877,100 versus $757,800 for the same three months last
year, an increase of 15.7%. These costs expressed as a percentage of gross sales
were 11.0% for the three months ended August 31, 2001 and 10.4% for the three
months ended August 31, 2000. Increased costs for special promotions and
incentives in the Home Business Division contributed to the increase in
operating and selling expenses for both the three months and six months ended
August 31, 2001.

Sales commissions for the six months ended August 31, 2001 increased 36.6% to
$2,137,600 when compared with $1,565,300 for the six months ended August 31,
2000. Sales commissions expressed as a percentage of gross sales were 14.0% for
the six months ended August 31, 2001 and 11.2% for the six months ended August
31, 2000. Sales commissions for the three months ended August 31, 2001 and 2000
were $1,104,600 and $759,700, respectively, an increase of 45.4%. Sales
commissions expressed as a percentage of gross sales were 13.9% for the three
months ended August 31, 2001 and 10.4% for the three months ended August 31,
2000. Sales commissions as a percentage of gross sales is determined by the
product mix sold and the division which makes the sale. Sales commissions for
the Publishing Division were up slightly both for the three months and six
months ended August 31, 2001. Sales commissions in the Home Business Division
increased 47.1% for the three months ended August 31, 2001 and 38.0% for the six
months ended August 31, 2001, the result of increased sales in that division.

General and administrative expenses were $715,900 for the six months ended
August 31, 2001 and $769,300 for the six months ended August 31, 2000, a
decrease of 6.9%. These expenses expressed as a percentage of gross sales were
4.7% and 5.5% for the periods ended August 31, 2001 and 2000, respectively.
General and administrative expenses for the three months ended August 31, 2001
and 2000 were $361,700 and $349,100, respectively, an increase of 3.6%. As a
percentage of gross sales, these expenses were 4.5% for the three months ended
August 31, 2001 and 4.8% for the three months ended August 31, 2000. A decrease
in depreciation expense contributed to the decrease in general and
administrative expenses for the six months ended August 31, 2001.

Interest expense was $20,300 for the six months ended August 31, 2001 and
$66,200 for the six months ended August 31, 2000, a decrease of 69.3%. As a
percentage of gross sales, interest expense was 0.1% and 0.5% for the six months
ended August 31, 2001 and 2000. Interest expense for the three months ended
August 31, 2001 decreased 86.7% to $4,300 versus $32,200 for the three months
ended August 31, 2000. As a percentage of gross sales, interest expense was
0.05% for the three months ended August 31, 2001 and 0.4% for the three months
ended August 31, 2000. Reduced borrowings and lower interest rates contributed
to the decrease in interest expense.





                                       8
<PAGE>   9

EDUCATIONAL DEVELOPMENT CORPORATION


BUSINESS SEGMENTS

The Company has two reportable segments: Publishing and Usborne Books at Home
("UBAH"). These reportable segments are business units that offer different
methods of distribution to different types of customers. They are managed
separately based on the fundamental differences in their operations. The
Publishing Division markets its products to retail accounts, which include book,
school supply, toy and gift stores and museums, through commissioned sales
representatives, trade and specialty wholesalers and an internal telesales
group. The UBAH Division markets its product line through a network of
independent sales consultants through a combination of direct sales, home shows
and book fairs.

The accounting policies of the segments are the same as those of the Company.
The Company evaluates segment performance based on operating profits of the
segments which is defined as segment net sales reduced by direct cost of sales
and direct expenses. Corporate expenses, including interest and depreciation,
and income taxes are not allocated to the segments. The Company's assets are not
allocated on a segment basis.

Information by industry segment for the three months and six months ended August
31, 2001 and 2000 is set forth below:

<Table>
<Caption>
                                              Publishing            UBAH              Other               Total
                                             ------------       ------------       ------------        ------------

<S>                                          <C>                <C>                <C>                 <C>
SIX MONTHS ENDED AUGUST 31, 2001

     Net sales from external customers       $  4,152,400       $  5,756,600       $         --        $  9,909,000
     Earnings before income taxes            $  1,496,400       $  1,254,000       $ (1,487,100)       $  1,263,300

THREE MONTHS ENDED AUGUST 31, 2001

     Net sales from external customers       $  2,155,300       $  2,953,100       $         --        $  5,108,400
     Earnings before income taxes            $    744,500       $    648,800       $   (728,600)       $    664,700

SIX MONTHS ENDED AUGUST 31, 2000

     Net sales from external customers       $  4,412,100       $  4,252,900       $         --        $  8,665,000
     Earnings before income taxes            $  1,616,500       $    980,000       $ (1,577,300)       $  1,019,200

THREE MONTHS ENDED AUGUST 31, 2000

     Net sales from external customers       $  2,340,400       $  2,074,200       $         --        $  4,414,600
     Earnings before income taxes            $    833,300       $    501,600       $   (763,200)       $    571,700
</Table>


Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company does not have any material market risk.

PART II  OTHER INFORMATION

Item 5. OTHER INFORMATION

         None



                                       9
<PAGE>   10



EDUCATIONAL DEVELOPMENT CORPORATION



                                   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.


                       EDUCATIONAL DEVELOPMENT CORPORATION
                                  (Registrant)



                       By         /s/ Randall W. White
                          --------------------------------
                                Randall W. White
                                President



Date:   October 4, 2001
     ----------------------





                                       10