--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.

                                    FORM 10-Q

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

For the period ended: March 31, 2001              Commission file number: 0-2047
                      --------------                                      ------

                     CAPITOL TRANSAMERICA CORPORATION (CTC)
      -----------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


    A Wisconsin Corporation                              39-1052658
    -----------------------               --------------------------------------
  (State or other jurisdiction           (I.R.S. Employer Identification Number)
of incorporation or organization)

       4610 University Avenue
          Madison, Wisconsin                                  53705-0900
---------------------------------------                 ----------------------
(Address of principal executive offices)                      (Zip Code)

  Registrant's telephone number, including area code:      (608) 231-4450
                                                           --------------


          Securities registered pursuant to Section 12 (g) of the Act:

                          COMMON STOCK, $1.00 PAR VALUE
--------------------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding  twelve  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
                         -------------------            -------------------


Based  on  the  closing average of the high (13 1/2) and low price (13 1/8), the
aggregate  market value of voting stock held by non-affiliates of the registrant
as  of  March  31,  2001  was  approximately  $145,764,180.


 Indicate the number of shares of each issuer's class of common stock, as of the
                            latest practicable date:

                                At March 31, 2001

                          Common Stock, $1.00 Par Value

                               Issued:  11,560,789

                            Outstanding:  10,949,422

                                Total Pages:  22


<PAGE>
                       Securities and Exchange Commission
                       ----------------------------------

                                Washington, D.C.
                                ----------------

                                    Form 10-Q
                                    ---------


                                     Part I
                                     ------


Financial Information                                                     Page
---------------------                                                     ----

     Consolidated  Financial  Statements                                  3 - 7

     Notes  to  Consolidated  Financial  Statements                       8 - 10

     Management's Discussion and Analysis of Financial
        Condition and Results  of  Operations                            11 - 13

     Condensed  Statutory Financial
        Statements of Insurance Subsidiaries                               14



                                     Part II
                                     -------


Other  Information
------------------

     Other  Disclosures                                                     15

     Officers  and  Directors                                               16

     Signatures                                                             17

     Exhibit Index                                                          18

                                        2
<PAGE>
<TABLE>
<CAPTION>
                                          CAPITOL TRANSAMERICA CORPORATION
                                            CONSOLIDATED BALANCE SHEETS


                                                                           March 31,    December 31,    March 31,
                                                                              2001          2000           2000
                                                                          ------------  -------------  ------------
<S>                                                                       <C>           <C>            <C>
ASSETS
Investments:
   Available-for sale investment securities, at fair value:
       U.S. Government bonds (amortized cost $32,546, $33,930 and
          $38,138, respectively)                                          $     35,003  $      35,620  $     39,580
       State, municipal and political subdivision bonds (amortized cost
          $91,870,973, $84,236,165 and $78,143,564, respectively)           98,440,968     89,732,054    81,758,869
       Corporate bonds and notes (amortized cost $1,097,552,
          $1,099,888 and $1,121,747, respectively)                           1,072,902      1,074,137     1,092,529
       Equity securities:
          Common stock (cost $124,492,833, $123,504,211 and
             $128,276,077, respectively)                                   116,340,574    119,413,538   119,475,929
          Non-redeemable preferred stock (cost $5,844,152, $6,470,793
             and $5,440,942, respectively)                                   5,524,420      5,516,567     4,795,435
   Investment real estate, at cost, net of depreciation                     11,238,190     11,008,554    10,669,674
   Short-term investments, at cost which approximates fair value             1,463,551      5,587,306     3,927,544
                                                                          ------------  -------------  ------------
        Total Investments                                                  234,115,608    232,367,776   221,759,560

Cash                                                                         1,687,228      3,641,628     1,336,084
Accrued investment income                                                    2,179,448      1,953,466     1,981,287
Receivables from agents, insureds and others, less allowance for
     doubtful accounts of $530,000 for each period                          19,966,663     18,438,610    16,977,606
Balances due from reinsurers                                                 2,101,339      1,794,851       425,338
Funds held by ceding reinsurers                                                 47,000         47,000        40,000
Deferred insurance acquisition costs                                        14,035,441     13,726,372    13,064,396
Prepaid reinsurance premiums                                                 1,900,839      1,714,017     1,354,715
Due from securities brokers                                                     35,000      4,218,650       680,452
State income taxes recoverable                                                  58,111         32,263             -
Federal income taxes recoverable                                                     -         35,200             -
Deferred income taxes                                                        4,182,345      2,468,713     4,205,197
Other assets                                                                 2,780,382      2,819,506     2,747,846
                                                                          ------------  -------------  ------------
       Total Assets                                                       $283,089,404  $ 283,258,052  $264,572,481
                                                                          ============  =============  ============
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                         CAPITOL TRANSAMERICA CORPORATION
                                            CONSOLIDATED BALANCE SHEETS

                                                                        March 31,     December 31,     March 31,
                                                                          2001            2000           2000
                                                                      -------------  --------------  -------------
<S>                                                                   <C>            <C>             <C>
LIABILITIES
Policy liabilities and accruals:
     Reserve for losses                                               $ 48,373,798   $  52,231,685   $ 52,356,662
     Reserve for loss adjustment expenses                               25,691,370      25,749,288     23,389,541
     Unearned premiums                                                  47,321,210      45,587,586     40,802,756
                                                                      -------------  --------------  -------------
        Total Policy Liabilities and Accruals                          121,386,378     123,568,559    116,548,959
                                                                      -------------  --------------  -------------

Accounts payable                                                         4,248,151       4,203,407      3,834,071
Claim drafts outstanding                                                 4,687,687       4,927,097      2,161,240
Balances due to securities brokers                                       1,036,891          34,125        357,083
Balances due to reinsurers                                               5,162,084       4,097,368      2,061,545
Accrued premium taxes                                                      681,298         727,627        316,594
State income taxes payable                                                       -               -         91,197
Federal income taxes payable                                             1,376,945               -      1,759,336
                                                                      -------------  --------------  -------------
      Total Other Liabilities                                           17,193,056      13,989,624     10,581,066
                                                                      -------------  --------------  -------------

      Total Liabilities                                                138,579,434     137,558,183    127,130,025
                                                                      -------------  --------------  -------------

SHAREHOLDERS' INVESTMENT
Common stock ($1.00 par value, authorized 15,000,000 shares, issued
     11,560,789, 11,558,767 and 11,558,166 shares, respectively)        11,560,789      11,558,767     11,558,166
Paid-in surplus                                                         22,743,089      22,733,088     22,727,877
Accumulated other comprehensive (loss) income (net of deferred tax
     (benefit) expense of ($673,466), $149,425 and ($2,050,343),
     respectively)                                                      (1,250,723)        277,504     (3,807,783)
Retained earnings                                                      116,028,503     114,944,048    108,469,296
                                                                      -------------  --------------  -------------

Shareholders' Investment Before Treasury Stock                         149,081,658     149,513,407    138,947,556

Treasury stock (611,367, 549,867 and 351,928 shares, respectively,
     at cost)                                                           (4,571,688)     (3,813,538)    (1,505,100)
                                                                      -------------  --------------  -------------

      Total Shareholders' Investment                                   144,509,970     145,699,869    137,442,456
                                                                      -------------  --------------  -------------

      Total Liabilities and Shareholders' Investment                  $283,089,404   $ 283,258,052   $264,572,481
                                                                      =============  ==============  =============

Book Value Per Share                                                  $      13.20   $       13.23   $      12.26
                                                                      =============  ==============  =============

Shares Outstanding                                                      10,949,422      11,008,900     11,206,238
                                                                      =============  ==============  =============
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                        CAPITOL TRANSAMERICA CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME


                                                    For the Three Months
                                                       Ended March 31,
                                                  --------------------------
                                                      2001          2000
                                                  ------------  ------------
<S>                                               <C>           <C>
REVENUES
Premiums earned                                   $22,842,813   $20,666,549
Net investment income                               2,453,781     2,258,601
Realized investment (losses) gains                 (1,822,488)    1,046,508
Other revenues                                        126,218        71,404
                                                  ------------  ------------
    Total Revenues                                 23,600,324    24,043,062
                                                  ------------  ------------

LOSSES AND EXPENSES INCURRED
Losses incurred                                     9,633,350     5,928,036
Loss adjustment expenses incurred                   2,622,424     1,911,201
Underwriting, acquisition and insurance expenses    8,841,479     8,005,872
Increase in deferred insurance acquisition costs     (309,069)     (420,207)
Other expenses                                        359,823       343,877
                                                  ------------  ------------
    Total Losses and Expenses Incurred             21,148,007    15,768,779
                                                  ------------  ------------


Income Before Income Taxes                          2,452,317     8,274,283
                                                  ------------  ------------

Income tax expense (benefit):
    Current                                         1,442,586     2,728,463
    Deferred                                         (890,740)     (135,059)
                                                  ------------  ------------
                                                      551,846     2,593,404
                                                  ------------  ------------


Net Income                                        $ 1,900,471   $ 5,680,879
                                                  ============  ============

Per Share Data:

     Cash Dividends Declared                      $      0.08   $      0.07
                                                  ============  ============

     Earnings Per Share - Basic                   $      0.17   $      0.50
                                                  ============  ============

     Earnings Per Share - Diluted                 $      0.17   $      0.50
                                                  ============  ============
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT AND COMPREHENSIVE INCOME (LOSS)


                                               Common                                  Accumulated
                                               Stock                                     Other
                                             (Par Value     Paid-In    Comprehensive  Comprehensive     Retained    Treasury
                                               $1.00)       Surplus    Income (Loss)  Income (Loss)     Earnings     Stock
                                           ------------  -----------  -------------  -------------  -------------  ------------
<S>                                        <C>           <C>          <C>            <C>            <C>            <C>
Balance, January 1, 1999                    $11,529,376   $22,246,366             -   $ 18,019,545   $ 90,016,245     ($495,559)
 Comprehensive income (loss):
  Net income                                          -             -    16,712,463              -     16,712,463             -
                                                                       -------------
  Other comprehensive loss:
   Unrealized depreciation on available-
    for-salesecurities, net of deferred
    taxes                                             -             -   (16,662,277)             -              -             -
   Less: reclassification adjustment,
     net of tax of $2,864,435, for gain
     included in net income                           -             -    (5,319,666)             -              -             -
                                                                       -------------
    Other comprehensive loss                          -             -   (21,981,943)   (21,981,943)             -             -
                                                                       -------------
  Comprehensive loss                                  -             -    (5,269,480)             -              -             -
 Stock options exercised                          9,594        57,748             -              -              -       (26,534)
 Purchases and sales of treasury
  stock, net                                          -       290,424             -              -              -             -
 Cash dividends paid                                  -             -             -              -     (3,151,515)            -
                                            ------------  -----------  -------------  -------------  -------------  ------------
Balance, December 31, 1999                  $11,538,970   $22,594,538             -    ($3,962,398)  $103,577,193     ($522,093)
 Comprehensive income:
  Net income                                          -             -    14,453,317              -     14,453,317             -
                                                                       -------------
  Other comprehensive income:
   Unrealized appreciation on available-
    for-salesecurities, net of deferred
    taxes                                             -             -    11,913,380              -              -             -
   Less: reclassification adjustment,
     net of tax of $2,546,352, for gain
     included in net income                           -             -    (7,673,478)             -              -             -
                                                                       -------------
    Other comprehensive income                        -             -     4,239,902      4,239,902              -             -
                                                                       -------------
  Comprehensive income                                -             -    18,693,219              -              -             -
 Stock options exercised                         19,797       138,550             -              -              -       (76,250)
 Stock-based compensation                             -             -             -              -         25,476             -
 Purchases and sales of treasury
  stock, net                                          -             -             -              -              -    (3,215,195)
 Cash dividends paid                                  -             -             -              -     (3,111,938)            -
                                            ------------  -----------  -------------  -------------  -------------  ------------
Balance, December 31, 2000                  $11,558,767   $22,733,088             -   $    277,504   $114,944,048   ($3,813,538)
 Comprehensive income (loss):
  Net income                                          -             -     1,900,471              -      1,900,471             -
                                                                       -------------
  Other comprehensive loss:
   Unrealized depreciation on available-
    for-sale securities, net of
    deferred taxes                                    -             -    (2,712,844)             -              -             -
   Less: reclassification adjustment,
    net of tax of $637,871, for gain
    included in net income                            -             -     1,184,617              -              -             -
                                                                       -------------
    Other comprehensive loss                          -             -    (1,528,227)    (1,528,227)             -             -
                                                                       -------------
  Comprehensive loss                                  -             -       372,244              -              -             -
 Stock options exercised                          2,022        10,001             -              -              -             -
 Stock-based compensation                             -             -             -              -         62,195             -
 Purchases and sales of treasury
  stock, net                                          -             -             -              -              -      (758,150)
 Cash dividends paid                                  -             -             -              -       (878,211)            -
                                            ------------  -----------  -------------  -------------  -------------  ------------
Balance, March 31, 2001                      $11,560,789  $22,743,089             -    ($1,250,723)  $116,028,503   ($4,571,688)
                                            ============  ===========  =============  =============  =============  ============
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>
                                             CAPITOL TRANSAMERICA CORPORATION
                                           CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                                             Year-to-date
                                                                               -------------------------------------------
                                                                                March 31,     December 31,    March 31,
                                                                                   2001           2000           2000
                                                                               ------------  --------------  ------------
<S>                                                                            <C>           <C>             <C>
Cash flows provided by (used for) operating activities:
-------------------------------------------------------
     Net Income                                                                $ 1,900,471   $  14,453,317   $ 5,680,879
     Adjustments to reconcile net income to net cash provided by (used
          for) operating activities:
               Depreciation                                                        302,678       1,215,024       270,830
               Realized investment gains                                         1,822,488     (11,805,350)   (1,046,508)
               Change in:
                    Deferred insurance acquisition costs                          (309,069)     (1,082,183)     (420,207)
                    Unearned premiums                                            1,733,624       6,133,329     1,348,499
                    Accrued investment income                                     (225,982)        (25,565)      (53,386)
                    Receivables from agents, insureds and others                (1,528,053)     (3,545,963)   (2,084,959)
                    Balances due to/from reinsurers                                754,663         149,564       153,792
                    Reinsurance recoverable on paid and unpaid losses                3,565         683,248        12,710
                    Funds held by ceding reinsurers                                      -          (7,000)            -
                    Income taxes payable/recoverable                             1,386,297         618,777     2,536,773
                    Deferred income taxes                                         (890,741)       (598,340)     (135,056)
                    Due to/from securities brokers                               5,186,416      (3,545,389)      315,767
                    Prepaid reinsurance premiums                                  (186,822)       (426,390)      (67,088)
                    Other assets                                                    (3,006)       (707,858)     (677,371)
                    Reserve for losses and loss adjustment expenses             (3,915,805)        724,781    (1,509,989)
                    Accounts payable                                              (194,666)      3,324,905       189,712
                    Accrued premium taxes                                          (46,329)        388,764       (22,269)
                                                                               ------------  --------------  ------------
                         Net cash provided by operating activities               5,789,729       5,947,671     4,492,129
                                                                               ------------  --------------  ------------

Cash flows provided by (used for) investing activities:
-------------------------------------------------------
     Proceeds from sales of available-for-sale securities                          895,770      26,278,568     2,599,193
     Purchases of available-for-sale securities                                 (7,797,800)    (26,716,842)   (6,815,685)
     Maturities of available-for-sale securities                                   851,766       4,053,867     1,724,072
     Purchases of depreciable assets                                              (131,722)       (782,511)     (124,812)
                                                                               ------------  --------------  ------------
                         Net cash (used for) provided by investing activities   (6,181,986)      2,833,082    (2,617,232)
                                                                               ------------  --------------  ------------

Cash flows (used for) provided by financing activities:
-------------------------------------------------------
     Cash dividends paid                                                          (878,211)     (3,111,938)     (788,776)
     Stock options exercised                                                        12,003          45,273        76,285
     Net cost of purchase of treasury stock                                       (695,935)     (3,152,895)     (906,757)
                                                                               ------------  --------------  ------------
                         Net cash used for financing activities                 (1,562,143)     (6,219,560)   (1,619,248)
                                                                               ------------  --------------  ------------

Net (decrease) increase in cash                                                 (1,954,400)      2,561,193       255,649
Cash, beginning of period                                                        3,641,628       1,080,435     1,080,435
                                                                               ------------  --------------  ------------
Cash, end of period                                                            $ 1,687,228   $   3,641,628   $ 1,336,084
                                                                               ============  ==============  ============

Cash paid during the period for:
     Income taxes                                                              $ 1,024,021   $   4,856,364   $ 1,713,260
                                                                               ============  ==============  ============
</TABLE>


                                        7
<PAGE>
                        CAPITOL TRANSAMERICA CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001


(1)  Basis  of  Presentation
    -----------------------
     The  condensed financial statements included herein of Capitol Transamerica
     Corporation  (the  "Company"), other than the Consolidated Balance Sheet at
     December  31,  2000,  and  the  Consolidated  Statement  of  Shareholders'
     Investment  and  Comprehensive Income (Loss) and the Consolidated Statement
     of  Cash  Flows  as of December 31, 2000, have been prepared by the Company
     without  audit, pursuant to the rules and regulations of the Securities and
     Exchange  Commission. Certain information and footnote disclosures normally
     included  in  financial  statements  prepared in accordance with accounting
     principles  generally  accepted in the United States have been condensed or
     omitted  pursuant  to  such  rules  and  regulations.

     Although  the  Company  believes  the  disclosures are adequate to make the
     information  presented not misleading, it is suggested that these condensed
     financial  statements  be read in conjunction with the financial statements
     and  the notes thereto included in the Company's 2000 annual report on Form
     10-K.


(2)  Earnings  Per  Share
     --------------------
     Basic earnings per share is computed by dividing net income by the weighted
     average  number  of  shares of stock outstanding during the period. Diluted
     earnings  per  share  is  computed  by  dividing net income by the weighted
     average  number of shares of common stock and common stock equivalents from
     options  outstanding.  The  following  table  sets forth the computation of
     basic  and  diluted  earnings  per  share  (EPS):

<TABLE>
<CAPTION>
                                                                  March 31,   December 31,    March 31,
                                                                    2001          2000          2000
                                                                 -----------  -------------  -----------
<S>                                                              <C>          <C>            <C>
Numerator:
----------
   Consolidated net income                                       $ 1,900,471  $  14,453,317  $ 5,680,879
                                                                 ===========  =============  ===========
Denominator:
------------
   Basic EPS - weighted average shares of common stock            11,050,244     11,124,074   11,257,512
   Effect of dilutive securities - unexercised stock options          46,698         34,388       37,721
                                                                 -----------  -------------  -----------
   Diluted EPS - weighted average shares of common
              stock and unexercised stock options                 11,096,942     11,158,462   11,295,233
                                                                 ===========  =============  ===========
</TABLE>

(3)  Comprehensive  Income  (Loss)
     -----------------------------
     Comprehensive  income  (loss)  is defined as net income plus or minus other
     comprehensive  income  (loss),  which  for  the  Company,  under  existing
     accounting  standards,  includes unrealized gains and losses, net of income
     tax  effects,  on  certain  investments  in  debt  and  equity  securities.
     Comprehensive  income (loss) is reported by the Company in the Consolidated
     Statements  of  Shareholders'  Investment  and Comprehensive Income (Loss).

(4)  Income  Taxes
     -------------
     Deferred  income  taxes reflect the net tax effect of temporary differences
     between  the  carrying  amounts  of  assets  and  liabilities for financial
     statement  purposes  and  the  corresponding  amounts  used  for income tax
     reporting.


(5)  Common  Stock  Options
     ----------------------
     There  were 2,022 options exercised during the three months ended March 31,
     2001  compared  to  19,196  options exercised during the three months ended
     March  31,  2000. For further information regarding stock options, refer to
     Note  6  of  the Notes to the Consolidated Financial Statements included in
     the  Company's  2000  annual  report.


                                        8
<PAGE>
(6)  Dividends
     ---------

     2001
     ----
     On  February  27,  2001,  a cash dividend of $.08 per share was declared to
     shareholders  of record March 9, 2001 and paid March 23, 2001 in the amount
     of  $878,211.

     2000
     ----
     On  November  21,  2000,  a cash dividend of $.07 per share was declared to
     shareholders  of  record December 8, 2000 and paid December 20, 2000 in the
     amount  of  $773,304.

     On  September  5,  2000,  a cash dividend of $.07 per share was declared to
     shareholders  of  record  September 15, 2000 and paid September 26, 2000 in
     the  amount  of  $773,993.

     On  May  30,  2000,  a  cash  dividend  of  $.07  per share was declared to
     shareholders  of  record June 16, 2000 and paid June 28, 2000 in the amount
     of  $775,865.

     On  February  18,  2000,  a cash dividend of $.07 per share was declared to
     shareholders of record March 10, 2000 and paid March 23, 2000 in the amount
     of  $788,776.


(7)  Investments
     -----------
     The  Company's  fixed  maturities  and  equity securities are classified as
     available-for-sale  and,  accordingly,  are  carried  at  fair  value, with
     unrealized  gains  (losses)  reported  as  a  separate  component  of  the
     shareholders'  investment,  net  of  taxes. The cost of fixed maturities is
     adjusted  for  the  amortization  of premiums and accretion of discounts to
     maturity. Fixed maturities and equity securities deemed to have declines in
     value  that are other than temporary are written down through the statement
     of  income  to  carrying  values  equal  to  their  estimated  fair values.

     Investment  real estate is carried at cost, net of accumulated depreciation
     of  $1,722,517,  $1,595,693  and $1,274,060 at March 31, 2001, December 31,
     2000  and March 31, 2000, respectively. Real estate is depreciated over the
     useful  life  of  the  asset.

     The  cost  of  investments  sold  is  determined  under  the  specific
     identification  method.


(8)  Contingent  Liabilities
     -----------------------
     The  Company  is a defendant in certain lawsuits involving complaints which
     demand  damages  and  recoveries for claims and losses allegedly related to
     risks  insured  by  the Company. Management's opinion is that such lawsuits
     are  a result of the ordinary course of business in the insurance industry.
     The  reserve  for  losses  includes  management's estimates of the probable
     ultimate  cost  of  settling  all  losses  involving  lawsuits.


                                        9
<PAGE>
(9)  Industry  Segment  Disclosures
     ------------------------------
     The  Company has three business segments, which are segregated based on the
     types  of products and services provided. The segments are (1) property and
     casualty, (2) fidelity and surety, and (3) discontinued reinsurance assumed
     operations.  These  segments  constitute  100%  of  the  operations  of the
     Company.  Data  for each segment as required for interim reporting follows:

<TABLE>
<CAPTION>
                                                              Year-to-date
                                              -------------------------------------------
                                                March 31,      December 31,    March 31,
                                                   2001            2000          2000
                                              --------------  --------------  -----------
<S>                                           <C>             <C>             <C>
    Total Revenues:
        Property & Casualty                   $  18,337,935   $  75,061,599   $17,195,635
        Fidelity & Surety                         4,748,203      21,451,988     4,754,952
        Discontinued Reinsurance Assumed             51,544         990,865       152,475
                                              --------------  --------------  -----------
              Total                           $  23,137,682   $  97,504,452   $22,103,062
                                              ==============  ==============  ===========

    Before-tax Profit (Loss):
        Property & Casualty                   $   1,638,804   $   4,948,274   $ 2,982,772
        Fidelity & Surety                          (743,957)       (410,132)    2,044,964
        Discontinued Reinsurance Assumed          1,001,038       2,362,652     1,023,635
                                              --------------  --------------  -----------
              Subtotal                        $   1,895,885   $   6,900,794   $ 6,051,371
        Reconciliation to Consolidated GAAP:
            Capital & Surplus                     2,584,012      12,064,331     1,821,154
            Inter-company adjustments            (2,027,580)        353,136       401,758
                                              --------------  --------------  -----------
    Consolidated Net Income Before Tax        $   2,452,317   $  19,318,261   $ 8,274,283
                                              ==============  ==============  ===========
</TABLE>


                                        10
<PAGE>
      MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF
                                   OPERATIONS


OVERVIEW
--------
Capitol  Transamerica  Corporation  (the  "Company")  is  an  insurance  holding
company,  which operates in 37 states and writes, through its subsidiaries, both
property-casualty  and  fidelity-surety insurance. The property-casualty segment
accounts for approximately 77% of the business written while the fidelity-surety
segment  accounts  for  approximately  23%  of  the  business.

The  underwriting  cycles  of the property-casualty insurance industry have been
characterized  by peak periods of adequate rates, underwriting profits and lower
combined  ratios,  with  the  down  side  of  the  cycles being characterized by
inadequate  rates,  underwriting losses and higher combined ratios. The adequacy
of  premium rates is affected primarily by the severity and frequency of claims,
which, in turn, are affected by natural disasters, regulatory measures and court
decisions, which continue to uphold the "deep pocket" theory in awarding against
insurance  companies.  Unfortunately  for  the  insurance industry, the trend of
increasing  price  competition  has  continued  as has the number of significant
natural  disasters. This combination has resulted in a considerable reduction in
underwriting  profitability  for  the  industry  as  a  whole.

Adequate  premium  rates  continue  to  be  a  concern  for  the Company and the
property-casualty  insurance industry as a whole. Management feels strongly that
rate  regulators  have  been slow to adjust rates in response to increased claim
costs  from  the  factors  noted  above.  This,  when  combined  with  increased
competition  in  the  Company's  niche  market,  has  presented an unprecedented
challenge  to  management.  The  Company  has  responded  to this challenge with
increased  marketing  efforts as well as the addition of innovative programs and
alliances  that  should  position  the  Company  for  continued  expansion  and
profitability.


OPERATING  RESULTS
------------------
As  mentioned  in  the  Overview, management believes that the property-casualty
industry  is  in  a  downward  cycle. However, due to a combination of increased
marketing  efforts  and  the  re-underwriting  of the Company's book of business
undertaken  in  1998  and  1999,  the  Company's  operating results remain quite
favorable.  Operating  income decreased compared to 2000 due primarily to higher
than expected losses on a few specific surety contract bonds coupled with better
than normal results for the first quarter of 2000, a 75.4% trade combined ratio.
Had  the  losses  on  the  aforementioned bonds not occurred, the combined ratio
would  have  been approximately 87.5%, a level typical of the Company's history.
Management  is  confident  that  the  return to solid underwriting standards and
continued  profitability  of  the  Company's  core  operations  will  provide  a
foundation  for  increasing  shareholder  value.

Gross  premiums written increased 18% over the first quarter of 2000, going from
$23.4  million  to  $27.6 million. The increase is due to rate increases and the
Company's  concerted  efforts  to  profitably  grow  its  business.  Management
continually  monitors the Company's expansion efforts to ensure that the Company
is  growing  profitably.  Net  premiums written followed gross premiums written,
increasing  from  $21.9  million  to  $24.4  million,  or  11.1%.

Premiums earned are recognized as net revenues after a reduction for reinsurance
ceded  and  after  the  establishment  of  the provision for a pro-rata unearned
portion  of  the premiums written. Premiums earned totaled $22.8 million for the
first three months of 2001, compared to $88.2 million for calendar year 2000 and
$20.7  million  for the first three months of 2000. The unearned premium reserve
at  the  end  of  these  same three periods was $47.3 million, $45.6 million and
$40.8  million,  respectively.

<TABLE>
<CAPTION>
                                   March 31,   December 31,    March 31,
                                     2001          2000          2000
                                  -----------  -------------  -----------
<S>                               <C>          <C>            <C>
    Gross Premiums Written        $27,573,255  $ 102,110,215  $23,364,959
    Reinsurance Ceded               3,183,640      8,218,433    1,416,999
                                  -----------  -------------  -----------
    Net Premiums Written          $24,389,615  $  93,891,782  $21,947,960
                                  ===========  =============  ===========
    Net Premiums Earned           $22,842,813  $  88,184,842  $20,666,549
                                  ===========  =============  ===========
    Net Unearned Premium Reserve  $47,321,210  $  45,587,586  $40,802,756
                                  ===========  =============  ===========
</TABLE>


                                       11
<PAGE>
The  Company's underwriting results can be measured by reference to the combined
loss  and  expense ratios. The following table includes the operating results of
the  Company's  two  subsidiary insurance companies on a statutory basis. Losses
and  loss adjustment expenses are stated as a percentage of net premiums earned,
while  underwriting expenses are stated as a percentage of net premiums written.
The  combined  ratios  are  as  follows:

<TABLE>
<CAPTION>
                                              March 31,   December 31,   March 31,
Insurance Operating Ratios (Statutory Basis)     2001         2000          2000
--------------------------------------------  ----------  -------------  ----------
<S>                                           <C>         <C>            <C>
     Losses and Loss Adjustment Expenses           53.8%          65.4%       38.1%
     Underwriting Expenses                         36.7%          35.1%       37.3%
--------------------------------------------  ----------  -------------  ----------
     Combined Ratio                                90.5%         100.5%       75.4%
============================================  ==========  =============  ==========
</TABLE>

The  Company's  combined  ratio  consistently  compares  very  favorably  to the
industry  average,  as  indicated  by  the  following  chart:

<TABLE>
<CAPTION>
                      Year-to-date   Year-end   Year-end
    Combined Ratio        2001         2000       1999
--------------------  -------------  ---------  ---------
<S>                   <C>            <C>        <C>
    Company                   90.5%     100.5%      75.4%
    Industry Average            N/A     110.4%     110.2%
--------------------  -------------  ---------  ---------
</TABLE>

REINSURANCE
-----------
The  Company  follows the customary practice of reinsuring with other companies,
i.e.,  ceding  a  portion  of  its exposure on the policies it has written. This
program  of  reinsurance permits the Company greater diversification of business
and  the  ability  to  write  larger  policies  while limiting the extent of its
maximum  net  loss.  It  provides  protection  for the Company against unusually
severe  occurrences  in which a number of claims could produce a large aggregate
loss.  Management  continually  monitors  the  Company's  reinsurance program to
obtain  protection  that  should be adequate to ensure the availability of funds
for  losses  while  maintaining  future  growth.

NET  INVESTMENT  INCOME  AND  REALIZED  GAINS
---------------------------------------------
The  Company's  fixed  maturities  and  equity  securities  are  classified  as
available-for-sale  and  are  carried  at  fair  value. The unrealized gains and
losses,  net  of  tax,  are  reported as "Accumulated Other Comprehensive Income
(Loss)"  in  the  equity  portion  of  the  balance  sheet.

Interest and Dividend Income: Interest on fixed maturities is recorded as income
when  earned  and  is  adjusted  for  any  amortization  of  purchase premium or
accretion  of discount. Dividends on equity securities are recorded as income on
ex-dividend  dates.

<TABLE>
<CAPTION>
                                                      March 31,     December 31,     March 31,
  Investments                                           2001            2000           2000
--------------------------------------------------  -------------  --------------  -------------
<S>                                                 <C>            <C>             <C>
       Invested Assets                              $234,115,608   $ 232,367,776   $221,759,560
       Net Investment Income                           2,453,781       9,163,062      2,258,601
       Percent of Return to Average Carrying Value           4.2%            4.0%           4.0%
       Realized (Losses) Gains                        (1,822,488)     11,805,350      1,046,508
       Change in Unrealized (Losses) Gains            (1,528,227)      4,239,902        154,615
--------------------------------------------------  -------------  --------------  -------------
</TABLE>

The  net  unrealized  loss  of  $1.5  million for the first three months of 2001
consists  of  a  $0.7  million  unrealized  gain  on fixed maturities and a $2.2
million  unrealized loss on the Company's equity portfolio. Management has begun
to  increase  its  tax-free bond holdings and de-emphasize the equity portfolio,
but  is  optimistic  that  the  recent  downturn  in  the  value  of  its equity
investments  is temporary and that the current market conditions will provide an
even  greater  opportunity  to  invest and build shareholder value over the long
term.

First  quarter,  2001  net investment income increased from $2.3 million to $2.5
million,  or  8.6%,  over  the  same period last year. The Company holds a large
percentage of equity investments, which results in a comparatively lower rate of
return  on  invested  assets  than  other property-casualty insurance companies.


                                       12
<PAGE>
Under  FASB  Statement 115, the Company absorbed $2.0 million in realized losses
in  the  first  quarter for "other-than- temporary" market value adjustments for
certain  securities held in its portfolio. Additionally, management continues to
monitor  its  investment  portfolio  for other securities that could potentially
fall  into  this  category  in  the  future.


INCOME  TAXES
-------------
Income  tax expense is based on income reported for financial statement purposes
and  tax  laws  and  rates  in  effect for the years presented. Deferred federal
income  taxes  arise  from  timing differences between the recognition of income
determined for financial reporting purposes and income tax purposes. Such timing
differences are related principally to the deferral of policy acquisition costs,
the  recognition of unearned premiums and the discounting of claims reserves for
tax  purposes.  Deferred taxes are also provided on unrealized gains and losses.
Also  of  note is that the Company's effective income tax rate tends to be lower
than  most  companies  because  of  the  high concentration of investment income
related  to  tax-free  municipal  bonds.


LOSS  RESERVES
--------------
Reserves  for  losses  and  loss  adjustment expenses reflect the Company's best
estimate  of the liability for the ultimate cost of reported claims and incurred
but  not  reported  (IBNR)  claims  at the end of each period. The estimates are
based  on  past  claim  experience  and consider current claim trends as well as
social  and  economic  conditions.  The  Company's  reserves for losses and loss
adjustment  expenses  were  $74.1  million  at March 31, 2001, compared to $75.7
million  at March 31, 2000. These reserves remain relatively constant due to the
Company  having a high level of loss and loss adjustment expense payments during
the  first  quarter  compared  to  the first quarter of last year, $15.9 million
compared  to  $9.0 million. Management continues to closely monitor the loss and
loss  adjustment expense reserves to assure adequate recognition of the ultimate
liability  for  claims  and  claims expenses. Management recognizes that this is
especially  important  in  light  of today's climate whereby the Company has had
increased  premium volume and larger than expected contract bond payments in the
Florida  and  Texas  markets.


LIQUIDITY  AND  CAPITAL  RESOURCES
----------------------------------
Liquidity  refers  to  the  Company's ability to meet obligations as they become
due. The obligations and cash outflows of the Company include claim settlements,
acquisition  and  administrative expenses, investment purchases and dividends to
shareholders.  In  addition  to satisfying obligations and cash outflows through
premium  collections, there are cash inflows obtained from interest and dividend
income,  and  maturities  and  sales  of  investments. Because cash inflows from
premiums are received in advance of the cash outflows required to settle claims,
the  Company accumulates funds, which it invests pending liquidity requirements.
Therefore,  investments  represent the majority (82.7%, 82.0% and 83.8% at March
31,  2001,  December 31, 2000 and March 31, 2000, respectively) of the Company's
assets.  Cash  outflows  can  be  unpredictable  for two reasons: first, a large
portion  of  liabilities  representing  loss reserves have uncertainty regarding
settlement  dates;  and second, there is a potential for losses occurring either
individually  or  in  the aggregate. As a result, the Company maintains adequate
short-term  investment  programs  necessary to ensure the availability of funds.
The  investment  programs  are  structured  so that a forced sale liquidation of
fixed maturities should not be necessary during the ordinary course of business.
The  Company  has  no  material  capital  expenditure  requirements.


SAFE  HARBOR  STATEMENT
-----------------------
Some  of  the statements in this report, as well as statements by the Company in
periodic  press  releases and oral statements made by the Company's officials to
analysts  and  shareholders  in  the  course of presentations about the Company,
constitute  "forward-looking  statements"  within  the  meaning  of  the Private
Securities  Litigation  Reform  Act  of  1995.  Such  forward-looking statements
involve  known  and  unknown  risks,  estimates subject to change circumstances,
uncertainties  and  other factors that may cause the actual results, performance
or  achievements  of  the  Company  to  be  materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements.


                                       13
<PAGE>
<TABLE>
<CAPTION>
                              INSURANCE SUBSIDIARY FINANCIAL STATEMENTS
                     STATUTORY BASIS AS REPORTED TO STATE REGULATORY AUTHORITIES

CAPITOL INDEMNITY CORPORATION
-----------------------------                             March 31,     December 31,     March 31,
BALANCE SHEETS                                              2001            2000           2000
------------------------------------------------------  -------------  --------------  -------------
<S>                                                     <C>            <C>             <C>
ASSETS
     Cash and Invested Assets                           $220,343,950   $ 220,326,616   $208,966,442
     Other Assets                                         28,636,890      24,911,537     19,925,954
------------------------------------------------------  -------------  --------------  -------------
     Total Assets                                       $248,980,840   $ 245,238,153   $228,892,396
======================================================  =============  ==============  =============
LIABILITIES
     Reserves for Losses and Loss Adjustment Expenses   $ 76,486,936   $  80,127,074   $ 75,910,827
     Unearned Premiums                                    45,420,371      43,873,569     39,448,041
     Other Liabilities                                    13,372,670      13,320,126     17,075,160
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities                                   135,279,977     137,320,769    132,434,028
------------------------------------------------------  -------------  --------------  -------------
SURPLUS AS REGARDS POLICYHOLDERS
     Shareholders' Equity                                113,700,863     107,917,384     96,458,368
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities and Capital                      $248,980,840   $ 245,238,153   $228,892,396
======================================================  =============  ==============  =============
STATEMENTS OF INCOME
     Premiums Earned                                    $ 22,842,813   $  88,184,842   $ 20,666,549
     Underwriting Deductions                              20,924,007      90,802,716     16,230,102
------------------------------------------------------  -------------  --------------  -------------
     Net Underwriting Gain (Loss)                          1,918,806      (2,617,874)     4,436,447
------------------------------------------------------  -------------  --------------  -------------
     Investment Income Including Sales                       524,377      20,845,091      3,183,553
     Other Income                                            137,306         396,399         74,115
     Dividends to Policyholders                              347,365         489,085              -
     Income Tax Expense                                      560,313       5,131,195      2,551,857
------------------------------------------------------  -------------  --------------  -------------
     Net Income                                         $  1,672,811   $  13,003,336   $  5,142,258
======================================================  =============  ==============  =============

CAPITOL SPECIALTY INSURANCE CORPORATION
---------------------------------------
BALANCE SHEETS
----------------------------------------------------------------------------------------------------
ASSETS
     Cash and Invested Assets                           $  4,576,422   $   4,474,294   $  4,309,467
     Other Assets                                            176,757         201,378        185,595
------------------------------------------------------  -------------  --------------  -------------
     Total Assets                                       $  4,753,179   $   4,675,672   $  4,495,062
======================================================  =============  ==============  =============
LIABILITIES
     Liabilities Other Than For Insurance Obligations          7,709           7,709          7,712
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities                                         7,709           7,709          7,712
------------------------------------------------------  -------------  --------------  -------------
SURPLUS AS REGARDS POLICYHOLDERS
     Shareholders' Equity                                  4,745,470       4,667,963      4,487,350
------------------------------------------------------  -------------  --------------  -------------
     Total Liabilities and Capital                      $  4,753,179   $   4,675,672   $  4,495,062
======================================================  =============  ==============  =============
STATEMENTS OF INCOME
     Underwriting Deductions                                   1,893           6,278          2,615
------------------------------------------------------  -------------  --------------  -------------
     Net Underwriting Gain                                    (1,893)         (6,278)        (2,615)
------------------------------------------------------  -------------  --------------  -------------
     Investment Income Including Sales                        51,401         249,300         71,322
     Income Tax Expense                                        3,348          10,634          7,714
------------------------------------------------------  -------------  --------------  -------------
     Net Income                                         $     46,160   $     232,388   $     60,993
======================================================  =============  ==============  =============
</TABLE>


                                       14
<PAGE>
                                    PART II
                                    -------

                                OTHER DISCLOSURES
                                -----------------



       Item  1.     Legal  Proceedings

                    Reference  is  made  to  footnote  number  8  "Contingent
                    Liabilities"  on  Page  9  of  this  report.


       Item  2.     Changes  in  Securities  and  Use  of  Proceeds

                    NONE


       Item  3.     Defaults  Upon  Senior  Securities

                    NONE


       Item  4.     Submission  of  Matters  to  a  Vote  of Security Holders

                    Reference  is  made  to  the  Notice  of  Annual  Meeting of
                    Shareholders  and  Proxy Statement for the Annual Meeting of
                    Shareholders  to  be held on May 14, 2001, both of which are
                    dated April 6, 2001 and previously filed with the Securities
                    and  Exchange  Commission  and are incorporated herein as an
                    exhibit  by  reference.


       Item  5.     Other  Information

                    NONE


       Item  6.     Exhibits  and  Reports  on  Form  8-K

                    NONE


                                       15
<PAGE>
                       CAPITOL TRANSAMERICA CORPORATION


                                  Subsidiaries
                                  ------------

                          Capitol Indemnity Corporation
                     Capitol Specialty Insurance Corporation
                         Capitol Facilities Corporation


                               Board of Directors
                               ------------------

    Paul J. Breitnauer                   Michael J. Larson
    Vice President and Treasurer         Principal
    Capitol Transamerica Corporation     Southwestern Financial Services
    Madison, Wisconsin                   Madison, Wisconsin

    Larry Burcalow                       Reinhart H. Postweiler
    Owner and President                  Retired, formerly with
    Yahara Materials, Inc.               Flad Affiliated Corporation
    Waunakee, Wisconsin                  Madison, Wisconsin

    George A. Fait                       Kenneth P. Urso
    Chairman of the Board and President  Principal
    Capitol Transamerica Corporation     Urso Ventures
    Madison, Wisconsin                   Madison, Wisconsin




                                    Officers
                                    --------

    George A. Fait                       Virgiline M. Schulte
    Chairman of the Board and President  Secretary

    Paul J. Breitnauer                   Jane F. Endres
    Vice President and Treasurer         Assistant Secretary


                                       16
<PAGE>
                                   SIGNATURES
                                   ----------



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




          CAPITOL  TRANSAMERICA  CORPORATION




          ---------------------------------------------
          George  A.  Fait
          Chairman  of  the  Board  and  President




          ---------------------------------------------
          Paul  J.  Breitnauer
          Vice  President  and  Treasurer




          Date:  May 10, 2001


                                       17
<PAGE>
                                  Exhibit Index





Exhibit  Number                 Exhibit  Description
---------------  -------------------------------------------------

    99           Press Release -- Capitol Transamerica Corporation
                 Reports First Quarter (March 31, 2001) Results





                                       18