SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

For the fiscal year ended October 31, 2000           Commission File No. 0-14880


                              MICROLOG CORPORATION
             (Exact name of Registrant as specified in its charter)


         VIRGINIA                                            52-0901291
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)


         20270 GOLDENROD LANE                                20876-4070
         GERMANTOWN, MARYLAND                                (Zip Code)
(Address of principal executive offices)

                                 (301) 540-5500
              (Registrant's telephone number, including area code)

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

                                      NONE

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

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (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 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
                                      ---  ---

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained herein, and
will not be  contained,  to the best of  Registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ( )

The  aggregate  market  value of shares of Common  Stock held by  non-affiliates
(based on the last  reported sale price of the Common Stock on January 19, 2001,
as reported by the Nasdaq SmallCap Market) was approximately  $4.9 million.  The
Common Stock is traded  over-the-counter  and quoted through the Nasdaq SmallCap
Market.

                 As of January 19, 2001, 7,066,938 shares of the
                  Registrant's Common Stock were outstanding.

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


<PAGE>


                       DOCUMENTS INCORPORATED BY REFERENCE

Parts I and III of this  Form  10-K  incorporate  information  by  reference  to
portions of the Company's definitive Proxy Statement to be filed within 120 days
after the end of the fiscal  year (the "Proxy  Statement").  Parts I, II, and IV
incorporate  information  by reference  from  portions of the  Company's  Annual
Report to Shareholders for the fiscal year ended October 31, 2000 attached as an
exhibit hereto (the "Annual Report to Shareholders").

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                PAGE
                                                                                ----
<S>        <C>                                                                   <C>

Part I.    Item 1.  Business ....................................................1
           Item 2.  Properties...................................................9
           Item 3.  Legal Proceedings............................................9
           Item 4.  Submission of Matters to a Vote of Security Holders..........9
Part II.   Item 5.  Market for Registrant's Common Equity and
                    Related Stockholder Matters..................................9
           Item 6.  Selected Financial Data......................................9
           Item 7.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations..........................9
           Item 7A. Quantitative and Qualitative Disclosures About Market Risk...9
           Item 8.  Financial Statements and Supplementary Data.................10
           Item 9.  Changes in and Disagreements with Accountants on
                    Accounting and Financial Disclosure.........................10
Part III.  Item 10. Directors and Executive Officers of the Registrant..........10
           Item 11. Executive Compensation......................................10
           Item 12. Security Ownership of Certain Beneficial
                    Owners and Management.......................................10
           Item 13. Certain Relationships and Related Transactions..............10
Part IV.   Item 14. Exhibits, Financial Statement Schedules
                    and Reports on Form 8-K.....................................10

Other Matters   ................................................................13

Signatures.

</TABLE>

                                       ii

<PAGE>


              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         This report and the information incorporated by reference in it contain
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The Company intends the forward-looking  statements to be covered by
the safe harbor provisions for forward-looking statements in these sections. All
statements  regarding the Company's  expected  financial  position and operating
results,  business strategy,  financing plans, forecasted trends relating to the
Company's  industry,  the Company's ability to realize  anticipated cost savings
and  similar  matters  are  forward-looking  statements.  These  statements  can
sometimes  be  identified  by the use of  forward-looking  words  such as "may,"
"will,"  "anticipate,"  "estimate," "expect," "believe" or "intend." The Company
cannot promise you that its expectations in such forward-looking statements will
turn out to be correct.  Some  important  factors that could cause the Company's
actual results to be materially  different from its  expectations  include those
discussed under the caption "Business--Factors That May Effect Future Results of
Operations."

                                      iii

<PAGE>


                                     PART I

ITEM 1.  BUSINESS

Unless the context otherwise  requires,  references in this report to "Microlog"
or the "Company" are to Microlog Corporation and its consolidated subsidiaries.

GENERAL

Microlog  Corporation is an  interactive  communications  software  company that
provides  advanced  Web-based  customer  interaction   management  products  and
services for businesses seeking to better serve their customers. Microlog offers
an integrated suite of products and services which blend with existing corporate
applications and infrastructure to accomplish both automated response functions,
such as  interactive  voice  response,  or  "IVR,"  email,  and Web,  as well as
intelligent   interactions   between   customers  and  contact   center  agents.
Interactions  today  include  telephone,  email,  Web chat,  Web  callback,  Web
collaboration, Web bulletin board, voice over IP, fax and scanned hardcopy mail.

Microlog caters to businesses and institutions  looking to serve their customers
through advanced, yet user-friendly customer contact and relationship management
systems.  This  approach  advocates  retaining  or  acquiring  applications  and
components  which  best suit the  customer's  objectives,  while  enhancing  its
customers' experience. Microlog's products and services are designed to serve as
middleware to integrate those  components  (e.g.  existing legacy  applications,
database applications,  CRM applications,  PBX or ACD switches, Web sites, email
servers,  IVRs, fax servers) in a way that affords  consistent  operation across
diverse systems and contact types, while preserving  investments in the existing
components. Microlog's products are Web-centric, which means major functions are
accomplished  through a central server suite, and only Java-enabled  browsers or
network  computers are required for agent desktop  operations.  This facilitates
lower cost and eases the  implementation of distributed  operations  afforded by
Internet technologies.

Microlog's  integrated  suite of customer  contact and  relationship  management
products is called the  uniQue(R)  (pronounced  you-knee-que)  family of contact
center  solutions.  This family of solutions  includes  uniQue RM  (Relationship
Management),  uniQue Web, uniQue eMail,  uniQue Voice,  uniQue Fax, uniQue VoIP,
uniQue CTI, and uniQue IVR.  uniQue can be implemented as a total  solution,  or
each family  member can be installed as an  individual  solution for an existing
contact center. In addition, businesses can add media types in a modular fashion
as they expand their customer  contact  facilities.  For example,  customers can
start with a telephone solution, add an email solution, then add a web solution,
then add a fax solution. This openness and modularity is complemented by uniform
and easy-to-use  management  facilities,  as well as  comprehensive  cross-media
statistics and reporting.  The name "uniQue" derives from "unified queuing," and
this refers to uniQue's ability to allow easy management of multiple media types
in one virtual queue,  allowing  "automated contact  distribution,"  prioritized
routing by customer, skills-based routing and multiple campaign management.

To  complement  its suite of  uniQue  products, Microlog  offers  the  following
services:  technology  assessment,   requirements  analysis  and  documentation,
project management,  application and software  development,  system integration,
telephony   integration,   installation,   system   administration  and  quality
assurance.

Microlog, a Virginia  corporation,  headquartered in Germantown,  Maryland,  was
organized  in 1969.  Microlog  Corporation  of  Maryland,  Microlog's  operating
subsidiary,  has two major  subdivisions:  the Contact Center Solutions division
and the Old Dominion Systems  division.  The Contact Center Solutions  division,
whose business generally is described above, represents Microlog's primary focus
and product future.  Accordingly,  the Company is concentrating  its investments
and efforts on developing the Contact Center Solutions division.  The charter of
the division is to help the Company's  customers  serve their  customers  better
through the use of technology in corporate contact centers  performing  customer
relationship management.

Through its Old Dominion  Systems  division,  the Company  provides  performance
analysis  and  technical  and  administrative  support  services  to the Applied
Physics  Laboratory  (APL), a prime  contractor to the U.S. Navy.  Although this
segment of the business has historically provided a source of sales and profits,
the Company  believes that its Old Dominion  Systems  division will not generate
significant  revenue  beginning  in the first  quarter of fiscal  2001.  Revenue
generated by the Old Dominion Systems  division  represented $7.1 million (49%),
$10.1 million (56%) and $11.7 million (44%) of Microlog's  consolidated  revenue
for the fiscal years ended October 31, 2000, 1999, and 1998, respectively.

                                       1

<PAGE>


Included in the products of the Contact Center Solutions division is uniQue IVR,
which was  formerly  called  both  Tivra and  Intela.  uniQue  IVR,  which is an
interactive voice response software product designed for simultaneous support of
multiple interactive voice applications and information solutions,  historically
has generated  significant revenue for Microlog.  Although Microlog continues to
market, sell and maintain its uniQue IVR product,  Microlog believes that uniQue
IVR will represent a decreasing  portion of Microlog's  consolidated  revenue in
fiscal 2001 and thereafter.  Revenue  generated by uniQue IVR  represented  $6.6
million  (46%),  $7.9 million  (44%),  and $14.7  million  (56%),  of Microlog's
consolidated  revenue for the fiscal  years ended  October 31, 2000,  1999,  and
1998, respectively. Revenue generated in the aggregate by uniQue IVR and the Old
Dominion Systems division represented $13.7 million (95%), $18.0 million (100%),
and $26.5 million (100%) of Microlog's consolidated revenue for the fiscal years
ended October 31, 2000, 1999, and 1998, respectively.  Microlog's strategy is to
replace the sharply declining  revenues of the Old Dominion Systems division and
uniQue IVR with increased revenue generated by its newer uniQue products.

As a result,  in fiscal 2000, the Company  continued to sharpen its focus on the
Contact Center Solutions  division in general and its uniQue line of products in
particular.  As a result of changes in its  relationship  with APL,  the Company
also  substantially  discontinued  the  performance  analysis and  technical and
administrative  support  services of its Old Dominion  System division in fiscal
2000.  In fiscal 2001,  the Company plans to continue to expand its uniQue sales
and marketing efforts,  product  offerings,  and related  professional  services
offerings to provide more  comprehensive  Contact Center solutions to small- and
medium-sized businesses and institutions throughout the United States, primarily
in the  eastern  U.S.  Microlog  plans to offer its  products  directly  through
regional sales  representatives,  indirectly  through OEM and reseller partners,
and through hosted or network-based services.

The results of the Company's  performance  during fiscal years 2000,  1999,  and
1998,  are  discussed  in detail in  "Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations," which forms a part of the Annual
Report to  Shareholders  and is  incorporated  by reference  into Item 7 of this
Annual Report on Form 10-K.  That  discussion and analysis should be read in its
entirety in conjunction  with the  discussion of the Company's  business in this
Item 1. Information  concerning the Company's  operations by business segment is
hereby  incorporated  by  reference  to  Note 1 of the  "Notes  to  Consolidated
Financial  Statements,"  which forms a part of the Annual Report to Shareholders
and is also incorporated by reference into Item 8 of this Report.

CONTACT CENTER SOLUTIONS DIVISION

CUSTOMER RELATIONSHIP MANAGEMENT/CUSTOMER INTERACTION MANAGEMENT INDUSTRY

According to the Gartner Group, Customer Relationship  Management,  or "CRM," is
"a business strategy whose outcomes optimize profitability, revenue and customer
satisfaction  by  organizing  around  customer   segments,   fostering  customer
satisfying  behaviors,   and  implementing   customer-centric   processes.   CRM
technologies should enable greater customer insight,  increased customer access,
more effective customer  interactions,  and integration  throughout all customer
channels and back-office  enterprise  functions."  While total CRM involves many
processes, applications, and infrastructures, many of which are in the domain of
the company  choosing to implement a CRM system,  a major  portion of CRM is the
management  of  customer  interactions  in  conjunction  with  those  processes,
applications,  and infrastructures.  This portion is called Customer Interaction
Management or "CIM."  Microlog's  uniQue  products are within the "CIM" industry
space  and  Microlog  offers  the  related  professional  services  required  to
integrate  its CIM  products  into  existing  CRM  systems to create a total CRM
solution.

Although the level of new CRM projects remains  reasonably  consistent for large
organizations,  Gartner Dataquest  expects to see a significant  increase in new
projects from the midmarket and small enterprises sector. An analysis of average
annual budgets allocated to CRM projects also indicates  significant increase in
investment  over the next two years.  To target this  growing  market,  Microlog
focuses direct sales on small to medium-sized businesses and institutions.

Gartner  analysis  indicates  "that  small  enterprises  are  willing  to invest
significantly in CRM implementations as a strategic differentiator against their
competitors.  As a percentage of revenue,  the small enterprises are expected to
invest twice as much in CRM  implementations  as the large enterprises  segment.
Given the large  number of new  projects  slated for the next couple of years in
the midmarket  and small  enterprises  segment,  this is likely to be a powerful
market opportunity...."


                                       2

<PAGE>

Estimates  by Gartner  Dataquest  state that "the North  American  CRM  services
market is estimated at $9.6 billion for the year 2000 and is slated to grow at a
CAGR of 22.8 percent,  reaching  $17.8 billion in 2003.  Globally,  the greatest
portion  of  CRM  Services  spending  will  be on  application  development  and
integration,   business/IT  consulting,  and  to  some  extent  IT  outsourcing.
Application  development and  integration  will represent 37 percent of spending
worldwide, largely because the packaged software application market does not yet
meet the needs of the end-user community."

CRM's   development   across  the  vertical  markets  is  evidenced  by  Gartner
Dataquest's  forecasts  showing  that the  financial  services,  high-technology
(included in  manufacturing),  telecommunications  and utilities  industries are
among the early  adopters of CRM. They have quickly  understood  the CRM concept
and have been willing to make the investments necessary to adopt enterprise-wide
solutions.  Often,  these early  adopters are willing to adopt CRM in one of two
ways -- by working  with  point  solutions  for  immediate  functionality  or by
investing in  highly-customized  and functional  solutions from  consultants and
systems  integrators.  Microlog's strategy for addressing this characteristic of
the market is to produce a middleware solution that can be highly customized and
integrated  for a total  solution,  but at the same time is offered  via modular
features  which  present   customers  with  the   opportunity  to  do  a  phased
implementation  of "point  solutions,"  growing  with  upgrades  as their  needs
dictate.  Microlog's  direct and indirect  services  provide the consultancy and
customization  services  necessary to the  complete  solutions  customers  want.
Bolstered by the  existing  shortage of IT skills in the  marketplace,  Microlog
believes that customers will pay for complete  solutions,  including  consulting
and IT services,  because  their own  internal  resources  are too  stretched to
accommodate the need for additional projects such as CRM integration.

Gartner states that "While the  convergence  to a common  customer focus through
the addition of value-added services is happening across all verticals,  how the
vertical   industries   are   pursuing   this  varies.   For  example,   in  the
high-technology  and retail sectors,  the focus has been on utilizing the Web to
sell to customers  and allowing  them to customize and configure the products to
their  needs." In other  industries,  Microlog has observed  that  automation of
voice contacts is still a primary concern and is often the first option pursued.
In any  industry  where  email as a contact  type is  supported,  there is great
pressure to manage email load in a more efficient and assured fashion, something
that is still not the norm. Microlog believes that,  regardless of the industry,
every business has to deal with their  customers in the fashion which best suits
that business.  This has led Microlog to a  cross-industry  product and services
approach, with a highly configurable and modular set of uniQue offerings for the
direct sales channel. To the extent that indirect channels tend to focus more on
specific industries, their offerings can be packaged and less configurable,  and
their  hosted  services are even more  packaged to appeal to a higher  volume of
small customers without need of a significant amount of customization.

UNIQUE(R)

Microlog's  uniQue family of products offers open  architecture,  cross platform
solutions  for  customer  contact  centers.  uniQue is designed  for the contact
center  with 5 to  1,000  agents  and  integrates  all of the  contact  center's
telephony,  computer  and  business  applications.  uniQue is  designed  for the
contact center manager and offers the agent tools  necessary to handle  customer
interactions.

Microlog's  uniQue product is in its second major release phase.  uniQue release
1.5 was first  demonstrated  in September  1998, and was generally  available in
November  1998.  The  function of this  release was  limited to  telephone  call
control, although the current functions of management, statistics, and the agent
interface were available at that time in a more limited implementation.

uniQue 2.0.0,  which adds the other major media contact types (discussed  below)
and major functional enhancements,  went into limited availability trial testing
in September  1999.  uniQue 2.0.0 was generally  available as of February  2000.
uniQue  2.1.0  was  generally  available  as of  September  2000 and  2.1.1  was
generally  available  as  of  October  2000.  Work  on  subsequent  releases  is
continuing,  along with  specific  custom  extensions  of the  product  based on
customer requests.  Four customers have been fully installed and are operational
on the uniQue 2.1 release, and two others are currently being installed.

                                       3

<PAGE>

THE UNIQUE PRODUCT INCLUDES THE FOLLOWING FEATURES:

MULTIPLE MEDIA - uniQue accepts and intelligently  routes all customer contacts,
whether from a traditional  telephone call, Web contact,  email,  facsimile,  or
even simple postal mail.  By accepting  any type of contact from the  customers,
uniQue  becomes  the  single  source  repository  of  all  customer  interaction
providing the user with a powerful  information  tool that  summarizes  customer
behavior and provides customer satisfaction.

CONTACT  PRIORITIZATION  - In addition to  handling  all types of media,  uniQue
prioritizes  the contact based upon the rules  established by the contact center
manager in order to ensure  that all of the  customers  are  handled in the most
appropriate manner, such as servicing the most important customers first.

INTELLIGENT ROUTING - uniQue leverages the effectiveness of skills-based routing
by matching the customer contact to the agent having the most appropriate skills
required to service the contact.  uniQue's simple system administration  feature
allows the  supervisor  to quickly and easily add or remove  skills to any agent
profile  on-line.  This allows the contact  center's  management to schedule and
maintain the most appropriate level of agents at all times.

EASY   CONFIGURATION  AND  REMOTE   ADMINISTRATION  -  Being  a  Web-based  Java
application  hosted on the  uniQue  server,  uniQue  offers the  contact  center
management zero administration at the agent's workstation. uniQue is loaded only
once and,  each time an agent logs into the  application,  the uniQue  applet is
downloaded  to  the  agent's  workstation   eliminating  any  agent  workstation
configuration or administration.

WEB-BASED SYSTEM - Consistent with the concept of open systems,  uniQue operates
on any agent  computer with any operating  system  provided  there is a properly
configured  Java-enabled Web browser on the agent's desktop. This frees the user
from  being  tied to a  single  computer  environment,  system  architecture  or
operating  system.  uniQue  will  operate in an  environment  where there may be
multiple types of computers.  The open system approach provides flexibility to a
contact center's computing requirements and simplifies the task of integration.

REPORTING - uniQue includes a powerful  statistical data capturing and reporting
component.  Contact  center  managers  can  generate  any number of  statistical
reports from the system.  uniQue  stores each  customer  contact  along with the
detailed  information about the contact.  Detailed  information which uniQue can
store includes,  among other information:  contact type, contact duration, agent
wrap-up time, total contact length, contact outcome,  contact result and contact
reason.  With uniQue,  contact  center  managers  are able to develop  their own
reports which summarize agent productivity, contact center accomplishments,  and
even business success statistics.

UNIQUE IVR(TM)

The uniQue IVR (formerly Tivra) platform is a Contact Center  Solutions  product
designed for simultaneous support of multiple interactive voice applications and
information solutions. Prices for uniQue IVR systems are dependent on the number
of ports in the system (from 4 to over 1,000), the amount of voice storage,  the
need for  additional  equipment,  and the time  needed to  develop a  customized
application.

uniQue  IVR is  based on an  Intel  Pentium(R)  hardware  platform  utilizing  a
Microsoft  NT(R)  operating  system with a Graphical  User  Interface  (GUI) for
application  development.  The  uniQue IVR  system  has a  non-proprietary  open
architecture.  uniQue  IVR also  supports  text-to-speech,  speech  recognition,
remote and local databases, host connectivity, Web and fax.

Each uniQue IVR system  incorporates  servers with hard disk storage and several
voice cards.  By increasing the number of voice cards and the number of servers,
the Company can  configure  the IVR systems  with a greater  number of ports and
hours of message storage.  Depending upon customer  specifications,  systems are
provided  as desktop or rack  mounted  units.  These units can be  networked  to
create a larger  system with  thousands of ports,  and they can be configured to
run on -48 volt DC power supply for use in a Central Office (CO).

The uniQue IVR  architecture  supports  a variety  of  configurations  that meet
varying functional,  processing, and voice port and storage needs. This platform
is designed for simultaneous  support of multiple  applications,  including both
voice response and voice  messaging  services.  The uniQue IVR system includes a
monitor,  keyboard, and printer. These are used to program the system,  organize
the storage of information (which will be accessible to users), produce reports,
and monitor system  activity.  Customers that contract for the Company's  system
maintenance services also purchase modems so that the Company can perform remote
diagnostic procedures.

                                       4

<PAGE>
SALES AND MARKETING

The sales model for uniQue is direct at first,  with  indirect  sales over time.
The direct  sales  experience  is  important  to the first phases of the product
roll-out in order to provide responsive  service to customers,  to obtain direct
feedback  on the  usability  and  marketability  of  the  product  as  initially
conceived,  and to allow the  Company to  develop a  certification  program  for
indirect  sales  representatives  to ensure  that the  product  will be properly
represented and supported. The indirect channel development will be important to
building sales volume beyond the  capabilities of the current direct sales staff
to reach some market  segments.  Indirect  sales methods could range from simple
lead  sharing  in  informal  partnership  arrangements  to  formal  value  added
remarketer  representation  of the product,  to actual  packaging of the product
under another brand, which is referred to as an original equipment manufacturer,
or "OEM,"  relationship.  Microlog is  currently  seeking  appropriate  indirect
relationships  within  this  spectrum  of  possibilities,  and we  believe  that
indirect  sales will  represent a key to the  long-term  success of uniQue.  The
Company  initiated its first OEM  relationship  late in fiscal 2000 and plans to
add an  expanding  group of indirect  partners  beginning  in fiscal  2001.  The
Company plans that  indirect  partners will begin to make sales of uniQue during
fiscal 2001.

During fiscal 2000,  the Company  increased it sales and marketing team from six
employees as of November 1, 1999 to seven employees and one indirect  partner as
of October 31, 2000.  The Company has further  expanded its sales and  marketing
team in the first  quarter of fiscal  2001,  which  currently  consists of eight
employees  primarily  located  in the  Washington-Baltimore  metropolitan  area,
including an experienced  Vice President of Sales & Marketing.  Sales  personnel
are also  located  in New  Jersey  and  Georgia.  This team will focus on direct
sales,  technology partners, and value-added resellers of the Company's products
in the eastern United States.  Sales and marketing  activities  will continue to
focus on certain markets,  including  contact centers,  utilities,  and Federal,
state and local governments.

The Company  compensates its direct and distribution  sales personnel  through a
base salary plus commission,  which generally represents a percentage of the net
sales for which the sales personnel is responsible.

SERVICES

The Company  provides  limited  warranties  for parts and labor on its  products
ranging  from 90 days to two years from the date of  delivery.  The Company also
offers its  customers  annual  maintenance  contracts  under  which the  Company
maintains  and services the  systems.  Annual  maintenance  fees  generally  are
established  as a percentage  of the  purchase  price of the system and can vary
depending on the scope of coverage,  which ranges from normal  business hours to
24-hour or weekend assistance.

The Company generally  performs  maintenance for its interactive  communications
systems in the Washington, D.C. metropolitan area from its Germantown,  Maryland
headquarters,  where an  inventory  of spare parts is  maintained.  Microlog has
partnered with a national  subcontractor to perform on-site maintenance over its
interactive  communications  systems nationwide.  The Company operates a hotline
which customers with maintenance  contracts may use to request  assistance or to
ask questions concerning operation of the Company's  interactive  communications
systems.   Microlog  can  perform  many  diagnostic   procedures  remotely  and,
historically,  has been able to correct many of the difficulties  experienced by
its customers  through  telephone  consultation.  International  maintenance  is
performed by a third party  distributor  and is  supported  by Microlog  service
personnel in Germantown, Maryland.

Microlog also offers a variety of other services to its customers. Microlog will
customize interactive  communications and contact center systems to a customer's
specific  needs by  designing  application  software,  or by making  appropriate
changes in the underlying source code of any of Microlog's products. The Company
may charge for this service on a time and  materials  basis,  or may include the
service in the price of the system  being sold.  Training  on system  operations
also is offered to  customers.  In  addition,  the  Company  generally  provides
certain  improvements to its software  modules to customers who contract for its
system maintenance services.

COMPETITION

The market for our products is highly  competitive and the Company believes that
competition  will  intensify.  Our  competition  currently  comes  from  several
different  market  segments,  including  telecommunications  equipment  vendors,
computer  telephony  platform  developers,   stand  alone  point  solutions  and
application providers.

Some competitors are established  telephony vendors and have added the new media
types to their ability to process telephony. These include Avaya, Inc. (formerly
Lucent), Nortel Networks, and Aspect Communications as examples. Traditional CTI
vendors have added this  capability to their  offerings,  an example of which is
Genesys (Alcatel).

                                       5

<PAGE>

Stand alone point solution companies competing in this space include Interactive
Intelligence   Inc.,   Acuity   Corporation   (which  was  acquired  by  Quintus
Corporation),   Cosmocom,   Inc.,  eGain  Communications   Corporation,   eShare
Communications  Corporation,   Sideware,  and  Apropos  Technology.  Application
provider  competitors  include Siebel Systems,  Nortel Networks  (Clarify),  and
Peoplesoft (Vantive) as examples. Additionally,  network component companies are
also interested in the market,  most notably Cisco Systems with its acquisitions
of  Webline   (Internet  based  contact   management),   Geotel   Communications
Corporation  (Network  routing)  and Summa  Four,  Inc.  (traditional  telephony
switches).

BACKLOG

As of October 31,  2000,  the  Company had a backlog of existing  orders for the
Contact Center  Solutions  division  totaling $1.7 million.  By comparison,  the
backlog,  as of October 31, 1999,  was $2.8 million.  The Company has at various
times in the past experienced, and in the future may experience, fluctuations in
its backlog  attributable  to the  seasonality of  governmental  purchases.  The
Company  anticipates that all of the outstanding orders at October 31, 2000 will
be shipped and the sales  recognized  during  fiscal 2001.  Although the Company
believes that its entire backlog of orders  consists of firm orders,  because of
the possibility of customer changes in delivery schedules and delays inherent in
the government  contracting  process, the Company's backlog as of any particular
date may not be indicative of actual sales for any future period.

RESEARCH AND DEVELOPMENT AND PRODUCT ENGINEERING

Research  and  development  expenses for fiscal 2000 were focused on the broader
uniQue family,  with incremental  investments in the uniQue IVR product.  uniQue
2.0, 2.1.0 & 2.1.1 were released in fiscal 2000, with additional capabilities in
e-mail  handling,  Web call-back,  Web chat, Web bulletin board,  collaboration,
security enhancements,  statistics collection, management, and reporting. uniQue
IVR enhancements were in the areas of specific custom and re-usable  application
extensions for individual customers. The Company, in providing special features,
application  development,  and system  integration  services  to its  customers,
undertakes a significant amount of custom engineering. The Company is subject to
the risk that it may not have the financial  resources to maintain a competitive
research and development strategy.

The following table sets forth for the periods indicated the Company's  research
and development  expenditures  and the percentage of interactive  communications
net sales represented by these expenditures.

                      RESEARCH AND DEVELOPMENT EXPENDITURES

                    (In thousands, except percentage amounts)

                                                       YEAR ENDED OCTOBER 31,
                                                       ----------------------

                                                       2000     1999    1998
                                                       ----     ----    ----

     Research and development expense                 $1,350   $2,870  $3,256

     Percentage of Contact Center Solutions sales        18%      36%     22%

Costs incurred in basic research and development  are expensed as incurred.  The
Company  has  determined   that  the  process  of   establishing   technological
feasibility with its new products is completed approximately upon the release of
the  products to its  customers.  Accordingly,  software  development  costs are
expensed as incurred.

MANUFACTURING AND OPERATIONS

The Company  assembles  its own equipment  using  standard  parts  obtained from
outside sources.  The proprietary aspects of the Company's systems are primarily
in the software  provided with the  equipment  and in the specific  applications
development  designed for the customer.  Systems are built to order as they vary
in size and sophistication of software modules.  Equipment assembly,  along with
testing and quality control, are performed at its Germantown, Maryland facility.
Microlog  currently has four employees in its  manufacturing  group. The Company
generally uses standard parts and components obtained from a variety of computer
vendors and specially  configures  these  components to produce the hardware for
its systems.  Certain  components  used in the Company's  products are presently
available  from limited  sources.  To date,  the Company has been able to obtain
supplies of these  components at  reasonable  prices and in a timely manner from
these sources.

                                       6

<PAGE>


SOFTWARE PROTECTION,  TECHNOLOGY LICENSES, AND TRADEMARKS FOR THE CONTACT CENTER
SOLUTIONS DIVISION

The Company regards its software as proprietary  and has  implemented  legal and
practical  protective  measures in an effort to ensure that the software retains
that status.  The Company derives  protection for its software by licensing only
the object code to customers and keeping the source code confidential. Like many
other companies in the interactive  communications  industry,  Microlog does not
have patent  protection  for its software,  although some of the  inventions for
which  Microlog  has  received  and applied for  patents can be  implemented  in
software.  The Company,  therefore,  relies upon the  copyright  laws to protect
against  unauthorized  copying  of the  object  code of its  software,  and upon
copyright  and trade  secret laws for the  protection  of the source code of its
software. Despite this protection, competitors could copy certain aspects of the
Company's  software or hardware or obtain  information which the Company regards
as a trade secret.

The Company  has  patents on an  Interactive  Audio  Telecommunications  Message
Storage,  Forwarding and Retrieval System, a Software Switch for Digitized Audio
Signals,   an  Automated   Telephone   System  Using   Multiple   Languages,   a
Telecommunications  System  for  Transferring  Calls  without a  Private  Branch
Exchange,  Detection  of  TDD  Signals  in an  Automated  Telephone  System,  an
Automated  Telephone  System with TDD  Capabilities,  an Automated  Announcement
System, and Methods for Communicating with a  Telecommunications  Device for the
Deaf (TDD). The Company also has pending patent applications on an Apparatus and
Method for Coupling an Automated  Attendant to a  Telecommunications  System,  a
Method and System for Enabling Computer  Terminals in a Call Center  Environment
to Display and Perform Telephony Related Functions,  and a Contact Center System
Capable of Handling  Multiple  Media Types of Contacts  and Method for Using the
Same.

EVR,  Microlog,  Truant,  CINDI,  ProNouncer,   CallStar,  CallStar  FXD,  APRS,
Connecting People to a World of Information, The Automated Collector, and uniQue
are all registered trademarks owned by the Company.  uniQue Agent, The Best Seat
In The House,  Strategic  Team of Elite  Partners,  and The Global  Call  Center
Company  are  all   trademarks  or  service  marks  which  are  the  subject  of
applications  for  registration  owned by the  Company  which are pending in the
United  States  Patent and  Trademark  Office  (PTO).  INTEL  Corporation  filed
oppositions  with the PTO Trademark Trial and Appeal Board against the Company's
federal  trademark  applications for the marks Intela,  VCS Intela,  Intelaware,
Intelaview,   and  Intelapowerdial  (the  "Intela  marks").   This  consolidated
opposition  proceeding  has been settled and,  under the terms of the settlement
agreement,  the Company has abandoned its applications for and ceased use of the
Intela marks.  Products  formerly  branded with the Intela marks are now branded
with the Company's "uniQue IVR" family of marks.

The Company is currently using, and claims unregistered trademark rights in, the
following  additional,  unregistered marks: uniQue IVR, uniQue IVR-ware,  uniQue
IVR Powerdial,  Voice Connect,  Genesis, Voice Path, VCS 3500, Retail Solutions,
RLT,  and  Release  Line  Trunking.   In  addition,   the  Company  enters  into
confidentiality agreements with its employees,  distributors,  and customers and
limits  access to and  distribution  of its software,  documentation,  and other
proprietary  information.  There can be no assurance that the steps taken by the
Company  to  protect   its   proprietary   rights  will  be  adequate  to  deter
misappropriation of its technology.  Further, there can be no assurance that any
of the Company's patents,  trademarks or copyrights can be successfully enforced
or defended.

OLD DOMINION SYSTEMS DIVISION

GENERAL

Since the early 1970s, the Company has been providing  performance  analysis and
technical and administrative  support services,  principally in the form of data
processing  and analysis,  engineering  and  scientific  analysis,  and computer
services, to government and commercial customers.  These services, which compose
the Company's  original  business,  are provided through Old Dominion Systems, a
division of Microlog  Corporation  of Maryland.  The principal  customer for the
Company's performance analysis and technical and administrative support services
is The Johns Hopkins  University's  Applied Physics  Laboratory  (APL), a United
States Navy contractor, for which the Company has been performing services since
1972.  Sales from  contracts  with APL  accounted  for 49%,  56%, and 44% of the
Company's sales for fiscal years 2000,  1999, and 1998,  respectively.  Although
this segment of the Company has  historically  provided a stable source of sales
and profits,  due to a change in policy  regarding  contract labor  positions by
APL, the Company will no longer provide significant services to APL beginning in
the first quarter of fiscal 2001.

                                       7

<PAGE>


SERVICES

The Company's  performance  analysis and support  services  personnel  perform a
variety  of  analytical  and  science-related  support  services  under  several
contracts. These services usually are performed on the customer's premises or at
test-site  locations.  The  Company's  technical  staff works  jointly  with the
customer's  scientists and engineers in the acquisition,  processing,  analysis,
and  management of certain major weapon  systems data.  This work is directed to
quantifying  and reducing the impact of current and future threats to the United
States'  submarine fleet through the use of ocean sensor systems.  The technical
support rendered by the Company  includes  real-time data  acquisition,  digital
signal  processing,   software  development  and  systems   applications,   data
management, and data analysis.

In addition,  the Company supports naval strategic  programs through its role as
an independent evaluator of the performance of submarine-based strategic missile
systems.  This is  accomplished  through  extensive data  processing,  technical
evaluation and data analysis relating to sonar, fire control, missile, launcher,
and navigation subsystems.

The Company's performance analysis and support services employees also engage in
communications   testing  and  evaluation  for  mobile  communications   network
exercises.   The   Company's   communications   analysts   assist  in  preparing
presentations  to the  Navy and in  designing  and  implementing  communications
analysis software.

The Company's employees perform various technical support services in connection
with several  Ballistic  Missile Defense  Organization  (BMDO)  projects.  These
include   advanced   technical   support  in  the   design,   development,   and
implementation of space-qualified equipment, systems analysis, and the operation
of a VAX computer-based mission control center for the MSX mission.

BACKLOG

As of October  31,  2000,  the  Company  had no  backlog of funding on  existing
contracts for Old Dominion Systems. By comparison, the backlog as of October 31,
1999 was $0.4 million. The Company's existing contracts are indefinite delivery,
indefinite  quantity  (IDIQ)  contracts  which  generally  do not have a funding
amount,  and  therefore  are not  included  in backlog.  The Company  expects to
continue to provide a minimal amount of services to APL in fiscal year 2001.

GOVERNMENT REGULATION FOR THE OLD DOMINION SYSTEMS DIVISION

In order to maintain  contracts  with  contractors or Government  agencies,  the
Company  must comply with a variety of  regulations  and  Department  of Defense
guidelines,  including  regulations  or  guidelines  covering  security,  record
keeping, and employment practices. The majority of the employees assigned to the
Company's  contracts with  contractors or agencies are required to have security
clearances.  The  Company  historically  has  not  experienced  any  significant
difficulty in obtaining the necessary security  clearances.  The Company's sales
under these contracts are subject to audit by the Defense  Contract Audit Agency
(the  DCAA).  The  DCAA  has  completed  audits  through  fiscal  1992,  and any
adjustments  required  as  a  result  of  these  audits  have  been  minor.  The
implementation by the Federal  Government of spending  cutbacks,  or a change in
national defense priorities, could reduce the Company's sales.

COMPANY EMPLOYEES

At January 19, 2001, the Company's two divisions employed a total of 89 persons,
including  two  part-time  employees.  Of  these  personnel,  63  worked  in the
Company's  Contact Center  Solutions  division and 26 worked in the Old Dominion
Systems  division.  Three  individuals in the Contact Center Solutions  division
serve as  officers  or  managers  or perform  administrative  services  for both
divisions of the Company.

The Company  believes that its success will continue to depend,  in part, on its
ability to attract  and  retain  skilled  sales and  marketing,  technical,  and
management  personnel.  Because of the high turnover rate  typically  associated
with sales and marketing personnel, the Company anticipates that it will need to
replace some of the sales and marketing  personnel who do not meet the Company's
performance  expectations.  The  Company  has not  experienced  any  significant
difficulty in hiring  qualified  technical  personnel.  Neither of the Company's
divisions  is a party to a  collective  bargaining  agreement,  and the  Company
considers its employee relations to be satisfactory.

                                       8

<PAGE>

FACTORS THAT MAY AFFECT FUTURE RESULTS OF OPERATIONS

The Company has been experiencing  reduced demand,  increased  competition,  and
reduced margins in the interactive voice response area, which was a major thrust
of the  Company  prior to the  development  of the uniQue  product  family.  The
Company  attributes  the  decline  in IVR sales to market  forces.  The  Company
believes  that  interactive  voice  response  systems in  general,  and  certain
vertical sub-segments of this market in particular, are in the maturing phase of
market  evolution  for  stand-alone   systems.   Accordingly,   competition  has
increased, industry consolidation is on-going, margins have been reduced, and it
has become more  difficult to sell these  products.  In  addition,  governmental
customers  have been procuring  large IVR systems as part of major  procurements
from  larger  vendors,  which has  required  the Company to work  through  prime
contractors,  also resulting in increased margin pressure and greater difficulty
in making sales  directly.  The Company's  response to this has been to increase
its R&D in the uniQue  product  family to  address  the  larger  opportunity  in
customer relationship  management associated with corporate contact centers, and
to offer professional  turnkey services associated with the integration of those
modern customer contact centers. This addresses not only traditional voice types
of contacts,  but also e-mail,  fax,  Web  callback,  IP  telephony,  chat,  Web
bulletin board, and hardcopy mail,  thereby expanding the Company's  addressable
market.  The Company  believes that this approach  yields sales potential due to
the  trend  in  corporate  process   re-engineering  in  customer   relationship
management,   and  in  outsourcing  of  related   transactions  and  application
development.

In fiscal 2001, the Company's  Contact Center Solutions  strategy for addressing
the market  trends  will be to expand its sales and  marketing  efforts,  uniQue
product  offerings,  and its  professional  services  offerings  to provide more
comprehensive  solutions to its customers and in different  ways.  Microlog will
offer its products directly through regional sales  representatives,  indirectly
through OEM and reseller partners, and through hosted or network-based services.
Both product features and services offerings will be augmented as appropriate to
facilitate marketing and sales through the various means.

The Company is subject to the risk that its new strategy will not be successful.
The new strategy is dependent on market  acceptance  of the  Company's new focus
and new  products,  ongoing  research  and  development  efforts  and  sales and
marketing  activities over the near term. In addition,  the new strategy is also
dependent on the Company's  ability to  successfully  retain and recruit skilled
personnel.

ITEM 2.  PROPERTIES

The Company  presently  leases and occupies the 24,000  square foot  building in
Germantown,  Maryland, which it uses for its principal executive offices and its
interactive  communications  operations  center.  In September 1999, the Company
entered into a 10-year lease  commitment on the building  which extends  through
2009.

ITEM 3.  LEGAL PROCEEDINGS

The  Company  is  subject  to  litigation  from  time to time  arising  from its
operations and receives  occasional  letters  alleging  infringement  of patents
owned by third parties.  Management believes that such litigation and claims are
without  merit and will not have a  material  adverse  effect  on the  Company's
financial position or results of operations.

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

None.

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Information  responsive to this Item is incorporated  herein by reference to the
Annual Report to Shareholders.

ITEM 6.  SELECTED FINANCIAL DATA

Information  responsive to this Item is incorporated  herein by reference to the
Annual Report to Shareholders.

                                       9

<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Information  responsive to this Item is incorporated  herein by reference to the
Annual Report to Shareholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to minimal  market  risks.  We are exposed to interest  rate risk
related to any  borrowings  under our line of credit.  There were no  borrowings
outstanding  under our line of credit as of October  31,  2000.  Our market risk
sensitive instruments do not expose us to material market risk exposures.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated  Financial  Statements of the Company,  including  Consolidated
Statements of Operations for the fiscal years ended October 31, 2000,  1999, and
1998,  Consolidated  Balance  Sheets  as of  October  31,  2000,  1999 and 1998,
Consolidated  Statements of Changes in Stockholders' Equity for the fiscal years
ended October 31, 2000,  1999, and 1998,  Consolidated  Statements of Cash Flows
for the fiscal  years  ended  October 31,  2000,  1999,  and 1998,  and Notes to
Consolidated  Financial  Statements,  together with the report  thereon of Grant
Thornton    dated    December   8,   2000,    and   the   report    thereon   of
PricewaterhouseCoopers  LLP,  dated March 17, 1999, are  incorporated  herein by
reference to pages 6 through 18 of the Company's Annual Report to Shareholders.

ITEM 9.  CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS   ON   ACCOUNTING  AND
         FINANCIAL DISCLOSURE

On July 12, 1999, the Company  dismissed  PricewaterhouseCoopers  LLP ("PWC") as
its independent accountant.  PWC's reports on the Company's financial statements
for the fiscal years ended  October 31, 1998 and 1997 did not contain an adverse
opinion or a  disclaimer  of opinion,  and were not  qualified or modified as to
uncertainty,   audit  scope  or  accounting  principle.  However,  such  reports
contained an explanatory paragraph relating to the Company's ability to continue
as a going  concern.  The  decision  to dismiss  PWC was  approved  by the Audit
Committee  and the Board of  Directors of the Company.  In  connection  with the
audits of the  financial  statements  of the Company for the fiscal  years ended
October 31, 1998 and 1997, and for the period from November 1, 1998 through July
12, 1999,  the Company had no  disagreements  with PWC on matters of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure,  which  disagreements,  if not resolved to the  satisfaction  of PWC,
would have caused PWC to make reference to such disagreements in their report on
the Company's financial statements for such years.

The Company engaged Grant Thornton LLP as its new  independent  accountant as of
July 12, 1999.  The  decision to engage  Grant  Thornton LLP was approved by the
Audit Committee and Board of Directors of the Company.

These events were  previously  reported by the Company on its Current  Report on
Form 8-K, filed with the SEC on July 16, 1999.

PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Information  responsive to this Item is incorporated  herein by reference to the
Proxy Statement.

ITEM 11.   EXECUTIVE COMPENSATION

Information  responsive to this Item is incorporated  herein by reference to the
Proxy Statement.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information  responsive to this Item is incorporated  herein by reference to the
Proxy Statement.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information  responsive to this Item is incorporated  herein by reference to the
Proxy Statement.

                                       10

<PAGE>


PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1)  Financial Statements

The  following  financial  statements  are included on pages 5 through 20 of the
Annual Report to Shareholders and are incorporated herein by reference.

        Consolidated Statements of Operations for the fiscal years ended October
        31, 2000, 1999, and 1998

        Consolidated Balance Sheets as of October 31, 2000, and 1999

        Consolidated  Statements  of  Changes  in  Stockholders'  Equity for the
        fiscal years ended October 31, 2000, 1999, and 1998

        Consolidated Statements of Cash Flows for the fiscal years ended October
        31, 2000, 1999, and 1998

        Notes to Consolidated Financial Statements

        Report of Independent Certified Public Accountants

        Report of Independent Accountants

(a)(2)  Financial Statement Schedule

Unaudited   supplementary  data  entitled  "Selected  Quarterly  Financial  Data
(unaudited)" is  incorporated  herein by reference in Item 8 (included in "Notes
to Consolidated Financial Statements" as Note 16).

The following  financial  statement  schedule and auditor's report in connection
therewith are attached hereto as pages F-1 and F-2:

F-1          Schedule II Valuation and Qualifying Accounts and Reserves

F-2          Report of Independent Certified Public Accountants on  Supplemental
             Information

All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

(b)      Reports on Form 8-K.

The  Company  did not file any  Current  Reports  on Form 8-K  during the fourth
quarter of its 2000 fiscal year.

(c)  Exhibits.

       EXHIBIT
       NUMBER                            DESCRIPTION
       -------                           -----------

         3.1      Amended  and Restated Articles of Incorporation of Registrant,
                  as amended 1/

         3.2      By-laws of Registrant, as amended 1/

         4.1      Specimen Stock Certificate 1/

         10.1     Microlog Corporation Medical Reimbursement Plan 2/

         10.2     Microlog Corporation 1989 Non-Employee Director  Non-Qualified
                  Stock Option Plan 3/

         10.3     Microlog Corporation 1995 Employee Stock Option Plan 4/

                                       11

<PAGE>

         10.4     Sub-contracting   Agreement   with   Aspect Telecommunications
                  Corporation 5/

         10.5     Sub-contracting Agreement with Applied Physics Laboratory 5/

         10.6     Loan and Security Agreement with Silicon Valley Bank 6/

         10.7     Amendment to  the  Loan  and  Security  Agreement with Silicon
                  Valley Bank 7/

         13       Annual Report  to  Shareholders  for  the  fiscal  year  ended
                  October 31, 2000 7/

         22       Subsidiaries of the Company 7/

         23.1     Consent of Grant Thornton LLP 7/

         23.2     Consent of PricewaterhouseCoopers LLP 7/

         27.1     Financial Data Schedule 7/

---------

1/ Filed as Exhibits 3.1, 3.2 and 4.1, respectively to Registration Statement on
   Form S-1, File No. 33-31710, and incorporated herein by reference.

2/ Filed as Exhibit 10.6 to Annual Report on Form 10-K for the fiscal year ended
   October 31, 1991 and incorporated herein by reference.

3/ Filed as Exhibit 10.8 to Annual Report on Form 10-K for the fiscal year ended
   October 31, 1993 and incorporated herein by reference.

4/ Filed  as  Exhibit  10.6 to  Registration  Statement  on Form  S-8,  File No.
   333-07981 and  incorporated  herein by reference.

5/ Filed as Exhibits 10.12 and 10.13, respectively to Annual Report on Form 10-K
   for the  fiscal  year  ended  October  31,  1992 and  incorporated  herein by
   reference.

6/ Filed as Exhibit 10.7 to Annual Report on Form 10-K for the fiscal year ended
   October 31, 1992 and incorporated herein by reference.

7/ Filed herewith.

                                       12


<PAGE>


OTHER MATTERS

For the purposes of complying  with the  amendments to the rules  governing Form
S-8 (effective  July 13, 1990) under the Securities Act of 1933, the undersigned
registrant hereby undertakes as follows, which undertaking shall be incorporated
by  reference  into  registrant's  Registration  Statements  on Form  S-8,  Nos.
33-30965 (filed September 11, 1989) and 33-34094 (filed March 30, 1990):

Insofar as indemnification  for liabilities  arising under the Securities Act of
1933 may be permitted to  directors,  officers  and  controlling  persons of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
of  1933  and is,  therefore,  unenforceable.  In the  event  that a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the  registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.


<PAGE>



        F-1, SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                  Balance                                   Balance
Fiscal Year Ended 10/31/00                                        11/01/99     Additions      Deletions     10/31/00
-----------------------------------------                         --------     ---------      ---------     --------
<S>                                                               <C>          <C>            <C>           <C>

Receivables
    Allowance for Doubtful Accounts                                   150             10            35          125

Inventory
    Reserve for Obsolescence                                          488            140           291          337

Income Taxes
    Valuation Allowance                                             8,315            385             0        8,700

                                                                  Balance                                   Balance
Fiscal Year Ended 10/31/99                                        11/01/98     Additions      Deletions     10/31/99
----------------------------------------                          --------     ---------      ---------     --------

Receivables
    Allowance for Doubtful Accounts                                   144            100            94          150

Inventory
    Reserve for Obsolescence                                        1,644            309         1,465          488

Income Taxes
    Valuation Allowance                                             6,400          1,915             0        8,315


                                                                  Balance                                   Balance
Fiscal Year Ended 10/31/98                                        11/01/97     Additions      Deletions     10/31/98
----------------------------------------                          --------     ---------      ---------     --------

Receivables
    Allowance for Doubtful Accounts                                   152             29            37          144

Inventory
    Reserve for Obsolescence                                          345          1,299             0        1,644

Income Taxes
    Valuation Allowance                                             1,966          4,434             0        6,400

</TABLE>

                                       F-1

<PAGE>







       REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SUPPLEMENTAL
                                  INFORMATION


To the Board of Directors and Stockholders
Microlog Corporation

In  connection  with  our  audit of the  consolidated  financial  statements  of
Microlog  Corporation referred to in our report dated December 8, 2000, which is
included in the Annual Report on Form 10-K, we have also audited Schedule II for
the year ended October 31, 2000. In our opinion,  this schedule presents fairly,
in all material respects, the information required to be set forth therein.

GRANT THORNTON LLP

Vienna, Virginia
December 8, 2000

                                      F-2

<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized,  in the  City of
Germantown, State of Maryland, on January 29, 2001.

                                      MICROLOG CORPORATION

                                      By   /s/ John C. Mears
                                           -------------------------------------
                                           John C. Mears
                                           President and Chief Executive Officer

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


         /s/ John C. Mears                               January 29, 2001
------------------------------------
John C. Mears
President and Chief Executive Officer
(Principal Executive Officer)


         /s/ Kirk E. Isenbart                            January 29, 2001
------------------------------------
Kirk E. Isenbart
Controller
(Principal Accounting and Financial Officer)


         /s/ David M. Gische                             January 29, 2001
--------------------------------------------
David M. Gische
Chairman of the Board and Director

         /s/ Robert E. Gray, Jr..                        January 29, 2001
--------------------------------------------
Robert E. Gray, Jr.
Director


         /s/ David B. Levi                               January 29, 2001
--------------------------------------------
David B. Levi
Director

         /s/ Joe J. Lynn                                 January 29, 2001
--------------------------------------------
Joe J. Lynn
Director

         /s/ John J. Sickler                             January 29, 2001
--------------------------------------------
John J. Sickler
Director

         /s/ Randall P. Gaboriault                       January 29, 2001
--------------------------------------------
Randall P. Gaboriault
Director