SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                                   __________

                                    Form 10-Q

  X    QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR  15(d) OF THE SECURITIES
-----  EXCHANGE  ACT  OF  1934
       For  the  quarterly  period  ended  December  31,  2002
                                           -------------------

                                       OR

       TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR 15(d) OF THE SECURITIES
-----  EXCHANGE  ACT  OF  1934
       For  the  transition  period  from  ____________  to  ____________

                         Commission file number  0-16061
                                                --------

                             CRITICARE SYSTEMS, INC.
                     ---------------------------------------
             (Exact name of registrant as specified in its charter)

                   Delaware                         39-1501563
                   --------                         ----------
        (State or other jurisdiction      (IRS Employer Identification No.)
      of incorporation or organization)

     20925 Crossroads Circle, Suite 100,  Waukesha, Wisconsin          53186
  -----------------------------------------------------------------------------
          (Address of principal executive offices)                   (Zip Code)

Registrant's  telephone  number  including  area  code  (262)  798-8282
                                                        ---------------

                                 N/A
        --------------------------------------------------------
        Former  name,  former  address  and  former fiscal year,
                   if changed since last  report.

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  whether  the  registrant  is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).            Yes      No    X
                                                           ---       ---

Number of shares outstanding of each class of the registrant's classes of common
stock  as  of  December  31,  2002:  Voting  Common  Stock  11,204,024 shares.

<PAGE>
                             CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2002 AND JUNE 30, 2002

                                   (UNAUDITED)
<TABLE>
<CAPTION>


ASSETS                                                                      December 31, 2002  June  30, 2002
                                                                            -----------------  --------------
<S>                                                                         <C>                  <C>
CURRENT ASSETS:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . .  $        4,203,567   $ 3,523,070
Accounts receivable, less allowance for doubtful accounts
   of $300,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           6,357,182     5,481,952
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             925,460     2,304,689
Other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . .             404,562       502,348
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           7,570,524     7,134,803
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             331,267       453,347
                                                                            -------------------  ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .          19,792,562    19,400,209

Property, plant and equipment - net. . . . . . . . . . . . . . . . . . . .           2,220,188     5,983,060

License rights and patents - net . . . . . . . . . . . . . . . . . . . . .              87,487        90,987
                                                                            -------------------  ------------

TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       22,100,237   $25,474,256
                                                                            ===================  ============


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $        3,606,819   $ 2,331,496
Accrued liabilities:
    Compensation and commissions . . . . . . . . . . . . . . . . . . . . .             934,998       770,578
    Product warranties . . . . . . . . . . . . . . . . . . . . . . . . . .             325,000       248,725
    Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             403,549       490,922
Current maturities of long-term debt . . . . . . . . . . . . . . . . . . .                   -        93,589
                                                                            -------------------  ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . .           5,270,366     3,935,310

LONG-TERM DEBT, less current maturities. . . . . . . . . . . . . . . . . .                   -     3,103,536

OTHER LONG-TERM OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . .              41,241        48,344

STOCKHOLDERS' EQUITY:
Preferred stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   -             -
Common stock - $.04 par value, 15,000,000 shares authorized,
    11,204,024 and 11,199,524 shares issued and outstanding, respectively.             448,161       447,981
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . .          23,358,742    23,350,124
Common stock held in treasury (133,539 and 100,890 shares, respectively) .            (425,852)     (309,059)
Subscriptions receivable . . . . . . . . . . . . . . . . . . . . . . . . .            (225,000)     (225,000)
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . . . .          (7,298,981)   (7,187,501)
Cumulative translation adjustment. . . . . . . . . . . . . . . . . . . . .               6,100         5,832
Unrealized gain on investments . . . . . . . . . . . . . . . . . . . . . .             925,460     2,304,689
                                                                            -------------------  ------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . .          16,788,630    18,387,066
                                                                            -------------------  ------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       22,100,237   $25,474,256
                                                                            ===================  ============


See notes to consolidated financial statements.
</TABLE>



                                        2
<PAGE>

                             CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                   SIX MONTHS ENDED DECEMBER 31, 2002 AND 2001


                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                     2002          2001
                                                 ------------  ------------
<S>                                              <C>           <C>
NET SALES . . . . . . . . . . . . . . . . . . .  $15,353,953   $12,835,733

COST OF GOODS SOLD. . . . . . . . . . . . . . .    9,018,466     8,160,154
                                                 ------------  ------------

GROSS PROFIT. . . . . . . . . . . . . . . . . .    6,335,487     4,675,579

OPERATING EXPENSES:
Sales and marketing . . . . . . . . . . . . . .    3,341,298     3,103,433
Research, development and engineering . . . . .    1,385,655     1,167,701
Administrative. . . . . . . . . . . . . . . . .    2,088,761     1,243,596
                                                 ------------  ------------
Total . . . . . . . . . . . . . . . . . . . . .    6,815,714     5,514,730

LOSS FROM OPERATIONS. . . . . . . . . . . . . .     (480,227)     (839,151)

OTHER INCOME (EXPENSE):
Interest expense. . . . . . . . . . . . . . . .      (91,533)     (124,947)
Interest income . . . . . . . . . . . . . . . .       28,528        47,999
Other . . . . . . . . . . . . . . . . . . . . .      431,752        39,777
                                                 ------------  ------------
Total . . . . . . . . . . . . . . . . . . . . .      368,747       (37,171)

LOSS BEFORE INCOME TAXES. . . . . . . . . . . .     (111,480)     (876,322)

INCOME TAX PROVISION. . . . . . . . . . . . . .            -             -
                                                 ------------  ------------

NET LOSS. . . . . . . . . . . . . . . . . . . .  $  (111,480)  $  (876,322)
                                                 ============  ============

NET LOSS PER COMMON SHARE:
Basic . . . . . . . . . . . . . . . . . . . . .  $     (0.01)  $     (0.08)
Diluted . . . . . . . . . . . . . . . . . . . .  $     (0.01)  $     (0.08)

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING:
Basic . . . . . . . . . . . . . . . . . . . . .   11,071,264    10,761,035
Diluted . . . . . . . . . . . . . . . . . . . .   11,071,264    10,761,035

See notes to consolidated financial statements.

</TABLE>


                                        3
<PAGE>

                             CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                  THREE MONTHS ENDED DECEMBER 31, 2002 AND 2001

                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                    2002          2001
                                                 -----------  ------------
<S>                                              <C>          <C>
NET SALES . . . . . . . . . . . . . . . . . . .  $ 9,049,606  $ 7,346,596

COST OF GOODS SOLD. . . . . . . . . . . . . . .    5,111,466    4,482,453
                                                 -----------  ------------

GROSS PROFIT. . . . . . . . . . . . . . . . . .    3,938,140    2,864,143

OPERATING EXPENSES:
Sales and marketing . . . . . . . . . . . . . .    2,014,338    1,503,078
Research, development and engineering . . . . .      756,715      580,618
Administrative. . . . . . . . . . . . . . . . .    1,131,531      582,818
                                                 -----------  ------------
Total . . . . . . . . . . . . . . . . . . . . .    3,902,584    2,666,514

INCOME FROM OPERATIONS. . . . . . . . . . . . .       35,556      197,629

OTHER INCOME (EXPENSE):
Interest expense. . . . . . . . . . . . . . . .            -      (62,271)
Interest income . . . . . . . . . . . . . . . .       12,662       14,954
Other . . . . . . . . . . . . . . . . . . . . .      131,953       35,201
                                                 -----------  ------------
Total . . . . . . . . . . . . . . . . . . . . .      144,615      (12,116)

INCOME BEFORE INCOME TAXES. . . . . . . . . . .      180,171      185,513

INCOME TAX PROVISION. . . . . . . . . . . . . .            -            -
                                                 -----------  ------------

NET INCOME. . . . . . . . . . . . . . . . . . .  $   180,171  $   185,513
                                                 ===========  ============

NET INCOME PER COMMON SHARE:
Basic . . . . . . . . . . . . . . . . . . . . .  $      0.02  $      0.02
Diluted . . . . . . . . . . . . . . . . . . . .  $      0.02  $      0.02

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING:
Basic . . . . . . . . . . . . . . . . . . . . .   11,069,846   10,789,041
Diluted . . . . . . . . . . . . . . . . . . . .   11,382,915   11,499,734

See notes to consolidated financial statements.

</TABLE>


                                        4
<PAGE>
                             CRITICARE SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   SIX MONTHS ENDED DECEMBER 31, 2002 AND 2001

                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                         2002          2001
                                                     ------------  ------------
<S>                                                  <C>           <C>
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . .  $  (111,480)  $  (876,322)
Adjustments to reconcile net loss to net cash
    used in operating activities:
         Depreciation . . . . . . . . . . . . . . .      453,725       389,675
         Amortization . . . . . . . . . . . . . . .        3,500         3,501
         Provision for doubtful accounts. . . . . .            -             -
         Provision for obsolete inventory . . . . .     (177,813)            -
         Gain on sale of Immtech stock. . . . . . .     (255,843)            -
         Gain on sale of building . . . . . . . . .      (41,208)            -
         Changes in assets and liabilities:
              Accounts receivable . . . . . . . . .     (875,230)    1,616,061
              Other receivables . . . . . . . . . .       97,786        15,341
              Inventories . . . . . . . . . . . . .     (145,120)      323,847
              Prepaid expenses. . . . . . . . . . .      122,080       129,867
              Accounts payable. . . . . . . . . . .    1,275,323    (1,361,629)
              Accrued liabilities . . . . . . . . .      146,219      (310,776)
                                                     ------------  ------------
Net cash provided by (used in) operating activities      491,939       (70,435)

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net . .     (557,597)     (147,820)
Proceeds from sale of Immtech stock . . . . . . . .      255,843             -
Proceeds from sale of building. . . . . . . . . . .    3,795,164             -
                                                     ------------  ------------
Net cash provided by (used in) investing activities    3,493,410      (147,820)

FINANCING ACTIVITIES:
Retirement of long-term debt. . . . . . . . . . . .   (3,197,125)      (42,223)
Repurchase of Company common stock                      (121,359)            -
Proceeds from issuance of common stock. . . . . . .       13,364       355,532
                                                     ------------  ------------
Net cash (used in) provided by financing activities   (3,305,120)      313,309

EFFECT OF EXCHANGE RATE CHANGES ON CASH . . . . . .          268             -

NET INCREASE IN CASH AND CASH EQUIVALENTS . . . . .      680,497        95,054
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR. . . .    3,523,070     3,362,104
                                                     ------------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR. . . . . . .  $ 4,203,567   $ 3,457,158
                                                     ============  ============


See notes to consolidated financial statements.
</TABLE>




                                        5
<PAGE>

                             CRITICARE SYSTEMS, INC.
              Condensed Notes to Consolidated Financial Statements
                                   (Unaudited)

1.  BASIS  OF  PRESENTATION

The  accompanying unaudited financial statements have been prepared by Criticare
Systems,  Inc.  (the  "Company")  pursuant  to  the rules and regulations of the
Securities  and  Exchange Commission ("SEC") and, in the opinion of the Company,
include  all  adjustments  necessary  for  a  fair statement of results for each
period  shown. Certain information and footnote disclosures normally included in
financial  statements  prepared in accordance with generally accepted accounting
principles  have  been  condensed  or  omitted  pursuant  to  such SEC rules and
regulations.  The  Company  believes  that  the disclosures made are adequate to
prevent  the  financial information given from being misleading. It is suggested
that  these  financial  statements  be  read  in  conjunction with the financial
statements  and notes thereto included in the Company's latest annual report and
previously  filed  Form  10-K.  Certain  amounts  from the fiscal 2002 financial
statements  have  been  reclassified to conform to the fiscal 2003 presentation.


2.  INVENTORY  VALUATION

Inventory  is stated at the lower of cost or market, with cost determined on the
first-in,  first-out method.  Components of inventory consisted of the following
at  December  31  and  June  30,  2002,  respectively:

<TABLE>
<CAPTION>


                                 December 31, 2002   June 30, 2002
                                 ------------------  --------------
<S>                              <C>                 <C>
Component parts . . . . . . . .  $    3,205,548      $  3,549,397
Work in process . . . . . . . .         772,661           499,950
Finished units. . . . . . . . .       4,360,502         4,031,456
                                 --------------      ------------
Total inventories . . . . . . .       8,338,711         8,080,803
Less:  reserve for obsolescence         768,187           946,000
                                 --------------      ------------
Net inventory . . . . . . . . .  $    7,570,524      $  7,134,803

</TABLE>


3.  INVESTMENTS

In  October  of 2002 the Company sold 4,000 shares of its Immtech International,
Inc.  ("Immtech")  common  stock  and realized a gain of $14,097 and in July and
August  of  2002  the  Company  sold  50,000  shares of Immtech common stock and
realized  a  gain of $241,746. The Company held 402,374 shares of Immtech stock,
which  was trading at $2.30 per share, on December 31, 2002. The market value of
these  shares  could  change  substantially  due  to  overall  market  risk.



                                        6
<PAGE>
4.  PROPERTY,  PLANT  AND  EQUIPMENT

Property,  plant  and  equipment  consist  of  the  following:

<TABLE>
<CAPTION>

                                      December 31, 2002   June 30, 2002
                                      -----------------   -------------
<S>                                   <C>                 <C>
Land and building.. . . . . . . . .       $           -   $  4,525,000
Machinery and equipment. . . . . . .          2,194,290      2,007,322
Furniture and fixtures . . . . . . .            908,896        809,277
Construction in progress . . . . . .                  -        116,798
Leasehold improvements . . . . . . .            207,969              -
Demonstration and loaner monitors. .          1,282,040      1,616,766
Production tooling . . . . . . . . .          3,499,560      3,425,117
                                          -------------   ------------
Property, plant and equipment - cost          8,092,755     12,500,280
Less:  accumulated depreciation. . .          5,872,567      6,517,220
                                          -------------   ------------
Property, plant and equipment - net.       $  2,220,188   $  5,983,060
</TABLE>



On  August  30,  2002,  the Company sold its building in Waukesha, Wisconsin and
leased  back  approximately  62% of the building's square footage.  The building
was sold for $4,000,000 and a gain of $41,208 was realized on the sale after the
payment of commissions and fees and the funding of $105,396 in capitalized build
out  costs  needed to split the building into two leasable spaces.  The proceeds
from  the  sale  were  used  to  retire  the $3,182,160 of debt on the Company's
balance  sheet  at  August 30, 2002 and increased the Company's cash position by
approximately  $500,000.


5.  CONTINGENCIES

The import and export rules applicable to all United States companies engaged in
international  business  transactions contain compliance guidelines.  Violations
may  result  in  civil  or criminal penalties, or both, as well as the potential
loss  of  export  privileges.

On  August  6,  2002,  in  part  due  to  the  new regulations imposed under the
Sarbanes-Oxley  Act,  the Company initiated an internal review of its import and
export  procedures.  On August 28, 2002, senior management of the Company became
aware of previous events that may have violated United States import/export laws
and  regulations.  Senior  management  of  the Company immediately authorized an
internal  audit  of  these  possible violations, focusing on the sale of medical
equipment  directly or indirectly into an embargoed country and possible marking
issues.

The  factual  investigation  pursuant  to  the  internal  audit  is complete, no
additional  compliance  issues  arose,  and  no  material  marking  issues  were
identified  as  a  result  of  the  investigation.

Subsequently,  the  Company  has  taken  action to adopt and implement a written
compliance  program  with respect to applicable import/export rules. The Company
has also undertaken a voluntary disclosure with the relevant government agencies
and  has  filed its completed internal audit report and all requested documents.
Although there is no assurance, based upon the results of the completed internal
audit  and  precedents,  the  Company  believes  a  negotiated settlement of any
violations  will  not  have  a  material  adverse  effect  on  the Company.   In
addition, the Company does not believe that the audit result supports the denial
of  export  privileges;  however, any such penalty would have a material adverse
effect  on  the  Company's  business.  The  Company  further  believes  that the
voluntary  disclosure,  along  with  other internal actions taken, will serve to
mitigate  any  potential  adverse  consequences  that  otherwise  might  accrue.


                                        7
<PAGE>
                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition
                   Six Months Ended December 31, 2002 and 2001

RESULTS  OF  OPERATIONS
-----------------------

Record  net sales in the fiscal second quarter ended December 31, 2002 increased
year-to-date sales for the six months ended December 31, 2002 over $2.5 million,
or  19.6%,  above the prior year period.  The Company's domestic, international,
OEM, and governmental sales all were higher than the prior year period, with OEM
and  domestic  sales  contributing  most significantly to the sales increase.  A
21.4% increase in the number of units shipped and a 7.5% increase in the average
selling  price  per  unit  drove  the  higher  year-to-date  sales.

The  gross  profit  percentage  for  the first six months of the current year of
41.3%  improved  almost  five  points from the 36.4% generated for the first six
months  of  the  prior year.  The significantly higher sales in the current year
resulted  in  a better utilization of fixed manufacturing costs and was the main
contributor to the improved margins.  In addition, due to the outsourcing of the
majority  of  the Company's products, approximately $310,000 of fixed costs that
had previously been classified as manufacturing expenses were more appropriately
included  in  administrative  expenses in the current year and improved margins.

Operating  expenses  for the six months ended December 31, 2002 were higher than
the same period in the prior year by $1.3 million, with over $1.2 million of the
increased  spending  occurring  in  the  Company's  second fiscal quarter ending
December  31,  2002.  The  higher  operating expenses in the quarter were mainly
driven  by  one  time  type  costs  incurred,  including  $103,000 to launch the
Company's  new  line  of proprietary anesthesia monitoring products, significant
legal  and  consulting  fees  related  to  the internal review conducted  by the
Company of its import and export procedures totaling approximately $285,000, and
a  final  payment  of  $150,000  made to the Company's former CEO and founder to
satisfy  past severance obligation issues.  Also contributing to the increase in
operating  expenses  was  the  $310,000  reclassification of fixed manufacturing
costs  discussed  above to administrative expense, higher trade show and related
sales  travel expenses to attend three large medical trade shows held during the
quarter  that  increased  spending  $211,000 from the prior year, and a $188,000
increase  in  employee and dealer commissions driven by the strong fiscal second
quarter  sales.  Operating  expenses are expected to return closer to historical
levels  in  future  quarters  as the internal review winds down and the costs to
support  the  newly  released  anesthesia  products  are  reduced.   See
"Forward-Looking  Statements."

Other  income  improved $405,918 for the six months ended December 31, 2002 from
the  same  period  in the prior year due mainly to the recognition of a $255,843
gain  on  the sale of 54,000 shares of the Company's Immtech International, Inc.
stock,  $100,000  in  profits  recognized  on  the  successful completion of the
Company's  first medical equipment integration project in Romania, and a $41,208
gain  on  the  sale  of  the  Company's  building.

The  significantly  higher sales, improved margins, and increase in other income
for the six months ended December 31, 2002 more than offset the higher operating
expenses,  resulting in a net loss of $111,480 that was $764,842 better than the
$876,322  net  loss  in  the  prior  year  period.


                                        8
<PAGE>
                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition
                  Three Months Ended December 31, 2002 and 2001

RESULTS  OF  OPERATIONS
-----------------------

Record  quarterly  net  sales  for  the  three months ended December 31, 2002 of
$9,049,606  increased  23.2% from the same period in the prior year, driven by a
26.3% increase in the number of units shipped and a 7.9% increase in the average
selling  price  per  unit.  Net sales of the Company's core 506DX and 8100 vital
signs  monitors  were  $1,203,577  higher  in the current quarter.  These higher
sales,  combined with a $357,800 increase in defibrillator sales and $162,226 of
new  sales  from  the  Company's recently released anesthesia monitors drove the
increase  in  sales  to  a  quarterly  record  level  for the three months ended
December  31,  2002.

The  gross  profit  percentage  of 43.5% for the three months ended December 31,
2002  improved  significantly  from the 39.0% produced in the same period in the
prior  year  and represented the strongest quarterly margin performance in three
years.  The  record  sales  volume  in  the  current period resulted in a better
utilization  of  fixed manufacturing costs and was the main driver of the higher
margins.  In  addition,  due to the outsourcing of the majority of the Company's
products,  approximately  $170,000  of  fixed  costs  that  had  previously been
classified  as  manufacturing  expenses  were  more  appropriately  included  in
administrative  expenses  in  the  current  period  ended  December 31, 2002 and
improved  margins  when  compared  to  the  same  period  in  the  prior  year.

Operating  expenses  for  the  three  months  ended  December 31, 2002 increased
$1,236,070  from  the  same  period  in  the prior year and more than offset the
favorable  impact  of  higher  sales and improved margins.  The higher operating
expenses  were  mainly  driven by the one time type costs incurred and discussed
above  to  launch  the  Company's  new line of proprietary anesthesia monitoring
products,  significant  legal and consulting fees related to the internal review
conducted  by  the  Company  of  its  import  and export procedures, and a final
payment  made  to the Company's former CEO and founder to satisfy past severance
obligation  issues.  Also contributing to the increase in operating expenses was
the  reclassification  of  fixed  manufacturing  costs  discussed  above  to
administrative  expense,  higher trade show and related sales travel expenses to
attend  three large medical trade shows held during the quarter, and an increase
in  employee  and  dealer commissions driven by the strong fiscal second quarter
sales.  Operating expenses are expected to return closer to historical levels in
future  quarters  as the internal review winds down and the costs to support the
newly  released  anesthesia  products  are  reduced.   See  "Forward-Looking
Statements."

Other income improved $156,731 for the three months ended December 31, 2002 from
the same period in the prior year due mainly to the successful completion of the
Company's  first  medical  equipment integration project in Romania in which the
Company  realized  a  $100,000  share  of  the profits from the transaction.  In
addition, the Company eliminated its interest expense in the current quarter due
to  the  retirement of the Company's mortgage in its fiscal first quarter ending
September  30, 2002, saving $62,271 in interest expense that was incurred in the
prior  year  period.

The record sales, improved margins, and higher other income for the three months
ended  December  31,  2002  offset  the  majority  of  the increase in operating
expenses  incurred  in  the  current period, resulting in net income of $180,171
that was basically level to the $185,513 of net income in the prior year period.

                                        9
<PAGE>

                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition

Liquidity  and  Capital  Resources
----------------------------------

As  of  December  31,  2002,  the  Company  had a cash balance of $4,203,567, an
increase  of  $680,497  from  its balance at June 30, 2002, and a long-term debt
free  balance  sheet  due  to  the sale of the Company's building in the current
fiscal  year.  The Company sold its building in Waukesha, Wisconsin in August of
2002, leased back approximately 62% of its square footage, and used the proceeds
from  the  sale  to retire the long-term debt on the balance sheet.  The sale of
the building increased the Company's cash position by approximately $500,000 and
was  the main contributor to the increase in cash from its balance of $3,362,104
at  June  30,  2002.

Other  significant events impacting cash flows for the six months ended December
31,  2002  included  the  sale  of  54,000  shares  of  the  Company's  Immtech
International, Inc. stock that resulted in the recognition of a realized gain of
$255,843.  The  Company  held  402,374 shares of Immtech stock after the sale of
these shares that was trading at $2.30 per share on December 31, 2002.  Also, in
accordance  with the authorized buyback of up to 500,000 shares of the Company's
common  stock by the Board of Directors in the third quarter of fiscal 2002, the
Company  purchased  35,100  shares  of common stock at a cost of $121,359 in the
first  quarter  of  fiscal  2003.  No shares were purchased in the second fiscal
quarter  ended  December  31,  2002.  The Company has acquired a total of 76,223
shares  of  its  common  stock  under  this  approved  stock  buyback.

The Company believes all capital and liquidity requirements for the remainder of
fiscal  2003 will be satisfied by cash generated from operations and its current
cash balances.  No major capital equipment expenditures are expected in the last
six  months  of  the  fiscal  year ending June 30, 2003.  The Company also has a
$4,000,000  line of credit currently in place that expires in November 2003 that
could be utilized, if necessary.  At December 31, 2002, there were no borrowings
outstanding  under  this  line  of  credit.

Forward  Looking  Statements
----------------------------

A  number  of  the  matters  and  subject  areas  discussed  herein that are not
historical  or  current  facts  deal  with  potential  future  circumstances and
developments.  These  include anticipated product introductions, expected future
financial  results,  liquidity  needs,  financing  ability,  management's or the
Company's expectations and beliefs and similar matters discussed in Management's
Discussion  and  Analysis  or elsewhere herein.  The discussions of such matters
and  subject  areas  are  qualified  by  the  inherent  risk  and  uncertainties
surrounding  future  expectations generally, and also may materially differ from
the  Company's  actual  future  experience.


                                       10
<PAGE>
The  Company's  business,  operations  and  financial performance are subject to
certain  risks  and  uncertainties which could result in material differences in
actual  results  from  management's or the Company's current expectations. These
risks  and  uncertainties  include,  but  are  not  limited to, general economic
conditions,  demand  for  the  Company's  products,  costs  of  operations,  the
development  of  new  products,  the  reliance  on  single sources of supply for
certain components in the Company's products, government regulation, health care
cost containment programs, the effectiveness of the Company's programs to manage
working  capital  and  reduce  costs,  competition  in  the  Company's  markets,
compliance  with  product  safety  regulations and product liability and product
recall  risks,  risks  relating  to international sales and compliance with U.S.
export  regulations, unanticipated difficulties in outsourcing the manufacturing
of  the  majority  of its products to foreign manufacturers and risks related to
foreign  manufacturing,  including economic and political instability, trade and
foreign  tax  laws, production delays and cost overruns and quality control, and
the  Company's  ability  to  reduce  costs by eliminating excess capacity at its
principal  facility.

CONTROLS  AND  PROCEDURES
-------------------------

Within  90  days  prior  to  the date of this report, the Company carried out an
evaluation,  under  the  supervision and with the participation of the Company's
management,  including  the  Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls  and  procedures.  Based on this evaluation, the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's  disclosure  controls and procedures were effective in timely alerting
them  to material information relating to the Company required to be included in
the  Company's periodic filings with the Securities and Exchange Commission.  It
should  be  noted  that  in designing and evaluating the disclosure controls and
procedures,  management  recognized  that any controls and procedures, no matter
how  well  designed  and  operated,  can  provide  only  reasonable assurance of
achieving  the  desired  control  objectives,  and  management  necessarily  was
required  to  apply  its judgment in evaluating the cost-benefit relationship of
possible  controls  and  procedures.

There  have been no significant changes in the Company's internal controls or in
other  factors  that could significantly affect the internal controls subsequent
to  the  date  the  Company  completed  its  evaluation.



                                       11
<PAGE>
                           PART II - OTHER INFORMATION

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

     The  annual  meeting of stockholders of the Company was held on December 6,
2002.  The  matters voted upon, including the number of votes cast for, against,
or  withheld,  as  well as the number of abstentions and broker non-votes, as to
each  such  matter  were  as  follows:

Proposal  1:  Election of directors for a term ending at the 2005 annual meeting
of   stockholders.

<TABLE>
<CAPTION>

                           For     Withheld
                        ---------  --------
<S>                     <C>        <C>
Jeffrey T. Barnes. . .  9,440,751   628,937
N.C. Joseph Lai, Ph.D.  9,404,061   665,627

</TABLE>


     The  Company's  other  directors consist of Karsten Houm, Emil H. Soika and
Stephen  K.  Tannenbaum  (whose  terms  end  at  the  2003  annual  meeting  of
stockholders)  and  Milton  Datsopoulos and Higgins D. Bailey, Ed.D (whose terms
end  at  the  2004  annual  meeting  of  stockholders).

     Proposal 2:  Approve and adopt proposed amendment to the Criticare Systems,
Inc.  1992  Employee  Stock  Option  Plan.

        For         Against        Abstain     Broker  Non-Votes
        ---         -------        -------     -----------------
     8,737,022     1,224,516       108,150               0


Proposal  3:  Ratification of appointment of BDO Seidman, LLP as auditors of the
Company.

        For         Against        Abstain     Broker  Non-Votes
        ---         -------        -------     -----------------
     9,997,871       28,900        42,917             0

Item  6.  Exhibits  and  Reports  on  Form  8-K.
          --------------------------------------

(a)     Exhibits:

     3.1  Restated  Certificate of Incorporation of the Company (incorporated by
          reference  to  the  Registration  Statement  filed  on  Form  S-1,
          Registration  No.  33-13050).

     3.2  By-Laws  of the Company (incorporated by reference to the Registration
          Statement  filed  on  Form  S-1,  Registration  No.  33-13050).

     4.1  Specimen  Common  Stock  certificate (incorporated by reference to the
          Registration  Statement filed on Form S-1, Registration No. 33-13050).

     4.2  Rights  Agreement  (incorporated by reference to the Company's Current
          Report  on  Form  8-K  filed  on  April  18,  1997).

     10.1 Criticare  Systems,  Inc.  1992 Employee Stock Option Plan, as amended
          (incorporated  by reference to the Proxy Statement for the 2002 Annual
          Meeting  of  Stockholders  filed  on  October  28,  2002).


(b)     Reports  on  Form  8-K:  None  in  the  quarter ended December 31, 2002.



                                       12
<PAGE>

                                   SIGNATURES

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

                                           CRITICARE  SYSTEMS,  INC.
                                           (Registrant)

Date:  February  11,  2003                 BY   /s/  Michael J. Sallmann
                                           -------------------------------------
                                           Michael  J.  Sallmann
                                           Vice  President  -  Finance
                                           (Chief  Accounting  Officer  and
                                           Duly  Authorized  Officer)

                                       13
<PAGE>

                                 CERTIFICATIONS
                                 --------------


I,  Emil  H.  Soika, President and Chief Executive Officer of Criticare Systems,
Inc.,  certify  that:

     1.     I  have  reviewed  this  quarterly  report on Form 10-Q of Criticare
Systems,  Inc.;

     2.     Based  on  my  knowledge, this quarterly report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
quarterly  report;

     3.     Based on my knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

     4.     The  registrant's other certifying officer and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

          (a)     designed  such  disclosure  controls  and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries,  is made known to us by others within those entities, particularly
during  the  period  in  which  this  quarterly  report  is  being  prepared;

          (b)     evaluated  the  effectiveness  of  the registrant's disclosure
controls  and procedures as of a date within 90 days prior to the filing date of
this  quarterly  report  (the  "Evaluation  Date");  and

          (c)     presented  in  this quarterly report our conclusions about the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date;

     5.     The  registrant's  other  certifying  officer  and I have disclosed,
based  on our most recent evaluation, to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

          (a)     all  significant  deficiencies  in  the design or operation of
internal  controls  which  could  adversely  affect  the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

          (b)     any  fraud,  whether or not material, that involves management
or  other  employees  who  have  a significant role in the registrant's internal
controls;  and

                                       14

<PAGE>
     6.     The  registrant's  other  certifying officer and I have indicated in
this  quarterly report whether or not there were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.

          Date:  February  6,  2003

                                                 /s/ Emil  H.  Soika
                                         --------------------------------------
                                         Emil  H.  Soika
                                         President and Chief Executive Officer


                                       15
<PAGE>
                                 CERTIFICATIONS
                                 --------------


I,  Michael  J.  Sallmann,  Vice  President - Finance and Secretary of Criticare
Systems,  Inc.,  certify  that:

     1.     I  have  reviewed  this  quarterly  report on Form 10-Q of Criticare
Systems,  Inc.;

     2.     Based  on  my  knowledge, this quarterly report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
quarterly  report;

     3.     Based on my knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

     4.     The  registrant's other certifying officer and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

          (a)     designed  such  disclosure  controls  and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries,  is made known to us by others within those entities, particularly
during  the  period  in  which  this  quarterly  report  is  being  prepared;

          (b)     evaluated  the  effectiveness  of  the registrant's disclosure
controls  and procedures as of a date within 90 days prior to the filing date of
this  quarterly  report  (the  "Evaluation  Date");  and

          (c)     presented  in  this quarterly report our conclusions about the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date;

     5.     The  registrant's  other  certifying  officer  and I have disclosed,
based  on our most recent evaluation, to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

          (a)     all  significant  deficiencies  in  the design or operation of
internal  controls  which  could  adversely  affect  the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

          (b)     any  fraud,  whether or not material, that involves management
or  other  employees  who  have  a significant role in the registrant's internal
controls;  and

                                       16
<PAGE>
     6.     The  registrant's  other  certifying officer and I have indicated in
this  quarterly report whether or not there were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.

          Date:  February  11,  2003

                                              /s/ Michael  J.  Sallmann
                                         --------------------------------------
                                         Michael  J.  Sallmann
                                         Vice President - Finance and Secretary

                                       17