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  September  30,  2000
                                           --------------------

                                       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,   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
                                                                 ---     ---

Number of shares outstanding of each class of the registrant's classes of common
stock  as  of  September  30,  2000:  Class  A  Common  Stock  8,991,251 shares.


<PAGE>
                             CRITICARE SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEETS
                      SEPTEMBER 30, 2000 AND JUNE 30, 2000
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                           September 30,       June 30,
ASSETS                                                                         2000              2000
                                                                          ---------------  ---------------
<S>                                                                       <C>              <C>
CURRENT ASSETS:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . .  $      212,840   $      114,830
Accounts receivable, less allowance for doubtful accounts
   of $1,400,000 and $1,300,000, respectively. . . . . . . . . . . . . .       6,451,657        6,782,765
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       7,558,694        5,704,675
Other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . .         123,903          116,773
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       7,788,891        8,178,326
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .         491,480          219,852
                                                                          ---------------  ---------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . .      22,627,465       21,117,221

Property, plant and equipment - net. . . . . . . . . . . . . . . . . . .       5,936,119        5,988,656

License rights and patents - net . . . . . . . . . . . . . . . . . . . .         101,390          104,990
                                                                          ---------------  ---------------

TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   28,664,974   $   27,210,867
                                                                          ===============  ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    2,386,134   $    2,635,344
Accrued liabilities:
    Compensation and commissions . . . . . . . . . . . . . . . . . . . .       1,264,811        1,243,839
    Product warranties . . . . . . . . . . . . . . . . . . . . . . . . .         325,000          325,000
    Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         585,298          574,826
Current maturities of long-term debt . . . . . . . . . . . . . . . . . .          81,984           80,432
                                                                          ---------------  ---------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . .       4,643,227        4,859,441

LONG-TERM DEBT, less current maturities. . . . . . . . . . . . . . . . .       3,263,317        3,283,892

OTHER LONG-TERM OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . .         232,171          268,582

STOCKHOLDERS' EQUITY:
Preferred stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -                -
Common stock - $.04 par value, 15,000,000 shares authorized,
    8,991,251 and 8,976,251 shares issued and outstanding, respectively.         359,650          359,050
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . .      18,507,981       18,478,040
Common stock held in treasury (76,439 and 81,122 shares, respectively) .        (142,388)        (151,111)
Retained earnings (accumulated deficit). . . . . . . . . . . . . . . . .      (5,757,678)      (5,591,702)
Accumulated comprehensive income . . . . . . . . . . . . . . . . . . . .       7,558,694        5,704,675
                                                                          ---------------  ---------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . . . .      20,526,259       18,798,952
                                                                          ---------------  ---------------
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $   28,664,974   $   27,210,867
                                                                          ===============  ===============
</TABLE>

See  notes  to  consolidated  financial  statements.

                                        2
<PAGE>

                             CRITICARE SYSTEMS, INC.
                         CONSOLIDATED INCOME STATEMENTS
                 THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                           2000         1999
                                       -----------  -----------
<S>                                    <C>          <C>
NET SALES . . . . . . . . . . . . . .  $6,229,877   $6,603,337

COST OF GOODS SOLD. . . . . . . . . .   3,718,831    3,614,526
                                       -----------  -----------

GROSS PROFIT. . . . . . . . . . . . .   2,511,046    2,988,811

OPERATING EXPENSES:
Marketing . . . . . . . . . . . . . .   1,475,109    1,606,379
Research, development and engineering     581,282      711,456
Administrative. . . . . . . . . . . .     562,238      514,000
                                       -----------  -----------
Total . . . . . . . . . . . . . . . .   2,618,629    2,831,835

(LOSS) INCOME FROM OPERATIONS . . . .    (107,583)     156,976

OTHER INCOME (EXPENSE):
Interest expense. . . . . . . . . . .     (64,806)     (65,781)
Interest income . . . . . . . . . . .       6,419       29,281
Gain on sale of stock . . . . . . . .           -    1,760,000
                                       -----------  -----------
Total . . . . . . . . . . . . . . . .     (58,387)   1,723,500

(LOSS) INCOME BEFORE INCOME TAXES . .    (165,970)   1,880,476

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

NET (LOSS) INCOME . . . . . . . . . .  $ (165,970)  $1,880,476
                                       ===========  ===========

NET (LOSS) INCOME PER COMMON SHARE
Basic . . . . . . . . . . . . . . . .  $    (0.02)  $     0.22
Diluted . . . . . . . . . . . . . . .  $    (0.02)  $     0.21

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING:
Basic . . . . . . . . . . . . . . . .   8,898,607    8,706,151
Diluted . . . . . . . . . . . . . . .   8,898,607    8,921,806
</TABLE>

See  notes  to  consolidated  financial  statements.

                                        3
<PAGE>
                             CRITICARE SYSTEMS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                            2000         1999
                                                        ----------  ------------
<S>                                                     <C>         <C>
OPERATING ACTIVITIES:
Net (loss) income. . . . . . . . . . . . . . . . . . .  $(165,970)  $ 1,880,476
Adjustments to reconcile net (loss) income to net cash
  provided by (used in) operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . .    127,499       231,784
    Amortization . . . . . . . . . . . . . . . . . . .      3,600         4,499
    Provision for doubtful accounts. . . . . . . . . .    100,000        57,838
    Gain on sale of Immtech stock. . . . . . . . . . .          -    (1,760,000)
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . .    231,108       471,819
      Other receivables. . . . . . . . . . . . . . . .     (7,130)       27,157
      Inventories. . . . . . . . . . . . . . . . . . .    430,907       (68,690)
      Prepaid expenses . . . . . . . . . . . . . . . .   (271,628)      (51,536)
      Accounts payable . . . . . . . . . . . . . . . .   (249,210)     (872,997)
      Accrued liabilities. . . . . . . . . . . . . . .     (4,967)   (1,668,965)
                                                        ----------  ------------
Net cash provided by (used in) operating activities. .    194,209    (1,748,615)

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . .   (116,434)      (78,583)
Proceeds from sale of Immtech stock. . . . . . . . . .          -     1,760,000
                                                        ----------  ------------
Net cash (used in) provide by investing activities . .   (116,434)    1,681,417

FINANCING ACTIVITIES:
Principal payments on long-term debt . . . . . . . . .    (19,023)      (17,596)
Proceeds from issuance of common stock . . . . . . . .     39,258             -
                                                        ----------  ------------
Net cash provided by (used in) financing activities. .     20,235       (17,596)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS .     98,010       (84,794)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . .    114,830     2,511,078
                                                        ----------  ------------
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . .  $ 212,840   $ 2,426,284
                                                        ==========  ============
</TABLE>

See  notes  to  consolidated  financial  statements.

                                        4
<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.


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  September  30,  2000  and  June  30,  2000,  respectively:
<TABLE>
<CAPTION>

                                 September 30, 2000      June 30, 2000
                                 -------------------  -------------------
<S>                              <C>                  <C>
Component parts . . . . . . . .  $         3,705,418  $         3,721,474
Work in process . . . . . . . .            1,167,141            1,169,609
Finished units. . . . . . . . .            3,316,332            3,687,243
                                 -------------------  -------------------
Total inventories . . . . . . .            8,188,891            8,578,326
Less:  reserve for obsolescence              400,000              400,000
                                 -------------------  -------------------
Net inventory . . . . . . . . .  $         7,788,891  $         8,178,326
</TABLE>

3.  INVESTMENTS

During  August,  September  and October 1999, the Company sold 500,000 shares of
Immtech  International,  Inc.  ("Immtech")  stock  for  $2,500,000  in a private
placement.  The  funds  were  used  primarily to settle a long-standing lawsuit,
which  was  settled  in  July  1999.  The Company held 456,374 shares of Immtech
stock,  which  was  trading  at  $16  9/16 per share, on September 30, 2000. The
market  value  of  these shares could change substantially due to overall market
risk.


                                        5
<PAGE>
4.  PROPERTY,  PLANT  AND  EQUIPMENT

Property,  plant  and  equipment  consist  of  the  following:
<TABLE>
<CAPTION>

                                      September 30, 2000      June 30, 2000
                                      -------------------  -------------------
<S>                                   <C>                  <C>
Land and building. . . . . . . . . .  $         4,525,000  $         4,525,000
Machinery and equipment. . . . . . .            2,037,639            2,009,312
Furniture and fixtures . . . . . . .              805,055              763,282
Demonstration and loaner monitors. .            1,366,115            2,651,145
Production tooling . . . . . . . . .            2,697,479            1,407,587
                                      -------------------  -------------------
Property, plant and equipment - cost           11,431,288           11,356,326
Less:  accumulated depreciation. . .            5,495,169            5,367,670
                                      -------------------  -------------------
Property, plant and equipment - net.  $         5,936,119  $         5,988,656
</TABLE>


                                        6
<PAGE>
                             CRITICARE SYSTEMS, INC.
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition
                 Three Months Ended September 30, 2000 and 1999

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

Sales  volume  (number  of  units sold) for the three months ended September 30,
2000  rose  15%  from the same period in fiscal 1999, however, net sales revenue
fell  by approximately $400,000, or approximately 6.1%, from $6.6 million in the
first  quarter  of  fiscal  2000  to $6.2 million in the first quarter of fiscal
2001.  One  of the reasons for this result is the large systems sale recorded in
the first quarter of the prior year.  Resulting hospital sales in the prior year
were  $1.5 million higher than that of the current year.  Another reason for the
overall  decrease  in revenue is the decline in the selling price of some of the
Company's  older  product  line.  Prices  have fallen, in part, due to increased
competition  and,  in  part,  due  to the willingness of the Company to accept a
lower  margin during the phase out period of some of these products, rather than
absorb  future  inventory obsolescence costs.  However, OEM sales in the current
year  have  rebounded  from a sluggish start in fiscal 1999, posting an $800,000
gain  over  the  same  period  last  year.

The  gross  profit  percentage  of  40% in the first quarter of the current year
represents  a  decrease of 11% from the same period in fiscal 2000, but shows an
improvement over both of the previous two quarters.  A comparison of the current
year  cost  of  sales  to that of the prior year (after adjusting for the higher
margin  systems  sale)  shows  that  the  cost  per unit has remained relatively
constant.  Therefore,  the  lower  margin  in  fiscal  2000 is attributed to the
profitable systems sale in the prior year, the lower sales prices on established
products  as  discussed  above,  and introductory pricing on the Company's newly
introduced  products  being sold as demonstration units.  The Company expects to
see  some  improvement  in  its margins, as most of the demonstration units have
been  moved  through  the  backlog,  and  future sales of the newer products are
expected  to  be subject to less discounting.  See "Forward-Looking Statements."

In the prior year, the Company made great strides in reducing operating expenses
from  that of the year before, and that emphasis has continued into fiscal 2001.
Current  year  operating  expenses  decreased $200,000 in the first quarter from
that  of  the  prior  year.  Approximately $100,000 is attributed to the service
area  in  the  form of higher warranty sales and better control of materials and
supplies.  Research and development accounts for another $100,000 in reductions,
as  there was a significant amount of activity in the first quarter of the prior
year  related  to  the  development  of the new products released in late fiscal
2000.

Income  (loss)  from operations fell approximately $250,000 for the three months
ended  September 30, 2000 when compared to the same period in fiscal 2000 due to
the  decrease  in  revenue  and  gross  profit,  which  offset  the reduction in
operating  expense.

Net  non-operating  expenses  were  approximately $60,000, the majority of which
relates  to  interest expense on the building mortgage, and is comparable to the
amount  spent  on  interest  in the prior year.  However, offsetting last year's
interest  expense  was  a  $1.8 million gain on the sale of Immtech stock, which
accounts  for  the  difference  in  the  non-operating  expense  totals.


                                        7
<PAGE>
LIQUIDITY
---------

As  of  September  30,  2000,  the  Company  had a cash balance of approximately
$200,000  and no short-term borrowings.  In the three months ended September 30,
2000,  approximately  $200,000 was provided by operations, of which $100,000 was
reinvested  in  property,  plant and equipment.  In the same period of the prior
year,  approximately $1.7 million was used in operations, of which a significant
portion  was  attributed to the settlement of a long-standing lawsuit.  Proceeds
for  this settlement were obtained from the sale of shares of Immtech stock in a
private  placement  sale. Subsequent to September 30, 2000, the Company received
$4.0 million in proceeds from the private placement of 1.8 million shares of the
Company's  common  stock.  The  primary  intended  use  of  these  funds  is for
additional  research  and  development  and  an expanded marketing program.  The
Company  believes all other capital and liquidity requirements will be satisfied
by  cash generated from operations and periodic utilization of a $4,000,000 line
of  credit  currently in place, if necessary.  At September 30, 2000, there were
no  borrowings  outstanding  under  the  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.

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,  and competition in the Company's markets.


                                        8
<PAGE>
                           PART II - OTHER INFORMATION

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).

          27      Financial  Data  Schedule.


     (b)  Reports on Form 8-K:  None in the quarter ended September 30, 2000.


                                        9
<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  November 13, 2000                   BY   /s/  Mark  S.  Ruehle
                                            ----------------------------------
                                             Mark  S.  Ruehle
                                             Vice  President  -  Finance
                                             (Chief  Accounting  Officer  and
                                             Duly  Authorized  Officer)


                                       10