UNITED STATES

                       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

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

        Commission File No. 33-18978

        TEL-INSTRUMENT ELECTRONICS CORP.
(Exact name of the Registrant as specified in Charter)

New Jersey                                      22-1441806
(State of Incorporation)                 (I.R.S. Employer ID Number)

728 Garden Street, Carlstadt, New Jersey          07072
(Address of Principal Executive Offices)       (Zip Code)

Registrant's Telephone No. including Area Code: 201-933-1600

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 the number of shares  outstanding of the issuer's  common stock,  as of
the latest practical date:

2,113,690 shares of Common stock, $.10 par value as of November 1, 2000.


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----

Item 1 Financial Statements (Unaudited):

       Condensed Comparative Balance Sheets
         September 30, 2000 and March 31, 2000                              1

       Condensed Comparative Statements of Operations -
         Three and Six Months Ended September 30, 2000 and 1999             2

       Condensed Comparative Statements of Cash Flows -
         Six Months Ended September 30, 2000 and 1999                       3

       Notes to Condensed Financial Statements                               4-6

Item 2 Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                7-10

                       SIGNATURES                                           10


<PAGE>

Item 1 - Financial Statements

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS
                      September 30, 2000 and March 31, 2000

<TABLE>
<CAPTION>
                                                             (Unaudited)    (Audited)
ASSETS                                                      September 30,    March 31,
                                                                    2000         2000
                                                            -------------  -----------
<S>                                                         <C>            <C>
Current assets:
  Cash                                                      $   231,455    $   172,836
  Accounts receivable, net                                    1,199,504      1,099,425
  Inventories                                                 1,646,017      1,486,885
  Prepaid expenses and other current assets                      41,104         56,020
  Deferred income tax asset - current                           215,000        215,000
                                                            -----------    -----------
Total current assets                                          3,333,080      3,030,166
                                                            -----------    -----------

Property, plant, and equipment, net                             379,669        350,872
Other assets                                                     34,776         28,628
Deferred income tax asset                                       387,389        523,099
                                                            -----------    -----------
Total assets                                                  4,134,914      3,932,765
                                                            ===========    ===========

LIABILITIES & STOCKHOLDERS EQUITY

Current liabilities:
  Note payable - related party - current portion                150,000        150,000
  Note payable - bank                                           250,000        250,000
  Convertible subordinate notes - related party                  15,000         15,000
  Capitalized lease obligations - current portion                73,324         56,376
  Advance payments                                              102,125        176,193
  Accrued payroll, vacation pay, deferred wages,                505,604        350,286
    payroll taxes, and interest on deferred wages
  Accounts payable and accrued expenses                       1,008,220      1,111,181
                                                            -----------    -----------

Total current liabilities                                     2,104,273      2,109,036
                                                            -----------    -----------

Notes payable - related party - non-current portion             200,000        200,000
Capitalized lease obligations - excluding current portion        99,022        101,682
                                                            -----------    -----------

Total liabilities                                             2,403,295      2,410,718

Stockholders' equity
  Common stock                                                  211,372        211,332
  Additional paid-in capital                                  3,928,545      3,927,921
  Accumulated deficit                                        (2,408,298)    (2,617,206)
                                                            -----------    -----------

Total stockholders' equity                                    1,731,619      1,522,047
                                                            -----------    -----------

Total liabilities and stockholders' equity                  $ 4,134,914    $ 3,932,765
                                                            ===========    ===========
</TABLE>

See accompanying notes to condensed financial statements


                                      -1-
<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     Three Months Ended                    Six Months Ended
                                                             September 30,      September 30,      September 30,      September 30,
                                                                2000                1999               2000              1999
                                                             ------------       -------------      -------------      -------------
<S>                                                          <C>                <C>                <C>                <C>
Sales
  Government, net                                            $   933,085        $   811,287        $ 1,850,198        $ 1,364,715
  Commercial, net                                                819,169            525,507          1,392,059          1,083,908
                                                             -----------        -----------        -----------        -----------
Total Sales                                                    1,752,254          1,336,794          3,242,257          2,448,623

Cost of sales                                                    896,554            634,996          1,683,263          1,100,420
                                                             -----------        -----------        -----------        -----------
Gross Margin                                                     855,700            701,798          1,558,994          1,348,203

Operating expenses
  Selling, general & administrative                              362,846            277,680            716,289            568,239
  Engineering, research, & development                           258,294            302,859            440,292            581,302
                                                             -----------        -----------        -----------        -----------
Total operating expenses                                         621,140            580,539          1,156,581          1,149,541

     Income from operations                                      234,560            121,259            402,413            198,662

Other income (expense):
  Interest income                                                  5,821              2,083              9,275              3,698
  Interest expense                                               (31,217)           (14,699)           (61,830)           (28,287)
                                                             -----------        -----------        -----------        -----------
Income before taxes                                              209,164            108,643            349,858            174,073

Provision for income taxes                                        84,743             43,403            140,950             69,543
                                                             -----------        -----------        -----------        -----------
Net income                                                   $   124,421        $    65,240        $   208,908        $   104,530
                                                             ===========        ===========        ===========        ===========
Basic and diluted income
  per common share                                                $ 0.06             $ 0.03             $ 0.10             $ 0.05

Dividends per share                                                 None               None               None               None
Weighted average shares outstanding
  Basic                                                        2,113,690          2,109,957          2,113,519          2,109,957
  Diluted                                                      2,150,185          2,122,896          2,150,014          2,122,896
</TABLE>

See accompanying notes to condensed financial statements


                                      -2-
<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                       Six Months Ended
                                                                                                         September 30,
                                                                                                     2000           1999
                                                                                                   ---------     ---------
<S>                                                                                                <C>           <C>
Increase in cash:
Cash flows from operating activities
Net income                                                                                         $ 208,908     $ 104,530
Adjustments to reconcile net income to cash used
     in operating activities:
     Deferred income taxes                                                                           135,710        69,543
     Depreciation                                                                                     57,602        31,962
Changes in operating assets or liabilities:
  Increase in accounts receivable and unbilled revenues                                             (100,079)     (251,999)
  Increase in inventories                                                                           (159,132)     (307,593)
  Decrease in prepaid expenses and other current assets                                               14,916         5,536
  Increase in other assets                                                                            (6,148)      (16,712)
  Increase in accrued payroll, deferred wages and
     vacation pay                                                                                    155,318        63,803
  (Decrease) increase in accounts payable, advance payments
   and accrued expenses                                                                             (177,029)       99,132
                                                                                                   ---------     ---------

Net cash provided by (used in) operations                                                            130,066      (201,798)
                                                                                                   ---------     ---------
Cash flows from investing activities:
  Cash purchases of property, plant and equipment                                                    (41,655)      (26,171)
                                                                                                   ---------     ---------
Net cash used in investing activities                                                                (41,655)      (26,171)
                                                                                                   ---------     ---------
Cash flows from financing activities:
  Proceeds from exercise of stock options                                                                664
  Proceeds from notes payable - bank                                                                      --       250,000
  Repayment of capitalized lease obligations                                                         (30,456)       (8,780)
                                                                                                   ---------     ---------
  Net cash (used in) provided by financing activities                                                (29,792)      241,220
                                                                                                   ---------     ---------

Net increase in cash                                                                                  58,619        13,251
Cash at beginning of period                                                                          172,836        70,617
                                                                                                   ---------     ---------
Cash at end of period                                                                              $ 231,455     $  83,868
                                                                                                   =========     =========

Supplemental information
     Interest paid                                                                                 $  28,983     $  39,934
     Assets acquired through capital leases                                                        $  44,744     $ 101,900
                                                                                                   =========     =========
</TABLE>

See accompanying notes to condensed financial statements


                                      -3-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1 Basis of Presentation

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals)  necessary to present fairly,  in accordance with the  requirements of
Form 10-Q,  the financial  position of  Tel-Instrument  Electronics  Corp. as of
September 30, 2000, the results of operations for the three and six months ended
September 30, 2000 and September 30, 1999,  and statements of cash flows for the
six months ended  September 30, 2000 and  September 30, 1999.  These results are
not necessarily indicative of the results to be expected for the full year.

The financial  statements have been prepared in accordance with the requirements
of Form 10-Q and  consequently  do not include  disclosures  normally made in an
Annual Report on Form 10-K. The March 31, 2000 results included herein have been
derived from the audited financial  statements  included in the Company's annual
report on Form 10-K. The financial statements included herein should be reviewed
in conjunction  with the financial  statements and notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000.

Note 2 Accounts Receivable

The following table sets forth the components of accounts receivable:

                                         September 30, 2000     March 31, 2000
                                         ------------------     --------------

           Commercial                        $  579,733           $  345,209
           Government                           631,369              765,814
           Allowance for bad debts              (11,598)             (11,598)
                                             ----------           ----------

           Total                             $1,199,504           $1,099,425
                                             ==========           ==========


                                      -4-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)

Note 3 Inventories

Inventories consist of:

                                           September 30, 2000    March 31, 2000
                                           ------------------    --------------

       Purchased Parts                         $  915,394          $  921,185
       Work-in-process                            752,861             609,824
       Less:  Reserve for obsolescence            (22,238)            (44,124)
                                               ----------          ----------

       Total                                   $1,646,017          $1,486,885
                                               ==========          ==========


Note 4 Income Taxes

The Company,  in accordance  with FASB 109, has recognized a deferred income tax
benefit based upon the expected  utilization of net operating loss carryforwards
as the Company  believes  that it is more likely than not that it will realize a
portion of its  operating  losses  before they expire.  For the six months ended
September  30, 2000,  the Company  recorded a tax  provision of $140,950,  which
represents the effective  federal and state tax rate on the Company's net income
before taxes of $349,858. The Company has no federal tax liability. The $140,950
decreased  the Company's  deferred  income tax benefit by the same amount in the
accompanying  balance sheet. The Company expects to utilize this deferred income
tax benefit in the future for tax reporting purposes.

Note 5 Earnings Per Share

The  Company's  basic  income per share is based on net income for the  relevant
period,  divided by the weighted  average  number of common  shares  outstanding
during the period.  Diluted income per share is based on net income,  divided by
the weighted  average  number of common  shares  outstanding  during the period,
including common share equivalents, consisting of outstanding stock options. The
inclusion of stock  options to  calculate  diluted  income per share,  under the
treasury stock method, did not affect earnings per share.


                                      -5-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)

Note 6 Government and Commercial Sales

In 1999,  the Company  adopted SFAS 131. The prior years'  information  has been
restated  to  present   separately  the  Company's   government  and  commercial
activities.

The Company is organized  primarily on the basis of its avionics  products.  The
government  market consists  primarily of the sale of test equipment to U.S. and
foreign  governments and militaries either direct or through  distributors.  The
commercial  market  consists of sales of test  equipment to domestic and foreign
airlines and to  commercial  distributors.  The Company  primarily  develops and
designs test  equipment for the avionics  industry  and, as such,  the Company's
products and designs may be sold in the government and commercial markets.

The table below  presents  information  about sales and gross  margin.  Costs of
sales includes certain allocation factors for indirect costs.

<TABLE>
<CAPTION>
                                       Three Months Ended                          Three Months Ended
                                       September 30, 2000                          September 30, 1999
                               Government             Commercial             Government             Commercial
                               ----------             ----------             ----------             ----------
<S>                             <C>                     <C>                   <C>                     <C>
Sales                           $933,085                819,169               $811,287                525,507
Cost of Sales                    502,416                394,138                411,923                223,073
                                --------               --------               --------               --------
Gross Margin                    $430,669                425,031               $399,364                302,434
                                ========               ========               ========               ========

<CAPTION>
                                        Six Months Ended                            Six Months Ended
                                       September 30, 2000                          September 30, 1999
                               Government             Commercial             Government             Commercial
                               ----------             ----------             ----------             ----------
<S>                           <C>                     <C>                   <C>                     <C>
Sales                         $1,850,198              1,392,059             $1,364,715              1,083,908
Cost of Sales                    999,160                684,103                645,889                454,531
                              ----------             ----------             ----------             ----------
Gross Margin                  $  851,038                707,956             $  718,826                629,377
                              ==========             ==========             ==========             ==========
</TABLE>


                                      -6-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
        RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Results of Operations

A number of the statements made by the Company in this report may be regarded as
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995.

Forward-looking  statements  include,  among others,  statements  concerning the
Company's outlook, pricing trends and forces within the industry, the completion
dates of capital projects,  expected sales growth, cost reduction strategies and
their  results,   long-term  goals  of  the  Company  and  other  statements  of
expectations, beliefs, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.

All  predictions  as to future  results  contain a measure  of  uncertainty  and
accordingly,  actual  results  could differ  materially.  Among the factors that
could cause a difference are: changes in the general economy;  changes in demand
for the Company's products or in the cost and availability of its raw materials;
the  actions of its  competitors;  the success of our  customers;  technological
change;  changes in  employee  relations;  government  regulations;  litigation,
including  its  inherent  uncertainty;  difficulties  in  plant  operations  and
materials;   transportation,   environmental   matters;   and  other  unforeseen
circumstances.  A number of these factors are discussed in the Company's filings
with the Securities and Exchange Commission.

Overview

Sales of the AN/APM-480 IFF (Identification, Friend or Foe) Transponder Set Test
Set (TSTS ) to the U.S. Navy accounted for approximately  $560,000 (32% of total
sales) for the three months ended  September 30, 2000.  The Company has received
total  orders  for more than 960  units,  totaling  over  $12.5,  million  to be
delivered  over the next three to four years.  The  AN/APM-480  is a militarized
avionics  ramp  tester used to simulate  IFF  Transponder/Interrogator  and TCAS
(collision  avoidance)  functions  to  provide  accurate  go,  no-go  testing of
avionics  equipment  installed  in U.S.  Navy  aircraft  on the  flightline  and
aircraft carrier deck.

During the second quarter of the current fiscal year, the Company began shipment
to a major freight  carrier  (through a domestic  distributor) of its commercial
avionics test sets. The total order exceeds $900,000, and the Company expects to
ship this order during the current fiscal year. In,  addition,  during the first
quarter the Company  shipped all of the T-76 Precision DME/P ("DME/P") ramp rest
sets  under  the  contract  with  Marconi  Communications  through  its  Italian
intermediary,  M.P.G.  Instruments s.r.l.  Precision DME/P is directed solely to
the  European  market.  The Company also  continues  its efforts to complete the
DME/P bench test sets under a contract with Marconi Communications in the amount
of $680,000.

The Company  continues to actively pursue  opportunities  in both the commercial
and government  markets,  both  domestically and  internationally,  and has been
active in  responding  to request for  quotations,  in addition to adapting  its
product designs to respond to these requests.

For the second  quarter of fiscal year 2001 sales  increased 31% to  $1,752,254,
and net income  before taxes was $209,164,  a 93%  increase,  as compared to the
second quarter of the prior fiscal year. For the six months ended  September 30,
2000,  sales  increased  32% to  $3,242,257  as compared to the same period last
year,  and net income  before  taxes was  $349,858,  more than double net income
before taxes for the same six month period in the prior fiscal year.


                                      -7-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
        RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued)

Results of Operations (continued)

Overview (continued)

The Company's backlog at September 30, 2000, including the production order from
the U.S. Navy of approximately  $12,000,000,  exceeds  $16,000,000.  The Company
expects to ship the backlog over the next three to four years.

Sales

Total sales increased  $415,460  (31.1%) for the three ended September 30, 2000,
as  compared  to the same  period in the prior  fiscal  year.  Commercial  sales
increased $293,662 (55.9%) and government sales increased $121,798 (15.0%).  The
increase  in  commercial  sales  is  primarily  attributed  to the  shipment  of
commercial test sets under the order from the major freight carrier, an increase
in  repair  and  overhaul  sales,  as a  result  of  the  Company  reducing  its
backorders,  and an increase in ILS (Instrument  Landing System) and TCAS (Total
Collision Avoidance System) test sets. Government sales increased as a result of
the shipment of the AN/APM-480 to the U.S. Navy, partially offset by lower sales
of the T-47 family of IFF test sets.

For the six months  ended  September  30,  2000 total sales  increased  $793,634
(32.4%) as  compared  to the same period in the prior  fiscal  year.  Commercial
sales  increased  $308,151  (28.4%)  and  government  sales  increased  $485,483
(35.6%).  The  increase  in  commercial  sales is  primarily  attributed  to the
shipment of commercial test sets from the order from the major freight  carrier,
an increase in repair and overhaul  sales,  as a result of the Company  reducing
its backorder,  and an increase in TCAS test sets. Government sales increased as
a  result  of the  shipment  of the  AN/APM-480  to the  U.S.  Navy and the T-76
Precision DME Ramp test sets.  These  increases were  partially  offset by lower
sales of the T-47 family of IFF test sets.

Gross Margin

Gross margin dollars  increased  $153,902  (21.9%) and $210,791  (15.6%) for the
three and six months ended September 30, 2000, respectively,  as compared to the
same  periods in the prior fiscal year.  The increase in gross  margin,  for the
most part, is attributed to higher sales  volume.  However,  gross margin,  as a
percentage of sales,  was reduced by the  introduction of new products,  such as
the T-76 and the AN/APM 480, and the  associated  learning curve in building and
testing these new and more sophisticated products, and the lower gross profit on
the AN/APM-480 contract.  The gross margin percentage for the three months ended
September  30, 2000 was 48.8% as compared  to 52.5% for the three  months  ended
September  30,  1999.  The gross  margin  percentage  for the six  months  ended
September  30,  2000 was 48.1% as  compared  to 55.1% for the six  months  ended
September  30,  1999.  The gross  margin  percentage  was impacted in the second
quarter by the lower gross profit on the sales to the major freight carrier as a
result of the discount given to the Company's domestic distributor.


                                      -8-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
        RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued)

Results of Operations (continued)

Operating Expenses (continued)

Selling,  general and  administrative  expenses  increased  $85,166  (30.7%) and
$148,050  (26.1%)  for the  three  and six  months  ended  September  30,  2000,
respectively,  as compared to the three and six months ended September 30, 1999.
This increase is attributed  to higher sales and marketing  expenses,  including
the  addition  to staff of a Director of Business  Development,  higher  outside
commission expenses,  consulting fees for program management, and an increase in
salaries.

Engineering,  research and development  expenses  decreased  $44,565 (14.7%) and
$141,010  (24.3%)  for the  three  and six  months  ended  September  30,  2000,
respectively, as compared to the same periods last year.

Income Taxes

In accordance  with SFAS 109, a provision for income taxes was recognized in the
amount of $140,950 for the six months ended September 30, 2000, which represents
the  effective  federal and state tax rate on the  Company's  net income  before
taxes  of  $349,858.  The  Company  currently  does not  have  any  federal  tax
liability. (See Note 4 to Notes to Condensed Comparative Financial Statements).

Liquidity and Capital Resources

At September 30, 2000 the Company had positive working capital of $1,228,807, as
compared to $921,130 at March 31, 2000.  For the six months ended  September 30,
2000, the Company generated $130,066 in cash used from operations as compared to
using $201,798 for the six months ended September 30, 1999. The increase in cash
from  operations  is primarily  attributed to the  improvement  in the Company's
operating income due to an increase in sales.

The Company has a credit line in the amount of $600,000  from Summit  Bank.  The
line of credit bears an interest rate of 1% above the lender's  prevailing  base
rate, which is payable monthly, based upon the outstanding balance. At September
30, 2000, the Company had an outstanding balance of $250,000. The line of credit
is  collateralized by substantially all of the assets of the Company and expires
in June 2001.  The credit  facility  requires  the Company to  maintain  certain
financial  covenants.  As of September  30, 2000,  the Company was in compliance
with all financial covenants.

Based upon the current  backlog,  available  credit line and cash  balance,  the
Company  believes that it has sufficient  working  capital to fund its plans for
the next twelve months. At present, the Company does not anticipate  significant
long-term needs for capital outside its normal operating activities.

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the three months ended September 30, 2000.


                                      -9-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
        RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued)

Liquidity and Capital Resources (continued)

These  financial  statements  should be read in  conjunction  with the Company's
annual Report on Form 10-K to the  Securities  and Exchange  Commission  for the
fiscal year ended March 31, 2000.

New Accounting Pronouncement

Staff  Accounting  Bulletin 101 ("SAB 101"),  Revenue  Recognition  in Financial
Statements,  was issued on December 3, 1999 with an original  effective  date of
the first quarter of fiscal years  beginning  after  December 15, 1999.  SAB 101
provides guidance on the recognition, presentation, and disclosure of revenue in
financial  statements filed with the SEC. On June 26, 2000, the SEC staff issued
SAB 101B to provide  registrants  with  additional  time to  implement  guidance
contained in SAB 101. SAB 101B delays the  implementation  date of SAB 101 until
no later than the fourth fiscal quarter of fiscal years beginning after December
15, 1999.  This provides an additional six months for companies with fiscal year
ends in December,  January,  or February.  Companies with other fiscal year ends
will  have an  additional  nine  months.  The  Company  does  not  believe  that
implementation  of  SAB  101  will  have a  material  impact  on  its  financial
statements.

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.

                                                TEL-INSTRUMENT ELECTRONICS CORP.

Date: November 10, 2000                         By: /s/ Harold K. Fletcher
                                                    ----------------------------
                                                    /s/ Harold K. Fletcher
                                                    Chairman and President

Date: November 10, 2000                         By: /s/ Joseph P. Macaluso
                                                    ----------------------------
                                                    Joseph P. Macaluso
                                                    Principal Accounting Officer

                                      -10-