SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-K

(Mark One)
   [X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended October 31, 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:  0-11518

                                PPT VISION, INC.
             (Exact name of registrant as specified in its charter)

               MINNESOTA                             41-1413345
      ---------------------------            --------------------------
      (State or other jurisdiction                (I.R.S. Employer
   of incorporation or organization)            Identification No.)

                             12988 Valley View Road
                             Eden Prairie, MN  55344
              -----------------------------------------------------
              (Address of principal executive offices and zip code)

       Registrant's telephone number, including area code:  (952) 996-9500

        Securities registered pursuant to Section 12(b) of the Act:  None

  Securities registered pursuant to Section 12(g) of the Act:  (1) Common Stock
                                 $.10 par value
                       (2) Preferred Stock Purchase Rights

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
                                   YES  X     NO
                                       ---    ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  (X)

The approximate aggregate market value of the registrant's common stock held by
nonaffiliates of the registrant (based on the closing sale price of such stock
as reported by the Nasdaq Stock Market) on January 16, 2001 was approximately
$11,500,000. The number of shares of common stock, $0.10 par value per share,
outstanding as of January 16, 2001 was 5,479,782.

Documents Incorporated by Reference:  The Company's Proxy Statement for its
Annual Meeting of Shareholders to be held March 15, 2001 is incorporated by
reference into Part III of this Form 10-K.
                                TABLE OF CONTENTS
                                -----------------

PART I                                                                Page
                                                                      ----

     Item 1.   Business..............................................   3
                  Important Factors Regarding
                     Forward-Looking Statements......................  12
                  Executive Officers of the Company..................  15
     Item 2.   Properties............................................  16
     Item 3.   Legal Proceedings.....................................  16
     Item 4.   Submission of Matters for a
                  Vote of Security Holders...........................  16

PART II

     Item 5.   Market for Registrant's Common
                  Equity and Related Stockholder Matters.............  17
     Item 6.   Selected Financial Data...............................  18
     Item 7.   Management's Discussion and Analysis of Financial
                  Condition and Results of Operations................  19
     Item 7A.  Quantitative and Qualitative Disclosures About
                  Market Risk........................................  22
     Item 8.   Financial Statements and Supplementary Data...........  23
     Item 9.   Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure................  23

PART III

     Item 10.  Directors and Executive Officers of the Registrant....  24
     Item 11.  Executive Compensation................................  24
     Item 12.  Security Ownership of Certain
                  Beneficial Owners and Management...................  24
     Item 13.  Certain Relationships and Related Transactions........  24

PART IV

     Item 14.  Exhibits, Financial Statement Schedules, and Reports
                  on Form 8-K........................................  25

     Signatures......................................................  27



                                     Part I

  This Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. Forward-
looking statements include, without limitation, statements regarding the extent
and timing of future revenues and expenses and customer demand. These statements
include, but are not limited to, changes in worldwide general economic
conditions, cyclicality of capital spending by customers, PPT VISION's ability
to keep pace with technological developments and evolving industry standards,
worldwide competition, and PPT VISION's ability to protect its existing
intellectual property from challenges from third parties and other factors.

  All forward-looking statements included in this document are based on
information available to the Company as of the date hereof, and the Company
assumes no obligation to update any such forward-looking statements. It is
important to note that the Company's actual results could differ materially from
those in such forward-looking statements. The forward-looking statements of the
Company are subject to risks and uncertainties. Some of the factors that could
cause future results to materially differ from the Company's recent results or
those projected in the forward-looking statements are described in the
"Important Factors Regarding Forward-Looking Statements" section of this
Form 10-K.

Item 1.  BUSINESS
-----------------

CORPORATE PROFILE

PPT VISION, Inc. designs, manufactures, markets, and integrates 2D and 3D
machine vision-based automated inspection systems for manufacturing
applications.  Machine vision-based inspection systems enable manufacturers to
realize significant economic paybacks by increasing the quality of manufactured
parts and improving the productivity of manufacturing processes.

The Company operates through two divisions.  The Vision Systems Division (VSD)
develops and applies 2D and 3D vision technology for general purpose end-user
and original equipment manufacturer (OEM) applications in the manufacturing
marketplace.  The Microelectronics Systems Division (MSD) develops and markets
application-specific inspection solutions utilizing the Company's core 2D and 3D
vision technology for three target markets:  inspection of leaded and bumped
components in the semiconductor back-end manufacturing process, inspection of
surface-mount electronic connectors, and inspection of components used in hard
disk drives.

The Company's vision systems are sold throughout the Americas, Europe and Asia
to a broad range of industry categories including manufacturers of automotive,
electronic and semiconductor components, consumer goods, pharmaceuticals,
medical devices and plastics.

Major manufacturing end users of PPT VISION systems include 3M, AMP, Abbott
Labs, Berg Electronics, Daimler-Chrysler, the Delphi Electronic Division of
General Motors, Imation, Johnson & Johnson, Kemet, Micron Technology, Molex,
Philip Morris, Siemens and United Technologies.


WHAT IS MACHINE VISION?

  A machine vision system consists of computer software and hardware working
together with cameras and lighting to automatically inspect products as they are
being manufactured.  This prevents defective products from being shipped to
consumers and helps manufacturers improve their processes and reduce costs.
Commercial use of machine vision technology for manufacturing quality control
began to emerge in the early 1980s. However, machine vision systems at that
time were complex to program and maintain, difficult to install, limited in
performance and not cost effective. Through advances in microprocessor and
software technologies these barriers have been removed, enabling machine
vision to emerge as a powerful process control technology that allows
manufacturers to improve quality and increase productivity.

THE MACHINE VISION MARKET

  The machine vision market is large and highly fragmented. The Automated
Imaging Association ("AIA") estimates that the North American market for machine
vision systems in 1999 was approximately $1.68 billion, with worldwide levels
estimated at approximately $4.97 billion. The AIA expects this market to grow at
approximately 12% per year through the year 2004. According to the AIA,  83%, of
the estimated 225 companies in the North American machine vision market have
less than $10 million in annual revenues. Demand for machine vision systems
comes from end user manufacturers who apply these systems as an integral part of
their manufacturing process, original equipment manufacturers ("OEMs") who
incorporate machine vision systems into their products, systems integrators and
machine builders. The AIA estimates that a substantial majority of the North
American market for machine vision systems consists of sales to end-user
manufacturers and OEM's.

  A key factor in the expansion of the machine vision market has been growth
in the demand for machine vision systems in the semiconductor and electronics
industries. The growth in demand for personal computers, cellular
communications and other electronic devices, as well as the increase in
electronic components inside other products such as consumer appliances and
automobiles, is stimulating demand for electronic and semiconductor components.
For example, VLSI Research, Inc., an independent technology research firm,
projects that the demand for lead inspection equipment will grow from $189
million in 2000 to $480 million in 2003.  In an effort to rapidly improve and
increase manufacturing capability while at the same time introducing innovative
new designs and improving quality, manufacturers of these components are
increasingly turning to machine vision as a vital part of their manufacturing
process.

  The growth of the end user machine vision market is also being driven by
global competitive trends, which have led manufacturers worldwide to
dramatically redesign manufacturing processes in order to reduce cost and
increase productivity and quality. In order to meet today's manufacturing
quality requirements, statistical sampling methods are often insufficient and
100% inspection is required. To accomplish these objectives, manufacturers
are increasingly adopting machine vision solutions.

  Manufacturers are demanding expanded capabilities from machine vision
systems, including faster processing capabilities and greater ease of use.
Manufacturers are also demanding more comprehensive services from machine
vision providers, including application engineering, technical support and
training. Furthermore, manufacturers are seeking the ability to monitor trends,
to better comprehend the manufacturing process and to identify problems. In
addition, manufacturers are being challenged to maintain high production levels
that require rapid set up times, flexibility and seamless networking with the
host manufacturing control system to provide comprehensive diagnostic and
process control feedback.

BUSINESS STRATEGY

  The Company's objective is to be a worldwide leader in the design,
manufacture, marketing and integration of 2D and 3D machine vision-based
automated inspection systems for manufacturing applications. Through the
successful integration of the Company's five core competencies, including
image acquisition, image processing, application development software, optics
and illumination, and vision system integration, the Company believes it will
be able to meet its objective and successfully implement its strategy.

  Key elements of the Company's strategy include:

  * Providing Complete Solutions: The Company focuses on providing
    complete machine vision solutions to end-user manufacturers, OEM's, system
    integrators and machine builders. PPT VISION is pursuing what it believes
    to be the most fully vertically integrated business model in the
    industry, including designing, manufacturing, marketing and integrating
    complete machine vision solutions. The Company believes this provides
    it with a competitive advantage in delivering cost effective, complete
    vision solutions.

  * Extending Technology Leadership in Speed and Ease-of-Use: The Company is
    continuing to aggressively invest in next generation software and
    hardware architectures that will expand its lead in speed, ease-of-use
    and the ability to deliver cost effective complete solutions to its
    customers.

  * Targeting Expanding Markets Through Continued Development of Application-
    Specific Software Tools and Hardware Products: The Company's application-
    specific software tools are a proven solution for a wide variety of
    inspection applications. In response to the worldwide expansion of the
    semiconductor and electronics industries, the Company is developing
    additional software tools and hardware products for electronic component,
    electronics and semiconductor applications.

  * Providing a Superior Level of Value-Added Application Engineering Support:
    The Company delivers a high level of value-added application engineering
    support to its end user customers through its own in-house applications
    engineering resources. Manufacturing end users increasingly want to
    concentrate their engineering expertise on the products they manufacture,
    not on engineering machine vision systems. They are seeking complete
    machine vision solutions with associated application engineering
    support on an on-going basis.

  * Increasing International Market Presence: The Company is aggressively
    focusing on increasing its market share in the worldwide machine vision
    market. The Company believes international markets represent a significant
    opportunity and intends to capture a significant share of this market
    through investment and expansion in its international sales distribution
    and support infrastructure.  In fiscal 2000, 47% of the Company's revenues
    came from customers based outside of the United States.

PRODUCTS

  The Company designs, manufactures, markets and integrates machine vision-based
automated inspection systems for manufacturing applications such as electronic
and mechanical assembly verification, verification of printed characters,
packaging integrity, surface flaw detection, and gauging and measurement tasks.
A machine vision system is a combination of cameras, lighting, and computer
hardware and software working together to capture an analyze images of moving
parts to determine if the parts match a defined standard.  Machine vision-based
inspection systems enable manufacturers to realize significant economic paybacks
by increasing the quality of manufactured parts and improving the productivity
of manufacturing processes.  The Company's vision systems are sold throughout
the Americas, Europe and Asia to a broad range of industry categories, including
automotive, electronic and semiconductor components, consumer goods, medical
devices, pharmaceuticals and plastics.

  The Company's machine vision systems are primarily targeted at providing
manufacturers with 100%  inspection in high speed, discrete part
manufacturing applications. This typically replaces older off-line, random
sampling techniques or human vision inspection techniques as a means of
monitoring quality. The Company's machine vision systems enable manufacturers
to achieve zero defect production.

  The Company's family of machine vision systems, which include its proprietary
Vision Program ManagerT (VPM) graphical programming software, provide
significant performance advantages that meet manufacturers' critical
requirements. These requirements include high speed, flexibility, ease-of-use,
networkability and statistical feedback, all without sacrificing performance.
All PPT VISION systems are supported by the Company's focus on providing its
customers with complete solutions, not just components, and a major commitment
to providing its customers with value-added application engineering services.

  The Company has developed products that have specific advantages in terms of
speed and ease-of-use. Many of the Company's machine vision systems are capable
of operating at speeds over 10,000 parts per minute performing 100% inspection.
This speed can be critical to successfully employing machine vision in many
applications. PPT VISION also pioneered the use of an icon-based visual
programming system (i.e. VPM) operating in the Microsoft(R) Windows(TM)
environment. Users are able to program the Company's systems by creating a
flowchart of icons linked together rather than having to write a computer
program in a programming language such as "C" or using a complex menu-based
system. This results in lower cost and less time for implementation.

Vision Systems Division

The Company's Vision System Division ("VSD") develops and applies 2D and 3D
vision technology for general purpose end-user and original equipment
manufacturer applications in the manufacturing marketplace.  The principle
product offerings of the Vision Systems Division are discussed below:

Passport DSL and Scout DSL (Digital Serial Link)

  The Company introduced its completely digital machine vision systems, the
patented Passport DSL and Scout DSL, in fiscal 1998. These products offer an
integrated network of cameras, lighting, image processors and hubs, which
together form a complete machine vision system.

  The Passport DSL and Scout DSL systems are completely digital, which results
in much greater accuracy and repeatability than traditional analog systems.
These DSL systems feature PPT's Vision Program Manager (VPM)software, a
powerful, graphical programming interface that requires no programming expertise
and operates in the Microsoftr Windows environment.  The Passport DSL and Scout
DSL both incorporate a fully integrated Pentium-based PC, which can be easily
added onto a factory network, allowing for a full range of control and
monitoring capabilities and an easy way to import or export process information
and images.  The DSL systems support a network of up to 16 asynchronously
functioning cameras that capture non-interlaced video images at rates up to
4,000 full frames per minute.  To complement the DSL product family, the Company
has also developed the DSL6000 digital camera.

Passport 440, Passport 240, and Scout machine vision systems

  The Passport 440 is designed to operate with up to four asynchronously
functioning cameras for multiple inspection views and complex imaging tasks. The
Passport 240 has all of the basic capabilities of the Passport 440 in a two-
camera model. Both systems are housed in industrially rugged enclosures and are
capable of operating at speeds of over 10,000 inspections per minute. The Scout
is a cost-effective machine vision system designed for industrial applications
that do not require rugged enclosures. It is packaged in a non-industrial style
enclosure and is capable of running two cameras with speed and power similar to
that of the Passport 240.

SpeedScan 3D Sensor.

  The SpeedScan 3D Sensor is based on PPT's patented Scanning Moire
Interferometry (SMI)3D technology.  Utilizing a tri-linear CCD sensor and
advanced optics, the SpeedScan 3D Sensor is capable of real-time calculation of
3D topography in a single pass.  SMI is a patented real-time, unique technology
for high speed, high accuracy 3D scanning.  It is an area-scanning technology
that gathers height data at rates many times faster than conventional laser-
based sensors.  SMI is especially suitable for applications in the semiconductor
and electronics industries, such as IC coplanarity (BGA, BGA, QFP), connector
coplanarity, solder paste volume and hard drive components.


Microelectronics Systems Division

The Microelectronics Systems Division ("MSD") develops and markets application-
specific inspection solutions utilizing the Company's core 2D and 3D vision
technology for three target markets:  inspection of leaded and bumped components
in the semiconductor back-end manufacturing process, inspection of surface-mount
electronic connectors, and inspection of components used in hard disk drives.
The principle product offering of the Microelectronics Systems Division is
discussed below:

PPT861, In-Tray 2D and 3D Scanning Station

 In late fiscal 1999, the Company introduced, the PPT861, a high-speed, semi-
automated, high resolution, 3D scanning station. The PPT861 provides the
flexibility to scan a wide range of in-tray semiconductor packages including
QFP, BGA, CSP and BGA, as well as electronic connectors and hard drive
components.  Using the Company's patented SMI 3D technology, the PPT861 delivers
precise measurements at greatly enhanced throughput rates as compared with
traditional inspection techniques.  With the addition of the optional 2D module,
the PPT861 provides a comprehensive solution for critical measurement and
inspection requirements.  The PPT861 can be configured to operate in either an
in-line or stand-alone mode, providing capabilities for both small lot
production and high volume applications. All scanning and motion parameters are
programmable to allow the inspection of a broad range of component types with
varying size and thickness.  During fiscal 2000, with orders in all three
targeted markets, the Company successfully installed 5 PPT861T systems.
Additionally, in January 2001 the Company received a large follow-on order
exceeding $1 million dollars for multiple PPT861T systems.

MARKETS AND CUSTOMERS

  The Company sells its products to a broad range of industries, including
manufacturers of electronic and semiconductor components, pharmaceuticals,
medical devices, automotive components, consumer products and plastics. As of
October 31, 2000, the Company had sold more than 3,600 machine vision systems to
over 290 customers since inception.

  In each of the past several years, the Company has had one or more customers
that have accounted for ten percent or more of the Company's net revenues.
During fiscal 2000, revenue from Tokyo Weld, Co., Ltd. accounted for 17% of net
revenues and revenue from Tyco International accounted for 12% of net revenues.
During fiscal 1999, revenue from Philip Morris Incorporated accounted for 27% of
net revenues.  During fiscal 1999 and fiscal 1998 revenue from one customer
based in the Netherlands, Simac Masic B. V., accounted for 13% and 16% of net
revenues, respectively. The loss of, or significant curtailment of purchases by,
any of the Company's principal customers could have a material adverse effect on
the Company's results of operations.

SALES, MARKETING AND CUSTOMER SUPPORT

  The Company sells its products primarily on a direct basis in the United
States to end users, system integrators, machine builders and OEMs. Outside the
United States, the Company sells primarily through a network of distributors
covering Europe, Asia and South America. The Company markets its products
through appearances at industry trade shows, advertising in industry trade
journals, articles published in industry and technical journals, its own website
and through direct-selling in specific vertical markets. In addition, the
Company's strong customer relationships serve as valuable references.

  The Company focuses on delivering a high level of value-added applications
engineering support to its end user customers through its own in-house
applications engineering resources. The Company also provides extensive
training opportunities for its customers, either at the Company's facilities or
on-site at the customer's facilities.

  The following table sets forth the percentage of the Company's net revenues
(including sales delivered through international distributors) by geographic
location during the past three years:

                                                    YEAR ENDED OCTOBER 31,
                                                    ---------------------
                                                    2000    1999     1998
                                                    ----    ----     ----
      North America..............................   53%      74%      62%
      Europe.....................................   11%      13%      18%
      Asia-Pacific...............................   31%      12%      18%
      South America..............................    5%       1%       2%

  Substantially all of the Company's export sales are negotiated, invoiced and
paid in United States dollars.  However, the Company will from time to time
enter into export sales negotiated, invoiced and paid in foreign currencies.

BACKLOG

  The Company does not believe backlog is a key indicator of future revenues in
the end user machine vision market. PPT VISION products are typically shipped
within 30 days after receipt of an order. The Company believes that maintaining
as short a time as practical for delivery is a competitive advantage in the end
user machine vision market. Customers in the end user machine vision market do
not normally place orders for large multiples of units with
scheduled deliveries over many months. Rather, end user machine vision
addresses a specific application or problem at a specific manufacturing site.

RESEARCH AND PRODUCT DEVELOPMENT

  PPT VISION's products are distinguished by the Company's proprietary
technology and its significant commitment to research and product development
efforts. The Company's research and product development efforts are focused on
its five core competencies: image acquisition, imaging processing,
application development software, optics and illumination, and vision system
integration. The Company believes that the integration of these core
competencies is essential to achieving long term success in the machine vision
market. The Company's five core competencies can be described as follows:

    Image Acquisition. This refers to the means and methods by which an image
  is captured, stored, and then made available for subsequent processing and
  display. Image acquisition combines the disciplines of photo-optics and
  electrical engineering.

    Imaging Processing. This refers to the means and methods whereby an image
  is analyzed or enhanced to produce some desired information, measurements
  or results. Image processing combines the disciplines of software
  engineering, mathematics, algorithm development and electrical engineering
  to implement efficient solutions to computationally complex problems.
  Typical image processing tasks include real-time inspection, guidance,
  gauging and recognition.

    Application Development Software. This refers to the means and methods
  whereby a machine vision system is configured and controlled. The
  development and support of applications development software requires
  expertise in the disciplines of object-oriented programming, graphical
  programming environments, man-machine interfaces, device drivers and
  general software engineering.

    Optics and Illumination. This refers to the means and methods by which a
  scene is illuminated and optically presented to an input device such as a
  video camera. Special optics and illumination techniques are often used to
  reveal features in an image which would otherwise go undetected or to
  optimize an image for subsequent processing. Optics and illumination draw
  on skills from the disciplines of physics, mechanical engineering and
  electrical engineering.

    Vision System Integration. This refers to the means and methods whereby a
  machine vision system is interfaced to and combined with other factory
  automation equipment for purposes of creating a complete solution for the
  customer. This may include the development of application specific solutions
  for certain vertical market applications along with mechanical fixturing for
  mounting camera and lighting components, networking and programmable
  controllers for process control, and reject mechanisms for ejection of
  defective parts.

  Various configurations of the Company's products include proprietary design
  work performed by the Company's employees in each of these five areas.

  PPT VISION believes that continued and timely development of new products and
enhancements to existing product characteristics are essential to maintaining
its competitive position. The Company has committed and expects to continue to
commit substantial resources to its research and development effort, which plays
a significant role in maintaining and advancing its position as a leading
provider of complete machine vision systems. The Company's current research and
development efforts are directed to increasing performance in image acquisition,
image processing and application development software, which could produce
systems with greater speed and accuracy while also providing customers with more
expanded software tools. These efforts include the Company's traditional two-
dimensional (2D) machine vision systems as well as three- and one-dimensional
(3D and 1D) sensor products. Key software products under development will enable
support for different hardware and user interfaces, as well as increasing the
development speed of application specific software tools. The Company also
intends to expand its offerings of application specific software and hardware
products for the industries it identifies as being poised to exhibit significant
growth in demand for machine vision solutions, which includes electronics and
semiconductors.

  Research and development expenditures were $5.3 million, $4.5 million and $2.9
million in the fiscal years ended October 31, 2000, 1999, and 1998,
respectively.

MANUFACTURING

  The Company assembles, configures and tests its products at its suburban
Minneapolis facility. The Company's printed circuit boards are custom built by
several manufacturers. Most of the components used in the Company's machine
vision systems are available off-the-shelf, however, some components are
available from only a single supplier or from a limited number of suppliers.
The Company typically purchases inventory and builds products in response to
quarterly sales forecasts, enabling it to ship products within 30 days after
receipt of an order.

  Much of the Company's product manufacturing, consisting primarily of circuit
board manufacturing and assembly and machined parts production, is contracted
with outside vendors. Company personnel inspect incoming parts and perform
final assembly and testing of finished products. The Company believes that its
outsourcing strategy enables it to focus its resources on the key core
competency areas from which it derives its competitive advantages.

COMPETITION

  The machine vision industry is highly fragmented. Currently, no competitor
holds a significant aggregate market share percentage, although some dominate
individual niches within the overall machine vision industry. The Company
believes that over the next several years, the industry will experience a
continuing trend toward consolidation. However, given the application specific
nature of the industry, the Company also believes that the machine vision
industry will continue to have a relatively large number of competitors.

  The Company believes the major competitive factors in the industry are
performance, quality, support and price. Although the Company believes that its
products are unique, competitors offer technologies and systems that are capable
of certain of the functions performed by the Company's products. The Company
faces competition from a number of companies in the machine vision market, some
of which have greater manufacturing and marketing capabilities and greater
financial, technological and personnel resources.

  Although the Company believes that its current products offer several
advantages in terms of speed and ease-of-use, and although the Company has
attempted to protect the proprietary nature of such products, it is possible
that any of the Company's products could be duplicated by other companies in
the same general market. There can be no assurances that the Company would be
able to compete with similar products produced by a competitor.

PATENTS AND PROPRIETARY RIGHTS

  The Company relies on a combination of patent, copyright, trademark and trade
secret laws to establish its proprietary rights in its products. The Company
owns several issued and pending United States and international patents for
various inventions used in machine-vision, automated inspection and illumination
systems. The Company believes that the patents it owns may have been useful in
protecting the Company's proprietary products and may be useful in protecting
potential future products. The Company also believes its ability to efficiently
develop and sell high performance, cost-effective vision systems on a timely
basis, whether patented or not, is crucial to the Company's future success. The
Company requires each of its employees to enter into standard agreements
pursuant to which the employee agrees to keep confidential all proprietary
information of the Company and to assign to the Company all rights in any
proprietary information or technology made or contributed by the employee during
his or her employment or made thereafter as a result of any inventions conceived
or work done during such employment. Despite these precautions, it may be
possible for a third party to copy or otherwise obtain and use the Company's
products or technology without authorization or to develop similar technology
independently. In addition, effective patent, copyright, trademark and trade
secret protection may be unavailable or limited in certain foreign countries.

  A number of users of machine-vision technology have received notice of alleged
patent infringement from, or have been sued by, the Lemelson Medical, Education
and Research Foundation Limited Partnership ("Lemelson Foundation") alleging
that their use of machine-vision technology in their production processes
infringes certain patents issued to Jerome H. Lemelson.  Certain of these users
have notified the Company that, in the event it is subsequently determined that
their use of the Company's products in their production processes infringes any
of Mr. Lemelson's patents, they may seek indemnification from the Company for
damages or expenses resulting from this matter. The Company believes that it has
defenses to such indemnification claims. To date, the Company has received no
actual claims for indemnification.  The Company cannot predict the outcomes from
the claims of alleged infringement made by the Lemelson Foundation or the affect
of such outcomes on the operating results of the Company.

  The Company has obtained United States federal registration for its "PPT",
"PPT VISION", "Passport", "Scout", "Passport DSL" and "Scout DSL" trademarks.
The Company intends to file for federal registration of additional trademarks in
the future. Although no assurance can be given as to the strength or scope of
the Company's trademarks, the Company believes that its trademarks have been and
will be useful in developing and protecting market recognition for its products.

EMPLOYEES

  As of January 16, 2001, the Company had 112 full-time employees, including 43
employees in research and development, 39 in sales and marketing, 22 in
manufacturing and 8 in finance and administration. To date, the Company has been
successful in attracting and retaining qualified technical personnel, although
there can be no assurance that this success will continue. None of the Company's
employees are covered by collective bargaining agreements or are members of a
union. The Company has never experienced a work stoppage and believes that its
relations with its employees are excellent.

IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS

  Various forward-looking statements have been made in this Annual Report on
Form 10-K.  Forward-looking statements may also be made in the Company's other
reports filed under the Securities Exchange Act of 1934, in its press releases
and in other documents. In addition, from time to time, the Company through its
management may make oral forward-looking statements.

  Forward-looking statements are subject to risks and uncertainties, including
those identified below, that could cause actual results to differ materially
from such statements.  The words "anticipate", "believe", "expect", "intend",
"optimistic", "will" or similar expressions are intended to identify forward-
looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are
made.  The Company undertakes no obligation to update publicly or revise any
forward-looking statements.

  Important factors that could cause actual results to differ materially from
the Company's forward-looking statements, as well as affect the Company's
ability to achieve its financial and other goals, include, but are not limited
to, the following:

  Technological Change and New Product Development. The market for the Company's
products is characterized by rapidly changing technology. The Company's future
success will continue to depend upon its ability to enhance its current products
and to develop and introduce new products that keep pace with technological
developments and evolving industry standards, respond to changes in customer
requirements and achieve market acceptance. Any failure by the Company to
anticipate or respond adequately to technological developments and customer
requirements, or any significant delays in product development or introduction,
could have a material adverse effect on the Company's business, results of
operations, financial condition and liquidity. In addition, there can be no
assurance the new products and services or product and service enhancements, if
any, developed by the Company will achieve market acceptance.

  Dependence Upon Principal Customers. In each of the past several years, the
Company has had one or more customers that have accounted for ten percent or
more of the Company's net revenues. During the fiscal year ended October 31,
2000, revenue from Tokyo Weld, Co., Ltd. accounted for 17% of net revenues and
revenue from Tyco International accounted for 12% of net revenues.  The loss of,
or significant curtailment of purchases by, any of the Company's principal
customers could have a material adverse effect on the Company's results of
operations.

  Cyclicality of Capital Spending by Customers. A significant portion of the
Company's revenues are derived from sales to various segments of the electronic
component industry, such as metal stamping, electronic connectors and passive
components. The markets for these segments, and for the electronic component
industry in general, can be cyclical, resulting in varying amounts of capital
spending. Any significant downturn in capital spending in these markets, or in
any other markets served by the Company's products, could have a material
adverse effect on the Company's business and results of operations.

  Proprietary Technology. The Company relies heavily on its image acquisition
and image processing hardware designs, along with proprietary software
technology. Although the Company has been issued patents, or obtained licenses
to patents, in the past on certain technology and has patents pending on new
technologies, it currently relies most heavily on protecting its proprietary
information as trade secrets. There can be no assurance that the steps taken by
the Company will be adequate to prevent misappropriation of its technology by
third parties or will be adequate under the laws of some foreign countries,
which may not protect the Company's proprietary rights to the same extent as do
laws of the United States. In addition, the possibility exists that others may
"reverse engineer" the Company's products in order to determine their method of
operation and then introduce competing products. Further, many high technology
markets, including segments of the machine vision industry, are characterized by
the existence of a large number of patents and frequent litigation for financial
gain  based on patents with broad, and often questionable, application. As the
number of the Company's products increases, the markets in which its products
are sold expands and the functionality of those products grows and overlaps with
products offered by competitors. The Company has been sued for patent
infringement in the past and may be subject to patent infringement claims in the
future.  In addition to being expensive and time consuming for the Company and
its management, protracted litigation to defend or to prosecute intellectual
property could result in some customers deferring or limiting their purchase of
the Company's product until resolution of the litigation.  Although the Company
is not aware that any of its products or proprietary rights infringe upon the
valid rights of third parties, there can be no assurance that infringement
claims will not be asserted against the Company in the future or that any such
claims will not require the Company to enter into royalty arrangements or result
in costly litigation. See Item 3, Legal Proceedings.

  Quarterly Fluctuations. The Company has experienced quarterly fluctuations in
operating results and anticipates that these fluctuations will continue. These
fluctuations have been caused by various factors, including the order flow of
its principal customers, the timing and acceptance of new product introductions
and enhancements and the timing of product shipments and marketing. Future
operating results may fluctuate as a result of these and other factors,
including the Company's ability to continue to develop innovative products, the
announcement or introduction of new products by the Company's competitors, the
Company's product and customer mix, the level of competition and overall trends
in the economy.

  Dependence on Outside Contractors and Suppliers. The Company currently
contracts with third party assembly houses for a substantial portion of its
components and assembly needs. Although the Company endeavors to inspect and
internally test most components prior to final assembly, reliance on outside
contractors reduces its control over quality and delivery schedules. The
failure by one or more of these subcontractors to deliver quality components in
a timely manner could have a material adverse effect on the Company's results of
operations. In addition, a number of the components integral to the functioning
of the Company's products are available from only a single supplier or from a
limited number of suppliers. Any interruption in or termination of supply of
these components, or a material change in the purchase terms, including pricing,
or a reduction in their quality or reliability, could have a material adverse
effect on the Company's business or results of operations.

  International Revenue. In the years ended October 31, 2000, 1999 and 1998,
sales of the Company's products to customers outside North America accounted for
approximately 47%, 26% and 38%, respectively, of the Company's net revenues. The
Company anticipates that international revenue will continue to account for a
significant portion of its net revenues. The Company's operating results are
subject to the risks inherent in international sales, including various
regulatory requirements, political and economic changes and disruptions,
transportation delays and difficulties in staffing and managing foreign sales
operations and distributor relationships. In addition, fluctuations in exchange
rates may render the Company's products less price competitive relative to local
product offerings. There can  be no assurance that these factors will not have a
material adverse effect on the Company's future international sales and,
consequently, on the Company's operating results.

  Competition. The Company competes with other vendors of machine vision
systems, some of which may have greater financial and other resources than the
Company. There can be no assurance that the Company will be able to compete
successfully in the future or that the Company will not be required to incur
significant costs in connection with its engineering research, development,
marketing and customer service efforts to remain competitive. Competitive
pressures may result in price erosion or other factors which will adversely
affect the Company's financial performance.

  Dependence on Key Personnel. The Company's success depends in large part upon
the continued services of many of its highly skilled personnel involved in
management, research and product development and sales, and upon its ability to
attract and retain additional highly qualified employees. The loss of services
of these key personnel could have a material adverse effect on the Company. The
Company does not have key-person life insurance on any of its employees.

  Utilization of Net Operating Loss. The utilization of the net operating loss
carryforward is dependent upon the Company's ability to generate sufficient
taxable income during the carryforward period. In fiscal 2000, there was no tax
provision due to the net loss for the period. At October 31, 2000, the Company
has available net operating loss and tax credit carryforwards for income tax
purposes of approximately $12.8 million and $1.0 million, respectively.  These
carryforwards expire in the years ending October 31, 2001 through October 31,
2020.  A valuation allowance equal to the deferred tax asset has been recorded.


EXECUTIVE OFFICERS OF THE COMPANY

  The executive officers and other key members of management of the Company are
as follows:

NAME                            AGE  POSITION
-----                           ---  --------
Joseph C. Christenson..........  42  President, Director
Thomas R. Northenscold.........  42  Vice President and General Manager,
                                     Vision Systems Division
Arye Malek.....................  44  Vice President and General Manager,
                                     Microelectronics Systems Division
Richard R. Peterson............  35  Chief Financial Officer
David L. Friske................  57  Vice President of Manufacturing

  Joseph C. Christenson has been President of the Company since January 1989
and a director since December 1987. Prior to being elected President of the
Company, Mr. Christenson served in a series of positions of increasing
responsibility since joining the Company in 1985. Mr. Christenson has a Masters
in Business Administration from the University of Michigan and a Bachelor of
Arts degree from St. Olaf College.

  Thomas R. Northenscold has been Vice President and General Manager of the
Company's Vision Systems Division since March 1999.  Prior to that, he served as
Chief Financial Officer of the Company since February 1995. From April 1992 to
April 1994, he was Senior Vice President of Operations in the City Directory
Division of R.L. Polk and Company, a directory publishing company. Mr.
Northenscold was previously employed at Cardiac Pacemakers, Inc., a medical
device company, in several finance and operations positions from June 1985 to
April 1992. He has a Masters in Business Administration in finance from the
University of Michigan and a Bachelor of Science degree from Mankato State
University.

  Arye Malek has been Vice President and General Manager of the Microelectronics
Systems Division since February 2000.  Prior to that, he served as Vice
President of Marketing of the Company since May 1996. He joined the Company
in May 1990 as a Senior Account Manager and became Director of International
Operations in November 1992. Mr. Malek holds a Bachelor of Science Degree
from the University of Minnesota.

  Richard R. Peterson has been Chief Financial Officer of the Company since
April 1999. From December 1996 to March 1999, Mr. Peterson served as Chief
Financial Officer of PREMIS Corporation, a developer of enterprise-wide retail
automation systems. From July 1992 through November 1996, Mr. Peterson was Vice
President of Finance and Administration of Teltech Resource Network Corporation,
an information technology company. From October 1988 through June 1992, Mr.
Peterson was at Ernst & Young LLP.  Mr. Peterson holds a Bachelor of Science
Degree from Mankato State University and is a Certified Public Accountant.

  David L. Friske has been Vice President of Manufacturing of the Company since
March 1999. From February 1984, Mr. Friske served as Director of Manufacturing
and Purchasing.  Prior to joining the Company, Mr. Friske was employed by
Medtronic, Inc.


Item 2.  PROPERTIES
-------------------

  The Company entered into a ten-year lease in May 1999 for approximately 59,000
square feet of office and manufacturing space in Eden Prairie, Minnesota.  The
lease commenced on June 1, 1999 at an initial monthly rate of approximately
$51,000.  The Company has an obligation to occupy additional space with
additional lease payments over the term of the lease.  The Company also leases
space for its regional sales and support offices in Massachusetts, Michigan and
North Carolina.


Item 3. LEGAL PROCEEDINGS
-------------------------
  None


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------
  None


                                     PART II
                                     -------

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
------------------------------------------------------------------------------

                          PRICE RANGE OF COMMON STOCK

The Company's Common Stock trades on the Nasdaq Stock Market under the symbol
"PPTV".  The following table sets forth the high and low closing sale prices of
the Company's Common Stock on the Nasdaq Stock Market as reported by Nasdaq.

                                                                    HIGH   LOW
                                                                   ------ -----
      FISCAL YEAR ENDED OCTOBER 31, 2000
        First Quarter............................................. $ 4.63 $2.94
        Second Quarter............................................   7.25  3.56
        Third Quarter.............................................   5.63  4.25
        Fourth Quarter............................................   6.00  4.19
      FISCAL YEAR ENDING OCTOBER 31, 1999
        First Quarter............................................. $ 6.63 $4.88
        Second Quarter............................................   6.88  4.38
        Third Quarter.............................................   5.19  4.38
        Fourth Quarter............................................   5.63  3.13

On January 17, 2001, there were approximately 537 holders of record of the
Company's common stock. This figure does not reflect more than 2,000 beneficial
stockholders whose shares are held in nominee names.

                                DIVIDEND POLICY

  The Company has never declared or paid any dividends on its Common Stock. The
Company currently intends to retain any earnings for use in its operations and
expansion of its business and therefore does not anticipate paying any cash
dividends in the foreseeable future.


Item 6.  SELECTED FINANCIAL DATA
--------------------------------
<TABLE>
<CAPTION>


                                               YEAR ENDED OCTOBER 31,
                             -------------------------------------------------------------
                                2000         1999          1998       1997        1996
                             -----------  -----------  ----------  ----------  -----------
<S>                        <C>          <C>          <C>         <C>         <C>

INCOME STATEMENT DATA:
 Net revenues.............. $18,272,000  $11,325,000  $13,512,000 $12,055,000 $12,693,000
 Income (loss)from
  operations...............  (4,138,000)  (6,821,000)  (1,184,000)    (82,000)  1,949,000
 Net income (loss).........  (3,598,000)  (7,734,000)     103,000     660,000   3,711,000

 Basic net income (loss)
   per share...............      $(0.67)      $(1.43)       $0.02      $0.12       $0.88
 Diluted net income (loss)
   per share...............      $(0.67)      $(1.43)       $0.02      $0.12       $0.84


BALANCE SHEET DATA:
 Working capital..........  $11,166,000  $13,444,000  $20,495,000 $22,887,000  $24,083,000
 Total assets.............   19,412,000   21,845,000   29,575,000  29,986,000   28,056,000
 Shareholders' equity.....   16,871,000   19,171,000   27,871,000  27,535,000   26,809,000


</TABLE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Comparison of Year Ended October 31, 2000 to Year Ended October 31, 1999
------------------------------------------------------------------------
  Net Revenues: Net revenues increased 61% to $18,272,000 in fiscal 2000,
compared to net revenues of $11,325,000 in fiscal 1999.  Unit sales of the
Company's machine vision systems increased to 853 in fiscal 2000 versus 387 in
fiscal 1999.  Net revenues increased primarily due to strong performance both
domestically and internationally in the Company's core markets, including
electronics and automotive.  Gross revenues in fiscal 2000 increased 15% in
North America and increased 195% outside North America.  Sales to customers
outside North America represented 47% of net revenues in fiscal 2000, compared
to 26% in fiscal 1999.

  Gross Profit: Gross profit increased 64% to $10,110,000 in fiscal 2000,
compared to $6,175,000 in fiscal 1999.  Gross profit as a percentage of net
revenues for fiscal 2000 remained constant at 55% as compared to fiscal 1999.
The increase in gross profit in absolute dollars in fiscal 2000 is attributed to
the increase in net revenues.  The Company anticipates that the gross profit as
a percentage of net revenues may fluctuate from quarter to quarter during fiscal
2001, but should remain at or near the levels achieved in fiscal 2000.

  Selling Expenses: Selling expenses increased 6% to $4,710,000 in fiscal 2000,
compared to $4,456,000 in fiscal 1999.  As a percentage of net revenues, fiscal
2000 selling expenses decreased to 26%, compared with 39% in fiscal 1999.  The
increase in selling expenses in absolute dollars is primarily the result of
higher net revenues in fiscal 2000.  Although the Company will limit the rate of
growth in selling expenses, it is anticipated that selling expenses may increase
somewhat in fiscal 2001 as the Company makes the necessary investments to
support strategic initiatives.  However, the Company believes that for the whole
of fiscal 2001, selling expenses will decrease slightly as a percentage of net
revenues compared to fiscal 2000, depending on the level of sales growth.

  General and Administrative Expenses: General and administrative expenses
decreased slightly to $2,511,000 in fiscal 2000, compared to $2,535,000 in
fiscal 1999.  As a percentage of net revenues, general and administrative
expenses decreased to 14% for fiscal 2000, compared to 22% for fiscal 1999.
The Company believes that during fiscal 2001, general and administrative
expenses will remain constant in absolute dollars and decrease slightly as a
percentage of net revenues compared to fiscal 2000, depending on the level of
sales growth.

  Research and Development Expenses: Research and development expenses increased
18% to $5,327,000 in fiscal 2000, compared to $4,524,000 in fiscal 1999.
Research and development expenses as a percentage of net revenues for fiscal
2000 decreased to 29%, compared to 40% for fiscal 1999.  The increase in
expenditures is mainly due to resource commitments required to support new and
existing product development programs, including development of our patented
Scanning Moire Interferometry (SMIT) 3D technology and our patented DSL digital
vision technology. The Company believes that during fiscal 2001, research and
development expenses will remain constant compared to fiscal 2000.

  Non-Recurring Charges:  Non-recurring charges for fiscal 2000 relate to costs
and expenses incurred in connection with the Company's defense and settlement of
the patent infringement lawsuit brought by National Instruments Corporation and
the Company's defense and settlement of the breach of contract lawsuit brought
by Integrated Electronic Technologies.  Both lawsuits were settled during the
quarter ended July 31, 2000.

  Interest income decreased 39% to $425,000 in fiscal 2000, compared to $701,000
in fiscal 1999.  The decrease in interest income is due to the decline in
balances of cash, cash equivalents and investments.

  Income Tax Benefit (Expense): There was no tax provision for fiscal 2000 due
to the net loss in the period.  In fiscal 1999, income tax expense of $1,650,000
was recorded.  This income tax expense resulted from the recording of a
valuation allowance against previously recorded deferred tax assets due to the
uncertainty of future realization.  A valuation allowance equal to the deferred
tax asset has been recorded.

Comparison of Year Ended October 31, 1999 to Year Ended October 31, 1998
------------------------------------------------------------------------
  Net Revenues: Net revenues decreased 16% to $11,325,000 in fiscal 1999,
compared to net revenues of $13,512,000 in fiscal 1998.  Unit sales of the
Company's machine vision systems decreased to 387 in fiscal 1999 versus 510 in
fiscal 1998.  Net revenues decreased primarily due to declines in the
electronics segment as well as new product introduction delays experienced in
the first half of fiscal 1999.  Gross revenues in fiscal 1999 increased 1% in
North America and decreased 44% outside North America.  The decline in revenues
outside North America was primarily due to lower sales in the Asia/Pacific
region.  Sales to customers outside North America represented 26% of net
revenues in fiscal 1999, compared to 38% in fiscal 1998.

  Gross Profit: Gross profit decreased 21% to $6,175,000 in fiscal 1999,
compared to $7,846,000 in fiscal 1998.  Gross profit as a percentage of net
revenues for fiscal 1999 decreased to 55%, compared with 58% in fiscal 1998.
The decrease in gross profit in absolute dollars in fiscal 1999 is primarily due
to the decrease in net revenues. The decrease in gross profit as a percentage of
net revenues is mainly a factor of unfavorable manufacturing variances resulting
from decreased production volumes and additional costs associated with the
introduction of new products.

  Selling Expenses: Selling expenses decreased 8% to $4,456,000 in fiscal 1999,
compared to $4,857,000 in fiscal 1998.  As a percentage of net revenues, fiscal
1999 selling expenses increased to 39%, compared with 36% in fiscal 1998.  The
decrease in selling expenses in absolute dollars is primarily the result of
lower net revenues in fiscal 1999.

  General and Administrative Expenses: General and administrative expenses
increased 96% to $2,535,000 in fiscal 1999, compared to $1,294,000 in fiscal
1998.  As a percentage of net revenues, general and administrative expenses
increased to 22% for fiscal 1999, compared to 10% for fiscal 1998.  The increase
in expenditures is primarily attributable to legal defense costs related to the
Company's lawsuit with National Instruments Corporation, legal costs associated
with new patent filings, and increased operating costs associated with the
Company's move to a new facility in May 1999.

  Research and Development Expenses: Research and development expenses increased
57% to $4,524,000 in fiscal 1999, compared to $2,879,000 in fiscal 1998.
Research and development expenses as a percentage of net revenues for fiscal
1999 increased to 40%, compared to 21% for fiscal 1998.  The increase in
expenditures is mainly due to resource commitments required to support new
product development programs, including development of our patented Scanning
Moire Interferometry (SMIT) 3D technology and our patented DSL digital vision
technology.

  Non-Recurring Charges:  In the fourth quarter of fiscal 1999, the Company
recorded a one-time charge of $1,481,000 for the write-down of assets and
inventory associated with discontinuing certain new product development
initiatives. These non-recurring charges did not affect the on-going development
of the Company's patented Scanning Moire Interferometry (SMIT) 3D technology or
its patented DSL digital vision technology.

  Interest income decreased 30% to $701,000 in fiscal 1999, compared to $998,000
in fiscal 1998.  The decrease in interest income is primarily due to the decline
in balances of cash, cash equivalents and investments.

  Income Tax Benefit (Expense): In fiscal 1999, income tax expense of $1,650,000
was recorded.  This income tax expense resulted from the recording of a
valuation allowance against previously recorded deferred tax assets due to the
uncertainty of future realization.  A valuation allowance equal to the deferred
tax asset has been recorded.  An income tax benefit of $278,000 was recorded in
fiscal 1998.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

  Working capital decreased to $11,166,000 at October 31, 2000 from $13,444,000
at October 31, 1999.  The Company financed its operations in fiscal 2000 through
internally generated cash flow, existing cash and cash equivalents, sales of
investments and proceeds from the sale of common stock.  Net cash used in
operating activities in fiscal 2000 was $5,526,000.  Accounts receivable
increased $1,911,000 primarily due to increased product shipments near the end
of the fourth quarter of fiscal 2000.  Inventories increased $699,000 in fiscal
2000 primarily due to purchases of raw materials with longer lead time delivery
schedules.

  Net cash provided by investing activities for fiscal 2000 was $3,987,000,
generated from the sales and maturities of investments which was partially
offset by cash used for the purchase of fixed assets and investment in other
long-term assets.  The Company used $1,060,000 of cash for the purchase of fixed
assets, mainly consisting of computer, lab and manufacturing equipment.  The
Company used $107,000 of cash for investment in other long-term assets, mainly
consisting of cost related to patent filings.  Investments consist of short-term
investment grade securities.

  Net cash provided by financing activities for fiscal 2000 was $1,222,000,
resulting from the issuance of common stock in a private placement in June 2000,
through the employee stock purchase plan and upon the exercise of common stock
options. In September of 1998 the Board of Directors of PPT VISION authorized
the Company to repurchase up to 750,000 shares of its Common Stock.  The Company
used $1,249,000 of cash to repurchase 295,500 shares of its Common Stock in
fiscal 1999.  There were no repurchases of common stock in fiscal 2000.

  The Company entered into a ten-year lease in May 1999 for approximately
59,000 square feet of office and manufacturing space in Eden Prairie,
Minnesota.  The lease commenced on June 1, 1999 at an initial monthly rate of
approximately $51,000.  The Company has an obligation to occupy additional
space with additional lease payments over the term of the lease.

  Current assets decreased to $13,707,000 at October 31, 2000 from $16,118,000
at October 31, 1999.  Investments decreased to $3,072,000 at October 31, 2000
from $8,262,000 at October 31, 1999.  Cash and cash equivalents decreased to
$1,818,000 at October 31, 2000 from $2,135,000 at October 31, 1999.

  The Company's current liabilities decreased to $2,541,000 at October 31, 2000
from $2,674,000 at October 31, 1999.

  The Company believes that its cash flows from operations, existing cash and
cash equivalents and investments at October 31, 2000 will be adequate for its
working capital and capital resource needs during fiscal 2001.


Recent Accounting Pronouncements
--------------------------------

  In June 1999, the FASB issued Statement of Accounting Standards No. 137,
"Accounting for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133." SFAS No. 137 delays the
implementation of SFAS No. 133 until the Company's fiscal year ending October
31, 2001. The Company does not expect a material impact to the financial
statements upon adoption of this standard.

  In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 summarizes certain of the SEC's views in applying
revenue recognition in financial statements. The SEC issued SAB No. 101B,
delaying implementation of the provisions of SAB No. 101 until the Company's
fourth quarter of fiscal 2001. Based on the Company's preliminary assessment,
the implementation of SAB No. 101 is not expected to have any material effect on
the Company's revenues or revenue recognition policy.

Effects of Inflation
--------------------

  The Company believes that the effects of inflation has not been material
during each of the years ended October 31, 2000, 1999 and 1998, respectively.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
-------------------------------------------------------------------

  The Company believes it does not have material exposure to quantitative and
qualitative market risks.  The carrying amounts reflected in the consolidated
balance sheets of cash and cash equivalents, investments, trade receivables and
trade payables approximate fair value at October 31, 2000 due to the short
maturities of these instruments.

Interest Rate Risk

  The Company maintains investment portfolio holdings of various issuers, types
and maturities, primarily U.S. government and agency securities and other short
terms, interest-bearing investment grade securities.   The Company's cash and
investments include cash equivalents, which the Company considers to be
investments purchased with original maturities of three months or less.
Investments having original maturities in excess of three months are stated at
amortized cost, which approximates fair value, and are classified as available
for-sale.  Given the short maturities and investment grade quality of the
portfolio holdings at October 31, 2000, as well as the Company's policy of
holding rate sensitive instruments to maturity, a 100 basis point rise in
interest rates would not be expected to have a material adverse impact on the
fair value of the Company's investment portfolio.  As a result, the Company does
not currently hedge these interest rate exposures.

Foreign Currency Exchange Rate Risk

  Historically, the Company's international sales, which are primarily in
Europe, South America, Japan and Southeast Asia, have been transacted in U.S.
Dollars.  However, during fiscal 2000 the Company entered into forward foreign
exchange contracts in Japanese Yen to hedge currency exposures associated with
specific contracts denominated in Japanese Yen. These contracts are used to
reduce the Company's risk associated with exchange rate movements, as the gains
or losses on these contracts are intended to offset the exchange rate losses or
gains on the underlying contracts. The Company does not engage in foreign
currency speculation. At October 31, 2000, the Company had $3,814,000 of foreign
exchange contracts outstanding, all of which were in Japanese yen.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

  See Part IV, Item 14 of this Form 10-K.


Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE
------------------------------------------------------------------------
  None.

                                    PART III
                                    --------

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------
  Information required under this item with respect to directors is contained in
the section "Election of Directors" in the Company's Proxy Statement for the
Annual Meeting of Shareholders to be held on March 15, 2001 (the "2001 Proxy
Statement"), a definitive copy of which will be filed within 120 days of October
31, 2000 and is incorporated herein by reference.

  Information concerning executive officers and other key members of management
is set forth in the Section entitled "Executive Officers and Other Key Members
of Management of the Company" in Part I, Item 1 of this Form 10-K pursuant to
Instruction 3 to paragraph (b) of Item 401 of Regulation S-K.

Item 11.  EXECUTIVE COMPENSATION
--------------------------------
  Information required under this item is contained in the section entitled
"Executive Compensation and Other Information," in the Company's 2001 Proxy
Statement and is incorporated herein by reference.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------
  Information required under this item is contained in the section entitled
"Security Ownership of Principal Shareholders and Management" in the Company's
2001 Proxy Statement and is incorporated herein by reference.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
  None

                                     PART IV
                                     -------

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

     (a)  Documents filed as Part of this Report

          (1)  FINANCIAL STATEMENTS.  The following financial statements of the
               Company are hereby included in this Form 10-K.
                                                                      Page
                                                                      ----
               Report of Independent Accountants.....................  29
               Income Statements for the three years ended
                    October 31, 2000, 1999 and 1998..................  30
               Balance Sheets as of October 31, 2000 and 1999........  31
               Statements of Cash Flows for the Years
                    ended October 31, 2000, 1999 and 1998............  32
               Statements of Shareholders' Equity for the Years
                    ended October 31, 2000, 1999 and 1998............  33
               Notes to Financial Statements.........................  34

          (2)  FINANCIAL STATEMENT SCHEDULES FOR THE THREE YEARS
               ENDED OCTOBER 31, 2000


               VIII.  Valuation and Qualifying Accounts..............  43

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

     (b)  Reports on Form 8-K
          -------------------

          There were no Reports on Form 8-K filed during the fourth quarter of
the year ended October 31, 2000.


     (c)  Listing of Exhibits
          -------------------
Exhibit
  No.                           Description                           Page
-------  ----------------------------------------------------------   ----
3.1.....  Restated Articles of Incorporation of Registrant
          (incorporated by reference to Exhibit 3.1 of 1996 Form 10-K)

3.2.....  By-Laws of Registrant
          (incorporated by reference to Exhibit 3.2 of 1996 Form 10-K)

4.1.....  Preferred Stock Purchase Rights Agreement, as amended
          (Incorporated by reference to Exhibit 1 to June 17, 1999
          Registration Statement on Form 8-A as amended by Exhibit 1 to
          October 19, 1999 Amendment No. 1 to Registration Statement on
          Form 8-A/A)

10.1....  Employment Agreement with Joseph C. Christenson dated as of
          May 7, 1984 (incorporated by reference from Exhibit 10.4 to
          May 15, 1996 Form S-2)

10.2....  Employment Agreement with Thomas Northenscold dated as of
          February 27, 1995 (incorporated by reference from
          Exhibit 10.6 to May 15, 1996 Form S-2)

10.3....  Employment Agreement with Arye Malek dated as of
          May 1, 1990 (incorporated by reference from
          Exhibit 10.7 to May 15, 1996 Form S-2)

10.4*...  PPT VISION, Inc. 1988 Stock Option Plan, as amended
          (incorporated by reference to Exhibit 10.6 of 1997 Form 10-K)

10.5*...  PPT VISION, Inc. 1997 Stock Option Plan
          (incorporated by reference to Exhibit 10.7 of 1997 Form 10-K)

10.6*...  PPT VISION, Inc. 2000 Stock Option Plan (incorporated by reference to
          Form S-8 dated June 15, 2000, file No. 333-39344)

10.7....  Lease Agreement dated July 17, 1998 for facilities at
          the Prairie Crossroads Corporate Center, Eden Prairie, Minnesota
          (incorporated by reference to Exhibit 10.7 of 1999 Form 10-K)

10.8....  First Amendment of Lease dated October 16, 1999 for
          facilities at the Prairie Crossroads Corporate Center,
          Eden Prairie, Minnesota (incorporated by reference to Exhibit 10.8 of
          1999 Form 10-K)

21......  The Company has no subsidiaries

23......  Consent of PricewaterhouseCoopers LLP......................  51

27......  Financial Data Schedule....................................  52


*Indicates compensatory plan


                                   SIGNATURES
                                   ----------
     Pursuant to the requirements of Section 13 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.

                                PPT VISION, INC.

Date:  January 29, 2001                 By:/s/Joseph C. Christenson
                                           ----------------------------
                                           Joseph C. Christenson
                                          (Principal Executive Officer)

Date:  January 29, 2001                 By:/s/Richard R. Peterson
                                           ----------------------------
                                           Richard R. Peterson
                                          (Principal Accounting Officer)
                                             and Chief Financial Officer



                        Signatures and Power of Attorney

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Registrant, in
the capacities, and on the dates, indicated.  Each person whose signature
appears below constitutes and appoints Joseph C. Christenson and Richard R.
Peterson as his true and lawful attorneys-in-fact and agents, each acting
alone, with full power of substitution and resubstitution, for him and in his
name, place, and stead, in any and all capacities, to sign any or all amendments
to this Annual Report on Form 10-K and to file the same, with the exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission.

        Date                                   Signature and Title
        ----                                   -------------------

  January 29, 2001                         /s/ Joseph C. Christenson
                                           ----------------------------
                                           Joseph C. Christenson
                                             President, Director
                                          (Principal Executive Officer)

  January 29, 2001                         /s/ Richard R. Peterson
                                           ----------------------------
                                           Richard R. Peterson
                                          (Principal Accounting Officer)
                                             and Chief Financial Officer

  January 29, 2001                         /s/ Robert W. Heller
                                           ----------------------------
                                           Robert W. Heller, Director

  January 29, 2001                         /s/ David C. Malmberg
                                           ----------------------------
                                           David C. Malmberg, Director

  January 29, 2001                         /s/ Peter R. Peterson
                                           ----------------------------
                                           Peter R. Peterson, Director



REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of PPT VISION, Inc.

In our opinion, the financial statements listed in the index appearing under
Item 14 (a) (1) and (2) present fairly, in all material respects, the financial
position of PPT VISION, Inc. at October 31, 2000 and 1999, and the results of
its operations and its cash flows for each of the three fiscal years in the
period ended October 31, 2000 in conformity with accounting principles
generally accepted in the United States of America.  In addition, in our
opinion, the financial statement schedules listed in the accompanying index
present fairly, in all material respects, the information set forth therein
when read in conjunction with the related financial statements.  These
financial statements and financial statement schedules are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements and financial statement schedules based on our
audits.  We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.


PricewaterhouseCoopers LLP
Minneapolis, MN
December 8, 2000


                                PPT VISION, INC.
                               INCOME STATEMENTS


                                                 YEAR ENDED OCTOBER 31,
                                         -------------------------------------
                                             2000         1999        1998
                                         -----------  -----------  -----------

Net revenues............................ $18,272,000  $11,325,000  $13,512,000
Cost of sales...........................   8,162,000    5,150,000    5,666,000
                                         -----------  -----------  -----------
    Gross profit........................  10,110,000    6,175,000    7,846,000
                                         -----------  -----------  -----------
Expenses:
  Selling...............................   4,710,000    4,456,000    4,857,000
  General and administrative............   2,511,000    2,535,000    1,294,000
  Research and development..............   5,327,000    4,524,000    2,879,000
  Non-recurring charges.................   1,700,000    1,481,000           --
                                         -----------  -----------  -----------
    Total expenses......................  14,248,000   12,996,000    9,030,000
                                         -----------  -----------  -----------
Loss from operations....................  (4,138,000)  (6,821,000)  (1,184,000)
Interest income.........................     425,000      701,000      998,000
Other income, net.......................     115,000       36,000       11,000
                                         -----------  -----------  -----------
Loss before income taxes................  (3,598,000)  (6,084,000)    (175,000)
Income tax benefit (expense)............          --   (1,650,000)     278,000
                                         -----------  -----------  -----------
    Net income (loss)................... $(3,598,000) $(7,734,000) $   103,000
                                         ===========  ===========  ===========
Net income (loss) per share:

  Basic................................. $    (0.67)  $   (1.43)   $    0.02
  Diluted............................... $    (0.67)  $   (1.43)   $    0.02

Weighted average shares outstanding:

  Basic.................................   5,346,000    5,398,000    5,425,000
  Diluted...............................   5,346,000    5,398,000    5,511,000


    The accompanying notes are an integral part of the financial statements


                                PPT VISION, INC.
                                 BALANCE SHEETS

                                                           OCTOBER 31,
                                                    -------------------------
                                                       2000          1999
                                                    -----------   -----------
ASSETS
Current assets
  Cash and cash equivalents........................ $ 1,818,000   $ 2,135,000
  Restricted cash..................................     400,000             -
  Investments......................................   3,072,000     8,262,000
  Accounts receivable, net.........................   5,202,000     3,325,000
  Inventories......................................   2,890,000     2,191,000
  Other current assets.............................     325,000       205,000
                                                    -----------   -----------
    Total current assets...........................  13,707,000    16,118,000
Fixed assets, net..................................   2,464,000     2,400,000
Other assets, net..................................   3,241,000     3,327,000
                                                    -----------   -----------
    Total assets................................... $19,412,000   $21,845,000
                                                    ===========   ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Accounts payable................................. $ 1,553,000   $ 1,371,000
  Accrued expenses.................................     705,000     1,303,000
  Deferred revenue.................................     283,000             -
                                                    -----------   -----------
    Total current liabilities......................   2,541,000     2,674,000

Commitments and contingencies

Shareholders' equity
  Preferred stock $.10 par value; authorized
   10,000,000 shares, none outstanding
  Common stock $.10 par value; authorized
   10,000,000 shares;
   issued and outstanding 5,479,782 and 5,256,275..     548,000       526,000
  Capital in excess of par value...................  30,062,000    28,862,000
  Accumulated (deficit)............................ (13,739,000)  (10,141,000)
  Accumulated other comprehensive income...........          -        (76,000)
                                                    -----------   -----------
    Total shareholders' equity.....................  16,871,000    19,171,000
                                                    -----------   -----------
    Total liabilities and shareholders' equity..... $19,412,000   $21,845,000
                                                    ===========   ===========


    The accompanying notes are an integral part of the financial statements



                                PPT VISION, INC.
                            STATEMENTS OF CASH FLOWS

                                                   YEAR ENDED OCTOBER 31,
                                         --------------------------------------
                                               2000         1999         1998
                                         ------------ ------------ ------------

Net income (loss)........................$ (3,598,000) $(7,734,000)  $   103,000
Adjustment to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
  Depreciation and amortization..........   1,189,000    1,093,000      670,000
  Deferred rent..........................          --     (102,000)     (34,000)
  Deferred income tax benefit............          --     (586,000)    (278,000)
  Deferred income tax valuation allowance          --    2,274,000           --
  Loss on disposal of fixed assets
    and other assets                               --      964,000           --
  Accrued interest income (loss).........      59,000       27,000     (137,000)
  Realized gain (loss) on
    sales of investments.................       1,000      (14,000)      (4,000)
Change in assets and liabilities:
  Accounts receivable....................  (1,911,000)    (484,000)     852,000
  Inventories............................    (699,000)    (184,000)    (266,000)
  Other assets...........................     (34,000)      49,000      (28,000)
  Restricted cash........................    (400,000)          --           --
  Accounts payable.......................     182,000      428,000      (67,000)
  Accrued expenses.......................    (598,000)     944,000       54,000
  Deferred revenue.......................     283,000           --           --
                                         ------------ ------------ ------------
    Total adjustments....................  (1,928,000)   4,409,000      762,000
                                         ------------ ------------ ------------
Net cash provided by (used in)
        operating activities.............  (5,526,000)  (3,325,000)     865,000

Cash flows from investing activities:
  Purchase of fixed assets...............  (1,060,000)  (1,877,000)  (1,344,000)
  Purchase of investments................  (2,643,000) (10,590,000) (23,148,000)
  Sales and maturities of investments....   7,797,000   17,238,000   23,853,000
  Net investment in other
    long-term assets.....................    (107,000)    (416,000)  (2,442,000)
                                         ------------ ------------ ------------
Net cash provided by (used in)
        investing activities.............   3,987,000    4,355,000  (3,081,000)

Cash flows from financing activities:
  Proceeds from issuance of common stock.   1,222,000      368,000      267,000
  Repurchases of common stock............           -   (1,249,000)     (92,000)
                                         ------------ ------------ ------------
Net cash provided by (used in)
        financing activities.............   1,222,000     (881,000)     175,000
                                         ------------ ------------ ------------
Net increase (decrease) in cash and
  cash equivalents.......................    (317,000)     149,000   (2,041,000)
Cash and cash equivalents at beginning
  of year................................   2,135,000    1,986,000    4,027,000
                                         ------------ ------------ ------------
Cash and cash equivalents at end of year $  1,818,000 $  2,135,000 $  1,986,000
                                         ============ ============ ============

Supplemental disclosure of cash flow information:
 Cash paid during the year for:
  Income tax.............................$      -- $         -- $     70,000
  Interest...............................       --           --           --

    The accompanying notes are an integral part of the financial statements


                                  PPT VISION, INC.
                         STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>



                                                                     ACCUMULATED
                                                        CAPITAL IN      OTHER                         TOTAL
                                       COMMON STOCK      EXCESS OF  COMPREHENSIVE   ACCUMULATED   SHAREHOLDERS'
                                     SHARES    AMOUNT    PAR VALUE  INCOME (LOSS)    (DEFICIT)        EQUITY
                                    --------- --------- ----------- -------------  ------------   -------------

<S>                                <C>        <C>       <C>          <C>          <C>            <C>
  October 31, 1997................. 5,387,355  539,000  $29,555,000   $(49,000)    $(2,510,000)   $27,535,000
  Stock issued through the
   exercise of stock options.......    48,005    5,000      134,000                                   139,000
  Stock issued through the
   employee stock purchase plan....    25,648    2,000      147,000                                   149,000
  Stock swapped to exercise
   Stock options...................    (2,625)      --      (21,000)                                  (21,000)
  Stock Repurchased................   (17,800)  (2,000)     (90,000)                                  (92,000)
 Comprehensive income:
  Net income.......................                                                    103,000        103,000
  Unrealized gain on investments...                                     58,000                         58,000
                                                                                                      --------
    Total comprehensive income                                                                        161,000
                                    --------- --------- ----------- -------------  ------------   ------------
  October 31, 1998................. 5,440,583  544,000   29,725,000      9,000      (2,407,000)    27,871,000
  Stock issued through the
   exercise of stock options.......    90,093   10,000      274,000                                   284,000
  Stock issued through the
   employee stock purchase plan....    21,099    2,000       82,000                                    84,000
  Stock repurchased................  (295,500) (30,000)  (1,219,000)                               (1,249,000)
 Comprehensive loss:
  Net loss.........................                                                 (7,734,000)    (7,734,000)
  Unrealized loss on investments...                                    (85,000)                       (85,000)
                                                                                                   -----------
    Total comprehensive loss                                                                       (7,819,000)
                                    --------- --------- -----------  ------------  ------------    -----------
  October 31, 1999................. 5,256,275  526,000   28,862,000    (76,000)    (10,141,000)    19,171,000
  Stock issued through the
    exercise of stock options......    19,275    2,000       69,000                                    71,000
  Stock issued through the
    employee stock purchase plan...    34,232    3,000      128,000                                   131,000
  Issuance of common stock.........   170,000   17,000    1,003,000                                 1,020,000
 Comprehensive loss:
  Net loss.........................                                                 (3,598,000)    (3,598,000)
  Unrealized gain on investments...                                     76,000                         76,000
                                                                                                   -----------
    Total comprehensive loss                                                                       (3,522,000)
                                    --------- --------- -----------  -----------   -------------   -----------
  October 31, 2000................. 5,479,782 $548,000  $30,062,000  $        -   $(13,739,000)   $16,871,000
                                    ========= ========= ===========  ===========   =============   ===========

</TABLE>

   The accompanying notes are an integral part of the financial statements


                                   PPT VISION, INC.
                            NOTES TO FINANCIAL STATEMENTS


NOTE 1: ORGANIZATION AND OPERATIONS

  PPT VISION, Inc. ("the Company") designs, manufactures, markets and integrates
2D and 3D machine vision based automated inspection systems. The systems are
used to improve productivity and quality by automating inspection tasks in
manufacturing applications such as assembly verification, flaw detection,
character verification or measurement tasks.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RESTRICTED CASH

  Restricted cash consists of an investment in a certificate of deposit used as
collateral against certain outstanding forward foreign exchange contracts at
October 31, 2000.

ACCOUNTS RECEIVABLE

  Accounts receivable are shown net of allowance for doubtful accounts of
$100,000 at October 31, 2000, and $74,000 at October 31, 1999.

INVENTORIES

  Inventories are stated at the lower of cost or market, with costs
determined on a first-in, first-out ("FIFO") basis.  As of October 31,
inventories consist of the following:


                                                      2000         1999
                                                   ----------   ----------
Manufactured and purchased parts............       $2,615,000   $1,742,000
Work-in-process.............................          275,000      419,000
Finished goods..............................                -       30,000
                                                   ----------   ----------
Totals..................................           $2,890,000   $2,191,000
                                                   ==========   ==========

FAIR VALUE OF FINANCIAL INSTRUMENTS

  The Company's financial instruments consist of cash and cash equivalents,
investments, short-term trade receivables and payables for which current
carrying amounts approximate fair market value.

OFF-BALANCE SHEET RISK

  In certain instances, the Company enters into forward exchange contracts to
hedge certain foreign currency denominated receivables against foreign currency
fluctuations. These contracts are used to reduce the Company's risk associated
with exchange rate movements, as the gains or losses on these contracts are
intended to offset the exchange rate losses or gains on the underlying
exposures. The Company does not engage in foreign currency speculation. At
October 31, 2000, the Company had $3,814,000 of foreign exchange contracts
outstanding, all of which were in Japanese yen.

OTHER ASSETS

  Other assets at October 31, consist of the following:

                                                            2000       1999
                                                         ---------- ----------
      Patent and trademark.............................  $3,538,000 $3,431,000
      Investment in a related party....................      53,000     53,000
                                                         ---------- ----------
                                                          3,591,000  3,484,000
      Less accumulated amortization....................    (350,000)  (157,000)
                                                         ---------- ----------
          Total other assets...........................  $3,241,000 $3,327,000
                                                         ========== ==========

  The patent and trademark balance of $3,538,000 as of October 31, 2000
includes $3,041,000 which represents the cost to acquire United States
Patent No. 5,646,733, ("Scanning Phase Measurement Method and System for an
Object at a Vision Station") which was purchased from a third party company
in fiscal year 1998.  Patent and trademark costs are amortized over five to
ten years.  The Company commenced amortizing Patent No. 5,646,733 in June 2000
in conjunction with the shipment of production product utilizing the underlying
technology.  The Company has recorded $125,000 of amortization expense related
to Patent No. 5,656,733 as of October 31, 2000.

FIXED ASSETS

  Fixed assets consist of furniture, fixtures and equipment and are stated at
cost net of accumulated depreciation. Depreciation is computed for book
purposes on a straight-line basis over the estimated useful life of the asset
and for tax purposes over five and ten years using accelerated and
straight-line methods. At October 31, furniture, fixtures and equipment
consisted of the following:

                                                           2000        1999
                                                        ----------  ----------
      Equipment.......................................  $6,071,000  $5,066,000
      Furniture and fixtures..........................     918,000     864,000
                                                        ----------  ----------
                                                         6,989,000   5,930,000
      Less accumulated depreciation...................  (4,525,000) (3,530,000)
                                                        ----------  ----------
          Total fixed assets..........................  $2,464,000  $2,400,000
                                                        ==========  ==========

IMPAIRMENT OF LONG-LIVED ASSETS

  The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to undiscounted future net cash
flows expected to be generated by the assets. If these assets are considered to
be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets.

REVENUE RECOGNITION

  The Company records sales revenue upon shipment to the customer as the terms
are generally FOB shipping point and the Company has no significant remaining
obligations.

RESEARCH AND DEVELOPMENT

  Expenditures for research and development are expensed as incurred.

INCOME TAXES

  Income taxes are provided on the liability method. Under the liability method,
deferred income taxes are provided on the difference in bases of assets and
liabilities between financial reporting and tax returns using expected tax
rates.

EARNINGS PER SHARE

  Basic earnings per share is computed using only weighted average common
shares outstanding. Diluted earnings per share gives effect to all
dilutive potential common shares outstanding during the fiscal reporting
periods.

                                             2000         1999        1998
                                          -----------  ----------  ----------
Net income (loss) ...................    $(3,598,000) $(7,734,000)   $103,000

Weighted average shares
   outstanding - basic...............      5,346,000    5,398,000   5,425,000
Dilutive effect of stock options.....             --           --      86,000

Weighted average shares
   outstanding - diluted.............      5,346,000    5,398,000   5,511,000

Basic earnings (loss) per share......         $(0.67)      $(1.43)      $0.02

Diluted earnings (loss) per share....         $(0.67)      $(1.43)      $0.02

If the Company did not have a net loss for the period ending October 31, 2000,
the weighted average common and common equivalent shares outstanding would have
been 5,427,000.

CASH FLOWS

  For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and investments with original maturities of three months or less.

ESTIMATES BY MANAGEMENT

  The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could differ from those
estimates.

STOCK OPTIONS

  The Company follows the disclosure only provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation"
regarding disclosure of proforma information for stock compensation. As
permitted by Statement No. 123, the Company measures compensation cost using
the methods described in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees."

RECLASSIFICATIONS

  Certain amounts in the 1998 and 1999 financial statements have been
reclassified to conform with the 2000 presentation.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

  In June 1999, the FASB issued Statement of Accounting Standards No. 137,
"Accounting for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133." SFAS No. 137 delays the
implementation of SFAS No. 133 until the Company's fiscal year ending October
31, 2001.

  In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 summarizes certain of the SEC's views in applying
revenue recognition in financial statements. The SEC issued SAB No. 101B,
delaying implementation of the provisions of SAB No. 101 until the Company's
fourth quarter of fiscal 2001. Based on the Company's preliminary assessment,
the implementation of SAB No. 101 is not expected to have any material effect on
the Company's revenues or revenue recognition policy.

Note 3: NON-RECURRING CHARGES

  During fiscal 2000 the Company had non-recurring legal costs and expenses of
$1,700,000 incurred in connection with the Company's defense and settlement of
the patent infringement lawsuit brought by National Instruments Corporation and
the Company's defense and settlement of the breach of contract lawsuit brought
by Integrated Electronic Technologies.  Both lawsuits were settled during the
third quarter of fiscal 2000.

  In the fourth quarter of fiscal 1999, the Company recorded a one-time charge
of $1,481,000 for the write-down of assets and inventory associated with
discontinuing certain new product development initiatives.  At October 31, 1999,
the Company included in accrued liabilities $360,000 of non-recurring charges
payable in fiscal 2000.  All amounts were paid during fiscal 2000.

NOTE 4: CUSTOMER INFORMATION

SIGNIFICANT CUSTOMER INFORMATION

  During fiscal 2000, revenue from one customer accounted for 17% of net
revenues and revenue from one other customer accounted for 12% of net revenues.
During 1999 revenue from two customers accounted for 27% and 13% of net
revenues, respectively.  During 1998 revenue from one customer accounted for
16% of net revenues.

CUSTOMER GEOGRAPHIC DATA

  North American and export sales as a percentage of net revenues at October 31,
are as follows:

                                2000  1999  1998
                                ----  ----  ----
      North America.........     53%   74%   62%
      Europe................     11%   13%   18%
      Asia-Pacific..........     31%   12%   18%
      South America.........      5%    1%    2%

NOTE 5: ACCRUED EXPENSES

  Accrued expenses at October 31, include:

                                                           2000         1999
                                                         --------     --------
      Vacation.........................................  $ 20,000   $   19,000
      Employee stock purchase plan payroll deductions..    83,000       82,000
      Accrued compensation.............................    53,000       63,000
      Sales and use taxes payable......................   101,000      122,000
      Reserve for non-recurring charges................        --      360,000
      Accrued litigation costs.........................        --      500,000
      Severance costs..................................   159,000            -
      Other............................................   289,000      157,000
                                                        ----------   ----------
          Total........................................ $ 705,000   $1,303,000
                                                        ==========   ==========

NOTE 6: COMMON STOCK OPTIONS AND WARRANTS

  Under the Company's 2000 Stock Option Plan, 1988 Stock Option Plan and 1997
Stock Option Plan the Company may issue options to purchase up to 1,600,000
shares of common stock to employees and directors.  Options are granted at the
fair market value on the date of grant.  The granting of options and their
vesting is within the discretion of the Company's Board of Directors.

  A summary of stock options issued and outstanding under these plans is as
follows:

                                                       EMPLOYEE STOCK OPTIONS
                                                      -----------------------
                                                                 WEIGHTED AVG
                                                         NUMBER  OPTION PRICE
                                                      ----------- -----------
Balance at October 31, 1997...........................    521,880     $ 5.79
  Granted.............................................     59,150     $ 6.81
  Exercised...........................................    (48,005)    $ 2.89
  Forfeited...........................................     (9,075)    $ 6.91
                                                       -----------  ---------
Balance at October 31, 1998...........................    523,950     $ 6.15
  Granted.............................................    269,850     $ 4.11
  Exercised...........................................    (95,875)    $ 3.24
  Forfeited...........................................    (26,500)    $ 6.79
                                                       -----------  ---------
Balance at October 31, 1999...........................    671,425     $ 5.78
  Granted.............................................    274,650     $ 4.23
  Exercised...........................................    (19,275)    $ 3.67
  Forfeited...........................................   (138,500)    $ 5.89
                                                       -----------  ---------
Balance at October 31, 2000...........................    788,300     $ 5.25
                                                       ===========  =========
As of October 31, 2000:
  Price Range of Outstanding Options
    Options...........................................  $3.13-$12.00
    Expiration dates..................................    2000-2007
    Options exercisable...............................     382,700

  The estimated weighted average grant-date fair value of stock options granted
is as follows: 2000--$2.56, 1999--$2.21 and 1998--$3.39.

  The Company accounts for stock options and other equity instruments in
accordance with APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Statement of Financial Accounting Standards ("SFAS")No. 123, "Accounting for
Stock-Based Compensation," was issued in October 1995.  SFAS No. 123 establishes
a fair value based method of accounting for employee stock based compensation
plans and encourages companies to adopt that method.  However, it also allows
companies to continue to apply the intrinsic value based method currently
prescribed under APB Opinion No. 25, provided certain pro forma disclosures are
made.  Had the Company's stock option plans and its stock purchase plans
compensation costs been determined based on the fair value at the option grant
dates for awards consistent with the accounting provision of SFAS No. 123 the
Company's net income (loss) and earnings per share (loss) for fiscal years 2000,
1999 and 1998 would have been adjusted to the pro forma amount indicated below:

<TABLE>
<CAPTION>

  Fiscal Year Ended October 31,                  2000          1999          1998
  -----------------------------              ------------  ------------   ------------
<S>                                         <C>           <C>            <C>
  Net income (loss)...........As reported... $(3,598,000)  $(7,734,000)   $   103,000
                              Pro forma..... $(4,198,000)  $(8,323,000)   $  (606,000)
  Diluted earnings (loss)
    per share.................As reported... $     (0.67)  $     (1.43)   $      0.02
                              Pro forma..... $     (0.79)  $     (1.54)   $     (0.11)

</TABLE>

  The following table summarizes stock options outstanding and exercisable
at October 31, 2000.
                       Outstanding                            Exercisable
-------------------------------------------------------- --------------------
                             Weighted
                              Average        Weighted               Weighted
    Exercise                Contractual      Average                Average
  Price Range    Options  Life Remaining  Exercise Price Options Exercise Price
---------------  -------  --------------  -------------- -------- ------------
$ 3.13 - $ 3.88  321,300       6.02          $ 3.73        85,900     $ 3.86
$ 3.89 - $ 6.84  168,700       6.19          $ 5.10        25,000     $ 5.11
$ 6.88 - $ 6.94  278,350       3.64          $ 6.88       251,850     $ 6.88
$ 7.00 - $12.00   19,950       3.64          $ 8.51        19,950     $ 8.51
                 -------  --------------  --------------  ------- ------------
                 788,300       5.16          $ 5.25       382,700     $ 6.17

  The fair value of options granted under the Company's fixed stock option
plans during fiscal 2000, 1999 and 1998 was estimated on the dates of grant
using the Black-Scholes options-pricing model.  The assumptions for the fiscal
periods ending October 31, were as follows:

    Fiscal Year Ended October 31,           2000         1999         1998
    ---------------------------------    -----------  -----------  -----------
    Risk free interest rates.........       5.13%        6.21%     4.7% - 5.1%
    Expected life....................        6.0          6.0          6.0
    Expected volatility..............        59%          47%       44% - 53%
    Expected dividends...............         0%           0%           0%

  Pro forma compensation cost related to shares purchased under the Company's
Employee Stock Purchase Plan is measured based on the discount from market
value.

  In September of 1997, the Company issued a warrant to purchase 25,000 shares
of common stock with an exercise price of $12.00 and an expiration date of
September of 2004.

NOTE 7: EMPLOYEE STOCK PURCHASE PLAN

  In March 2000 shareholders approved the adoption of the 2000 Employee Stock
Purchase Plan (the "2000 Plan") to replace the 1995 Employee Stock Purchase Plan
(the "1995 Plan") which by its terms expired during 2000. The 2000 Plan provides
for the purchase of up to 150,000 shares of common stock during a five year
annual offering period beginning June 1, 2000.  Under the terms of the 2000
Plan, eligible employees may purchase common stock annually at 85% of the lesser
of (1) the fair market value on the first day of the annual offering period or
(2) the fair market value on the last day of each annual offering period.  The
1995 Plan had similar provisions.

  The first phase of the 2000 Plan began on June 1, 2000 and employees were
granted the right to purchase 53,354 shares at $3.88 per share.  The fifth phase
of the 1995 Plan ended on May 31, 2000 and employees purchased 34,232 shares at
$3.83 per share under the Plan. The fourth phase of the 1995 Plan ended on May
31, 1999 and employees purchased 21,473 shares at $3.93 per share under the
Plan.  The third phase of the 1995 Plan ended on May 31, 1998 and employees
purchased 25,648 shares at $5.84 per share under the Plan.

Note 8: SHAREHOLDER RIGHTS PLAN

  On June 2, 1999, the Company adopted a Shareholder Rights Plan (the "Rights
Plan") designed to deter coercive or unfair takeover tactics and to prevent a
person or a group from gaining control of the Company without offering a fair
price to all shareholders. Under the terms of the Rights Plan, a dividend
distribution of one Preferred Stock Purchase Right ("Right") for each
outstanding share of the Company's common stock was made to holders of record on
June 22, 1999. These Rights entitle the holder to purchase one one-hundredth of
a share of the Company's Series A Junior Participating Preferred Stock
("Preferred Stock") at an exercise price of $28. The Rights become exercisable
(a) 10 days after a public announcement that a person or group has acquired
shares representing 20% or more of the outstanding shares of common stock, or
(b) 10 business days following commencement of a tender or exchange offer for
20% or more of such outstanding shares of common stock. The Company can redeem
the Rights for $0.001 per Right at any time prior to their becoming exercisable.
The Rights expire on June 2, 2009, unless redeemed earlier by the Company. Under
certain circumstances, if a person or group acquires 20% or more of the
Company's common stock, the Rights permit shareholders other than the acquiror
to purchase common stock having a market value of twice the exercise price of
the Rights.  In addition, in the event of certain business combinations, the
Rights permit shareholders to purchase the common stock of an acquiror at a 50%
discount. Rights held by the acquiror will become null and void in both cases.

  On October 13, 1999, the Company amended the terms of the Rights Plan to
enable a certain member of the Board of Directors of the Company to purchase up
to 30% of the common stock of the Company without being deemed an "Acquiring
Person" within the meaning of the Rights Agreement.

NOTE 9: OPERATING LEASES

  The Company leases facilities and equipment under non-cancelable operating
lease agreements.  Rent expense was $729,000, $450,000, and $239,000
in 2000, 1999, and 1998 respectively.  Minimum future rental payments due
under non-cancelable operating lease agreements are as follows:

             2001............................   1,101,000
             2002............................   1,100,000
             2003............................   1,063,000
             2004............................   1,026,000
             2005............................   1,024,000
             Thereafter......................   3,189,000
                                              -----------
                 Total....................... $ 8,503,000
                                              ===========

NOTE 10: EMPLOYEE SAVINGS PLAN

  The Company provides a supplementary retirement savings plan which is
structured in accordance with Section 401(k) of the Internal Revenue Code.
Employees eligible for the Plan may contribute from one to fifteen
percent of their monthly earnings on a pre-tax basis, subject to annual
contribution limitations. The Company makes matching contributions of
one dollar for each dollar contributed by each Plan participant up to a
maximum of $2,000 annually.

The Company's contributions under this program were approximately $199,000,
$184,000, and $152,000 for the years ended October 31, 2000, 1999 and 1998
respectively.

NOTE 11: INCOME TAXES

  The provision for income taxes differs from the statutory U.S. federal
tax rate of 34% applied to earnings before income taxes for the fiscal periods
ended October 31, as follows:

                                               2000         1999        1998
                                           ------------  ----------  ----------
Expected tax provision (benefit)
  at statutory rate........................ $(1,223,000)$(2,068,000)  $ (59,000)
State income tax provision, net of federal
  tax effect...............................    (142,000)   (241,000)     (7,000)
Permanent differences......................       7,000       5,000       5,000
Tax credits and other......................     110,000    (408,000)   (217,000)
Increase in valuation allowance............   1,248,000   4,362,000
                                           ------------  ----------   ---------
Total income tax expense (benefit) ........ $        -- $ 1,650,000   $(278,000)
                                           ============  ==========   =========

Deferred tax assets (liabilities) are comprised of the following
at October 31:

                                                         YEAR ENDED OCTOBER 31,
                                                       ------------------------
                                                          2000          1999
                                                       -----------  -----------
Depreciation........................................  $   92,000    $   56,000
Deferred rent.......................................           -             -
Other...............................................      94,000       244,000
Net operating loss carryforwards....................   4,355,000     3,031,000
Income tax credits..................................     978,000     1,031,000
                                                      ------------  -----------
Total deferred tax assets before valuation allowance.. 5,519,000     4,362,000

Less valuation allowance............................  (5,519,000)   (4,362,000)
                                                      ------------  -----------
Net deferred tax asset..............................  $       --    $        --
                                                      ============  ===========

At October 31, 2000, the Company has available net operating loss and tax credit
carryforwards for income tax purposes of approximately $12.8 million and $1.0
million, respectively.  These carryforwards expire in the years ending October
31, 2001 through October 31, 2020.

The utilization of the net operating loss and tax credit carryforwards is
dependent upon the Company's ability to generate sufficient taxable income
during the carryforward period. Because of the uncertainty of future
realization, a valuation allowance equal to the deferred tax asset has been
recorded.



SCHEDULE VIII


Valuation and Qualifying Accounts and Reserves

Allowance for Doubtful Accounts:

                              Balance at  Additions   Deductions  Balance at
                              Beginning   Charged to  and Write-    End of
                              of Period    Earnings      offs       Period
                              ----------  ----------  ----------  ----------
Year Ended October 31, 1998    $30,000     $10,000     ($11,000)   $29,000

Year Ended October 31, 1999    $29,000    $101,000     ($56,000)   $74,000

Year Ended October 31, 2000    $74,000      89,000     ($63,000)  $100,000


Reserve for Obsolete Inventory:

                              Balance at  Additions               Balance at
                              Beginning   Charged to                End of
                              of Period    Earnings   Deductions    Period
                              ----------  ----------  ----------  ----------
Year Ended October 31, 1998    $19,000     $     -            -    $19,000

Year Ended October 31, 1999    $19,000    $195,000            -   $214,000

Year Ended October 31, 2000   $214,000    $155,000    ($197,000)  $172,000


EXHIBIT 23:  CONSENT OF INDEPENDENT ACCOUNTANTS
-----------------------------------------------

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8, Numbers 33-39459, 33-61266, 333-00665, 333-48065, 333-
39344 and 333-39346 of PPT VISION, Inc. of our report dated December 8, 2000
appearing in this Annual Report on Form 10-K.


/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers, LLP
Minneapolis, Minnesota
January 24, 2001