SECURITIES AND EXCHANGE COMMISSION

                             Washington, DC 20549


                                  FORM 10-Q

                 QUARTERLY REPORT UNDER SECTIONS 13 OR 15(d)

                    OF THE SECURITIES EXCHANGE ACT OF 1934


    For the Quarter Ended March 31, 2001    Commission File Number 0-13071


                            INTERPHASE CORPORATION
            (Exact name of registrant as specified in its charter)

            Texas                                      75-1549797
  (State of incorporation)                  (IRS Employer Identification No.)


                      13800 Senlac, Dallas, Texas 75234
                   (Address of principal executive offices)

                                (214)-654-5000
             (Registrant's telephone number, including area code)

 ____________________________________________________________________________
 Indicate by check  mark whether  the registrant  (1) has  filed all  reports
 required by  Section 13  or 15(d)  of the  Securities Exchange  Act of  1934
 during the  preceding 12  months (or  for  a much  shorter period  that  the
 registrant was required to file such  reports), and (2) has been subject  to
 such filing requirements for the past 90 days.         Yes  [ X ]   No [   ]
 ____________________________________________________________________________
 Indicate the number of shares outstanding of each of the issuer's classes of
 common stock, as of the latest practicable date.

           Class                                  Outstanding at May 1, 2001
 ----------------------------                   -----------------------------
 Common Stock, $.10 par value                              5,758,593


<PAGE>

                            INTERPHASE CORPORATION

                                    INDEX


 Part I -Financial Information

      Item 1.        Consolidated Interim Financial Statements

                Consolidated Balance Sheets as of March 31, 2001
                and December 31, 2000                                       3

                Consolidated Statements of Operations for the three
                months ended March 31, 2001 and 2000                        4

                Consolidated Statements of Cash Flows for the three
                months ended March 31, 2001 and 2000                        5

                Notes to Consolidated Interim Financial Statements        6-9

      Item 2.   Management's Discussion and Analysis of
                Financial Condition and Results of Operations            9-11


 Part II - Other Information

      Item 4.   Submission of Matters to a Vote of Security Holders        12

      Item 6.   Reports on Form 8-K and Exhibits                           12

                Signature                                                  13


<PAGE>

 INTERPHASE CORPORATION
 CONSOLIDATED BALANCE SHEETS
 (in thousands, except number of share data)
                                                      (unaudited)
                                                        Mar. 31,     Dec. 31,
 ASSETS                                                  2001          2000
                                                       ----------------------
 Cash and cash equivalents                            $  13,025     $  10,587
 Marketable securities                                    6,972         6,886
 Trade accounts receivable, less allowances
   for uncollectible accounts of $270 and
   $273, respectively                                     9,401        14,085
 Inventories                                             13,825        13,193
 Prepaid expenses and other current assets                  749           941
 Deferred income taxes                                      797           844
                                                       ----------------------
      Total current assets                               44,769        46,536

 Machinery and equipment                                  8,029         8,033
 Leasehold improvements                                   2,954         2,954
 Furniture and fixtures                                     480           490
                                                       ----------------------
                                                         11,463        11,477
 Less-accumulated depreciation and amortization          (9,989)       (9,755)
                                                       ----------------------
      Total property and equipment, net                   1,474         1,722

 Capitalized software, net                                  430           490
 Deferred income taxes, net                               1,146         1,146
 Acquired developed technology, net                       1,530         1,680
 Goodwill, net                                            2,530         2,590
 Other assets                                               318           309
                                                       ----------------------
      Total assets                                    $  52,197     $  54,473
                                                       ======================


 LIABILITIES AND SHAREHOLDERS' EQUITY
 Accounts payable                                     $   1,588     $   1,417
 Deferred revenue                                         1,017         1,093
 Accrued liabilities                                      2,214         2,816
 Accrued compensation                                     1,081         1,947
 Income taxes payable                                        16            78
 Current portion of debt                                  1,116         1,683
                                                       ----------------------
      Total current liabilities                           7,032         9,034

 Long term debt, net of current portion                   3,500         3,500
                                                       ----------------------
      Total liabilities                                  10,532        12,534

 Commitments and contingencies

 Common stock redeemable; 243,997 and 284,664
   shares, respectively                                   1,526         1,780


 SHAREHOLDERS' EQUITY
 Common stock, $.10 par value; 100,000,000 shares
   authorized; 5,756,193 and 5,480,550 shares
   issued and outstanding, respectively                     576           548
 Additional paid in capital                              36,975        36,805
 Retained earnings                                        2,990         3,178
 Cumulative other comprehensive loss                       (402)         (372)
                                                       ----------------------
      Total shareholders' equity                         40,139        40,159
                                                       ----------------------
      Total liabilities and shareholders' equity      $  52,197     $  54,473
                                                       ======================


 The accompanying notes are an integral part of these consolidated financial
                                statements.


<PAGE>

 INTERPHASE CORPORATION
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands except per share amounts)
 (unaudited)

                                             Three Months Ended Mar. 31,
                                                --------------------
                                                 2001         2000
                                                --------------------
       Revenues                                $  9,951     $ 13,585
       Cost of sales                              4,891        6,089
                                                --------------------
       Gross profit                               5,060        7,496
                                                --------------------

       Research and development                   2,213        2,554
       Sales and marketing                        2,050        2,432
       General and administrative                 1,095        1,099
                                                --------------------

          Total operating expenses                5,358        6,085
                                                --------------------

       Operating (loss) income                     (298)       1,411
                                                --------------------
       Interest, net                                 83           77
       Other, net                                   (37)        (232)
                                                --------------------

       (Loss) income from continuing               (252)       1,256
         operations before income taxes

       (Benefit) provision for income taxes         (64)         533
                                                --------------------
       (Loss) income from continuing
         operations                                (188)         723

       Discontinued Operations
       Gain on disposal of VOIP business,
         net of tax                                   -          571
                                                --------------------
        Net (loss) income                      $   (188)    $  1,294
                                                ====================
       (Loss) income from continuing
         operations per share
              Basic                            $  (0.03)    $   0.12
                                                --------------------
              Diluted                          $  (0.03)    $   0.11
                                                --------------------

       Net (loss) income per share
              Basic                            $  (0.03)    $   0.22
                                                --------------------
              Diluted                          $  (0.03)    $   0.20
                                                --------------------

       Weighted average common shares             5,758        5,813
                                                --------------------
       Weighted average common and
         dilutive shares                          5,758        6,395
                                                --------------------


           The accompanying notes are an integral part of these
                   consolidated financial statements.


<PAGE>

 INTERPHASE CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)

                                                    Three Months ended Mar. 31,
                                                       ----------------------
                                                         2001          2000
                                                       ----------------------
 Cash flow from operating activities:
   (Loss) income from continuing operations           $   (188)      $    723
   Gain on disposal of VOIP business                         -            571
   Adjustment to reconcile (loss) income from
     continuing operations to net cash provided
     by operating activities:
   Depreciation and amortization                           567            637
   Deferred income taxes                                    47             42
   Tax benefit from stock option exercises                  75            150
    Change in assets and liabilities:
        Trade accounts receivable                        4,684          3,927
        Inventories                                       (632)           865
        Prepaid expenses and other current assets          192            498
        Accounts payable, deferred revenue and
          accrued liabilities                             (507)        (1,394)
        Other liabilities                                    -           (143)
        Accrued compensation                              (866)        (1,171)
        Income taxes payable                               (62)           699
                                                       ----------------------
    Net adjustments                                      3,498          4,110
                                                       ----------------------
        Net cash provided by operating activities        3,310          5,404
 Cash flows from investing activities:
    Additions to property, equipment, capitalized
      software and leasehold improvements                  (49)          (525)
    Decrease (increase) in other assets                     62           (974)
    Cash received in sale of VOIP business                   -          1,230
    Proceeds from the sale of marketable securities      4,286              -
    Purchases of marketable securities, net of
      unrealized holding period gain or loss            (4,473)        (1,611)
                                                       ----------------------
        Net cash used by investing activities             (174)        (1,880)
 Cash flows from financing activities:
    Payments on debt                                      (567)          (552)
    Purchase of redeemable common stock                   (254)          (254)
    Proceeds from the exercise of stock options            123            245
                                                       ----------------------
 Net cash used by financing activities                    (698)          (561)
                                                       ----------------------
 Net increase in cash and cash equivalents               2,438          2,963

 Cash and cash equivalents at beginning of period       10,587         10,988
                                                       ----------------------
 Cash and cash equivalents at end of period           $ 13,025       $ 13,951
                                                       ======================

 Supplemental Disclosure of Cash Flow Information:
 Income taxes paid                                    $      -       $    184
 Interest paid                                        $    120       $    160


 The accompanying notes are an integral part of these consolidated financial
                                 statements.


<PAGE>

              NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS


 1.   BASIS OF PRESENTATION

 The accompanying  consolidated  interim  financial  statements  include  the
 accounts of Interphase  Corporation and its  wholly owned  subsidiaries (the
 "Company").  Significant  intercompany accounts and  transactions  have been
 eliminated.

 In September 1999, the Company completed the sale of its Voice over Internet
 Protocol ("VOIP")  businesses.    Accordingly,  the  Company's  consolidated
 financial statements and  notes included herein,  for all periods  presented
 reflect the VOIP  business as a  discontinued operation  in accordance  with
 Accounting Principles Board Opinion No. 30.   See further discussion  of the
 sale in Note 5.

 While the accompanying interim financial statements are unaudited, they have
 been prepared by the  Company pursuant to the  rules and regulations of  the
 Securities and  Exchange Commission.  In the  opinion  of the  Company,  all
 material  adjustments  and  disclosures  necessary  to  fairly  present  the
 results of  such  periods have been  made.  Certain information and footnote
 disclosures normally included in financial statements prepared in accordance
 with accounting principles generally accepted in the United States have been
 condensed or omitted pursuant to the rules and regulations of the Securities
 and Exchange  Commission.   These financial  statements  should be  read  in
 conjunction with the consolidated financial statements and notes thereto for
 the year ended December 31, 2000.

 Certain prior period amounts have been reclassified to conform with the 2001
 presentation.


 2.       CREDIT FACILITY

 The Company maintains a  credit facility with a  bank.  The credit  facility
 consists of an $8.5 million acquisition term loan, a $2.5 million  equipment
 financing  facility  and  a  $5  million  revolving  credit  facility.   The
 revolving credit facility matures June 30,  2002, and bears interest at  the
 bank's base  rate (currently  8.5%).   The  term loan  is payable  in  equal
 quarterly installments of $548,000 plus accrued interest with the  remaining
 balance  due  November  30, 2001.  The  Company has  the  ability to satisfy
 the  quarterly  payments  on  the term notes  through  borrowings under  the
 revolving credit  component of the credit  facility.  The credit facility is
 collateralized by marketable securities, accounts receivable and  equipment.
 The  credit  facility  includes  certain  restrictive  financial   covenants
 including, among others, tangible net  worth, total liabilities to  tangible
 net worth, interest coverage, quick ratio  and debt service coverage and  is
 subject to a borrowing base calculation.  At March 31, 2001, the Company was
 in  compliance  with all  covenants.  At  March 31,  2001, the  Company  had
 borrowings of  $4.6  million and  availability  under the  revolving  credit
 facility was $1.5 million.


 3.       COMPREHENSIVE INCOME

 The following table shows the Company's comprehensive income (in thousands):

                                                  Three months ended Mar. 31,
                                                        2001       2000
                                                       -----------------
 Net (loss) income                                    $  (188)   $ 1,294
 Other comprehensive income
 Unrealized holding gains                                 101         23
   arising during period, net of tax
 Foreign currency translation adjustment                 (131)       (70)
                                                       -----------------
 Comprehensive (loss) income                          $  (218)   $ 1,247
                                                       =================



 4.   NET INCOME PER COMMON AND COMMON DILUTIVE SHARE

 The following table shows the calculations of the Company's weighted average
 common and dilutive equivalent shares outstanding (in thousands):

                                                 Three months ended Mar. 31,
                                                        2001       2000
                                                       -----------------
 Weighted average shares outstanding                    5,758      5,813
 Dilutive impact of stock options                           -        582
                                                       -----------------
 Total weighted average common and common
   equivalent shares outstanding                        5,758      6,395
                                                       -----------------
 Anti-dilutive weighted shares
 excluded from shares outstanding                       1,139         12



 5.   DISPOSITION OF ASSETS

 In June 1999, the Company sold an 80% interest in part of its VOIP business,
 Quescom, for $1,172,000 to the former owner of Interphase's Paris Operation.
 The sales proceeds  consisted of  $300,000 due  at closing  with a  $830,000
 technology license  fee.  In  2000,  the  remaining  $830,000  due  for  the
 technology license fee was collected and  recorded as a gain on  disposal of
 discontinued operations.  Additionally,  in 2000, the  Company sold its  20%
 interest in Quescom for $400,000, resulting in a gain of $91,000.  The total
 gain in 2000 was $571,000 net of $350,000 tax.

 In  September  1999,  the  Company  sold  its  other  VOIP  business,  Zirca
 Corporation ("Zirca"), along  with the technologies  developed by Zirca  for
 $300,000 cash and stock  valued at $517,680 on  the date of disposition,  to
 UniView Technologies, resulting in a gain of $140,000, net of $86,000 tax.


 6.   SEGMENT INFORMATION

 The  Company  is  principally  engaged   in  the  design,  development   and
 manufacturing of advanced technologies for  enterprise networks and  storage
 environments.   The   chief   operating  decision-makers  review   financial
 information presented on a consolidated basis, accompanied by information by
 geographic region for purposes of  making operating decisions and  assessing
 financial performance.  Accordingly, the Company considers itself to be in a
 single industry segment.

 Geographic revenue and long lived assets related to North America and  other
 foreign countries as of and for the three month period ended March 31,  2001
 and 2000 are as follows:  (in thousands)


                        Three months ended Mar. 31:
   Revenue                 2001             2000
   ----------------------------------------------
   North America         $ 8,235         $ 11,254
   Europe                  1,438            1,858
   Pacific Rim               278              473
                          -----------------------
   Total                 $ 9,951         $ 13,585
                          =======================


 Geographic long-lived  assets exclude  corporate assets.   Corporate  assets
 include cash and cash equivalents, marketable securities and intangibles.


  Long lived assets  Mar. 31, 2001  Dec. 31, 2000
  -----------------------------------------------
  North America          $ 1,708          $ 1,995
  Europe                     195              215
  Pacific Rim                  1                2
                          -----------------------
  Total                  $ 1,904          $ 2,212
                          =======================



 Additional information regarding revenue by product line is as follows:
 (in thousands)


                      Three months ended Mar. 31:
   Revenue                   2001          2000
  -----------------------------------------------
  Storage                $   2,469      $   7,255
  Broadband Telecom          2,559          2,568
  Combo                      1,126            108
  LAN                        2,963          3,047
  WAN                          340            391
  Other                        494            216
                          -----------------------
   Total                 $   9,951      $  13,585
                          =======================


 7.  RECENTLY ISSUED ACCOUNTING POLICIES

 On January 1, 2001, the Company adopted SFAS 133, "Accounting for Derivative
 Instruments and Hedging Activities,"  as amended by SFAS  137 and SFAS  138.
 SFAS 133 requires all derivatives to be recorded at fair value.  Changes  in
 the  fair  values of  derivatives are  recorded in  either the  statement of
 operations or as a component of  comprehensive income, depending on  whether
 the derivative qualifies as  a hedge, and depending  on the type  of hedging
 relationship that exists.  Adoption of this standard did not have a material
 effect on the Company's financial statements.


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

 This report contains  forward-looking statements with  respect to  financial
 results  and  certain other matters.  These  statements are  made under  the
 "safe harbor" provisions of the Private Securities Litigation Reform Act  of
 1995 and involve a number of risks and uncertainties that could cause actual
 results to differ materially from  those in the forward-looking  statements.
 Such risks and  uncertainties include, without  limitation, fluctuations  in
 demand, the quality and price of similar or comparable networking  products,
 access to sources of capital, general  economic conditions in the  Company's
 market areas and that future sales and growth rates for the industry and the
 Company could be lower than anticipated.


 RESULTS OF OPERATIONS

 In September 1999,  the Company  completed the  sale of  its remaining  VOIP
 business.  Accordingly the  Company's consolidated financial statements  and
 notes included herein, for all periods  presented reflect the VOIP  business
 as a discontinued operation in  accordance with Accounting Principles  Board
 Opinion No. 30.

 Revenues consist  of product  and service  revenues  and are  recognized  in
 accordance  with  SEC   Staff  Accounting  Bulletin   (SAB)  101,   "Revenue
 Recognition."  Product revenues are recognized upon shipment, provided  fees
 are fixed and determinable, a customer order is obtained, and collection  is
 probable.  Revenues from reseller  agreements are typically recognized  when
 the product is sold through to the end customer.  Deferred revenue  consists
 of revenue from reseller arrangements and certain arrangements with extended
 payment terms.  Service revenue is recognized as the services are performed.

 Revenues:  Total revenues for the three months ended March 31, 2001  ("first
 quarter 2001")  were $10  million.   Revenues for  the same  period in  2000
 ("comparative period") were  $13.6 million.   The reduction  in revenues  is
 generally due to  the overall economic  conditions which have  significantly
 reduced  computer and communications equipment purchasing by key  customers.
 In addition, 33% of the comparative  period's revenues were attributable  to
 Hewlett Packard's purchase of a single  Fibre Channel product, which  ceased
 in the first quarter of 2000.  The decrease in revenues was partially offset
 by revenue growth in  Combo technologies.  Combo  technologies grew to  $1.1
 million in the  first quarter  2001 from  just $108,000  in the  comparative
 period.

 Three customers individually accounted for 21%, 16% and 10% of the Company's
 first  quarter  2001  revenue.  In  the  comparative  period,  one  customer
 accounted for 36% of the Company's revenue.

 Gross Profit:  Gross profit as a percentage  of sales was 51% for the  first
 quarter 2001 and 55% for the comparative period.  The reduction in the gross
 profit rate is primarily  the result of  under-utilization of the  Company's
 manufacturing facility and obsolete inventory charges.

 Research and Development:   The Company's investment  in the development  of
 new products through research and development was $2.2 million in the  first
 quarter 2001 and $2.6 million in the comparative period.  As a percentage of
 revenue, research and  development expenses were  22% in  the first  quarter
 2001 and 19% in the comparative period.  Research and development costs,  in
 total, decreased as spending  on legacy sustaining  engineering was down  in
 line with the Company's  exit from legacy  technologies through its  end-of-
 life program.  Additionally, the first quarter 2001 research and development
 costs experienced a temporary drop as the Company finished and released  two
 major products  and completed  an important  new  release of  Fibre  Channel
 drivers.

 Sales and Marketing:  Sales and marketing expenses were $2.1 million in  the
 first quarter  2001  and $2.4  million  in the  comparative  period.   As  a
 percentage of revenue, sales  and marketing expenses were  21% in the  first
 quarter 2001 and 18% in the comparative  period.  The decrease in sales  and
 marketing expense, in total, is primarily the result of decreased  revenues,
 which resulted  in  reduced sales  commissions  and bonuses  for  the  year,
 partially offset  by  increased  marketing activity  used  to  position  the
 Company for future product releases.

 General and Administrative:  General  and administrative expenses were  $1.1
 million in both the  first quarter 2001  and the comparative  period.  As  a
 percentage of revenue, general and administrative  expenses were 11% in  the
 first quarter 2001  and 8% in  the comparative  period.  The  increase as  a
 percentage of revenue is due to decreased sales volume.

 Interest, Net:  Interest income, net of interest expense, was $83,000 in the
 first quarter 2001, up slightly from $77,000 in the comparative period.  The
 increase is a reflection of the increase in funds available for investment.

 Other Expense, Net:   Other expense, net, was  $37,000 in the first  quarter
 2001 and  $232,000  in the  comparative  period.   Other  expense  primarily
 reflects the amortization  of goodwill and  acquired developed  technologies
 related to a  1996 acquisition of  Synaptel.  However,  the net decrease  is
 primarily due to proceeds received in the first quarter 2001 related to  the
 settlement of a lawsuit for approximately $130,000.

 Income Taxes:   The Company's effective  income tax rate  was 25.4% for  the
 first quarter 2001 and  42.4% for the comparative  period.  The decrease  is
 due to an increase  in foreign income which  is offset by foreign  operating
 losses.

 Net (Loss) Income:  The Company reported a net loss of $188,000 in the first
 quarter 2001 and net income of $1.3 million in the comparative period.


 LIQUIDITY AND CAPITAL RESOURCES

 The Company's cash,  cash equivalents and  marketable securities  aggregated
 $20 million at March 31, 2001, and $17.5 million at December 31, 2000.   The
 growth in  cash, cash  equivalents and  marketable securities  is  primarily
 attributable to cash generated by the Company's operations.

 At March  31, 2001,  the Company  had no  material commitments  to  purchase
 capital assets.   The Company's  significant long-term  obligations are  its
 operating lease on its Dallas facility, future debt payments and  repurchase
 of  Interphase  common stock  from Motorola,  Inc.  (described below).   The
 Company has  not  paid  any  dividends  since its  inception  and  does  not
 anticipate paying any dividends in 2001.

 The Company has a $16 million credit facility with a financial  institution.
 This credit facility  includes an  $8.5 million  term loan,  a $2.5  million
 equipment loan and  a $5 million  revolving  credit facility.  The term  and
 equipment loans are  due in quarterly  installments and  expire in  November
 2001.  The revolving credit facility expires in June 2002.  As of March  31,
 2001, the  current portion  of this  credit facility  is approximately  $1.1
 million.

 Effective October 1998,  the Company approved  a stock repurchase  agreement
 with Motorola, Inc. to purchase ratably from October 1998 to July 2002,  all
 of the  shares owned by Motorola for $4.1 million at $6.25 per share.  Under
 the terms of the  agreement, Motorola retains the  right as an equity  owner
 and has assigned its voting rights to the Company.  The Company cancels  the
 stock upon  each repurchase.  Prior to  the repurchase  agreement,  Motorola
 owned approximately  12% of  the Company's  outstanding common  stock.   The
 future scheduled payments are classified as  redeemable  common stock in the
 accompanying consolidated balance  sheets.  As  of March  31, 2001,  416,003
 shares have been repurchased  for $2.6 million  and retired; 243,997  shares
 remain to be repurchased.

 The Company expects that its  cash, cash equivalents, marketable  securities
 and proceeds from its credit facility  will be adequate to  meet foreseeable
 cash needs for the next 12 months.



                                   PART II

 OTHER INFORMATION

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

 On May 2, 2001, the annual meeting of shareholders of Interphase Corporation
 was held. The following matters were voted upon and approved at the meeting:

 An election  of directors  of the  Company to  serve until  the next  annual
 meeting for the  Company was  held.   The following  seven individuals  were
 elected as Directors of the Company:

       Nominee                      Votes Cast For   Votes Withheld
   ----------------------------------------------------------------
   James F. Halpin                     4,935,601           95,710
   Paul N. Hug                         4,924,731          106,580
   Gregory B. Kalush                   4,934,768           96,543
   Randall D. Ledford                  4,936,021           95,290
   David H. Segrest                    4,928,949          102,362
   S. Thomas Thawley                   4,925,668          105,643
   William R. Voss                     4,928,829          102,482


 Item 6.   REPORTS ON FORM 8-K

           None

           Exhibits

           None


<PAGE>

 SIGNATURE

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


                                    INTERPHASE CORPORATION
                                    (Registrant)
 Date:  May 15, 2001

                                    /s/ Steven P. Kovac
                                    ------------------------------
                                    Steven P. Kovac
                                    Chief Financial Officer,
                                    Vice President of Finance and
                                    Treasurer
                                    (Principal Financial and
                                    Accounting Officer)