UNITED STATES
                                    SECURITIES AND EXCHANGE COMMISSION
                                            Washington, DC 20549

                                                     FORM 10-Q

[X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 ACT OF 1934.

For the quarterly period ended March 31, 1999.

Commission File Number:                                 0-12661

Exact Name of Registrant as Specified in its Charter:   IMTEC, Inc.

State of Incorporation:                                 Delaware

IRS Employer Identification Number:                     03-0283466

Address of Principal Executive Offices:                 One Imtec Lane
                                                        Bellows Falls, VT  05101

Registrant's Telephone Number:                          802-463-9502



         Indicate  by check  mark  whether  the  registrant  (1) has  filled 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  shorted  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. [X] YES [ ] NO





APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

         Common shares outstanding as of April 28, 1999,   1,587,313




<PAGE>



IMTEC, INC.

INDEX

                                                                         Page #
Part I   Item 1   Unaudited Financial Information

                  Condensed Balance Sheets -
                       March 31, 1999 and June 30, 1998                  3 - 4

                  Condensed Statements of Income -
                       Three Months and Nine Months Ended
                           March 31, 1999 and 1998                        5

                  Condensed Statements of Cash Flows
                       Three Months and Nine Months Ended
                           March 31, 1999 and 1998                        6

                  Notes to Condensed Financial Statements                7 - 8

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

         Item 3   Quantitative and Qualitative Disclosures about         11
                       Market Risk

Part II  Other Information

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

         Item 6   Exhibits and Reports on Form 8-K                       12

         Signatures                                                      13



<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1     UNAUDITED FINANCIAL INFORMATION
IMTEC, INC.
CONDENSED BALANCE SHEETS (Unaudited)
<TABLE>
<CAPTION>
                                                                  March 31,              June 30,
                                                                      1999                 1998  .
ASSETS

Current Assets:
<S>                                                               <C>                   <C>      
      Cash                                                        $  39,099             $  84,100
      Accounts receivable
           Trade, less allowance for doubtful accounts:
                March 31, 1999 - $213,000
                June 30, 1998 - $198,000                          2,611,243             2,259,107

      Inventories                                                 2,472,717             2,286,123
      Prepaid expenses and deferred charges                          83,495                60,725
      Deferred income tax                                            85,941                85,941
                                                                -----------           -----------

                Total Current Assets                              5,292,495             4,775,996
                                                                 ----------            ----------

Plant and equipment - net                                         2,167,103             1,587,914

Other assets:
      Deposits                                                       73,805                60,347
      Computer software - net                                        69,254                97,469
      Other intangibles - net                                     1,773,460             1,832,023
                                                                -----------           -----------

                                                                $ 9,376,117           $ 8,353,749
                                                                  =========             =========
</TABLE>
The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.



<PAGE>



IMTEC, INC.
CONDENSED BALANCE SHEETS (Unaudited) (CONTINUED)
<TABLE>
<CAPTION>

                                                                  March 31,              June 30,
                                                                     1999                  1998  .
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
<S>                                                              <C>                <C>          
      Notes payable - bank                                       $  520,956         $           0
      Current installments of long term debt                        235,567               235,567
      Accounts payable                                              650,206               469,972
      Income tax payable                                            168,748                33,323
      Accrued liabilities
           Salaries and wages                                       240,950               486,555
           Commissions                                              227,850                68,375
           Other                                                    287,187               432,165
                                                                 ----------             ---------

                Total current liabilities                         2,330,964             1,725,957

Long term debt less current installments                            373,403               575,118

Stockholders' equity:
      Common stock - $.01 par value;
           authorized 5,000,000 shares, issued and outstanding:
           1,587,313 shares March 31, 1999
           1,585,713 shares June 30, 1998                            15,873                15,857
      Additional paid-in capital                                  2,599,163             2,591,629
      Retained earnings                                           4,056,714             3,445,188
                                                                 ----------            ----------

                Total stockholders' equity                        6,671,750             6,052,674
                                                                 ----------            ----------

                                                                $ 9,376,117           $ 8,353,749
                                                                   ========              ========
</TABLE>

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



<PAGE>



IMTEC, INC.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>

                                               Nine Months Ended                  Three Months Ended
                                                     March 31,                          March 31,
                                                1999          1998                 1999             1998
                                                ----          ----                 ----             ----
<S>                                      <C>           <C>                  <C>              <C>        
Net sales                                $ 9,949,040   $ 8,588,595          $ 3,736,654      $ 3,184,630
Cost of sales                              5,687,331     4,528,000            2,059,691        1,707,777
                                         -----------   -----------          -----------      -----------

              Gross profit                 4,261,709     4,060,595            1,676,963        1,476,853

Selling, general and
     administrative expenses               2,845,365     2,520,861            1,105,089          929,142
Research and development
     expenses                                352,444       439,561              109,027          149,548
                                          ----------    ----------            ----------      ----------

              Operating profit             1,063,900     1,100,173              462,847          398,163

Other Income (Expense)
     Other income 2,984                       31,936            66                6,953
     Interest expense                        (55,591)      (56,807)             (16,354)         (21,917)
                                         ------------   -----------          -----------      -----------

Income before income taxes                 1,011,293     1,075,302              446,559          383,199

Income tax expense                           399,749       425,886              172,695          151,715
                                          ----------    ----------            ---------        ---------

     Net income                           $  611,544    $  649,416           $  273,864       $  231,484
                                             =======       =======              =======          =======

Earnings per share - Basic               $      0.39   $      0.42          $      0.17       $     0.15
                                             =======       =======              =======           ======

Earnings per share - Diluted             $      0.37   $      0.40          $      0.17       $     0.14
                                             =======        ======              =======           ======
</TABLE>

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


<PAGE>


IMTEC, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
                                                                    Nine Months Ended
                                                                        March 31,
                                                                    1999            1998
                                                                    ----            ----
Cash flows from operating activities:
<S>                                                            <C>            <C>       
     Net income                                                $ 611,544      $  649,416
     Adjustments to reconcile net income to
     net cash provided by operating activities-
         Depreciation & amortization                             408,401         402,257
Increase ( decrease) in cash from:
     Accounts receivable                                        (365,594)       (312,060)
     Marketable securities                                             -          40,999
     Inventory                                                  (186,594)       (863,238)
     Prepaid expenses and other assets                           (22,770)        (50,133)
     Accounts payable                                            180,234          73,354
     Income tax payable                                          135,425          77,712
     Accrued liabilities                                        (231,608)        (23,122)
                                                              -----------      ----------
     Net cash provided by (used in)
         operating activities                                    529,038          (4,815)
Cash flows from investment activities-
     Expenditures for property & equipment,
         computer software and other
         intangible assets                                      (900,833)     (2,322,269)
                                                                ---------     -----------

Cash flows from financing activities:
     Net borrowing under line of credit                          520,956               -
     Proceeds from long term debt                                      -       1,200,000
     Principal payments on long term debt                       (201,715)       (221,878)
     Proceeds from issuance of stock                               7,553         102,281
                                                              ----------        --------
     Net cash provided by (used in) finance
         activities                                              326,794       1,080,400
                                                               ---------       ---------

Net increase (decrease) in cash                                  (45,001)     (1,246,684)
Cash at the beginning of period                                   84,100       1,352,562
                                                                --------       ---------
Cash at the end of period                                      $  39,099      $  105,878
                                                                 =======         =======
Supplemental Information Disclosures:
         Interest paid                                          $ 55,591        $ 56,807
         Income taxes paid                                     $ 144,324       $ 548,175
                                                                 =======         =======
</TABLE>

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


<PAGE>



IMTEC, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1 -      Basis of Presentation

         The financial  information included herein is unaudited:  however, such
information  reflects all  adjustments  (consisting  solely of normal  recurring
adjustments)  which are,  in the  opinion of  management,  necessary  for a fair
statement of results for the interim periods.

         This  financial  statement  should  be read  in  conjunction  with  the
Company's  Annual  Report on Form 10-K for the year ended June 30,  1998,  which
includes  financial  statements  and notes  thereto for the years ended June 30,
1998, 1997, 1996.

         The results of  operations  for the  nine-month  period ended March 31,
1999 may not  necessarily  be  indicative  of the results to be expected for the
full year.

<TABLE>
<CAPTION>

2 -      Inventories

         Inventories consist of:
                                                  March 31,            June 30,
                                                      1999                1998

<S>                                             <C>                  <C>       
         Finished Products                      $   115,590          $  158,907
         Work in Process                            472,227             190,122
         Purchased Components                     2,084,900           1,937,094
                                                -----------         -----------

                                               $  2,472,717         $ 2,286,123
                                                   ========            ========

</TABLE>


3 -      Liability for Estimated Product Warranty

         On March  31,  1999  and  June  30,  1998,  the  Company  had  provided
approximately  $141,000  and  $125,000,  respectively,  against  future  product
warranties  based on its  experience  with customer  claims.  Warranty  expenses
amounted to approximately $61,000 for the nine-month period ended March 31, 1999
and $58,000 for the nine-month period ended March 31, 1998.



<PAGE>


4 -      Earnings per Common Share


         Basic  earnings  per share was computed by dividing net earnings by the
weighted average number of shares of common stock  outstanding  during the year.
Dilutive  earnings per share  reflect the effects of the  Company's  outstanding
options (using the treasury stock method at the average price during the period)
except where such items would be antidilutive.

         A  reconciliation  of  weighted  average  shares  used  for  the  basic
calculation and that used for the diluted calculation was as follows:
<TABLE>
<CAPTION>

                                                             Nine months ended March 31,
                                                              1999                  1998

<S>                                                      <C>                   <C>      
Weighted average shares - basic                          1,586,788             1,560,998
Dilutive effect of options                                  59,224                82,128
                                                        ----------            ----------
Weighted average shares - diluted                        1,646,012             1,643,126
                                                           =======               =======

                                                            Three months ended March 31,
                                                              1999                  1998

Weighted average shares - basic                          1,587,313             1,577,171
Dilutive effect of options                                  46,148                75,456
                                                        ----------            ----------
Weighted average shares - diluted                        1,633,461             1,652,627
                                                           =======               =======
</TABLE>


5 -      Pro Forma Information

         On August 12, 1997,  IMTEC  acquired the  Customark  division of Markem
Crop. The following pro forma information reflects operations had Customark been
a part of IMTEC since July 1, 1997.
<TABLE>
<CAPTION>

                                        Nine Months Ended              Three Months Ended
                                               March 31,                    March 31,
                                           1999           1998              1999         1998
                                           ----           ----              ----         ----
<S>                                   <C>             <C>                <C>              <C>       
Revenues                              $9,949,040      $8,783,199         $3,736,654       $3,184,630
Net Income                              $611,544        $660,487           $273,864         $231,484
Diluted Earnings per Share                 $0.37           $0.40              $0.17            $0.14
</TABLE>

         The unaudited pro forma results are not  necessarily  indicative of the
actual  results  of  operations  that would have  occurred  had the  acquisition
actually been made at the beginning of fiscal 1998.



<PAGE>


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

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

         The statements contained in the following  Management's  Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations  which  are not
historical are "forward looking statements" within the meaning of Section 27A of
the  Securities  Act of 1933,  as amended,  and  Section  31E of the  Securities
Exchange Act of 1934, as amended. These forward looking statements represent the
Company's present expectations or beliefs concerning future events; however, the
Company cautions that such statements are qualified by important  factors.  Such
factors could cause actual results to differ  materially from those indicated in
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations.

RESULTS OF OPERATIONS

Three Months and Nine Months Ended March 31, 1999
as compared to Three Months and Nine Months Ended March 31, 1998

         Revenues  for the three  months and nine  months  ended  March 31, 1999
increased  approximately  17.3% and 15.8%  respectively  over the  corresponding
periods in 1998.

         Revenues  from  labels  and  printing   supplies  were  $2,516,016  and
$6,945,896  for the  three-month  and  nine-month  periods  ended March 31, 1999
compared to $2,278,074 and $6,302,998,  respectively,  for the same periods last
year.  Revenue from labels and printing supplies  represented 67.3% and 69.8% of
total  revenue for the three month and nine month  periods  ended March 31, 1999
compared  to 71.5% and  73.4%,  respectively,  for the same  periods  last year.
Management  believes that the increase in sales of labels and printing  supplies
is  attributable  to an increase in the bredth of the  product  line,  the sales
force and production capacity.

         Revenues from the sales of Industrial  Equipment  were  $1,220,638  and
$3,003,144 for the three and nine-month periods ended March 31, 1999 compared to
$906,556 and $2,285,597 for the same periods in 1998. Industrial Equipment sales
represented  32.7% and 30.2% of total revenue for the three month and nine month
periods ended March 31, 1999 compared to 28.5% and 26.6%, respectively,  for the
same  periods  last year.  Management  believes  that this  trend in  Industrial
Equipment  sales will continue for the proximate  future due to new products and
an increase in the number of resellers  of the product  line and the  geographic
coverage.  Equipment backlog was $376,400 at March 31, 1999 compared to $620,000
at March 31, 1998.

         Total backlog, for all products, as of March 31, 1999 was approximately
$3,713,000,  of which  approximately  $1,829,000  is shipable by June 30,  1999,
compared to $2,414,000 as of March 31, 1998.

         Cost of sales as a percentage  of revenue for the three months and nine
months  ended  March 31,  1999 were 55.1% and 57.2%,  respectively,  compared to
53.6% and 52.7% for the same periods in 1998.  The increase in the cost of goods
is related to the significant increase in large volume sales.
<PAGE>

         Selling,   general  and  administrative   expenses  were  approximately
$1,105,000  for  the  three  months  ended  March  31,  1999  and  approximately
$2,845,000   for  the  nine  months  ended  March  31,  1999,   as  compared  to
approximately  $929,000  and  approximately  $2,521,000,  respectively,  for the
corresponding periods ended March 31, 1998. The increase for the 1999 periods is
primarily attributable to increased sales and marketing activity.

         Research and development  expenses for the three months and nine months
ended  March  31,  1999  were  approximately  $109,000  (2.9%  of  revenue)  and
approximately  $352,000  (3.5% of revenue)  compared to  approximately  $150,000
(4.7% of revenue) and  approximately  $440,000 (5.2% of revenue),  respectively,
for the same periods last year.

         The Company's  effective tax rate was approximately 40% for all periods
presented,  and are based on the Company's  estimated effective tax rate for the
full year.

         Net income for the three  months and nine  months  ended March 31, 1999
was  $273,864 and  $611,544,  respectively,  compared to $231,484 and  $649,416,
respectively, for the same periods ended March 31, 1998.

         At  the  beginning  of the  fourth  quarter,  the  Company's  Board  of
Directors  appointed Steve Anton as President and CEO. The Company will expense,
in the fourth quarter, the severance fee of his predecessor, relocation cost and
search fees. The total amount to be expensed will be approximately  $265,000, or
about $0.10 per dilutied share, after tax.


LIQUIDITY AND CAPITAL RESOURCES:

         As of March 31, 1999,  the  Company's  principal  available  sources of
liquidity were,  respectively,  operations, a $2,000,000 bank line of credit, of
which  $1,479,044  was  available as of March 31, 1999 and a five year term loan
for $1,200,000, with a remaining balance of $608,970 at March 31, 1999.

         Accounts receivable increased by $352,136,  from $2,259,107 at June 30,
1998 to  $2,611,243  at March 31, 1999, a direct result of the increase in sales
revenues

         Inventories increased by $186,594,  from $2,286,123 at June 30, 1998 to
$2,472,717 at March 31, 1999,  as a result of  increasing  levels of business in
the sales of labels and printing supplies.

         The Company's capital commitments for fiscal 1999 are expected to be at
the same level as fiscal 1998.

         The  Company  believes  that it will be able to offset  the  effects of
inflation by selected price  increases in its products,  although it can give no
assurances in this regard.

         The Company anticipates that cash flows from operations,  together with
current cash and funds  available  under the Company's  line of credit,  will be
sufficient  to  meet  the  Company's   working  capital  and  capital  equipment
expenditure requirements for the foreseeable future.


<PAGE>

Recent Accounting Pronouncements

         Statements of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive  Income," was adopted by the Company  during the first quarter and
it had no effect upon the Company's financial position,  results of operation or
financial statement disclosures as it does not have any element of comprehensive
income.  SFAS No. 131,  "Disclosure  About  Segments of an  Enterprise & Related
Information,"  will be adopted for the  Company's  fiscal 1999 annual  financial
statements. The Company is currently evaluating the effect that the new standard
will have on disclosures in its annual financial statements.

         In June 1998, The Financial  Accounting Standards Board issued SFAS No.
133,  "Accounting for Derivatives  Instruments and Hedging Activities." SFAS No.
133 establishes  accounting and reporting standards for derivative  instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities.  It requires that an entity  recognize all  derivatives  as
either assets or liabilities in the balance sheet and measure those  instruments
at fair value. SFAS No. 133 is effective for all fiscal quarters of fiscal years
that begin after June 15, 1999.  The Company is currently  accessing the impact,
but does not anticipate that the adoption of this statement will have a material
effect on its financial statements.

Year 2000

         The  Company  has  reviewed  the  issue  of  Year  2000.   All  of  the
manufacturing  and  accounting   software  has  been  brought  into  compliance,
effective June 16,1998.  There are neither internal clocks nor dating mechanisms
within the  Company's  products  that would be affected by changing  dates.  The
Company is confident that its products and services will continue  uninterrupted
into the new millennium.  No material  additional  costs are anticipated at this
time.

         The Company's  contingency  plan in the event other  parties  should be
unable to  provide  Year 2000  compliant  electronic  data is to revert to paper
documentation from these parties. However, to the extent that customers, vendors
or other  entities  with which the Company  has  material  relationships  do not
adequately  address  Year 2000  issues,  the Company  could  experience  payment
delays.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company's  outstanding  long-term and short-term  debt at March 31,
1999 bears  interest at variable  rates;  therefore,  the  Company's  results of
operations would be affected by interest rate changes to the extent of the notes
outstanding.  Due to the  short  term  nature  and  insignificant  amount of the
Company's  notes payable and the  decreasing  amounts of the long-term  debt, an
immediate 10 percent change in interest  rates would not have a material  effect
on the Company' results of operations over the next fiscal year.



<PAGE>



PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
         None

Item 2 - Changes in Securities
         Not applicable

Item 3 - Defaults upon Senior Securities
         None

Item 4 - Submission of Matters to a Vote of Security Holders
         None

Item 5 - Other Information
         None

Item 6 - Exhibits and Reports on Form 8-K
         Exhibit 27 - Financial Data Schedule
         The Company filed no reports on Form 8-K during the quarter.



<PAGE>



SIGNATURES


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

                                   IMTEC, INC.

May 14, 1999




                                    BY:_______/s/ Steven D. Anton___________
                                                  Steven D. Anton
                                        President & Chief Executive Officer






                                    BY:______/s/ George S. Norfleet III_________
                                                George S. Norfleet III
                                                 Secretary / Treasurer


<PAGE>