UNITED STATES
                                    SECURITIES AND EXCHANGE COMMISSION
                                            Washington, D.C. 20549

                                                     FORM 10-Q

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

For the quarterly period ended September 30, 1997.

Commission File Number:             0-12661

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

State of Incorporation:                              Delaware

I.R.S. 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  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. [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 October 29, 1997:   1,553,088



<PAGE>



                                   IMTEC, INC.

                                      INDEX

                                                                      Page #
Part I            Financial Information


                  Condensed Balance Sheets -
                       September 30, 1997 and June 30, 1997             3 - 4

                  Condensed Statements of Operations -
                    Three Months Ended
                           September 30, 1997 and 1996                    5

                  Condensed Statements of Cash Flows
                    Three Months Ended
                           September 30, 1997 and 1996                    6

                  Notes to Condensed Financial Statements               7 - 8

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

Part II  Other Information

         Item 2   Changes in Securities                                   12

         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>
<TABLE>
<CAPTION>


                         PART I - FINANCIAL INFORMATION
                                   IMTEC, INC.
                            CONDENSED BALANCE SHEETS
                                   (Unaudited)

                                                              September 30,             June 30,
                                                                 1997                    1997  .
ASSETS

Current Assets:
<S>                                                          <C>                      <C>        
     Cash and cash equivalents                               $  262,199               $ 1,352,562
     Marketable investment securities                            92,590                    92,999
     Accounts receivable:
         less allowance for doubtful accounts:
              September 30, 1997 - $177,204
                  June 30, 1997 - $175,000                    1,886,803                 1,499,283

     Inventories                                              1,814,801                 1,402,318
     Prepaid expenses and deferred charges                       90,654                    45,423
     Deferred income taxes                                      159,508                   159,508
                                                            -----------                ----------

                  Total Current Assets                        4,306,555                 4,552,093
                                                           ------------              ------------

Property and equipment - net                                  1,425,787                 1,234,488

Deposits          51,515                                         48,991
Computer software - net                                          86,055                    94,759
Goodwill - net                                                1,648,216
Other intangibles - net                                         241,738                   222,032
                                                            -----------               -----------

                                                           $  7,759,866               $ 6,152,363
                                                              =========                 =========
</TABLE>

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



<PAGE>
<TABLE>
<CAPTION>


                         PART I - FINANCIAL INFORMATION
                                   IMTEC, INC.
                      CONDENSED BALANCE SHEETS (CONTINUED)
                                   (Unaudited)

                                                              September 30,             June 30,
                                                                 1997                    1997  .
LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities
<S>                                                         <C>                 <C>              
     Notes payable - bank                                   $    99,922         $               0
     Current installments of long term debt                     185,051                         0
     Accounts payable                                           675,388                   324,651
     Income tax payable                                         155,224                   223,935
     Accrued liabilities
         Salaries and wages                                     118,561                   191,502
         Commissions                                            166,907                    95,229
         Other                                                  293,507                   351,275
                                                            -----------               -----------

                  Total Current Liabilities                   1,694,560                 1,186,592

Long term debt less current installments                        898,154                         -
                  Total liabilities                           2,592,714                 1,186,592
                                                            -----------                ----------

Stockholder's equity:
     Common stock - $.01 par value;
         authorized 5,000,000 shares, issued and outstanding:
         1,553,088 shares September 30, 1997
         1,553,088 shares June 30, 1997                          15,531                    15,531
     Additional paid-in capital                               2,489,674                 2,489,674
     Retained Earnings                                        2,661,947                 2,460,566
                                                            -----------               -----------

                  Total Stockholder's Equity                  5,167,152                 4,965,771
                                                            -----------               -----------

                                                           $  7,759,866              $  6,152,363
                                                               ========                  ========
</TABLE>
                         The  accompanying  notes are an integral  part of these
condensed financial statements.



<PAGE>
<TABLE>
<CAPTION>

                                   IMTEC, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                               Three Months Ended
                                                   September 30,
                                               1997           1996
                                               ----           ----
<S>                                       <C>            <C>       
Net Sales                                 $2,619,525     $2,100,143
Cost of Sales                              1,378,508      1,038,799
                                         -----------    -----------

              Gross Profit                 1,241,017      1,061,344

Selling, general and
     administrative expenses                 776,655        667,334
Research and development
     expenses                                133,789        142,674
                                           ---------      ---------

              Operating Income               330,573        251,336

Other Income (Expenses):
     Miscellaneous income
         and other expenses                   10,724         12,264
     Interest Expense                         (7,825)
                                           ---------      ---------
         Income (Loss) Before
              Income Taxes                   333,472        263,600
                                           ---------      ---------

Income Tax Expense                           132,088        104,954

     Net Income                          $   201,384    $   158,646
                                             =======        =======

Weighted average number of
     common shares and common
     shares equivalents outstanding        1,628,326     1,600,112

Earnings per common share and
     common share equivalents          $         .12  $        .10
                                             =======        =======
</TABLE>
                         The  accompanying  notes are an integral  part of these
condensed financial statements.


<PAGE>
<TABLE>
<CAPTION>
                                   IMTEC, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                              Three Months Ended
                                                                    September 30,
                                                                  1997          1996
                                                                  ----          ----
Cash flows from operating activities:
<S>                                                            <C>            <C>     
     Net income                                                $201,384       $158,646
     Adjustment to reconcile net income to
     net cash provided by operating activities:
         Depreciation & amortization of property,
         plant, equipment and other assets                      164,714        155,423

Increase (decrease) in cash from:
     Accounts receivable                                       (390,044)       116,091
     Income tax refundable                                                      87,086
     Inventory                                                 (412,483)       (59,120)
     Marketable securities                                          409
     Prepaid expenses and other assets                          (45,231)       127,924
     Accounts payable                                           350,734       (217,246)
     Income tax payable                                         (68,711)        17,542
     Accrued liabilities                                        (59,031)       (39,538)
                                                              ----------     ----------
     Net cash provided by operating activities                 (258,668)       425,884

Cash flows from investment activities:
     Expenditures for property & equipment,
         computer software and other
         intangible assets                                   (2,015,231)      (449,984)
                                                             -----------    -----------

Cash flows from financing activities:
     Proceeds from issuance of notes                             99,922
     Principal notes payable to bank                          1,200,000
     Principal payments on long term debt                      (116,795)
     Proceeds from issuance of stock                           ________        _______
     Net cash provided by financing
         activities                                           1,183,127              0
                                                              ---------      ---------
Net increase (decrease) in cash                              (1,090,772)       (24,100)
Cash at the beginning of period                               1,352,562        806,633
                                                              ---------      ---------
Cash at the end of period                                     $ 262,199      $ 782,533
                                                              =========      =========
Supplemental Information Disclosures:
         Interest paid                                        $   7,825
         Income tax paid                                      $ 200,800

</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.

         The results of operations for the  three-month  period ended  September
30, 1997 are not  necessarily  indicative  of the results to be expected for the
full year.


2 -      Inventories
<TABLE>
<CAPTION>
         Inventories consist of:
                                                     September 30,          June 30,
                                                          1997                 1997

<S>                                                  <C>                  <C>       
Finished Products                                    $    13,780          $   78,263
Work in Process                                          162,624             145,391
Purchased Components                                   1,638,397           1,178,664
                                                     -----------         -----------
                                                       1,814,801           1,402,318
                                                      ==========          ==========
</TABLE>
         Inventory  cost  consisted  of the  cost of  purchased  components  and
supplies, manufacturing labor and manufacturing overhead.


3 -      Liability for Estimated Product Warranty

         On  September  30, 1997 and June 30,  1997,  the  Company had  provided
$188,317 and $149,306  respectively,  against future product warranties based on
its  experience  with  customer  claims.  Warranty  expenses  charged  to income
amounted to approximately $22,615 for the three month period ended September 30,
1997 and $18,405 for the three-month period ended September 30, 1996.



<PAGE>



4 -      Earnings per Common Share

         Primary  earnings  per share were  computed by dividing net earnings by
the weighted  average number of shares of common stock  equivalents  outstanding
during the year,  if  dilutive.  Common  stock  equivalents  (stock  options and
warrants) are assumed to be exercised when they are issued and the proceeds used
to repurchase  outstanding  shares of the Company's  common stock at the average
price during the period.

         The fully-diluted computation is performed using the same method as for
the primary  computation,  except that the proceeds from exercised stock options
and  warrants  are assumed to be used to  repurchase  outstanding  shares of the
Company's  common  stock at the higher of the average or  September  30,  market
price.

         The  average  number  of  common  share and  common  share  equivalents
entering into the  calculation  of primary and fully diluted  earnings per share
are as follows:
<TABLE>
<CAPTION>
                                                      Three months ended September 30,
                                                          1997                  1996

<S>                                                    <C>                 <C>      
Common shares                                          1,553,088           1,545,088
Options                                                   71,685              53,857
Warrants                                                     --                  --
                                                       ---------           ---------
         Total for primary calculation                 1,624,773           1,598,945
Options                                                    3,553               1,167
Warrants                                                     --                  --
                                                       ---------           ---------
         Total for fully-diluted calculation           1,628,326           1,600,112
                                                       =========           =========
</TABLE>

5 -       Pro forma Information

         On August 12, 1997,  IMTEC  acquired the  Customark  division of Markem
Corp. The following pro forma  reflects  operations had Customark been a part of
IMTEC since 7/1/96.
<TABLE>
<CAPTION>

         Period Ended                         September 30, 1997             September 30, 1996
                         -----------------------------------------------------------------------
<S>                                                   <C>                            <C>       
Revenues                                              $2,814,129                     $2,596,934
Net Income                                               212,455                        201,754
Earnings per share                                         $0.13                          $0.13
</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 1996


<PAGE>


                                   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 Ended September 30, 1997
              as compared to Three Months Ended September 30, 1996

         Revenues  for the three  months  ended  September  30,  1997  increased
approximately 24.7% from the corresponding period in 1996.

         Revenues from Bar Code labels and printing supplies were $1,860,862 for
the quarter ended  September 30, 1997 compared to $1,502,539 for the same period
last year.  Bar Code labels and  printing  supplies  represented  71.0% of total
revenue for the three months ended  September 30, 1997 compared to 71.5% for the
same period last year

         Revenues from the sales of Industrial  Bar Code Equipment were $758,663
for the three months ended  September 30, 1997 compared to $597,604 for the same
period in 1996.  Industrial Bar Code Equipment sales  represented 29.0% of total
revenue for the three months ended  September 30, 1997 compared to 28.5% for the
same period last year.  The  increase in bar code  equipment  sales in the three
months ended  September 30, 1997,  when contrasted with the same period in 1996,
is primarily  attributable to the  introduction of eight new equipment  products
during the prior twelve  months.  Management  believes  that the upward trend in
Industrial Bar Code Equipment sales will continue due to expanded partnering and
distribution   relationships,   new  product   offerings  and  expanded  use  of
technology.

         Total  backlog,  for  all  products,  as  of  September  30,  1997  was
approximately  $1,547,000  of which all is  scheduled  to ship by June 30, 1998.
Total backlog as of September 30, 1996 was $1,927,000.

         Cost of sales for the three months ended September 30, 1997 were 52.6%,
up from 49.5% for the same period in 1996.  This increase is directly related to
the product mix.

         Selling,  general and  administrative  expenses  were  $776,655 for the
quarter  ended  September 30, 1997 as compared to $667,334 for the quarter ended
September 30, 1996. This  represents a 16.4% increase in these  expenses.  While
this is an increase in dollars,  this is a decrease in  percentage  of revenues,
from 31.6% at September 30, 1996 to 29.6% at September 30, 1997. The increase in
the  dollars  is the  result  of the  addition  of five new  associates,  two in
Marketing and three in sales.  This is  consistent  with  management's  focus on
increasing sales.

         Research and  development  expenses for the quarter ended September 30,
1997 were $133,789 (5.1% of sales)  compared to $142,674 (6.8% of sales) for the
same period last year.

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

         Net  income for the  quarter  ended  September  30,  1997 was  $201,384
compared to $158,646 for the quarter ended  September 30, 1996. The major reason
for this increase is the increase in revenues.

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES:

         As of September 30, 1997, the Company's  principal available sources of
liquidity were, respectively,  from operations, a $1,000,000 bank line of credit
(of which  $900,078 was  available  at September  30, 1997) and a five year term
bank loan for  $1,200,000,  with a remaining  balance of $1,083,205 at September
30,  1997.  The  purpose  of the term  loan was the  acquisition  of  Customark,
discussed in the Company's 8-K filing on August 26, 1997.

         Accounts  receivable  increased  from  $1,499,283  at June 30,  1997 to
$1,886,803  at  September  30,  1997,  a direct  result of the increase in sales
revenues.

         Inventories increased from $1,402,318 at June 30, 1997 to $1,814,801 at
September 30, 1997.  This increase is the  result of the increase  in the sales 
activity.

         The Company's capital commitments for fiscal 1998 are expected to be at
the same level as fiscal 1997.

         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 marketable  securities  balances 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

         In  March  1997,  the  Financial   Accounting  Standards  Board  issued
Statement  of  Financial  Accounting  Standards  (SFAS) No. 128,  "Earnings  per
Share,"  which will be  effective  for interim and annual  periods  ending after
December  15,  1997.  SFAS No. 128 will  require  the  Company  to  restate  all
previously  reported  earnings  per  share  information  to  conform  to the new
pronouncement's requirements.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
Income," and SFAS No. 131,  "Disclosures  about  Segments of an  Enterprise  and
Related  Information."  SFAS No. 130  establishes  standards  for  reporting and
display of comprehensive income and its components  (revenues,  expenses,  gains
and losses) in a full set of general-purpose financial statements.  SFAS No. 131
establishes  standards  for the way  that  public  business  enterprises  report
information about operating segments in annual financial statements and requires
that those enterprises  report selected  information about operating segments in
interim financial reports. It also establishes standards for related disclosures
about  products  and  services,  geographic  areas  and  major  customers.  Both
standards will be adopted by the Company during the first quarter of fiscal 1999
and are not  expected  to have a  material  effect  on its  financial  position,
results of operations or financial statement disclosures.




<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 if Matters to a Vote of Security Holders
              A.    October 27, 1997 - Annual Meeting of Stockholders

              B.     Election of Directors - all nominees elected

              C.     Proposal to adopt the Company's 1997 Stock Option Plan
                     Results of vote; for, 916,198;  against, 6,805; 
                     abstained,  2,622;   unvoted, 525,914.

Item 5 -      Other Information
              None
Item 6 -      Exhibits and Reports on Form 8-K
              Exhibit 27 - Financial Data Schedule
              8-K, filed August 26, 1997;  Items 2 and 7;  Financial  Statements
              included  in  Item  7:    Financial    Statements,   Pro   Forma 
              Financial Statements and Exhibits:

         (a)       Financial Statements

                  Attached audited Statements of Income for years ended December
                  31, 1996 and 1995 and for the six-month  period ended June 30,
                  1997

         (b)      Pro Forma Financial Information

                  (i) Unaudited pro forma condensed  balance sheet of Registrant
                  as of June 30,  1997,  giving  effect  to the  acquisition  of
                  Customark.

                  (ii) Unaudited pro forma consolidated  statement of income for
                  the year ended June 30, 1997, giving effect to the acquisition
                  of Customark.

         (c)       Exhibits

                  Inapplicable




<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.






                                     BY:____/s/ Richard L. Kalich___________
                                               Richard L. Kalich
                                       President & Chief Executive Officer






                                     BY:____/s/ George S. Norfleet III______
                                                George S. Norfleet III
                                                 Secretary / Treasurer