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, 1997.

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 18, 1997,   1,553,088




<PAGE>



                                   IMTEC, INC.

                                      INDEX

                                                                        Page #
Part I            Financial Information

                  Condensed Balance Sheets -
                       March 31, 1997 and June 30, 1996                 3 - 4

                  Condensed Statements of Income -
                       Three Months and Nine Months Ended
                           March 31, 1997 and 1996                      5

                  Condensed Statements of Cash Flows
                       Three Months and Nine Months Ended
                           March 31, 1997 and 1996                      6

                  Notes to Condensed Financial Statements               7 - 8

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

Part II  Other Information

         Item 4   Submission of Matters to a Vote of
                  Security Holders                                      13

         Item 6   Exhibits and Reports on Form 8-K                      13

         Signatures                                                     14



<PAGE>
<TABLE>
<CAPTION>


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

                                                              March 31,                 June 30,
                                                                 1997                    1996  .
ASSETS

Current Assets:
<S>                                                          <C>                       <C>       
     Cash                                                    $  867,516                $  806,633
     Marketable Securities                                       54,671                    54,671
     Accounts receivable
         Trade, less allowance for doubtful accounts:
              March 31, 1997 - $77,000
                  June 30, 1996 - $94,000                     1,596,110                 1,281,101

     Inventories                                              1,585,819                 1,512,037
     Prepaid expenses and deferred charges                       77,043                   134,650
     Income tax refundable                                                                 87,086
     Deferred income tax                                         96,330                    96,330
                                                           ------------               -----------

                  Total Current Assets                        4,277,489                 3,972,508
                                                            -----------              ------------

Plant and equipment, net of depreciation                      1,214,280                   995,450
                                                              ---------             -------------

Other assets:
     Deposits                                                    36,437                   150,481
     Computer software less accumulated amortization
         of $440,643 in 1997 and $317,718 in 1996,               60,594                   109,008
     Other intangibles less accumulated amortization of
         $506,905 in 1997 and $362,535 in 1996                  230,506                   211,638
                                                            -----------               -----------
                                                                327,537                   471,127
                                                            -----------               -----------


                                                           $  5,819,306              $  5,439,085
                                                              =========                 =========
</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 (Unaudited) (CONTINUED)

                                                              March 31,                 June 30,
                                                                 1997                    1996  .
LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:
<S>                                                           <C>                       <C>      
     Accounts payable                                         $ 199,466                 $ 430,420
     Income tax payable                                         194,155                         -
     Accrued liabilities
         Salaries and wages                                     124,305                   176,276
         Commissions                                            208,001                    45,899
         Other                                                  322,120                   417,030
                                                             ----------                ----------

                  Total Current Liabilities                   1,048,047                 1,069,625
                                                            -----------               -----------

Stockholders' equity:
     Common stock - $.01 par value;
         authorized 5,000,000 shares, issued and outstanding:
         1,553,088 shares March 31, 1997
         1,545,088 shares June 30, 1996                          15,531                    15,451
     Additional paid-in capital                               2,470,281                 2,449,517
     Retained earnings                                        2,285,447                 1,904,492
                                                            -----------               -----------

                  Total Stockholders' Equity                  4,771,259                 4,369,460
                                                            -----------               -----------

                                                           $  5,819,306              $  5,439,085
                                                             ==========                ==========
</TABLE>


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



<PAGE>
<TABLE>
<CAPTION>



                                   IMTEC, INC.
                         CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

                                               Nine Months Ended                  Three Months Ended
                                                   March 31,                          March 31,
                                                1997          1996                 1997          1996
                                                ----          ----                 ----          ----

<S>                                       <C>           <C>                 <C>            <C>       
Net sales                                 $6,421,867    $7,072,244          $ 2,224,656    $2,307,861
Cost of sales                              3,480,482     3,862,624            1,263,093     1,176,841
                                         -----------   -----------          -----------   -----------

              Gross Profit                 2,941,385     3,209,620              961,563     1,131,020

Selling, general and
     administrative expenses               1,890,315     1,705,678              641,636       615,666
Research and development
     expenses                                445,311       484,131              144,361       178,176
                                          ----------    ----------           ----------    ----------

              Operating profit               605,759     1,019,811              175,566       337,178

Miscellaneous income (expenses):              25,066        16,047                6,425         3,228
                                          ----------    ----------          -----------   -----------
Income before income taxes                   630,825     1,035,858              181,991       340,406

Income tax expense                           249,870       410,889               72,752       135,039
                                           ---------     ---------             --------     ---------

     Net income                           $  380,955    $  624,969           $  109,239    $  205,367
                                             =======       =======              =======       =======

Weighted average number of
     common shares and common
     shares equivalents outstanding        1,605,832     1,570,144            1,608,165     1,583,623
                                             =======       =======              =======       =======

Earnings per common share and
     common share equivalents           $     .24    $      .40           $      .07    $      .13
                                              ======        ======              =======        ======
</TABLE>

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


<PAGE>
<TABLE>
<CAPTION>


                                   IMTEC, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                               Nine Months Ended                  Three Months Ended
                                                   March 31,                          March 31,
                                                   1997             1996            1997            1996
                                                   ----             ----            ----            ----
Cash flows from operating activities:
<S>                                          <C>                <C>             <C>             <C>     
     Net income                              $  380,955         $624,969        $109,239        $205,367
     Adjustments to reconcile net income to
     net cash provided by operating activities:
         Depreciation & amortization            466,266          384,590         155,423         128,954
     Increase ( decrease) in cash from:
     Accounts receivable                       (315,009)         281,848        (395,514)       (217,580)
     Income tax refundable                       87,086
     Inventory                                  (73,782)           8,973          17,530          86,977
     Prepaid expenses and other assets          171,651          (48,686)         20,441         (20,577)
     Accounts payable                          (230,954)        (302,445)         47,039          20,970
     Income tax payable                         194,155           17,434          53,052          48,028
     Accrued liabilities                         15,221         (639,223)          2,899        (148,524)
                                              ---------        ----------      ---------       ----------
     Net cash provided by
         operating activities                   695,589          327,460          10,109         103,615
Cash flows (used in) investment activities:
     Expenditures for property & equipment,
         computer software and other
         intangible assets                     (655,550)        (328,013)        (84,401)        (42,834)
                                              ----------       ----------      ----------      ----------

Cash flows provided by financing activities:
     Proceeds from issuance of stock             20,844          176,964          20,844         149,463
                                              ---------        ---------       ---------       ---------

Net increase (decrease) in cash                  60,883          176,411         (53,448)        210,244
Cash at the beginning of period                 806,633          685,727         920,964         651,894
                                              ---------        ---------       ---------       ---------
Cash at the end of period                    $  867,516       $  862,138      $  867,516      $  862,138
                                                =======          =======         =======         =======
Supplemental Information Disclosures:
         Income taxes paid                     $ 52,212        $ 394,344        $ 19,700        $ 87,900
                                                =======          =======         =======         =======
</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 nine month  period  ended March 31,
1997 may not  necessarily  be  indicative  of the results to be expected for the
full year.


2 -      Inventories

         Inventories consist of:
                                                   March 31,          June 30,
                                                    1997                 1996

Finished Products                            $      18,132         $    39,299
Work in Process                                    192,856              97,310
Purchased Components                             1,374,831           1,375,428
                                               -----------         -----------

                                              $  1,585,819         $ 1,512,037
                                                  ========            ========



3 -      Liability for Estimated Product Warranty

         On March  31,  1997  and  June  30,  1996,  the  Company  had  provided
approximately  $143,000  and  $120,000  respectively,   against  future  product
warranties  based on its  experience  with customer  claims.  Warranty  expenses
charged to income  amounted to  approximately  $62,000 for the nine month period
ended March 31, 1997 and $64,000 for the nine month period ended March 31, 1996.



<PAGE>


4 -      Earnings per Common Share

         Primary  earnings per share were computed by dividing net income by the
weighted  average number of shares of common stock and 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 for the period or the March
31 market price.

         The  average  number  of  common  stock and  common  stock  equivalents
entering into the  calculation of primary and  fully-diluted  earnings per share
are as follows:

                                                   Nine months ended March 31,
                                                      1997                1996

Common shares                                    1,546,427           1,497,766
Options                                             55,989              72,378
Warrants                                                 0                   0
                                                ----------          ----------
         Total for primary calculation           1,602,416           1,570,144
Options                                              3,416                   0
Warrants                                                 0                   0
                                                ----------          ----------
         Total for fully-diluted calculation     1,605,832           1,570,144
                                                 =========           =========


                                                  Three months ended March 31,
                                                      1997                1996

Common shares                                    1,549,166           1,539,513
Options                                             56,634              44,110
Warrants                                                 0                   0
                                                ----------          ----------
         Total for primary calculation           1,605,800           1,583,623
Options                                              2,365                   0
Warrants                                                 0                   0
                                                 ---------          ----------
         Total for fully-diluted calculation     1,608,165           1,583,623
                                                 =========           =========

         In March  1997,  the  Financial  Accounting  Standards  Board  released
Statement  of  Financial  Accounting  Standards  (SAFS) No. 128,  "Earnings  per
Share,"  which will be  effective  for interim and annual  periods  ending after
December 15, 1997.  Had SFAS No. 128 been effective for the quarters ended March
31, 1997 and 1996, reported earnings per share and diluted earnings per share on
a proforma basis would be the same as stated in this report.



<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 and Nine Months Ended March 31, 1997
        as compared to Three Months and Nine Months Ended March 31, 1996

         Revenues  for the three  months and nine  months  ended  March 31, 1997
decreased  approximately  3.3% and  8.9%  respectively  over  the  corresponding
periods in 1996.

         Revenues  from  labels  and  printing   supplies  were  $1,637,863  and
$4,637,884  for the three  month and nine month  periods  ended  March 31,  1997
compared to $1,329,479  and  $3,744,758  respectively  for the same periods last
year. Labels and printing supplies  represented 73.6% and 72.2% of total revenue
for the three month and nine month  periods  ended  March 31,  1997  compared to
57.8% and 53.1% 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 product line and the sales force and production capacity.

         Revenues  from the sales of  Industrial  Equipment  were  $586,793  and
$1,783,983 for the three and nine month periods ended March 31, 1997 compared to
$971,329 and $3,304,383 for the same periods in 1996. Industrial Equipment sales
represented  26.4% and 27.8% of total revenue for the three month and nine month
periods  ended March 31, 1997 compared to 42.2% and 46.9%  respectively  for the
same periods last year. It should be noted that approximately $1,115,752 for the
nine months ended March 31, 1996  represented  sales to a single  customer.  The
contract  with the above  mentioned  customer was  completed  in July,  1995 and
additional  orders are not  anticipated.  If these sales to the single  customer
were excluded from the previous  year's  revenue  figures,  remaining  equipment
revenues  would show a decrease  of 18.5% for the nine month  period and a 39.6%
decrease  for the three  month  period  over the  corresponding  periods  of the
previous year. Management believes that this trend in Industrial Equipment sales
will be reversed due to newly  available  products and an increase in the number
and geographic coverage by resellers of the product line.  Equipment backlog was
$266,000 at March 31, 1997  compared to $289,000 at March 31,  1996.  While this
represents a 7.9% decrease in equipment backlog, it should be noted that the new
products mentioned above have just been introduced to the market.

         Total backlog, for all products, as of March 31, 1997 was approximately
$1,354,000,,  of which  approximately  $576,000 is  shipable  by June 30,  1997,
compared to $1,212,000 as of March 31, 1996, about half of which was shipable by
June 30, 1996.

         Cost of sales for the three months and nine months ended March 31, 1997
were  56.8% and  54.2%  respectively,  compared  to 51.2% and 54.8% for the same
periods in 1996.  The increase in the three month cost of sales is the result of
increased  shipments through  resellers,  which carry lower margins,  and normal
startup costs on new products.

         Selling,  general and  administrative  expenses  were  $641,636 for the
quarter ended March 31, 1997 and  $1,890,315 for the nine months ended March 31,
1997, as compared to $615,666 and $1,705,678, respectively for the corresponding
periods  ended March 31,  1996.  The  increase for the 1997 quarter is primarily
attributed  to an increase in  marketing & sales  activity.  The 1997 nine month
increase  is  primarily  the  result  of the  reversal  in  December,  1995 of a
previously  established litigation contingency reserve estimate of $215,000 as a
consequence of the Vermont  Supreme Court's ruling in favor of the Company which
overturned a judgment in that amount previously entered against the Company. Had
such reversal not occurred, selling, general and administrative expenses for the
nine months ended March 31, 1996 would have been $1,920,678,  approximately  the
same as the 1997 period.

         Research and development  expenses for the three months and nine months
ended March 31, 1997 were $144,361  (6.5% of sales) and $445,311 (6.9% of sales)
compared to $178,176 (7.7% of sales) and $484,131 (6.8% of sales), respectively,
for the same periods 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 three  months and nine  months  ended March 31, 1997
was  $109,239 and  $380,955,  respectively,  compared to $205,367 and  $624,969,
respectively, for the same periods ended March 31, 1996.


LIQUIDITY AND CAPITAL RESOURCES:

         As of March 31, 1997,  the  Company's  principal  available  sources of
liquidity  were,  respectively,  from  operations and a $1,000,000  bank line of
credit, all of which was available as of March 31, 1997.

         Accounts receivable increased by $315,009,  from $1,281,101 at June 30,
1996 to  $1,596,110  at March  31,  1997,  a direct  result of the  increase  in
international  shipments that  represented  32.1% of sales for the quarter ended
March 31, 1997,  compared to 19.6% and 14.6% for the quarters ended December 31,
1996 and September 30, 1996,  respectively.  Typically,  international terms and
collections  tend to extend  beyond  those of domestic  customers,  creating the
increase in the accounts receivable.

         The Company's  capital  commitments  for fiscal 1997 are expected to be
approximately  50% above the level of  fiscal  1996.  This is the  result of the
Company's  commitment  to  improve  the  capability  and  capacity  of its label
operations.  The Company  anticipates  that it will fund such  commitments  from
operating  revenues  and, if  required,  its unused and  available  bank line of
credit.

         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.

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.



<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.    December 11, 1996 - Annual Meeting of Stockholders

              B.    Election of Directors - all nominees elected

Item 5 -      Information
              None

Item 6 -      Exhibits and Reports on Form 8-K
              8-K, filed Feb. 21, 1997, announcing a change in audit firms
              Exhibit 27 - Financial Data Schedule



<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