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 EXCHANG
 ACT OF 1934.

For the quarterly period ended December 31, 1996.

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  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 January 20, 1996,   1,545,088



<PAGE>



                                   IMTEC, INC.

                                      INDEX

                                                                         Page #
Part I            Financial Information

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

                  Condensed Statements of Income -
                       Three Months and Six Months Ended
                           December 31, 1996 and 1995                        5

                  Condensed Statements of Cash Flows
                       Three Months and Six Months Ended
                           December 31, 1996 and 1995                        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                                           11

         Item 6   Exhibits and Reports on Form 8-K                           11

         Signatures                                                          12



<PAGE>

<TABLE>
<CAPTION>

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

                                                              December 31,              June 30,
                                                                 1996                    1996  .
                                                                (Unaudited)                 *
ASSETS

Current Assets:
<S>                                                         <C>                        <C>       
     Cash                                                   $   920,964                $  806,633
     Marketable Securities                                       54,671                    54,671
     Accounts and notes receivable: Trade,
      less allowance for doubtful accounts:
              December 31, 1996 - $74,397
                  June 30, 1996 - $93,915                     1,200,596                 1,281,101

     Inventories                                              1,603,349                 1,512,037
     Prepaid expenses and deferred charges                       92,316                   134,650
     Income Tax Refundable                                            0                    87,086
     Deferred income tax                                         96,330                    96,330
                                                             ----------                 ---------
                  Total Current Assets                        3,968,226                 3,972,508

Plant and equipment                                           4,076,616                 3,569,012
Less: Accumulated depreciation                                2,810,843                 2,573,562
                                                              ---------                 ---------
                                                              1,265,773                   995,450

Other Assets:
     Deposits                                                    41,605                   150,481
     Computer software less accumulated amortization
         of $423,838 in 1996 and $317,718 in 1996,               77,399                   109,008
     Other intangibles less accumulated amortization of,
         $486,928 in 1996 and $362,535 in 1996                  233,230                   211,638
                                                              ---------                 ---------    
                                                                352,234                   471,127


                                                           $  5,586,233              $  5,439,085
                                                              =========                 =========
* From audited financial statements.
</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)

                                                              December 31,              June 30,
                                                                 1996                    1996  .
                                                                (Unaudited)                 *
LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities
<S>                                                   <C>                       <C>              
     Notes payable - bank                             $               0         $               0
     Current installments of long term debt                           0                         0
     Current capital lease obligations                                0                         0
     Accounts payable                                           152,427                   430,420
     Income tax payable                                         141,103                         0
     Accrued liabilities
         Salaries and wages                                     144,237                   176,276
         Commissions                                            199,715                    45,899
         Other                                                  307,563                   417,030
                                                                -------                 ---------
                  Total Current Liabilities                     945,045                 1,069,625

Long term debt less current installments                              -                         -
Long term capital lease obligations                                   -                         -
                                                                945,045                 1,069,625

Stockholders' equity:
     Common stock - $.01 par value;
         authorized 5,000,000 shares, issued and outstanding:
         1,545,088 shares December 31, 1996
         1,545,038 shares June 30, 1996                          15,451                    15,451
     Additional paid-in capital                               2,449,517                 2,449,517
Retained Earnings                                             2,176,220                 1,904,492
                                                              ---------                 ---------
                  Total Stockholders' Equity                  4,641,188                 4,369,460

                                                           $  5,586,233              $  5,439,085
                                                               ========                  ========

* From audited financial statements.
</TABLE>

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



<PAGE>
<TABLE>
<CAPTION>



                                   IMTEC, INC.
                         CONDENSED STATEMENTS OF INCOME
                                   (Unaudited)

                                               Six Months Ended                   Three Months Ended
                                                   December 31,                       December 31,
                                               1996           1995                 1996          1995

<S>                                       <C>            <C>                  <C>             <C>       
Net Sales                                 $4,197,209     $4,764,384           $2,097,066      $2,184,273
Cost of Sales                              2,217,389      2,685,783            1,178,594       1,259,346
                                           ---------      ---------            ---------       ---------
              Gross Profit                 1,979,820      2,078,601              918,472         924,927

Selling, general and
     administrative expenses               1,253,169      1,090,016              585,840         403,271
Research and development
     expenses                                300,946        305,960              158,274         151,866
                                           ---------       --------              -------         -------
              Operating Profit               425,705        682,625              174,358         369,790

Other Income:
     Miscellaneous income
         and other expenses                   23,141         12,820               10,877           1,411
     Interest Expense                              0              0                    0               0

         Income Before
              Income Taxes                   448,846        695,445              185,235         371,201
                                           ---------       --------              -------         -------
Income Tax Expense                           177,118        275,850               72,164         147,237
                                           ---------       --------              -------         -------
     Net Income                           $  271,728     $  419,595           $  113,071      $  223,964
                                          ==========      =========            =========       =========

Weighted average number of
     common shares and common
     shares equivalents outstanding        1,604,691      1,563,634            1,609,280       1,579,532

Earnings per common share and
     common share equivalents             $      .17     $      .27          $       .07     $       .14
                                              ======         ======               ======          ======
</TABLE>

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


<PAGE>
<TABLE>
<CAPTION>


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

                                               Six Months Ended                   Three Months Ended
                                                   December 31,                       December 31,
                                               1996           1995                  1996         1995
Cash flows from operating activities:
<S>                                            <C>             <C>              <C>             <C>     
     Net Earnings                              $271,728        $419,595         $113,071        $223,964
     Adjust, to reconcile net earnings to,
     net cash provided by operating activities:
         Depreciation & amortization of
         property plant, equipment
         and other assets                       310,843         255,643          155,420         133,508

     Decrease(inc.) in accounts receivable       80,505         499,428          (35,586)        (53,849)
     Decrease(inc.) income tax refundable        87,086
     Decrease (inc.) in inventory               (91,312)        (78,004)         (32,192)        (41,596)
     Decrease (inc.) in prepaid expenses
         and other assets                       151,210         (28,109)          23,286          (5,898)
     Increase (dec.) in accounts payable       (277,993)       (323,415)         (60,747)        (64,819)
     Increase (dec.) in income tax payable      141,103         (30,594)         123,561        (122,213)
     Increase (dec.) in accrued liabilities      12,310        (490,699)         (27,217)       (300,130)
                                                -------         -------          -------        ---------
     Net cash from by operating activities      685,480         223,845          259,596        (213,033)
Cash flows from (used in) investment activities:
     Expenditures for property & equipment,
         computer software and other
         intangible assets                     (571,149)       (285,179)        (121,165)        (88,672)
     Net cash used in invest. activities       (571,149)       (285,179)        (121,165)        (88,672)
Cash flows from (used in) financing activities:
     Principal notes payable to bank
     Proceeds  from new long  term  debt
     Principal  payments  on long term debt
     Principal payments under capital
         lease obligations
     Proceeds from issuance of stock                  0          27,501                0               0
     Net cash provided by finance
         activities                                   0          27,501                0               0
Net increase (decrease) in cash                 114,331         (33,833)         138,431        (319,705)
Cash at the beginning of period                 806,633         685,727          782,533         971,599
                                              ---------       ---------        ---------       ---------
Cash at the end of period                     $ 920,964       $ 651,894        $ 920,964       $ 651,894
                                                =======         =======          =======         =======
Supplemental Information Disclosures:
         Interest paid
         Income tax paid                      $  32,512       $ 306,444        $  32,512       $ 269,450
</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 six month period ended  December 31,
1996 are not  necessarily  indicative of the results to be expected for the full
year.


2 -      Inventories

         Inventories consist of:
                                                 December 31,          June 30,
                                                     1996                 1996

Finished Products                               $    12,913          $   39,299
Work in Process                                     141,624              97,310
Purchased Components                              1,448,812           1,375,428
                                                  ---------           ---------
                                                  1,603,349           1,512,037
                                                  =========           =========

         Inventory  cost  consisted  of the  cost of  purchased  components  and
supplies, manufacturing labor and manufacturing overhead.


3 -      Liability for Estimated Product Warranty

         On December  31,  1996 and June 30,  1996,  the  Company  had  provided
$137,739 and $119,954  respectively,  against future product warranties based on
its  experience  with  customer  claims.  Warranty  expenses  charged  to income
amounted to  approximately  $45,925 for the six month period ended  December 31,
1996 and $57,704 for the six month period ended December 31, 1995.



<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  December  31st 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>

                                                       Six months ended December 31,
                                                            1996                1995

<S>                                                    <C>                 <C>      
Common shares                                          1,545,088           1,477,122
Options                                                   55,666              86,512
Warrants                                                       0                   0
                                                       ---------           ---------
         Total for primary calculation                 1,600,754           1,563,634
Options                                                    3,937                   0
Warrants                                                       0                   0
                                                       ---------           ---------
         Total for fully-diluted calculation           1,604,691           1,563,634
                                                       =========           =========


                                                       Three months ended December 31,
                                                            1996                1995

Common shares                                          1,545,088           1,478,888
Options                                                   57,475             100,644
Warrants                                                       0                   0
                                                       ---------           ---------
         Total for primary calculation                 1,602,563           1,579,532
Options                                                    6,717                   0
Warrants                                                       0                   0
                                                       ---------           ---------
         Total for fully-diluted calculation           1,609,280           1,579,532
                                                       =========           =========
</TABLE>



<PAGE>


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

               Three Months and Six Months Ended December 31, 1996
       as compared to Three Months and Six Months Ended December 31, 1995

         Revenues for the three  months and six months  ended  December 31, 1996
decreased  approximately 4.0% and approximately  11.9%,  respectively,  over the
corresponding periods in 1995.

         Revenues from Bar Code labels and printing supplies were $1,497,482 and
$3,000,021  for the three month and six month  periods  ended  December 31, 1996
compared to $1,240,340 and $2,415,280,  respectively,  for the same periods last
year. Bar Code labels and printing supplies represented 71.4% and 71.5% of total
revenue  for the three  month and six month  periods  ended  December  31,  1996
compared to 56.8% and 50.7%, respectively, for the same periods last year.

         Revenues from the sales of Industrial  Bar Code Equipment were $599,584
and  $1,197,188  for the three and six month  periods  ended  December  31, 1996
compared to $934,771 and $2,333,055 for the same periods in 1995. Industrial Bar
Code Equipment sales  represented 28.6% and 28.5% of total revenue for the three
month and six month periods ended  December 31, 1996 compared to 43.2% and 49.3%
respectively  for the same periods last year. The decrease in bar code equipment
sales in the three month and six month  periods  ended  December 31, 1996,  when
contrasted  with the same  periods in 1995,  is  primarily  attributable  to the
completion,  in October,  1995 of a contract with UPS. This contract represented
sales  of  approximately   $278,938  for  the  three  months  and  approximately
$1,115,752  for the six months ended  December 31, 1995.  When this  contract is
removed from the revenues for the prior year, the remaining  equipment  business
decreased  8.6% from $655,833 for the three months ended  December 31, 1995 , to
$599,584 for the three months ended  December 31, 1996 and,  decreased 1.7% from
$1,217,303  for the six months ended  December 31, 1995 , to $1,197,188  for the
six months ended December 31, 1996. Equipment backlog decreased from $549,211 at
December 31, 1995 to $325,642 at December 31, 1996. Management believes that the
trend in Industrial  Bar Code  Equipment  sales will move upward due to expanded
partnering and  distribution  relationships,  new product  offerings  (including
three new machine  products  introduced  during the prior  fiscal  quarter)  and
expanded use of technology.

         Cost of sales for the three  months and six months  ended  December 31,
1996 were 56.2% and 52.8% respectively, compared to 57.7% and 56.4% for the same
periods in 1995.
<PAGE>
         Selling,  general and  administrative  expenses  were  $585,840 for the
quarter ended December 31, 1996 and $1,253,169 for the six months ended December
31,  1996,  as  compared  to  $403,271  and  $1,090,016   respectively  for  the
corresponding  periods ended  December 31, 1995.  Such 1995 expenses  would have
been $618,271 and  $1,305,016,  respectively,  but for a decision by the Vermont
Supreme Court in December 1995 which  overturned a judgment  against the Company
in a wrongful  termination suit brought by a former  employee,  thereby enabling
the Company to reverse a previously established reserve against such judgment of
$215,000.  The effect of the  reversal  represented  $.08 per share in  earnings
during the prior year. Total backlog as of December 31, 1996 was $1,482,170, all
of which is shipable by June 30, 1996,  compared to approximately  $1,486,852 as
of December 31, 1995.

         Development  and  engineering  expenses  for the three  months  and six
months ended  December 31, 1996 were $158,274 (7.5% of sales) and $300,946 (7.2%
of sales)  compared to $151,866  (6.9% of sales) and  $305,960  (6.4% of sales),
respectively, for the same periods last year.

         Income  tax  expense  is a direct  result of the  Company's  net income
before taxes.

         Net income for the three months and six months ended  December 31, 1996
was  $113,071 and  $271,728,  respectively,  compared to $223,964 and  $419,595,
respectively, for the same periods ended December 31, 1995.

         As of December 31, 1996, 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 December 31, 1996.

         Inventories  increased by $91,312,  from $1,512,037 at June 30, 1996 to
$1,603,349 at December 31, 1996, as a result of increasing levels of business in
the sales of labels and printing supplies.

         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 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.


<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 -      Other Information
              None

Item 6 -      Exhibits and Reports on Form 8-K
              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