SECURITIES AND EXCHANGE COMMISSION
            WASHINGTON, DC 20549

                FORM 10-QSB

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

For the quarterly period ended August 31, 2001

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to


       Commission file number 0-17741


                  EPOLIN, INC.
(Exact name of Small Business Issuer as Specified in its
Charter)


New Jersey                                    22-2547226
(State or Other Jurisdiction            (I.R.S. Employer
of Incorporation or                       Identification
Organization)                                    Number)

              358-364 Adams Street
            Newark, New Jersey 07105
   (Address of Principal Executive Offices)

                (973) 465-9495
(Issuer's Telephone Number, Including Area Code)

Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

     Yes    X              No

State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:

Common, no par value per share: 11,599,355
outstanding as of August 31, 2001



      PART I - FINANCIAL INFORMATION

        EPOLIN, INC. AND SUBSIDIARY


       Index to Financial Information
        Period Ended August 31, 2001



Item
                                    Page Herein

Item 1 - Financial Statements:

Accountant's Review Report              3

Consolidated Financial Statements:

Consolidated Balance Sheets             4-5

Consolidated Statements of Income       6-7

Consolidated Statements of
Stockholders' Equity                    8

Consolidated Statements of Cash Flows   9-10

Notes to Consolidated
Financial Statements                    11-19

Item 2 - Management's Discussion and
     Analysis or Plan of Operation      20-21



ACCOUNTANT'S REVIEW REPORT


To the Board of Directors
EPOLIN INC. AND SUBSIDIARY
Newark, NJ

We have reviewed the accompanying Consolidated Balance Sheets
of Epolin Inc. and Subsidiary as of August 31, 2001 and 2000
and the related Consolidated Statements of Income,
Stockholders' Equity and Cash Flows for the six months then
ended in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of
Certified Public Accountants.  All information included in
these financial statements is the representation of the
management of Epolin, Inc. and Subsidiary.

A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data.  It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial
statements taken as a whole.  Accordingly, we do not express
such an opinion.

Based on our review, we are not aware of any material
modifications that should be made to the accompanying August
31, 2001 financial statements in order for them to be in
conformity with generally accepted accounting principles.


                 IWA FINANCIAL CONSULTING LLC

October 8, 2001









                           EPOLIN, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                August 31,
                                                         -----------------------
                                                            2001         2000
Current assets:                                          ----------   ----------
  Cash and cash equivalents                              $1,590,314    1,192,995
  Accounts receivable                                       642,332      415,736
  Inventories                                               653,205      463,007
  Prepaid expenses                                           12,333       12,999
  Employee loans                                                 --        1,675
  Deferred tax assets-current portion                         8,379        8,079
                                                         ----------   ----------

    Total current assets                                  2,906,563    2,094,491
                                                         ----------   ----------

Plant, property and equipment - at cost:
  Land                                                       81,000       81,000
  Building                                                  369,000      369,000
  Machinery and equipment                                   242,136      228,837
  Furniture and fixtures                                     12,223       11,407
  Leasehold improvements                                    432,037      432,037
                                                         ----------   ----------

    Total                                                 1,136,396    1,122,281

  Less: Accumulated depreciation and amortization           684,129      662,204
                                                         ----------   ----------

    Net plant, property and equipment                       452,267      460,077
                                                         ----------   ----------

Other assets:
  Deferred tax assets-non current portion                   228,896      151,904
  Cash value - life insurance policy                        116,051       89,579
                                                         ----------   ----------

    Total other assets                                      344,947      241,483
                                                         ----------   ----------

    Total                                                $3,703,777    2,796,051
                                                         ==========   ==========



             See accompanying notes and accountant's review report.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                August 31,
                                                         -----------------------
                                                            2001         2000
                                                         ----------   ----------
Current liabilities:
  Accounts payable                                       $   60,324       16,340
  Accrued expenses                                           86,552      134,636
  Taxes payable:
    Payroll                                                   1,065           --
    Income                                                  187,990       52,587
                                                         ----------   ----------

    Total current liabilities                               335,931      203,563
                                                         ----------   ----------

Other liabilities:
  Deferred compensation                                     311,440      271,986
  Loans payable-officers                                     10,319       10,319
                                                         ----------   ----------

    Total other  liabilities                                321,759      282,305
                                                         ----------   ----------

       Total liabilities                                    657,690      485,868
                                                         ----------   ----------

Stockholders' equity:
  Preferred stock, $15.513 par value; 940,000
    shares authorized; none issued
  Preferred stock, series A convertible non-cumulative,
    $2.50 par value; redemption price and
    liquidation preference; 60,000 shares
    authorized; 5,478 shares issued and redeemed
  Common stock, no par value; 20,000,000 shares
    authorized; 12,216,500 and 11,956,500 shares issued
    and outstanding at 2001 and 2000, respectively        2,248,308    2,229,658
  Paid-in capital                                             6,486        6,486
  Retained earnings                                         946,609      203,811
                                                         ----------   ----------

       Total                                              3,201,403    2,439,955
  Less: Treasury stock-at cost                              155,316      129,772
                                                         ----------   ----------

    Total stockholders' equity                            3,046,087    2,310,183
                                                         ----------   ----------

    Total                                                $3,703,777    2,796,051
                                                         ==========   ==========



             See accompanying notes and accountant's review report.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                    SIX MONTHS ENDED AUGUST 31, 2001 AND 2000

                                                        2001            2000
                                                     -----------     -----------

Sales                                                $ 1,443,112       1,154,597
                                                     -----------     -----------

Cost of sales and expenses:
  Cost of sales                                          212,897         374,933
  Selling, general and administrative                    348,978         331,444
                                                     -----------     -----------

    Total                                                561,875         706,377
                                                     -----------     -----------

Operating income                                         881,237         448,220
                                                     -----------     -----------

Other income - interest                                   32,348          30,620
                                                     -----------     -----------

Income before taxes                                      913,585         478,840

Income taxes                                             373,220         194,207
                                                     -----------     -----------

Net income                                           $   540,365         284,633
                                                     ===========     ===========


Per share data:
  Basic earnings per common share                           0.05            0.02
                                                     ===========     ===========

  Fully diluted earnings per common share                   0.05            0.02
                                                     ===========     ===========

  Weighted average number of
    common shares outstanding                         11,597,453      11,445,414
                                                     ===========     ===========



             See accompanying notes and accountant's review report.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME

                   THREE MONTHS ENDED AUGUST 31, 2001 AND 2000

                                                        2001            2000
                                                     -----------     -----------

Sales                                                $   813,191         657,396
                                                     -----------     -----------

Cost of sales and expenses:
  Cost of sales                                          118,184         199,386
  Selling, general and administrative                    194,493         155,306
                                                     -----------     -----------

    Total                                                312,677         354,692
                                                     -----------     -----------

Operating income                                         500,514         302,704
                                                     -----------     -----------

Other income - interest                                   13,768          14,630
                                                     -----------     -----------

Income before taxes                                      514,282         317,334

Income taxes                                             202,801         144,713
                                                     -----------     -----------

Net income                                           $   311,481         172,621
                                                     ===========     ===========


Per share data:
  Basic earnings per common share                           0.03            0.02
                                                     ===========     ===========

  Fully diluted earnings per common share                   0.03            0.02
                                                     ===========     ===========

  Weighted average number of
    common shares outstanding                         11,597,453      11,445,414
                                                     ===========     ===========



             See accompanying notes and accountant's review report.


<PAGE>

<TABLE>
<CAPTION>
                           EPOLIN, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                    SIX MONTHS ENDED AUGUST 31, 2001 AND 2000

                                                    Additional    Retained
                                         Common      Paid-in-     Earnings      Treasury    Stockholders'
                                         Stock       Capital      Deficit        Costs         Equity
                                       ----------   ----------   ----------    ----------    ----------

<S>                                    <C>               <C>        <C>          <C>          <C>
Balance - March 1, 2000                $2,220,384        6,486      (80,822)     (118,906)    2,027,142

Issue of common stock                       9,274           --           --            --         9,274

Purchase of treasury stock                     --           --           --       (10,866)      (10,866)

Net income                                     --           --      284,633            --       284,633
                                       ----------   ----------   ----------    ----------    ----------

Balance - August 31, 2000               2,229,658        6,486      203,811      (129,772)    2,310,183


Balance - March 1, 2001                 2,229,658        6,486      754,225      (155,316)    2,835,053

Common stock issued for stock option       18,650           --           --            --        18,650

Dividends paid                                 --           --     (347,981)           --      (347,981)

Net income                                     --           --      540,365            --       540,365
                                       ----------   ----------   ----------    ----------    ----------

Balance - August 31, 2001              $2,248,308        6,486      946,609      (155,316)    3,046,087
                                       ==========   ==========   ==========    ==========    ==========
</TABLE>



             See accompanying notes and accountant's review report.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    SIX MONTHS ENDED AUGUST 31, 2001 AND 2000

                                                            2001         2000
                                                         ---------    ---------
Cash flows from operating activities:
  Net income                                             $ 540,365      284,633
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Depreciation and amortization                         11,115       13,267
      Deferred tax expense                                   3,503      (14,031)
      Obligation under deferred compensation
        agreement                                           12,038       42,790
  (Increase) decrease in:
        Accounts receivable                               (336,049)    (126,900)
        Inventories                                       (151,613)      12,208
        Employee loans                                          --        3,094
        Prepaid expenses                                    16,790       19,600
  Increase (decrease) in:
        Accounts payable                                    50,131         (990)
        Accrued expenses                                   (47,606)     (27,448)
        Taxes payable                                      154,630     (170,342)
                                                         ---------    ---------

        Net cash provided by operating activities          253,304       35,881
                                                         ---------    ---------

Cash flows from investing activities:
  Increase in cash value - life insurance policy           (10,000)      (9,000)
  Payments for equipment                                   (14,115)     (15,231)
                                                         ---------    ---------

        Net cash used by investing activities              (24,115)     (24,231)
                                                         ---------    ---------



             See accompanying notes and accountant's review report.


<PAGE>

                           EPOLIN, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                    SIX MONTHS ENDED AUGUST 31, 2001 AND 2000



                                                         2001           2000
                                                     -----------    -----------

Cash flows from financing activities:
  Proceeds from the issuance of capital stock             18,650          9,274
  Dividends paid                                        (347,980)            --
  Purchase of treasury stock                                  --        (10,866)
                                                     -----------    -----------

    Net cash used by financing activities               (329,330)        (1,592)
                                                     -----------    -----------

Increase (decrease) in cash                             (100,141)        10,058

Cash and cash equivalents:
  Beginning                                            1,690,455      1,182,937
                                                     -----------    -----------

  Ending                                             $ 1,590,314      1,192,995
                                                     ===========    ===========

Supplemental information:

  Income taxes paid                                  $   209,135        377,124
                                                     ===========    ===========

  Interest paid                                      $       418            472
                                                     ===========    ===========



             See accompanying notes and accountant's review report.




EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001



NOTE A - ORGANIZATION AND BASIS OF PRESENTATION:

The Company is engaged in the development, production and sale
of near infrared dyes to the optical industry for laser
protection and welding applications and other dyes and
specialty chemical products that serve as intermediates and
additives used in the adhesive, plastic, aerospace,
pharmaceutical and flavors and fragrance industries to
customers located in the United States and throughout the
world.

The Company's wholly owned Subsidiary, Epolin Holding, Corp.,
was incorporated in New Jersey as a real estate holding company
whose asset consist of land and a building.  Prior to being
acquired on January 29, 1998, it was controlled by two
officers/stockholders of the Company.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation - The accompanying Consolidated
Financial Statements include the accounts of the Company and
its Subsidiary.  Intercompany transactions and balances have
been eliminated in consolidation.  Condensed consolidating
financial statements for the six months ended August 31, 2001
follows:

CONDENSED CONSOLIDATING BALANCE SHEET

                                  Epolin
                      Epolin      Holding  Eliminations  Consolidated
Current assets      $2,895,261     45,041      (33,739)     2,906,563
Non-current assets     703,114    404,197     (310,097)       797,214
Total               $3,598,375    449,238     (343,836)     3,703,777

Total liabilities     $552,288    163,576      (58,174)       657,690

Stockholders' equity:
Common stock         2,248,308         -            -       2,248,308
Additional paid-in
capital                  6,486         -            -           6,486
Retained earnings      946,609    285,662     (285,662)       946,609
Treasury stock        (155,316)        -            -        (155,316)

Total stockholders'
equity               3,046,087    285,662     (285,662)     3,046,087

Total               $3,598,375    449,238     (343,836)     3,703,777





EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)

CONDENSED CONSOLIDATING STATEMENT OF INCOME

                                  Epolin
                       Epolin     Holding Eliminations  Consolidated
Sales               $1,443,112       -            -     1,443,112

Other revenue              -      48,870      (48,870)         -
Total                1,443,112    48,870      (48,870)  1,443,112

Cost of sales          212,897       -            -       212,897
Selling, general
and administrative     392,697     5,151      (48,870)    348,978
Total                  605,594     5,151      (48,870)    561,875

Operating income       837,518    43,719          -       881,237

Other income -
interest                32,348       -            -        32,348

Income before taxes    869,866    43,719          -       913,585

Income taxes           369,225     3,995          -       373,220

Net income            $500,641    39,724          -       540,365


Cash and Cash Equivalents - Includes cash in bank and money market
accounts for purposes of preparing the Statement of Cash Flows.

Concentrations of Credit Risks - The Company has cash deposits in
financial institutions and brokerage houses in excess of the amount
insured by agencies of the federal government in the amounts of
$1,490,300 and $1,093,000 at August 31, 2001 and 2000, respectively.  In
evaluating this credit risk, the Company periodically evaluates the
stability of these financial institutions.

Inventories - Consists of raw materials, work in process, finished goods
and supplies valued at the lower of cost or market under the first-in,
first-out method.

Fair Value of Financial Instruments - All reported assets and
liabilities, which represent financial instruments, approximate the
carrying values of such amounts.



EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001



NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)

Plant, Property and Equipment - Stated at cost less accumulated
depreciation and amortization. Provisions for depreciation are computed
on the straight-line and declining balance methods, based upon the
estimated useful lives of the assets.

Depreciation and amortization expense totaled $11,115 and $13,267 for the
six months ended August 31, 2001 and 2000 respectively.

Income taxes -The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes",
wherein the asset and liability method is used in accounting for income
taxes.  Deferred taxes are recognized for temporary differences between
the basis of assets and liabilities for financial statement and income
tax purposes.  The temporary differences relate primarily to different
accounting methods used for depreciation and amortization of property and
equipment, allowance for doubtful accounts and net operating loss carry
forwards.

Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the amounts of sales and expenses
during the reporting period.  Actual results could differ from those
estimates.

NOTE C - ECONOMIC DEPENDENCY:

A material portion of the Company's business is dependent on certain
domestic customers, the loss of which could have a material effect on
operations.  During the six months ended August 31, 2001, approximately
58.2% of sales were to four customers.   Three of these customers,
located in the Eastern United States, account for 44.7% of sales at
August 31, 2001.  During the six months ended August 31, 2000,
approximately 66.0% of sales were to four customers. Three of these
customers located in the Eastern United States comprised 42.7% of sales
at August 31, 2000.




EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001


NOTE D - INVENTORIES:

                                  2001       2000
Raw materials and supplies    $  45,191     36,594
Work in process                 244,399     28,946
Finished goods                  363,615    397,467

          Total                $653,205    463,007

NOTE E - INCOME TAXES:
                                       2001          2000
1.  Federal and State deferred
    tax assets include
     the following:

Temporary differences - principally
  accelerated amortization of leasehold
  improvements for book purposes and
  deferred compensation               $237,275     159,983

Current portion                          8,379       8,079

Non-current portion                   $228,896     151,904


2.  Income tax expense (benefit) consists of the following components:

                             2001        2000
Current
Federal                   $286,327     160,300
State                       83,390      46,338

Total current              369,717     206,638

Deferred:
Federal                      2,771      (9,800)
State                          732      (2,631)

Total deferred               3,503     (12,431)

Total                     $373,220     194,207



EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001

NOTE F - ACCRUED SALARIES:


On April 25, 1995, the Board of Directors authorized the issuance of
1,000,000 shares of common stock (market value $.04 per share) to an
officer in lieu of $40,000 of his remaining accrued salary of $89,948.
The remaining unpaid balance of $49,948 was paid during the period ended
February 28, 2001.

NOTE G - EMPLOYEE BENEFITS:

Simplified Employee Pension Plan - Effective June 1, 1994, covering all
eligible participating employees as defined. Employer contributions
totaled $4,531, and $5,396 for the six months ended August 31, 2001 and
2000, respectfully.

Incentive Compensation Plan - On December 1989, the Company approved the
1989 Incentive Compensation Plan for the purpose of attracting and
retaining key personnel.  All employees of the Company are eligible to
participate in the plan whereby incentive bonuses are determined by the
Board of Directors and payable in shares of common stock.  Shares issued
are determined at fifty percent of the closing bid price, vested, and
delivered over a three-year period.   During the year ended February 28,
1999, 20,000 shares of common stock were issued covering a previously
awarded bonus to an employee on May 18, 1998.





EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001


NOTE G - EMPLOYEE BENEFITS (continued):

Employee Option Plan - The Company previously adopted The 1986 Stock
Option Plan.  As of April 1996, options may no longer be granted.  Under
the terms of the Plan, options granted could be designated as portions
which qualify for incentive stock option treatment under Section 422A of
the Internal Revenue Code of 1986, as amended, or options which do not
qualify. On December 1, 1995, options to acquire up to 490,000 shares of
the Company's common stock were granted and expire on December 1, 2005.
In the current quarter, 185,000 shares of common stock were issued to
three employees. Common stock issued for all prior years totaled 270,000
shares. Options totaling 35,000 expired for all prior years. There are no
outstanding options as of August 31, 2001.


The Company adopted the 1998 Stock Option Plan on December 1, 1998.
Under the terms of the plan, the company reserved 750,000 shares of
common stock for issuance pursuant to the exercise of options to be
granted under the Plan, which do not meet the requirements of Section 422
of the Code.  Options expire ten years after the date granted and are
subject to a vesting period as follows: (1) no portion will be
exercisable prior to the first anniversary of the date of grant, and (2)
each of the options will become exercisable as to 50% of the shares
underlying the option on each of the first and second anniversaries of
the date granted at $0.15 per share. Options exercised for all prior
years were 12,500. Options exercised during the current year were 75,000.

Options granted as of August 31, 2001:

No. of
Shares      Date Granted        Expiration Date

 425,000  December 1, 1998     November 30, 2008
  25,000  February 10, 1999    February 9, 2009
  25,000  February 10, 2000    February 9, 2010

There are 275,000 options attributable to future grants.



EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001


NOTE H - TREASURY STOCK:

      Treasury stock at August 31, 2001 totaled 617,145 shares, at a
cumulative cost of $155,316. Included are 42,445 shares, which were
returned to the Company at no cost in prior years.

NOTE I - RESEARCH AND DEVELOPMENT:

Included in selling, general and administrative expenses totaling
$99,394, $108,731 for the six months ended August 31, 2001 and 2000
respectively.

NOTE J - ACQUISITIONS:

On January 29, 1998, the Company acquired 100 shares (100% interest) of
Epolin Holding Corp.'s common stock.

NOTE K - COMMITMENTS:

On October 17, 1996, the premises leased from 350 South Street
Partnership was purchased for $450,000 by Epolin Holding Corp., a New
Jersey Corporation, controlled by Murray S. Cohen, Ph.D. and James A.
Ivchenko, officers/stockholders of Epolin, Inc. This transaction was
approved by the Board of Directors in June 1996 based upon the terms of a
$350,000 mortgage obtained from the Broad National Bank wherein personal
guarantees of two officers/stockholders were mandatory.  Other directors
declined participation in this transaction.

The down payment of $100,000 was obtained from The Company, evidenced by
a five (5) year promissory note of $75,565 (net of a three (3) months
security deposits amounting to $24,435). The note is payable for a term
of five years in monthly payments of $1,541, including interest at an
annual rate of 8.25%.

The lease, is for a term of five (5) years, expiring October 31, 2001,
with three (3) five (5) year options at annual rentals of $97,740 subject
to a Cost of Living Index adjustment effective with the second year.
Rent includes reimbursed insurance.





EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001

NOTE K - COMMITMENTS (continued):

The minimum annual rental balance under the current lease expiring
October 31, 2001 is $97,740.

Management anticipates renewing the lease at terms yet to be determined.

Rental expense charged to operations, eliminated in consolidation,
amounted to $48,870 for the six months ended August 31, 2001 and 2000,
respectively.

Deferred Compensation - On December 29, 1995, the Company entered into a
deferred compensation agreement with an officer. The officer's additional
annual compensation of $19,645 plus interest is being deferred until such
time he reaches age 65 or is terminated.  The obligation is being funded
by a life insurance policy.  Annual payments of $32,000 for ten
consecutive years shall commence the first day of the month following the
officer's 65th birthday or termination.  On January 1, 1996 the company
entered into a deferred compensation agreement with a second officer
wherein $25,000 per year was accrued. This agreement, terminated on June
25, 1998, with unfunded accruals of $79,041 will be paid upon retirement
either in equal consecutive monthly payments for a period not exceeding
sixty (60) months or a single payment equal to the then present value of
the account, said selection to be at the discretion of the company. The
company entered into a second deferred compensation agreement with the
same officer on June 25, 1998 which provided for the payment of certain
funds for a period of ten years beginning two weeks after the date of his
retirement. This agreement was terminated March 1, 1999.

Effective March 1, 1999, the company adopted deferred compensation
agreement with two of its employees.  Under the term of the agreement,
each employee will receive one twenty sixth (1/26) of fifty percent (50%)
of their annual salary (excluding bonuses) as of the date of retirement.
Each has a death vesting schedule.  Management has elected not to provide
any additional funding for either employee subsequent to the date at
which each of the two employees were no longer employed with the company.

Deferred compensation of $12,039, and $42,780 was charged to operations
for the six months ended August 31, 2001 and 2000, respectively.




EPOLIN, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AUGUST 31, 2001

NOTE K - COMMITMENTS (continued):

Employment Agreements - Effective March 1, 1999, the Company entered into
ten-year employment agreements with executive officers/directors:

James Ivchenko, President - To be paid an annual salary of not less than
the greater of his annual base salary in effect immediately prior to the
effective date of the agreement or any subsequently established annual
base salary.  In addition, he is to receive 1.5% of gross annual sales of
no more than $3,000,000, effective with the year ended February 29, 2000,
increasing by 0.25% a year during the term of the agreement.

Murray S. Cohen, PhD, Chairman of the Board and Chief Executive Officer -
To be paid an annual salary of not less than the greater of his annual
base salary in effect immediately prior to the effective date of the
agreement or any subsequently established annual base salary.  He is to
receive 2.00% of gross annual sales of no more than $3,000,000, effective
with the year ended February 29, 2000, increasing by 0.25% a year during
the term of the agreement.


Treasury Stock - During August 2001, the Board of Directors of the
Company authorized a 500,000 share stock repurchase program whereupon
the Company may purchase up to 500,000
shares of its common stock at current market prices. The repurchase
program may be suspended by the Board of Directors without further
notice. No shares were repurchased during the quarter ended August 31,
2001.

Contingencies:

In August 2000, the Company received a letter from a law firm
representing an individual who is a former officer and former director of
the Company alleging age discrimination and other monetary claims
pertaining to such former officer's past employment.  In addition,
September 2000, the Company received a letter from the same law firm on
behalf of another individual who is a former employee and former director
of the Company alleging similar claims.  In December 2000, these
individuals instituted suit in the Superior Court of New Jersey, Bergen
County - Law Division, against the Company and other directors of the
Company alleging claims pursuant to their past employment as well as a
derivative claim, as minority stockholders.  The Company believes such
claims are without merit and is defending such matters vigorously.
Nevertheless, while the outcome of this action cannot be predicted at
this time, taking into account the uncertainty and risks inherent in any
litigation, management does not anticipate that the ultimate disposition
will have a material adverse effect on the Company.




Item 2. Management's Discussion and Analysis or Plan of
        Operation.

     The following discussion should be read in conjunction
with the Financial Statements  included in this report and is
qualified in its entirety by the foregoing.

Introduction

     Epolin, Inc. (the "Company") is a manufacturing and
research and development company which was incorporated in the
State of New Jersey in May 1984.  The Company is principally
engaged in the development, production and sale of near
infrared dyes to the optical industry for laser protection and
for welding applications and other dyes, specialty chemical
products that serve as intermediates and additives used in the
adhesive, plastic, aerospace, pharmaceutical, flavors and
fragrance industries to a group of customers located in the
United States and throughout the world.

     This discussion contains certain forward-looking
statements and information relating to the Company that are
based on the beliefs and assumptions by the Company's
management as well as information currently available to the
management.  When used herein, the words "anticipate",
"believe", "estimate", and "expect" and similar expressions,
are intended to identify forward-looking statements.  Such
statements reflect the current views of the Company with
respect to future events and are subject to certain risks,
uncertainties and assumptions.  Should one or more of these
risks or uncertainties materialize or should underlying
assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated
or expected.  The Company does not intend to update these
forward-looking statements.

Results of Operations

     During the quarter ended August 31, 2001, the Company
reported sales of approximately $813,200 as compared to sales
of approximately $657,400 during the quarter ended August 31,
2000, an increase of approximately $155,800 or 23.7%.  During
the six months ended August 31, 2001, the Company reported
sales of approximately $1,443,100 as compared to sales of
approximately $1,154,600 during the six months ended August 31,
2000, an increase of approximately $288,500 or 20.0%.  This
increase in sales was primarily attributed to an increase in
sales of the Company's near infrared absorbing dyes and
increases in sales of new dyes for new applications.

     Operating income for the quarter August 31, 2001
increased to approximately $500,500 from operating income of
approximately $302,700 for the quarter ended August 31, 2000,
an increase of approximately $197,800 or 65.3%. Operating income for
the six months ended August 31, 2001 increased to approximately
$881,200 from operating income of approximately $448,200 for
the six months ended August 31, 2000, an increase of
approximately $433,000 or 96.6%.  This change resulted primarily
from an increase in sales for the six months ended August 31, 2001
compared to the comparable period of the prior fiscal year as
well as a decrease in cost of sales partially offset by
increases  in selling, general and administrative expenses for
the six months ended August  31, 2001 as compared to the six
months ended August 31, 2000.  Cost of sales for the six months
ended August 31, 2001 was approximately $212,900 as compared to
cost of sales during the six months ended August 31, 2000 of
approximately $374,900.  During the six months ended August 31,
2001, the Company's selling, general and administrative
expenses were approximately $349,000 as compared to selling,
general and administrative expenses of approximately $331,400
for the six months ended August 31, 2000.

     During the three and six months ended August 31, 2001,
the Company realized approximately $13,800 and $32,300,
respectively, in interest income as compared to approximately
$14,600 and $30,600, respectively, in interest income for the
comparable periods of the prior fiscal year.

     During the quarter ended August 31, 2001, the Company
reported income before taxes of approximately $514,300 as
compared to income before taxes of approximately $317,300 for
the three months ended August 31, 2000.  For the six months
ended August 31, 2001, the Company reported income before taxes
of approximately $913,600 as compared to income before taxes of
approximately $478,800 for the six months ended August 31,
2000.  Net income after taxes was approximately $311,500 for
the three months ended August 31, 2001 as compared to income
after taxes of approximately $284,600 for the three months
ended August 31, 2000, an increase of approximately $26,900 or 9.5%.
For the six months ended August 31, 2001, net income after
taxes was approximately $540,400 as compared to net income
after taxes of approximately $284,600 for the comparable
period of the prior fiscal year, an increase of approximately $255,800
or 89.9%.

Liquidity and Capital Resources

     On August 31, 2001, the Company had working capital of
approximately $2,570,600, an equity to debt ratio of
approximately 4.63 to 1, and stockholders' equity of
approximately $3,046,100.  On August 31, 2001, the Company had
approximately $1,590,300 in cash and cash equivalents, total
assets of approximately $3,703,800 and total  liabilities of
approximately $657,700.  The Company believes that its
available cash, cash flow from operations and projected
revenues will be sufficient to fund the Company's operations
for more than the next 12 months.

     The Company does not anticipate making any significant
additional capital expenditures in the immediate future as it
believes its present machinery and equipment will be sufficient
to meet its near term needs.

     Inflation has not significantly impacted the Company's
operations.

Other Information

     In August 2001, the Board of Directors of the Company
authorized a 500,000 share stock repurchase program.   Pursuant
to the repurchase program, the Company may purchase up to
500,000 shares of its common stock  in the open market or in
privately negotiated transactions from time to time, based on
market prices.  The Company indicated that the timing of the
buyback of the Company's shares will be dictated by overall
financial and market conditions and other corporate
considerations.   The repurchase program may be suspended
without further notice.   No shares were repurchased during the
quarter ended August 31, 2001.  Under a previous stock
repurchase program authorized in March 1998, which permitted
the Company to repurchase up to $150,000 of the Company's
outstanding shares of common stock, the Company had repurchased
from April 1998 through December 2000 a total of 574,700 shares
at a cumulative cost of $148,641.

     During the fiscal quarter ended August 31, 2001, the
Board of Directors of the Company declared a $0.03 per share
dividend for shareholders of record as of the close of business
on June 15, 2001 which was paid on June 29, 2001.  This
represented the first time that a cash dividend was paid by the
Company.



PART II - OTHER INFORMATION


Item 1.   Legal Proceedings.

          In August 2000, the Company received a letter
          from a law firm representing an individual who
          is a former officer and  former director of the
          Company alleging age discrimination and other
          monetary claims pertaining to such former
          officer's past employment.  In addition, in
          September 2000, the Company received a letter
          from the same law firm on behalf of another
          individual who is a former director and former
          employee of the Company alleging similar claims.
          In December 2000, these individuals instituted
          suit in the Superior Court of New Jersey, Bergen
          County - Law Division, against the Company and
          the other directors of the Company alleging
          claims pursuant to their past employment as well
          as a derivative claim, as minority stockholders.
          The Company believes such claims are without
          merit and is defending such matter vigorously.
          Nevertheless, while the outcome of this action
          cannot be predicted at this time, taking into
          account the uncertainty and risks inherent in
          any litigation, management does not anticipate
          that the ultimate disposition will have a
          material adverse effect on the Company.

Item 2.   Changes in Securities.

          None.

Item 3.   Defaults Upon Senior Securities.

          None.

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

          On July 18, 2001, an annual meeting of
          stockholders was held for the following
          purposes:  (1) to elect six Directors to serve
          as the Board of Directors of the Company until
          the next Annual Meeting of Stockholders and
          until their successors shall be elected and
          shall qualify; and (2) to ratify the selection
          of Polakoff Weismann Leen LLC as the Company's
          independent auditors.  At such meeting, with
          regard to proposal 1, Murray S. Cohen, James
          Ivchenko, Claire Bluestein and Morris Dunkel,
          each an incumbent director, and James R. Torpey,
          Jr. and Peter Kenny, were duly elected as
          directors of the Company. Murray S. Cohen
          received 9,382,814 affirmative votes and 511,252
          negative votes, each of James Ivchenko, Claire
          Bluestein and Morris Dunkel received 9,384,314
          affirmative votes and 509,752 negative votes,
          and each of James R. Torpey, Jr. and Peter Kenny
          received 9,388,664 affirmative votes and 505,402
          negative votes.  Proposal 2 was also duly
          approved.  With regard to proposal 2, there were
          9,391,614 votes cast in favor and 1,376,554
          votes cast against the proposal, with 5,400
          shares abstaining.

Item 5.   Other Information.

          None.


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

          (a)  Exhibits.

          There are no exhibits applicable to this Form
          10-QSB.

          (b)  Reports on Form 8-K.

          Listed below are reports on Form 8-K filed
          during the fiscal quarter ended August 31, 2001.

          None.




                      SIGNATURES

     In accordance with the requirements of the Exchange Act,
the Registrant caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.


                            EPOLIN, INC.
                           (Registrant)


Dated: October 12, 2001    By: /s/ Murray S. Cohen
                           Murray S. Cohen,
                           Chief Executive Officer



Dated: October 12, 2001    By: /s/ Murray S. Cohen
                           Murray S. Cohen,
                           Principal Financial
                           Officer