U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

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

              For the quarterly period ended October 31, 2000

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

              For the transition period from to .

                  Commission File Number 0 - 14835

                         TRANSNATIONAL INDUSTRIES, INC.
                     (Exact Name of small business issuer as
                          specified in its charter)


            Delaware                                        22-2328806
  (State or Other Jurisdiction of                        (I.R.S. Employer
   Incorporation or Organization)                      Identification Number)



                               Post Office Box 198
                                  U.S. Route 1
                         Chadds Ford, Pennsylvania 19317
                    (Address of principal executive offices)

                                 (610) 459-5200
                           (Issuer's telephone number)

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  (which is the period
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
stock, as of the latest practicable date.

                          Common stock, $0.20 par value
                    Outstanding at November 30, 2000: 456,760

Transitional Small Business Disclosure Format (check one):
YES           NO    X

<PAGE>


                         TRANSNATIONAL INDUSTRIES, INC.

                                   INDEX                                    PAGE


Part I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

           Condensed consolidated balance sheets -- October 31, 2000,
           and January 31, 2000.                                            3-4

           Condensed  consolidated  statements  of  operations -- Three
           months ended October 31, 2000 and 1999; nine months ended
           October 31, 2000 and 1999.                                         5

           Condensed consolidated statements of cash flows -- Nine
           months ended October 31, 2000 and 1999.                            6

           Notes to condensed consolidated financial statements --
           October 31, 2000.                                                7-8

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations                             9-12


Part II.   OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K                                  13


SIGNATURES                                                                   13


                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements


                         Transnational Industries, Inc.

                      Condensed Consolidated Balance Sheets

                             (Dollars in thousands)
<TABLE>
<CAPTION>

                                                                       October 31,       January 31,
                                                                           2000              2000
                                                                     --------------------------------
Assets                                                                  (Unaudited)        (Audited)

Current Assets:
<S>                                                                      <C>              <C>
  Cash                                                                    $      23         $    107
  Accounts receivable                                                         2,676            2,173
  Inventories                                                                 2,224            1,716
  Deferred taxes                                                                368              368
  Other current assets                                                          338              149
                                                                       ------------------------------

Total current assets                                                          5,629            4,513



Machinery and equipment:
  Machinery and equipment                                                 $   3,068         $  2,838
  Less accumulated depreciation                                               2,142            1,932
                                                                       ------------------------------

Net machinery and equipment                                                     926              906



Other assets:
  Repair and maintenance inventories, less provision
    for obsolescence                                                             55               55
  Computer software, less amortization                                          565              674
  Excess of cost over net assets of business acquired,
    less amortization                                                         1,706            1,757
                                                                       ------------------------------

Total other assets                                                            2,326            2,486
                                                                       ------------------------------

Total assets                                                              $   8,881         $  7,905
                                                                       ==============================
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>

                         Transnational Industries, Inc.

                Condensed Consolidated Balance Sheets (continued)

                             (Dollars in thousands)

 <TABLE>
<CAPTION>
                                                                        October 31,      January 31,
                                                                             2000            2000
                                                                     --------------------------------
Liabilities and stockholders' equity                                     (Unaudited)        (Audited)

<S>                                                                      <C>              <C>
Current liabilities:
  Accounts payable                                                       $    1,281      $     1,043
  Deferred maintenance revenue                                                  701              751
  Accrued expenses                                                              490              398
  Billings in excess of cost and estimated earnings                           1,461              815
  Current portion of long-term debt                                             377              323
                                                                     --------------------------------

Total current liabilities                                                     4,310            3,330

Long-term debt, less current portion                                            341              879


Stockholders' equity:
 Series B cumulative  convertible preferred stock,
  $0.01 par value - authorized 100,000 shares;
  issued and outstanding 318 shares
  (liquidating value $166,950)                                                   73               73
 Common stock, $0.20 par value -authorized
  1,000,000 shares; issued and outstanding 456,760
  (excluding 45,710 shares held in treasury)                                    100              100
 Additional paid-in capital                                                   8,514            8,505
 Accumulated deficit                                                         (4,320)          (4,982)
                                                                     --------------------------------
                                                                              4,367            3,696
Less: Treasury stock                                                           (137)              -
                                                                     --------------------------------
Total stockholders' equity                                                    4,230            3,696
                                                                     --------------------------------

Total liabilities and stockholders' equity                               $    8,881       $    7,905
                                                                     ================================
</TABLE>

See notes to condensed consolidated financial statements.


                                       4
<PAGE>

                         Transnational Industries, Inc.

                 Condensed Consolidated Statements of Operations

                                   (Unaudited)
                     (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                    Three Months Ended                      Nine Months Ended
                                                       October 31,                             October 31,
                                               -----------------------------          ------------------------------
                                                        2000           1999                      2000          1999
                                               -------------- --------------          ---------------- -------------
<S>                                                  <C>            <C>                       <C>           <C>
Revenues                                             $ 3,329        $ 2,481                   $ 9,534       $ 7,145
Cost of Sales                                          2,313          1,911                     6,582         5,208
                                               -------------- --------------          ---------------- -------------
Gross Margin                                           1,016            570                     2,952         1,937

Selling expenses                                         231            203                       653           599
Research and development                                 275            117                       743           467
General and administrative expenses                      247            207                       756           636
                                               -------------- --------------          ---------------- -------------
                                                         753            527                     2,152         1,702
                                               -------------- --------------          ---------------- -------------
Operating income                                         263             43                       800           235

Interest expense                                          28             21                        94            58
                                               -------------- --------------          ---------------- -------------
Income before income tax                                 235             22                       706           177

Provision for income taxes                                15              3                        44            14
                                               -------------- --------------          ---------------- -------------
Net income                                               220             19                       662           163

Preferred dividend requirement                             2              2                         6             6
                                               -------------- --------------          ---------------- -------------
Income applicable to common shares                   $   218         $   17                    $  656        $  157
                                               ============== ==============          ================ =============

Basic income per common share                         $ 0.48         $ 0.03                    $ 1.44        $ 0.31
                                               ============== ==============          ================ =============
Diluted income per common share                       $ 0.45         $ 0.03                    $ 1.38        $ 0.31
                                               ============== ==============          ================ =============

</TABLE>

         See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                         Transnational Industries, Inc.

                        Condensed Consolidated Statements
                                  of Cash Flows

                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>

                                                              Nine Months Ended
                                                                 October 31,
                                                            --------------------
                                                                 2000      1999
                                                            ---------- ---------
<S>                                                         <C>        <C>
       Net cash provided (used) by operating activities      $   769    $  220


       Net cash provided (used) by investing activities         (242)     (370)


       Net cash provided (used) for financing activities        (611)     (215)
                                                            ---------- ---------

       Increase (decrease) in cash                               (84)     (365)
       Cash at beginning of period                               107       455
                                                            ---------- ---------
            Cash at end of period                             $   23    $   90
                                                            ========== =========
</TABLE>


     See notes to condensed consolidated financial statements.

                                       6
<PAGE>


                         Transnational Industries, Inc.

              Notes to Condensed Consolidated Financial Statements

                                   (Unaudited)

                                October 31, 2000

Note A -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instructions to Form 10-QSB and Regulation
S-B.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements.  In the opinion of management,  all adjustments considered necessary
for a fair presentation have been included. All such adjustments are of a normal
recurring nature.  Operating results for the three-month and nine-month  periods
ended  October 31, 2000,  are not  necessarily  indicative  of the results to be
expected for the fiscal year. For further information, refer to the consolidated
financial  statements and footnotes thereto for the year ended January 31, 2000,
contained in the  Registrant's  Annual  Report on Form 10-KSB for the year ended
January 31, 2000.

Note B - EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share (dollars in thousands except per share data):

<TABLE>
<CAPTION>
                                                                      Three Months Ended             Nine Months Ended
                                                                         October 31,                    October 31,
                                                                  ---------------------------    --------------------------
                                                                           2000         1999            2000          1999
                                                                  -------------- ------------    ------------ -------------
<S>                                                                     <C>          <C>             <C>           <C>
Numerator (same for basic and dilutive):
Net income                                                                $ 220         $ 19           $ 662         $ 163
Preferred dividend requirement                                                2            2               6             6
                                                                   -------------- ------------    ------------ -------------
Net income available to common  stockholders                              $ 218         $ 17           $ 656         $ 157
                                                                  ============== ============    ============ =============

Denominator:
Weighted average shares outstanding for basic earnings per
share                                                                   456,760      502,470         456,760       502,470
Dilutive effect of employee stock options                                29,273       11,070          18,997         7,911
                                                                  -------------- ------------    ------------ -------------
Weighted average shares outstanding and assumed conversions
for dilutive earnings per share                                         486,033      513,540         475,757       510,381
                                                                  ============== ============    ============ =============

Basic income per share                                                    $ .48        $ .03          $ 1.44         $ .31
                                                                  ============== ============    ============ =============
Dilutive income per share                                                 $ .45        $ .03          $ 1.38         $ .31
                                                                  ============== ============    ============ =============
</TABLE>

                                       7
<PAGE>


Common shares  potentially  issuable under the contractual  conversion rights of
the Preferred B shares would have an  antidilutive  effect on earnings per share
and therefore have not been included in the above computations. Weighted average
common shares issuable under the contractual  conversion rights of the Preferred
B shares amounted to 1,871 in each of periods ended October 31, 2000 and 1999.


Note C - Debt

On July 7, 2000 the Revolving Credit Agreement  originally  executed on June 12,
1997 was amended.  Under the amendment the  borrowing  limit was increased  from
$800,000 to  $1,100,000,  the rate of interest  was lowered  from prime plus two
percent to prime plus  one-half  percent and the maturity date was extended from
July 1, 2002 to July 7, 2005.  The security and all other terms of the bank debt
agreements remain unchanged.

Note D - Treasury Stock

Treasury  Stock is shown at cost and consists of 45,710  shares of common stock.
The shares were acquired in February 2000 for cash of $3 per share or a total of
$137,130.


                                       8
<PAGE>


         Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OFOPERATIONS

Results of operations

Revenues  in the third  quarter  and first nine  months of the fiscal year ended
January  31, 2001  (Fiscal  2001) were  $3,329,000  and  $9,534,000  compared to
$2,481,000  and  $7,145,000 in the  comparable  periods of the fiscal year ended
January 31, 2000 (Fiscal  2000).  The increase of $848,000 (34%) for the quarter
and $2,389,000  (33%) for the nine-month  period was due to higher revenues from
all of the Company's products, but mostly ImmersaVision.  ImmersaVision revenues
were  $1,251,000  and  $2,640,000  in the third quarter and first nine months of
Fiscal 2001,  compared to $534,000 and $1,294,000 in the third quarter and first
nine months of Fiscal 2000,  an increase of $717,000  (134%) for the quarter and
$1,346,000  (104%) for the  nine-month  period.  The  increase in  ImmersaVision
revenue in Fiscal 2001 was attributable to work completed on seven ImmersaVision
orders on the backlog. The ImmersaVision products are often sold with a dome and
optical planetarium  system,  which generates more sales opportunities for domes
and optical planetarium systems. Dome revenues were $1,233,000 and $4,581,000 in
the third  quarter and first nine months of Fiscal 2001  compared to  $1,213,000
and $3,564,000 in the comparable  periods of Fiscal 2000, an increase of $20,000
(2%) for the  quarter  and  $1,017,000  (29%)  for the  nine-month  period.  The
increase in dome revenues for the quarter was attributable to the sale of a dome
for a special effects  attraction for a casino. The increase in dome revenue for
the nine  month  period  was  attributable  to the  casino  dome as well as ride
simulation  attractions,  planetarium  domes,  and the sale of a special theater
dome  to a  major  European  automobile  maker  for  use  in a  visitor  center.
Otherwise,  dome revenues from film  theaters and military  training  simulators
decreased.  Planetarium  revenues  were  $845,000  and  $2,313,000  in the third
quarter and first nine months of Fiscal 2001 compared to $733,000 and $2,286,000
in the comparable  periods of Fiscal 2000, an increase of $112,000 (15%) for the
quarter  and  $27,000  (1%)  for the  nine-month  period.  Planetarium  revenues
attributable  to the sale of new and  refurbished  optical systems were $463,000
and  $1,333,000  in the third  quarter  and  first  nine  months of Fiscal  2001
compared to $400,000 and $1,325,000 in the comparable periods of Fiscal 2000, an
increase of $63,000 (16%) and $8,000 (1%),  respectively.  The number of optical
planetarium  systems  sold has  increased  due to  ImmersaVision;  however,  the
average  sales  price is  lower  than a stand  alone  system  since  much of the
peripheral  equipment  has been enhanced and expanded for  integration  into the
ImmersaVision  systems  and is now  recorded  as  part of  ImmersaVision  sales.
Planetarium  revenues  attributable  to the sale of  maintenance  and parts were
$382,000 and $980,000 in the third  quarter and first nine months of Fiscal 2001
compared to $333,000 and $961,000 in the  comparable  periods of Fiscal 2000, an
increase  of $49,000  (15%) and  $19,000  (2%),  respectively.  The  increase in
maintenance  and  parts  revenues  was  due  to the  timing  of  performance  on
preventive maintenance agreements.

Revenues  are expected to continue at the level of the first nine months for the
remainder  of Fiscal 2001 and into Fiscal  2002 as work  continues  on the order
backlog.  The backlog of unearned revenue as of July 31, 2000 was  approximately
$11,900,000,  of which approximately 80% is scheduled to be earned over the next
twelve months. While revenues are expected to continue at higher than historical
levels over the next year,  uncertainty  in the timing and delivery of new sales


                                       9
<PAGE>

may cause revenue levels to fluctuate in interim periods.

Gross  margins  improved to 30.5% and 31.0% in the third  quarter and first nine
months of Fiscal 2001 compared to 23.0% and 27.1% in the  comparable  periods of
Fiscal 2000. The gross margin  improvement  was  attributable to dome sales with
strong margins which improved from volume related efficiencies.  Planetarium and
ImmersaVision  gross  margins  continued to lag dome margins but showed signs of
improvement due to experience and volume related efficiencies.  Selling expenses
increased  $28,000  (14%) and $54,000  (9%) in the third  quarter and first nine
months of Fiscal 2001 compared to the  comparable  periods of Fiscal 2000 due to
staffing additions and higher use of engineering  resources for selling efforts.
Selling  expenses  in  Fiscal  2001 are  expected  to  continue  at  current  or
increasing  levels as  marketing  efforts on  ImmersaVision  continue  to demand
significant  resource  commitments.  Research and development expenses increased
$158,000 (135%) and $276,000 (59%) in the third quarter and first nine months of
Fiscal 2001 compared to the  comparable  periods of Fiscal 2000. The increase in
research and development  expenses was due to modifications  and improvements of
ImmersaVision products to fulfill customer requirements,  the continued creation
of  proprietary   programming   tools  for  software  content   development  for
ImmersaVision,  and improvements to optical planetarium  products.  Research and
development  efforts are  expected to  continue at  increasing  levels in future
periods.  General  and  administrative  expenses  increased  $40,000  (19%)  and
$120,000  (19%) in the third  quarter  and  first  nine  months  of Fiscal  2001
compared to the  comparable  periods of Fiscal 2000. The increase in general and
administrative expenses was due primarily to costs related to information system
improvements and strategic planning.

Net interest  expense  amounted to $28,000 and $94,000 in the third  quarter and
first  nine  months of Fiscal  2001  compared  to  $21,000  and  $58,000  in the
comparable  periods  of  Fiscal  2000.  The  increase  in  interest  expense  is
attributable  to new  capital  leases and higher use of the bank line of credit.
The $28,000 and $94,000  reported in the first  quarter and first nine months of
Fiscal 2000 consisted of $13,000 and $57,000 paid on bank debt  agreements  plus
$15,000 and $37,000 paid on capital lease  obligations.  The $21,000 and $58,000
reported in the first quarter and first nine months of Fiscal 2000  consisted of
$12,000 and $40,000 paid on bank debt  agreements  plus $10,000 and $21,000 paid
on capital  lease  obligations,  offset by $1,000 and $3,000 of interest  income
earned on cash invested. The Company continues to pay no federal income taxes as
federal  taxable  income is  offset by the  utilization  of net  operating  loss
carryforwards.  The  provision  for state income  taxes  amounted to $15,000 and
$44,000 in the third  quarter and first nine  months of Fiscal 2001  compared to
$3,000 and $14,000 in the comparable periods of Fiscal 2000.

As a result of the  above,  the  Company  reported  net income of  $220,000  and
$662,000 in the third  quarter and first nine months of Fiscal 2001  compared to
$19,000 and $163,000 in comparable periods of Fiscal 2000.

Liquidity and Capital Resources

Net cash provided by operating  activities was $769,000 in the first nine months
of Fiscal 2001 compared to $220,000  provided in the first nine months of Fiscal
2000.  The $769,000  provided by  operations  in the first nine months of Fiscal
2001 consisted of $1,073,000  provided from earnings  offset by $304,000 used by
changes in operating assets and liabilities. The $220,000 provided by operations
in the first nine months of Fiscal 2000  consisted  of  $525,000  provided  from
earnings offset by $305,000 used by changes in operating assets and liabilities.
The change in operating  assets from time to time is primarily  attributable  to


                                       10
<PAGE>

progress payment terms on particular customer contracts, and the Company expects
changes in  operating  assets from period to period to remain both  material and
variable.

The $769,000  provided by operations in the first nine months of Fiscal 2001 was
offset by $611,000 used by financing  activities  and $242,000 used by investing
activities.  The  $220,000  provided by  operations  in the first nine months of
Fiscal 2000 was offset by $215,000  used by  financing  activities  and $370,000
used by  investing  activities.  The net result was an $84,000  decrease in cash
balances  during the first nine months of Fiscal 2001  compared to a decrease of
$365,000 during the first nine months of Fiscal 2000.

Financing  activities  in the first nine months of Fiscal 2001  consisted of net
payments of  $355,000  on the  revolving  credit  note,  payments of $128,000 on
capital leases and monthly principal payments on the bank term note of $128,000.
Financing  activities  in the first nine months of Fiscal 2000  consisted of net
payments of $25,000 on the revolving credit note, payments of $76,000 on capital
leases and monthly principal payments on the bank term note of $114,000.

Total debt at October 31,  2000 was  $718,000,  a decrease of $484,000  from the
$1,202,000  at January 31, 2000.  The  decrease  resulted  from  $355,000 of net
payments on the revolving credit note, $128,000 of scheduled payments applied to
term debt and $128,000 of payments applied to capital lease  obligations  offset
by a new capital lease obligation of $127,000.

Investing  activities  in the first  nine  months of Fiscal  2001  consisted  of
$105,000  of various  machinery  and  equipment  additions  and the  purchase of
treasury stock at a cost of $137,000. In addition, $127,000 of various machinery
and  equipment  additions  were  financed  through a capital  lease in the third
quarter of Fiscal  2001.  The $370,000  invested in capital  assets in the first
nine months of Fiscal 2000  consisted  of  $253,000  in  computer  software  and
$117,000 of various machinery and equipment additions.

At October 31, 2000 there was no balance on the  revolving  credit note compared
to $355,000 at January 31, 2000. This resulted in unused  borrowing  capacity of
$1,100,000  under the amended  borrowing  limit at October 31, 2000  compared to
$445,000 under the $800,000 limit at January 31, 2000.  Cash balances of $23,000
provided  additional  liquidity  at October  31,  2000  compared  to $107,000 at
January 31, 2000. The next source of liquidity,  accounts receivable,  increased
to  $2,676,000  at October 31, 2000  compared to $2,173,000 at January 31, 2000.
This  resulted  in a  $1,074,000  increase  in  liquidity  available  from cash,
borrowing  capacity  and  accounts  receivable  at October 31, 2000  compared to
January 31, 2000. Although fluctuations in the progress billings of contracts in
progress  pressured  liquidity  through  the first nine  months of Fiscal  2001,
contract funding  recovered as billings exceeded revenue recorded by $265,000 at
October 31, 2000  compared to the $54,000 at January 31,  2000.  The increase of
the revolving  credit limit has provided some relief to the liquidity  pressures
from  customer  contracts.  Liquidity  pressure  is  expected to continue as the
payment terms on many large  contracts  require  performance  milestones and, as
expected, fewer contracts are providing advance payments from customers.

The modified debt  agreements  combined  with current  assets and cash flow from
operations,  assuming reasonably  consistent revenue levels,  should provide the
Company with adequate liquidity for the foreseeable future.



                                       11
<PAGE>

Forward-Looking Information

The statements in this  Quarterly  Report on Form 10-QSB that are not statements
of historical fact constitute "forward-looking statements." Said forward-looking
statements  involve risks and uncertainties  which may cause the actual results,
performance or achievements  of the Company to be materially  different from any
future results, performances or achievements,  expressly predicted or implied by
such forward-looking statements. These forward-looking statements are identified
by  their  use of  forms of such  terms  and  phrases  as  (without  limitation)
"expects," "intends," "goals," "estimates,"  "projects," "plans," "anticipates,"
"should," "future," "believes," and "scheduled."

The  important  factors  which  may cause  actual  results  to  differ  from the
forward-looking statements contained herein include, but are not limited to, the
following:  general economic and business  conditions;  competition;  success of
operating initiatives; operating costs; advertising and promotional efforts; the
existence  or absence of adverse  publicity;  changes in  business  strategy  or
development plans; the ability to retain key management; availability, terms and
deployment   of  capital;   business   abilities   and  judgment  of  personnel;
availability  of  qualified   personnel;   labor  and  employee  benefit  costs;
availability and costs of raw materials and supplies; and changes in, or failure
to comply with, government  regulations.  Although the Company believes that the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-looking statements included in this filing will
prove to be accurate. In light of the significant  uncertainties inherent in the
forward-looking  statements  included herein,  the inclusion of such information
should not be regarded as a  representation  by the Company or any other  person
that the objectives and expectations of the Company will be achieved.

                                       12
<PAGE>


                              II. OTHER INFORMATION

6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

Exhibit
  No.   Description of Document

  27    Financial Data Schedules



(b) The  Registrant did not file any reports on Form 8-K during the three months
ended October 31, 2000.

                                 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.

                                               TRANSNATIONAL INDUSTRIES, INC.


                                               /s/   Paul L. Dailey, Jr.
                                               -------------------------
      Date:  December 14, 2000                 Paul L. Dailey, Jr.
                                               Secretary-Treasurer

                                               Signing on Behalf of Registrant
                                               and as Chief Financial Officer