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 July 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 August 31, 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 -- July 31, 2000,
             and January 31, 2000.                                           3-4

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

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

             Notes to condensed consolidated financial statements --
             July 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>

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

Current Assets:
<S>                                                                      <C>              <C>
  Cash                                                                    $      45         $    107
  Accounts receivable                                                         3,149            2,173
  Inventories                                                                 2,232            1,716
  Deferred taxes                                                                368              368
  Other current assets                                                          269              149
                                                                       ------------------------------

Total current assets                                                          6,063            4,513



Machinery and equipment:
  Machinery and equipment                                                 $   2,901         $  2,838
  Less accumulated depreciation                                               2,063            1,932
                                                                       ------------------------------

Net machinery and equipment                                                     838              906



Other assets:
  Repair and maintenance inventories, less provision
    for obsolescence                                                             55               55
  Computer software, less amortization                                          608              674
  Excess of cost over net assets of business acquired,
    less amortization                                                         1,723            1,757
                                                                       ------------------------------

Total other assets                                                            2,386            2,486
                                                                       ------------------------------

Total assets                                                              $   9,287         $  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>
                                                                          July 31,       January 31,
                                                                             2000            2000
                                                                     --------------------------------
Liabilities and stockholders' equity                                     (Unaudited)        (Audited)

<S>                                                                      <C>              <C>
Current liabilities:
  Accounts payable                                                       $    1,313      $     1,043
  Deferred maintenance revenue                                                  778              751
  Accrued expenses                                                              551              398
  Billings in excess of cost and estimated earnings                           1,479              815
  Current portion of long-term debt                                             329              323
                                                                     --------------------------------

Total current liabilities                                                     4,450            3,330

Long-term debt, less current portion                                            830              879


Stockholders' equity:
 Series B cumulative  convertible preferred stock,
  $0.01 par value - authorized 100,000 shares;
  issued and outstanding 318 shares
  (liquidating value $164,764)                                                   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                                                   8,511            8,505
 Accumulated deficit                                                         (4,540)          (4,982)
                                                                     --------------------------------
                                                                              4,144            3,696
Less: Treasury stock                                                           (137)              -
                                                                     --------------------------------
Total stockholders' equity                                                    4,007            3,696
                                                                     --------------------------------

Total liabilities and stockholders' equity                               $    9,287       $    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          Six Months Ended
                                                            July 31                    July 31
                                                    -----------------------     -----------------------
                                                          2000        1999            2000        1999
                                                    ----------- -----------     ----------- -----------
<S>                                                   <C>         <C>             <C>         <C>
Revenues                                               $ 3,203     $ 2,114         $ 6,205     $ 4,664
Cost of Sales                                            2,203       1,489           4,269       3,297
                                                    ----------- -----------     ----------- -----------
Gross Margin                                             1,000         625           1,936       1,367

Selling expenses                                           208         217             422         396
Research and development                                   243         161             468         350
General and administrative expenses                        270         219             509         429
                                                    ----------- -----------     ----------- -----------
                                                           721         597           1,399       1,175
                                                    ----------- -----------     ----------- -----------
Operating income                                           279          28             537         192

Interest expense                                            34          17              66          37
                                                    ----------- -----------     ----------- -----------
Income before income tax                                   245          11             471         155

Provision for income taxes                                  15           2              29          11
                                                    ----------- -----------     ----------- -----------
Net income                                                 230           9             442         144

Preferred dividend requirement                               2           2               4           4
                                                    ----------- -----------     ----------- -----------
Income applicable to common shares                     $   228       $   7          $  438      $  140
                                                    =========== ===========     =========== ===========

Basic income per common share                           $ 0.50      $ 0.01          $ 0.96      $ 0.28
                                                    =========== ===========     =========== ===========
Diluted income per common share                         $ 0.48      $ 0.01          $ 0.93      $ 0.28
                                                    =========== ===========     =========== ===========
</TABLE>

         See notes to condensed consolidated financial statements.

                                       5
<PAGE>

                         Transnational Industries, Inc.

                        Condensed Consolidated Statements
                                  of Cash Flows

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

                                                              Three Months Ended
                                                                  July 31,
                                                            --------------------
                                                                 2000      1999
                                                            ---------- ---------
<S>                                                         <C>        <C>
       Net cash provided (used) by operating activities      $   183    $  (12)


       Net cash provided (used) by investing activities         (202)     (162)


       Net cash provided (used) for financing activities         (43)     (202)
                                                            ---------- ---------

       Increase (decrease) in cash                               (62)     (376)
       Cash at beginning of period                               107       455
                                                            ---------- ---------
            Cash at end of period                             $   45    $   79
                                                            ========== =========
</TABLE>


     See notes to condensed consolidated financial statements.



                                       6
<PAGE>

                         Transnational Industries, Inc.

              Notes to Condensed Consolidated Financial Statements

                                   (Unaudited)

                                  July 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 six
month periods ended July 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        Six Months Ended
                                                                          July 31                  July 31
                                                                  -----------------------  -----------------------
                                                                        2000        1999         2000        1999
                                                                  ----------- -----------  ----------- -----------
<S>                                                                  <C>         <C>          <C>         <C>
Numerator (same for basic and diluted):
Net income                                                            $  230        $  9        $ 442       $ 144
Preferred dividend requirement                                             2           2            4           4
                                                                  ----------- -----------  ----------- -----------

Net income available to common  stockholders                          $  228        $  7        $ 438       $ 140
                                                                  =========== ===========  =========== ===========

Denominator:
Weighted average shares outstanding for basic earnings per
share                                                                456,760     502,470      456,760     502,470
Dilutive effect of employee stock options                             15,006      12,338       13,859       6,332
                                                                  ----------- -----------  ----------- -----------
Weighted average shares outstanding and assumed conversions
for diluted earnings per share                                       471,766     514,808      470,619     508,802
                                                                  =========== ===========  =========== ===========

Basic income per share                                                 $ .50       $ .01        $ .96       $ .28
                                                                  =========== ===========  =========== ===========
Diluted income per share                                               $ .48       $ .01        $ .93       $ .28
                                                                  =========== ===========  =========== ===========
</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 July 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 second  quarter  and first six months of the fiscal  year ended
January  31, 2001  (Fiscal  2001) were  $3,203,000  and  $6,205,000  compared to
$2,114,000  and  $4,664,000 in the  comparable  periods of the fiscal year ended
January 31, 2000  (Fiscal  2000).  The  increases  of  $1,089,000  (52%) for the
quarter and  $1,541,000  (33%) for the six-month  period were due to higher dome
and ImmersaVision revenues.  ImmersaVision revenues were $808,000 and $1,389,000
in the first  quarter and first six months of Fiscal 2001,  compared to $286,000
and  $760,000  in  the  first   quarter  and  first  six  months   Fiscal  2000,
respectively. Dome revenues were $1,622,000 and $3,348,000 in the second quarter
and first six months of Fiscal 2001 compared to $1,015,000 and $2,351,000 in the
comparable  periods of Fiscal 2000,  an increase of $607,000  (60%) and $997,000
(42%) for the quarter and the six-month  period,  respectively.  The increase in
dome  revenues  was   attributable   to  higher  revenue  from  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 $773,000 and  $1,468,000  in the second  quarter and
first six months of Fiscal  2001  compared  to $813,000  and  $1,553,000  in the
comparable  periods of Fiscal  2000,  a decrease  of $40,000 and $85,000 for the
quarter and the  six-month  period,  respectively.  The decrease in  planetarium
revenues was  attributable  to lower  revenues  from  maintenance  and parts and
peripheral  equipment  previously  recorded as part of the  optical  planetarium
systems.  Much of the peripheral equipment sold with the new planetarium systems
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 $285,000 and $598,000 in
the second  quarter and first six months of Fiscal 2001 compared to $330,000 and
$628,000 in the  comparable  periods of Fiscal 2000, a decrease of $45,000 (14%)
and $30,000 (5%),  respectively.  The decrease 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 six months for the
remainder of Fiscal 2001 as work continues on the order backlog.  The backlog of
unearned  revenue as of July 31, 2000 was  approximately  $10,600,000,  of which
approximately  80% is  scheduled  to be earned over the next twelve  months.  In
addition,  the Company  has booked or is in  negotiation  to book  approximately
$2,800,000 of new orders,  most of which is expected to be completed  within 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 may cause revenue levels to fluctuate in interim periods.

Gross  margins  improved  to  31.2%  in each of the  second  quarter  and  first
six-month  periods of Fiscal 2001 compared to 29.6% and 29.3% in the  comparable
periods of Fiscal 2000. The gross margin  improvement  was  attributable  to the
higher  dome sales with  strong  margins  which  improved  from  volume  related
efficiencies.  Planetarium and ImmersaVision gross margins continued to lag dome
margins.  Selling  expenses  decreased  $9,000  (4%) in the second  quarter  and
increased $26,000 in the first six months of Fiscal 2001 compared to the


                                       9
<PAGE>

comparable  periods of Fiscal 2000.  The decrease for the quarter was due to the
timing of sales related travel. The increase for the six-month period was due to
staffing additions and organizational  changes.  Selling expenses in fiscal 2001
are  expected  to be at current or  increasing  levels as  marketing  efforts on
ImmersaVision continue to demand significant resource commitments.  Research and
development  expenses  increased  $82,000 (51%) and $118,000 (34%) in the second
quarter and first six 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  $51,000 (23%) and $80,000  (19%) in the second  quarter and first six
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 $34,000 and $66,000 in the second quarter and
first six  months  of  Fiscal  2001  compared  to  $17,000  and  $37,000  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 $34,000 and  $66,000  reported in the first  quarter and first six months of
Fiscal 2001 consisted of $24,000 and $44,000 paid on bank debt  agreements  plus
$10,000 and $22,000 paid on capital lease  obligations.  The $17,000 and $37,000
reported in the first  quarter and first six months of Fiscal 2000  consisted of
$13,000 and $29,000 paid on bank debt agreements plus $5,000 and $11,000 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
$29,000 in the second  quarter and first six months of Fiscal  2001  compared to
$2,000 and $11,000 in the comparable  periods of Fiscal 2000. As a result of the
above,  the Company  reported  net income of $230,000 and $442,000 in the second
quarter and first six months of Fiscal 2001  compared to of $9,000 and  $144,000
for the comparable periods of Fiscal 2000.


Liquidity and Capital Resources

Net cash provided by operating  activities  was $183,000 in the first six months
of Fiscal 2001, compared to $12,000 used in the first six months of Fiscal 2000.
The $183,000 of net cash provided by operating activities in first six months of
Fiscal 2001 was produced by adding  $259,000 of non-cash  charges to $442,000 of
net income and subtracting  $518,000 of cash used by changes in operating assets
and liabilities.  By way of comparison,  in the first six months of Fiscal 2000,
the $12,000 of net cash used by operating  activities  resulted from the effects
of $392,000 of cash used from changes in operating assets and liabilities  which
offset  $144,000 of net income and  $236,000 of non-cash  charges to net income.
The change in operating  assets from time to time is primarily  attributable  to
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 $183,000  provided by  operations in the first six months of Fiscal 2001 was
offset by $202,000  used by financing  activities  and $43,000 used by investing
activities. In addition to the $12,000 used by operations in first six months of
Fiscal 2000,  financing  activities used $162,000 and investing  activities used
$202,000.  The net result was a $62,000  decrease  in cash  balances  during the


                                       10
<PAGE>

first six months of Fiscal 2001  compared  to a decrease of $376,000  during the
first six months of Fiscal 2000.

Financing  activities  in the first six months of Fiscal 2001  consisted  of net
proceeds  of  $115,000  from the  revolving  credit  note  offset by payments of
$74,000 on capital leases and monthly  principal  payments on the bank term note
of  $84,000.  Financing  activities  in the  first six  months  of  Fiscal  2000
consisted of net payments of $75,000 on the revolving  credit note,  payments of
$41,000 on capital leases and monthly  principal  payments on the bank term note
of $86,000.

Total  debt at July 31,  2000 was  $1,159,000,  a decrease  of $43,000  from the
$1,202,000 at January 31, 2000. In summary,  the decrease resulted from $115,000
of net  proceeds on the  revolving  credit  note offset by $84,000 of  scheduled
payments  applied to term debt and $74,000 of payments  applied to capital lease
obligations.

Investing activities in the first six months of Fiscal 2001 consisted of $65,000
of various machinery and equipment  additions and the purchase of treasury stock
at a cost of $137,000.  The $162,000 invested in capital assets in the first six
months of Fiscal 2000  consisted of $94,000 in computer  software and $68,000 of
various machinery and equipment additions.

At July 31,  2000 there was a  $470,000  balance on the  revolving  credit  note
compared  to $355,000 at January 31,  2000.  This  resulted in unused  borrowing
capacity of $630,000 under the amended  $1,100,000  borrowing  limit at July 31,
2000  compared to $445,000  under the $800,000  limit at January 31, 2000.  Cash
balances of $45,000 provided  additional  liquidity at July 31, 2000 compared to
$107,000 at January 31, 2000. The next source of liquidity, accounts receivable,
increased to  $3,149,000  at July 31, 2000 compared to $2,173,000 at January 31,
2000. This resulted in a $1,099,000  increase in liquidity  available from cash,
borrowing capacity and accounts  receivable at July 31, 2000 compared to January
31,  2000.  Although  fluctuations  in the  progress  billings of  contracts  in
progress  pressured  liquidity  through  the  first six  months of Fiscal  2001,
contract funding  recovered as billings exceeded revenue recorded by $224,000 at
July 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.

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)


                                       11
<PAGE>

"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

10.1     Letter  Agreement to Amend Revolving Line of Credit dated July 7, 2000,
         between First Keystone Federal Savings Bank,  Transnational  Industries
         Inc. and Spitz Inc.

10.2     Line of Credit Modification Agreement dated July 7, 2000, between First
         Keystone Federal Savings Bank,  Transnational Industries Inc. and Spitz
         Inc.

10.3     Renewal  Line of Credit  Note  dated  July 7,  2000,  of  Transnational
         Industries Inc. and Spitz Inc. to First Keystone Federal Savings Bank.


27       Financial Data Schedule

(b) The  Registrant did not file any reports on Form 8-K during the three months
ended July 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:  September 14, 2000                Paul L. Dailey, Jr.
                                               Secretary-Treasurer

                                               Signing on Behalf of Registrant
                                               and as Chief Financial Officer



                                       13