UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended December 31, 2008

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


                         Commission File Number 0-16106


                                Clearfield, Inc.
             (Exact name of Registrant as specified in its charter)


          Minnesota                                     41-1347235
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


          5480 Nathan Lane North, Suite 120, Plymouth, Minnesota 55442
              (Address of principal executive offices and zip code)

                                 (763) 476-6866
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for 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 |_|

Indicate by check mark whether the registrant is a "large accelerated filer", an
"accelerated filer", a "non-accelerated filer" or a "smaller reporting company"
(as defined in Rule 12b-2 of the Exchange Act).


Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |_|
Smaller Reporting Company |X|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                     YES |_|    NO |X|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                      Class:                    Outstanding at December 31, 2008
             Common stock, par value $.01                 11,938,131

                                       1
<PAGE>

                                CLEARFIELD, INC.
                                    FORM 10-Q
                                TABLE OF CONTENTS


PART I.  FINANCIAL INFORMATION.................................................3
   ITEM 1.  FINANCIAL STATEMENTS UNAUDITED.....................................3
   CONSOLIDATED BALANCE SHEETS.................................................3
   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS.............................4
   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY.............................5
   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS.............................6
   NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS........................7
   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
   AND RESULTS OF OPERATIONS..................................................11
   ITEM 3. QUANTITAVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK..........14
   ITEM 4. CONTROLS AND PROCEDURES............................................14
PART II. OTHER INFORMATION....................................................15
   ITEM 1. LEGAL PROCEEDINGS..................................................15
   ITEM 1A.RISK FACTORS.......................................................15
   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS........15
   ITEM 3. DEFAULTS UPON SENIOR SECURITIES....................................15
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................15
   ITEM 5. OTHER INFORMATION..................................................15
   ITEM 6. EXHIBITS...........................................................15
SIGNATURES....................................................................15



                                        2
<PAGE>
<TABLE>
<CAPTION>
<S>                                                          <C>                <C>
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS UNAUDITED

                                CLEARFIELD, INC.
                           CONSOLIDATED BALANCE SHEETS
                                    UNAUDITED


                                                                December 31,      September 30,
                                                                   2008              2008
                                                             -----------------  -----------------
                                     Assets
Current Assets
   Cash and cash equivalents                                 $       7,609,966  $       4,333,709
   Accounts receivable, net                                          1,750,593          2,533,447
   Inventories                                                       1,900,233          2,088,769
   Other current assets                                                182,632            115,344
                                                             -----------------  -----------------
        Total  current assets                                       11,443,424          9,071,269

Property plant and equipment, net                                    1,531,825          1,604,202

Other Assets
   Available for sale securities                                             -          3,036,000
   Goodwill                                                          2,570,511          2,570,511
   Other                                                               288,032            284,309
   Notes receivable                                                    422,926            432,846
                                                             -----------------  -----------------
        Total other assets                                           3,281,469          6,323,666
                                                             -----------------  -----------------
                Total Assets                                 $      16,256,718  $      16,999,137
                                                             =================  =================

                      Liabilities and Shareholders' Equity
Current Liabilities
   Current maturities of long term debt                      $          63,448  $          62,126
   Accounts payable                                                    925,005          1,849,633
   Accrued compensation                                                721,059            903,276
   Accrued expenses                                                    148,309            301,859
                                                             -----------------  -----------------
        Total  current liabilities                                   1,857,821          3,116,894

   Long term debt, net of current maturities                            16,715             33,081
   Deferred rent                                                        89,700             89,641
   Deferred income taxes                                               189,259            166,904
                                                             -----------------  -----------------
        Total Liabilities                                            2,153,495          3,406,520

Shareholders' Equity
   Undesignated shares, 4,999,500 authorized shares: no
   shares issued and outstanding                                             -                  -
   Preferred stock, $.01 par value;  500 shares; no shares
   outstanding                                                               -                  -
   Common stock, authorized 50,000,000, $ .01 par value;
   11,938,131 shares issued and outstanding at December 31,
   2008 and September 30, 2008                                         119,381            119,381
   Additional paid-in capital                                       52,195,338         52,166,219
   Accumulated deficit                                             (38,211,496)       (38,428,983)
   Accumulated other comprehensive loss                                      -           (264,000)
                                                             -----------------  -----------------
   Total shareholders' equity                                       14,103,223         13,592,617
                                                             -----------------  -----------------
        Total Liabilities and Shareholders' Equity           $      16,256,718  $      16,999,137
                                                             =================  =================
</TABLE>
      SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                       3
<PAGE>

                                CLEARFIELD, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                    UNAUDITED

                                                    Three Months Ended
                                                       December 31,
                                                 2008                2007
                                            -----------------  -----------------

Revenues                                    $       5,933,287  $      4,697,440

Cost of sales                                       3,919,079         3,247,969
                                            -----------------  -----------------

        Gross profit                                2,014,208         1,449,471

Operating expenses
   Selling, general and administrative              1,804,978         1,422,459
                                            -----------------  -----------------

        Income from operations                        209,230            27,012

Interest income                                        31,750            87,806
Interest expense                                       (1,906)           (3,136)
Other income                                           13,644            13,417
                                            -----------------  -----------------
                                                       43,488            98,087
                                            -----------------  -----------------
   Income before income taxes                         252,718           125,099

Income tax expense                                     35,231            27,170
                                            -----------------  -----------------

   Net income from continuing operations              217,487            97,929
Net income from discontinued operations                     -           342,390
Net loss on disposal of assets of
 discontinued operations                                    -           (44,951)
                                            -----------------  -----------------
   Total income from discontinued operations                -           297,439
                                            -----------------  -----------------
Net income                                  $         217,487  $        395,368
                                            =================  =================

Net income per share:
   Continuing operations                                $0.02             $0.01
   Discontinued operations                              $0.00             $0.02
                                            -----------------  -----------------
   Basic and diluted                                    $0.02             $0.03
                                            =================  =================

Weighted average shares outstanding:
                                            -----------------  -----------------
   Basic and diluted                               11,938,131        11,872,331
                                            =================  =================

      SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                       4
<PAGE>
                                CLEARFIELD, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                    UNAUDITED

                      Three Months Ended December 31, 2008
<TABLE>
<CAPTION>
<S>                   <C> <C>        <C>         <C>           <C>           <C>           <C>           <C>
                                                                                           Accumulated
                                                                Additional                   other         Total
                                                                 paid-in     Accumulated   comprehensive shareholders
                                      Shares        Amount       Capital       deficit        loss         equity
                                   ------------  ------------  ------------  ------------  ------------  ------------
Balance at September  30, 2008       11,938,131  $    119,381  $ 52,166,219  $(38,428,983) $   (264,000) $ 13,592,617
   Stock based compensation expense           -             -        29,119             -             -        29,119
   Other comprehensive loss                   -             -             -             -       264,000       264,000
   Net income                                 -             -             -       217,487             -       217,487
                                                                                                         ------------
   Comprehensive income                       -             -             -             -             -       481,487
                                   ------------  ------------  ------------  ------------  ------------  ------------
Balance at December  31, 2008        11,938,131  $    119,381  $ 52,195,338  $(38,211,496) $          -  $ 14,103,223
                                   ============  ============  ============  ============  ============  ============
</TABLE>

      SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                       5
<PAGE>
                                CLEARFIELD, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
<TABLE>
<CAPTION>
<S>                                                                 <C>                <C>
                                                                       Three Months    Ended December 31,
                                                                           2008             2007
                                                                    -----------------  -----------------
Cash flow from operating activities
Net income                                                          $         217,487  $         395,368
Adjustments to reconcile net income to net cash provided by
operating activities:
   Depreciation and amortization                                              108,715            120,673
   Deferred taxes                                                              22,355             24,270
   Loss on disposal of assets                                                       -             55,251
   Stock based compensation                                                    29,119             11,814
   Lease termination accrual                                                        -           (362,028)
 Changes in operating assets and liabilities:
   Accounts receivable, net                                                   782,854            647,043
   Inventories                                                                188,536             29,937
   Prepaid expenses and other                                                 (61,091)           (64,429)
   Accounts payable and accrued expenses                                   (1,260,336)          (493,575)
                                                                    -----------------  -----------------
Net cash provided by operating activities                                      27,639            364,324

Cash flow from investing activities
   Purchases of property and equipment                                        (36,338)        (1,719,951)
   Proceeds from sale of assets                                                     -          1,451,624
   Purchase of available for sale securities                                        -         (3,675,000)
   Sale of available for sale securities                                    3,300,000          1,450,000
                                                                    -----------------  -----------------
 Net cash provided by (used in) investing activities                        3,263,662         (2,493,327)

Cash flow from financing activities
   Repayment of long-term debt                                                (15,044)           (17,525)
                                                                    -----------------  -----------------
 Net cash used in financing activities                                        (15,044)           (17,525)
                                                                    -----------------  -----------------

Increase (decrease) in cash and cash equivalents                            3,276,257         (2,146,528)


Cash and cash equivalents at beginning of period                            4,333,709          3,304,645
                                                                    -----------------  -----------------
Cash and cash equivalents at end of period                                  7,609,966  $       1,158,117
                                                                    =================  =================

Supplemental cash flow information: Cash paid during the period for:
   Interest                                                         $           1,906  $           3,136
   Income taxes                                                                12,875              2,900
</TABLE>

      SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                       6
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note 1.  Basis of Presentation

     The accompanying unaudited consolidated condensed financial statements have
been  prepared  pursuant  to the rules and  regulations  of the  Securities  and
Exchange  Commission  (SEC)  for  interim  financial  statements  and  with  the
instructions  of Regulation  S-K as they apply to smaller  reporting  companies.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles in the United States of America for
complete financial statements.  For further information,  refer to the financial
statements and footnotes  thereto  included in the Company's report on Form 10-K
for the period ended September 30, 2008.

     In the opinion of management,  all estimates and adjustments (consisting of
normal recurring  accruals)  considered  necessary for a fair  presentation have
been included.  Certain  reclassifications  of previously  reported amounts have
been made to conform that presentation to the current period presentation.

     In  preparation  of  the  Company's   consolidated   financial  statements,
management is required to make estimates and  assumptions  that affect  reported
amounts of assets and liabilities  and related  revenues and expenses during the
reporting  periods.  Actual  results  could  differ from the  estimates  used by
management.

     Effective January 2, 2008 the Company merged its sole subsidiary APA Cables
and Networks,  Inc. (APCAN) into the Company (the "Parent - Subsidiary  Merger")
and changed the name of the Company from APA  Enterprises,  Inc. to  Clearfield,
Inc. Since the Parent - Subsidiary Merger on January 2, 2008, the Company has no
subsidiaries.  For periods prior to January 2, 2008 the  consolidated  financial
statements  represent  all  companies  of which  Clearfield,  Inc.  directly  or
indirectly  had  majority   ownership  or  otherwise   controlled.   Significant
intercompany  accounts and  transactions  have been  eliminated.  The  Company's
consolidated   financial   statements   include  the  accounts  of  wholly-owned
subsidiaries of Clearfield, Inc.

Note 2.  Net Income Per Share

     Basic and diluted  income per common  share is  computed  by  dividing  net
income by the  weighted-average  number of common shares outstanding during each
period.  Diluted  income per share is  computed  by  dividing  net income by the
weighted-average   number  of  common  shares  and  common   equivalent   shares
outstanding during each period.

     Common stock options and warrants to purchase  1,002,700 and 794,700 shares
of common stock with a weighted  average  exercise price of $1.13 and $2.12 were
outstanding at December 31, 2008 and 2007, respectively,  but were excluded from
calculating  diluted net income per share because they were antidilutive.  There
were no dilutive shares at December 31, 2008 and 2007.

Note 3.  Discontinued Operations

     Blaine Facility
     ---------------

     On  October  30,  2007  the  Company   purchased  its  previous   corporate
headquarters  in Blaine,  Minnesota for  $1,500,000  under the provisions of its
option  to  purchase  as stated in its lease  with  Jain-Olsen  Properties.  The
Company,  as owner of the building,  canceled the lease to itself. The lease was
scheduled to run through November of 2009. The elimination of the lease resulted
in the elimination of approximately  $342,000 of accrued  obligations related to
this lease in  conjunction  with the  discontinuation  of the Optronics  segment
recorded during the fiscal quarter ended June 30, 2007 and was taken into income
during the three months ending  December 31, 2007. On the same day,  October 30,
2007, the Company sold the land and building for $1,450,000  incurring a loss of
$50,000.

     Aberdeen Facility
     -----------------

     On October  1, 2007 the  Company  entered  into a lease  agreement  for its
Aberdeen,  South Dakota  facility  which allows the tenant first  opportunity to
purchase the building over the upcoming three year period.

                                       7
<PAGE>
Prior Year
----------

     The Company did not have discontinued operations for the three month period
ended December 31, 2008. For the comparable  period ended December 31, 2007, the
Company incurred income net of expenses of approximately $297,000 as a result of
the purchase and resale of the Blaine building which resulted in the termination
of the lease and subsequent  reversal of accrued rent.  The Blaine  Building was
formerly  the  corporate  headquarters  prior  to  the  discontinuation  of  the
Optronics segment in June 2007.

Note 4.  Severance Agreement

     Effective June 28, 2007 Anil K. Jain ceased to be Chief  Executive  Officer
(principal executive officer),  Chief Financial Officer (principal financial and
accounting officer), and Chairman of the Board of Directors of the Company.

     Pursuant  to the  terms of an  Amended  and  Restated  Agreement  Regarding
Employment/Compensation  Upon Change In Control dated  September  15, 2005,  Dr.
Jain will be paid his current salary ($190,000 per year) for 24 months after the
date of termination  of his  employment,  payable  quarterly.  As a result,  the
Company  recorded a severance  charge of $397,000 in the statement of operations
for the six months ended  September 30, 2007. This severance  provision  applies
notwithstanding  the absence of a "change of  control".  As of December 31, 2008
the balance due is $102,277 and is included in the accrued compensation as it is
all short term.

Note  5. Cash Equivalents and Long-Term Investments

     The Company invests its excess cash in money market accounts backed by U.S.
Treasuries with a term of not more than 90 days.

     The Company no longer holds $3.3 million of Auction Rate  Securities  (ARS)
at September  30, 2008 because they were sold back to Credit Suisse at par value
in October 2008. As of September 2008,  Credit Suisse,  our broker and financial
advisor,  settled  a  lawsuit  with the  state of New  York  related  to its ARS
marketing  practices.  On October 2, 2008,  Credit Suisse offered to buy back at
par value the ARS securities  from  individuals,  charities and businesses  with
accounts valued up to $10 million. We accepted the offer in October 2008. During
the month of October of 2008 Credit  Suisse  bought  back all of the  securities
held by Clearfield at par value resulting in proceeds of $3.3 million.  The sale
of  these  assets  and the  related  mark up to par  value is  reflected  in the
financial statements as of December 31, 2008.

Note 6.  Warrants and Stock Based Compensation

     The  Company  accounts  for  warrant  and stock  based  compensation  under
Statement of Financial  Accounting Standard No. 123R,  Share-Based Payment (SFAS
123R),  which  requires  all  share-based  payments,  including  grants of stock
options, to be recognized in the income statement as an operating expense, based
on their fair values over the requisite service period.

     During the three month period ended  December 31, 2008 the Company  granted
244,000  non-qualified  stock options to employees with a contractual term of 10
years,  a  three-year  vesting  term and an exercise  price of $1.03 with a fair
value of $.42 per share.  Senior  executives  and officers were granted  392,000
incentive  stock  options to employees  with a contractual  term of 10 years,  a
three-year vesting term and an exercise price of $1.03 with a fair value of $.42
per share.

     The Company recorded $29,119 and $11,814 of compensation expense related to
current and past option grants for the three month  periods  ended  December 31,
2008 and 2007,  respectively.  This expense is included in selling,  general and
administrative  expense.  There was no tax benefit from  recording this non-cash
expense.  As of December 31, 2008,  $303,595 of total unrecognized  compensation
expense  related  to  non-vested  awards is  expected  to be  recognized  over a
weighted average period of approximately 2.93 years.

     In April of 2003,  350,000  warrants  were issued at an  exercise  price of
$3.00 per share; on June 30, 2008 they were unexercised and expired.

                                       8
<PAGE>

Note 7.  Inventories

     Inventories consist of the following as of:


                        December 31, 2008       September 30, 2008
                        -----------------       ------------------
     Raw materials      $       1,397,606       $        1,815,777
     Work-in-progress               7,560                   14,483
     Finished goods               495,607                  258,511
                        -----------------       ------------------
                        $       1,900,233       $        2,088,769
                        =================       ==================


Note 8.  Major Customer Concentration

     Two  customers  comprised  approximately  35% of total  sales for the three
months ended  December 31, 2008 and two  customers  one of which was part of the
sales concentration comprised 32% of accounts receivable. One customer comprised
13% of total sales for three months ended December 31, 2007 and another customer
accounted for 12% of accounts receivable.

Note 9.  Goodwill

     As disclosed  in the  Company's  Annual  Report on Form 10-K for the fiscal
year ended  September 30, 2008, the Company  performs an impairment  analysis of
goodwill  during  the fourth  quarter of each  fiscal  year in  accordance  with
Statement  of  Financial   Accounting  Standard  No.  142,  Goodwill  and  Other
Intangible  Assets (SFAS No. 142).  Fair values are estimated  based on our best
estimate of the expected  present  value of future cash flows and compared  with
the corresponding book value of the company.  Where available and as appropriate
comparative  market multiples are used to corroborate the results of the present
value method. We consider our net book value and market  capitalization  when we
test for goodwill impairment because we have consolidated our reporting units in
prior years into the parent company resulting in one reporting unit.

     In addition, subsequent to September 30, 2008, we have conducted an interim
review of our carrying value with the market  capitalization  of our stock for a
reasonable period and applied limited variables such as control premium and have
concluded  that  goodwill  is not  impaired  at  December  31,  2008.  Should we
experience adverse changes in expected  operating  results,  stock trading below
per share book value, or unfavorable  changes in other economic  factors we will
reassess goodwill impairment prior to the end of the fiscal year.

Note 10. Income Taxes

     We recorded a provision  for income taxes of $35,000 and  $27,000,  for the
quarter ended December 31, 2008 and 2007. Our tax provision  includes  estimated
federal  and state  alternative  minimum  taxes,  but is  primarily  related  to
deferred tax expense related to book and income tax basis difference in goodwill
on prior year asset acquisitions.

     Based upon available evidence,  there is uncertainty  regarding our ability
to  realize  our  deferred  tax  assets  and we have  therefore  recorded a full
valuation  allowance  against  the  deferred  tax  assets  in  our  consolidated
financial  statements.  We believe  the  uncertainty  regarding  the  ability to
realize our deferred tax assets may diminish to the point where the  recognition
of our deferred tax assets may be warranted in the future.  If we determine that
it is more  likely  than not that we will be able to realize  our  deferred  tax
assets  in the  future,  an  adjustment  to the  deferred  tax  asset  valuation
allowance would be recorded in the period when such determination is made.

     Effective  April 1, 2007, we adopted the provisions of FASB  Interpretation
No. 48,  Accounting for  Uncertainty  in Income Taxes (FIN 48) as required.  The
adoption  did not have a material  impact on our  financial  statements.  At the
adoption date, we recorded no gross unrecognized tax benefits. Subsequent to the
adoption date including  current quarter ended December 31, 2008 the Company has
not recorded any unrecognized  tax benefits.  Because we are using net operating
loss  carryforwards  generated in prior tax years to off-set  taxable  income in
current  periods,  there are no  periods  that have been  cleared  by the taxing
authorities.

                                       9
<PAGE>

     We  recognize  interest  and  penalties  accrued  on any  unrecognized  tax
benefits as a component of income tax expense.  At the adoption  date of FIN 48,
we  did  not  have  any  accrued  interest  or  penalties  associated  with  any
unrecognized  tax  benefits,  nor  has  any  interest  expense  been  recognized
subsequent to the acquisition date.

Note 11. Certain Relationships and Transactions

India Facility
--------------

     Prior to June 28, 2007, Kul B. Jain,  brother of our former chief executive
officer,  Anil K. Jain,  was a director  of our APA  Optronics  (India)  Private
Limited  subsidiary  that was  established  in fiscal 2005. Kul B. Jain was paid
approximately  $250 per month in this  position.  He was not an  employee of APA
Optronics (India) or Clearfield, Inc. (formerly APA Enterprises,  Inc.). On June
28,  2007,  we sold all of our  interest in our Indian  subsidiary  to an entity
controlled by Anil K. Jain, our former chief executive officer,  on terms deemed
by the  independent  directors to be fair and  reasonable  to the  Company.  The
purchase  price of $500,000 is payable over five years and is secured by pledges
of stock and Dr. Jain's payments under his separation agreement, as well as by a
guarantee from Dr. Jain.

Note 12.  Accounting Pronouncements

New Accounting Pronouncements

     In May 2008, the FASB issued  Statement of Financial  Accounting  Standards
(SFAS) No. 162, The Hierarchy of Generally Accepted Accounting Principles.  SFAS
No. 162  identifies the sources of accounting  principles and provides  entities
with a framework for selecting the  principles  used in preparation of financial
statements  that are  presented  in  conformity  with  GAAP.  The  current  GAAP
hierarchy has been criticized  because it is directed to the auditor rather than
the entity, it is complex,  and it ranks FASB Statements of Financial Accounting
Concepts,  which are subject to the same level of due process as FASB Statements
of Financial  Accounting  Standards,  below  industry  practices that are widely
recognized  as generally  accepted but that are not subject to due process.  The
Board believes the GAAP hierarchy  should be directed to entities  because it is
the entity (not its  auditors)  that is  responsible  for  selecting  accounting
principles for financial  statements that are presented in conformity with GAAP.
The  adoption  of FASB 162 is not  expected  to have a  material  impact  on the
Company's financial position

     In September  2006, the FASB issued SFAS No. 157, Fair Value  Measurements.
SFAS No. 157 defines fair value,  establishes  a framework  for  measuring  fair
value and expands  disclosures about fair value measurement but does not require
any new  fair  value  measurements.  SFAS No.  157 is  effective  for  financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. However on February 12, 2008, the FASB issued
proposed  FSP FAS 157-2  which  delayed the  effective  date of SFAS 157 for all
non-financial  assets  and  non-financial  liabilities,  except  those  that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually).  This FSP partially defers the effective date of SFAS
157 to fiscal years  beginning  after  November 15,  2008,  and interim  periods
within  those fiscal years for items within the scope of this FSP. We will adopt
SFAS 157, except as it applies to those  non-financial  assets and non-financial
liabilities as noted in proposed FSP FAS 157-2, on October 1, 2008. As such, the
Company is required to adopt this provision in the current  period.  Adoption of
the applicable portions of SFAS No. 157 did not have a significant effect on the
Company's  financial  statements because the Company did not have any applicable
financial  assets or liabilities.  The Company believes the adoption of SFAS No.
157, as it applies to non-financial  assets and non-financial  liabilities could
have a material impact on financial statement disclosures.

     In February  2007,  the FASB issued SFAS No. 159, The Fair Value Option for
Financial  Assets and  Financial  Liabilities,  including  an  amendment of FASB
Statement  No.  115.  SFAS No. 159 permits  entities  to choose to measure  many
financial  instruments  and  certain  other  items at fair  value  at  specified
election dates. SFAS No. 159 applies to all entities,  including  not-for-profit
organizations.  The  provisions  of SFAS No. 159 are  effective for fiscal years
beginning  after  November 15, 2007.  As such,  the Company is required to adopt
this  provision in the current  period.  Adoption of SFAS No. 159 did not have a
significant effect on the Company's financial statements because the Company did
not elect the fair value option for any financial assets or liabilities.


                                       10
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     Statements in this Report about future sales prospects and other matters to
occur  in  the  future  are  forward  looking  statements  and  are  subject  to
uncertainties due to many factors,  many of which are beyond our control.  These
factors  include,  but are not  limited  to, the  continued  development  of our
products,  acceptance of those products by potential  customers,  our ability to
sell  such  products  at a  profitable  price,  and  our  ability  to  fund  our
operations.  For further discussion  regarding these factors,  see "Factors That
May Influence Future Results."

OVERVIEW
--------

General

     On January 2, 2008,  Clearfield,  Inc.,  formerly known as APA Enterprises,
Inc., consolidated its sole subsidiary APA Cables & Networks, Inc., (APACN) into
the parent company,  Clearfield, Inc. Since the discontinuation of the Optronics
business,  the  operations of the Company  consist  solely of the  operations of
APACN.  In June 2007,  we elected to change our fiscal year end from March 31 to
September 30. In view of this change the quarter ended  December 31, 2008 is the
first  quarter of 2009 and the  quarter  ended  December  31,  2007 is the first
quarter for 2008.

     The Company focuses on highly configurable products for  telecommunications
customers,   primarily  related  to  cabling  management   requirements  of  the
Fiber-to-the-Home  ("FTTH")  marketplace and in designing and terminating custom
cable assemblies for commercial and industrial original equipment  manufacturers
("OEM's").  Over the past four  years  the  Company  has  expanded  its  product
offerings and broadened its customer base. We continue to see positive trends in
the  markets we serve and believe our solid  reputation  of quality  service and
competitive and innovative  product line which will permit us achieve our growth
plans.

     Current  economic  conditions  provide a degree of uncertainty.  Should the
economy  continue to erode  Clearfield  is not immune to the broader  effects of
such a decline and may suffer a reduction  in revenues  and  profits.  We remain
optimistic  that the markets we serve are stable and are a core component of the
nation's  strategic  infrastructure.  However we are  realistic  and are closely
monitoring the trends with in our industry and our customer base and prepared to
take the necessary actions in our business model as appropriate.

     Should the company continue to experience  increased  profits  resulting in
increased  shareholder  equity  value  and the  market  price of our  stock  not
respond,  it is possible that this may trigger an impairment of goodwill.  While
it is  counterintuitive  to  believe  that  increased  shareholder  value  would
increase and the market not recognize this change, we believe it is important to
disclose the potential for such an occurrence.

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 2008 VS. THREE MONTHS ENDED DECEMBER 31, 2007

     Revenues for the first quarter ended  December 31, 2008 of fiscal year 2009
increased 26% to $5,933,000 from revenue of $4,697,000 for the comparable period
for  fiscal  2008.  This  increase  is  attributable  to the  acceptance  of the
Company's  products,  the continued and improving  acceptance of the  Fieldsmart
fiber  management  product line and  engineering-led  design services within the
FTTH market.

     Revenue  to  broadband  service  providers  and  commercial  data  networks
amounted to  $4,786,000 or 81% of revenue for 2009 compared to $3,494,000 or 74%
of sales in 2008. Sales to OEMs,  consisting primarily of fiber optic and copper
cable assemblies produced to customer design specifications, were 19% of revenue
or $1,147,000 for 2009 compared to $1,203,000 or 26% of sales in 2008.

     Gross  margin  increased  from 31% of  revenues  in  fiscal  2008 to 34% of
revenues in fiscal 2009  resulting  in a gross profit of  $2,014,000  in 2009 as
compared to  $1,449,000 in 2008, an increase of $565,000 or 39%. The 3% increase
in gross  margin as a percent of  revenues  is due to the  results  of  on-going
programs  to reduce  the cost of  products  through  a  combination  of  process
improvement,  global sourcing of components and sub assembly  manufacturing  and
new product introduction, specifically our Fieldsmart product line.

                                       11
<PAGE>

     Selling, general and administrative expenses increased 27% or $382,000 from
$1,422,000  for 2008 to  $1,804,000  for 2009.  This  increase  is  composed  of
increased   sales    commissions    directly   related   to   increased   sales,
performance-based  compensation  programs and  investment  in sales,  marketing,
product  management,  and product  engineering  that are the driving factors for
increased sales and profitability.

     Income from operations for 2009 was $209,000  compared to $27,000 for 2008,
an  improvement  of  $182,000  or 675%.  This  improvement  is  attributable  to
increased revenue and improved gross margin.

     Interest  income in 2009  declined  64% from  $88,000 in 2008 to $32,000 in
2009. This is attributable to declining  interest rates as the Company moved its
excess cash into money markets composed of 90 day U.S.  Treasuries.  In 2008 the
Company held $3.3 million in Auction Rate  Securities  that were paying rates of
approximately 5% as compared to U.S. Treasuries which returned approximately 1%.

     Interest expense decreased from $3,000 in 2008 to $2,000 in 2009.  Interest
for both years is  attributable  to  financing  associated  with the  enterprise
information system installed during 2007 and 2008.

     Other   income   consists  of  $14,000  and  $13,000  for  2009  and  2008,
respectively.  This is  attributable  to the  lease  of the  Company's  Aberdeen
facility which was rented beginning in October 2007.

     Income  taxes were  $35,000 and  $27,000  for 2009 and 2008,  respectively.
Taxes  related  to  goodwill  were  $22,000  and  $24,000  for  2009  and  2008,
respectively.  The balance was paid to various states for income,  sales and use
taxes  except  for  $10,000  of  alternative  minimum  taxes  from 2008 paid and
expensed in 2009.

     Net income from  continuing  operations  for 2009 was $217,000 or $0.02 per
diluted share compared to a $98,000 or $0.01 per diluted share for 2008.

     There was no income from  discontinued  operations  for 2009. In 2008 there
was $297,000 of income or $0.02 per diluted share.  The 2008 income consisted of
the reversal of a portion of the Blaine building lease termination  accrual, and
expenses  incurred in the purchase and resale of the building  netting to a gain
of  $342,000,  in  addition  there  was a loss  on the  disposal  of  assets  of
discontinued operations of totaling $44,000.

     The  Company's  net income was $217,000 or $0.02 per diluted  share for the
quarter ended  December 31, 2008 compared to $395,000 or $0.03 per share for the
comparable  period in the prior year.  This is a net decrease of $178,000.  This
decrease was the result of factors explained above in discontinued operations.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     As of December 31, 2008, our principal source of liquidity was our cash and
cash  equivalents.  Those  sources total  $7,610,000,  compared to $4,334,000 at
September 30, 2008,  respectively.  Our non operating  cash is invested in money
market  accounts  composed of U.S.  Treasuries.  These  accounts are liquid on a
daily basis and are generally  considered low-risk  investments.  The Company is
currently  expecting to fund  operations  with its working  capital which is the
combination  of cash flow from  operations,  accounts  receivable  and inventory
which is managed to meet customer demand. Cash in excess of operating capital is
invested in money  market  accounts  and is readily  accessible  should the need
arise or economic conditions change significantly.

     Operating Activities
     --------------------

     Net cash  generated  for the three months  ended  December 31, 2008 totaled
$28,000.  This was primarily due to our net income of $217,000,  depreciation of
$109,000, deferred taxes of $22,000, stock based compensation of $29,000, and an
increase in accounts receivable of $783,000 and inventory of $189,000.  This was
offset by a decrease in accounts  payable of  $1,260,000  and $61,000 in prepaid
expenses.

     Net cash  generated  for the three months  ended  December 31, 2007 totaled
$364,000.  This was primarily due to our net income of $395,000 and depreciation
of $120,000,  deferred taxes of $24,000, stock based compensation of $12,000 and
an increase in accounts  receivable of $647,000 and  inventory of $30,000.  This
was offset by a decrease in accounts  payable of $493,000 and $64,000 in prepaid
expenses.

                                       12
<PAGE>

     Investing Activities
     --------------------

     For the three  months  ended  December  31, 2008 we sold our  Auction  Rate
Securities at par for  $3,300,000  and purchased  equipment,  consuming  cash of
$36,000.

     For the three months ended  December  31, 2007 we purchased  $1,720,000  of
property,  plant and  equipment;  of that  approximately  $1,500,000 was for the
purchase of the Blaine building which was  subsequently  sold.  During this same
period we made a significant  investment  in our IT structure and  manufacturing
equipment  totaling  $404,000.  The proceeds from the sale of assets amounted to
$1,452,000  of which the Blaine  building was the major  portion at  $1,452,000.
During the same period we purchased  $3,675,000 and sold $1,450,000 of available
for sale securities which were Auction Rate Securities.  The net result is a net
decrease in cash from investing activities of $2,493,000.

     Financing Activities
     --------------------

     For the three  months  ended  December 31, 2008 we used a net of $15,000 to
make scheduled debt principal payments principally associated with the financing
of our IT systems.

     For the three  months  ended  December 31, 2007 we used a net of $17,000 to
make scheduled debt principal payments.

     The Company  believes that its current cash and cash  equivalents  and cash
flow  from  operations  will be  sufficient  to meet  its  working  capital  and
investment  requirements  for  the  next  12  months.  However,  future  growth,
including  potential  acquisitions,  may require  the  Company to raise  capital
through additional equity or debt financing.  There can be no assurance that any
such financing would be available on commercially acceptable terms.


                                       13
<PAGE>

FACTORS THAT MAY INFLUENCE FUTURE RESULTS
-----------------------------------------

     The  statements  contained  in this Report on Form 10-Q that are not purely
historical are  "forward-looking  statements"  within the meaning of the Private
Securities  Litigation Reform Act of 1995,  Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, including,  without
limitation,  statements regarding the Company's  expectations,  hopes,  beliefs,
anticipations,  commitments,  intentions  and  strategies  regarding the future.
Forward-looking statements include, but are not limited to, statements contained
in  Management's  Discussion or Plan of Operation.  Actual  results could differ
from those projected in any  forward-looking  statements for the reasons,  among
others, detailed below. We believe that many of the risks detailed here are part
of doing business in the industry in which we compete and will likely be present
in all periods reported.  The fact that certain risks are  characteristic to the
industry  does not  lessen the  significance  of the risk.  The  forward-looking
statements  are made as of the date of this  Report as Form 10-QSB and we assume
no obligation to update the forward-looking  statements or to update the reasons
why actual  results  could differ from those  projected  in the  forward-looking
statements.  Readers of this Report and prospective investors should also review
the Risk Factors set forth in our Report on Form 10-K for the transition  period
ended September 30, 2008.

APPLICATION OF CRITICAL ACCOUNTING POLICIES
-------------------------------------------

     Our  significant  accounting  policies  are  described  in  Note  A to  the
Consolidated Financial Statements in our Annual Report for the fiscal year ended
September 30, 2008. The  accounting  policies used in preparing our interim 2009
Consolidated  Financial Statements are the same as those described in our Annual
Report on Form 10-K.

RECENTLY ISSUED ACCOUNTING STANDARDS
------------------------------------

     See Note 12 to the financial  statements  located in Part I, Item 1 of this
Report.

ITEM 3.  QUANTITAVE AND QUALITIATIVE DISCLOSURES ABOUT MARKET RISK

     Not Required

ITEM  4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

     The Company  conducted an evaluation,  under the  supervision  and with the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
its  disclosure  controls  and  procedures  (as such  term is  defined  in Rules
13a-15(e) and 15d-15(e)  under the  Securities  Exchange Act of 1934, as amended
(the "Exchange Act")) as of the end of the period covered by this report.  There
are  inherent  limitations  to the  effectiveness  of any  system of  disclosure
controls  and  procedures,  including  the  possibility  of human  error and the
circumvention  or overriding of the controls and procedures.  Accordingly,  even
effective  disclosure  controls  and  procedures  can  only  provide  reasonable
assurance of achieving their control objectives.  Due to the material weaknesses
described in the Company's  Annual Report on Form 10-K for the fiscal year ended
September 30, 2008,  the Chief  Executive  Officer and Chief  Financial  Officer
concluded  that  the  Company's  disclosure  controls  and  procedures  were not
effective as of the end of the period covered by this report in alerting them on
a timely basis to material  information  relating to the Company  required to be
included in the Company's reports filed or submitted under the Exchange Act. The
Chief Executive  Officer and Chief Financial Officer believe that the Company is
currently in process of remediating these deficiencies.

Changes in Internal Control

Management,  with  oversight  from the Audit  Committee,  has been  aggressively
addressing the material  weaknesses  disclosed in its Annual Report on Form 10-K
for the fiscal year ended  September  30, 2008 and is committed  to  effectively
remediating  known  weaknesses  as  expeditiously  as  possible.   Although  the
Company's remediation efforts are well underway,  control weaknesses will not be
considered  remediated until new internal controls over financial  reporting are
implemented and operational for a period of time and are tested,  and management
concludes  that these controls are operating  effectively.  Due to the timing of
this  process,  there were no changes in the  Company's  internal  control  over
financial  reporting  that occurred  during the first quarter ended December 31,
2008 that have  materially  affected,  or are  reasonably  likely to  materially
affect its internal control over financial reporting.

                                       14
<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 1A. RISK FACTORS

     None.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS

     Exhibit 31.1 - Certification of Chief Executive Officer pursuant to Section
     302 of the Sarbanes-Oxley Act of 2002

     Exhibit 31.2 - Certification required of Chief Financial Officer by Section
     302 of the Sarbanes Oxley Act of 2002

     Exhibit 32.1 - Certification of Chief Executive Officer pursuant to Section
     906 of the Sarbanes-Oxley Act of 2002

     Exhibit 32.2 - Certification required of Chief Financial Officer by Section
     906 of the Sarbanes Oxley Act of 2002


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.



                      CLEARFIELD, INC.


February 9, 2009      /s/ Cheryl Beranek Podzimek
                      ----------------------------------------------------------
                      By: Cheryl Beranek Podzimek, President and CEO
                      (Principal Executive Officer and Duly Authorized Officer)

                      /s/ Bruce G. Blackey
                      ----------------------------------------------------------
                      Bruce G. Blackey, Chief Financial Officer
                      (Principal Accounting Officer and Duly Authorized Officer)



                                       15