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

                                 FORM 10-Q

     (Mark One)
(X)   Quarterly Report Under Section 13 or 15(D) of The Securities Exchange
      Act of 1934
      For Quarter Ended March 31, 2001

                       OR

( )  Transition Report Pursuant to Section 13 or 15(d) of The  Securities
     Exchange Act of 1934


                       Commission File Number 0-275


                            Allen Organ Company
          (Exact name of registrant as specified in its charter)



       Pennsylvania                       23-1263194
  (State of Incorporation)      (I.R.S. Employer Identification No.)



  150 Locust Street, P. O. Box 36, Macungie, Pennsylvania      18062-0036
    (Address of principal executive offices)                   (Zip Code)



Registrant's telephone number, including area code           610-966-2200


Indicate  by  check mark whether the registrant (1) has 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 _____

Number of shares outstanding of each of the issuer's classes of common
stock, as of May 10, 2001:

                    Class A - Voting          84,002 shares
                    Class B - Non-voting   1,086,457 shares
<PAGE>
                            ALLEN ORGAN COMPANY

                                   INDEX


Part I   Financial Information

   Item 1.Financial Statements
          Consolidated Condensed Statements of Income for the three months
          ended March 31, 2001 and 2000

          Consolidated Condensed Balance Sheets at March 31, 2001 and
          December 31, 2000

          Consolidated Condensed Statements of Cash Flows for the three
          months ended March 31, 2001 and 2000

          Notes to Consolidated Condensed Financial Statements

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

Part II  Other Information
   Item 6.Exhibits and Reports on Form 8-K

   Signatures
<PAGE>
PART I  FINANCIAL INFORMATION
   ITEM 1.FINANCIAL STATEMENTS

                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                (Unaudited)

                                                 For the 3 Months Ended:
                                                 3/31/2001    3/31/2000

          Net Sales                             $13,259,398  $16,808,032

          Costs and Expenses
            Costs of sales                        9,877,547    9,854,404
            Selling, general and
             administrative                       4,300,272    4,256,717
            Research and development              2,196,308    1,687,055
            Impairment of VIR, Inc. goodwill      1,400,000       -

           Total Costs and Expenses              17,774,127   15,798,176

          (Loss) Income from Operations          (4,514,729)   1,009,856

          Other Income and (Expense)
            Interest and other income               354,143      267,395
            Interest expense                       (151,029)      -
            Minority interests in
             consolidated subsidiaries               50,123       34,601

           Total Other Income and Expense           253,237      301,996

          (Loss) Income Before Taxes             (4,261,492)   1,311,852

          Income Tax (Benefit) Provision         (1,636,000)     442,000

          Net (Loss) Income                     $(2,625,492) $   869,852

          Basic and Diluted (Loss)
          Earnings Per Share                         $(2.24)       $0.74

          Shares Used in Per Share Calculation    1,170,592    1,170,627

          Dividends Per Share - Cash                  $0.14        $0.14

          Total Comprehensive (Loss) Income     $(2,726,504) $   969,417

                          See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED BALANCE SHEETS
                                                    March 31,     Dec 31,
                     ASSETS                            2001        2000
                                                   (Unaudited)   (Audited)
Current Assets
  Cash                                            $ 1,750,237  $ 2,712,368
  Investments Including Accrued Interest           24,592,969   24,694,377
  Accounts Receivable, net of reserves of           7,524,630   10,285,659
   $442,821 and $428,791, respectively
  Inventories:
     Raw Materials                                  6,754,296    7,684,892
     Work in Process                                6,955,017    6,172,954
     Finished Goods                                 7,238,698    5,950,327
      Total Inventories                            20,948,011   19,808,173
  Income Taxes Prepaid and Receivable               1,495,715       13,972
  Prepaid Expenses                                    694,249      304,342
  Deferred Income Tax Benefits                      1,139,843    1,094,701
     Total Current Assets                          58,145,654   58,913,592
Property, Plant and Equipment                      26,491,748   25,861,781
  Less Accumulated Depreciation                   (13,947,741) (13,338,648)
     Total Property, Plant and Equipment           12,544,007   12,523,133
Other Assets
  Prepaid Pension Costs                               535,278      506,702
  Inventory Held for Future Service                   769,078      690,657
  Note Receivable                                   1,955,779    1,556,721
  Cash Value of Life Insurance                      2,034,867    2,034,867
  Deferred Income Tax Benefits                        354,476      398,476
  Goodwill, net                                     2,578,950    4,165,002
  Other Assets                                         18,592       18,592
     Total Other Assets                             8,247,020    9,371,017
     Total Assets                                 $78,936,681  $80,807,742

         LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
  Notes Payable - Bank                            $10,900,000  $ 8,700,000
  Accounts Payable                                  3,102,029    3,448,119
  Other Accrued Expenses                            1,862,584    2,816,102
  Customer Deposits                                 3,010,462    2,991,628
     Total Current Liabilities                     18,875,075   17,955,849
Noncurrent Liabilities
  Deferred and Other Noncurrent Liabilities           344,869      310,016
     Total Liabilities                             19,219,944   18,265,865
Minority Interests                                     56,853      106,976

STOCKHOLDERS' EQUITY
  Common Stock   2001              2000
     Class A   127,232 shares;   127,232 shares       127,232      127,232
     Class B 1,410,761 shares; 1,410,761 shares     1,410,761    1,410,761
  Capital in Excess of Par Value                   12,854,943   12,758,610
  Retained Earnings
     Balance, Beginning                            59,977,002   56,677,650
     Net Income                                    (2,625,492)   3,954,896
     Dividends - Cash 2001 and 2000                  (163,886)    (655,544)
     Balance, End                                  57,187,624   59,977,002
  Accumulated Other Comprehensive Income:
     Unrealized Gain on Investments                    63,753      139,990
      Sub-total                                    71,644,313   74,413,595
  Treasury Stock
     2001- 43,230 Class A shares;
          324,270 Class B shares                  (11,984,429)      --
     2000- 43,230 Class A shares;
          324,148 Class B shares                        --     (11,978,694)
  Total Stockholders' Equity                       59,659,884   62,434,901
  Total Liabilities and Stockholders' Equity      $78,936,681  $80,807,742
                          See accompanying notes.
<PAGE>

                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
              CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                     For the 3 Months Ended:
                                                     3/31/2001     3/31/2000
   CASH FLOWS FROM OPERATING ACTIVITIES
   Net (loss) income                               $(2,625,492)   $  869,852
   Adjustments to reconcile net (loss) income
    to net cash (used in) provided by
    operating activities
     Depreciation and amortization                     795,812       520,171
     Loss from impairment of VIR, Inc.
      goodwill, included in operating expenses       1,400,000          --
     Minority interest in consolidated subsidiaries    (50,123)      (34,601)
   Change in assets and liabilities
     Accounts receivable                             2,761,029     3,116,661
     Inventories                                    (1,218,259)   (1,912,966)
     Income taxes prepaid and receivable            (1,481,743)         --
     Prepaid expenses                                 (389,907)      (79,997)
     Prepaid pension costs                             (28,576)       43,113
     Deferred income tax benefits                       44,000          --
     Other assets                                         --           3,640
     Accounts payable                                 (346,090)     (417,423)
     Accrued income taxes                                 --         287,049
     Accrued expenses                                 (953,518)      436,787
     Customer deposits                                  18,834      (121,933)
     Deferred and other noncurrent liabilities          34,853        32,525
       Net Cash (Used In) Provided by
        Operating Activities                        (2,039,180)    2,742,878

  CASH FLOW FROM INVESTING ACTIVITIES
     Increase in note receivable                      (399,058)     (405,612)
     Net additions to plant and equipment             (630,634)     (916,522)
     Additions to goodwill                                --        (277,804)
     Net (purchase) sale of short-term investments     (19,971)    1,894,305
       Net Cash (Used In) Provided by
        Investing Activities                        (1,049,663)      294,367

  CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from bank loans                        2,200,000          --
     Proceeds from sale of subsidiary stock             96,333          --
     Reacquired Class B common shares                   (5,735)       (3,732)
     Dividends paid in cash                           (163,886)     (163,887)
       Net Cash Provided by (Used In)
        Financing Activities                         2,126,712      (167,619)

  NET (DECREASE) INCREASE IN CASH                     (962,131)    2,869,626

  CASH, BEGINNING                                    2,712,368       209,277

  CASH, ENDING                                     $ 1,750,237    $3,078,903

            SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
  Cash paid for:
     Income Taxes                                  $    94,000    $  169,750
     Interest                                      $   151,029    $    --


                          See accompanying notes.
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1. Interim Financial Statements
   The  results of operations for the interim periods shown in this  report
   are  not necessarily indicative of results to be expected for the fiscal
   year.   In  the opinion of management, the information contained  herein
   reflects  all  adjustments necessary to make the results  of  operations
   for  the interim periods a fair statement of such operations.  All  such
   adjustments are of a normal recurring nature.

   Certain notes and other information have been condensed or omitted  from
   the  interim financial statements presented in the Quarterly  Report  on
   Form  10-Q.   Therefore, these financial statements should  be  read  in
   conjunction with the Company's 2000 Annual Report on Form 10-K.

2. Impairment of Goodwill
   During  March  2001 the Company recorded a charge to operating  expenses
   of  $1,400,000 related to the impairment in the value of goodwill  which
   arose  in connection with the acquisition of VIR, Inc.  This write  down
   of  goodwill  is  attributable  to  the  recent  downturn  in  the  data
   communications  industry,  the announced combination  of  VIR  into  the
   Company's  subsidiary Eastern Research and closure of the  VIR  facility
   discussed  in  more detail below, all of which reduced  expectations  of
   future cash flows from VIR's operations.

3. Subsequent Event
   During  April  2001  the Company announced plans  to  combine  its  Data
   Communications  subsidiaries VIR Linear Switch (VIR) of Southampton,  PA
   into  Eastern  Research, Inc. (ERI), which is also a subsidiary  of  the
   Company.  VIR designs, manufactures and markets a number of test  access
   and   tech   control  products  for  use  in  customer  networks.    The
   Southampton,  PA facility will be closed later this year.  The  combined
   operations  will  be headquartered at ERI's facility in Moorestown,  New
   Jersey.  Manufacturing of some of VIR's products will be moved to  ERI's
   supplier with other manufacturing being transferred to the Macungie,  PA
   plant.   The  Company  estimates  the restructuring  charges  (including
   employee  severance,  benefits and other exit  costs)  related  to  this
   combination  and plant closure to be approximately $530,000  which  will
   be included in the operating results for the second quarter of 2001.

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

Liquidity and Capital Resources:
    Cash  flows from operating activities decreased during the three  month
period ended March 31, 2001, primarily due to operating losses incurred  in
the  Data  Communications  segment and increases in  inventory.   Inventory
increased approximately $100,000 and $1,100,000 respectively in the Musical
Instruments and Data Communications segments during the three months  ended
March 31, 2001.

    Cash flows from investing activities were used to purchase property and
equipment including approximately $546,000 in new computer, office and test
equipment for the Data Communications segment during the three months ended
March  31, 2001.  The Company will reduce capital expenditures in the  Data
Communications segment for the balance of the year as part of its  plan  to
improve this segment's operating results.


Sales and Operating Income

                                             For the 3 Months Ended:
                                             3/31/2001     3/31/2000
   Net Sales to Unaffiliated Customers
     Musical Instruments                   $ 5,923,121   $ 6,671,347
     Data Communications                     3,600,016     8,058,089
     Electronic Assemblies                   3,293,360     1,503,855
     Audio Equipment                           442,901       574,741
      Total                                $13,259,398   $16,808,032

   Intersegment Sales
     Musical Instruments                   $    16,291   $    74,042
     Data Communications                       132,126         --
     Electronic Assemblies                        --          15,577
     Audio Equipment                            10,127         1,182
      Total                                $   158,544   $    90,801

   Income (Loss) from Operations
     Musical Instruments                   $   414,141   $ 1,070,625
     Data Communications                    (5,005,185)       59,832
     Electronic Assemblies                     287,388       127,425
     Audio Equipment                          (211,073)     (248,026)
       Total                               $(4,514,729)  $ 1,009,856

Musical Instruments Segment

    Sales decreased $748,226 in the first quarter of 2001 when compared  to
the  same  period in 2000.  While the order rate for the first  quarter  of
2001  was approximately equal to 2000, the first quarter of 2000 sales were
higher due to shipments made against a higher order backlog in 2000.

   Gross profit margins decreased to 29.1% of sales in the first quarter of
2000  from 37.1% in the same period in 2000.  This decrease is due to lower
sales over which to absorb fixed costs and changes in product mix.

     Selling,   general  and  administrative  expenses  and  research   and
development expenditures decreased when compared to the same period in 2000
due to lower sales and lower personnel requirements.

Data Communications Segment

    This  segment's sales in the first quarter of 2001 decreased $4,458,000
when  compared  to  the  same period in 2000, resulting  in  a  significant
operating  loss for the first quarter.  This segment's order  rate  in  the
first quarter of 2001 was significantly lower than the same period in 2000.
The Company expects lower sales to continue through the balance of the year
and  has  begun  implementing plans, discussed below, to improve  operating
results.   The sales decrease is attributable to a slowdown in the national
economy  and an industry wide slowdown in the Data Communications  markets.
Some  of  this  segment's products are sold to Competitive  Local  Exchange
Carriers  (CLEC).   These carriers have been especially  hard  hit  by  the
recent  economic  down  turn in the industry, with many  having  difficulty
raising  capital required to continue to build out their networks (purchase
equipment) and deliver services.

    Gross  profit margins in the first quarter of 2001 decreased  to  30.1%
compared to 49.8% in the same period of 2000 due to the lower sales  volume
over  which  to  absorb  fixed costs and $360,000 of  additional  inventory
reserves  recorded  at  VIR, Inc. for slow moving  and  obsolete  inventory
associated  with  discontinued product lines.   The  Company  continues  to
review  the VIR inventory and product lines, which may result in additional
increases in inventory reserves in future periods.

   Sales and marketing expenditures increased approximately $35,000 (2%) in
the first quarter of 2001 when compared to the same period in 2000.

    General  and  administrative expenses increased approximately  $222,097
(31%)  in  the  first quarter of 2001 when compared to the same  period  in
2000,  primarily  related to additional management  and  support  personnel
added at Eastern Research, Inc. (ERI).

   Research and development expenses increased approximately $520,000 (40%)
in the first quarter of 2001 when compared to the same period in 2000.

    As  discussed  in  Note 2 above, the first quarter  of  2001  operating
expenses includes a charge of $1,400,000 related to the write down  of  the
value of VIR's goodwill.

    In  April 2001 the Company announced plans for restructuring  its  Data
Communications  segment.   The  Company will combine  the  VIR  operations,
located  in  Southampton,  PA into ERI with the combined  operations  being
headquartered  in  Moorestown, NJ.  The Southampton, PA  facility  will  be
closed  later  this year.  Manufacture of some of VIR's  products  will  be
moved to ERI's supplier with other manufacturing being  transferred to  the
Macungie, PA plant.  VIR employs about 30 people, approximately 11 will  be
transferred to the Moorestown or Macungie facility.  See Note 3  above  for
additional information on this plant closing.

    Because  of the current economic climate and this segment's significant
reduction  in sales volume the Company has taken other steps to reduce  its
expenditures  for this segment.  ERI reduced its workforce by 11  positions
during  the first quarter of 2001 resulting in severance and related  costs
of  approximately $100,000.  In April of 2001 ERI reduced its workforce  by
an  additional 12 positions.  These additional terminations along with  the
VIR   plant  closure  costs  discussed  above  will  result  in   a   total
restructuring charge for the Data Communications segment of $640,000  which
will  be  included in the operating results of the second quarter of  2001.
In  addition  this  segment has reduced its planned operating  and  capital
expenditures for the balance of the year.

    The Company's Data Communications segment is also redirecting its sales
and  marketing efforts, specifically for ERI's DACs product, the  DNX.   In
recent  years ERI has had significant growth in the CLEC market, which  has
been radically affected by the economic problems discussed above.  ERI  has
more  recently  focused on healthier markets for which the DNX  is  suited,
including  the  wireless and certain international markets.  While  initial
results  are  promising, the long sales cycles involved in DNX  sales  will
require a couple of quarters for this program to be evaluated.

    The  Company's Data Communications segment has significant new  product
introductions planned for the remainder of 2001 as previously discussed  in
the  Company's  2000 Annual Report on Form 10-K.  These products  are  well
positioned for the markets listed in the previous paragraph.

    With the cost reductions and new markets focus listed above the Company
has  plans  for the Data Communications segment to approach breakeven  from
operations in the last quarter of 2001.  However, the current economic  and
market  conditions  make  future  sales visibility  problematic  and  could
jeopardize achievement of this goal.

Electronic Assemblies Segment

    Sales for the first quarter of 2001 increased $1,789,505 over the  same
period  in  2000 from higher order volume.  Some of the Company's  contract
manufacturing customers have been affected by the current economic slowdown
which  may lower sales for this segment during future quarters.  The  gross
profit  percentage was 12% and 15% in the first quarter of  2001  and  2000
respectively.   Selling,  general  and  administrative  expenses  increased
slightly when compared to the same period in 2000.

Audio Equipment Segment

    Sales for the first quarter of 2001 decreased $131,840 when compared to
the same period in 2000.  Gross profit margins in the first quarter of 2001
decreased  to  31.7%  as compared to 37.1% for the  same  period  in  2000,
primarily due to lower sales volume over which to absorb fixed costs.

    Selling,  general and administrative costs for the period decreased  in
the first quarter of 2001 when compared to the same period in 2000.

    Legacy  Audio  has  historically sold its  products  through  a  direct
marketing  program.  The Company believes that this method of  distribution
has  limited  its  ability  to penetrate the broader  market.   Legacy  has
developed  plans  to  begin  distributing  its  products  through  a   more
traditional dealer network.  The Company plans to begin adding dealers in a
conservative  manner beginning in the third quarter of this  year.   During
this  period  Legacy  will begin shifting marketing resources  to  the  new
method  of  distribution while at the same time attempting to maintain  its
current level of direct sales.

Other Income and Expense

    Investment income for the three months ended March 31, 2001 was  higher
than  the  same period in 2000 due to higher invested balances  and  higher
rates of return available on invested funds.

Factors that May Affect Operating Results

   The statements contained in this report on Form 10-Q that are not purely
historical are forward looking statements within the meaning of Section 27A
of  the  Securities Act of 1933 and Section 21E of the Securities  Exchange
Act  of  1934,  including statements regarding the Company's  expectations,
hopes,  intentions  or  strategies regarding the future.   Forward  looking
statements  include:  statements  regarding  future  products  or   product
development; statements regarding future research and development  spending
and  the  Company's marketing and product development strategy,  statements
regarding  future  production  capacity.  All  forward  looking  statements
included in this document are based on information available to the Company
on  the  date hereof, and the Company assumes no obligation to  update  any
such  forward looking statements.  Readers are cautioned not to place undue
reliance  on  these forward looking statements, which reflect  management's
opinions  only as of the date hereof.  Readers should carefully review  the
risk  factors described in other documents the Company files from  time  to
time  with  the  Securities and Exchange Commission, including  the  Annual
Report  on  Form  10-K.  It is important to note that the Company's  actual
results  could  differ  materially  from  those  in  such  forward  looking
statements.  Some of the factors that could cause actual results to  differ
materially are set forth below.

   The  Company  has  experienced and expects  to  continue  to  experience
fluctuations  in  its  results  of operations.   Factors  that  affect  the
Company's  results of operations include the volume and  timing  of  orders
received, changes in global economics and financial markets, changes in the
mix of products sold, market acceptance of the Company's and its customer's
products,  competitive pricing pressures, global currency  valuations,  the
availability  of  electronic  components that the  Company  purchases  from
suppliers,  the Company's ability to meet increasing demand, the  Company's
ability  to  introduce new products on a timely basis, the  timing  of  new
product  announcements and introductions by the Company or its competitors,
changing  customer requirements, delays in new product qualifications,  the
timing and extent of research and development expenses and fluctuations  in
manufacturing yields.  As a result of the foregoing or other factors, there
can  be  no  assurance  that  the  Company  will  not  experience  material
fluctuations  in future operating results on a quarterly or  annual  basis,
which  would  materially  and  adversely  affect  the  Company's  business,
financial condition and results of operations.

PART II    OTHER INFORMATION
  Item 6.  Exhibits and Reports on Form 8-K
   (b)  Forms 8-K
          1. The Company filed a Form 8-K dated March 23, 2001 announcing
          significantly lower sales and operating income in its Data
          Communication segment for the first quarter of 2001.

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.
                                   Allen Organ Company
                                      (Registrant)

Date: May 11, 2001               /s/STEVEN MARKOWITZ
                                 Steven Markowitz, President and Chief
                                 Executive Officer

Date: May 11, 2001               /s/NATHAN S. ECKHART
                                 Nathan S. Eckhart, Vice President-Finance,
                                 Chief Financial and Principal
                                 Accounting Officer