SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q
                                    ---------

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


                        For Quarter Ended July 31, 1997
                         Commission File Number 0-11518



                                PPT VISION, INC.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

            MINNESOTA                                    41-1413345
   ----------------------------------------------------------------------
    (State of other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)              Identification Number)



       10321 West 70th Street              Eden Prairie, Minnesota  55344
    ----------------------------------------------------------------------
                 (Address of principal executive offices)     (Zip Code)

                             (612) 996-9500
    ----------------------------------------------------------------------
           (Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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 last 90 days.               Yes  X  No

Shares of $.10 par value common stock outstanding at September 9, 1997:
5,386,980
                                                  Total pages this report:  13

Page 2


                                  INDEX

                            PPT VISION, INC.

Part I.    Financial Information                                    Page
-------    ---------------------                                    ----

Item 1.    Unaudited Financial Statements

           Balance Sheets as of July 31, 1997 and...................   3
           October 31, 1996

           Income Statements for the Three-month and................   4
           Nine-month periods ended July 31, 1997 and July 31, 1996

           Statement of Cash Flows for the Nine-month periods.......   5
           ended July 31, 1997 and July 31, 1996

           Notes to Financial Statements--July 31, 1997.............   6

Item 2.    Management's Discussion and Analysis of..................   7
           Financial Condition and Results of Operations

Part II.   Other Information........................................  11
--------   -----------------

Item 1.    Legal Proceedings

Item 2.    Changes in Securities

Item 3.    Defaults Upon Senior Securities

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

Item 5.    Other Information

Item 6.    Exhibits and Reports on Form 8-K

           Signatures...............................................  12
           ----------

Page 3
<TABLE>
                                PPT VISION, INC.

                                 BALANCE SHEETS


                                          07/31/97      10/31/96
                                           Note A        Note A
                                        ------------  ------------
                                        (unaudited)
<S>                                     <C>           <C>
ASSETS
Cash and cash equivalents.............  $ 3,824,000   $ 4,179,000
Investments...........................   16,584,000    15,135,000
Accounts receivable, net..............    3,038,000     4,451,000
Inventories:
  Manufactured and purchased parts....    1,329,000     1,015,000
  Work-in-process.....................      230,000       144,000
  Finished goods......................       73,000        69,000
                                        ------------  ------------
Inventories, net......................    1,632,000     1,228,000
Other current assets..................      115,000       171,000
                                        ------------  ------------
     Total current assets.............   25,193,000    25,164,000

Restricted cash.......................       18,000       135,000
Fixed assets, net.....................    1,323,000       863,000
Other assets, net.....................       95,000        79,000
Deferred income taxes.................    1,634,000     1,815,000
                                        ------------  ------------
     Total assets.....................  $28,263,000   $28,056,000
                                        ============  ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities...................  $   879,000   $ 1,081,000

Deferred rent.........................      145,000       166,000

Shareholders' equity:
Common stock..........................      538,000       536,000
Capital in excess of par value........   29,554,000    29,443,000
Accumulated (deficit).................   (2,823,000)   (3,170,000)
Unrealized loss--investments..........      (30,000)        --
                                        ------------  ------------
     Total shareholders' equity.......   27,239,000    26,809,000
                                        ------------  ------------
     Total liabilities and
     shareholders' equity.............  $28,263,000   $28,056,000
                                        ============  ============

</TABLE>

Page 4
<TABLE>

                                PPT VISION, INC.
                                INCOME STATEMENTS
                                   (UNAUDITED)


                              Three Months Ended         Nine months Ended
                                   July 31,                   July 31,
                           ------------------------   ------------------------
                              1997         1996          1997        1996
                           -----------  -----------   -----------  -----------
<S>                        <C>          <C>           <C>          <C>
Net revenues.............  $3,305,000   $3,163,000    $8,345,000   $9,511,000
Cost of sales............   1,350,000    1,183,000     3,347,000    3,754,000
                           -----------  -----------   -----------  -----------
Gross profit.............   1,955,000    1,980,000     4,998,000    5,757,000

Expenses:
  Selling................     895,000      738,000     2,661,000    1,969,000
  General and
   administrative........     316,000      230,000       916,000      761,000
  Research and
   development...........     580,000      425,000     1,704,000    1,313,000
                           -----------  -----------   -----------  -----------
  Total expenses.........   1,791,000    1,393,000     5,281,000    4,043,000
                           -----------  -----------   -----------  -----------
Income (loss) from
 operations..............     164,000      587,000      (283,000)   1,714,000

Interest income..........     287,000      124,000       830,000      167,000
Other income.............       9,000        3,000        13,000       11,000
                           -----------  -----------   -----------  -----------
Net income before taxes..     460,000      714,000       560,000    1,892,000
Income tax...............    (175,000)       --         (213,000)       --
                           -----------  -----------   -----------  -----------
Net income...............  $  285,000   $  714,000    $  347,000   $1,892,000
                           ===========  ===========   ===========  ===========
Per share data (Note B):
Weighted average common
shares outstanding.......   5,509,000    4,569,000     5,482,000    4,073,000
Net income per share.....  $     0.05   $     0.16    $     0.06   $     0.46
                           ===========  ===========   ===========  ===========


</TABLE>


Page 5
<TABLE>
                                 PPT VISION, INC.
                             STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                               Nine Months       Nine Months
                                                  Ended             Ended
                                              July 31, 1997     July 31, 1996
                                             ----------------  ----------------
<S>                                              <C>               <C>
Net income...................................... $   347,000       $ 1,892,000
Adjustments to reconcile net income to net
 cash provided by operating activities:
 Depreciation and amortization..................     303,000           201,000
 Deferred rent..................................     (21,000)           (3,000)
 Deferred income tax benefit....................     181,000             --
 Accrued interest income........................    (285,000)          (40,000)
Change in assets and liabilities
 Accounts receivable............................   1,413,000          (657,000)
 Inventories....................................    (404,000)          (63,000)
 Other assets...................................      29,000           (85,000)
 Restricted cash................................     117,000             --
 Accounts payable and accrued expenses..........    (202,000)         (188,000)
                                                  ----------        ----------
  Total adjustments.............................   1,131,000          (835,000)
                                                  ----------        ----------
  Net cash provided by operating activities.....   1,478,000         1,057,000

Cash flows from investing activities:
 Purchase of fixed assets.......................    (753,000)         (455,000)
 Purchase of investments........................ (16,407,000)       (3,983,000)
 Sales and maturities of investments............  15,214,000             2,000
                                                  ----------        ----------
  Net cash provided (used) by
   investing activities.........................  (1,946,000)       (4,436,000)

Cash flows from financing activities
 Proceeds from issuance of common stock.........     113,000        17,912,000
                                                  ----------        ----------
  Net cash provided by financing activities.....     113,000        17,912,000
                                                  ----------        ----------

Net increase (decrease) in cash and
 cash equivalents...............................    (355,000)       14,533,000

Cash and cash equivalents at beginning of year..   4,179,000         1,235,000
                                                  ----------        ----------
Cash and cash equivalents at end of period...... $ 3,824,000       $15,768,000
                                                  ==========        ==========

Supplemental disclosure of cash flow information:
 Cash paid during the year for:
  Income tax.................................... $    35,000       $    77,000
  Interest......................................       --                --

</TABLE>

Page 6

                                PPT VISION, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

JULY 31, 1997

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X.  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 (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The Balance Sheet at October 31, 1996 has been derived from the
Company's audited financial statements for the fiscal year ended October 31,
1996.  For further information, refer to the financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended October 31, 1996.

NOTE B - STOCK SPLIT

On March 14, 1996, the Board of Directors approved a three-for-two stock split
in the form of a fifty percent (50%) stock dividend.  The distribution of shares
was made on April 5, 1996 to shareholders of record as of March 25, 1996. All
historical share and per share data included in the financial statements and
exhibits have been restated to reflect the stock split.

Page 7

Item 2
------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Results of Operations
---------------------
  Net Revenues: Net revenues increased 4% to $3,305,000 for the three-month
period ended July 31, 1997, compared to net revenues of $3,163,000 for the same
period in fiscal 1996.  For the nine-month period ended July 31, 1997, net
revenues decreased 12% to $8,345,000 compared to net revenues of $9,511,000 for
the same period in fiscal 1996.  Sales of the Company's machine vision systems
increased to 137 for the third quarter of fiscal 1997 versus 127 for the same
period in fiscal 1996.  For the nine-month period ended July 31, 1997, unit
sales decreased to 332 compared to 356 for the same period in fiscal 1996. Gross
revenues for the first nine months of fiscal 1997 decreased 6% in North America
and 31% outside North America. Sales to customers outside North America
represented 23% of gross revenues in the first nine months of fiscal 1997,
compared to 29% for the same period in fiscal 1996. The increase in net revenues
during the third quarter of fiscal 1997 is primarily due to sales in the
European market. The performance in Europe is mainly the result of strengthening
sales in the electronics segment as well as the addition of new customers in
other markets. The decrease in net revenues during the first nine months of
fiscal 1997 in North America is primarily the result of slowdowns in deliveries
to customers in the electronics segment, which mainly occurredoccured during the
first half of fiscal 1997. Relative to the first half of fiscal 1997, the
Company did improvement in North America during the third quarter of fiscal 1997
in deliveries to customers in the electronics segment.  The decrease in net
revenues during the first nine months of fiscal 1997 outside North America is
primarily the result of decreased deliveries in the Far East, which is mainly
related to slowdowns in the electronics segment.

  Gross Profit: Gross profit decreased 1% to $1,955,000 for the three-month
period ended July 31, 1997, compared to $1,980,000 for the same period in fiscal
1996. For the nine-month period ended July 31, 1997, gross profit decreased 13%
to $4,998,000 compared to $5,757,000 for the same period in fiscal 1996. As a
percentage of net revenues, the gross profit for the third quarter of fiscal
1997 decreased to 59% compared to 63% for the same period in fiscal 1996. For
the nine-month period ended July 31, 1997, the gross profit as a percentage of
net revenues decreased to 60% compared to 61% for the same period in fiscal
1996. The decrease in gross profit as a percentage of net revenues in fiscal
1997 is primarily related to geographic and product mix shift. The Company
anticipates that the gross profit as a percentage of net revenues may fluctuate
and may decline temporarily at certain times in fiscal 1997 due to shifts in
geographic and product mix as well as normal start-up costs associated with
expected new product introductions.

  Selling Expenses: Selling expenses increased 21% to $895,000 for the three-
month period ended July 31, 1997, compared to $738,000 for the same period in
fiscal 1996. For the nine-month period ended July 31, 1997, selling expenses
increased 35% to $2,661,000 compared to $1,969,000 for the same period in fiscal
1996. As a percentage of net revenues, selling expenses increased to 27% for the
third quarter of fiscal 1997, compared to 23% for the third quarter of fiscal

Page 8

1996. For the nine-month period ended July 31, 1997, selling expenses as a
percentage of net revenues increased to 32% compared to 21% for the same period
in fiscal 1996. The increase in expenditures is primarily the result of the
addition of several application engineers and sales people in the latter part of
fiscal 1996. Although the Company will limit the rate of growth in selling
expenses, it is anticipated that selling expenses may remain at current levels
or increase somewhat in the coming quarters as the Company launches new product
initiatives and strengthens its sales and applications engineering organization.
However, the Company believes that over that time, selling expenses will not
increase substantially as a percentage of net revenues compared to the third
quarter of fiscal 1997, depending on the level of sales growth.

  General and Administrative Expenses: General and administrative expenses
increased 37% to $316,000 for the three-month period ended July 31, 1997,
compared to $230,000 for the same period in fiscal 1996. For the nine-month
period ended July 31, 1997, general and administrative expenses increased 20% to
$916,000 compared to $761,000 for the same period in fiscal 1996. As a
percentage of net revenues, general and administrative expenses increased to 10%
for the third quarter of fiscal 1997, compared to 7% for the third quarter of
fiscal 1996. For the nine-month period ended July 31, 1997, general and
administrative expenses as a percentage of net revenues increased to 11%
compared to 8% for the same period in fiscal 1996. The increase in expenditures
is primarily attributable to increased expenses associated with operating the
Company as it prepares for continued growth. In addition, the Company did incur
a one-time charge during the third quarter of fiscal 1997 due to the write-off
of a receivable involving a bankruptcy. The Company believes that during the
remainder of fiscal 1997, general and administrative expenses will not increase
substantially as a percentage of net revenues compared to the third quarter of
fiscal 1997, depending on the level of sales growth.

  Research and Development Expenses: Research and development expenses increased
36% to $580,000 for the three-month period ended July 31, 1997, compared to
$425,000 for the same period in fiscal 1996. For the nine-month period ended
July 31, 1997, research and development expenses increased 30% to $1,704,000
compared to $1,313,000 for the same period in fiscal 1996. As a percentage of
net revenues, research and development expenses increased to 18% for the third
quarter of fiscal 1997, compared to 13% for the third quarter of fiscal 1996.
For the nine-month period ended July 31, 1997, research and development expenses
as a percentage of net revenues increased to 20% compared to 14% for the same
period in fiscal 1996. The increase in expenditures is mainly due to new product
development programs and increased permanent staffing and contract personnel to
support these efforts. While research and development expenses may remain at
current levels or increase slightly as the Company continues to invest in next
generation software and hardware development, the Company expects that during
the remainder of fiscal 1997, such expenses will not increase substantially as a
percentage of net revenues compared to the third quarter of fiscal 1997,
depending on the level of sales growth.

  Interest income increased to $287,000 for the three-month period ended
July 31, 1997, compared to $124,000 for the same period in fiscal 1996. For the
nine-month period ended July 31, 1997, interest income increased to $830,000
compared to $167,000 for the same period in fiscal 1996.  The increase in

Page 9

interest income is primarily due to interest on the proceeds of a public stock
offering completed in June of 1996.

  Income Tax Expense: Income tax expense of $175,000 was recorded for the three-
month period ended July 31, 1997, compared to no income tax expense for the same
period in fiscal 1996. For the nine-month period ended July 31, 1997, income tax
expense of $213,000 was recorded compared to no income tax expense for the same
period in fiscal 1996. The increase in income tax expense resulted from the full
recognition of the potential future tax benefits of loss carry forwards and net
deductible temporary differences available to offset taxable income in future
periods, which occurred in the fourth quarter of fiscal 1996. As a result of
this full recognition, the Company is reporting earnings on a fully-taxed basis.

Liquidity and Capital Resources
-------------------------------
  Working capital increased to $24,314,000 on July 31, 1997 from $24,083,000 on
October 31, 1996. Net cash provided from operating activities during the nine-
month period ended July 31, 1997 was $1,478,000. During the same time
periodfirst nine months of fiscal 1997, accounts receivable decreased $1,413,000
and inventories increased $404,000. The reduction in accounts receivable is
primarily due to improved collections performance. The increase in inventories
is mainly related to raw material purchases to support new product
introductions.

  Net cash used by investing activities was $1,946,000.  The proceeds from sales
and maturities of investments provided $15,214,000 of cash flow, while
$16,407,000 of cash flow was used for the purchase of investments. Investments
consist of short-term investment grade securities. The Company used $753,000 of
cash flow for the purchase of fixed assets, mainly consisting of computer
equipment, lab equipment, and manufacturing equipment.  The Company anticipates
purchases of fixed assets to remain at or near recent levels for the remainder
of fiscal 1997. The Company generated $113,000 from its financing activities as
a result of issuances of its Common Stock upon exercise of stock options.

  Current assets increased slightly to $25,193,000 at July 31, 1997 from
$25,164,000 at October 31, 1996.  This was primarily due to the previously noted
increase in investments and inventories offset by the $1,413,000 decline in
accounts receivable to $3,038,000 at July 31, 1997 from $4,451,000 at October
31, 1996.

  Current liabilities decreased to $879,000 at July 31, 1997 from $1,081,000 at
October 31, 1996.  This was mainly due to a reduction in accrued expenses that
were paid subsequent to year-endwhich resulted from the full payment of certain
accrued expenses as well as a reduction in trade accounts payables.

  The Company believes that its cash flow from operations, existing cash and
cash equivalents, and investments at July 31, 1997 will be adequate for its
working capital and capital resource needs for the foreseeable
future.foreseeable operating needs.

Page 10

FORWARD LOOKING STATEMENT
-------------------------
  Certain of the statements contained in this Form 10-Q that relate to
expectations regarding future sales and profitability contain forward-looking
statements regarding future performance of the Company.  The Company's actual
results could differ materially from the estimates made in the forward-looking
statements as a result of a number of factors, including (i) risks and
uncertainty in the market for machine vision, (ii) cyclicality of capital
spending by customers, (iii) quarterly fluctuations in operating results by the
Company due to the long selling cycle for machine vision products, (iv) the
Company's continued ability to achieve significant international revenue, (v)
competition in the Company's principal markets and (vi) the Company's ability to
continue to enhance its current products and develop new products that keep pace
with technological developments and evolving industry standards.  The Company
wishes to caution readers not to place undue reliance upon any such forward-
looking statement, which speak only as of the date made.

Page 11

PART II.  Other Information

Item 1:   LEGAL PROCEEDINGS
          -----------------
          None

Item 2:   CHANGES IN SECURITIES
          ---------------------
          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 AND REPORTS ON FORM 8-K
          --------------------------------
          (a)   Exhibits:                                                Page
             1. Exhibit 27 - Financial Data Schedule....................  13

          (b)   Reports on Form 8-K

             None

Page 12

                                   SIGNATURES




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


                                        PPT VISION, INC.

Date: September 12, 1997

                                        /s/Thomas R. Northenscold
                                        -----------------------------
                                        Thomas R. Northenscold
                                        (Principal Accounting Officer)
                                        Chief Financial Officer