Page 4



                       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, 2000
                         Commission File Number 0-11518



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

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



       12988 Valley View Road              Eden Prairie, Minnesota  55344
    ----------------------------------------------------------------------
                 (Address of principal executive offices)     (Zip Code)

                             (952) 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 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 last 90 days.  Yes X  No

Shares of $.10 par value common stock outstanding at September 8, 2000:
5,477,407











                                  INDEX

                            PPT VISION, INC.

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

Item 1.    Financial Statements

           Balance Sheets as of July 31, 2000 and
           October 31, 1999........................................   3

           Income Statements for the Three and Nine Months Ended
           July 31, 2000 and July 31, 1999........................    4

           Statements of Cash Flows for the Nine Months Ended
           July 31, 2000 and July 31, 1999........................    5

           Notes to Interim Financial Statements-July 31, 2000....    6

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

Item 3.    Quantitative and Qualitative Disclosures about
           Market Risk .............................................  10


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

Item 1.    Legal Proceedings

Item 2.    Changes in Securities and Use of Proceeds

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


                                PPT VISION, INC.

                                 BALANCE SHEETS


                                       July 31, 2000  October 31, 1999
                                           Note A            Note A
                                        ------------      ------------
                                       (unaudited)
ASSETS
Cash and cash equivalents.............  $ 2,236,000       $ 2,135,000
Investments...........................    4,118,000         8,262,000
Accounts receivable, net..............    4,554,000         3,325,000
Inventories:
  Manufactured and purchased parts....    2,242,000         1,649,000
  Work-in-process.....................      307,000           512,000
  Finished goods......................       15,000            30,000
                                        ------------      ------------
Inventories, net......................    2,564,000         2,191,000
Other current assets..................      268,000           205,000
                                        ------------      ------------
     Total current assets.............   13,740,000        16,118,000

Fixed assets, net.....................    2,441,000         2,400,000
Other assets, net.....................    3,316,000         3,327,000
                                        ------------      ------------
     Total assets.....................  $19,497,000       $21,845,000
                                        ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses.  $ 1,736,000       $ 2,674,000
Deferred revenue......................      260,000                --
                                        ------------      ------------
     Total current liabilities........    1,996,000         2,674,000

Shareholders' equity:
Common stock..........................      548,000           526,000
Capital in excess of par value........   30,053,000        28,862,000
Accumulated (deficit).................  (13,035,000)      (10,141,000)
Unrealized loss, investments..........      (65,000)          (76,000)
                                        ------------      ------------
     Total shareholders' equity.......   17,501,000        19,171,000
                                        ------------      ------------
     Total liabilities and
     shareholders' equity.............  $19,497,000       $21,845,000
                                        ============      ============

         See accompanying notes to condensed financial statements

                                 PPT VISION, INC.
                                INCOME STATEMENTS
                                   (UNAUDITED)


                              Three Months Ended          Nine Months Ended
                                   July 31,                   July 31,
                           ------------------------  --------------------------
                              2000         1999           2000         1999
                           -----------  -----------  ------------  ------------
Net revenues.............  $4,714,000   $2,915,000   $12,945,000    $7,897,000
Cost of sales............   2,063,000    1,323,000     5,658,000     3,600,000
                           -----------  -----------  ------------  ------------
Gross profit.............   2,651,000    1,592,000     7,287,000     4,297,000

Expenses:
  Sales and marketing....   1,200,000    1,131,000     3,426,000     3,241,000
  General and
   administrative........     598,000      509,000     1,638,000     1,238,000
  Research and
   development...........   1,343,000    1,158,000     3,882,000     3,138,000
  Non-recurring
   legal costs...........   1,319,000            -     1,700,000             -
                           -----------  -----------  ------------  ------------
  Total expenses.........   4,460,000    2,798,000    10,646,000     7,617,000
                           -----------  -----------  ------------  ------------
Loss from
 operations..............  (1,809,000)  (1,206,000)   (3,359,000)   (3,320,000)

Interest income..........     101,000      162,000       353,000       554,000
Other income.............      60,000            -       112,000        17,000
                           -----------  -----------  ------------  ------------
Net loss before taxes....  (1,648,000)  (1,044,000)   (2,894,000)   (2,749,000)
Income tax benefit.......           -            -             -       587,000
                           -----------  -----------  ------------  ------------
Net loss........          $(1,648,000) $(1,044,000) $ (2,894,000)  $(2,162,000)
                           ===========  ===========  ============  ============
Per share data:
Common shares outstanding   5,380,000    5,440,000     5,301,000     5,418,000
Common and common
  equivalent shares
  outstanding............   5,380,000    5,440,000     5,301,000     5,418,000
Basic loss per share.....  $    (0.31)  $    (0.19)   $    (0.55)   $    (0.40)
                           ===========  ===========  ============  ============
Diluted loss per share...  $    (0.31)  $    (0.19)   $    (0.55)   $    (0.40)
                           ===========  ===========  ============  ============

            See accompanying notes to condensed financial statements








                                 PPT VISION, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                 Nine Months        Nine Months
                                                    Ended              Ended
                                                July 31, 2000      July 31, 1999
                                               ----------------  ---------------
-
Net loss....................................... $(2,894,000)    $  (2,162,000)
Adjustments to reconcile net loss to net
 cash provided by (used in) operating activities:
 Depreciation and amortization..................     805,000           730,000
 Deferred rent..................................          --          (102,000)
 Deferred income tax (benefit) expense..........          --          (587,000)
 Accrued interest income (loss).................      31,000            53,000
 Realized gain on sale of investments...........          --           (14,000)
Change in assets and liabilities
 Accounts receivable............................  (1,229,000)       (1,063,000)
 Inventories....................................    (373,000)          (72,000)
 Other assets...................................     (63,000)          129,000
 Accounts payable and accrued expenses..........    (938,000)         (438,000)
 Deferred revenue...............................     260,000                --
                                                  ----------        ----------
  Total adjustments.............................  (1,507,000)       (1,364,000)
                                                  ----------        ----------
  Net cash used in operating activities.........  (4,401,000)       (3,526,000)

Cash flows from investing activities:
 Purchase of fixed assets.......................    (773,000)       (1,441,000)
 Purchase of investments........................  (2,643,000)       (8,842,000)
 Sales and maturities of investments............   6,767,000        14,468,000
 Net investment in other long-term assets.......     (62,000)           (5,000)
                                                  ----------        ----------
  Net cash provided by investing activities.....   3,289,000         4,180,000

Cash flows from financing activities
 Proceeds from issuance of common stock.........   1,213,000           363,000
 Repurchases of common stock....................          --          (415,000)
                                                  ----------        ----------
  Net cash provided by
   (used in) financing activities.............    1,213,000           (52,000)
                                                  ----------        ----------
Net (decrease) increase
 in cash and cash equivalents..................      101,000           602,000

Cash and cash equivalents at beginning of year..   2,135,000         1,986,000
                                                  ----------        ----------
Cash and cash equivalents at end of period...... $ 2,236,000       $ 2,588,000
                                                  ==========        ==========

         See accompanying notes to condensed financial statements








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

July 31, 2000

NOTE A - ORGANIZATION

We design, manufacture, market and integrate machine vision-based automated
inspection systems for manufacturing applications such as electronic and
mechanical assembly verification, verification of printed characters, packaging
integrity, surface flaw detection, and gauging and measurement tasks.  A machine
vision system is a combination of cameras, lighting, and computer hardware and
software working together to capture and analyze images of moving parts to
determine if the parts match a defined standard.  Machine vision-based
inspection systems enable manufacturers to realize significant economic paybacks
by increasing the quality of manufactured parts and improving the productivity
of manufacturing processes.  The Company's vision systems are sold throughout
the Americas, Europe and Asia to a broad range of industry categories, including
automotive, electronic and semiconductor components, consumer goods, medical
devices, pharmaceuticals and plastics.

NOTE B - 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, 1999 has been derived from the Company's
audited financial statements for the fiscal year ended October 31, 1999 but does
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.

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, 1999.















NOTE C - COMPREHENSIVE LOSS

                              Three Months Ended         Nine Months Ended
                                   July 31,                   July 31,
                           ------------------------  --------------------------
                              2000         1999           2000         1999
                           -----------  -----------  ------------  ------------

Net loss                   $(1,648,000) $(1,044,000)  $(2,894,000)  $(2,162,000)
Other comprehensive loss:
 Unrealized income
 (Loss) on investments          13,000      (21,000)       11,000       (77,000)
                           -----------  -----------  ------------  ------------
Total comprehensive loss   $(1,635,000) $(1,065,000)  $(2,883,000)  $(2,239,000)
                           ===========  ===========  ============  ============

NOTE D - RECLASSIFICATIONS

Certain reclassifications have been made to the 1999 financial statements to
conform to the July 31, 2000 presentation.


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

Results of Operations
---------------------

Net revenues increased 62% to $4,714,000 for the three-month period ended July
31, 2000, compared to net revenues of $2,915,000 for the same period in fiscal
1999 and increased to $12,945,000 for the nine-months ended July 31, 2000, up
from $7,897,000 for the same period of 1999.  Unit sales of the Company's
machine vision systems increased to 233 for the third quarter of fiscal 2000
versus 118 for the same period in fiscal 1999.  Unit sales for the nine-month
period ended July 31, 2000 increased to 597 compared to 279 for the same period
in fiscal 1999.  The increase in the number of units sold is attributed to
strong performance both domestically and internationally in the Company's core
markets, including electronics and automotive. Gross revenues for the first
nine-months of fiscal 2000 increased 22% in North America and 160% outside North
America. Sales to customers outside North America represented 48% of gross
revenues for the first nine-months of fiscal 2000, compared to 30% for the same
period in fiscal 1999.  The Company expects fourth quarter fiscal 2000 net
revenues and unit sales to increase compared to the third quarter of fiscal
2000.

Gross profit increased 66% to $2,651,000 for the three-month period ended July
31, 2000, compared to $1,592,000 for the same period in fiscal 1999. For the
nine-month period ended July 31, 2000, gross profit increased 70% to $7,287,000,
compared to $4,297,000 for the same period in fiscal 1999.  As a percentage of
net revenues, the gross profit for the third quarter of fiscal 2000 increased
slightly to 56% compared 55% in the same period in fiscal 1999.  For the nine-
month period ended July 31, 2000, gross profit as a percentage of net revenues
increased to 56%, compared to 54% for the same period in fiscal 1999.  This
increase in gross profit in absolute dollars for the three and nine month period
ended July 31, 2000 is primarily attributed to the increase in net revenues. The
Company anticipates that the gross profit as a percentage of net revenues to
remain constant for the remainder of fiscal 2000.

Sales and marketing expenses increased 6% to $1,200,000 for the three-month
period ended July 31, 2000, compared to $1,131,000 for the same period in fiscal
1999. For the nine-month period ended July 31, 2000, selling expenses increased
6% to $3,426,000, compared to $3,241,000 for the same period in fiscal 1999.  As
a percentage of net revenues, sales and marketing expenses decreased to 25% for
the third quarter of fiscal 2000, compared to 39% for the third quarter of
fiscal 1999.  For the nine-month period ended July 31, 2000, selling expenses as
a percentage of net revenues decreased to 26%, compared to 41% for the same
period in fiscal 1999.  The decrease in expenses as a percentage of net revenues
is attributed to the increase in net revenues.  Although the Company will limit
the rate of growth in sales and marketing expenses, it is anticipated that sales
and marketing expenses may increase slightly in the remainder of fiscal 2000 as
the Company makes the necessary investments to support strategic initiatives.

General and administrative expenses increased 17% to $598,000 for the three-
month period ended July 31, 2000, compared to $509,000 for the same period in
fiscal 1999. For the nine-month period ended July 31, 2000, general and
administrative expenses increased 32% to $1,638,000, compared to $1,238,000 for
the same period in fiscal 1999. As a percentage of net revenues general and
administrative expenses decreased to 13% for the third quarter of fiscal 2000,
compared to 17% for the third quarter of fiscal 1999.  For the nine-month period
ended July 31, 2000, general and administrative expenses as a percentage of net
revenues decreased to 13%, compared to 16% for the same period in fiscal 1999.
The increase in expenditures in absolute dollars is primarily attributable to
increases associated with the Company's revenue growth along with amortization
expense related to the Company's SMI patent which commenced in June 2000.  The
SMI patent is being amortized on a straight-line basis over a ten year period
resulting in an incremental $75,000 of amortization expense per quarter.

Research and development expenses increased 16% to $1,343,000 for the three-
month period ended July 31, 2000, compared to $1,158,000 for the same period in
fiscal 1999. For the nine-month period ended July 31, 2000, research and
development expenses increased 24% to $3,882,000, compared to $3,138,000 for the
same period in fiscal 1999. As a percentage of net revenues, research and
development expenses decreased to 28% for the third quarter of fiscal 2000,
compared to 40% for the third quarter of fiscal 1999. For the nine-month period
ended July 31, 2000, research and development expenses as a percentage of net
revenues decreased to 30%, compared to 40% for the same period in fiscal 1999.
The increase in research and development expenses is in line with the Company's
objective to commit the necessary resources to support strategic initiatives.
The Company expects its research and development expenses to increase slightly
in its fourth quarter of fiscal 2000 as compared to the third quarter of fiscal
2000.

Non-recurring legal costs for the three and nine-month period ended July 31,
2000 relate to costs and expenses incurred in connection with the Company's
defense and settlement of the patent infringement lawsuit brought by National
Instruments Corporation and the Company's defense and settlement of the breach
of contract lawsuit brought by Integrated Electronic Technologies.  Both
lawsuits were settled during the quarter ended July 31, 2000.  See Part II, Item
1 "Legal Proceedings" of this Form 10-Q for more detailed information regarding
the lawsuits.

Interest income decreased 37% to $101,000 for the three-month period ended July
31, 2000, compared to $162,000 for the same period in fiscal 1999. For the nine-
month period ended July 31, 2000, interest income decreased 36% to
$353,000, compared to $554,000 for the same period in fiscal 1999.  The decrease
in interest income is related to a reduction in the balances in cash and cash
equivalents and short-term investments.

The Company did not record an income tax benefit or expense for the first nine-
months ended July 31, 2000, compared to an income tax benefit of $587,000 for
the first nine-months in fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Working capital decreased to $11,744,000 at July 31, 2000 from $13,444,000 at
October 31, 1999.  The Company financed its operations during the first nine-
months of fiscal 2000 through internally generated cash flow and existing cash
and cash equivalents. Net cash used by operating activities during the first
nine months of fiscal 2000 was $4,401,000.  Accounts receivable increased
$1,229,000 primarily due to increased revenues and product shipments during the
third quarter ended July 31, 2000.  Inventories increased $373,000 during the
first nine-months of fiscal 2000 due to the purchase of inventory items with
extended delivery lead times to fulfill future orders.  Accounts payable and
accrued expenses decreased by $938,000.  The decrease in accounts payable and
accrued expenses primarily results from the reduction of accruals established at
the previous fiscal year-end.

Net cash provided by investing activities was $3,289,000, primarily due to sales
and maturities of investments.  The Company used $773,000 of cash for the
purchase of fixed assets, mainly consisting of computer, lab and manufacturing
equipment.  The Company anticipates that it will expend approximately $150,000
on capital expenditures over the last quarter of fiscal 2000.  Investments
consist of short-term investment grade securities.

Net cash provided by financing activities was $1,213,000.  The financing
activities for the nine-month period ended July 31, 2000 consisted of stock
option exercises, issuance of shares pursuant to the Company's employee stock
purchase plan and a $1.0 million equity investment made by Mr. Peter R.
Peterson, a member of the Board of Directors.

The Company believes that its cash flow from operations, existing cash and cash
equivalents, and investments at July 31, 2000 will provide adequate liquidity to
meet the Company's normal working capital and capital resource needs for at
least the next twelve months.

FORWARD LOOKING STATEMENTS
--------------------------
This Form 10-Q contains 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, beliefs,
intentions or strategies regarding the future. Forward-looking statements
include, without limitation, statements regarding the extent and timing of
future revenues and expenses and customer demand. These statements include, but
are not limited to, changes in worldwide general economic conditions,
cyclicality of capital spending by customers, PPT VISION's ability to keep pace
with technological developments and evolving industry standards, worldwide
competition, and PPT VISION's ability to protect its existing intellectual
property from challenges from third parties and other factors.

All forward-looking statements included in this document are based on
information available to the Company as of the date hereof, and the Company
assumes no obligation to update any such forward-looking statements. It is
important to note that the Company's actual results could differ materially from
those in such forward-looking statements. The forward-looking statements of the
Company are subject to risks and uncertainties. Some of the factors that could
cause future results to materially differ from the Company's recent results or
those projected in the forward-looking statements are detailed in our Annual
Report on Form 10-K for the year ended October 31, 1999, filed with the SEC.

Item 3:  Quantitative and Qualitative Disclosures about Market Risk.

The Company believes it does not have material exposure to quantitative and
qualitative market risks.  The carrying amounts reflected in the balance sheets
of cash and cash equivalents, investments, trade receivables and trade payables
approximate fair value at July 31, 2000 due to the short maturities of these
instruments.

Interest Rate Risk

The Company maintains investment portfolio holdings of various issuers, types
and maturities, primarily U.S. government and agency securities and other short
term, interest-bearing investment grade securities.   The Company's cash and
investments include cash equivalents, which the Company considers to be
investments purchased with original maturities of three months or less.
Investments having original maturities in excess of three months are stated at
amortized cost, which approximates fair value, and are classified as available
for-sale.  Given the short maturities and investment grade quality of the
portfolio holdings at July 31, 2000, as well as the Company's policy of holding
rate sensitive instruments to maturity, a 100 basis point rise in interest rates
would not be expected to have a material adverse impact on the fair value of the
Company's investment portfolio.  As a result, the Company does not currently
hedge these interest rate exposures.

Foreign Currency Exchange Rate Risk.

The Company's international sales, which are primarily in Europe, South America,
Japan and Southeast Asia, have historically been transacted in U.S. Dollars.  As
a result, the Company believes it is not subject to adverse movements in foreign
currency exchange rates.













PART II.  Other Information

Item 1:   LEGAL PROCEEDINGS
          -----------------

National Instruments Corporation v. PPT Vision, Inc.

As previously disclosed, in July 1999, the Company was served by National
Instruments Corporation ("NIC") of Austin, Texas, in a patent infringement
lawsuit filed in United States District Court for the Western District of Texas.
NIC alleged that the Company's Vision Program Manager software ("VPM") infringed
certain United States patents held by NIC that it claimed related to certain
aspects of graphical user interfaces.  The Company filed a counterclaim and
requested that the Court declare the NIC patents invalid or determine that the
Company did not infringe the NIC patents.

On June 16, 2000, PPT Vision announced that it had entered into a settlement
agreement with NIC under which PPT agreed to make a one-time payment of
$1,000,000 to NIC and to make a minor modification to its Vision Program
ManagerO (VPM) software, and NIC agreed to dismiss the case with prejudice.
PPT also dismissed its counterclaims with prejudice.  The District Court entered
an Order dismissing the case with prejudice on June 23, 2000.

Electronic Technologies, Inc v. PPT Vision,  Inc.

On July 9, 1999, Integrated Electronic Technologies, Inc. ("IET") of Cicero, New
York, filed a complaint against the Company in the United States District Court
for the Northern District of New York. IET asserted breach of contract and
related claims in connection with the proposed purchase by the Company of
certain handling systems to be manufactured by IET.  The Company filed an answer
denying all liability and asserted  counterclaims seeking damages from IET.  The
parties entered into a settlement agreement under which the parties agreed to
dismiss the lawsuit with prejudice and  the Company agreed to pay IET a total of
$160,000.  The District Court entered an Order dismissing the case with
prejudice in July 2000.

For further information see "Patents and Proprietary Rights" and "Important
Factors Regarding Forward-Looking Statements- Proprietary Technology" in Part 1,
Item 1 of the Company's Annual Report on Form 10-K.


Item 2:   CHANGES IN SECURITIES AND USE OF PROCEEDS
          -----------------------------------------

In June, 2000, Mr. Peter R. Peterson, a director of the Company,  purchased
170,000 shares of the common stock directly from the Company at a price of $6.00
per share for total consideration of $1,020,000.   The Company believes the
transaction was exempt pursuant to Section 4(2) of the Securities Act of 1933.

Item 3:   DEFAULTS UPON SENIOR SECURITIES
          ------------------------------
          Not Applicable




Item 4:   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          ---------------------------------------------------
          None.


Item 5:   OTHER INFORMATION
          -----------------
          On July 7, 2000, PPT VISION announced the election of Robert W. Heller
          to its Board of Directors.


Item 6:   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------
          (a)   Exhibits:

          The following exhibits are filed as part of this Quarterly
          Report on Form 10-Q for the quarterly period
          ended July 31, 2000: .....................................     12

          27.1 Financial Data Schedule


          (b)   Reports on Form 8-K

                None.



                                   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.

                                        PPT VISION, INC.

Date: September 14, 2000

                                        /s/Richard R. Peterson
                                        -----------------------------
                                        Richard R. Peterson
                                        (Principal Accounting Officer)
                                        Chief Financial Officer