================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

             [X]     Quarterly Report Pursuant to Section 13 or
                     15(d) of the Securities Exchange Act of 1934

                     For the period ended February 28, 2001
                                          -----------------

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

             For the transition period from __________ to __________


             Commission File Number: 0-8656
                                    ------------------------------

                                    TSR, Inc.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                     13-2635899
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


                      400 Oser Avenue, Hauppauge, NY 11788
              ----------------------------------------------------
                    (Address of principal executive offices)


                                  631-231-0333
              ----------------------------------------------------
                         (Registrant's telephone number)


                                      None
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


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.    [X] Yes [ ] No


                               SHARES OUTSTANDING

           4,418,012 shares of common stock, par value $.01 per share,
                              as of March 31, 2001

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                                     Page 1
<PAGE>

                           TSR, INC. AND SUBSIDIARIES


                                      INDEX

                                                                           Page
                                                                          Number
                                                                          ------
Part I.  Financial Information:

         Item 1.  Financial Statements (unaudited):

                  Consolidated Condensed Balance Sheets --
                       February 28, 2001 and May 31, 2000.................   3

                  Consolidated Condensed Statements of Earnings --
                       For the three months and nine months ended
                       February 28, 2001 and February 29, 2000............   4

                  Consolidated Condensed Statements of Cash Flows --
                       For the nine months ended February 28, 2001 and
                       February 29, 2000..................................   5

                  Notes to Consolidated Condensed Financial Statements....   6

         Item 2.  Management's Discussion and Analysis....................   7

Part II.  Other Information...............................................  12

Signatures................................................................  12


                                     Page 2


<PAGE>

Part I. Financial Information
        Item 1. Financial Statements


                           TSR, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
ASSETS                                                                       February 28,      May 31,
                                                                                 2001            2000
                                                                             -----------     -----------
<S>                                                                          <C>             <C>
Current Assets:
     Cash and cash equivalents (Note 6) ................................     $ 3,678,583     $ 4,110,283
     Marketable securities (Note 7) ....................................       4,050,334       3,279,232
     Accounts receivable (net of allowance for
          doubtful accounts of $273,000 and $173,000) ..................      14,016,754      12,816,762
     Other receivables .................................................          82,566         146,318
     Prepaid expenses ..................................................          42,659          39,700
     Prepaid and recoverable income taxes ..............................          20,630          39,158
     Deferred income taxes .............................................          93,000          59,000
                                                                             -----------     -----------
          Total current assets .........................................      21,984,526      20,490,453

Equipment and leasehold improvements, at cost (net of accumulated
     depreciation and amortization of $661,000 and $577,000) ...........         158,375         183,356
Other assets ...........................................................          46,145          40,302
Deferred income taxes ..................................................         231,000         231,000
                                                                             -----------     -----------
                                                                             $22,420,046     $20,945,111
                                                                             ===========     ===========
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
     Accounts and other payables .......................................     $   103,790     $   178,077
     Accrued and other liabilities .....................................       2,893,630       3,563,024
     Advances from customers ...........................................       1,943,256       1,234,660
     Income taxes payable ..............................................         215,719         220,823
                                                                             -----------     -----------
          Total current liabilities ....................................       5,156,395       5,196,584
                                                                             -----------     -----------
Shareholders' Equity:
     Preferred stock, $1 par value, authorized
          1,000,000 shares; none issued ................................            --              --
     Common stock, $.01 par value, authorized
          25,000,000 shares; issued 6,078,326 shares ...................          60,783          60,783
     Additional paid-in capital ........................................       4,134,053       4,134,053
     Retained earnings .................................................      25,100,116      22,165,851
                                                                             -----------     -----------
                                                                              29,294,952      26,360,687
     Less: Treasury Stock, 1,660,314 and 1,397,914 shares at cost ......      12,031,301      10,612,160
                                                                             -----------     -----------
                                                                              17,263,651      15,748,527
                                                                             -----------     -----------

                                                                             $22,420,046     $20,945,111
                                                                             ===========     ===========
</TABLE>

        The accompanying notes are an integral part of these consolidated
                         condensed financial statements.


                                     Page 3
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
   FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            Three Months Ended                Nine Months Ended

                                                                       February 28,     February 29,    February 28,    February 29,
                                                                           2001             2000            2001            2000
                                                                       ------------     ------------    ------------    ------------
<S>                                                                    <C>              <C>             <C>             <C>
Revenues ..........................................................    $ 19,392,765     $ 18,432,266    $ 60,528,268    $ 60,067,905

Cost of sales .....................................................      15,233,999       14,056,550      47,236,700      45,855,484
Selling, general and administrative expenses ......................       2,839,951        2,937,205       8,442,749       8,838,590
                                                                       ------------     ------------    ------------    ------------
                                                                         18,073,950       16,993,755      55,679,449      54,694,074
                                                                       ------------     ------------    ------------    ------------

Income from operations ............................................       1,318,815        1,438,511       4,848,819       5,373,831

Other income:
   Interest and dividend income ...................................         144,644          103,637         351,758         313,584
   Unrealized gain (loss) from marketable securities, net .........         (25,369)           1,103          17,688          10,076
   Gain from sales of assets ......................................            --             22,000            --            23,950
                                                                       ------------     ------------    ------------    ------------
Income before income taxes ........................................       1,438,090        1,565,251       5,218,265       5,721,441
Provision for income taxes ........................................         638,000          683,000       2,284,000       2,470,000
                                                                       ------------     ------------    ------------    ------------
   Net income .....................................................    $    800,090     $    882,251    $  2,934,265    $  3,251,441
                                                                       ============     ============    ============    ============

Basic and diluted net income per common share .....................    $       0.18     $       0.18    $       0.65    $       0.63
                                                                       ============     ============    ============    ============
Weighted average number of basic and diluted
  common shares outstanding .......................................       4,423,945        4,925,962       4,519,990       5,128,198
                                                                       ============     ============    ============    ============
</TABLE>

        The accompanying notes are an integral part of these consolidated
                         condensed financial statements.


                                     Page 4
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
        FOR THE NINE MONTHS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  Nine Months Ended

                                                                            February 28,    February 29,
                                                                                2001            2000
                                                                            ------------    ------------
<S>                                                                         <C>             <C>
Cash flows from operating activities:
   Net income ..........................................................    $ 2,934,265     $ 3,251,441
   Adjustments to reconcile net income
     to net cash provided by operating activities:
       Provision for doubtful accounts .................................        100,000            --
       Depreciation and amortization ...................................         84,469         106,287
       Unrealized gain from marketable securities, net .................        (17,688)        (10,076)
       Deferred income taxes ...........................................        (34,000)         25,000
       Gain on sales of assets .........................................           --           (23,950)
   Changes in assets and liabilities:
       Accounts receivable .............................................     (1,299,992)      1,410,276
       Other receivables ...............................................         63,752         (36,912)
       Prepaid expenses ................................................         (2,959)         11,612
       Prepaid and recoverable income taxes ............................         18,528        (310,108)
       Other assets ....................................................         (5,843)         (7,610)
       Accounts payable and accrued expenses ...........................       (743,681)       (716,911)
       Income taxes payable ............................................         (5,104)         70,224
       Advances from customers .........................................        708,596         185,984
                                                                            -----------     -----------
    Net cash provided by operating activities ..........................      1,800,343       3,955,257
                                                                            -----------     -----------

Cash flows from investing activities:
       Proceeds from maturities and sales of marketable securities .....      4,109,937       4,336,181
       Purchases of marketable securities ..............................     (4,863,351)     (3,389,263)
       Purchases of fixed assets .......................................        (59,488)       (158,519)
       Proceeds from sales of assets ...................................           --            23,950
                                                                            -----------     -----------
    Net cash provided by (used in) investing activities ................       (812,902)        812,349
                                                                            -----------     -----------

Cash flows from financing activities:
       Purchase of treasury stock ......................................     (1,419,141)     (6,023,793)
                                                                            -----------     -----------
    Net cash used in financing activities ..............................     (1,419,141)     (6,023,793)
                                                                            -----------     -----------

Net decrease in cash and cash equivalents ..............................       (431,700)     (1,256,187)
Cash and cash equivalents at beginning of period .......................      4,110,283       2,234,723
                                                                            -----------     -----------

Cash and cash equivalents at end of period .............................    $ 3,678,583     $   978,536
                                                                            ===========     ===========
Supplemental Disclosures:
    Income tax payments ................................................    $ 2,305,000     $ 2,710,000
                                                                            ===========     ===========

    Interest paid ......................................................    $      --       $      --
                                                                            ===========     ===========
</TABLE>

        The accompanying notes are an integral part of these consolidated
                         condensed financial statements.


                                     Page 5
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                FEBRUARY 28, 2001


1.   The accompanying unaudited consolidated condensed financial statements have
     been prepared in accordance with generally accepted accounting principles
     for interim financial information and with the instructions of Form 10- Q
     of Regulation S-X. Accordingly, they do not include all the information and
     notes required by generally accepted accounting principles for complete
     financial statements. For further information refer to the Company's
     consolidated financial statements and notes thereto included in the
     Company's Annual Report on Form 10-K for the year ended May 31, 2000.

2.   In the opinion of the Company, the accompanying unaudited consolidated
     condensed financial statements contain all adjustments (consisting of only
     normal recurring accruals) necessary to present fairly the consolidated
     financial position, the consolidated results of operations, and
     consolidated cash flows for the periods presented.

3.   The Company is primarily engaged in the business of providing computer
     programming consulting services. The Company provides technical computer
     personnel to companies to supplement their in-house information technology
     capabilities. In addition, the Company provided services converting
     software applications to be year 2000 compliant utilizing Catch/21 a year
     2000 software solution which automated to a significant extent the
     conversion process.

4.   The consolidated condensed financial statements include the accounts of
     TSR, Inc. and its wholly-owned subsidiaries. All significant intercompany
     balances and transactions have been eliminated in consolidation.

5.   The Company recognizes computer programming consulting services revenues as
     services are provided. Provided that acceptance was probable, revenue from
     Catch/21 code conversion was recognized when the converted code was
     delivered.

6.   The Company considers short-term highly liquid investments with maturities
     of three months or less at the time of purchase to be cash equivalents.
     Cash and cash equivalents were comprised of the following as of February
     28, 2001:

           Cash in banks .............................       $  718,519
           Money Market Funds.........................        1,972,771
           United States Treasury Bills...............          987,293
                                                              ---------
                                                             $3,678,583
                                                             ==========

7.   Marketable securities consists of United States Treasury Bills and equity
     securities. The treasury bills with maturities at acquisition in excess of
     90 days, are classified as held to maturity investments. The Company's
     equity securities are classified as trading securities. The amortized cost,
     gross unrealized holding gains, gross unrealized holding losses and
     carrying value for marketable securities by major security type at February
     28, 2001 are as follows:

                                               Gross       Gross
                                            Unrealized   Unrealized
                                Amortized    Holding      Holding      Carrying
                                  Cost        Gains       Losses        Value
                               ----------    -------     -------     ----------
     United States
       Treasury Bills........  $3,893,736       --          --        3,893,736
     Equity Securities ......     133,289     25,302      (1,993)       156,598
                               ----------    -------     -------     ----------
                               $4,027,025    $25,302     $(1,993)    $4,050,334
                               ==========    =======     =======     ==========

8.    In October 2000, the Board of Directors authorized an additional buy-back
      of up to 250,000 shares of the Company's common stock. During the nine
      months ended February 28, 2001, the Company repurchased 262,400 shares of
      its common stock at a cost of $1,419,141.


                                     Page 6


<PAGE>


Part I. Financial Information

        Item 2.

                           TSR, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION


The following discussion and analysis should be read in conjunction with the
consolidated condensed financial statements and the notes to the consolidated
condensed financial statements.

Results of Operations

The following table sets forth for the periods indicated certain financial
information derived from the Company's consolidated statements of earnings.
There can be no assurance that trends in sales growth or operating results will
continue in the future:

Three months ended February 28, 2001 compared with three months ended February
29, 2000


  (Dollar amounts in Thousands)                    3 Months Ended

                                         February 28,            February 29,
                                            2001                    2000

                                                  % of                    % of
                                    Amount      Revenues     Amount     Revenues
                                    -------     --------    -------     --------

Revenues ........................   $19,393      100.0      $18,432      100.0
Cost of Sales ...................    15,234       78.6       14,057       76.3
                                    -------      -----      -------      -----
Gross Profit ....................     4,159       21.4        4,375       23.7

Selling, General, and
  Administrative expenses .......     2,840       14.6        2,937       15.9
                                    -------      -----      -------      -----
Income from Operations ..........     1,319        6.8        1,438        7.8

Other Income ....................       119        0.6          127        0.7
                                    -------      -----      -------      -----
Income Before Income Taxes ......     1,438        7.4        1,565        8.5
Provision for Income Taxes ......       638        3.3          683        3.7
                                    -------      -----      -------      -----
Net Income ......................   $   800        4.1      $   882        4.8
                                    =======      =====      =======      =====

Revenues

Revenues for the quarter ended February 28, 2001 increased $961,000 or 5.2% from
the comparable period in fiscal 2000. For the current quarter 100% of revenues
were derived from computer programming consulting services as compared with
97.7% from computer programming consulting services and 2.3% from Year 2000
services in fiscal 2000.

Computer programming consulting services revenues increased $1,381,000 or 7.7%
from $18,012,000 in the quarter ended February 29, 2000 to $19,393,000 in the
quarter ended February 28, 2001. This increase resulted primarily from an
increase in billing rates, which increase is attributable to increased costs of
consultants. The Company had an average of approximately 470 consultants on
billing during the quarter ended February 29, 2000. The Company experienced a
low-point in the number of consultants on billing of approximately 450 in March
2000 and from April 2000 the Company experienced an increase in new business to
approximately 520 consultants on billing as of November 30, 2000. Since then,
the numbers have decreased to 470 consultants. The Company believes that this
decline is primarily attributable to a decrease in the levels of IT spending for
2001 due to the current economic climate.

Revenues from the Company's Catch/21 Year 2000 compliance services, were
$421,000 for the fiscal 2000 third quarter while there were no Year 2000
revenues in the fiscal 2001 third quarter. The Company's Year 2000 projects have
been completed.


                                     Page 7


<PAGE>


Cost of Sales

Cost of sales as a percentage of revenues increased from 76.3% in the quarter
ended February 29, 2000 to 78.6% in the quarter ended February 28, 2001. This
increase is primarily attributable to the decrease in Year 2000 revenues for
which cost of sales as a percentage of revenues was less than the computer
programming consulting services business.

In the computer programming consulting services business, cost of sales as a
percentage of sales increased from 77.7% in the quarter ended February 29, 2000
to 78.6% in the quarter ended February 28, 2001. This increase is attributable
to increases in the amounts being paid to qualified programming professionals
outpacing the Company's ability to pass the increases onto customers due to
competitive market pressures in the industry.

The Year 2000 business incurred no cost of sales in the quarter ended February
28, 2001 versus $62,000 in the prior year quarter.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses decreased $97,000 or 3.3% from
$2,937,000 in the quarter ended February 29, 2000 to $2,840,000 in the quarter
ended February 28, 2001. Selling, general and administrative expenses related to
computer programming consulting services decreased $72,000 from the prior year
period to $2,840,000. This decrease was primarily attributable to lower
compensation expense as a result of a decrease in sales and recruiting staff.
Additionally in the quarter ended February 28, 2001, the Company added $100,000
to its allowance for doubtful accounts due to a small exposure to dot-com
businesses and due to the trend whereby the Company's customers are outsourcing
their IT departments to third parties who may not be as creditworthy as the
original customers.

In the quarter ended February 28, 2001, no selling, general and administrative
expenses were attributable to Year 2000 services. Year 2000 selling, general and
administrative expenses in the quarter ended February 29, 2000 were $26,000.

Income from Operations

In the quarter ended February 28, 2001, the computer programming consulting
service business contributed $1,319,000 or 100% of the income from operations.
In the prior year quarter, the computer programming consulting service business
contributed $1,106,000 or 76.9% of income from operations and the Year 2000
business contributed $332,000 or 23.1%.

Other Income

Other income resulted primarily from interest and dividend of $145,000. The
decrease in other income by $8,000 to $119,000 was due to higher interest income
in the current period offset by unrealized mark to market losses of $25,000 in
the current period and a gain on sale of assets of $24,000 in fiscal 2000.

Income Taxes

The effective income tax rate increased to 44.4% in the quarter ended February
28, 2001 from 43.6% in the quarter ended February 29, 2000 because of higher
state and local taxes.


                                     Page 8
<PAGE>


Nine months ended February 28, 2001 compared with nine months ended February 29,
2000.

 (Dollar amounts in Thousands)                     9 Months Ended

                                         February 28,            February 29,
                                            2001                    2000

                                                  % of                    % of
                                    Amount      Revenues     Amount     Revenues
                                    -------     --------    -------     --------

Revenues ........................   $60,528       100.0     $60,068      100.0
Cost of Sales ...................    47,237        78.0      45,855       76.3
                                    -------       -----     -------      -----
Gross Profit ....................    13,291        22.0      14,213       23.7

Selling, General, and
  Administrative expenses .......     8,442        14.0       8,839       14.7
                                    -------       -----     -------      -----
Income from Operations ..........     4,849         8.0       5,374        8.9

Other Income ....................       369         0.6         347        0.6
                                    -------       -----     -------      -----
Income Before Income Taxes ......     5,218         8.6       5,721        9.5

Provision for Income Taxes ......     2,284         3.8       2,470        4.1
                                    -------       -----     -------      -----
Net Income ......................   $ 2,934         4.8     $ 3,251        5.4
                                    =======       =====     =======      =====

Revenues

Revenues for the nine months ended February 28, 2001 increased $460,000 or 0.8%
from the comparable period in fiscal 2000. For the current period 99.9% of
revenues were derived from computer programming consulting services and 0.1%
from Year 2000 services, as compared with 97.1% and 2.9% respectively in fiscal
2000.

Computer programming consulting services revenues increased $2,160,000 or 3.7%
from $58,301,000 in the nine months ended February 29, 2000 to $60,461,000 in
the nine months ended February 28, 2001. This increase resulted primarily from
an increase in billing rates, which increase is attributable to increased costs
of consultants. The Company had an average of approximately 510 consultants on
billing for the nine months ending February 29, 2000. The Company experienced a
low-point in the number of consultants on billing of approximately 450 in March
2000 and from April 2000 the Company experienced an increase in new business to
approximately 520 consultants on billing as of November 30, 2000. Since then,
the numbers have decreased to 470 consultants. The Company believes that the
decline is primarily attributable to a decrease in the levels of IT spending for
2001 due to the current economic climate.

Revenues from the Company's Catch/21 Year 2000 compliance services, were $67,000
for the current period versus $1,767,000 in the fiscal 2000 nine month period.
The Company's Year 2000 projects have been completed.


                                     Page 9
<PAGE>

Cost of Sales

Cost of sales as a percentage of revenues increased from 76.3% in the nine
months ended February 29, 2000 to 78.0% in the nine months ended February 28,
2001. This increase is primarily attributable to the decrease in Year 2000
revenues for which cost of sales as a percentage of revenues was less than the
computer programming consulting services business.

In the computer programming consulting services business, cost of sales as a
percentage of sales increased from 77.7% in the nine months ended February 29,
2000 to 78.1% in the nine months ended February 28, 2001. This increase is
primarily attributable to increases in the amounts being paid to qualified
programming professionals outpacing the Company's ability to pass the increases
onto customers due to competitive market pressures in the industry.

The Year 2000 business incurred cost of sales of $30,000 in the nine months
ended February 28, 2001 versus $563,000 in the prior year period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses decreased $397,000 or 4.5%
from $8,839,000 in the nine months ended February 29, 2000 to $8,442,000 in the
nine months ended February 28, 2001. Selling, general and administrative
expenses related to computer programming consulting services decreased $291,000
from the prior year period to $8,427,000. This decrease was primarily
attributable to lower compensation expenses as a result of a decrease in sales
and recruiting staff. Additionally in the nine months ended February 28, 2001,
the Company added $100,000 to its allowance for doubtful accounts due to a small
exposure to dot-com businesses and due to the trend whereby the Company's
customers are outsourcing their IT departments to third parties who may not be
as creditworthy as the original customers.

In the nine months ended February 28, 2001, approximately $16,000 in selling,
general and administrative expenses were attributable to Year 2000 services.
These expenses consist primarily of general overhead, and facilities expenses.
Comparable Year 2000 selling, general and administrative expenses in the nine
months ended February 29, 2000 were $121,000.

Income from Operations

In the nine months ended February 28, 2001, the computer programming consulting
service business contributed $4,828,000 or 99.6% of the income from operations,
while the Year 2000 business contributed the remaining $21,000 or 0.4%. In the
prior year period, the computer programming consulting service business
contributed $4,291,000 or 79.8% of income from operations and the Year 2000
business contributed $1,083,000 or 20.2%.

Other Income

Other income resulted primarily from interest and dividend income of $352,000.
The increase of $22,000 in other income was primarily attributable to a higher
average investable balance and higher interest rates.

Income Taxes

The effective income tax rate increased to 43.8% in the nine months ended
February 28, 2001 from 43.2% in the nine months ended February 29, 2000 because
of higher state and local taxes.


                                     Page 10
<PAGE>

Liquidity, Capital Resources and Changes in Financial Condition

The Company expects that cash flow generated from operations together with its
cash and marketable securities will be sufficient to provide the Company with
adequate resources to meet its cash requirements.

At February 28, 2001, the Company had working capital of $16,828,000 and cash
and cash equivalents of $3,679,000 as compared to working capital of $15,294,000
and cash and cash equivalents of $4,110,000 at May 31, 2000. Working capital
increased primarily due to the Company's net income of $2,934,000 in the nine
months ended February 28, 2001.

The Company had net cash flow of $1,800,000 from operations during the nine
months ended February 28, 2001 as compared to net cash flow from operations of
$3,955,000 in the nine months ended February 29, 2000. Cash flow from operations
consisted primarily of net income of $2,934,000 in the nine months ended
February 28, 2001. However, the Company used cash to support an increase in
accounts receivable of $1,300,000. The increase in accounts receivable occurred
primarily because of slowness in collections due to system changes at several
customers. Additionally, in the nine months ended February 28, 2001, the Company
added $100,000 to its allowance for doubtful accounts due to a small exposure to
dot-com businesses and due to the trend whereby the Company's customers are
outsourcing their IT departments to third parties who may not be as creditworthy
as the original customers. To date, the Company has not sustained any specific
write-offs.

Cash flow used in investing activities resulted primarily from the purchase of
United States Treasury Bills in the current period.

Cash flow used in financing activities of $1,419,000 in the nine months ended
February 28, 2001 resulted from the repurchase of 262,400 shares of common
stock. As of February 28, 2001, the Company has repurchased a total of 1,660,314
shares at an average price of $7.25 or a total cost of $12,031,301. The Company
has completed the buy back authorizations totaling 1,600,000 shares and the
Company's board of directors has authorized the repurchase of up to an
additional 250,000 shares of its common stock. No time limit has been placed on
the duration of the share repurchases. Subject to applicable securities laws,
such purchases will be at times and in amounts as the Company deems appropriate
and may be discontinued at any time. The Company has no obligation or commitment
to repurchase all or any portion of the shares covered by the authorization.

The Company's capital resource commitments at February 28, 2001 consisted of
lease obligations on its branch and corporate facilities. The Company intends to
finance these lease commitments from cash flow provided by operations, available
cash and short-term marketable securities.

The Company's cash and marketable securities were sufficient to enable it to
meet its cash requirements during the period ended February 28, 2001. The
Company has available a revolving line of credit of $5,000,000 with a major
money center bank, which the Company believes provides sufficient financing if
the need arose. As of February 28, 2001, no amounts were outstanding under this
line of credit.

Recent Accounting Pronouncements

Effective June 1, 2001, the Company will adopt SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended. This statement
requires companies to record derivatives on the balance sheet as assets or
liabilities at their fair value. In certain circumstances changes in the value
of such derivatives may be required to be recorded as gains or losses. The
impact of this statement is not expected to have a material effect on the
Company's consolidated financial statements.


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<PAGE>


Forward-Looking Statements

Certain statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations", including statements concerning
the Company's future prospects, the anticipated increase in consulting projects,
and the Company's future cash flow requirements are forward looking statements,
as defined in the Private Securities Litigation Reform Act of 1995. Actual
results may differ materially from those projections in the forward looking
statements which statements involve risks and uncertainties, including but not
limited to the following: risks relating to the competitive nature of the
markets for computer programming consulting services, the effect of current
economic conditions on IT budgets, the extent to which growth in the Company's
contract computer programming services will offset the loss of Year 2000
profits, concentration of the Company's business with certain customers and
uncertainty as to the Company's ability to bring in new customers.


Item 3. Quantitative and Qualitative Disclosure About Market Risk

The Company's earnings and cash flows are subject to fluctuations due to changes
in interest rates primarily from its investment of available cash balances in
money market funds and marketable securities. Under its current policies, the
Company does not use interest rate derivative instruments to manage exposure to
interest rate changes.

                           TSR, INC. AND SUBSIDIARIES

Part II. Other Information

 Item 6. Exhibits and Reports on Form 8K
               (a)  Reports on Form 8K: 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.


                                    TSR, INC.
                                    ----------------------
                                    (Registrant)


Date: April 2, 2001                 /s/ J.F. HUGHES
                                    --------------------------------------------
                                    J.F. Hughes, Chairman,
                                    President and Treasurer


Date: April 2, 2001                 /s/ JOHN G. SHARKEY
                                    --------------------------------------------
                                    John G. Sharkey, Vice President, Finance


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