SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
 FORM 10- QSB QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED:  MARCH 31,
2001   COMMISSION FILE NO: 0-2172  THE FLAMEMASTER CORPORATION(Exact name of
Registrant as specified in its Charter) NEVADA
  95-2018730(State or other jurisdiction of incorporation
  (IRS Employer identificationor organization)
  Number)
  11120 SHERMAN WAY, SUN VALLEY, CALIFORNIA 91352(Address of Principal Executive Office)
   (818) 982-1650Registrant's telephone number including area code (818) 765-5603Registrant's facsimile number including area code Indicate by
check mark whether 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. YESxNO ̈ Indicate the number
of shares outstanding of each of the issuer's classes of common stock, as of
the latest practicable date: March 31, 2001     1,579,729   Item
1 Financial InformationItem 1 Financial Statement

THE FLAMEMASTER
CORPORATION
CONDENSED BALANCE SHEET

MARCH 312001(Unaudited)A S S E T S :Current Assets:Cash and cash
  equivalents
  $2,110,363Marketable securities
  2,554,027Accounts receivable,
  less allowance of $5,000 and $5,000, respectively
  640,258Inventories
  836,415Prepaid expenses
  45,405Deferred income taxes
  206,023Other investments
  76,912Total current assets:
  6,469,403Machinery &
  improvements, net of accumulated depreciation
  94,695License agreement, net
  of accumulated amortization
  62,547TOTAL ASSETS
  $6,626,645LIABILITIES AND STOCKHOLDERS EQUITY:Current Liabilities:Accounts payable
  $122,488Accrued liabilities
  11,881Income tax payable
  -0-Deferred tax liability
  15,076Deferred credits
  10,119Total current liabilities:
  159,564Long-term
  liabilities:Notes payable
  411,967Total Liabilities:
  571,531SHAREHOLDERS' EQUITY:Common Stock,par
  value,$.01 per share, authorized 6,000,000 shares; issued and outstanding
  1,579,729 shares at 03/31/01 and 1,595,757 at 9/30/00.
  15,798Additional paid-in Capital
  3,625,351Retained earning
  2,617,087Allowance for
  marketable securities
  (203,122)TOTAL STOCKHOLDERS EQUITY
  $6,055,114TOTAL LIABILITY AND EQUITY
  $6,626,645



See notes to condensed financial statements.

THE FLAMEMASTER CORPORATION
CONDENSED  STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,







2001
  2000Net
  sales
  $1,102,830
  $1,033,424Royalties
  -
  -Interest
  and Other Income
  103,240
  441,797Total Revenues
  1,206,070
  1,475,221Costs and expenses:Cost of sales
  578,524
  521,888Selling
  84,914
  69,409General and administrative
  152,052
  155,902Laboratory costs
  74,272
  71,991Other expenses
  21,744
  22,544Total costs and expenses:
  911,506
  841,734Income
  before income taxes
  294,564
  633,487Income
  taxes
  77,481
  226,358Net  income
  217,083
  407,129Other
  comprehensive incomeNet of income taxUnrealized
  Holding Gains (Losses)
  (277,362)
  374,628Comprehensive Income
  (60,279)
  $781,757Net income per share, basic
  $.14
  $.25Net income per share, diluted
  ****
  ****Weighted average shares outstanding:Basic
  1,581,513
  1,612,131Diluted
  1,697,900
  1,697,701

****Diluted
earnings per share are not presented, as effect of the assumed conversion of
Notes Payable is anti-dilutive.
See notes to condensed financial statements.

THE FLAMEMASTER
CORPORATIONCONDENSED STATEMENTS OF INCOME (UNAUDITED)
SIX MONTHS ENDED MARCH 31,




2001
  2000Net
  Sales
  $1,965,776
  $1,883,940Royalties
  -
  813Interest
  and Other Income
  191,937
  608,015Total Revenues
  2,157,713
  2,492,768Costs and expenses:Cost of Sales
  1,023,618
  976,546Selling
  169,769
  138,318General and administrative
  304,647
  320,219Laboratory
  141,362
  139,068Other (income)/ Expenses, Net
  42,709
  44,040Total Costs and Expenses
  1,682,105
  1,618,191Income
  before income taxes
  475,608
  874,577Income
  taxes
  148,671
  326,674Net
  income
  326,937
  547,903Other comprehensive incomeNet of income taxesIncrease
  (decrease) in unrealized holding gains
  (1,036,510)
  1,404,262Comprehensive
  Income
  $(709,573)
  $1,952,165Net income per share, basic
  $.21
  $.34Net income per share, diluted
  ***
  $.34Weighted average shares outstanding:Basic
  1,586,903
  1,616,624Diluted
  1,627,865
  1,702,194See notes to condensed financial statements

THE FLAMEMASTER
CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED MARCH 31,




2001Net
  cash provided (used) by operating activities:
  $316,659CASH FLOWS FROM INVESTING ACTIVITIES:Purchase
  of equipment & improvements
  (35,644)Net
  purchases and sales of investment securities
  (393,380)NET CASH USED IN INVESTING ACTIVITIES:
  (429,024)CASH
  FLOWS FROM FINANCING ACTIVITIES:Increase
  in notes payable
  11,770Purchase
  of Companys Common Stock
  (86,462)Dividends
  paid
  (101,721)NET CASH USED IN FINANCING ACTIVITIES
  (176,413)NET
  INCREASE, (DECREASE), IN CASH
  (288,778)Cash, beginning of period
  2,399,141Cash, end of period
  $2,110,363Cash paid during period for income taxes
  $205,300Cash
  paid during period for interest expense
  $13,183

See notes to Condensed Financial Statements.

THE FLAMEMASTER
CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2001



Note 1:         Forward-Looking
and Cautionary Statements

The Company and its representatives may
from time to time make written or oral forward-looking statements, including
statements contained in the Company's filings with Securities and Exchange
Commission and its reports to stockholders. In connection with the "safe
harbor" provisions of the Private Securities Litigation Reform Act of
1995, the Company is hereby identifying information that is forward-looking,
including, without limitations, statements regarding the Company's future
financial performance, the effect of government regulations, national and local
economic conditions, the competitive environment in which the Company operates,
results or success of discussions with other entities on mergers, acquisitions,
or alliance possibilities and expansion of product offerings.  Actual results may differ materially from
those described in the forward-looking statement.  The Company cautions that the foregoing list of important factors
is not exclusive.The Company does not
undertake to update any forward-looking statements that  may be made from time to time by or on behalf of the Company.Note 2:         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-QSB and Article 10 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.  Operating results for the six
months and three months ended March 31, 2001 are not indicative of the results
that may be expected for the year ending September 30, 2001.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended September 30, 2000.Note 3:         
Summary of Significant Accounting
Policies:

Investment in Debt and
Equity Securities:The Company
adopted Statement of Financial Accounting Standards No: 115 ("SFAS No:
115"), Accounting for Certain Investments in Debt and Equity Securities,
effective January 1,1995. Management determines the appropriate classification
of its Investments in debt and equity securities at the time of purchase and
reevaluates such determination at each balance sheet date. Debt securities for
which the Company does not have the intent or ability to hold to maturity are
classified as available for sale, along with the Company's investment in equity
securities. Securities available for sale are carried at fair value, with the
unrealized gains and losses reported in a separate component of shareholders'
equity net of income taxes, until realized. At March 31, 2001 the Company had
no investments that qualified as trading or held to maturity. The amortized
cost of zero-coupon debt securities classified as available for sale is
adjusted for accretion of discounts to maturity.  Such amortization and interest are included in interest income.  Realized gains and losses are included in
other income or expense. The cost of securities sold is based on specific
identification method.Reclassification of
Financial Statements:Beginning in
the first quarter of fiscal 2000, various items of portfolio income, which were
previously classified as "other (income), expenses, net" are
classified as "interest and other income" in the condensed Statements
of Income.  Amounts reported for the
prior quarters have been reclassified to conform to the quarter 2000
presentation.Note 4:
  Inventories are summarized as follows:

March 312001Raw
  materials
  $388,673Shipping
  materials
  91,115Finished
  goods
  356,627836,415

Note 5:
  During the six months ended March 31, 2001,
  the Company purchased 5,722 shares of its outstanding common stock at a cost
  of $28,163.Note 6:
  MARKETABLE SECURITIES:Marketable securities classified as current
  assets at March 31, 2001 include the following:

Fair Value
  CostU.S.
  Treasury obligations
  515,051
  473,621Other
  Government Bonds
  42,920
  43,093Corporate
  debt securities
  15,530
  26,090Mortgage
  backed securities
  805
  1,196Marketable
  equity securities
  1,979,721
  2,383,7492,554,027
  2,927,749

The
contractual maturities of debt securities available for sale at March 31, 2001
is as follows:

Fair Value
  CostDue
  within one year
  -
  -Due
  after one year thru 5 years
  417,844
  407,444Due
  after 5 years thru 10 years
  129,520
  108,350Due
  after 10 years
  26,137
  27,009Not
  due at single maturity date
  805
  1,196574,306
  543,999

Gross unrealized holding gains and losses at
March 31, 2001 were $236,434 and $610,155, respectively.  Realized gains and losses from the sale of
securities for the six months ended March 31, 2001 were $40,518 and $1,142
respectively.

THE FLAMEMASTER CORPORATIONItem 2:Management's Discussion and Analysis of Financial Condition and Results of
Operations:

March 31, 2001 compared to September 30,
2000 and March 31, 2001 compared to March 31, 2000.

FINANCIAL CONDITION AND
LIQUIDITY:

The Companys
financial condition is strong with current assets of $6,469,403 compared to
current liabilities of $159,564 at March 31, 2001 for a current ratio of more
than 40 to 1.  Working capital decreased
to $6,309,839 on March 31, 2001 compared to $7,211,653 at September 30, 2000.  Cash and cash equivalents, and marketable securities
stood at $4,664,390.  Accounts
receivable expanded to $640,258 from $585,846 in the prior years quarter ended
March 31, 2000.  Inventories contracted
to $836,415 on March 31, 2001 from $925,771 at year-end.  Revenues for the March 31, 2001 quarter were
$1,206,070 compared to $1,475,221 in the prior year due to a lower level of
investment income.    Sales from
operation expanded to $1,102,830 in the three month period ended March 31, 2001
from the $1,033,424 in the prior year.

Management
believes that future working capital requirements will be provided primarily
from operations and that the Companys liquidity and working capital
requirements are adequate for the next 12 months of operation.  Management believes that the Companys
creditworthiness is substantial relative to its size.

The Company
paid a $.032 dividend on its common stock in March 2001

RESULTS OF OPERATIONS:

For the three
month ended March 31, 2001 net income was $217,083 compared to $407,129 or $.14
per share vs. $.25 per share in the year earlier period.  The decrease in earnings was due to lower
level of investment gains.  The Company
continues to expand its customer base. 
Laboratory costs including research and development for this quarter
increased modestly to $74,272 from $71,991. 
General and administrative expenses decreased to $152,052 from $155,902.

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 hereunto duly
authorized.

THE FLAMEMASTER CORPORATION(Registrant)DATE:
  JOSEPH MAZINMay 10, 2001(Signature)Joseph Mazin, President and Chairmanand Chief Executive OfficerDATE:
  MARY KAY EASONMay 10, 2001(Signature)Mary Kay Eason, Assistant Treasurer andAssistant SecretaryDATE:
  DONNA MAZINMay 10, 2001(Signature)Donna Mazin, Director