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

                            FORM 10-QSB


                            (Mark One)
          [X]  Quarterly Report Under Section 13 or 15(d)
              of the Securities Exchange Act of 1934

     For the Quarterly Period Ended     September 30, 2000
                                   --------------------------

                                OR

         [  ] Transition Report Under Section 13 or 15(d)
                       of the Exchange Act

       For the Transition Period From                to
                                      ---------------   -------------

                  Commission File Number  1-10185
                                        ----------


                       DOCUCON, INCORPORATED
 (Exact name of small business issuer as specified in its charter)


            Delaware                   74-2418590
(State or other jurisdiction of      (IRS Employer
 incorporation or organization)   Identification No.)

                        8 Airport Park Boulevard
                          Latham, New York  12110
                           (Address of principal
                            executive offices)

                              (518) 786-7733
                (Issuer's telephone number)



     Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X    No
    ---      -----

     State the number of shares outstanding of each of the issuer's
classes of common equity as of
November 3, 2000        3,658,767
----------------    -----------------


<PAGE>

                        DOCUCON, INCORPORATED
                        --------------------


                                INDEX
                                -----



                                                               Page

PART I.      FINANCIAL INFORMATION (UNAUDITED)
-------      ---------------------------------

Item 1:      Balance Sheets - September 30, 2000, and               3
             December 31, 1999

             Statements of Operations - For the Three and
             Nine Months Ended                                      5
             September 30, 2000 and 1999

             Statements of Cash Flows - For the Nine
             Months Ended September 30, 2000 and 1999               6

             Notes to Financial Statements                          7

Item 2:      Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations                                             13


PART II.     OTHER INFORMATION                                      17
--------     -----------------


SIGNATURES                                                          19
----------

                                 -2-

<PAGE>

                        DOCUCON, INCORPORATED


                           BALANCE SHEETS




                                              September 30,
                                                  2000       December 31,
                   ASSETS                      (Unaudited)       1999
                                               ------------  -----------

CURRENT ASSETS:
 Cash and temporary cash investments            $   271,265   $  28,835
 Escrow account                                     254,987          -
 Receivable from TAB Products Co.                     4,709          -
 Prepaid expenses and other                          20,560      13,323
 Deposits                                             5,568      73,249
                                                -----------   ---------

             Total current assets                   557,089     115,407
                                                -----------   ---------
PROPERTY AND EQUIPMENT:
 Office equipment                                   129,802     129,802

 Furniture and fixtures                               1,000      37,445

 Leasehold improvements                                   -      26,680
                                                -----------   ---------

             Total property and equipment           130,802     193,927


 Less- Accumulated depreciation and
   amortization                                    (54,552)      (66,069)
                                               ------------   ----------

             Net property and equipment              76,250       127,858
                                                -----------   -----------
OTHER, net                                                -         9,653
                                                -----------    ----------


NET LONG-TERM ASSETS OF DISCONTINUED                      -       291,888
  OPERATIONS                                    -----------    ----------

             Total assets                      $    633,339    $  544,806
                                                ===========    ==========




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

                                 -3-
<PAGE>

                        DOCUCON, INCORPORATED


                     BALANCE SHEETS (Continued)




                                             September 30,   December 31,
                                                  2000         1999
   LIABILITIES AND STOCKHOLDERS' EQUITY       (Unaudited)
                 (DEFICIT)                  --------------   ------------

CURRENT LIABILITIES:
 Accounts payable                               $   29,795    $  156,219

 Accrued liabilities                               126,125       324,542

 Retirement benefit payable                         37,834        45,886
 Income taxes payable                              100,000             -
 Current maturities of capital leases                8,610         8,124
 Related-party notes                               108,333       254.335

 Net current liabilities of discontinued
  operations                                             -     1,422,072
                                                ----------    ----------
          Total current liabilities                410,697     2,211,178
                                                ----------    ----------

CAPITAL LEASE OBLIGATIONS                            8,863        14,957
                                                ----------    ----------

OTHER LONG-TERM OBLIGATIONS                              -       226,310
                                                ----------    ----------
COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' EQUITY (DEFICIT):
 Preferred stock, $1.00 par value,
  10,000,000 shares authorized-
   Series A, 60 shares authorized, 7 shares
    issued and outstanding as of September 30,
    2000, and December 31, 1999                          7             7
  Common stock, $.01 par value,
   25,000,000 shares authorized;
    3,658,767 shares and 3,508,767 shares
    outstanding as of September 30, 2000, and
    December 31, 1999, respectively                 36,588        35,088
 Additional paid-in capital                     10,145,928    10,209,903
 Accumulated deficit                            (9,964,508)  (12,148,401)
  Treasury stock, at cost, 4,495 shares             (4,236)       (4,236)
                                              ------------  ------------
          Total stockholders' equity
           (deficit)                               213,779    (1,907,639)

          Total liabilities and
            stockholders' equity (deficit)     $   633,339   $   544,806
                                               ===========   ===========



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

                                 -4-
<PAGE>

                        DOCUCON, INCORPORATED


                      STATEMENTS OF OPERATIONS

                             (Unaudited)

<TABLE>

                                          Three Months               Nine Months
                                       Ended September 30         Ended September 30
                                    -------------------------   -----------------------
                                        2000         1999         2000         1999
                                    ------------  -----------   ---------- ------------
<S>                                 <C>           <C>          <C>         <C>
OPERATING REVENUES                    $        -  $         -   $        -   $        -
                                     -----------  -----------   ---------- ------------

COSTS AND EXPENSES:
 General and administrative               93,863      499,259      843,897    1,273,333
 Depreciation and amortization             2,250        8,045       13,131       15,540
                                     -----------   ----------   ----------  -----------

                                          96,113      507,304      857,028    1,288,873
                                     -----------   ----------   ----------  -----------

OPERATING LOSS FROM CONTINUING
 OPERATIONS                              (96,113)    (507,304)    (857,028)  (1,288,873)

OTHER INCOME (EXPENSE):
 Interest expense                           (172)        (503)                     (503)
                                                                   (24,438)
 Interest income                           3,942            -        5,091            -
                                     -----------  -----------   ----------  -----------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                     (92,343)    (507,807)    (876,375)  (1,289,376)

INCOME TAX EXPENSE                             -            -            -            -
                                     -----------  -----------   ----------  -----------

NET LOSS FROM CONTINUING OPERATIONS      (92,343)    (507,807)    (876,375)  (1,289,376)

PREFERRED STOCK DIVIDEND
 REQUIREMENTS                              4,813        4,813       14,438       14,438
                                     -----------   ----------   ---------- ------------
NET LOSS FROM CONTINUING OPERATIONS
 APPLICABLE TO COMMON STOCKHOLDERS       (97,156)    (512,620)    (890,813)  (1,303,814)

LOSS FROM DISCONTINUED OPERATIONS              -      (64,772)    (913,510)  (1,121,055)

GAIN ON DISPOSAL OF OPERATING
 ASSETS, net of income tax expense             -            -    3,973,778            -
 of $100,000                         -----------  -----------   ---------- ------------

NET INCOME (LOSS) APPLICABLE TO
 COMMON STOCKHOLDERS                 $   (97,156)   $(577,392)  $2,169,455 $ (2,424,869)
                                     ===========   ==========   ========== ============

BASIC AND DILUTED LOSS FROM
 CONTINUING OPERATIONS PER COMMON
 SHARE                               $      (.03)  $     (.15)  $     (.25) $      (.39)

BASIC AND DILUTED EARNINGS (LOSS)
 FROM DISCONTINUED OPERATIONS PER
 COMMON SHARE                                  -         (.02)         .86         (.33)
                                      ----------   ----------   ----------  -----------

BASIC AND DILUTED EARNINGS (LOSS)
 PER COMMON SHARE                     $     (.03)  $     (.17)  $      .61   $     (.72)
                                      ==========   ==========   ==========   ==========

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING                           3,654,272    3,456,436    3,571,060    3,363,099
                                      ==========    =========   ==========   ==========

</TABLE>


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

                                 -5-

<PAGE>

                        DOCUCON, INCORPORATED

                      STATEMENTS OF CASH FLOWS

                             (Unaudited)

                                                     Nine Months
                                                  Ended September 30
                                              --------------------------
                                                  2000         1999
                                               -----------  ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss from continuing operations           $ (876,375)  $(1,289,376)
  Adjustments to reconcile net loss from
   continuing operations to net cash used in
   operating activities-
    Depreciation and amortization                  13,131        15,540
    Common stock issued to officer                 22,838             -
    Loss on sale or abandonment of assets          25,222             -
    Gain on retirement debt forgiveness          (156,444)            -
    Changes in current assets and current
      liabilities-
     Decrease (increase) in prepaid expenses
      and other                                    60,444       (10,858)
     (Decrease) increase in accounts payable
  and accrued liabilities                        (232,893)      247,886
                                               ----------   -----------
                                                                      -
         Net cash used in operating
           activities                          (1,144,077)   (1,036,808)
                                               ----------   -----------

NET CASH PROVIDED BY DISCONTINUED OPERATIONS    1,678,648        23,881
                                               ----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures                                   -       (39,832)
                                               ----------   -----------

         Net cash used in investing
  activities                                            -       (39,832)
                                               ----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from short-term notes                 1,075,000       325,000
 Principal payments on short-term notes        (1,075,000)            -
 Principal payments on long-term debt and
  other obligations                              (286,533)      (12,028)
 Principal payments under capital lease
  obligations                                      (5,608)       (1,228)
 Purchase of treasury stock                             -       (25,792)
                                               ----------   -----------

         Net cash (used in) provided by
  financing activities                           (292,141)      285,952
                                               ----------   -----------

NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS                                  242,430      (766,807)

CASH AND TEMPORARY CASH INVESTMENTS,
  beginning of period                              28,835     1,082,321
                                               ----------   -----------

CASH AND TEMPORARY CASH INVESTMENTS, end of
  period                                       $  271,265   $   315,514
                                               ==========   ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
 Noncash investing and financing activities-
  Cancellation of warrants issued in           $   85,313   $         -
connection with related-party debt

  Capital lease obligations incurred           $        -   $    70,552

  Treasury stock issued for Employee Stock     $        -   $    23,805
Purchase Plan

  Stock issued in satisfaction of accrued      $        -   $    85,701
liabilities

 Cash paid during the period for-
  Interest                                     $   30,174   $    62,756

  Income taxes                                 $        -   $         -


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

                                 -6-

<PAGE>

                        DOCUCON, INCORPORATED


                    NOTES TO FINANCIAL STATEMENTS

                             (Unaudited)


NOTE 1
------

The financial statements included herein have been prepared by
Docucon, Incorporated (the Company), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.
However, all adjustments have been made which are, in the opinion of
the Company, necessary for a fair presentation of the results of
operations for the periods covered.  Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading.  It is recommended that these
financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company' Annual
Report on Form 10-KSB for the year ended December 31, 1999.  Certain
reclassifications have been made in the prior period financial
statements to conform with the current period presentation.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.

The accompanying financial statements of the Company have been
prepared on the basis of accounting principles applicable to a going
concern.  Since its inception, the Company has incurred cumulative
net losses of approximately $10 million, including losses of
approximately $3.6 million in 1999 and approximately $.9 million from
continuing operations in the first nine months of 2000.  For the year
ended December 31, 1999, and the nine months ended September 30,
2000, the Company had negative cash flows from operating activities
of approximately $2.7 million and $1.2 million, respectively.  In
addition, as discussed in Note 9, the Company sold substantially all
of its operating assets to TAB Products Co. (TAB) during the second
quarter of 2000.  These matters raise substantial doubt about the
Company's ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the
outcome of these uncertainties.

NOTE 2
------

Allowance for unbilled revenues-

Included as a component of net current liabilities of discontinued
operations at December 31, 1999, is a current asset, unbilled
revenues, net of an allowance.  The allowance for unbilled revenues
relates to conversion services performed for agencies of the U.S.
Government.  The Company's ability to collect these unbilled revenues
was dependent upon a number of factors including quality control
acceptance and the availability of funding to the respective
agencies.  The Company was informed by a U.S. Government customer in
mid-1997 that funding for certain conversion services being performed
had been depleted.  Management completed the work that had been
placed in production for this customer.  As a result, the Company was
unable to collect for approximately $1.6 million of conversion
services for this customer, the substantial majority of which were

                                 -7-


<PAGE>

performed during 1997.  A substantial portion of the conversion
products associated with the $1.6 million of unbilled revenues were
shipped to the customer and is in various stages of quality control
review.  Management of the Company believes that a significant
portion of such unbilled revenues represent valid assets.  However,
due to the continued aging of the unbilled revenues, the Company
believed it was appropriate to provide an allowance on these unbilled
revenues for the entire amount during the year ended December 31,
1998.  The unbilled revenues and related allowance for unbilled
revenues were a component of the net operating assets sold in the
transaction described in Note 9.

NOTE 3
------

Common stock and preferred stock-

Each share of the Company's preferred stock ($25,000 stated value) is
convertible into 8,333 shares of common stock and earns cash
dividends of 11 percent per annum.  Each share of preferred stock is
entitled to vote 8,333 common shares.  Under the terms of the
Company's preferred stock, the Company cannot pay dividends on its
common stock until all accumulated but unpaid dividends on such
preferred stock have been paid.  The Company cannot make
distributions to common stockholders until cumulative undeclared
dividends on the preferred stock are paid.  As of September 30, 2000,
cumulative undeclared dividends on the preferred stock approximated
$193,000.  In January 1999, the Company paid cash of $88,816 related
to cumulative dividends on preferred stock that was converted during
the fourth quarter of 1998.  As the remainder of these dividends are
undeclared, they have not been recorded as a reduction of the
Company's equity.  Common stock is subordinate to preferred stock in
the event of liquidation.  The Company has never paid cash dividends
on its common stock.

Treasury stock-

On June 18, 1998, the Company announced that its board of directors
had authorized the repurchase of up to 500,000 shares of the
Company's common stock in the open market.  From June 19, 1998,
through December 31, 1998, the Company acquired 36,250 treasury
shares for approximately $50,000.  Approximately 33,333 of such
shares were reissued during 1998 in connection with the conversion of
Series A preferred stock.  In 1999, the Company acquired
26,400 treasury shares for approximately $26,000, of which
24,822 shares were reissued pursuant to the Company's Employee Stock
Purchase Plan.

NOTE 4
------

Property and equipment-

In January 1999, the Company sold its San Antonio operations center
building.  In connection with the sale, the Company paid off the
remaining balance of the related secured indebtedness.  The Company's
net cash proceeds from the sale, net of debt repayments, approximated
$800,000.  The Company entered into a noncancelable operating
leaseback of the building through December 1999 at a rate of
approximately $27,000 per month, before a cancelable month-to-month
sublease arrangement of approximately $15,000 per month.  The gain on
the sale of the building was deferred and was recognized over the
term of the operating leaseback as a component of other income.  The
Company moved into a new operations facility in December 1999.

                                 -8-

<PAGE>

In May 2000, the Company completed an agreement with the lessor for
early termination of the lease of the Company's corporate
headquarters.  Pursuant to this agreement, the Company paid the
lessor approximately $131,000 from the TAB proceeds at closing and
gave up its rights to security deposits in the amount of
approximately $51,000.  Accelerated rent in the approximate amount of
$96,000 is reflected as a component of the loss from continuing
operations in the nine months ended September 30, 2000.

NOTE 5
------

Earnings (loss) per share-

Statement of Financial Accounting Standards No. 128, "Earnings Per
Share," outlines methods for computing and presenting earnings
per share.  Because the Company had losses from continuing operations
during the quarters and nine months ended September 30, 2000 and
1999, options, warrants and shares from the assumed conversion of
preferred stock were excluded as they are antidilutive in periods
with losses from continuing operations.  The exercise prices of
substantially all of the Company's options and warrants outstanding
exceeds the average market price for all periods presented and, thus,
would be antidilutive had the Company had income from continuing
operations.

NOTE 6
------

Accounts receivable financing-

On June 18, 1999, the Company entered into an accounts receivable
purchase agreement (the Financing Agreement) with Silicon Valley Bank
(SVB).  Under the terms of the agreement as amended, the Company was
eligible to receive funding from SVB for up to $1,500,000 of eligible
accounts receivable with full recourse by SVB to the Company.  The
Company received cash advances from the eligible receivables equal to
the face amount of the eligible receivables financed, less a reserve
established by SVB of not less than 20 percent of the aggregate face
amount of the receivables.  The Company was obligated to repay on
demand the unpaid portion of any receivable financed by SVB under
certain conditions including (i) an account receivable that remained
uncollected 90 calendar days after the invoice date, (ii) the
bankruptcy or insolvency of any account debtor or (iii) any breach of
the Financing Agreement by the Company.  During the fourth quarter of
1999, and subsequent to December 31, 1999, the Company was in
technical default under certain provisions of the Financing
Agreement.  While SVB did not make a declaration of default or demand
for payment, it had the right to do so under the provisions of the
Financing Agreement.  Pursuant to the agreement discussed in Note 9,
TAB assumed the accounts receivable financing obligation in the net
amount of approximately $636,000 and related accrued interest and
fees in the amount of $55,831.  The Company was released from the
terms of the Financing Agreement when TAB promptly paid the
obligation, interest and fees.  The interest and fees are reported as
a component of net loss from discontinued operations in the nine
months ended September 30, 2000.

NOTE 7
------

Related-party loan transaction-

On September 29, 1999, two directors of the Company loaned the
Company an aggregate of $325,000.  The promissory notes (the Notes)
issued in conjunction with these loans carried a 12 percent annual
interest rate.  Principal and interest on the Notes were payable on
the earlier of (i) September 28, 2000, or (ii) within 10 days of an
equity-based-financing (the Financing), as defined.  In conjunction
with the Notes, the two directors were issued an aggregate of
243,750 warrants to purchase common stock of the Company.  Pursuant
to an agreement with the two directors, the warrants were canceled
and interest payable on these related-party loans was waived upon
consummation of the transaction with TAB described in Note 9.

                                 -9-
<PAGE>

Related-party transaction-

In May 2000, as consideration for acceptance of service as the
Company's president the Company's board of directors authorized the
issuance of 150,000 shares of the Company's common stock to a company
in which the Company's president has material ownership.  The stock
was fully vested on June 1, 2000, and the fair value on date of grant
has been recorded as a component of general and administrative
expenses for the nine months ended September 30, 2000.

NOTE 8
------

Commitments and contingencies-

On February 2, 1999, the Company contacted the Department of
Defense's Voluntary Disclosure Program Office to request admission
into its Voluntary Disclosure Program.  The Voluntary Disclosure
Program is intended to encourage government contractors to
voluntarily disclose potential violations of government contracting
policies and procedures.  In general, companies who volunteer
information and cooperate with the government's investigation are not
subject to criminal and administrative sanctions such as suspension
and debarment from government contracting activities.

Admission into the Voluntary Disclosure Program does not protect
companies from any potential civil liability the government may
assert.  The Company's request for admission into the Voluntary
Disclosure Program was the result of an internal review by the
Company that indicated a billing practice, with respect to certain
invoices submitted during the period from September 1996 through
July 1997, might be perceived by the government as a technical
violation of Department of Defense (DOD) billing procedures.  As
described in Note 2, the unbilled revenues related to this matter
were sold.  However, the Company remains contingently liable as
further described below.

The DOD Inspector General formally admitted the Company into the
Voluntary Disclosure Program in June 1999 and commenced its
investigation of the Company's voluntary disclosure in the second
half of that year.  In February 2000, Company counsel was orally
advised that the Government's investigation of the Company's
voluntary disclosure is complete and that criminal prosecution has
been declined.  While the Company remains potentially liable for
civil damages, it does not believe that it is probable that material
civil damages, if any, will ultimately be assessed.

As discussed in Note 9, on November 9, 2000, TAB asserted claims
against the $250,000 Escrow Fund, as defined.  The Company is unable
to determine the likelihood that TAB will recover a portion, if any,
of the Escrow Fund.  The Company believes that recovery by TAB above
and beyond the Escrow Fund is remote.

The Company is involved in various claims and legal actions arising
in the ordinary course of business.  The Company believes it is
unlikely that the final outcome of any of the claims or proceedings
to which the Company is a party, including those described above,
would have a material adverse effect on the Company's financial
position or results of operations; however, due to the inherent
uncertainty of litigation, there can be no assurance that the
resolution of any particular claim or proceeding would not have a
material adverse effect on the Company's results of operations for
the fiscal period in which such resolution occurred.

Except as noted above, no material actions are currently pending
against the Company.  The Company maintains general liability
insurance and other insurance coverages that it believes to be
adequate and typical in the industry.

                                -10-
NOTE 9
------
Discontinued operations-

In May 2000, the Company's shareholders approved the sale of
substantially all of its operating assets to TAB for cash of
approximately $2.7 million and the assumption of approximately
$2.3 million of operating liabilities, resulting in a pre tax gain of
approximately $4.1 million.  As a result, the operating activity
related to the operating assets and liabilities has been accounted
for as a discontinued operation and, accordingly, the Company has
restated its financial statements for all periods reported in
accordance with Accounting Principles Board Opinion No. 30.  The
following table provides certain information related to the
discontinued operations:


<TABLE>

                                        Three Months                 Nine Months
                                     Ended September 30          Ended September 30
                                 --------------------------  --------------------------
                                     2000          1999          2000          1999
                                 ------------   -----------  -----------  -------------
<S>                              <C>            <C>          <C>          <C>
Revenues                          $         -   $2,013,425   $ 1,213,204  $   4,477,559
                                  ===========   ==========   ===========  =============

Loss from discontinued
 operations                       $         -   $  (64,772)  $  (913,510)  $ (1,121,055)
                                  ===========   ==========   ===========   ============

Gain on disposal of discontinued
 operations, net of income tax
 expense of $100,000              $         -   $        -   $ 3,973,778   $          -
                                  ===========   ==========   ===========   ============

</TABLE>

The components of net current liabilities and net long-term assets of
discontinued operations at December 31, 1999, are shown below:

Accounts receivable, net             $    992,243
Unbilled revenue, net                     523,014
Prepaid expenses and other                100,834
Accounts payable                       (1,229,416)
Accrued liabilities                      (862,140)
Current maturities of capital
  leases                                  (47,603)
Secured indebtedness                     (899,004)
                                     ------------

Net current liabilities of
  discontinued operations            $ (1,422,072)
                                     ============

Property and equipment, net          $    334,486
Other, net                                 17,647
Capital lease obligations                 (60,245)
                                     ------------

Net long-term assets of
  discontinued operations            $    291,888
                                     ============

In conjunction with entering into a nonbinding letter of intent in
January 2000, and definitive asset purchase agreement dated March 7,
2000, by and among TAB and Bunt Acquisition Corporation on one hand,
and the Company on the other hand (TAB Asset Purchase Agreement), TAB
loaned the Company cash evidenced by secured promissory notes in the
amount of $1,075,000 to fund working capital deficits.  This amount,
plus accrued interest, was deducted from cash proceeds at closing.
In addition, in accordance with the TAB Asset Purchase Agreement,
promptly after closing, the Company paid from the cash proceeds
substantially all liabilities not assumed by TAB, except for certain
amounts due under employment agreements with certain Company
officers, a retirement obligation due to a former officer of the
Company and the related-party loans discussed in Note 7.  Prior to
the closing of the TAB transaction, certain Company officers and a
former Company officer agreed to reductions in the amounts due under
employment agreements and a retirement

                                -11-

<PAGE>

agreement, respectively, among other terms.  The two directors of the
Company who had loaned the Company an aggregate of $325,000 agreed to
waive the accrued interest due on the notes and to the cancellation
of the related warrants (as described in Note 7), among other terms.
In accordance with these revised agreements, the Company paid two-
thirds of the obligations promptly after closing and the remaining
one-third will be satisfied upon release of the escrow fund,
described below, from available cash less a reasonable provision for
any net costs necessary to wind-down and/or dispose of the Company.

Under the terms of the TAB Asset Purchase Agreement, TAB paid
$250,000 of the purchase price into an Escrow Fund (Escrow Fund) for
the purposes of indemnifying TAB from certain "Indemnifiable losses,"
as defined therein, including any failure of the Company to discharge
any liability not assumed by TAB.  The Escrow Fund is scheduled to be
released in November 2000, net of any indemnification claims that
have been agreed to by TAB and the Company and any unresolved claims.
Unresolved claims will be satisfied or the related Escrow Fund
released after the claims resolution procedure detailed in the TAB
Asset Purchase Agreement has been completed.  On November 9, 2000,
TAB asserted claims against the Escrow Fund pursuant to Article XII
of the TAB Asset Purchase Agreement and pursuant to Section 6 of the
Escrow Agreement.  The Company is currently evaluating these claims
and is preparing a response thereto.  The Company has until
December 11, 2000, to respond.  At the present time, the Company is
unable to determine with any certainty the outcome of the claims
asserted.  The Company does not believe that any claims asserted by
TAB will exceed the amount of the Escrow Fund.  Under the TAB Asset
Purchase Agreement, all claims by TAB are limited to the amount of
the Escrow Fund except as to claims asserted on the basis of fraud,
willful misconduct or the failure of the Company to perform
postclosing obligations.  The Company does not believe the foregoing
exceptions apply.  The Company is unable to determine the likelihood
that TAB will recover a portion, if any, of the Escrow Fund.  The
Company believes that recovery by TAB above and beyond the Escrow
Fund is remote.

Unrelated to TAB's pending claim against the Escrow Fund, at June 30,
2000, the Company owed TAB approximately $213,000 consisting primarily
of the Company's cash balances that were acquired by TAB as well as
certain purchase price adjustments to the net assets acquired by TAB
pursuant to the TAB Asset Purchase Agreement.  This amount was paid
during the three months ended September 30, 2000, upon final agreement
of the parties.

Pursuant to the TAB Asset Purchase Agreement, TAB acquired
substantially all of the Company's operating assets and assumed
substantially all of the Company's operating liabilities.
Consequently, the Company's on-going activities are related to the
efforts to realize value, if any, from the remaining assets (which
may include the Company's publicly traded "shell"), payment of
remaining liabilities including income taxes, and a potential
distribution to shareholders.  Because the value to be realized from
the remaining assets, the amount of the remaining liabilities and the
net balance to be released from the Escrow Fund are uncertain, the
amount of cash that will ultimately be available for distribution to
stockholders, if any, is not determinable at this time.

                                -12-

<PAGE>

                        DOCUCON, INCORPORATED


                MANAGEMENT'S DISCUSSION AND ANALYSIS

          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS

In May 2000, the Company sold substantially all of its operating
assets to TAB Products Co. (TAB), for cash of approximately
$2.7 million and the assumption of approximately $2.3 million of
operating liabilities, resulting in a pretax gain of approximately
$4.1 million.  As a result, the operating activity related to the
operating assets and liabilities has been accounted for as a
discontinued operation.  Consequently, the Company's ongoing
activities are related to efforts to realize value, if any, from the
remaining assets (which may include the Company's publicly traded
"shell"), payment of remaining liabilities, including income taxes
and a potential distribution to shareholders.  The Company does not
expect to have future operating revenues and related operating costs
and expenses.

The Company reported a net loss applicable to common stockholders of
approximately $97,000 and net income applicable to common
stockholders of approximately $2,169,000, in the quarter and nine
months ended September 30, 2000, respectively.  The Company reported
a net loss applicable to common stockholders of approximately
$577,000 and approximately $2,425,000 in the quarter and nine month
periods ended September 30, 1999, respectively.

The Company reported a net loss from continuing operations applicable
to common stockholders of approximately $97,000 and approximately
$891,000 in the quarter and nine months ended September 30, 2000, as
compared to losses of approximately $513,000 and approximately
$1,304,000 in the 1999 periods.

Discontinued operations, before gain on disposal of operating assets,
produced losses of approximately $65,000 in the quarter ended
September 30, 1999, and approximately $914,000 and approximately
$1,121,000 for the nine months ended September 30, 2000 and 1999,
respectively.

Revenues from discontinued operations were approximately $2,013,000
for the quarter ended September 30, 1999, and approximately
$1,213,000 and $4,478,000 for the nine months ended September 30,
2000 and 1999, respectively.  The decrease for the nine months was
primarily the result of 129 fewer days of operations in the 2000
period due to the sale of substantially all of the operating assets
to TAB in late May.  In addition, the 1999 revenues reflected
significant increases in production due to new contracts, compared to
2000 which had production from fewer new contracts.

Production costs from discontinued operations were approximately
$2,013,000 for the 1999 quarter and approximately $1,213,000 for the
nine months ended September 30, 2000, as compared to approximately
$4,478,000 for the 1999 period.  The decreases in the quarter and
nine-month periods were due to fewer days of operations in the 2000
periods due to the TAB transaction and to lower compensation costs as
a result of reduced headcount related to reduced revenue levels.

General and administrative expenses, research and development
expenses and marketing expenses from discontinued operations all
decreased in the nine months ended September 30, 2000, when compared
to the same periods in 1999, primarily due to fewer days of
operations in the 2000 periods and reduced revenue levels.  Interest
expense from discontinued operations increased in the nine months
ended September 30, 2000, as compared to 1999, due primarily to
increased accounts receivable financing.

                                -13-

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

In May 2000, the Company sold substantially all of its operating
assets to TAB for cash of approximately $2.7 million and the
assumption of $2.3 million of operating liabilities.  Consequently,
the Company's primary remaining assets at September 30, 2000, are
cash of approximately $271,000, an escrow account in the amount of
approximately $255,000 and office equipment with a net book value of
approximately $76,000.  Remaining liabilities include accounts
payable and accrued expenses of approximately $156,000, income taxes
payable of approximately $100,000, capital lease liability of
approximately $17,000 and the related-party notes balance of
approximately $108,000.  The remaining assets will be used to pay the
remaining liabilities, fund efforts to realize value, if any, from
the remaining assets and pay a distribution to shareholders, if any.
The Company's only current source of liquidity is realization of
value from Company assets and there can be no assurance that the
remaining assets will yield material value.

The Company was informed by a U.S. Government customer in mid-
1997 that funding for certain conversion services being performed had
been depleted.  Management completed the work that had been placed in
production for this customer.  As a result, the Company was unable to
invoice and collect for approximately $1.6 million of conversion
services for this customer, the substantial majority of which were
performed during 1997.  A substantial portion of the conversion
products associated with the $1.6 million of unbilled revenues were
shipped to the customer and are in various stages of quality control
review.  Management of the Company believes that a significant
portion of such unbilled revenues represent valid assets.  However,
due to the continued aging of the unbilled revenues, the Company
believed it was appropriate to provide an allowance of $1.6 million
on these unbilled revenues for the entire amount during the year
ended December 31, 1998.  The unbilled revenues and related allowance
for unbilled revenues were a component of the net operating assets
sold in the transaction described in Note 9 and above.

In May 2000, the Company completed an agreement with the lessor for
early termination of the lease of the Company's corporate
headquarters.  Pursuant to this agreement, the Company paid the
lessor approximately $131,000 from the TAB proceeds at closing and
gave up its rights to security deposits in the amount of
approximately $51,000.

On June 18, 1999, the Company entered into an accounts receivable
purchase agreement (the Financing Agreement) with Silicon Valley Bank
(SVB).  Under the terms of the agreement as amended, the Company was
eligible to receive funding from SVB for up to $1,500,000 of eligible
accounts receivable with full recourse by SVB to the Company.  The
Company received cash advances from the eligible receivables equal to
the face amount of the eligible receivables financed, less a reserve
established by SVB of not less than 20 percent of the aggregate face
amount of the receivables.  The Company was obligated to repay on
demand the unpaid portion of any receivable financed by SVB under
certain conditions including (i) an account receivable that remains
uncollected 90 calendar days after the invoice date, (ii) the
bankruptcy or insolvency of any account debtor or (iii) any breach of
the Financing Agreement by the Company.  During the fourth quarter of
1999, and subsequent to December 31, 1999, the Company was in
technical default under certain provisions of the Financing
Agreement.  While SVB did not make a declaration of default or demand
for payment, it had the right to do so under the provisions of the
Financing Agreement.  Pursuant to the agreement discussed in
Note 9 and above, TAB assumed the accounts receivable financing
obligation in the net amount of approximately $636,000 and the
related accrued interest and fees in the amount of approximately
$56,000.  The Company was released from the terms of the Financing
Agreement when TAB promptly paid the obligation, interest and fees.


                                -14-

<PAGE>

On September 29, 1999, two directors of the Company loaned the
Company an aggregate of $325,000.  The promissory notes (the Notes)
issued in conjunction with these loans carried a 12 percent annual
interest rate.  Principal and interest on the Notes were payable on
the earlier of (i) September 28, 2000, or (ii) within 10 days of an
equity-based-financing (the Financing), as defined.  In conjunction
with the Notes, the two directors were issued an aggregate of
243,750 warrants to purchase common stock of the Company.  Pursuant
to an agreement with the two directors, the warrants were canceled
and interest payable on these related-party loans was waived upon
consummation of the TAB transaction described above.

The accompanying financial statements of the Company have been
prepared on the basis of accounting principles applicable to a going
concern.  Since its inception, the Company has incurred cumulative
net losses of approximately $10 million, including losses of
approximately $3.6 million in 1999 and approximately $.9 million from
continuing operations in the first nine months of 2000.  For the year
ended December 31, 1999, and the nine months ended September 30,
2000, the Company had negative cash flows from operating activities
of approximately $2.7 million and $1.2 million, respectively.  In
addition, as discussed above, the Company sold substantially all of
its operating assets to TAB during the second quarter of 2000.  These
matters raise substantial doubt about the Company's ability to
continue as a going concern.  The financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.

OUTLOOK

In May 2000, the Company sold substantially all of its operating
assets to TAB Products Co. (TAB), for cash of approximately
$2.7 million and the assumption of approximately $2.3 million of
operating liabilities, resulting in a pretax gain of approximately
$4.1 million.  Consequently, the Company's ongoing activities are
related to efforts to realize value, if any, from the remaining
assets (which may include the Company's publicly traded "shell"),
payment of remaining liabilities, including income taxes, and a
potential distribution to shareholders.  The Company does not expect
to have future operating revenues and related operating costs and
expenses.  Because the value to be realized from the remaining
assets, the amount of the remaining liabilities and the net balance
to be released from the Escrow Fund are uncertain, the amount of cash
that will ultimately be available for distribution to stockholders,
if any, is not determinable at this time.

Prior to the closing of the TAB transaction, certain Company officers
and a former Company officer agreed to reductions in the amounts due
under employment agreements and a retirement agreement, respectively,
among other terms.  The two directors of the Company who had loaned
the Company an aggregate of $325,000 agreed to waive the accrued
interest due on the notes and to the cancellation of the related
warrants (as described in Note 7), among other terms.  In accordance
with these revised agreements, the Company paid two-thirds of the
obligations promptly after closing and the remaining one-third will
be satisfied upon release of the escrow fund, described below, from
available cash less a reasonable provision for any net costs
necessary to wind-down and/or dispose of the Company.

Under the terms of the TAB Asset Purchase Agreement, TAB paid
$250,000 of the purchase price into an Escrow Fund (Escrow Fund) for
the purposes of indemnifying TAB from certain "Indemnifiable losses,"
as defined therein, including any failure of the Company to discharge
any liability not assumed by TAB.  The Escrow Fund is scheduled to be
released in November 2000, net of any indemnification claims that
have been agreed to by TAB and the Company and any unresolved claims.
Unresolved claims will be satisfied or the related Escrow Fund
released after the claims resolution procedure detailed in the TAB
Asset Purchase Agreement has been completed. On November 9, 2000, TAB
asserted claims against the Escrow Fund pursuant to Article XII of
the TAB Asset Purchase Agreement and pursuant to Section 6 of the
Escrow

                                -15-
<PAGE>

Agreement.  The Company is currently evaluating these claims and is
preparing a response thereto.  The Company has until December 11,
2000, to respond.  At the present time, the Company is unable to
determine with any certainty the outcome of the claims asserted.  The
Company does not believe that any claims asserted by TAB will exceed
the amount of the Escrow Fund.  Under the TAB Asset Purchase
Agreement, all claims by TAB are limited to the amount of the Escrow
Fund except as to claims asserted on the basis of fraud, willful
misconduct or the failure of the Company to perform postclosing
obligations.  The Company does not believe the foregoing exceptions
apply.  The Company is unable to determine the likelihood that TAB
will recover a portion, if any, of the Escrow Fund.  The Company
believes that recovery by TAB above and beyond the Escrow Fund is
remote.  At June 30, 2000, the Company owed TAB approximately
$213,000 consisting primarily of the Company's cash balances that
were acquired by TAB as well as certain purchase price adjustments to
the net assets acquired by TAB pursuant to the TAB Asset Purchase
Agreement.  This amount was paid during the three months ended
September 30, 2000, upon final agreement of the parties.

                                -16-

<PAGE>


                     PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

     On February 2, 1999, the Company contacted the Department of
     Defense's Voluntary Disclosure Program Office to request
     admission into its Voluntary Disclosure Program.  The Voluntary
     Disclosure Program is intended to encourage government
     contractors to voluntarily disclose potential violations of
     government contracting policies and procedures.  In general,
     companies who volunteer information and cooperate with the
     government's investigation are not subject to criminal and
     administrative sanctions such as suspension and debarment from
     government contracting activities.

     Admission into the Voluntary Disclosure Program does not protect
     companies from any potential civil liability the government may
     assert.  The Company's request for admission into the Voluntary
     Disclosure Program was the result of an internal review by the
     Company that indicated a billing practice, with respect to
     certain invoices submitted during the period from
     September 1996 through July 1997, might be perceived by the
     government as a technical violation of Department of Defense
     (DOD) billing procedures.  As described in Note 2, the unbilled
     revenues related to this matter were sold.  However, the Company
     remains contingently liable as further described below.

     The DOD Inspector General formally admitted the Company into the
     Voluntary Disclosure Program in June 1999 and commenced its
     investigation of the Company's voluntary disclosure in the
     second half of that year.  In February 2000, Company counsel was
     orally advised that the Government's investigation of the
     Company's voluntary disclosure is complete and that criminal
     prosecution has been declined.  While the Company remains
     potentially liable for civil damages, it does not believe that
     it is probable that material civil damages, if any, will
     ultimately be assessed.

     As discussed in Note 9, to the financial statements on
     November 9, 2000, TAB asserted claims against the $250,000
     Escrow Fund, as defined.  The Company is unable to determine the
     likelihood that TAB will recover a portion, if any, of the
     Escrow Fund.  The Company believes that recovery by TAB above
     and beyond the Escrow Fund is remote.

     The Company is involved in various claims and legal actions
     arising in the ordinary course of business.  The Company
     believes it is unlikely that the final outcome of any of the
     claims or proceedings to which the Company is a party, including
     those described above, would have a material adverse effect on
     the Company's financial position or results of operations;
     however, due to the inherent uncertainty of litigation, there
     can be no assurance that the resolution of any particular claim
     or proceeding would not have a material adverse effect on the
     Company's results of operations for the fiscal period in which
     such resolution occurred.

     Except as noted above, no material actions are currently pending
     against the Company.  The Company maintains general liability
     insurance and other insurance coverages that it believes to be
     adequate and typical in the industry.

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

                                -17-


<PAGE>

Item 5.   Other Matters - None

Item 6.   Exhibits and Reports on Form 8-K

     (a)  Exhibits

          Exhibit 27 - Financial Data Schedule

     (b)  Reports on Form 8-K - None

                                -18-

                            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.


                                        DOCUCON, INCORPORATED
                                        (Registrant)




                                        By /s/ Robert W. Schwartz
                                           ------------------------
                                         Robert W. Schwartz,
                                         President and Chief
                                         Executive Officer




Dated:    November 13, 2000


                               -19-