SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000

                           Commission File No. 0-26912


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


                Delaware                                         86-0789350
     -------------------------------                         -------------------
     (State or other jurisdiction of                          (I.R.S. Employer
      incorporation or organization)                         Identification No.)


8300 E. Raintree Drive, Scottsdale, Arizona                         85260
-------------------------------------------                       ----------
 (Address of principal executive offices)                         (Zip Code)

                                 (480) 443-6000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

The number of shares  outstanding of registrant's  Common Stock, $.001 par value
per share, as of May 10, 2000 was 4,326,688.
<PAGE>
                             VODAVI TECHNOLOGY, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2000

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets - March 31, 2000
          and December 31, 1999.                                              3

          Condensed Consolidated Statements of Operations - Three Months      4
          Ended March 31, 2000 and 1999.

          Condensed Consolidated Statements of Cash Flows - Three Months
          Ended March 31, 2000 and 1999.                                      5

          Notes to Condensed Consolidated Financial Statements.               6

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

Item 3.   Quantitative and Qualitative Disclosures about Market Risk          9

PART II.  OTHER INFORMATION                                                  10

          SIGNATURES                                                         11

                                        2
<PAGE>
                    VODAVI TECHNOLOGY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  IN THOUSANDS


                                                       March 31,    December 31,
                                                         2000          1999
                                                       --------      --------
                                                      (Unaudited)
CURRENT ASSETS:
Cash                                                   $    982      $  1,528
Accounts receivable, net                                  8,929        10,530
Inventory                                                 7,341         6,550
Prepaids and other current assets                           931         1,037
                                                       --------      --------
     Total current assets                                18,183        19,645

PROPERTY AND EQUIPMENT, net                               2,297         2,356

GOODWILL, net                                             1,872         1,906

OTHER LONG-TERM ASSETS, net                               1,220         1,307
                                                       --------      --------
                                                       $ 23,572      $ 25,214
                                                       ========      ========
CURRENT LIABILITIES:
Accounts payable                                       $  3,424      $  2,990
Accrued liabilities                                       1,543         1,546
Revolving credit facility                                 6,655         8,672
                                                       --------      --------
     Total current liabilities                           11,622        13,208
                                                       --------      --------
OTHER LONG-TERM OBLIGATIONS                                 180           186
                                                       --------      --------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common Stock                                                  5             4
Additional Paid-In Capital                               13,170        12,334
Accumulated Deficit                                        (853)         (473)
Treasury stock                                             (552)          (45)
                                                       --------      --------
                                                         11,770        11,820
                                                       --------      --------
                                                       $ 23,572      $ 25,214
                                                       ========      ========

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

                                        3
<PAGE>
                    VODAVI TECHNOLOGY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      IN THOUSANDS EXCEPT PER SHARE AMOUNTS
                                   (Unaudited)


                                                           Three Months Ended
                                                                 March 31,
                                                          ----------------------
                                                           2000           1999
                                                          -------        -------
REVENUE, net                                              $ 9,464        $11,307

COST OF GOODS SOLD                                          5,871          7,456
                                                          -------        -------
GROSS MARGIN                                                3,593          3,851

OPERATING EXPENSES:
  Engineering and product development                         412            318
  Selling, general and administrative                       3,596          3,008
                                                          -------        -------
OPERATING INCOME (LOSS)                                      (415)           525

INTEREST EXPENSE                                              188            138
                                                          -------        -------
INCOME (LOSS) BEFORE INCOME TAXES                            (603)           387

PROVISION FOR (BENEFIT FROM) INCOME TAXES                    (223)           148
                                                          -------        -------
NET INCOME (LOSS)                                         $  (380)       $   239
                                                          =======        =======
BASIC EARNINGS (LOSS) PER SHARE                           $ (0.09)       $  0.06
                                                          =======        =======
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC                 4,221          4,342
                                                          =======        =======
DILUTED EARNINGS (LOSS) PER SHARE                         $ (0.09)       $  0.06
                                                          =======        =======
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED               4,221          4,342
                                                          =======        =======

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

                                        4
<PAGE>
                    VODAVI TECHNOLOGY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  IN THOUSANDS
                                   (Unaudited)

                                                             Three months ended
                                                                  March 31,
                                                             ------------------
                                                              2000       1999
                                                             -------    -------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                          $  (380)   $   239
  Adjustments to reconcile net income (loss) to net
   cash provided by operating activities
    Depreciation and amortization                                192        199
    Rent levelization                                             (6)        (3)
Changes in working capital:
  Accounts receivable, net                                     1,601        262
  Inventory                                                     (791)       742
  Prepaids and other current assets                              106       (323)
  Other long-term assets, net                                     80        261
  Accounts payable                                               434      1,407
  Accrued liabilities                                             (3)        59
                                                             -------    -------
      Net cash flows provided by operating activities          1,233      2,843
                                                             -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                             (92)       (70)
                                                             -------    -------
      Net cash flows used in investing activities                (92)       (70)
                                                             -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net payments on revolving credit facility                   (2,017)    (2,783)
  Purchase of common stock                                      (507)        --
  Stock options exercised                                        837         --
  Payments on capital leases                                      --        (89)
                                                             -------    -------
      Net cash flows used in financing activities             (1,687)    (2,872)
                                                             -------    -------
DECREASE IN CASH                                                (546)       (99)

CASH, beginning of period                                      1,528        796
                                                             -------    -------
CASH, end of period                                          $   982    $   697
                                                             =======    =======

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

                                        5
<PAGE>
                    VODAVI TECHNOLOGY, INC. AND SUBSIDIARIES
    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED
                                 MARCH 31, 2000


(a)  Vodavi  Technology,   Inc.  and  subsidiaries  (the  Company),  a  Delaware
corporation,  designs, develops, markets, and supports a broad range of business
telecommunication  solutions,  including  telephony  products,  voice processing
products,  and  computer-telephony  products,  for a wide  variety  of  business
applications. The Company markets its products primarily in the United States as
well  as in  foreign  countries  through  a  distribution  model  consisting  of
wholesale distributors, direct dealers, and its own direct sales personnel.

(b) The  accompanying  unaudited  consolidated  financial  statements  have been
prepared by the Company without audit,  pursuant to the rules and regulations of
the Securities and Exchange  Commission.  These financial statements reflect all
adjustments (consisting of normal recurring accruals and adjustments) which are,
in the opinion of management,  necessary to fairly state the financial  position
as of March 31,  2000 and the  operating  results and cash flows for the periods
presented.   Operating  results  for  the  interim  periods  presented  are  not
necessarily  indicative  of the  operating  results that may be expected for the
entire year. These financial  statements  should be read in conjunction with the
Company's December 31, 1999 financial statements and accompanying notes thereto.

(c) Diluted  earnings  per share for the  periods  ended March 31, 2000 and 1999
were determined by dividing net income by the weighted  average number of common
shares  and  dilutive  securities  outstanding,  as  outlined  in  Statement  of
Financial  Accounting  Standard  (SFAS) No.  128,  EARNINGS  PER SHARE.  For the
periods ended March 31, 2000 and 1999, no dilutive  securities  were included in
the  diluted EPS  calculation  as their  effects  were  antidilutive  or all the
dilutive securities were out of the money.

(d) The Company has  determined  that it operates one  reportable  segment,  the
distribution  of  telecommunications  equipment.  The Company has three  product
categories - telephony, voice processing, and computer-telephony;  however, each
of these does not meet the segment criteria for SFAS No. 131,  DISCLOSURES ABOUT
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. As a result of the foregoing,
the Company has  determined  that it is  appropriate  to present one  reportable
segment consistent with the guidance in SFAS No. 131.  Accordingly,  the Company
has not presented separate financial  information for each product category,  as
the  Company's  consolidated  financial  statements  present its one  reportable
segment.

(e) The  Company  is a  defendant  in  various  lawsuits.  See  Item  3,  "Legal
Proceedings" included in the Company's Form 10-K for the year ended December 31,
1999.  There have been no significant  developments  in these lawsuits since the
filing of the Company's  Form 10-K.  The Company has not made any  provisions in
its financial statements for these lawsuits. The imposition of damages in any of
these matters could have a material  adverse effect on the Company's  results of
operations  and  financial  position.  From time to time,  the  Company  also is
subject to certain  asserted and  unasserted  claims  encountered  in the normal
course of business.  The Company  believes that the  resolution of these matters
will not have a material adverse effect on the Company's  financial  position or
results of  operations.  The Company  cannot provide  assurance,  however,  that
damages  that result in a material  adverse  effect on the  Company's  financial
position or results of operations will not be imposed in these matters.

                                        6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000 AND 1999:

The following table summarizes our operating  results as a percentage of revenue
for the periods indicated.

                                                            Three Months Ended
                                                                 March 31,
                                                            -------------------
                                                            2000         1999
                                                            -----        -----
Revenue                                                     100.0%       100.0%
Cost of goods sold                                           62.0%        65.9%
                                                            -----        -----
Gross margin                                                 38.0%        34.1%
Operating expenses:
     Engineering and product development                      4.4%         2.8%
     Selling, general and administrative                     38.0%        26.7%
                                                            -----        -----
Operating income (loss)                                      (4.4%)        4.6%
Interest expense                                              2.0%         1.2%
                                                            -----        -----
Income (loss) before income taxes                            (6.4%)        3.4%
Provision for (benefit from) income taxes                    (2.4%)        1.3%
                                                            -----        -----
Net income (loss)                                            (4.0%)        2.1%
                                                            =====        =====

     REVENUE

Revenue  was $9.5  million  in the first  quarter of 2000,  a  decrease  of $1.8
million,  or 16.3%,  from the first  quarter of 1999.  Revenue for our wholesale
distribution  channel decreased by $3.2 million,  or 36%, from the first quarter
of 1999.  This  decrease  is  primarily  due to a  decision  by one of our major
wholesale   distribution   customers  to  reduce  its  inventory  levels.   This
distribution  channel was also impacted by the planned  migration from our older
digital key telephone systems and commercial grade telephones into newer product
lines. Revenue for this distribution channel for the first quarter 2000 was $2.0
million  lower  than the same  period  in 1999 due to these  migrations  and the
wholesale distribution customer's inventory reduction.

The decrease in sales through the wholesale  distribution  channel was partially
offset by an increase in revenue from sales  through the INFINITE  dealer-direct
and  Vodavi  CT  voice  processing   divisions.   INFINITE   revenue   increased
approximately  $1.0  million,  or  51%,  primarily  due  to the  addition  of 35
large-volume,  well-qualified  new  dealers.  Additionally,  Vodavi  CT  revenue
increased  $348,000,  or 99%.  Total voice  processing  revenue for all channels
increased by 33% to $2.2 million.

     GROSS MARGIN

Gross  margin  increased  to 38.0% of revenue in 2000 as compared  with 34.1% in
1999. The  improvement in gross margin in 2000 was  attributable  to a number of
factors,  including  changes  in  product  mix as sales of  higher-margin  voice
processing  products  increased  from 14.9% of total revenue in 1999 to 23.7% of
total revenue in 2000. Other factors include the elimination of expenses related
to our repair center division,  which we sold during the second quarter of 1999,
and a decrease in import duties.

                                        7
<PAGE>
     ENGINEERING AND PRODUCT DEVELOPMENT

Expenditures related to engineering and product development increased by $94,000
to $412,000 in the first  quarter of 2000.  The  increase was  primarily  due to
salaries and related  personnel  costs due to additional  headcount in the first
quarter of 2000 as compared with the same period in 1999.

     SELLING, GENERAL AND ADMINISTRATIVE

Selling,  general and  administrative  expenses increased to $3.6 million in the
first  quarter of 2000 as compared  with $3.0 million in 1999.  This increase is
attributable  to a number of factors,  including:  (a) an increase in personnel-
related costs,  including  salaries and travel expenses,  due to the addition of
the Vice  President  of Sales and  Marketing  and  several  new sales  personnel
beginning  in the second  quarter of 1999 and a Chief  Financial  Officer in the
third  quarter  of 1999;  (b)  increased  efforts  in our  marketing  and  sales
programs; and (c) increases in the reserve for doubtful accounts receivable.

     INTEREST EXPENSE

Interest expense increased to $188,000 in the first quarter of 2000, as compared
with $138,000 in 1999. The $50,000 increase is due to higher average outstanding
borrowings  on our line of credit  during the first  quarter of 2000 as compared
with the same period in 1999. Although accounts  receivable  collections for the
first quarter of 2000 were higher than the first quarter of 1999, we experienced
higher cash outlays as a direct  result of funding  additional  operating  costs
discussed  above and the  approximately  $790,000  increase in  inventory  since
December 31, 1999.

     INCOME TAXES

We recorded a tax benefit of $223,000,  or 37.0%  effective  rate, for the first
quarter of 2000, as compared with a tax provision utilizing an effective rate of
38.2%, or $148,000, for the first quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

We had $982,000 of cash at March 31, 2000. Our cash accounts are swept regularly
and applied against our line of credit, as described below. We had borrowings of
approximately  $6.7 million  against our available  operating  line of credit at
March 31, 2000,  which  represents a decrease of $2.0 million from borrowings of
$8.7 million at December 31, 1999.  This decrease is primarily due to the timing
of payments received on accounts receivable balances from customers and payments
on accounts payable balances to vendors.  At March 31, 2000,  amounts  available
for additional borrowing totaled $2.6 million.

We maintain a $15.0  million  credit  facility  with  General  Electric  Capital
Corporation  which expires in April 2003.  The line of credit bears  interest at
2.5% over the 30-day commercial paper rate, or 8.3% at March 31, 2000.  Advances
under the line of  credit  are  based  upon  eligible  accounts  receivable  and
inventory of our wholly owned subsidiary Vodavi  Communications  Systems,  Inc.,
and are secured by substantially all of our assets. The revolving line of credit
contains  covenants  that are customary for similar  credit  facilities and also
prohibit our operating subsidiaries from paying dividends to our company without
the consent of GE Capital.  At March 31, 2000, we were in compliance with all of
the covenants.

Working capital  increased to approximately  $6.6 million at March 31, 2000 from
approximately $6.4 million at December 31, 1999.

In October  1999,  our Board of  Directors  approved a buy-back of up to 400,000
shares of our outstanding  common stock over a six-month  period. In April 2000,
the program was extended  through October 2000.  Financing for the buy-back will
be provided through our line of credit and proceeds from option exercises. As of
March 31, 2000,  we had  repurchased  226,800  shares with a cumulative  cost of
$552,000 under this program.

                                        8
<PAGE>
During the first  quarter of 2000,  net  receipts  from the  exercise of 211,250
common stock options amounted to $837,000.

We are a defendant in various  lawsuits.  We have not made any provisions in our
financial  statements  for these  lawsuits.  The imposition of damages in any of
these matters could have a material  adverse effect on our results of operations
and financial position.

From time to time we also are subject to certain asserted and unasserted  claims
encountered in the normal course of business.  We believe that the resolution of
these matters will not have a material adverse effect on our financial  position
or results of operations.  We cannot provide  assurance,  however,  that damages
that result in a material adverse effect on our financial position or results of
operations will not be imposed in these matters.

We believe that our working  capital and credit  facilities  are  sufficient  to
finance our  internal  growth in the near term.  Although we  currently  have no
acquisition targets, we intend to continue to explore acquisition  opportunities
as they arise and may be required to seek additional  financing in the future to
meet such opportunities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At  March  31,  2000,  we  did  not  participate  in  any  derivative  financial
instruments or other  financial and commodity  instruments  for which fair value
disclosure would be required under Statement of Financial  Accounting  Standards
No. 107. We do not hold investment  securities that would require  disclosure of
market risk.

Our market risk  exposure is limited to interest rate risk  associated  with our
credit  instruments.  We incur  interest on loans made under a revolving line of
credit at variable interest rates of 2.5% over the 30-day commercial paper rate,
a total of 8.3% at March 31,  2000.  The  principal  of loans under this line of
credit is due in April 2003. At March 31, 2000 we had outstanding  borrowings on
the line of credit of approximately $6.7 million.




--------------------------------------------------------------------------------
This Report contains forward-looking statements,  including statements regarding
our  business,   strategies,  and  the  industry  in  which  we  operate.  These
forward-looking  statements  are based  primarily  on our  expectations  and are
subject  to a number of risks and  uncertainties,  some of which are  beyond our
control.  Actual  results  could  differ  materially  from  the  forward-looking
statements  as a result of numerous  factors,  including  those set forth in our
Form 10-K for the year ended December 31, 1999, as filed with the Securities and
Exchange Commission.

                                        9
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Not applicable

ITEM 2. CHANGES IN SECURITIES

     Not applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable

ITEM 5. OTHER INFORMATION

     Not applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     a) Exhibits

        Exhibit 27 Financial Data Schedule

     b) Reports on Form 8-K

        Not applicable

                                       10
<PAGE>
                                   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.

                                        Vodavi Technology, Inc.

Dated: May 10, 1999                     /s/ Gregory K. Roeper
                                        ----------------------------------------
                                        Gregory K. Roeper
                                        President, Chief Executive Officer, and
                                        Secretary (Principal Executive Officer)


Dated: May 10, 1999                     /s/ Tammy M. Powers
                                        ----------------------------------------
                                        Tammy M. Powers
                                        Chief Financial Officer, Vice
                                        President-Finance, and Treasurer
                                        (Principal Financial and Accounting
                                        Officer)

                                       11