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, 2001

                           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 14, 2001 was 4,234,788.
<PAGE>
                             VODAVI TECHNOLOGY, INC.
                          QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2001

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets - March 31, 2001
          and December 31, 2000.                                               3

          Consolidated Statements of Operations - Three Months                 4
          Ended March 31, 2001 and 2000.

          Consolidated Statements of Cash Flows - Three Months
          Ended March 31, 2001 and 2000.                                       5

          Notes to Consolidated Financial Statements.                          6

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                  8

Item 3.   Quantitative and Qualitative Disclosures about Market Risk          11

PART II.  OTHER INFORMATION                                                   12

          SIGNATURES                                                          13

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


<TABLE>
<CAPTION>
                                                                   March 31,     December 31,
                                                                     2001            2000
                                                                   --------        --------
                                                                  (Unaudited)
<S>                                                                <C>             <C>
CURRENT ASSETS:
  Cash                                                             $    297        $    564
  Accounts receivable, net of reserves for doubtful accounts
    and sales returns of $2,092 and $1,582, respectively              5,617          11,797
  Inventory                                                           8,511           6,707
  Prepaids and other current assets                                   1,925             870
                                                                   --------        --------
       Total current assets                                          16,350          19,938

PROPERTY AND EQUIPMENT, net                                           1,860           2,033

GOODWILL, net                                                         1,739           1,772

OTHER LONG-TERM ASSETS                                                1,080           1,152
                                                                   --------        --------
                                                                   $ 21,029        $ 24,895
                                                                   ========        ========

CURRENT LIABILITIES:
  Accounts payable                                                 $  2,345        $  3,756
  Accrued liabilities                                                 2,392           2,161
  Revolving credit facility                                           5,678           6,259
                                                                   --------        --------
       Total current liabilities                                     10,415          12,176
                                                                   --------        --------

OTHER LONG-TERM OBLIGATIONS                                             114             135
                                                                   --------        --------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value;
    1,000,000 shares authorized, no shares issued                        --              --
  Common stock, $.001par value;
    10,000,000 shares authorized; 4,553,488 shares issued                 5               5
  Additional paid-in capital                                         13,363          13,363
  Accumulated deficit                                                (2,109)            (25)
  Treasury stock, 318,700 shares at cost                               (759)           (759)
                                                                   --------        --------
                                                                     10,500          12,584
                                                                   --------        --------
                                                                   $ 21,029        $ 24,895
                                                                   ========        ========
</TABLE>

              The accompanying notes are an integral part of these
                          consolidated balance sheets.

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


                                                           Three Months Ended
                                                                March 31,
                                                         ----------------------
                                                          2001           2000
                                                         -------        -------
REVENUE, net                                             $ 6,060        $ 9,603

COST OF GOODS SOLD                                         4,908          6,010
                                                         -------        -------

GROSS MARGIN                                               1,152          3,593
                                                         -------        -------

OPERATING EXPENSES:
  Engineering and product development                        496            412
  Selling, general and administrative                      3,786          3,596
                                                         -------        -------
                                                           4,282          4,008
                                                         -------        -------

OPERATING LOSS                                            (3,130)          (415)

INTEREST EXPENSE                                             161            188
                                                         -------        -------

LOSS BEFORE INCOME TAXES                                  (3,291)          (603)

BENEFIT FROM INCOME TAXES                                 (1,207)          (223)
                                                         -------        -------

NET LOSS                                                 $(2,084)       $  (380)
                                                         =======        =======

BASIC & DILUTED LOSS PER SHARE                           $ (0.49)       $ (0.09)
                                                         =======        =======

WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC & DILUTED                              4,235          4,221
                                                         =======        =======

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

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


                                                             Three months ended
                                                                  March 31,
                                                             ------------------
                                                              2001       2000
                                                             -------    -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                     $(2,084)   $  (380)
Adjustments to reconcile net loss to net cash
  provided by operating activities:
    Depreciation and amortization                                273        192
    Provision for doubtful accounts and sales returns            510          4
    Rent levelization                                            (21)        (6)
Changes in:
Accounts receivable                                            5,670      1,597
Inventory                                                     (1,804)      (791)
Prepaids and other current assets                             (1,055)       106
Other long-term assets                                            41         80
Accounts payable                                              (1,411)       434
Accrued liabilities                                              231         (3)
                                                             -------    -------
        Net cash flows provided by operating activities          350      1,233
                                                             -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                               (36)       (92)
                                                             -------    -------
        Net cash flows used in investing activities              (36)       (92)
                                                             -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on revolving credit facility                       (581)    (2,017)
Purchase of common stock                                          --       (507)
Stock options exercised                                           --        837
                                                             -------    -------
        Net cash flows used in financing activities             (581)    (1,687)
                                                             -------    -------

DECREASE IN CASH                                                (267)      (546)

CASH, beginning of period                                        564      1,528
                                                             -------    -------

CASH, end of period                                          $   297    $   982
                                                             =======    =======

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest                                       $   161    $   188
                                                             =======    =======

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

                                        5
<PAGE>
                             VODAVI TECHNOLOGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001

(a) INTERIM FINANCIAL REPORTING

The accompanying  unaudited Consolidated Financial Statements have been prepared
by Vodavi Technology, Inc. and subsidiaries ("Vodavi" or the "Company") pursuant
to the rules and regulations of the Securities and Exchange  Commission  ("SEC")
and,  in the opinion of the  Company,  include all  adjustments  (consisting  of
normal recurring accruals and adjustments)  necessary for a fair presentation of
results  of  operations,  financial  position,  and cash flows as of and for the
periods presented.

The  preparation of financial  statements and related  disclosures in conformity
with  generally  accepted  accounting  principles  requires  management  to make
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 revenue and expenses  during the period  reported.
Actual  results  could  differ  from  those  estimates.  Estimates  are  used in
accounting for, among other things,  allowances for  uncollectible  receivables,
inventory  obsolescence,   product  warranty,  depreciation,  taxes,  and  other
contingencies.  Estimates  and  assumptions  are reviewed  periodically  and the
effects of revisions are reflected in the Consolidated  Financial  Statements in
the period they are determined to be necessary.

The  Company  believes  that  the  disclosures  made  are  adequate  to keep the
information  presented from being  misleading.  The results for the three months
ended March 31, 2001 are not necessarily indicative of financial results for the
full year.  These financial  statements  should be read in conjunction  with the
audited Consolidated Financial Statements and notes thereto included in Vodavi's
latest Annual Report on Form 10-K/A for the year ended December 31, 2000.

(b) CALCULATION OF EARNINGS PER SHARE

Diluted  earnings  per share for the periods  ended March 31, 2001 and 2000 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, 2001 and 2000, no dilutive  securities  were included in
the diluted EPS calculation as their effects were antidilutive.

(c) SEGMENT REPORTING

The Company has  determined  that it operates  in 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.  Accordingly, the Company has
not presented separate financial information for each product category.

(d) SPECIAL CHARGES

During the first quarter of 2001, Vodavi  implemented a restructuring plan aimed
at reducing its operating  expenses to coincide with its current sales  outlook.
In line with the  restructuring  plan,  the  Company  reduced its  workforce  by
approximately  20 percent,  discontinued  certain  operations of its Interactive
Voice Response  product group, and implemented  broad-based  price reductions on
certain product groups. These actions created  severance-related  obligations of
$168,000,  estimated shut-down costs of $265,000, and estimated price protection
obligations of $432,000 to the Company's distribution partners.

Additionally,  in light of current economic and industry  conditions and planned
introductions  of new products,  the Company  re-evaluated the carrying value of
certain  receivables  and  inventory  items  resulting  in  additional  accounts
receivable  reserve  requirements  of  $328,000  and  inventory  impairments  of
$568,000.  The pre-tax  financial impact of these  initiatives  during the first
quarter totaled approximately $1.8 million.

                                        6
<PAGE>
(e) RECENT ACCOUNTING PRONOUNCEMENTS

On December 3, 1999, the Securities  and Exchange  Commission  staff (the Staff)
issued Staff Accounting Bulletin (SAB) 101, REVENUE  RECOGNITION.  Subsequent to
its issuance the Staff elected to defer the required  implementation  date.  The
Company  adopted SAB 101 during the fourth  quarter of 2000,  with an  effective
date of January 1, 2000. The adoption of SAB 101 did not have a material  impact
on the Company's financial position or results of operations.

In July 2000, the Emerging  Issues Task Force (EITF) reached a consensus on EITF
Issue 00-10,  related to the accounting  for shipping and handling  revenues and
costs and their  classification in the income statement.  The consensus requires
an entity to record all shipping and handling billed to customers as revenue. It
also  states  that the  classification  of  shipping  and  handling  costs is an
accounting  policy decision subject to appropriate  disclosure.  The Company has
adopted EITF 00-10  concurrent with SAB 101 as discussed  above. The Company has
elected to account for shipping  and  handling  costs as a component of costs of
goods sold.

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133 (as amended by SFAS No. 137),  ACCOUNTING  FOR  DERIVATIVE  INSTRUMENTS  AND
HEDGING  ACTIVITIES,  which requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial  position and measure
those  instruments at fair value.  The issuance of SFAS No. 137,  ACCOUNTING FOR
DERIVATIVE  INSTRUMENTS AND HEDGING  ACTIVITIES - DEFERRAL OF THE EFFECTIVE DATE
OF FASB STATEMENT NO. 133,  delayed the required  effective date of SFAS No. 133
to all fiscal years  beginning  after June 15, 2000. The Company was required to
adopt SFAS No.  133, as amended,  on January 1, 2001.  The  adoption of SFAS No.
133, as amended,  did not have an impact on the Company's  results of operations
or financial position.

(f) COMMITMENTS AND CONTINGENCIES

The Company is a defendant in various lawsuits.  See Item 3, "Legal Proceedings"
included in the  Company's  Form 10-K/A for the year ended  December  31,  2000.
There have been no significant  developments  in these lawsuits since the filing
of the Company's Form 10-K/A.  The Company has not made any material  provisions
in its financial  statements for these lawsuits.  The Company is also 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  its  financial  position  or  results  of
operations.  The Company cannot provide  assurance,  however,  that damages that
result in a material  adverse  effect on its  financial  position  or results of
operations will not be imposed in these matters.

                                        7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

BUSINESS OVERVIEW

We  design,   develop,   market,   and   support  a  broad   range  of  business
telecommunications  solutions,  including telephony  products,  voice processing
products,  and  computer-telephony  products  for a  wide  variety  of  business
applications.   Our  telecommunications   solutions  incorporate   sophisticated
features,  such as automatic call  distribution  and Internet  protocol,  or IP,
gateways.  Our voice  processing  products  include  interactive  voice response
systems,  automated  attendant,  and voice and fax mail. Our  computer-telephony
products enable users to integrate the  functionality of their telephone systems
with their  computer  systems.  We market our  products  primarily in the United
States as well as in foreign countries  through a distribution  model consisting
primarily of wholesale distributors and direct dealers.

RESULTS OF OPERATIONS

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

                                                           Three Months Ended
                                                                March 31,
                                                           -------------------
                                                           2001          2000
                                                           -----         -----
Revenue, net                                               100.0%        100.0%
Cost of goods sold                                          81.0          62.6
                                                           -----         -----
Gross margin                                                19.0          37.4
Operating expenses:
  Engineering and product development                        8.2           4.3
  Selling, general and administrative                       62.4          37.4
                                                           -----         -----
                                                            70.6          41.7
                                                           -----         -----
Operating loss                                             (51.6)         (4.3)
Interest expense                                             2.7           2.0
                                                           -----         -----
Loss before income taxes                                   (54.3)         (6.3)
Benefit from income taxes                                  (19.9)         (2.3)
                                                           -----         -----
Net loss                                                   (34.4)%        (4.0)%
                                                           =====         =====

During the first quarter of 2001, we implemented a  restructuring  plan aimed at
reducing our operating  expenses to coincide with our current sales outlook.  In
line with the  restructuring  plan, we reduced our workforce by approximately 20
percent,  discontinued  certain  operations of our  Interactive  Voice  Response
product group, and implemented  broad-based  price reductions on certain product
groups.  These  actions  created  severance-related   obligations  of  $168,000,
estimated   shut-down  costs  of  $265,000,   and  estimated  price   protection
obligations of $432,000 to our distribution partners.

Additionally,  in light of current economic and industry  conditions and planned
introductions  of new products,  we  re-evaluated  the carrying value of certain
receivables  and inventory  items  resulting in additional  accounts  receivable
reserve requirements of $328,000 and inventory impairments of $568,000.

                                        8
<PAGE>
The  pre-tax  financial  impact of these  initiatives  during the first  quarter
totaled approximately $1.8 million consisting of both cash and non-cash charges.
The following table sets forth the components of these special charges  included
in the  accompanying  consolidated  statement of operations for the three months
ended March 31, 2001:

<TABLE>
<CAPTION>
                                       Amount                     Inclusion in
                                       ($000)                Statement of Operations
                                       ------                -----------------------
<S>                                    <C>          <C>
Non-cash Charges:
  Inventory impairments                $  568       Cost of goods sold
  Allowance for bad debts                 328       Selling, general & administrative expenses
  Distributor price protection            151       Revenue
  Property and equipment                   15       Selling, general & administrative expenses
                                       ------
                                        1,062
                                       ------

Cash Charges:
  Distributor price protection            281       Revenue
  Severance-related costs                 168       Selling, general & administrative expenses
  Other shut-down costs                   250       Selling, general & administrative expenses
                                       ------
                                          699
                                       ------
                                       $1,761
                                       ======
</TABLE>

As of  March  31,  2001,  accrued  cash  charges  included  in the  accompanying
consolidated balance sheet totaled $637,000.

THREE MONTHS ENDED MARCH 31, 2001 COMPARED WITH THE THREE MONTHS ENDED MARCH 31,
2000

Revenue  decreased  by 36.9% to $6.1  million in the first  quarter of 2001 from
revenue of $9.6  million in the first  quarter of 2000.  We believe  the overall
decrease  in  revenue  was  primarily  attributable  to soft  market  conditions
affecting  our industry and the decision to reduce  inventory  levels by some of
our wholesale  distributors  resulting in fewer  purchases from us. The decrease
was also  attributable  to special  charges  related to our  decision  to reduce
prices on certain product groups, the continued impact of the migration from our
older digital key telephone systems to our newer Triad and Starplus DHS systems,
the  migration  of our  commercial  grade  telephones  to the new 2700 series of
commercial grade  telephones,  and the planned  introduction of our new low-cost
voice mail  product,  which had the  effect of  reducing  sales of our  existing
low-end voice mail systems.

Revenue from our wholesale  distribution  channel decreased by $3.5 million,  or
61.3%,  from the first  quarter of 2000.  The  decrease  in revenue  through the
wholesale  distribution  channel was partially  offset by an increase in revenue
from sales through the INFINITE dealer-direct channel.  Revenue for the INFINITE
product line increased by  approximately  $260,000,  an 8.1% increase in revenue
from sales of those products over first quarter 2000. The increase was primarily
due to our continued focus on and growth of this dealer-direct channel.

Our gross margin decreased to $1.2 million during the first quarter of 2001 from
$3.6 million for the comparable period of 2000,  representing 19.0% and 37.4% of
revenue, respectively. The decline in gross margin as a percentage of revenue in
2001 was  attributable  to fewer sales to cover the fixed  component  of cost of
goods sold, fewer sales of our  higher-margin  voice processing  products in the
first  quarter of 2001  compared  to the first  quarter of 2000,  and  inventory
impairment losses recorded in the first quarter of 2001.

Expenditures related to engineering and product development increased by $84,000
to $496,000 in the first quarter of 2001 from $412,000 in 2000. The increase was
primarily  due to salaries and other  personnel  costs related to our efforts to
develop next generation IP telephony products. We expect these increased efforts
to continue until such time that our IP telephony products are introduced to the
market in late 2001 or early 2002.

Selling,  general  and  administrative  expenses  increased  by $190,000 to $3.8
million in the first quarter of 2001 from $3.6 million in 2000. This increase is
primarily attributable to special charges of approximately $760,000 taken in the
first  quarter of 2001  related to employee  severance  costs,  shut-down  costs
associated with our  Interactive  Voice Response  product group,  and additional
reserves  recorded  against  certain  receivables.  Excluding  special  charges,
selling, general and administrative expenses decreased by approximately $570,000
during the first  quarter of 2001.  The decrease  resulted  from:  (a) decreased
selling commissions due to a decline in sales as compared to first quarter 2000;
(b) decreased marketing and promotional expenses; and (c) headcount reductions.

                                        9
<PAGE>
Interest  expense  decreased  to  $161,000  in the  first  quarter  of 2001 from
$188,000  in the same  quarter of 2000.  The  reduction  is  primarily  due to a
decrease in the average loan balance from $8.5 million  during the first quarter
of 2000 to $6.6  million  during the first  quarter of 2001.  The line of credit
bears interest at 2.5% over the 30-day commercial paper rate.

We recorded a tax  benefit of $1.2  million  for the first  quarter of 2001,  an
effective rate of 36.7%, compared with a tax benefit utilizing an effective rate
of 37.0%, or $223,000, for the first quarter of 2000.

LIQUIDITY AND CAPITAL RESOURCES

We had a cash balance of $297,000 at March 31, 2001. Our cash accounts are swept
regularly  and  applied  against  our  line  of  credit.  We had  borrowings  of
approximately  $5.7 million  against our available  operating  line of credit at
March 31, 2001,  which represents a decrease of $581,000 from borrowings of $6.3
million at December 31, 2000.  This  decrease is primarily  due to payments made
against  the  loan  balance  with  proceeds  from  the  collection  of  accounts
receivable  during the first quarter.  At March 31, 2001,  amounts available for
additional borrowings totaled $3.7 million.

We maintain a $15.0  million  credit  facility  with  General  Electric  Capital
Corporation  that expires in April 2003.  The line of credit  bears  interest at
2.5% over the 30-day commercial paper rate, or 7.65% at March 31, 2001. 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, 2001, we were in compliance with all of
the covenants,  except for a covenant related to the amount of inventory on-hand
at March 31, 2001.  GE Capital  waived the covenant  violation at March 31, 2001
and  modified  other  covenants to  eliminate  the effects of the first  quarter
special charges from current and future covenant calculations.

Working capital decreased to $5.9 million at March 31, 2001 from $7.8 million at
December 31, 2000. This decrease is due to (a) operating  losses recorded in the
first quarter of 2001, (b) a substantial  decrease in accounts  receivable  from
December 31, 2000;  and (c) accrued  cash charges  related to our  restructuring
efforts implemented in the first quarter of 2001.

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,  which was
subsequently  extended  through  June 2001.  During  October  2000,  the Company
negotiated, with GE Capital, an extension of the stock repurchase period to June
30, 2001.  Financing for the buy-back is provided through our line of credit and
proceeds from option exercises. As of March 31, 2001, we had repurchased 318,700
shares with a  cumulative  cost of $759,000  under this  program.  There were no
options exercised during the first quarter of 2001.

We are a defendant in various lawsuits. We have not made any material 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 fund
our  capital  needs  during the next 12 months.  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.

                                       10
<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements,  including statements regarding
our business  strategies,  our  business,  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 and Form 10-K/A for the year ended  December 31,  2000,  as filed with
the Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At March 31, 2001, we did not participate in any activities involving 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 7.65% at March 31, 2001.  The revolving  line of credit expires
in April 2003, at which time all unpaid  principal and accrued  interest is due.
At  March  31,  2001 we had  outstanding  borrowings  on the line of  credit  of
approximately $5.7 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/A for the year ended  December 31, 2000, as filed with the  Securities
and Exchange Commission.

                                       11
<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 10.44 - Waiver and Amendment of Credit Agreement dated May 11,
          2001, between Vodavi Communications Systems, Inc. and General Electric
          Capital Corporation.

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<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 15, 2001                     /s/ Gregory K. Roeper
       ------------                     ----------------------------------------
                                        Gregory K. Roeper
                                        President, Chief Executive Officer, and
                                        Secretary (Principal Executive Officer)


Dated: May 15, 2001                     /s/ David A. Husband
       ------------                     ----------------------------------------
                                        David A. Husband
                                        Chief Financial Officer and Vice
                                        President-Finance, (Principal Financial
                                        and Accounting Officer)

                                       13