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                       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 September 30, 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 November 13, 2000 was 4,256,588.

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<PAGE>
                    VODAVI TECHNOLOGY, INC. AND SUBSIDIARIES
                          QUARTERLY REPORT ON FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2000

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets -
          September 30, 2000 and December 31, 1999.                            3

          Condensed Consolidated  Statements of Operations -
          Three and Nine Months Ended September 30, 2000 and 1999.             4

          Condensed Consolidated Statements of Cash Flows -
          Nine Months Ended September 30, 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                                  8

Item 3.   Quantitative and Qualitative Disclosures about Market Risk          11

PART II.  OTHER INFORMATION                                                   12

          SIGNATURES                                                          13

                                        2
<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    VODAVI TECHNOLOGY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  IN THOUSANDS


                                                September 30,       December 31,
                                                    2000               1999
                                                  --------           --------
                                                 (Unaudited)
CURRENT ASSETS:
Cash                                              $    435           $  1,528
Accounts receivable, net                            11,211             10,530
Inventory                                            6,773              6,550
Prepaids and other current assets                      759              1,037
                                                  --------           --------
     Total current assets                           19,178             19,645

PROPERTY AND EQUIPMENT, net                          2,124              2,356

GOODWILL, net                                        1,805              1,906

OTHER LONG-TERM ASSETS, net                          1,086              1,307
                                                  --------           --------
                                                  $ 24,193           $ 25,214
                                                  ========           ========
CURRENT LIABILITIES:
Accounts payable                                  $  3,632           $  2,990
Accrued liabilities                                  1,934              1,546
Revolving credit facility                            5,915              8,672
                                                  --------           --------
     Total current liabilities                      11,481             13,208
                                                  --------           --------

OTHER LONG-TERM OBLIGATIONS                            156                186
                                                  --------           --------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock                                             5                  4
Additional paid-in capital                          13,170             12,334
Retained earnings (Accumulated deficit)                 69               (473)
Treasury stock                                        (688)               (45)
                                                  --------           --------
                                                    12,556             11,820
                                                  --------           --------
                                                  $ 24,193           $ 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       Nine Months Ended
                                         September 30,           September 30,
                                       -----------------       -----------------
                                        2000      1999          2000      1999
                                       -------   -------       -------   -------
REVENUE, net                           $13,024   $14,033       $35,468   $37,981

COST OF GOODS SOLD                       8,129     9,005        22,209    24,666
                                       -------   -------       -------   -------
GROSS MARGIN                             4,895     5,028        13,259    13,315

OPERATING EXPENSES
  Engineering and product development      447       411         1,266     1,141
  Selling, general and administrative    3,473     3,454        10,564     9,969
                                       -------   -------       -------   -------
OPERATING INCOME                           975     1,163         1,429     2,205

INTEREST EXPENSE                           167       189           532       478
                                       -------   -------       -------   -------
INCOME BEFORE INCOME TAXES                 808       974           897     1,727

PROVISION FOR INCOME TAXES                 311       365           355       647
                                       -------   -------       -------   -------

NET INCOME                             $   497   $   609       $   542   $ 1,080
                                       =======   =======       =======   =======

BASIC EARNINGS PER SHARE               $  0.12   $  0.14       $  0.13   $  0.25
                                       =======   =======       =======   =======
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC                      4,293     4,342         4,279     4,342
                                       =======   =======       =======   =======

DILUTED EARNINGS PER SHARE             $  0.12   $  0.14       $  0.13   $  0.25
                                       =======   =======       =======   =======
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED                    4,293     4,342         4,338     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)

<TABLE>
<CAPTION>
                                                                         Nine months ended
                                                                           September 30,
                                                                       ---------------------
                                                                         2000         1999
                                                                       -------       -------
<S>                                                                    <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                            $   542       $ 1,080
 Adjustments to reconcile net income to net cash
  provided by (used in) operating activities
  Depreciation and amortization                                            712           486
  Loss on sale of repair center division                                    --            86
  Rent levelization                                                        (30)           (7)
 Changes in working capital:
  Accounts receivable, net                                                (681)       (3,764)
  Inventory                                                               (223)          757
  Prepaids and other current assets                                        278          (382)
  Other long-term assets, net                                               69           335
  Accounts payable                                                         642         1,466
  Accrued liabilities                                                      388           286
                                                                       -------       -------
        Net cash flows provided by operating activities                  1,697           343
                                                                       -------       -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                        (227)         (254)
Cash paid for license agreement                                             --          (500)
Proceeds from sale of repair center division                                --           282
                                                                       -------       -------
        Net cash flows used in investing activities                       (227)         (472)
                                                                       -------       -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings on revolving credit facility                  (2,757)        1,839
Purchase of common stock                                                  (643)           --
Proceeds from stock options exercised                                      837            --
Payments on capital leases                                                  --          (124)
                                                                       -------       -------
        Net cash flows (used in) provided by financing activities       (2,563)        1,715
                                                                       -------       -------

(DECREASE) INCREASE IN CASH                                             (1,093)        1,586

CASH, beginning of period                                                1,528           796
                                                                       -------       -------
CASH, end of period                                                    $   435       $ 2,382
                                                                       =======       =======
</TABLE>

         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
                               SEPTEMBER 30, 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 condensed 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  September  30,  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  September  30, 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. The number of dilutive  securities for the first nine months of 2000
     was 59,000  shares.  There were no dilutive  securities  for the first nine
     months of 1999 or for the third quarters of 2000 and 1999.

(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,  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 because
     the  Company  does not  believe  that these  lawsuits  will have a material
     impact on our results of operations and financial position.  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.

(f)  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 will be required to adopt SAB 101 during
     the fourth  quarter of 2000.  Management  believes that the adoption of SAB
     101 will not have a material impact on the Company's  financial position or
     results of operations.

                                        6
<PAGE>
(g)  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  will be  required  to adopt SFAS No. 133, as
     amended, on January 1, 2001.  Management does not believe that the adoption
     of SFAS No. 133, as amended,  will have a material impact on its results of
     operations or financial position.

(h)  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 will be required to implement EITF 00-10 concurrent
     with the implementation of SAB 101 as discussed above.  Management does not
     believe the implementation of EITF 00-10 will have a material impact on the
     Company's   financial  position  or  results  of  operations.   However,  a
     reclassification  of prior  periods  within  the income  statement  will be
     necessary to conform with the requirements of EITF 00-10.

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999:

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

                                                          Three Months Ended
                                                             September 30,
                                                         ---------------------
                                                          2000           1999
                                                         ------         ------
Revenue, net                                              100.0%         100.0%
Cost of goods sold                                         62.4%          64.2%
                                                         ------         ------
Gross margin                                               37.6%          35.8%
Operating expenses:
  Engineering and product development                       3.4%           2.9%
  Selling, general and administrative                      26.7%          24.6%
                                                         ------         ------
Operating income                                            7.5%           8.3%
Interest expense                                            1.3%           1.4%
                                                         ------         ------
Income before income taxes                                  6.2%           6.9%
Provision for income taxes                                  2.4%           2.6%
                                                         ------         ------
Net income                                                  3.8%           4.3%
                                                         ======         ======

     REVENUE

Revenue  was $13.0  million  in the third  quarter of 2000,  a decrease  of $1.0
million,  or 7.2%,  from the third  quarter of 1999.  This decrease is primarily
attributable  to a  decrease  of  $1.8  million  in the  wholesale  distribution
channel,  a decrease  in other  revenue of  $233,000,  an increase in rebates of
$102,000, which were partially offset by an increase of $1.2 million in INFINITE
revenue.  We believe  the  overall  decrease  was  primarily  due to soft market
conditions in the small- to mid-sized  markets  affecting our industry,  and the
planned  migration of our customers from our older digital key telephone systems
into newer product lines. These decreases were partially offset by the expansion
of our dealer-focused channels.

The wholesale distribution channel decrease of $1.8 million, or 17%, was the net
effect of the planned product  migration  discussed  above,  offset by growth in
sales of the Triad program.  Sales of the Starplus digital product  decreased by
$1.7 million, or 82%, in the third quarter of 2000 as compared to the comparable
prior year period. Additionally, sales of Starplus analog product were $507,000,
or 35%, lower than third quarter of 1999. The Triad program,  which is a focused
dealer program through our wholesale  distribution channel,  increased $658,000,
or 25%.

The decrease in the wholesale  distribution  channel was partially  offset by an
increase of $1.2 million, or 46%, in INFINITE revenue.  The increase in INFINITE
revenue is primarily due to the continued addition,  beginning in fourth quarter
of 1999, of large-volume, well-qualified new dealers.

Total  voice  processing  revenue  for all  channels  of $2.7  million  remained
consistent  with the third quarter of 1999.  As a percentage  of total  revenue,
voice-processing  revenue  comprised  20.5% of revenue for third quarter 2000 as
compared to 19.8% for the same period in 1999.

     GROSS MARGIN

Gross margin increased to 37.6% of revenue in the third quarter of 2000 compared
with 35.8% of revenue in the third  quarter of 1999.  The  improvement  in gross
margin  in  the  third  quarter  of  2000  was  mainly  attributable  to  margin
improvements for voice mail products. Additional improvement in gross margin was
attributable to a decrease in import duties.

                                        8
<PAGE>
     ENGINEERING AND PRODUCT DEVELOPMENT

For the quarter ended  September 30, 2000,  expenditures  related to engineering
and product  development  increased  $36,000 to $447,000 as compared to the same
period  in  1999.  This  increase  is  mainly  due to two  additional  temporary
engineers.

     SELLING, GENERAL AND ADMINISTRATIVE

For the quarter ended September 30, 2000,  selling,  general and  administrative
expenses remained consistent with expenditures in the third quarter of 1999.

     INTEREST EXPENSE

Interest  expense  decreased to $167,000 in the third quarter of 2000,  compared
with  $189,000 in the third quarter of 1999.  The $22,000  decrease is primarily
due to a decrease  in the  average  loan  balances  from $9.3  million for third
quarter 1999 to $7.0 million for third  quarter  2000.  The line of credit bears
interest at 2.5% over the 30-day commercial paper rate.

     INCOME TAXES

We recorded a tax provision of $311,000,  or 38.5% effective rate, for the third
quarter of 2000 as compared with a tax provision  utilizing an effective rate of
37.5%,  or $365,000,  for the third  quarter of 1999.  The  provision  for third
quarter  2000 is slightly  higher due to greater  utilization  of  research  and
development tax credits during 1999.

     NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999:

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

                                                          Nine Months Ended
                                                             September 30,
                                                         ---------------------
                                                          2000            1999
                                                         ------         ------
Revenue, net                                              100.0%         100.0%
Cost of goods sold                                         62.6%          64.9%
                                                         ------         ------
Gross margin                                               37.4%          35.1%
Operating Expenses:
  Engineering and product development                       3.6%           3.0%
  Selling, general and administrative                      29.8%          26.3%
                                                         ------         ------
Operating income                                            4.0%           5.8%
Interest expense                                            1.5%           1.3%
                                                         ------         ------
Income before income taxes                                  2.5%           4.5%
Provision for income taxes                                  1.0%           1.7%
                                                         ------         ------
Net income                                                  1.5%           2.8%
                                                         ======         ======

         REVENUE

Revenue was  approximately  $35.5  million for the first nine months of 2000,  a
decrease of approximately  $2.5 million,  or 6.6%, over the first nine months of
1999.  Wholesale  distribution  revenue decreased by approximately $6.1 million.
This  decrease  is the net  effect  of a  number  of  factors,  including  (a) a
decision,  during  the first  quarter  of 2000,  by one of our  major  wholesale
distribution customers to reduce its inventory levels; (b) our planned migration
from our older digital key telephone  systems and  commercial  grade  telephones
into newer product  lines;(c) soft market  conditions in the small- to mid-sized
markets  affecting  our  industry  during the third  quarter of 2000;  and (d) a
partial offset due to the expansion of our dealer focused channels (INFINITE and
Triad).

                                        9
<PAGE>
Triad revenue,  our dealer focused  channel  through our wholesale  distribution
channel,  increased  28% to $8.3  million  for the  first  nine  months of 2000.
Additionally,  INFINITE  revenue,  generated  through our INFINITE dealer direct
channel,  increased approximately $4.4 million, or 64%. The increase in INFINITE
revenue is primarily due to the continued addition,  beginning in fourth quarter
of 1999, of large-volume, well-qualified new dealers.

We sold our repair center  division  during the second  quarter of 1999.  Repair
revenue  decreased by $405,000 during the first nine months of 2000. Total voice
processing  revenue for all channels  increased by  $538,000,  or 7.8%,  to $7.4
million.

     GROSS MARGIN

Gross  margin  increased  to  approximately  37.4% of revenue for the first nine
months  of 2000  compared  with  35.1% for the first  nine  months of 1999.  The
improvement in gross margin is primarily due to the enhanced margins  associated
with our voice processing  products and decreased import duties.  The voice mail
margin  improvements  are a direct result of the  acquisition  of the voice mail
technology rights in early 1999 and the movement of the  manufacturing  overseas
in late 1999.  Additionally,  sales of higher margin voice  processing  products
increased from 18.1% of total revenue in 1999 to 20.9% of total revenue in 2000.

     ENGINEERING AND PRODUCT DEVELOPMENT

Expenditures  related  to  engineering  and  product  development  increased  by
$125,000 to approximately  $1.3 million,  or 3.6% of revenue,  in the first nine
months of 2000 compared with $1.1 million or 3.0% of revenue,  in the first nine
months of 1999. The increase was primarily due to salaries and related personnel
costs associated with additional headcount and field trial expenses.

     SELLING, GENERAL AND ADMINISTRATIVE

Selling,  general and  administrative  expenses increased by $595,000 during the
first nine months of 2000 to $10.6  million  compared with $10.0 million for the
same  period in 1999.  This  increase  is the net effect of a number of factors,
including  (a) continued  investment in our sales force  beginning in the second
quarter of 1999;  (b) an increase in  professional  fees;  (c)  increases in the
reserve for doubtful accounts receivable; (d) increased efforts in our marketing
and sales  programs;  and (e)  decreased  expenses due to the sale of our repair
center during second quarter of 1999.

     INTEREST EXPENSE

Interest expense was approximately  $532,000 in the first nine months of 2000, a
$54,000, or 11.3%,  increase over the first nine months of 1999. The increase is
attributable  to an increase in the interest  rate,  which is calculated at 2.5%
over the 30-day  commercial  paper rate.  The average  interest  rate during the
first nine months in 2000 was 8.61%,  while the average interest rate during the
first nine months in 1999 was 7.54%.

     INCOME TAXES

We recorded a tax  provision of $355,000 or 39.6%  effective  rate for the first
nine months of 2000 compared with a tax provision utilizing an effective rate of
37.5%, or $647,000 for the same period in 1999. The provision for the first nine
months of 2000 is slightly  higher due to greater  utilization  of research  and
development tax credits during 1999.

LIQUIDITY AND CAPITAL RESOURCES

We had $435,000 of cash at September 30, 2000. The decrease in cash from the end
of the year is  primarily  due to a cash  receipt  in  excess of  $900,000  on a
receivable  balance that did not sweep  against our line of credit at the end of
the year. Accordingly,  this balance was reflected in cash at December 31, 1999.
The comparable cash receipt, also in excess of $1.0 million, received during the
third quarter of 2000 had swept against the line of credit,  and is reflected as
a reduction to the cash balance and the credit facility at September 30, 2000.

                                       10
<PAGE>
We had borrowings of approximately $5.9 million against our available  operating
line of credit at  September  30,  2000,  which  represents  a decrease  of $2.8
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,  payments on accounts payable balances to vendors, and cash flow
generated the first nine months.  At September 30, 2000,  amounts  available for
additional  borrowing  totaled  $5.5  million.   Working  capital  increased  to
approximately $7.7 million at September 30, 2000 from approximately $6.4 million
at December 31, 1999.

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 8.98% at  September  30, 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 September 30, 2000, we were in compliance
with all of the covenants.

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 General Electric Capital Corporation, an extension to 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 September
30, 2000, we had  repurchased  282,000 shares with a cumulative cost of $688,000
under this program.

During the first  quarter of 2000,  net  proceeds  from the  exercise of 211,250
common stock  options  amounted to $837,000.  There were no common stock options
exercised during the second or third quarters of 2000.

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 September  30,  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,
or 8.98% at September 30, 2000. The principal of loans under this line of credit
is due in April 2003. At September 30, 2000 we had outstanding borrowings on the
line of credit of approximately $5.9 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.

                                       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 10.43 - Third Amendment to Amended and Restated Credit
                        Agreement dated October 9, 2000, between Vodavi
                        Communications Systems, Inc. and General Electric
                        Capital Corporation.

        Exhibit 27 -    Financial Data Schedule

     b) Reports on Form 8-K

        Not applicable

                                       12
<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: November 13, 2000                 /s/ Gregory K. Roeper
                                         ---------------------------------------
                                         Gregory K. Roeper
                                         President and Chief Executive Officer
                                         (Principal Executive Officer)


Dated: November 13, 2000                 /s/ Tammy M. Powers
                                         ---------------------------------------
                                         Tammy M. Powers
                                         Chief Financial Officer, Vice President
                                         - Finance, Treasurer, and Secretary
                                         (Principal Financial and Accounting
                                         Officer)

                                       13