<HTML>
<head>
<TITLE>1st Quarter 10-Q 2000</TITLE>
</head>
<body text="#000000" link="#0000ff" vlink="#551a8b" alink="#ff0000" bgcolor="#FFFFFF">

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<p align="center"><font face="Arial"><font size="4"><strong>U.S. SECURITIES AND EXCHANGE COMMISSION</font><BR></strong>Washington, D.C. 20549
<br wp="br1"><br wp="br2">
<p align="center"><strong><font size="4">FORM 10-Q</font></strong>

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<table  width="90%">
<tr>
<td valign="top" width="5%">[X]</td>
<td valign="top" width="100%">QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>For the Quarterly Period Ended March 31, 2000.
</td></tr>
<tr><td><BR></td><td><BR></td></tr>
<tr>
<td valign="top">[  ]</td>
<td valign="top">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>For the Transition Period from __________ to __________.</td></tr></TABLE>


<br wp="br1"><br wp="br2">
<br wp="br1"><p align="center"><B>COMMISSION FILE NUMBER:      0-17893
</B>
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center"><center> <B>TELTRONICS, INC.</B><HR noshade width="75%">(Exact name of registrant as specified in its charter)</center>

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center"><B>DELAWARE</B><HR noshade width="75%"><CENTER>(State or other jurisdiction of incorporation or organization)</CENTER>

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center"> <B>59-2937938</B><HR noshade width="75%">
<CENTER>(I.R.S. Employer Identification Number)
</CENTER><br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center"><B>2150 WHITFIELD INDUSTRIAL WAY<BR>
 SARASOTA, FLORIDA 34243</B><HR noshade width="75%">
<CENTER>(Address of principal executive offices, including zip code)</CENTER>
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center">   <B>941-753-5000</B><HR noshade width="75%">
<CENTER>(Registrant's telephone number, including area code)</CENTER>

<br wp="br1"><br wp="br2">
<p align="justify">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 [ ]

<br wp="br1"><br wp="br2">
<p>As of May 12, 2000 there were 4,060,522 shares of the Registrant's Common Stock outstanding.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<HR noshade="10%">
<BR><BR><BR><BR>

<p><center><strong>INDEX</strong></center>

<BR>
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<br wp="br1"><br wp="br2">
<p align="right"><strong>	PAGE            
     </strong>

<p>
<blockquote>
<table  width="80%">
<tr>
<td valign="top" width="10%"><strong>PART I.<BR></strong></td>
<td valign="top" width="70%"><strong>FINANCIAL INFORMATION</strong></td>
<td valign="top" width="10%">
<p align="right">3-13</td></tr>
<tr>
<td valign="top"><BR>ITEM 1.</td>
<td valign="top"><BR>FINANCIAL STATEMENTS</td>
<td align="right" valign="top"><BR>3-11</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>Consolidated Balance Sheets at March 31, 2000 and December 31, 1999.</td>
<td align="right" valign="top"><BR>3-4</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>Consolidated Statements of Operations for the Three Months ended<BR>March 31, 2000 and 1999.</td>
<td align="right" valign="top">
<br wp="br1"><BR>5</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>Consolidated Statements of Cash Flows for the Three Months ended<BR>March 31, 2000 and 1999.</td>
<td align="right" valign="top">
<br wp="br1"><BR>6</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>Notes to Interim Consolidated Financial Statements</td>
<td align="right" valign="top"><BR>7-11</td></tr>
<tr>
<td valign="top"><BR>ITEM 2.</td>
<td valign="top"><BR>MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL<BR>CONDITION AND RESULTS OF OPERATIONS</td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">12-13</td></tr>
<tr>
<td valign="top">
<br wp="br1"><strong>PART II.</strong></td>
<td valign="top">
<br wp="br1"><strong>OTHER INFORMATION</strong></td>
<td align="right" valign="top">
<br wp="br1">14</td></tr>
<tr>
<td valign="top"><BR>ITEM 1.</td>
<td valign="top"><BR>LEGAL PROCEEDINGS</td>
<td align="right" valign="top"><BR>14</td></tr>
<tr>
<td valign="top"><BR>ITEM 2.</td>
<td valign="top"><BR>CHANGES IN SECURITIES</td>
<td align="right" valign="top"><BR>14</td></tr>
<tr>
<td valign="top"><BR>ITEM 3.</td>
<td valign="top"><BR>DEFAULTS UPON SENIOR SECURITIES</td>
<td align="right" valign="top"><BR>14</td></tr>
<tr>
<td valign="top"><BR>ITEM 4.</td>
<td valign="top"><BR>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</td>
<td align="right" valign="top"><BR>14</td></tr>
<tr>
<td valign="top"><BR>ITEM 5.</td>
<td valign="top"><BR>OTHER INFORMATION</td>
<td align="right" valign="top"><BR>14</td></tr>
<tr>
<td valign="top"><BR>ITEM 6A.</td>
<td valign="top"><BR>EXHIBITS</td>
<td align="right" valign="top"><BR>14</td></tr>
<tr>
<td valign="top"><BR>ITEM 6B.</td>
<td valign="top"><BR>REPORTS ON FORM 8-K</td>
<td align="right" valign="top"><BR>14</td></tr></TABLE></blockquote>

<br wp="br1"><br wp="br2">
<p align="center">2
<br wp="br1"><br wp="br2">
<BR><BR>
<p><strong>PART I - FINANCIAL INFORMATION</strong>

<br wp="br1"><br wp="br2">
<p><strong>ITEM 1.	FINANCIAL STATEMENTS</strong>

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><center><strong>TELTRONICS, INC. AND SUBSIDIARIES<BR>CONSOLIDATED BALANCE SHEETS</strong></center>


<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><strong><center>ASSETS</strong></center>


<br wp="br1"><br wp="br2">
<table  width="90%" cellspacing="0" cellpadding="0">
<tr>
<td valign="top" width="65%"></td>
<td colspan="2" align="center" valign="top" width="2%">	March 31,<BR>2000<HR noshade></td>
<td align="center" valign="top" width="3%"></td>
<td colspan="2" align="center" valign="top" width="2%">	December 31,<BR>1999<HR noshade></td></tr>
<td>
<tr>
<td valign="top"></td>
<td colspan="2" align="center" valign="top">(Unaudited)</td>
<td align="center" valign="top"></td>
<td colspan="2" align="center" valign="top"></td></tr>
<tr>
<td colspan="6" valign="top"><strong>Current Assets:</strong></td></tr>
<tr>
<td valign="top">Cash</td>
<td valign="top">$</td>
<td align="right" valign="top" width="15%">616,691 </td>
<td valign="top"></td>
<td valign="top">$</td>
<td align="right" valign="top" width="15%">954,764 </td></tr>
<tr>
<td valign="top">Accounts receivable, net of allowance for doubtful accounts<BR>
     of $138,992 at March 31, 2000 and $210,000 at<BR>
     December 31, 1999.</td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">
4,517,616 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">
4,754,896 </td></tr>
<tr>
<td valign="top">Inventories, net</td>
<td valign="top"></td>
<td align="right" valign="top">5,659,805 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">5,319,765 </td></tr>
<tr>
<td valign="top">Prepaid expenses and other current assets</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">219,147 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">236,034 <HR noshade size="1"> </td></tr>
<tr>
<td valign="top">

<p><BR>Total current assets</td>
<td valign="top"></td>
<td align="right" valign="top"><BR>
11,013,259 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR>
11,265,459 </td></tr>
<tr>
<td valign="top">
<br wp="br1"><strong>Property and equipment, net</strong></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1">3,655,372 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1">3,872,018 </td></tr>
<tr>
<td valign="top">
<br wp="br1"><strong>Other assets</strong></td>
<td valign="top"><BR><BR><HR noshade size="1"></td>
<td align="right" valign="top"><BR>
621,876 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><BR><HR noshade size="1"></td>
<td align="right" valign="top"><BR>657,364 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">
<br wp="br1">          Total assets</td>
<td valign="top">
<br wp="br1">$<HR noshade size="3"></td>
<td align="right" valign="top">
<br wp="br1">15,290,507 <HR noshade size="3"></td>
<td valign="top"></td>
<td valign="top">
<br wp="br1">$<HR noshade size="3"></td>
<td align="right" valign="top">
<br wp="br1">15,794,841 <HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><center>The accompanying notes are an integral part of these consolidated financial statements.</center>

<br wp="br1"><br wp="br2">
<p align="center">3
<br wp="br1"><br wp="br2">

<p><center><strong>TELTRONICS, INC. AND SUBSIDIARIES<BR>CONSOLIDATED BALANCE SHEETS - Continued</strong></center>


<br wp="br1"><br wp="br2">
<p><center><strong>LIABILITIES AND SHAREHOLDERS' EQUITY</strong></center>


<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td valign="top" width="64%"></td>
<td colspan="2" align="center" valign="top" width="3%">	March 31,<BR>2000<HR noshade></td>
<td align="center" valign="top" width="3%"></td>
<td colspan="2" align="center" valign="top" width="3%">	December 31,<BR>1999<HR noshade></td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" align="center" valign="top">(Unaudited)</td>
<td align="center" valign="top"></td>
<td colspan="2" align="center" valign="top"></td></tr>
<tr>
<td colspan="6" valign="top"><strong>Current Liabilities:</strong></td></tr>
<tr>
<td valign="top">     Current portion of long-term debt</td>
<td valign="top">$</td>
<td align="right" valign="top" width="15%">5,162,872 </td>
<td valign="top"></td>
<td valign="top" align="center">$</td>
<td align="right" valign="top" width="15%">5,266,159 </td></tr>
<tr>
<td valign="top">     Current portion of capital lease obligations</td>
<td valign="top"></td>
<td align="right" valign="top">324,566 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">326,663 </td></tr>
<tr>
<td valign="top">     Accounts payable</td>
<td valign="top"></td>
<td align="right" valign="top">3,141,812 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">3,151,492 </td></tr>
<tr>
<td valign="top">     Accrued expenses and other current liabilities</td>
<td valign="top"></td>
<td align="right" valign="top">1,215,848 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">981,030 </td></tr>
<tr>
<td valign="top">     Deferred income</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">1,006,292 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">734,856 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">          Total current liabilities</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">10,851,390 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">10,460,200 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"><strong>Long-term liabilities:</strong></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Long-term debt, net of current portion</td>
<td valign="top"></td>
<td align="right" valign="top">1,250,000 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">1,250,000 </td></tr>
<tr>
<td valign="top">     Capital lease obligations, net of current portion</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">179,948 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">259,662 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">          Total long-term liabilities</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">1,429,948 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">1,509,662 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"><strong><BR>Commitments and contingencies</strong></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"><strong>Shareholders' equity:</strong></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Common stock, $.001 par value, 40,000,000 shares authorized,<BR>
          4,060,522 and 4,054,522 issued and outstanding at<BR>
          March 31, 2000 and December 31, 1999, respectively.</td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">4,062 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">4,056 </td></tr>
<tr>
<td valign="top"><BR>     Non-voting common stock, $.001 par value, 5,000,000 shares<BR>
          authorized, zero shares issued and outstanding.</td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">
0 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">0 </td></tr>
<tr>
<td valign="top"><BR>     Preferred Series A stock, $.001 par value, 100,000 shares<BR>
          authorized, 100,000 shares issued and outstanding at<BR>
          March 31, 2000 and December 31, 1999.</td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2">
<BR>100 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2"><BR>100 </td></tr>
<tr>
<td valign="top"><BR>     Preferred Series B Convertible stock, $.001 par value, 25,000<BR>
          shares authorized, 12,625 shares issued and outstanding at<BR>
          March 31, 2000 and December 31, 1999.</td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2"><BR>13 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top">
<br wp="br1"><br wp="br2"><BR>13 </td></tr>
<tr>
<td valign="top"><BR>     Additional paid-in capital</td>
<td valign="top"></td>
<td align="right" valign="top"><BR>16,635,166 </td>
<td valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR>16,624,672 </td></tr>
<tr>
<td valign="top">     Accumulated deficit</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(13,630,172)<HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(12,803,862)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">          Total shareholders' equity</td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,009,169 <HR noshade size="1"></td>
<td valign="top"></td>
<td valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,824,979 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">          Total liabilities and shareholders' equity</td>
<td valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">15,290,507 <HR noshade size="3"></td>
<td valign="top"></td>
<td valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">15,794,841 <HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><center>The accompanying notes are an integral part of these consolidated financial statements.</center>

<br wp="br1"><br wp="br2">
<p align="center">4
<br wp="br1"><br wp="br2">

<p><center><strong>TELTRONICS, INC. AND SUBSIDIARIES<BR>CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)</strong></center>


<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td valign="top" width="64%"></td>
<td colspan="5" align="center" valign="top" width="3%">Three Months Ended March 31,<HR noshade></td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" align="center" valign="top">2000<HR noshade></td>
<td align="center" valign="top" width="4%"></td>
<td colspan="2" align="center" valign="top" width="3%">1999<HR noshade></td></tr>
<tr>
<td colspan="6" valign="top"></td></tr>
<tr>
<td valign="top"><strong><BR>Net Sales</strong></td>
<td align="right" valign="top"><BR>$</td>
<td align="right" valign="top" width="15%"><BR>7,584,389 </td>
<td valign="top"></td>
<td align="right" valign="top"><BR>$</td>
<td align="right" valign="top" width="15%"><BR>6,824,986 </td></tr>
<tr>
<td valign="top">Cost of goods sold</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">4,501,137 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,529,812 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"><strong>Gross profit</strong></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,083,252 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,295,174 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"><strong>Operating expenses:</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     General and administrative</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">980,193 </td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">852,446 </td></tr>
<tr>
<td valign="top">     Sales and marketing</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,633,810 </td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,294,836 </td></tr>
<tr>
<td valign="top">     Research and development</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">907,889 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">937,736 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,521,892 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">3,085,018 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">Income (loss) from operations</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(438,640)<HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">210,156 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"><strong>Other income (expense):</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Interest</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(219,123)</td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(208,379)</td></tr>
<tr>
<td valign="top">     Financing</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(70,894)</td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(103,239)</td></tr>
<tr>
<td valign="top">     Litigation costs</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(76,800)</td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(21,685)</td></tr>
<tr>
<td valign="top">     Gain on dispositions</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">111,614 </td></tr>
<tr>
<td valign="top">     Other</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">17,022 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">24,346 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(349,795)<HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(197,343)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">Income (loss) before income taxes</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(788,435)</td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">12,813 </td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">Income taxes</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">0 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">300 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"><strong>Net income (loss)</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(788,435)</td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">12,513 </td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">Dividends on Preferred Series B Convertible  Stock</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">37,875 <HR noshade size="1"></td>
<td valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">75,000 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">Net loss attributable to Common Shareholders</td>
<td align="right" valign="top">$<BR><HR noshade size="3"></td>
<td align="right" valign="top">(826,310)<BR><HR noshade size="3"></td>
<td valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(62,487)<HR noshade size="3"></td></tr>
<tr>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"><strong>Net loss per share:</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Basic and Diluted</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(.20)<HR noshade size="3"></td>
<td valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(.02)<HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><center>The accompanying notes are an integral part of these consolidated financial statements.</center>

<br wp="br1"><br wp="br2">
<p align="center">5
<br wp="br1"><br wp="br2">

<p><center><strong>TELTRONICS, INC. AND SUBSIDIARIES<BR>CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)</strong></center>


<br wp="br1"><br wp="br2">
<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td valign="top" width="64%"></td>
<td colspan="5" align="center" valign="top" width="3%">Three Months Ended March 31,<HR noshade></td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" align="center" valign="top">2000<HR noshade></td>
<td align="center" valign="top" width="4%"></td>
<td colspan="2" align="center" valign="top" width="3%">1999<HR noshade></td></tr>
<tr>
<td colspan="6" valign="top"></td></tr>
<tr>
<td valign="top"><strong>Cash Flows from Operating Activities:</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top" width="15%"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top" width="15%"></td></tr>
<tr>
<td valign="top">     Net income (loss)</td>
<td align="right" valign="top">$</td>
<td align="right" valign="top">(788,435)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$</td>
<td align="right" valign="top">12,513 </td></tr>
<tr>
<td valign="top">     Adjustments to reconcile net income (loss) to net cash<BR>
     flows provided by (used in) operating activities:</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Provision for doubtful accounts</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(71,008)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td></tr>
<tr>
<td valign="top">     Provision for obsolete inventories</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">9,501 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(3,376)</td></tr>
<tr>
<td valign="top">     Depreciation and amortization</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">372,940 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">318,541 </td></tr>
<tr>
<td valign="top">     Amortization of deferred financing costs</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">25,935 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">56,396 </td></tr>
<tr>
<td valign="top">     Amortization of intangibles</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">3,121 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td></tr>
<tr>
<td valign="top">Changes in operating assets and liabilities, net of<BR>
acquisitions and dispositions:</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Accounts receivable</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">308,288 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(798,559)</td></tr>
<tr>
<td valign="top">     Inventories</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(349,541)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(41,104)</td></tr>
<tr>
<td valign="top">     Prepaid expenses and other current assets</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">16,887 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">52,251 </td></tr>
<tr>
<td valign="top">     Accounts payable</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(9,680)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">57,414 </td></tr>
<tr>
<td valign="top">     Accrued expenses and other liabilities</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">234,818 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">208,219 </td></tr>
<tr>
<td valign="top">     Deferred income</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">271,436 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">594,096 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">Net cash flows provided by operating activities</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">24,262 <HR noshade size="1"><td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">456,391 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"><strong>Cash Flows from Investing Activities:</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Acquisition of property and equipment</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(156,794)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(165,014)</td></tr>
<tr>
<td valign="top">     (Increase) decrease in other assets</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">6,432 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(3,852)</td></tr>
<tr>
<td valign="top">     Proceeds from sale of assets</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">500 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td></tr>
<tr>
<td valign="top">     Acquisition of Cascade Technology Corporation</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">0 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(57,500)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">Net cash flows used in investing activities</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(149,862)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(226,366)<HR noshade size="1"></td></tr>
<tr>
<td valign="top"><strong>Cash Flows from Financing Activities:</strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">     Net (repayment) proceeds from line of credit</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(77,022)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">157,787 </td></tr>
<tr>
<td valign="top">     Loan proceeds</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,099 </td></tr>
<tr>
<td valign="top">     Principal repayments of loans, notes and leases</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(108,076)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(141,844)</td></tr>
<tr>
<td valign="top">     Net proceeds from sale of common stock</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">10,500 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td></tr>
<tr>
<td valign="top">     Dividends on Preferred Series B Convertible Stock</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(37,875)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(75,000)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">Net cash flows used in financing activities</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(212,473)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(57,958)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">Net increase (decrease) in cash</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(338,073)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">172,067 </td></tr>
<tr>
<td valign="top">Cash - beginning of period</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">954,764 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR></td>
<td align="right" valign="top">136,467 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">Cash - end of period</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">616,691 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">308,534 <HR noshade size="3"></td></tr></table>


<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td valign="top" width="64%"></td>
<td colspan="5" align="center" valign="top" width="3%"></td></tr>
<tr>
<td valign="top"></td><td colspan="2" align="center" valign="top"></td>
<td align="center" valign="top" width="4%"></td>
<td colspan="2" align="center" valign="top" width="3%"></td></tr>
<tr>
<td colspan="6" valign="top"></td></tr>
<tr>
<td valign="top"><strong>Supplemental Non-cash Financing and<BR>
     Investing Activities:</strong></td>
<td></td><td></td></tr>
<tr>
<td valign="top"><BR>     Acquisition of assets of<BR>
          Cascade Technology Corporation</td>
<td align="right" valign="top" width="3%">
<br wp="br2"><BR>$<HR noshade size="3"></td>
<td align="right" valign="top" width="15%">
<br wp="br2"><BR>0 <HR noshade size="3"></td>
<td align="right" valign="top" width="4%"></td>
<td align="right" valign="top" width="3%">
<br wp="br1"><BR>$<HR noshade size="3"></td>
<td align="right" valign="top" width="15%">
<br wp="br2"><BR>181,865 <HR noshade size="3"></td></tr>
<tr>
<td valign="top">     Lease of fixed assets</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">0 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">25,778 <HR noshade size="3"></td></tr></table>


<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">


<br wp="br1"><br wp="br2">
<p><center>The accompanying notes are an integral part of these consolidated financial statements.</center>

<br wp="br1"><br wp="br2">
<p align="center">6
<br wp="br1"><br wp="br2">

<p><center><strong>TELTRONICS, INC. AND SUBSIDIARIES</center>
</strong>

<p><strong><center>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS</strong></center>


<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><strong>NOTE 1 - <u>NATURE OF BUSINESS AND BASIS OF PRESENTATION</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">Teltronics, Inc. ("Teltronics" or "Company"), a Delaware corporation, designs, develops, manufactures and markets
electronic hardware and  application software products, and engages in contract manufacturing for the
telecommunication industry.  Through its majority owned subsidiary, Interactive Solutions, Inc. ("ISI") it has also
engaged in the design and manufacturing of a small, Pentium® powered, multimedia computer and
DiscoveryMATETM panel link displays for the mobile computer industry.

<br wp="br1"><br wp="br2">
<p align="justify">The accompanying consolidated financial statements include the accounts of the Company and is comprised of its
wholly-owned subsidiaries TTG Acquisition Corp. and TELTRONICS/SRX, Inc., and its 85% owned subsidiary
Interactive Solutions, Inc. ("ISI").  All significant intercompany transactions and balances have been eliminated in
consolidation.

<br wp="br1"><br wp="br2">
<p align="justify">The unaudited consolidated financial statements and related notes have been prepared in accordance with the rules
and regulations of the Securities and Exchange Commission and on substantially the same basis as the annual
consolidated financial statements.  In the opinion of management, the consolidated financial statements reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial
position, operating results, and cash flows for those periods presented.  Operating results for the three month period
ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending
December 31, 2000.  These consolidated financial statements should be read in conjunction with the consolidated
financial statements, and notes thereto, for the year ended December 31, 1999, as presented in the Company's
annual report on Form 10-K.

<br wp="br1"><br wp="br2">
<p><strong>NOTE 2 - <u>ACQUISITIONS</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">On February 19, 1999, the Company acquired certain assets and the technology of Cascade Technology
Corporation ("Cascade").  The Company acquired all of Cascade's rights to and in certain technology for a
DiscoveryMATETM panel link display, open sales orders and certain other assets.  The display is sold to Ford
Visteon, Chrysler, General Motors, Kelsey Hayes and other companies.

<br wp="br1"><br wp="br2">
<p align="justify">The Company delivered an aggregate of 126,383 restricted shares (including 52,117 shares in escrow for claims
by the Company) of its voting common stock for selected assets of Cascade.  The holders of these restricted shares
have been granted certain registration rights under a Registration Rights Agreement which allows them to elect to
have their shares registered if the Company proposes to register any of its securities under the Securities Act of
1933, as amended, in an offering for cash.  In addition, the Company paid $57,500 at closing and issued a non-interest bearing note for $47,913 that was paid in June, 1999.

<br wp="br1"><br wp="br2">
<p align="justify">The acquisition has been accounted for using the purchase method of accounting and results of operations of
Cascade are included from the date of acquisition.  The purchase price has been assigned to the net assets
acquired based on management's estimate of the fair value of such assets and liabilities at the date of acquisition
as follows:

<br wp="br1"><br wp="br2">
<table  width="79%" cellspacing="0" cellpadding="0">
<tr>
<td valign="top" width="12%"></td>
<td colspan="2" valign="top" width="4%">Inventory</td>
<td align="right" valign="top" width="3%">$</td>
<td align="right" valign="top" width="10%">100,000 </td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" valign="top">Fixed assets</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">71,000 </td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" valign="top">Goodwill and identifiable intangible assets</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">116,278 </td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" valign="top">Notes payable</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(47,913)<HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top" width="62%">Net assets acquired</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">239,365 <HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="center">7
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="justify">The pro forma operating results for 1999 assuming this acquisition had been consummated as of January 1, 1999,
would not be materially different from reported operating results.  The excess cost over fair value of the net assets
acquired (goodwill) and identifiable tangible assets are being amortized on a straight-line basis as follows:

<br wp="br1"><br wp="br2">
<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td valign="top" width="12%"></td>
<td valign="top" width="40%"></td>
<td valign="top" width="3%"><BR><HR noshade></td>
<td align="center" valign="top" width="7%">Amount<HR noshade></td>
<td align="center" valign="top" width="3%"></td>
<td align="center" valign="top" width="15%">   Life<HR noshade></td>
<td width="5%"> </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Customer List</td>
<td valign="top">$</td>
<td align="right" valign="top">35,000</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">5 years</td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Patent</td>
<td valign="top"></td>
<td align="right" valign="top">35,000</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">14 years, 7 months</td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Goodwill</td>
<td valign="top"></td>
<td align="right" valign="top">46,278</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">15 years</td></tr></TABLE>
<br wp="br1"><br wp="br2">
<p><strong>NOTE 3 - <u>DISPOSITIONS</strong></u>

<br wp="br1"><br wp="br2">
<p align="justify">On April 23, 1998, the Company sold the customer list and maintenance and support agreements for the ORBi-TEL
for Windows and non-Unix call accounting product lines to MDR Telemanagement Limited.  These product lines
were sold for $100,000 in cash, and a contingent consideration payable in one year of $112,000. The Company
recognized a gain of $100,000 during the quarter ended June 30, 1998 and $111,614 during the quarter ended
March 31, 1999.

<br wp="br1"><br wp="br2">
<p><strong>NOTE 4 - <u>NET LOSS PER SHARE</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">Basic net loss per share is computed by dividing net loss, adjusted for preferred stock dividends, by the weighted
average number of issued common shares outstanding during the applicable period.  Diluted net loss per share is
computed by dividing net loss, adjusted for preferred stock dividends, by the weighted average number of issued
common shares.  Potential common shares consist of convertible preferred stock, stock options (vested and
unvested) and warrants and are computed using the treasury stock method.  Potential common  shares for 1999
and 1998 were anti-dilutive and were not included in the calculation of diluted net loss per share.

<br wp="br1"><br wp="br2">
<p align="justify">The following unaudited table sets forth the computation of basic and diluted net loss per share:

<br wp="br1"><br wp="br2">
<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td valign="top" width="64%"></td>
<td colspan="5" align="center" valign="top" width="3%">Three Months Ended March 31,<HR noshade></td></tr>
<tr>
<td valign="top"></td>
<td colspan="2" align="center" valign="top">2000<HR noshade></td>
<td align="center" valign="top" width="4%"></td>
<td colspan="2" align="center" valign="top" width="3%">1999<HR noshade></td></tr>
<tr>
<td colspan="6" valign="top"><strong><u>Basic</strong></u></td></tr>
<tr>
<td valign="top">Net income (loss)</td>
<td align="right" valign="top">$</td>
<td align="right" valign="top" width="15%">(788,435)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$</td>
<td align="right" valign="top" width="15%">12,513 </td></tr>
<tr>
<td valign="top">Preferred dividends</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(37,875)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(75,000)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">     Net loss attributable to common shareholders</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(826,310)<HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(62,487)<HR noshade size="3"></td></tr>
<tr>
<td valign="top">Weighted average shares outstanding</td>
<td align="right" valign="top"><BR><HR noshade size="3"></td>
<td align="right" valign="top">4,058,412 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="3"></td>
<td align="right" valign="top">3,534,309 <HR noshade size="3"></td></tr>
<tr>
<td valign="top">     Net loss per share</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(.20)<HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(.02)<HR noshade size="3"></td></tr>
<tr>
<td valign="top"><strong><u>Diluted</u></strong></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top">Net income (loss)</td>
<td align="right" valign="top">$</td>
<td align="right" valign="top">(788,435)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$</td>
<td align="right" valign="top">12,513 </td></tr>
<tr>
<td valign="top">Preferred dividends</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(37,875)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(75,000)<HR noshade size="1"></td></tr>
<tr>
<td valign="top">     Net loss attributable to common shareholders</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(826,310)<HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(62,487)<HR noshade size="3"></td></tr>
<tr>
<td valign="top">Weighted average shares outstanding</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">4,058,412 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">3,534,309 </td></tr>
<tr>
<td valign="top">Net effect of dilutive stock options using the treasury stock method</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0 </td></tr>
<tr>
<td valign="top">Net effect of dilutive warrants using the treasury stock method</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">0 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size=""></td>
<td align="right" valign="top">0 <HR noshade size="1"></td></tr>
<tr>
<td valign="top">     Dilutive potential common shares</td>
<td align="right" valign="top"><BR><HR noshade size="3"></td>
<td align="right" valign="top">4,058,412 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="3"></td>
<td align="right" valign="top">3,534,309 <HR noshade size="3"></td></tr>
<tr>
<td valign="top">     Net loss per share</td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(.20)<HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">(.02)<HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="center">8
<br wp="br1"><br wp="br2">


<p><strong>NOTE 5 - <u>INVENTORIES</strong></u>

<br wp="br1"><br wp="br2">
<p>The major classes of inventories are as follows:

<br wp="br1"><br wp="br2">
<table  width="90%" cellpadding="0" cellspacing="0">
<tr>
<td colspan="2" valign="top" width="11%"></td>
<td colspan="2" align="center" valign="top" width="3%">March 31,<BR>2000<HR noshade></td>
<td align="center" valign="top" width="4%"></td>
<td colspan="2" align="center" valign="top" width="3%">December 31,<BR>1999<HR noshade></td></tr>
<tr>
<td colspan="2" valign="top"></td>
<td colspan="2" align="center" valign="top">(Unaudited)
</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top" width="15%">
<br wp="br1"><br wp="br2"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top" width="52%">Raw materials</td>
<td align="right" valign="top">$</td>
<td align="right" valign="top" width="15%">3,888,665 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$</td>
<td align="right" valign="top">3,307,549 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Work-in-process</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,133,974 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,931,809 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Finished goods</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,349,738 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">783,478 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Provision for obsolete inventory</td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(712,572)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"><BR><HR noshade size="1"></td>
<td align="right" valign="top">(703,071)<HR noshade size="1"></td></tr>
<tr>
<td colspan="2" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">5,659,805 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$<HR noshade size="3"></td>
<td align="right" valign="top">5,319,765 <HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">
<p><strong>NOTE 6 - <u>LONG TERM DEBT</strong></u>

<br wp="br1"><br wp="br2">
<p align="justify">On February 25, 1998, the Company issued $1,750,000 of Subordinated Secured Debentures (the "Debentures").
The Debentures were due February 13, 2002 and fees paid in connection with the Debentures totaled $8,750.  The
Debentures do not have a prepayment penalty and are collateralized by a first lien on fixed assets and a second
lien on all other assets.  The Holder of the Debentures received 525,000 warrants to purchase the Company's
Common Stock at an exercise price of $2.75 per share.  These warrants are exercisable in whole, or in part, at any
time during a five-year period beginning on the date of issuance.  The Debentures contain certain financial
covenants, including restrictions which could affect future funding of ISI by the Company.

<br wp="br1"><br wp="br2">
<p align="justify">On March 29, 1999, the Company amended and restated the $1,750,000 of Subordinated Secured  Debentures
Agreement.  The Debentures have a revised maturity of $500,000 on April 30, 2000 and $1,250,000 on February
13, 2002.  The Holder has extended the April 30, 2000 maturity date.  See Note 10 - Financial Statements.

<br wp="br1"><br wp="br2">
<p align="justify">On February 25, 1998, the Company entered into senior Secured Loans ("Loans") for $1,000,000 and $280,000.
Interest is paid quarterly starting May 15, 1998.  On March 29, 1999, the Company amended and restated the
$1,000,000 Loan Agreement originally entered into on February 25, 1998 and originally due February 25, 1999.
The Loan Agreement had a revised maturity of April 30, 2000.  The Holder has extended the April 30, 2000
maturity date.  On September 30, 1999, the interest rate increased from 12% to 13.5%.  The Holder of the Loans
received 365,000 warrants to purchase the Company's Common Stock at an exercise price of $2.75 per share.
These warrants are exercisable in whole, or in part, at any time during a five-year holding period beginning on the
date of issuance.  The Loans contain certain financial covenants, including restrictions which could effect future
funding of ISI by the Company.  See Note 10 - Financial Statements.

<br wp="br1"><br wp="br2">
<p><strong>NOTE 7 - <u>SHAREHOLDERS' EQUITY</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">The total number of shares of all classes of capital stock which the Company has the authority to issue is
50,000,000 shares divided into three classes of which 5,000,000 shares, par value $.001 per share are designated
Preferred stock, 40,000,000 shares, par value $.001 per share are designated Common stock and 5,000,000
shares, par value $.001 per share, are designated Non-Voting Common stock.

<br wp="br1"><br wp="br2">
<p align="justify">(A)     <strong>Preferred Stock</strong> - On February 25, 1998, the Company issued 25,000 shares of Preferred Series B
Convertible Stock for $2,500,000.  The Preferred Series B Convertible Stock provides for a $12 per share annual
dividend, payable quarterly starting May 15, 1998.  The dividend increases to $20 after four years.  Fees paid in
connection with this Preferred Stock totaled $12,500.  The holder of the Preferred Series B Convertible Stock has
the right at its option to convert to the Company's Common Stock at $2.75 per share.  The Preferred Series B
Convertible Stock cannot be called for two years and after two years, only if the twenty-day average bid price of the
Company's common stock exceeds $5.50 per share.  After four years, the Company has the right to redeem the
Preferred Series B Convertible Stock in full at 100% of the face value plus accrued and unpaid dividends.  The
Preferred Series B Convertible Stock contains certain financial covenants.

<br wp="br1"><br wp="br2">
<p align="center">9
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="justify">(B)     <strong>Warrants</strong> - On February 25, 1998, the Company issued 890,000 warrants to purchase the Company's
common stock at an exercise price of $2.75 per share.  These warrants are exercisable in whole, or in part, at any
time during a five year period beginning on the date of issuance.  The fair value of the warrants was recorded as
deferred financing costs and totaled $569,600.  This amount is being amortized to financing expense over the life
of the Subordinated Secured Debentures and Senior Secured Loans.

<br wp="br1"><br wp="br2">
<p><strong>NOTE 8 - <u>PROPOSED BUSINESS COMBINATIONS</strong></u>

<br wp="br1"><br wp="br2">
<p align="justify">On December 31, 1999, the Company entered into an agreement to acquire substantially all of the assets of
Telident, Inc. ("Seller"), a Minnesota corporation, located in Minneapolis, Minnesota, under an Agreement of Sale
dated December 31, 1999 ("Agreement").  The agreement was amended on February 16, 2000.

<br wp="br1"><br wp="br2">
<p align="justify">Under the Amended Agreement, the Company would acquire substantially all of the assets of the Seller, including
$1,100,000 cash, and assume certain liabilities in exchange for 637,500 shares of the Company's $.001 par value
voting common stock ("Shares").  Ten percent (10%) of the Shares will be placed in escrow for 90 days to cover
any indemnity claims of Company under the Amended Agreement.  Holders of a majority of the voting securities
of the Seller have indicated their consent to the proposed transactions under the Amended Agreement if closed prior
to June 1, 2000.

<br wp="br1"><br wp="br2">
<p align="justify">Completion of the proposed transaction is subject to certain conditions described in the Amended Agreement
including approval by the shareholders of Seller to the dissolution of Seller and registration under the Securities Act
of 1933, as amended, of the Shares to be distributed to the shareholders of Seller upon liquidation.  Registration
of the Shares on Form S-4 was declared effective by the Securities and Exchange Commission on April 20, 2000.

<br wp="br1"><br wp="br2">
<p align="justify">On May 11, 2000, the Company entered into a letter of intent to acquire selected assets and technology of the
Harris 20/20 switching product line.  Under the proposed transaction, Teltronics would also assume certain liabilities
and contractual obligations of Harris' Communications Product Division with regard to the assets being acquired,
including providing on-going support to Harris customers.

<br wp="br1"><br wp="br2">
<p align="justify">The closing of the proposed transaction is anticipated to occur in the third quarter of 2000.  Completion of this
transaction is subject to a number of conditions, including completion of due diligence by the Company and entry
into a definitive purchase agreement.  There can be no assurance that the definitive  purchase agreement will be
executed or if executed, that the proposed transaction will occur.

<br wp="br1"><br wp="br2">
<p><strong>NOTE 9 - <u>SEGMENT INFORMATION</strong></u>

<br wp="br1"><br wp="br2">
<p align="justify">The Company's operations are classified into two reportable segments, Teltronics and ISI.  Each reportable segment
is staffed separately, requires different technology and marketing strategies and sells to different customers.

<br wp="br1"><br wp="br2">
<p align="justify">The accounting policies of the Segments are the same.  Intersegment sales and transfers are recorded at Teltronics'
cost  plus a normal margin for electronic manufacturing.  Company management evaluates performance based on
segment profit, which is net income or (loss) before taxes, excluding nonrecurring gains or losses.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center">10
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="justify">The following table presents information about reportable segment operations and assets.

<br wp="br1"><br wp="br2">
<table  width="90%">
<tr>
<td colspan="2" rowspan="2" valign="top" width="5%"></td>
<td colspan="3" align="center" valign="top" width="16%">Three Months Ended<BR>March 31,<HR noshade></td></tr>
<tr>
</td>
<td align="center" valign="top">2000<HR noshade></td>
<td align="center" valign="top" width="3%"></td>
<td align="center" valign="top" width="16%">1999<HR noshade></td></tr>
<tr>
<td colspan="2" valign="top"><u><strong>Net Sales</strong></u></td>
<td colspan="3" align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top" width="62%"> Teltronics</td>
<td align="right" valign="top">$  7,486,000 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$  6,881,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> ISI</td>
<td align="right" valign="top">98,000 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">17,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Elimination of Intersegment sales</td>
<td align="right" valign="top">0 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(73,000)<HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Total sales</td>
<td align="right" valign="top">$  7,584,000 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$  6,825,000 <HR noshade size="3"></td></tr>
<tr>
<td colspan="2" valign="top"><u><strong>Depreciation and Amortization</strong></u></td>
<td colspan="3" align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Teltronics</td>
<td align="right" valign="top">$     242,000 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     198,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> ISI</td>
<td align="right" valign="top">131,000 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">121,000 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Total depreciation and amortization</td>
<td align="right" valign="top">$     373,000 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     319,000 <HR noshade size="3"></td></tr>
<tr>
<td colspan="2" valign="top"><u><strong>Interest and Financing Costs</strong></u></td>
<td colspan="3" align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Teltronics</td>
<td align="right" valign="top">$     290,000 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     187,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> ISI</td>
<td valign="top">
<p align="right">0 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">125,000 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Total interest and financing costs</td>
<td align="right" valign="top">$     290,000 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     312,000 <HR noshade size="3"></td></tr>
<tr>
<td colspan="2" valign="top"><u><strong>Segment Profits</strong></u></td>
<td colspan="3" align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Teltronics</td>
<td align="right" valign="top">$   (373,000)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     581,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> ISI</td>
<td align="right" valign="top">(415,000)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(680,000)<HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Total</td>
<td align="right" valign="top">(788,000)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(99,000)</td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Gain on dispositions</td>
<td align="right" valign="top">0 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">112,000 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Net income (loss) before taxes</td>
<td align="right" valign="top">$   (788,000)<HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$       13,000 <HR noshade size="3"></td></tr>
<tr>
<td colspan="2" valign="top"><u><strong>Segment Assets</strong></u></td>
<td colspan="3" align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Teltronics</td>
<td align="right" valign="top">$14,473,000 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$14,206,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> ISI</td>
<td align="right" valign="top">817,000 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1,295,000 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Total segment assets</td>
<td align="right" valign="top">$15,290,000 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$15,501,000 <HR noshade size="3"></td></tr>
<tr>
<td colspan="2" valign="top"><u><strong>Acquisition of Property and Equipment</strong></u></td>
<td colspan="3" align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Teltronics</td>
<td align="right" valign="top">$      138,000 </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     119,000 </td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> ISI</td>
<td align="right" valign="top">19,000 <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">46,000 <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"> Total acquisition of property and equipment</td>
<td align="right" valign="top">$     157,000 <HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">$     165,000 <HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">
<p><strong>NOTE 10 - <u>SUBSEQUENT EVENTS</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">On May 12, 2000, the Company extended the due date of the $1,750,000 of Subordinated Secured
Debentures Agreement with Finova Capital.  The Debentures have a maturity of February 13, 2002 with principal
payments due of $500,000 on June 30, 2000, September 30, 2000 and December 30, 2000 and $250,000 on
February 13, 2002.

<br wp="br1"><br wp="br2">
<p align="justify">On May 12, 2000, the Company extended the due date of the $1,000,000 Loan Agreement with Finova
Capital.  The Loan Agreement has a revised maturity of February 13, 2002.

<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="center">11
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><strong>ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</strong>

<br wp="br1"><br wp="br2">
<p><strong><u>FORWARD-LOOKING STATEMENTS</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">A number of statements contained in this Quarterly Report on Form 10-Q are forward-looking statements which are
made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements involve a number of risks and uncertainties, including the timely development and market
acceptance of products and technologies, competitive market conditions, successful integration of acquisitions, the
ability to secure additional sources of financing, the ability to reduce operating expenses, the ability to comply with
the rules for inclusion in the Nasdaq Stock Market and other factors described in the Company's filings with the
Securities and Exchange Commission.  The actual results that the Company achieves may differ materially from
any forward-looking statements due to such risks and uncertainties.

<br wp="br1"><br wp="br2">
<p><strong><u>RESULTS OF OPERATIONS</strong></u>

<br wp="br1"><br wp="br2">
<p align="justify">The following unaudited tables set forth certain data, expressed as a percentage of revenue, from the company's
consolidated Statements of Operations for the three month periods ended March 31, 2000 and 1999.

<br wp="br1"><br wp="br2">
<table  width="90%">
<tr>
<td colspan="2" valign="top" width="7%"></td>
<td colspan="3" align="center" valign="top" width="15%">Three Months Ended<BR>March 31,<HR noshade></td></tr>
<tr>
<td colspan="2" valign="top"></td>
<td align="center" valign="top" width="16%">2000<HR noshade></td>
<td align="center" valign="top" width="3%"></td>
<td align="center" valign="top" width="16%">1999<HR noshade></td></tr>
<tr>
<td colspan="5" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top" width="56%">Net sales</td>
<td align="right" valign="top">100.0%  </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">100.0%  </td></tr>
<tr>
<td valign="top">     </td>
<td valign="top">Cost of goods sold</td>
<td align="right" valign="top">59.3% <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">51.7% <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Gross profit</td>
<td align="right" valign="top">40.7% <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">48.3% <HR noshade size="1"></td></tr>
<tr>
<td colspan="2" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Operating expenses:</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     General and administrative</td>
<td align="right" valign="top">12.9%  </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">12.5%  </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Sales and marketing</td>
<td align="right" valign="top">21.5%  </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">19.0%  </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Research and development</td>
<td align="right" valign="top">12.0% <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">13.7% <HR noshade size="1"></td></tr>
<tr>
<td colspan="2" valign="top"></td>
<td align="right" valign="top">46.4% <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">45.2% <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Income (loss) from operations</td>
<td align="right" valign="top">(5.7%)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">3.1% <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">Other income (expense):</td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Interest</td>
<td align="right" valign="top">(2.9%)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(3.1%)</td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Financing</td>
<td align="right" valign="top">(0.9%)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(1.5%)</td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Litigation costs</td>
<td align="right" valign="top">(1.0%)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(0.3%)</td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Gain on dispositions</td>
<td align="right" valign="top">0% </td>
<td align="right" valign="top"></td>
<td align="right" valign="top">1.6% </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Other</td>
<td align="right" valign="top">0.2% <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0.4% <HR noshade size="1"></td></tr>
<tr>
<td colspan="2" valign="top"></td>
<td align="right" valign="top">(4.6%)<HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">(2.9%)<HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Income before income taxes</td>
<td align="right" valign="top">(10.3%)</td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0.2% </td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Income tax expense</td>
<td align="right" valign="top">0% <HR noshade size="1"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0.0% <HR noshade size="1"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">     Net income     </td>
<td align="right" valign="top">(10.3%)<HR noshade size="3"></td>
<td align="right" valign="top"></td>
<td align="right" valign="top">0.2% <HR noshade size="3"></td></tr></table>
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p><strong><u>Three Months Ended March 31, 2000 and 1999.</u></strong>

<br wp="br1"><br wp="br2">
<p align="justify">Sales were $7,584,000 for 2000 as compared to $6,825,000 for 1999.  This increase was due to strong low margin
electronic manufacturing sales.  This was offset by lower sales for Vision and  E-911 switching and service product
lines.

<br wp="br1"><br wp="br2">
<p align="center">12
<br wp="br1"><br wp="br2">

<br wp="br1"><br wp="br2">
<p align="justify">Gross profit was $3,083,000 or 40.7% for 2000 as compared to $3,295,000 or 48.3% for 1999.  The decrease was
due to product mix, with increased low margin electronic manufacturing sales and cost  increases on selected
components.

<br wp="br1"><br wp="br2">
<p align="justify">General and administrative expenses were $980,000 for 2000 as compared to $852,000 for 1999.  The increase
was due to increased payroll and benefit plan expenses.

<br wp="br1"><br wp="br2">
<p align="justify">Sales and marketing expenses were $1,634,000 for 2000 as compared to $1,295,000 for 1999.  The increase is
due to increased payroll, travel and marketing expenses.

<br wp="br1"><br wp="br2">
<p align="justify">Research and development expenses were $908,000 for 2000 as compared to $938,000 for 1999.

<br wp="br1"><br wp="br2">
<p align="justify">Loss from operations was $439,000 for 2000 as compared to income of $210,000 for 1999.  This decrease relates
to lower gross profit and increased expenses.

<br wp="br1"><br wp="br2">
<p align="justify">Other expense was $350,000 for 2000 as compared to $197,000 for 1999.  Interest and financing was $290,000
for 2000 as compared to $312,000 for 1999.

<br wp="br1"><br wp="br2">
<p align="justify">The net loss was $788,000 for 2000 as compared to net income of $13,000 for 1999.

<br wp="br1"><br wp="br2">
<p><u><strong>LIQUIDITY AND CAPITAL RESOURCES</strong></u>

<br wp="br1"><br wp="br2">
<p align="justify">Cash requirements were met with borrowings from The CIT Group/Credit Finance ("CIT").

<br wp="br1"><br wp="br2">
<p align="justify">The Company's working capital ratio was 1.01:1 at March 31, 2000 as compared to 1.08:1 at December 31, 1999.
Net working capital  was $162,000 at March 31, 2000 as compared to $805,000 at December 31, 1999.

<br wp="br1"><br wp="br2">
<p align="justify">Net cash decreased by $338,000 for the quarter ended March 31, 2000 as compared to an increase of $172,000
for the quarter ended March 31, 1999.  Net cash flows provided by operating activities were $24,000 for the quarter
ended March 31, 2000 as compared to net cash flows provided by operating activities of $456,000 for the quarter
ended March 31, 1999.

<br wp="br1"><br wp="br2">
<p align="justify">Accounts receivable decreased by $308,000 for the quarter ended March 31, 2000 as compared to an increase of
$799,000 for the quarter ended March 31, 1999.  This decrease was due to 1999 sales being concentrated in the
last month of the quarter.  Inventories increased by $350,000 for the quarter ended March 31, 2000 as compared
to an increase of $41,000 for the quarter ended March 31, 1999.  This increase relates to inventory purchases made
for production scheduled for the second quarter of 2000.  Accounts payable decreased by $10,000 for the quarter
ended March 31, 2000 as compared to an increase of $57,000 for the quarter ended March  31, 1999.

<br wp="br1"><br wp="br2">
<p align="justify">Net cash flows used in investing activities totaled $150,000 for the quarter as compared to $226,000 for the quarter
ended March 31, 1999.  Acquisition of property and equipment totaled $157,000 for the quarter ended March 31,
2000 as compared to $165,000 for the quarter ended March 31, 1999.

<br wp="br1"><br wp="br2">
<p align="justify">Cash flows used in financing activities totaled $212,000 for the quarter ended March 31, 2000 as compared to
$58,000 for the quarter ended March 31, 1999.  The Company repaid debt of $185,000 during the quarter ended
March 31, 2000 and borrowed $17,000 for the quarter ended March 31, 1999.

<br wp="br1"><br wp="br2">
<p align="justify">On May 12, 2000, the Company extended the due date of the $1,750,000 of Subordinated Secured
Debentures Agreement with Finova Capital.  The Debentures have a maturity of February 13, 2002 with principal
payments due of $500,000 on June 30, 2000, September 30, 2000 and December 30, 2000 and $250,000 on
February 13, 2002.

<br wp="br1"><br wp="br2">
<p align="justify">On May 12, 2000, the Company extended the due date of the $1,000,000 Loan Agreement with Finova
Capital.  The Loan Agreement has a revised maturity of February 13, 2002.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="center">13
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p><strong>PART II - OTHER INFORMATION</strong>

<br wp="br1"><br wp="br2">
<table  width="90%">
<tr>
<td valign="top" width="13%"><strong>ITEM 1.</strong></td>
<td colspan="3" valign="top" width="10%"><strong>LEGAL PROCEEDINGS</strong></td></tr>
<tr>
<td colspan="4" valign="top" align="justify">From time to time, the Company is a party to litigation, which arises, in the normal course of business.  There is
no litigation pending, or to the Company's knowledge, threatened that, if determined adversely, would have a
material adverse effect upon the business or financial condition of the Company.

<br wp="br1"><br wp="br2">
<p align="justify">In August, 1999, a former employee commenced an action against Teltronics in the Circuit Court, Twelfth Judicial
Circuit, Sarasota County, Florida seeking damages for alleged violations of the Florida Worker's Compensation
Law and the Family and Medical Leave Act. An answer with affirmative defenses was served and the action will
be vigorously defended.

<br wp="br1"><br wp="br2">
<p align="justify">In September, 1999, Teltronics and its subsidiary, ISI, were served with a counterclaim in connection with litigation
commenced in July, 1998, by Teltronics and ISI in the United States District Court for the Middle District of Florida
against two former employees and entities they control. Teltronics' and ISI's complaint sought damages and
equitable relief against the defendants for breach of fiduciary duties and contract obligations; fraud; conversion;
theft of trade secrets; interference with contracts and business relations; and violations of federal and state anti-fraud statutes. The counterclaim sought damages in excess of $3,000,000 for alleged interference with contracts,
breach of employment contracts and trade slander.  During the trial in May, 2000, certain claims of Teltronics and
ISI against the defendants and the counterclaims made by the defendants against Teltronics and ISI were
withdrawn.  After trial of the remaining claims of Teltronics and ISI against the defendants, the jury rendered a
verdict that awarded Teltronics and ISI approximately $16 million from the defendants.  There can be no
assurance that Teltronics and ISI will be successful in collecting the damages awarded to them by the jury.</td></tr>
<tr>
<td valign="top"><strong><BR>ITEM 2.</strong></td>
<td colspan="3" valign="top"><BR><strong>CHANGES IN SECURITIES - None</strong></td></tr>
<tr>
<td valign="top"><strong><BR><B>ITEM 3.</B></td>
<td colspan="3" valign="top"><BR><B>DEFAULTS UPON SENIOR SECURITIES</B></strong><strong> - None</strong></td></tr>
<tr>
<td valign="top"><BR><strong>ITEM 4.</strong></td>
<td colspan="3" valign="top"><BR><strong>SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</strong><B> - None</B></td></tr>
<tr>
<td valign="top"><strong><BR>ITEM 5.</strong></td>
<td colspan="3" valign="top"><BR><strong>OTHER INFORMATION</strong> <B>- None</B></td></tr>
<tr>
<td valign="top"><BR><strong>ITEM 6A.</strong></td>
<td colspan="3" valign="top"><BR><strong>EXHIBITS</strong></td></tr>
<tr>
<td valign="top"></td>
<td valign="top"><BR>27</td>
<td valign="top" width="75%"><BR>Financial Data Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . </td>
<td valign="top" width="7%"><BR>(a)</td></tr>
<tr>
<td valign="top"><strong><BR>ITEM 6B.</strong></td>
<td colspan="3" valign="top"><BR><strong>REPORTS ON FORM 8-K</strong></td></tr>
<tr>
<td colspan="4" valign="top"><BR>The Company filed a Form 8-K on January 14, 2000 and Amendments to the Form 8-K on February 24, 2000,
March 16, 2000 and March 28, 2000.

<br wp="br1"><br wp="br2">
<p>_______________________</td></tr>
<tr>
<td valign="top">(a)</td>
<td colspan="3" valign="top">Filed as an Exhibit to this Quarterly Report on Form 10-Q for the Three month period<BR>ended March 31, 2000.</td></tr></TABLE>

<br wp="br1"><br wp="br2">
<p align="center">14
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<p align="justify">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.

<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<br wp="br1"><br wp="br2">
<table  width="90%">
<tr>
<td valign="top" width="49%"></td>
<td valign="top" width="56%">TELTRONICS, INC.</td></tr>
<tr>
<td colspan="2" valign="top"></td></tr>
<tr>
<td valign="top">May 12, 2000</td>
<td valign="top"></td></tr>
<tr>
<td></td><td valign="top">/s/ Ewen R. Cameron<HR noshade>Ewen R. Cameron<BR>President & Chief Executive Officer</td></tr>
<tr>
<td colspan="2" valign="top"></td></tr>
<tr>
<td colspan="2" valign="top"></td></tr>
<tr>
<td valign="top">May 12, 2000</td>
<td valign="top"></td></tr>
<tr>
<td valign="top"></td>
<td valign="top">/s/ Mark E. Scott<HR noshade>Mark E. Scott<BR>Vice President Finance, Secretary, Treasurer<BR>and Principal Accounting Officer  </td></tr></TABLE>

<br wp="br1"><br wp="br2">
<p align="center">15
<br wp="br1"><br wp="br2">
</blockquote>


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