UNITED STATES
                       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, 2001

            ___   TRANSITION REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                  Commission File No. 33-18978

                        TEL-INSTRUMENT ELECTRONICS CORP.
             (Exact name of the Registrant as specified in Charter)

                  New Jersey                                22-1441806
                  (State of Incorporation)           (I.R.S. Employer ID Number)

                 728 Garden Street, Carlstadt, New Jersey 07072
               (Address of Principal Executive Offices) (Zip Code)

          Registrant's Telephone No. including Area Code: 201-933-1600

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 ____

Indicate the number of shares  outstanding of the issuer's  common stock,  as of
the latest practical date:

2,128,351 shares of Common stock, $.10 par value as of November 2, 2001.


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Item 1.  Financial Statements (Unaudited):

         Condensed Comparative Balance Sheets
         September 30, 2001 and March 31, 2001                               1

         Condensed Comparative Statements of Operations -
         Three and Six Months Ended September 30, 2001 and 2000              2

         Condensed Comparative Statements of Cash Flows -
         Three Months Ended September 30, 2001 and 2000                      3

         Notes to Condensed Financial Statements                            4-5

Item 2.  Management's Discussion and Analysis of the Results of
         Operations and Financial Conditions                                6-8

         SIGNATURES                                                          9


<PAGE>

Item 1 - Financial Statements

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS
                      September 30, 2001 and March 31, 2001

<TABLE>
<CAPTION>
                                                                                  (Unaudited)              (Audited)
ASSETS                                                                           Sept. 30, 2001          March 31, 2001
                                                                                 --------------          --------------
<S>                                                                               <C>                      <C>
Current assets:
Cash                                                                              $   536,091              $   433,438
  Accounts receivable, net of allowance for doubtful
      accounts of $11,598 at September 30, 2001 and
     March 31, 2001                                                                 1,347,945                1,264,383
  Inventories, net                                                                  2,630,341                2,351,648
  Prepaid expenses and other current assets                                            30,186                   43,568
  Deferred income tax benefit - current                                               527,276                  527,276
                                                                                  -----------              -----------
Total current assets                                                                5,071,839                4,620,313
Property, plant and equipment, net                                                    792,353                  674,656
Other assets                                                                           51,506                   35,354
Deferred income tax benefit                                                           416,435                  604,323
                                                                                  -----------              -----------
Total assets                                                                        6,332,133                5,934,646
                                                                                  ===========              ===========

LIABILITIES & STOCKHOLDERS EQUITY

Current liabilities:
  Note payable - related party - current portion                                      200,000                  200,000
  Note payable - bank                                                                 250,000                  250,000
  Convertible subordinated notes - related party                                       15,000                   15,000
  Capitalized lease obligations - current portion                                      94,156                   77,826
  Deferred revenues                                                                   522,013                  267,630
  Accrued payroll, vacation pay, deferred wages
      payroll taxes and interest on deferred wages                                    528,905                  535,850
  Accounts payable and accrued expenses                                             1,258,041                1,507,647
                                                                                  -----------              -----------
Total current liabilities                                                           2,868,115                2,853,953
Notes payable - related party - non-current portion                                   150,000                  150,000
Capitalized lease obligations - excluding current port                                 62,711                   68,345
                                                                                  -----------              -----------
Total liabilities                                                                   3,080,826                3,072,298

Stockholders' equity:
   Common stock                                                                       215,070                  212,438
   Additional paid-in capital                                                       3,932,735                3,932,111
   Accumulated deficit                                                               (896,498)              (1,282,201)
                                                                                  -----------              -----------
Total stockholders' equity                                                          3,251,307                2,862,348
                                                                                  -----------              -----------

Total liabilities and stockholders' equity                                        $ 6,332,133              $ 5,934,646
                                                                                  ===========              ===========
</TABLE>

See accompanying notes to condensed financial statements


                                      -1-
<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    Three Months Ended                Six Months Ended
                                                             Sept. 30, 2001  Sept. 30, 2000    Sept. 30, 2001  Sept. 30, 2000
                                                             --------------  --------------    --------------  --------------
<S>                                                            <C>            <C>                <C>            <C>
Sales
  Government, net                                              $ 1,652,050    $   933,085        $ 3,460,721    $ 1,850,198
  Commercial, net                                                  534,432        819,169          1,287,450      1,392,059
                                                               -----------    -----------        -----------    -----------
Total Sales                                                      2,186,482      1,752,254          4,748,171      3,242,257

Cost of sales                                                    1,112,871        896,554          2,427,177      1,683,263
                                                               -----------    -----------        -----------    -----------
Gross Margin                                                     1,073,611        855,700          2,320,994      1,558,994

Operating expenses
  Selling, general & administrative                                450,783        362,846            849,395        716,289
  Engineering, research, & development                             379,879        258,294            795,050        440,292
                                                               -----------    -----------        -----------    -----------
Total operating expenses                                           830,662        621,140          1,644,445      1,156,581

     Income from operations                                        242,949        234,560            676,549        402,413

Other income (expense):
  Interest income                                                    4,736          5,821              9,328          9,275
  Interest expense                                                 (24,963)       (31,217)           (43,575)       (61,830)
                                                               -----------    -----------        -----------    -----------
Income before taxes                                                222,722        209,164            642,302        349,858

Provision for income taxes                                          85,719         84,743            256,599        140,950
                                                               -----------    -----------        -----------    -----------

Net income                                                     $   137,003    $   124,421        $   385,703    $   208,908
                                                               ===========    ===========        ===========    ===========
Basic and diluted income
     per common share                                          $      0.06    $      0.06        $      0.18    $      0.10
                                                               ===========    ===========        ===========    ===========

Dividends per share                                                   None           None               None           None
Weighted average shares outstanding
     Basic                                                       2,128,351      2,113,690          2,126,580      2,113,519
     Diluted                                                     2,128,918      2,150,185          2,127,147      2,150,014
</TABLE>

See accompanying notes to condensed financial statements


                                      -2-
<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                            Six Months Ended
                                                                                  Sept. 30, 2001      Sept. 30, 2000
                                                                                  --------------      --------------
<S>                                                                                 <C>                  <C>
0Increase in cash:
Cash flows from operating activities
Net income                                                                          $ 385,703            $ 208,908
Adjustments to reconcile net income to cash used
   in operating activities:
     Deferred income taxes                                                            187,888              135,710
     Depreciation                                                                     100,503               57,602
Changes in operating assets or liabilities:
  Increase in accounts receivable and unbilled revenues                               (83,562)            (100,079)
  Increase in inventories                                                            (278,693)            (159,132)
  Decrease in prepaid expenses and other current assets                                13,382               14,916
  Increase in other assets                                                            (16,151)              (6,148)
  (Decrease) increase in accrued payroll, deferred wages and
     vacation pay                                                                      (6,945)             155,318
  Increase (decrease) in accounts payable, advance payments
   and accrued expenses                                                                 4,777             (177,029)
                                                                                    ---------            ---------

Net cash provided by operations                                                       306,902              130,066
                                                                                    ---------            ---------

Cash flows from investing activities:
  Cash purchases of property, plant and equipment                                    (156,343)             (41,655)
                                                                                    ---------            ---------
Net cash used in investing activities                                                (156,343)             (41,655)
                                                                                    ---------            ---------

Cash flows from financing activities:
  Proceeds from exercise of stock options                                               3,256                  664
  Repayment of capitalized lease obligations                                          (51,162)             (30,456)
                                                                                    ---------            ---------
  Net cash used in financing activities                                               (47,906)             (29,792)
                                                                                    ---------            ---------

Net increase in cash                                                                  102,653               58,619
Cash at beginning of period                                                           433,438              172,836
                                                                                    ---------            ---------
Cash at end of period                                                               $ 536,091            $ 231,455
                                                                                    =========            =========

Supplemental information
     Interest paid                                                                  $  42,045            $  28,983
                                                                                    =========            =========
     Assets acquired through capital leases                                         $  61,857            $  44,744
                                                                                    =========            =========
</TABLE>

See accompanying notes to condensed financial statements


                                      -3-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1    Basis of Presentation

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals)  necessary to present fairly the financial  position of Tel-Instrument
Electronics  Corp. as of September  30, 2001 the results of  operations  for the
three and six months  ended  September  30, 2001 and  September  30,  2000,  and
statements  of cash  flows  for the six  months  ended  September  30,  2001 and
September 30, 2000. These results are not necessarily  indicative of the results
to be expected for the full year.

The financial  statements have been prepared in accordance with the requirements
of Form 10-Q and  consequently  do not include  disclosures  normally made in an
Annual Report on Form 10-K. The March 31, 2001 results included herein have been
derived from the audited financial  statements  included in the Company's annual
report on Form 10-K.  Accordingly,  the  financial  statements  included  herein
should be  reviewed  in  conjunction  with the  financial  statements  and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2001.

Note 2    Accounts Receivable

The following table sets forth the components of accounts receivable:

                                           Sept. 30, 2001    March 31, 2001
                                           --------------    --------------
      Commercial                            $   367,300       $   392,214
      Government                                992,243           883,767
      Allowance for bad debts                   (11,598)          (11,598)
                                            -----------       -----------
      Total                                 $ 1,347,945       $ 1,264,383
                                            ===========       ===========

Note 3    Inventories

Inventories consist of:                    Sept. 30, 2001    March 31, 2001
                                           --------------    --------------
      Purchased parts                       $ 1,226,545       $ 1,072,191
      Work-in-process                         1,476,591         1,352,252
      Less:  Reserve for obsolescence           (72,795)          (72,795)
                                            -----------       -----------
                                            $ 2,630,341       $ 2,351,648
                                            ===========       ===========

Note 4    Income Taxes

The Company,  in accordance  with FASB 109, has recognized a deferred income tax
benefit based upon the expected  utilization of net operating loss carryforwards
before  they  expire  and  benefit  from the  reversal  of tax  asset  temporary
difference.  For the six months ended September 30, 2001, the Company recorded a
tax provision of $ 256,599, which represents the effective federal and state tax
rate on the Company's net income before taxes of $642,302.  The Company does not
pay   significant   federal  taxes  as  a  result  of  its  net  operating  loss
carryforwards.


                                      -4-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)

Note 5    Earnings Per Share

The  Company's  basic  income per share is based on net income for the  relevant
period,  divided by the weighted  average  number of common  shares  outstanding
during the period.  Diluted income per share is based on net income,  divided by
the weighted  average  number of common  shares  outstanding  during the period,
including common share equivalents, such as outstanding stock options.

Note 6    Government and Commercial Sales

The Company is organized  primarily on the basis of its avionics  products.  The
government  market consists  primarily of the sale of test equipment to U.S. and
foreign  governments and militaries either direct or through  distributors.  The
commercial  market  consists of sales of test  equipment to domestic and foreign
airlines  and to  commercial  distributors.  The Company  primarily  designs and
builds test  equipment  for the avionics  industry  and, as such,  the Company's
products and designs may be sold in the government and commercial markets.

The table below  presents  information  about sales and gross  margin.  Costs of
sales includes certain allocation factors for indirect costs.

<TABLE>
<CAPTION>
                                           Three Months Ended               Three Months Ended
                                           September 30, 2001               September 30, 2000
                                       Government      Commercial       Government     Commercial
                                       ----------      ----------       ----------     ----------
<S>                                    <C>             <C>              <C>            <C>
      Sales                            $1,652,050      $  534,432       $  933,085     $  819,169
      Cost of Sales                       864,462         248,409          502,416        394,138
                                       ----------      ----------       ----------     ----------

      Gross Margin                     $  787,588      $  286,023       $  430,669     $  425,031
                                       ==========      ==========       ==========     ==========
</TABLE>

<TABLE>
<CAPTION>
                                           Three Months Ended               Three Months Ended
                                           September 30, 2001               September 30, 2000
                                       Government      Commercial       Government     Commercial
                                       ----------      ----------       ----------     ----------
<S>                                    <C>             <C>              <C>            <C>
                Sales                  $3,460,721      $1,287,450       $1,850,198     $1,392,059
                Cost of Sales           1,829,765         597,412          999,160        684,103
                                       ----------      ----------       ----------     ----------
                Gross Margin           $ 1,630,956     $  690,038       $  851,038     $  707,956
                                       ===========     ==========       ==========     ==========
</TABLE>


                                      -5-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION

Results of Operations
---------------------

A number of the statements made by the Company in this report may be regarded as
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995.

Forward-looking  statements  include,  among others,  statements  concerning the
Company's outlook, pricing trends and forces within the industry, the completion
dates of capital projects,  expected sales growth, cost reduction strategies and
their  results,   long-term  goals  of  the  Company  and  other  statements  of
expectations, beliefs, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.

All  predictions  as to future  results  contain a measure  of  uncertainty  and
accordingly,  actual  results  could differ  materially.  Among the factors that
could cause a difference are: changes in the general economy;  changes in demand
for the Company's products or in the cost and availability of its raw materials;
the  actions of its  competitors;  the success of our  customers;  technological
change;  changes in  employee  relations;  government  regulations;  litigation,
including  its  inherent  uncertainty;  difficulties  in  plant  operations  and
materials;   transportation,   environmental   matters;   and  other  unforeseen
circumstances.  A number of these factors are discussed in the Company's filings
with the Securities and Exchange Commission.

Overview
--------

For the six months ended September 30, 2001, sales increased 46.4% to $4,748,171
and net income  before  taxes  increased  83.6% to $642,302.  Deliveries  of the
AN/APM 480 IFF  (Identification,  Friend or Foe) Transponder Set Test Set to the
U.S.  Navy  continue and  accounted  for 44.5% of total sales for the six months
ended September 30, 2001.

The Company's backlog at September 30, 2001, including the production order from
the U.S. Navy, exceeds $11,000,000. The company expects to ship the backlog over
the next few fiscal years

The Company  continues to actively pursue  opportunities  in both the commercial
and government markets,  both domestically and internationally,  and new product
development efforts based upon evaluation of these markets. The Company has been
active in responding to customer requests for quotation, in addition to adapting
its product designs to respond to these requests.  Exploration of  opportunities
in other  government  and  commercial  markets  also  continues in an attempt to
broaden the Company's product line.

Sales
-----

For the three months ended  September  30, 2001,  net sales  increased  $434,228
(24.8%) to $2,186,482 as compared to the three months ended  September 30, 2000.
Government  sales  increased  $718,965  (77.1%) to  $1,652,050  as  compared  to
$933,085  for the three  months  ended  September  30,  2000.  The  increase  in
government  sales is mainly  attributed to the shipment of the AN/APM 480 to the
U.S. Navy,  which accounted for 47.8% of the total sales for the current quarter
as  compared  to 30.8% for the second  quarter  last  year.  Sales in the second
quarter  also  increased as a result of  shipments  of ILS  (Instrument  Landing
System) test sets to the U.S.  Government.  Commercial sales decreased  $284,737
(34.8%) for the second quarter.


                                      -6-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION (Continued)

Results of Operations (continued)
---------------------------------

Sales (continued)
-----------------

ended  September  30,  2001 as compared  to the second  quarter of the  previous
fiscal  year.  This  decrease is  primarily  the result of the  completion  of a
contract to a major freight carrier,  and the inability to replace this contract
with a new contract due to the  financial  difficulties  encountered  within the
commercial airline industry, and the consequences of the September 11th tragedy.

For the six months ended  September  30, 2001,  net sales  increased  $1,505,914
(46.4%) to  $4,748,171  as compared to the six months ended  September 30, 2000.
Government  sales  increased  $1,610,523  (87%) to  $3,460,721,  as  compared to
$1,850,198  for the first six months of the prior fiscal  year.  The increase in
government  sales is mainly  attributed to the shipment of the AN/APM 480 to the
U.S.  Navy.  Sales of the AN/APM 480 to the U.S. Navy accounted for 44.5% of the
sales for the first six months of the  current  fiscal year as compared to 20.7%
for the same period last year.  Commercial  sales  decreased  $104,609 (7.5%) to
$1,287,450  as compared to  $1,392,059  for the six months ended  September  30,
2000. This decrease is primarily the result of the completion of a contract to a
major  freight  carrier,  and the  inability to replace this contract with a new
contract due to the financial  difficulties  encountered  within the  commercial
airline industry, and the consequences of the September 11th tragedy.

Gross Margin
------------

Gross margin dollars  increased  $217,911  (25.5%) and $762,000  (48.9%) for the
three and six months ended September 30, 2001, respectively,  as compared to the
same  periods in the prior fiscal year.  The increase in gross  margin,  for the
most part,  is  attributed  to an increase  in sales  volume.  The gross  margin
percentage  for the three months ended  September 30, 2001 was 49.1% as compared
to 48.8% for the  three  months  ended  September  30,  2000.  The gross  margin
percentage for the six months ended  September 30, 2001 was 48.9% as compared to
48.1% for the six months ended September 30, 2000.

Operating Expenses
------------------

Selling,  general and  administrative  expenses  increased  $87,937  (24.2%) and
$133,106   (18.6%)  for  the  three  and  months  ended   September   30,  2001,
respectively,  as compared to the three and six months ended September 30, 2000.
This increase is  attributed  to an increase in sales and marketing  activities,
higher commission  expenses,  accrued  compensation  expense, and an increase in
facility  costs  associated  with the  Company  adding  the  lower  level of the
building to its lease.

Engineering,  research and development  expenses  increased $121,585 (47.1%) and
$354,758  (80.6%) for the same  periods.  The higher  level of  expenditures  is
associated  with an increase in research and development  activities,  including
the  completion  of a design  of a  multi-function  test set,  development  a of
commercial bench test, and new products for other targeted markets.  The Company
has also begun work on the next  generation  of IFF  (Identification,  Friend or
Foe) test sets.


                                      -7-
<PAGE>

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
        FINANCIAL CONDITION (Continued)

Results of Operations (continued)
---------------------------------

Income Taxes
------------

In accordance  with SFAS 109, a provision for income taxes was recognized in the
amount of $256.599 for the six months ended September 30, 2001, which represents
the effective federal and state tax rate on the company's income before taxes of
$642,302.  (See Note 4 to Notes to Condensed comparative Financial  Statements.)
The  Company  does not pay  significant  federal  taxes  as a result  of its net
operating loss carryforwards

Liquidity and Capital Resources
-------------------------------

At September 30, 2001 the Company had positive  working capital of $2,203,724 as
compared to $1,766,360 at March 31, 2001. For the six months ended September 30,
2001,  cash provided by operations  was $306,902 as compared to $130,066 for the
six months ended  September 30, 2001.  This increase in cash from  operations is
primarily  attributed  to the  improvement  in the Company's  operating  income,
partially  offset by an increase  in  inventories  and a  reduction  in accounts
payable and accrued expenses.

The Company has a line of credit in the amount of $600,000 from Fleet Bank.  The
line of credit bears an interest rate of 1% above the lender's  prevailing  base
rate, which is payable monthly, based upon the outstanding balance. At September
30, 2001, the company had borrowed $250,000 against its line of credit. The line
of credit is  collateralized  by substantially all of the assets of the company.
The  credit  facility   requires  the  Company  to  maintain  certain  financial
covenants.  As of September  30, 2001,  the Company was in  compliance  with all
financial  covenants.  The line of credit  expired  at August  30,  2001 and the
Company is currently renegotiating this line with the bank.

Based upon the current backlog,  its existing credit line, and cash balance, the
Company  believes that it has sufficient  working  capital to fund its operating
plans for the next twelve  months.  At present,  the Company does not anticipate
significant long-term needs for capital.

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the six months ended September 30, 2001.

These  financial  statements  should be read in  conjunction  with the Company's
Annual Report on Form 10-K to the  Securities  and Exchange  Commission  for the
fiscal year ended March 31, 2001.


                                      -8-
<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.

                                                TEL-INSTRUMENT ELECTRONICS CORP.

Date: November 13, 2001                         By: /s/ Harold K. Fletcher
                                                    ----------------------------
                                                    Harold K. Fletcher
                                                    Chairman and President

Date: November 13, 2001                         By: /s/ Joseph P. Macaluso
                                                    ----------------------------
                                                    Joseph P. Macaluso
                                                    Principal Accounting Officer


                                      -9-