----

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| T      | QUARTERLY      REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934.                                                                                                      |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                    |
|   | For      the Quarterly Period Ended September 30, 2008                                                                                                                                                  |
|   |
| Or     |
|   |
| £ | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934. For      the transition period from ____________________ to      _____________________________ |

| TELTRONICS,      INC.                                                             |
|-----------------------------------------------------------------------------------|
| (Exact      name of registrant as specified in its charter)                       |
|                                                                              |
| Delaware                                                                          | 59-2937938 |
| (State      or other jurisdiction of Incorporation or organization)               | (IRS      Employer Identification Number) |
|                                                                              |
| 2150      Whitfield Industrial Way, Sarasota,      Florida   34243 |
| (Address      of principal executive offices including zip code)                  |
|                                                                              |
| (941)      753-5000                                                               |
| Issuer's      telephone number, including areacode                                |

| Large      accelerated filer                            | £ | Accelerated      filer         | £ |
|---------------------------------------------------------|--------|--------------------------------|--------|
| Non-accelerated      filer                              | £ | Smaller      reporting company | T      |
|  (Do      not check if a smaller reportingcompany) |

----

|                     |                                                                                                                                                   | PAGE   |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| PART      I              | FINANCIAL      INFORMATION                                                                                                                             |   |
|                     |                                                                                                                                                   |   |
| ITEM 1.                  | FINANCIAL      STATEMENTS                                                                                                                              |   |
|                     |  Condensed      Consolidated Balance Sheets at September 30, 2008(Unaudited)      and December 31, 2007                                           | 1      |
|                     |  Condensed      Consolidated Statements of Operations (Unaudited)for      the Three months and Nine months ended September 30, 2008 and      2007 | 2      |
|                     |  Condensed      Consolidated Statements of Cash Flows (Unaudited)for      the Three months and Nine months ended September 30, 2008 and      2007 | 3      |
|                     |  Notes      to Condensed Consolidated Financial Statements (Unaudited)                                                                            | 4      |
|  ITEM 2.            |  MANAGEMENT’S      DISCUSSION AND ANALYSIS OFFINANCIAL      CONDITION AND RESULTS OF OPERATIONS                                             | 7      |
|  ITEM 3.            |  QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUTMARKET      RISK                                                                              | 9      |
|  ITEM 4.            |  CONTROLS      AND PROCEDURES                                                                                                                     | 9      |
|  PART      II       |  OTHER      INFORMATION                                                                                                                           |
|  ITEM 3.            |  DEFAULTS      UPON SENIOR SECURITIES                                                                                                             | 10     |
|  ITEM 6.            |  EXHIBITS      AND REPORTS ON FORM 8-K                                                                                                            | 10     |
|  SIGNATURE          | 11                                                                                                                                                     |
|  EXHIBIT      INDEX | 12                                                                                                                                                     |
|                     |                                                                                                                                                   |   |

----

| ASSETS                                                           |   |
|------------------------------------------------------------------|--------|
|                                                             |   |   |   |   |   |   |
|                                                             |   | September      30, |   |   | December      31, |   |
|                                                             |   | 2008 |   |   | 2007 |   |
|                                                             |   | (Unaudited) |   |   |   |   |
| Current      assets:                                             |   |   |   |   |   |   |
| Cash and cash      equivalents                                   |   | $ | 785 |   |   | $ | 1,123 |   |
| Accounts receivable, net of      allowance for doubtful accounts |   |   | 4,703 |   |   |   | 9,122 |   |
| Inventories,net                                                  |   |   | 4,604 |   |   |   | 5,423 |   |
| Prepaid expenses and other      current assets                   |   |   | 614 |   |   |   | 643 |   |
| Total current      assets                                        |   |   | 10,706 |   |   |   | 16,311 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Property      and equipment, net                                 |   |   | 894 |   |   |   | 949 |   |
| Other      assets                                                |   |   | 773 |   |   |   | 773 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Total assets                                                     |   | $ | 12,373 |   |   | $ | 18,033 |   |
|                                                             |   |   |   |   |   |   |   |   |
| LIABILITIES      AND SHAREHOLDERS’ DEFICIENCY              |   |
|                                                             |   |   |   |   |   |   |   |   |
| Current      liabilities:                                        |   |   |   |   |   |   |   |   |
| Line of credit                                                   |   | $ | 2,791 |   |   | $ | 4,029 |   |
| Current portion of long-term      debt                           |   |   | 1,450 |   |   |   | 1,759 |   |
| Accountspayable                                                  |   |   | 6,270 |   |   |   | 6,279 |   |
| Other current      liabilities                                   |   |   | 3,279 |   |   |   | 4,128 |   |
| Total current      liabilities                                   |   |   | 13,790 |   |   |   | 16,195 |   |
| Long-term      liabilities:                                      |   |   |   |   |   |   |   |   |
| Deferred    dividends                                            |   |   | 2,800 |   |   |   | 2,200 |   |
| Long-term debt, net of current      portion                      |   |   | 2,612 |   |   |   | 4,125 |   |
| Total long-term      liabilities                                 |   |   | 5,412 |   |   |   | 6,325 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Minority    interest                                             |   |   | --- |   |   |   | --- |   |
|                                                             |   |   |   |   |   |   |   |   |
| Commitments      and contingencies                               |   |   |   |   |   |   |   |   |
| Shareholders'      deficiency:                                   |   |   |   |   |   |   |   |   |
| Capital stock                                                    |   |   | 9 |   |   |   | 9 |   |
| Additional paid-in      capital                                  |   |   | 24,724 |   |   |   | 24,722 |   |
| Accumulated deficit and other      comprehensive loss            |   |   | (31,562 | ) |   |   | (29,218 | ) |
| Total shareholders'      deficiency                              |   |   | (6,829 | ) |   |   | (4,487 | ) |
|                                                             |   |   |   |   |   |   |   |   |
| Total liabilities and      shareholders' deficiency              |   | $ | 12,373 |   |   | $ | 18,033 |   |

----

|                                                             |   | Three      MonthsEnded      September 30, |      |   | Nine      MonthsEnded      September 30, |   |
|------------------------------------------------------------------|--------|-------------------------------------------|-----------|--------|------------------------------------------|--------|
|                                                             |   | 2008                                      |      |   | 2007                                     |   |   | 2008 |   |   | 2007 |   |
|                                                             |   |                                      |      |   |                                     |   |   |   |   |   |   |   |
| Net      sales                                                   |   |                                      |      |   |                                     |   |   |   |   |   |   |   |
| Product sales and      installation                              |   | $                                         | 5,097     |   |                                     | $      | 8,985 |   |   | $ | 17,656 |   |   | $ | 20,761 |   |
| Maintenance and      service                                     |   |                                      | 2,999     |   |                                     |   | 2,721 |   |   |   | 8,528 |   |   |   | 8,621 |   |
|                                                             |   |                                      | 8,096     |   |                                     |   | 11,706 |   |   |   | 26,184 |   |   |   | 29,382 |   |
| Cost      of goods sold                                          |   |                                      | 4,954     |   |                                     |   | 7,194 |   |   |   | 16,934 |   |   |   | 18,383 |   |
| Gross      profit                                                |   |                                      | 3,142     |   |                                     |   | 4,512 |   |   |   | 9,250 |   |   |   | 10,999 |   |
| Operating      expenses:                                         |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| General and      administrative                                  |   |                                      | 851       |   |                                     |   | 1,195 |   |   |   | 3,992 |   |   |   | 3,594 |   |
| Sales and    marketing                                           |   |                                      | 1,194     |   |                                     |   | 1,584 |   |   |   | 4,315 |   |   |   | 4,653 |   |
| Research and      development                                    |   |                                      | 622       |   |                                     |   | 947 |   |   |   | 2,441 |   |   |   | 3,193 |   |
| Depreciation and      amortization                               |   |                                      | 92        |   |                                     |   | 64 |   |   |   | 440 |   |   |   | 191 |   |
|                                                             |   |                                      | 2,759     |   |                                     |   | 3,790 |   |   |   | 11,188 |   |   |   | 11,631 |   |
|                                                             |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) from operations                               |   |                                      | 383       |   |                                     |   | 722 |   |   |   | (1,938 | ) |   |   | (632 | ) |
|                                                             |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Other      income (expense):                                     |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                         |   |                                      | (299      | )      |                                     |   | (379 | ) |   |   | (924 | ) |   |   | (1,552 | ) |
| Other                                                            |   |                                      | (3        | )      |                                     |   | (27 | ) |   |   | 1,406 |   |   |   | (59 | ) |
| Minority interest      income                                    |   |                                      | ---       |   |                                     |   | --- |   |   |   | 38 |   |   |   | --- |   |
|                                                             |   |                                      | (302      | )      |                                     |   | (406 | ) |   |   | 520 |   |   |   | (1,611 | ) |
| Income      (loss) before income taxes                           |   |                                      | 81        |   |                                     |   | 316 |   |   |   | (1,418 | ) |   |   | (2,243 | ) |
| Income      taxes                                                |   |                                      | 6         |   |                                     |   | 6 |   |   |   | 16 |   |   |   | 18 |   |
| Net      income (loss)                                           |   |                                      | 75        |   |                                     |   | 310 |   |   |   | (1,434 | ) |   |   | (2,261 | ) |
| Dividends      on Preferred Series Band C Convertible      stock |   |                                      | 263       |   |                                     |   | 263 |   |   |   | 832 |   |   |   | 689 |   |
| Net      income (loss) available toCommon    shareholders        |   | $                                         | (188      | )      |                                     | $      | 47 |   |   | $ | (2,266 | ) |   | $ | (2,950 | ) |
|                                                             |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) per share:                                |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   | $                                         | (0.02     | )      |                                     | $      | 0.01 |   |   | $ | (0.26 | ) |   | $ | (0.34 | ) |
| Diluted                                                          |   | $                                         | (0.02     | )      |                                     | $      | 0.01 |   |   | $ | (0.26 | ) |   | $ | (0.34 | ) |
|                                                             |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average sharesoutstanding:                         |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                            |   |                                      | 8,647,539 |   |                                     |   | 8,647,539 |   |   |   | 8,647,539 |   |   |   | 8,646,425 |   |
| Diluted                                                          |   |                                      | 8,647,539 |   |                                     |   | 9,064,142 |   |   |   | 8,647,539 |   |   |   | 8,646,425 |   |
|                                                             |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                          |   | Nine      Months Ended September 30, |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                          |   | 2008                                 |   |   | 2007 |   |
|                                                                          |   |                                 |   |   |   |   |
| NET      CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES                |   | $                                    | 1,468  |   |   | $ | (791 | ) |
|                                                                          |   |                                 |   |   |   |   |   |   |
| INVESTING      ACTIVITIES – NET                                         |   |                                 | 1,524  |   |   |   | (347 | ) |
|                                                                          |   |                                 |   |   |   |   |   |   |
| FINANCING      ACTIVITIES:                                                    |   |                                 |   |   |   |   |   |   |
| Net repayments on line of      credit                                         |   |                                 | (1,238 | ) |   |   | (1,523 | ) |
| Net principal borrowings      (repayments) on loans, notes and capital leases |   |                                 | (1,646 | ) |   |   | 2,948 |   |
| Repayment of loan from related      party                                     |   |                                 | (177   | ) |   |   | --- |   |
| Dividends paid on Preferred      Series B Convertible stock                   |   |                                 | (189   | ) |   |   | (189 | ) |
| Net      cash flows provided by (used in) financing activities                |   |                                 | (3,250 | ) |   |   | 1,236 |   |
|                                                                          |   |                                 |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                  |   |                                 | (80    | ) |   |   | 4 |   |
|                                                                          |   |                                 |   |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents for the      period |   |                                 | (338   | ) |   |   | 102 |   |
|                                                                          |   |                                 |   |   |   |   |   |   |
| Cash      and cash equivalents - Beginning of Period                          |   |                                 | 1,123  |   |   |   | 794 |   |
|                                                                          |   |                                 |   |   |   |   |   |   |
| Cash      and cash equivalents - End of Period                                |   | $                                    | 785    |   |   | $ | 896 |   |
|                                                                          |   |                                 |   |   |   |   |   |   |

----

----

|                                   |   | Three      Months EndedSeptember      30, |   |   | Nine      Months EndedSeptember      30, |   |
|----------------------------------------|--------|-------------------------------------------|--------|--------|------------------------------------------|--------|
|                                   |   | 2008                                      |   |   | 2007                                     |   |   | 2008 |   |   | 2007 |   |
|                                   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net      income (loss)                 |   | $                                         | 75     |   |                                     | $      | 310 |   |   | $ | (1,434 | ) |   | $ | (2,261 | ) |
| Foreign      currency translation      |   |                                      | (71    | )      |                                     |   | --- |   |   |   | (80 | ) |   |   | 4 |   |
| Total      comprehensive income (loss) |   | $                                         | 4      |   |                                     | $      | 310 |   |   | $ | (1,514 | ) |   | $ | (2,257 | ) |
|                                   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |   |   |   |   |

----

|                                     |   | Three      Months EndedSeptember      30, |      |   | Nine      Months EndedSeptember      30, |   |
|------------------------------------------|--------|-------------------------------------------|-----------|--------|------------------------------------------|--------|
| Net      loss per share                  |   | 2008                                      |      |   | 2007                                     |   |   | 2008 |   |   | 2007 |   |
|                                     |   |                                      |      |   |                                     |   |   |   |   |   |   |   |
| Basic                                    |   |                                      |      |   |                                     |   |   |   |   |   |   |   |
| Net      income (loss)                   |   | $                                         | 75        |   |                                     | $      | 310 |   |   | $ | (1,434 | ) |   | $ | (2,261 | ) |
| Preferred      dividends                 |   |                                      | (263      | )      |                                     |   | (263 | ) |   |   | (832 | ) |   |   | (689 | ) |
|                                     |   | $                                         | (188      | )      |                                     | $      | 47 |   |   | $ | (2,266 | ) |   | $ | (2,950 | ) |
|                                     |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares Outstanding |   |                                      | 8,647,539 |   |                                     |   | 8,647,539 |   |   |   | 8,647,539 |   |   |   | 8,646,425 |   |
| Net income (loss) per      share         |   | $                                         | (0.02     | )      |                                     | $      | 0.01 |   |   |   | (0.26 | ) |   | $ | (0.34 | ) |

|                                     |   | Three      Months EndedSeptember      30, |      |   | Nine      Months EndedSeptember      30, |   |
|------------------------------------------|--------|-------------------------------------------|-----------|--------|------------------------------------------|--------|
| Net      loss per share                  |   | 2008                                      |      |   | 2007                                     |   |   | 2008 |   |   | 2007 |   |
|                                     |   |                                      |      |   |                                     |   |   |   |   |   |   |   |
| Diluted                                  |   |                                      |      |   |                                     |   |   |   |   |   |   |   |
| Net      income (loss)                   |   | $                                         | 75        |   |                                     | $      | 310 |   |   | $ | (1,434 | ) |   | $ | (2,261 | ) |
| Preferred      dividends                 |   |                                      | (263      | )      |                                     |   | (263 | ) |   |   | (832 | ) |   |   | (689 | ) |
|                                     |   | $                                         | (188      | )      |                                     | $      | 47 |   |   | $ | (2,266 | ) |   | $ | (2,950 | ) |
|                                     |   |                                      |      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares Outstanding |   |                                      | 8,647,539 |   |                                     |   | 9,064,142 |   |   |   | 8,647,539 |   |   |   | 8,646,425 |   |
| Net income (loss) per      share         |   | $                                         | (0.02     | )      |                                     | $      | 0.01 |   |   |   | (0.26 | ) |   | $ | (0.34 | ) |

|                |   | September      30, 2008 |   |   | December      31, 2007 |   |
|---------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                |   | (Unaudited)             |   |   |                   |   |
|                |   |                    |   |   |                   |   |
| Raw      materials  |   | $                       | 2,316  |   |                   | $      | 2,670 |   |
| Work-in-process     |   |                    | 744    |   |                   |   | 1,237 |   |
| Finished      goods |   |                    | 1,544  |   |                   |   | 1,516 |   |
|                |   | $                       | 4,604  |   |                   | $      | 5,423 |   |

----

| ITEM      2.   MANAGEMENT'S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND        RESULTS OF      OPERATIONS     (In thousands, except shares      and per share amounts) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| 31.1 |   | Certification      by the Chief Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.                                                               |
|------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.2 |   | Certification      by the Chief Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.                                                               |
| 32   |   | Certification      of Periodic Financial Report by the Chief Executive Officer and Chief      Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of      2002. |

| Date      Filed      | Item Reported      On |
|----------------------|-----------------------|
|                 |                  |
| July      7, 2008    | Item      5.02:       | Departure      of Directors or Certain Officers; Appointment of Certain Officers;      Compensatory Arrangements or Certain Officers. |
| August      26, 2008 | Item      1.01:       | Entry      into a Material  Definitive Agreement; |
|                 | Item      2.01:       | Completion      of Acquisition or Disposition of Assets; and |
|                 | Item      9.01:       | Financial      Statements and Exhibits |

----

|                                           | TELTRONICS,      INC. |
|------------------------------------------------|-----------------------|
|                                           |                  |   |
| Dated:   November      12, 2008 | By:                   | /s/ Ewen R. Cameron |
|                                           |                  | Ewen      R. CameronPresident      & Chief Executive Officer |
|                                           |                  |   |
| Dated:  November      12, 2008       | By:                   | /s/ Carol A.      Harkins                                                        |
|                                           |                  | Carol      A. HarkinsChief      Accounting Officer |

----

| ExhibitNumber |  Description                                                                                                                                                               |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                            |
|          |                                                                                                                                                                            |
| 31.1*         | Certification      by the Chief Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.                                                               |
| 31.2*         | Certification      by the Chief Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley Act of 2002.                                                               |
| 32*           | Certification      of Periodic Financial Report by the Chief Executive Officer and Chief      Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of      2002. |
|          |                                                                                                                                                                            |
| _______       |                                                                                                                                                                            |
| (*)           | Filed      as an Exhibit to this Report on Form 10-Q for the period ended September      30, 2008.                                                                              |

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