<PAGE>

================================================================================


                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549


                                  ___________


                                   FORM 10-Q

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

               For the quarterly period ended December 31, 2000

                        Commission file number 0-20839

                                  ___________


                            DUPONT PHOTOMASKS, INC.

            (Exact name of registrant as specified in our charter)



               Delaware                                      74-2238819
     (State or Other Jurisdiction                         (I.R.S. Employer
   of Incorporation or Organization)                     Identification No.)


                          131 Old Settlers Boulevard
                            Round Rock, Texas 78664
                   (Address of Principal Executive Offices)
      Registrant's telephone number, including area code: (512) 310-6500

                                  ___________

     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 [_]

     As of January 25, 2001, there were 17,390,246 shares of the registrant's
common stock, $.01 par value, outstanding.

================================================================================
<PAGE>

                               TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                                                              Page
                                                                                                                              ----
<S>                                                                                                                           <C>
Part I

      Item 1.  Financial Statements

       Consolidated Income Statement (unaudited) for the Three Months Ended December 31, 1999 and 2000 and
         the Six Months Ended December 31, 1999 and 2000....................................................................     3
       Consolidated Balance Sheet (unaudited) at June 30, 2000 and December 31, 2000........................................     4
       Consolidated Statement of Cash Flows (unaudited) for the Six Months Ended December 31, 1999 and 2000.................     5
       Consolidated Statement of Stockholders' Equity (unaudited) for the Twelve Months Ended June 30, 2000 and
         the Six Months Ended December 31, 2000.............................................................................     6
       Notes to Consolidated Financial Statements (unaudited)...............................................................     7

      Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations........................    11

      Item 3.  Quantitative and Qualitative Disclosures About Market Risk...................................................    15

Part II

      Item 1.  Legal Proceedings............................................................................................    15

      Item 2.  Changes in Securities........................................................................................    15

      Item 3.  Defaults Upon Senior Securities..............................................................................    15

      Item 4.  Submission of Matters to a Vote of Security Holders..........................................................    15

      Item 5.  Other Information............................................................................................    16

      Item 6.  Exhibits and Reports on Form 8-K.............................................................................    16

               Signatures...................................................................................................    16
</TABLE>

                                       2
<PAGE>

                                    PART I

Item 1.  Financial Statements

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

                         CONSOLIDATED INCOME STATEMENT

               (Dollars in thousands, except per share amounts)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                          Three Months Ended                Six Months Ended
                                                                             December 31,                      December 31,
                                                                    -----------------------------     ----------------------------
                                                                        1999              2000            1999            2000
                                                                    -----------       -----------     ------------    ------------
<S>                                                                 <C>               <C>             <C>             <C>
Sales...........................................................        $73,761          $106,774         $147,883        $207,363
Cost of goods sold..............................................         53,633            68,943          104,527         133,912
Selling, general and administrative expense.....................          8,808            13,342           17,677          25,361
Research and development expense................................          5,422             7,923           10,426          15,581
                                                                    -----------       -----------     ------------    ------------
Operating profit................................................          5,898            16,566           15,253          32,509
Other income (expense), net.....................................            195             1,046              (17)          1,315
                                                                    -----------       -----------     ------------    ------------
Income before income taxes and minority interest................          6,093            17,612           15,236          33,824
Provision for income taxes......................................          1,677             4,617            4,235           8,777
                                                                    -----------       -----------     ------------    ------------
Income before minority interest.................................          4,416            12,995           11,001          25,047
Less minority interest in income of joint ventures..............           (104)           (1,121)            (112)         (2,475)
                                                                    -----------       -----------     ------------    ------------
Net income......................................................         $4,312           $11,874          $10,889         $22,572
                                                                    ===========       ===========     ============    ============

Basic earnings per share........................................          $0.28             $0.69            $0.71           $1.32
                                                                    ===========       ===========     ============    ============
Basic weighted average shares outstanding.......................     15,479,965        17,271,186       15,421,985      17,085,303
                                                                    ===========       ===========     ============    ============
Diluted earnings per share......................................          $0.27             $0.64            $0.68           $1.22
                                                                    ===========       ===========     ============    ============
Diluted weighted average shares outstanding.....................     16,144,735        18,712,825       16,074,120      18,649,598
                                                                    ===========       ===========     ============    ============
</TABLE>

        The accompanying notes are an integral part of this statement.

                                       3
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEET

               (Dollars in thousands, except per share amounts)
                                  (unaudited)

                                    ASSETS

<TABLE>
<CAPTION>
                                                                                                           June 30,    December 31,
                                                                                                             2000         2000
                                                                                                         -----------   ------------
<S>                                                                                                      <C>           <C>
Current assets:
   Cash and cash equivalents............................................................................     $42,203       $ 96,089
   Accounts receivable, trade, net......................................................................      57,479         75,745
   Accounts receivable, related parties.................................................................       1,518          2,062
   Inventories, net.....................................................................................      15,569         16,745
   Deferred income taxes................................................................................      13,119          7,109
   Prepaid expenses and other current assets............................................................      16,077         11,724
                                                                                                         -----------   ------------

      Total current assets..............................................................................     145,965        209,474
Property and equipment, net............................................................................      452,827        474,519
Accounts receivable, related parties....................................................................       1,406          1,291
Deferred income taxes...................................................................................       2,756          4,231
Other assets, net.......................................................................................      41,272         43,095
                                                                                                         -----------   ------------

            Total assets................................................................................    $644,226       $732,610
                                                                                                         ===========   ============

                                                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable, trade..............................................................................    $ 74,190       $ 52,698
   Accounts payable, related parties....................................................................       1,054            975
   Short-term borrowings................................................................................       3,797          3,238
   Income taxes payable.................................................................................       6,252          2,423
   Other accrued liabilities............................................................................      30,459         36,046
                                                                                                         -----------   ------------

      Total current liabilities.........................................................................     115,752         95,380
Long-term borrowings....................................................................................       2,350          1,833
Long-term borrowings, related parties...................................................................     150,000              -
Long-term convertible notes.............................................................................           -        100,000
Deferred income taxes...................................................................................      15,804         24,071
Other liabilities.......................................................................................      16,043         25,922
Minority interest in net assets of joint ventures.......................................................      28,622         31,097
                                                                                                         -----------   ------------
        Total liabilities...............................................................................     328,571        278,303
                                                                                                         -----------   ------------
Commitments and contingencies
Stockholders' equity:

   Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued and outstanding...........            -              -
   Common stock, $.01 par value; 100,000,000 shares authorized;
      15,767,813 and 17,283,106 issued and outstanding, respectively....................................         158            173
   Additional paid-in capital                                                                                179,591        287,301
   Retained earnings...................................................................................      135,906        158,478
   Accumulated other comprehensive income..............................................................            -          8,355
                                                                                                         -----------   ------------
        Total stockholders' equity.....................................................................      315,655        454,307
                                                                                                         -----------   ------------
            Total liabilities and stockholders' equity.................................................     $644,226       $732,610
                                                                                                         ===========   ============
</TABLE>

        The accompanying notes are an integral part of this statement.

                                       4
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENT OF CASH FLOWS

                            (Dollars in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                                     Six Months Ended
                                                                                                       December 31,
                                                                                              -----------------------------
                                                                                                  1999             2000
                                                                                              ------------      -----------
          <S>                                                                                 <C>               <C>
          Cash flows from operating activities:
             Net income......................................................................      $10,889          $22,572
             Adjustments to reconcile net income to net cash provided by operating
                activities:
                Depreciation and amortization................................................       26,850           36,452
                Other........................................................................         (321)             515
                Cash provided by (used in) changes in assets and liabilities:
                  Accounts receivable, trade, net............................................       (4,560)         (18,212)
                  Accounts receivable, related parties.......................................           94             (544)
                  Inventories, net...........................................................       (1,032)          (1,065)
                  Prepaid expenses and other current assets..................................       (1,954)           5,142
                  Deferred income taxes......................................................            -            5,954
                  Accounts payable, trade....................................................        1,366          (24,138)
                  Accounts payable, related parties..........................................         (202)              79
                  Other accrued liabilities..................................................       (2,341)           6,099
                  Other liabilities..........................................................            -           22,500
                                                                                              ------------      -----------
                     Net cash provided by operating activities...............................       28,789           55,354
                                                                                              ------------      -----------

          Cash flows from investing activities:
             Additions of property and equipment, net........................................      (62,507)         (55,324)
             Payment for acquisitions........................................................      (10,025)               -
                                                                                              ------------      -----------

                     Net cash used in investing activities...................................      (72,532)         (55,324)
                                                                                              ------------      -----------

          Cash flows from financing activities:
             Proceeds from borrowings........................................................        3,289            1,289
             Payments of borrowings..........................................................       (2,337)          (2,057)
             Proceeds from borrowings, related parties.......................................            -           25,000
             Payments of borrowings, related parties.........................................            -         (175,000)
             Proceeds from issuance of convertible notes, net................................            -           97,600
             Proceeds from issuance of common stock under employee plans.....................        5,358            1,419
             Proceeds from issuance of common stock, net.....................................            -          103,814
             Increase in minority interest in net assets of joint ventures...................        9,443            2,475
                                                                                              ------------      -----------
                     Net cash provided by financing activities...............................       15,753           54,540
                                                                                              ------------      -----------
          Effect of exchange rate changes on cash............................................         (618)            (684)
                                                                                              ------------      -----------
          Net increase (decrease) in cash and cash equivalents...............................      (28,608)          53,886
          Cash and cash equivalents at beginning of period...................................       61,311           42,203
                                                                                              ------------      -----------
          Cash and cash equivalents at end of period.........................................      $32,703          $96,089
                                                                                              ============      ===========

          SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
            Cash paid for:
                Interest.....................................................................         $403             $525
                Taxes........................................................................        1,375            1,423
             Non-cash investing and financing activities:
                Contributions of capital.....................................................       $1,544           $1,628
</TABLE>


        The accompanying notes are an integral part of this statement.

                                       5
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                            (Dollars in thousands)
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                             Accumulated
                                                                Additional                      Other               Total
                                            Common Stock         Paid-In     Retained       Comprehensive       Stockholders'
                                         Shares      Amount      Capital     Earnings          Income              Equity
                                      ------------------------------------------------------------------------------------------
<S>                                   <C>            <C>         <C>         <C>            <C>                 <C>
   Balance at June 30, 1999..........   15,332,282       $153      $164,342    $109,806         $    -                 $274,301
Contribution of capital..............            -          -         5,716           -              -                    5,716
Issuance of common stock
      under employee plans...........      435,531          5         9,533           -              -                    9,538
Net income...........................            -          -             -      26,100              -                   26,100
                                      ------------------------------------------------------------------------------------------

   Balance at June 30, 2000..........   15,767,813        158       179,591     135,906              -                  315,655
Contribution of capital..............            -          -         1,628           -              -                    1,628
Issuance of common stock
      under employee plans...........       93,071          1         2,283           -              -                    2,284
Issuance of common stock.............    1,422,222         14       103,799           -              -                  103,813
Net income...........................            -          -             -      22,572              -                   22,572
Unrealized gain on investments.......            -          -             -           -          8,355                    8,355
                                      ------------------------------------------------------------------------------------------

   Balance at December 31, 2000......   17,283,106       $173      $287,301    $158,478         $8,355                 $454,307
                                      ==========================================================================================
</TABLE>

        The accompanying notes are an integral part of this statement.

                                       6
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

               (Dollars in thousands, except per share amounts)
                                  (unaudited)


1. Basis of Presentation

     The interim consolidated financial statements presented herein include the
accounts of DuPont Photomasks, Inc. and its wholly-owned subsidiaries.
References to the "Company" mean DuPont Photomasks, Inc. and, unless the context
indicates otherwise, its consolidated subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation. These interim
consolidated financial statements have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). All adjustments have been made to the accompanying interim
consolidated financial statements which are, in the opinion of the Company's
management, necessary for a fair presentation of the Company's operating results
and include all adjustments of a normal recurring nature. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. It is recommended that these
interim consolidated financial statements be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 2000. The
results of operations for any interim period are not necessarily indicative of
the results of operations for the entire year. Certain reclassifications have
been made in the prior period financial statements to conform with the current
period presentation.

2. Property and Equipment

     Property and equipment are stated at cost and are depreciated using the
straight-line method over the estimated useful lives of the assets. Leasehold
improvements are depreciated using the straight-line method over the shorter of
the estimated useful lives of the assets or the duration of the lease.
Accumulated depreciation at June 30, and December 31, 2000 are $277,766 and
$305,362, respectively.

3. Investments

     The Company's investments are classified as available-for-sale securities
and are reported at fair value in non-current other assets. Unrealized gains and
losses are excluded from income and reported, net of taxes, as a separate
component of stockholders' equity in other comprehensive income. Unrealized
losses are charged against income when a decline in fair value below cost basis
is determined to be other than temporary. Gains and losses on investments are
included in other income when realized. The specific identification method is
used to determine the cost of securities sold. As of December 31, 2000 we held
approximately 600,000 warrants as investments.

                                       7
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

4.   New Accounting Pronouncements

          In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements,"
which summarizes certain of the staff's views in applying generally accepted
accounting principles to revenue recognition in financial statements. We
anticipate that adoption will be no later than the fiscal quarter ending June
30, 2001. We are currently evaluating the impact of this bulletin, but do not
expect that its adoption will have a material adverse impact on our financial
position or results of operations.

5.   Liabilities

          In the second quarter we received cash prepayments from customers to
reserve .18 micron and below production capacity in future periods; a portion is
classified in current accrued liabilities and the remainder is classified in
non-current other liabilities.

6.   Debt

          In July 2000, we issued $100,000 aggregate principal amount of
convertible subordinated notes. The notes were sold at par less an underwriting
discount of two percent and we received net proceeds of $97,600. The notes are
due in July 2004, with no stated interest, are convertible at any time into
shares of our common stock at a conversion price of $106.26 per share, are
unconditionally guaranteed by E. I. du Pont de Nemours and Company ("DuPont")
and are not redeemable by us. Debt issue costs of $2,400 related to these notes
are included in non-current other assets and are amortized to interest expense
over the scheduled maturity period.

          At June 30, 2000, we had a credit agreement with DuPont, which was
comprised of two separate facilities for $100,000 each. The first facility
expires in 2001 and any advances bear an interest rate at LIBOR plus 0.25
percent per annum. In July 2000, the outstanding balance was repaid and this
credit facility was amended to increase the interest charged on outstanding
amounts from LIBOR plus 0.25 percent per annum to LIBOR plus 1.875 percent per
annum and to terminate our ability to convert outstanding amounts into term
loans. The second facility initially had a term of three years and outstanding
amounts bore interest at 0.25 percent per annum for the first two years and
LIBOR plus 0.25 percent per annum for the third year. In July 2000, we repaid
all outstanding amounts and terminated this second facility.

7.   Equity

          In July 2000, we completed a public offering of 3.2 million shares of
our common stock, of which 1.4 million shares represented original issuance by
our Company and 1.8 million shares represented registration of outstanding
shares held by DuPont. The stock was offered to the public at $77 per share,
resulting in net offering proceeds to us of approximately $103,800 for the
original issuance.

8.   Derivatives and Hedging Activities

          Derivative financial instruments are used to mitigate risk of certain
international revenue and balance sheet exposures, and are, therefore, held
primarily for purposes other than trading. These instruments may involve
elements of credit and market risk in excess of the amounts recognized in the
financial statements. The Company monitors its positions and the credit quality
of counter-parties, consisting primarily of major financial institutions, and
does not anticipate nonperformance by any counter-party.

                                       8
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


9.   Earnings Per Share

          Basic earnings per share ("EPS") is computed by dividing net income by
the weighted number of common shares outstanding during each period. Diluted EPS
is computed by dividing net income after adjustments for the dilutive effect of
the convertible notes by the weighted average number of common shares and common
share equivalents outstanding (if dilutive) during each period. Common share
equivalents include stock options and assumed conversion of the convertible
notes. The number of common share equivalents outstanding relating to stock
options is computed using the treasury stock method while the number of common
share equivalents relating to the convertible notes is computed using the if
converted method.

          The reconciliation of the amounts used to calculate the basic EPS and
diluted EPS are as follows:

<TABLE>
<CAPTION>
                                                               Three Months Ended                      Six Months Ended
                                                                   December 31,                           December 31,
                                                        --------------------------------       -----------------------------------
                                                            1999              2000                  1999               2000
                                                        -------------      -------------       --------------       --------------
<S>                                                     <C>                <C>                 <C>                  <C>
Net income for the period - basic..................     $       4,312      $      11,874       $       10,889       $       22,572
Dilutive effect of convertible notes...............                 -                 91                    -                  183
                                                        -------------      -------------       --------------       --------------
Net income for the period - diluted ...............     $       4,312      $      11,965       $       10,889       $       22,755
                                                        =============      =============       ==============       ==============

Weighted average shares outstanding - basic........        15,479,965         17,271,186           15,421,985           17,085,303
Plus: Common share equivalents.....................           664,770          1,441,639              652,135            1,564,295
                                                        -------------      -------------       --------------       --------------
Weighted average shares outstanding - dilutive.....        16,144,735         18,712,825           16,074,120           18,649,598
                                                        =============      =============       ==============       ==============
</TABLE>

          Stock options to acquire 3,500 and 1,118,380 shares for the quarters
ended December 31, 1999 and 2000, respectively, were not included in common
share equivalents because the effect of including these stock options would have
been anti-dilutive.

10. Comprehensive Income

          The Company has adopted SFAS No. 130, "Reporting Comprehensive
Income." Our comprehensive income is comprised of net income and unrealized
gains and losses on certain investments in debt and equity securities. The
components of comprehensive income, net of tax are as follows:

<TABLE>
<CAPTION>
                                                                           Three Months Ended             Six Months Ended
                                                                               December 31,                  December 31,
                                                                       ----------------------------   -------------------------
                                                                          1999             2000           1999          2000
                                                                       ------------   -------------   ------------  -----------
<S>                                                                    <C>            <C>             <C>           <C>
Net income for the period ......................................       $      4,312   $      11,874   $     10,889  $    22,572
     Other comprehensive income:................................
        Unrealized gain on investments, net of tax: $1,223 and
         $5,341, respectively...................................                  -           1,915              -        8,355
                                                                       ------------   -------------   ------------  -----------
Total comprehensive income...............................              $      4,312   $      13,789   $     10,889  $    30,927
                                                                       ============   =============   ============  ===========
</TABLE>

                                       9
<PAGE>

                   DUPONT PHOTOMASKS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



11. Segment Information

         In accordance with SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," segment information is as follows:

<TABLE>
<CAPTION>
                                                        North
                                                       America       Europe           Asia         Eliminations       Total
                                                      ----------    ----------      ---------      ------------    -----------
<S>                                                   <C>           <C>             <C>            <C>             <C>
Six Months Ended December 31, 1999
----------------------------------
 Sales..........................................      $   89,063    $   26,609      $  32,211       $        -     $   147,883
 Transfers between geographic segments..........          11,770           914          8,133          (20,817)              -
                                                      ----------    ----------      ---------       ----------     -----------
                                                      $  100,833    $   27,523      $  40,344       $  (20,817)    $   147,883
                                                      ==========    ==========      =========       ==========     ===========
 Net income (loss)..............................      $    4,239    $   (1,863)     $   8,513       $        -     $    10,889

June 30, 2000
-------------
 Identifiable assets............................      $  278,066    $  110,531      $ 255,629                      $   644,226

Six Months Ended December 31, 2000
----------------------------------
 Sales..........................................      $  123,002    $   41,371      $  42,990       $        -     $   207,363
 Transfers between geographic segments..........          11,281         6,719         12,722          (30,722)              -
                                                      ----------    ----------      ---------       ----------     -----------
                                                      $  134,283    $   48,090      $  55,712       $  (30,722)    $   207,363
                                                      ==========    ==========      =========       ==========     ===========
 Net income.....................................      $    7,382    $    6,443      $   8,747       $        -     $    22,572

December 31, 2000
-----------------
 Identifiable assets............................      $  332,770    $  120,634      $ 279,206                      $   732,610
</TABLE>

         Products are transferred between geographic areas on a basis intended
to approximate the market value of such products.

12. Commitments and Contingencies

         We are undertaking a significant global expansion to support the future
growth of our business. We have established a joint venture with UMC Group to
produce photomasks in Taiwan. We have a photomask production facility in
Gresham, Oregon, but we have delayed completion of the construction of that
facility. If additional capacity were to be needed, we could complete the
Gresham facility within approximately six months. Currently we are evaluating
the potential opportunities for the Gresham facility.

         We have various purchase commitments incidental to the normal course of
business including non-refundable deposits to purchase equipment. In the
aggregate, such commitments are not at prices in excess of current market. We
also have guaranteed a portion of certain equipment leases of the DPI Reticle
Technology Center. Such leases are generally for four years and provide for
payments not in excess of current market.

         We are subject to litigation in the normal course of business. We
believe the effect, if any, of an unfavorable settlement of such litigation
would not have a material adverse impact on our financial position, results of
operations, cash flows or liquidity.

                                       10
<PAGE>

Item 2.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The following discussion and analysis of the financial condition and
results of operations should be read in conjunction with our financial
statements and related notes thereto. References to years are to fiscal years
ended June 30. Results for interim periods are not necessarily indicative of
results for the full year.

Overview

         Based on worldwide sales, we believe we are one of the largest
photomask manufacturers in the world. We sell our products to over 300 customers
in 20 different countries. Essentially all of our sales are to customers in the
semiconductor manufacturing industry. We manufacture a broad range of photomasks
based on customer-supplied design data. We also manufacture photoblanks and
pellicles, the principal components of photomasks, primarily for internal
consumption. We operate globally with established manufacturing facilities in
North America, Europe and Asia.

         The demand for photomasks is driven primarily by semiconductor design
activity. A number of recent trends have fueled growth in photomasks, including:

         .     Proliferation of semiconductor applications;

         .     Customization of semiconductor designs;

         .     Increasing semiconductor device complexity;

         .     Decreasing size of semiconductor designs; and

         .     Shorter product lifecycles.

These trends have increased the importance of photomask technology in the
semiconductor manufacturing process.

         Photomask manufacturing operations are capital intensive. Accordingly,
at a given threshold of manufacturing capacity, a high proportion of our
operating costs are fixed and remain relatively constant as sales volume
increases or decreases. To the extent that we have utilized production capacity,
operating profit increases or decreases significantly as sales volume increases
or decreases. We anticipate that our operating costs will continue to increase
as we add capacity to position ourselves for future growth. If our sales growth
does not keep pace with increases in operating costs, our operating margin will
decline.

Results of Operations

         Sales. Sales are comprised primarily of photomask sales to
semiconductor manufacturers. Sales increased 44.8 percent from $73.8 million in
the quarter ended December 31, 1999 to $106.8 million in the quarter ended
December 31, 2000. Sales increased 40.2 percent from $147.9 million in the six
months ended December 31, 1999 to $207.4 million in the six months ended
December 31, 2000. Sales in North America, Europe and Asia increased from $89.1
million, $26.6 million and $32.2 million, respectively, in the six months ended
December 31, 1999 to $123.0 million, $41.4 million and $43.0 million,
respectively, in the six months ended December 31, 2000. Increased average
selling price was the primary contributor to the increase in sales during the
quarter and six months ended December 31, 2000. We continue to experience an
increase in demand for advanced photomasks, those with design technology of 0.18
micron and below, which for the quarter and six months ended December 31, 2000,
represented approximately 25 percent and 24 percent of our sales, respectively.
This shift in demand reflects what we believe to be a continued trend toward
higher utilization of complex semiconductor devices with finer line widths.

                                       11
<PAGE>

         Cost of Goods Sold. Cost of goods sold consists of materials, labor,
depreciation and overhead. Cost of goods sold increased 28.5 percent from $53.6
million to $68.9 million for the three months ended December 31, 1999 and, 2000,
respectively, and 28.1 percent from $104.5 million to $133.9 million for the six
months ended December 31, 1999 and, 2000, respectively. The increase resulted
primarily from higher costs associated with increased. Gross profit increased
from 27.3 percent in the quarter ended December 31, 1999 to 35.4 percent for the
quarter ended December 31, 2000 and from 29.3 percent in the six months ended
December 31, 1999 to 35.4 percent for the six months ended December 31, 2000.
The increase in gross profit was due to changes in the product mix and the
impact of price increases which went into effect in the first quarter of fiscal
year 2001.

         Selling, General and Administrative Expense. Selling, general and
administrative expense includes salaries of sales and administrative personnel,
marketing expense, general and administrative expense and product distribution
expense. Selling, general and administrative expense increased 51.5 percent from
$8.8 million in the quarter ended December 31, 1999 to $13.3 million in the
quarter ended December 31, 2000 and 43.5 percent from $17.7 million in the six
months ended December 31, 1999 to $25.4 million in the six months ended December
31, 2000. Selling, general and administrative expense as a percentage of sales
increased from 12.0 percent in the six months ended December 31, 1999 to 12.2
percent in the six months ended December 31, 2000.

         Research and Development Expense. Research and development expense
consists primarily of employee costs, cost of material consumed, depreciation,
engineering related costs and our share of costs of the DPI Reticle Technology
Center. Research and development expense increased 46.1 percent from $5.4
million in the quarter ended December 31, 1999 to $7.9 million in the quarter
ended December 31, 2000 and increased 49.4 percent from $10.4 million in the six
months ended December 31, 1999 to $15.6 million in the six months ended December
31, 2000. Research and development expense as a percentage of sales remained
constant at 7.4 percent in the quarters ended December 31, 1999 and December 31,
2000 and increased from 7.1 percent in the six months ended December 31, 1999 to
7.5 percent in the six months ended December 31, 2000. The increases were due
primarily to increased focus on research and development in all of our
facilities and our joint venture participation with Advanced Micro Devices,
Micron Technology and Motorola in the DPI Reticle Technology Center, which was
formed to develop advanced photomask technology and manufacture leading-edge
photomasks. We believe that, through our participation in the DPI Reticle
Technology Center, we will be able to help meet the future technology needs of
the semiconductor industry for advanced photomasks. We continue to invest
aggressively in mask technology and expect research and development expense to
increase.

         Other Income (Expense), net. Other income (expense), net includes
interest expense, interest income and exchange gains and losses. Other income
(expense), net was $0.2 million in the quarter ended December 31, 1999 and $1.0
million in the quarter ended December 31, 2000 and negligible in the six months
ended December 31, 1999 and $1.3 million in the six months ended December 31,
2000. The increase in net interest income resulted from carrying a higher cash
balance due to receiving customer prepayments and a significant reduction of
interest expense due to financing activities in the quarter ended September 30,
2000.

         Provision for Income Taxes. Our tax expense has been determined in
accordance with SFAS No. 109, "Accounting for Income Taxes," and is based on the
statutory rates in effect in the countries in which we operate. Our effective
tax rate was 28 percent for the quarters ended December 31, 1999 and 2000. Our
effective tax rate varied from the maximum statutory rate primarily because
certain of our operations in Asia are subject to various tax holidays which
expire in whole or in part during fiscal years 2003 through 2010. Certain tax
holidays may be extended if specific conditions are met. We expect the effective
tax rate to remain stable for fiscal year 2001.

         Minority Interest in Income of Joint Ventures. The minority interest
impact of our joint ventures was $0.1 million for the quarter ended December 31,
1999 and $1.1 million for the quarter ended December 31, 2000 and was $0.1
million for the six months ended December 31, 1999 and $2.5 million for the six
months ended December 31, 2000. Minority interest reflects the partners' share
of the joint venture operations and decreased slightly from the prior quarter as
a result of increased depreciation expense of the ventures.

                                       12
<PAGE>

Liquidity and Capital Resources

         Our working capital was $30.2 million at June 30, 2000 and $114.1
million at December 31, 2000. The increase in working capital was principally
due to our separate issuances of convertible notes and common stock (net of debt
repayments), which were completed in July 2000 as discussed below. The offering
proceeds increased cash balances and decreased our accounts payable balance.
Cash and cash equivalents were $42.2 million at June 30, 2000 and $96.1 million
at December 31, 2000. Cash provided by operating activities of $55.3 million in
the six months ended December 31, 2000 was due principally to net income for the
period as well as cash prepayments from customers to reserve .18 micron and
below production capacity.

         Cash used in investing activities related to capital expenditures of
$62.5 million and $55.3 million in the six months ended December 31, 1999 and
2000, respectively. Management expects capital expenditures for fiscal year 2001
to be approximately $150 million. Capital expenditures have been and will be
used primarily to expand our manufacturing capacity and advance our technical
capability. In addition, we may in the future pursue additional acquisitions of
businesses, products and technologies, or enter into other joint venture
arrangements that could complement or expand our business. Any material
acquisition or joint venture could result in a decrease to our working capital
depending on the amount, timing and nature of the consideration to be paid.

         Cash provided by financing activities was $15.8 million and $54.5
million in the six months ended December 31, 1999 and 2000, respectively. In
July 2000, we completed two public offerings of common stock and convertible
notes with aggregate net proceeds of $201.4 million. A portion of the proceeds
was used to repay all of the outstanding borrowings from DuPont, and we are
using the remaining proceeds for general corporate purposes, including potential
acquisitions, working capital and capital expenditures. The first offering was
the sale of 1.4 million shares of our common stock. The stock was offered to the
public at $77 per share with net proceeds to us of $103.8 million after
deducting underwriting discounts and offering expenses of $12.8 million paid by
us. We also issued an aggregate principal amount of $100 million of convertible
subordinated notes. The notes were sold at par less an underwriting discount of
two percent, and we received net proceeds of $97.6 million. The notes are due in
July 2004, with no stated interest, are convertible into shares of our common
stock at a conversion price of $106.26 per share, are unconditionally guaranteed
by DuPont, and are not redeemable by us.

         At June 30, 2000, we had a credit agreement with DuPont, which was
comprised of two separate facilities for $100 million each. The first facility
expires in 2001 and any advances bear an interest rate at LIBOR plus 0.25
percent per annum. In July 2000, the outstanding balance was repaid and this
credit facility was amended to increase the interest charged on outstanding
amounts from LIBOR plus 0.25 percent per annum to LIBOR plus 1.875 percent per
annum and to terminate our ability to convert outstanding amounts into term
loans. The second facility initially had a term of three years and outstanding
amounts bore interest at 0.25 percent per annum for the first two years and
LIBOR plus 0.25 percent per annum for the third year. In July 2000, we repaid
all outstanding amounts and terminated this second facility.

         Our ongoing cash requirements will be for capital expenditures,
acquisitions, research and development and working capital. We are constructing
a new photomask production facility in Corbeil-Essonnes, France. Management
believes that cash on hand, cash provided by operations and our existing credit
facility will be sufficient to meet our cash requirements for at least the next
12 months. Thereafter, based on our current operating plans, we may require
external financing from time to time to fund our capital expenditure
requirements. There can be no assurance that alternative sources of financing
will be available upon expiration of our credit facility or if our capital
requirements exceed the facility and cash flow from operations. There can be no
assurance that we will be able to obtain any additional financing required to
fund our capital needs on reasonable terms, or at all.

Other Matters

         In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements,"
which summarizes certain of the staff's views in applying generally accepted
accounting principles to revenue recognition in financial statements. We
anticipate that adoption will be no later than the fiscal quarter ending June
30, 2001. We are currently evaluating the impact of this bulletin, but do not
expect that its adoption will have a material adverse impact on our financial
position or results of operations.

                                       13
<PAGE>

Forward Looking Statements

        Certain statements contained in this document that are not historical
facts, are "forward-looking statements," as that term is defined in Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, that involve a number of risks and uncertainties. Such forward-looking
statements may concern growth and future operating results, forecasts,
projections, pricing pressures, potential acquisitions and joint ventures, new
manufacturing facilities, capital expenditures, the global economic climate, the
continued successful integration of the Company's new executives into the
business, new products and product enhancements, the future importance of
photomask technology, the demand for products, competitive factors, research and
development activities and expenditures, strategic relationships with third
parties, liquidity, financing and the Company's strategy. Such forward-looking
statements are generally accompanied by words such as "intend," "may," "plan,"
"expect," "believe," "should," "would," "could," "anticipate," or other words
that convey uncertainty of future events or outcomes. Such forward-looking
statements are based upon management's current plans, expectations, estimates
and assumptions and are subject to a number of risks and uncertainties that
could significantly affect current plans, anticipated actions, the timing of
such actions and the company's business, financial position and results of
operations. As a consequence, actual results may differ materially from
expectations, estimates or assumptions expressed in or implied by any
forward-looking statements made by or on behalf of the Company. Factors which
could cause or contribute to such differences include, but are not limited to,
those factors set forth below which are fully discussed under the caption "Risk
Factors" in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission dated September 15, 2000, the 10-Q dated November 1,
2000, and the S-3 most recently amended on September 11, 2000, as well as
cautionary statements and other factors set forth as Risk Factors: capital
intensive industry, significant fixed costs, rapid technological change,
relationship with and dependence on semiconductor industry, fluctuations in
quarterly and annual earnings, competition, significant international
operations, capital valuation risks, Asian market volatility, currency
fluctuation and hedging activity, manufacturing risks, concentration of
customers, concentration of and dependence on suppliers, dependence on
management and technical personnel, relationship with E. I. du Pont de Nemours &
Company, volatility of market price, potential acquisitions, technology
challenges in the manufacture of advanced photomasks, intellectual property,
changes in governmental laws and regulations, potential effect of shares
eligible for future sales and registration rights. Results for the interim
period are not necessarily indicative of the results for the year. The
forward-looking statements are made as of the release date hereof, and the
Company disclaims any intention or obligation to update or revise any
forward-looking statements or to update the reasons why the actual results could
differ materially from those projected in the forward-looking statements,
whether as a result of new information, future events or otherwise.

                                       14
<PAGE>

Item 3.

          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risks relating to our operations result primarily from changes
in interest rates and changes in foreign currency exchange rates. As of December
31, 2000, we had $100.0 million in non-interest bearing convertible notes and
approximately $5.1 million in interest bearing debt of which approximately $3.2
million was short-term debt. As a result, changes in the interest rate market
would change the estimated fair value of our long-term debt. We believe that a
10 percent change in the interest rate would not have a material effect on our
business, financial condition, results of operations or cash flows.

         Foreign Currency Exposure. Non-U.S. operations are subject to certain
risks inherent in conducting business abroad, including price and currency
exchange controls, fluctuation in the relative value of currencies and
restrictive governmental actions. Changes in the relative value of currencies
occur from time to time and may, in certain instances, have a material effect on
our results of operations. An exchange rate fluctuations can affect our margins
since we may have imbalances between some foreign currency denominated revenues
and expenses, and we may not be able to hedge them completely. Our financial
statements reflect remeasurement of items denominated in non-U.S. currencies to
U.S. Dollars, our functional currency. Exchange gains or losses are included in
income in the period in which they occur. We monitor our exchange rate exposure
and attempt to reduce such exposure by hedging. We have entered into forward
contracts in currencies of the countries in which we conduct business in order
to reduce such exposure. At December 31, 2000, we held forward contracts with a
carrying amount of approximately $9.7 million and an unrealized gain recorded in
the income statement of approximately $0.8 million. There can be no assurance
that such forward contracts or any other hedging activity will be available or
adequate to eliminate, or even mitigate, the impact of our exchange rate
exposure. There can be no assurance that such risks will not have a material
adverse impact on our liquidity and results of operations in the future. We do
not hold or issue derivative financial instruments for trading or speculative
purposes.

         PART II

Item 1.  Legal Proceedings

         We are not currently involved in any material legal proceedings.

Item 2.  Changes in Securities

         Not applicable

Item 3.  Defaults Upon Senior Securities

         Not applicable

Item 4.  Submission of Matters to a Vote of Security Holders

         The Company's Annual Meeting of Stockholders was held October 24, 2000
(the "Annual Meeting"). At the Annual Meeting, (i) the Company's Class I
existing directors were reelected to the Board of Directors to serve until our
2003 annual meeting and (ii) the selection of PricewaterhouseCoopers LLP as the
Company's independent accountants for the year ended June 30, 2001 was ratified.
Votes cast at the Annual Meeting are as follows:

<TABLE>
<CAPTION>
                                                                    FOR              WITHHELD
<S>                                                                 <C>              <C>            <C>            <C>          <C>
John L. Doyle                                                       15,534,114       192,156
John W. Himes                                                       15,543,167       183,103
John C. Hodgson                                                     15,619,912       106,358

                                                                    FOR              AGAINST        ABSTAIN      NON-VOTES

Ratification of the selection of PricewaterhouseCoopers LLP         15,718,969       3,750          3,551            0
</TABLE>

                                       15
<PAGE>

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         (A) Exhibits

                (3.1) Second Restated Certificate of Incorporation

                (3.2) Restated Bylaws

                (11) Statement re Earnings Per Share Computation

         (B) Reports on Form 8-K

                We filed a Form 8-K on October 12, 2000, announcing the
implementation of written stock selling plans in accordance with the recently
adopted Rule 10b5-1 of the Exchange Act of 1934.

                                  SIGNATURES

         Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                              Dupont Photomasks, Inc.
                              (Registrant)

Date: January 29, 2001        By:           /s/ Gerd stoecker
                                       --------------------------
                                                Gerd Stoecker
                                    Executive Vice President - Finance
                                        and Chief Financial Officer
                                       (Principal Financial Officer)

                                       16