UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C. 20549

                                 FORM 10-K

     (Mark One)
(X)  Annual Report Pursuant to Section 13 or 15(d) of The Securities
     Exchange Act of 1934
     For the Fiscal Year Ended December 31, 2000

                       OR

( )  Transition Report Pursuant to Section 13 or 15(d) of The
     Securities Exchange Act of 1934

                       Commission File Number 0-275

                           Allen Organ Company
          (Exact name of registrant as specified in its charter)

     Pennsylvania                       23-1263194
  (State of Incorporation)      (IRS Employer Identification No.)

  150 Locust Street, P. O. Box 36, Macungie, Pennsylvania      18062-0036
  (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code           610-966-2200

       Securities registered pursuant to section 12 (b) of the Act:

                                   None

       Securities registered pursuant to section 12 (g) of the Act:

               Class B Common Shares, par value $1 per share
                             (Title of Class)

Indicate  by  check mark whether the registrant (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange  Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject  to
such filing requirements for the past 90 days.

                             Yes   X        No

Indicate by check mark if disclosure of delinquent filers pursuant to  Item
405  of  Regulation S-K is not contained herein, and will not be contained,
to  the  best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K  or  any
amendment of this Form 10-K.  (  X  )

The  Class  A voting stock of the registrant is not registered pursuant  to
the  Securities  Exchange  Act  of  1934,  is  not  publicly  traded,  and,
therefore, no market value information exists for such stock held  by  non-
affiliates.

The  number  of shares outstanding of each of the Registrant's  classes  of
common stock, as of the close of business on March 9, 2001:

Class A - Voting    84,002                 Class B - Non-voting     1,086,613

                            ALLEN ORGAN COMPANY

                                   INDEX



                                  PART I

1. Business
      - General developments of business
      - Industry Segments
      - Description of business
      - Financial information about foreign operations and export sales
2. Properties
3. Legal Proceedings
4. Submission of Matters to a Vote of Security Holders


                                  PART II

5. Market for the Registrants Common Stock and
      Related Security Holder Matters
6. Selected Financial Data
7. Management's Discussion and Analysis of Financial Condition and
      Results of Operations
7A.   Quantitative and Qualitative Disclosures About Market Risk
8. Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
9. Financial Statements


                                 PART III

10.   Directors and Executive Officers of the Registrant
11.   Executive Compensation
12.   Security Ownership of Certain Beneficial Owners and Management
13.   Certain Relationships and Related Transactions


                                  PART IV

14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

Signatures

Financial Statement Schedules

Exhibits

                                  PART I
Item 1.   Business

          General developments of business.

                Incorporated  in Pennsylvania in 1945, Allen Organ  Company
          and  Subsidiaries ("Company") operate in four industry  segments:
          Musical  Instruments, Data Communications, Electronic Assemblies,
          and Audio Equipment.
                While  there  are many factors that may affect  the  future
          business  of  the Company, the Company is particularly  concerned
          with  the recent downturn in the economic environment, which  may
          alter or delay customers purchasing decisions in any of the  four
          industry segments that it operates.
                The  Company's subsidiary Eastern Research, Inc. (ERI)  has
          had  significant  growth in recent years.   Due  to  the  current
          weakness  in the Data Communications markets the Company foresees
          significantly  less  growth during the  first  half  of  2001  as
          compared  to  the  same  period in 2000.  Consequently,  ERI  has
          developed a plan that reduces and delays planned expenditures  to
          minimize the impact on operating results.
                In  addition,  some  of the Company's  Data  Communications
          products  are  sold  to  carriers  including  Competitive   Local
          Exchange   Carriers   (CLEC).    The   financial   markets   have
          significantly   lowered  the  valuations  for  these   types   of
          companies, some of which require continued funding to  build  out
          their  networks (purchase equipment) and deliver  services.   The
          Company  has experienced some delays in completing sales to  this
          sector.   Future  sales  to  some  of  these  customers  may   be
          negatively affected by their ability to raise capital.
                As a result of the above, the Data Communications  segments
          order rate for the first two months of 2001 is less than the same
          period in 2000.   This  segment is targeting alternative markets,
          including international, for its products.
               In March of 2000 the Company announced that it was exploring
          strategic alternatives for its subsidiary Eastern Research,  Inc.
          (ERI).   The  recent volatility in the technology sector  of  the
          financial  markets  may affect alternatives  available  and  will
          extend the timing for this process.

          Industry segments.

                The  Company  operates in four industry  segments:  Musical
          Instruments,  Data  Communications,  Electronic  Assemblies,  and
          Audio  Equipment.   For  financial  information  concerning   the
          segments, see Note 15 to the financial statements.

          Description of business.

              Musical Instruments.

                Allen Organ Company is a leading manufacturer of electronic
          keyboard musical instruments, primarily digital electronic church
          organs and accessories.  This segment accounted for 39%, 47%  and
          57% of revenue in 2000, 1999 and 1998 respectively.
                The principal market for the Musical Instruments segment is
          institutions, primarily churches.  Sales to the home market  make
          up   a   smaller  portion  of  this  segment's  sales.    Musical
          instruments  are  distributed mostly through  dealers,  primarily
          independent  retail  music stores throughout the  United  States,
          with    a   lesser   percentage   distributed   through   dealers
          internationally.  The segment's business is not seasonal.
                The  principal raw materials used in the segment's products
          are  electronic  components and wood, all of  which  are  readily
          available from various sources without undue difficulty.  Certain
          electronic  components  continue to be  on  allocation  by  their
          suppliers.   The Company believes that these lead times  will  be
          reduced  during  the current economic slowdown.   Also,  as  life
          cycles  for electronic components have shortened in recent  years
          the  Company has had to make special efforts redesigning  circuit
          boards  to  satisfy the needs of current customers and the  long-
          term  needs of past customers.  Traditionally organs have  longer
          service requirements than other digital products.  At the present
          time  the  Company  does not expect this issue  to  significantly
          affect future product shipments.
                The  segment does not engage in any significant amounts  of
          consignments,  extended payment terms, or lease guarantees.   The
          Company   is  contingently  liable  in  connection  with  certain
          customers' financing arrangements.  See Note 10 to the  financial
          statements.   The dollar amounts and number of times the  Company
          has had to honor these repurchase agreements are negligible.
                The  Musical  Instruments segment is not dependent  on  any
          single or small group of customers, the loss of which would  have
          a  material adverse effect on the business.  The dollar amount of
          the segment's unshipped order backlog at the end of February 2001
          and  2000  was  $4.7 million and $7.0 million respectively.   All
          orders are expected to be filled in the current year.
                The  electronic organ industry is competitive involving  at
          least  five  (5)  domestic and foreign companies.   In  addition,
          there  are  many small pipe organ companies in the  institutional
          organ  market.  The organ market consists of two basic divisions,
          institutional  (primarily churches) and  home  or  entertainment.
          The Company believes it has a major position in the institutional
          market because of product performance and competitive prices, and
          a smaller percentage of the home or entertainment market.

              Data Communications.

                The  Data  Communications segment  operates  through  three
          majority owned subsidiaries, VIR, Inc., Linear Switch Corporation
          and  Eastern Research, Inc.  This segment accounted for 46%,  40%
          and 27% of revenues in 2000, 1999 and 1998 respectively.
                Data communications products are sold directly to end-user,
          to  wholesale  and retail distributors worldwide  and  under  OEM
          agreements  with  several customers.  The  segment  maintains  an
          inventory  of  in-process and finished goods to allow  for  rapid
          fulfillment of customer orders which is expected in the industry.
                The  principal raw material used in the data communications
          products  are electronic components, which are readily  available
          from   various   sources  without  undue   difficulty.    Certain
          electronic  components  have been placed  on  allocation  by  the
          suppliers  and  order  lead  times have  increased  for  numerous
          electronic  components.   Also, as  life  cycles  for  electronic
          components have shortened in recent years the Company has had  to
          make  special efforts redesigning circuit boards to  satisfy  the
          needs  of  current  customers and the  long-term  needs  of  past
          customers.  At the present time the Company does not expect  this
          to significantly affect future product shipments.
                The data communications segment derived 16% and 13 % of its
          revenue  from one customer in 2000 and 1998 respectively and  52%
          of its 1999 revenue from three customers.
                VIR, Inc. (VIR) and Linear Switch Corporation (LSC)  During
          1997, these two companies combined their marketing and research &
          development functions under the name of "VIR Linear Switch".  The
          companies  design,  manufacture, and  market  a  number  of  data
          communication  products  including patch and  testing  equipment,
          often referred to as tech control products, test access equipment
          and  a  matrix  switch  which  can transport  high-speed  digital
          signals  and  allow "any-to-any" connectivity between  and  among
          connections.  The products are of varying complexity and are used
          to  connect, switch, test and trouble shoot data lines  in  large
          computer installations.
                 The  Companies  compete  in  a  relatively  mature  field,
          producing  high  quality  products at  competitive  prices.   The
          Companies have approximately four major competitors, all of which
          are larger than VIR/LSC.
                 With   the  need  for  higher  speed  and  more   reliable
          communications circuits increasing, VIR/LSC introduced in 1998, a
          new  family of products (TAS DS1 and DS3) to provide the  ability
          to  access and configure these higher speed circuits for  various
          test procedures.  These products require long sales cycles.   One
          type  of  customer  for these products are the Competitive  Local
          Exchange Carriers (CLEC) whose ability to purchase equipment  has
          been hampered due to the economic issues discussed above.
               VIR faces market condition similar to those listed below for
          ERI.  To increase VIR's product visibility in the marketplace the
          Company  will begin to utilize ERI's significantly larger  direct
          sales force to market VIR's TAS products.  VIR's TAS products are
          often sold to the same customers that ERI sells its DNX products.
          Also,  Thomas Infantino, who has been VIR's President since April
          1997, will be retiring in April 2001.  In order to facilitate the
          ERI  and  VIR  joint marketing efforts, Mike Doyle, President  of
          ERI, will also assume the position as President of VIR.
                The dollar amount of unshipped order backlog at the end  of
          February  2001  and 2000 was $363,000 and $955,000  respectively.
          All orders are expected to be filled in the current year.

               Eastern Research, Inc. (ERI)  Designs and markets data inter-
          networking  products.   These  products  enable  network  service
          providers to deliver services to their customers.
                ERI  competes in a growing market that is in excess of  $10
          billion.   However,  the Company's current and projected  product
          lines and sales programs are targeted at only a fraction of  that
          market.   The customer base includes major end-user corporations,
          Network Service Providers, Internet Service Providers and systems
          integrators.  There are many competitors in this market  that  is
          dominated by several large data communications companies, such as
          Cisco  Systems, Tellabs and Alcatel.  The Company's strategy  has
          been  to  target existing, yet still growing, market niches  with
          products  that provide new features and packaging with attractive
          pricing.
                ERI initially built its business in the CSU/DSU market  and
          also   developed  router  technology  products.   In  1997,   ERI
          introduced its multi-service access concentrator (DNX) family  of
          products.  ERI has expanded this product family and broadened its
          feature  set  over  the past 3 years and now considers  this  its
          flagship  product.  The DNX revenues represent over 90% of  ERI's
          sales for 2000.  In order to properly capitalize on this market's
          opportunities,   ERI   has   implemented   aggressive   marketing
          strategies  and  increased  product  development  work  and  will
          continue  to  do so in a way that takes into account ERI's  needs
          and the current economic environment
               ERI has expanded its sales efforts in international markets.
          ERI   derived   approximately  23%  of  its  2000  revenue   from
          international markets, primarily the Far East.  ERI will continue
          to  pursue  growth  opportunities in markets outside  the  United
          States.    The   realization  of  future  business   from   these
          opportunities  or  from  current  customers  could  be  adversely
          affected by currency fluctuations, social and political risks and
          changes in foreign financial markets and economies.
                ERI has also developed strategic customer relationships  to
          expand  distribution  of  its products by  supplying  its  multi-
          service  access  concentrator product line  to  other  networking
          companies.
                The dollar amount of unshipped order backlog at the end  of
          February,  2001  and  2000  was $1.0  million  and  $2.0  million
          respectively.   All  orders are expected  to  be  filled  in  the
          current year.
                Due  to  the  current  weakness in  the  telecommunications
          markets, ERI foresees significantly less growth during the  first
          half   of  2001,  as  compared  to  the  same  period  in   2000.
          Consequently,  ERI has developed a plan that reduces  and  delays
          planned  expenditures to minimize the impact on operating results
          during this period.
                 At   the   same  time  ERI  has  significant  new  product
          introductions scheduled for 2001 that are designed to enhance the
          Company's  position  in  the markets  served  and  should  create
          additional sales opportunities for the Company later in the year.
          During the first quarter of 2001 ERI will launch a new capability
          for  the  DNX 4/11 platforms called GR303.  GR303 provides  voice
          concentration enabling emerging and incumbent carriers to  reduce
          capital  outlay  and operating expense for both  their  back-haul
          transmission facilities and service platform ports.
                During  the  second quarter of 2001 ERI will launch  a  new
          product  platform-the  DNX-88  that  will  provide  carriers  the
          ability  to  scale their edge or co-location sites to 688  T1/E-1
          ports,  24  DS3  and/or  8 OC3/STM1 interfaces,  all  managed  by
          Envision.   Envision  is a comprehensive element  manager  system
          designed  to  manage and control the DNX family of  products  and
          enable  service  providers  to  integrate  the  DNX  family  with
          existing OSS platforms.  (As a point of comparison, prior to  the
          DNX-88,  the  largest DNX configuration could scale  to  only  88
          T1/E1  ports.)  Also during the second quarter ERI will introduce
          OC3/STM-1  capability  for the DNX family,  ERI's  first  optical
          interface capabilities to the DNX family.
                The  2001  product enhancements are expected to  strengthen
          both  ERI's  direct  customer and OEM relationships.   They  also
          begin  to  position  ERI as an optical access  solution  provider
          helping  carriers migrate their T-1/T-3 networks onto the optical
          backbones already in place and begin to break the bottlenecks  in
          the "last mile".

              Electronic Assemblies.

                Allen Integrated Assemblies (AIA), a division of the  Allen
          Organ  Company,  provides subcontract manufacture  of  electronic
          assemblies  for  outside  customers.  The  Electronic  Assemblies
          segment is an outgrowth of the technical skills and manufacturing
          capabilities developed by the Company in its musical  instruments
          business. This segment accounted for 12% of 2000 revenue and  10%
          of  revenue  in 1999 and 1998.  AIA derived 76% of  its  revenues
          from  three customers in 2000 and 68% of its revenues from  three
          customers in 1999 and 1998.
                The  Electronic Assemblies segment is very competitive with
          numerous  manufacturers  offering such services.   Customers  are
          generally  obtained from a geographic area located close  to  the
          manufacturer.   In  order  to improve its contract  manufacturing
          capabilities, the segment is upgrading its manufacturing  systems
          and increasing its sales and marketing efforts.
                The  dollar amount of the segment's unshipped order backlog
          at  the  end of February 2001 and 2000 was $3.4 million and  $1.6
          million  respectively.  All orders are expected to be  filled  in
          the current year.

              Audio Equipment.

                 The   Audio   Equipment  segment  operates   through   two
          subsidiaries,  Legacy  Audio, Inc  and  Allen  Audio,  Inc.  This
          segment accounted for 3%, of revenue in 2000 and 1999 and  6%  of
          1998 revenue.
                The  principal raw materials used in the segment's products
          are  audio speakers, electronic components and wood, all of which
          are   readily  available  from  various  sources  without   undue
          difficulty.
                The  Audio Equipment segment is not dependent on any single
          or  small  group  of customers, the loss of which  would  have  a
          material adverse effect on the business
                Legacy  Audio, Inc. (LAI) Designs, manufactures and markets
          high-quality  audio speaker cabinets for hi-fi  stereo  and  home
          theater applications.  It also markets electronic audio equipment
          such as amplifiers that are manufactured to its specifications by
          third party suppliers.
                The  principal market for LAI's products are consumers  for
          home use.  The segment's products are distributed directly to the
          customer  and  through  Dealer Audition  Sites.   This  segment's
          business is not seasonal.
                 The   high-end  audio  market  continues  to  go   through
          significant  changes  as  it evolves from  the  traditional  two-
          channel  to the multi-channel market, which is utilized  in  home
          theater  applications.  Legacy Audio has recently  developed  and
          has  begun  marketing products specifically for the home  theater
          market.
                LAI's  manufacturing facility is currently  operating  near
          full capacity.  Many of their manufacturing needs are similar  to
          those required in the Company's Musical Instruments segment.  The
          Company  is  building  some  of LAI's  speaker  cabinets  at  its
          Macungie, PA facility.
                The  Company  competes with several  other  high-end  audio
          speaker cabinet manufacturers including Martin-Logan, Thiel, B&W,
          Celestion, and others.
                LAI  is  not  dependent on any single, or small  group,  of
          customers.   The  dollar amount of the segment's unshipped  order
          backlog  at  the end of February 2001 and 2000 was  $267,000  and
          $674,000  respectively.  All orders are expected to be filled  in
          the current year.
                Allen  Audio, Inc. (AAI) Designs, manufactures and  markets
          Public  Address System products.  AAI has developed a  PA  System
          mixer  utilizing  Digital Signal Processor (DSP) technology  also
          used  in the Allen digital organs.  AAI has also developed a line
          of  speaker  cabinets  for  the  PA  field.   The  Company  began
          marketing these PA Systems to mid-sized churches, auditoriums and
          the  like  during  1999.   These products are  being  distributed
          through dealers, primarily in the sound reinforcement business.

           General.

                The  Company's working capital is sufficient  to  meet  the
          normal expansion of inventory and receivables.
                The  Company  spent $7,340,209, $4,910,278, and  $3,478,775
          annually  in  2000, 1999, and 1998 respectively on  research  and
          development.  The increases are a result of the Company's ongoing
          commitment  to new product development and support, primarily  at
          Eastern Research.
                The Company and its subsidiaries employ approximately   613
          persons.
               The Company monitors its compliance with applicable federal,
          state,  or  local  provisions with regard to the environment  and
          implements procedures or modifies its equipment as necessary. The
          Company does not expect any significant capital additions in  the
          coming year to maintain its compliance.

           Financial  information  about  foreign  operations  and   export
           sales.

                The  Company does not own manufacturing or sales facilities
          in   any  foreign  countries.   See  Note  14  to  the  financial
          statements, for additional information on export sales.
                Export  sales are all made in US dollars and for  the  most
          part are made under Letter of Credit or on a prepaid basis.
                The  Company  has  established a Foreign Sales  Corporation
          within  the  meaning of the Internal Revenue Code of 1986.   This
          wholly-owned  subsidiary is Allen Organ  International,  Inc.,  a
          Virgin Islands corporation.

Item 2.   Properties

                The  following sets forth the location, approximate  square
          footage  and use of the Company's operating locations  segregated
          by  segment.   The  Company  believes  that  its  facilities  are
          generally suitable and adequate for its needs.

                                 Approximate
             Location           Square Footage                Use
      Musical Instruments and Electronic Assemblies:
        Macungie, Pennsylvania    242,000         Administrative,  research and
                                                  manufacturing facility. Owned
                                                  by  Allen   Organ   Company.
                                                  Operating at approximately
                                                  90% capacity.

        Macungie, Pennsylvania     27,000         International sales,
                                                  exhibition  center,  museum
                                                  and teaching facility. Owned
                                                  by  Allen Organ Company.

      Data Communications:
        Southampton, Pennsylvania  22,000         Administrative, research
                                                  and manufacturing facility.
                                                  Leased until August,  2005.
                                                  Operating at approximately
                                                  80% capacity.

        Moorestown, New Jersey     39,000         Administrative, sales and
                                                  research facility.   Leased
                                                  until September, 2002.

      Audio Equipment:
        Springfield,  Illinois     15,000         Administrative, research
                                                  and  manufacturing  facility.
                                                  Owned  by  Legacy Audio, Inc.
                                                  Operating at approximately
                                                  95%  capacity.

                In April 1999, the Company sold its manufacturing and sales
          facility located in Rocky Mount, North Carolina.  See Note  2  to
          the financial statements, for additional information.

Item 3.     Legal Proceedings

               There is no litigation requiring disclosure pursuant to Item
          103 of regulation S-K.

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

                No  matters  were  submitted to a vote of security  holders
          during the fourth quarter of fiscal year 2000.

                                  PART II

Item 5.     Market  for the Registrant's Common Stock and Related  Security
            Holder Matters

                The  Company's  Class A voting shares  are  not  registered
          pursuant  to  the  Securities Exchange Act of 1934  and  are  not
          publicly  traded.  The Company's Class B non-voting stock  trades
          on The NASDAQ Stock Market under the symbol AORGB.

                The high and low bid quotations for each quarter during the
          last two years as reported by NASDAQ Market Information System is
          as follows:

                  2000             High           Low

                  First Quarter    85             38 3/8
                  Second Quarter   74             55
                  Third Quarter    71             57 1/4
                  Fourth Quarter   68             44

                  1999             High           Low

                  First Quarter    41 1/8         33
                  Second Quarter   39             33 1/2
                  Third Quarter    40 1/2         35 1/4
                  Fourth Quarter   39 3/4         37

                The  Company  has 8 Class A Shareholders and  279  Class  B
          Shareholders of record as of March 9, 2001.

                During  the past two fiscal years, the Company has declared
          dividends on both its class A and B shares as follows:

                  Record of Quarterly Dividends Paid in 2000

                  Record Date          Payable   Amount
                  Cash   2/18/2000    3/3/2000    $.14
                  Cash   5/19/2000    6/2/2000    $.14
                  Cash   8/18/2000    9/1/2000    $.14
                  Cash  11/17/2000   12/1/2000    $.14

                  Record of Quarterly Dividends Paid in 1999

                  Record Date        Payable     Amount
                  Cash   2/19/1999    3/5/1999    $.14
                  Cash   5/23/1999    6/6/1999    $.14
                  Cash   8/20/1999    9/3/1999    $.14
                  Cash  11/19/1999   12/3/1999    $.14

Item 6.   Selected Financial Data
                                  Years Ended December 31,
                   2000        1999        1998        1997        1996

Net Sales      $72,516,208  $58,018,742  $44,966,075  $40,348,084  $36,715,128
Net Income
(Loss)         $ 3,954,896  $ 2,884,488  $  (616,711) $ 3,512,142  $ 3,865,876
Earnings (Loss)
per share      $      3.38  $      2.46  $     (0.52) $      2.79  $      2.88
Cash dividends
per share      $       .56  $       .56  $       .56  $       .56  $       .55
At Year End
 Total Assets  $80,807,742  $67,466,070  $61,989,953  $62,562,004  $63,966,646

 Long-Term Debt,
  net of current
   portion     $         0   $        0  $         0  $         0  $         0

        The  2000, 1999, 1998 and 1997 results of operations include Legacy
     Audio, Inc. acquired April 1, 1997.

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

     Liquidity and Capital Resources:
        The  Company continues to maintain a strong financial position  and
     high level of liquidity, which enables it to generate funds internally
     to   meet   operating  needs,  capital  expenditures  and   short-term
     obligations.  Key indicators of the Company's liquidity are  presented
     below:
                                            December 31,
                                      2000             1999
          Working Capital          $40,957,743      $40,175,282
          Current Ratio               3.3 to 1         6.2 to 1
          Debt to Equity Ratio        .29 to 1         .13 to 1

        As  indicated  in  Note  8  of  the financial  statements,  Eastern
     Research, Inc. has obtained bank financing to provide them with future
     working  capital as well as funds to repay $7,000,000 of ERI's  inter-
     company  loans due to Allen Organ Company.  The proceeds of  the  term
     loan  were  invested in the Company's short-term investment  accounts.
     These financing facilities have been obtained to begin to provide  ERI
     with   financial   autonomy   as  the  Company   considers   strategic
     alternatives for ERI.
        Cash  flows provided by operating activities increased during  2000
     as compared prior years primarily due to increases in operating income
     in  the Musical Instruments segment resulting from higher sales volume
     and operational improvements.
        Cash  flows provided by operating activities decreased during  1999
     as compared to 1998 primarily due to a $3,075,000 increase in accounts
     receivable  and $2,800,000 increase in inventory at Eastern  Research,
     Inc. as a result of that subsidiaries growth.
        Cash  flows used in investing activities during 2000 were  used  to
     purchase  approximately  $3,157,000 in plant and  equipment  including
     approximately $2,148,000 for leasehold improvements and new  computer,
     office  and test equipment to support the growth of Eastern  Research,
     Inc.
        Cash  flows used in investing activities during 1999 were  used  to
     purchase  approximately  $3,260,000 in plant and  equipment  including
     $775,000 for a new air handling system in the wood and metal finishing
     area  and $150,000 for a new automated router in the woodworking  area
     of   the  Macungie,  PA  plant.   Plant  and  equipment  purchases  of
     approximately  $1,567,000  in  the  Data  Communications  segment  are
     primarily related to leasehold improvements, new computers, office and
     test equipment to support the growth of Eastern Research.
        Cash  flows used in investing activities during 1998 were  used  to
     purchase approximately $925,000 in machinery and equipment to be  used
     in   the   Musical  Instruments  and  Electronic  Assemblies  segments
     including approximately $200,000 for hardware and software related  to
     new   information  systems.   The  Data  Communications  segment  used
     approximately $552,000 primarily related to computer, office and  test
     equipment purchased to support the growth of Eastern Research.

     Results of Operations:

     Sales and Operating Income
        Consolidated  sales for 2000 and 1999 increased  $14,497,466  (25%)
     and  $13,052,667 (29%) respectively when compared to  the  prior  year
     primarily due to higher sales at Eastern Research, Inc (ERI)  as  well
     as  in  the  Musical Instruments segment.  ERI increased its  incoming
     order volume primarily by expanding its customer base.

                                            December 31,
                                2000            1999            1998
        Net Sales
        Musical Instruments
         Domestic            $24,422,709     $23,769,362     $21,748,131
         Export                3,635,123       3,563,383       3,676,981
          Total               28,057,832      27,332,745      25,425,112
        Data Communications
         Domestic             25,556,745      22,149,842      11,036,926
         Export                7,764,597       1,146,137       1,261,029
          Total               33,321,342      23,295,979      12,297,955
        Electronic Assemblies
         Domestic              8,624,199       5,650,917       4,727,975
        Audio Equipment
         Domestic              2,323,865       1,651,566       2,422,507
         Export                  188,970          87,535          92,526
          Total                2,512,835       1,739,101       2,515,033

        Total                $72,516,208     $58,018,742     $44,966,075

        Income (Loss) from Operations
        Musical Instrument   $ 5,029,871     $ 2,950,251     $   795,773
        Data Communications   (2,063,221)       (805,738)     (3,397,020)
        Electronic Assemblies  1,284,806         430,031         326,609
        Audio Equipment         (429,386)       (761,688)         (9,846)
         Total               $ 3,822,070     $ 1,812,856     $(2,284,484)

     Musical Instruments Segment

        The   increases  in  domestic  sales  reflect  continuing  customer
     acceptance  of the Company's products based on Renaissance technology.
     In addition, churches, which are the primary customer for the segments
     products, have also been the beneficiary of the strong US economy  and
     financial  markets,  which  has increased the  segments  order  volume
     during these same periods.  As discussed above, the recent downturn in
     economic and financial markets may affect future order volume.
        Export  sales  were approximately equal for the three  years  ended
     December  31,  2000.   Foreign  markets continue  to  be  affected  by
     unfavorable economic conditions in certain world markets, particularly
     Far East countries, and changes in the value of the US dollar compared
     to foreign currencies.
        In  recent years the Company has entered a different subset of  the
     institutional  organ  market  that includes  the  sale  of  its  organ
     consoles  and  control electronics to customers that  want  to  retain
     their  wind-blown pipes.  In the past this market was served  by  pipe
     organ  manufacturers  and local pipe organ maintenance  organizations.
     The  Company's ability to produce both the wood cabinetry and  digital
     electronics gives it an advantage in this market.
        Gross  profit margins on sales were 36.5%, 30.5% and 24.6% for  the
     three  years ended December 31, 2000.  These increases in gross profit
     are a result of higher sales volume and business improvement programs,
     which  included  implementation of new information systems,  up-graded
     production and product planning processes and the closure of the North
     Carolina production facility consolidating all organ production at the
     Macungie, PA facility.
        Selling  and  advertising expenses for 2000 remained  approximately
     equal to 1999.  General and administrative expenses decreased in  2000
     due  to  lower personnel requirements and related benefits.   Selling,
     administrative and other expenses increased approximately $200,000  in
     1999,  due to increased selling costs associated with the higher sales
     volume.
        Research  and development expenses increased approximately $264,000
     and  $151,000  in  2000 and 1999 respectively.   These  increases  are
     primarily  due  to  increases in personnel  to  continue  new  product
     development.

     Data Communications Segment

        Domestic  sales increased $3,406,903 and $11,112,916  in  2000  and
     1999  respectively.  International sales increased  $6,618,460  during
     2000,  primarily  from sales to two customers  in  the  Far  East  and
     decreased slightly during 1999.  These increases are related to higher
     sales  at  Eastern Research, Inc.  The Company significantly increased
     its  investment  in the sales, marketing and research and  development
     efforts  at Eastern Research and will continue to do so in a way  that
     takes  into  account ERI's needs and the current economic environment.
     These  additional  efforts  are focused  on  expanding  the  Company's
     product  offering,  and  its  channels of distribution  and  targeting
     markets,  including foreign, for the Company's products.  The  segment
     has  developed strategic relationships with customers to expand  their
     channels of distribution through OEM agreements.
        Gross  profit  margins were 47%, 48% and 41%  for  the  past  three
     years  ended  December  31,  2000.  The 2000  gross  margin  decreased
     primarily  due  to lower margins at VIR, Inc. that related  to  higher
     overhead  costs.  The 1999 increase was due to higher sales  of  ERI's
     DNX  product  line.   While the companies strive  to  maintain  profit
     margins  by developing products that offer more features, the industry
     is  competitive which often results in pricing changes to  obtain  and
     maintain market share.
        Selling  expenses increased approximately $2,500,000 and $2,200,000
     in  2000  and 1999 respectively, reflecting the additional  sales  and
     marketing efforts at ERI.  Selling expenses will continue to  increase
     in line with the philosophy outlined above.
        Administrative  expenses increased approximately $900,000  in  2000
     primarily   related   to  additional  management  and   administrative
     personnel added at ERI to support its growth.  Administrative expenses
     remained approximately unchanged during 1999 when compared to 1998.
        Research  and  development expenses were $5,911,740, $3,759,183 and
     $2,464,808  for  the  years ended December 31, 2000,  1999  and  1998,
     respectively  primarily related to ERI.  The segment is  committed  to
     new product development and support and expects these expenditures  to
     increase  in  the  future, again in line with the philosophy  outlined
     above.

     Electronic Assemblies Segment

        Sales  increased  during 2000 and 1999 from higher  incoming  order
     volume.   This  segment  has  focused  its  sales  efforts  on  larger
     customers  whose  products require a high degree of  quality  and  the
     broad range of manufacturing services available at AIA.
        Gross  profit  margins were 19.5%, 15.2% and 13.6%  for  the  three
     years  ended  December 31, 2000.  These increases are  due  to  higher
     order  volume over which to absorb fixed costs and changes in  product
     mix.
        Selling, general and administrative expenses decreased slightly  in
     2000  when  compared  to  1999 and increased  $115,000  in  1999  when
     compared to 1998.  The segment continues its marketing efforts and has
     begun  to  diversify  its  customer base.  The  Company  continues  to
     improve  its  production  capabilities  to  offer  state  of  the  art
     manufacturing services to its customers.

     Audio Equipment Segment

        Sales  for the year ended December 31, 2000 increased approximately
     $773,000  when compared to 1999 and decreased $775,000  in  1999  when
     compared to 1998.
        Gross  profit  margins were 43.5%, 38.1% and 39.6%  for  the  years
     ended  December  31,  2000,  1999 and 1998,  respectively.   The  2000
     increase  is attributable to higher sales volume over which to  absorb
     fixed costs.
        Selling,  general and administrative costs increased  approximately
     $82,000 during 2000 as compared to 1999 resulting from increased sales
     and marketing efforts and additional administrative personnel added to
     support the company's growth.
        As  previously  discussed, the Company  has  developed  a  line  of
     Public  Address System products and in connection therewith has formed
     Allen  Audio,  Inc. to continue development, establish  marketing  and
     distribution for these products.  Allen Audio began shipping units  in
     late  1999.  Allen Audio continues to build a dealer network  and  has
     initiated marketing programs to promote the Company's products.

     Other Income (Expense)

        Investment  income for the year ended December 31,  2000  increased
     when  compared to 1999 due to higher returns on investments and higher
     invested balances.  These increases were offset by interest expense on
     short-term  financing related to Eastern Research and other  expenses.
     The 2000, 1999, and 1998 amounts include $17,684, $67,244 and $242,227
     of realized capital gains respectively.
        The  1999  Gain  (loss) on sale of property,  plant  and  equipment
     includes approximately $1,068,000 of gains related to the sale of  the
     Rocky Mount, North Carolina facility

     Income Taxes

        The  effective  tax rate was 22.4%, 30.6% and 55.4% in  2000,  1999
     and  1998 respectively.  These decreases are due to higher tax credits
     and other non-taxable items.

     Factors that May Affect Operating Results

        The  statements contained in this report on Form 10-K that are  not
     purely historical are forward looking statements within the meaning of
     Section  27A  of  the Securities Act of 1933 and Section  21E  of  the
     Securities  Exchange Act of 1934, including statements  regarding  the
     Company's expectations, hopes, intentions or strategies regarding  the
     future.   Forward  looking  statements include:  statements  regarding
     future  products  or product development; statements regarding  future
     research  and  development spending and the  Company's  marketing  and
     product  development strategy, statements regarding future  production
     capacity.   All  forward looking statements included in this  document
     are  based on information available to the Company on the date hereof,
     and  the  Company  assumes no obligation to update  any  such  forward
     looking statements.  Readers are cautioned not to place undue reliance
     on  these  forward  looking  statements,  which  reflect  management's
     opinions only as of the date hereof.  Readers should carefully  review
     the  risk factors described in other documents the Company files  from
     time  to  time with the Securities and Exchange Commission,  including
     the  Quarterly  Reports on Form 10-Q to be filed  by  the  Company  in
     fiscal  year 2001.  It is important to note that the Company's  actual
     results  could  differ materially from those in such  forward  looking
     statements.   Some of the factors that could cause actual  results  to
     differ materially are set forth below.
        The  Company has experienced and expects to continue to  experience
     fluctuations  in its results of operations.  Factors that  affect  the
     Company's  results  of  operations include the volume  and  timing  of
     orders  received,  changes in global economics and financial  markets,
     changes  in  the  mix  of  products sold,  market  acceptance  of  the
     Company's  and its customer's products, competitive pricing pressures,
     global  currency valuations, the availability of electronic components
     that  the  Company purchases from suppliers, the Company's ability  to
     meet  increasing  demand,  the  Company's  ability  to  introduce  new
     products  on  a  timely basis, the timing of new product announcements
     and introductions by the Company or its competitors, changing customer
     requirements,  delays in new product qualifications,  the  timing  and
     extent  of  research  and  development expenses  and  fluctuations  in
     manufacturing yields.  As a result of the foregoing or other  factors,
     there  can  be  no  assurance  that the Company  will  not  experience
     material  fluctuations in future operating results on a  quarterly  or
     annual  basis,  which  would  materially  and  adversely  affect   the
     Company's business, financial condition and results of operations.
        See  Note  1 to the financial statements for information concerning
     the effects of changes in accounting policies.

Item 7A    Quantitative and Qualitative Disclosures About Market Risk.

        Financial  instruments  that potentially  subject  the  Company  to
     market   and/or   credit  risk  consist  principally   of   short-term
     investments  and trade receivables.  The Company places  substantially
     all  of  its  investments in mutual funds holding federal,  state  and
     local  government  obligations and, by policy, limits  the  amount  of
     credit   exposure  in  any  one  investment.   The  Company's  Musical
     Instruments  segment  sells most of its products  through  established
     dealer networks.  The Data Communications segment sells most of  their
     products  directly to end-users, to wholesale and retail  distributors
     worldwide  and  under  OEM agreements with other  data  communications
     companies.   The  market  and  credit  risk  associated  with  related
     receivables  is  limited  due  to the  large  number  of  dealers  and
     distributors  and  their geographic dispersion.  The  Company  has  no
     other material exposure to market risk.

Item 8.    Financial Statements
        See Item 14 for index.

Item 9.    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
        There were no reportable events as described in Item 304(b).


KPMG
4905 Tilghman Street
Allentown, PA 18104



                       INDEPENDENT AUDITORS' REPORT


The Board of Directors
 and Stockholders
Allen Organ Company


      We have audited the accompanying consolidated balance sheets of Allen
Organ  Company and Subsidiaries as of December 31, 2000 and 1999,  and  the
related  consolidated statements of income, stockholders' equity  and  cash
flows and the related financial statement schedule for each of the years in
the  three  year  period  ended  December  31,  2000.   These  consolidated
financial   statements   and   financial   statement   schedule   are   the
responsibility  of  the  Company's management.  Our  responsibility  is  to
express an opinion on these consolidated financial statements and financial
statement schedule based on our audits.

      We  conducted  our  audits  in  accordance  with  auditing  standards
generally  accepted  in  the  United States of  America.   Those  standards
require  that we plan and perform the audit to obtain reasonable  assurance
about  whether  the financial statements are free of material misstatement.
An  audit  includes  examining, on a test basis,  evidence  supporting  the
amounts  and  disclosures  in  the financial  statements.   An  audit  also
includes assessing the accounting principles used and significant estimates
made  by  management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

      In  our  opinion, the consolidated financial statements  referred  to
above  present fairly, in all material respects, the financial position  of
Allen Organ Company and Subsidiaries as of December 31, 2000 and 1999,  and
the  results of their operations and their cash flows for each of the years
in  the  three  year  period ended December 31,  2000  in  conformity  with
accounting  principles generally accepted in the United States of  America.
Also  in  our  opinion,  the  related financial  statement  schedule,  when
considered in relation to the basic consolidated financial statements taken
as  a whole, present fairly, in all material respects, the information  set
forth therein.



/s/ KPMG LLP




Allentown, PA
February 7, 2001

                      ALLEN ORGAN COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                             December 31
                     ASSETS                               2000         1999
CURRENT ASSETS
 Cash                                                $  2,712,368  $   209,277
 Investments including accrued interest                24,694,377   19,649,433
 Accounts receivable, net of allowance for
  doubtful accounts of $428,791 in 2000
     and $300,823 in 1999                              10,285,659   10,444,430
 Inventories                                           19,808,173   16,715,328
 Prepaid income taxes                                      13,972          --
 Prepaid expenses                                         304,342      287,138
 Deferred income tax benefits                           1,094,701      658,869
     Total Current Assets                              58,913,592   47,964,475

PROPERTY, PLANT AND EQUIPMENT, NET                     12,523,133   11,429,173

OTHER ASSETS
 Prepaid pension costs                                    506,702      470,154
 Inventory held for future service                        690,657      733,301
 Note receivable                                        1,556,721    1,111,147
 Cash value of life insurance                           2,034,867    1,721,497
 Deferred income tax benefits                             398,476      122,742
 Goodwill, net                                          4,165,002    3,872,441
 Other assets                                              18,592       41,140
     Total Other Assets                                 9,371,017    8,072,422
     Total Assets                                     $80,807,742  $67,466,070

  LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Notes payable - Bank                                 $ 8,700,000  $      --
 Accounts payable                                       3,448,119    3,593,708
 Accrued income taxes                                        --        683,133
 Other accrued expenses                                 2,816,102    1,927,156
 Customer deposits                                      2,991,628    1,585,196
     Total Current Liabilities                         17,955,849    7,789,193

NONCURRENT LIABILITIES
 Deferred and other noncurrent liabilities                310,016      179,915
     Total Liabilities                                 18,265,865    7,969,108

MINORITY INTERESTS                                        106,976      175,271

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
 Common stock, par value $1 per share
 Authorized
     Class A Voting Shares-400,000 in 2000 and 1999
     Class B Non-Voting Shares-3,600,000 in 2000 and 1999
 Issued           2000                1999
     Class A   127,232 shares;   127,232 shares           127,232      127,232
     Class B 1,410,761 shares; 1,410,761 shares         1,410,761    1,410,761
      Total Common Stock                                1,537,993    1,537,993
 Capital in excess of par value                        12,758,610   12,758,610
 Retained earnings                                     59,977,002   56,677,650
 Accumulated other comprehensive income:
     Unrealized gain on investments, net                  139,990      322,400
      Sub-total                                        74,413,595   71,296,653
 Less cost of common shares in treasury
     2000 - 43,230 Class A shares and
           324,148 Class B shares                     (11,978,694)       --
     1999 - 43,230 Class A shares and
           324,052 Class B shares                            --    (11,974,962)
 Total Stockholders' Equity                            62,434,901   59,321,691
 Total Liabilities and Stockholders' Equity           $80,807,742  $67,466,070

          See accompanying notes to Consolidated Financial Statements.


              ALLEN ORGAN COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF INCOME

                                             Years Ended December 31,
                                         2000          1999            1998

NET SALES                            $72,516,208    $58,018,742    $44,966,075
COSTS AND EXPENSES
  Cost of sales                       43,730,716     36,793,515     31,870,469
  Selling, administrative and
   other expenses                     17,623,213     14,502,093     11,486,315
  Research and development             7,340,209      4,910,278      3,478,775
  Costs to close Rocky Mount plant         --             --           415,000
   Total Costs and Expenses           68,694,138     56,205,886     47,250,559

INCOME (LOSS) FROM OPERATIONS          3,822,070      1,812,856     (2,284,484)
OTHER INCOME (EXPENSE)
  Investment income                    1,542,347      1,128,524      1,223,699
  Interest expense                      (320,942)         --             --
  (Loss) gain on sale of property,
    plant and equipment                  (58,288)     1,063,722         (8,153)
  Other income (expense), net             20,414         (9,593)        21,078
  Minority interests in
   consolidated subsidiaries              68,295        112,979         61,958
    Total Other Income                 1,251,826      2,295,632      1,298,582

INCOME (LOSS) BEFORE TAXES             5,073,896      4,108,488       (985,902)
PROVISION FOR TAXES
  Current                              1,736,000      2,030,000        (11,000)
  Deferred                              (617,000)      (806,000)      (646,000)
   Total Provision for Taxes           1,119,000      1,224,000       (657,000)

NET INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE                            $ 3,954,896    $ 2,884,488    $  (328,902)

CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE
(net of income tax benefit of
 $183,000)                                 --             --          (287,809)

NET INCOME (LOSS)                    $ 3,954,896    $ 2,884,488    $  (616,711)

OTHER COMPREHENSIVE INCOME (LOSS),
 NET OF TAX
  Unrealized gains on investments:
   Unrealized (loss)  gains arising
    during period                    $  (171,313)   $   230,132    $   162,874
   Less:  reclassified adjustment
    for gains included in income         (11,097)       (42,068)      (157,012)
Other comprehensive income (loss)       (182,410)       188,064          5,862
COMPREHENSIVE INCOME (LOSS)          $ 3,772,486    $ 3,072,552    $  (610,849)

BASIC AND DILUTED EARNINGS PER SHARE:
Net income (loss) before cumulative
 effect of change in accounting
 principle                           $      3.38    $      2.46    $     (0.28)
Cumulative effect of change in
 accounting principle                      --              --            (0.24)

NET INCOME (LOSS)                    $      3.38    $      2.46    $     (0.52)

  See accompanying notes to Consolidated Financial Statements.


                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                      Common Stock                   Capital
                                                                     in
                                Class A             Class B          Excess of
                            Shares    Amount    Shares     Amount    Par Value

Balance-December 31, 1997   127,232  $127,232  1,410,761 $1,410,761 $12,758,610

Balance-December 31, 1998   127,232  $127,232  1,410,761 $1,410,761 $12,758,610

Balance-December 31, 1999   127,232  $127,232  1,410,761 $1,410,761 $12,758,610

Balance-December 31, 2000   127,232  $127,232  1,410,761 $1,410,761 $12,758,610

                                         Accumulated
                                         Other
                             Retained    Comprehensive      Treasury Stock
                             Earnings    Income            Shares    Amount

Balance-December 31, 1997  $55,725,180    $128,474        357,275  $11,618,425
Net Loss                      (616,711)
Reacquired Class B Shares                                   9,897      352,578
Change in unrealized gain
  on securities available
  for sale                                   5,862
Cash dividend paid
 ($.56 per share)             (659,709)

Balance-December 31, 1998  $54,448,760    $134,336        367,172  $11,971,003

Net Income                   2,884,488
Reacquired Class A Shares                                     110        3,959
Change in unrealized gain
 on securities available
 for sale                                  188,064
Cash dividend paid
 ($.56 per share)             (655,598)

Balance-December 31, 1999  $56,677,650    $322,400        367,282  $11,974,962

Net Income                   3,954,896
Reacquired Class B Shares                                      96        3,732
Change in unrealized gain
 on securities available
 for sale                                 (182,410)
Cash dividend paid
 ($.56 per share)             (655,544)

Balance-December 31, 2000  $59,977,002    $139,900        372,378  $11,978,694

       See accompanying notes to Consolidated Financial Statements.

                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CASH FLOWS

                                               Years Ended December 31,
                                            2000          1999          1998
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                      $3,954,896    $2,884,488   $ (616,711)
  Adjustments to reconcile net income
   (loss) to net cash provided by
    operating activities
  Depreciation and amortization           2,519,496     1,916,970    1,478,379
  Minority interest in consolidated
   subsidiaries                             (68,295)     (112,979)     (61,958)
  Cumulative effect of change in
   accounting principle (excluding
   income tax effects)                          --          --         470,809
  Loss (Gain) on sale of property,
   plant and equipment                       58,288    (1,063,722)       8,153
  Gain on sale of investments               (17,684)      (67,244)    (242,227)
  Change in assets and liabilities
   Accounts receivable                      158,771    (3,375,842)  (1,336,156)
   Inventories                           (3,050,201)   (1,724,698)   3,459,802
   Prepaid income taxes                     (13,972)      422,656     (189,761)
   Prepaid expenses                         (17,204)      224,816      (28,654)
   Deferred income tax benefits            (711,566)     (474,799)    (306,812)
   Prepaid pension costs                    (36,548)      172,455      152,498
   Other assets                              22,548       (34,641)         --
   Accounts payable                        (145,589)    2,031,276      649,322
   Accrued income taxes                    (683,133)      683,133          --
   Other accrued expenses                   888,946       504,871      730,003
   Customer deposits                      1,406,432        57,767      219,428
   Deferred and other noncurrent
    liabilities                             130,101      (100,589)    (514,851)
     Net Cash Provided by Operating
      Activities                          4,395,286     1,943,918    3,871,264
CASH FLOWS FROM INVESTING ACTIVITIES
  Cash proceeds from sale of investments
   classified as available for sale       9,908,680     5,993,248    2,526,721
  Cash paid for purchase of investments
   classified as available for sale     (15,118,347)   (5,399,027)  (2,226,644)
  Increase in cash value of life
   insurance                               (313,370)     (321,163)    (277,839)
  Increase in note receivable              (445,574)     (451,261)    (456,329)
  Additions to goodwill                    (906,700)     (733,194)    (238,534)
  Cash proceeds from sale of property,
   plant and equipment                      100,206     1,382,716       28,170
  Cash paid for purchase of property,
   plant and equipment                   (3,157,814)   (3,260,719)  (1,477,340)
     Net Cash Used In Investing
      Activities                         (9,932,919)   (2,789,400)  (2,121,795)
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from bank loans                8,700,000          --             --
  Dividends paid in cash                   (655,544)     (655,598)    (659,709)
  Reacquired Class B common shares           (3,732)         --       (352,578)
  Subsidiary company stock reacquired
   from minority stockholders                  --         (13,238)     (29,976)
  Reacquired Class A common shares             --          (3,959)          --
   Net Cash Provided by (Used in)
    Financing Activities                  8,040,724      (672,795)  (1,042,263)
NET INCREASE (DECREASE) IN CASH           2,503,091    (1,518,277)     707,206

CASH, JANUARY 1                             209,277     1,727,554    1,020,348

CASH, DECEMBER 31                        $2,712,368    $  209,277   $1,727,554

           SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

  Cash paid for income taxes             $2,535,061    $1,625,400   $  167,050
  Cash paid for interest                 $  320,942    $     --     $       --

       See accompanying notes to Consolidated Financial Statements.


                     ALLEN ORGAN COMPANY AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 Significant Accounting Policies
     Background:
        Allen   Organ  Company  and  Subsidiaries  operate  in  four   industry
     segments:     Musical   Instruments,   Data   Communications,   Electronic
     Assemblies,  and Audio Equipment.  See Note 15 for additional  information
     on the operating activities of each segment.

     Principles of Consolidation:
        The  consolidated  financial statements include  the  accounts  of  the
     Allen   Organ  Company  and  the  following  subsidiaries.   All  material
     intercompany transactions have been eliminated.
           Subsidiary Name               Ownership %
         Allen Audio, Inc.                 100.00%
         Allen Diversified, Inc.           100.00%
         Allen Organ International, Inc.   100.00%
         Eastern Research, Inc.             92.52%
         Legacy Audio, Inc.                 75.00%
         Linear Switch Corporation          92.20%
         Rocky Mount Instruments, Inc.     100.00%
         VIR, Inc.                          98.84%

     Revenue and Cost Recognition:
        The  Company's  financial  statements are prepared  using  the  accrual
     method  of  accounting.   In accordance with this  method  of  accounting,
     revenue is recognized in the period in which it is earned and expenses are
     recognized  in the period in which they are incurred.  Revenue on  product
     shipments  is recognized when title has transferred pursuant  to  shipping
     terms  with the Company's customers.  All revenue and expenses  which  are
     applicable to future periods have been presented as deferred or prepaid on
     the accompanying financial statements.

     Off-Balance Sheet Risk:
        Financial  instruments that potentially subject the Company  to  credit
     risk  consist principally of short-term investments and trade receivables.
     The  Company  places substantially all of its investments in mutual  funds
     holding  federal, state and local government obligations and,  by  policy,
     limits the amount of credit exposure in any one investment.  The Company's
     Musical Instruments segment sells most of its products through established
     dealer  networks.   The Data Communications segment sells  most  of  their
     products  to  wholesale and retail distributors worldwide  and  under  OEM
     agreements  with  other data communications companies.   The  credit  risk
     associated with related receivables is limited due to the large number  of
     dealers and distributors and their geographic dispersion.

     Use of Estimates:
        The  preparation of financial statements in conformity  with  generally
     accepted  accounting principles requires management to make estimates  and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets and liabilities  at  the  date  of  the
     financial  statements  and the reported amounts of revenues  and  expenses
     during  the  reported  period.  Actual results  could  differ  from  those
     estimates.

     Investments:
        The  Company accounts for its short-term investments in accordance with
     Statement  of  Financial  Accounting Standards  No.  115,  Accounting  for
     Certain  Investments in Debt and Equity Securities.  Management determines
     the  appropriate  classification of its investments  in  debt  and  equity
     securities  at the time of purchase and reevaluates such determination  at
     each balance sheet date.

     Inventories:
        Inventories  are  valued  at the lower of  cost  or  market.   Cost  is
     determined  using the first-in, first- out (FIFO) method for substantially
     all inventories.

     Property, Plant and Equipment:
        Property,  plant  and  equipment are stated at cost.   Depreciation  is
     computed  over  estimated useful asset lives using both straight-line  and
     accelerated  methods for financial reporting and accelerated  methods  for
     tax reporting.

     Goodwill:
        Goodwill  represents the excess of cost over the net assets of acquired
     subsidiaries.  Goodwill is amortized on a straight-line basis over various
     periods  generally from 5 - 20 years and is presented net  of  accumulated
     amortization  of $1,837,816 and $1,275,630 at December 31, 2000  and  1999
     respectively.   The  carrying  value of  goodwill  for  each  business  is
     continually  reviewed to assess its recoverability from future  operations
     of  the  acquired subsidiaries, based on future cash flows  (undiscounted)
     expected  to  be  generated by such operations.  Any impairment  in  value
     indicated  by  the assessment would be computed based on  discounted  cash
     flows and charged against current operations.

     Income Taxes:
        Income  taxes are provided for the tax effects of transactions reported
     in  the  financial  statements and consist of  taxes  currently  due  plus
     deferred taxes.  Deferred taxes are recognized for differences between the
     basis  of  assets and liabilities for financial statement and  income  tax
     purposes.

     Research and Development:
        Research  and  development  expenditures  are  charged  to  expense  as
     incurred.

     Stock-Based Compensation:
        The  Company accounts for its stock-based compensation plans using  the
     accounting  prescribed  by Accounting Principles  Board  Opinion  No.  25,
     Accounting  for  Stock  Issued to Employees.  Since  the  Company  is  not
     required  to adopt the fair value based recognition provisions  prescribed
     under Statement of Financial Accounting Standards No. 123, Accounting  for
     Stock-Based  Compensation,  it  has  elected  only  to  comply  with   the
     disclosure requirements set forth in the Statement.  (See Note 17.)

     Change in Accounting Policies:
        Effective  January  1, 1998, the Company adopted the  AICPA  Accounting
     Standards  Executive Committee Statement of Position, 98-5,  Reporting  on
     the  Costs of Start-up Activities, (SOP 98-5).  In accordance with SOP 98-
     5,  costs  associated  with start-up activities, including  organizational
     costs,  should be expensed as incurred.  The effect of the change resulted
     in  a  decrease  to  net income for the year ended December  31,  1998  of
     $287,809  (net  of  taxes of $183,000).  These amounts were  a  result  of
     unamortized organizational costs associated with the subsidiaries  in  the
     Data Communications and Audio Equipment segments.

NOTE 2 Sale of Manufacturing Facility
        In  April  1999  the Company sold its manufacturing  plant  located  in
     Rocky  Mount, North Carolina for $1,360,000 (net of selling expenses)  and
     recognized  a gain on the sale of approximately $1,068,000.   The  Company
     announced the closing of this facility in October 1998 at which  time  the
     Company  accrued termination costs of $415,000 all of which has been  paid
     as  of  December 31, 2000.  The Company ceased operations at this facility
     effective  March 31, 1999 and consolidated all of its Musical  Instruments
     production into its manufacturing facility in Macungie, PA.

NOTE 3  Investments

       The  cost  and  fair value of investments in debt and equity  securities
       are as follows:


                                             Gross       Gross
                                Amortized  Unrealized  Unrealized       Fair
                                  Cost       Gains       Losses         Value

      December 31, 2000
      Available for sale
      Equity securities        $   129,315  $   --     $ 100,067  $    29,248
      Mutual Funds
        Short Term Gov't Funds  13,345,217   138,061        --     13,483,278
        Municipal Bond Funds     7,769,342    68,453          57    7,837,738
        Equity Funds             3,229,923   233,541     119,351    3,344,113
      Totals                   $24,473,797  $440,055    $219,475  $24,694,377

      December 31, 1999
      Available for sale
      Equity securities        $   129,311  $    218    $ 88,966  $    40,563
      Mutual Funds
        Short Term Gov't Funds   9,854,584      --        97,841    9,756,743
        Municipal Bond Funds     5,873,745      --       211,713    5,662,032
        Equity Funds             2,211,262   895,833        --      3,107,095
      U.S. Treasury Bills        1,083,000      --          --      1,083,000
      Totals                   $19,151,902  $896,051    $398,520  $19,649,433

        Marketable  debt  securities have an average  contractual  maturity  of
     approximately 1 year or less.
        Realized gains and losses are determined based on the original cost  of
     these  investments using a first-in, first-out method.  During 2000,  1999
     and 1998, sales proceeds and gross realized gains and losses on securities
     classified as available for sales were:

                                  2000           1999          1998

     Sales proceeds           $9,908,680     $5,993,248     $2,526,721

     Gross realized losses    $   37,974     $   60,606     $      --

     Gross realized gains     $   55,658     $  127,850     $  242,227

        The  change in net unrealized holding gains on securities available for
     sale  in the amount of $276,948, $285,677, and $8,697 net of deferred  tax
     expense  of  $94,538,  $97,613, and $2,835  has  been  included  in  other
     comprehensive income in stockholders' equity for the years ended  December
     31, 2000, 1999, and 1998, respectively.

NOTE 4 Inventories
                                                   December 31,
                                                2000        1999
           Finished goods                  $ 5,950,327   $ 5,915,057
           Work in process                   6,172,954     4,803,969
           Raw materials                     7,684,892     5,996,302
            Totals                         $19,808,173   $16,715,328

           Inventory is net of allowance for obsolete and slow moving items  of
       $2,451,587 and $2,214,159 at December 31, 2000 and 1999, respectively.
           The  Company also maintains an inventory of various parts to be used
       to  service musical instruments as future needs arise which are reported
       as  a  noncurrent asset and are net of allowance for obsolete  and  slow
       moving items of $196,000 at December 31, 2000 and 1999.

NOTE 5 Property, Plant and Equipment
                                                                      Estimated
                                                December 31,            Useful
                                               2000         1999         Lives
           Land and improvements          $ 2,407,298  $ 2,369,994      10 yrs
           Buildings and improvements       8,955,230    8,636,998    2-40 yrs
           Machinery and equipment          9,993,291    8,629,366    5-10 yrs
           Office furniture and equipment   4,341,718    3,283,352     3-8 yrs
           Vehicles                           164,244      194,087       4 yrs
            Sub-total                      25,861,781   23,113,797
           Less accumulated depreciation   13,338,648   11,684,624
            Total                         $12,523,133  $11,429,173

           Depreciation   expense   charged  to  operations   was   $1,897,715,
       $1,424,189 and $1,044,393 in 2000, 1999 and 1998 respectively.

NOTE 6 Note Receivable
           The  Company  has  entered  into  two  Split-Dollar  Life  Insurance
       agreements  with  its  President who is the insured  and  owner  of  the
       policies.  The policy owner shall pay the portion of the premiums  equal
       to  the  value  of  the economic benefit determined in  accordance  with
       applicable  IRS Revenue Rulings.  The Company shall pay the  balance  of
       the net premiums, which approximates $450,000 annually.
           The  agreements  provide  that  the Company  shall  be  entitled  to
       recover the amount of premiums paid out of the built up cash value  upon
       termination  of the agreement or out of the proceeds upon the  death  of
       the  insured.   As  security for repayment the Company is  a  collateral
       assignee  of the policy to the extent of any such unreimbursed premiums.
       The   Company  is  also  secured  by  the  personal  obligation  of  its
       President.   The  note receivable exceeds the cash  surrender  value  of
       these  policies by approximately $483,000 and $415,000 at  December  31,
       2000 and 1999, respectively.

NOTE 7 Income Taxes
           The provision for income taxes consists of the following:
                  2000                    1999                    1998
         Currently                Currently               Currently
          Payable     Deferred     Payable    Deferred    Payable     Deferred

Federal  $1,392,000 $ (251,000)  $1,620,000  $ (658,000)  $(151,000) $(420,000)
State       344,000   (366,000)     410,000    (148,000)    125,000   (394,000)
 Total   $1,736,000 $ (617,000)  $2,030,000  $ (806,000)  $ (26,000) $(814,000)

           The  total  1998 tax benefit of $840,000 is included in current  and
       deferred taxes on income and in the tax effect of the cumulative  effect
       of  change  in  accounting principle on the consolidated  statements  of
       income.
           A  reconciliation  of  the  provision  for  income  taxes  with  the
       statutory rate follows:
                          2000               1999                1998
  Statutory provision for
   federal income tax  $1,702,000  34.0%  $1,359,000  34.0%  $ (516,000)  34.0%
  State taxes, net of
   federal tax benefits   (14,000) (0.3)      73,000   1.8     (177,000)  11.7
  Tax credits            (325,000) (6.5)    (179,000) (4.5)        --      --
  Tax-exempt income      (106,000) (2.1)    (110,000) (2.8)     (97,000)   6.4
  Exempt income of foreign
   sales corporation     (151,000) (3.0)     (77,000) (1.9)     (61,000)   4.0
  Other items, net         13,000   0.3       58,000   1.5       11,000   (0.7)
  Effect of change in
   state valuation allowance
    of deferred tax asset    --     --       100,000   2.5         --      --
     Total             $1,119,000  22.4%  $1,224,000  30.6%  $ (840,000)  55.4%

           The  following temporary differences give rise to the net  deferred
     tax asset at December 31, 2000 and 1999.
                                                       2000           1999
  Deferred Tax Liabilities
   Excess of tax depreciation/amortization
    over book depreciation/amortization            $ (398,666)    $ (389,932)
   Excess of pension expense for tax
    purposes over book                               (188,722)      (172,872)
   Unrealized gain not recognized for tax purposes    (80,806)      (184,206)
     Total Deferred Tax Liabilities                  (668,194)      (747,010)
  Deferred Tax Assets
   Deferred compensation not recognized
    for tax purposes                                  118,082         66,612
   Net operating loss carry forwards                  888,981        740,368
   Warranty Reserve                                    70,275           --
   Reserve for Bad Debts                              163,008        113,714
   Inventory Reserve                                1,021,025        801,927
    Sub-total                                       2,261,371      1,722,621
  Valuation Allowance                                (100,000)      (194,000)
    Total Deferred Tax Assets                       2,161,371      1,528,621
      Net Deferred Tax Asset                       $1,493,177     $  781,611

           Deferred taxes are included in the Company's financial statements as
     follows:
                                                       2000            1999
        Current deferred tax asset                 $1,094,701     $   658,869
        Non-current deferred tax asset (liability)    398,476         122,742
         Net deferred tax asset                    $1,493,177     $   781,611

           The  Company  has  available at December  31,  2000,  approximately
     $979,838  of unused federal and $9,466,045 of unused state net  operating
     loss carry forwards that may be applied against future taxable income and
     that expire in various years from 2002 to 2020.
           At  December  31,  1999  the Company has a valuation  allowance  of
     $100,000  for  the  deferred tax assets relating to  the  uncertainty  of
     realizing state net operating loss carry forwards.  The decrease  in  the
     2000  valuation  allowance is related to the write off of  Linear  Switch
     Corporation's  net  operating loss carryforwards, which  were  previously
     fully reserved.

NOTE 8 Notes Payable - Bank
           On  June 30, 2000 Eastern Research, Inc. (ERI), a subsidiary of the
     Company,  entered into a Loan and Security Agreement with  a  bank.   The
     agreement provides ERI with two credit facilities.  The first is  a  term
     loan  in  the  amount  of $7,000,000 due on July 1, 2001,  interest  only
     payable  monthly  at the LIBOR Market Index Rate plus 1.25%  (7.9450%  at
     December 31, 2000).  The proceeds of the term loan were received in  July
     2000 and all were used to repay a portion of the inter-company loans  due
     to  Allen  Organ Company.  The second facility is a $5,000,000  revolving
     line  of  credit, due on July 1, 2001, interest payable  monthly  at  the
     LIBOR  Market Index Rate plus 1.50% (8.1950% at December 31, 2000).   The
     line  of  credit  has  been obtained to provide ERI with  future  working
     capital.  Outstanding borrowings under the line of credit were $1,700,000
     at  December 31, 2000.  Both credit facilities are secured by the  assets
     of  Eastern Research, Inc. and have been guaranteed by Allen Diversified,
     Inc. and Allen Organ Company.

NOTE 9 Other Accrued Expenses
                                                          December 31,
                                                       2000         1999
             Accrued salaries and commissions      $  996,254   $  722,336
             Accrued additional purchase price        906,700      733,319
             Accrued plant closing costs                --          44,588
             Other                                    913,148      426,913
              Total                                $2,816,102   $1,927,156

NOTE 10    Commitments and Contingencies
           As  of December 31, 2000, the Company is contingently liable for  a
     maximum  amount  of  approximately  $1,636,849  in  connection  with  the
     financing arrangements of certain customers.
           Under  the terms of an agreement with the wife of the late Chairman
     and principal shareholder, the Company may be required to purchase within
     eight  months of her death, at the option of her personal representative,
     an amount of Class B Common Shares then owned by her or includable in her
     estate for Federal Estate Tax purposes sufficient to pay estate taxes and
     costs,  subject to the limitations of Section 303 of the Internal Revenue
     Code.   At  December  31,  2000,  the shareholder  owned  or  would  have
     includable  in  her estate 261,072 shares of Class B Common  Stock.   The
     Company has purchased life insurance on the life of the shareholder  with
     a  face  value of $6,000,000.  While the potential obligation related  to
     this  agreement  is in large part dependent on the value  placed  on  the
     Company's  stock  for estate tax purposes, the Company believes  that  it
     would  have  access  to sufficient resources to fund this  obligation  if
     necessary.
           In connection with the purchase of VIR, Eastern Research and Linear
     Switch,  the Company agreed to pay a contingent purchase price  equal  to
     4.5%  of  the sales of these Companies in excess of $7,000,000  per  year
     through  December 2000.  The total additional payment for 2000, 1999  and
     1998  amounted  to  $906,700, $733,319 and $238,535,  respectively.   The
     agreement  provides  that the total of these payments  shall  not  exceed
     $2,000,000 and this limit was met during 2000.
           The  Company's Data Communications segment leases its  offices  and
     production facility under non-cancelable operating leases which expire at
     various  dates through August 2005.  These leases include renewal options
     for  periods  ranging up to ten years with increases  of  lease  payments
     based on changes in the Consumer Price Index.  Rent expense was $440,971,
     $321,368  and  $230,447  for 2000, 1999 and 1998, respectively.   Minimum
     annual rent payments for the operating leases are as follows:

            2001                     $ 388,587
            2002                       315,229
            2003                       103,054
            2004                       103,054
            2005                        60,115
             Total                   $ 970,039

NOTE 11    Retirement Plans
           The  Company  sponsors two noncontributory defined benefit  pension
     plans,  which  cover substantially all of its employees.   Salaried  plan
     benefits  are  generally based on the employee's  years  of  service  and
     compensation  levels.  Hourly plan benefits are based on various  monthly
     amounts for each year of credited service.  The Company's funding  policy
     is  to  contribute  amounts to the plans sufficient to meet  the  minimum
     funding requirements set forth in the Employee Retirement Income Security
     Act of 1974, plus such additional amounts as the Company may determine to
     be  appropriate from time to time.  Plan assets are comprised principally
     of   cash   equivalents,  U.S.  Government  obligations,   fixed   income
     securities, and equity securities.
           Following are reconciliations of the pension benefit obligation and
     the value of plan assets:

                                          2000          1999           1998
   Pension benefit obligation
      Balance, beginning of year      $15,065,101   $14,923,318   $13,222,392
      Service cost                        324,423       380,650       310,909
      Interest cost                     1,024,441       999,772       983,147
      Benefits paid to participants      (976,612)     (812,359)     (792,052)
      Gain (loss) on updated
       data/assumptions                  (243,120)     (426,280)    1,198,922
        Balance, end of year          $15,194,233   $15,065,101   $14,923,318

   Plan assets
      Fair value, beginning of year   $17,477,871   $15,611,950   $14,764,799
      Actual investment returns          (811,632)    2,678,280     1,639,203
      Benefits paid to participants      (976,612)     (812,359)     (792,052)
        Fair value, end of year       $15,689,627   $17,477,871   $15,611,950

           The Funded status of the plans were as follows:
                                                    December 31,
                                            2000         1999          1998
      Excess of the value of plan
       assets over the benefit
        obligation                    $   495,394   $ 2,412,770   $   688,632
      Unrecognized prior service cost        --          73,323       147,313
      Unrecognized net transition
       liability (asset)                  (72,012)     (144,020)     (216,028)
      Unrecognized net actuarial
       loss (gain)                         83,320    (1,871,919)       22,692
        Prepaid benefit cost          $   506,702   $   470,154   $   642,609

           The following weighted-average rates were used:

      Discount rate on the benefit obligation   7.0%      7.0%        6.75%
      Rate of return on plan assets             8.0%      8.0%        8.0%
      Rate of long-term compensation increase   6.0%      6.0%        6.0%

           Pension expense is comprised as follows:
                                           2000          1999          1998

      Service cost                    $   324,423   $   380,650   $   310,909
      Interest cost                     1,024,441       999,772       983,147
      Expected return on plan assets   (1,357,306)   (1,209,949)   (1,143,540)
      Amortization of net gain
       from prior periods                 (29,421)         --           --
      Amortization of unrecognized
       prior service cost                  73,323        73,990        73,990
      Amortization of transition asset    (72,008)      (72,008)      (72,008)
        Net Pension Cost              $   (36,548)  $   172,455   $   152,498

           The  foregoing net amounts regarding the pension benefit  obligation
       and  the  value  of  plan  assets are based on  a  combination  of  both
       overfunded  and  underfunded plans.  The aggregate amounts  relating  to
       underfunded plans are as follows:

                                                     December 31,
                                           2000        1999           1998
      Projected benefit obligation    $ 8,078,231   $   --        $ 7,798,136
      Accumulated benefit obligation    7,167,545       --          6,708,396
      Fair value of plan assets         7,827,166       --          7,707,085

           The  Company  provides  a  401(k) deferred compensation  and  profit
       sharing  plan  for the benefit of eligible employees.  The  plan  allows
       eligible  employees  to  defer a portion of their  annual  compensation,
       pursuant  to  Section  401(k)  of the Internal  Revenue  Code.   Company
       profit-sharing   contributions  to  the  plan   are   discretionary   as
       determined   by   the  Company's  board  of  directors.    The   Company
       contributions were $125,374, $93,388 and $112,981 to the plans in  2000,
       1999 and 1998 respectively.
           During   1999,   the  Company  established  supplemental   executive
       retirement  plans (deferred compensation) for 3 of its officers.   These
       plans  provide for discretionary company contributions, which vest  over
       a  5  year period, accrue interest at the prime rate, not to exceed  9%,
       and are payable upon the executive's death or retirement.

NOTE 12    Deferred and Other Noncurrent Liabilities
                                                    December 31,
                                                  2000        1999
           Deferred compensation expense       $ 250,016    $ 179,915
           Other Noncurrent Liabilities           60,000         --
            Total                              $ 310,016    $ 179,915

NOTE 13    Earnings Per Share
           Earnings  per  share were computed using 1,170,618 shares  in  2000,
       1,170,719  shares  in 1999, and 1,178,064 shares in 1998,  the  weighted
       average  number  of  shares outstanding during each year.   The  Company
       does not have any dilutive equity instruments.

NOTE 14    Export Sales
           In  2000,  1999  and  1998,  net sales by  the  Musical  Instruments
       segment include export sales, principally to Canada, Europe and the  Far
       East  of  $3,635,123,  $3,563,383, and  $3,676,981,  respectively.   Net
       sales   by   the  Data  Communications  segment  include  export   sales
       principally  to  Europe  and  the  Far  East  of  $7,764,597  for  2000,
       $1,146,137  for 1999, and $1,261,029 for 1998.  Net sales by  the  Audio
       Equipment  segment include export sales principally to  Europe  and  the
       Far East of $188,970 for 2000, $87,535 for 1999 and $92,526 for 1998.

NOTE 15     Industry Segment Information
           The   Company's   operations  are  classified  into  four   industry
       segments:   Musical   Instruments,   Data   Communications,   Electronic
       Assemblies,  and  Audio Equipment.  The Musical Instruments  segment  is
       comprised   of   operations   principally  involved   in   the   design,
       manufacture,  sale  and  distribution  of  electronic  keyboard  musical
       instruments, primarily digital organs and related accessories.   Musical
       instruments are sold primarily to retail distributors worldwide.
           The   Data  Communications  segment  is  involved  in  the   design,
       manufacture,  sale  and  distribution of data communications  equipment.
       Data  communications products are sold primarily to wholesale and retail
       distributors worldwide and under OEM agreements with several customers.
           The  Electronic  Assemblies segment is involved in the  manufacture,
       sale  and  distribution of electronic assemblies for  outside  customers
       used   primarily  as  control  devices  and  other  circuitry  in  their
       products.   Subcontract  assembly services  are  provided  primarily  to
       industrial concerns in Pennsylvania and New Jersey.
           The  Audio Equipment segment is involved in the design, manufacture,
       sale  and  distribution  of high quality speaker  cabinets  and  related
       equipment  for  hi-fi  stereo and home theater  applications.   Legacy's
       products  are sold worldwide directly to individual customers  for  home
       use  with a lesser percentage distributed through dealer audition sites.
       During  1999  the Company established the subsidiary Allen  Audio,  Inc.
       and  introduced  a  line of Public Address system products,  which  have
       initially been targeted at small to mid-sized churches, auditoriums  and
       similar customers.
           Following is a summary of segmented information for 2000,  1999  and
       1998.
                                                      December 31,
                                            2000         1999         1998
       Net Sales to Unaffiliated Customers
        Musical Instruments              $28,057,832  $27,332,745  $25,425,112
        Data Communications               33,321,342   23,295,979   12,297,955
        Electronic Assemblies              8,624,199    5,650,917    4,727,975
        Audio Equipment                    2,512,835    1,739,101    2,515,033
         Total                           $72,516,208  $58,018,742  $44,966,075

       Intersegment Sales
        Musical Instruments              $   294,146  $   109,667  $   136,123
        Data Communications                  120,712      174,516          594
        Electronic Assemblies                 15,577       37,742      495,266
        Audio Equipment                       35,563       58,253      148,573
         Total                           $   465,998  $   380,178  $   780,556

       Income (Loss) from Operations
        Musical Instruments              $ 5,029,871  $ 2,950,251  $   795,773
        Data Communications               (2,063,221)    (805,738   (3,397,020)
        Electronic Assemblies              1,284,806      430,031      326,609
        Audio Equipment                     (429,386)    (761,688)      (9,846)
         Total                           $ 3,822,070  $ 1,812,856  $(2,284,484)

       Identifiable Assets
        Musical Instruments              $18,693,577  $18,912,763  $19,777,418
        Data Communications               31,011,641   19,764,425   11,532,523
        Electronic Assemblies              4,444,349    3,658,915    3,501,492
        Audio Equipment                    2,658,110    2,209,810    2,259,185
         Sub-total                        56,807,677   37,070,618   39,541,023
        General corporate assets          24,000,065   22,920,157   24,919,335
         Total                           $80,807,742  $67,466,070  $61,989,953

        Capital Expenditures
         Musical Instruments             $   837,828  $ 1,268,726  $   866,868
         Data Communications               2,297,046    1,908,323      542,030
         Electronic Assemblies                 5,320        5,670       59,850
         Audio Equipment                      17,620       78,000        8,592
          Total                          $ 3,157,814  $ 3,260,719  $ 1,477,340

        Depreciation and Amortization
         Musical Instruments             $   683,673  $   697,587  $   614,670
         Data Communications               1,632,861      992,933      618,380
         Electronic Assemblies               120,750      145,948      171,912
         Audio Equipment                      82,212       80,502       73,417
          Total                          $ 2,519,496  $ 1,916,970  $ 1,478,379

        Income Tax Expense (Benefit)
         Musical Instruments             $ 1,984,000  $ 1,985,000   $  726,000
         Data Communications              (1,156,000)    (619,000)  (1,458,000)
         Electronic Assemblies               484,000      159,000      115,000
         Audio Equipment                    (193,000)    (301,000)     (40,000)
          Total                          $ 1,119,000  $ 1,224,000   $ (657,000)

           Intersegment  sales are generally priced at cost plus  a  percentage
       mark-up,  and  are generally thought to be marginally less  than  prices
       which  would be charged for the same product to unaffiliated  customers.
       Intersegment  sales  are  excluded  from  net  sales  reported  in   the
       accompanying  consolidated income statements.   Identifiable  assets  by
       segment  are  those  assets  that are used in the  Company's  operations
       within  that  segment.  General corporate assets consist principally  of
       cash and short-term investments.
           The  Electronic Assemblies segment derived 76% of its revenues  from
       three customers in 2000 and 68% of its revenues from three customers  in
       1999  and 1998. The Data Communications segment derived 16% and 13 %  of
       its  revenue from one customer in 2000 and 1998 respectively and 52%  of
       its   1999   revenue  from  three  customers.   The  Company's   Musical
       Instrument and Audio Equipment segments are not dependent on any  single
       customer.

NOTE 16    Investment Income

                                                    December 31,
                                           2000         1999        1998

       Interest Income                   $1,109,751  $  935,290    $ 887,338
       Dividend Income                      414,912     125,990       94,134
       Gain on Sale of Investments           17,684      67,244      242,227
        Total                            $1,542,347  $1,128,524   $1,223,699

NOTE 17    Stock Option Plans
           VIR,  Inc.  (VIR) and Eastern Research, Inc. (ERI) have  established
       employee  stock-based compensation plans to assist  them  in  attracting
       and  retaining  personnel.  The maximum number  of  these  subsidiaries'
       shares  that  may be issued under the plans approximates a 15%  interest
       in  each  of the respective companies.  Options are generally issued  at
       estimated  fair  market value.  The maximum term of  the  options  is  6
       years, and they generally vest equally over 4 years.
           As  of  December  31, 2000, total options issued  for  VIR  and  ERI
       represent   11%   and  15%,  respectively,  of  the   shares   currently
       outstanding.   Vested  options consist of 6% and  9%  of  the  currently
       outstanding shares of VIR and ERI, respectively.
           ERI  recognized compensation expense of $29,687 during 2000  related
       to  options  granted with an exercise price less than  the  fair  market
       value  on the date of grant. No compensation expense was recognized  for
       the  VIR  plan.  Had compensation cost been determined pursuant to  FASB
       Statement  No. 123, net income (loss) and earnings per share would  have
       been:

                                     2000        1999        1998
           Net income (loss)     $3,820,658   2,775,220   $(686,811)
           Earnings per share         $3.26       $2.37      $(0.58)

NOTE 18     Quarterly Financial Data (Unaudited)


                First        Second       Third         Fourth
   2000        Quarter       Quarter      Quarter       Quarter       Total
Net Sales    $16,808,032  $18,931,735   $17,850,297   $18,926,144  $72,516,208
Gross Profit   6,953,628    7,751,695     6,891,620     7,188,549   28,785,492
Net Income       869,852    1,356,195       658,528     1,070,321    3,954,896
Earnings
 per Share          0.74         1.16          0.56          0.91         3.38

   1999
Net Sales    $11,699,573  $13,887,775   $15,590,813   $16,840,581  $58,018,742
Gross Profit   3,637,359    4,878,932     6,107,161     6,601,775   21,225,227
Net Income
 (Loss)         (136,631)   1,044,946       741,718     1,234,455    2,884,488
Earnings (Loss)
 per Share         (0.12)        0.89          0.63          1.05         2.46

    1998
Net Sales    $10,227,291  $10,567,919   $11,812,748   $12,358,117  $44,966,075
Gross Profit   3,342,669    3,128,723     2,763,234     3,860,980   13,095,606
Income before
 cumulative effect
 of Accounting
 Change          100,568     (280,643)     (599,701)      450,874     (328,902)
Cumulative effect
 on prior
 years of SOP 98-5                                       (287,809)    (287,809)
Net Income
 (Loss)          100,568     (280,643)     (599,701)      163,065     (616,711)
Earnings (Loss) per Share:
Income before
 cumulative effect
 of Accounting
 Change             0.09        (0.24)        (0.51)         0.38        (0.28)
Cumulative effect
 on prior
 years of SOP 98-5                                          (0.24)       (0.24)
Net Income
 (Loss)             0.09        (0.24)        (0.51)         0.14        (0.52)

                                 PART III

Item 10.    Directors and Executive Officers of the Registrant.

                 (a)            Identification of Directors
                                                               Time Period
                              Date Term                         Position
Name                           Expires       Age  Position         Held

Steven Markowitz             Next Annual     47   Director     Since 1980
                           Meeting in 2001
Eugene Moroz                 Next Annual     77   Director     Since 1968
                           Meeting in 2001
Leonard W. Helfrich (1)      Next Annual     71   Director     1964 - 1968 and
                           Meeting in 2001                     1972 to present
Orville G. Hawk (1)          Next Annual     83   Director     Since 1989
                           Meeting in 2001
Albert F. Schuster (1)       Next Annual     81   Director     Since 1989
                           Meeting in 2001
Martha Markowitz             Next Annual     79   Director     Since 1991
                           Meeting in 2001
Jeffrey L. Schucker (1)      Next Annual     46   Director     Since July 1996
                           Meeting in 2001
Ernest Choquette             Next Annual     47   Director     Since April 1998
                           Meeting in 2001

   (1)  Audit Committee member.

           (b)  Identification of Executive Officers.
                                                               Time Period
                              Date Term                         Position
Name                           Expires       Age  Position         Held
Steven Markowitz             Next Annual     47   President        1990 to
                           Meeting in 2001                         present
Barry J. Holben              Next Annual     48   Vice President   October 1995
                           Meeting in 2001                         to present
Dwight A. Beacham            Next Annual     54   Vice President   October 1995
                           Meeting in 2001                         to present
Nathan S. Eckhart            Next Annual     37   Treasurer,       May 1996
                           Meeting in 2001        Secretary        to present

           (c)  Identification of Certain Significant Employees.

                       Not required to be answered.

           (d)  Family Relationships.

                        Except  for Martha Markowitz and Steven  Markowitz,
                  who  are  mother and son, there is no family relationship
                  between any officers or directors of the Company.

           (e)  Business Experience.

                        (1)  Steven Markowitz and Dwight Beacham, have
                  been   employees   of  the  Company   in   executive
                  capacities for at least the last five years.
                             Mr.  Holben  has  been  employed  by  the
                  Company  since 1989, spending two years  in  product
                  development  and  then  serving  in  various   sales
                  capacities.
                             Mr.  Eckhart  has been  employed  by  the
                  Company   since   1993,   previously   serving    as
                  Controller.  Prior to that time he was a manager for
                  a public accounting firm.
                             Mr. Moroz was employed by the Company for
                  over 50 years, having last held the position of Vice
                  President.  He retired from active employment in May
                  1998  and  continues  to  serve  on  the  Board   of
                  Directors.
                             Mr. Helfrich was employed by the Company
                  for  nearly  40 years as Vice President-Finance  and
                  Secretary   before  retiring  in  March   2000   and
                  continues to serve on the Board of Directors.
                             Mr. Hawk who has been retired more  than
                  five  (5)  years was formerly Chairman of the  Board
                  and President of First National Bank of Allentown.
                             Mr. Schuster is a church director of music
                  and prior to his retirement more than five (5) years
                  ago was a supervisor at Bethlehem Steel Corporation.
                             Mr. Schucker is currently  President  of
                  Middle  Market Capital Advisors, L.L.C.  (MMCA)  and
                  formerly  a  Vice  President  of  Meridian   Capital
                  Markets.   MMCA provides financial advisory services
                  to the Company from time to time.
                             Mr. Choquette has been a member of the law
                  firm of Stevens & Lee, Reading PA, for over 20 years
                  and   currently  serves  as  Co-Chairman  of   their
                  Corporate  Group.  Stevens & Lee serves  as  general
                  counsel to the Company.
                             Mrs.  Markowitz  is the widow  of  Jerome
                  Markowitz, the Company's founder, and represents the
                  family interests.

           (f)    Involvement  in  Certain  Legal   Proceedings   by
                  Directors or Officers.

                  None.

           (g)  Compliance with Section 16(a) of the Exchange Act.

                  No transaction required to be reported.

Item 11.    Executive Compensation.
                 Deleted paragraphs and/or columns are not required to be
                 answered.

             (b)  SUMMARY COMPENSATION TABLE:
                                        Annual Compensation      All Other
                                        Salary    Bonus         Compensation
Name and Principal   Position   Year       $        $                $

Steven A. Markowitz, President  2000     135,923     -            42,322 (1)
 (Chief Executive Officer)      1999     126,840     -            42,059
                                1998     105,115  17,000          35,558

Leonard W. Helfrich,            2000      38,970     -
  Vice President - Finance      1999     116,416     -
  (Secretary)                   1998      95,065  16,000


(1)-Value  of  Split Dollar Life Insurance.  See Note 7 to the accompanying
consolidated  financial  statements  for  additional  information  on  this
arrangement.

             (f)  Defined Benefit or Actuarial Plan Disclosure.

                   Estimated  Annual Benefit obtained from  2000  Actuarial
                   Valuation Report:

                  Steven A. Markowitz      $60,984        Age 47 (1)

                 (1)Amount shown is calculated from prior compensation to date
                    and estimated compensation to normal retirement age (65).

             (g)  Compensation of Directors:

                        Non-employee Directors receive  $350  for
                  each Board and committee meeting attended plus reasonable
                  expenses   in   connection  with  attendance.    Employee
                  Directors  receive no additional compensation  for  their
                  services as a Director.

             (h)        Employment Contracts and Termination  of
                  Employment and Change in Control Arrangements:

                        There are no employment contracts between
                  the  Company and any of the Company's Executive Officers.
                  The Company has established an Executive Bonus Program in
                  the  form of executive supplemental retirement plans  for
                  the  benefit of Mr. Beacham, Mr. Holben and Mr.  Eckhart.
                  These    plans   provide   for   discretionary    company
                  contributions,  which vest over a 5 year  period,  accrue
                  interest  at  the prime rate, not to exceed 9%,  and  are
                  payable upon the executives death or retirement.

             (j)        Additional Information with  Respect  to
                  Compensation    Committee    Interlocks    and    Insider
                  Participation in Compensation Decisions:

                  (1)      Nathan    S. Eckhart,  Treasurer and  Secretary
                       and  Ernest  J. Choquette,  Director of the Company,
                       serve  on  the Compensation  Committee of the  Board
                       of Directors whose  function  is to set the compensation
                       of  the President.  The compensation of all other
                       employees is set by or at the direction of the
                       President.


Item 12.     Security Ownership of Certain Beneficial Owners and Management

             (a)   Voting securities of the registrant owned of  record  or
             beneficially by each person who owns of record, or is known by
             the registrant to own beneficially, more than 5 percent of any
             class  of  such securities.  Class A Common Shares  constitute
             the  only  securities with voting rights.  Information  as  of
             February 28, 2001.
                                          Amount and
                                          Nature of
            Names and           Title of  Beneficial   % of
            Addresses             Class   Ownership    Class
            Jerome Markowitz        A     81,531       97.06%
            Trust (2)                     (1)
            821 N. 30th St.
            Allentown, PA

            (1)  Sole voting and investment power

            (2)   The  shares are held by Trustees under an Inter  Vivos
               Trust  established by Mr. Markowitz, who died  in  February,
               1991,  for the benefit of his family, principally his widow,
               Martha   Markowitz.   The  Trustees  are  Steven  Markowitz,
               President  and  a  Director  of  the  Company,  and   Martha
               Markowitz, a Director of the Company.

              (b) Each class of equity securities of the registrant  or  any
           of   its   parents   or  subsidiaries,  other  than   directors'
           qualifying shares, beneficially owned directly or indirectly  by
           all  directors  naming them and directors and  officers  of  the
           registrant, as a group, without naming them.  Information as  of
           December 31, 2000.

                                                    Percent  Percent
                                        Nature of    of       of
                 Class     Class        Beneficial Class    Class
Directors          A         B          Ownership    A        B

Steven Markowitz     58                 (1) (3)      .07 %
                           13,562       (1) (3)               1.25%
                81,531*                 (2) (4)    97.06 %
                        242,016*        (2) (4)              22.27%

Eugene Moroz                6,290       (1) (3) as
                                        to 6,290
                            6,000       (2) (4) as
                                        to 6,000              1.13%

Leonard W. Helfrich           346       (2) (4)                .03%

Orville G. Hawk                50       (2) (4)                .005%

Martha Markowitz           19,056       (1) (3)               1.75%
                81,531*                 (2) (4)    97.06 %
                         242,016*       (2) (4)              22.27%


                                                    Percent  Percent
All Directors                                        of       of
and Officers     Class     Class                   Class    Class
as a Group         A         B                       A        B

     7            81,589**  287,320**               97.13%** 26.43%


              (1)   Sole voting power
              (2)   Shared voting power
              (3)   Sole investment power
              (4)   Shared investment power

                     *     Shares owned by the Jerome Markowitz Trust  for
                  which   Martha  Markowitz  and  Steven  Markowitz,   Co-
                  Trustees, have shared voting and investment power and of
                  which  Martha  Markowitz is the primary beneficiary  and
                  Steven Markowitz, one of the residuary beneficiaries.

                    **   The shares held by the Jerome Markowitz Trust are
                  not duplicated in the totals for the Class A and Class B
                  Shares.

     (c)      Changes in Control.  Not required to be answered.


Item 13.    Certain Relationships and Related Transactions

            See  Note  10 to Financial Statements, concerning an  agreement
            between  the  Company and Martha Markowitz, a Director  of  the
            Company.

                                  PART IV

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K

            (a)  (1)  Financial Statements
                       The  following consolidated financial statements  of
                 Allen  Organ Company and its subsidiaries are included  in
                 Part II, Item 8:
                      Independent Auditors' Reports.
                       Consolidated Balance Sheets as of December 31,  2000
                 and 1999.
                      Consolidated Statements of Income for the years ended
                 December 31, 2000, 1999, and 1998.
                       Consolidated  Statement of Changes in  Stockholders'
                 Equity  for the years ended December 31, 2000,  1999,  and
                 1998.
                       Consolidated Statements of cash flows for the  years
                 ended December 31, 2000, 1999, and 1998.
                      Notes to Consolidated Financial Statements.

                        The   individual   financial  statements   of   the
                 Registrant's subsidiaries have been omitted, as  they  are
                 all  included  in  the  consolidated financial  statements
                 referred to above.

                 (a)  (2) Financial Statement Schedules

                       Schedule II.  Valuation and Qualifying Accounts  for
                 the three years ended December 31, 2000.

                       Schedules   other  than   those
                  listed  above  are  omitted  because  they   are
                  either  not required, are not applicable or  the
                  required   information  is  presented   in   the
                  Consolidated Financial Statements.

                 (a)  (3) Exhibits
                      Exhibit No.    Description
                      2(4)      Plan of acquisition
                      3.1(1)    Articles of Incorporation as amended
                      3.2(2)    Bylaws, as amended
                      10.2(3)   Agreement of Amendment between the Company
                                and Martha Markowitz
                               10.3(5)         Executive Bonus Program  and
                               Endorsement  Split  Dollar  Life   Insurance
                               Agreements  between the Company  and  Dwight
                               A.  Beacham, Nathan S. Eckhart and Barry  J.
                               Holben
                      21       Subsidiaries of the registrant
                      99.1     Audit Committee Charter

                1.   Incorporated  by  reference  to  the  exhibit
                     filed with the Registrants Annual Report on Form  10-K
                     for the year ended December 31, 1984.
                2.   Incorporated  by  reference  to  the  exhibit
                     filed  with the Registrants Quarterly Report  on  Form
                     10-Q for the period ended September 30, 1996.
                3.   Incorporated  by  reference  to  the  exhibit
                     filed with the Registrants Annual Report on Form  10-K
                     for the year ended December 31, 1992.
                4.   Incorporated by reference to the exhibit filed with the
                     Registrants Current Report on form 8-K dated
                     August 1, 1995.
                5.   Incorporated by reference to the exhibit filed with the
                     Registrants Quarterly Report on Form 10-Q for the period
                     ended September 30, 1999.

                 (b)   Reports  on  Form  8-K.  None  filed  during  fourth
                 quarter of 2000.

SIGNATURES

Pursuant  to  the  requirements of Section 13 or 15 (d) of  the  Securities
Exchange  Act  of 1934, the registrant has duly caused this  report  to  be
signed on its behalf by the undersigned, thereunto duly authorized.


                                     ALLEN ORGAN COMPANY



Date: March 13, 2001                             /s/ STEVEN A. MARKOWITZ
                                                  Steven A. Markowitz
                                                  Chief Executive Officer,
                                                  President and Director



Date:  March 13, 2001                            /s/NATHAN S. ECKHART
                                                  Nathan S. Eckhart
                                                  Treasurer, Secretary, and
                                                  Principal Accounting Officer


Date:  March 13, 2001                             /s/LEONARD W. HELFRICH
                                                  Leonard W. Helfrich
                                                  Director


Date:  March 13, 2001                             /s/JEFFREY L. SCHUCKER
                                                  Jeffrey  L. Schucker
                                                  Director

     Allen Organ Company and Subsidiaries

     Schedule II - Valuation and Qualifying Accounts

     For the Years Ended December 31, 2000, 1999 and 1998


                                           Additions
                   Balance at  Additions    Charged    Write Offs    Balance
                    Beginning   Charged     to Other      And         at End
    Description      Of Year   to Expense    Accounts   Recoveries    Of Year

  Year Ended
    December 31, 2000
  Allowance for
   Doubtful Accounts $ 300,823   $174,034  $    -      $   (46,066)  $ 428,791
  Inventory Allowance
   for Obsolete
   and Slow
   Moving Items      2,410,159    545,857       -         (308,429)  2,647,587
  Valuation
   Allowance
   Deferred Tax
   Asset               194,000       -          -          (94,000)    100,000

  Year Ended
    December 31, 1999
  Allowance for
   Doubtful Accounts   191,057    109,766       -              -       300,823
  Inventory Allowance
   for Obsolete
   and Slow
   Moving Items        773,272  1,636,887       -              -     2,410,159
  Valuation
   Allowance
   Deferred Tax
   Asset                94,000    100,000       -              -       194,000

  Year Ended
   December 31, 1998
  Allowance for
   Doubtful Accounts    30,000    161,057       -              -       191,057
  Inventory Allowance
   for Obsolete
   and Slow
   Moving Items         64,800    708,472       -              -       773,272
  Valuation
   Allowance
   Deferred Tax
   Asset                   -       94,000       -              -        94,000