SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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

         For the quarterly period ended June 30, 2001

                                       OR

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

         For the transition period from ___________ to __________


Commission File Number  0-27266
                        -------


                           WESTELL TECHNOLOGIES, INC.
             (Exact name of registrant as specified in its charter)

                     DELAWARE                                  36-3154957
          (State or other jurisdiction of                   (I.R.S. Employer
          incorporation or organization)                 Identification Number)

     750 N. COMMONS DRIVE, AURORA, IL                           60504
    (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code   (630) 898-2500

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report)


Indicate by check or mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 .


The number of shares outstanding of each of the issuer's classes of common stock
are:

Class A Common Stock, $0.01 Par Value - 45,819,063 shares at August 6, 2001
Class B Common Stock, $0.01 Par Value - 19,014,869 shares at August 6, 2001


<PAGE>



                   WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                    FORM 10-Q
                                      INDEX


PART I  FINANCIAL INFORMATION:                                          Page No.
                                                                        --------

         Item 1. Financial Statements

                  Condensed Consolidated Balance Sheets                        3
                  - As of March 31, 2001 and June 30, 2001 (unaudited)

                  Condensed Consolidated Statements of Operations (unaudited)  4
                  - Three months ended June 30, 2000 and 2001

                  Condensed Consolidated Statements of Cash Flows (unaudited)  5
                  - Three months ended June 30, 2000 and 2001

                  Notes to the Condensed Consolidated Financial Statements
                    (unaudited)                                                6

         Item 2. Management's Discussion and Analysis of Financial Condition
                    and Results of Operations                                  9

         Item 3. Quantitative and Qualitative Disclosures About Market Risks  12


PART II OTHER INFORMATION

         Item 1. Litigation                                                   13

         Item 4. Changes in Securities and Use of Proceeds                    13

         Item 5. Other events                                                 13

         Item 6. Exhibits and Reports on Form 8-K                             13


SAFE HARBOR STATEMENT
Certain statements contained in this Quarterly Report of Form 10-Q regarding
matters that are not historical facts (as such term is defined in the rules
promulgated pursuant to the Securities Act of 1933, as amended (the "Securities
Act")) or that contain the words "believe", "expect", "intend", "anticipate" or
derivatives thereof, are forward looking statements. Because such
forward-looking statements include risks and uncertainties, actual results may
differ materially from those expressed in or implied by such forward-looking
statements. Factors that could cause actual results to differ materially
include, but are not limited to, those discussed herein under "Risk Factors".
Westell Technologies, Inc. ("Westell" or the "Company") undertakes no obligation
to publicly update these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.


                                       2
<PAGE>


<TABLE>

                                  WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                    ASSETS
                                                                              March 31,           June 30,
                                                                                2001                2001

                                                                           ----------------    ----------------
                                                                                                     (unaudited)
                                                                                       (in thousands)
<S>                                                                                   <C>                 <C>
Current assets:
  Cash and cash equivalents...........................................                $405                $461
  Accounts receivable (net of allowance of $1,363,000 and $1,527,000,
  respectively).......................................................              34,906              37,504
  Inventories.........................................................              73,068              58,335
  Prepaid expenses and other current assets...........................               2,124               2,465
  Deferred income tax asset...........................................              10,500              10,500
  Land and building held for sale.....................................              2,980.               2,087
                                                                           ----------------    ----------------
      Total current assets............................................             123,983             111,352
                                                                           ----------------    ----------------
Property and equipment:
  Machinery and equipment.............................................              42,077              43,508
  Office, computer and research equipment.............................              29,847              31,904
  Leasehold improvements..............................................               6,032               7,339
                                                                           ----------------    ----------------
                                                                                    77,956              82,751
  Less accumulated depreciation and amortization......................              41,726              45,238
                                                                           ----------------    ----------------
   Property and equipment, net........................................              36,230              37,513
                                                                           ----------------    ----------------
Goodwill and intangibles, net.........................................             139,373             131,420
Deferred income tax asset and other assets............................              15,553              15,593
                                                                           ----------------    ----------------
      Total assets....................................................           $ 315,139            $295,878
                                                                           ================    ================

                                        LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable....................................................             $57,577             $50,639
  Accrued expenses....................................................              22,838              23,307
  Notes payable.......................................................                   -              26,105
  Accrued compensation................................................               4,687               4,053
  Current portion of long-term debt...................................                 103                 326
                                                                           ----------------    ----------------
   Total current liabilities..........................................              85,205             104,430
                                                                           ----------------    ----------------
Long-term debt........................................................              28,451                 706
                                                                           ----------------    ----------------
Other long-term liabilities...........................................               3,658               3,740
                                                                           ----------------    ----------------
Stockholders' equity:
Class A common stock, par $0.01.......................................                 425                 458
  Authorized - 85,000,000 shares
  Issued and outstanding - 42,472,781 shares at March 31, 2001 and 45,819,063
  shares at June 30, 2001
Class B common stock, par $0.01.......................................                 190                 190
  Authorized - 25,000,000 shares
  Issued and outstanding - 19,014,869 shares at March 31, 2000 and
   June 30, 2001
Preferred stock, par $0.01............................................                  --                  --
  Authorized - 1,000,000 shares
  Issued and outstanding - none
Deferred compensation                                                                  854                 877
Additional paid-in capital............................................             357,684             363,598
Accumulated other comprehensive (loss) income.........................                (34)                   9
Accumulated deficit...................................................           (161,294)           (178,130)
                                                                           ----------------    ----------------
      Total stockholders' equity......................................             197,825             187,002
                                                                           ----------------    ----------------
        Total liabilities and stockholders' equity....................           $ 315,139           $ 295,878
                                                                           ================    ================


         The accompanying notes are an integral part of these Condensed
                       Consolidated Financial Statements.

</TABLE>


                                       3

<PAGE>

<TABLE>

                                   WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>


                                                                Three Months Ended
                                                                      June 30,
                                                    ---------------------------------------
                                                            2000                 2001
                                                    ----------------        ---------------

                                                                  (unaudited)
                                                    (in thousands, except per share data)
                                                    ---------------------------------------

<S>                                                        <C>                    <C>
Equipment revenue.............................             $ 93,954               $ 50,207
Service revenue...............................                9,389                 13,091
                                                    ----------------        ---------------
  Total revenues..............................              103,343                 63,298

Cost of equipment sales.......................               75,611                 43,105
Cost of services..............................                5,739                  7,875
                                                    ----------------        ---------------
  Cost of goods sold..........................               81,350                 50,980
                                                    ----------------        ---------------

   Gross margin...............................               21,993                 12,318
Operating expenses:
  Sales and marketing.........................                8,199                  5,915
  Research and development....................                7,438                  7,990
  General and administrative..................                5,664                  5,680
  Goodwill amortization.......................                7,958                  7,953
                                                    ----------------        ---------------
    Total operating expenses..................               29,259                 27,538
                                                    ----------------        ---------------
  Operating loss..............................              (7,266)               (15,220)

Other (income) expense, net...................                (169)                    257
Interest expense..............................                  119                  1,359
                                                    ----------------        ---------------
Loss before tax benefit.......................              (7,216)               (16,836)
Benefit for income taxes......................                    -                      -
                                                    ----------------        ---------------
Loss before cumulative effect of change in
accounting principle.........................               (7,216)               (16,836)
                                                    ----------------        ---------------
Cumulative effect of change in accounting
principle....................................                   400                      -
Net loss......................................             $(7,616)              $(16,836)
                                                    ================        ===============

Net loss per basic and diluted common share...             $ (0.13)               $ (0.27)
                                                    ================        ===============
  Weighted average number of basic and diluted
common shares outstanding.....................               60,206                 62,641
                                                    ================        ===============




         The accompanying notes are an integral part of these Condensed
                        Consolidated Financial Statements

</TABLE>


                                       4
<PAGE>

<TABLE>

                                   WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>


                                                                                 Three Months Ended
                                                                                      June 30,
                                                                       -----------------------------------------
                                                                            2000                     2001
                                                                       -----------------       -----------------

                                                                                     (unaudited)
                                                                                   (in thousands)

<S>                                                                    <C>                     <C>
Cash flows from operating activities:
Net loss...........................................................    $       (7,616)         $      (16,836)
Reconciliation of net loss to net cash
  used in operating activities:
  Depreciation and amortization....................................            10,530                  11,516
  Interest expenses related to conversion of debentures............               135                      -
  Other............................................................                 -                     121
Changes in assets and liabilities:
  Increase in accounts receivable..................................           (30,427)                 (2,570)
  (Increase) decrease in inventory.................................           (17,834)                 14,757
  Increase in prepaid expenses and deposits........................              (397)                   (340)
  Decrease (increase) in other assets..............................               546                     (40)
  Increase (decrease) in accounts payable and accrued expenses.....            22,918                  (6,387)
  Decrease in accrued compensation.................................              (663)                   (633)
                                                                       -----------------       -----------------
     Net cash used in operating activities.........................           (22,808)                   (412)
                                                                       -----------------       -----------------

Cash flows from investing activities:
  Purchases of property and equipment..............................            (6,682)                 (4,943)
  Proceeds from the sale of land and building......................                 -                     893
  Decrease in short term investments...............................             1,951                       -
                                                                       -----------------       -----------------
     Net cash used in investing activities.........................            (4,731)                 (4,050)
                                                                       -----------------       -----------------

Cash flows from financing activities:
  Borrowing of long-term debt and leases payable...................             3,692                     878
  Net borrowing (repayment) under revolving promissory notes.......             8,000                  (2,296)
  Proceeds from the issuance of common stock.......................             1,574                   5,945
                                                                       -----------------       -----------------
     Net cash provided  in financing activities....................            13,266                   4,527
                                                                       -----------------       -----------------

Effect of exchange rate changes on cash............................               (26)                     (9)
     Net (decrease) increase in cash...............................           (14,299)                     56
Cash and cash equivalents, beginning of period.....................            27,258                     405
                                                                       -----------------       -----------------
Cash and cash equivalents, end of period...........................    $       12,959           $         461
                                                                       =================       =================




         The accompanying notes are an integral part of these Condensed
                        Consolidated Financial Statements

</TABLE>


                                       5
<PAGE>


                   WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1.  BASIS OF PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. It is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended March 31, 2001.

         In the opinion of management, the unaudited interim financial
statements included herein reflect all adjustments, consisting of normal
recurring adjustments, necessary to present fairly the Company's consolidated
financial position and the results of operations and cash flows at June 30,
2001, and for all periods presented. The results of operations for the three
month period ended June 30, 2001 are not necessarily indicative of the results
that may be expected for the fiscal year ending March 31, 2002 ("fiscal year
2002").

NOTE 2. COMPUTATION OF NET LOSS PER SHARE

         The computation of basic earnings per share is computed using the
weighted average number of common shares outstanding during the period. Diluted
earnings per share includes the number of additional common shares that would
have been outstanding if the dilutive potential common shares had been issued.
The effect of this computation on the number of outstanding shares is
antidilutive for the periods ended June 30, 2000, and 2001, and therefore the
net loss per basic and diluted earnings per share are the same.

NOTE 3. RESTRUCTURING CHARGE

         The Company recognized a restructuring charge of $1.7 million in the
three months ended March 31, 2001. This charge was for personnel, legal, and
other related costs. The restructuring was to achieve cost reductions and was
focused primarily on the sales and marketing functions. Included in the accrued
restructuring balance as of March 31, 2001, is $1.3 million of restructuring
charges related to the Teltrend acquisition. As of June 30, 2001, the Company
has paid approximately $887,000 of these accrued costs.

         The Company's restructuring balances and their utilization are
presented in the following table:


                                            Utilized
                                  Balance       thru       Balance
 (in thousands)                 March 31,   June 30,      June 30,
                                     2001       2001          2001
-------------------------------------------------------------------
Employee Costs...........         $ 2,602       $814       $ 1,788
Legal & Other Costs......             395         73           322
-------------------------------------------------------------------
Total....................         $ 2,997       $887       $ 2,110
===================================================================




                                       6

<PAGE>


                   WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 4. INTERIM SEGMENT INFORMATION

         Westell's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technology and market strategy. They consist of:

          1)   A telecommunications  equipment manufacturer of local loop access
               products, and
          2)   A multi-point  telecommunications  service bureau specializing in
               audio teleconferencing, multi-point video conferencing, broadcast
               fax and multimedia teleconference services.

         Performance of these segments is evaluated utilizing, revenue,
operating income and total asset measurements. The accounting policies of the
segments are the same as those for Westell Technologies, Inc. Segment
information for the three-month periods ended June 30, 2000 and 2001, are as
follows:

                                          Telecom       Telecom     Consolidated
(in thousands)                           Equipment     Services         Total
                                       ------------  ------------     ---------
Three months ended June 30, 2000
      Revenues........................  $ 93,954      $  9,389      $ 103,343
      Operating income (loss) ........   (8,810)         1,544        (7,266)
      Depreciation and amortization...     9,757           773         10,530
      Total assets....................   350,701        20,418        371,119

Three months ended June 30, 2001
      Revenues........................    50,207        13,091         63,298
      Operating income (loss).........  (17,871)         2,651       (15,220)
      Depreciation and amortization...    10,551           965         11,516
      Total assets....................   272,312         23,566       295,878


         Reconciliation of Operating loss from continuing operations for the
reportable segments to Loss from continuing operations before income taxes or
cumulative effect of accouting change:

                                                         Three Months Ended
                                                               June 30,
                                               ---------------------------------
(in thousands)                                       2000              2001
                                               --------------    ---------------
Operating loss ..........................           $(7,266)          $(15,220)
Other (income) expense , net.............              (169)                257
Interest expense.........................                119              1,359
                                               --------------    ---------------
Loss ....................................           $(7,216)          $(16,836)


NOTE 5.  NEW ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards No. 141, Business Combinations, and
No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill will no longer
be amortized but will be subject to annual impairment tests in accordance with
the Statements. Other intangible assets will continue to be amortized over their
useful lives.

         The Company will adopt the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of fiscal 2003 (April 1,
2002). Application of the nonamortization provisions of the Statement is
expected to result in an increase in net income of $31.8 million ($.51 per
share) per year. During fiscal 2003, the Company will perform the first of the
required impairment test of goodwill and indefinite lived intangible assets as
of April 1, 2002 and has not yet determined what the effect of these tests will
be on the earnings and financial position of the Company.


                                       7

<PAGE>


                   WESTELL TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 6.  COMPREHENSIVE INCOME

         The disclosure of comprehensive loss, which encompasses net loss and
foreign currency translation adjustments, is as follows:
                                                   Three Months Ended June 30,
                                                 -------------------------------
(in thousands)                                        2000            2001
                                                 -------------    -------------
Net Loss......................................       $(7,616)        $(16,836)
Other comprehensive income
     Foreign currency translation adjustment..            202               43
                                                 -------------    -------------
 Comprehensive loss...........................       $(7,414)        $(16,793)


NOTE 7. INVENTORIES

         The components of inventories are as follows:

                                                    March 31,        June 30,
                                                   --------------  -------------
(in thousands)                                        2001             2001
                                                   --------------  -------------
Raw material .................................          $ 47,989        $ 46,445
Work in process...............................                26             272
Finished goods................................            51,153          35,537
Reserve for excess and obsolete inventory and net
realizable value..............................          (26,100)        (23,919)
                                                   --------------  -------------
                                                        $ 73,068        $ 58,335
                                                   ==============  =============


NOTE 8.  CAPITAL STOCK

         In May 2001, the Company sold 3,314,918 shares of Class A common shares
in a private placement. Net proceeds to the Company from the sale of the Class A
Common Stock was approximately $5.9 million and was used to fund working
capital.


                                       8

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         -----------------------------------------------------------------------
OF OPERATION
------------

OVERVIEW

         Westell Technologies, Inc. ("Westell" or the "Company") derives most of
its equipment revenue from the sale of telecommunications equipment that enables
telecommunications services over copper telephone wires. The Company offers a
broad range of products that facilitate the transmission of high-speed digital
and analog data between a telephone company's central office and its end-user
customers. These products can be categorized into two business units presented
below. In previous quarters, the Company divided Broadband product revenue by
business unit for quarterly reporting purposes. Transport Systems and Customer
Premise Equipment business units have been combined to simplify the reporting of
revenue related to DSL products.

o    TELCO ACCESS PRODUCTS ("TAP"): Products that maintain, repair and monitor
     special service circuits used over copper telephone wires in the portion of
     the telephone companies' network connecting the central office with the
     customers' locations (the "Local Loop"). Products include all of Westell's
     analog products and products that support digital T-1 transmission such as
     its Network Interface Units ("NIU") products.
o    BROADBAND: Products that facilitate high speed voice and data access
     originating through copper lines and terminating to copper or fiber.
     Products include equipment located in the telco's central offices and
     equipment on the customer premises. Broadband products include ADSL, HDSL
     and DS3.

         The Company's service revenues are derived from audio, multi port video
and multi media teleconferencing services from the Company's Conference Plus,
Inc. subsidiary.

         Below is a table that compares equipment and service revenues for the
quarter ended June 30, 2000 with the quarter ended June 30, 2001 by business
unit.

                                    June 30,        June 30,
(in thousands)                          2000            2001
                                 ------------    ------------
TAP..........................        $30,431        $ 26,903
Broadband....................         63,523          23,304
                                 ------------    ------------
Total equipment..............         93,954          50,207

Services.....................          9,389          13,091

Total revenues...............      $ 103,343        $ 63,298
                                 ============    ============

         Westell's net revenues decreased 38.7% in the three months ended June
30, 2001 when compared to the same period last year due to a 46.6% decrease in
equipment revenue combined with a 39.4% increase in service revenue. The
decrease in equipment revenue is due primarily to the decreased sales of the
Company's broadband products and, to a lessor extent, a decrease in TAP sales.
The increase in service revenue is a result of increased teleconference call
minutes.

         The Company expects to continue to evaluate new product opportunities
and engage in extensive research and development activities. This will require
the Company to continue to invest heavily in research and development and sales
and marketing, which could adversely affect short-term results of operations.
The Company believes that its future revenue growth and profitability will
principally depend on its success in increasing sales of DSL products and
developing new and enhanced TAP and other DSL products. In view of the Company's
reliance on the emerging DSL market for growth and the unpredictability of
orders and subsequent revenues, the Company believes that period to period
comparisons of its financial results are not necessarily meaningful and should
not be relied upon as an indication of future performance. Revenues from TAP
products such as NIUs have declined in recent years as telcos continue to move
to networks that deliver higher speed digital transmission services. Failure to
increase revenues from new products, whether due to lack of market acceptance,
competition, technological change or otherwise, would have a material adverse
effect on the Company's business and results of operations.



                                       9
<PAGE>


RESULTS OF OPERATIONS - Period ended June 30, 2001 compared to period ended June
30, 2000.

Revenues. The Company's revenues decreased 38.7% from $103.3 million in the
three months ended June 30, 2000 to $63.3 million in the three months ended June
30, 2001. This revenue decrease was due to decreased equipment revenue of $43.7
million offset by an increase in teleconference service revenue of $3.7 million.
The decreased equipment revenue was due primarily to decreased sales of the
Company's broadband products. Revenue from our broadband products declined
63.3%, to $23.3 million for the three months ended June 30, 2001 compared to
$63.5 million for the quarter ending June 30, 2000 due to lower unit volumes and
lower unit selling prices. Revenues from the Company's TAP business unit, in the
quarter ended June 30, 2001, decreased to $26.9 million compared to $30.4
million in the same quarter one year ago. The decrease in revenues from the TAP
business unit is due primarily to lower unit volume. The Company's
teleconference service revenue of $13.1 million for the quarter ended June 30,
2001 increased $3.7 million from $9.4 million in the same quarter one year ago.
This increase in revenue is attributable to continued growth in call minutes at
the Company's subsidiary Conference Plus, Inc.

Gross Margin. Gross margin as a percentage of revenue decreased from 21.3% in
the three months ended June 30, 2000 to 19.5% in the three months ended June 30,
2001. This decrease in gross margin was primarily due to high material costs of
our broadband products. This decrease in gross margin was somewhat offset by
increased margins from service revenues in the three months ended June 30, 2001.

Sales and Marketing. Sales and marketing expenses decreased 27.9%, from $8.2
million in the three months ended June 30, 2000 to $5.9 million in the three
months ended June 30, 2001. Sales and marketing expenses increased as a
percentage of revenues from 7.9% in the three months ended June 30, 2000 to 9.3%
in the three months ended June 30, 2001. The decrease in sales and marketing
expenses was primarily due to cost reductions initiated in the March 2001
reorganization. The Company believes that continued investment in sales and
marketing will be required to expand its product lines, bring new products to
market and service customers.

Research and Development. Research and development expenses increased 7.4%, from
$7.4 million in the three months ended June 30, 2000 to $8.0 million in the
three months ended June 30, 2001. Research and development expenses increased as
a percentage of revenues from 7.2% in the three months ended June 30, 2000 to
12.6% in the three months ended June 30, 2001. The increase in research and
development expense is a result of additional engineers. The Company believes
that a continued commitment to research and development will be required for the
Company to remain competitive.

General and Administrative. General and administrative expenses were constant at
$5.7 million in the three months ended June 30, 2000 and June 30, 2001. General
and administrative expenses increased as a percentage of revenues from 5.5% in
the three months ended June 30, 2000 to 9.0% in the three months ended June 30,
2001.

Goodwill Amortization. Intangible assets include goodwill, synergistic goodwill
and product technology related to the Teltrend acquisition. The purchase price
of approximately $238.2 million exceeded the fair market value of net assets
acquired, resulting in goodwill of $59.9 million, synergistic goodwill of $57.0
million, and product technology of $55.6 million which will be amortized on a
straight-line basis over an average of approximately ten years.

Other (income) expense, net. Other (income) expense, net decreased from income
of $169,000 in the three months ended June 30, 2000 to expense of $257,000 in
the three months ended June 30, 2001. The expense for the period was primarily
due to the recognition of foreign currency gains/loss on intercompany balances.

Interest expense. Interest expense increased from $119,000 in the three months
ended June 30, 2000 to $1,359,000 in the three months ended June 30, 2001. The
interest expense during the current period is a result of interest incurred on
net obligations outstanding during the period under promissory notes, capital
leases, and vendor debt. The increase is due to larger outstanding debt
obligations.


                                       10

<PAGE>


RESULTS OF OPERATIONS - continued

Income taxes. There was no benefit for income taxes recorded for both
three-month periods ended June 30, 2000 and 2001. The Company provided valuation
reserves for the entire benefit generated during the current quarter of $3.5
million. The Company will evaluate on a quarterly basis it's ability to record a
benefit for income taxes in relation to the value of tax planning strategies
available in relation to the resulting gross deferred asset.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2001, the Company had $461,000 in cash. As of June 30,
2001, the Company had $26.1 million outstanding under its secured revolving
promissory note facility and approximately $9.1 million available under its
secured revolving promissory note facility.

         The secured revolving credit facility required, among other things, the
maintenance of a minimum interest coverage ratio, a minimum net worth, a maximum
capital expenditures and target EBITDA. The Company's failure to meet these
quarterly financial covenants would allow the lenders to demand repayment of all
amounts outstanding under the credit facility. The Company was not in compliance
with target EBITDA and the interest coverage ratio at March 31, 2001. The
Company and its lenders have entered into an amendment and waiver under which
the covenant violations discussed above were waived.

         On June 29, 2001, the Company amended the revolving credit facility,
resulting in an asset-based, revolving lending facility providing for total
borrowing based upon 85% of eligible accounts receivable and 30% of eligible
inventory not to exceed $9.0 million and 70% of the guarantee described below.
The $9.0 million inventory limitation is reduced by $.1 million on August 1,
2001, and shall be reduced by an additional $.1 million on the first day of each
month thereafter. The Company was eligible to borrow an additional $9.1 million
under this facility as of June 30, 2001. Up to $10,000,000 of the facility is
collateralized by substantially all assets of the Company and will remain
available until June 30, 2002. The facility provides for maximum borrowings of
up to $35.0 million. The facility is guaranteed by trusts for the benefit of
Robert C. Penny III and other Penny family members and is supported by their
brokerage account totaling approximately $10.0 million. In consideration of the
guarantee, the Company has granted these stockholders warrants to purchase
512,820 shares of Class A Common Stock for a period of five years at an exercise
price of $1.95 per share. Any future equity financing will also reduce dollar
for dollar the amount of the guaranty. Borrowings under this facility provide
for the interest to be paid by the Company at prime plus 1%. This amendment
provides for covenants regarding EBITDA and tangible net worth.

         The Company's operating activities used cash of $412,000 in the three
months ended June 30, 2001. This resulted primarily from a loss from continuing
operations of $5.3 million (excluding depreciation and amortization) and working
capital requirements. Working capital was affected primarily by decreases in
inventory and offset by a decrease in accounts payable and accrued expenses.

         Capital expenditures for the three month period ended June 30, 2001
were approximately $4.9 million, of which $.9 million was funded by a capital
lease. The Company expects to spend approximately $10.6 million for the
remainder of fiscal year 2002 related primarily for machinery, computer and
research equipment purchases.



                                       11

<PAGE>


RESULTS OF OPERATIONS - continued

         At June 30, 2001, the Company's principle sources of liquidity were
$461,000 of cash and the secured revolving promissory note facility under which
the Company was eligible to borrow up to an additional $9.1 million based upon
receivables and inventory levels. To meet the Company's cash needs for fiscal
year 2002 the Company is exploring various alternatives including a larger line
of credit from new asset based lenders replacing the current bank credit line
and some type of equity or subordinated debt offering.

         The Company had a deferred tax asset of approximately $75.5 million at
June 30, 2001. This deferred tax asset relates to (i) tax credit carryforwards
of approximately $4.8 million, (ii) a net operating loss carryforward tax
benefit of approximately $50.3 million and (iii) temporary differences between
the amount of assets and liabilities for financial reporting purposes and such
amounts measured by tax laws. Of such tax credit carryforwards, the first
$243,000 of credits expire in 2008 and $722,000 of credits may be carried
forward indefinitely. The net operating loss carryforward begins to expire in
2012.

         Realization of deferred tax assets associated with the Company's future
deductible temporary differences, net operating loss carryforwards and tax
credit carryforwards is dependent upon generating sufficient taxable income
prior to their expiration. Although realization of the deferred tax asset is not
assured as the Company has incurred operating losses for the 1999, 2000 and 2001
fiscal years, management believes that it is more likely than not that it will
generate taxable income sufficient to realize a portion of the tax benefit. A
portion of these deferred tax assets are expected to be utilized, prior to their
expiration, through a tax planning strategy available to the Company. Management
will continue to periodically assess whether it remains more likely than not
that the deferred tax asset will be realized. If the tax planning strategy is
not sufficient to generate taxable income to recover the deferred tax benefit
recorded, an increase in the valuation allowance will be required through a
charge to the income tax provision. However, if the Company achieves sufficient
profitability or has available additional tax planning strategies to utilize a
greater portion of the deferred tax asset, an income tax benefit would be
recorded to decrease the valuation allowance.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.
---------------------------------------------------------------------

          Westell is subject to certain market risks, including foreign currency
and interest rates. The Company has foreign subsidiaries in the United Kingdom
and Ireland that develop and sell products and services in those respective
countries. The Company is exposed to potential gains and losses from foreign
currency fluctuations affecting net investments and earnings denominated in
foreign currencies. The Company's future primary exposure is to changes in
exchange rates for the U.S. dollar versus the British pound and the Irish pound.
The Company also has accounts receivable denominated in British pounds. The
Company at times uses foreign currency derivatives to manage the exposure to
changes in the exchange rate on accounts receivable. No derivatives were used in
the first quarter of fiscal 2002.

         As of June 30, 2001, the net balance in the cumulative foreign currency
translation adjustment account, which is a component of stockholders' equity,
was an unrealized gain of $9,000.

         The Company does not have significant exposure to interest rate risk
related to its debt obligations, which are primarily U.S. Dollar denominated.
The Company's market risk is the potential loss arising from adverse changes in
interest rates. As further described in Note 1 of the Company's 10-K for the
period ended March 31, 2001, the Company's debt consists primarily of a
floating-rate bank line-of credit. Market risk is estimated as the potential
decrease in pretax earnings resulting from a hypothetical increase in interest
rates of 10% (i.e. from approximately 7.75% to approximately 8.5%) average
interest rate on the Company's debt. If such an increase occurred, the Company
would incur approximately $225,000 per annum in additional interest expense
based on the average debt borrowed during the twelve months ended June 30, 2001.
The Company does not feel such additional expense is significant.

         The Company does not currently use any derivative financial instruments
relating to the risk associated with changes in interest rates.


                                       12
<PAGE>


PART II. OTHER INFORMATION
--------------------------

ITEM 1. LITIGATION
------------------

 Westell Technologies, Inc. and certain of its officers and directors have been
named in the following class actions:

1.   Schumaster  v.  Westell  Technologies,  Inc.,  et al., No.  00C7991  (filed
     December 26, 2000);
2.   Barton v. Westell  Technologies,  Inc., et al., No. 00C7765 (filed December
     12, 2000);
3.   Hoffman v. Westell Technologies,  Inc., et al., No. 00C7624 (filed December
     4, 2000);
4.   PAS Mgmt. & Consulting Serv., Inc.v.  Westell  Technologies,  Inc., et al.,
     No. 00C7605 (filed December 4, 2000);
5.   Abdelnour  v.  Westell  Technologies,  Inc.,  et al.,  No.  00C7308  (filed
     November 20, 2000);
6.   Feinstein  v.  Westell  Technologies,  Inc.,  et al.,  No.  00C7247  (filed
     November 16, 2000);
7.   Lefkowitz  v.  Westell  Technologies,  Inc.,  et al.,  No. 00 C 6881 (filed
     November 2, 2000);
8.   Greif v. Westell Technologies,  Inc., et al., No. 00 C 7046 (filed November
     8, 2000);
9.   Seplow v. Westell Technologies, Inc., et al., No. 00 C 7019 (filed November
     7, 2000);
10.  Llanes v. Westell Technologies,  Inc., et al., No. 00 C 6780 (filed October
     30, 2000); and
11.  Bergh v. Westell  Technologies,  Inc., et al., No. 00 C 6735 (filed October
     27, 2000).

Each of these cases was filed in the United States District Court for the
Northern District of Illinois and alleges generally that the defendants violated
the antifraud provisions of the federal securities laws by allegedly issuing
material false and misleading statements and/or allegedly omitting material
facts necessary to make the statements made not misleading thereby allegedly
inflating the price of Westell stock for certain time periods. Each of these
cases allegedly arises from the same set of operative facts and seeks the same
relief -- damages allegedly sustained by plaintiffs and the class by reason of
the acts and transactions alleged in the complaints as well as interest on any
damage award, reasonable attorneys' fees, expert fees, and other costs.

         On January 11, 2001 Judge George W. Lindbergh of the federal district
court for the Northern District of Illinois consolidated these cases into one
lawsuit, captioned In re Westell Technologies, Inc., No 00 C 6735 (filed
February 1, 2001).

         Certain of its Westell Technologies, Inc.'s officers and directors have
been named in the following derivative actions:

1.   Vukovich v. Zionts, et al., No. 18647 (filed January 26, 2001); and
2.   Dollens v. Zionts, et al., No. 18533 NC (filed December 4, 2000).


Each of these cases was filed in the Court of Chancery for the State of
Delaware, New Castle County. Each case alleges generally that the defendants
issued material false and misleading statements and/or allegedly omitting
material facts necessary to make the statements made not misleading thereby
allegedly inflating the price of Westell stock for certain time periods, engaged
in insider trading, misappropriated corporate information, and beached their
fiduciary duties to Westell Technology, Inc.'s shareholders. Each case allegedly
arises from the same set of operative facts and seeks the same relief -- damages
allegedly sustained by Westell by reason of the acts and transactions alleged in
the complaints, a constructive trust for the amount of profits the individual
defendants made on insider sales, reasonable attorneys' fees, expert fees, and
other costs.

         In the opinion of the Company, although the outcome of any legal
proceedings cannot be predicted with certainty, the liability of the Company in
connection with its legal proceedings could have a material effect on the
Company's financial position.

         The Company has been named as a defendant in Celsian Technologies, Inc.
v. Westell, Inc., Case No. 01 CC 03977, Superior Court of the State of
California, County of Orange, which was filed March 23, 2001. The complaint
alleges nonpayment for delivered goods and seeks $13,400,000 in damages. The
Company removed this case to federal court on April 30, 2001, where it is now
pending in the United States District Court for the Central District of
California as Case No. 01-3878 FMC. On May 29, 2001, Westell answered Celsian's
complaint and filed a counterclaim against Celsian for breach of contract and
breach of express and implied warranties. Westell's counterclaim seeks damages
in an amount to be proven at trial but presently believed to be in excess of
$13,000,000. Celsian has not yet responded to the counterclaim. Discovery has
not yet


                                       13


<PAGE>

commenced.

         The  Company  has been named as a defendant  in Virata  Corporation  v.
Westell  Technologies,  Inc., Case No. CV 797182,  Superior Court of California,
County of Santa  Clara,  which was filed April 2, 2001.  The  complaint  alleges
nonpayment for delivered goods and  non-acceptance  of goods and seeks in excess
of $6,400,000 in damages.  The Company  answered  Virata's  complaint on May 22,
2001. Discovery has commenced.

         The Company has been named as a defendant in PacTec, a division of La
France Corporation v. Celsian Technology, Inc. and Westell Technologies, Inc.
which was filed in May 1, 2001 in the Court of Common Pleas of Delaware County,
Pennsylvania. The complaint alleges nonpayment for good delivered to Celsian and
claiming liability of Westell in connection therewith and seeking $660,124.86 in
damages. The Company removed this case to federal court on June 11, 2001, where
it is now pending in the United States District Court for the Eastern District
of Pennsylvania as Civil Action No. 01 CV 2836. The Company has not yet
responded to this complaint.

         The Company has been named as a defendant in Alcatel Microelectronics,
N.V. v. Westell, Inc., Case No. 01 C 3265, United States District Court,
Northern District of Illinois, which was filed in May 4, 2001. The complaint
alleges nonpayment for delivered goods and seeks in excess of $13,000,000 in
damages. On June 11, 2001, Westell filed a Motion to Dismiss Count III (unjust
enrichment) of the complaint. Westell did not answer Count I (breach of
contract) or Count II (account stated) of the complaint at that time. On June
19, 2001, Alcatel filed a Motion For Judgment By Default Against Westell on
Counts I and II of the complaint. By agreement of the parties, Westell will
answer Counts I and II of the complaint by July 9, 2001, Alcatel will
voluntarily dismiss Count III of the complaint, and both pending motions will be
withdrawn. There is a status conference scheduled for July 13, 2001.

         We are currently reviewing the Alcatel, Celsian, PacTec and Virata
complaints. However, we cannot guarantee that we will be meritorious in any of
the lawsuits described above and a verdict against us in any of the lawsuits
could materially adversely affect our business and operating results.


ITEM 5. OTHER EVENTS
--------------------

         None.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------


   a)    The following documents are furnished as an exhibit and numbered
         pursuant to Item 601 of regulation S-K:


   b)    The following Form 8-K was filed by the Company.

         1.) On April 17, 2001 the Company filed an 8-K announcing an amendment
to its Amended and Restated Loan and Security Agreement.







                                       14


                                   SIGNATURES
                                   ----------


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


                                              WESTELL TECHNOLOGIES, INC.
                                              --------------------------
                                                 (Registrant)



DATE: August 14, 2001                         By:  VAN CULLENS
                                                 -------------
                                                 VAN CULLENS
                                                 Chief Executive Officer


                                              By: NICHOLAS C. HINDMAN
                                                 ---------------------
                                                 NICHOLAS C. HINDMAN
                                                 Chief Financial Officer