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 December 31,
            2000.



|_|         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________
            TO___________.

                           Commission File No. 0-27302

                                   LABTEC INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Massachusetts                           04-3116697
         -------------------------------              --------------
         (State or other jurisdiction of             (I.R.S. Employer
         incorporation or organization)              Identification No.)

          1499 S.E. Tech Center Place, Suite 350, Vancouver, WA 98683
       --------------------------------------------------------------
       (Address of principal executive offices)              Zip Code

Registrant's telephone number, including area code: (360) 896-2000
                                                    --------------

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       |_|

There were 4,104,982 shares of Common Stock outstanding at December 31, 2000.
<PAGE>

                                   LABTEC INC.
                                      INDEX

PART I - FINANCIAL INFORMATION
-----------------------------------

Item 1.     Financial Statements

            Consolidated Balance Sheets as of December 31, 2000
                  (unaudited) and March 31, 2000 ........................... 3

            Consolidated Statements of Operations (unaudited) for the
                  nine month period ended December 31, 2000 ................ 4

            Consolidated Statements of Cash Flows (unaudited) for the
                  nine month period ended December 31, 2000 ................ 5

            Notes to Financial Statements .................................. 6

Item 2.     Management's Discussion and Analysis
                of Financial Statements (unaudited) ........................ 9

Item 3.     Quantitative and Qualitative Disclosures About Market Risk...... 13

PART II -   OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K ............................... 14

            Signatures ..................................................... 16

<PAGE>
<TABLE>
<CAPTION>
                                  Labtec, Inc.
                           Consolidated Balance Sheets
                    (In thousands, except per share amounts)

                              Assets                                    December 31, 2000         March 31, 2000
                              ------                                    -----------------         --------------
                                                                           (Unaudited)
<S>                                                                     <C>                       <C>
Current Assets:
   Cash...........................................................                   $  1,456              $  1,373
   Accounts receivable, net.......................................                     26,305                22,120
   Interest and other receivables.................................                         23                    16
   Inventories....................................................                     24,398                13,955
   Prepaid expenses...............................................                         93                   171
   Current deferred income taxes..................................                      2,572                 1,854
                                                                                     --------              --------
      Total current assets........................................                     54,847                39,489

Property and equipment, net.......................................                      2,498                 2,332
Noncurrent deferred income taxes..................................                      1,953                 1,953
Debt issuance costs...............................................                      1,957                 2,277
Other noncurrent assets...........................................                        228                   180
Goodwill, net.....................................................                     16,140                17,038
                                                                                       ------                ------
                                                                                    $  77,623             $  63,269
                                                                                     ========              ========
          Liabilities and Shareholders' Equity (Deficit)

Current Liabilities:
   Line of credit.................................................                    $16,647              $ 10,761
   Current portion of long-term debt..............................                      2,736                 2,900
   Accounts payable...............................................                     17,114                 9,411
   Income taxes payable...........................................                      1,456                   185
   Accrued payroll and benefits...................................                        676                 1,359
   Accrued interest...............................................                        360                   256
   Other accrued expenses.........................................                      1,432                 1,539
                                                                                        -----                 -----
      Total current liabilities...................................                     40,421                26,411

Long-term debt...................................................                      25,400                28,747
                                                                                       ------                ------
                                                                                       65,821                55,158
                                                                                       ------                ------

Commitments and contingencies....................................                         ---                   ---

Shareholders' Equity (Deficit):
Preferred stock, par value $.01, 1,000 share authorized and no
shares outstanding at December 31, or March 31, 2000                                      ---                   ---
Common stock, par value $.01, 25,000 shares authorized, 4,015
and 4,013 shares issued and outstanding at December 31, and
March 31, 2000, respectively......................................                         40                    40
Additional paid-in capital........................................                     23,835                23,806
Accumulated deficit...............................................                   (12,035)              (15,688)
Accumulated other comprehensive income (loss):
      Cumulative foreign currency translation adjustment..........                       (38)                  (47)
                                                                                         ----                  ----
                                                                                       11,802                 8,111
                                                                                       ------                 -----
                                                                                      $77,623              $ 63,269
                                                                                      =======              ========
</TABLE>


    The accompanying notes are an integral part of these financial statements



                                      -3-

<PAGE>
<TABLE>
<CAPTION>
                                  Labtec, Inc.
      Consolidated Statements of Operations and Comprehensive Income (Loss)
                    (In thousands, except per share amounts)
                                   (Unaudited)

                                                  Three Months Ended                    Nine Months Ended
                                            December 31,       December 31,        December 31,     December 31,
                                            ------------       ------------        ------------     ------------
                                                2000               1999                2000             1999
                                                ----               ----                ----             ----
<S>                                         <C>                 <C>                 <C>              <C>
Net sales                                       $ 29,800            $27,379             $78,067          $64,566

Cost of sales                                     17,579             16,526              46,287           38,802
                                            ------------       ------------        ------------       ----------
Gross profit                                      12,221             10,853              31,780           25,764
                                            ------------       ------------        ------------       ----------
Operating expenses:
  Selling and marketing                            5,286              4,756              15,244           12,029
  General and administrative                       1,466              1,620               4,023            3,955
  Research and development                           535                633               1,659            1,706
  Depreciation                                       416                427               1,196            1,186
  Amortization of goodwill                           299                682                 898            2,611
                                            ------------       ------------        ------------       ----------
                                                   8,002              8,118              23,020           21,487
                                            ------------       ------------        ------------       ----------

Income from operations                             4,219              2,735               8,760            4,277

  Interest expense, net                            1,232              1,179               3,673            2,942
  Other nonoperating expense                        (22)                  3                 107               62
                                            ------------       ------------        ------------       ----------
Total other expense                                1,210              1,182               3,780            3,004
                                            ------------       ------------        ------------       ----------

Income before income taxes                         3,009              1,553               4,980            1,273

Provision for income taxes                           551                371               1,327              626
                                            ------------       ------------        ------------       ----------
Net income before extraordinary items              2,458              1,182               3,653              647

Extraordinary loss                                                                                        (1,016)
                                            ------------       ------------        ------------       ----------
Net income (loss)                                 $2,458             $1,182              $3,653            $(369)
                                            ============       ============        ============       ==========

Weighted average shares outstanding
     Basic                                         4,015              3,751               4,013            3,575
     Diluted                                       4,024              3,790               4,024            3,575

Net income per share before extraordinary
loss
     Basic                                         $0.61              $0.32               $0.91            $0.18
                                            ============       ============        ============       ==========
     Diluted                                       $0.61              $0.31               $0.91            $0.18
                                            ============       ============        ============       ==========
Net income (loss) per share
     Basic                                         $0.61              $0.32               $0.91           $(0.10)
                                            ============       ============        ============       ==========
     Diluted                                       $0.61              $0.31               $0.91           $(0.10)
                                            ============       ============        ============       ==========
Comprehensive income (loss):
  Net income (loss)                               $2,458             $1,182              $3,653            $(369)
  Change in cumulative translation                   (8)                (8)                   9              (18)
    adjustment
                                            ------------       ------------        ------------       ----------
Comprehensive income (loss)                       $2,450             $1,174              $3,662            $(387)
                                            ============       ============        ============       ==========
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                                  Labtec, Inc.
                      Consolidated Statement of Cash Flows
                    (In thousands, except per share amounts)
                                   (Unaudited)

                                                                        Nine Months Ended December 31,
                                                                      -----------------------------------
                                                                           2000              1999
                                                                           ----              ----
<S>                                                                   <C>               <C>
        Cash flow from operating activities
          Net income (loss)                                                    $3,653              $(369)
          Adjustments to reconcile net income (loss) to net cash
            provided by operating activities
              Depreciation                                                      1,196              1,186
              Amortization of goodwill                                            898              2,611
              Amortization of debt issuance costs                                 329                330
              Change in deferred income taxes                                   (718)                 13
              Compensation expense on stock options                                11                ---
              Write-off of debt issuance costs                                    ---              1,693
          Changes in current assets and liabilities:
              Accounts receivable                                              (4,185)            (3,182)
              Inventories                                                     (10,443)             1,363
              Interest and other receivables                                       (7)               144
              Income taxes receivables                                            ---                163
              Prepaid expenses                                                     78                (25)
              Accounts payable                                                  7,703              1,008
              Income taxes payable                                              1,271               (449)
              Accrued interest                                                    104                (12)
              Accrued payroll and other expenses                                 (789)            (1,334)


                                                                      ---------------     ---------------
        Net cash provided by (used in) operating activities                      (899)             3,140
                                                                      ---------------     ---------------


        Cash flow from investing activities
          Capital expenditures                                                 (1,341)              (992)
          Other assets                                                            (69)               (57)
          Costs associated with CRU purchase                                                     (13,901)
                                                                      ---------------     ---------------
        Net cash used in investing activities                                  (1,410)           (14,950)
                                                                      ---------------     ---------------


        Cash flow from financing activities
          Net increase (decrease) in short-term credit facility                 5,886              5,202
          Proceeds from issuance of long-term debt                                                28,500
          Repayment of long-term debt                                          (3,512)           (20,276)
          Debt issuance costs                                                      (8)            (2,419)
          Proceeds from exercise of stock options                                  18                 28
          Proceeds from issuance of common stock                                                   1,000
          Collection on stock subscription                                                             9
          Repurchase and cancellation of common stock                                               (154)
                                                                      ---------------     ---------------
        Net cash provided by financing activities                               2,384             11,890
                                                                      ---------------     ---------------
        Effect of foreign currency on cash                                          8                (18)
                                                                      ---------------     ---------------
        Net increase (decrease) in cash                                            83                 62

        Cash at beginning of period                                             1,373                768
                                                                      ---------------     ---------------

        Cash at end of period                                                  $1,456               $830
                                                                      ===============     ===============
</TABLE>
    The accompanying notes are an integral part of these financial statements

                                      -5-
<PAGE>
                                  Labtec, Inc.
                   Notes to Consolidated Financial Statements
                    (In thousands, except per share amounts)
                                   (Unaudited)

1.     Basis of Presentation

The accompanying consolidated financial statements are unaudited and have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission and in the opinion of management include all
adjustments, consisting only of normal recurring adjustments, necessary for the
fair statement of results for the interim periods. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. These consolidated financial
statements and notes should be read in conjunction with the audited financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended March 31, 2000. The results of operations for the
interim periods are not necessarily indicative of the results for the entire
year.

Reclassifications have been made to amounts in prior years to conform to the
current year presentation. These changes had no impact on previously reported
results of operations or shareholders' equity.

2.     Accounts Receivable

Accounts receivable are net of allowances for doubtful accounts and for sales
returns of $1,322 and $1,290 at December 31 and March 31, 2000, respectively. At
December 31 and March 31, 2000, 14.4% and 11%, respectively, of receivables were
from one customer.

3.     Inventories

Inventories are manufactured by foreign factories subcontracted by the Company.
Of total inventories, $414 and $450 was in transit at December 31, and March 31,
2000, respectively.

4.     Property and Equipment

Property and equipment consists of the following:

                                  December 31, 2000         March 31, 2000
                                  -----------------         --------------
Leasehold improvements                   $    127                 $    256
Tooling and molds                           1,931                    2,588
Furniture and equipment                     2,827                    2,473
Retail displays                             1,588                    2,145
                                            -----                    -----
                                            6,473                    7,462
Less: accumulated depreciation             (3,975)                  (5,130)
                                           -------                  -------
                                         $  2,498               $    2,332
                                         ========               ==========





                                      -6-
<PAGE>

                                  Labtec, Inc.
             Notes to Consolidated Financial Statements - Continued
                    (In thousands, except per share amounts)


5.       Stock

On December 1, 1999 the Company completed a one-for-two reverse stock split of
its common stock. Subsequent to the reverse stock split, one of the Company's
subordinate debt holders converted $1,500 principal amount of its Senior
Subordinated Note due October 1, 2005 for 262 shares of common stock. Also, the
Company's majority shareholder converted $824 of the Unsecured Subordinated
Promissory Note due February 17, 2005 and $28 of accrued interest for 149 shares
of common stock.

6.       Earnings Per Share

Net income (loss) per share on a diluted basis is based on the weighted average
number of shares of common stock and all potentially dilutive securities
outstanding during the periods, computed using the treasury stock method for
stock options. Given the Company's net loss for the nine months ended December
31, 1999, the dilutive effect of stock options has been excluded from the
computation of the weighted average shares outstanding. For the three and nine
months ended December 31, 2000, the dilutive impact of stock options are
included in the computation of net income per share in accordance with FAS 128.
On December 1, 1999 the Company had a one-for-two reverse stock split. The
weighted average shares outstanding in 1999 have been adjusted to reflect the
reverse split.

Weighted average shares outstanding consist of the following:
<TABLE>
<CAPTION>

                                                      For the Three Months Ended      For the Nine Months Ended
                                                            December 31,                    December 31,
                                                      --------------------------      -------------------------
                                                        2000             1999           2000            1999
                                                        ----             ----           ----            ----
<S>                                                    <C>              <C>            <C>             <C>
Weighted average shares outstanding (basic)            4,015            3,751          4,013           3,575
Effect of dilutive stock options                           9               39             11              --
                                                           -               --             --              --
Weighted average shares outstanding (diluted)          4,024            3,790          4,024           3,575
                                                       =====            =====          =====           =====
</TABLE>

7.     Purchase of Connector Resources Unlimited, Inc.

On August 20, 1999, Labtec, Inc. ("Labtec") completed the acquisition of all of
the outstanding shares of Connector Resources Unlimited, Inc. ("CRU") for
approximately $13,146 in cash and $1,500 in debt. CRU designs, develops and
markets computer peripheral products principally in North America. The
acquisition was accounted for as a purchase and therefore the operations of CRU
have been included with those of the Company since August 20, 1999.






                                      -7-
<PAGE>
                                  Labtec, Inc.
             Notes to Consolidated Financial Statements - Continued
                    (In thousands, except per share amounts)


The following sets forth the reconciliation of fair value of the assets acquired
and the liabilities assumed.

Purchase price                                                $14,646
Fair value of tangible assets acquired                         (5,338)
Liabilities assumed                                             2,098
Direct costs of acquisition                                       755
                                                              -------
Excess of purchase price over fair value of tangible assets   $12,161
                                                              =======

The excess of the purchase price over fair value of tangible assets acquired is
being amortized over an estimated useful life of twenty years.

The following unaudited pro forma information presents the results of the
Company's operations assuming the CRU acquisition occurred at the beginning of
the respective three and nine month periods, after giving effect to adjustments
for amortization of goodwill, estimated increase in interest expense and the
estimated impact on the income tax provision.

                                   Three Months Ended       Nine Months Ended
                                      December 31,            December 31,
                                      ------------            ------------
                                   2000          1999      2000          1999
                                   ----          ----      ----          ----
                                      (unaudited)              (unaudited)
Net sales                          $29,800    $27,379      $78,067    $70,475
Net income (loss)                    2,458      1,182        3,653        575
Net income (loss) per share
before extraordinary loss:
Basic                              $  0.61    $  0.32      $  0.91    $  0.15
Diluted                               0.61       0.31         0.91       0.15

The unaudited pro forma financial information is not necessarily indicative of
the operating results that would have occurred had the CRU acquisition been
consummated as of the beginning of each period, nor is it necessarily indicative
of future operating results. The unaudited pro forma information should be read
in conjunction with the current report of the Company on Form 8-K dated August
20, 1999 and the current report of the Company on Form 8-K/A filed November 2,
1999.

8.     Borrowings

In conjunction with the purchase of CRU in August 1999, the Company repaid its
$7,500 revolving line of credit and $19,250 long-term loan with funds obtained
from a $27,000 long-term loan and a $16,000 revolving line of credit with other
lenders. Also, a $1,500 seven and one-half year promissory note was issued to
the prior shareholders of CRU. Fees related to the extinguished credit line are
included in the extraordinary loss on extinguishment of debt. At December 31,
2000, the long-term loans and a portion of the revolving line of credit were
accruing interest at LIBOR plus 3.00-3.50% and the remaining portion of the
revolving line of credit was accruing interest at the prime rate plus 1.50%. In
December 1999, the Company entered into an interest rate swap agreement with its
primary lender in order to fix the interest rate on a portion of its long-term
debt. At December 31, 2000, the amount of debt subject to the fixed rate was
$11,725 for which the rate was 9.44%. The bank line of credit is secured by
substantially all of the Company's assets. Loan fees paid to the banks and
transaction fees relating to the term loan, revolving line of credit and
promissory note were $2,419 and have been recorded in debt issuance costs. The
current line of credit expires in September 2005 and the long-term debt expires
June 30, 2005.




                                      -8-
<PAGE>

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

Overview

The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere herein.

This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements that involve a number of risks
and uncertainties. The following are among the factors that could cause actual
results to differ materially from the forward-looking statements: business
conditions and growth in the personal computer and workstation industries;
general economies, both domestic and international; lower than expected customer
orders or variations in customer order patterns; competitive factors, including
increased competition, new product offerings by competitors and pricing
pressures; the availability of parts and components; changes in product mix;
resource constraints encountered in developing new products; and product
shipment interruptions due to manufacturing difficulties. The forward-looking
statements contained in the MD&A regarding industry trends, product development
and liquidity and future business activities should be considered in light of
these factors.

Three and Nine Months Ended December 31, 2000 and December 31, 1999 (dollars in
thousands)

Net sales were $29,800 for the three months ended December 31, 2000 compared to
$27,379 for the three months ended December 31, 1999 and $78,067 for the nine
months ended December 31, 2000 compared to $64,566 for the nine months ended
December 31, 1999. The increase in net sales over the periods was due primarily
to the increase in sales for the Company's personal audio and the PC Voice
Access(TM) line of products. Also, the Company's North American retail business
increased substantially. The Company's largest customer represented 10.5% of
sales for the nine months ended December 31, 2000, as compared to 9.4% of sales
for nine months ended December 31, 1999.


                    Three Months Ended               Nine Months Ended
                       December 31,                     December 31,
             -----------------------------     ------------------------------
                (dollars in thousands)             (dollars in thousands)
             2000        1999     % Change      2000       1999      % Change
             ----        ----     --------      ----       ----      --------
Net Sales   $29,800    $27,379       9%        $78,067    $64,566      21%


Cost of sales increased for the three and nine months ended December 31, 2000
compared to the three and nine months ended December 31, 1999 primarily as a
result of higher net sales. Cost of sales as a percentage of net sales decreased
for the three and nine months ended December 31, 2000 compared to the three and
nine months ended December 31, 1999 primarily as a result of the change in
product mix from a larger portion of higher cost products (speakers) to a larger
portion of lower cost products (voice access and personal audio).




                                      -9-
<PAGE>
<TABLE>
<CAPTION>
                                          Three Months Ended                           Nine Months Ended
                                             December 31,                                 December 31,
                               -----------------------------------------   -------------------------------------------
                                        (dollars in thousands)                       (dollars in thousands)
                                   2000          1999       % Change           2000           1999         % Change
                                   ----          ----       --------           ----           ----         --------
<S>                               <C>          <C>             <C>            <C>            <C>             <C>
Cost of sales                     $17,579      $16,526         6%             $46,287        $38,802         19%
As a % of net sales                59.0%        60.4%                          59.3%          60.1%
</TABLE>


Selling and marketing expenses increased by $530 to $5,286 for the three months
ended December 31, 2000 from $4,756 for the three months ended December 31,
1999. For the nine months ended December 31, 2000 selling and marketing expenses
increased by $3,215. As a percentage of net sales, selling and marketing
expenses increased slightly to 19.5% for the nine months ended December 31, 2000
from 18.6% for the nine months ended December 31, 1999. The dollar increase is
primarily a result of additional sales personnel, higher travel costs to support
the increased sales volume, increased variable costs (such as freight,
commissions and coop advertising) related to the increased sales volume, and
increased marketing efforts in the North American retail portion of the business
to maintain market share in this very competitive market.
<TABLE>
<CAPTION>

                                         Three Months Ended                            Nine Months Ended
                                            December 31,                                  December 31,
                               ----------------------------------------    -------------------------------------------
                                       (dollars in thousands)                        (dollars in thousands)
                                   2000         1999       % Change            2000           1999        % Change
                                   ----         ----       --------            ----           ----        --------
<S>                               <C>          <C>           <C>              <C>           <C>             <C>
Selling and marketing             $5,286       $4,756        11.1%            $15,244       $12,029         26.7%
As a % of net sales               17.7%        17.4%                           19.5%         18.6%
</TABLE>


General and administrative expenses, which include the Company's corporate
finance, legal, human resources, and administrative functions, decreased by
$154, or 9.5%, for the three months ended December 31, 2000 as compared to the
three months ended December 31, 1999. For the nine months ended December 31,
2000 general and administrative expenses increased by $68 from the nine months
ended December 31, 1999. As a percentage of net sales, general and
administrative expenses decreased to 5.2% for the nine months ended December 31,
2000 from 6.1% for the prior period. The dollar decrease for the three months
ended December 31, 2000, is due primarily to savings in labor costs related to
the downsizing of administrative personnel after the CRU acquisition. As a
percentage of net sales, general and administrative expenses decreased primarily
due to increased net sales.
<TABLE>
<CAPTION>
                                             Three Months Ended                          Nine Months Ended
                                                December 31,                                December 31,
                                   ---------------------------------------   -------------------------------------------
                                           (dollars in thousands)                      (dollars in thousands)
                                      2000        1999        % Change           2000           1999         % Change
                                      ----        ----        --------           ----           ----         --------
<S>                                  <C>         <C>           <C>              <C>            <C>             <C>
General and administrative           $1,466      $1,620        (9.5%)           $4,023         $3,955          1.7%
As a % of net sales                   4.9%        5.9%                           5.2%           6.1%
</TABLE>


Research and development expenses decreased by $47 for the nine months ended
December 31, 2000 as compared to the nine months ended December 31, 1999,
primarily due to the decreased investment related to new product introductions,
which was partially offset by an increase in hiring of employees working in
research and development. As a percentage of net sales, research and development
decreased primarily due to increased net sales.

                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                                             Three Months Ended                          Nine Months Ended
                                                December 31,                                December 31,
                                   ---------------------------------------   -------------------------------------------
                                           (dollars in thousands)                      (dollars in thousands)
                                      2000        1999        % Change           2000           1999         % Change
                                      ----        ----        --------           ----           ----         --------
<S>                                   <C>         <C>          <C>              <C>            <C>            <C>
Research and development              $535        $633         (15.5)%          $1,659         $1,706         (2.8)%
As a % of net sales                   1.8%        2.3%                           2.1%           2.6%
</TABLE>


Depreciation dollar amounts increased slightly for the nine months ended
December 31, 2000 compared to the nine months ended December 31, 1999 as the
result of increased capital expenditures for computer equipment and software and
tooling/molds for new products being developed. Depreciation decreased as a
percentage of net sales primarily due to the increase in net sales.
<TABLE>
<CAPTION>

                                         Three Months Ended                           Nine Months Ended
                                            December 31,                                 December 31,
                                --------------------------------------    -------------------------------------------
                                       (dollars in thousands)                       (dollars in thousands)
                                   2000        1999       % Change            2000           1999        % Change
                                   ----        ----       --------            ----           ----        --------
<S>                                <C>         <C>         <C>               <C>            <C>            <C>
  Depreciation                     $416        $427        (2.6)%            $1,196         $1,186         0.8%
  As a % of net sales              1.4%        1.6%                           1.5%           1.8%
</TABLE>

Amortization decreased in dollar amount in the three and nine months ended
December 31, 2000 compared to the three and nine months ended December 31, 1999.
As a percentage of net sales, amortization decreased for the three and nine
months ended December 31, 1999 compared to the same periods ended December 31,
1999. This decrease was primarily the result of changing the Spacetec
amortization of goodwill from three (3) years to ten (10) years. Goodwill (the
purchase price paid for Spacetec and CRU in excess of the fair value of net
tangible assets) is being amortized over ten (10) years for Spacetec and twenty
(20) years for CRU.
<TABLE>
<CAPTION>
                                         Three Months Ended                           Nine Months Ended
                                            December 31,                                 December 31,
                                --------------------------------------    -------------------------------------------
                                       (dollars in thousands)                       (dollars in thousands)
                                   2000        1999       % Change            2000           1999        % Change
                                   ----        ----       --------            ----           ----        --------
<S>                                <C>         <C>         <C>                <C>           <C>           <C>
  Amortization                     $299        $682        (56.2)%            $898          $2,611        (65.6)%
  As a % of net sales              1.0%        2.5%                           1.2%           4.0%
</TABLE>

Interest expense increased in dollar amount for the three and nine months ended
December 31, 2000 compared to the three and nine months ended December 31, 1999.
The increase was primarily the result of the Company's refinancing and
increasing its debt in conjunction with the purchase of CRU in August 1999.



                                      -11-
<PAGE>
<TABLE>
<CAPTION>
                                         Three Months Ended                           Nine Months Ended
                                            December 31,                                 December 31,
                                --------------------------------------    -------------------------------------------
                                       (dollars in thousands)                       (dollars in thousands)
                                   2000        1999       % Change            2000           1999        % Change
                                   ----        ----       --------            ----           ----        --------
<S>                               <C>         <C>           <C>              <C>            <C>            <C>
  Interest expense, net           $1,232      $1,179        4.5%             $3,673         $2,942         24.8%
  As a % of net sales              4.1%        4.3%                           4.7%           4.6%
</TABLE>


The provision for income taxes was $551 for the three months ended December 31,
2000, as compared to $371 for the same period in fiscal 2000. The provision for
income taxes was $1,327 for the nine months ended December 31, 2000, as compared
to $626 for the same period in fiscal 2000. The primary reason for the increase
was the increase in pre-tax income. During the three months ended December 31,
2000, the Company reduced its deferred tax valuation allowance by the amount of
$739 due to an increase in the limitation on the amount of net operating losses
that the Company may utilize in any one year.


Liquidity and Capital Resources

As of December 31, 2000, the Company had $1,456 in cash and cash equivalents and
working capital of $14,426. The working capital balance increase from March 31,
2000, was primarily due to the increase in accounts receivable and inventories,
which was partially offset, by the increase in borrowing on the line of credit
and accounts payable.

Net cash used for operating activities was $899 for the nine months ended
December 31, 2000, compared to cash provided by operating activities of $3,140
for the same period in fiscal 2000. The increase in net cash used for by
operating activities was primarily due to the increase in accounts receivable
and inventories, which was offset by the increase in net income over the prior
year net loss and the increase in accounts payable.

Net cash used in investing activities was $1,410 for the nine months ended
December 31, 2000, compared to net cash used in investing activities of $14,950
in fiscal 2000. The decrease was primarily due to the purchase of CRU in the
period during fiscal 2000.

Financing activities provided net cash of $2,384 for the nine months ended
December 31, 2000, principally due to the increase in short-term borrowing,
which was partially offset by the repayment of long-term debt.

At December 31, 2000, the long-term loans were accruing interest at the LIBOR
rate plus 3.00 - 3.50%, the subordinated note at 12%, the line of credit at the
prime rate plus 1.50%, and the promissory notes at 10% and 6%, respectively. In
December 1999, the Company entered into an interest rate swap agreement with its
primary lender in order to fix the interest rate on a portion of its long-term
debt. At December 31, 2000, the amount of debt subject to the fixed rate was
$11,725, for which the rate was 9.44%.

The Company believes that its existing cash and revolving line of credit,
together with future funds from operations, will satisfy its need for working
capital and other cash requirements for at least the next twelve-month period.



                                      -12-
<PAGE>

Year 2000 Issues

The Year 2000 issue is the result of date-sensitive devices, systems and
computer programs that were deployed using two digits rather than four to define
the applicable year. Any such technologies may recognize a year containing "00"
as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculation causing disruption of operations including, among
other things, a temporary inability to process transactions or engage in similar
normal business activities.

The Company did not experience any significant malfunctions or errors in its
information or business systems when the date changed from 1999 to 2000. Based
on its operations since January 1, 2000, the Company does not expect any
significant problems related to the Year 2000 issue. However, it is possible
that the full impact of the date change has not been fully recognized. For
example, it is possible that Year 2000 or similar issues, such as leap year
related problems, may occur with financial closings. The Company believes that
any such problems will be minor and easily corrected. In addition, the Company
could still be negatively impacted if the Year 2000 or similar issues adversely
affect its customers or suppliers. Currently, the Company is not aware of any
significant Year 2000 or similar problems that have arisen with its customers or
suppliers.


Disclosure Regarding Private Securities Litigation Reform Act of 1995
---------------------------------------------------------------------

From time to time, the Company, through its management, may make forward-looking
public statements in press releases or other communications, such as statements
concerning then expected future revenues or earnings or alliances, product
development, and commercialization, as well as other estimates relating to
future operations. Forward-looking statements may be in reports filed under the
Securities Exchange Act of 1934, as amended, in press releases, or in oral
statements made with the approval of an authorized executive officer. The words
or phrases "believe," "will likely result," "are expected to," "will continue,"
"is anticipated," "estimate," or similar expressions are intended to identify
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934 and Section 27A of the Securities Act of 1933, as enacted
by the Private Securities Litigation Reform Act of 1995.

The Company wishes to caution readers not to place undue reliance on these
forward-looking statements which speak only as of the date on which they are
made. Various factors could affect the Company's financial or other performance,
and could cause the Company's actual results for future periods to differ
materially from any opinions or statements expressed with respect to future
periods or events in any current statement. These facts include, but are not
limited to: business conditions and growth in the personal computer and
workstation industries and general economies, both domestic and international;
dependence on a limited number of retail customers; dependence on a limited
number of source suppliers; lower than expected customer orders or variations in
customer order patterns due to changes in demand for customers' products and
customers' inventory levels; competitive factors, including increased
competition, new product offerings by competitors and pricing pressures; changes
in product mix; dependence on proprietary technology; assertion of intellectual
property rights by third parties; technological difficulties and resource
constraints encountered in developing new products; product shipment
interruptions and other factors discussed herein and in the Company's other
filings with the Securities and Exchange Commission.

The Company will not undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events which may cause management to reevaluate such forward-looking statements.

Item 3.          Quantitative and Qualitative Disclosures About Market Risk

                  None.
                                      -13-
<PAGE>

                           PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K


(a)      Exhibits:
<TABLE>
<CAPTION>

Number    Description of Exhibit                           Method of Filing
------    ----------------------                           ----------------
<S>      <C>                                              <C>
3.1       Restated Articles of Organization                Incorporated  by  reference to Exhibit 3.1 to the
                                                           Company's  Annual  Report  on Form  10-K  for the
                                                           fiscal  year ended March 31, 1999 (the "1999 Form
                                                           10-K")
3.2       Articles of Amendment                            Incorporated  by  reference to Exhibit 3.2 to the
                                                           1999 Form 10-K
3.3       Articles of Amendment                            Incorporated  by  reference to Exhibit 3.3 to the
                                                           Form  10-Q  for  the   quarterly   period   ended
                                                           September 30, 1999
3.4       Articles of Amendment                            Incorporated by reference to Exhibit 3.4 to the
                                                           Company's Quarterly Report on Form 10-Q for the
                                                           fiscal quarter entded December 31, 1999
3.5       Amended and Restated By-Laws of the Company      Incorporated  by  reference to Exhibit 3.3 to the
                                                           1999 Form 10-K
4.1       Specimen   certificate  for  shares  of  common  Incorporated  by  reference to Exhibit 4.1 to the
          stock of the Company                             1999 Form 10-K
10.1      Labtec Inc.  Amended and Restated 1997 Employee  Incorporated  by reference to Exhibit 10.1 to the
          Stock Option Plan                                1999 Form 10-K
10.2      1997  Employee   Stock  Option  Plan  -  Option  Incorporated  by reference to Exhibit 10.2 to the
          Certificate and Agreement                        1999 Form 10-K
10.3      Amended  and  Restated  1997   Employee   Stock  Incorporated  by reference to Exhibit 10.3 to the
          Option Plan - Option Certificate and Agreement   1999 Form 10-K
10.4      Amended and Restated Stock Option Plan           Incorporated  by reference to Exhibit 10.1 to the
                                                           Company's  Registration  Statement  on  Form  S-1
                                                           (Commission     File    No.     33-98064)    (the
                                                           "Registration Statement")
10.5      Amended  and  Restated  1995   Director   Stock  Incorporated  by reference to Exhibit 10.2 to the
          Option Plan                                      Company's  Annual  Report  on Form  10-K  for the
                                                           fiscal year ended March 31, 1997
10.6      1995 Employee Stock Purchase Plan                Incorporated  by reference to Exhibit 10.3 to the
                                                           Registration Statement

10.7      Amended  and  Restated  Agreement  and  Plan of  Incorporated  by  reference to Exhibit 2.1 to the
          Merger  among  Spacetec IMC  Corporation,  SIMC  Company's   Current  Report  on  Form  8-K  dated
          Acquisition  Corporation and Labtec Inc., dated  October  21,   1998  (date  of   earliest   event
          as of October 2, 1998,  as amended and restated  reported)  filed  with the  Commission  (File No.
          as of November 13, 1998                          0-27302) on November 17, 1998
10.8      Spacetec     IMC     Corporation      Unsecured  Incorporated  by reference to Exhibit 10.8 to the
          Subordinated  Promissory  Note  for  $1,065,000  1999 Form 10-K
          dated February 17, 1999
10.9      Stock  Purchase  Agreement,  dated as of August  Incorporated  by  reference to Exhibit 2.1 to the
          4, 1999,  among the Purchaser,  the Company and  Company's   Current  Report  on  Form  8-K  dated
          each   of   the   stockholders   of   Connector  August   20,   1999  (date  of   earliest   event
          Resources Unlimited, Inc.                        reported)  filed  with the  Commission  (File No.
                                                           0-27302)  on  September  2, 1999 (the  "1999 Form
                                                           8-K")


                                      -14-
<PAGE>

Number    Description of Exhibit                           Method of Filing
------    ----------------------                           ----------------

10.10     Promissory  Note,  dated as of August 20, 1999,  Incorporated  by  reference to Exhibit 2.2 to the
          issued  by the  Company  and  payable  to  Carl  1999 Form 8-K
          Gromada,  as  collection  agent for each of the
          stockholders of Connector Resources  Unlimited,
          Inc.
10.11     Form of  Credit  Agreement,  dated as of August  Incorporated  by  reference  to Exhibit  10.11 to
          20,   1999,   among  the  Company  and  certain  the Form  10-Q  for the  quarterly  period  ended
          subsidiaries,   various   guarantors,   various  September 30, 1999
          lending  institutions  and The Chase  Manhattan
          Bank, as agent
10.12     Recapitalization  Agreement  and Plan of Merger  Incorporated  by  reference  to Exhibit  10.12 to
          between  Speaker   Acquisition  Corp.  and  LEI  the 1999 Form 10-K
          Holdings, Inc., dated as of August 26, 1997
10.13     Lease Agreement,  dated April 24, 1997, between  Incorporated  by  reference  to Exhibit  10.13 to
          Pacific  Realty  Associates,  L.P.,  and Labtec  the 1999 Form 10-K
          Enterprises, Inc.
10.14     Lease   Agreement,   dated  February  4,  1998,  Incorporated  by  reference  to Exhibit  10.14 to
          between  Columbia  Tech  Center,   L.L.C.,  and  the 1999 Form 10-K
          Labtec Inc.
10.15     Labtec Enterprises,  Inc. $6,000,000  Principal  Incorporated  by  reference  to Exhibit  10.16 to
          Amount of Senior  Subordinated Notes and 50,000  the 1999 Form 10-K
          Shares  of  Common  Stock  Purchase  Agreement,
          dated October 7, 1997
10.16     Amendment  to Purchase  Agreement,  dated as of  Incorporated  by  reference  to Exhibit  10.17 to
          October  25,  1999 and  effective  as of August  the Form  10-Q  for the  quarterly  period  ended
          20, 1999,  between Labtec  Corporation  and The  September 30, 1999
          KB Mezzanine Fund II, L.P.
10.17     Recognition,   Non-Disturbance   and   Attorney  Incorporated  by reference to Exhibit 10.5 to the
          Agreement,  dated  December 26,  1995,  between  1996 Form 10-K
          the Company  and  Historic  Boott Mill  Limited
          Partnership
10.18     Royalty Agreement,  dated May 29, 1991, between  Incorporated  by reference to Exhibit 10.6 to the
          the Company and John A. Hilton                   Registration Statement
10.19     Resale  Agreement,  dated  as of May  1,  1991,  Incorporated  by reference to Exhibit 10.8 to the
          between  the  Company   and   Electronic   Data  Registration  Statement.   See  also  footnote  1
          Systems    Corporation    (as   successors   to  below.
          McDonnell Douglas  Corporation),  as amended by
          Amendment  No. 1 dated  December 23, 1993,  and
          Amendment No. 2 dated October 6, 1994
10.20     Distribution  and  Marketing  Agreement,  dated  Incorporated  by reference to Exhibit 10.9 to the
          April  28,   1994,   between  the  Company  and  Registration  Statement.   See  also  footnote  1
          Sumisho Electronic Devices Corporation           below.
10.21     Form   of   Confidentiality    and   Inventions  Incorporated  by  reference  to Exhibit  10.11 to
          Agreement between the Company and its employees  the Registration Statement.
10.22     Form of  Non-Disclosure  Agreement  between the  Incorporated  by  reference  to Exhibit  10.12 to
          Company and its consultants                      the Registration Statement.
10.23     Severance  Agreement,  dated  March  18,  1998,  Incorporated  by  reference  to Exhibit  10.15 to
          between the Company and Dennis T. Gain           the Company's  Annual Report on Form 10-K for the
                                                           fiscal year ended March 31, 1998
10.24     Employment  Agreement,   dated  June  1,  1998,  Incorporated  by  reference  to Exhibit  10.24 to
          between the Company and Gregory Jones            the 1999 Form 10-K
27.1      Financial Data Schedule                          Filed herewith
</TABLE>
--------
(1) Certain confidential material contained in the document has been omitted and
filed  separately with the Securities and Exchange  Commission  pursuant to Rule
406 of the Securities Act of 1933, as amended,  and Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.

       (b)   Reports on Form 8-K

                  The Company has not filed any reports on Form 8-K during the
quarterly period ended December 31, 2000.

                                      -15-
<PAGE>

                                   SIGNATURES
                                   ----------

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


                                         LABTEC INC.


Dated:    February ___, 2001            By: /s/  Robert G. Wick
                                        ----------------------
                                              Robert G. Wick
                                              President and
                                              Chief Executive Officer


























                                      -16-