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

                                    FORM 10-Q



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


For the Quarter Ended December 31, 2000 Commission File Number 0-12283


                                ZONIC CORPORATION
             (Exact name of Registrant as specified in its charter)



                                 Ohio 31-0791199
        (State of Incorporation) (I.R.S. Employer Identification Number)

              50 West Technecenter Drive, Milford, Ohio 45150-9777
               (address of principal executive offices) (Zip Code)


       Registrant's telephone number, including area code: (513) 248-1911


                                 Not Applicable
(Former name, address or fiscal year if changed since last report)


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 _________

The total number of shares  outstanding of the issuer's  common shares,  without
par value, as of the date of this report, follow:



                                    3,044,136



<PAGE>




Part I   Financial Information

Item 1.  Financial Statements

STATEMENT OF OPERATIONS
(unaudited)

<TABLE>
                                                 Three Months Ended                    Nine Months Ended
<CAPTION>

                                            12/31/00          12/31/99              12/31/00     12/31/99

<S>                                       <C>             <C>                 <C>              <C>
Products and service revenues             $   602,527     $     517,926       $     1,495,086  $ 1,510,231

Cost of products and services sold            243,480           209,897               552,877      619,877
Selling and administrative expenses           239,765           248,243               715,186      696,391
Research and development expenses
   and software construction and
   product enhancement amortization            81,583            38,564               189,102      100,423

                                              564,828           496,704             1,457,165    1,416,691
                                              -------           -------             ---------    ---------

Operating profits                              37,699            21,222                37,921       93,540
                                              -------           -------             ---------    ---------

Interest expense, net                          (7,780)           (2,996)              (20,275)      (5,899)
Foreign currency gain (loss)                      242               (12)                  242          (12)
                                              -------           -------             ---------    ---------

Income before taxes                            30,161            18,214                17,888       87,629

Provision for income taxes                          -                 -                    -            -
                                              -------           -------             ---------    ---------

Net income                                     30,161            18,214                17,888       87,629

Less: Dividend payable on preferred
     shares                                    (3,578)           (3,644)               (3,578)     (17,527)
                                              -------           -------             ---------    ---------

Net income available to common
     shareholders                         $    26,583       $    14,570           $    14,310    $  70,102
                                            =========         =========             =========    =========

Weighted average of common shares           3,044,136         3,044,136             3,044,136    3,044,136
     outstanding
Dilutive potential common shares:
     Class A convertible preferred stock    1,200,000        1,200,000              1,200,000    1,200,000

          Stock options                           667                 -                58,476            -
                                            ---------         ---------             ---------   ----------
Adjusted weighted average of common
     shares outstanding                     4,244,803         4,244,136             4,302,612    4,244,136
                                            =========         =========             =========    =========

Basic earnings per share                        $0.01            $0.00                 $0.00         $0.02
                                            =========         =========             =========    =========

Diluted earnings per share                      $0.01            $0.00                 $0.00         $0.02
                                            =========         =========             =========    =========
</TABLE>

The accompanying notes are an integral part of these financial statements.


<PAGE>


Item 1 - Financial Statements  (continued)

BALANCE SHEETS
As of December 31, 2000 & March 31, 2000
<TABLE>


                                                           (Unaudited)
                                                            Dec.  31           March-31
ASSETS                                                        2000               2000
                                                            ------------      ---------
<S>                                                     <C>               <C>
Current Assets
     Cash                                               $      8,022      $      34,578
     Receivables
          Trade                                              211,285            101,662
          Related parties                                      6,500             27,751
                                                           ---------          ---------
     Total receivables                                       217,785            129,413

     Inventories
          Finished products                                   63,941            137,628
          Work in process                                     28,210             18,561
          Raw material                                       105,648             81,229
                                                           ---------          ---------
     Total inventories                                       197,799            237,418
     Prepaid expenses                                         38,325              1,896
                                                           ---------          ---------
          Total Current Assets                               461,931            403,305

Property and Equipment-at Cost
     Furniture and office equipment                          104,504            102,217
     Machinery and plant equipment                           229,985            219,381
     Software construction and product enhancement         2,360,457          2,270,008
                                                           ---------          ---------
                                                           2,694,946          2,591,606
     Less accumulated depreciation and amortization        2,532,198          2,494,387
                                                           ---------          ---------
                                                             162,748             97,219
                                                           ---------          ---------
               Total Assets                             $    624,679       $    500,524
                                                           =========          =========

LIABILITIES
Current Liabilities
     Note payable                                         $  110,000           $135,000
     Current maturities of long term obligations               5,405              5,133
     Accounts payable - trade                                666,883            567,958
     Accounts payable - related parties                        7,441                  -
     Dividend payable                                         12,153              8,575
     Deferred income                                         263,212            244,098
     Accrued liabilities
          Salaries and wages                                  85,136             88,693
          Property and payroll taxes                          44,907             33,777
          Commissions                                         83,775             72,043
          Other                                               47,175             56,874
                                                           ---------          ---------
            Total Accrued Liabilities                        260,993            251,387
                                                           ---------          ---------
            Total Current Liabilities                      1,326,087          1,212,151

Long-term obligations, less current maturities                   938              5,029

SHAREHOLDERS' DEFICIT
     Preferred shares                                      2,400,000          2,400,000
     Common shares                                            61,674             61,674
     Additional paid-in capital                            5,727,881          5,727,881
                                                           ---------          ---------
                                                           8,189,555          8,189,555
     Accumulated deficit                                  (8,891,901)        (8,906,211)
                                                           ---------          ---------
           Total Shareholders' Deficit                      (702,346)          (716,656)
                                                           ---------          ---------
           Total Liabilities and Shareholders' Deficit   $   624,679         $  500,524
                                                           =========          =========
</TABLE>


The accompanying notes are an integral part of these financial statements.

<PAGE>


Item 1 - Financial Statements  (continued)

                  STATEMENT OF  SHAREHOLDERS'  DEFICIT For the nine months ended
December 31, 2000 (unaudited)
<TABLE>


<CAPTION>
                                                                 Additional
                                 Common        Preferred         Paid - In          Accumulated
                                 Shares         Shares            Capital             Deficit            Total

<S>                           <C>           <C>                <C>                <C>               <C>
Balance, March 31, 2000       $   61,674    $  2,400,000       $  5,727,881       $  (8,906,211)    $  (716,656)

Net income for the period              -               -                  -              17,888          17,888

Dividends payable on
     preferred shares                  -               -                  -              (3,578)         (3,578)
                                --------       ---------        -----------         -----------        --------
Balance, December 31, 2000    $   61,674    $  2,400,000       $  5,727,881       $  (8,891,901)    $  (702,346)
                                ========       =========        ===========         ===========        ========
</TABLE>


The accompanying notes are an integral part of these financial statements.

<PAGE>


Item 1 - Financial Statements  (continued)

STATEMENTS OF CASH FLOWS
For the nine months ended December 31,
(unaudited)
<TABLE>

<CAPTION>
                                                                        2000             1999
<S>                                                             <C>              <C>
Cash provided (used) by operations
    Net income for period                                       $     17,888     $     87,629
    Adjustments to reconcile net income to cash from operations
        Depreciation and amortization                                 11,495            8,342
        Amortization of software construction
               and product enhancements                               26,316            2,862
        Provision for obsolete inventory                              18,000           18,000
        Amortization of deferred income and deferred rent            (70,881)        (113,272)
        Foreign currency (gain) loss and other                          (242)              12

    Increase (decrease) in cash  due to changes in
        Accounts receivable                                         (101,064)         (38,221)
        Inventories                                                   21,619           14,432
        Prepaid expenses                                             (36,429)          (1,387)
        Accounts payable                                             119,300          (28,704)
        Accrued liabilities                                            9,606           (2,718)
        Deferred income                                               89,995           44,697
                                                                   ---------        ---------
              Net cash provided (used) by operations                 105,603           (8,328)

Cash used in investment activities
        Purchase of equipment                                        (12,891)          (5,667)
        Increase in software construction and product enhancements   (90,449)         (64,764)
                                                                   ---------        ---------
              Net cash used in investment activities                (103,340)         (70,431)

Cash provided (used) by financing activities
        Addition (repayment) of note payable                         (25,000)          85,000
        Payments on debt obligations                                  (3,819)         (19,557)
                                                                   ---------        ---------
              Net cash provided (used) by financing activities       (28,819)          65,443

Decrease in cash                                                     (26,556)         (13,316)
Cash - beginning of period                                            34,578           32,848
                                                                   ---------        ---------
Cash - end of period                                            $      8,022     $     19,532
                                                                   =========        =========
Interest paid during period                                     $     20,275     $      5,899
                                                                   =========        =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>


Item 1 - Financial Statements  (continued)

Notes to Financial Statements


1.   Presentation of Information

In the opinion of management,  the accompanying  unaudited financial  statements
reflect  all  adjustments  (consisting  of only  normal  recurring  adjustments)
necessary to present fairly Zonic Corporation's (the Company) financial position
at December 31, 2000 and the results of operations  for the three and nine month
periods  ended  December 31, 2000 and 1999 and its cash flows for the nine month
periods  ended  December 31, 2000 and 1999.  The results of  operations  for the
interim periods are not  necessarily  indicative of results to be expected for a
full year.

The financial  statements are summarized and should be read in conjunction  with
the annual  report to  shareholders  and Form 10-K for the year ended  March 31,
2000.  Certain  reclassifications  have been made to amounts shown for the prior
year to conform to current year classifications.

2.       New Standards

In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation  No. 44,  "Accounting  for Certain  Transactions  involving Stock
Compensation  - an  interpretation  of APB Option No.  25." This  Interpretation
clarifies the application of Opinion 25 for only certain  issues,  including the
accounting  consequence  of various  modifications  to the terms of a previously
fixed stock option or award. This Interpretation was effective July 1, 2000, but
covers   specific   events  that  occurred   after   December  15,  1998.   This
Interpretation affects the Company as a result of the repricing of options which
occurred in February 1999.  Commencing  July 1, 2000,  the repriced  options are
accounted  for as  variable  until  the  date  the  awards  are  exercised,  are
forfeited,  or expire unexercised.  Compensation cost is recognized  immediately
after July 1, 2000 to the extent that the stock price exceeds the stock price on
July 1, 2000. As of December 31, 2000, the market value of the Company's  common
stock did not increase in value from July 1, 2000 and as such,  no  compensation
expense  related to the repricing of options which occurred in February 1999 has
been recorded.

3.       Earnings Per Share

Certain  stock  options  were not  included  in the diluted  earnings  per share
calculations  for the three months  ended  December 31, 2000 as their effect was
anti-dilutive.



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


Special Cautionary Notice Regarding Forward-Looking Statements

         Certain  of the  matters  discussed  under  the  caption  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operation"  may
constitute forward-looking statements for purposes of the Securities Act of 1933
and the  Securities  Exchange Act of 1934,  as amended,  and as such may involve
known and unknown  risks,  uncertainties  and other  factors which may cause the
actual  results,  performance  or  achievements  of the Company to be materially
different from future results,  performance or achievements expressed or implied
by such  forward-looking  statements.  Important  factors  that could  cause the
actual results,  performance or achievement of the Company to differ  materially
from the Company's expectations include,  without limitation,  the following: 1)
the Company is unable to improve existing products or develop new products which
satisfy  needs in the Company's  markets;  2) the Company is unable to penetrate
new  markets;  3) the  Company is unable to retain  existing  personnel  or hire
additional personnel; 4) the industries the Company serves experience less rapid
growth than anticipated; 5) the Company is unable to obtain supplies on a timely
basis from its limited number of suppliers; 6) new competitors enter the markets
the Company serves or existing  competitors increase their marketing efforts; 7)
the Company is unable to obtain additional debt or equity financing on favorable
terms,  if at all,  to  satisfy  its  cash  requirements.  All  written  or oral
forward-looking  statements  attributable to the Company are expressly qualified
in their entirety by such factors.


Results of Operations

Product and Services Revenue  increased by $84,601,  or 16% for the three months
ended December 31, 2000, when compared to the prior year period. Sales continued
to  increase  in  the  targeted  new  markets  for  special   systems  and  test
applications  during the period  resulting  in  significantly  higher  Medallion
product  revenue for the current  three month period when  compared to the prior
year. For the nine months ended December 31, 2000,  revenue decreased by $15,145
or 1% when compared to the same period of the prior year.  This slight  decrease
was due to a significant  decline in revenue from custom designed  systems which
the  Company  no longer  actively  markets  but was mostly  offset by  increased
Medallion product revenue.

Order  backlog  amounted to $148,000 at December 31, 2000 compared with $105,000
at December 31, 1999. The increase occurred primarily in Medallion products.

Costs of products  and  services  sold were 40% and 37% of products and services
revenues  for the three and nine months ended  December 31, 2000,  respectively,
versus 41% for the same periods of the prior year.  Costs  increased  during the
current three month period  versus costs earlier  during the current year due to
lower  margins on certain  sales in the targeted new markets.  The  year-to-date
decrease resulted from increased sales of Medallion  software products which had
significantly  lower costs during the current year versus  higher costs  related
7000 Series and custom designed system sales in the prior year.

Selling and  administrative  expenses  decreased $8,478 or 3% during the current
three month period  versus the same prior year period.  Fewer sales from outside
sales representatives resulted in decreased commission expense during the period
but was partially offset by higher  commissions paid to employees.  For the nine
months  ended  December 31, 2000,  expenses  increased  $18,795 or 3% versus the
prior year due to higher  commissions  expense from  increased  sales by outside
sales  representatives  and higher  advertising,  product  collateral  and sales
promotional  expenses.  These were partially offset by a significant decrease in
professional services expense.  Selling and administrative expenses were 40% and
48% respectively of products and service revenues for the current three and nine
month periods versus 48% and 46%  respectively for the same periods of the prior
year.  The  decrease  for the current  three month  period was due mainly to the
increase in revenue which occurred during the same period.

Research and development  expenses and software  construction  amortization  was
$81,583 and $189,102,  respectively,  for the three and nine month periods ended
December  31,  2000  versus  $38,564 and  $100,423,  respectively,  for the same
periods  of the prior  year.  These  increases  were due to higher  amortization
expense as a result of an  increase in  capitalized  software  construction  and
product  enhancement costs during the current and prior years and an increase in
Medallion  product  research and  development  costs versus the prior year.  See
Software  Construction  and  Product  Development  under  Liquidity  and Capital
Resources.

Interest  expense was $7,780 and $20,275,  respectively,  for the three and nine
month  periods ended  December 31, 2000 versus $2,996 and $5,899,  respectively,
for the same periods  ended  December 31, 1999.  This increase was due to higher
borrowings  and  discounts  given to  customers  for payment of accounts  before
stated terms during the current year.

Foreign  currency gain was $242 for the three and nine months ended December 31,
2000 versus a loss of $12 for the three and nine months of the prior year.  This
gain and loss are due to an increase and decrease, respectively, in the value of
the dollar against the Japanese yen.

Income tax expense of $10,254 and $6,082,  respectively,  for the three and nine
months ended December 31, 2000 was offset by net operating  loss  carryforwards.
At March 31, 2000, loss  carryforwards  totaling $6.8 million and tax credits of
$663,000  were  available to offset  future  income  taxes.  No benefit from the
Company's deferred tax assets has been provided at this time.

Dividend  payable on class B preferred  shares is equal to 20% of the  Company's
current year-to-date net income.


Liquidity & Capital Resources

Software Construction and Product Development

The Company's total unamortized  software  construction and product  enhancement
costs at  December  31,  2000 and March  31,  2000 were  $127,252  and  $63,119,
respectively.  The cash outlay for capitalized software construction and product
enhancement  costs  during the  current and prior year nine month  periods  were
$90,449 and $64,764, respectively.


Working Capital and Cash Flow

The Company's  working capital  decreased from a negative  $808,846 at March 31,
2000 to a negative  $863,620 at December 31, 2000. The current ratio was .33 and
 .35 at March 31, 2000 and December 31, 2000, respectively. The change in working
capital  was  due  primarily  to  increases  in  accounts  payable  and  accrued
commissions  which were partially offset by lower  short-term  borrowings and an
increase in accounts receivable.

The  Company's  cash flows from  operations  amounted to  $105,603  for the nine
months ended December 31, 2000.  Investment in software construction and product
enhancement  activities and purchased equipment amounted to $90,449 and $12,891,
respectively.  The Company repaid $25,000 of its short-term  borrowings from the
bank and made payments on other  long-term debt totaling  $3,819 during the nine
months ended December 31, 2000.

The Company  continues to experience  cash flow problems as current  liabilities
exceed  current  assets.  Many of these excess  liabilities  relate to unsettled
accounts payable from prior years. The Company's operations generated sufficient
cash flow to meet its current obligations during the current three month period,
but outstanding  obligations  have increased over the current nine month period.
As such,  the  Company  is  unable  to reduce  the  amount of the old  unsettled
obligations.  The Company  periodically seeks additional working capital through
debt or equity  financing  from  public or private  sources  when  opportunities
become  available,  but to date has been unable to obtain  additional  financing
from any source.



PART II - Other Information

None


Item 6:  Exhibits and Reports on Form 8-K

     Exhibit 11 - Computation  of earnings per common share - see  Statements of
     Operations

         Reports on Form 8-K  - None


<PAGE>


                                   SIGNATURES
Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.

ZONIC CORPORATION



By:_/s/ James B. Webb_______________
    James B. Webb
    President and Chief Executive Officer



By:_/s/ John H. Reifschneider__________
    John H. Reifschneider
    Controller



Dated:  February 9, 2001