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 January 31, 2001

          Commission File Number: 0-5105



                  MILASTAR CORPORATION
(Exact name of registrant as specified in its charter)



            DELAWARE                          13-2636669
(State or other jurisdiction of            (I.R.S. Employer
 incorporation or organization)           Identification No.)


7317 West Lake Street, Minneapolis, MN               55426
(Address of principal executive offices)           (Zip code)


Registrant's telephone number, including area code (952) 929-4774


Not Applicable

Former name, former address and former 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


At January 31, 2001, 2,738,264 shares of common stock of the Registrant
were issued and outstanding.



  MILASTAR CORPORATION AND SUBSIDIARIES



PART I

Item 1.
    Financial Statements

    The condensed financial statements included herein have been
prepared by Milastar Corporation (the "Company") without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures
are adequate to make the information presented not misleading.
It is suggested that these condensed financial statements be
read in conjunction with the financial statements and the notes
thereto included in the Company's annual report on Form 10-K for
the fiscal year ended April 30, 2000.

    The condensed financial statements included herein, which are
unaudited, include, in the opinion of management, all
adjustments (consisting only of normal recurring accruals)
necessary to present fairly the financial position and results
of operations of the Company for the periods presented.


<TABLE>
<CAPTION>
              MILASTAR CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS

                              ASSETS
                                                  January 31,     April 30,
                                                      2001           2000
                                                  (unaudited)      (audited)
Current assets:                              <C>             <C>
Cash and cash equivalents. . . . . . . .             82,000          56,000
Accounts receivable:
 Trade, less allowance for doubtful
 accounts of $42,000 (January 31, 2001)
 and $50,000 (April 30, 2000). . . . . .            951,000       1,281,000
 Other . . . . . . . . . . . . . . . . .             18,000          16,000
Inventory. . . . . . . . . . . . . . . .            113,000         116,000
Prepaid expenses and other . . . . . . .            215,000         158,000

    Total current assets . . . . . . . .          1,379,000       1,627,000

Property, plant and equipment:
 Land. . . . . . . . . . . . . . . . . .            420,000         420,000
 Buildings and improvements. . . . . . .          2,794,000       2,274,000
 Deposits on equipment . . . . . . . . .                             45,000
 Equipment . . . . . . . . . . . . . . .          8,874,000       8,704,000
                                                 12,088,000      11,443,000
  Less accumulated depreciation. . . . .         (4,813,000)     (4,714,000)
                                                  7,275,000       6,729,000
Other assets:
Non-compete agreement, net of
  accumulated amortization of
  of $263,000 & $191,000 respectively. .            183,000         255,000

    Total assets . . . . . . . . . . . .          8,837,000       8,611,000
</TABLE>
<TABLE>
<CAPTION>

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:                         <C>             <C>
Notes payable to bank  . . . . . . . . .            150,000         250,000
Current maturities of long-term debt . .            546,000         844,000
Accounts payable . . . . . . . . . . . .            543,000         382,000
Accrued payroll and benefits . . . . . .            156,000         303,000
Accrued real estate taxes. . . . . . . .             79,000         105,000
Other accrued liabilities. . . . . . . .            130,000         104,000

    Total current liabilities. . . . . .          1,604,000       1,988,000

Long-term debt,
 less current maturities . . . . . . . .          2,307,000       1,947,000

    Total liabilities. . . . . . . . . .          3,911,000       3,935,000

Stockholders' equity:
Preferred stock, $1.00 par value;
 authorized 5,000,000 shares, none
 issued. . . . . . . . . . . . . . . . .
Common stock,  $.05 par value;
 authorized 7,500,000 shares, issued
 and outstanding 2,728,264 shares at
 January 31, 2001 and April 30, 2000 . .            137,000         137,000
Note receivable from officer . . . . . .            (20,000)        (20,000)
Additional paid-in capital . . . . . . .          1,666,000       1,666,000
Retained earnings. . . . . . . . . . . .          3,143,000       2,893,000

   Total stockholders' equity. . . . . .          4,926,000       4,676,000

   Total liabilities and
    stockholders' equity . . . . . . . .          8,837,000       8,611,000
</TABLE>
<TABLE>
<CAPTION>
                   MILASTAR CORPORATION AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)


                                             Three Months Ended        Nine Months Ended
                                                 January 31,               January 31,
                                             2001          2000        2001          2000

                                         <C>          <C>          <C>          <C>
   Net Sales . . . . . . . . . . . . . .   1,954,000    2,194,000    6,745,000    6,684,000
   Cost of Sales . . . . . . . . . . . .   1,498,000    1,612,000    4,715,000    4,978,000

   Gross margin. . . . . . . . . . . . .     456,000      582,000    2,030,000    1,706,000
   Selling general and administrative
    expenses . . . . . . . . . . . . . .     495,000      469,000    1,598,000    1,394,000
   Amortization of non-compete
    agreements . . . . . . . . . . . . .      24,000       24,000       72,000       68,000

   Operating income (loss) . . . . . . .     (63,000)      89,000      360,000      244,000

   Other income (expense):
    Dividend and interest income . . . .       5,000        2,000       14,000        2,000
    Interest expense . . . . . . . . . .     (56,000)     (81,000)    (186,000)    (219,000)
    Gain on sale of net assets of
       a business. . . . . . . . . . . .                                68,000
   Total other expense . . . . . . . . .     (51,000)     (79,000)    (104,000)    (217,000)

   Income (loss) before income taxes . .    (114,000)      10,000      256,000       27,000
   Provision for income taxes. . . . . .       2,000        3,000        7,000        7,000

   Net income (loss) . . . . . . . . . .    (116,000)       7,000      249,000       20,000

   Net income (loss) per share-basic . .       (0.04)         .00          .09          .01

   Net income (loss) per share-diluted .       (0.04)         .00          .09          .01
</TABLE>

<TABLE>
<CAPTION>
              MILASTAR CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF CASH FLOWS
                   Nine Months Ended January 31,
                           (Unaudited)


                                                     2001            2000
                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . .            249,000          20,000
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
   Depreciation and amortization . . . .            713,000         858,000
   Gain on sale of the net assets
    of a business. . . . . . . . . . . .            (68,000)

  Changes in operating assets and
   liabilities, net of the effect of the
   sale of the net assets of a business:
   Accounts and other receivables. . . .            118,000         160,000
   Inventory . . . . . . . . . . . . . .              3,000          10,000
   Prepaid supplies and other. . . . . .            (68,000)        (20,000)
   Accounts payable and accrued
    expenses . . . . . . . . . . . . . .             14,000        (122,000)

 Net cash provided by operating
  activities . . . . . . . . . . . . . .            961,000         906,000

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of property, plant and
  equipment: . . . . . . . . . . . . . .         (1,512,000)       (376,000)
 Proceeds from the sale of the net
  assets of a business . . . . . . . . .            615,000
 Net cash used in investing
  activities . . . . . . . . . . . . . .           (897,000)       (376,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds (repayments) from bank
  line of credit . . . . . . . . . . . .           (100,000)        100,000
 Principal payments on long-term debt. .           (763,000)       (565,000)
 Proceeds from issuance of
  long-term debt . . . . . . . . . . . .            825,000
 Net cash used in financing
  activities . . . . . . . . . . . . . .            (38,000)       (465,000)

NET INCREASE IN CASH AND
 CASH EQUIVALENTS. . . . . . . . . . . .             26,000          65,000

CASH AND CASH EQUIVALENTS BALANCE
 AT BEGINNING OF YEAR. . . . . . . . . .             56,000          19,000

CASH AND CASH EQUIVALENTS BALANCE
 AT END OF THE THIRD QUARTER . . . . . .             82,000          84,000


Supplemental disclosures of cash flow information:
 Cash paid during the first nine months for:
  Interest . . . . . . . . . . . . . . . .          186,000         219,000

  Income taxes . . . . . . . . . . . . . .            7,000          10,000
</TABLE>


       MILASTAR CORPORATION AND SUBSIDIARIES

    CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (Unaudited)


1   CONSOLIDATED FINANCIAL STATEMENTS

    The consolidated financial statements of Milastar Corporation
(the "Company") reflect the financial position and results of
operations of the Company and its wholly owned subsidiaries,
after elimination of all material intercompany transactions and
balances.

    The consolidated financial statements as of January 31, 2001 and
for the nine month periods ended January 31, 2001 and January
31, 2000, included herein are unaudited and have been prepared
by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading.  The interim financial statements reflect all
adjustments (consisting of normal recurring accruals) that are,
in the opinion of management, necessary for a fair statement of
the results for the interim periods.  These consolidated
financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included
in the Company's 2000 Annual Report to Stockholders and
incorporated by reference in the Company's annual report on Form
10-K filed with the Securities and Exchange Commission.  The
results of operations for the interim period should not be
considered indicative of the results to be expected for the
entire year.


2    RELATED PARTY TRANSACTIONS

     Notes Receivable

    The Company entered into a note during fiscal 1993 with L.
Michael McGurk, President, Chief Operating Officer and a
director of the Company who, with the encouragement of the
Company, bought 15,000 shares of Milastar Class A Common Stock
and entered into a note with the Company.  The note of $20,000
is dated August 15, 1992 and bears interest at 50 basis points
over NYC Prime adjustable upward or downward at the end of each
six-month period, which interest rate is subject to an 8% "cap"
during the life of the loan.  Interest on the principal is
payable each year on the anniversary date of the note.  The
principal portion of the note that was originally due on August
15, 1995 has been extended until August 15, 2002.  The Company
is holding Mr. McGurk's 15,000 shares of Milastar Class A Common
Stock as collateral for the note. Total interest income related
to this note for both nine month periods ended January 31, 2001
and 2000 was $1,800.


3    INCOME PER COMMON SHARE

     The following table presents a reconciliation of the
denominators used in the computation of net income per common
share - basic and net income per common share - diluted for the
three and nine month periods ended January 31, 2001 and 2000:


                             Three Months Ended      Nine Months Ended
                                January 31,             January 31,
                              2001        2000        2001        2000
Weighted shares
 outstanding - basic. . .   2,738,264   2,738,264   2,738,264   2,738,264

Weighted shares assumed
 upon exercise of
 stock options. . . . . .                  97,806      87,146     198,881

Weighted shares
 outstanding - diluted. .   2,738,264   2,836,070   2,825,410   2,937,145


4    SALE OF SUBSIDIARY

     On August 25, 2000, the Company sold all of the
assets of its wholly owned subsidiary, New England Metal Treating
Corporation located in Auburn, Massachusetts.  The Company
received $615,000 in cash from the sale and recorded a $68,000
gain.  The net book value of the assets sold consisted of the
following:

           Machinery & Equipment . . . . . . . . . .  $325,000
           Accounts Receivables. . . . . . . . . . .   211,000
           Other . . . . . . . . . . . . . . . . . .    11,000
           Total . . . . . . . . . . . . . . . . . .  $547,000



5    LONG TERM DEBT

     In August 2000, the Company refinanced its note payable to bank
(line of credit) and established a term note payable with
interest at 8.6%.  The new term note payable of $825,000
included borrowings for the purchase of equipment.  The amount
available on the line of credit is $500,000 with $150,000
outstanding at January 31, 2001.


6    INCOME TAXES

     The low effective tax rate for the nine months ended January 31,
2001 compared to the federal statutory rate is due to a
reduction of the valuation allowance resulting from the
utilization of net operating loss carryforwards in the current
period. The low effective tax rate for the three months ended
January 31, 2001 compared to the federal statutory rate is due
to the increase in the valuation allowance from the addition to
the net operating loss carryforwards in the period. The income
tax expense in the three and nine month periods ended January
31, 2001 is due to minimum state income tax fees.


7    ENVIRONMENTAL ACTIONS

     The Company is currently in discussions with the
Minnesota Pollution Control Agency (MPCA) concerning  alleged
violations of past air permit rules.  The MPCA is proposing a
$73,000 penalty.  Management's position is that the MPCA has
waived enforcement action against the Company.  However, the
Company has established a reserve which it believes is adequate to
cover legal expenses and any potential penalties.


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

Results of Operations

    Three Months Ended January 31, 2001 as Compared with the Three
Months Ended January 31, 2000.  The Company recorded sales of
$1,954,000 during the third quarter of fiscal year 2001 as
compared with $2,194,000 for the same period last year, a
$240,000 (11%) decrease.  The decrease was primarily
attributable to the loss of revenue from the sale of New England
Metal Treating.

    Cost of sales of $1,498,000 (77% of net sales) during the third
quarter of fiscal year 2001 decreased $114,000 (7%) from
$1,612,000 (73% of net sales) for the same period a year
earlier.  The decrease in total dollars was primarily
attributable to the sale of New England Metal Treating being
partially offset by an increase in natural gas costs of
$156,000.  The increase in cost of sales as a percent of net
sales from 73% to 77% was primarily the result of higher natural
gas prices.  Gross margin decreased to $456,000 as compared with
$582,000 for the prior year third quarter.  The decrease was
also primarily attributable to higher natural gas prices.

    Selling, general and administrative (SG&A) expenses of $495,000
(25% of net sales) increased $26,000 (6%) from $469,000 (21% of
net sales) for the same period a year earlier.  The change in
SG&A expenses is primarily due to an increase in administrative
salaries.

    The Company recorded an operating loss of $63,000 in the third
quarter of fiscal 2001 as compared with operating income of
$89,000 recorded in the prior year third quarter.  The decrease
in operating income in the third quarter of fiscal year 2001 is
primarily attributable to the increase in natural gas prices.

    Total other expense amounted to $51,000 in the third quarter of
fiscal 2001 as compared with other expense of $79,000 in the
third quarter of last year.  Other expense in both third
quarters is primarily due to interest expense.

    The Company recorded a net loss of $116,000 in the third quarter
of fiscal 2001 as compared with net income of $7,000 in the
prior year third quarter.


    Nine Months Ended January 31, 2001 as Compared with the Nine
Months Ended January 31, 2000.  The Company recorded sales of
$6,745,000 during the first nine months of fiscal year 2001 as
compared with $6,684,000 for the same period last year, a
$61,000 (1%) increase.  The sales increase was primarily
attributable to a stronger economy for the heat treating
industry in the Midwest being partially offset by the loss of
revenue from the sale of New England Metal Treating in the
second quarter.

    Cost of sales of $4,715,000 (70% of net sales) during the first
nine months of fiscal year 2001 decreased $263,000 (5%) from
$4,978,000 (74% of net sales) for the same period a year
earlier. The decrease in total dollars was primarily
attributable to the sale of New England Metal Treating being
partially offset by an increase in natural gas costs.  The
decrease in cost of sales as a percent of net sales from 74% to
70% was primarily the result of higher sales in the Midwest.
Gross margin increased to $2,030,000 as compared with $1,706,000
for the prior year nine months.  The increase was primarily
attributable to increased sales in the Midwest and decreased
cost of sales that resulted from the sale of New England Metal
Treating.

    Selling, general and administrative (SG&A) expenses of
$1,598,000 (24% of net sales) increased $204,000 from $1,394,000
(21% of net sales) for the same period a year earlier. The
change in SG&A expenses is primarily due to an increase in
administrative salaries and a reserve for legal fees associated
with a state air permit.

    The Company recorded operating income of $360,000 in the first
nine months of fiscal 2001 as compared with operating income of
$244,000 recorded in the prior year nine months.  The increase
in operating income in the first nine months of fiscal year 2001
is primarily attributable to a steady revenue being generated
with decreased cost of sales that resulted from the sale of New
England Metal Treating.

    Total other expense amounted to $104,000 in the first nine
months of fiscal 2001 as compared with other expense of $217,000
in the same period of last year. Other expense consisted of
interest income of $14,000 and a $68,000 gain on the sale of New
England Metal Treating being offset by $186,000 in interest
expense.

    The Company recorded net income of $249,000 in the first nine
months of fiscal 2001 as compared with net income of $20,000 in
the prior year nine months.


Income Taxes

    The provision for income taxes for the nine months ended January
31, 2001 was $7,000, or an effective tax rate of 2.7%, compared
to a provision for income taxes of $7,000, or an effective tax
rate of 25.9%, for the nine months ended January 31, 2000.  The
low effective income tax rate, compared to the federal statutory
rate of 34% plus state and local taxes in fiscal 2001, is due to
a reduction in the valuation allowance resulting from the
utilization of net operating loss carryforwards in the current
year period.  The low effective income tax rate for the three
months ended January 31, 2001, compared to the federal statutory
rate of 34% plus state and local taxes, is due to an increase in
the valuation allowance from the addition to the net operating
loss carryforwards in the three month period ended January 31,
2001.


Liquidity and Capital Resources

    At January 31, 2001, the Company had negative working capital of
$225,000 compared with $361,000 of negative working capital at
April 30, 2000 and the ratio of current assets to current
liabilities was 0.9 to 1.0 and 0.8 to 1.0, respectively.  Cash
and accounts receivables represented 76% (83% at April 30, 2000)
and 12% (16% at April 30, 2000) of total current assets and
total assets, respectively.  During the first nine months of
fiscal 2001, net cash provided by operating activities amounted
to $961,000 compared to $906,000 provided by operating
activities in the first nine months of fiscal 2000.  Working
capital requirements for the first nine months of fiscal 2001
was funded primarily from available cash, cash generated from
operations, short-term borrowings under the line of credit,
issuance of long-term debt and cash from the sale of New England
Metal Treating.  The Company believes anticipated cash flows
from operations, issuance of long-term debt and its line of
credit will be adequate to satisfy projected operating
requirements through the foreseeable future.


New Accounting Pronouncements

    During 1999, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No.
133, Accounting for Derivative Instruments and Hedging
Activities (as amended by SFAS No. 137 with respect to the
effective date and SFAS No. 138 with respect to certain hedging
activities), which establishes new standards for recognizing all
derivatives as either assets or liabilities, and measuring those
instruments at fair value.  The Company will be required to
adopt the new standard beginning in fiscal 2002.  Its adoption
is not expected to materially impact the Company's financial
condition or results of operations.

    In December 1999, the SEC issued Staff Accounting Bulletin (SAB)
No. 101, Revenue Recognition in Financial Statements.  SAB No.
101 summarizes certain of the SEC staff's views in applying
generally accepted accounting principles to revenue recognition
in financial statements.  The Company implemented SAB No. 101 in
the third quarter of fiscal 2001 and has determined that there
is no impact to the financial statements.


Forward-Looking Statements

    Certain statements contained in Management's Discussion and
Analysis and elsewhere in the 10-Q are forward-looking
statements.  These statements may discuss, among other things,
expected growth, future revenues and future performance.  The
forward-looking statements are subject to risks and
uncertainties, including, but not limited to, competitive
pressures, inflation, consumer debt levels, currency exchange
fluctuations, trade restrictions, changes in tariff and freight
rates, capital market conditions and other risks indicated in
the Company's filings with the Securities and Exchange
Commission.  Actual results may materially differ from
anticipated results described in these statements.



Item 3.  Qualitative and Quantitative Disclosures About Market
Risk.


Market Risks

    The Company is exposed to certain market risks with its $500,000
line of credit of which $150,000 is outstanding at January 31,
2001.  The line bears interest at the bank's reference rate plus
 .25%.



PART II

Items 1 thru 5

     No response to these items is furnished, since in each case the
appropriate response would be either not applicable or none.

Item 6.      Exhibits and Reports on Form 8-K

        (a)       Exhibits:  None

        (b)       Reports on Form 8-K:  None


       MILASTAR CORPORATION AND SUBSIDIARIES


                     S I G N A T U R E


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


        MILASTAR CORPORATION



        /s/ J. RUSSELL DUNCAN                  /s/ DENNIS J. STEVERMER
          J. Russell Duncan                      Dennis J. Stevermer
Chairman of the Board, Chief Executive   Vice President Treasurer, Principal
        Officer and Director               Financial and Accounting Officer


      Dated: March 14, 2001