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

                                    FORM 10-K
(Mark one)

    X         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
--------
                         SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
               For the Transition Period from ________ to ________

                         COMMISSION FILE NUMBER 0-21366
                            ------------------------

                              TRICORD SYSTEMS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                 DELAWARE                                  41-1590621
     (STATE OR OTHER JURISDICTION OF                   (I.R.S. EMPLOYER
      INCORPORATION OR ORGANIZATION)                   IDENTIFICATION NO.)

2905 NORTHWEST BOULEVARD, SUITE 20, PLYMOUTH, MINNESOTA       55441
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)


                                 (612) 557-9005
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:   Common Stock, $.01
                                                              par value
                                                              Preferred Stock
                                                              Purchase Rights
                                                              (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                  Yes    X                    No
                       ------                     ------

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

As of March 24, 2000, 20,797,995 shares of Common Stock of the Registrant
were outstanding, and the aggregate market value of the Common Stock of the
registrant as of that date (based on the closing price as reported by the Nasdaq
SmallCap Market System), excluding shares beneficially owned by directors and
executive officers, was approximately $179,128,099.

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the year ended December 31,
1999 (the "Annual Report") are incorporated by reference into Parts II and IV to
the extent specific captions or pages are referred to herein. Portions of the
proxy statement for the Annual Meeting of Stockholders to be held May 18, 2000
("the Proxy Statement") are incorporated by reference in Part III, to the extent
specific captions are referred to herein.


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                                     PART I


ITEM 1.  BUSINESS

GENERAL

Throughout 1999 the Company continued to focus its development efforts
exclusively on storage system management software, the strategy it defined in
1997. The storage system management software architecture includes an entirely
new generation of distributed file system and file-intelligent input/output
("I/O") technology known as Tricord Storage Management Software ("TSMS"). No
revenues were generated by TSMS for 1999, and the Company may or may not receive
revenues from TSMS-based products in 2000.

The Company had historically engaged in the business of designing,
manufacturing, marketing and supporting high-performance enterprise servers for
use in mission critical applications principally running on Microsoft Windows
NT(R) and Novell(R) NetWare(R).

In August 1999, the Company sold all of its remaining assets related to the
server line of business (sometimes referred to as the "legacy business"),
except for existing trade accounts receivable, in exchange for the assumption
of all liabilities of the legacy business, except Year 2000 issues relating to
the legacy server business, which the Company believes are not material.

The Company was incorporated in Minnesota in 1987 and reincorporated in Delaware
in 1992.

BACKGROUND AND MARKETS

Data storage is a critical part of the computing infrastructure for most
businesses. The Company believes that two major trends in data access and
management will necessitate major changes in data storage. The first trend is
the growing user demand for large amounts of data and the increasing complexity
of applications used to manipulate that data. Reflecting this trend, storage
today can account for 50%-70% of initial system cost, compared with less than
30% a few years ago.

The second trend is the increasing acceptance of clustered servers. These
computers need access to multiple storage systems providing data as a shared
network resource. In addition, access to data must be uninterrupted seven days a
week, 24 hours per day and 365 days per year ("7x24x365").

Storage needs are also increasingly being met by external storage systems, in
both Windows NT and UNIX environments.


---------------------
*  This Annual Report on Form 10-K includes trademarks of companies other than
   Tricord Systems, Inc.



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The operational demands of businesses are not only increasing the complexity of
storage management but are also increasing the demand for availability of more
and more data, including web sites, email, eCommerce, production databases, data
marts and support information. This rapidly growing demand creates new
requirements that are not addressed adequately by today's storage products.

The end user requirements that need to be addressed in future storage products
are as follows:

-    The ability to separate application processing from storage both in terms
     of purchase decision and functionality that can provide greater
     configuration flexibility and a wider range of growth options.

-    The ability to aggregate storage beyond a single storage enclosure and to
     expand in large and small increments, without downtime.

-    The ability to provide 7x24x365 availability regardless of the source of
     failure, whether disk, controller or storage system.

PRODUCTS UNDER DEVELOPMENT

The Company has responded to market requirements by developing intelligent
storage management software using an advanced architecture. This software-based
architecture, Tricord Storage Management Software ("TSMS"), incorporates the
Tricord File System ("TFS") and file intelligent I/O technology. TSMS is based
on the TFS and management interface software, user configuration tools,
initialization tools and other networking software. TSMS can be specifically
configured for potential Original Equipment Manufacturer ("OEM") storage
products and other storage products distributed by the Company. TSMS technology
and solutions support three distinct storage system environments - HOST-attached
storage, Local Area Network ("LAN")-attached storage and Storage Area Network
("SAN")-attached storage and are platform independent. In all configurations,
TSMS provides the ease of management and high availability of a storage pool of
clustered storage systems.

The TSMS software will be positioned to enable storage products as follows:

-    HOST-Attached Storage - premier high-end Redundant Array of Inexpensive
     Disks ("RAID") controller. Significant improvements in management,
     availability, expansion, investment protection and performance over
     conventional Intelligent RAID controllers.

-    LAN-Attached Storage - premier workgroup, departmental and enterprise
     shared data servers. Significant improvements in management, availability,
     expansion,

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investment protection and performance over market leading LAN-attached storage
solutions.

-    SAN-Attached Storage - premier high-end multi-host clustered SAN storage
     solution. Significant improvements in management, availability, expansion,
     investment protection, performance and data sharing over competitive SAN
     storage solutions.

Today, the interfaces between the UNIX and Windows NT file systems and storage
devices break files into pieces of data, called blocks, which are identified by
their location in the storage system when being transferred between a server and
a storage device. TSMS avoids the limitations of the block I/O model by using
file-intelligent I/O to manage the data.

The Company believes that the TSMS approach to storage management will offer the
following benefits:

-    Easier management of attached storage because TSMS manages storage as a
     single filesystem for the system administrator to dynamically manage the
     allocation of physical storage in storage systems.

-    Maximum scalability in large and small storage increments because TSMS
     uniquely and dynamically allocates files to physical storage media without
     predetermined partitions of the storage media.

-    Continuous availability; whenever new storage is needed, it can be
     non-disruptively added with no system downtime. TSMS defines RAID levels
     for data across disks, controllers and storage systems enabling domain
     fault tolerance.

RESEARCH AND DEVELOPMENT

The Company performs all of its research and development activities at its
headquarters in Plymouth, Minnesota. During 1999, 1998, and 1997, research and
development expenses totaled approximately $3,442,000, $2,473,000 and
$2,351,000, respectively. The Company currently anticipates that research and
development costs will rise during 2000 as the Company continues to focus on the
development of TSMS.

SALES AND DISTRIBUTION

The Company is pursuing OEM partners as well as other distribution channels. The
most likely partners would be storage suppliers, computer system vendors, disk
drive manufacturers and disk controller vendors. The Company would make
available its technology and/or solutions to these partners who would then build
it into storage solution offerings for their end users.

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The Company believes that these types of partnerships will provide a rapid and
cost-effective method for its technology and solutions to gain visibility and
penetrate the storage market. The Company is also taking additional steps to
increase the visibility of its technology and solutions by, among other things,
demonstrating a working prototype of TSMS. Although a number of partners have
expressed interest in the Company's technology and solutions, adoption requires
a departure from existing technology plans by these partners.

COMPETITION

While the Company believes that its file intelligent I/O technology and the TSMS
implementation have a significant lead in the marketplace, there are competitors
in the area of specialized file systems, including Veritas Software Corporation
("Veritas"), CrosStor Software, Inc. and university projects. The Company
expects that additional competitors may also be developing products that have
not yet been announced. In addition, many of the same companies that represent
potential partners also represent potential competitors in the event that one or
more elect to develop and market their own products.

The Company knows of companies currently developing products in related areas
that compete indirectly with the Company's products. For instance, Veritas sells
storage management products for Windows NT and UNIX. These products are widely
used and highly regarded in the industry. Veritas is also developing storage
management products for Windows 2000.

The Company believes that none of the products discussed above are distributed
file systems and that significant time, investment and effort would be needed to
develop products to provide the comparable features of TSMS. The Company's
competitors, however, are more established, benefit from greater market
recognition and have greater financial, technological, production and marketing
resources than the Company. As a result, attaining a competitive position will
require that the Company develop its products on a timely basis and continue to
invest in research and development and marketing. There can be no assurance that
the Company will have sufficient resources to make such investments or that the
Company will be able to continue to make the necessary technological advances.


MANUFACTURING AND SUPPORT

On August 27, 1999, the Company sold all of its remaining assets related to the
server line of business (sometimes referred to as the "legacy business"),
except for existing trade accounts receivable, to EFC Systems, Inc. ("EFC") in
exchange for the assumption of all liabilities of the legacy business,
excluding Year 2000 issues relating to the legacy server business, which the
Company believes are not material. In July 1999, the Company effected a
workforce reduction to streamline its operations. The reduction resulted in
the severance

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of eleven employees engaged in performing legacy business activities. In
connection with future product introductions, the Company will determine what
level of manufacturing and/or support capability will be required.

INTELLECTUAL PROPERTY

The Company's intellectual property strategy is both a strength and a high
priority. The Company currently has been granted one patent in the core
distributed file system technology and has six U.S. patent applications pending
with respect to its TSMS products. The Company intends to continue to broaden
its TSMS patent application pool in 2000. There can be no assurance, however,
that any of these patent applications will result in issued patents or that any
such patents, if issued, will be held to be valid or will otherwise be of value
to the Company. The Company also relies on a combination of trade secret and
other intellectual property law, nondisclosure agreements and other protective
measures to establish and protect its proprietary rights in its products.
Despite these precautions, however, it may be possible for unauthorized third
parties to copy aspects of the Company's products or technology or to obtain and
use information that the Company regards as proprietary. In addition, the laws
of some foreign countries do not protect proprietary rights in products and
technology to the same extent as do the laws of the United States. Although the
Company continues to implement protective measures and intends to defend its
proprietary rights vigorously, there can be no assurance that these efforts will
be successful, and the failure or inability of the Company to effectively
protect its proprietary information could have an adverse effect on the
Company's business.

There can also be no assurance that third parties will not assert intellectual
property infringement claims against the Company. Although no litigation related
to any such matter is currently pending or threatened against the Company, there
can be no assurance that none will be initiated, that the Company would prevail
in any such litigation seeking damages or an injunction against the sale of the
Company's products, or that the Company would be able to obtain any necessary
licenses on reasonable terms or at all.

TEAM MEMBERS

As of December 31, 1999, the Company had 26 full-time and 2 part-time team
members, including 2 in marketing, 19 in research and development and technical
support and 7 in corporate operations. In addition to these 28 team members, the
Company also has contracted with four outside contractors to provide research
and development expertise and are considered by the Company to be crucial to the
success of TSMS development.

In March 2000, the Company named Joan Wrabetz as President and Chief Operating
Officer. Ms. Wrabetz was most recently Vice President and General Manager for
SAN operations at Storage Technology Corporation. Previously, Ms. Wrabetz was
Vice President and Chief Technical Officer for the Company.

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In February 2000, David Cabello, the Company's Vice President, Counsel and
Secretary and Kathleen Clark, the Company's Vice President of Marketing, left
the Company to pursue other interests.

The Company's future success depends to a significant extent upon the
performance of its executive officers and other key personnel. The future
success of the Company will also depend in large part upon its ability to
continue to attract and retain highly skilled and qualified personnel. In
addition, the Company's success will also depend in large part on its ability to
retain key contract team members. None of the Company's team members are
represented by a labor union. The Company has experienced no work stoppages and
believes that its relations with its team members are good.

YEAR 2000

Prior to January 2000, the Company evaluated its business and operational
systems to ensure readiness for the Year 2000. As a result, the Company
believes that all mission critical software and hardware was assessed, and if
necessary, remedied to be ready for the Year 2000. All mission critical software
and hardware has continued to function beyond January 1, 2000 without
interruption.

Because substantially all of the Company's Year 2000 efforts were made using
internal personnel, the costs associated with the Year 2000 assessment and
corrections were not material to the Company. All such costs to date have been
expressed as incurred.

The Company is responsible for all Year 2000 issues, if any, related to its
server line of business sold to EFC. The Company has had no claims related to
Year 2000 issues related to its server line of business.

CERTAIN IMPORTANT FACTORS

This Annual Report contains certain forward looking statements within the
meaning of the Private Securities Reform Act of 1995. For this purpose, any
statements contained in this Annual Report that are not statements of historical
fact are deemed to be forward looking statements. Without limiting the
foregoing, words such as "may," "will," "should," "expects," "anticipates,"
"estimates," "believes," or "plans," or comparable terminology, are intended to
indicate forward looking statements. These statements by their nature are based
on current expectations and assumptions and entail various risks and
uncertainties that could cause actual results to differ materially from those
expressed in such forward looking statements, including the following risks:

-        Because of the sale of the legacy server business, the Company has no
         revenues to fund its ongoing TSMS product development and marketing
         operations. During 2000, continued product development and product
         introduction necessarily requires that the Company obtain additional
         funds from investors. The Company is pursuing additional investors,
         however, there can be no assurance that funds will be obtained on
         acceptable terms or at all, and the failure to obtain such additional
         funds would have a material adverse effect on the Company.

-        The market window for the Company's products is limited inasmuch as
         many competitors with established brand identity are beginning to enter
         the market with products that will be positioned against the Company's
         products. Although the Company believes that it has a significant
         headstart and that its technology is superior, established product
         channels and bundling arrangements may impede the Company's product
         introduction and market acceptance.

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-        The market for distributed file system products for the Windows NT and
         UNIX environment is new and developing. The Company believes that its
         future success will depend upon the growth in demand for attached
         storage. In addition, the Company's success is dependent upon its
         ability to develop, test and release products for this market on a
         timely basis.

-        The market for storage products currently is characterized by rapid
         technological change and evolving industry standards and is expected to
         be highly competitive with respect to timing of product innovation. The
         introduction of products embodying new technology and the emergence of
         new industry standards can render products, either existing or under
         development, obsolete and unmarketable. The Company's success is
         dependent in part upon its ability to anticipate changes in technology
         and industry standards and to successfully develop and introduce new
         and enhanced products on a timely basis. If the Company is unable for
         technological or other reasons to develop products in a timely manner
         in response to changes in the industry, or if products or product
         enhancements that the Company develops do not achieve market
         acceptance, the Company's business will be materially and adversely
         affected.

-        The Company currently intends to market its TSMS through OEM and other
         distribution channels, and the failure to establish such relationships
         on acceptable terms or develop other distribution channels could
         adversely affect the Company's ability to introduce and market
         TSMS-based products successfully.

-        The Company will need to maintain compliance with the Nasdaq SmallCap
         Market requirements.

-        Many of the Company's potential competitors in the market for UNIX and
         Windows NT storage products are the same companies that represent
         potential partners. The Company's ability to introduce and market its
         technology and solutions could be adversely affected if one or more of
         these competitors elects to develop and market its own products.
         Additionally, the Company's ability to market its technology and
         solutions will necessarily require the endorsement of industry leaders
         if the Company's products are to gain wide-scale acceptance by the
         industry.

-        The Company's sales lead time may be longer than most storage products
         due to the general market reluctance to accept new entrants and due to
         the sensitivity of the data on today's storage devices.

-        The Company will need to attract new team members and consultants and
         retain existing team members and consultants.

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ITEM 2.       PROPERTIES

The Company's principal administrative, sales, and research and development
activities are performed in its 14,834 square foot headquarters facility in
Plymouth, Minnesota. The Company first occupied this facility in August 1997.
The lease for this facility expires in August 2000. The Company's lease payments
are approximately $6,000 monthly with an additional approximately $6,000 monthly
for the Company's pro rata share of the lessor's operating costs, including real
estate taxes. In February, 2000, the Company agreed to a two year extension of
its headquarters facility lease, which will expire in August 2002. The Company's
lease payments beginning September 2000 will be approximately $11,000 monthly
with an additional $6,000 monthly for the Company's pro rata share of the
lessor's operating costs, including real estate taxes.

The Company opened a 4,000 square foot marketing office in Houston, Texas in
January 1999. The lease for this facility expires in January 2002. The Company's
lease payments are approximately $7,000 monthly, which include the Company's pro
rata share of the lessor's operating costs, including real estate taxes. The
lease is cancelable but provides that lease payments will continue for a minimum
of two years. The Company discontinued using this facility at the end of
December 1999 and is attempting to sublease the office space.

The Company has no other facilities in the U.S. or any foreign countries.


ITEM 3.       LEGAL PROCEEDINGS

During 1997, a dispute occurred between the Company and Novell, Inc. ("Novell")
regarding alleged royalties owed by the Company to Novell with respect to
Novell's software that the Company disposed of when such software could not be
sold. The Company had entered into an OEM agreement with Novell, pursuant to
which the Company purchased Novell's software that was to be installed on the
Company's servers. The Company paid Novell $100,000 in advance royalties
pursuant to the OEM agreement. The Company's sales of Novell's software did not
result in royalties in excess of this advance royalty payment, and the Company
disposed of the remaining Novell software. Novell had requested that the Company
pay royalties of approximately $800,000 on the software it disposed of. The
Company had informed Novell that it did not owe royalties on the disposed
software because the OEM agreement only provided for the payment of royalties on
the sale of the software shipped for use with the Company's servers.

During 1998, an additional dispute arose between the Company and Novell
regarding the return to the Company of five multi-processing enterprise server
units originally sent to Novell under the OEM agreement, along with certain
other computer hardware equipment provided to Novell. In addition, the Company
had claimed damages due to

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alleged defects in Novell's software product. Both the Company and Novell
commenced legal action by filing complaints regarding these disputes.

In June 1999, the Company entered into a mediation settlement with Novell to
settle the disputes discussed above. The terms of the settlement will remain
confidential, but the resolution of this dispute had no material adverse effect
on the Company's financial position, results of operations or liquidity.


ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There was no matter submitted to a vote of security holders during the fourth
quarter of 1999.


ITEM 4A.      EXECUTIVE OFFICERS OF THE COMPANY

The executive officers of the Company and their ages as of March 30, 2000 are as
follows:

         Name               Age                     Position
         ----               ---                     --------
John J. Mitcham             59        Chairman and Co-Chief Executive Officer

Rod Canion                  55        Co-Chief Executive Officer

Joan M. Wrabetz             40        President and Chief Operating Officer

Dr. Alexander H. Frey       66        Senior Vice President and
                                      Chief Technical Officer

John F. Gribi               59        Vice President and Chief Financial Officer

Charles E. Pearsall         57        Vice President, Engineering


Mr. Mitcham has served as Chief Executive Officer and as a director of the
Company since joining the Company in May 1995, and was elected Chairman in
October 1998. From 1989 to 1995, Mr. Mitcham was President and Chief Executive
Officer of AT&T Paradyne Corporation. Prior to 1989, Mr. Mitcham was President
and Chief Executive Officer of Paradyne Corporation and served in executive
positions with IBM Corporation, Rolm Corporation, Memorex Telex Corporation and
Texas Instruments Corporation.

Mr. Canion has served as the Company's Co-Chief Executive Officer since May
1999.

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Since 1992, Mr. Canion has been involved in the technology industry as a board
member of various technology companies. Mr. Canion is a co-founder of Compaq
Computer Corporation and served as its Chief Executive Officer from 1982 to
1992.

Ms. Wrabetz joined the Company in March 2000 as President and Chief Operating
Officer. From February 1998 to February 2000, Ms. Wrabetz was Vice President and
General Manager for SAN operations at Storage Technology Corporation. From
December 1995 to February 1998, Ms. Wrabetz served in various executive
positions with the Company, the last being Vice President and Chief Technical
Officer.

Dr. Frey has served as the Company's Senior Vice President and Chief Technical
Officer since December 1998 and as Vice President, Architecture from October
1996 to December 1998. From 1991 to 1996, Dr. Frey was CEO and Chief Technology
officer of Reliable Distributed Information Corporation. Prior to 1991, Dr. Frey
served in various technical and management positions with IBM Corporation.

Mr. Gribi has served as the Company's Vice President and Chief Financial Officer
since July 1999. From 1990 to July 1999, Mr. Gribi performed various consulting
assignments in the technology industry. Mr. Gribi served as Chief Financial
Officer of Compaq Computer Corporation from 1982 to 1990.

Mr. Pearsall has served as the Company's Vice President of Engineering since
February 1998 and as Vice President, Customer Service from February 1996 to
January 1998. From 1993 to 1996, Mr. Pearsall was Senior Director of Program
Management and Field Services for Concurrent Computer Corporation. Prior to
1993, Mr. Pearsall, Colonel, USAF Retired, held a wide range of technical and
executive positions within the Air Force.

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                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference to the
information under the caption "Investor Information" of the Company's 1999
Annual Report to Stockholders ("the Annual Report").

In July 1999, the Company received $2,100,000 from a private placement to
certain investors of 840,000 shares of common stock at a price of $2.50 per
share. The sales of common stock and warrants in connection with such private
investment were made in reliance on the exemptions from registration under the
Securities Act of 1933 provided by Regulation D and Section 4(2) thereunder.
With respect to such reliance, certain inquiries were made by the Company and
certain representations and warranties were received by the investors to
establish that such exemptions were available.

ITEM 6.   SELECTED FINANCIAL DATA

The information required by this Item is incorporated by reference to the
information under the caption "Historical Financial Summary" of the Annual
Report.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

The information required by this Item is incorporated by reference to the
information under the caption "Management's Discussion and Analysis of Results
of Operations and Financial Condition" of the Annual Report.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK

The information required by this Item is incorporated by reference to the
information under the caption "Management's Discussion and Analysis of Results
of Operations and Financial Condition" and subheading "Financial Instruments" of
the Annual Report.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Company's consolidated financial statements and notes thereto and the report
of its independent accountants are incorporated by reference to pages 12 through
29 of the Annual Report.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.

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<PAGE>   13



                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding the Company's directors required by this Item is
incorporated by reference to the Company's Proxy Statement under the captions
"Election of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance."

Information regarding the Company's executive officers is included in Part I
hereof under the caption "Item 4A. Executive Officers of the Company" and is
incorporated by reference into this Item 10.


ITEM 11.  EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to the
Company's Proxy Statement under the caption "Executive Compensation."


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated by reference to the
Company's Proxy Statement under the captions "Security Ownership of Certain
Beneficial Owners and Management" and "Election of Directors."


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated by reference to the
Company's Proxy Statement under the caption "Investors Agreement."


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                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A) DOCUMENTS FILED WITH REPORT

         1.       Financial Statements

                  The following Financial Statements and Report of Independent
                  Accountants are incorporated by reference to pages 12 through
                  28 of the Annual Report.

                    Report of Independent Accountants.

                    Consolidated Statements of Operations - Years Ended
                    December 31, 1999, 1998 and 1997.

                    Consolidated Balance Sheets - December 31, 1999 and 1998.

                    Consolidated Statements of Cash Flows - Years Ended
                    December 31, 1999, 1998 and 1997.

                    Consolidated Statements of Stockholders' Equity - Years
                    Ended December 31, 1999, 1998 and 1997.

                    Notes to Consolidated Financial Statements.


         2.       Financial Statement Schedule

                  The following financial statement schedule and report of
                  independent accountants thereon should be read in conjunction
                  with the consolidated financial statements and the notes
                  thereto referred to above.

                                                                            Page
                    Report of Independent Accountants....................    16
                    Schedule II - Valuation and Qualifying Accounts......    17

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         3.       Exhibits

                  The Exhibits to this Report are listed in the Exhibit Index on
                  pages 19 to 20 below.

                  A copy of any of the exhibits will be furnished at a
                  reasonable cost to any shareholder of the Company, upon
                  receipt from any such shareholder of a written request for any
                  such exhibit. Such request should be sent to Tricord Systems,
                  Inc., 2905 Northwest Blvd., Suite 20, Plymouth Minnesota
                  55441; Attention:
                  Investor Relations.

                  The following is a list of each management contract or
                  compensatory plan or arrangement required to be filed as an
                  exhibit to this Annual Report on Form 10-K pursuant to Item
                  14(c):

                  1.  Employment Agreement, dated May 2, 1995, between the
                        Company and John J. Mitcham. (a)
                  2.  Change in Control Agreement, dated September 13,
                        1996, between the Company and Charles E. Pearsall. (b)
                  3.  Restricted Stock Agreement, dated November 3, 1998,
                        between the Company and Alexander H. Frey. (c)
                  4.  Restricted Stock Agreement, dated December 7,
                        1998, between the Company and Jon W. Flower. (c)
                  5.  Restricted Stock Agreement, dated December 7,
                        1998, between the Company and J. David Cabello. (c)
                  6.  Restricted Stock Agreement, dated December 7, 1998,
                        between the Company and Kathleen H. Clark. (c)
                  7.  1998 Stock Incentive Plan, as amended effective
                        January 30, 1999. (c)
                  8.  1998 Non-Employee Director Stock Plan, as amended
                        effective January 30, 1999. (c)
                  9.  Employment Letter, dated March 1, 2000, between the
                        Company and Joan M. Wrabetz. (d)

                     -----------------------------------------------------------

                  (a)  Incorporated by reference from the exhibits to the
                         Company's Quarterly Report on Form 10-Q For the
                         Quarter Ended March 31, 1995 (File No. 0-21366).
                  (b)  Incorporated by reference from the exhibits to the
                         Company's Annual Report on Form 10-K for the year
                         ended December 31, 1997.
                  (c)  Incorporated by reference from the exhibits to the
                         Company's Annual Report on Form 10-K for the year
                         ended December 31, 1998.
                  (d)  Filed herewith.

                                       14
<PAGE>   16

(B) REPORTS ON FORM 8-K

                  On August 4, 1999, the Company filed a report on Form 8-K
                  under Item 5, related to the sale of the Company's common
                  stock to a group of private investors effective July 26, 1999.
                  No financial statements were included as part of this filing.

                  On September 23, 1999, the Company filed a report on Form 8-K
                  under Item 5, related to the sale of the Company's server
                  hardware business to EFC Systems of Nashville, Tennessee. No
                  financial statements were included as part of this filing.




                                       15

<PAGE>   17


                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE



To the Board of Directors of
Tricord Systems, Inc.

Our audits of the consolidated financial statements referred to in our report
dated February 17, 2000, appearing in the 1999 Annual Report to Stockholders of
Tricord Systems, Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 14(a)(2) of this Form
10-K. In our opinion, the financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.






                                             PricewaterhouseCoopers LLP


Minneapolis, Minnesota
February 17, 2000

                                       16
<PAGE>   18
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997



(in thousands)
<TABLE>
<CAPTION>
                                                            Balance at           Additions         Deductions          Balance
                                                           Beginning of          Charged to           from            at End of
                         Description                          Period              Expense           Allowance          Period
--------------------------------------------------       ----------------     ---------------     -------------     ------------

<S>                                                      <C>                  <C>                 <C>               <C>
Year ended December 31, 1999
        Allowance for doubtful accounts (deducted
        from accounts receivable)                             $   679               (22)(1)             (657)               -

        Inventory obsolescence reserve (deducted
        from inventory)                                         3,259                  -              (3,259)               -


Year ended December 31, 1998
        Allowance for doubtful accounts (deducted
        from accounts receivable)                               1,213              (142)(1)             (392)             679

        Inventory obsolescence reserve (deducted
        from inventory)                                         6,018                21               (2,780)           3,259


Year ended December 31, 1997
        Allowance for doubtful accounts (deducted
        from accounts receivable)                               2,844              (455)              (1,176)           1,213

        Inventory obsolescence reserve (deducted
        from inventory)                                         7,330             1,818               (3,130)           6,018

</TABLE>


Notes:
  (1)   Relates to a reduction in the allowance.


                                       17
<PAGE>   19





                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 30, 2000.


                                         TRICORD SYSTEMS, INC.

                                         By /s/ John J. Mitcham
                                         John J. Mitcham
                                         Chairman and Co-Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant in
the capacities indicated on March 30, 1999.

         Signatures                                   Title


/s/ John J. Mitcham                          Chairman of the Board and
----------------------------                 Co-Chief Executive Officer
    John J. Mitcham                          (Principal Executive Officer)
                                             and Director

/s/ John F. Gribi.                           Vice President and Chief Financial
----------------------------                 Officer (Principal Financial and
    John F. Gribi                            Accounting Officer)


/s/ Yuval Almog                              Director
----------------------------
    Yuval Almog


/s/ Tom R. Dillon                            Director
----------------------------
    Tom R. Dillon


/s/ Donald L. Lucas                          Director
----------------------------
    Donald L. Lucas


/s/ Fred G. Moore                            Director
----------------------------
    Fred G. Moore


                                       18

<PAGE>   20

                              TRICORD SYSTEMS, INC.
                              ---------------------

                   EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 1999
                              ---------------------

<TABLE>
<CAPTION>

 ITEM                                                                                       PAGE
NUMBER                                  ITEM                                               NUMBER
------                                  ----                                               ------
<S>                <C>                                                                     <C>
 3.1               Certificate of Incorporation (a)
 3.2               Amendment to Certificate of Incorporation, dated
                     March 29, 1999 (i)
 3.3               Bylaws (a)
 4.1               Rights Agreement (e)
 4.2               Amendment to Rights Agreement, dated January 30,
                     1999, between the Company and Norwest Bank
                     Minnesota, N.A. (h)
10.1               Form of Indemnification Agreement (a)
10.2               Warrants of the Company, dated December 18, 1992,
                     issued to Sequent Computer Systems, Inc. (a)
10.3               1994 Employee Stock Purchase Plan (b)
10.4               1995 Stock Incentive Plan (c)
10.5               Employment Agreement, dated May 2, 1995, between
                     the Company and John J. Mitcham (d)
10.6               Change of Control Agreement, dated September 13, 1996,
                     between the Company and Charles E. Pearsall (f)
10.7               Restricted Stock Agreement, dated November 3, 1998,
                     between the Company and Alexander H. Frey (h)
10.8               Restricted Stock Agreement, dated December 7, 1998,
                     between the Company and Jon W. Flower (h)
10.9               Restricted Stock Agreement, dated December 7, 1998,
                     between the Company and J. David Cabello (h)
10.10              Restricted Stock Agreement, dated December 7, 1998,
                     between the Company and Kathleen H. Clark (h)
10.11              Stock Purchase Agreement, dated December 7, 1998,
                     by and among the Company and the Purchasers (g)
10.12              1998 Stock Incentive Plan, as amended effective
                     January 30, 1999 (h)
10.13              1998 Non-Employee Director Stock Plan, as amended
                     effective January 30, 1999 (h)
10.14              Lease Agreement, dated July 28, 1997, between the
                     Company and Liberty Property Limited Partnership (f)
10.15              Stock Purchase Agreement, dated July 23, 1999,
                     by and among the Company and the Purchasers (j)

</TABLE>

<PAGE>   21

<TABLE>
<CAPTION>

 ITEM                                                                                       PAGE
NUMBER                                  ITEM                                               NUMBER
------                                  ----                                               ------
<S>                <C>                                                                     <C>
10.16              Amendment to Lease Agreement, dated February 10,
                     2000, between the Company and Liberty Property
                     Limited Partnership (j)
10.17              Employment Agreement, dated March 1, 2000, between
                     the Company and Joan M. Wrabetz (j)
13.1               Annual Report to Stockholders for the year ended
                     December 31, 1999 (to be deemed filed only to the
                     extent required by the instructions to exhibits
                     for reports on Form 10-K) (j)

</TABLE>


<TABLE>
<CAPTION>

 ITEM                                                                                       PAGE
NUMBER                                  ITEM                                               NUMBER
------                                  ----                                               ------
<S>                <C>                                                                     <C>
21.1               Subsidiaries of the Company (j)
23.1               Consent of Independent Accountants (j)
27.1               Financial Data Schedule (j)

</TABLE>

--------------------------------------------------------------------------------

(a)   Incorporated by reference to the exhibits to the Company's Registration
        Statement on Form S-1 (File No. 33-48733).
(b)   Incorporated by reference to the exhibits to the
        Company's Registration Statement on Form S-8 (File No. 33-76532).
(c)   Filed in connection with Annual Report on Form 10-K for the year ended
        December 31, 1994.
(d)   Incorporated by reference to the exhibits to the Company's Quarterly
        Report on Form 10-Q For the Quarter Ended March 31, 1995 (File No.
        0-21366).
(e)   Filed in connection with Annual Report on Form 10-K for the year ended
        December 31, 1995.
(f)   Filed in connection with Annual Report on Form 10-K for the year ended
        December 31, 1997.
(g)   Incorporated by reference to the exhibits to the Company's Current Report
        on Form 8-K, dated December 15, 1998 (File No. 0-21366).
(h)   Filed in connection with Annual report on Form 10-K for the year Ended
        December 31, 1998.
(i)   Incorporated by reference to the exhibits to the Company's Quarterly
        Report on Form 10-Q For the Quarter Ended March 31, 1999 (File No.
        0-21366).
(j)   Filed herewith.