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

                  FORM 10-QSB

(Mark One)
  X  	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934


      For the Quarterly Period Ended March 31, 2001
_____  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE 				EXCHANGE ACT.

Commission File Number 33-13058-C

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                  SURGIDYNE, INC.
    (Name of small business issuer in its charter)


         Minnesota                      58-1486040
(State or other jurisdiction of    (I.R.S. Employer
incorporation of organization)     Identification Number)

       9909 South Shore Drive, Minneapolis, MN  55441
         (Address if principal executive offices)

                    (763) 595-0665
               (Issuer's telephone number)




Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter periods that the
registrant was required to file such reports), and  (2) has
been subject to such filing requirements for the past 90
days.         X   YES     ______NO

7,447,085 shares of Common Stock, no par value, outstanding
                 at March 31, 2001

Transitional Small Business Disclosure Format.
            ____YES    X   NO











                 PART I  -  FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS

                      SURGIDYNE, INC.


CONTENTS                                             PAGE


FINANCIAL STATEMENTS

	Balance sheets                                  3
	Statements of operations                        5
	Statements of cash flows                        6
      Notes to financial statements                   7







































SURGIDYNE, INC.
BALANCE SHEETS

                                    March 31,    December 31,
                                 2001(unaudited)   2000

ASSETS

Current Assets
    Cash                         $    46,866     $   33,924
    Accounts receivable, less
      allowance for doubtful
      accounts of $4,200              38,381         31,002
    Inventories (Note 2)             135,104        160,687
    Prepaid expenses (Note 5)         27,407         50,548
       Total current assets          247,758        276,161


Furniture and Equipment,
      at cost (Note 3)               353,917        353,917
     Less accumulated depreciation
      and amortization               329,880        328,673
        Total furniture and equipment 24,037         25,244
Other Assets
     Patents and trademarks, net
      of accumulated amortization
      of  $19,020 in 2001 and
      $18,774 in 2000                  4,365          4,611
     Deposits                          3,529          3,529
         Total other assets            7,894          8,140

           Total assets           $  279,688     $  309,545


See Notes to Financial Statements.























SURGIDYNE, INC.
BALANCE SHEETS (continued)

                                    March 31,     December 31,
                               2001 (unaudited)      2000

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
    Current maturities of capital
     Lease                         $   4,692      $   4,590
    Notes payable to officers
     and directors                     8,474          8,474
    12% demand note payable           11,646         11,646
    Non-interest bearing demand
     note payable                     35,546         35,546
    Accounts payable                  45,806         33,582
    Accrued expenses                  60,985         53,972
         Total current liabilities   167,149        147,810


Capital lease obligation, less
      current maturities               9,294         10,504


Stockholders' Equity
    Series A Preferred stock,
     authorized 1,600,000 shares;
     $400,000 liquidation preference,
     1,600,000 shares Issued and
     outstanding                     400,000        400,000
    Common stock, no par value;
     authorized 18,400,000 shares;
     Issued and outstanding
     7,447,085 shares              4,606,266      4,606,266
    Accumulated deficit           (4,903,021)    (4,855,035)
         Total stockholders' equity  103,245        151,231

         Total liabilities and
           stockholders' equity  $   279,688    $   309,545


See Notes to Financial Statements















SURGIDYNE, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)

                                  March 31,       March 31,
Three Months Ended                  2001            2000

Net sales                         $  130,064   $  118,215

Cost of goods sold                    93,828       92,218
     Gross profit                     36,236       25,997

Operating expenses
    Research and development           3,548        2,889
    Sales and marketing                9,333        7,733
    General and administrative        70,203       51,178
        Total operating expenses      83,084       61,800

           Operating loss            (46,848)     (35,803)

Other Income (expense)
    Interest income                       14          741
    Interest expense                  (1,185)      (1,101)
    Other                                 32           -

       Net loss                   $  (47,987)  $  (36,163)

       Basic and diluted
        loss per common share     $     0.01)  $    (0.01)

       Weighted average common
        shares outstanding-basic   7,447,085    7,017,085

       Weighted average common
        shares outstanding-diluted 7,447,085    7,017,085


See Notes to Financial Statements


















SURGIDYNE, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)

                                       March 31,     March 31,
Three Months Ended                       2001           2000


Cash Flows from Operating Activities
    Net loss                       $  (47,987)    $  (36,163)
    Adjustments to reconcile net
	loss to net
     Cash provided by operating activities:
        Depreciation and amortization   1,454          1,481
        Amortization of prepaid
          consulting expenses          23,181            -
        Changes in assets and liabilities:
           Accounts receivable         (7,379)        25,303
           Inventories                 25,584         (7,575)
           Prepaid expenses               (39)        11,588
           Accounts payable and
             Accrued expenses          19,237         16,235
       Net cash provided by
          operating activities         14,051         10,869


Cash Flows from Financing Activities
   Payments on capital lease
     Obligation                        (1,109)        (1,216)
       Net cash used in financing
          Activities                   (1,109)        (1,216)
       Increase in cash                12,942          9,653

Cash:
  Beginning                            33,924         70,090
  Ending                           $   46,866     $   79,743


Supplemental Disclosures of Cash Flow Information
  Cash payments for interest       $      623     $      498
Supplemental Disclosures of Non-cash
    Investing and Financing Activities
  Equipment acquired under capital
    Lease                          $      -       $   19,491


See Notes to Financial Statements











SURGIDYNE, INC.
NOTES TO FINANCIAL STATEMENTS (unaudited)

Note. 1	Financial Statements

The Balance Sheet as of March 31, 2001, the Statements of
Operations for the three-month periods ended March 31, 2001
and March 31, 2000, and the Statements of Cash Flows for
the three-month periods ended March 31, 2001 and March 31,
2000 have been prepared by the Company without audit. In
the opinion of management, all adjustments (consisting
solely of normal, recurring adjustments) necessary to
present fairly the financial position at March 31, 2001;
the results of operations for the three month periods
ended March 31, 2001 and March 31, 2000 and the statements
of cash flows for the three month periods ended March 31,
2001 and March 31, 2000 have been made. The Balance Sheet
at December 31, 2000 has been taken from the audited
financial statements at that date. Results of operations
for the interim periods are not necessarily indicative of
future financial conditions or operating results.  These
interim financial statements should be read in conjunction
with the Company's annual financial statements and related
notes there to included in the Company's form 10-KSB for
the year ended December 31, 2000.

Note 2.	Inventories

Inventories consisted of the following:
                             March 31,  December 31,
                               2001         2000
Component parts and
    Subassemblies          $  78,259    $  75,780
Work in process               23,904       17,687
Finished goods                42,941       77,290
Less obsolescence reserve    (10,000)     (10,000)

                           $ 135,104    $ 160,687

Note 3. 	Furniture and Equipment

Furniture and equipment consisted of the following:

                            March 31,    December 31,
                               2001         2000
Furniture, fixtures and
    Equipment             $  251,735     $  251,735
Tooling and molds            102,182        102,182
                          $  353,917     $  353,917






Note. 4	Net Earnings (Loss) Per Share

Because the Company has incurred a loss in all periods
presented, the inclusion of potential common shares in
the calculation of diluted loss per share would have an
anti-dilutive effect. Therefore, Basic and Diluted loss
per share amounts are the same for such periods.

Note 5.  Consulting Agreement

On June 2, 2000, the Company retained Equity Securities
Investments, Inc. (the Consultant) to advise and assist
the Company in evaluating strategic opportunities
including a possible sale or merger. However, there can
be no assurance that these activities will result in a
proposal acceptable to the Company or that any
transaction will be completed.

The consulting agreement has a term of one year and
provides the Consultant with a warrant to purchase
600,000 shares of Company common stock at a price of
$0.17 per share. The Company valued this warrant using
the Black-Scholes pricing model, which resulted in a
value of approximately $93,000. The expense is being
recognized over the term of the agreement and $23,181
is reflected as an operating expense for the three-
month period ending March 31, 2001.





ITEM 2.  Management's Discussion and Analysis or Plan
          of Operations

Results of Operations - 2001 compared to 2000

Sales.  Sales for the first three months of fiscal
2001 were $130,064, compared to $118,215 in fiscal
2000, an increase of approximately 10%. This increase
was primarily related to an increase in sales volume.

Gross Profit. Gross profit expressed as a percentage
of sales increased from approximately 22% for the
first three months of 2000 to approximately 28% for
the same period in 2001 due primarily to a change in
the mix of products sold during this period.

Operating Expenses.  Operating expenses increased
from $61,800 for the three-month period ended March
31, 2001 to $83,084 for the same period in 2000.
This increase was primarily the result of the
amortization expense of $23,181 for the consulting
agreement signed in June of 2000 (See Note 5). This
amortization expense offset a slight decrease in
other operating expenses.

Liquidity and Capital Resources

At March 31, 2001 the Company had working capital of
$84,326 compared to $128,351 at December 31, 2000.

The cash flows provided by operating activities for
the first three months of 2001 were $14,051.

The ability of the Company to continue as a going
concern and it's short-term liquidity is dependent
upon obtaining additional debt and/or equity
financing to fund future development and operations.
The Company plans to add additional products in order
to offer a more complete and competitive line. These
products will be manufactured for the Company on an
OEM basis without incurring any capital or
development costs on the part of the Company.
Long-term liquidity is dependent upon the attainment
of the short-term factors discussed above and greater
sales volume that generates profitable operations.
Increased sales volumes in 2001 depend largely on
increased business from contract manufacturing
and increased sales from existing and new products.

Consulting Agreement: As stated in Note 5 of the
interim financial statements, on June 2, 2000, the
Company retained Equity Securities Investments, Inc.
(the Consultant) to advise and assist the Company
in evaluating strategic opportunities including a
possible sale or merger. However, there can be no
assurance that these activities will result in a
proposal acceptable to the Company or that any
transaction will be completed.

Seasonality: The Company is not subject to any
significant seasonal factors.

Market Risk and Impact of Inflation: We do not
believe that we have any significant risks related
to interest rate fluctuations. We also believe that
inflation has not had a material impact on our
results of operations. We cannot assure you that
future inflation will not have an adverse impact on
our operations results and financial condition.

Forward-looking statement
This document includes forward-looking statements
based on current expectations.  Actual results may
differ materially.  These forward-looking statements
involve a numbers of risks and uncertainties including,
but not limited to, the receipt and shipping of new
orders for the Company's current products; the timely
introduction and market acceptance of new products
and research and development funding at the levels
required.




PART III.	OTHER INFORMATION

ITEM 6.	Exhibits and Reports on Form 8-K


(b) Reports on Form 8-K

No reports on Form 8-K were filled during the three
month period ended March 31, 2001.


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                   SIGNATURES

In accordance with the requirements of the Exchange
Act, the registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly
authorized.


SURGIDYNE, INC.
  (Registrant)



Date:  May 02, 2001         /s/ Vance D. Fiegel
                            By: Vance D. Fiegel
                            President and Principal
                             Accounting Officer