----

----

| For      the Quarter Ended: | June      30, 2008 |
|-----------------------------|--------------------|

| For      the transition period from _____________________ to      _____________________________________ |
|---------------------------------------------------------------------------------------------------------|

| Minnesota                                                           | 41-0992135                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) | (IRS      Employer Identification Number) |

| Title of Each      Class             | Name of      Exchange        |
|--------------------------------------|------------------------------|
| Common      Stock, $.01 par value    | American      Stock Exchange |
| Preferred      Stock Purchase Rights | American      Stock Exchange |

| Large      accelerated filer o | Accelerated      filer o | Non-accelerated      filer o | Smaller      Reporting Company þ |
|--------------------------------|--------------------------|------------------------------|---------------------------------------|

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TABLE OF CONTENTS

| PART I – FINANCIAL INFORMATION |
|--------------------------------------|
|                                 | ITEM 1. FINANCIAL STATEMENTS |
|                                 | ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL      CONDITION AND RESULTS OF OPERATIONS |
|                                 | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT      MARKET RISK |
|                                 | ITEM 4. CONTROLS AND PROCEDURES |
| PART II – OTHER INFORMATION    |
|                                 | ITEM 1. LEGAL PROCEEDINGS |
|                                 | ITEM 1A. RISK FACTORS |
|                                 | ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS |
|                                 | ITEM 3. DEFAULTS UPON SENIOR    SECURITIES |
|                                 | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY      HOLDERS |
|                                 | ITEM 5. OTHER INFORMATION |
|                                 | ITEM      6. EXHIBITS |
| SIGNATURES                           |
| EXHIBIT INDEX                        |

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Table of Contents

PART I 

| WINLAND ELECTRONICS,      INC.                                                                                                   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED BALANCE      SHEETS                                                                                                    |   |
| (In Thousands of      Dollars)                                                                                                   |   |
|                                                                                                                             |   |   |   |   |   |   |
| ASSETS                                                                                                                           |   | June 30,    2008 |   |   | December 31,      2007 |   |
|                                                                                                                             |   | (Unaudited) |   |   |   |   |
| Current      Assets                                                                                                              |   |   |   |   |   |   |
|  Cash                                                                                                                       |   | $ | - |   |   | $ | 1,152 |   |
|  Accounts receivable, less      allowance for doubtful accounts of $25                                                      |   |   | 3,569 |   |   |   | 3,436 |   |
|  Refundable income      taxes                                                                                               |   |   | 601 |   |   |   | 389 |   |
|  Inventories                                                                                                                |   |   | 4,390 |   |   |   | 4,708 |   |
|  Prepaid expenses and other      assets                                                                                     |   |   | 389 |   |   |   | 253 |   |
|  Deferred income      taxes                                                                                                 |   |   | - |   |   |   | 400 |   |
|  Total current      assets                                                                                                  |   |   | 8,949 |   |   |   | 10,338 |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |
|  Property and equipment at      cost                                                                                        |   |   | 11,913 |   |   |   | 11,827 |   |
|  Less accumulated      depreciation                                                                                         |   |   | (6,792 | ) |   |   | (6,410 | ) |
|  Net property and      equipment                                                                                            |   |   | 5,121 |   |   |   | 5,417 |   |
|  Total      assets                                                                                                          |   | $ | 14,070 |   |   | $ | 15,755 |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |
|  LIABILITIES AND      STOCKHOLDERS' EQUITY                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |
|  Current      Liabilities                                                                                                   |   |   |   |   |   |   |   |   |
|  Revolving line of credit      agreement                                                                                    |   | $ | 175 |   |   | $ | - |   |
|  Current maturities of      long-term debt                                                                                  |   |   | 441 |   |   |   | 512 |   |
|  Accounts      payable                                                                                                      |   |   | 1,685 |   |   |   | 1,729 |   |
|  Accrued      expenses:                                                                                                     |   |   |   |   |   |   |   |   |
|  Compensation                                                                                                               |   |   | 416 |   |   |   | 733 |   |
|  Allowance for rework and      warranty costs                                                                               |   |   | 175 |   |   |   | 160 |   |
|  Other                                                                                                                      |   |   | 255 |   |   |   | 219 |   |
|  Total current      liabilities                                                                                             |   |   | 3,147 |   |   |   | 3,353 |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |
|  Long Term      Liabilities                                                                                                 |   |   |   |   |   |   |   |   |
|  Long-term debt, less current      maturities                                                                               |   |   | 1,259 |   |   |   | 1,471 |   |
|  Deferred income      taxes                                                                                                 |   |   | - |   |   |   | 282 |   |
|  Deferred      revenue                                                                                                      |   |   | 134 |   |   |   | 138 |   |
|  Other long term tax      liabilities                                                                                       |   |   | 129 |   |   |   | 129 |   |
|  Total long-term      liabilities                                                                                           |   |   | 1,522 |   |   |   | 2,020 |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |
|  Stockholders'      Equity                                                                                                  |   |   |   |   |   |   |   |   |
| Common stock, par value $0.01 per      share; authorized 20,000,000                                                              |   |   |   |   |   |   |   |   |
| shares; issued and outstanding      3,656,668 and 3,640,741 shares as of June 30, 2008 and December 31, 2007,      respectively. |   |   | 37 |   |   |   | 36 |   |
|  Additional paid-in      capital                                                                                            |   |   | 4,854 |   |   |   | 4,691 |   |
|  Retained      earnings                                                                                                     |   |   | 4,510 |   |   |   | 5,655 |   |
|  Total stockholders'      equity                                                                                            |   |   | 9,401 |   |   |   | 10,382 |   |
|  Total liabilities and      stockholders' equity                                                                            |   | $ | 14,070 |   |   | $ | 15,755 |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |
|  See Notes to Condensed      Financial Statements                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                                             |   |   |   |   |   |   |   |   |

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Table of Contents

| WINLAND ELECTRONICS,      INC.                             |   |
|------------------------------------------------------------|--------|
| CONDENSED STATEMENTS OF      OPERATIONS                    |   |
| (In Thousands, Except Per Share      Amounts)              |   |
| (Unaudited)                                                |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   | For the Three Months Ended June      30, |   |   | For the Six Months Ended June      30, |   |
|                                                       |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Net      sales                                             |   | $ | 6,866 |   |   | $ | 8,099 |   |   | $ | 13,898 |   |   | $ | 17,398 |   |
| Cost of    sales                                           |   |   | 6,194 |   |   |   | 7,492 |   |   |   | 12,604 |   |   |   | 15,919 |   |
| Grossprofit                                                |   |   | 672 |   |   |   | 607 |   |   |   | 1,294 |   |   |   | 1,479 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General and      administrative                            |   |   | 577 |   |   |   | 716 |   |   |   | 1,193 |   |   |   | 1,346 |   |
| Sales and      marketing                                   |   |   | 353 |   |   |   | 279 |   |   |   | 693 |   |   |   | 531 |   |
| Research and      development                              |   |   | 359 |   |   |   | 303 |   |   |   | 594 |   |   |   | 636 |   |
| Total operating      expenses                              |   |   | 1,289 |   |   |   | 1,298 |   |   |   | 2,480 |   |   |   | 2,513 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating    loss                                          |   |   | (617 | ) |   |   | (691 | ) |   |   | (1,186 | ) |   |   | (1,034 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income      (expense)                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                      |   |   | (31 | ) |   |   | (93 | ) |   |   | (65 | ) |   |   | (173 | ) |
| Other income,      net                                     |   |   | - |   |   |   | 2 |   |   |   | 11 |   |   |   | 15 |   |
| Total other income      (expense)                          |   |   | (31 | ) |   |   | (91 | ) |   |   | (54 | ) |   |   | (158 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss before income      taxes                              |   |   | (648 | ) |   |   | (782 | ) |   |   | (1,240 | ) |   |   | (1,192 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit      (expense)                          |   |   | (117 | ) |   |   | 291 |   |   |   | 94 |   |   |   | 435 |   |
| Net loss                                                   |   | $ | (765 | ) |   | $ | (491 | ) |   | $ | (1,146 | ) |   | $ | (757 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss per common      share:                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and      diluted                                     |   | $ | (0.21 | ) |   | $ | (0.14 | ) |   | $ | (0.31 | ) |   | $ | (0.21 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average number of common      shares outstanding: |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and      diluted                                     |   |   | 3,649,541 |   |   |   | 3,600,856 |   |   |   | 3,645,141 |   |   |   | 3,600,603 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See Notes to Condensed Financial      Statements           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| WINLAND ELECTRONICS,      INC.                                       |   |
|----------------------------------------------------------------------|--------|
| CONDENSED STATEMENTS OF CASH      FLOWS                              |   |
| (In Thousands of      Dollars)                                       |   |
| (Unaudited)                                                          |   |
|                                                                 |   | For the Six Months Ended June      30, |   |
|                                                                 |   | 2008 |   |   | 2007 |   |
| Cash Flows From Operating      Activities                            |   |   |   |   |   |   |
|  Net      loss                                                  |   | $ | (1,146 | ) |   | $ | (757 | ) |
|  Adjustments to reconcile net      loss to net cash provided by |   |   |   |   |   |   |   |   |
|  (used in) operating      activities:                           |   |   |   |   |   |   |   |   |
|  Non-cash stock based      compensation                         |   |   | 144 |   |   |   | 114 |   |
|  Depreciation and      amortization                             |   |   | 408 |   |   |   | 444 |   |
|  Consulting expense, non-cash      warrant expense              |   |   | - |   |   |   | 22 |   |
|  Deferred tax      assets                                       |   |   | 118 |   |   |   | (18 | ) |
|  Changes in assets and      liabilities:                        |   |   |   |   |   |   |   |   |
|  Accounts      receivable                                       |   |   | (133 | ) |   |   | 1,574 |   |
|  Refundable income      taxes                                   |   |   | (212 | ) |   |   | (323 | ) |
|  Inventories                                                    |   |   | 318 |   |   |   | 845 |   |
|  Prepaid      expenses                                          |   |   | (136 | ) |   |   | (119 | ) |
|  Accounts      payable                                          |   |   | (44 | ) |   |   | (863 | ) |
|  Accrued expenses, including      deferred revenue and          |   |   |   |   |   |   |   |   |
|  other long term tax      liabilities                           |   |   | (270 | ) |   |   | (123 | ) |
|  Net cash provided by (used      in) operating activities       |   |   | (953 | ) |   |   | 796 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|  Cash Flows From Investing      Activities                      |   |   |   |   |   |   |   |   |
|  Purchases of property and      equipment                       |   |   | (111 | ) |   |   | (235 | ) |
|  Proceeds from sale of      property and equipment              |   |   | - |   |   |   | 4 |   |
|  Net cash used in investing      activities                     |   |   | (111 | ) |   |   | (231 | ) |
|                                                                 |   |   |   |   |   |   |   |   |
|  Cash flows From Financing      Activities                      |   |   |   |   |   |   |   |   |
|  Net borrowings (payments) on      revolving line of credit     |   |   | 175 |   |   |   | (45 | ) |
|  Payments on long-term      borrowings, including capital       |   |   |   |   |   |   |   |   |
|  lease      obligations                                         |   |   | (283 | ) |   |   | (323 | ) |
|  Proceeds from issuance of      common stock                    |   |   | 20 |   |   |   | 17 |   |
|  Net cash used in financing      activities                     |   |   | (88 | ) |   |   | (351 | ) |
|                                                                 |   |   |   |   |   |   |   |   |
|  Net increase (decrease) in      cash                           |   |   | (1,152 | ) |   |   | 214 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|  Cash                                                           |   |   |   |   |   |   |   |   |
|  Beginning of      period                                       |   |   | 1,152 |   |   |   | 51 |   |
|  Ending of      period                                          |   | $ | - |   |   | $ | 265 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|  Supplemental      information                                  |   |   |   |   |   |   |   |   |
|  Cash payments      for:                                        |   |   |   |   |   |   |   |   |
|  Interest                                                       |   | $ | 65 |   |   | $ | 178 |   |
|  Acquisition of property      under capital leases              |   | $ | - |   |   | $ | 167 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|  See Notes to Condensed      Financial Statements               |   |   |   |   |   |   |   |   |

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Note 1. Basis ofPresentation

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| WINLAND ELECTRONICS,      INC.        |   |
|---------------------------------------|--------|
| SEGMENT      REPORTING                |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| ($ in      thousands)                 |   | EMS |   |   | Proprietary |   |   | Other |   |   | Total |   |
| Three months ended June 30,      2008 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                             |   | $ | 5,966 |   |   | $ | 900 |   |   | $ | - |   |   | $ | 6,866 |   |
| Operating income      (loss)          |   |   | 40 |   |   |   | (81 | ) |   |   | (576 | ) |   |   | (617 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Three months ended June 30,      2007 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                             |   | $ | 7,304 |   |   | $ | 795 |   |   | $ | - |   |   | $ | 8,099 |   |
| Operating income      (loss)          |   |   | 7 |   |   |   | 17 |   |   |   | (715 | ) |   |   | (691 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Six months ended June 30,      2008   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                             |   | $ | 12,140 |   |   | $ | 1,758 |   |   | $ | - |   |   | $ | 13,898 |   |
| Operating income      (loss)          |   |   | 81 |   |   |   | (74 | ) |   |   | (1,193 | ) |   |   | (1,186 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Six months ended June 30,      2007   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                             |   | $ | 15,855 |   |   | $ | 1,543 |   |   | $ | - |   |   | $ | 17,398 |   |
| Operating income      (loss)          |   |   | 313 |   |   |   | (1 | ) |   |   | (1,346 | ) |   |   | (1,034 | ) |
|                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                                                                            |   | For the Three Months Ended June      30, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|--------|
| Sales      percentage:                                                                                                                          |   | 2008                                     |   |   | 2007 |   |
|    Customer      A                                                                                                               |   |                                     | 37     | % |   |   | 17 | % |
|    Customer      B                                                                                                               |   |                                     | 19     | % |   |   | 22 | % |
|    Customer      C                                                                                                               |   |                                     | 9      | % |   |   | 19 | % |
|                                                                                                                                            |   |                                     |   |   |   |   |   |   |
|                                                                                                                                            |   | For the Six Months Ended June      30,   |   |
| Sales      percentage:                                                                                                                          |   | 2008                                     |   |   | 2007 |   |
|    Customer      A                                                                                                               |   |                                     | 33     | % |   |   | 18 | % |
|    Customer      B                                                                                                               |   |                                     | 17     | % |   |   | 21 | % |
|    Customer      C                                                                                                               |   |                                     | 13     | % |   |   | 17 | % |
|                                                                                                                                            |   |                                     |   |   |   |   |   |   |
| The Company had net receivables      (as a percentage of total receivables) from the above customers at June      30, 2008 and 2007 as follows: |
|                                                                                                                                            |   |                                     |   |   |   |   |   |   |
| Accounts receivable      percentage:                                                                                                            |   | 2008                                     |   |   | 2007 |   |
|    Customer      A                                                                                                               |   |                                     | 48     | % |   |   | 17 | % |
|    Customer      B                                                                                                               |   |                                     | 13     | % |   |   | 11 | % |
|    Customer      C                                                                                                               |   |                                     | 7      | % |   |   | 26 | % |
|                                                                                                                                            |   |                                     |   |   |   |   |   |   |

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|                  |   |             |   |   |                   |   |
|-----------------------|--------|------------------|--------|--------|------------------------|--------|
| ($ in      thousands) |   | June 30,    2008 |   |   | December 31,      2007 |   |
| Raw    materials      |   | $                | 3,409  |   |                   | $      | 3,467 |   |
| Work in      progress |   |             | 371    |   |                   |   | 293 |   |
| Finished    goods     |   |             | 610    |   |                   |   | 948 |   |
| Total                 |   | $                | 4,390  |   |                   | $      | 4,708 |   |
|                  |   |             |   |   |                   |   |   |   |

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|                                      |   | For the Three Months Ended June      30, |   |
|-------------------------------------------|--------|------------------------------------------|--------|
| ($ in      thousands)                     |   | 2008                                     |   |   | 2007 |   |
| Balance,      Beginning                   |   | $                                        | 165    |   |   | $ | 191 |   |
| Accruals for products      sold           |   |                                     | 89     |   |   |   | 160 |   |
| Expensing of specific warranty      items |   |                                     | (79    | ) |   |   | (111 | ) |
| Balance,    Ending                        |   | $                                        | 175    |   |   | $ | 240 |   |
|                                      |   |                                     |   |   |   |   |   |   |
|                                      |   |                                     |   |   |   |   |   |   |
|                                      |   | For the Six Months Ended June      30,   |   |
|                                      |   | 2008                                     |   |   | 2007 |   |
| Balance,      Beginning                   |   | $                                        | 160    |   |   | $ | 126 |   |
| Accruals for products      sold           |   |                                     | 240    |   |   |   | 570 |   |
| Expensing of specific warranty      items |   |                                     | (225   | ) |   |   | (456 | ) |
| Balance,    Ending                        |   | $                                        | 175    |   |   | $ | 240 |   |
|                                      |   |                                     |   |   |   |   |   |   |

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OVERVIEW

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ITEM3.   

ITEM4.    

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PART II – OTHER INFORMATION

   LEGAL 

RISK FACTORS

      UNREGISTERED 

 DEFAULTS UPON 

  SUBMISSION 

|                      |   | Number ofvotes |      |
|---------------------------|--------|----------------|-----------|
| Nominee                   |   | For            |      |   | Withheld |   |
| Thomas J. de      Petra   |   |           | 2,891,166 |   |   |   | 299,425 |   |
| Lorin E.      Krueger     |   |           | 3,104,779 |   |   |   | 85,812 |   |
| Richard T.      Speckmann |   |           | 2,888,707 |   |   |   | 301,884 |   |
| Thomas J.      Goodmanson |   |           | 2,891,166 |   |   |   | 299,425 |   |
| Thomas J.    Brady        |   |           | 3,102,822 |   |   |   | 87,769 |   |

 OTHER 

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SIGNATURES

|                             | Winland Electronics,      Inc. |                                       |
|----------------------------------|--------------------------------|--------------------------------------------|
|                             |                           |                                       |   |
| Date:       August 12, 2008 | By:                            | /s/ Thomas      J. de Petra           |   |
|                             |                           | President      and Chief Executive Officer |   |
|                             |                           | (Principal      Executive Officer)         |   |
|                             |                           |                                       |   |

|   |   |                                              |
|--------|--------|---------------------------------------------------|
|   |   |                                              |   |
|   | By:    | /s/ Glenn      A. Kermes                     |   |
|   |   | Chief      Financial Officer                      |   |
|   |   | (Principal      Financial and Accounting Officer) |   |
|   |   |                                              |   |

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| For      the fiscal quarter ended June 30, 2008 | Commission      File No. 0-15637 |
|-------------------------------------------------|----------------------------------|

| Exhibit No. | Description                                                                                                   |
|-------------|---------------------------------------------------------------------------------------------------------------|
|        |                                                                                                          |
| 31.1   | Certification of Chief Executive Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |
| 31.2   | Certification of Chief Financial Officer      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |
| 32.1   | Certification of Chief Executive Officer      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |
| 32.2   | Certification of Chief Financial Officer      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |