FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   Quarterly Report under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

For Quarter Ended:   June 30, 1997
Commission File Number:  0-18393

                            WINLAND ELECTRONICS, INC.
        (Exact name of small business issuer as specified in its charter)

          Minnesota                                       41-0992135
(state or other juris-                                (I.R.S. Employer
diction of incorporation)                            Identification No.)

                   1950 Excel Drive, Mankato, Minnesota 56001
               (Address of principal executive offices)(zip code)

               Registrant's telephone number, including area code:
                                 (507) 625-7231

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 the number of shares  outstanding  of each of the  issuer's  classes of
common  stock,  as of the latest  practicable  date:  As of July 31,  1997,  the
Registrant had 2,803,881 shares of Common Stock, $.01 par value, outstanding.

         Transitional Small Business Disclosure Format (check one):

         Yes                        No   x







                                        1

<PAGE>
                          PART I-FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                            WINLAND ELECTRONICS, INC.
                                  BALANCE SHEET
                                   (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS                                                        June 30,    December 31,
                                                                1997          1996
                                                             ----------   ----------
CURRENT ASSETS:
<S>                                                          <C>          <C>
Cash                                                         $   44,612   $   19,499
Accounts Receivable, Net                                      1,528,442    1,327,386
Inventories                                                   3,414,210    2,969,677
Prepaid Items                                                   125,749       63,633
                                                             ----------   ----------
             Total Current Assets                             5,113,013    4,380,195

Property and Equipment, Net                                   3,124,334    3,128,588
Property Under Capital Lease, Net                             1,097,877      721,066
OTHER ASSETS:
             Intangibles                                          7,799        8,564
             Deferred Income Taxes                               52,535       52,535
                                                             ----------   ----------
                          TOTAL ASSETS                       $9,395,558   $8,290,948

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
             Notes Payable                                   $1,930,227   $1,580,227
             Accounts Payable                                   955,008      683,406
             Payroll Taxes Payable                               19,924       34,891
             Wages and Commissions Payable                       41,055       41,815
             Other Accruals                                      98,730      120,382
             Obligations Under Capital Lease                    229,110      163,636
             Deferred Revenue                                    27,001       27,001
             Income Taxes Payable                                22,416          336
             Current Maturities                                 168,506      161,267
                                                             ----------   ----------
                          Total Current Liabilities           3,491,977    2,812,961

LONG TERM LIABILITIES:
             Long Term Maturities                             2,375,121    2,459,644
             Obligations Under Capital Lease
             Less: Current Portion                              786,511      492,120
                                                             ----------   ----------
                          TOTAL LONG TERM LIABILITIES         3,161,632    2,951,764

OTHER LIABILITIES:
             Deferred Revenue
             Less: Current Portion                              202,507      216,007
                          TOTAL LIABILITIES                   6,856,116    5,980,732

SHAREHOLDERS' EQUITY:
             Common Stock                                        28,039       27,511
             Additional Paid-In Capital                       2,068,920    2,047,794
             Retained Earnings                                  442,483      234,911
                                                             ----------   ----------
                          Total Shareholders' Equity          2,539,442    2,310,216
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                     $9,395,558   $8,290,948

</TABLE>

<PAGE>
                            WINLAND ELECTRONICS, INC.
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                            QUARTER ENDED
                                                               JUNE 30,

                                                        1997          1996
                                                   -----------    -----------
<S>                                                <C>            <C>
NET SALES:                                         $ 2,983,529    $ 1,562,655
       Less, Cost of Goods Sold                      2,408,351      1,252,011
                                                   -----------    -----------
       Gross Profit on Sales                           575,178        310,644

OPERATING EXPENSES:
       General and Administrative                      288,144        186,575
       Marketing                                        58,115         42,264
       Research and Development                        108,043         74,262
                                                   -----------    -----------
                    Total Operating Expenses           454,302        303,101

INCOME BEFORE OTHER INCOME
       AND EXPENSE                                     120,876          7,543
                                                   -----------    -----------
MISCELLANEOUS INCOME                                    15,976         18,936
MISCELLANEOUS EXPENSE, PROVISION
       FOR BAD DEBT                                       --             --
INTEREST EXPENSE                                       (57,034)       (36,176)
                                                   -----------    -----------
       TOTAL OTHER INCOME & EXPENSE                    (41,058)       (17,240)
                                                   -----------    -----------

NET INCOME BEFORE TAXES                                 79,818         (9,697)
                                                   -----------    -----------

PROVISION FOR INCOME TAXES                                 584          1,000
                                                   -----------    -----------

NET INCOME                                         $    79,234    $   (10,697)

NET INCOME PER COMMON SHARE                        $     0.028    $    (0.004)

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING AS OF JUNE 30, 1997 & 1996               2,798,634      2,587,833

</TABLE>


<PAGE>
                            WINLAND ELECTRONICS, INC.
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        SIX MONTHS ENDED
                                                             JUNE 30,

                                                      1997           1996
                                                   -----------    -----------

<S>                                               <C>            <C>
NET SALES:                                        $ 5,805,624    $ 3,315,707
       Less, Cost of Goods Sold                     4,564,503      2,612,641
                                                   -----------    -----------
       Gross Profit on Sales                        1,241,121        703,066

OPERATING EXPENSES:
       General and Administrative                     552,149        390,730
       Marketing                                      124,921         94,724
       Research and Development                       208,216        134,592
                                                   -----------    -----------
                    Total Operating Expenses          885,286        620,046

INCOME BEFORE OTHER INCOME
       AND EXPENSE                                    355,835         83,020
                                                   -----------    -----------
MISCELLANEOUS INCOME                                   24,839         48,811
MISCELLANEOUS EXPENSE, PROVISION
       FOR BAD DEBT                                   (43,000)          --
INTEREST EXPENSE                                     (106,519)       (69,958)
                                                   -----------    -----------
       TOTAL OTHER INCOME & EXPENSE                  (124,680)       (21,147)
                                                   -----------    -----------

NET INCOME BEFORE TAXES                               231,155         61,873
                                                   -----------    -----------

PROVISION FOR INCOME TAXES                             23,584          1,000
                                                   -----------    -----------

NET INCOME                                        $   207,571    $    60,873

NET INCOME PER COMMON SHARE                       $     0.074    $     0.022

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING AS OF JUNE 30, 1997 & 1996              2,788,343      2,585,584
</TABLE>
                                                   
                                                   
<PAGE>

                            WINLAND ELECTRONICS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 SIX MONTHS ENDED SIX MONTHS ENDED
                                                                   JUNE 30, 1997  JUNE 30, 1996
                                                                 ---------------- ----------------
<S>                                                                <C>            <C>
CASH FLOW FROM OPERATING ACTIVITIES:
       Cash Received from Customers                                $ 5,561,568    $ 3,653,821
       Interest Received                                                11,323         22,171
       Other Miscellaneous Operating Receipts                             --           13,293
       Cash Paid to Suppliers and Employees                         (5,427,642)    (3,950,303)
       Interest Paid                                                  (198,523)      (152,250)
       Income Taxes Paid                                                (1,168)        (1,000)
                                                                   -----------    -----------
           Net Cash (Used) by Operating Activities                     (54,442)      (414,268)
                                                                   -----------    -----------
CASH FLOW FROM INVESTING ACTIVITIES:
       Purchases of Property and Equipment                             (97,804)      (204,084)
       Cash Proceeds From Sales of Equipment                              --             --   
                                                                   -----------    -----------
           Net Cash (Used) by Investing Activities                     (97,804)      (204,084)
                                                                   -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
       Net Advances on Credit Line                                     350,000        659,775
       Proceeds from Debt                                                 --           57,725
       Payments on Debt                                                (77,284)       (30,350)
       Payments on Capital Lease Obligations                          (117,011)       (56,206)
       Sale of Common Stock                                             21,654          1,376
                                                                   -----------    -----------
           Net Cash Provided by Financing Activities                   177,359        632,320
                                                                   -----------    -----------
NET INCREASE IN CASH                                                    25,113         13,968
CASH - BEGINNING OF YEAR                                                19,499          2,839
                                                                   -----------    -----------
CASH - END OF PERIOD                                              $     44,612    $    16,807
                                                                   -----------    -----------

                 RECONCILIATION OF NET INCOME TO NET CASH (USED)
                             BY OPERATING ACTIVITIES


Net Income (Loss)                                                 $    207,571    $    60,873
Adjustments:
Disposition of Assets                                                       15            155
Depreciation & Amortization                                            202,904        126,333
(Increase) Decrease in Accounts Receivable                            (201,056)       337,154
(Increase) Decrease in Inventory                                      (444,533)      (576,703)
(Increase) Decrease in Prepaid Items                                   (62,116)        10,804
(Decrease) Increase in Accounts Payable                                271,602       (354,650)
(Decrease) Increase in Wages Payable                                      (760)         4,078
(Decrease) Increase in Accrued Payroll Taxes                           (14,967)         2,207
(Decrease) Increase in Other Accruals                                  (21,652)       (11,019)
(Decrease) Increase in Deferred Revenue                                (13,530)       (13,500)
(Decrease) Increase in Income Taxes Payable                             22,080           --   
                                                                   -----------    -----------
Net Cash (Used) by Operating Activities                           $    (54,442)   $  (414,268)
                                                                   -----------    -----------

</TABLE>
<PAGE>

                            WINLAND ELECTRONICS, INC.
                    NOTES TO THE INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 1997
                                   (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The  accompanying  unaudited  financial  statements  have been  prepared  by the
Company in accordance with generally accepted accounting principles, pursuant to
the  rules  and  regulations  of the  Securities  and  Exchange  Commission.  In
management's  opinion all  adjustments  necessary to a fair  presentation of the
results for the  interim  period have been  reflected  in the interim  financial
statements. The results of operations for any interim period are not necessarily
indicative of the results for a full year.  Except for those described in note B
below,  all  other  adjustments  are  of  a  normal  recurring  nature.  Certain
information and footnote  disclosures  normally included in financial statements
have  been  condensed  or  omitted.   Such  disclosures  are  those  that  would
substantially  duplicate  information  contained  in  the  most  recent  audited
financial  statements of the Company,  such as significant  accounting policies,
net operating loss carry-overs, lease and license commitments and stock options.
Management  presumes  that  users of the  interim  statements  have read or have
access to the audited financial statements included in the Company's most recent
annual report on Form 10-KSB.

NOTE B - ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company  maintains an allowance for doubtful  accounts based on the aging of
accounts  receivable.  The balance of the  allowance  for  doubtful  accounts is
$46,921  at June 30,  1997 and  $4,455  at  December  31,  1996.  The  following
allowance for doubtful accounts was increased by $43,000 in the first quarter of
1997.  The Company was  informed  that a customer  had filed for chapter  eleven
bankruptcy, which required a significant increase to the allowance.

NOTE C - INVENTORY
Major Components of inventory at June 30, 1997 and December 31, 1996 are as
follows:
                                                     June 30,    December 31,
                                                       1997         1996
                                                    ----------   ----------
Raw Materials                                       $2,201,958   $1,695,764
Work In Process                                        494,619      554,090
Finished Goods                                         708,515      709,860
Manufacturing, Shipping, and Office Supplies             9,118        9,963
                                                    ----------   ----------
                        Total                       $3,414,210   $2,969,677
                                                    ----------   ----------

NOTE D - PROPERTY AND EQUIPMENT
Property and Equipment not under capital leases consists of the following at 
June 30, 1997 and December 31, 1996:
                                                     June 30,   December 31,
                                                       1997          1996
                                                    ----------    ----------
Building                                           $ 2,361,016    $ 2,343,275
Land                                                   192,640        192,640
Office Equipment                                       159,424        341,658
Computer & Telephone Equipment                         339,917           --
Research & Development                                 109,369        143,941
Marketing and Display Equipment                         18,152         31,413
Factory Equipment                                      520,705        549,567
Land Improvements                                       77,369         77,369
Accumulated Deprecation                               (654,258)      (551,275)
                                                   -----------    -----------
                        Net Book Value             $ 3,124,334    $ 3,128,588
                                                   -----------    -----------




                                        6
<PAGE>

                            WINLAND ELECTRONICS, INC.
                    NOTES TO THE INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 1997
                                   (UNAUDITED)
NOTE D - CONTINUED
Property and Equipment under capital leases consists of the following at June 
30, 1997 and at December 31, 1996:
<TABLE>
<CAPTION>
                                                                              June 30,      December 31,
                                                                                1997            1996
                                                                              ----------     ----------
<S>                                                                          <C>            <C>        
Factory Equipment                                                            $ 1,269,214    $   863,472
Office Equipment                                                                  60,408         95,754
Computer & Telephone Equipment                                                   110,640           --
Research & Development                                                             4,401          4,401
Accumulated Amortization                                                        (346,786)      (242,561)
                                                                              ----------     ----------
            Total Leased Property and Equipment, Net of
                        Accumulated Amortization                             $ 1,097,877    $   721,066
                                                                              ----------     ----------
Capital Leases are summarized as follows:
Lease on factory equipment with lease period expiring
May of 2002, at an interest rate of 10.04%                                   $    63,354    $      --
Lease on factory equipment with lease period expiring
June of 2002, at an interest rate of 10.04%                                       78,939           --
Lease on factory equipment with lease period expiring
March of 2002, at an interest rate of 9.94%                                       60,920           --
Lease on factory equipment with lease period expiring
March of 2002, at an interest rate of 8.88%                                      204,652           --
Lease on computer and telephone equipment with lease
period expiring February of 2000, at an interest rate of 9.01%                    36,989           --
Lease on factory equipment with lease period expiring
August of 2001, at an interest rate of 9.49%                                     222,134        242,293
Lease on factory equipment with lease period expiring
July of 2001, at an interest rate of 9.96%                                       104,810        113,809
Lease on factory, office, and R&D equipment with lease
period expiring July of 1997, at an interest rate of 8.0%                            902          6,195
Lease on factory and office equipment with lease period
expiring January of 2000, at interest  of 1% over prime                          207,693        248,826
Lease on factory equipment with lease period expiring
October of 1998 at an interest rate of 9.23%                                      18,731         25,641
Lease on office equipment with lease period expiring
March of 2000 at an interest rate of 9%                                           16,497         18,992
                                                                              ----------     ----------
Total                                                                        $ 1,015,621    $   655,756
Less Current Portion                                                             (229110)       (163636)
                                                                              ----------     ----------
Long Term Obligation Under Capital Leases                                    $    786511    $    492120 
                                                                              ----------     ----------
</TABLE>

NOTE E - SHORT TERM BORROWING
Short term borrowing consists of the following at June 30, 1997 and December 31,
1996 balance sheet:
                                                    June 30,     December 31,
Norwest Bank - Revolving Credit Line                  1997          1996
                                                   ----------    ----------
Balance                                            $1,930,227    $1,580,227
Stated Interest Rate per Annum                           9.25%          9.0%*
Maximum Amount Outstanding During the Quarter      $2,050,227    $1,995,227
Average Amount Outstanding During the Quarter      $1,986,894    $1,626,398
Unused Credit Available                            $  881,723    $1,204,081

* The  stated  interest  rate per annum is equal to 3/4 of a percent  over prime
rate 



                                        7
<PAGE>

                            WINLAND ELECTRONICS, INC.
                    NOTES TO THE INTERIM FINANCIAL STATEMENTS
                                  JUNE 30, 1997
                                   (UNAUDITED)

The interest on the  revolving  loan was $57,034 for the three months ended June
30,  1997 and  $106,519  for the first six months of 1997.  Additional  interest
expense was  reported  related to the leased  capital  equipment  and other term
borrowing.  The interest expense on leased equipment was $24,662 and $47,819 for
the three and six months  ended June 30,  1997.  Interest  expense on other long
term  borrowing  was $22,907 and $56,815 for the three and six months ended June
30, 1997.

NOTE F - STOCK OPTIONS AND WARRANTS
As of June 30, 1997,  options to purchase an aggregate of 307,000  shares of the
Company's  common stock were granted and  outstanding  under the Company's  1989
Stock Option  Plan(the  "1989 Plan").  As of June 30, 1997,  options to purchase
143,600 shares granted under the 1989 Plan were exercisable. The exercise prices
of all  outstanding  options  under the 1989 Plan  range from $0.06 to $3.64 per
share.  Options to purchase 6,000 shares were granted and outstanding  under the
1997 Stock  Option Plan,  all of which were  exercisable  at June 30, 1997.  The
exercise price of such options was $3.125.

As of June 30, 1997,  warrants to purchase an aggregate of 37,000  shares of the
Company's Common Stock at $2.20 per share were granted and  outstanding,  all of
which warrants are exercisable.

                                       8

<PAGE>


ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations
Three and six months ended June 30 1997 v.
Three and six months ended June 30 1996

Net Sales:
The Company recorded net sales of $2,983,529 for the three months ended June 30,
1997,  an  increase of 91% from net sales of  $1,562,655  for the same period in
1996.  Net sales of  $5,805,624  were recorded for the first six months of 1997,
compared to $3,315,707 for the same period in 1996, a 75% increase. The increase
in sales for the second  quarter  and first six months of 1997  compared  to the
same  period  in 1996  was  primarily  attributed  to sales  to  Select  Comfort
Corporation  pursuant  to a  $6.9  million  dollar  purchase  order,  which  was
increased from $5.6 million  dollars in July of 1997. The current Select Comfort
Corporation  purchase  order was  approximately  56%  complete at June 30, 1997.
Sales of  security/industrial  products  were off  slightly for the three months
ended June 30,  1997  compared  to the same period in 1996,  and  experienced  a
slight  increase for the first six months of 1997 compared to the same period in
1996.

The  Company  has  continued  to  identify  and secure new  contract  design and
manufacturing  customers,  as well as to actively market its security/industrial
products.  The loss of any contract customer could have an adverse effect on the
Company's  short term results.  The management of the Company  believes that the
contract  design and  manufacturing  portion of its business has  potential  for
growth and is actively promoting this portion of the business.

Gross Profits:
Gross  profit was $575,178 or 19.3% of net sales for the three months ended June
30,  1997,  compared  to  $310,644  or 19.9% of net sales for the same period in
1996. For the first six months of 1997,  gross profit was $1,241,121 or 21.4% of
net sales,  compared  to  $703,066  or 21.2% of net sales for the same period in
1996. Although sales increased significantly for the three months and six months
ended June 30,  1997,  the gross  profit,  as a  percentage  of sales,  declined
slightly for the three month period compared to the same period in 1996. Factors
that  contributed to the lower than  anticipated  gross profits were: 1) startup
costs  associated  with a  significant  new OEM  customer's  product line; 2) an
engineering  change of a security  product,  which  resulted in the reworking of
existing stock,  and; 3) greater than expected costs  associated with the design
and manufacture of a new product line for an existing OEM customer.

Operating Expenses:
General and  administrative  expense  was  $288,144 or 9.7% of net sales for the
three months ended June 30 1997,  compared to $186,575 or 11.9% of net sales for
the same period in 1996. General and administrative expense was $552,149 or 9.5%
for the first six months of 1997, compared to $390,730 or 11.8% of net sales for
the  same  period  in  1996.  As  a  percentage   of  net  sales,   general  and
administrative  expenses declined for the three months and six months ended June
30, 1997, compared to the same periods in 1996 due to the increase in sales. The
increase in actual  general  and  administrative  expenses  of $101,569  for the
quarter  and  $161,419  for the first six months of 1997,  compared  to the same
periods in 1996, are associated  with  additional  costs necessary to support an
increased level of business.

Marketing  expense was  $58,115 or 1.9% of net sales for the quarter  ended June
30, 1997, compared to $42,264 or 2.7% for the same period in 1996. The marketing
expenses  for the first six months of 1997 were  $124,921  or 2.2% of net sales,
compared  to  $94,724  or 2.9% of net  sales for the same  period in 1996.  As a
percentage of net sales, the marketing  expenses declined for second quarter and
first six  months of 1997,  compared  to the same  periods  in 1996.  The actual
marketing  expenses  increased  for the second  quarter  and first six months of
1997, but at a slower rate than the increase in net sales.

<PAGE>

Research and development expense was $108,043 or 3.6% of net sales for the three
months  ended June 30,  1997,  compared  to $74,262 or 4.8% of net sales for the
same period in 1996. Research and development  expenses were $208,216 or 3.6% of
net sales for the first six months of 1997,  compared to $134,592 or 4.2% of net
sales for the same period in 1996. While research and development expenses, as a
percentage  of net sales,  declined  for both the second  quarter  and first six
months of 1997, the actual expenses increased $33,781 for the second quarter and
$73,624 for the first six months 1997 compared to the same periods in 1996.  The
increases are attributed to the addition of technical staff and equipment needed
to better  serve our  customers'  growing  requirements  for design and  support
services.

Interest Expense:
Interest  expense on the  revolving  line of credit  was  $57,034 or 1.9% of net
sales for the three months  ended June 30, 1997,  compared to $36,176 or 2.3% of
net sales for the same period in 1996. Interest expense for the first six months
of 1997 on the  revolving  line of  credit  was  $106,519  or 1.8% of net  sales
compared  to  $69,958  or 2.1% of net  sales for the same  period  in 1996.  The
increase in interest expense reflected additional short term borrowing needed to
support  increased  sales,  as well as increases in interest  rates  compared to
1996.

Net Earnings:
The  Company  reported  net  income of $79,234 or $0.028 per share for the three
months  ended  June 30,  1997,  compared  to a net loss of $10,697 or $0.004 per
share for the same period in 1996.  For the six months ended June 30, 1997,  the
Company  reported  net income of $207,571  or $0.074 per share,  compared to net
income of $60,873 or $0.022 per share for the same period in 1996.

The Company  believes  inflation has not  significantly  affected its results of
operations.

Liquidity and Capital Resources

The  current  ratio on June 30,  1997  was 1.46 to 1,  compared  to 1.56 to 1 on
December 31, 1996.  Working capital on June 30, 1997 was $1,621,036  compared to
$1,567,234  on December 31, 1996.  The increase in working  capital is primarily
attributed to increases in  inventory,  accounts  receivable,  and prepaid items
that are  offset by  additional  short  term  borrowing  needed to  support  the
increased sales during the first six months of 1997. The Company has no material
commitments for the capital expenditures as of this date here of.

The Company has a revolving  credit  agreement  with the Norwest Bank  Minnesota
South  N.A.("Norwest"),  with a maximum  loan  limit of  $3,500,000,  subject to
additional  limitations set forth in the credit agreement.  The interest rate is
calculated at 3/4% over the prime interest rate. At June 30, 1997,  there was an
outstanding  balance  of  $1,930,227  under the line of  credit.  The  Company's
management believes that capital available through the current credit agreement,
together  with  cash  flows  from  operations  will be  sufficient  to meet  the
Company's capital needs in the near future.










                                       10
<PAGE>

                            PART II-OTHER INFORMATION



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

         (a) The Company held its Annual Meeting on May 6, 1997.

         (b)  Proxies  for  the  annual  meeting  were  solicited   pursuant  to
         Regulation 14A under the Securities  Exchange Act of 1934. There was no
         solicitation  in opposition to  management's  nominees as listed in the
         proxy statement, and all of such nominees were elected.

         The  shareholders  set the number of directors at five (5) by a vote of
         2,347,384  shares in favor,  with 9,635 shares voted against and 15,090
         shares  abstaining.  The  following  persons  were  elected to serve as
         directors  of  the  Company  until  the  next  annual  meeting  of  the
         shareholders with the following votes:

                                       Number of                   Number of
             Nominee                   Votes For                 Votes Withheld

             W. Kirk Hankins           2,346,709                      25,400
             Lorin E. Krueger          2,346,709                      25,400
             Kirk P. Hankins           2,324,734                      47,375
             S. Robert Dessalet        2,349,009                      23,100
             Thomas J. de Petra        2,328,259                      43,850

         The  shareholders  approved the Company's  1997 Employee Stock Purchase
         Plan by a vote of 1,601,742  shares in favor,  with 63,474 shares voted
         against,  26,825  shares  abstaining  and  680,468  shares  present for
         determining  the  quorum  but which  lacked  authority  to vote on this
         matter (broker non-votes).

         The  shareholders  approved the  Company's  1997 Stock Option Plan by a
         vote of 1,569,912  shares in favor,  with 83,954 shares voted  against,
         32,865 shares  abstaining and 685,378 shares present for  determining a
         quorum  but  which  lacked  authority  to vote on this  matter  (broker
         non-votes).

         The  shareholders  ratified the  appointment  of Ahern Montag & Vogler,
         Ltd.  as  independent  Auditors  for the  Company  for the year  ending
         December  31, 1997 by a vote of 2,352,944  shares in favor,  with 6,250
         shares voted against and 12,915 shares abstaining.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

         (a) See Exhibit Index following the signature page.

         (b) There are no  reports  on Form 8-K for the  quarter  ended June 30,
         1997.










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<PAGE>


                                   SIGNATURES



Pursuant  to the  requirement  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.



                                            WINLAND ELECTRONICS, INC.


Dated: August 1, 1997                       By: /s/ W. K. Hankins
                                            William K. Hankins, President,
                                            Chief Executive Officer and
                                            Chief Financial Officer
                                            (Principal Executive Officer
                                            and Principal Financial and
                                            Accounting Officer)








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<PAGE>


                            WINLAND ELECTRONICS, INC.
                          EXHIBIT INDEX TO FORM 10-QSB



For The Quarter Ended
June 30, 1997



Exhibit
Number            Item


10.1       Winland Electronics Inc. 1997 Employee Stock Purchase Plan

10.2       Winland Electronics Inc. 1997 Stock Option Plan

10.3       Form of Incentive Stock Option Agreement under 1997 Stock Option Plan

10.4       Form of Nonqualified Stock Option Agreement under 1997 Stock Option 
           Plan

11         Statement Re: Computation of per share earnings.

27         Financial Data Schedule (filed only with electronic version).











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