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: September 30, 2000
                        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 November 10, 2000 the
issuer had 2,946,464 shares of Common Stock, $.01 par value, outstanding.

         Transitional Small Business Disclosure Format (check one):

         Yes                        No   x

<PAGE>
                   PART I-FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                            WINLAND ELECTRONICS, INC.
                                  BALANCE SHEET

<TABLE>
<CAPTION>
ASSETS                                                    September 30,      December 31,
                                                               2000               1999
                                                          ------------       ------------
                                                            (UNAUDITED)
<S>                                                       <C>                <C>
CURRENT ASSETS:
Cash                                                      $     49,272       $     40,017
Accounts Receivable, Net                                     3,185,037          2,531,872
Income Tax Receivable                                          110,852             19,000
Inventories                                                  5,048,317          3,453,778
Prepaid Expenses                                               131,494             58,591
Deferred Taxes                                                 112,800            112,800
                                                          ------------       ------------
                   Total Current Assets                      8,637,772          6,216,058
                                                          ------------       ------------

Patent and Trademarks, net of amortization                       2,866              3,971
                                                          ------------       ------------

Property and Equipment, at cost:
  Land and Land Improvements                                   272,901            272,901
  Building                                                   2,983,586          2,980,268
  Machinery and Equipment                                    3,372,742          3,234,166
  Data Processing Equipment                                  1,403,287          1,305,425
  Office Furniture and Equipment                               397,463            367,898
                                                          ------------       ------------
    Total                                                    8,429,979          8,160,658
    Less Accumulated Depreciation                           (3,149,151)        (2,522,088)
                                                          ------------       ------------
   Property and Equipment, Net of Depreciation               5,280,828          5,638,570
                                                          ------------       ------------
                   TOTAL ASSETS                           $ 13,921,466       $ 11,858,599
                                                          ============       ============

</TABLE>

<PAGE>

                            WINLAND ELECTRONICS, INC.
                                  BALANCE SHEET

<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY                      September 30,       December 31,
                                                              2000               1999
                                                          ------------       ------------
                                                           (UNAUDITED)
CURRENT LIABILITIES:
<S>                                                       <C>                 <C>
Note Payable, Bank                                        $  3,248,501       $  1,518,501
Current Maturities of Long Term Debt                           694,737            656,671
Accounts Payable                                             2,166,955          1,091,964
Accrued Expenses:
   Compensation                                                166,841            337,846
   Other                                                       116,951            109,583
                                                          ------------       ------------
                   Total Current Liabilities                 6,393,985          3,714,565
                                                          ------------       ------------

LONG TERM LIABILITIES:
Deferred Revenue                                               208,344            202,161
Long Term Debt, Less Current Maturities                      2,680,329          3,238,995
Deferred Taxes                                                 166,000            166,000
                                                          ------------       ------------
                   Total Long Term Liabilities               3,054,673          3,607,156
                                                          ------------       ------------

SHAREHOLDERS' EQUITY:
Common Stock                                                    29,465             29,016
Additional Paid-In Capital                                   2,236,266          2,169,750
Retained Earnings                                            2,207,077          2,338,112
                                                          ------------       ------------
                   Total Shareholders' Equity                4,472,808          4,536,878
                                                          ------------       ------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                  $ 13,921,466       $ 11,858,599
                                                          ============       ============

</TABLE>

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

<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                          September 30,
                                                      2000               1999
                                                  -----------       -----------
<S>                                               <C>               <C>
NET SALES                                         $ 4,658,615       $ 4,176,717
COST OF GOODS SOLD                                  4,155,017         3,432,756
                                                  -----------       -----------
        Gross Profit                                  503,598           743,961
                                                  -----------       -----------

OPERATING EXPENSES:
        General and Administrative                    271,878           285,929
        Marketing                                     143,348           103,552
        Research and Development                      291,430           227,237
                                                  -----------       -----------
                    Total Operating Expenses          706,656           616,718
                                                  -----------       -----------


OPERATING INCOME (LOSS)                              (203,058)          127,243
                                                  -----------       -----------

INTEREST EXPENSE                                     (122,225)          (94,222)
OTHER INCOME  (EXPENSE), NET                           16,515            36,373
                                                  -----------       -----------
                                                     (105,710)          (57,849)
                                                  -----------       -----------

NET INCOME (LOSS) BEFORE INCOME TAXES                (308,768)           69,394
                                                  -----------       -----------

PROVISION FOR INCOME TAXES                             95,584           (22,000)
                                                  -----------       -----------
NET INCOME (LOSS)                                 $  (213,184)      $    47,394

BASIC EARNINGS (LOSS) PER SHARE                   $    (0.072)      $     0.016
WEIGHTED AVERAGE NUMBER OF SHARES
        OUTSTANDING                                 2,946,464         2,896,631

DILUTED EARNINGS (LOSS) PER SHARE                 $    (0.072)      $     0.016
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, INCLUDING POTENTIALLY
 DILUTIVE SHARES                                    2,946,464         2,998,580

</TABLE>

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

<TABLE>
<CAPTION>
                                                         Nine Months Ended
                                                           September 30,
                                                      2000               1999
                                                  ------------       ------------
<S>                                               <C>                <C>
NET SALES:                                        $ 13,981,273       $ 15,445,778
COST OF GOODS SOLD                                  11,634,412         12,184,265
                                                  ------------       ------------
        Gross Profit                                 2,346,861          3,261,513
                                                  ------------       ------------

OPERATING EXPENSES:
        General and Administrative                   1,019,387          1,177,621
        Marketing                                      448,538            294,366
        Research and Development                       792,303            599,540
                                                  ------------       ------------
                    Total Operating Expenses         2,260,228          2,071,527
                                                  ------------       ------------


OPERATING INCOME                                        86,633          1,189,986
                                                  ------------       ------------

OTHER INCOME (EXPENSE), NET                             75,202             98,136
INTEREST EXPENSE                                      (334,270)          (318,835)
                                                  ------------       ------------
                                                      (259,068)          (220,699)
                                                  ------------       ------------

NET INCOME (LOSS) BEFORE INCOME TAXES                 (172,435)           969,287
                                                  ------------       ------------

PROVISION FOR INCOME TAXES                              41,400           (358,000)
                                                  ------------       ------------
NET INCOME (LOSS)                                 $   (131,035)      $    611,287

BASIC EARNINGS (LOSS) PER SHARE                   $     (0.045)      $      0.211
WEIGHTED AVERAGE NUMBER OF SHARES
        OUTSTANDING                                  2,932,511          2,891,962

DILUTED EARNINGS (LOSS) PER SHARE                 $     (0.045)      $      0.203
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, INCLUDING POTENTIALLY
DILUTIVE SHARES                                      2,932,511          3,014,663

</TABLE>

<PAGE>
                            WINLAND ELECTRONICS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                                 2000                1999
                                                                             -----------       -----------
<S>                                                                          <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES:
     Net Income (Loss)                                                       $  (131,035)      $   611,287
     Adjustments to reconcile net income (loss) to net cash provided by
     (used in) operating activities:
         Depreciation and Amortization                                           625,025           569,759
         Loss on Disposal of Equipment                                               350              --
         Deferred Taxes                                                             --             (21,400)
         Changes in Assets and Liabilities
               Accounts Receivable                                              (653,166)          676,097
               Income Taxes Receivable                                           (91,852)           47,454
               Inventories                                                    (1,577,061)           79,558
               Prepaid Expenses                                                  (90,382)          (70,389)
               Accounts Payable                                                1,074,992          (375,324)
               Accrued Expenses and Deferred Revenue                            (157,456)          141,553
               Income Taxes Payable                                                 --             (65,186)
                                                                             -----------       -----------
                   Net Cash Provided By (Used In) Operating Activities        (1,000,585)        1,593,409
                                                                             -----------       -----------

CASH FLOW FROM INVESTING ACTIVITIES:
     Purchase of Equipment                                                      (268,718)       (1,138,757)
     Proceeds from sale of Equipment                                               2,190              --
                                                                             -----------       -----------
                   Net Cash Used in Investing Activities                        (266,528)       (1,138,757)
                                                                             -----------       -----------

CASH FLOW FROM FINANCING ACTIVITIES:
     Net Borrowings on Revolving Credit Agreement                              1,730,000           (52,000)
     Payments on Long Term Borrowings, Including
         Capital Lease Obligations                                              (520,597)         (490,148)
     Proceeds From Long Term Debt                                                   --             226,785
     Proceeds From Issuance of Common Stock                                       66,965            18,682
                                                                             -----------       -----------
                   Net Cash Provided by (Used In) Financing Activities         1,276,368          (296,681)
                                                                             -----------       -----------

                   Net Increase in Cash                                            9,255           157,971

CASH
     Beginning                                                                    40,017            20,656
                                                                             -----------       -----------
     End                                                                     $    49,272       $   178,627
                                                                             -----------       -----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash Payments For:
         Interest                                                            $   330,498       $   320,287
         Income Taxes                                                             50,453           445,241
                                                                             -----------       -----------
Supplemental Schedule of Noncash Investing and Finacing Activities
     Capital Lease Obligations Incurred for the Purchase of Equipment        $      --         $   226,785
                                                                             -----------       -----------
</TABLE>
<PAGE>
                            WINLAND ELECTRONICS, INC.
                    NOTES TO THE INTERIM FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2000
                                   (UNAUDITED)

NOTE 1 - 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 for 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. All adjustments to the financial
statements 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, 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 2 - INVENTORY
Major components of inventory at September 30, 2000 and December 31, 1999 are as
follows:

                                          September 30,      December 31,
                                              2000               1999
                                          -----------       ------------
Raw Materials                             $ 3,978,917       $ 2,713,671
Work In Process                               627,806           358,956
Finished Goods                                536,690           421,289
Obsolescence reserve                          (95,096)          (40,138)
                                          -----------       ------------
                Total                     $ 5,048,317       $ 3,453,778
                                          -----------       ------------

NOTE 3 - FINANCING ARRANGEMENT
The Company has a $3,500,000 revolving line-of-credit agreement through August
31, 2001. Interest on advances accrues at the bank's reference rate (9.5 percent
at September 30, 2000) and is due monthly. Advances are due on demand, are
secured by substantially all assets of the Company, and are subject to a defined
borrowing equal to 80 percent of qualified accounts receivable and 60 percent of
inventories. In addition, the agreement contains certain reporting and operating
covenants. Advances outstanding on the revolving line-of-credit agreement at
September 30, 2000 and December 31, 1999, were $3,248,501 and $1,518,501,
respectively.

NOTE 4 - STOCK OPTIONS AND WARRANTS
As of September 30, 2000, the Company's 1989 and 1997 Stock Option Plans in
aggregate had options to purchase 449,000 shares of common stock, of which
234,350 shares were exercisable. At September 30, 2000, the exercise prices of
all options range from $1.75 to $2.938 per share.

NOTE 5 - MAJOR CUSTOMERS AND ENTERPRISEWIDE DISCLOSURES
Major Customers: The Company has customers that accounted for more than 10
percent of net sales for the three and nine months ended September 30, 2000 and
1999, as follows:

<TABLE>
<CAPTION>
                   Three Months Ended     Nine Months Ended      Three Months Ended       Nine Months Ended
                   September 30, 2000     September 30, 2000     September 30, 1999       September 30, 1999
                   ------------------     ------------------     ------------------       ------------------
<S>                      <C>                    <C>                        <C>                 <C>
Sales percentage:
   Customer A            32%                    36%                        37%                 34%
   Customer B            27%                    19%                        16%                 24%
   Customer C            14%                    19%                        16%                 16%
</TABLE>

Enterprisewide Disclosures: The following table presents three and nine month
revenues from external customers for each of the Company's groups of products
and services:

<TABLE>
<CAPTION>
                                              Three Months Ended   Nine Months Ended   Three Months Ended   Nine Months Ended
                                              September 30, 2000   September 30, 2000  September 30, 1999   September 30, 1999
                                              ------------------   ------------------  ------------------   ------------------
<S>                                                  <C>                <C>                  <C>                <C>
Proprietary microprocessors and mechanically
  controlled sensors and alarms               $      683,758       $    1,881,132      $     641,594        $   1,771,211
Electronic controls and assemblies for
   OEM customers                                   3,974,857           12,100,141          3,535,123           13,674,567
                                              ------------------   ------------------  ------------------   ------------------
                                              $    4,658,615       $   13,981,273      $   4,176,717        $  15,445,778
                                              ------------------   ------------------  ------------------   ------------------

</TABLE>

<PAGE>

NOTE 6 - REVENUE RECOGNITION
In 1999, the staff of the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements". SAB
No. 101 summarizes some of the staff's interpretations of the application of
generally accepted accounting principles to revenue recognition. The Company
will adopt SAB No. 101 when required in the fourth quarter of 2000. Management
believes the adoption of SAB No. 101 will not have a significant affect on its
financial statements.

NOTE 7 - EARNINGS (LOSS) PER SHARE
Basic per-share amounts are computed, generally, by dividing net income or loss
by the weighted-average number of common shares outstanding. Diluted per-share
amounts assume the conversion, exercise, or issuance of all potential common
stock instruments unless the effect is anti-dilutive.

The Company has granted options to purchase shares of common stock at various
amounts per share. Those options were not included in the computation of diluted
earnings per share because the Company incurred a year-to-date loss. The
inclusion of potential common shares in the calculation of diluted loss per
share would have an antidilutive effect. Therefore, basic and diluted loss per
share amounts are the same in each period presented for 2000.

<PAGE>

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

General

Winland Electronics, Inc. is engaged in the design and manufacturing of a
variety of custom electronic controls and assemblies for OEM customers and, in
addition, designs, manufactures, and markets proprietary products. The Company
conducts all engineering, manufacturing, procurement, and administrative
activities in a 58,000 sq. ft., ISO 9001- registered facility in Mankato,
Minnesota.

The services Winland provides its OEM customers range from simple assembly to
full turnkey services, including product design, value engineering,
manufacturing, repair depot, and complete shipping services. In order to
distinguish itself from the large number of competitive contract manufacturers
in the USA and throughout the world, Winland has invested substantially in
plant, equipment, personnel, systems, and technology. The Company also operates
in a highly competitive labor market, particularly in the engineering and
technical segment of the workforce.

The Company's proprietary products include an established family of
environmental security products, a line of DC motor controllers that can be
customized to meet customer requirements, and the SatSource(TM) GPS antenna
product line that provides both standard and custom solutions for users of
global positioning systems technology.

Results of Operations
Three and nine months ended September 30, 2000 v.
Three and nine months ended September 30, 1999

Net Sales: The Company recorded net sales of $4,658,615 for the third quarter
ended September 30, 2000, an increase of 11.5% from $4,176,717 for the same
period in 1999. For the nine months ended September 30, 2000, the Company
recorded net sales of $13,981,273 compared to $15,445,778 for the same period in
1999. The increase in net sales for the three months ended September 30, 2000 is
the result of increased net sales to key OEM customers as well as sales to new
OEM customers. The Company also recorded increased net sales of
security/industrial products for the three months ended September 30, 2000,
compared to the same period in 1999. The Company attributes the increase in net
sales of security/industrial products to increased sales of established products
as well as the introduction of two new product lines late in 1999.

The decline in net sales during the nine months ended September 30, 2000
compared to the same period in 1999 resulted primarily from a reduction in sales
to certain OEM customers. All of the decline in net sales during the nine months
ended September 30, 2000 compared to the same period in 1999 occurred during the
first quarter ended March 31, 2000, and resulted primarily from a reduction in
sales to certain OEM customers. Net sales of security/industrial products
increased for the first nine months of 2000, compared to 1999.

Also during the nine months ended September 30, 2000, as a result of a worldwide
shortage of electronics components, the Company began to experience difficulties
in its ability to procure certain components to meet customer manufacturing and
shipping due dates. According to industry sources, this shortage of electronic
components may continue throughout 2000 and into 2001. This shortage has been
caused, in part, by the electronic industry's production capacity lagging behind
the demand caused by the continued proliferation of wireless devices, internet
hardware, and other consumer products.

The Company believes that, for the foreseeable future, its sales may be
negatively impacted by delays associated with electronic component shortages.
Winland is exploring procurement strategies with suppliers and parts agreements
with customers that may minimize the negative impact of electronic component
shortages.


<PAGE>

Major OEM customers have given the Company firm purchase commitments having an
aggregate value in excess of $3.9 million for delivery during the remainder of
2000. These purchase commitments are at various stages of completion. The
Company also has several smaller agreements with various OEM customers to be
fulfilled in 2000 of approximately $770,000. In addition, the Company has
purchase commitments in excess of $11.5 million for delivery in 2001.

The Company continues to promote itself as a full service designer and
manufacturer of custom controls and assemblies for OEM customers. The loss of
any major OEM customer would likely adversely affect the Company's short-term,
and potentially long-term, results.

Gross Profits: Gross profit was $503,598 or 10.8% of net sales for the three
months ended September 30, 2000, compared to $743,961 or 17.8% of net sales for
the same period in 1999. For the nine months ended September 30, 2000, gross
profit was $2,346,861 or 16.8%, of net sales, compared to $3,261,513, or 21.1%
of net sales for the same period in 1999. The decline in gross profit is
primarily attributed to increased raw material cost and depreciation expense,
and increased employee benefit costs, as well as labor inefficiencies associated
with set up and tear down on smaller production runs caused by parts shortages.
In addition, the decline in gross profit margins on OEM customers is partially
attributed to the introduction of new products with reduced profit margins,
necessary to stay competitive.

Operating Expenses: General and administrative expense was $271,878 or 5.8% of
net sales for the three months ended September 30, 2000, compared to $285,929 or
6.8% of net sales for the same period in 1999. For the nine months ended
September 30, 2000, general and administrative expense was $1,019,387 or 7.3% of
net sales, compared to $1,177,621 or 7.6% of net sales, during the same period
last year. The decrease in general and administrative expense for the first nine
months of 2000 was primarily attributed to elimination of bonus allowances in
reaction to lost profits for the period.

Marketing and customer relations expense was $143,348 or 3.1% of net sales for
the three months ended September 30, 2000, compared to $103,552 or 2.5% of net
sales for the same period in 1999. Marketing and customer relations expense was
$448,538 or 3.2% of net sales for the nine months ended September 30, 2000,
compared to $294,366 or 1.9% of net sales for the same period in 1999. During
both periods, the increased marketing and customer relations expense is
attributed to additional customer service staffing, costs associated with
additional trade shows attended, and costs associated with the production of
promotional materials. The Company continues to direct marketing efforts to
secure new OEM customers, as well as to promote the new DC motor controller
product line and the SatSource GPS antenna product line.

Research and development expense was $291,430 or 6.2% of net sales for the three
months ended September 30, 2000, compared to $227,237 or 5.4% of net sales for
the same period in 1999. Research and development expense was $792,303 or 5.7%
of net sales for the nine months ended September 30, 2000, compared to $599,540
or 3.9% of net sales for the same period in 1999. During both periods, the
increased research and development expense was primarily due to the addition of
technical staff in the areas of design engineering, drafting and printed circuit
board layout, as well as increased depreciation expense related to the purchase
of additional test and development equipment. The Company believes these
investments will help expand the Company's engineering capabilities in order to
meet the needs of existing and new OEM customers, and will aid with the
development of new proprietary products.

Interest Expense: Interest expense was $122,225 or 2.6% of net sales for three
months ended September 30, 2000, compared to $94,222 or 2.2% of net sales for
the same period in 1999. Interest expense for the first nine months of 2000 was
$334,270 or 2.4% of net sales, compared to $318,835 or 2.0% of net sales for the
same period in 1999.

Net Income: The Company reported a net loss of $213,184 or $0.072 loss per
diluted share for the three months ended September 30, 2000, compared to net
income of $47,394 or $0.016 per diluted share for the same period in 1999. For
the first nine months of 2000, the Company reported a net loss of $131,035 or
$0.045 loss per diluted share, compared to net income of $611,287 or $0.203 per
diluted share. The reduction in net income is primarily attributed to a decline
in profit margins and, to a lesser extent, the increase in marketing and
engineering expenses for the three and nine month periods compared to 1999.


<PAGE>

Liquidity and Capital Resources The current ratio on September 30, 2000 was 1.4
to 1, compared to 1.7 to 1 on December 31, 1999. Working capital amounted to
$2,243,787 on September 30, 2000, compared to $2,501,493 on December 31, 1999.
The decrease in working capital is primarily attributed to increases in short
term borrowings on the revolving line of credit and accounts payable which is
offset by increased accounts receivables and significantly increased inventory
levels.

Cash used by operating activities was $1,000,585 for the first nine months of
2000, compared to cash provided by operating activities of $1,593,409 for the
same period in 1999. The decrease in cash provided by operations is attributed
to the reduction in net income, as well as a build up of inventory needed, in
part, to offset the effects of expected industry shortages of electronic
components. The reduction of long-term debt was funded primarily by additional
short-term borrowings on the revolving line of credit and proceeds from the
issuance of common stock in May 2000.

The Company has a revolving credit agreement with the Wells Fargo Bank, 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 prime rate. At
September 30, 2000, an outstanding balance of $3,248,501 existed under the line
of credit. The agreement expires in August 2001, at which time the Company
anticipates that it will renew its working capital line of credit on terms
similar to its existing line. The Company's management believes that the capital
available through the current credit agreement, together with cash flows from
operations, will not be sufficient to meet the Company's capital needs over the
next four to six months, and have requested an additional $1,000,000 line of
credit to meet this need. There is no assurance that the Company will obtain
additional credit.

Cautionary Statements: Certain statements made in this quarterly report on Form
10-Q, as well as oral statements made by management of the Company from time to
time, which are prefaced with words such as "intends", "plans", "expects",
"anticipates", "believes", "projects", and similar words and other statements of
similar same are forward-looking statements. As provided for under the Private
Securities Litigation Reform Act of 1995, the Company wishes to caution
investors that the following important factors, among others, in some cases have
affected, and in the future, could affect the Company's actual results of
operations and cause such results to differ materially from those anticipated in
forward-looking statements made in this document and elsewhere by or on behalf
of the Company.

The Company derives a significant portion of its revenues from a small number of
major OEM customers which are not subject to any long-term contracts with the
Company. If any major customer should for any reason stop doing business with
the Company, the Company's business would be adversely affected. Some of the
Company's key customers are not large well-established companies, and the
business of each customer is subject to various risks such as market acceptance
of such customer's new products and continuing availability of financing. To the
extent that the Company's customers encounter difficulties, or the Company is
unable to meet the demands of its OEM customers, the Company would likely be
adversely affected.

The Company's operations and financial results are subject to its ability to
obtain raw materials, including high-demand electronic components, that may,
from time to time, be on backorder, in allocation status, or unavailable to the
Company. Under such circumstances, the Company may be required to pay higher
prices for such raw materials or incur higher financial risks through planned
inventory build up.


<PAGE>

The Company's ability to increase its revenues and profits is dependent upon its
ability to retain existing customers and obtain new customers. The Company
competes for new customers with numerous independent contract design and
manufacturing firms in the United States and abroad, many of whom have greater
financial resources and a more established reputation than the Company. The
Company's ability to compete successfully in this industry depends, in part,
upon the price at which the Company is willing to manufacture a proposed product
and the quality of the Company's design and manufacturing services. There is no
assurance that the Company will be able to continue to obtain contracts from
existing and new customers on financially advantageous terms, and the failure to
do so could prevent the Company from achieving its desired growth.

The Company undertakes no obligation to update any forward-looking statements,
but investors are advised to consult any further disclosures by the Company on
this subject in its filings with the Securities and Exchange Commission,
especially on Forms 10-KSB, 10-QSB and 8-K (if any), in which the Company
discusses in more detail various important factors that could cause actual
results to differ from expected or historic results. It is not possible to
foresee or identify all such factors. As such, investors should not consider any
list of such factors to be an exhaustive statement of all risks, uncertainties
or potentially inaccurate assumptions.

The operations and success of the Company depend, in part, upon the experience
and knowledge of W. Kirk Hankins, the Company's Chief Executive Officer, and
Lorin E. Krueger, the Company's President and Chief Operating Officer. The loss
of either Mr. Hankins or Mr. Krueger would have a material adverse effect on the
Company.


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON 8-K

(a)      The exhibit to this report is:
         27.1 Financial Data Schedule (included in electronic versions only).

(b)      No reports on Form 8-K were filed during the quarter ended September
         30, 2000.


<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Company has caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.


                                 WINLAND ELECTRONICS, INC.
                                   ("Company")



Dated: November 13, 2000         /s/ W. Kirk Hankins
                                 W. Kirk Hankins, Chairman and Chief
                                 Executive Officer (Principal Executive
                                 Officer)


                                 /s/ Jennifer A. Thompson
                                 Jennifer A. Thompson, V.P. of Financial
                                 Operations (Principal Financial and Accounting
                                 Officer)