----

----

| For      the Quarter Ended: | September      30, 2009 |
|-----------------------------|-------------------------|

| 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 |
|--------------------------------|--------------------------|------------------------------|---------------------------------------|

Table of Contents

----

TABLE OF CONTENTS

| PART I – FINANCIAL INFORMATION                                                                     |
|----------------------------------------------------------------------------------------------------------|
| ITEM 1. FINANCIAL STATEMENTS                                                                             |
| BALANCE SHEETS AS OF SEPTEMBER 30, 2009 AND DECEMBER 31,      2008                                       |
| CONDENSED STATEMENTS OF OPERATIONS FOR THREE AND NINE      MONTHS ENDED SEPTEMBER 30, 2009 AND 2008      |
| CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS      ENDED SEPTEMBER 30, 2009 AND 2008.           |
| 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                                                                                            |

Table of Contents

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PART I – FINANCIAL INFORMATION

ITEM1.                 FINANCIALSTATEMENTS

| WINLAND      ELECTRONICS, INC.                                                                                     |   |
|--------------------------------------------------------------------------------------------------------------------|--------|
| CONDENSED BALANCE SHEETS                                                                                           |   |
| (In      Thousands of Dollars)                                                                                     |   |
|                                                                                                               |   |   |   |   |   |   |
| ASSETS                                                                                                             |   | September      30, 2009 |   |   | December      31, 2008 |   |
|                                                                                                               |   | (Unaudited) |   |   |   |   |
| Current      Assets                                                                                                |   |   |   |   |   |   |
|  Cash                                                                                                         |   | $ | 290 |   |   | $ | 356 |   |
| Accounts      receivable, less allowance for doubtful accounts of $38 and      $127                                |   |   | 3,022 |   |   |   | 3,901  |   |
|  Refundable      income taxes                                                                                 |   |   | 391 |   |   |   | 595 |   |
|  Inventories                                                                                                  |   |   | 3,817 |   |   |   | 4,337 |   |
|  Prepaid      expenses and other assets                                                                       |   |   | 446 |   |   |   | 231 |   |
|  Total      current assets                                                                                    |   |   | 7,966 |   |   |   | 9,420 |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
|  Property      and equipment at cost                                                                          |   |   | 12,100 |   |   |   | 12,112 |   |
|  Less      accumulated depreciation                                                                           |   |   | (7,757 | ) |   |   | (7,201 | ) |
|  Net      property and equipment                                                                              |   |   | 4,343 |   |   |   | 4,911 |   |
|  Total      assets                                                                                            |   | $ | 12,309 |   |   | $ | 14,331 |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
|  LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                    |   |   |   |   |   |   |   |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
|  Current      Liabilities                                                                                     |   |   |   |   |   |   |   |   |
|  Revolving      line-of-credit agreement                                                                      |   | $ | 506 |   |   | $ | - |   |
|  Current      maturities of long-term debt                                                                    |   |   | 375 |   |   |   | 392 |   |
|  Accounts      payable                                                                                        |   |   | 1,528 |   |   |   | 2,457 |   |
|  Accrued      expenses:                                                                                       |   |   |   |   |   |   |   |   |
|  Compensation                                                                                                 |   |   | 521 |   |   |   | 446 |   |
|  Allowance      for rework and warranty costs                                                                 |   |   | 51 |   |   |   | 80 |   |
|  Other                                                                                                        |   |   | 31 |   |   |   | 41 |   |
|  Total      current liabilities                                                                               |   |   | 3,012 |   |   |   | 3,416 |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
|  Long-Term      Liabilities                                                                                   |   |   |   |   |   |   |   |   |
|  Long-term      debt, less current maturities                                                                 |   |   | 794 |   |   |   | 1,079 |   |
|  Deferred      revenue                                                                                        |   |   | 124 |   |   |   | 130 |   |
|  Other      long-term tax liabilities                                                                         |   |   | 258 |   |   |   | 129 |   |
|  Total      long-term liabilities                                                                             |   |   | 1,176 |   |   |   | 1,338 |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
|  Stockholders'      Equity                                                                                    |   |   |   |   |   |   |   |   |
| Common      stock, par value $0.01 per share; authorized 20,000,000 shares; issued      and                        |   |   |   |   |   |
| outstanding      3,679,719 and 3,669,148 shares as of September 30, 2009 and December 31,      2008, respectively. |   |   | 37 |   |   |   | 37 |   |
|  Additional      paid-in capital                                                                              |   |   | 4,991 |   |   |   | 4,913 |   |
|  Retained      earnings                                                                                       |   |   | 3,093 |   |   |   | 4,627 |   |
|  Total      stockholders' equity                                                                              |   |   | 8,121 |   |   |   | 9,577 |   |
|  Total      liabilities and stockholders' equity                                                              |   | $ | 12,309 |   |   | $ | 14,331 |   |
|                                                                                                               |   |   |   |   |   |   |   |   |
|  See      Notes to Condensed Financial Statements                                                             |   |   |   |   |   |   |   |   |

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| WINLAND      ELECTRONICS, INC.                             |   |
|------------------------------------------------------------|--------|
| CONDENSED STATEMENTS OF OPERATIONS                         |   |
| (In      Thousands, Except Share and Per Share Amounts)    |   |
| (Unaudited)                                                |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   | For      the Three Months Ended September 30, |   |   | For      the Nine Months Ended September 30, |   |
|                                                       |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Net      sales                                             |   | $ | 5,122 |   |   | $ | 7,003 |   |   | $ | 18,008 |   |   | $ | 20,901 |   |
| Cost      of sales                                         |   |   | 4,831 |   |   |   | 5,883 |   |   |   | 16,153 |   |   |   | 18,487 |   |
| Gross      profit                                          |   |   | 291 |   |   |   | 1,120 |   |   |   | 1,855 |   |   |   | 2,414 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| General      and administrative                            |   |   | 468 |   |   |   | 576 |   |   |   | 1,636 |   |   |   | 1,769 |   |
| Sales      and marketing                                   |   |   | 347 |   |   |   | 300 |   |   |   | 1,122 |   |   |   | 993 |   |
| Research      and development                              |   |   | 143 |   |   |   | 137 |   |   |   | 394 |   |   |   | 731 |   |
| Total      operating expenses                              |   |   | 958 |   |   |   | 1,013 |   |   |   | 3,152 |   |   |   | 3,493 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss)                               |   |   | (667 | ) |   |   | 107 |   |   |   | (1,297 | ) |   |   | (1,079 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      income (expense)                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                                      |   |   | (30 | ) |   |   | (34 | ) |   |   | (75 | ) |   |   | (98 | ) |
| Other      income (expense), net                           |   |   | 2 |   |   |   | 12 |   |   |   | (12 | ) |   |   | 22 |   |
| Total      other expense                                   |   |   | (28 | ) |   |   | (22 | ) |   |   | (87 | ) |   |   | (76 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) before income taxes                     |   |   | (695 | ) |   |   | 85 |   |   |   | (1,384 | ) |   |   | (1,155 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      tax benefit (expense)                          |   |   | - |   |   |   | 33 |   |   |   | (150 | ) |   |   | 128 |   |
| Net      income (loss)                                     |   | $ | (695 | ) |   | $ | 118 |   |   | $ | (1,534 | ) |   | $ | (1,027 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) per common share:                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      & Diluted                                   |   | $ | (0.19 | ) |   | $ | 0.03 |   |   | $ | (0.42 | ) |   | $ | (0.28 | ) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average      number of common shares outstanding: |   |   |   |   |   |   |   |   |   |
| Basic      & Diluted                                   |   |   | 3,679,719 |   |   |   | 3,656,668 |   |   |   | 3,672,710 |   |   |   | 3,647,309 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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 Nine Months Ended September 30, |   |
|                                                             |   | 2009 |   |   | 2008 |   |
| Cash      Flows From Operating Activities                        |   |   |   |   |   |   |
|  Net      loss                                              |   | $ | (1,534 | ) |   | $ | (1,027 | ) |
|  Adjustments      to reconcile net loss to net cash used in |   |   |   |   |   |   |   |   |
|  operating      activities:                                 |   |   |   |   |   |   |   |   |
|  Depreciation      and amortization                         |   |   | 615 |   |   |   | 611 |   |
|  Non-cash      stock based compensation                     |   |   | 72 |   |   |   | 202 |   |
|  Allowance      for doubtful accounts                       |   |   | (89 | ) |   |   | - |   |
|  Loss      on disposal of property and equipment            |   |   | 20 |   |   |   | - |   |
|  Deferred      tax assets                                   |   |   | - |   |   |   | 118 |   |
|  Changes      in assets and liabilities:                    |   |   |   |   |   |   |   |   |
|  Accounts      receivable                                   |   |   | 968 |   |   |   | (401 | ) |
|  Refundable      income taxes                               |   |   | 204 |   |   |   | (262 | ) |
|  Inventories                                                |   |   | 520 |   |   |   | (7 | ) |
|  Prepaid      expenses and other assets                     |   |   | (215 | ) |   |   | (80 | ) |
|  Accounts      payable                                      |   |   | (929 | ) |   |   | 904 |   |
| Accrued      expenses, including deferred revenue and            |   |   |   |   |   |
|  other      long term tax liabilities                       |   |   | 159 |   |   |   | (224 | ) |
| Net      cash used in operating activities                       |   |   | (209 | ) |   |   | (166 | ) |
|                                                             |   |   |   |   |   |   |   |   |
|  Cash      Flows From Investing Activities                  |   |   |   |   |   |   |   |   |
|  Purchases      of property and equipment                   |   |   | (75 | ) |   |   | (130 | ) |
|  Proceeds      from sale of property and equipment          |   |   | 8 |   |   |   | - |   |
| Net      cash used in investing activities                       |   |   | (67 | ) |   |   | (130 | ) |
|                                                             |   |   |   |   |   |   |   |   |
|  Cash      flows From Financing Activities                  |   |   |   |   |   |   |   |   |
|  Net      borrowings on revolving line-of-credit            |   |   | 506 |   |   |   | 55 |   |
| Payments      on long-term borrowings, including capital         |   |   |   |   |   |
|  lease      obligations                                     |   |   | (302 | ) |   |   | (397 | ) |
|  Proceeds      from issuance of common stock                |   |   | 6 |   |   |   | 20 |   |
|  Net      cash provided by (used in) financing activities   |   |   | 210 |   |   |   | (322 | ) |
|                                                             |   |   |   |   |   |   |   |   |
|  Net      decrease in cash                                  |   |   | (66 | ) |   |   | (618 | ) |
|                                                             |   |   |   |   |   |   |   |   |
|  Cash                                                       |   |   |   |   |   |   |   |   |
|  Beginning      of period                                   |   |   | 356 |   |   |   | 1,152 |   |
|  Ending      of period                                      |   | $ | 290 |   |   | $ | 534 |   |
|                                                             |   |   |   |   |   |   |   |   |
|  Supplemental      information                              |   |   |   |   |   |   |   |   |
|  Cash      payments for interest                            |   | $ | 77 |   |   | $ | 98 |   |
|  Cash      received for income taxes                        |   | $ | 183 |   |   | $ | 1 |   |
|                                                             |   |   |   |   |   |   |   |   |
|  See      Notes to Condensed Financial Statements           |   |   |   |   |   |   |   |   |

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| WINLAND      ELECTRONICS, INC.             |   |
|--------------------------------------------|--------|
| SEGMENT      REPORTING                     |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| ($      in thousands)                      |   | EMS |   |   | Proprietary |   |   | Other |   |   | Total |   |
| Three      months ended September 30, 2009 |   |   |   |   |   |   |   |
| Net      sales                             |   | $ | 4,228 |   |   | $ | 894 |   |   | $ | - |   |   | $ | 5,122 |   |
| Operating      income (loss)               |   |   | (332 | ) |   |   | 133 |   |   |   | (468 | ) |   |   | (667 | ) |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Three      months ended September 30, 2008 |   |   |   |   |   |   |   |   |   |
| Net      sales                             |   | $ | 6,051 |   |   | $ | 952 |   |   | $ | - |   |   | $ | 7,003 |   |
| Operating      income (loss)               |   |   | 553 |   |   |   | 130 |   |   |   | (576 | ) |   |   | 107 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nine      months ended September 30, 2009  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      sales                             |   | $ | 15,636 |   |   | $ | 2,372 |   |   | $ | - |   |   | $ | 18,008 |   |
| Operating      income (loss)               |   |   | 100 |   |   |   | 239 |   |   |   | (1,636 | ) |   |   | (1,297 | ) |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nine      months ended September 30, 2008  |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      sales                             |   | $ | 18,191 |   |   | $ | 2,710 |   |   | $ | - |   |   | $ | 20,901 |   |
| Operating      income (loss)               |   |   | 630 |   |   |   | 60 |   |   |   | (1,769 | ) |   |   | (1,079 | ) |

|                              |   | For      the Three Months Ended September 30, |   |
|-----------------------------------|--------|-----------------------------------------------|--------|
| Sales      percentage:            |   | 2009                                          |   |   | 2008 |   |
|    Customer      A |   |                                          | 25     | % |   |   | 34 | % |
|    Customer      B |   |                                          | 11     | % |   |   | 8 | % |
|    Customer      C |   |                                          | 7      | % |   |   | 2 | % |
|    Customer      D |   |                                          | 0      | % |   |   | 17 | % |
|                              |   |                                          |   |   |   |   |   |   |
|                              |   | For      the Nine Months Ended September 30,  |   |
| Sales      percentage:            |   |                                          | 2009   |   |   |   | 2008 |   |
|    Customer      A |   |                                          | 38     | % |   |   | 34 | % |
|    Customer      B |   |                                          | 11     | % |   |   | 11 | % |
|    Customer      C |   |                                          | 13     | % |   |   | 1 | % |
|    Customer      D |   |                                          | 6      | % |   |   | 17 | % |

| Accounts      receivable percentage: |   | 2009   |   |   | 2008   |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|
|    Customer      A    |   |   | 30     | %      |   |   | 34 | % |
|    Customer      B    |   |   | 15     | %      |   |   | 10 | % |
|    Customer      C    |   |   | 16     | %      |   |   | 0 | % |
|    Customer      D    |   |   | 0      | %      |   |   | 16 | % |

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|                  |   |                    |   |   |                   |   |
|-----------------------|--------|-------------------------|--------|--------|------------------------|--------|
| ($      in thousands) |   | September      30, 2009 |   |   | December      31, 2008 |   |
| Raw      materials    |   | $                       | 2,612  |   |                   | $      | 2,923 |   |
| Work      in progress |   |                    | 238    |   |                   |   | 423 |   |
| Finished      goods   |   |                    | 967    |   |                   |   | 991 |   |
| Total                 |   | $                       | 3,817  |   |                   | $      | 4,337 |   |
|                  |   |                    |   |   |                   |   |   |   |

|                                      |   | For      the Three Months Ended September 30, |
|-------------------------------------------|--------|-----------------------------------------------|
| ($      in thousands)                     |   | 2009                                          |   |   | 2008 |   |
| Balance,      Beginning                   |   | $                                             | 45 |   |   | $ | 175 |   |
| Accruals      for products sold           |   |                                          | 36 |   |   |   | 23 |   |
| Expensing      of specific warranty items |   |                                          | (30 | ) |   |   | (48 | ) |
| Balance,      Ending                      |   | $                                             | 51 |   |   | $ | 150 |   |
|                                      |   |                                          |   |   |   |   |   |   |
|                                      |   | For      the Nine Months Ended September 30,  |
|                                      |   |                                          | 2009 |   |   |   | 2008 |   |
| Balance,      Beginning                   |   | $                                             | 80 |   |   | $ | 160 |   |
| Accruals      for products sold           |   |                                          | 86 |   |   |   | 263 |   |
| Expensing      of specific warranty items |   |                                          | (83 | ) |   |   | (273 | ) |
| Change      in estimate                   |   |                                          | (32 | ) |   |   | - |   |
| Balance,      Ending                      |   | $                                             | 51 |   |   | $ | 150 |   |
|                                      |   |                                          |   |   |   |   |   |   |

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Table of Contents

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Table of Contents

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ITEM2:                      MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS

Table of Contents

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Table of Contents

----

Table of Contents

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ITEM3.                      QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM4.                      CONTROLSAND PROCEDURES

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PART II – OTHER INFORMATION

ITEM1.                      LEGALPROCEEDINGS

ITEM1A.                      RISKFACTORS

ITEM2.                      UNREGISTEREDSALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM3.                      DEFAULTSUPON SENIOR SECURITIES

ITEM4.                      SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM5.                      OTHERINFORMATION

| (i) | For      all stock performance award grants, the Plan was amended so that there is      a minimum of a one year performance period and a minimum of a three year      restriction on tenure awards; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | All      tenure awards will not vest more favorably than 33% each year and all      performance awards will not vest earlier than the one year performance      period; |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | If      stock performance award grants vest any earlier than before a minimum of a      one year performance period, such cumulative grants will not be in excess      of 10% of the total shares authorized under the Plan;  and |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iv) | The      Company’s Board of Directors or any Committee of the Board of Directors      may not accelerate options or waive vesting periods of any awards except      in the case of death, disability, retirement or change in control, unless      it is for shares not in excess of 10% of the total shares authorized under      the Plan, |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM6.                      EXHIBITS

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SIGNATURES

|                               | Winland Electronics,      Inc. |                                                                                |
|------------------------------------|--------------------------------|-------------------------------------------------------------------------------------|
|                               |                           |                                                                                |   |
| Date:       November 12, 2009 | By:                            | /s/ Thomas      J. de Petra                                                    |   |
|                               |                           | Thomas      J. de Petra                                                             |   |
|                               |                           | President      and Chief Executive Officer(Principal Executive Officer)   |   |
|                               |                           |                                                                                |   |

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

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EXHIBIT INDEX TO FORM 10-Q

| For      the fiscal quarter ended September 30, 2009 | Commission      File No. 1-15637 |
|------------------------------------------------------|----------------------------------|

| 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  |