FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
(Mark One)
   [X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For  the quarterly period ended December 1, 2000

                                       OR
   [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to_______________________

Commission file No. 0-11003

                               WEGENER CORPORATION

             (Exact name of registrant as specified in its charter)

         DELAWARE                                                81-0371341
(State of incorporation)                                      (I.R.S. Employer
                                                             Identification No.)

11350 TECHNOLOGY CIRCLE, DULUTH, GEORGIA                         30097-1502
(Address of principal executive offices)                         (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (770) 623-0096

                  REGISTRANT'S WEB SITE: HTTP://WWW.WEGENER.COM

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:

Common Stock, $.01 par value                              11,900,005 Shares
----------------------------                         ---------------------------
           Class                                     Outstanding January 5, 2001

<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                Form 10-Q For the Quarter Ended December 1, 2000

                                      INDEX
                                                                         Page(s)
                                                                         -------
PART I.   Financial Information

Item 1.   Consolidated Financial Statements

          Introduction ...................................................     3
          Consolidated Statements of Operations
          (Unaudited) - Three Months Ended
          December 1, 2000 and December 3, 1999 ..........................     4

          Consolidated Balance Sheets - December 1,
          2000 (Unaudited) and September 1, 2000 .........................     5

          Consolidated Statements of Shareholders' Equity
          (Unaudited) -  Three Months Ended December 1,
          2000 and December 3, 1999 ......................................     6

          Consolidated Statements of Cash Flows
          (Unaudited) - Three Months Ended December 1,
          2000 and December 3, 1999 ......................................     7

          Notes to Consolidated Financial
          Statements (Unaudited) .........................................  8-11

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations............................. 12-14

Item 3.   Quantitative and Qualitative Disclosures About Market Risk......    15

PART II.  Other Information

Item 1.   None
Item 2.   None
Item 3.   None
Item 4.   None
Item 5.   None
Item 6.   Exhibits and Reports on Form 8-K ...............................    16

          Signatures .....................................................    17

                                       2
<PAGE>

PART I.   FINANCIAL INFORMATION                     Item 1. Financial Statements
-------------------------------                     ----------------------------

                INTRODUCTION - CONSOLIDATED FINANCIAL STATEMENTS

     The consolidated  financial  statements  included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The  consolidated  balance  sheet  as of  December  1,  2000;  the  consolidated
statements of shareholders'  equity as of December 1, 2000 and December 3, 1999;
the consolidated statements of operations for the three months ended December 1,
2000 and December 3, 1999; and the consolidated statements of cash flows for the
three  months  ended  December 1, 2000 and  December 3, 1999 have been  prepared
without audit. The  consolidated  balance sheet as of September 1, 2000 has been
audited by independent  certified public  accountants.  Certain  information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to such rules and  regulations,  although the Company believes
that the disclosures  herein are adequate to make the information  presented not
misleading. It is suggested that these consolidated financial statements be read
in conjunction  with the financial  statements and the notes thereto included in
the Company's Annual Report on Form 10-K, for the fiscal year ended September 1,
2000, File No. 0-11003.

     In the opinion of the Company,  the  statements  for the unaudited  interim
periods  presented  include all  adjustments,  which were of a normal  recurring
nature,  necessary  to present a fair  statement  of the results of such interim
periods.  The results of operations  for the interim  periods  presented are not
necessarily indicative of the results of operations for the entire year.

                                       3
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                        Three months ended
                                                   DECEMBER 1,      December 3,
                                                      2000             1999
--------------------------------------------------------------------------------
Revenues                                          $  4,997,581     $  7,014,503
--------------------------------------------------------------------------------

Operating costs and expenses
    Cost of products sold                            4,216,397        4,687,903
    Selling, general, and administrative             1,007,219        1,855,827
    Research and development                           726,070          810,933
--------------------------------------------------------------------------------

Operating costs and expenses                         5,949,686        7,354,663
--------------------------------------------------------------------------------

Operating loss                                        (952,105)        (340,160)
    Interest expense                                   (13,242)         (24,888)
    Interest income                                     45,090          104,239
--------------------------------------------------------------------------------

Loss before income taxes                              (920,257)        (260,809)

Income tax (benefit)                                  (336,000)         (94,000)
--------------------------------------------------------------------------------

Net loss                                          $   (584,257)    $   (166,809)
================================================================================

Net loss per share:
    Basic                                         $       (.05)    $       (.02)
    Diluted                                       $       (.05)    $       (.02)
================================================================================

Shares used in per share calculation
    Basic                                           11,855,517       11,740,545
    Diluted                                         11,855,517       11,740,545
================================================================================

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                        DECEMBER 1,      September 1,
                                                           2000             2000
------------------------------------------------------------------------------------
ASSETS                                                  (UNAUDITED)

Current assets
<S>                                                    <C>              <C>
    Cash and cash equivalents                          $  1,100,019     $  2,072,853
    Accounts receivable                                   3,681,676        4,110,827
    Inventories                                          10,012,173       10,106,776
    Deferred income taxes                                 1,959,000        1,858,000
    Other                                                    99,292           62,573
------------------------------------------------------------------------------------

         Total current assets                            16,852,160       18,211,029

Property and equipment, net                               4,040,901        4,207,183
Capitalized software costs, net                           1,134,139        1,209,139
Deferred income taxes                                       700,000          465,000
Other assets                                                 73,061           54,311
------------------------------------------------------------------------------------

                                                       $ 22,800,261     $ 24,146,662
====================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable                                   $  1,987,061     $  2,781,470
    Accrued expenses                                      2,855,078        2,533,262
    Customer deposits                                     2,148,637        2,076,361
    Current maturities of long-term obligations             437,827          539,628
------------------------------------------------------------------------------------

          Total current liabilities                       7,428,603        7,930,721

Long-term obligations, less current maturities                   --           38,843
------------------------------------------------------------------------------------

          Total liabilities                               7,428,603        7,969,564
------------------------------------------------------------------------------------

Commitments and contingencies

Shareholders' equity
    Common stock, $.01 par value; 20,000,000 shares
        authorized; 12,314,575 shares issued                123,146          123,146
    Additional paid-in capital                           20,033,623       20,324,568
    Deficit                                              (3,817,366)      (3,233,109)
    Less treasury stock, at cost                           (967,745)      (1,037,507)
------------------------------------------------------------------------------------

         Total shareholders' equity                      15,371,658       16,177,098
------------------------------------------------------------------------------------

                                                       $ 22,800,261     $ 24,146,662
====================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                 Common Stock           Additional       Retained              Treasury Stock
                                                 ------------             Paid-in        Earnings              --------------
                                             Shares         Amount        Capital        (Deficit)          Shares        Amount
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>            <C>             <C>                  <C>        <C>
BALANCE, at September 3, 1999              12,314,575   $    123,146   $ 19,492,570    $     95,781         632,459    $   (931,728)

    Treasury stock reissued through
       stock options and 401(k) plan               --             --         65,797              --         (88,900)         82,548
    Value of stock
       option compensation                         --             --        269,000              --              --              --
    Net loss for the three months                  --             --             --        (166,809)             --              --
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, at December 3, 1999               12,314,575   $    123,146   $ 19,827,367    $    (71,028)        543,559    $   (849,180)
===================================================================================================================================

Balance, at September 1, 2000              12,314,575   $    123,146   $ 20,324,568    $ (3,233,109)        481,471    $ (1,037,507)

    Treasury stock reissued through
       stock options and 401(k) plan               --             --        (20,039)             --         (32,374)         69,762
    Value of stock options granted for
      services                                     --             --         74,094              --              --              --
    Value of stock
       option compensation                         --             --       (345,000)             --              --              --
    Net loss for the three months                  --             --             --        (584,257)             --              --
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, AT DECEMBER 1, 2000               12,314,575   $    123,146   $ 20,033,623    $ (3,817,366)        449,097    $   (967,745)
===================================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                         Three months ended
                                                    DECEMBER 1,     December 3,
                                                       2000            1999
--------------------------------------------------------------------------------
CASH USED FOR OPERATING ACTIVITIES
    Net loss                                       $   (584,257)   $   (166,809)
    Adjustments to reconcile net loss to
           cash provided by operating activities
        Depreciation and amortization                   430,656         424,365
        Issuance of treasury stock for
            compensation expenses                        49,723          43,478
        Other non-cash expenses                          74,094              --
        Non-cash stock option compensation
            benefit                                    (484,000)        376,000
        Bad debt allowance                               25,000          20,000
        Inventory reserves                              250,000          25,000
        Deferred income taxes                          (336,000)        (12,000)
    Changes in assets and liabilities
            Accounts receivable                         404,151      (1,587,190)
            Inventories                                (155,397)       (728,505)
            Other assets                                (62,344)        235,445
            Accounts payable and accrued expenses      (333,593)        909,116
            Customer deposits                            72,276         127,384
--------------------------------------------------------------------------------

                                                       (649,691)       (333,716)
--------------------------------------------------------------------------------

CASH USED FOR INVESTMENT ACTIVITIES
    Property and equipment expenditures                 (82,499)       (353,618)
    Capitalized software additions                     (100,000)       (104,846)
--------------------------------------------------------------------------------

                                                       (182,499)       (458,464)
--------------------------------------------------------------------------------

CASH USED FOR FINANCING ACTIVITIES
    Repayment of long-term debt and capitalized
        lease obligation                               (140,644)       (155,602)
    Proceeds from stock options exercised                    --         104,867
--------------------------------------------------------------------------------

                                                       (140,644)        (50,735)
--------------------------------------------------------------------------------

Decrease in cash and cash equivalents                  (972,834)       (842,915)
Cash and cash equivalents, beginning of period        2,072,853       8,858,591
--------------------------------------------------------------------------------

Cash and cash equivalents, end of period           $  1,100,019    $  8,015,676
================================================================================

Supplemental disclosure of cash flow information:
    Cash paid during the three months for:
          Interest                                 $     13,242    $     24,888
          Income taxes                             $         --    $     38,500
================================================================================

See accompanying notes to consolidated financial statements.

                                       7
<PAGE>

NOTE 1    SIGNIFICANT ACCOUNTING POLICIES

The  significant  accounting  policies  followed by the Company are set forth in
Note 1 to the Company's audited  consolidated  financial  statements included in
the annual report on Form 10-K for the year ended September 1, 2000.

EARNINGS PER SHARE

Basic and diluted  net  earnings  per share were  computed  in  accordance  with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share". Basic
net earnings per share is computed by dividing net earnings  available to common
shareholders  (numerator)  by the  weighted  average  number  of  common  shares
outstanding  (denominator) during the period and excludes the dilutive effect of
stock  options.  Diluted net  earnings  per share gives  effect to all  dilutive
potential common shares  outstanding  during a period.  In computing diluted net
earnings  per  share,  the  average  stock  price  for  the  period  is  used in
determining  the number of shares  assumed to be  reacquired  under the treasury
stock method from the exercise of stock options.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities,  the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could vary from these estimates.

FISCAL YEAR

The Company uses a fifty-two, fifty-three week year. The fiscal year ends on the
Friday  closest to August 31. Fiscal years 2001 and 2000 each contain  fifty-two
weeks.

                                       8
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2    ACCOUNTS RECEIVABLE

Accounts receivable are summarized as follows:

                                              DECEMBER 1,     September 1,
                                                 2000             2000
                                             -----------------------------
                                              (UNAUDITED)

     Accounts receivable - trade             $  3,070,187     $  3,474,717
     Recoverable income taxes                     659,000          659,000
     Other receivables                            142,488          142,688
                                             -----------------------------
                                                3,871,675        4,276,405

     Less allowance for
          doubtful accounts                      (189,999)        (165,578)
                                             -----------------------------
                                             $  3,681,676     $  4,110,827
                                             =============================

NOTE 3    INVENTORIES

Inventories are summarized as follows:

                                              DECEMBER 1,     September 1,
                                                 2000             2000
                                             -----------------------------
                                              (UNAUDITED)

     Raw material                           $  4,738,113       $  4,176,521
     Work-in-process                           5,826,456          5,539,578
     Finished goods                            2,529,098          3,835,171
                                            -------------------------------
                                              13,093,667         13,551,270

     Less inventory reserves                  (3,081,494)        (3,444,494)
                                             ------------------------------
                                            $ 10,012,173       $ 10,106,776
                                            ===============================

During the first quarter of fiscal 2001  inventory  reserves  were  increased by
charges to cost of sales of $250,000 and were reduced by inventory write-offs of
$613,000.  The  Company's  inventory  reserve  of  approximately  $3,081,000  at
December 1, 2000,  is to provide  for items that are  potentially  slow  moving,
excess, or obsolete. Changes in market conditions,  lower than expected customer
demand, and rapidly changing  technology could result in additional obsolete and
slow-moving  inventory  that is  unsaleable  or saleable at reduced  prices.  No
estimate  can be made of a range of amounts of loss from  obsolescence  that are
reasonably possible should the Company's sales efforts not be successful.

NOTE 4    INCOME TAXES

For the three months ended December 1, 2000,  income tax benefit of $336,000 was
comprised  of a deferred  federal and state  income tax benefit of $313,000  and
$23,000,  respectively.  Net deferred tax assets increased $336,000  principally
due to increases in net operating loss  carryforwards and increases to inventory
reserves in the first  quarter.  Realization of deferred tax assets is dependent
on generating  sufficient  future  taxable income prior to the expiration of the
loss and credit carryforwards.  Although realization is not assured,  management
believes it is more likely than not that all of the  deferred tax assets will be
realized. The amount of the deferred tax asset considered  realizable,  however,
could be reduced in the near term if estimates of further  taxable income during
the carryforward period are reduced.

                                       9
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5    EARNINGS PER SHARE

The following tables represent required  disclosure of the reconciliation of the
numerators  and  denominators  of the basic and diluted net  earnings  per share
computations.  The  calculation  of  earnings  per share is subject to  rounding
differences.

<TABLE>
<CAPTION>
                                                                        Three months ended
                                       --------------------------------------------------------------------------------
                                                     DECEMBER 1, 2000                         December 3, 1999
                                       --------------------------------------------------------------------------------
                                                                          PER                                     Per
                                        EARNINGS           SHARES        SHARE       Earnings        Shares      share
                                       (NUMERATOR)      (DENOMINATOR)    AMOUNT     (Numerator)  (Denominator)   amount
                                       --------------------------------------------------------------------------------
<S>                                    <C>               <C>             <C>         <C>          <C>            <C>
Net loss                               $  (584,257)                                  $ (166,809)
                                       --------------------------------------------------------------------------------
Basic earnings (loss) per share:
    Net loss available
        to common shareholders         $  (584,257)        11,855,517    $ (.05)     $ (166,809)    11,740,545   $(0.02)
                                       ================================================================================
Effect of dilutive potential
    common shares:
        Stock options                           --                 --                        --             --
                                       --------------------------------------------------------------------------------
Diluted earnings (loss) per share:
    Net loss available
        to common shareholders         $  (584,257)        11,855,517    $ (.05)     $ (166,809)    11,740,545   $(0.02)
                                       ================================================================================
</TABLE>

Stock  options  which  were  excluded  from  the  diluted  net  loss  per  share
calculation due to their anti-dilutive effect are as follows:

                                                Three months ended
                                        ---------------------------------
                                          DECEMBER 1,        December 3,
                                              2000               1999
                                        ---------------------------------
Common stock options:
    Number of shares                        1,188,800             847,750
    Range of exercise prices            $. 75 TO 5.63       $ .75 to 1.63
                                        =================================

NOTE 6    SEGMENT INFORMATION AND SIGNIFICANT CUSTOMERS

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  131,
Disclosure about Segments of an Enterprise and Related Information,  the Company
operates  within  a  single  reportable  segment,  the  manufacture  and sale of
satellite communications equipment.

                                       10
<PAGE>

In this single operating  segment the Company has three product lines.  Revenues
from customers in each of these product lines are as follows:

                                                    Three months ended
                                               ----------------------------
                                                DECEMBER 1,     December 3,
                                                   2000            1999
     ----------------------------------------------------------------------

     Product Line
         Direct Broadcast Satellite            $  4,099,500    $  6,210,248
         Telecom and Custom Products                756,718         675,548
         Service                                    141,363         128,707
     ----------------------------------------------------------------------

                                               $  4,997,581    $  7,014,503
     ======================================================================

For the three months ended December 1, 2000,  revenues by geographical area were
approximately:  United States - $3,168,000; Latin America - $1,087,000; Europe -
$686,000;  all other - $57,000.  For the three  months  ended  December 3, 1999,
revenues by geographical  area were  approximately:  United States - $5,878,000;
Mexico - $820,000; all other - $317,000. Revenues attributed to geographic areas
are based on the  location  of the  customer.  All of the  Company's  long-lived
assets are located in the United States.

For the three months ended December 1, 2000,  two customers  accounted for 20.2%
and 13.1% of revenues,  respectively.  A third  customer  accounted for 12.0% of
revenues for the three  months ended  December 1, 2000 and 27.1% of revenues for
the three  months  ended  December 3, 1999.  Additionally,  for the three months
ended December 3, 1999, a separate customer accounted for 11.7% of revenues.

                                       11
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS

This information  should be read in conjunction with the consolidated  financial
statements and the notes thereto included in Item 1 of this Quarterly Report and
the audited consolidated financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended  September 1, 2000  contained in the Company's  2000 Annual Report on
Form 10-K.

Certain  statements  contained in this filing are  "forward-looking  statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, such
as  statements  relating  to  financial  results,  future  business  or  product
development  plans,  research  and  development  activities,  capital  spending,
financing  sources  or  capital   structure,   the  effects  of  regulation  and
competition,  and are thus  prospective.  Such  forward-looking  statements  are
subject to risks,  uncertainties  and other  factors  which could  cause  actual
results to differ  materially  from future results  expressed or implied by such
forward-looking  statements.  Potential risks and uncertainties include, but are
not limited to, economic  conditions,  customer plans and  commitments,  product
demand,  government  regulation,  rapid technological  developments and changes,
performance  issues with key  suppliers  and  subcontractors,  delays in product
development   and   testing,    material   availability,    new   and   existing
well-capitalized  competitors, and other uncertainties detailed in the Company's
Form  10-K for the year  ended  September  1,  2000 and from time to time in the
Company's periodic Securities and Exchange Commission filings.

The Company  manufactures  satellite  communications  equipment  through Wegener
Communications,   Inc.  (WCI),  a  wholly-owned  subsidiary.   WCI  designs  and
manufactures   communications  transmission  and  receiving  equipment  for  the
business  broadcast,   data  communications,   cable  and  broadcast  radio  and
television industries.

RESULTS OF OPERATIONS
THREE MONTHS ENDED  DECEMBER 1, 2000 COMPARED TO THREE MONTHS ENDED  DECEMBER 3,
1999

The operating  results for the three month period ended December 1, 2000, were a
net loss of $(584,000) or $(0.05) per basic and diluted share  compared to a net
loss of  $(167,000)  or $(0.02) per basic and diluted  share for the three month
period ended December 3, 1999.

REVENUES - The Company's revenues for the first quarter of fiscal 2001 decreased
$2,017,000 or 28.8% to $4,998,000  from $7,015,000 for the same period in fiscal
2000.

Direct Broadcast Satellite (DBS) revenues decreased  $2,111,000 or 34.0%, in the
first quarter of fiscal 2001 to $4,099,000  from  $6,210,000 for the same period
in fiscal 2000.  The decrease  reflected  the decline in order backlog which was
adversely  impacted by delayed  purchasing  decisions  in the digital  satellite
transmission market,  increased pricing  competition,  industry-wide new product
introductions  which  resulted  in an  expanded  range of choices  available  to
customers,  and delayed product introductions by the Company. Telecom and Custom
Products  Group  revenues  increased  $81,000 or 12.0% to  $757,000 in the first
quarter of fiscal 2001 from  $676,000 in the first  quarter of fiscal 2000.  The
increase was mainly due to higher level  shipments of cue and control  equipment
to provide local commercial  insertion  capabilities to cable television headend
systems.  For the three months ended December 1, 2000,  two customers  accounted
for 20.2% and 13.1% of revenues,  respectively.  A third customer  accounted for
12.0% of revenues for the three months ended December 1, 2000 and 27.1% of

                                       12
<PAGE>

revenues  for the three  months ended  December 3, 1999.  Additionally,  for the
three months ended December 3, 1999, a separate customer  accounted for 11.7% of
revenues.  The  Company's  backlog is comprised of  undelivered,  firm  customer
orders,  which are scheduled to ship within eighteen  months.  WCI's backlog was
approximately  $16,100,000  at  December  1, 2000,  compared  to  $9,210,000  at
September 1, 2000 and $12,500,000 at December 3, 1999.

GROSS PROFIT MARGINS - The Company's gross profit margin  percentages were 15.6%
for the three month  period  ended  December  1, 2000  compared to 33.2% for the
three month period ended December 3, 1999. Gross profit margin dollars decreased
$1,545,000  for the three  month  period  ended  December  1, 2000 from the same
period ended December 3, 1999.  The decreases in margin dollars and  percentages
were mainly due to lower  revenues  during the periods which  resulted in higher
unit fixed  overhead  costs.  Profit margins in the first quarter of fiscal 2001
included  inventory reserve charges of $250,000 compared to $25,000 for the same
period of fiscal 2000 .

SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative (SG&A)
expenses  decreased  $849,000  or 45.7% to  $1,007,000  in the first  quarter of
fiscal 2001 from  $1,856,000 in the first  quarter of fiscal 2000.  The decrease
was  primarily  due to variable  stock option  accounting.  The first quarter of
fiscal 2001 included a variable  stock option  compensation  benefit of $484,000
compared to an expense of $376,000 in the same period of fiscal 2000.  Excluding
this benefit and expense, SG&A increased $11,000, or less 1%, in the first three
months of fiscal 2001  compared to the same period of fiscal 2000.  Increases in
SG&A expenses  included  increases in corporate  professional  fees  principally
associated  with  a  national  financial   relations  program,   in-house  sales
commissions  associated with an increase in bookings during the first quarter of
fiscal 2001, and an increase in depreciation expense. Decreases in SG&A included
lower outside sales commissions,  consulting fees principally  associated with a
new management  information  system, and repair and maintenance  expenses.  As a
percentage of revenues,  selling, general and administrative expenses were 20.2%
for the three month period ended December 1, 2000 compared to 26.5% for the same
period ended December 3,1999.

RESEARCH AND  DEVELOPMENT  - Research and  development  expenditures,  including
capitalized  software  development  costs, were $826,000 or 16.5% of revenues in
the first  quarter of fiscal 2001  compared to $916,000 or 13.1% of revenues for
the same period of fiscal 2000.  Capitalized software development costs amounted
to  $100,000  in the first  quarter of fiscal  2001  compared to $105,000 in the
first  quarter of fiscal 2000.  Research  and  development  expenses,  excluding
capitalized  software  development  costs, were $726,000 or 14.5% of revenues in
the first quarter of fiscal 2001,  and $811,000 or 11.6% of revenues in the same
period of fiscal 2000.  The decrease in expenses was primarily due to a decrease
in engineering consulting expenses.

INTEREST  EXPENSE - Interest expense  decreased  $12,000 to $13,000 in the first
quarter of fiscal  2001 from  $25,000  in the same  period in fiscal  2000.  The
decrease was primarily due to a decrease in average outstanding debt balances.

INTEREST  INCOME -  Interest  income  was  $45,000  for the three  months  ended
December  1, 2000  compared to $104,000  for the same period  ended  December 3,
1999.  The decrease was due to lower  average cash  equivalent  balances for the
period.

INCOME TAX EXPENSE - For the three  months  ended  December 1, 2000,  income tax
benefit of $336,000  was  comprised  of a deferred  federal and state income tax
benefit of $313,000 and $23,000, respectively.

                                       13
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
THREE MONTHS ENDED DECEMBER 1, 2000

During the first quarter of fiscal 2001,  operating  activities used $650,000 of
cash.  Net loss  adjusted for non-cash  expenses  used  $575,000 of cash,  while
changes in accounts  receivable and customer deposit balances  provided $476,000
of cash.  Changes in accounts  payable and accrued  expenses,  inventories,  and
other  assets  used  $551,000 of cash.  Cash used by  investing  activities  for
property and  equipment  expenditures  and  capitalized  software  additions was
$182,000. Financing activities used cash of $141,000 for scheduled repayments of
long-term obligations.

Subsequent to the first  quarter,  WCI's existing bank loan facility was amended
and  renewed  for a three  year  period.  The loan  facility  provides a maximum
available  credit limit of $10,000,000  with sublimits as defined and matures on
June  21,  2003 or  upon  demand.  Annual  facility  fees  are  $27,500  plus an
additional .50% of $3,000,000 if borrowings, at any time, exceed $5,500,000. The
loan facility  consists of 1) a term loan and a revolving  line of credit with a
combined  borrowing  limit of $8,500,000,  bearing  interest at the bank's prime
rate (9.50% at December 1, 2000) and 2) a real estate  advance  facility  with a
maximum  borrowing limit of $1,500,000  bearing  interest at a fixed rate of 225
basis points over the five year U.S. Treasury rate.

The term loan facility  provides for a maximum of $1,000,000  for advances of up
to 80% of the cost of  equipment  acquisitions.  Principal  advances are payable
monthly over sixty months with a balloon payment due at maturity.  The revolving
line of credit is  subject  to  availability  advance  formulas  of 80%  against
eligible accounts receivable; 20% of eligible raw materials inventories;  20% of
eligible  work-in-process  kit inventories;  and 40% to 50% of eligible finished
goods  inventories.  Advances  against  inventory  are  subject to a sublimit of
$2,000,000.  The real estate advance  portion of the loan facility  provides for
advances of up to 70% of the appraised value of certain real property.  Advances
for real  property  are payable in 35 equal  principal  payments  with a balloon
payment due at maturity.  At December 1, 2000, previous  outstanding balances on
real property advances aggregated $388,000,  and no balances were outstanding on
the  revolving  line of  credit or  equipment  term  loan  portions  of the loan
facility.  Additionally,  at  December  1, 2000,  approximately  $3,926,000  was
available to borrow under the advance formulas.

The Company is required  to  maintain a minimum  tangible  net worth with annual
increases  at each fiscal  year end  commencing  with  fiscal year 1997,  retain
certain key employees, limit expenditures of Wegener Corporation to $600,000 per
fiscal year, and is precluded from paying  dividends.  At September 1, 2000, the
Company was in  violation  of the  tangible  net worth and  Wegener  Corporation
annual  spending  limit  covenants  with respect to which the bank has granted a
waiver. As a result of the convenant violations, the bank has the right to amend
any terms of the loan facility.  The Company  believes that it will be necessary
to borrow on the line of credit  during  fiscal year 2001 and that the  existing
facility  will be  sufficient  to  support  fiscal  2001  operations.  While  no
assurances may be given,  the Company  believes that it will continue to be able
to obtain  waivers  prior to  requiring  any  future  borrowings  on the line of
credit. However, if the Company is unable to meet the minimum tangible net worth
covenant or obtain a waiver,  it may be required to obtain  other debt or equity
financing, and no assurance can be given that the Company would in such event be
able to secure new financing.

                                       14
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's exposure to market rate risk for changes in interest rates relates
primarily to its  revolving  line of credit and cash  equivalents.  The interest
rate on  certain  advances  under  the line of  credit  and term  loan  facility
fluctuates with the bank's prime rate.  There were no borrowings  outstanding at
December 1, 2000 subject to variable interest rate fluctuations.

The Company's cash  equivalents  consist of a bank  certificate of deposit.  The
cash  equivalents  have  maturities  of less than three months and therefore are
subject to minimal market risk.

The Company does not enter into derivative financial instruments.  All sales and
purchases are denominated in U.S. dollars.

                                       15
<PAGE>

                           PART II. OTHER INFORMATION
                           --------------------------

Item 6.   Exhibits and Reports on Form 8-K
          --------------------------------

          (a)  Exhibits: None

          (b)  Reports on Form 8-K - No  reports  on Form 8-K were filed  during
               the quarter ended December 1, 2000.

                                       16
<PAGE>

                                   SIGNATURES
                                  ------------

     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  Registrant  has duly  caused  this  Report to be signed on it behalf by the
undersigned thereunto duly authorized.

                                        WEGENER CORPORATION
                                        ------------------------
                                        (Registrant)

Date:  January 16, 2001                 By: /s/ Robert A. Placek
                                            -------------------------
                                            Robert A. Placek
                                            President
                                            (Principal Executive Officer)

Date:  January 16, 2001                 By: /s/ C. Troy Woodbury, Jr.
                                            -------------------------
                                            C. Troy Woodbury, Jr.
                                            Treasurer and Chief
                                            Financial Officer
                                            (Principal Financial and
                                            Accounting Officer)