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 March 2, 2001

                                       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 March 29, 2001

<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                  Form 10-Q For the Quarter Ended March 2, 2001

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

Item 1.   Consolidated Financial Statements

          Introduction ........................................................3

          Consolidated Statements of Operations
          (Unaudited) - Three and Six Months Ended
          March 2, 2001 and March 3, 2000 .....................................4

          Consolidated Balance Sheets - March 2,
          2001 (Unaudited) and September 1, 2000 ..............................5

          Consolidated Statements of Shareholders' Equity
          (Unaudited) - Six Months Ended March 2,
          2001 and March 3, 2000 ..............................................6

          Consolidated Statements of Cash Flows
          (Unaudited) - Six Months Ended March 2,
          2001 and March 3, 2000 ..............................................7

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

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations .............................12-15

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.   Submission of Matters to a Vote of Security Holders ................16
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 March 2, 2001; the consolidated  statements
of shareholders' equity as of March 2, 2001, and March 3, 2000; the consolidated
statements of operations  for the three and six months ended March 2, 2001,  and
March 3, 2000; and the consolidated  statements of cash flows for the six months
ended March 2, 2001, and March 3, 2000,  have been prepared  without audit.  The
consolidated  balance  sheet as of  September  1,  2000,  has been  examined  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)

<TABLE>
<CAPTION>
                                                 Three months ended                 Six months ended
                                              MARCH 2,         March 3,         MARCH 2,         March 3,
                                                2001             2000             2001             2000
-----------------------------------------------------------------------------------------------------------
<S>                                         <C>              <C>              <C>              <C>
Revenues                                    $  3,766,210     $  7,170,016     $  8,763,791     $ 14,184,519
-----------------------------------------------------------------------------------------------------------

Operating costs and expenses
    Cost of products sold                      3,297,310        4,609,663        7,513,707        9,297,566
    Selling, general, and administrative       1,567,148        4,177,854        2,574,367        6,033,681
    Research and development                     810,898          639,540        1,536,968        1,450,473
-----------------------------------------------------------------------------------------------------------

Operating costs and expenses                   5,675,356        9,427,057       11,625,042       16,781,720
-----------------------------------------------------------------------------------------------------------

Operating loss                                (1,909,146)      (2,257,041)      (2,861,251)      (2,597,201)
    Interest expense                             (10,620)         (23,044)         (23,862)         (47,932)
    Interest income                               10,525           93,701           55,615          197,940
-----------------------------------------------------------------------------------------------------------

Loss before income taxes                      (1,909,241)      (2,186,384)      (2,829,498)      (2,447,193)

Income tax (benefit)                            (683,000)        (785,000)      (1,019,000)        (879,000)
-----------------------------------------------------------------------------------------------------------

Net loss                                    $ (1,226,241)    $ (1,401,384)    $ (1,810,498)    $ (1,568,193)
===========================================================================================================

Net loss per share:
    Basic                                   $       (.10)    $       (.12)    $       (.15)    $       (.13)
    Diluted                                 $       (.10)    $       (.12)    $       (.15)    $       (.13)
===========================================================================================================

Shares used in per share calculation
    Basic                                     11,878,685       11,804,965       11,867,101       11,772,755
    Diluted                                   11,878,685       11,804,965       11,867,101       11,772,755
===========================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

                      WEGENER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             MARCH 2,       September 1,
                                                               2001             2000
----------------------------------------------------------------------------------------
ASSETS                                                      (UNAUDITED)

Current assets
<S>                                                        <C>              <C>
    Cash and cash equivalents                              $  1,027,474     $  2,072,853
    Accounts receivable                                       3,183,395        4,110,827
    Inventories                                              10,358,608       10,106,776
    Deferred income taxes                                     2,041,000        1,858,000
    Other                                                       128,315           62,573
----------------------------------------------------------------------------------------

         Total current assets                                16,738,792       18,211,029

Property and equipment, net                                   3,938,106        4,207,183
Capitalized software costs, net                               1,047,220        1,209,139
Deferred income taxes                                         1,301,000          465,000
Other assets                                                     66,184           54,311
----------------------------------------------------------------------------------------

                                                           $ 23,091,302     $ 24,146,662
========================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
    Accounts payable                                       $  2,035,417     $  2,781,470
    Accrued expenses                                          3,168,547        2,533,262
    Customer deposits                                         3,343,702        2,076,361
    Current maturities of long-term obligations                 284,399          539,628
----------------------------------------------------------------------------------------

          Total current liabilities                           8,832,065        7,930,721

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

          Total liabilities                                   8,832,065        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                               20,003,280       20,324,568
    Deficit                                                  (5,043,607)      (3,233,109)
    Less treasury stock, at cost                               (823,582)      (1,037,507)
----------------------------------------------------------------------------------------

         Total shareholders' equity                          14,259,237       16,177,098
----------------------------------------------------------------------------------------

                                                           $ 23,091,302     $ 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              --             --         124,914              --         169,995         157,848
    Value of stock options granted for
        services                                  --             --          27,000              --              --              --
     Value of stock
         option compensation                      --             --       2,084,000              --              --              --
    Net loss for the six months                   --             --              --      (1,568,193)             --              --
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, AT MARCH 3, 2000                 12,314,575   $    123,146    $ 21,728,484    $ (1,472,412)       (462,464)   $   (773,880)
===================================================================================================================================

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              --             --        (124,476)             --         (99,275)        213,925
    Value of stock options granted for
      services                                    --             --         148,188              --              --              --
    Value of stock
       option compensation                        --             --        (345,000)             --              --              --
    Net loss for the six months                   --             --              --      (1,810,498)             --              --
-----------------------------------------------------------------------------------------------------------------------------------

BALANCE, AT MARCH 2, 2001                 12,314,575   $    123,146    $ 20,003,280    $ (5,043,607)        382,196    $   (823,582)
===================================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                                     Six months ended
                                                                 MARCH 2,         March 3,
                                                                   2001             2000
--------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
<S>                                                            <C>              <C>
    Net loss                                                   $ (1,810,498)    $ (1,568,193)
    Adjustments to reconcile net loss to
           cash provided by (used for) operating activities         847,323          875,659
        Depreciation and amortization
        Issuance of treasury stock for
            compensation expenses                                    89,449           88,825
        Non-cash variable stock
            option compensation                                    (484,000)       2,918,000
        Other non-cash expenses                                     148,188           27,000
        Bad debt allowance                                           75,000           20,000
        Inventory reserves                                          425,000          100,000
        Deferred income taxes                                    (1,019,000)        (220,000)
    Changes in assets and liabilities
            Accounts receivable                                     852,432       (3,387,009)
            Inventories                                            (676,832)          36,584
            Other assets                                            (91,365)         173,534
            Accounts payable and accrued expenses                    28,232           99,883
            Customer deposits                                     1,267,341        1,356,511
--------------------------------------------------------------------------------------------

                                                                   (348,730)         520,794
--------------------------------------------------------------------------------------------

CASH USED BY INVESTMENT ACTIVITIES
    Property and equipment expenditures                            (227,505)        (530,752)
    Capitalized software additions                                 (175,072)        (389,412)
--------------------------------------------------------------------------------------------

                                                                   (402,577)        (920,164)
--------------------------------------------------------------------------------------------

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
    Repayment of long-term debt and capitalized
        lease obligations                                          (294,072)        (305,665)
    Proceeds from stock options exercised                                --          193,937
--------------------------------------------------------------------------------------------

                                                                   (294,072)        (111,728)
--------------------------------------------------------------------------------------------

Decrease in cash and cash equivalents                            (1,045,379)        (511,098)
Cash and cash equivalents, beginning of period                    2,072,853        8,858,591
--------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                       $  1,027,474     $  8,347,493
============================================================================================

Supplemental disclosure of cash flow information:
    Cash paid during the six months for:
          Interest                                             $     23,862     $     47,932
          Income taxes                                                   --     $     38,500
============================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       7
<PAGE>

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


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 year 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:

                                           MARCH 2,        September 1,
                                             2001             2000
                                         -----------------------------
                                         (UNAUDITED)

          Accounts receivable - trade    $  2,621,306     $  3,474,717
          Recoverable income taxes            659,000          659,000
          Other receivables                   143,088          142,688
                                         -----------------------------
                                            3,423,394        4,276,405



          Less allowance for
               doubtful accounts             (239,999)        (165,578)
                                         -----------------------------
                                         $  3,183,395     $  4,110,827
                                         =============================

NOTE 3    INVENTORIES

          Inventories are summarized as follows:

                                           MARCH 2,        September 1,
                                             2001             2000
                                         -----------------------------
                                         (UNAUDITED)

          Raw material                   $  3,385,645     $  4,176,521
          Work-in-process                   7,615,286        5,539,578
          Finished goods                    2,614,171        3,835,171
                                         -----------------------------
                                           13,615,102       13,551,270


          Less inventory reserves          (3,256,494)      (3,444,494)
                                         -----------------------------
                                         $ 10,358,608     $ 10,106,776
                                         =============================

During  the first half of fiscal  2001  inventory  reserves  were  increased  by
charges to cost of sales of $425,000 and were reduced by inventory write-offs of
$613,000.  The Company's inventory reserve of approximately  $3,256,000 at March
2, 2001, 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 six months  ended March 2, 2001,  income tax benefit of  $1,019,000  was
comprised  of a deferred  federal and state  income tax benefit of $962,000  and
$57,000,  respectively. Net deferred tax assets increased $1,019,000 principally
due to an increase in net operating loss  carryforwards and during the six-month
period ended March 2, 2001.  Realization  of deferred tax assets is dependent on
generating sufficient future taxable income prior to the expiration

                                       9
<PAGE>

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 tax assets  considered  realizable,
however,  could be reduced  in the near term if  estimates  of  further  taxable
income during the carryforward period are reduced.

NOTE 5    EARNINGS PER SHARE

Due to the net loss for all periods, basic and diluted loss per share amounts
are the same. The calculation of loss per share is subject to rounding
differences.

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

<TABLE>
<CAPTION>
                                   Three months ended               Six months ended
                             -------------------------------------------------------------
                                 MARCH 2,        March 3,        MARCH 2,        March 3,
                                  2001            2000            2001            2000
                             -------------------------------------------------------------
    Common stock options:
<S>                          <C>             <C>             <C>             <C>
        Number of shares        1,200,800       1,291,500       1,200,800       1,291,500
        Exercise price       $.63 TO $5.63   $.75 to $5.63   $.63 TO $5.63   $.75 to $5.63
                             =============================================================
</TABLE>

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.

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

<TABLE>
<CAPTION>
                                              Three months ended               Six months ended
                                        ------------------------------------------------------------
                                           MARCH 2,        March 3,        MARCH 2,        March 3,
                                             2001            2000            2001            2000
                                        ------------------------------------------------------------
     Product Line
<S>                                     <C>             <C>             <C>             <C>
         Direct Broadcast Satellite     $  3,043,456    $  6,452,106    $  7,142,955    $ 12,662,354
         Telecom and Custom Products         577,949         646,867       1,334,667       1,322,415
         Service                             144,805          71,043         286,169
                                        ------------------------------------------------------------
                                        $  3,766,210    $  7,170,016    $  8,763,791    $ 14,184,519
                                        ============================================================
</TABLE>

Revenues by geographic areas are as follows:

<TABLE>
<CAPTION>
                                Three months ended              Six months ended
                          ------------------------------------------------------------
                             MARCH 2,        March 3,        MARCH 2,        March 3,
                               2001            2000            2001            2000
                          ------------------------------------------------------------

     Geographic Area
<S>                       <C>             <C>             <C>             <C>
         United States    $  3,373,048    $  5,625,399    $  6,541,079    $ 11,503,369
         Latin America          98,891       1,241,718       1,199,320       2,143,583
         Canada                 35,732          14,703          52,841          21,032
         Europe                156,152         285,456         842,234         352,526
         Other                 102,387           2,740         127,717         164,009
                          ------------------------------------------------------------
                          $  3,766,210    $  7,170,016    $  8,763,191    $ 14,184,519
                          ============================================================
</TABLE>

All of the Company's long-lived assets are located in the United States.

                                       10
<PAGE>

Customers  representing 10% or more of the respective  period's  revenues are as
follows:

                              Three months ended             Six months ended
                            ----------------------------------------------------
                            MARCH 2,      March 3,        MARCH 2,      March 3,
                              2001          2000            2001          2000
                            ----------------------------------------------------
          Customer 1           (A)          18.5%            (A)          22.8%
          Customer 2          18.7%          (a)             (A)           (a)
          Customer 3          16.3%          (a)             (A)           (a)
          Customer 4          15.4%          (a)            14.1%          (a)
          Customer 5          12.8%          (a)             (A)           (a)
          Customer 6           (A)           (a)            11.5%          (a)


          (a)  Revenues for the period were less than 10% of total revenues.


NOTE 7    COMMITMENTS

During  the  second  quarter  of  fiscal  2001,  the  Company   entered  into  a
manufacturing and purchasing  agreement for certain finished goods  inventories.
The agreement is a firm  commitment by the Company to purchase  amounts  ranging
from approximately  $2,565,000 to $3,287,000,  depending on products  purchased,
over a twelve month period beginning in the third quarter of fiscal 2001.

                                       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,  governmental regulation,  rapid technological developments and changes,
performance  issues with key  suppliers  and  subcontractors,  delays in product
development   and  testing,   availability   of  materials,   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,  through  Wegener  Communications,   Inc.  (WCI),  a  wholly-owned
subsidiary,  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 AND SIX MONTHS ENDED MARCH 2, 2001  COMPARED TO THREE AND SIX MONTHS ENDED
MARCH 3, 2000

The  operating  results for the three and six month  periods ended March 2, 2001
were  a net  loss  of  $(1,226,000)  or  $(.10)  per  share  and a net  loss  of
$(1,810,000)  or  $(.15)  per  share,  respectively,  compared  to a net loss of
$(1,401,000)  or $(.12) per share and a net loss of  $(1,568,000)  or $(.13) per
share, respectively, for the three and six month periods ended March 3, 2000.

REVENUES - The Company's  revenues for the three months ended March 2, 2001 were
$3,766,000,  down 47.5% from revenues of  $7,170,000  for the three months ended
March 3, 2000.  Revenues were $8,764,000 for the six months ended March 2, 2001,
down 38.2% from revenues of $14,185,000 for the six months ended March 3, 2000.

Direct Broadcast  Satellite (DBS) revenues decreased  $3,409,000 or 52.8% in the
second quarter of fiscal 2001 to $3,043,000  from  $6,452,000 in the same period
of fiscal 2000. The decrease  reflected a decline in shippable order backlog for
the three  month  period  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  Customer  Products  Group  revenues
decreased $69,000 or 10.6% in the second quarter of fiscal 2001 to $578,000 from
$647,000 in the same period of fiscal 2000. The decrease was mainly due to lower
levels of

                                       12
<PAGE>

shipments of cue and control  equipment to provide  local  commercial  insertion
capabilities to cable  television  headend  systems.  For the three months ended
March 2, 2001,  four customers  each accounted for 10% or more of revenues.  For
the three months ended March 3, 2000, one customer  accounted for  approximately
18.5% of revenues.

For the six months ended March 2, 2001,  DBS revenues  decreased  $5,519,000  or
43.6% to $7,143,000 from $12,662,000 for the six months ended March 3, 2000. The
decrease reflected a decline in shippable order backlog for the six month period
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.  For the six
months ended March 2, 2001,  Telecom and Custom Product Group revenues increased
$12,000 or 1.0% to $1,335,000  from $1,322,000 for the six months ended March 3,
2000. For the six months ended March 2, 2001, two customers  accounted for 14.1%
and 11.5% of revenue,  respectively. For the six months ended March 3, 2000, one
customer  accounted for 22.8% of revenue.  The Company's backlog is comprised of
undelivered,  firm customer orders,  which are scheduled to ship within eighteen
months.  WCI's backlog was approximately  $20,700,000 at March 2, 2001, compared
to $9,210,000 at September 1, 2000, and $12,700,000 at March 3, 2000. Management
anticipates that while challenges remain for the second half of fiscal 2001, the
visibility of the revenue stream for fiscal year 2002,  along with the increased
short-term backlog, is improving.

GROSS PROFIT MARGINS - The Company's gross profit margin  percentages were 12.5%
and 14.3% for the three and six month periods  ended March 2, 2001,  compared to
35.7% and 34.5% for the three and six month periods  ended March 3, 2000.  Gross
profit margin dollars decreased  $2,091,000 and $3,637,000 for the three and six
month  periods  ended March 2, 2001,  from the same periods ended March 3, 2000.
The  decreases in margin  dollars and  percentages  for the three and six months
ended March 2, 2001,  were mainly due to lower revenues during the periods which
resulted in higher unit fixed  overhead  costs.  Profit margins in the three and
six month periods of fiscal 2001 included  inventory reserve charges of $175,000
and  $425,000  compared to $75,000 and  $100,000  for the same periods of fiscal
2000.  Management  anticipates that gross profit margins will improve during the
second  half of fiscal  2001 due to  product  mix and an  expected  increase  in
revenue.

SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative (SG&A)
expenses decreased  $2,611,000 or 62.5% to $1,567,000 for the three months ended
March 2, 2001, from $4,178,000 for the three months ended March 3, 2000. For the
six months ended March 2, 2001, SG&A expenses  decreased  $3,459,000 or 57.3% to
$2,574,000  from  $6,034,000  for the same period ended March 3, 2000. The three
and six month decreases were primarily due to variable stock option  accounting.
For the three months ended March 2, 2001, no variable stock option  compensation
expense was incurred  compared to an expense of $2,542,000  for the three months
ended March 3, 2000.  For the six months  ended March 2, 2001,  SG&A  included a
variable stock option  benefit of $484,000  compared to an expense of $2,918,000
for the six months ended March 3, 2000.  Excluding the effect of variable  stock
option  compensation,  SG&A decreased $69,000 or 4.2% and $57,000 or 1.8% in the
three and six month  periods  ended March 2, 2001,  compared to the same periods
ending  March 3, 2000.  Decreases  in SG&A  expenses for the three and six month
periods were mainly due to lower outside sales  commissions which were offset by
an  increase  in  corporate  professional  fees  principally  associated  with a
national financial relations program. As a percentage of revenues, SG&A expenses
were 41.6% and 29.4% for the three and six month  periods  ended  March 2, 2001,
compared to 58.3% and 42.5% for the same periods of fiscal 2000.

RESEARCH AND  DEVELOPMENT  - Research and  development  expenditures,  including
capitalized  software  development costs, were $886,000 or 23.5% of revenues and
$1,712,000  or 19.5% of revenues for the

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<PAGE>

three and six month periods  ended March 2, 2001,  compared to $924,000 or 12.9%
of revenues and  $1,840,000  or 13.0% of revenues for the same periods of fiscal
2000.  Capitalized  software  development costs amounted to $75,000 and $175,000
for the second  quarter and first six months of fiscal 2001 compared to $285,000
and $389,000 for the same periods of fiscal 2000.  The decreases in  capitalized
software  costs are due to  decreased  expenditures  on COMPEL  network  control
software and software  associated with new digital video products.  The decrease
in expenditures  for the three and six months ended March 2, 2001, was primarily
due to a decrease in engineering  consulting expenses.  Research and development
expenses, excluding capitalized software expenditures, were $811,000 or 21.5% of
revenues and  $1,537,000 or 17.5% of revenues for the three and six months ended
March 2, 2001,  compared to $640,000 or 8.9% of revenues and $1,450,000 or 10.2%
of revenues for the same periods of fiscal 2000. The  expenditures  for research
and development for the second half of fiscal 2001 are expected to continue at a
rate similar to that of the first half of fiscal 2001.

INTEREST EXPENSE - Interest expense  decreased  $12,000 to $11,000 for the three
months  ended March 2, 2001,  from  $23,000 for the three  months ended March 3,
2000. For the six months ended March 2, 2001, interest expense decreased $24,000
to $24,000 from $48,000 for the same period ended March 3, 2000.  The  decreases
for the three and six month  periods  in  fiscal  2001 were  primarily  due to a
decrease in the average outstanding balance of indebtedness.

INTEREST  INCOME - Interest income was $11,000 and $56,000 for the three and six
month periods ended March 2, 2001, compared to $94,000 and $198,000 for the same
periods  ended March 3, 2000.  The  decrease  for the three and six months ended
March 2, 2001, was mainly due to lower average cash equivalent  balances for the
periods.

INCOME TAX EXPENSES - For the six months ended March 2, 2001, income tax benefit
of  $1,019,000  was  comprised  of a deferred  federal  and state tax benefit of
$962,000 and $57,000, respectively. Net deferred tax assets increased $1,019,000
in the first six months of fiscal  2001.  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 tax assets  considered  realizable,
however,  could be reduced  in the near term if  estimates  of  further  taxable
income during the carryforward period are reduced.

LIQUIDITY AND CAPITAL RESOURCES
SIX MONTHS ENDED MARCH 2, 2001

During the first six months of fiscal 2001,  operating  activities used $349,000
of cash. Net loss adjusted for non-cash  expenses used $1,729,000 of cash, while
changes in accounts receivable,  customer deposits, accounts payable and accrued
expenses  provided  $2,148,000 of cash.  Changes in inventories and other assets
used  $768,000 of cash.  Cash used by  investing  activities  for  property  and
equipment   expenditures  and  capitalized   software  additions  was  $403,000.
Financing activities used cash of $294,000 for scheduled repayments of long-term
obligations.

During the second  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 (8.5%
at March 2, 2001) 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

                                       14
<PAGE>

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 March 2, 2001,
previous outstanding balances on real property advances aggregated $272,000, and
no balances were  outstanding  on the revolving line of credit or equipment term
loan  portions  of  the  loan   facility.   Additionally,   at  March  2,  2001,
approximately $2,126,000 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 granted a waiver.
As a result  of the  covenant  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 borrowing 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.

During  the  second  quarter  of  fiscal  2001,  the  Company   entered  into  a
manufacturing and purchasing  agreement for certain finished goods  inventories.
The agreement is a firm  commitment by the Company to purchase  amounts  ranging
from approximately  $2,565,000 to $3,287,000,  depending on products  purchased,
over a twelve month period beginning in the third quarter of fiscal 2001.


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
March 2, 2001, subject to variable interest rate fluctuations.

The  Company's  cash  equivalents  consist of a repurchase  agreement and 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 4.   Submission of Matters to a Vote of Security Holders
          ---------------------------------------------------


          On January 23, 2001, the Annual Meeting of  Shareholders  was held and
          the following matters were voted upon:

          (1.) The shareholders  approved the election of the following nominees
               to the Board of Directors:

               (A.) Class II Directors

                         Thomas G. Elliot
                              11,022,292 votes FOR
                              328,724 votes WITHHELD

                         James H. Morgan, Jr.
                              11,021,657 votes FOR
                              329,359 votes WITHHELD


                    The terms of office of Robert A. Placek,  C. Troy  Woodbury,
                    Jr., Joe K. Parks,  and Keith N. Smith continued  subsequent
                    to the Annual Meeting.


          (2.) The  appointment of BDO Seidman,  LLP as auditors for the Company
               for the fiscal year 2001 was approved with 11,133,943  votes FOR,
               175,178 votes AGAINST, and 41,895 votes ABSTAINING.


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

          (a.) Exhibits: 4.1 Loan and Security Agreement - Third Amendment dated
               December 11, 2000, by and between  Wegener  Communications,  Inc,
               and  LaSalle  National  Bank  respecting   $10,000,000   combined
               revolving credit note and term note.

          (b.) Reports on Form 8-K - No  reports  on Form 8-K were filed  during
               the quarter ended March 2, 2001.

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<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 its behalf by the
undersigned, thereunto duly authorized.

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


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



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