SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended  October 31, 2000   Commission file number 0-27022
                           ----------------                          -------


                            OPTICAL CABLE CORPORATION
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



                 Virginia                              54-1237042
     (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                 Identification No.)


     5290 Concourse Drive, Roanoke, VA                    24019
   (Address of principal executive offices)            (Zip Code)



Registrant's telephone number, including area code    (540) 265-0690


Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:


                                               Name of Each Exchange on
          Title of Each Class                      Which Registered
-----------------------------------     --------------------------------------
                                                     OTC (Nasdaq
      Common Stock, No Par Value                    National Market)


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.

 (1)   Yes   X     No                  (2)   Yes    X    No
           -------      --------                 -------     --------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of January 24, 2001, was $34,350,550.





<PAGE>



Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.


             Class                            Outstanding at January 24, 2001
----------------------------------     -----------------------------------------
   COMMON STOCK, NO PAR VALUE                       56,246,556 SHARES


DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Optical Cable Corporation Proxy Statement for the 2001 Annual
Meeting of Shareholders are incorporated by reference into Part III hereof.




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<PAGE>



                                     PART I

Item 1.  Business.
-------  --------

         FORWARD-LOOKING INFORMATION

         This report may contain certain "forward-looking" information within
         the meaning of the federal securities laws. The forward-looking
         information may include, among other information, (i) statements
         concerning Optical Cable Corporation's (the "Company") outlook for the
         future, (ii) statements of belief, (iii) future plans, strategies or
         anticipated events, and (iv) similar information and statements
         concerning matters that are not historical facts. Such forward-looking
         information is subject to risks and uncertainties that may cause
         actual events to differ materially from the expectations of the
         Company. Factors that could cause or contribute to such differences
         include, but are not limited to, the level of sales to key customers,
         the deteriorating financial condition of many technology companies in
         the United States, actions by competitors, fluctuations in the price
         of raw materials (including optical fiber), the Company's dependence
         on a single manufacturing facility, the ability of the Company to
         protect its proprietary manufacturing technology, the Company's
         dependence on a limited number of suppliers, an adverse price change
         in trading securities held by the Company, an adverse outcome in
         litigation, claims and other actions against the Company,
         technological changes and introductions of new competing products,
         changes in market demand, exchange rates, productivity, weather and
         market and economic conditions in the areas of the world in which the
         Company operates and markets its products.

         GENERAL

         The Company manufactures and markets a broad range of fiber optic
         cables for high bandwidth transmission of data, video and audio
         communications over moderate distances of up to approximately 10
         miles. The Company's cables can be used both indoors and outdoors, are
         easy and economical to install, and provide a high degree of
         reliability. The Company believes that its products are widely
         accepted for use in fiber optic Local Area Networks ("LANs") and are
         increasingly accepted in other communications applications. The
         Company's products directly address the needs of the moderate distance
         market by utilizing a tight-buffer coating that protects the optical
         fiber and a cable design that achieves superior mechanical and
         environmental performance.

         The Company was incorporated in Virginia in 1983. The Company's
         executive offices are located at 5290 Concourse Drive, Roanoke,
         Virginia 24019. The Company's telephone number is (540) 265-0690.

         INDUSTRY BACKGROUND AND MARKETS

         Application of Fiber Optic Communications Technology

         Fiber optic technology was developed in the mid-1970s as a
         communications medium offering numerous technical advantages over
         metallic conductors, such as copper. Optical fiber is an ultra-pure
         glass structure that has been pulled into a hair thin strand. Optical
         fiber advantages include its high bandwidth, which permits reliable
         transmission of complex signals, such as multiple high quality audio
         and video channels; high speed data formats such as Fiber Distributed
         Data Interface ("FDDI") and Asynchronous Transfer Mode ("ATM"); other
         LAN transmissions; and high-definition television. Relative to copper,
         optical fiber has thousands of times the information carrying capacity,
         occupies much less space and operates more reliably over greater
         distances. Furthermore, it is immune to the electromagnetic
         interference that causes static in copper wire transmission, as well as
         to electrical surges. Because optical fiber does not carry electricity,
         it is a safer choice in flammable environments. Additionally,
         communicating through optical fiber is more secure than copper because
         tapping into fiber optic cable without detection is very difficult.
         Optical fiber also enjoys technical advantages over other

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<PAGE>



         communications media, such as satellite and microwave communications,
         particularly in applications over shorter distances.

         Because most of the world's information storage, reception and display
         systems (such as computers, telephones and televisions) are
         electronically based, various electro-optical hardware components must
         be attached to each end of an optical fiber. For instance, a laser or
         light emitting diode converts electrically encoded information into
         light signals, which travel over the optical fiber to the terminal
         point of reception. At the terminal point a photodetector converts the
         information back to its original form. Other passive optical
         components, such as optical connectors and splices, facilitate the
         travel of a light signal from one optical fiber to another or to
         another electro-optical component, while couplers and splitters combine
         or divide signals, thereby permitting simultaneous distribution of
         information to or from multiple locations. The cost of the necessary
         electro-optical transmitters and recorders have been reduced to the
         point where fiber optic cable is economically feasible for many
         moderate distance applications.

         Like copper cable, fiber optic cable is restricted to applications in
         which it is possible to lay cable between the point of transmission and
         the point of reception. Wireless communication media does not have this
         limitation.

         The Long Distance Telephone Market

         Private industry initially developed optical fiber systems for long
         distance commercial applications, particularly the U.S. telephone
         networks. For the long distance telephone market, single-mode optical
         fiber is generally used. To protect the optical fiber without adversely
         affecting its optical performance, fiber optic cable producers use a
         high-density (i.e., high fiber count) loose-tube cable construction.
         This cable design was intended to put many optical fibers in a small,
         relatively inexpensive cable. To protect such cables from water
         penetration, manufacturers add a water-blocking flammable gel, making
         them unsuitable for indoor use.

         U.S. long distance carriers have aggressively installed fiber optic
         routes across the United States. Since the late 1980s, optical fiber
         has constituted nearly all of the long distance telephone network, as
         well as the interoffice local exchange network connecting central
         telephone offices in the same area.

         The Moderate Distance Market

         In the 1970s the U.S. government made available substantial funds for
         research and development to determine the viability of optical fiber as
         a solution to critical communications problems faced by the military
         and other agencies. In the course of addressing these challenging,
         multiple termination point applications, which were predominately over
         moderate distances, engineers achieved significant technological
         advances. Such advances included the introduction of multimode optical
         fiber and the development of an easy-to-handle tightbound cable
         structure that afforded the optical fiber effective protection against
         mechanical shock, water, extreme temperatures and other stresses likely
         to be encountered in a battlefield environment.

         High levels of production of optical fiber, cable and components for
         the long distance telephone market since the mid-1980s have resulted in
         cost reductions that make fiber optic cable economically feasible for a
         growing number of potential customers with moderate distance business
         application needs. Such applications include data communications, LANs,
         telecommunications, video transmission, cable television, traffic
         signaling, and military tactical communications. Particularly in data
         communications, high performance, rugged, and survivable fiber optic
         cable is well suited and has become economically attractive for diverse
         and often unpredictable installation environments. The Company believes
         that the LAN market is particularly attractive. LANs are often
         installed at corporate offices, hospitals, utilities, academic
         campuses, factories and transportation management facilities.

                                        4

<PAGE>



         The increasing standardization of communications technology and the
         increasing demand for high bandwidth (i.e., high data capacity or
         volume) are expected to facilitate further penetration by optical fiber
         of the moderate distance market presently served by copper cable. Fiber
         optic cable is better able to maximize the utility of emerging LAN
         interface standards, such as FDDI and ATM, and has, therefore, become a
         preferred data transmission medium. In addition, high speed, high
         bandwidth applications, such as video conferencing, imaging and
         Internet access, are growing and are driving increased demand for fiber
         optic cable in moderate distance applications.

         The large cable television companies, often referred to as Multiple
         System Operators, the Regional Bell Operating Companies ("RBOCs"), and
         other independent long distance carriers are competing to provide
         enhanced cable television, data, and other information highway services
         to homes and businesses. Many of these companies have begun to use, on
         a limited basis, optical fiber systems in the portion of the U.S.
         telephone networks which lies between telephone companies' central
         offices and subscribers' offices and homes (the "subscriber loop"). To
         date, the subscriber loop remains overwhelmingly copper. Because the
         subscriber loop represents approximately 90% of the U.S. telephone
         system (measured by total length of cable), the potential demand for
         fiber optic cable in this application is very large, provided that cost
         parity with copper cable systems can be achieved.

         THE COMPANY'S SOLUTION

         Fiber optic cables used for moderate distance applications may be
         subjected to many different stress environments. Cables installed
         inside buildings may be routed through cable trays, floor ducts,
         conduits and walls and may encounter sharp corners or edges. They may
         be pulled without lubricant, resulting in higher pull tensions, and
         stressed to the breaking point if care is not used. In the outdoor and
         underground environments, cables are often subjected to moisture,
         ultra-violet radiation and long pulling distances through conduits with
         a variety of bends and corners, resulting in high pulling tensions.
         These conditions can be aggravated if installers are not adequately
         trained in the installation of fiber optic cable. The Company's
         founders recognized that, for many applications, the stresses on the
         cables during installation are similar to those in the military
         tactical environment, for which the Company's technology was initially
         developed. The Company applied this technology to commercial products
         serving a market that could not be adequately served by loose-tube
         gel-filled cable manufactured for the long distance telephone market.

         The Company believes that nearly one-half of the fiber optic cable sold
         in the moderate distance market today is the loose-tube gel-filled
         type, which requires careful installation and extensive preparation for
         termination with connectors. While this cable design has served the
         long distance telephone market reasonably well, it was not designed to
         withstand the stress that cables undergo during installation in the LAN
         or subscriber loop environments. Loose-tube gel-filled cables are
         difficult to terminate with connectors, because they cannot be
         mechanically attached directly to the cable's optical fibers. Designed
         for long, straight outdoor runs, the cables are stiff and difficult to
         place in complex installations and are flammable and are not suited for
         indoor use. When used for indoor/outdoor installations, these cables
         must be spliced near the building entrance to flame retardant cables
         suitable for indoor use, adding cost and complexity and reducing
         reliability. Therefore, the total installed cost of loose-tube
         gel-filled cables is high in moderate distance applications.

         In contrast, the Company's products address the needs of the moderate
         distance market by utilizing a tight-buffer coating that protects the
         optical fiber and a cable design that achieves superior mechanical and
         environmental performance. The Company's products are derived from
         technology originally developed for military applications requiring
         very rugged, flexible and compact fiber optic cables. Unlike loose-tube
         gel-filled cables, the Company's cables may be used indoors and
         outdoors, are flame resistant, flexible, easy and economical to
         install, and provide a high degree of reliability. The Company believes
         that because of these features, its products are widely accepted for
         use in fiber optic LANs and are increasingly accepted in other
         applications.

                                        5

<PAGE>



         THE COMPANY'S STRATEGY

         The Company's primary strategy is to capitalize on its proprietary
         cable manufacturing processes and technologies to provide a
         comprehensive line of versatile fiber optic cables with superior
         features and competitive pricing that appeals to the large, diverse and
         growing market for high bandwidth communications over moderate
         distances.

         Focus on the Moderate Distance Market

         Optical fiber has become an accepted medium for the transmission of
         data, video and audio in moderate distance applications in cities,
         factories, high rise buildings, and on campuses. High speed, high
         bandwidth applications deployed in LAN environments are growing in both
         large and small corporations and are driving increased demand for
         optical fiber. Increasing deployment of multimedia systems on LANs that
         utilize protocols such as FDDI and ATM also enhances the demand for
         bandwidth.

         The Company's products address the needs of the moderate distance
         market by utilizing a tight-buffer coating that protects the optical
         fiber and a cable design that achieves superior mechanical and
         environmental performance. The Company believes that because of the
         outstanding features of its fiber optic cable, including suitability
         for indoor and outdoor use, easy and economical installation and a high
         degree of reliability, the Company's products have become well
         established for optical fiber LANs and are increasingly accepted for
         other applications.

         Develop High Performance Products and Offer a Broad Product Line

         The Company believes that serving both the premium performance and the
         price competitive parts of the moderate distance market best utilizes
         its development and manufacturing capabilities. The Company's
         Ultra-FoxTM product line provides optical fiber products that are
         competitively priced, with features that the Company believes are
         superior to its competitors' offerings. The Ultra-FoxTM plus product
         line shares many of the materials and features with the Company's
         military tactical cable products and is marketed to customers who want
         the most reliable installations for their critical communication or
         control processes. Since January 1994, the Company's quality management
         system has been certified to the internationally recognized ISO 9001
         quality standard.

         Leverage Existing Technologies and Knowledge

         The Company has extensive expertise in optical fiber packaging and
         applications design, which it utilizes for new products. The Company is
         responsive to, and works to anticipate the requirements of, its
         customers. Its expertise with tight-buffer cable technology facilitates
         development of new products and variations of existing products.
         Products that are developed for a special application also may be
         introduced to the broader market.

         Capitalize on Proprietary, Automated Manufacturing Processes

         The Company believes that its customized, internally developed and
         highly automated manufacturing processes provide a competitive
         advantage. The Company has developed proprietary process control
         systems to ensure consistency and uniformity at high throughput rates.
         Ample capacity, versatile automated production processes and a broad
         range of products are intended to enable the Company to be flexible and
         responsive to customer needs.


                                        6

<PAGE>



         Offer Cost Effective Solutions to Its Customers

         The Company believes that its products are rugged, easy to install,
         versatile and highly reliable, making them attractive to distributors,
         installers, and most importantly, end-users. Because the Company's
         cables are multipurpose, distributors can stock fewer varieties and
         less quantities of cable. For installers and systems integrators, the
         multipurpose feature can significantly reduce installation costs by
         eliminating the need to transition from indoor cable to outdoor cable
         at a building entrance. This also enhances reliability by eliminating
         splices and possible high stress on optical fibers that could lead to
         breakage. This simplified installation, lower cost and enhanced
         reliability are also valued by the end-user, because a long lasting,
         trouble-free cable is the basis for minimizing down time and maximizing
         system availability.

         Distribution and Marketing Presence

         The Company distributes its products through independent distributors
         to supplement the Company's existing distribution channels and to
         provide the Company with access to a greater number of potential
         customers in the United States. Revenues from international sales were
         approximately 22%, 20% and 21% in fiscal 1998, 1999 and 2000,
         respectively. The Company does not separately track gross profit or
         expenses attributable to international sales. Management of the Company
         does not regularly evaluate international sales by region.
         Substantially, all of the Company's international sales are denominated
         in U.S. dollars. The Company has no material assets located outside of
         the United States. (See also Note 9 to the Financial Statements, which
         is included on page 36 herein.)

         Working with IBM's E-Commerce division, the Company launched its
         E-Commerce website (http://purchasing.occfiber.com) in March 1999.
         Initially, the E-Commerce website included only the Company's product
         line. The Company intends to look for opportunities to establish
         strategic alliances with other leading suppliers of communications
         equipment to expand the website's future offerings and eventually
         create an independent communications superstore which would offer
         one-stop shopping to global purchasers of communication materials.

         PRODUCTS AND TECHNOLOGY

         Products

         The Company manufactures and markets a broad range of fiber optic
         cables that provide a high bandwidth transmission for data, video and
         audio communications over moderate distances. The Company's products
         are derived from technology originally developed for military
         applications requiring very rugged, flexible and compact fiber optic
         cables. The Company's method of applying a tight-buffer coating on each
         optical fiber before it is encased minimizes microbending, the primary
         cause of signal loss in optical fibers.

         The Company has pioneered a pressure extrusion technique for applying a
         cable jacket directly over the fiber optic cable core elements,
         resulting in high cable tensile strength and lateral stress resistance.
         Such Core-LockedTM jackets allow the cable to operate as a single
         mechanical unit, maximizing resistance to tears during installation
         pulls through narrow spaces. The Company's product line is deliberately
         diverse and flexible, in keeping with the evolving application needs
         within the moderate distance market. Most of the Company's cable
         designs are available in both the Ultra-FoxTM Plus premium product and
         the Ultra- FoxTM highly featured, cost competitive commercial product.




                                        7

<PAGE>


<TABLE>
<CAPTION>


Product Type                                Features/Description              Applications
------------                                --------------------              ------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

A-Series "Assembly"                       o simplex (one optical fiber)     o short "patch cord" cables
  Cables                                    and duplex (two optical           links between electronic
                                            fibers) cables                    equipment and main fiber
                                          o tight-buffer coating on each      optic cable
                                            optical fiber                   o routing connections in
                                          o aramid strength members           patching systems
                                          o thermoplastic outer jacket      o indoor use
                                          o flame retardant


B-Series "Breakout"                       o 2 to 156 optical fibers tight-  o direct termination with
  Cables                                    buffer coating on each optical    connectors on each optical
                                            fiber                             fiber
                                          o elastomeric jacket encases      o short and moderate
                                            each optical fiber and            distance links between
                                            surrounding aramid strength       buildings or within a
                                            members (similar to an A-         building, where multiple
                                            Series simplex cable)             termination points are
                                          o Core-LockedTM outer jacket        needed
                                          o rugged                          o installations where ease of
                                          o flame retardant                   termination and
                                          o moisture and fungus resistant   o termination cost are
                                                                              important factors
                                                                              indoor and outdoor use

D-Series "Distribution"                   o 2 to 156 optical fibers tight-  o longer distance runs where
  Cables                                    buffer coating on each optical    size and cable cost are
                                            fibers                            more significant
                                          o Core-LockedTM outer jacket      o can be armored for
                                            encases the optical fibers and    additional protection in
                                            aramid strength members           buried and overhead
                                          o smaller, lighter and less         installations
                                            expensive than the B-Series     o indoor and outdoor use
                                            cable
                                          o high strength to weight ratio
                                          o compact size
                                          o rugged
                                          o flame retardant
                                          o moisture and fungus resistant

</TABLE>


                                        8

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<TABLE>

<CAPTION>


Product Type                                Features/Description              Applications
------------                                --------------------              ------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

G-Series "Subgrouping"                    o up to 864 optical fibers in     o high fiber count systems
  Cables                                    various subgroup sizes          o subgroups needed to
                                          o multifiber subcables, each        facilitate organization of
                                            similar to a D-Series cable       large numbers of optical
                                            Core-LockedTM outer jacket        fibers
                                            surrounds subcables             o subcables routed to
                                          o high density "micro"              different locations
                                            construction                    o installations requiring
                                          o rugged                            several different optical
                                          o flame retardant                   fiber types
                                          o moisture and fungus resistant   o indoor and outdoor use
</TABLE>

         A-Series "Assembly" Cables. Simplex and duplex cables are round single
         fiber and "zipcord" two-fiber structures, respectively. Both cables
         contain tight-buffer optical fibers, aramid strength members and a
         thermoplastic outer jacket for each fiber. They are used for "jumpers"
         (short length patch cords) and for "pigtails" (short lengths of cable
         with a connector on one end). Various outer jacket materials are
         offered to provide flammability ratings and handling characteristics
         tailored to customers' needs. These cables are often privately labeled
         and sold to original equipment manufacturers ("OEMs") who produce the
         cable assemblies.

         B-Series "Breakout" Cables. The B-Series cables consist of a number of
         subcables, each consisting of a single optical fiber and aramid
         strength members similar to an A-Series simplex cable. These subcables
         are tightbound in a pressure extruded, high performance Core-LockedTM
         PVC outer jacket to form the finished multifiber cable. Like the
         A-Series cables, the subcables are intended to be terminated directly
         with connectors. This direct termination feature makes this cable type
         particularly suited for shorter distance installations, where there are
         many terminations and termination costs are more significant. The
         materials and construction of the cable permit its use both indoors and
         outdoors. These features make the cable cost effective for use in
         campus and industrial complex installations, between and within
         buildings.

         D-Series "Distribution" Cables. The Company's D-Series cables are made
         with the same tight-buffer optical fiber and high performance
         Core-LockedTM PVC outer jacket as the B-Series cable. Unlike the B-
         Series cable, however, each tight-buffer optical fiber in a D-Series
         cable is not covered with a separate subcable jacket. D-Series cable is
         intended for longer distance applications, where termination
         considerations are less important and often traded off for size, weight
         and cost. The tight-buffer optical fiber and Core-LockedTM PVC outer
         jacket make D-Series cables rugged and survivable, with a small,
         lightweight configuration. The high strength to weight ratio of these
         cables makes them well suited for installations where long lengths of
         cables must be pulled through duct systems. D-Series cable is used in
         relatively longer length segments of installations.

         G-Series "Subgrouping" Cables. This cable design combines a number of
         multifiber subcables, each similar to a D-Series cable. Each multifiber
         subcable is tightbound with an elastomeric jacket, providing excellent
         mechanical and environmental performance. These subcables are contained
         in a pressure extruded, high performance Core-LockedTM PVC outer jacket
         to form the finished cable. This design permits the construction of
         very high fiber count cables. These cables may be used where groups of
         optical fibers are routed to different locations. The Company has
         fabricated a developmental subgroup cable containing over 1,000 fibers
         intended for high density, moderate length routes such as urban
         telephone distribution systems.

         Other Cable Types. The Company produces many variations on the basic
         cable styles presented above for more specialized installations. For
         outdoor applications, both the B-Series and D-Series cables may be
         armored with corrugated steel tape for further protection in
         underground or overhead installations. For

                                        9

<PAGE>



         overhead installations on utility poles, the Company offers several
         self-supporting versions of the D-Series cables, with higher
         performance outer jackets. One contains additional aramid strength
         members, to support its weight with wind and ice loading over long
         unsupported lengths. Another style has a separate strength member,
         either metallic or non-metallic, in a figure-eight configuration, to
         reduce installation costs. The Company's cables are available in
         several flammability ratings, including "plenum" for use in moving air
         spaces in buildings, and "riser" for less critical flame retardant
         requirements. "Zero Halogen" versions of the B-Series and D-Series
         cables are available for use in enclosed spaces where there is concern
         over release of toxic gases during fire. Composite cables combining
         optical fiber and copper are offered to facilitate the transition from
         copper-based to optical fiber-based systems without further
         installation of cable.

         Product Development

         The Company continues to develop enhancements to its automated,
         computer-controlled production processes that it believes increase
         product quality and reduce costs. Many of the Company's technological
         advances are the result of refinements and improvements made during
         production runs. Occasionally, potential customers contact the Company
         to develop new products or modified product designs for them, which
         ultimately may appeal to other customers. The development costs
         associated with new products and modified product designs requested by
         the customer are included in the price charged to that customer. By
         utilizing these new products and modified product designs, the Company
         continues to improve its product line with minimal direct expenditures
         for research and development.

         MAJOR MARKET APPLICATIONS

         The most common application of the Company's products is in LANs, where
         optical fiber is widely used as the "backbone" or "trunk," connecting
         groups of workstations and central file servers. In its typical
         implementation, the fiber optic cable may be installed between wiring
         closets in a building, or installed between buildings in a
         multibuilding complex. Fiber optic cable runs between electronic
         equipment that combines the signals of many workstations. Because the
         combined signals may carry a large volume of critical information,
         fiber optic cable, which is immune to electrical interference, is often
         desired. In comparison, copper wires carry less information, or the
         same amount of information for a shorter distance, in either case
         remaining susceptible to electrical noise and interference. The
         following are typical applications for the Company's fiber optic cable:

         Office Facilities. Banks, stock trading companies, insurance companies,
         and other businesses often have a need to distribute information among
         a large number of workstations, have time-critical data and would incur
         severe costs as a result of system failures. A LAN connected with fiber
         optic cable has in the past several years been an increasingly common
         way of implementing management information systems for these
         businesses.

         Educational Institutions. Colleges and universities have been leaders
         in implementing large fiber optic networks. Many states have undertaken
         large-scale projects to install networks in high schools and even grade
         schools. These systems link personal computers with central file
         servers. As interactive learning systems require increased transmission
         speeds, optical fiber becomes a logical medium.

         Manufacturing and Mining Facilities. Manufacturing and mining
         facilities are typically not air conditioned, are less clean and have a
         less controlled environment than other types of businesses. They often
         contain heavy electrical equipment, which causes electromagnetic
         interference if conventional copper cable is used. The advantages of
         fiber optic cable in this environment include immunity to electrical
         noise, ruggedness, high information carrying capacity and greater
         distance capability. The Company's products are installed in automotive
         assembly plants, steel plants, chemical and drug facilities, petroleum
         refineries, mines and other similar environments.

                                       10

<PAGE>




         Health Care Facilities. Hospitals have extensive data transfer needs
         for medical records, patient monitoring, inventory, billing and payroll
         functions. The transfer of electronically stored images of x- rays,
         MRIs and CAT scans has increased to facilitate analysis and diagnosis
         at multiple locations. These applications require high data transfer
         rates. Optical fiber is a preferred solution, especially in
         electromagnetic environments with heavy electrical equipment such as
         x-ray machines.

         Traffic Control Systems. Traffic system applications range from
         surveillance and control of traffic flow in cities to installation of
         sensors, automatic toll collection, video monitoring and control of
         signs in "smart" highway programs. These applications often require
         transmission of high bandwidth signals such as video monitoring, for
         which optical fiber is well suited. The Company's cables offer
         ruggedness, reliability and cost savings for termination in systems
         that are near the vibrations of traffic and require many termination
         points.

         Telephone Companies. The Company has worked with several RBOCs for
         their business customers' requirements. As high bandwidth services of
         the information highway are brought closer to more homes and
         businesses, the bandwidth of optical fiber becomes more important.

         SALES, MARKETING AND CUSTOMER SERVICE

         The Company's products are sold to end-users, electrical contractors,
         system integrators, value-added resellers ("VARs"), OEMs and
         distributors. Distribution methods are adapted to the particular needs
         of different types of customers. The decision to purchase the Company's
         products may be made by end-users, distributors, electrical
         contractors, system integrators or specialized installers. The Company
         attempts to reach these decision makers by advertising in fiber optic
         trade journals and other communications magazines. The Company also
         participates in numerous domestic and international trade shows
         attended by customers and prospective customers. International sales
         are made primarily through foreign distributors, system integrators and
         VARs.

         The Company's field sales force consists of independent sales
         representatives located in various geographic areas. The field sales
         force provides sales support for distributors, system integrators and
         VARs and communicates with the customer's purchase decision makers. The
         field sales force is supported by inside sales personnel and supervised
         by regional sales managers. The inside sales group provides quotations
         and customer service. The regional sales managers provide on-site sales
         support with major customers and are responsible for major customers
         and opportunities. For more in-depth technical support, the sales group
         has access to engineering, quality control and management personnel who
         have extensive fiber optic cable expertise and industry experience.

         Furthermore, the Company believes that it has a reputation for product
         excellence based on its success with large projects for end-users such
         as Chrysler Corporation, 3M, Virginia Polytechnic Institute and State
         University, Bankers Trust and Salomon Brothers Inc, and for integrators
         such as Ameritech Information Systems and US WEST. The Company had no
         single customer that accounted for more than 5% of its net sales in
         fiscal 1998, 1999 or 2000. However, in fiscal 1998, 1999 and 2000,
         27.3%, 30.6% and 28.0%, respectively, of net sales were attributable to
         two major domestic distributors. As of October 31, 2000, the Company
         has specifically reserved approximately $1.8 million for estimated
         uncollectible accounts receivable from one of these major distributors.
         Subsequent to October 31, 2000, this distributor filed for bankruptcy.
         Net sales attributable to this distributor approximated $9 million in
         fiscal 2000. Most of the Company's revenue in each quarter results from
         orders received in that quarter. Accordingly, the Company does not
         believe that its backlog at any particular point in time is indicative
         of future sales. The Company believes that its customer base is
         diverse, crossing over many markets and regions worldwide and believes
         that it is important to maintain that diversity to avoid dependence on
         any particular segment of the economy or area of the world.

                                       11

<PAGE>



         MANUFACTURING AND SUPPLIERS

         The Company's manufacturing operations consist of applying a variety of
         raw plastic materials to optical fibers. The key raw material in the
         manufacture of the Company's products is optical fiber, which the
         Company currently purchases from more than four manufacturers. The
         Company works with its vendors in an effort to ensure a continuous
         supply. The Company utilizes two sources for the cable's aramid
         strength member and several suppliers of coating materials. The Company
         has not experienced difficulty in arranging alternate sources. All
         other raw materials have at least one backup source.

         The Company believes that by maintaining a consistent relationship with
         suppliers, it can obtain better quality control and emergency
         deliveries. Being able to deliver product on time has been an important
         factor in the Company's success. To date, the Company has been able to
         obtain adequate supplies of its raw materials in a timely manner from
         existing sources or, when necessary, from alternate sources. However,
         any disruption in the supply of raw materials could adversely affect
         the Company's cable production capability and its operating results.

         The Company believes that other fiber optic cable manufacturers
         generally carry minimal amounts of raw materials and finished goods
         inventory. The Company generally holds raw materials and finished goods
         inventory in amounts greater than that of its competitors to ensure a
         quick response after receiving a customer's order.

         The Company believes its quality control procedures have been
         instrumental in achieving the performance and reliability of its
         products. The Company produces cable using the quality control
         procedures of MIL- I-45208 (the primary standard applicable to most
         government purchasers of cable).

         Since January 1994, the Company's quality management system has been
         certified to the internationally recognized ISO 9001 quality standard.
         ISO 9000 is a series of standards agreed to by the International
         Organization for Standardization (ISO). ISO 9001 is the highest level
         of accreditation and includes an assessment of 20 elements covering
         various aspects of design, development, distribution and production of
         fiber optic cables. The Company's certification was obtained through an
         audit by a qualified international certifying agency. In order to
         maintain its certification, the Company must continue to comply with
         the standards.

         PROPRIETARY RIGHTS

         None of the Company's current manufacturing processes or products is
         protected by patents. The Company relies on a combination of trade
         secret, copyright and trademark law, nondisclosure agreements and
         technical measures to establish and protect its rights pertaining to
         its production technology. Such protection may not deter
         misappropriation or preclude competitors from developing production
         techniques or equipment with features identical, similar or superior to
         the Company's. The Company believes, however, that because of the rapid
         pace of technological change in the data communications industry and
         particularly in the fiber optic cable segment, legal protection for the
         Company's products is less significant to the Company's prospects than
         the knowledge, ability and expertise of its management and technical
         personnel with respect to the timely development and production of new
         products and product enhancements. The Company considers its
         proprietary knowledge with respect to the development and manufacture
         of fiber optic cable to be a valuable asset. This expertise enables the
         Company to formulate new cable compositions, develop special coatings
         and coating methods, develop and implement manufacturing improvements
         and quality control techniques, and design and construct manufacturing
         and quality control equipment. The Company restricts access to its
         manufacturing facility and engineering documentation to maintain
         security. Employees are required to sign nondisclosure agreements.


                                       12

<PAGE>



         The Company believes that none of its products, trademarks or other
         proprietary rights infringes upon the proprietary rights of others.
         There can be no assurance, however, that third parties will not assert
         infringement claims against the Company in the future with respect to
         the Company's present or future products which may require the Company
         to enter into license agreements or result in protracted and costly
         litigation, regardless of the merits of such claims.

         COMPETITION

         The market for fiber optic cable, including the moderate distance
         market in which the Company's products are concentrated, is highly
         competitive. Corning and Lucent Technologies are the leading
         manufacturers of fiber optic cable for both the long distance telephone
         market and the moderate distance market. Although both manufacture
         loose-tube gel-filled cables, a significant portion of Lucent
         Technologies and Corning's fiber optic cable sales are tight-buffer
         fiber optic cable products in the moderate distance market. Also,
         Corning and Lucent Technologies are principal suppliers of optical
         fiber worldwide. The Company's competitors, including Corning and
         Lucent Technologies, are more established, having a large business base
         in the long distance telephone, loose-tub gel-filled cable market.
         Those companies can benefit from greater market recognition and have
         greater financial, research and development, production and marketing
         resources than the Company.

         Additionally, fiber optic cable competes with copper wire cable on the
         basis of cost and performance tradeoffs. The cost of the
         electro-optical interfaces required for fiber optic systems and higher
         speed electronics generally associated with high performance fiber
         optic systems can make them uncompetitive in applications where the
         advantages of optical fiber are not required. Fiber optic cable also
         competes with other alternative transmission media including wireless
         and satellite communications.

         The Company believes that it competes successfully against its
         competitors on the basis of breadth of product features, quality,
         ability to meet delivery schedules, technical support and service,
         breadth of distribution channels and price. Maintaining such
         competitive advantages will require continued investment by the Company
         in product development, sales and marketing. There can be no assurance
         that the Company will have sufficient resources to make such
         investments or that the Company will be able to make the technological
         advances necessary to maintain its competitive position. An increase in
         competition could have a material adverse effect on the Company's
         business and operating results because of price reductions and loss of
         market share. Competition could increase if new companies enter the
         market or if existing competitors expand their product lines.

         EMPLOYEES

         As of October 31, 2000, the Company employed a total of 181 persons,
         including 38 in sales, marketing and customer service, 21 in
         engineering, product development and quality control, 100 in
         manufacturing, and 22 in finance and administration. None of the
         Company's employees is represented by a labor union. The Company has
         experienced no work stoppages and believes its employee relations are
         excellent.


Item 2.  Properties.
-------  ----------

         The Company's principal administration, marketing, manufacturing, and
         product development facilities are located in a 148,000 square foot
         building located adjacent to the Roanoke, Virginia airport and major
         trucking company facilitates. The Company believes that its production
         equipment is presently operating at approximately 65% of its capacity.



                                       13

<PAGE>



Item 3.  Legal Proceedings.
-------  -----------------

         On September 27, 2000, the Equal Employment Opportunity Commission (the
         "EEOC") filed a lawsuit under Title VII of the Civil Rights Act of 1964
         against the Company in the United States District Court for the Western
         District of Virginia alleging a pattern or practice of discrimination
         on the bases of gender and race. The lawsuit seeks injunctive and other
         relief and damages in an unspecified amount. Management intends to
         vigorously defend the lawsuit on the merits. While the ultimate
         resolution of this lawsuit cannot be determined, management does not
         expect that its resolution will have a material adverse effect on the
         financial condition or business of the Company.

         A charge of discrimination was filed on or about May 1, 2000, with the
         EEOC by one of the Company's former employees, John C. Clark, alleging
         that the Company denied him a promotion on or about January 12, 2000,
         in violation of the Age Discrimination in Employment Act. A charge of
         discrimination was filed on or about November 27, 2000, with the EEOC
         by one of the Company's former employees, Gary W. Cheatwood, alleging
         that the Company denied him merit increases and stock options on the
         basis of race, in violation of Title VII of the Civil Rights Act of
         1964. A charge of discrimination was filed on or about November 25,
         2000, with the EEOC by one of the Company's former employees, Barry D.
         Cheatwood, alleging that the Company denied him merit increases and
         stock options on the basis of race, in violation of Title VII of the
         Civil Rights Act of 1964. A charge of discrimination was filed on or
         about November 30, 2000, with the EEOC by Victor W. Gravely, a former
         applicant for employment with the Company, alleging that the Company
         did not hire him because of his race in violation of Title VII. On each
         of these matters, the Company has filed a statement of its position
         with the EEOC denying the allegations. The EEOC has yet to issue a
         determination on any of these charges. No litigation has been filed
         against the Company in connection with any of these charges. While the
         ultimate resolution of these four EEOC charges cannot be determined,
         management does not expect that their resolution will have a material
         adverse effect on the financial condition or business of the Company.


Item 4.  Submission of Matters to a Vote of Security Holders.
-------  ---------------------------------------------------

         There were no matters submitted to a vote of security holders during
         the fourth quarter of the year ended October 31, 2000.




                                       14

<PAGE>



                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters.
-------  ---------------------------------------------------------------------

         The Company's Common Stock is traded on the Nasdaq National Market
         under the symbol "OCCF." On January 24, 2001, the Company's Common
         Stock closed at a price of $15.31 per share.

         The following table sets forth for the fiscal periods indicated the
         high and low bid prices of the Common Stock, as reported on the Nasdaq
         National Market, during the two most recent fiscal years:
<TABLE>
<CAPTION>


                                                                        RANGE OF BID PRICES
                                                                     ----------------------------
FISCAL YEAR ENDED OCTOBER 31, 2000                                       HIGH             LOW
                                                                      ----------       ----------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

First Quarter (November 1, 1999 to January 31, 2000)                 $    32.147      $     7.083
Second Quarter (February 1 to April 30, 2000)                        $    44.917      $    12.917
Third Quarter (May 1 to July 31, 2000)                               $    25.667      $    12.500
Fourth Quarter (August 1 to October 31, 2000)                        $    30.000      $    15.938

FISCAL YEAR ENDED OCTOBER 31, 1999

First Quarter (November 1, 1998 to January 31, 1999)                 $    11.333      $     6.833
Second Quarter (February 1 to April 30, 1999)                        $     9.000      $     5.667
Third Quarter (May 1 to July 31, 1999)                               $     8.667      $     6.750
Fourth Quarter (August 1 to October 31, 1999)                        $     8.333      $     6.083
</TABLE>


         At October 31, 2000, there were approximately 6,017 stockholders of
         record. No cash dividends have been declared or paid since the
         completion of the initial public offering in April 1996. While there
         are no restrictions on the payment of dividends, the Company does not
         anticipate the payment of dividends for the foreseeable future.




                                       15

<PAGE>



Item 6.  Selected Financial Data.
-------  -----------------------
<TABLE>
<CAPTION>


                                               OPTICAL CABLE CORPORATION
                                                Selected Financial Data

                                                                       YEARS ENDED OCTOBER 31,
                                               -----------------------------------------------------------------------
                                                  2000           1999           1998           1997           1996
                                               -----------    -----------    -----------    -----------    -----------
                                                                (In Thousands, Except Per Share Data)
<S>     <C>    <C>    <C>    <C>    <C>    <C>
STATEMENT OF INCOME DATA:
   Net sales                                  $     58,219   $     50,699   $     50,589   $     52,189   $     45,152
   Cost of goods sold                               30,878         27,547         29,330         30,613         24,907
                                               -----------    -----------    -----------    -----------    -----------
     Gross profit                                   27,341         23,152         21,259         21,576         20,245
   Total operating expenses                         15,024         10,799          9,939          9,572          8,416
                                               -----------    -----------    -----------    -----------    -----------
     Income from operations                         12,317         12,353         11,320         12,004         11,829
   Other income (expense), net                         417            166             57           (47)            198
                                               -----------    -----------    -----------    -----------    -----------
     Income before income tax expense               12,734         12,519         11,377         11,957         12,027
   Income tax expense (1)                            4,479          4,214          4,107          4,150          2,806
                                               -----------    -----------    -----------    -----------    -----------

     Net income                               $      8,255   $      8,305   $      7,270   $      7,807   $      9,221
                                               ===========    ===========    ===========    ===========    ===========

   Pro forma Income Data (1):
   Net income before pro forma income
     tax provision, as reported                                                                           $      9,221
   Pro forma income tax provision                                                                                1,747
                                                                                                           -----------

   Pro forma net income                                                                                   $      7,474
                                                                                                           ===========
   Net income per common share
     (pro forma for 1996) (2)                 $      0.147   $      0.147   $      0.127   $      0.135   $      0.127
                                               ===========    ===========    ===========    ===========    ===========

   Net income per common share - assuming
     dilution (pro forma for 1996) (2)        $      0.145   $      0.146   $      0.125   $      0.133   $      0.126
                                               ===========    ===========    ===========    ===========    ===========

BALANCE SHEET DATA:
   Working capital                            $     31,986   $     21,980   $     18,991   $     19,912   $     14,377
   Total assets                                     52,688         37,512         32,829         35,214         31,127
   Total stockholders' equity                       43,508         32,847         29,991         31,379         23,572
-------------------
</TABLE>

(1)  Through March 31, 1996, the Company was not subject to federal and state
     income taxes since it had elected, under provisions of the Internal Revenue
     Code, to be taxed as an S Corporation. On April 1, 1996, the Company
     completed a public offering of 4,013,124 shares of the Company's common
     stock from which it received net proceeds of approximately $5.5 million. In
     connection with the closing of the Company's initial public offering on
     April 1, 1996, the Company terminated its status as an S Corporation
     effective March 31, 1996 and became subject to federal and state income
     taxes. Accordingly, the statement of income data for the year ended October
     31, 1996 includes income taxes from April 1, 1996, and for informational
     purposes, the statement of income data for the year ended October 31, 1996
     includes a pro forma adjustment for income taxes which would have been
     recorded if the Company had been subject to income taxes for the entire
     fiscal year presented.

(2)  On August 31, 2000, the Company's Board of Directors approved a 3-for-2
     stock split effected in the form of a stock dividend of one share paid on
     September 28, 2000, upon each two shares held by stockholders of record at
     the close of business on September 8, 2000. The Company's stock began
     trading ex-dividend on September 29, 2000. All references to share and per
     share data, except for references to authorized shares, contained elsewhere
     in this annual report have been retroactively adjusted to reflect the
     impact of the approved stock dividend.

                                       16


<PAGE>




Item 7.  Management's Discussion and Analysis of Financial Condition and
-------  ---------------------------------------------------------------
         Results of Operations.
         ----------------------

         FORWARD-LOOKING INFORMATION

         This report may contain certain "forward-looking" information within
         the meaning of the federal securities laws. The forward-looking
         information may include, among other information, (i) statements
         concerning the Company's outlook for the future, (ii) statements of
         belief, (iii) future plans, strategies or anticipated events, and (iv)
         similar information and statements concerning matters that are not
         historical facts. Such forward-looking information is subject to risks
         and uncertainties that may cause actual events to differ materially
         from the expectations of the Company. Factors that could cause or
         contribute to such differences include, but are not limited to, the
         level of sales to key customers, the deteriorating financial condition
         of many technology companies in the United States, actions by
         competitors, fluctuations in the price of raw materials (including
         optical fiber), the Company's dependence on a single manufacturing
         facility, the ability of the Company to protect its proprietary
         manufacturing technology, the Company's dependence on a limited number
         of suppliers, an adverse price change in trading securities held by the
         Company, an adverse outcome in litigation, claims and other actions
         against the Company, technological changes and introductions of new
         competing products, changes in market demand, exchange rates,
         productivity, weather and market and economic conditions in the areas
         of the world in which the Company operates and markets its products.


         RESULTS OF OPERATIONS

         Net Sales

         Net sales consists of gross sales of products, less discounts, refunds
         and returns. Net sales increased 14.8 percent to $58.2 million in
         fiscal 2000 from $50.7 million in fiscal 1999. This increase was
         attributable to increased sales volume. Total fiber meters shipped
         during fiscal 2000 increased 18.5 percent to 199.3 million from 168.2
         million fiber meters shipped for the same period in 1999. This increase
         in fiber meters shipped was a result of a 13.8 million increase in
         multimode fiber meters shipped and an 17.3 million increase in
         single-mode fiber meters shipped. Multimode fiber generally has a
         higher selling price than single-mode cable. Management believes there
         is a trend in the marketplace of an accelerated pace of fiber
         deployment, particularly of the type sold by the Company. Management
         believes this trend resulted in increased sales volume during fiscal
         2000 and could continue to positively affect net sales in the future.

         Net sales increased to $50.7 million in fiscal 1999 from $50.6 million
         in fiscal 1998. This slight increase was primarily attributable to
         reduced selling price and a change in product mix. Total fiber meters
         shipped during fiscal 1999 increased 7.5 percent to 168.2 million from
         156.5 million fiber meters shipped for the same period in 1998. This
         increase in fiber meters shipped was a result of a 3.3 million increase
         in multimode fiber meters shipped and an 8.4 million increase in
         single-mode fiber meters shipped.

         Management believes that the Company's business will grow as the global
         market for fiber optic cable used for moderate distance applications
         expands. Management anticipates that new electronic communication
         devices will continue to become more reliant on fiber optic technology
         to achieve improved performance. Additionally, the Company expects new
         markets for fiber optic cable to emerge as fiber optic sensors are
         developed for production plant automation, smart highways, security
         applications, and other specialty applications. Management believes the
         Company's unique technological background and specialty market
         expertise should assist the Company in capturing its share of any
         increase in the global market for fiber optic cable used for moderate
         distance applications and contribute to future

                                       17

<PAGE>



         earnings growth for the Company. The Company also intends to use its
         existing product line to make inroads into other markets such as
         moderate distance applications for single-mode telecommunications and
         cable television.

         Gross Profit Margin

         Cost of goods sold consists of the cost of materials, compensation
         costs and overhead related to the Company's manufacturing operations.
         The Company's gross profit margin (gross profit as a percentage of net
         sales) increased to 47.0 percent in fiscal 2000 from 45.7 percent in
         fiscal 1999. This slight increase was due to reduced raw fiber prices
         and the impact of the decrease in the ratio of large orders and the
         decrease in the ratio of net sales attributable to the Company's
         distributors during the year. During fiscal 2000, net sales to
         distributors approximated 58 percent versus 63 percent for the same
         period in 1999. During fiscal 2000, sales from orders $50,000 or more
         approximated 11 percent of net sales compared to 15 percent for fiscal
         1999. Discounts on large orders and on sales to distributors are
         generally greater than for sales to the rest of the Company's customer
         base.

         The Company's gross profit margin increased to 45.7 percent in fiscal
         1999 from 42.0 percent in fiscal 1998. This increase was due to reduced
         raw fiber prices, partially offset by an increase in the ratio of net
         sales attributable to the Company's distributors during the period as
         compared to total net sales. During fiscal 1999, net sales to
         distributors approximated 63 percent versus 62 percent for the same
         period in 1998. During fiscal 1999, sales from orders $50,000 or more
         approximated 15 percent compared to 18 percent for fiscal 1998.

         Selling, General and Administrative Expenses

         Selling, general and administrative expenses consist of the
         compensation costs (including sales commissions) for sales and
         marketing personnel, shipping costs, travel expenses, customer support
         expenses, trade show expenses, advertising, the compensation cost for
         administration, finance and general management personnel, as well as
         legal and accounting fees. Selling, general and administrative expenses
         as a percentage of net sales were 25.8 percent in fiscal 2000 compared
         to 21.3 percent in fiscal 1999. This higher percentage reflects the
         fact that net sales for fiscal 2000 increased 14.8 percent while
         selling, general and administrative expenses increased 39.1 percent
         compared to fiscal 1999. Selling, general and administrative expenses
         as a percentage of net sales increased largely as a result of an
         increase in the allowance for doubtful accounts of $1.6 million. This
         increase in the allowance for doubtful accounts is attributable to a
         $1.8 million specific reserve for estimated uncollectible accounts
         receivable from one of the Company's major distributors that filed for
         bankruptcy subsequent to October 31, 2000. Other factors that
         contributed to the increase in selling, general and administrative
         expenses as a percentage of net sales in fiscal 2000 include an
         increase in the Company's sales force, the continued expansion of
         marketing efforts, and an increase in legal fees associated with a
         lawsuit filed by the Equal Employment Opportunity Commission (EEOC)
         against the Company and with several other EEOC charges.

         Selling, general and administrative expenses as a percentage of net
         sales were 21.3 percent in fiscal 1999 compared to 19.6 percent in
         fiscal 1998. This higher percentage reflects the fact that net sales
         for fiscal 1999 were comparable to fiscal 1998, while selling, general
         and administrative expenses increased 8.6 percent, due primarily to
         increased marketing efforts.



                                       18

<PAGE>



         Other Income (Expense)

         Other income, net increased $251,000 to $417,000 for fiscal 2000
         compared to $166,000 for the same period in 1999. During fiscal 2000,
         the Company began investing in trading securities and has recognized
         related gains on trading securities, net, of $289,000 in other income
         for fiscal 2000. The increase in other income, net resulting from gains
         on trading securities, net, was partially offset by interest expense of
         $57,000 on short-term margin borrowings payable to the investment
         broker related to the trading securities. Although the Company actively
         purchases and sells trading securities in order to realize such gains,
         it should not be expected that these gains will be recurring.

         Income Before Income Tax Expense

         Income before income tax expense of $12.7 million in fiscal 2000
         increased $215,000 compared to fiscal 1999. This 1.7 percent increase
         was primarily due to increases in sales volume, gross profit margin,
         and other income, net, partially offset by the $4.2 million increase in
         selling, general and administrative expenses.

         Income before income tax expense of $12.5 million in fiscal 1999
         increased $1.1 million compared to fiscal 1998. This 10.0 percent
         increase was primarily due to the increase in gross profit margin,
         partially offset by the $859,000 increase in selling, general and
         administrative expenses.

         Income Tax Expense

         The statements of income for the years ended October 31, 2000, 1999 and
         1998 include income tax expense at effective tax rates of 35.2 percent,
         33.7 percent and 36.1 percent, respectively. Fluctuations in the
         Company's effective tax rates are due primarily to the amount and
         timing of the tax benefit related to the Company's foreign sales
         corporation.

         Net Income

         Net income for fiscal 2000 and 1999 was $8.3 million. Net income
         decreased $50,000 due to the increase in selling, general and
         administrative expenses and the $265,000 increase in income tax
         expense, partially offset by the increases in sales volume, gross
         profit margin and other income, net.

         Net income for fiscal 1999 was $8.3 million compared to $7.3 million
         for fiscal 1998. Net income increased $1.0 million due to the increase
         in gross profit margin, partially offset by the increase in selling,
         general and administrative expenses and the $107,000 increase in income
         tax expense.


         FINANCIAL CONDITION

         Total assets at October 31, 2000 were $52.7 million, an increase of
         $15.2 million, or 40.5 percent from October 31, 1999. This increase was
         primarily due to the Company investing its cash and cash equivalents on
         hand at October 31, 1999, as well as cash flows from operating income
         generated during fiscal 2000 in trading securities. In addition,
         realized gains from these trading activities were reinvested during
         fiscal 2000. As a result, cash and cash equivalents have decreased $5.4
         million and trading securities have increased $18.0 million. Trade
         accounts receivable, net increased 11.0 percent from $10.2 million at
         October 31, 1999 to $11.4 million at October 31, 2000 and inventories
         decreased 13.5 percent from $8.8 million at October 31, 1999 to $7.6
         million at October 31, 2000. The increase in trade accounts receivable
         and the decrease in inventories are primarily attributable to increased
         sales volume. Income taxes refundable increased to $1.2 million at
         October 31, 2000. The increase results primarily from the tax benefit
         of disqualifying disposition of stock options exercised. Property and
         equipment, net, increased 5.8 percent from $10.8 million at October 31,
         1999 to $11.5 million at October 31, 2000. This increase

                                       19

<PAGE>



         results from capital expenditures related to facilities and equipment
         totaling $1,462,000, partially offset by depreciation expense of
         $825,000.

         Total stockholders' equity at October 31, 2000 increased $10.7 million,
         or 32.5 percent from October 31, 1999. Net income retained, proceeds
         received from the exercise of employee stock options of $1.0 million
         and an increase in paid-in capital of $1.4 million resulting from the
         tax benefit of disqualifying disposition of stock options exercised
         accounted for the majority of this increase. During fiscal 2000,
         employees realized gains on the premature disposition of stock options
         exercised of approximately $3.6 million. The $1.4 million tax benefit
         to the Company of these gains has been reflected as an increase in
         paid-in capital.


         LIQUIDITY AND CAPITAL RESOURCES

         During fiscal 2000 and 1999, the Company's primary capital needs have
         been to fund working capital requirements and capital expenditures as
         needed. The Company's primary source of financing has been cash
         provided from operations; however, the Company does maintain bank lines
         of credit as described below. There was no balance outstanding under
         the lines of credit as of the end of fiscal 2000 or 1999.

         Under a loan agreement with its bank dated March 10, 1999, the Company
         has a $5 million secured revolving line of credit available for general
         corporate purposes and a $10 million secured revolving line of credit
         available to fund potential acquisitions, mergers and joint ventures.
         The lines of credit bear interest at 1.50 percent above the monthly
         LIBOR rate and are equally and ratably secured by the Company's
         accounts receivable, contract rights, inventory, furniture and
         fixtures, machinery and equipment and general intangibles. The lines of
         credit will expire on February 28, 2001, unless renewed or extended. As
         of the date hereof, the Company has no additional material sources of
         financing. The Company believes that its cash flow from operations,
         liquidation of trading securities and available lines of credit will be
         adequate to fund its operations for at least the next twelve months.

         Cash flows used in operations were approximately $5.0 million for
         fiscal 2000. Cash flows provided by operations were approximately $11.9
         million and $9.6 million for fiscal 1999 and 1998, respectively. For
         fiscal 2000, cash flows used in operations were primarily due to the
         purchase of approximately $18.5 million in trading securities, an
         increase in trade accounts receivable of $3.0 million, and a decrease
         in accounts payable and accrued expenses of $1.1 million, partially
         offset by cash provided by operating income, realized net gains on
         trading securities of $788,000, a decrease in inventories of $1.2
         million and an increase in payable to investment broker of $5.7
         million. Cash flows from operations in fiscal 1999 were primarily
         provided by operating income, a decrease in inventory of $1.2 million
         and an increase in accounts payable and accrued expenses of $1.3
         million. Cash flows from operations in fiscal 1998 were primarily
         provided by operating income and a decrease in inventory of $2.1
         million. In 1998, the Company reduced its inventory of optical fiber
         due to anticipated continued reductions in raw fiber prices.

         Net cash used in investing activities totaled $1.4 million for fiscal
         2000 and was primarily for expenditures related to facilities and
         equipment of $1.3 million and increase in cash surrender value of life
         insurance of $91,000. Net cash used in investing activities in fiscal
         1999 totaled $553,000 and was primarily for expenditures related to
         facilities and equipment of $401,000 and increase in cash surrender
         value of life insurance of $171,000. Net cash used in investing
         activities in fiscal 1998 was primarily for expenditures related to
         facilities and equipment and was $622,000. In October 2000, the Company
         entered into agreements to purchase certain machinery and equipment
         totaling approximately $872,000. The machinery and equipment is
         expected to be delivered and installed by the end of July 2001. Total
         remaining commitments under the machinery and equipment purchase
         agreements as of October 31, 2000 approximated $712,000. There are no
         other material commitments for capital expenditures as of October 31,
         2000.

                                       20

<PAGE>



         Net cash provided by financing activities was $1.0 million for fiscal
         2000 and related to proceeds received from the exercise of employee
         stock options. Net cash used in financing activities was $5.7 million
         and $8.8 million in fiscal 1999 and 1998, respectively. The net cash
         used in financing activities in fiscal 1999 consisted of the repurchase
         of common stock in the amount of $5.9 million, offset by proceeds
         received from the exercise of employee stock options of $200,000. The
         net cash used in financing activities in fiscal 1998 consisted of a
         repurchase of common stock in the amount of $9 million, offset by
         proceeds received from the exercise of employee stock options of
         $198,000.

         On September 27, 2000, the Equal Employment Opportunity Commission
         filed a lawsuit under Title VII of the Civil Rights Act against the
         Company in the United States District Court for the Western District of
         Virginia alleging a pattern or practice of discrimination on the bases
         of gender and race. The lawsuit seeks injunctive and other relief and
         damages in an unspecified amount. Management intends to vigorously
         defend the lawsuit on the merits. While the ultimate resolution of this
         lawsuit cannot be determined, management does not expect that its
         resolution will have a material adverse effect on the financial
         condition or business of the Company.

         The Company's Board of Directors has authorized the repurchase of up to
         $20 million of the Company's common stock in the open market or in
         privately negotiated transactions. Through October 31, 2000, the
         Company has repurchased approximately $14.9 million of its common stock
         in such transactions since the inception of the Company's share
         repurchase program in October 1997. The repurchases were funded through
         cash flows from operations. The Company may use excess working capital
         and other sources as appropriate to finance the remaining share
         repurchase program.

         On August 31, 2000, the Company's Board of Directors approved a 3-for-2
         stock split effected in the form of a stock dividend of one share paid
         on September 28, 2000, upon each two shares held by stockholders of
         record at the close of business on September 8, 2000. The Company's
         stock began trading ex-dividend on September 29, 2000. All references
         to share and per share data, except for references to authorized
         shares, contained elsewhere in this annual report have been
         retroactively adjusted to reflect the impact of the approved stock
         dividend.

         On November 30, 2000, the Board of Directors approved grants of stock
         options for a total of 500,000 shares effective December 1, 2000, under
         the Company's 1996 Stock Incentive Plan. The per share exercise price
         of $10.688 associated with these stock options was equal to the fair
         market value of the Company's common stock on the date of grant.


         NEW ACCOUNTING STANDARDS

         In June 1998, the Financial Accounting Standards Board (FASB) issued
         Statement of Financial Accounting Standards (SFAS) No. 133, ACCOUNTING
         FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. SFAS No. 133
         establishes accounting and reporting standards for derivative
         instruments, including certain derivative instruments embedded in
         other contracts, and for hedging activities. In June 1999, the FASB
         issued SFAS No. 137, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING
         ACTIVITIES - DEFERRAL OF THE EFFECTIVE DATE OF FASB STATEMENT NO. 133.
         SFAS No. 137 defers the effective date of SFAS No. 133 to apply to all
         fiscal quarters of all fiscal years beginning after June 15, 2000. In
         June 2000, the FASB issued SFAS No. 138, ACCOUNTING FOR CERTAIN
         DERIVATIVE INSTRUMENTS AND CERTAIN HEDGING ACTIVITIES, an amendment of
         FASB Statement No. 133. SFAS No. 138 amends SFAS No. 133 for a limited
         number of issues that have caused application difficulties. The
         adoption of SFAS No. 133, as amended, as of November 1, 2000, did not
         have any effect on the financial position, results of operations or
         liquidity of the Company.

         SFAS No. 140, ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL
         ASSETS AND EXTINGUISHMENTS OF LIABILITIES, A REPLACEMENT OF FASB
         STATEMENT NO. 125, supercedes and replaces the guidance in SFAS No.

                                       21

<PAGE>



         125, ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND
         EXTINGUISHMENTS OF LIABILITIES. SFAS No. 140 revises the standards for
         accounting for securitizations and other transfers of financial assets
         and collateral and requires certain disclosures, but it carries over
         most of the provisions of SFAS No. 125 without reconsideration. SFAS
         No. 140 is effective for transfers and servicing of financial assets
         and extinguishments of liabilities that occur after March 31, 2001, and
         for recognition and reclassification of collateral and for disclosures
         relating to securitization transactions and collateral for fiscal years
         ending after December 15, 2000. Disclosures about securitization and
         collateral accepted need not be reported for periods ending on or
         before December 15, 2000 for which financial statements are presented
         for comparative purposes. Management believes the adoption of SFAS No.
         140 will not have a significant effect on the Company's financial
         statements.

         As of October 31, 2000, there are no other new accounting standards
         issued, but not yet adopted by the Company, which are expected to be
         applicable to the Company's financial position, operating results or
         financial statement disclosures.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
-------- ----------------------------------------------------------

         The Company does not engage in derivative financial instruments or
         derivative commodity instruments. As of October 31, 2000, the Company's
         financial instruments are not exposed to significant market risk due to
         interest rate risk, foreign currency exchange risk or commodity price
         risk. However, as of October 31, 2000, the Company's trading
         securities, which consist of shares in a stock index mutual fund
         concentrated in the technology industry sector, are exposed to equity
         price risk. As of October 31, 2000, the Company's trading securities,
         valued at approximately $18.0 million, have experienced a 2.7 percent
         decline in value since the date of purchase. In addition, subsequent to
         October 31, 2000 through January 24, 2001, the Company has continued to
         purchase and sell these trading securities and as a result has recorded
         realized and unrealized losses for the period from November 1, 2000
         through January 24, 2001 in the amount of approximately $3.3 million.
         It is reasonably possible that the price of these trading securities
         could continue to experience a further adverse change in the near term.
         For illustration purposes, assuming a 30 percent further adverse change
         in the fund's equity price subsequent to January 24, 2001, the
         Company's trading securities would decrease in value by an additional
         $5.0 million, based on the value of the Company's portfolio of
         approximately $16.5 million as of January 24, 2001. This assumption is
         not necessarily indicative of future performance and actual results may
         differ materially.




                                       22

<PAGE>



Item 8.  Financial Statements and Supplementary Data.
-------  -------------------------------------------

                            OPTICAL CABLE CORPORATION
                                    INDEX TO
                              FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES



         Financial Statements:                                             PAGE

             Independent Auditors' Report....................................24

             Balance Sheets as of October 31, 2000 and 1999..................25

             Statements of Income for the Years Ended October 31,
                 2000, 1999 and 1998.........................................26

             Statements of Stockholders' Equity for the Years Ended
                 October 31, 2000, 1999 and 1998.............................27

             Statements of Cash Flows for the Years Ended October 31,
                 2000, 1999 and 1998.........................................28

             Notes to Financial Statements...................................29


         Financial Statement Schedules:

         All schedules are omitted as the required information is inapplicable
         or the information is presented in the financial statements or related
         notes thereto.

                                       23

<PAGE>



                          INDEPENDENT AUDITORS' REPORT



The Board of Directors and Stockholders
Optical Cable Corporation:


We have audited the accompanying balance sheets of Optical Cable Corporation as
of October 31, 2000 and 1999, and the related statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended October 31, 2000. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Optical Cable Corporation as of
October 31, 2000 and 1999, and the results of its operations and its cash flows
for each of the years in the three-year period ended October 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America.


                                    KPMG LLP


Roanoke, Virginia
December 8, 2000


                                       24

<PAGE>

<TABLE>
<CAPTION>



                                               OPTICAL CABLE CORPORATION
                                                    Balance Sheets
                                               October 31, 2000 and 1999
                                                                                                 OCTOBER 31,
                                                                                       --------------------------------
                                       ASSETS                                               2000              1999
                                                                                       --------------    --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Current assets:
   Cash and cash equivalents                                                          $     1,458,896   $     6,816,678
   Trading securities                                                                      17,982,830              ----
   Trade accounts receivable, net of allowance for doubtful
     accounts of $1,909,069 in 2000 and $316,000 in 1999                                   11,357,522        10,230,717
   Income taxes refundable                                                                  1,162,118              ----
   Other receivables                                                                          362,000           280,219
   Due from employees                                                                           2,890             8,100
   Note receivable                                                                               ----            61,100
   Inventories                                                                              7,572,153         8,754,423
   Prepaid expenses                                                                           112,794           106,536
   Deferred income taxes                                                                      959,665           206,652
                                                                                       --------------    --------------

              Total current assets                                                         40,970,868        26,464,425

Note receivable, noncurrent                                                                      ----            32,505
Other assets, net                                                                             261,937           188,328
Property and equipment, net                                                                11,455,372        10,826,331
                                                                                       --------------    --------------

              Total assets                                                            $    52,688,177   $    37,511,589
                                                                                       ==============    ==============

                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses                                              $     2,479,116   $     3,370,244
   Accrued compensation and payroll taxes                                                     847,572           692,678
   Payable to investment broker                                                             5,658,574              ----
   Income taxes payable                                                                          ----           421,803
                                                                                       --------------    --------------

              Total current liabilities                                                     8,985,262         4,484,725

Deferred income taxes                                                                         195,085           179,789
                                                                                       --------------    --------------

              Total liabilities                                                             9,180,347         4,664,514
                                                                                       --------------    --------------

Stockholders' equity:
   Preferred stock, no par value, authorized 1,000,000 shares;
     none issued and outstanding                                                                 ----              ----
   Common stock, no par value, authorized 100,000,000
     shares; issued and outstanding 56,391,993 shares in 2000
     and 56,121,407 shares in 1999                                                          5,179,295         4,128,316
   Paid-in capital                                                                          1,714,284           359,566
   Retained earnings                                                                       36,614,251        28,359,193
                                                                                       --------------    --------------

              Total stockholders' equity                                                   43,507,830        32,847,075

Commitments and contingencies
                                                                                       --------------    --------------

              Total liabilities and stockholders' equity                              $    52,688,177   $    37,511,589
                                                                                       ==============    ==============
</TABLE>

See accompanying notes to financial statements.


                                       25

<PAGE>


<TABLE>
<CAPTION>


                                               OPTICAL CABLE CORPORATION
                                                 Statements of Income
                                      Years Ended October 31, 2000, 1999 and 1998

                                                                              YEARS ENDED OCTOBER 31,
                                                             ----------------------------------------------------------
                                                                   2000                 1999                 1998
                                                             ----------------     ----------------     ----------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net sales                                                   $      58,218,994    $      50,698,637    $      50,588,893
Cost of goods sold                                                 30,877,688           27,547,022           29,329,822
                                                             ----------------     ----------------     ----------------

         Gross profit                                              27,341,306           23,151,615           21,259,071

Selling, general and administrative expenses                       15,024,198           10,798,643            9,939,258
                                                             ----------------     ----------------     ----------------

         Income from operations                                    12,317,108           12,352,972           11,319,813

Other income (expense):
   Gains on trading securities, net                                   288,667                 ----                 ----
   Interest income                                                    230,038              201,708               56,260
   Interest expense                                                   (57,084)                ----                 (505)
   Other, net                                                         (45,015)             (35,944)               1,891
                                                             ----------------     ----------------     ----------------

         Other income, net                                            416,606              165,764               57,646
                                                             ----------------     ----------------     ----------------

         Income before income tax expense                          12,733,714           12,518,736           11,377,459

Income tax expense                                                  4,478,656            4,214,096            4,107,495
                                                             ----------------     ----------------     ----------------

         Net income                                         $       8,255,058    $       8,304,640    $       7,269,964
                                                             ================     ================     ================

Net income per share:
   Net income per common share                              $           0.147    $           0.147    $           0.127
                                                             ================     ================     ================

   Net income per common share - assuming dilution          $           0.145    $           0.146    $           0.125
                                                             ================     ================     ================
</TABLE>

See accompanying notes to financial statements.



                                       26

<PAGE>

<TABLE>
<CAPTION>



                                                OPTICAL CABLE CORPORATION
                                            Statements of Stockholders' Equity
                                       Years Ended October 31, 2000, 1999 and 1998


                                              COMMON STOCK                                                     TOTAL
                                   ----------------------------------      PAID-IN          RETAINED        STOCKHOLDERS'
                                       SHARES             AMOUNT           CAPITAL          EARNINGS           EQUITY
                                   ---------------   ----------------   --------------   ---------------   ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Balances at October 31, 1997           58,013,124   $     18,594,116   $        ----    $  12,784,589      $ 31,378,705

Exercise of employee stock
   options ($1.67 per share)              119,025            198,375            ----             ----           198,375
Tax benefit of disqualifying
   disposition of stock options
   exercised                                 ----               ----         150,359             ----           150,359
Repurchase of common stock
   (at cost)                           (1,313,595)        (9,006,210)           ----             ----        (9,006,210)
Net income                                   ----               ----            ----        7,269,964         7,269,964
                                   ---------------   ----------------   --------------   ---------------   ---------------

Balances at October 31, 1998           56,818,554          9,786,281         150,359       20,054,553        29,991,193

Exercise of employee stock
   options ($1.67 per share)              119,700            199,500            ----             ----           199,500
Tax benefit of disqualifying
   disposition of stock options
   exercised                                 ----               ----         209,207             ----           209,207
Repurchase of common stock
   (at cost)                             (816,847)        (5,857,465)           ----             ----        (5,857,465)
Net income                                   ----               ----            ----        8,304,640         8,304,640
                                   ---------------   ----------------   --------------   ---------------   ---------------

Balances at October 31, 1999           56,121,407          4,128,316         359,566       28,359,193        32,847,075

Exercise of employee stock
   options ($3.86 per share)              268,336          1,036,916            ----             ----         1,036,916
Restricted stock award ($6.25
   per share)                               2,250             14,063            ----             ----            14,063
Tax benefit of disqualifying
   disposition of stock options
   exercised                                 ----               ----       1,354,718             ----         1,354,718
Net income                                   ----               ----            ----        8,255,058         8,255,058
                                   ---------------   ----------------   --------------   ---------------   ---------------

Balances at October 31, 2000           56,391,993   $      5,179,295   $   1,714,284     $ 36,614,251      $ 43,507,830
                                   ===============   ================   ==============   ===============   ===============
</TABLE>


See accompanying notes to financial statements.



                                       27

<PAGE>
<TABLE>
<CAPTION>




                                               OPTICAL CABLE CORPORATION
                                                Statements of Cash Flows
                                      Years Ended October 31, 2000, 1999 and 1998
                                                                                   YEARS ENDED OCTOBER 31,
                                                                      --------------------------------------------------
                                                                           2000              1999              1998
                                                                      ---------------   ---------------   --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Cash flows from operating activities:
   Net income                                                        $      8,255,058  $      8,304,640  $     7,269,964
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization                                          841,646           764,652          787,674
       Bad debt expense                                                     2,018,128            87,490           88,005
       Deferred income tax expense (benefit)                                 (737,717)           67,754          (77,515)
       Loss on disposal of property and equipment                               7,807              ----            2,669
       Tax benefit of disqualifying disposition of stock
         options exercised                                                  1,354,718           209,207          150,359
       Stock-based compensation expense                                        14,063              ----             ----
       Unrealized loss on trading securities, net                             499,755              ----             ----
       (Increase) decrease in:
         Trading securities                                               (18,482,585)             ----             ----
         Trade accounts receivable                                         (3,051,328)         (417,913)        (169,428)
         Income taxes refundable                                           (1,162,118)             ----             ----
         Other receivables                                                    (81,781)           14,980          244,903
         Due from employees                                                     5,210            (2,511)          (2,055)
         Inventories                                                        1,182,270         1,212,589        2,052,431
         Prepaid expenses                                                      (6,258)          (10,770)          25,280
       Increase (decrease) in:
         Accounts payable and accrued expenses                             (1,053,960)        1,328,540         (395,330)
         Accrued compensation and payroll taxes                               154,894            36,650           43,292
         Payable to investment broker                                       5,658,574              ----             ----
         Income taxes payable                                                (421,803)          310,354         (453,550)
                                                                      ---------------   ---------------   --------------

              Net cash provided by (used in) operating activities          (5,005,427)       11,905,662        9,566,699
                                                                      ---------------   ---------------   --------------

Cash flows from investing activities:
   Purchase of property and equipment                                      (1,298,717)         (400,714)        (622,394)
   Cash surrender value of life insurance                                     (90,554)         (171,382)            ----
   Collection from note receivable                                               ----            18,800             ----
                                                                      ---------------   ---------------   --------------

              Net cash used in investing activities                        (1,389,271)         (553,296)        (622,394)
                                                                      ---------------   ---------------   --------------

Cash flows from financing activities:
   Repurchase of common stock                                                    ----        (5,857,465)      (9,006,210)
   Proceeds from exercise of employee stock options                         1,036,916           199,500          198,375
                                                                      ---------------   ---------------   --------------

              Net cash provided by (used in) financing activities           1,036,916        (5,657,965)      (8,807,835)
                                                                      ---------------   ---------------   --------------

Net increase (decrease) in cash and cash equivalents                       (5,357,782)        5,694,401          136,470

Cash and cash equivalents at beginning of year                              6,816,678         1,122,277          985,807
                                                                      ---------------   ---------------   --------------

Cash and cash equivalents at end of year                             $      1,458,896  $      6,816,678  $     1,122,277
                                                                      ===============   ===============   ==============

Supplemental Disclosure of Cash Flow Information:
   Cash payments for interest                                        $         57,084  $           ----  $           505
                                                                      ===============   ===============   ==============

   Income taxes paid                                                 $      5,445,576  $      3,615,300  $     4,488,201
                                                                      ===============   ===============   ==============

   Noncash investing and financing activities:
     Capital expenditures accrued in accounts payable                $        162,832  $         89,344  $          ----
                                                                      ===============   ===============   ==============

     Trade accounts receivable financed as note receivable           $           ----  $        112,405  $          ----
                                                                      ===============   ===============   ==============
</TABLE>

See accompanying notes to financial statements.

                                       28

<PAGE>



                            OPTICAL CABLE CORPORATION
                          Notes to Financial Statements
                   Years Ended October 31, 2000, 1999 and 1998

(1)      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (a)      DESCRIPTION OF BUSINESS

                  Optical Cable Corporation (the "Company") manufactures and
                  markets a broad range of fiber optic cables for "high
                  bandwidth" transmission of data, video and audio
                  communications over moderate distances. The Company's fiber
                  optic cables are sold nationwide and in over 70 foreign
                  countries (also see note 9).

         (b)      CASH EQUIVALENTS

                  At October 31, 2000 and 1999, cash equivalents consist of
                  $1,171,777 and $6,755,814, respectively, of overnight
                  repurchase agreements and money market mutual funds. For
                  purposes of the statements of cash flows, the Company
                  considers all highly liquid debt instruments with original
                  maturities of three months or less to be cash equivalents.

         (c)      TRADING SECURITIES

                  Trading securities are recorded at fair value, which is based
                  on quoted market prices. Purchases and sales of trading
                  securities are recognized on a trade-date basis, the date the
                  order to buy or sell is executed. The Company's trading
                  securities are bought and held principally for the purpose of
                  selling them in the near term. Unrealized holding gains and
                  losses for trading securities are included in net income. The
                  amount of net unrealized holding loss that has been included
                  in net income for the year ended October 31, 2000 was
                  $499,755. Net realized gains or losses are determined on the
                  first-in, first-out cost method. As of October 31, 2000, the
                  Company's trading securities consist of shares in a stock
                  index mutual fund concentrated in the technology sector.

                  As of October 31, 2000, the Company's trading securities have
                  experienced a 2.7 percent decline in value since the date of
                  purchase. In addition, subsequent to October 31, 2000 through
                  December 8, 2000, the market value of the Company's trading
                  securities held as of October 31, 2000 has declined
                  approximately 17 percent, or approximately $3.0 million. It is
                  reasonably possible that the price of these trading
                  securities, valued at $17,982,830 as of October 31, 2000,
                  could continue to experience an adverse change in the near
                  term.

                  At October 31, 2000, the Company had short-term margin
                  borrowings of $5,658,574 payable to investment broker related
                  to the trading securities. The margin account incurs interest
                  at rates ranging from the Call Money rate plus .25 percent to
                  the Call Money rate plus 2.50 percent, depending on the
                  outstanding balance of margin borrowings (8.50 percent as of
                  October 31, 2000). Obligations of the Company to the
                  investment broker are collateralized by the trading
                  securities.



                                       29

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998



         (d)      INVENTORIES

                  Inventories of raw materials and production supplies are
                  stated at the lower of cost (specific identification for
                  optical fibers and first-in, first-out for other raw materials
                  and production supplies) or market. Inventories of work in
                  process and finished goods are stated at average cost, which
                  includes raw materials, direct labor and manufacturing
                  overhead.

         (e)      PROPERTY AND EQUIPMENT

                  Property and equipment are stated at cost. Depreciation and
                  amortization are provided for using both straight-line and
                  declining balance methods over the estimated useful lives of
                  the assets. Estimated useful lives are thirty-nine years for
                  buildings and improvements and five to seven years for
                  machinery and equipment and furniture and fixtures.

         (f)      REVENUE RECOGNITION

                  Revenue is recognized at the time of product shipment or
                  delivery to the customer, based on shipping terms.

         (g)      SHIPPING AND HANDLING COSTS

                  Shipping and handling costs include the costs incurred to
                  physically move finished goods from the Company's warehouse to
                  the customers designated location and the costs to store, move
                  and prepare the finished goods for shipment. All amounts
                  billed to a customer in a sale transaction related to shipping
                  and handling is classified as sales revenue. Shipping and
                  handling costs of approximately $1,948,000, $1,425,000 and
                  $1,195,000 are included in selling, general and administrative
                  expenses for the years ended October 31, 2000, 1999 and 1998,
                  respectively.

         (h)      INCOME TAXES

                  Income taxes are accounted for under the asset and liability
                  method. Deferred tax assets and liabilities are recognized for
                  the future tax consequences attributable to differences
                  between the financial statement carrying amounts of existing
                  assets and liabilities and their respective tax bases and
                  operating loss and tax credit carryforwards. Deferred tax
                  assets and liabilities are measured using enacted tax rates
                  expected to apply to taxable income in the years in which
                  those temporary differences are expected to be recovered or
                  settled. The effect on deferred tax assets and liabilities of
                  a change in tax rates is recognized in income in the period
                  that includes the enactment date.

         (i)      IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE
                  DISPOSED OF

                  The Company reviews long-lived assets and certain identifiable
                  intangibles for impairment whenever events or changes in
                  circumstances indicate that the carrying amount of an asset
                  may not be recoverable. Recoverability of assets to be held
                  and used is measured by a comparison of the carrying amount of
                  an asset to future undiscounted net cash flows expected to be
                  generated

                                       30

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998




                  by the asset. If such assets are considered to be impaired,
                  the impairment to be recognized is measured by the amount by
                  which the carrying amount of the assets exceed the fair value
                  of the assets. Assets to be disposed of are reported at the
                  lower of the carrying amount or fair value less costs to sell.

         (j)      STOCK OPTION PLAN

                  Prior to November 1, 1996, the Company accounted for its stock
                  option plan in accordance with the provisions of Accounting
                  Principles Board ("APB") Opinion No. 25, ACCOUNTING FOR STOCK
                  ISSUED TO EMPLOYEES, and related interpretations. As such,
                  compensation expense would be recorded on the date of grant
                  only if the current market price of the underlying stock
                  exceeded the exercise price. On November 1, 1996, the Company
                  adopted Statement of Financial Accounting Standards ("SFAS")
                  No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, which
                  permits entities to recognize as expense over the vesting
                  period the fair value of all stock-based awards on the date of
                  grant. Alternatively, SFAS No. 123 also allows entities to
                  continue to apply the provisions of APB Opinion No. 25 and
                  provide pro forma net income and pro forma earnings per share
                  disclosures for employee stock option grants made in 1995 and
                  future years as if the fair-value-based method defined in SFAS
                  No. 123 had been applied. The Company has elected to continue
                  to apply the provisions of APB Opinion No. 25 and provide the
                  pro forma disclosure provisions of SFAS No. 123.

         (k)      NET INCOME PER SHARE

                  Net income per common share excludes dilution and is computed
                  by dividing net income available to common stockholders by the
                  weighted-average number of common shares outstanding for the
                  period. Net income per common share - assuming dilution
                  reflects the potential dilution that could occur if securities
                  or other contracts to issue common stock were exercised or
                  converted into common stock or resulted in the issuance of
                  common stock that then shared in the net income of the
                  Company.

         (l)      COMPREHENSIVE INCOME

                  In June 1997, the Financial Accounting Standards Board issued
                  SFAS No. 130, REPORTING COMPREHENSIVE INCOME. SFAS No. 130
                  establishes standards for reporting and display of
                  comprehensive income and its components in a full set of
                  financial statements. SFAS No. 130 was issued to address
                  concerns over the practice of reporting elements of
                  comprehensive income directly in equity. This Statement
                  requires all items that are required to be recognized under
                  accounting standards as components of comprehensive income be
                  reported in a financial statement that is displayed in equal
                  prominence with the other financial statements. It does not
                  require a specific format for that financial statement but
                  requires that an enterprise display an amount representing
                  total comprehensive income for the period in that financial
                  statement.

                  SFAS No. 130 is applicable to all entities that provide a
                  full set of financial statements. Enterprises that have no
                  items of other comprehensive income in any period presented
                  are

                                       31

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


                  excluded from the scope of this Statement. SFAS No. 130 does
                  not have any effect on current or prior period financial
                  statement displays presented by the Company since the Company
                  has no items of other comprehensive income in any period
                  presented.

         (m)      USE OF ESTIMATES

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

         (n)      RECLASSIFICATIONS

                  Certain reclassifications have been made to the prior year's
                  financial statements to place them on a basis comparable with
                  the current year's financial statements.


(2)      ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

         A summary of changes in the allowance for doubtful accounts receivable
         for the years ended October 31, 2000, 1999 and 1998 follows (see also
         note 9):

<TABLE>
<CAPTION>

                                                                   YEARS ENDED OCTOBER 31,
                                                      --------------------------------------------------
                                                           2000              1999              1998
                                                      --------------    --------------    --------------
<S>                                                  <C>               <C>               <C>
Balance at beginning of year                         $       316,000   $       311,500   $       307,400
Bad debt expense                                           2,018,128            87,490            88,005
Losses charged to allowance                                 (453,049)          (84,633)          (90,147)
Recoveries added to allowance                                 27,990             1,643             6,242
                                                      --------------    --------------    --------------

Balance at end of year                               $     1,909,069   $       316,000   $       311,500
                                                      ==============    ==============    ==============
</TABLE>


(3)      INVENTORIES

         Inventories at October 31, 2000 and 1999 consist of the following:
<TABLE>
<CAPTION>


                                                                                  OCTOBER 31,
                                                                        -------------------------------
                                                                             2000             1999
                                                                        --------------   --------------
<S>                                                                    <C>              <C>
Finished goods                                                         $       808,271  $     2,976,426
Work in process                                                              3,487,611        2,306,209
Raw materials                                                                3,194,393        3,416,046
Production supplies                                                             81,878           55,742
                                                                        --------------   --------------
                                                                       $     7,572,153  $     8,754,423
                                                                        ==============   ==============
</TABLE>


                                       32

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


(4)      PROPERTY AND EQUIPMENT

         Property and equipment at October 31, 2000 and 1999 consists of the
         following:

<TABLE>
<CAPTION>

                                                                                   OCTOBER 31,
                                                                        ---------------------------------
                                                                             2000              1999
                                                                        ---------------   ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Land                                                                   $      2,745,327  $      2,745,327
Building and improvements                                                     6,896,842         6,893,642
Machinery and equipment                                                       6,676,960         5,424,594
Furniture and fixtures                                                          735,052           734,404
Construction in progress                                                        236,071           131,008
                                                                        ---------------   ---------------

         Total property and equipment, at cost                               17,290,252        15,928,975

Less accumulated amortization and depreciation                               (5,834,880)       (5,102,644)
                                                                        ---------------   ---------------

         Property and equipment, net                                   $     11,455,372  $     10,826,331
                                                                        ===============   ===============
</TABLE>

         In October 2000, the Company entered into agreements to purchase
         certain machinery and equipment totaling approximately $872,000. The
         machinery and equipment is expected to be delivered and installed by
         the end of July 2001. Total remaining commitments under the machinery
         and equipment purchase agreements as of October 31, 2000 approximated
         $712,000.


(5)      NOTES PAYABLE

         Under a loan agreement with its bank dated March 10, 1999, the Company
         has a $5 million secured revolving line of credit and a $10 million
         secured revolving line of credit. The Company's intention is that the
         $5 million line of credit be available to fund general corporate
         purposes and that the $10 million line of credit be available to fund
         potential acquisitions and joint ventures. The lines of credit bear
         interest at 1.50 percent above the monthly LIBOR rate (8.12 percent as
         of October 31, 2000) and are equally and ratably secured by the
         Company's accounts receivable, contract rights, inventory, furniture
         and fixtures, machinery and equipment and general intangibles. The
         lines of credit will expire on February 28, 2001, unless renewed or
         extended. While the lines of credit do not require a compensating
         balance that legally restricts the use of cash amounts, at the bank's
         request, the Company has agreed to maintain an unrestricted target cash
         balance of $125,000.


(6)      LEASES

         In August 1994, the Company entered into a four-year operating lease
         for computerized mailing and shipping equipment with an unrelated
         party. Rent expense under this lease amounted to $21,527 for the year
         ended October 31, 1998.

                                       33

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


(7)      RELATED PARTY AGREEMENTS

         Since February 1, 1995, the Company has entered into employment
         agreements with the individual who is the Company's Chairman, President
         and Chief Executive Officer and its previously sole stockholder which
         typically have a term of less than two years. Annual compensation under
         the agreements consists of salary payments equal to 1 percent of the
         previous fiscal year's net sales and provides for sales commissions
         equal to 1 percent of the positive difference between the current
         fiscal year's net sales and the prior fiscal year's net sales.
         Compensation under this agreement amounted to $582,190, $506,986 and
         $521,889 for the years ended October 31, 2000, 1999 and 1998,
         respectively.


(8)      EMPLOYEE BENEFITS

         The Company's independently administered self-insurance program
         provides health insurance coverage for employees and their dependents
         on a cost-reimbursement basis. Under the program, the Company is
         obligated for claims payments. A stop loss insurance contract executed
         with an insurance carrier covers claims in excess of $35,000 per
         covered individual and $813,716 in the aggregate per year. During the
         years ended October 31, 2000, 1999 and 1998, total claims expense of
         $925,347, $837,488 and $725,535, respectively, was incurred, which
         represents claims processed and an estimate for claims incurred but not
         reported. Effective January 1, 2001, the Company will no longer
         independently administer the health insurance coverage, but will
         contract for insurance coverage with a third-party administrator.

         Effective January 1, 1994, the Company adopted a 401(k) retirement
         savings plan. To become eligible for the plan, an employee must
         complete six months of service and be at least 21 years of age. The
         plan allows participants to contribute through salary reduction up to 7
         percent of their annual compensation on a pretax basis. Company
         matching contributions are two dollars for every one dollar contributed
         by an employee up to 4 percent of the employees' annual compensation.
         The Company made matching contributions to the plan of $406,934,
         $365,887 and $353,096 for the years ended October 31, 2000, 1999 and
         1998, respectively.

         The Company and its previously sole stockholder adopted on March 1,
         1996 a stock incentive plan which is called the Optical Cable
         Corporation 1996 Stock Incentive Plan (the "Plan"). The Plan is
         intended to provide a means for employees to increase their personal
         financial interest in the Company, thereby stimulating the efforts of
         these employees and strengthening their desire to remain with the
         Company through the use of stock incentives. The Company has reserved
         6,000,000 shares of common stock for issuance pursuant to incentive
         awards under the Plan. At October 31, 2000, there were 5,571,001
         additional shares available for grant under the Plan. Although not
         required under the Plan stock options granted to date have been granted
         at not less than fair market value on the date of grant. The options
         have terms ranging from 8.75 to 10 years and vest 25 percent after two
         years, 50 percent after three years, 75 percent after four years and
         100 percent after five years.

                                       34

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


         The per share weighted-average estimated fair value of stock options
         granted during 1997 and 1996 was $6.25 and $1.45, respectively, on the
         date of grant using the Black-Scholes option-pricing model with the
         following weighted-average assumptions: 1997 - expected cash dividend
         yield of zero percent, risk-free interest rate of 6.08 percent,
         expected volatility of 85.5 percent and an expected life of 8.75 years;
         1996 - expected cash dividend yield of zero percent, risk-free interest
         rate of 6.28 percent, expected volatility of 85.5 percent and an
         expected life of 10 years.

         The Company applies APB Opinion No. 25 in accounting for its Plan and,
         accordingly, no compensation cost has been recognized for its stock
         options in the financial statements. Had compensation cost for the
         Company's Plan been determined consistent with SFAS No. 123, the
         Company's net income and net income per share would have been reduced
         to the SFAS No. 123 pro forma amounts indicated below:
<TABLE>
<CAPTION>


                                                                      YEARS ENDED OCTOBER 31,
                                                          ------------------------------------------------
                                                               2000             1999             1998
                                                          --------------   --------------   --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Net income:
     As reported                                         $     8,255,058  $     8,304,640  $     7,269,964
                                                          ==============   ==============   ==============

     Pro forma                                           $     7,911,830  $     7,961,412  $     6,926,736
                                                          ==============   ==============   ==============

Net income per share:
     Net income per common share:
          As reported                                    $         0.147  $         0.147  $         0.127
                                                          ==============   ==============   ==============

     Pro forma                                           $         0.141  $         0.141  $         0.121
                                                          ==============   ==============   ==============

     Net income per common share - assuming
          dilution:
          As reported                                    $         0.145  $         0.146  $         0.125
                                                          ==============   ==============   ==============

          Pro forma                                      $         0.139  $         0.140  $         0.120
                                                          ==============   ==============   ==============
</TABLE>

         Stock option activity during the periods indicated is as follows:

<TABLE>
<CAPTION>

                                                                   NUMBER OF         WEIGHTED-AVERAGE
                                                                     SHARES           EXERCISE PRICE
                                                                 --------------    --------------------
<S>                <C> <C>                                             <C>             <C>
Balance at October 31, 1997                                            995,250         $     3.742

     Exercised                                                        (119,025)              1.667
     Forfeited                                                         (22,500)              6.267
                                                                 --------------

Balance at October 31, 1998                                            853,725               3.965

     Replacement options issued                                          3,449               7.250
     Exercised                                                        (119,700)              1.667
     Forfeited                                                         (26,250)              5.940
                                                                 --------------

Balance at October 31, 1999                                            711,224               4.280

</TABLE>

                                       35

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>


                                                                   NUMBER OF         WEIGHTED-AVERAGE
                                                                     SHARES           EXERCISE PRICE
                                                                 --------------    --------------------
<S>                                                                    <C>         <C>
     Replacement options issued                                        1,500       $        7.250
     Exercised                                                      (268,336)               3.864
     Forfeited                                                       (15,389)               6.018
                                                                 --------------

Balance at October 31, 2000, (124,499 options exercisable;
     215,550 options at exercise price of $1.67 per share
     with remaining contractual life of 5.5 years, and
     213,449 options at exercise price of $7.42 per share
     with remaining contractual life of 5.5 years)                   428,999       $        4.531
                                                                 ==============
</TABLE>

         No new stock options were granted during the fiscal years ended October
         31, 2000, 1999 and 1998. However, prior stock options granted have a
         replacement feature, whereby the participant automatically receives a
         replacement option to purchase additional shares of the Company's
         common stock equal to the number of shares surrendered, if any, to the
         Company by the participant in payment of the exercise price with
         respect to stock options exercised. Replacement options were issued
         under this replacement feature during the fiscal years ended October
         31, 1999 and 1998.

         On November 30, 2000, the Board of Directors approved grants of stock
         options for a total of 500,000 shares effective December 1, 2000 under
         the Company's 1996 Stock Incentive Plan. The per share exercise price
         of $10.688 associated with these stock options was equal to the fair
         market value of the Company's common stock on the date of grant.


(9)      BUSINESS AND CREDIT CONCENTRATIONS, MAJOR CUSTOMERS AND GEOGRAPHIC
         INFORMATION

         On November 1, 1998, the Company adopted SFAS No. 131, DISCLOSURES
         ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION. SFAS No. 131
         establishes standards for the way public business enterprises are to
         report information about operating segments in annual financial
         statements and requires those enterprises to report selected
         information about operating segments in interim financial reports. It
         also establishes standards for related disclosures about products and
         services, geographic areas and major customers.

         The Company has a single reportable segment for purposes of segment
         reporting pursuant to SFAS No. 131. In addition, the Company's fiber
         optic cable products are similar in nature. Therefore, the Company has
         disclosed enterprise-wide information about geographic areas and major
         customers below in accordance with the provisions of SFAS No. 131.

         The Company provides credit, in the normal course of business, to
         various commercial enterprises, governmental entities and
         not-for-profit organizations. Concentration of credit risk with respect
         to trade receivables is limited due to the Company's large number of
         customers. The Company also manages exposure to credit risk through
         credit approvals, credit limits and monitoring procedures.


                                       36

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


         Management believes that credit risks at October 31, 2000 and 1999 have
         been adequately provided for in the financial statements. As of October
         31, 2000 and 1999, there were no significant amounts receivable from
         any one customer other than those described below.

         For the year ended October 31, 2000, 28.0 percent or approximately
         $16,241,000 of net sales were attributable to two major domestic
         distributors. The combined related trade accounts receivable for these
         distributors at October 31, 2000 totaled approximately $3,468,000. The
         Company has specifically reserved $1,772,000 for estimated
         uncollectible accounts receivable from one of these major distributors
         that filed for bankruptcy subsequent to October 31, 2000. Bad debt
         expense related to this distributor has been included in selling,
         general and administrative expenses on the statement of income for the
         year ended October 31, 2000. Net sales attributable to this distributor
         approximated $8,995,000 for the year ended October 31, 2000. No single
         customer or other distributor accounted for more than 5 percent of net
         sales for the year ended October 31, 2000. As of October 31, 2000, no
         single customer or other distributor had an outstanding balance payable
         to the Company in excess of 5 percent of total stockholders' equity.

         For the year ended October 31, 1999, 30.6 percent or approximately
         $15,513,000 of net sales were attributable to two major domestic
         distributors. The combined related trade accounts receivable for these
         distributors at October 31, 1999 totaled approximately $3,294,000. No
         single customer or other distributor accounted for more than 5 percent
         of net sales for the year ended October 31, 1999. As of October 31,
         1999, no single customer or other distributor had an outstanding
         balance payable to the Company in excess of 5 percent of total
         stockholders' equity.

         For the year ended October 31, 1998, 27.3 percent or approximately
         $13,817,000 of net sales were attributable to two major domestic
         distributors. The combined trade accounts receivable for these
         distributors at October 31, 1998 totaled approximately $2,989,000. No
         single customer or other distributor accounted for more than 5 percent
         of net sales for the year ended October 31, 1998.

         For the years ended October 31, 2000, 1999 and 1998, approximately 79
         percent, 80 percent and 78 percent, respectively, of net sales were
         from customers located in the United States, while approximately 21
         percent, 20 percent and 22 percent, respectively, were from
         international customers. Net sales attributable to the United States
         and other foreign countries for the years ended October 31, 2000, 1999
         and 1998 were as follows:

<TABLE>
<CAPTION>

                                                                    YEARS ENDED OCTOBER 31,
                                                       --------------------------------------------------
                                                             2000             1999             1998
                                                       ----------------  ---------------  ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
United States                                         $      45,878,300 $     40,687,466 $     39,621,544
Australia                                                       801,641          702,780        1,570,536
Canada                                                        1,808,469        1,756,928          889,702
England                                                       1,163,587          694,680          987,154
Other foreign countries                                       8,566,997        6,856,783        7,519,957
                                                       ----------------  ---------------  ---------------

         Total net sales                              $      58,218,994 $     50,698,637 $     50,588,893
                                                       ================  ===============  ===============
</TABLE>


         None of the Company's long-lived assets are located outside the United
         States.

                                       37

<PAGE>

                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


(10)     INCOME TAXES

         Total income taxes for the years ended October 31, 2000, 1999 and 1998
         were allocated as follows:
<TABLE>
<CAPTION>
                                                                   YEARS ENDED OCTOBER 31,
                                                      --------------------------------------------------
                                                           2000              1999              1998
                                                      --------------    --------------    --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Income from operations                               $     4,478,656   $     4,214,096   $     4,107,495
Stockholders' equity, for disqualifying disposition
    of stock options exercised                            (1,354,718)         (209,207)         (150,359)
                                                      --------------    --------------    --------------

                                                     $     3,123,938   $     4,004,889   $     3,957,136
                                                      ==============    ==============    ==============
</TABLE>

         Income tax expense (benefit) attributable to income from operations for
         the years ended October 31, 2000, 1999 and 1998 consists of:
<TABLE>
<CAPTION>

YEAR ENDED OCTOBER 31, 2000                              CURRENT           DEFERRED           TOTAL
                                                      --------------    --------------    --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
U.S. Federal                                         $     4,667,627   $     (658,506)   $     4,009,121
State                                                        548,746          (79,211)           469,535
                                                      --------------    --------------    --------------

         Totals                                      $     5,216,373   $     (737,717)   $     4,478,656
                                                      ==============    ==============    ==============

YEAR ENDED OCTOBER 31, 1999                              CURRENT           DEFERRED           TOTAL
                                                      --------------    --------------    --------------

U.S. Federal                                         $     3,729,606   $       60,479    $     3,790,085
State                                                        416,736            7,275            424,011
                                                      --------------    --------------    --------------

         Totals                                      $     4,146,342   $       67,754    $     4,214,096
                                                      ==============    ==============    ==============

YEAR ENDED OCTOBER 31, 1998                              CURRENT           DEFERRED           TOTAL
                                                      --------------    --------------    --------------

U.S. Federal                                         $     3,733,231   $      (69,192)   $     3,664,039
State                                                        451,779           (8,323)           443,456
                                                      --------------    --------------    --------------

         Totals                                      $     4,185,010   $      (77,515)   $     4,107,495
                                                      ==============    ==============    ==============
</TABLE>

         Reported income tax expense for the years ended October 31, 2000, 1999
         and 1998 differs from the "expected" tax expense, computed by applying
         the U.S. Federal statutory income tax rate of 35 percent to income
         before income tax expense, as follows:

<TABLE>
<CAPTION>
                                                                   YEARS ENDED OCTOBER 31,
                                                      --------------------------------------------------
                                                           2000              1999              1998
                                                      --------------    --------------    --------------
<S>                                                  <C>               <C>               <C>
"Expected" tax expense                               $     4,456,800   $     4,381,558   $     3,982,111
Increase (reduction) in income tax expense
    resulting from:
        Foreign Sales Corporation benefit                   (201,098)         (326,662)         (122,282)
        State income taxes, net of federal benefits          295,853           254,359           288,822
        Other differences, net                               (72,899)          (95,159)          (41,156)
                                                      --------------    --------------    --------------

              Reported income tax expense            $     4,478,656   $     4,214,096   $     4,107,495
                                                      ==============    ==============    ==============
</TABLE>


                                       38

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


         The tax effects of temporary differences that give rise to significant
         portions of the Company's net deferred tax asset as of October 31, 2000
         and 1999 are presented below:

<TABLE>
<CAPTION>
                                                                                  OCTOBER 31,
                                                                        -------------------------------
                                                                             2000             1999
                                                                        --------------   --------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Deferred tax assets:
     Accounts receivable, due to allowance for doubtful accounts       $       718,312  $       118,911
     Inventories, due to additional costs inventoried for tax
        purposes pursuant to the Tax Reform Act of 1986                         66,070           71,564
     Self-insured health care costs, due to accrual for financial
        reporting purposes                                                      44,780           58,739
     Compensated absences due to accrual for financial reporting
        purposes                                                                49,594           48,812
     Unrealized loss on trading securities, net                                187,368             ----
     Other                                                                       4,205             ----
                                                                        --------------   --------------

            Total gross deferred tax assets                                  1,070,329          298,026

     Less valuation allowance                                                     ----             ----
                                                                        --------------   --------------

            Net deferred tax assets                                          1,070,329          298,026

Deferred tax liabilities:
     Plant and equipment, due to differences in depreciation and
        capital gain recognition                                              (195,085)        (179,789)
     Other receivables, due to accrual for financial reporting
        purposes                                                              (110,664)         (91,374)
                                                                        --------------   --------------

            Total gross deferred tax liabilities                              (305,749)        (271,163)
                                                                        --------------   --------------

            Net deferred tax asset                                     $       764,580  $        26,863
                                                                        ==============   ==============
</TABLE>

         Based on the Company's historical and current pretax earnings,
         management believes that it is more likely than not that the recorded
         deferred tax assets will be realized.


(11)     FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying amounts reported in the balance sheet for cash, cash
         equivalents, trade accounts receivable, other receivables, accounts
         payable and accrued expenses approximate fair value because of the
         short maturity of these instruments. For trading securities, fair value
         is based on quoted market prices.

         As of October 31, 1999, the carrying amount and fair value of the
         Company's note receivable were $93,605 and $86,250, respectively. The
         fair value of the note receivable was estimated by discounting the
         future cash flows of the instrument at an estimated interest rate for
         loans of similar terms to companies with comparable credit risk.

                                       39

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


(12)     NET INCOME PER SHARE

         The following is a reconciliation of the numerators and denominators of
         the net income per common share computations for the periods presented:
<TABLE>
<CAPTION>


                                                        NET INCOME          SHARES           PER SHARE
YEAR ENDED OCTOBER 31, 2000                            (NUMERATOR)      (DENOMINATOR)         AMOUNT
                                                      --------------   ----------------   ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net income per common share                          $     8,255,058         56,306,679   $         0.147
                                                                                          ===============
Effect of dilutive stock options                                ----            451,503
                                                      --------------   ----------------

Net income per common share - assuming dilution      $     8,255,058         56,758,182  $          0.145
                                                      ==============   ================   ===============

                                                        NET INCOME          SHARES           PER SHARE
YEAR ENDED OCTOBER 31, 1999                            (NUMERATOR)      (DENOMINATOR)         AMOUNT
                                                      --------------   ----------------   ---------------

Net income per common share                          $     8,304,640         56,503,964  $          0.147
                                                                                          ===============
Effect of dilutive stock options                                ----            360,933
                                                      --------------   ----------------

Net income per common share - assuming dilution      $     8,304,640         56,864,897  $          0.146
                                                      ==============   ================   ===============

                                                        NET INCOME          SHARES           PER SHARE
YEAR ENDED OCTOBER 31, 1998                            (NUMERATOR)      (DENOMINATOR)         AMOUNT
                                                      --------------   ----------------   ---------------

Net income per common share                          $     7,269,964         57,430,907  $          0.127
                                                                                          ===============
Effect of dilutive stock options                                ----            432,370
                                                      --------------   ----------------

Net income per common share - assuming dilution      $     7,269,964         57,863,277  $          0.125
                                                      ==============   ================   ===============
</TABLE>

         Stock options that could potentially dilute net income per common share
         in the future that were not included in the computation of net income
         per common share - assuming dilution because to do so would have been
         antidilutive totaled 341,250 for the year ended October 31, 1998. No
         such antidilutive stock options existed with respect to net income per
         common share - assuming dilution calculation for the years ended
         October 31, 2000 and 1999. See note 8 for discussion of stock options
         granted subsequent to October 31, 2000.


(13)     STOCKHOLDERS' EQUITY

         On August 31, 2000, the Company's Board of Directors approved a 3-for-2
         stock split effected in the form of a stock dividend of one share paid
         on September 28, 2000, upon each two shares held by stockholders of
         record at the close of business on September 8, 2000. The Company's
         stock began trading ex-dividend on September 29, 2000. All references
         to share and per share data, except for references to authorized
         shares, contained elsewhere in this annual report have been
         retroactively adjusted to reflect the impact of the approved stock
         dividend.

                                       40

<PAGE>


                            OPTICAL CABLE CORPORATION
                    Notes to Financial Statements (Continued)
                   Years Ended October 31, 2000, 1999 and 1998


         The Company's Board of Directors has authorized the repurchase of up to
         $20 million of the Company's common stock in the open market or in
         privately negotiated transactions. Through October 31, 2000, the
         Company has repurchased 2,130,443 shares of its common stock for
         $14,863,675 in such transactions since the inception of the Company's
         share repurchase program in October 1997.


(14)     CONTINGENCIES

         On September 27, 2000, the Equal Employment Opportunity Commission
         filed a lawsuit under Title VII of the Civil Rights Act against the
         Company in the United States District Court for the Western District of
         Virginia alleging a pattern or practice of discrimination on the bases
         of gender and race. The lawsuit seeks injunctive and other relief and
         damages in an unspecified amount. Management intends to vigorously
         defend the lawsuit on the merits. While the ultimate resolution of this
         lawsuit cannot be determined, management does not expect that its
         resolution will have a material adverse effect on the financial
         condition or business of the Company.

         From time to time, the Company is involved in various other claims and
         legal actions arising in the ordinary course of business. In the
         opinion of management, the ultimate disposition of these matters will
         not have a material adverse effect on the Company's financial position,
         results of operations or liquidity.


(15)     QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         The following is a summary of the unaudited quarterly results of
         operations for the years ended October 31, 2000 and 1999:

<TABLE>
<CAPTION>

                                                                  QUARTER ENDED
                                        ------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 2000               JANUARY 31        APRIL 30          JULY 31        OCTOBER 31
                                        ---------------  ---------------  ---------------  ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net sales                               $    11,346,235  $    13,028,310  $    16,650,975  $    17,193,474
Gross profit                                  5,205,115        5,909,092        7,652,197        8,574,902
Other income (expense), net                     532,545        1,386,149         (403,252)      (1,098,836)
Income before income taxes                    3,138,397        4,163,017        3,702,629        1,729,671
Net income                                    2,033,120        2,697,442        2,400,129        1,124,367
Net income per common share                       0.036            0.048            0.043            0.020
Net income per common share -
    assuming dilution                             0.036            0.048            0.042            0.019

</TABLE>
<TABLE>
<CAPTION>

                                                                  QUARTER ENDED
                                        ------------------------------------------------------------------
YEAR ENDED OCTOBER 31, 1999               JANUARY 31        APRIL 30          JULY 31        OCTOBER 31
                                        ---------------  ---------------   --------------  ---------------
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Net sales                               $    10,841,939  $    12,434,733   $   12,602,659  $    14,819,306
Gross profit                                  4,722,187        5,710,552        5,424,127        7,294,749
Income before income taxes                    2,252,663        3,057,265        2,899,109        4,309,639
Net income                                    1,448,235        1,963,327        1,816,583        3,076,495
Net income per common share                       0.025            0.035            0.032            0.055
Net income per common share -
    assuming dilution                             0.025            0.035            0.032            0.055
</TABLE>


                                       41

<PAGE>



Item 9.  Changes in and Disagreements with Accountants on Accounting and
-------  ---------------------------------------------------------------
         Financial Disclosure.
         ---------------------

         Not applicable.


                                    PART III

Item 10. Directors and Executive Officers of the Registrant.
-------- --------------------------------------------------

         For information with respect to the Directors of the registrant, see
         "Election of Directors" in the Proxy Statement for the 2001 Annual
         Meeting of Shareholders of the Company, which information is
         incorporated herein by reference. For information with respect to the
         executive officers and significant employees of the registrant, see
         "Executive Officers and Other Significant Employees" in the Proxy
         Statement for the 2001 Annual Meeting of Shareholders of the Company,
         which information is incorporated herein by reference. The information
         with respect to compliance with Section 16(a) of the Securities
         Exchange Act of 1934, which is set forth under the caption "Compliance
         with Section 16(a) of the Securities Exchange Act of 1934" in the Proxy
         Statement for the 2001 Annual Meeting of Shareholders of the Company,
         is incorporated herein by reference.


Item 11. Executive Compensation.
-------- ----------------------

         The information set forth under the captions "Executive Compensation,"
         "Compensation Committee Report on Executive Compensation",
         "Compensation Committee Interlocks and Insider Participation" and
         "Performance Graph" in the Proxy Statement for the 2001 Annual Meeting
         of Shareholders of the Company is incorporated herein by reference.


Item 12. Security Ownership of Certain Beneficial Owners and Management.
-------- --------------------------------------------------------------

         The information pertaining to shareholders beneficially owning more
         than five percent of the registrant's common stock and the security
         ownership of management, which is set forth under the caption
         "Beneficial Ownership of Common Stock" in the Proxy Statement for the
         2001 Annual Meeting of Shareholders of the Company, is incorporated
         herein by reference.


Item 13. Certain Relationships and Related Transactions.
-------- ----------------------------------------------

         The information with respect to certain transactions with management of
         the registrant, which is set forth under the caption "Certain
         Relationships and Transactions with Management" in the Proxy Statement
         for the 2001 Annual Meeting of Shareholders of the Company, is
         incorporated herein by reference.


                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
-------- ---------------------------------------------------------------

         (a)      List of documents filed as part of this report:

         1.       Financial statements:  The Company's financial statements and
                  related information are included under  Item 8 of this
                  Form 10-K.


                                       42

<PAGE>



         2.       Financial statement schedules:

                  All schedules are omitted, as the required information is
                  inapplicable or the information is presented in the financial
                  statements or related notes thereto.

         3.       Exhibits to this Form 10-K pursuant to Item 601 of Regulation
                  S-K are as follows:


Exhibit No.       Description
-----------       -----------
     3.1          Amended and Restated Articles of Incorporation of Optical
                  Cable Corporation (as amended)(filed as exhibit 3.1 to the
                  Registrant's Annual Report on Form 10-K for the fiscal year
                  ended October 31, 1997 (file number 0-27022), and
                  incorporated herein by reference).

     3.2          Bylaws of Optical Cable Corporation, as amended (filed as
                  exhibit 3.2 to the Registrant's Annual Report on Form 10-K
                  for the fiscal year ended October 31, 1997 (file number
                  0-27022), and incorporated herein by reference).

     4.1          Form of certificate representing Common Stock (filed as
                  exhibit 4.1 to the Registrant's Annual Report on Form 10-K
                  for the fiscal year ended October 31, 1997 (file number
                  0-27022), and incorporated herein by reference).

     10.1         Royalty Agreement, dated November 1, 1993, by and between
                  Robert Kopstein and Optical Cable Corporation (filed as
                  exhibit 10.1 to the Registrant's Annual Report on Form 10-K
                  for the fiscal year ended October 31, 1997 (file number
                  0-27022), and incorporated herein by reference).

     10.2         Assignment of Technology Rights from Robert Kopstein to
                  Optical Cable Corporation, effective as of October 31, 1994
                  (filed as exhibit 10.2 to the Registrant's Annual Report on
                  Form 10-K for the fiscal year ended October 31, 1997 (file
                  number 0-27022), and incorporated herein by reference).

     10.3*        Employment Agreement by and between Optical Cable Corporation
                  and Robert Kopstein, effective November 1, 2000.

     10.4         Tax Indemnification Agreement, dated as of October 19, 1995,
                  by and between Optical Cable Corporation and Robert Kopstein
                  (filed as exhibit 10.4 to the Registrant's Annual Report on
                  Form 10-K for the fiscal year ended October 31, 1997 (file
                  number 0-27022), and incorporated herein by reference).

     10.6         Loan Agreement dated March 10, 1999 by and between Optical
                  Cable Corporation and First Union National Bank (filed as
                  Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q
                  for the fiscal quarter ended January 31, 1999 (file number
                  0-27022), and incorporated herein by reference).

     10.7         Security Agreement, dated April 25, 1997, by and between
                  Optical Cable Corporation and First Union National Bank of
                  Virginia (filed as exhibit 10.7 to the Registrant's Annual
                  Report on Form 10-K for the fiscal year ended October 31, 1997
                  (file number 0-27022), and incorporated herein by reference).

     10.8         Promissory Note dated March 10, 1999 issued by Optical Cable
                  Corporation to First Union National Bank in the amount of
                  $5,000,000 and the Promissory Note dated March 10, 1999 issued
                  by Optical Cable Corporation to First Union National Bank in
                  the amount of $10,000,000

                                       43

<PAGE>



                  (filed as Exhibit 10.8 to the Registrant's Quarterly Report on
                  form 10-Q for the fiscal quarter ended January 31, 1999 (file
                  number 0-27022), and incorporated herein by reference).

     10.9*        Optical Cable Corporation Employee Stock Purchase Plan (filed
                  as exhibit 10.9 to the Registrant's Quarterly Report on Form
                  10-Q for the fiscal quarter ended July 31, 1998 (file number
                  0-27022), and incorporated herein by reference).

     23           Consent of KPMG LLP to incorporation by reference of
                  independent auditors' report included in this Form 10-K into
                  registrant's registration statement on Form S-8.

-------------------------------

* Management contract or compensatory plan or agreement.


     (b)          Reports on Form 8-K

                  There were two reports on Form 8-K filed by the Company during
                  the fourth quarter of fiscal year 2000.

                  1.       Form 8-K dated September 8, 2000, reporting under
                           Item 5 thereof a three-for-two stock split effected
                           in the form of a share dividend and attaching under
                           Item 7 thereof a press release of Optical Cable
                           Corporation dated September 6, 2000.

                  2.       Form 8-K dated September 27, 2000, reporting under
                           Item 5 thereof the filing of a lawsuit on such date
                           against Optical Cable Corporation by the Equal
                           Employment Opportunity Commission.



                                       44

<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                            OPTICAL CABLE CORPORATION

Date:  January 29, 2001                     By  /s/ Robert Kopstein
                                                ------------------------------
                                                     Robert Kopstein
                                                     Chairman of the Board
                                                     President and Chief
                                                     Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of January 29, 2001.

/s/ Robert Kopstein      January 29, 2001  Chairman of the Board, President
-----------------------------------------  Chief Executive Officer and Director
Robert Kopstein               Date         (principal executive officer)


/s/ Luke J. Huybrechts   January 29, 2001  Senior Vice President of Sales
-----------------------------------------  and Director
Luke J. Huybrechts            Date


/s/ Kenneth W. Harber    January 29, 2001  Vice President of Finance, Treasurer,
-----------------------------------------  Secretary and Director
Kenneth W. Harber             Date         (principal financial and accounting
                                           officer)


/s/ Randall H. Frazier   January 29, 2001  Director
-----------------------------------------
Randall H. Frazier            Date


/s/ John M. Holland      January 29, 2001  Director
-----------------------------------------
John M. Holland               Date




                                       45

<PAGE>


                           INDEX TO ATTACHED EXHIBITS

Exhibit No.       Description
-----------       -----------

10.3              Employment Agreement by and between Optical Cable Corporation
                  and Robert Kopstein, effective November 1, 2000.

23                Consent of KPMG LLP to incorporation by reference of
                  independent auditors' report included in this Form 10-K into
                  registrant's registration statement on Form S-8.


                                       46