1
<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

(Mark one)

     [ X ] QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
                              EXCHANGE ACT OF 1934

                 For the quarterly period ended January 1, 2000


                                       OR


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

 For the transition period from                to
                           -------------------     -------------------

                        Commission file number 000-25103

                              E-TEK Dynamics, Inc.
               (Exact name of registrant as specified in its charter)

              Delaware                                59-2337308
(State or other jurisdiction          (I.R.S. Employer Identification Number)
of Incorporation or organization)


                            1865 Lundy Avenue
                       San Jose, California 95131
             (Address of principal executive office and zip code)

                             (408) 546-5000
             (Registrant's telephone number, including area code)

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 filing requirements
for the past 90 days.

              YES       X                 NO
                  ---------                  ---------

As of January 1, 2000,  67,915,191 shares of the Registrant's  common stock were
outstanding.



                                      2
<PAGE>





                              E-TEK Dynamics, Inc.

                                    FORM 10-Q
                                 January 1, 2000


                       INDEX
                                                                           Page
<TABLE>
<CAPTION>

<S>               <C>                                                       <C>

Part I.          Financial Information

Item 1.          Financial Statements

                 Consolidated Statements of Operations for the Quarter and
                 Six Months Ended January 1, 2000 and January 1, 1999         4

                 Consolidated Balance Sheets as of January 1, 2000 and
                 June 30, 1999                                                5

                 Consolidated Statements of Cash Flows for the Six Months
                 Ended January 1, 2000 and January 1, 1999                    6

                 Notes to Consolidated Financial Statements                   7

Item 2.          Management's Discussion and Analysis of Financial Condition
                 and Results of Operations                                    9

Part II.         Other Information


Item 1.          Legal Proceedings                                           20


Item 4.          Submision of Matters to a Vote of Security Holders          20

Item 6.          Exhibits and Reports on Form 8-K                            20

Signatures                                                                   20

</TABLE>







                                       3
<PAGE>




Part I.          Financial Information

Item 1.          Financial Statements
<TABLE>
<CAPTION>
                                                           E-TEK Dynamics, Inc.
                                                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                                (In thousands, except per-share amounts)
                                                               (Unaudited)


                                              Quarter Ended                 Six Months Ended
                                     ----------------------------  -------------------------------
                                           Jan. 1,        Jan. 1,          Jan. 1,         Jan. 1,
                                             2000           1999             2000            1999
<S>                                  <C>            <C>            <C>             <C>

Net revenues                         $      72,465  $      38,708  $       132,807  $       71,650
Cost of goods sold                          36,549         18,854           66,730          34,843
                                        -----------  -------------  ---------------  --------------
   Gross profit                             35,916         19,854           66,077          36,807
                                      -------------  -------------  ---------------  --------------

Operating expenses:

   Research and development                  6,308          3,255           11,221           6,331
   Selling, general
     and administrative                      8,516          5,748           16,138          11,143
   Purchased in-process
     research and development                    -              -            1,630               -
   Amortization of intangibles               8,325              -           14,590               -
                                      -------------  -------------  ---------------  --------------
      Total operating
          expenses                          23,149          9,003           43,579          17,474
                                      -------------  -------------  ---------------  --------------

Operating income                            12,767         10,851           22,498          19,333
Interest income                              2,418            822            3,957           1,410
Interest expense                              (345)          (340)            (837)           (625)
                                      -------------  -------------  ---------------  --------------

Income before income taxes                  14,840         11,333           25,618          20,118
Provision for income taxes                   5,639          4,533            9,735           8,047
                                      -------------  -------------  ---------------  --------------

Net income                                   9,201          6,800           15,883          12,071
Convertible preferred
    stock accretion                              -          1,482                -           3,882
                                     -------------  -------------  ---------------  --------------

Net income available to Common
   Stockholders                      $       9,201  $       5,318  $        15,883  $        8,189
                                     =============  =============  ===============  ==============

Net Income per share:
   Basic                             $        0.14  $        0.15  $          0.25  $         0.29
   Diluted                           $        0.13  $        0.11  $          0.23  $         0.20

Shares used in net income per share calculations:
   Basic                                    65,438         34,777           63,717          28,350
   Diluted                                  70,656         60,125           68,986          59,219




                                            See Notes to Consolidated Financial Statements.


</TABLE>



                                      4
<PAGE>




                              E-TEK Dynamics, Inc.
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
<TABLE>
<CAPTION>

                                           January 1,             June 30,
                                              2000                  1999
                                       -----------------   -------------------
                                         (Unaudited)            (Audited)
                               ASSETS
<S>                                       <C>                           <C>

  Current assets:
     Cash and cash equivalents         $       177,037     $          55,090
     Accounts receivable                        46,398                29,831
     Inventories                                49,036                20,367
     Deferred tax assets                        13,649                13,542
     Other current assets                        5,165                 3,542
                                     -----------------   -------------------
           Total current assets                291,285               122,372

  Property and equipment, net                   87,749                61,874
  Long-term investments                         15,416                11,665
  Goodwill and other intangibles, net           82,218                34,585
                                       -----------------   -------------------
           Total assets                $       476,668     $         230,496
                                       =================   ===================

                        LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
     Accounts payable                  $        32,940     $          17,762
     Accrued liabilities                        28,458                26,352
     Income taxes payable                        6,971                 4,337
     Current portion of capital
        lease obligations                        1,327                 1,277
     Current portion of long-term debt          10,167                 6,101
                                       -----------------   -------------------
           Total current liabilities            79,863                55,829
  Capital lease obligations,
     net of current portion                      1,616                 2,281
  Long-term debt, net of current portion        22,949                19,232
  Deferred income taxes                         18,802                 3,481
                                       -----------------   -------------------
           Total liabilities                   123,230                80,823
                                       -----------------   -------------------


  Stockholders' equity:
     Preferred Stock, $0.01 par value,
        25,000 shares authorized, none issued
        and outstanding                              -                     -
     Common stock, $0.001 par value,
        300,000 shares authorized, 67,915 and
        62,054 shares issued and outstanding,
        respectively                               68                     63
     Additional paid-in capital               401,017                216,124
     Notes receivable from stockholders        (9,638)               (11,454)
     Deferred compensation                     (2,801)                (3,805)
     Distribution in excess of
        net book value                        (83,901)               (83,901)
     Retained earnings                         48,529                 32,646
     Cumulative translation adjustment            164                      -
                                     -----------------   -------------------
           Total stockholders' equity         353,438                149,673
                                     -----------------   -------------------
           Total liabilities and
              stockholders' equity    $       476,668      $         230,496
                                     =================   ===================
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                       5
<PAGE>
                              E-TEK Dynamics, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands, unaudited)
<TABLE>
<CAPTION>

                                                      Six Months Ended
                                               Jan.1,                  Jan.1,
                                                2000                    1999
                                       ----------------------------------------
<S>                                               <C>                     <C>

Cash flows from operating activities:
  Net income                        $            15,882     $            12,071
  Adjustments to reconcile
     net income to net cash provided
     by operating activities:
     Depreciation and amortization               22,623                   5,303
     Stock compensation expense                     350                     752
     Imputed interest income                        (79)                   (482)
     Purchased in-process research
       and development                            1,630                       -
     Changes in assets and liabilities:
        Accounts receivable                     (13,109)                 (6,397)
        Inventories                             (24,583)                 (6,544)
        Deferred income taxes                        24                       -
        Other current assets                       (983)                   (468)
        Accounts payable                         12,350                   1,920
        Accrued liabilities                      (2,008)                  9,019
        Income taxes payable                      2,633                     562
                                     ------------------     -------------------
            Net cash provided by
               operating activities              14,730                  15,736
                                     ------------------     -------------------

  Cash flows from investing activities:
     Additions to property and equipment        (28,408)                (16,794)
     Long-term investments                       (3,001)                      -
     Payment from (advance to) joint venture       -                      7,000
     Acquisition of Fibx, net of cash received  (12,550)                      -
     Acquisition of Kaifa, net of cash received (10,551)                      -
                                      ------------------     -------------------
            Net cash used in investing
                activities                      (54,510)                 (9,794)
                                      ------------------     ------------------

  Cash flows from financing activities:
     Repurchase of Common Stock                      (3)                      -
     Proceeds from issuance of Common Stock, net      -                  43,616
     Proceeds from secondary offering, net      146,990                       -
     Proceeds from exercise of Common
        Stock Options                             5,406                       -
     Proceeds from Employee
        Stock Purchase Plan                       1,970                       -
     Principal payments on capital
        lease obligations                          (615)                   (627)
     Principal repayments on notes
        receivable from stockholders              2,530                       -
     Borrowings on short-term debt                  269                       -
     Payments on short-term debt                   (898)                      -
     Borrowings on long-term debt                10,000                  13,330
     Payments on long-term debt                  (4,083)                 (3,282)
     Other, net                                     161                       -
                                     ------------------     -------------------
            Net cash provided by
               financing activities             161,727                  53,037
                                     ------------------     -------------------

  Net increase in cash and
      cash equivalents                          121,947                  58,979
  Cash and cash equivalents at
      beginning of period                        55,090                  21,918
                                     ------------------     -------------------
  Cash and cash equivalents at
      end of period                 $           177,037   $              80,897
                                     ==================     ===================

  Supplemental disclosure of cash flow information:
  Interest paid                     $            1,038    $                 599
  Income taxes paid                 $            7,041    $               7,485
</TABLE>

                 See Notes to Consolidated Financial Statements.

                                      6
<PAGE>


                              E-TEK Dynamics, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




1. Basis of Presentation

The accompanying  unaudited  financial data as of January 1, 2000 and January 1,
1999 and for the quarter and six month periods ended January 1, 2000 and January
1, 1999,  have been prepared by us pursuant to the rules and  regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles have been condensed or omitted pursuant to such
rules and regulations. These consolidated financial statements should be read in
conjunction with the financial  statements and the notes thereto included in our
Registration Statement on Form S-1 declared effective on August 11, 1999.

In the  opinion of  management,  all  adjustments  (which  include  only  normal
recurring  adjustments)  necessary  to present  fairly the  financial  position,
results of operations,  and cash flows as of January 1, 2000 and for the 3 month
and 6 month periods (as  applicable)  ended January 1, 2000 and January 1, 1999,
have been made.  The results of operations  for the period ended January 1, 2000
are not necessarily indicative of the operating results for the full year.

2. Inventories

The components of inventories consist of the following (in thousands):

<TABLE>
<CAPTION>

                                                 Jan.1,                June 30,
                                                 2000                   1999
                                      ------------------     ------------------
        <S>                                     <C>                     <C>

       Raw materials...................         $20,816                $10,613
       Work in process.................          20,267                  7,577
       Finished goods..................           7,953                  2,177
                                      ------------------     ------------------
                                                $49,036                $20,367
                                      ==================     ==================

</TABLE>





                                       7
<PAGE>





3.  Earnings per share

The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):

<TABLE>
<CAPTION>

                                         Quarter Ended        Six Months Ended

                                       Jan. 1,     Jan.1,    Jan. 1,     Jan.1,
                                        2000        1999      2000        1999
                                       -------    ------   ---------  ---------
<S>                                      <C>         <C>        <C>        <C>

Numerator:
   Net income...................      $ 9,201     $ 6,800   $ 15,883   $ 12,071
   Convertible Preferred Stock
     accretion....................        -         1,482          -      3,882
                                   -----------   ----------  -------- ---------
   Net income available to Common
     Stockholders (Basic)........       9,201       5,318     15,883      8,189
   Convertible Preferred Stock
     accretion....................        -         1,482          -      3,882
                                     ---------   ---------  --------- ---------
   Net income available to Common
     Stockholders and Assumed
     Conversions (Diluted)........    $ 9,201     $ 6,800   $ 15,883   $ 12,071
                                     =========   =========   ======= ==========
Denominator:
   Denominator for basic earnings per
     share-weighted average
     common shares...................  65,438      34,777     63,717     28,350
   Effect of dilutive securities
     Common Stock options.............  2,891       1,592      2,747      1,361
   Unvested Common Stock subject
     to repurchase................      2,327       4,782      2,522      4,975
   Convertible Preferred Stock........      -      18,974          -     24,533
                                    ---------    ---------   ---------  -------
   Denominator for dilutive earnings per
     share-adjusted weighted average
     common shares and
     assumed conversions.............   70,656     60,125     68,986     59,219

Basic earnings per share............     $0.14      $0.15      $0.25      $0.29
                                     ---------- ---------  ---------- ---------
Diluted earnings per share.......        $0.13      $0.11      $0.23      $0.20
                                    ---------- ----------  --------- ----------
</TABLE>

4.       Comprehensive income

Comprehensive income for the quarter ended January 1, 2000 was $9,081,000.

5. Recent Financial Pronouncements

In  June  1998,  the  Financial  Accounting  Standards  Board  issued  SFAS  133
"Accounting  for  Derivative  Instruments  and  Hedging  Activities."  SFAS  133
establishes  accounting and reporting  standards for derivative  instruments and
for hedging activities. The adoption of SFAS 133 has been deferred to all fiscal
quarters of fiscal years  beginning  after June 15, 2000, by SFAS 137. We do not
expect  the  adoption  of SFAS 133 to have a material  impact on our  results of
operations.

6.  Subsequent Events

On January  17,  2000,  we  announced  the signing of an  Agreement  and Plan of
Reorganization  and  Merger  between  E-TEK  Dynamics,  Inc.  and  JDS  Uniphase
Corporation.  Upon completion of this transaction, our stockholders will receive
1.1 shares of JDS  Uniphase  common  stock for each share of E-TEK  common stock
they  own,  and we  will  become  a  wholly-owned  subsidiary  of JDS  Uniphase.
Completion of the transaction is subject to the approval of our stockholders, as
well as customary closing conditions and regulatory approvals. Accordingly there

                                       8
<PAGE>

can be no assurance that the transaction will be completed. On January 19, 2000,
we filed the press release  announcing the transaction and the merger  agreement
as  exhibits  to Form  8-K.  Those  documents  contain  the  specific  terms and
conditions of the transaction.  More information about JDS Uniphase is available
in their reports to the  Securities  and Exchange  Commission,  which are on the
Internet at www.sec.gov. Those reports include a Form 8-K filed January 18, 2000
by JDS  Uniphase,  with  unaudited  pro forma  condensed  combined  consolidated
financial  statements  showing  E-TEK and JDS  Uniphase on a combined  pro forma
basis for certain periods.


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

Certain statements  contained in this Quarterly Report on Form 10-Q,  including,
without limitation,  statements containing the words "believes,"  "anticipates,"
"estimates,"  "expects," and words of similar  import,  may  constitute  forward
looking  statements  within the  meaning of the  Private  Securities  Litigation
Reform Act of 1995.  Readers are  referred to the Risk  Factors  section in this
report and to the risk factors set out in our Registration Statement on Form S-1
(File No.  333-83857) and Annual Report on Form 10-K which describe factors that
could cause actual events to differ from those  contained in the forward looking
statements.

Overview

We design, manufacture and sell high quality fiber optic components, modules and
subsystems  for  optical  networks.  Optical  networks  are  being  deployed  by
telecommunications  service  providers like AT&T and MCI WorldCom to address the
demand for applications such as Internet access, e-mail, and electronic commerce
that  require  high  capacity,  high speed data  transmission.  Our products are
designed into optical  systems built for these  service  providers'  networks by
telecommunications equipment manufacturers. Our products guide, route or amplify
the  light  signals  which  transmit  data  within an optical  network,  in both
terrestrial and and undersea  networks as well as in metropolitan area and cable
networks.

Revenues from product sales are generally  recognized at the time the product is
shipped,   with  provisions   established  for  estimated  product  returns  and
allowances.  A  relatively  small  number  of  customers  has  accounted  for  a
significant  portion of our revenues to date, and we expect that this trend will
continue for the foreseeable  future.  This has historically  resulted in uneven
orders and fluctuating demand for our products.

The fiber optic component industry is characterized by rapidly declining average
selling  prices and  increasing  unit volumes.  These price declines have had an
adverse affect on our gross margins.


                                       9
<PAGE>



Results of Operations

The following table sets forth,  for the periods  indicated,  the percentages of
net  revenues  represented  by  certain  items  reflected  in  our  Consolidated
Statement of Operations:

<TABLE>
<CAPTION>

                                 Quarter ended               Six Months ended
                                 -------------               ----------------
                               Jan. 1,     Jan. 1,         Jan. 1,      Jan. 1,
                                2000        1999            2000          1999
                                ----        ----            ----          ----
<S>                              <C>         <C>            <C>             <C>

Net revenues                   100.0%      100.0%           100.0%       100.0%
Cost of goods sold........      50.4        48.7             50.2         48.6
                         ------------  ------------    ------------  ----------
     Gross profit...........    49.6        51.3             49.8         51.4
                         -------------  -----------    -----------  ----------
Operating expenses:
     Research and
       development........       8.7         8.4              8.5          8.8
     Selling, general and
       administrative.......... 11.8        14.9             12.2         15.6
     Purchased in-process
       R&D....................   0.0         0.0              1.2          0.0
     Amortization of
       intangibles............. 11.5         0.0             11.0          0.0
                            ---------  ------------   ------------  -----------
          Total operating
           expenses.........    32.0        23.3             32.9         24.4
                            ----------  -----------      ---------  -----------
Operating income..........      17.6        28.0             16.9         27.0
Interest income................  3.3         2.1              3.0          2.0
Interest expense............... (0.4)       (0.8)            (0.6)        (1.0)
                         ------------  ------------     -----------  ----------
Income before income taxes..... 20.5        29.3             19.3         28.0
Provision for income taxes...    7.8        11.7              7.3         11.2
                          -----------  -----------       ----------  ----------
Net income.................     12.7%       17.6%            12.0%        16.8%
                         ------------  ------------       ----------  ---------
</TABLE>

Quarters Ended January 1, 2000 and January 1, 1999

Net Revenues

Net revenues  increased  87.2% to $72.5 million in the second  quarter of fiscal
2000 from $38.7  million  in the second  quarter  of fiscal  1999.  The  revenue
increase was primarily  due to increased  shipments of our  Wavelength  Division
Multiplexer components,  modules and subsystems (WDMs), couplers and micro-optic
integrated  components  (MOICs).  WDMs  accounted  for the majority of our total
revenues and this is expected to continue for the  remainder of fiscal 2000.  We
also  increased  revenues  from new  customers  in the optical  systems  market,
particularly  those  focused  on the  metropolitan,  access  and cable  markets.
Customers  continue to demand a wide variety of wavelengths  with more difficult
filter and packaging specifications.  This may decrease our usable filter supply
and affect our ability to ship products and generate revenues. In addition,  our
customers are  requesting  higher levels of  integration,  such as packaging WDM
devices into  modules,  which may impact our ability to build and ship  products
and generate revenues.

Gross Profit

Gross profit  increased  80.9% to $35.9 million for the second quarter of fiscal
2000 from $19.9 million in the second quarter of fiscal 1999. Cost of goods sold
consists of raw material costs,  direct labor costs,  warranty costs,  royalties
and overhead  related to our  manufacturing  operations.  Gross  profit  margins
declined  from 51.3% to 49.6%  between  these  periods due to declining  average
selling  prices  (ASPs) and increased  costs  associated  with  expansion of our
manufacturing   capacity  in  San  Jose  and  the   integration  of  our  recent
acquisitions.  In January 2000 we expanded into an additional 80,000 square foot

                                       10
<PAGE>

manufacturing facility in San Jose, California. We expect growth and integration
to  continue to have an adverse  affect on our  margins  until we can absorb the
additional  manufacturing  capacity through  increased  revenues.  Also, as more
people are hired to meet increased  unit volumes,  the  manufacturing  yield and
quality may decline,  which may have an adverse  impact on our margins.  We also
expect the decline in ASPs to continue in the future.

Research and Development Expenses

Research and development  expenses consist of compensation  costs for personnel,
depreciation  of equipment,  and prototype  materials.  Research and development
expenses  were $6.3 million for the second  quarter of fiscal 2000  representing
8.7% of net revenues.  This  represents a 93.8% increase over the second quarter
of fiscal 1999  research  and  development  expenses of $3.3  million or 8.4% of
revenues.  The  increase  was  primarily  due to the  increase in  research  and
development   personnel  and  material   costs.  We  expect  that  research  and
development  expenses  will  continue to  increase  in absolute  dollars for the
remainder of fiscal 2000.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses consist of compensation costs for
personnel, sales commissions,  travel expenses, marketing programs, professional
services,  accounting,  human  resources,  executive  management and consulting.
Selling,  general and  administrative  expenses were $8.5 million for the second
quarter of fiscal 2000,  representing  11.8% of net revenues.  This represents a
48.2% increase over selling,  general and administrative expenses for the second
quarter of fiscal 1999 of $5.8 million or 14.9% of net revenues. The increase in
absolute  dollars  of  expenditures  over this  period  reflected  the hiring of
additional   selling,   marketing  and   administrative   personnel,   increased
commissions  paid on higher revenues,  and increased  promotional  expenses.  We
anticipate that our selling,  general and administrative  expenses will increase
in absolute dollars for the remainder of fiscal 2000.

Amortization of Purchased Intangibles

Amortization of purchased  intangibles was $8.3 million in the second quarter of
fiscal 2000 due to the  intangible  assets  generated from our  acquisitions  of
Kaifa, ElectroPhotonics, and FibX, all of which were accounted for as purchases.

Interest Income and Interest Expense

Our interest  income was  approximately  $2.4 million for the second  quarter of
fiscal  2000,  which  represents  an  increase of $1.6  million  from the second
quarter of fiscal 1999. The increase in interest income was the result of higher
investment  balances obtained from our follow-on public offering of our stock in
August 1999,  that generated  $147.0 million in cash, net of transaction  costs.
Interest expense,  incurred on borrowings secured by our property and equipment,
and on capital leases, was $0.4 million for the second quarter of fiscal 2000.

Provision for Income Taxes

Our  combined  federal  and state  income tax  provision  was 38% for the second
quarter  of fiscal  2000,  slightly  lower than the 40% tax  provision  rate for
fiscal  1999.  The  higher  rate  for  fiscal  1999  is due to a  permanent  tax
difference resulting from our purchase of ElectroPhotonics.  Our future tax rate
may be adversely affected by acquisition related activities.





                                       11
<PAGE>

Six Months Ended January 1, 2000 and January 1, 1999

Net Revenues

Net revenues increased 85.4% from $71.7 million for the six months ended January
1, 1999 to $132.8 million for the six months ended January 1, 2000. The increase
in net revenues reflected higher shipments of our WDMs, Couplers, and MOICs.

Gross Profit

Gross profit increased 79.5% from $36.8 million for the six months ended January
1, 1999 to $66.1 million for the six months ended January 1, 2000.  Gross profit
margins  declined  from 51.4% to 49.8% during these  periods,  primarily  due to
declining ASPs and the  additional  costs  associated  with the expansion of our
manufacturing capacity.

Research and Development Expenses

Research and development  expenses increased 77.2% from $6.3 million for the six
months ended  January 1, 1999,  which  represented  8.8% of  revenues,  to $11.2
million for the six months  ended  January 1, 2000,  which  represented  8.5% of
revenues.  The increase was primarily due to the hiring of additional  personnel
and higher material costs.

Selling, General and Administrative Expenses

Selling,  general and administrative expenses increased 44.8% from $11.1 million
for the six months ended January 1, 1999 which represented 15.6% of revenues, to
$16.1 million for the six months ended January 1, 2000, which  represented 12.2%
of revenues.  The increase in absolute dollars of expenditures  over this period
reflected  the  hiring  of  additional  selling,  marketing  and  administrative
personnel,   increased  commissions  paid  on  higher  revenues,  and  increased
promotional expenses.

Interest Income and Interest Expense

Interest  income  increased from $1.4 million in the six months ended January 1,
1999 to $4.0 million in the six months ended  January 1, 2000,  primarily due to
the higher level of investment  balances from the cash received on the follow-on
stock offering in August 1999.  Interest expense  increased from $0.6 million in
the six months  ended  January  1,1999 to $0.8  million in the six months  ended
January 1, 1999, reflecting a higher level of borrowings.

Amortization of Purchased Intangibles

Amortization of purchased intangibles was $14.6 million for the six months ended
January 1, 2000, due to the intangible assets generated from our acquisitions of
Kaifa, ElectroPhotonics, and FibX, all of which were accounted for as purchases.

Liquidity and Capital Resources

Since  inception,  we have financed  operations and met our capital  expenditure
requirements  primarily  through cash flows from our operations,  borrowings and
equity financings.  Our operating  activities provided cash of $14.7 million for
the six months  ended  January 1, 2000 as compared to $15.7  million for the six


                                       12
<PAGE>

months ended January 1, 1999. Cash provided by operating activities is primarily
the result of net income,  depreciation and  amortization  expenses and accounts
payable,  offset in part by increases in accounts receivable and inventory,  and
decreases  in  accrued  liabilities.  At  January  1,  2000 we had cash and cash
equivalents of $177 million and working capital of $211.4 million.

Net cash used in investing activities was $54.5 million for the six months ended
January 1, 2000 as compared to $9.8 million used in investing activities for the
six months  ended  January 1,  1999.  The net cash used in the six months  ended
January  1,  2000  related  to  capital  expenditures  and to the Kaifa and FibX
acquisitions.

Net cash provided by financing  activities was $161.7 million for the six months
ended  January 1, 2000,  as compared to $53.0  million for the six months  ended
January 1, 1999.  Net cash provided by financing  activities  for the six months
ended  January 1, 2000  resulted  primarily  from net proceeds of  approximately
$147.0 million from our follow-on public offering.

Our cash is invested in short term taxable funds with a maximum  duration of 120
days, and our debt instruments are all fixed rate instruments. Our invested cash
may produce less income if interest rates fall.  Currently,  the majority of our
international  sales are U.S.  dollar  denominated.  We could  incur  additional
expenses  due to  exchange  rate risk  because  many  expenses  relating  to our
international  operations  are  denominated in foreign  currencies.  We have not
entered into any currency hedging activities.

Year 2000 Compliance

We have not had any disruption to our computer  programs or business as a result
of year 2000 compliance.  However,  if our customers or suppliers  encounter any
year 2000 problems, our business could be disrupted as well.

Risk Factors

You should  carefully  consider  these risk  factors  in  addition  to the other
information in this Report.  You should also consider the risk factors set forth
in other documents filed with the SEC,  including the Annual Report on Form 10-K
for the fiscal year ended June 30, 1999, and the Registration  Statement on Form
S-1 dated August 11, 1999.  Any of these factors  could have a material  adverse
impact on our business, financial condition and results of operations.

Our  proposed   merger  with  JDS  Uniphase   Corporation   involves  risks  and
uncertainties, and requires stockholder and regulatory approval.

On January 17, 2000, we announced the signing of an agreement  with JDS Uniphase
Corporation  under  which JDS  Uniphase  proposes to acquire  E-TEK  shares in a
merger  transaction.  If this transaction  closes, our stockholders will receive
1.1 shares of JDS  Uniphase  common  stock for each share of E-TEK  common stock
they  own,  and we  will  become  a  wholly-owned  subsidiary  of JDS  Uniphase.
Completion  of this  proposed  transaction  is  subject to the  approval  of our
stockholders,  as well as customary closing conditions and regulatory approvals.
On January  19,  2000,  we filed  with the SEC a press  release  announcing  the
transaction  and the  merger  agreement  as  exhibits  to our  Form  8-K.  Those
documents  contain the specific terms and conditions of the  transaction.  There
are no assurances  that this proposed merger will occur, or that the performance
of the  combined  company will be  favorable  to our  stockholders,  or that the
pendency of the  proposed  merger  will not have an adverse  effect on us in the
interim.

                                       13
<PAGE>

The success of the merger  between  E-TEK and JDS Uniphase  may  require,  among
other  things,   integration  or  coordination  of  different   operational  and
management teams, as well as different business  processes and  infrastructures.
Successful integration of the two companies will depend on a variety of factors,
including   the  hiring  and   retention  of  key   employees,   management   of
geographically  separate  facilities,  and the  integration or  coordination  of
different  research and development and product  manufacturing  facilities.  The
diversion of  management  resources  necessary  to  successfully  complete  this
integration  or   coordination   may  temporarily   adversely   impact  business
operations.

It is not certain that JDS Uniphase and E-TEK can be successfully  integrated in
a timely manner or at all or that any of the anticipated  benefits of the merger
will be  realized.  Failure  to do so could  materially  harm the  business  and
operating results of the combined company.  Also, neither JDS Uniphase nor E-TEK
can assure  you that the  growth  rate of the  combined  company  will equal the
historical growth rate experienced by JDS Uniphase and E-TEK.

Customer and employee uncertainty related to the merger could harm E-TEK.

Our customers may, in response to the announcement of the merger, delay or defer
purchasing  decisions.  Any delay or deferral  in  purchasing  decisions  by our
customers  could  seriously  harm  the  business  of the  combined  company.  In
addition,  existing and future strategic alliances that may be beneficial to our
success may be adversely  affected as a result of E-TEK  becoming a wholly owned
subsidiary of JDS Uniphase.  Similarly, our employees may experience uncertainty
about  their  future  role with the  combined  company  until or after  specific
integration  plans are  announced or  executed.  This may  adversely  affect our
ability to attract and retain key management, marketing and technical personnel.

If a major  customer  delays,  reduces or defers  purchases,  our revenues  will
decline.

We have depended on a small number of large customers for a substantial  portion
of our sales, and we expect this to continue for the foreseeable  future. In the
second  quarter of fiscal 2000,  our three  largest  customers and their related
entities  accounted for 56% of our revenues.  Industry  consolidation may reduce
the number of potential  customers and increase our dependence on a small number
of customers.

Further,  we do not  have  long-term  contracts  with  many  customers,  and our
existing  contracts do not obligate our customers to buy material amounts of our
products. In addition, we have recently signed contracts that require us to hold
safety  stock,  which  results  in our  holding  inventory  and not  recognizing
revenues until shipment.  Therefore,  sales in a particular period are difficult
to  predict  and  we  may   experience   unforeseen   decreases  in   purchases,
cancellations of purchase orders or deferrals of purchases.

If sales of our wavelength division  multiplexing products decline, our revenues
will be materially reduced.

Sales of wavelength  division  multiplexing  components,  modules and subsystems
accounted for over 50% of our revenues in the second quarter of fiscal 2000, and
are expected to account for more than 50% of our total  revenues in fiscal 2000.
If sales of this product line decline, our overall revenues will be lower, which
could result in operating  losses.  We may not be  successful in taking steps to
mitigate the risks associated with reduced demand for our existing products.

                                       14
<PAGE>

If we  cannot  obtain an  adequate  supply  of thin  film  filters  or other raw
materials or equipment, our product revenues may decline.

Thin film filters are a key raw material for WDMs and are  difficult to produce.
We have  previously  experienced  and continue to experience  shortages of these
filters, which has limited our ability to ship product and generate revenues.

Also,  we depend on a limited  number of suppliers  for other key  materials and
equipment, some of which are sole sources. Delivery delays, quality problems and
price  increases could hurt our ability to supply our customers with products in
a timely manner, which can cause our shipments and revenues to decline.

The increase in the number of WDM wavelengths, narrower spacing requirements and
greater integration increases product complexity, which may adversely affect our
yields and revenues.

The increased  need for bandwidth is being  satisfied by using more  wavelengths
with  narrower  spacing  between  each  wavelength.  Both of these  trends (more
wavelengths and tighter spacing)  increase the complexity and variety of filters
needed and the risk of lower yields.  In addition,  the trend towards  increased
integration  from devices to modules,  and to subsystems  means that any missing
wavelengths  can delay  shipment of the whole module or  subsystem,  which would
have an adverse impact on our revenues.  Furthermore,  building more  integrated
products  is more  difficult,  and could  impact  our  ability to build and ship
products  and  generate   revenues.   Other  technologies  that  offer  narrower
wavelength spacing,  such as array waveguide or fiber Bragg gratings,  have been
introduced to the market as an alternative to thin film filter WDMs.  Acceptance
of these products could aversely impact our revenues.

We may not be able to reduce our  manufacturing  costs  sufficiently or plan our
manufacturing expansion accurately.

We expect the price of our existing  products to decline due to various factors,
such as increased  competition,  including  from  companies with lower labor and
production  costs;  a limited  number of potential  customers  with  significant
bargaining  leverage;  introduction of new products by competitors;  and greater
economies  of scale for higher  volume  manufacturers.  To maintain our existing
revenues,  we must  increase  our unit volumes and our  manufacturing  capacity.
Adding  capacity  increases our fixed costs and the levels of unit  shipments we
must  achieve  to  maintain  gross  margins.  As a result,  if we are  unable to
increase our revenues or continuously reduce our manufacturing  costs, our gross
margins may decline and we could incur losses.

We are increasing our manufacturing  capacity at our existing  facilities in San
Jose, California as well as pursuing the expansion of overseas  manufacturing in
Taiwan  and  China.  Developing  overseas  manufacturing  capabilities  involves
significant risks which could materially  adversely affect our gross margins and
revenues, including:

         Our inability to qualify a new manufacturing line for all of our
         customers;

         unanticipated cost increases;

         unavailability or late delivery of equipment;

         unforeseen environmental or engineering problems;

                                       15
<PAGE>

         personnel recruitment delays; and

         political instability.

Expanding our manufacturing  capacity requires substantial time to build out and
equip  facilities and train  personnel.  If we receive orders  substantially  in
excess of our planned  capacity,  we might not be able to fulfill  them  quickly
enough to meet customer  requirements.  Our inability to deliver products timely
could enable competitors to win business from our customers.

We may not be able to effectively  increase  production and maintain  acceptable
manufacturing yields,  resulting in delay of product shipments and impairment of
our gross margins.

Manufacturing our products is highly complex and labor intensive.  As we rapidly
increase production and hire more people, our manufacturing  yield, which is the
percentage of our products  which meet customer  specifications,  could decline,
resulting in product  shipment  delays,  possible  lost  revenue  opportunities,
higher customer returns,  and impaired gross margins.  Some of our manufacturing
lines have experienced  lower than expected yields,  which could continue in the
future.  Rapid increases in production levels to meet  unanticipated  demand may
also result in higher overtime costs and other expenses.

Our stock price could fluctuate significantly due to our pending merger with JDS
Uniphase, and to the unpredictability of our quarterly results.

Since the  announcement  on January 17, 2000 of our  agreement to merge with JDS
Uniphase, our stock price has fluctuated  significantly.  Our stock price may be
affected by  fluctuations in the price of JDS Uniphase shares and a higher level
of speculative trading while the merger is pending approval.

Also,  our revenues and operating  results have  fluctuated  significantly  from
quarter-to-quarter in the past and may fluctuate  significantly in the future as
a result of several  factors,  some of which are outside of our  control.  These
factors include:

         the size and timing of customer orders;

         our ability to manufacture and ship our products on a timely basis;

         our ability to obtain sufficient supplies to meet our product
         manufacturing needs;

         our ability to meet customer product specifications and qualifications;

         long and unpredictable sales cycles of up to a year or more;

         our ability to sustain high levels of quality across all product lines;

         changes in our product mix;

         customer cancellations or delivery deferrals;

         seasonality of customer demand; and

         difficulties in collecting accounts receivable.

                                       16
<PAGE>

Due to these  factors,  results are difficult to predict and you should not rely
on quarter-to-quarter  comparisons of our results of operations as an indication
of our future performance.  It is possible that, in future periods,  our results
of  operations  may be below the  expectations  of public  market  analysts  and
investors.

If we do not achieve  our planned  revenues,  we could  incur  operating  losses
because our expenses are fixed in the short term.

We make  manufacturing  and related  capital  expenditures  in anticipation of a
level of customer orders that may vary over multiple quarters.  Our expenditures
are largely based on anticipated  future sales and a significant  portion of our
expenses is fixed in the short term. If  anticipated  levels of customer  orders
are not received,  we may not be able to reduce our expenses  quickly  enough to
prevent a decline in our gross margins and operating income.

The fiber-optic component market is highly competitive,  and we could lose sales
to our competitors and our customers.

Many of our competitors  have greater  financial and other resources than us and
they may be able to more quickly:

         respond to new technologies or technical standards;

         react to changing customer requirements and expectations;

         manufacture, market and sell current products;

         develop new products or technologies; and

         deliver competitive products at lower prices.

As a result of these factors,  our customers  could decide to purchase  products
from our competitors and reduce their purchases from us.

In addition,  our  competitors  and our  customers may acquire our suppliers and
potential  suppliers.  Our customers may also develop their own internal sources
of supply in competition  with us. For example,  Corning,  one of our customers,
has  announced an expansion of its ability to produce thin film optical  filters
by a factor of ten, as well as the  acquisition  of Oak  Industries,  a maker of
components  used in WDM systems.  Lucent  Technologies,  a customer of ours, has
announced an investment in privately-held Horizon Photonics, Inc., a provider of
automated manufacturing of passive optical components. Lucent has also commented
publicly that it sells a large portion of its components on the merchant  market
in addition to supplying its own needs. Cisco Systems, an emerging player in WDM
systems,  has  announced  the  acquisition  of  Pirelli  Optical  Systems  and a
strategic  investment  of $100  million  in  Pirelli's  optical  components  and
submarine optical transmission system businesses.  In addition, Nortel Networks,
one of our  customers,  has  announced a $400 million  investment in its optical
networking and components  business including a new facility for the fabrication
of optical components.

If our new  product  introductions  are  delayed,  or if our new  products  have
defects, our revenues would be harmed and our costs could increase.

If we do not  introduce  new  products  in a timely  manner,  we will not obtain
incremental  revenues  from these  products  or be able to replace  more  mature
products with  declining  revenues or gross margins.  Customers  could decide to
purchase  components  from our  competitors,  resulting  in lost  revenue over a
longer  term.   We  could  also  incur   unanticipated   costs  if  new  product
introductions are delayed or we need to fix defective new products.



                                       17
<PAGE>

Acquisitions and investments may adversely affect our business.

Our strategy  includes the acquisition and integration of additional  companies'
products,  technologies and personnel.  We have limited  experience in acquiring
outside  businesses.  Acquisition of businesses  requires  substantial  time and
attention of management personnel and may also require additional equity or debt
financings.

Integration of newly established or acquired businesses can be disruptive. There
is no assurance  that we will identify  appropriate  targets,  will acquire such
businesses  on  favorable  terms,  will  obtain JDS  Uniphase's  consent for any
proposed acquisitions,  or will be able to integrate such organizations into our
business successfully.

Financial   consequences  of  our   acquisitions  and  investments  may  include
potentially dilutive issuances of equity securities;  large one-time write-offs;
reduced cash balances and related interest  income;  higher fixed expenses which
require a higher level of revenues to maintain gross margins;  the incurrence of
debt and contingent  liabilities;  and amortization expenses related to goodwill
and other intangible assets.

If a key sales representative or distributor stopped selling or reduced sales of
our products, our revenues would suffer.

We sell substantially all of our products through a network of independent sales
representatives and distributors,  the majority of whom have exclusive rights to
sell  our  products  in  certain  territories.  Our  sales  representatives  and
distributors could decide to reduce or stop selling our products.

We may not be able to recruit and retain the personnel we need to succeed.

If we cannot  hire and  retain  technical  personnel  with  advanced  skills and
experience in the  specialized  field of fiber optics,  our product  development
programs may be delayed and our customer  support efforts may be less effective.
If we  are  unable  to  hire  the  necessary  managerial,  sales  and  marketing
personnel, we may not be able to grow our revenues.

Our  international  sales could be delayed or could have additional  costs which
would lower their contribution to our gross profit.

We  generate a  significant  portion  of our  revenues  from sales to  companies
located  outside  the  United  States,  principally  in Europe.  As a result,  a
significant   portion  of  our  sales  faces  risks  inherent  in  international
operations, including:

         government controls, which can delay sales or increase our costs;

         export licensing requirements and restrictions, which can delay or
         prevent sales;

         tariffs and other trade barriers, which can increase our costs and make
         our products uncompetitive; and

         greater  difficulty  in  accounts  receivable   collection  and  longer
         collection periods, which can increase our need for working capital.



                                       18
<PAGE>

Currently,  the majority of our international sales are U.S. dollar denominated.
As a result,  our customers'  orders could  fluctuate  significantly  based upon
changes  in our  customers'  currency  exchange  rates in  relation  to the U.S.
dollar. A large increase in the value of the U.S. dollar could make our products
more  expensive  to our foreign  customers,  resulting  in  cancelled or delayed
orders and decreased revenues.

Our  international  operations  expose us to additional  costs, some of which we
cannot predict.

Our recent  expansion of our operations  into other  countries,  such as Canada,
Taiwan and China, has increased the legal,  tax and other business  complexities
that we must comply with. If we cannot comply with local  regulations,  we could
incur unexpected costs and potential  litigation.  Our international  operations
could cause our average tax rate to increase.  We could also incur  expenses due
to the exchange  rate risk because many expenses  relating to our  international
operations are denominated in foreign currencies, while our revenues are in U.S.
dollars.

If  we  cannot  protect  or  enforce  our  intellectual   property  rights,  our
competitive position may be impaired.

Third parties may attempt to use our  confidential  information  and proprietary
technologies without  authorization.  Policing unauthorized use is expensive and
difficult.  We cannot be sure that will be able to prevent  misappropriation  or
infringement of our intellectual property.

Intellectual property claims against us could cause our business to suffer.

In the past, we have received  notifications alleging that we are infringing the
intellectual  property  rights of third  parties,  and we may in the future face
claims that our products  infringe  the rights of another.  Whether or not these
claims are successful,  we would likely incur significant costs and diversion of
our resources defending these claims.

We could incur costs and experience  disruptions  complying  with  environmental
regulations.

We handle  small  amounts of hazardous  materials  as part of our  manufacturing
activities.  We may be  required  to incur  environmental  remediation  costs to
comply with current or future environmental laws.

Our operations could be disrupted by natural disasters.

Our facilities are susceptible to damage from  earthquakes as well as from fire,
floods, loss of power or water supply,  telecommunications  failures and similar
events. Any of these events could significantly disrupt our operations.




                                       19
<PAGE>

Part II. Other Information

Item 1. Legal Proceedings

We are involved in disputes and litigation in the normal course of our business.
We do not believe that the outcome of any of these  disputes or litigation  will
have a material adverse effect on our business,  financial  condition or results
of operations.


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

We held our Annual Meeting of  Stockholders on October 28, 1999. At the meeting,
the  stockholders  elected Dr.  Joseph W. Goodman to serve as a Class I Director
until our Annual  Meeting in 2002. The vote in favor of Dr.  Goodman's  election
was  54,478,802,   with  13,414  votes  withheld.   The  proposal  to  reappoint
PricewaterhouseCoopers LLC as our auditor was approved with a vote of 54,485,800
in favor; 1,870 against; and 4,546 abstaining.


Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits
                        The following exhibit is filed herewith.

                           27.1 Financial data schedule

(b)      Reports on Form 8-K
                        We  filed a  report  on Form 8-K on  January  19,  2000,
                        reporting the Agreement and Plan of  Reorganization  and
                        Merger   among   JDS   Uniphase   Corporation,   Rainbow
                        Acquisition, Inc. and E-TEK Dynamics, Inc.

Signatures

In accordance with the  requirements  of the Securities  Exchange Act of 1934 as
amended, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



Date: January 31, 2000              By
                                          -----------------------
                                            /s/ Sanjay Subhedar
                                            Chief Operating Officer and Chief
                                            Financial Officer
                                            (Principal Financial Officer)