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                      U.S. SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, DC  20549

                                    FORM 10-KSB

(Mark One)
/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                     For the fiscal year ended August 31, 1998

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934

   For the transition period from __________________ to _____________________.

                           COMMISSION FILE NO.:  0-27928

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

                         NICOLLET PROCESS ENGINEERING, INC.
                   (Name of small business issuer in its charter)


                    MINNESOTA                                  41-1528120
         (State or other jurisdiction of                     (IRS Employer
          incorporation or organization)                   Identification No.)

  420 NORTH FIFTH STREET, FORD CENTRE, SUITE 1040,
             MINNEAPOLIS, MINNESOTA                              55401
     (Address of principal executive offices)                  (Zip Code)

                     Issuer's telephone number:  (612) 339-7958

       Securities registered under Section 12(b) of the Exchange Act:  NONE.

          Securities registered under Section 12(g) of the Exchange Act:

                             COMMON STOCK, NO PAR VALUE
                                --------------------

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.  YES /X/
NO / /

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this Form, and no disclosure will 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-KSB
or any amendment to this Form 10-KSB.   / /

     State issuer's revenues for its most recent fiscal year. $1,122,579

     As of November 20, 1998, 5,545,195 shares of Common Stock of the Registrant
were deemed outstanding, and the aggregate market value of the Common Stock of
the Registrant (based upon the average of the closing bid and asked prices of
the Common Stock at that date as reported by the OTC Bulletin Board), excluding
outstanding shares beneficially owned by directors and executive officers, was
approximately $2,621,000.

                        DOCUMENTS INCORPORATED BY REFERENCE

     Part III of this Annual Report on Form 10-KSB incorporates by reference
information (to the extent specific sections are referred to herein) from the
Company's Proxy Statement for its Annual Meeting of Shareholders to be held
February 9, 1999 (the "1999 Proxy Statement").

   Transitional Small Business Disclosure Format (check one):  YES / /    NO /X/

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     THIS FORM 10-KSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS.  FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED IN THIS FORM 10-KSB THAT ARE NOT STATEMENTS OF
HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS.  WITHOUT
LIMITING THE FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE,"
"ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS
THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS.  THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY
OF FACTORS, INCLUDING THOSE DESCRIBED UNDER THE CAPTION "IMPORTANT FACTORS TO
CONSIDER."

                                       PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

          (a)  BUSINESS DEVELOPMENT

     Nicollet Process Engineering, Inc.'s ("NPE" or the "Company") mission is to
assist customers in turning factory floor information into revenues and profits
for its customers.  NPE is focused on the information technology requirements of
manufacturers for better managing production processes and supporting management
decision support systems.  NPE designs, manufactures, markets and supports high
speed data acquisition systems that bring a range of solutions to solve process
automation problems, including process visualization, machine and process
control and real-time database management products.  The Company currently
focuses on the die casting and plastics injection molding industries with
industry specific process monitoring and control systems, client/server software
and machine diagnostic instruments.

     The Company has developed a die casting industry-specific, "turn-key"
manufacturing information and process control system ("Process Vision") which,
on a real-time basis, monitors, collects and displays machine performance data,
monitors process performance continuously against pre-set values, provides
feedback to the machine's controller to bring out-of-tolerance performance back
into conformance, and aggregates data for real-time presentation of process
reports for use by the machine operator.  As part of its product offering to the
die casting industry, the Company has also developed client/server software (the
"Client/Server Software" which together with Process Vision are referred to as
the "Die Casting Products"), which provides access to factory floor data stored
in file servers and distributes that data, on a real-time basis, to all levels
of an organization in either preprogrammed report formats or on a user defined
basis.

     The Company has developed a line of products in the plastics injection
molding industry that provides process and production monitoring to all levels
of an organization.  The Company's plastics monitoring product is also a
"turn-key" manufacturing information system (the "Plastics Monitoring System")
which, on a real-time basis, monitors, collects and displays machine performance
data, monitors process performance continuously against pre-set values and
provides the information collected and analyzed to all levels of an
organization.  In February 1997, the Company developed a second product to the
plastics industry--the PMRS.  The Company's production monitoring and reporting
system (the "PMRS") collects production information, such as cycle time and
number of parts manufactured, from machines at the factory floor level and
provides specific production reports to the machine operator or, at the
customer's option, to all levels of the organization. In conjunction with and at
the request of several original equipment manufacturers ("OEMs"), the Company
developed a modified version of the Plastics Monitoring System that offers a
direct connection to the plastic injection molding machine for process
monitoring (the "Direct Connect" which together with the Plastics Monitoring
System and PMRS are referred to as the "Plastics Products"), thereby eliminating
the need for specialized computer hardware to run process monitoring.


                                          2
<PAGE>

     The Company's third product line, the Machine Capability Analyzer (the
"MCA"), is a portable, troubleshooting instrument that tests the functioning of
a manufacturing machine for inconsistencies in operation.  Under an agreement
with GE Plastics, an operating division of General Electric Corporation, the
Company developed of a new module for the MCA.  This new module was custom
designed for GE Plastics to test specific parameters of GE Plastic's proprietary
resins.  The Company believes that GE Plastics will apply this GE-specific
product throughout its polymer manufacturing plants.

     During the last fiscal year, the Company has focused substantially all of
the Company's research and development efforts in converting to a Structural
Query Language ("SQL") data base and in modularizing the Company's Plastics
Monitoring System. The Company's Plastics Products are powered by the windows
SQL data base and are now engineered to allow customers to mix and match modules
according to a customer's specific needs, thereby permitting easy migration from
simpler starter systems, such as PMRS, to more sophisticated process monitoring
and client/server level information gathering systems.

     The Company was incorporated in Minnesota on February 22, 1985.  The
Company's principal executive offices are located at 420 North Fifth Street,
Ford Centre, Suite 1040, Minneapolis, MN 55401, and its telephone number is
(612) 339-7958.

          (b)  BUSINESS OF ISSUER

PRODUCTS

     The Company's technology is designed to improve discrete manufacturing
processes at the machine and plant floor level and to enhance management
decision making enterprise-wide with real-time manufacturing analysis and
reporting.  The Company has three product lines: a machine-level monitoring and
control system for the die casting industry with add-on capabilities for
client/server level information dissemination, a production and process
monitoring and reporting system for the plastic injection molding industry with
add-on capabilities for client/server level information reports and a portable,
machine diagnostic instrument called the Machine Capability Analyzer.

     DIE CASTING PRODUCTS.  NPE offers two major products for use in the die
casting industry: a "turn-key" manufacturing information and process control
system ("Process Vision") and client/server or workstation software (the
"Client/Server Software").

     PROCESS VISION.  NPE's Process Vision is a Windows-TM- developed, PC based
system consisting of standard personal computer hardware, NPE's proprietary
monitoring software (the "Process Monitoring Software") and various sensors and
programmable logic controller ("PLC") interface hardware for data acquisition
connection to die casting machines.  The sensors measure critical elements of
the die casting production process, E.G. temperature, various pressures and
velocities.  This information, together with data provided by the PLC, is
acquired by the system during each cycle, through interface hardware, for data
analysis, presentation and alarming.  Process Vision is used exclusively in the
die casting industry.

     Using the data collected from the sensors and the PLC, the Process
Monitoring Software computes numerous die casting parameters that describe and
profile the performance of each manufacturing production cycle, or "shot," and
instantaneously detects structurally inferior parts.  Upon detection of an
out-of-tolerance part, the Process Monitoring Software sets off alarms to inform
factory personnel of the out-of-tolerance event, directs the PLC to divert the
part as defective and provides


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information to the PLC for automatic adjustment of the machine's performance.
This PLC interface capability is designed to integrate with and communicate to
many different types of PLCs.

     Information relating to each production cycle, or shot, is used for
real-time parameter calculations.  Information is then displayed and run through
a technique called statistical process control ("SPC").  SPC is a commonly used
technique that identifies trends in a manufacturing process.  These SPC results
are immediately charted and aggregated for real-time generation of data.
Competing products generally aggregate data for a period of time and perform SPC
only periodically.  All information is stored at the machine level for
traceability and verification.

     In addition to Process Vision's ability to collect and analyze data and
correct irregularities in the production process, the Process Monitoring
Software provides, in addition to other reports, the following reports for use
by management and factory floor personnel:

     -    Production and process reports;
     -    SPC reports;
     -    Efficiency and productivity reports;
     -    Shift and run reports;
     -    Cycle time reports;
     -    Machine maintenance reports; and
     -    Downtime and scrap reports.

     CLIENT/SERVER SOFTWARE.  NPE also offers the Client/Server Software, which
is designed for use on various major hardware platforms and operating systems
and is compatible with many relational database management systems ("RDBMS"),
such as Sybase and Oracle.  The Client/Server Software receives data that has
been collected at the machine level on the factory floor through Process Vision.
That data, through a high speed network, is stored on the client/server and
updated on a real-time basis, providing desk top computer information access to
plant supervisors, quality control and financial personnel, and other
supervisory or management personnel.

     The process and production information is stored in a networked database
server allowing data to be accessed and queried by users.  This information can
be accessed and arrayed by the user to create custom reports and can even be
exported to other software applications, such as Excel or Lotus. The
Client/Server Software also provides a set of standard, die-casting reports that
support decision making used by manufacturers.  Specifically, the Client/Server
Software provides the following reports that can be accessed by desk top
computers:

     -    Machine maintenance reports;
     -    Gauging statistical quality and process control ("SQC" and "SPC")
          reports;
     -    Machine efficiency and productivity reports;
     -    Scrap and downtime reports;
     -    Material usage reports;
     -    Operator efficiency reports; and
     -    Machine, run and shift profit and loss reports.

     PLASTIC INJECTION MOLDING PRODUCTS.  NPE offers three major products for
use in the plastic injection molding industry: a process monitoring system (the
"Plastics Monitoring System"), a production monitoring and reporting system with
add-on capabilities for client/server level information reporting ("PMRS") and
the direct connect (the "Direct Connect").


                                          4
<PAGE>

     PLASTICS MONITORING SYSTEM.  Like Process Vision for the die casting
industry, the Plastics Monitoring System is a Windows-TM- developed, PC based
system consisting of standard personal computer hardware, monitoring and
client/server level software ("R3V1") and various sensors for data acquisition
from plastic injection molding machines.  Like Process Vision, the sensors
measure critical elements of the plastic injection molding production process,
E.G. temperature, various pressures and velocities.

     Using the data collected from the sensors, R3V1 computes numerous plastic
injection molding parameters that describe and profile the performance of each
manufacturing shot, and instantaneously detects structurally inferior parts.
Upon detection of an out-of-tolerance part, R3V1 sets off alarms to inform
factory personnel of the out-of-tolerance event. Information relating to each
production cycle, or shot, is used for real-time parameter calculations.
Information is then displayed and run through SPC and the results are
immediately charted and aggregated for real-time generation of data. All
information is stored at the machine level for traceability and verification
and, at the customers option, at the client/server level. As part of the core
engine of R3V1, NPE offers a client/server product similar to the Client/Server
Software for the die casting industry that provides information collected at the
machine level to personnel throughout the enterprise.  NPE offers core
client/server information capabilities with R3V1 and also offers, as an add-on,
additional reporting features if requested, which include SPC, scheduling,
maintenance and profiling. R3V1 generally provides the same reports as the
Process Vision product and also offers real-time finite machine, tool and
material scheduling.

     THE PMRS.  The Company's production monitoring system for the plastic
injection molding industry, the PMRS, is a Windows-TM- developed, PC based
system consisting of standard personal computer hardware, NPE's proprietary
production software (the "Production Software") and one sensor for data
acquisition from plastic injection molding machines.  The sensor measures
critical elements of the production cycle of a machine, E.G. the number of
seconds elapsed per cycle of production on the machine, the number of parts the
machine has produced over a defined period of time, and the number of cycles the
machine has reciprocated over a defined period of time.  The information
acquired by the system during each cycle is used for production status
calculations and real-time report generations.  PMRS provides, in addition to
other reports, the following reports for use by management and factory floor
personnel:

     -    Production reports;
     -    Shift and run reports;
     -    Cycle time reports; and
     -    Down time reports.

     PMRS is designed to be a starter system for customers in the plastic
injection molding industry, permitting easy migration for a customer to full
process monitoring or client/server level formation processing.

     DIRECT CONNECT.  The Company has also developed the Direct Connect, a
modified version of the Plastics Monitoring System that offers a direct
connection to the plastic injection molding machine through the machine's
controller to access data in a special protocol format for process monitoring.
The Direct Connect consists of a cable that is wired directly into selected OEM
machines and the customer's PC containing the Company's R3V1.  The cable
collects information directly from the machine's controller in Society of
Plastics Industry, Inc. ("SPI") protocol and provides that information, through
a modified version of the R3V1 software, to the customer's reporting and
monitoring system.  The Direct Connect gathers information when provided by the
machine, typically every 10 or 15 seconds rather than on a real-time basis.
Other than purchasing the cable and the R3V1, the Direct Connect does not
require


                                          5
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additional expenditures for hardware, such as a separate PC.  The Company
intends to sell the Direct Connect both directly to customers who purchase new
generation plastic injection molding machines and through private label
arrangements with these OEMs.

     THE MCA.  The MCA is a portable, Windows-TM- based diagnostic instrument
that detects and displays machine inconsistencies and performance variances
while also collecting process data for detailed analysis.  Unlike Process Vision
and the Plastics Monitoring System, the MCA monitors machine performance
characteristics and is not limited to the die casting and plastic injection
molding industries.  The MCA incorporates the functions of an oscilloscope,
chart recorder, logic analyzer and voltmeter into one seamless, easy to use
instrument.  It has 16 analog channels and 16 digital channels along with a scan
rate that permits very precise, high resolution presentation of a machine's
performance characteristics.

     Machine diagnostics have traditionally been performed using trial and error
techniques using a variety of instruments with limited scope.  When a machine
malfunctions, an operator generally knows that it has malfunctioned but often
does not know the cause of the problem.  An operator begins a trial and error
process to determine the cause of the malfunction by utilizing separate
instruments (such as an oscilloscope, chart recorder, logic analyzer and
voltmeter) one at a time to determine the cause of the malfunction.  The MCA, in
contrast, combines all of these functions into one instrument thereby
eliminating this trial and error methodology and decreasing the time required to
diagnose the problem.

     The MCA provides precise visual presentation of the most minute
inconsistencies, pinpointing the corrective action necessary to bring the
machine into conformance with original specifications. The MCA contains certain
preprogrammed math functions and provides SPC capabilities that permit the MCA
to perform instantaneous calculations.  The user can easily design and run
unlimited experiments and can configure, calibrate and set-up the analyzer for
analysis on a broad range of machines where data can be collected.

     The Company, under an agreement with GE Plastics, an operating division of
General Electric Corporation, developed a new module for the MCA.  This new
module was custom designed for GE Plastics to test specific parameters of GE
Plastic's proprietary resins.  This continued development produced the Card
Compatible Analyzer (CCA) which utilizes a miniature high speed PCMCIA data
acquisition card.  This modular technology of the CCA family of analyzers will
replace the LTA and PCA models.  The PCMCIA card provides the capability to
connect to either a laptop PC or to a desktop  through an ISA bus data
acquisition card.  The new compact modular hardware design the user can insert
up to eight, signal specific, conditioning modules into the base unit to monitor
up to 16 channels.  Modules may be inserted in any combination to quickly and
accurately match the CCA to the signal requirements of the machine.  The totally
new and unique approach to signal conditioning allow the user to only buy the
modules required for his particular needs.  Additional modules may be added at
any time.  Output modules are also available.  Based on feedback from customers,
the MCA software has also undergone significant improvements in both performance
and usability.

MARKETING STRATEGY

     DIRECT AND INDIRECT APPROACH.  During the fourth quarter of fiscal 1998,
the Company began development of  a direct and indirect marketing strategy for
its plastics market to seed its technology in a broader base of customers in the
plastics market and vertically and horizontally integrate the Company's products
through a customer's organization.  Under this strategy, the Company will
utilize its current manufactures' sales representatives working with a channel
sales manager.  The Company has added approximately two sales executives and two
technical sales support personnel since October and


                                          6
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November 1998 to concentrate its sales and marketing efforts on the larger
accounts to generate greater sales per customer.  The Company continues its
overall approach of identifying customers who offer the potential for high
revenue over a period of multiple years, then approaches each customer with a
proposal designed to place a "starter" PMRS system in the customer's factory to
meet its most immediate, basic needs of production monitoring.  Once a customer
decides to use the PMRS system, the Company's strategy is to vertically and
horizontally integrate its full range of products throughout this customer's
organization.  This integration may include upgrading the customer's system from
PMRS to full process monitoring, increasing the number of machines being
monitored, installing client/server level reporting for a factory or
implementing the entire NPE solution to the customer's organization across
multiple plants throughout the world.

     SALES CYCLE.  The Company's products, because of the cost of the systems
and their functions, have a typical sales cycle of eight to twelve months.  The
customer's acquisition decisions often occur at senior management levels in the
information systems, plant management and quality control areas.  Since most
customers purchase process monitoring and control systems in several phases,
such as first purchasing PMRS and then, several months or years later,
purchasing the Plastics Monitoring System, a high level of customer support is
critical to the successful marketing and sales of the Company's products and to
future revenue generation for the Company.

     The sales cycle for the MCA product can be as short as two to four weeks.
The MCA is a smaller capital expenditure for the Company's customers and, in
addition, does not control the manufacturing process.  Accordingly, decisions to
purchase an MCA are typically made by lower level management.

     SALES METHODOLOGY FOR THE DIE CASTING AND PLASTICS PRODUCTS.  The Company
sells its products using a direct sales force and through a network of industry
specific manufacturers' representatives.  For die casting sales, the Company has
one direct sales representatives and two domestic manufacturing representatives.
For plastic injection molding sales, the Company has four direct sales
representatives and 12 domestic manufacturing representatives.  The Company also
has one distributor organization in the United Kingdom serving both the die
casting and plastics industries.

     The Company has entered into sales agreements with all of its domestic
manufacturers' representatives for both die casting and plastic injection
molding sales.  These agreements generally impose limited geographic exclusivity
and confidentiality restrictions.  Each manufacturers' representative is paid a
commission based on the net selling price.  These arrangements are typically
terminable at any time by either party, upon 30 days written notice.  The
Company's distributor in the United Kingdom, formerly known as Six Sigma, Ltd.,
has changed its name to Nicollet Process Engineering, Ltd. ("NPE, Ltd.").  NPE,
Ltd. employs three full-time direct sales personnel devoted exclusively to
developing markets for and selling the Company's products in the United Kingdom
and Ireland.

     The Company also routinely retains other professionals to assist with sales
and marketing efforts, including telemarketers.

     SALES METHODOLOGY FOR THE MCA.  The Company currently sells its MCA/CCA
through telemarketing programs and advertising in trade journals.  The Company
has introduced the MCA/CCA at various quality control trade shows, including the
show sponsored by the SPI.  The Company intends to increase its consulting staff
primarily to assist in diagnosing machine performance problems and rendering
solutions to the Company's customers, either with the existing MCA/CCA or
through the development of new products.


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     CUSTOMERS.  Sales to two customers of the Company represented 12% and 10%
of total sales in 1998, respectively.  In addition, sales to one customer
represented 11% of total sales in 1997.

RESEARCH AND DEVELOPMENT

     The Company's research and development staff is dedicated to the research,
design and development of the technology used in the Company's products.  The
Company's research and development expenses for the fiscal years ended August
31, 1997 and 1998 were approximately $788,000 and $712,000, respectively.

     During fiscal 1998, the Company devoted substantial resources to rewrite
and convert to the SQL data base.   This was required due to the lack of
robustness of the old data base and the unstableness of the parameters.  The
Company completed the conversion process and, as a result of these efforts, the
Company has redesigned its technology platform for the plastics industry.  The
Company's technology platform now consists of a core engine, which performs high
speed data acquisition, surrounded by customer specific modules, which vary in
number and characteristics so that a customer can "mix and match" options to
meet a particular need.

     The Company anticipates continuing efforts to develop enhancements to
existing products with the emphases on modularity and cost reduction.  These
efforts will focus on improving and adding to the Company's module products,
refining and improving the Company's core engine products, improving the options
for and ease with which customers can upgrade or migrate to other
Company-provided technology, enhancing the degree to which the Company's
products can be integrated with the software systems of third-party providers
and modifying current products for additional industry applications.

COMPETITION

     GENERAL.  The Company provides industry-specific software/hardware "turn
key" systems that compete directly with several companies in the die casting and
plastic injection molding industries that also offer similar solutions.  The
Company knows of at least five other privately held organizations providing
process monitoring and control systems in the die casting industry.  The Company
believes that these competitors do not offer an open architecture product, but
rather rely on proprietary software systems that typically are not compatible
with other software operating systems.  The Company's products utilize open
architecture software, which usually can be easily ported to a wide variety of
software systems and hardware platforms.

     The Company also has several indirect competitors, including large business
software companies which offer lower cost, generic application development
tools, requiring additional software programming by the customer.  Unlike the
Company's products, the Company believes these competing products are not "turn
key" and typically are not industry specific.  Nonetheless, these companies may
sell their programming software as an alternative to the Company's products into
the die casting and plastic injection molding industries.

     Generally, the methods of competition in this industry include the quality
and level of technology of the product offered, the level of product service and
support, and price.  The Company believes that its current and planned levels of
product support compare favorably with its competitors.  Although the price of
the Company's products is generally higher than the price of competitors'
products, the Company is able to justify higher prices based on the value
provided to customers by the high level of technology offered by the Company's
products that may not be offered by competitors'


                                          8
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products.  Because of these features, the Company does not believe that higher
prices for its products will have a negative impact on its results of operations
and financial condition.

     Some of the Company's competitors and potential competitors have
significantly greater financial, technical, research, marketing, sales,
distribution and other resources than the Company.  There can be no assurance
that the Company's competitors will not succeed in developing or marketing
technologies and products that are more effective or less expensive than those
developed or marketed by the Company or that would render the Company's
technology and products obsolete or noncompetitive.

     THE MCA.  The MCA was developed specifically for the plastic injection
molding industry, but has applications in various industries.  The MCA competes
with a wide variety of instruments from many competitors.  Competing companies
offer products that perform separate diagnostic functions such as an
oscilloscope, a logic analyzer, chart recorder and voltmeter.  Management is not
aware of any instrument, other than the MCA/CCA , which combines all of these
features in one instrument.

PATENTS AND PROPRIETARY RIGHTS/TRADE SECRETS

     The Company relies primarily on trade secrets and other unpatented
proprietary technology.  There can be no assurance that the Company can
meaningfully protect its rights in such unpatented proprietary technology or
that others will not independently develop substantially equivalent proprietary
products.  Furthermore, there can be no assurance that third parties or
competitors would not otherwise gain access to the Company's proprietary
technology.  The Company seeks to protect its trade secrets and proprietary
know-how, in part, with confidentiality agreements with employees and
consultants.  There can be no assurance that the agreements will not be
breached, that the Company will have adequate remedies for any breach or that
the Company's trade secrets will not otherwise become known to or independently
developed by competitors.

     The Company's success will also depend, in part, on its ability to obtain
patent protection for its products and to operate without infringing the
proprietary rights of third parties.  No assurances can be given that the
Company will obtain any issued patents, that the scope of any patent protection
will exclude competitors or that any of the Company's rights under such patents
will be held valid if subsequently challenged.  The validity and breadth of
claims covered in software technology involve complex legal and factual
questions and therefore may be highly uncertain.  Third parties may receive
patents which contain claims encompassing products, or product functions,
developed by the Company.

     The Company has a non-exclusive worldwide license to make, use and sell
process monitoring software covered by two patents owned by John R. Mickowski
(the "Licensed Patents").  In consideration of such license, the Company pays
Mickowski royalty payments of $1,800 per unit of process monitoring equipment
sold by the Company to or on behalf of an original equipment manufacturer
("OEM").  Sales to end users are royalty free. If the Licensed Patents are held
invalid in the future, no further royalties will be due after the date that the
judgment of invalidity becomes final and nonappealable.  The license expires
upon expiration of both Licensed Patents, the years 2002 and 2009.  The Company
has limited sublicensing rights to the Licensed Patents.

     The Company acquired the core technology for Process Vision from a third
party in August 1995.  The total purchase price for the acquisition of this
software was $300,000, payable in varying monthly installments through May 1999.
As of October 31, 1998, the outstanding balance due on this obligation was
approximately $24,500.  This obligation is secured by the acquired software.


                                          9
<PAGE>

MANUFACTURING

     NPE's operational strategy increasingly emphasizes outsourcing of
manufacturing to manage margins and to provide flexibility in meeting customer
schedules.  NPE's manufacturing operations consist primarily of material
procurement, light assembly, systems integration and testing and quality
assurance.  The Company purchases all of the hardware components and
subassemblies for its products.  The Company purchases sensors, cables and other
peripheral equipment from third party suppliers.  The Company contracts most
circuit board assembly to companies that specialize in those services.  All
software and hardware is assembled and configured by the Company and is tested
by the Company's quality control team prior to installation at the customer's
site.  All of the materials necessary for the assembly of its products are
available from multiple third party sources.

EMPLOYEES

     As of August 31, 1998, the Company had no part-time employees and 21
full-time employees, including four in manufacturing, three in research and
development, five in sales and marketing, three in customer service and six in
general administration.  As of August 31, 1998, the Company had three contract
individuals, including one in research and development, one in sales and
marketing and one in general administration.  None of the Company's employees
are represented by a labor union, and the Company considers its employee
relations to be satisfactory.

ITEM 2.   DESCRIPTION OF PROPERTY.

     The Company's facilities are located at 420 North Fifth Street, Ford
Centre, Suite 1040, Minneapolis, Minnesota, and consists of approximately 11,705
square feet, 10,505 square feet of manufacturing and administration space and
1,200 square feet of storage space.  The Company leases these facilities
pursuant to a lease which expires on December 31, 1999.  The Company has the
option to extend the term of the lease for an additional five-year term.
Monthly rent is currently approximately $9,850 plus the Company's pro rate share
of operating expenses and real estate taxes.  These facilities are in
satisfactory condition and the Company expects that these facilities will be
sufficient for its operations through fiscal 1999.  The Company believes that
additional or alternative space is readily available at acceptable rates.

ITEM 3.   LEGAL PROCEEDINGS.

     There are no material pending legal, governmental, administrative or other
proceedings to which the Company is a party or of which any of its property is
the subject.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matter was submitted to a vote of security holders during the fourth
quarter ending August 31, 1998.

                                          10
<PAGE>

ITEM 4A.  EXECUTIVE OFFICERS OF THE COMPANY.

     The executive officers of the Company, their ages and the offices held, as
of November 20, 1998, are as follows:

           NAME               AGE                   POSITION
   --------------------     -------  -------------------------------------------
     Robert A. Pitner          55    Chief Executive Officer and Interim Chief
                                     Financial Officer

     Evros Psiloyenis          45    President and Chief Operating Officer


     ROBERT A. PITNER has served as Chief Executive Officer and director of the
Company since April 1991, as President from April 1991 to November 1998 and as
Interim Chief Financial Officer since May 1997.  From April 1991 to May 1995,
Mr. Pitner also served as the Company's Chief Financial Officer.  From June 1989
to April 1991, Mr. Pitner was a Vice President at Wiken Advertising and
Promotion, a consulting firm specializing in "high tech" industries. From 1988
to 1989, he was President and Chief Operating Officer of Springboard Software,
Inc., a software company.  Prior to 1988, Mr. Pitner spent twenty years in the
banking industry in various executive positions, most recently as a senior
executive at First Bank System.

     EVROS PSILOYENIS has served as President and Chief Operating Officer of the
Company since November 1998.  From February 1997 to November 1998, Mr.
Psiloyenis served as Management Consultant for KPMG Peat Marwick LLP in their
interim management business sector.  Mr. Psiloyenis was the European Business
Development Director of Softvision Group, PLC from March 1995 to December 1997.
From April 1986 to October 1995, Mr. Psiloyenis spent nine years in the software
industry with companies such as Epilogos, LDA, a subsidiary of Epcom, LDA and
was the Chief Executive Officer of Epcom, LDA.

                                          11
<PAGE>

                                      PART II


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The Company's Common Stock currently trades in the over-the-counter market
on the OTC Bulletin Board under the symbol NPET.  From March 19, 1996, the date
of the Company's initial public offering, through March 11, 1998, the Company's
Common Stock was traded on the Nasdaq SmallCap Market.  The following table sets
forth the quarterly high and low bid prices for the Company's Common Stock for
the periods indicated as reported by Nasdaq prior to March 11, 1998, and by the
OTC Bulletin Board thereafter.  These quotations reflect inter-dealer prices,
without retail mark up, mark down or commissions and may not necessarily
represent actual transactions.



<TABLE>
<CAPTION>
PERIOD                                                                        HIGH       LOW
------                                                                        ----       ---
1998
<S>                                                                           <C>       <C>
     First Quarter (September 1, 1997 through November 30, 1997). . . .        2-7/8      3/4
     Second Quarter (December 1, 1997 through February 28, 1998). . . .        1-3/4      1/2
     Third Quarter (March 1, 1998 through May 31, 1998) . . . . . . . .        11/16     3/16
     Fourth Quarter (June 1, 1998 through August 31, 1998). . . . . . .        11/16      3/8

1997

      First Quarter  (September 1, 1996 through November 30, 1996). . .         3       2-15/64
      Second Quarter (December 1, 1996 through February 28, 1997) . . .       2-5/8     1-11/64
     Third Quarter (March 1, 1997 through May 31, 1997) . . . . . . . .       1-7/16      3/4
     Fourth Quarter (June 1, 1997 through August 31, 1997). . . . . . .       1-7/16     9/16
</TABLE>



     As of August 31, 1998, the Company's Common Stock was held by approximately
130 shareholders of record.  No cash dividends were declared or paid by the
Company during the fiscal years ending August 31, 1997 or 1998.

     The Company did not issue any unregistered securities during the fourth
quarter of fiscal 1998.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.


Disclosure under this item has been omitted pursuant to Rule 12b-25.

                           IMPORTANT FACTORS TO CONSIDER

     The following factors are important and should be considered carefully in
connection with any evaluation of the Company's business, financial condition,
results of operations and prospects.


                                          12
<PAGE>

HISTORY OF LOSSES; UNCERTAINTY OF FUTURE RESULTS

     To date, the Company has incurred continuing operating losses.  As of
August 31, 1998, the Company's accumulated deficit was approximately $10.0
million.  Net losses for the year ended August 31, 1998 were approximately $2.9
million.  Historically, the Company has financed its operations through public
and private placements of Common Stock and short-term borrowings.  The Company
is dependent on increasing its revenue base to achieve profitability.  Expenses
will continue to increase as the Company begins to increase its sales and
marketing activities.  There can be no assurance that the Company will ever
generate substantial revenues or achieve profitability.  The Company's results
of operations will depend upon numerous factors, including market acceptance of
the Company's products, the timing of customer orders, the level of pricing and
product competition and the Company's ability to manufacture and market its
products efficiently and competitively.

NEED FOR ADDITIONAL CAPITAL

     The Company plans to continue to expand its sales and marketing activities.
Although the Company believes that the proceeds from the private placements and
the Credit Facilities with TECHinspirations, Inc., the cash on hand and future
revenues will be sufficient to meet the Company's operating and capital
requirements through August 1999, there can be no assurance that the Company
will not require additional financing earlier.  Any additional required
financing may not be available on terms satisfactory to the Company, if at all.

EFFECTS OF DELISTING FROM NASDAQ SMALLCAP MARKET

     Effective March 11, 1998, the Company's Common Stock was no longer quoted
on the Nasdaq Small Cap Market because the Company no longer met, and currently
does not meet standards for continued listing on the Nasdaq Small Cap Market.
The Company's Common Stock is currently quoted in the "over-the-counter" market
and is eligible to trade on the OTC Bulletin Board.  The public trading market
for the Company's Common Stock has been, and may continue to be, adversely
effected by this development.  In order for the Company's Common Stock to be
quoted on the Nasdaq Small Cap Market, the Company will be required to meet
initial listing criteria.  These criteria require the Company to have at least:

     -    three market makers in the Common Stock
     -    total net tangible assets of $4.0 million
     -    a minimum bid price for the Common Stock of $4.00 per share
     -    300 holders of its Common Stock
     -    1 million shares of its Common Stock held by non-affiliates, having a
          market value of  $5 million or more

The Company does not expect to be able to achieve these criteria in the
foreseeable future.  Consequently, the ability of shareholders to sell their
shares of the Company's Common Stock may be further impaired, not only in the
number of shares which may be bought and sold, but also through delays in the
timing of transactions and reductions in security analysts and the news media
coverage, if  any, of the Company.


                                          13
<PAGE>

LENGTHY SALES CYCLES

     The Company's products, in particular the Process Vision and the Plastics
Monitoring System, are subject to a long sales cycle, lasting from approximately
eight to twelve months or longer.  This cycle may result in delays in realizing
revenues from the sale of the Company's products.

VARIABILITY OF QUARTERLY OPERATING RESULTS

     The Company's operating results can vary substantially from quarter to
quarter due to various factors including among others: the size and timing of
customer orders; lengthy sales cycles for the Company's products, in particular
the Process Vision and the Plastics Monitoring System; the buying patterns of
manufacturers in the Company's target markets; delays in the introduction of
products or product upgrades by the Company or by other providers of hardware
and software components; customer order deferrals in anticipation of new
products; market acceptance of new products; reduction in demand for existing
products; changes in operating expenses; and general economic conditions.  There
can be no assurance that future product upgrades and resulting customer order
deferrals will not impact its quarterly operating results.

LIMITED MARKETING EXPERIENCE

     A key element of the Company's business strategy is to promote the sale of
its products by continuing to expand its sales and marketing efforts.  To date,
the Company has had limited resources for sales and marketing activities and has
primarily sold its products through its independent representative
organizations.  The Company has not had sufficient resources to develop
marketing materials and programs or to adequately train its independent
representative organizations, which currently provide most of the Company's
sales efforts in the plastic injection molding industry.  There can be no
assurance that the Company will increase its sales activity, or that the Company
will be able to develop and maintain an effective sales force.

DEPENDENCE UPON PLASTIC INJECTION MOLDING AND DIE CASTING INDUSTRIES

     Currently, the Die Casting Products and the Plastics Products are designed
only for the die casting and plastic injection molding industries.  Each of
these industries is characterized by fluctuations in manufacturing capacity and
pricing and gross margin pressures.  Segments of these industries have from time
to time experienced significant economic downturns characterized by decreased
product demand, production over-capacity, price erosion, work slowdowns and
layoffs.  Historically, the die casting industry has been deeply affected by
economic cycles and tends to be characterized by quick declines at the very
beginning of a downturn and gradual recoveries very late in the cycle.
Accordingly, the Company's sales efforts to the die casting market are also
subject to downturns in the economy.  Unlike the die casting industry, the
plastic injection molding industry historically has grown steadily in recent
years, even through downturns in the economic cycle.  Since 1994, however, when
the Company entered the plastic injection molding industry, there have been no
economic downturns as reflected by industry revenues which would enable the
Company to gauge its impact on sales.  The Company's operations may in the
future reflect substantial fluctuations from period to period as a consequence
of such industry patterns, general economic conditions affecting the timing of
orders from major customers, and other factors affecting capital spending.
There can be no assurance that such factors will not have a material adverse
effect upon the Company's business, operating results and financial conditions.


                                          14
<PAGE>

TECHNOLOGICAL OBSOLESCENCE

     The market for the Company's products is characterized by rapid
technological advances, evolving industry standards, changes in end-user
requirements and frequent new product introductions and enhancements.  The
introduction of products embodying new technologies and the emergence of new
industry standards could render the Company's existing products and products
currently under development obsolete and unmarketable.  The Company's future
success will depend upon its ability to enhance its current products and to
develop and introduce new products that keep pace with technological
developments, respond to evolving end-user requirements and achieve market
acceptance.  Any failure by the Company to anticipate or respond adequately to
technological developments or end-user requirements, or any significant delays
in product development or introduction, could result in a loss of
competitiveness or revenues.  Furthermore, the Company may not have sufficient
financial resources to maintain research and development capabilities and,
consequently, to maintain its technology position.  Even though the Company's
products have been designed to incorporate the latest technology, some of the
Company's competitors have greater financial resources and larger research and
development staffs than the Company and accordingly may have greater
capabilities to adapt their products to technological changes.

GROWTH REQUIREMENTS

     In addition to the Company's efforts to grow its existing core business,
future growth of the Company will also depend on, among other things, the
Company's ability to develop products for different industries and the Company's
ability to gain market acceptance for the Company's products in new geographic
areas.  In order to expand into additional industries, the Company must obtain
necessary industry-specific knowledge and successfully design new products
specific to the new industries.  In order to enter new geographical markets, the
Company must successfully develop effective distribution channels, product
recognition and product and customer support capabilities.  All of these
requirements present significant risks, and may require additional investment by
the Company.  To date, the Company has begun limited expansion into industries
other than die casting and plastic injection molding, including the machine tool
and plastic extrusion industries.  No assurance can be given that the Company
will be able to successfully manage or generate necessary funding for these
aspects of its business or adequately monitor and control the additional costs
and expenses associated with growth.

COMPETITION

     The markets for the Company's products are highly competitive.  Several
companies offer lower cost products that compete with the Company's products.
Many of the Company's competitors and potential competitors include a number of
established companies that have significantly greater financial, technical and
marketing resources than the Company.  There can be no assurance that such
competitors will not develop products that are superior to the Company's
products or that achieve greater market acceptance.  There is no assurance that
the Company will be able to compete successfully against current and future
sources of competition or that the competitive pressures faced by the Company
will not adversely affect its financial performance.

DEPENDENCE ON KEY EMPLOYEES

     The Company's success depends on the performance of its executive officers
and other key personnel, and in particular Robert A. Pitner, the Company's Chief
Executive Officer and Interim Chief Financial Officer, Evros Psiloyenis, the
Company's President and Chief Operating Officer and Pierce A. McNally, the
Company's Chairman of the Board and Director of Corporate Development.  The loss
of


                                          15
<PAGE>

the services of either Mr. Pitner, Mr. Psiloyenis or Mr. McNally could have a
material adverse effect on the Company.  The Company's future success will also
depend in part upon its ability to attract and retain highly qualified
personnel.  Competition in the recruiting of highly qualified personnel in the
Company's industry is intense.  While the Company has not experienced any
difficulty in attracting and retaining talented and qualified employees to date,
there can be no assurance that the Company can retain its key employees or that
it can attract, assimilate and retain other qualified personnel in the future.

PROTECTION OF INTELLECTUAL PROPERTY

     The Company primarily relies upon unpatented trade secrets to protect is
proprietary technology.  The Company's success will depend on its ability to
preserve these trade secrets and no assurance can be given that others will not
independently develop or acquire substantially equivalent techniques, gain
access to the Company's proprietary technology or disclose such technology to
third parties.  Furthermore, there can be no assurance that the Company will
ultimately protect meaningful rights to such unpatented proprietary technology.
The Company generally requires its employees to execute nondisclosure agreements
to preserve these trade secrets.  The Company's success may also depend on its
ability to obtain patent protection for its products and to operate without
infringing the proprietary rights of third parties.  The Company has not
undertaken any independent investigation to determine whether it is infringing
any intellectual property rights of others.  No assurances can be given that any
future patent applications will be issued or that the scope of any patent
protection will exclude competitors or provide competitive advantages to the
Company.  Furthermore, there can be no assurance that others will not claim
rights in or ownership of proprietary rights held by the Company, or that the
Company's products and processes will not infringe, or be alleged to infringe,
the proprietary rights of others.  Moreover, there can be no assurance that
others have not developed or will not develop similar products, duplicate any of
the Company's products or design around the Company's patents, if issued.  In
addition, whether or not any patents are issued to the Company, others may hold
or receive patents which contain claims having a scope that covers products
subsequently developed by the Company.

INTERNATIONAL SALES

     The Company intends to expand its operations outside of the United States,
in part by the addition of international sales representatives, and to enter
additional international markets, which will require significant management
attention and financial resources.  International sales are subject to inherent
risks, including unexpected changes, in regulatory requirements, currency
exchange rates, tariffs and taxes, difficulties in staffing and managing foreign
operations, longer payment cycles, greater difficulty in accounts receivable
collection and political and economic instability.  If, for any reason, exchange
or price controls or other restrictions on foreign currencies were imposed, the
Company's business could be adversely affected.  In addition, the laws of
certain countries do not protect the Company's products and intellectual
property rights to the same extent as do the laws of the United States.  There
can be no assurance that these factors will not have a material adverse effect
on the Company's future international sales and, consequently, on the Company's
business, operating results and financial condition.

PRODUCT LIABILITY

     The Company may be exposed to product liability claims with respect to
defective parts produced by machines served by Process Vision.  While the
Company believes it would have adequate defenses to any such claim, any such
claims could have an adverse effect on the Company.  The Company currently
maintains product liability insurance in the face amount of $2,000,000; however,


                                          16
<PAGE>

there can be no assurance that any insurance coverage would be adequate to cover
product liability claims.

APPLICABILITY OF "PENNY STOCK RULES"

     Federal regulations under the Exchange Act, regulate the trading of
so-called "penny stocks" (the "Penny Stock Rules"), which are generally defined
as any security not listed on a national securities exchange or Nasdaq, priced
at less than $5.00 per share and offered by an issuer with limited net tangible
assets and revenues.  Because the Company's Common Stock trades below $5.00 per
share and is not listed on Nasdaq or any national securities exchange, trading,
if any, of the Company's Common Stock will be subject to the full range of the
Penny Stock Rules.  Under these rules, broker-dealers must take certain steps
prior to selling a "penny stock," which steps include: (i) obtaining financial
and investment information from the investor; (ii) obtaining a written
suitability questionnaire and purchase agreement signed by the investor; and
(iii) providing the investor a written identification of the shares being
offered and the quantity of the shares.  If the Penny Stock Rules are not
followed by the broker-dealer, the investor has no obligation to purchase the
shares.  The application of the comprehensive Penny Stock Rules make it more
difficult for broker-dealers to sell the Company's Common Stock and shareholders
of the Company may have difficulty in selling their shares in the future in the
secondary trading market.

POSSIBLE VOLATILITY OF STOCK PRICE

     The stock market has from time to time experienced significant price and
volume fluctuations that are unrelated to the operating performance of
particular companies.  These broad market fluctuations may adversely affect the
market price of the Company's Common Stock.  In addition, the market price of
the Company's Common Stock may be highly volatile.  Factors such as a small
market float, fluctuations in the Company's operating results, announcements of
technological innovations or new products by the Company or its competitors,
developments with respect to patents or proprietary rights, changes in stock
market analyst recommendations regarding the Company, other technology companies
or the Company's industry generally and general market conditions may have a
significant effect on the market price of the Common Stock.

ITEM 7.   FINANCIAL STATEMENTS.

     The Financial Statements and Independent Auditors' Report has been omitted
pursuant to Rule 12b-25.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     Not applicable.

                                          17
<PAGE>

                                      PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

          (a)  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF
               THE COMPANY

     The information under the caption "Election of Directors -- Information
About Nominees" in the Company's 1999 Proxy Statement is incorporated herein by
reference.  Information concerning executive officers of the Company is included
in this Report under Item 4A, "Executive Officers of the Company."

          (b)  SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Information under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance" in the 1999 Proxy Statement is incorporated herein by reference.

ITEM 10.  EXECUTIVE COMPENSATION.

     The information under the caption "Election of Directors -- Director
Compensation" in the Company's 1998 Proxy Statement is incorporated herein by
reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information under the caption "Principal Shareholders and Beneficial
Ownership of Management" in the Company's 1999 Proxy Statement is incorporated
herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information under the captions "Election of Directors -- Information
About Nominees" and "Certain Transactions" in the Company's 1999 Proxy Statement
is incorporated herein by reference.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K .

          (a)  EXHIBITS

     The exhibits to this Report are listed on the Exhibit Index on pages E-1 to
E-4 below.  A copy of any of the exhibits listed or referred to above will be
furnished at a reasonable cost to any person who was a shareholder of the
Company as of December 15, 1998, upon receipt from any such person of a written
request for any such exhibit.  Such request should be sent to Nicollet Process
Engineering, Inc., 420 North Fifth Street, Suite 1040, Ford Centre, Minneapolis
Minnesota, 55401; Attn.:  Shareholder Information.

     The following is a list of each management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Annual Report on Form
10-KSB pursuant to Item 14(c):

A.   1990 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the
     Company's Registration Statement on Forms SB-2 (File No. 333-00852C)).

B.   1995 Amended and Restated Stock Indenture Plan (incorporated by reference
     to Exhibit 10.2 to the Company's Registration Statement on Form SB-2 (File
     No. 333-00852C)).


                                          18
<PAGE>

C.   Employment Agreement between the Company and Robert A. Pitner, dated July
     31, 1994 (incorporated by reference to Exhibit 10.3 to the Company's
     Registration Statement on Form SB-2 (File No. 333-00852C)).

D.   Amendment No. 1, dated effective October 26, 1995 to Employment Agreement
     between the Company and Robert A. Pitner, dated July 31, 1994 (incorporated
     by reference to Exhibit 10.4 to the Company's Registration Statement on
     Form SB-2 (File No. 333-00852C)).

E.   Agreement between the Company and Pierce A. McNally, dated June 1, 1995
     (incorporated by reference to Exhibit 10.5 to the Company's Registration
     Statement on Form SB-2 (File No. 333-00852C)).

F.   Amendment No. 1, dated effective October 26, 1995 to Agreement between the
     Company and Pierce A. McNally, dated June 1, 1995 (incorporated by
     reference to Exhibit 10.6 to the Company's Registration Statement on Form
     SB-2 (File No. 333-00852C)).

G.   Form of Indemnification Agreement by and between the Company and the
     Officers and Directors of the Company (incorporated by reference to Exhibit
     10.15 to the Company's Registration Statement on Form SB-2 (File No.
     333-00852C)).

H.   Termination Agreement, dated December 31, 1997 by and between Richard
     Koontz and the Company (filed herewith).

I.   Employment Proposal Agreement dated July 20, 1998 between the Company and
     Evros Psiloyenis (filed herewith).

          (b)  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed during the fourth quarter of the fiscal
year ended August 31, 1998.


                                          19
<PAGE>

                                     SIGNATURES


     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Date:  November 30, 1998        NICOLLET PROCESS ENGINEERING, INC.

                                By: /s/ Robert A. Pitner
                                    --------------------------------------------
                                     Robert A. Pitner
                                     Chief Executive Officer and Interim Chief
                                     Financial Officer
                                     (principal executive officer)

                                By: /s/ John Sandberg
                                    --------------------------------------------
                                    John Sandberg
                                    Controller
                                    (principal accounting officer)


         In accordance with the Exchange Act, this report has been signed below
on November 30, 1998 by the following persons on behalf of the Company and in
the capacities indicated.


                                Signature and Title
                                -------------------

                                /s/ Pierce A. McNally
                                ------------------------------------------------
                                    Pierce A. McNally
                                    Chairman of the Board and Director of
                                    Corporate Development

                                /s/ Robert A. Pitner
                                ------------------------------------------------
                                    Robert A. Pitner
                                    Chief Executive Officer,
                                    Interim Chief Financial Officer and Director
                                    (principal executive and financial officer)

                                /s/ Thomas W. Bugbee
                                ------------------------------------------------
                                    Thomas W. Bugbee
                                    Director

                                /s/ Benton J. Case Jr.
                                ------------------------------------------------
                                    Benton J. Case Jr.
                                    Director


                                ------------------------------------------------
                                    Andrew K. Boszhardt, Jr.
                                    Director


                                          20
<PAGE>

                         NICOLLET PROCESS ENGINEERING, INC.

                         Exhibit Index to Annual Report On
                                    Form 10-KSB
                       For Fiscal Year Ended August 31, 1998


<TABLE>
<CAPTION>
ITEM NO.                      DESCRIPTION                                                      METHOD OF FILING
--------                      -----------                                                      ----------------
<S>      <C>                                                                                   <C>
3.1      Articles of Incorporation, as amended............................................            (3)
3.2      Bylaws, as amended...............................................................            (2)
4.1      Specimen Form of the Company's Common Stock Certificate..........................            (1)
4.2      Warrant for Purchase of Shares of Common Stock of the Company issued to Anelise
             Sawkins dated August 9, 1993.................................................            (1)
4.3      Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with November 1993 private placement..............................            (1)
4.4      Warrant for Purchase of Shares of Common Stock of the Company issued to Charlie
             Phelps dated May 5, 1994.....................................................            (1)
4.5      Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with advertising design services..................................            (1)
4.6      Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with January 1995 private placement...............................            (1)
4.7      Form of Warrant for Purchase of Shared of Common Stock of the Company issued in
             connection with February 1995 private placement..............................            (1)
4.8      Warrant for Purchase of Shares of Common Stock of the Company issued to Tuschner
             & Company, Inc. dated February 7, 1995.......................................            (1)
4.9      Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with March 1995 private placement.................................            (1)
4.10     Warrant for Purchase of Shares of Common Stock of the Company issued to Tuschner
             & Company dated March 2, 1995................................................            (1)
4.11     Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with March 1995 bridge financing..................................            (1)
4.12     Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with repayment of March 1995 bridge financing.....................            (1)
4.13     Form of Warrant for Purchase of Shares of Common Stock of the Company issued in
             connection with January 1996 bridge financing................................            (1)


                                         E-1
<PAGE>

<CAPTION>
ITEM NO.                      DESCRIPTION                                                      METHOD OF FILING
--------                      -----------                                                      ----------------
<S>      <C>                                                                                   <C>
4.14     Warrant for Purchase of Shares of Common Stock of the Company issued to Dillon
             Advertising dated July 31, 1997..............................................            (7)
4.15     Warrant for Purchase of Shares of Common Stock of the Company issued to Dillon
             Advertising dated August 31, 1997............................................            (7)
4.16     Registration Rights Agreement Dated as of November 7, 1997
             among the Company and certain Investors......................................            (6)
10.1     1990 Stock Option Plan...........................................................            (1)
10.2     1995 Amended and Restated Stock Incentive Plan...................................            (1)
10.3     Employment Agreement between the Company and Robert A. Pitner, dated July 31,
             1994 ........................................................................            (1)
10.4     Amendment No. 1, dated effective October 26, 1995 to Employment Agreement between
             the Company and Robert A. Pitner, dated July 31, 1994........................            (1)
10.5     Agreement between the Company and Pierce A. McNally, dated June 1, 1995..........            (1)
10.6     Amendment No. 1, dated effective October 26, 1995 to Agreement between the
             Company and Pierce A. McNally, dated June 1, 1995............................            (1)
10.7     Settlement Agreement between the Company and John W. Mickowski, dated October 1,
             1995.........................................................................            (1)
10.8     Form of Indemnification Agreement by and between the Company and the Officers and
             Directors of the Company.....................................................            (1)
10.9     Lease Agreement by and between Hillcrest Development and the Company, dated
             January 11, 1993.............................................................            (1)
10.10    Agreement for the First Amendment to a Lease between Hillcrest Development and
             the Company, dated June 8, 1993..............................................            (1)
10.11    Agreement for the Second Amendment to a Lease between Hillcrest Development and
             the Company, dated July 20, 1993.............................................            (1)
10.12    Agreement for the Third Amendment to a Lease between Hillcrest Development and
             the Company, dated November 12, 1993.........................................            (1)
10.13    Agreement for the Sixth Amendment to a Lease between Hillcrest Development and
             the Company, dated October 7, 1994...........................................            (1)


                                         E-2
<PAGE>

<CAPTION>
ITEM NO.                      DESCRIPTION                                                      METHOD OF FILING
--------                      -----------                                                      ----------------
<S>      <C>                                                                                   <C>
10.14    Agreement for the Seventh Amendment to a Lease between Hillcrest Development and
             the Company dated September 3, 1996..........................................            (2)
10.15    Agreement for the Eighth Amendment to a Lease between Hillcrest Development and
             the Company dated October 18, 1996...........................................            (2)
10.16    Software Purchase Agreement between Larry D. Glendenning, dba LDG Software
             Solutions and the Company dated effective August 1, 1995.....................            (1)
10.17    Promissory Note and Security Agreement in favor of Larry D. Glendenning, dba LDG
             Software Solutions dated effective August 1, 1995............................            (1)
10.18    Termination Agreement dated December 31, 1997 between the Company and Richard A.
             Koontz.......................................................................      Filed herewith
10.19    Credit and Security Agreement dated as of May 28, 1997 by and between Norwest
             Business Credit, Inc. and the Company........................................            (4)
10.20    Credit and Security Agreement dated as of May 28, 1997 by and between Norwest
             Bank Minnesota, National Association and the Company.........................            (4)
10.21    Subscription Agreement dated as of November 7, 1997 among the Company and certain
             Investors....................................................................            (5)
10.22    First Amendment dated as of November 24, 1997 to Credit and Security Agreement
             dated as of May 28, 1997 by and between Norwest Business Credit, Inc. and the            (7)
             Company......................................................................
10.23    Nonrecourse Assignment dated as of June 8, 1998 by and between Norwest Business
             Credit Inc. and TECHinspirations, Inc........................................      Filed herewith
10.24    Employment Proposal Agreement dated July 26, 1998 between the Company and Evros
             Psiloyenis...................................................................      Filed herewith
23.1     Consent of Ernst & Young LLP.....................................................      To be Filed by
                                                                                                   Amendment
27.1     Financial Data Schedule..........................................................      To be Filed by
                                                                                                   Amendment
</TABLE>



------------------------------------
(1)  Incorporated by reference for the Company's Registration Statement on Form
     SB-2 (File No. 333-00852C).

(2)  Incorporated by reference for the Company's Annual Report on Form 10-KSB
     for the fiscal year ended August 31, 1996 (File No. 0-27928).


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<PAGE>

(3)  Incorporated by reference for the Company's Quarterly Report on Form 10-QSB
     for the fiscal quarter ended February 28, 1997 (File No. 0-27928).

(4)  Incorporated by reference for the Company's Quarterly Report on Form 10-QSB
     for the fiscal quarter ended May 31, 1997 (File No. 0-27928).

(5)  Incorporated by reference for a Schedule 13D/A dated November 12, 1997,
     filed on behalf of Pierce A. McNally and Robert A. Pitner.

(6)  Incorporated by reference for the Company's Current Report on Form 8-K as
     filed with the Securities and Exchange Commission on November 17, 1997
     (File No. 0-27928).

(7)  Incorporated by reference for the Company's Annual Report on Form 10-KSB
     for the year ended August 31, 1997 (File No. 0-27928).


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