FORM 10-Q QUARTERLY REPORT
  UNDER SECTION 13OR 15(D) OF THE SECURITIES
  EXCHANGE ACT OF 1934

SECURITIES AND EXCHANGE
  COMMISSIONWASHINGTON, D.C. 20549

For quarter ended March
  31, 2001Commission File Number
  0-24064

CONESTOGA ENTERPRISES,
  INC.(Exact name of Registrant
  as specified in its charter)

PENNSYLVANIA(State of Incorporation)

23-2565087(IRS Employer Number)

202 East First Street,
  Birdsboro, Pennsylvania 19508(Address of Principal
  Executive Offices)

Registrant's telephone number,
  including area code (610) 582-8711

Indicate by check mark whether
  the registrant (1) has filed all reports required to be filed by Section 13
  or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
  (or for such shorter period that the Registrant was required to file such reports),
  and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

As of March 31, 2001, the
  outstanding number of shares of Common Stock, par value $1.00, was 7,879,435.























|CONESTOGA
      ENTERPRISES, INC. 
      CONSOLIDATED BALANCE SHEETS ( UNAUDITED ) 
      March 31, 2001 and December 31, 2000
      (In Thousands, Except Shares and Per Share Data)                
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ASSETS                                                                                                                                                                                               
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Current Assets                                                                                                                                                                                       
|Cash and Cash Equivalents                                                                                                                                                                            
|Accounts receivable, including unbilled                                                                                                                                                              
|revenue                                                                                                                                                                                              
|Inventories, at average cost                                                                                                                                                                         
|Prepaid taxes                                                                                                                                                                                        
|Prepaid expenses                                                                                                                                                                                     
|Total Current Assets                                                                                                                                                                                 
|                                                                                                                                                                                                     
|Investments and Other Assets                                                                                                                                                                         
|Assets held for sale                                                                                                                                                                                 
|Cost in Excess of Net Assets of Businesses Acquired                                                                                                                                                  
|Investments in partnerships                                                                                                                                                                          
|Investments in equity securities                                                                                                                                                                     
|Prepaid Pension Costs                                                                                                                                                                                
|Other                                                                                                                                                                                                
|                                                                                                                                                                                                     
|Plant                                                                                                                                                                                                
|In Service                                                                                                                                                                                           
|                                                                                                                                                                                                     
|Under Construction                                                                                                                                                                                   
|                                                                                                                                                                                                     
|Less accumulated depreciation                                                                                                                                                                        
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Total
      Assets                                                                                                                                                                                   
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                       
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|                                                                                                                                                                                                     
|CONESTOGA
      ENTERPRISES, INC.CONSOLIDATED BALANCE
      SHEETS ( UNAUDITED )March 31, 2001
      and December 31, 2000( In Thousands,
      Except Shares and Per Share Data)                    
|                                                                                                                                                                                                     
|LIABILITIES
      AND STOCKHOLDERS' EQUITY                                                                                                                                                           
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Current
      Liabilities                                                                                                                                                                            
|Current maturities of long term debt                                                                                                                                                                 
|Current liability under capital lease                                                                                                                                                                
|Notes payable                                                                                                                                                                                        
|Accounts payable                                                                                                                                                                                     
|Accrued:                                                                                                                                                                                             
|Taxes                                                                                                                                                                                                
|Payroll & Vacation Pay                                                                                                                                                                               
|Other                                                                                                                                                                                                
|                                                                                                                                                                                                     
|Total Current Liabilities                                                                                                                                                                            
|                                                                                                                                                                                                     
|Long
      Term Liabilities                                                                                                                                                                          
|Long term debt, less current maturities                                                                                                                                                              
|Liability under capital lease, less current maturities                                                                                                                                               
|Accrued post retirement cost                                                                                                                                                                         
|Other                                                                                                                                                                                                
|                                                                                                                                                                                                     
|Deferred
      Income Taxes                                                                                                                                                                          
|                                                                                                                                                                                                     
|Convertible\Redeemable
      Preferred Stock                                                                                                                                                         
|Par value $65 per share; authorized 900,000 shares; issued
      and 
          outstanding; 3/31/01 - 139,333  12/31/00 - 141,288                                                                   
|                                                                                                                                                                                                     
|Common
      Stockholders' Equity                                                                                                                                                                    
|Common Stock par value $1 per share; authorized                                                                                                                                                      
|200,000,000 shares; Issued 7,897,914                                                                                                                                                                 
|Additional Paid-In Capital                                                                                                                                                                           
|Retained earnings                                                                                                                                                                                    
|Net unrealized appreciation on                                                                                                                                                                       
|marketable equity securities                                                                                                                                                                         
|Less cost of treasury stock; 3/31/01 18,479 shares and                                                                                                                                               
|12/31/00 33,427 shares                                                                                                                                                                               
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Total Liabilities
      and Stockholders' Equity                                                                                                                                                     
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|CONESTOGA ENTERPRISES,
        INC.
        CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)THREE MONTHS ENDED
        MARCH 31, 2001 and 2000( In Thousands,
        Except Per Share Data)            
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Operating
      Revenues:                                                                                                                                                                            
|Local Services                                                                                                                                                                                       
|Long Distance and Access Services                                                                                                                                                                    
|Wireless Services                                                                                                                                                                                    
|Equipment and Other                                                                                                                                                                                  
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Operating
      Expenses:                                                                                                                                                                            
|Cost of Operations                                                                                                                                                                                   
|Depreciation and Amortization                                                                                                                                                                        
|Selling, General and Administrative                                                                                                                                                                  
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Operating Income                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Other
      Income(Deductions), Net:                                                                                                                                                                 
|Interest Expense                                                                                                                                                                                     
|Loss from unconsolidated                                                                                                                                                                             
|partnership interest                                                                                                                                                                                 
|Gain on Sale of Securities                                                                                                                                                                           
|Other, Net                                                                                                                                                                                           
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Income Before Income
      Taxes                                                                                                                                                                     
|Income
      Taxes                                                                                                                                                                                   
|Net
      Income                                                                                                                                                                                     
|                                                                                                                                                                                                     
|Basic
      earnings per common share                                                                                                                                                                
|Diluted
      earnings per common share                                                                                                                                                              
|Dividends
      per common share                                                                                                                                                                     
|* Some 2000 amounts have been restated to conform to current years presentation.                                                                                                                     
|                                                                                                                                                                                                     
|                                                                                                                                                                                                     
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|                                                                                                                                                                                                     
|CONESTOGA ENTERPRISES,
        INC.CONSOLIDATED STATEMENT
        OF COMPREHENSIVE INCOME (UNAUDITED)THREE
        MONTHS ENDED MARCH 31, 2001 and 2000( In Thousands, Except
        Per Share Data)
|                                                                                                                                                                                                     
|Net Income                                                                                                                                                                                           
|Unrealized gains on Securities                                                                                                                                                                       
|Unrealized holding gainsduring
      period                                                                                                                                                          
|Less: reclassification adjustmentfor
      gains included in net income                                                                                                                              
|Comprehensive Income                                                                                                                                                                                 
|CONESTOGA ENTERPRISES,
      INC.CONSOLIDATED STATEMENTS
      OF CASH FLOW (UNAUDITED)THREE MONTHS ENDED
      MARCH 31, 2001 AND 2000(in thousands)                                                
|                                                                                                                                                                                                     
|Cash
      Flows from Operating Activities                                                                                                                                                           
|Net cash provided by operating activities                                                                                                                                                            
|                                                                                                                                                                                                     
|Cash
      Flows From Investing Activities                                                                                                                                                           
|Purchase of Plant, net of removal costs and salvage                                                                                                                                                  
|Proceeds from sale of marketable equity securities                                                                                                                                                   
|Proceeds from sale of unconsolidated partnership interests                                                                                                                                           
|Capital investments in unconsolidated partnershp interests                                                                                                                                           
|                                                                                                                                                                                                     
|Net cash used in investing activities                                                                                                                                                                
|Cash Flows From Financing Activities                                                                                                                                                                 
|Proceeds from long-term borrowing                                                                                                                                                                    
|Proceeds from short-term borrowing (net)                                                                                                                                                             
|Proceeds from capital lease financing                                                                                                                                                                
|Principal payments on long term borrowing                                                                                                                                                            
|Principal payments on capital lease financing                                                                                                                                                        
|Proceeds from issuance of stock                                                                                                                                                                      
|Proceeds from issuance of stock under the                                                                                                                                                            
|dividend reinvestment plan                                                                                                                                                                           
|Common stock dividends paid                                                                                                                                                                          
|Preferred stock redemption                                                                                                                                                                           
|Preferred stock dividends paid                                                                                                                                                                       
|Purchase of common stock for the treasury                                                                                                                                                            
|                                                                                                                                                                                                     
|Net cash provided by (used in) financing
      activities                                                                                                                                            
|                                                                                                                                                                                                     
|Increase (decrease) in cash and cash
      equivalents                                                                                                                                               
|Cash and cash equivalents                                                                                                                                                                            
|Beginning                                                                                                                                                                                            
|Ending                                                                                                                                                                                               
|                                                                                                                                                                                                     
|SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION                                                                                                                                               
|Cash Payments for:                                                                                                                                                                                   
|Interest                                                                                                                                                                                             
|Income Taxes                                                                                                                                                                                         



CONESTOGA ENTERPRISES,
  INC.NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS

NOTE
  1: BASIS OF PRESENTATION

The
  accompanying unaudited consolidated financial statements have been prepared
  in accordance with the instructions to Form 10-Q and do not include all of the
  information and footnotes required by generally accepted accounting principles
  for complete financial statements. In the opinion of management, all adjustments
  (consisting only of normal recurring accruals) considered necessary for a fair
  presentation have been included. Operating results for the three months ended
  March 31, 2001 are not necessarily indicative of the results that may be expected
  for the year ending December 31, 2001. The December 31, 2000 condensed balance
  sheet data was derived from audited financial statements. For further information,
  refer to the consolidated financial statements and footnotes included in Conestoga's
  2000 Annual Report on Form 10-K.

The
  preparation of financial statements in conformity with generally accepted accounting
  principles requires management to make estimates and assumptions that affect
  the amounts of assets and liabilities at the date of the financial statements
  and the reported amounts of revenues and expenses during the reporting period.
  Actual results could differ from those estimates. Some of the 2000 revenues
  and expenses have been restated to conform to the current reporting period presentation.

NOTE
  2: EARNINGS PER SHARE

Per
  share data for the three months ended March 31, 2001 and 2000 are based on the
  weighted average number of shares outstanding of 7,867,516 and 7,817,394 for
  2001 and 2000 respectively. Net income available for the common shareholders
  was approximately $841,000 and $247,000 for 2001 and 2000 respectively. Net
  income available for common shareholders differs from net income on the consolidated
  statement of income by the amount of preferred stock dividends.



The
  effect of convertible preferred stock and the effect of stock options outstanding
  were anti-dilutive and therefore excluded from the computation of diluted earnings
  per share.

NOTE
  3: OPERATING SEGMENTS

The
  Company's reportable segments are strategic business units that offer
  different services. They are managed separately because each business unit requires
  different technology and marketing strategies. The Company has three reportable
  segments: Telephone - traditional telephone service provided by Conestoga Telephone
  and Telegraph Company (CTT) and Buffalo Valley Telephone Company (BVT);
  Wireless paging and PCS communication services provided by Conestoga Wireless
  Company (CWC) and Conestoga Mobile Systems (CMS); and CLEC and full service
  inter-exchange long distance provided by Conestoga Networks, Inc. (CNI). The
  "Other" column primarily includes equipment sale and consulting services provided
  by Infocore, Inc.(INF), and corporate related items.

The
  accounting policies of the segments are the same as those described in the summary
  of accounting policies. The Company evaluates performance based on profit or
  loss from operations before corporate allocations, interest, income taxes and
  non-recurring gains and losses. Transactions occurring between segments are
  recorded on the same basis as transactions with third parties.

Segment
  information as of March 31, 2001 and 2000 are as follows:











|                                                                                                | Telephone        | Wireless  | CLECandLong Distance | Other     | Total        
|----------------------------------------------------------------------------------------------- | ---------------- | --------- | -------------------- | --------- | -------------
|                                                                                                | ( in thousands )
|Three months
      ended March 31,
      2001: Operating revenuesfrom
      external customers; |                  |           |                      |           |              
|Local
      Service                                                                             | $
      3,449    | $
      - | $
      921          | $
      - | $
      4,370
|Long
      distance andaccess
      service                                                     | 8,026            | $
      - | 4,175                | $
      - | 12,201       
|Wireless
      service                                                                          | $
      -        | 1,335     | $
      -            | $
      - | 1,335        
|Equipment
      and Other                                                                       | 1,958            | 295       | 562                  | 2,037     | 4,852        
|                                                                                                | 13,433           | 1,630     | 5,658                | 2,037     | 22,758       
|                                                                                                |                  |           |                      |           |              
|Inter-segment
      operatingRevenues                                                           | 668              | 19        | 71                   | 0         | 758          
|Operating
      profit (loss)                                                                   | 5,922            | (2,100)   | (595)                | 45        | 3,272        
|Total
      Assets                                                                              | 118,308          | 38,978    | 30,097               | 5,189     | 192,572      
|Capital
      expenditures                                                                      | 2,897            | 1,670     | 915                  | 40        | 5,522        
|Depreciation
      andAmortization                                                              | 2,781            | 1,102     | 439                  | 49        | 4,371        
|                                                                                                |                  |           |                      |           |              
|                                                                                                |                  |           |                      |           |              
|Three
      months endedMarch
      31, 2000: Operating revenuesfrom external
      customers;  |                  |           |                      |           |              
|Local
      Service                                                                             | $
      3,099    | $
      - | $ 291                | $
      - | $
      3,390
|Long
      distance andaccess
      service                                                     | 7,456            | -         | 4,640                | -         | 12,096       
|Wireless
      service                                                                          | -                | 704       | -                    | -         | 704          
|Equipment
      and Other                                                                       | 1,904            | 238       | 584                  | 2,772     | 5,498        
|                                                                                                | 12,459           | 942       | 5,515                | 2,772     | 21,688       
|                                                                                                |                  |           |                      |           |              
|Inter-segment
      operatingRevenues                                                           | 904              | 30        | 21                   | -         | 955          
|Operating
      profit (loss)                                                                   | 4,651            | (2,241)   | (635)                | (213)     | 1,562        
|Total
      Assets                                                                              | 117,740          | 31,008    | 19,593               | 6,653     | 174,994      
|Capital
      expenditures                                                                      | 2,053            | 1,884     | 359                  | 94        | 4,390        
|Depreciation
      andAmortization                                                              | 2,621            | 919       | 294                  | 278       | 4,112        

Certain items in the schedule
  above need to be reconciled to the consolidated financial statements and are
  provided in the schedules below:















|                                                 | Three
      Months Ended 
|------------------------------------------------ | -------------------------
|                                                 | March
      31
      2001
|Revenues:                                        |                          
|Total
      revenue forReportable
      segments | $
      21,479           
|Other
      Revenues                             | 2,037                    
|Elimination
      ofIntersegment
      revenues  | (758)                    
|Total consolidated
      revenues                | $
      22,758           
|Total Assets:                                    |                          
|Total
      assets forReportable
      segments  | $187,383                 
|Other
      assets                               | 5,189                    
|Elimination
      andadjustments                 | (10,829)                 
|Total consolidated
      assets                  | $181,743                 
|                                                 |                          



NOTE
  4: SUBSEQUENT EVENTS

During
  2000, the Company decided to sell its existing towers, leaseback space on the
  towers for its antennae and utilize the proceeds for capital expenditures. Accordingly,
  the book value of the towers, which are included in the Company's wireless segment,
  have been classified as assets held for sale.

On
  April 26, 2001, the Company announced that it had entered into an Asset Acquisition
  Agreement, a Master Lease Agreement and a Build-to-Suit Agreement with Mountain
  Union Telecom, LLC for digital communication towers located throughout Eastern
  and Central Pennsylvania. The cash transaction is valued at approximately $21
  million. Under the agreement Mountain Union will acquire 76 towers from Conestoga
  and build 20 additional towers for Conestoga over the next two years. Conestoga
  will lease back space on the towers purchased by Mountain Union under a ten-year
  license agreement, with rights to renew each license for two additional five-year
  terms.

On
  April 27, 2001 the Company announced that it has engaged Legg Mason Wood Walker,
  Inc. as its financial advisor to assist the Company in the exploration and evaluation
  of strategic alternatives. These alternatives include the potential sale or
  merger of the Company, spinning off or selling certain of the Company's properties,
  entering into other business combinations and/or remaining independent.

NOTE
  5: OTHER

Certain
  items of the March 31, 2000 consolidated financial statements have been restated
  to conform to the March 31, 2001 financial statements. There was no impact on
  net income.

Inventories,
  at average cost, are both material and supplies used to provide service, and
  equipment held for resale.







MANAGEMENT'S DISCUSSION
  AND ANALYSISOF THE QUARTERLY INCOME
  STATEMENTS

Overview



During
  the first quarter of 2001, the Company's net income was $974 thousand, $0.11
  per common share, compared to $381 thousand, $0.03 per common share, in the
  first quarter of 2000, and $602 thousand, $0.06 per common share, in the fourth
  quarter of 2000.

The
  Company's net income during the first three months of 2000 included an after
  tax gain totaling $532 thousand from the sale of investment securities. No such
  investment securities were sold during the first three months of 2001.

The
  Company's net income for the first three months of 2000 also included $837 thousand
  in one time acquisition costs associated with the acquisition of TeleBeam.

After
  normalizing the Company's net income for the first three months of 2000 for
  the two events mentioned above net income would have been $686.

The
  Company's net income for the first three months of 2001 and 2000 were negatively
  impacted by the operating expenses of Conestoga Wireless Company's wireless
  telecommunications system, known as Personal Communications Service ("PCS"),
  and the operating expenses of the long distance and competitive local exchange
  services of CEI Networks, Inc. Both segments of the business have shown improvements
  during the first quarter 2001 when compared with the first quarter of 2000.
  The PCS revenue increased 73% during this period and the customer base increased
  53%, with over 17 thousand customers as of March 31, 2001. The CLEC revenues
  increased 216% when comparing the two periods, and the customer base increased
  in excess of 8,000 lines with over 12,500 lines in service on March 31, 2001.
  Long distance revenues declined 10% during the first quarter 2001 mostly due
  to pricing competition and lower minutes of use.

The
  access lines in service of the Company's local exchange carriers at the end
  of the first quarters of 2001 and 2000 were 83,750 and 80,006 respectively,
  an increase of 4.7% during the twelve month period.

The
  Company's subscriber and access line data as of March 31, 2001 and December
  31, 2000 is as follows:





|                                | Mar.
      31 | Dec.
      31 |     
|------------------------------- | ------------- | ------------- | ----
|2001                            | 2000          | change       
|LEC
      Lines                 | 83,750        | 82,844        | +1% 
|CLEC Lines                      | 12,593        | 10,928        | +15%
|PCS Subscribers                 | 17,179        | 15,405        | +12%
|Long Distance
      Subscribers | 37,666        | 36,754        | +2% 
|Paging
      Lines              | 5,514         | 5,904         | -7% 
|DSL Subscribers                 | 743           | 567           | +31%
|Cable Modem
      Subscribers   | 381           | 350           | +9% 
|Video Subscribers               | 2,690         | 2,561         | +5% 













RESULTS OF OPERATIONS

REVENUES

|Operating
      Revenues:                                           |                                          |        
|------------------------------------------------------------------- | ---------------------------------------- | -------
|                                                                    | Increase/(Decrease)
      (in thousands)
|First Quarter
      Ended March 31, 2001 compared to March 31, 2000 |                                          |        
|Local
      Service                                                 | $
      980                              | 28.9%  
|Long
      Distance and Access Service                              | 105                                      | 0.9%   
|Wireless
      Service                                              | 631                                      | 89.6%  
|Equipment
      and Other                                           | (646)                                    | (11.7%)
|                                                                    |                                          |        
|Total                                                               | $1,070                                   | 4.9%   



Operating
  revenues increased during the first three months of 2001 over the first three
  months of 2000 by $1.1 million or 4.9% due to substantial increases in local
  service revenues and wireless PCS revenues. Access revenues from the local exchange
  carriers increased primarily due to increased inter-lata settlements. The Company's
  long distance revenues declined mostly due to price competition and due to local
  exchange carrier's rate reduction in the second quarter of 2000. The increase
  in wireless revenues is directly related to the increase in subscribers from
  the first quarter of 2000. Equipment and other revenues are lower primarily
  due to completion of the installation of security monitoring systems for a major
  account during the first quarter of 2000.

Local
  Service

Conestoga
  Telephone and Telegraph Company ("Conestoga Telephone") and Buffalo Valley Telephone
  Company ("Buffalo Valley Telephone"), the local telephone companies, and CEI
  Networks, the competitive local exchange company, contributed to the increase
  in local service revenue during the first quarter of 2001. The Company had a
  total of 96,343 access lines in service as of March 31, 2001, an increase of
  2,571 lines during the first three months of 2001.

The
  local service rates of Conestoga Telephone and Buffalo Valley Telephone increased
  during the second quarter of 2000 as a result of the Pennsylvania Public Utility
  Commission's "Global Order". The competitive local exchange companies' revenue
  during the first quarter of 2001 was 216% greater than their revenue during
  the first quarter of 2000 primarily due to the increase in subscribers.

Long
  Distance and Access Service

Long
  Distance and Access Service revenues are generated by Conestoga Telephone and
  Buffalo Valley Telephone, and CEI Networks. The access revenues of Conestoga
  Telephone and Buffalo Valley Telephone together increased during the first three
  months of 2001 mostly due to increased inter-lata settlements. Minutes of use
  were up slightly this quarter over the first quarter of 2000. As a result of
  the "Global Order" access rates and long distance were reduced in the second
  quarter of 2000.

Intralata
  competition within Pennsylvania and the long distance rate decrease have caused
  long distance revenue of Conestoga Telephone, Buffalo Valley Telephone and CEI
  Networks to decline. During the first three months of 2001 the combined long
  distance revenues of Conestoga Telephone and Buffalo Valley Telephone declined
  27.9%, or $266 thousand, and the long distance revenues of CEI Networks decreased
  10.0%, or $465 thousand compared to the first three months of 2000.

Wireless
  Service

Wireless
  Service revenue is generated by Conestoga Wireless Company's PCS service and
  Conestoga Mobile System's paging service. During the first quarter of 2001,
  Conestoga Wireless generated $1.220 million in PCS revenue, as compared with
  $663 thousand during the first quarter of 2000. As of March 31, 2001, Conestoga
  Wireless had 17,179 subscribers adding 1,774 during the first three months of
  2001.

Equipment
  and Other

Equipment
  and Other revenues include the sale and lease of communications equipment, including
  telephones, PBX equipment, pagers and PCS wireless telephones, by all of the
  subsidiaries. Billing and collection revenue and directory advertising revenue
  are also included as revenue of the telephone company subsidiaries. Together
  the local exchange carrier's equipment revenues were even for the first three
  months of 2001 compared with the first three months of 2000. Infocore's equipment
  sales decreased due to the completion of the security system installation in
  the first quarter of 2000, as mentioned above.



EXPENSES:

|Operating
      Expenses                                            |                                                      |        
|------------------------------------------------------------------- | ---------------------------------------------------- | -------
|                                                                    | Increase
      (Decrease)
      	 			 (in thousands)
|First Quarter
      Ended March 31, 2001 compared to March 31, 2000 |                                                      |        
|Cost
      of Operations                                            | $
      134                                          | 1.2%   
|Depreciation
      and Amortization                                 | 259                                                  | 6.3%   
|Selling,
      General and Administrative                           | (1,033)                                              | (20.2%)
|                                                                    |                                                      |        
|Total                                                               | $
      (640)                                        | (3.2%) 
|                                                                    |                                                      |        



The
  3.2% decrease in operating expenses during the first quarter of 2001 from the
  first quarter of 2000 was caused mostly by one-time acquisition costs associated
  with the TeleBeam acquisition booked during the first quarter of 2000. The telco
  operating expenses during the first quarter 2001 were 6.1% lower when compared
  with the first quarter of 2000, mostly in labor related charges. The wireless
  operating expenses during the first quarter 2001 increased 18.5% over the first
  quarter 2000, and CLEC and long distance operating expenses increased 2.3%.

Cost
  of Operations

The
  increase in network operations and cost of sales expenses during the first three
  months of 2001 was caused in large part by the expansion of the Company's PCS,
  long distance and CLEC businesses. CEI Networks long distance cost of operations
  declined 6%, or $205 thousand, due to a decline in the rates charged by the
  long distance carriers that provide its long distance access. CEI Networks CLEC
  costs and Conestoga Wireless's PCS costs increased 56% and 25% respectively
  directly related to the expansion of the services. Infocore's equipment costs
  decreased 57%, or $578 thousand due to completion of the installation contract
  mentioned above. Conestoga Telephone's and Buffalo Valley Telephone's cost of
  operations increased by 12%.



Depreciation
  and Amortization

Depreciation
  and amortization expenses include charges from all of the subsidiaries. The
  continued build-out of the wireless PCS and the CLEC infrastructures caused
  a large portion of the increase in depreciation and amortization expenses from
  the first quarter of 2001 to the first quarter of 2000. The increase in the
  depreciation and amortization expenses of the PCS and the CLEC infrastructures
  was $337 thousand, or 28%, between the two quarters. Comparing the same quarters,
  the local telephone companies' combined depreciation expense increased $160
  thousand or 6%.

These
  increases were offset by the completion of the amortization of the purchase
  price of the 1997 acquisition of Infocore during the second quarter of 2000.

Selling,
  General and Administrative

The
  Company and all of its subsidiaries incur selling, general and administrative
  expenses. Selling expenses include customer care expenses along with advertising
  and marketing. General and administrative expenses include executive, accounting
  and finance, information technology expenses, and taxes other than income. When
  comparing the first quarter 2001 with the first quarter of 2000 the decrease
  is primarily due to costs associated with the acquisition of TeleBeam, Inc.
  as mentioned above, and reduction in Pa Capital stock tax rate in the second
  quarter of 2000.

When
  comparing the first three months of 2001 with the first three months of 2000
  the telephone companies selling general and administrative costs declined 28%,
  or $699 thousand mostly in labor related charges as the result of an allocation
  study for shared corporate services for sales and marketing, human resource
  and management information personnel. Conestoga Wireless's selling, general
  and administrative expenses increased only 2.7%, and CEI Networks were down
  16%.

|Operating
      Income                                                   | Increase
      (Decrease) (in thousands)
|------------------------------------------------------------------------ | ----------------------------------------
|                                                                         |                                         
|First
      Quarter EndedMarch
      31, 2001 compared to March 31, 2000 | $
      1,710                           
|                                                                         |                                         



Operating
  income during the first three months of 2001 compared with the first three months
  of 2000 reflects improvement from all subsidiaries of the Company. The continued
  expansion of the Company's CLEC and PCS business produced negative operating
  results in both periods. The CLEC and long distance business recorded an operating
  loss of $595 thousand during the first three months of 2001 compared with an
  operating loss of $635 thousand in the first three months of 2000. The PCS business
  incurred an operating loss of $2.1 million this current period compared with
  an operating loss of $2.2 million for the same period of 2000. The first three
  months of 2000 included $837 thousand one-time costs associated with the TBI
  acquisition. Without those one-time charges operating income for the first three
  months of 2001 would have been 36% greater than the first three months of 2000.

The
  telephone companies' operating income during the first quarter of 2001 increased
  $1.2 million, or 27.3%, from the first quarter of 2000.

Other
  Income (Deductions), Net

The
  change in other income (deductions) was impacted by the sale of some of the
  Company's marketable securities held for investment during the first three months
  of 2000, and to the additional interest expense associated with the additional
  long-term debt. The sale of these securities resulted in a before tax gain of
  $806 thousand. The Company did not sell any investment securities during the
  first three months of 2001. Interest expense during the first quarter of 2001
  was impacted by the receipt of patronage refund of $150 thousand associated
  with one of the debt obligations.



Income
  Taxes

Income
  taxes incurred during the first quarter 2001 and the first quarter 2000 were
  about the same. The Company's effective tax rate (income tax expense as a percentage
  of income before income taxes) was 50.8% and 72.4% for the first three months
  of 2001 and 2000, respectively. The effective tax rate takes into consideration
  a valuation allowance on state net operating losses and the relationship of
  nondeductible goodwill amortization and merger costs to pretax income.

NET INCOME

|Operating
      Income                                                   | Increase
      (Decrease) (in thousands)
|------------------------------------------------------------------------ | ----------------------------------------
|                                                                         |                                         
|First
      Quarter EndedMarch
      31, 2001 compared to March 31, 2000 | $
      593                             
|                                                                         |                                         



First
  quarter 2001 net income was $974 thousand compared with $381 thousand for first
  quarter 2000. Net income for the first three months of both years include additional
  costs associated with the continued expansions of the PCS, long distance and
  CLEC businesses. Net income for the three months ending on March 31, 2000, includes
  a $532 thousand after tax gain on the sale of investment securities, and the
  one-time acquisition costs. Net Income for the three-month period ended March
  31, 2001 not including those one-time transactions would have been $288 thousand
  or 42% greater than the first three months of 2000.



FINANCIAL CONDITION

|Liquidity
      and Capital Commitments |                     
|--------------------------------------- | --------------------
|Three Months
      Ended March 31,      | 2001                
|                                        | (in
      thousands)
|Cash Flows
      From (Used In):       
|Operating
      activities              | $
      3,864       
|Investing
      activities              | (5,522)             
|Financing
      activities              | (1,829)             



The
  Company uses the net cash generated from its operations and from external financing
  to fund capital expenditures for networkexpansion
  and modernization, pay dividends, and invest in new businesses. The Company's
  sources of funds, primarily from operations and, to the extent necessary, from
  readily available external financing arrangements, are sufficient to meet ongoing
  operating and investing requirements. The Company's capital requirements for
  additional development activities during the year 2001 will require some additional
  funding. Accordingly, on April 25, 2001, the Company announced that it and Mountain
  Union Telecom LLP have entered into an Asset Acquisition Agreement, a Master
  License Agreement and a Build-to-Suit Agreement for digital communications towers
  located throughout Eastern and Central Pennsylvania. The cash transaction is
  valued at approximately $21 million, and is expected to close in the second
  quarter 2001.

Cash
  Flows From Operating Activities

The
  Company's primary source of funds continues to be cash generated from operations.
  Taking into account net income plus various adjustments and depreciation and
  amortization, the cash flows from operating activities in the first quarter
  of 2001 were $3.8 million. Net income for accounting purposes is decreased by
  the amortization of the goodwill arising from the prior years acquisitions,
  and the higher depreciation expense arising from the capital investment in PCS
  and CLEC. Amortization and depreciation are non-cash expenses, and consequently
  a source of cash that the Company can use for the capital investments necessary
  to maintain and upgrade its network and build and develop PCS and its CLEC operations.

Cash
  Flows Used in Investing Activities

Capital
  expenditures are the Company's primary use of cash resources. The Company's
  capital expenditures during the first three months of 2001 included $2.9 million
  for the Company's local exchange operations, $1.7 million for the continued
  build-out of its PCS operations, and $915 thousand for the build-out of its
  CLEC operations. The Company's capital investments during the first three months
  of 2001 were $1.1 million greater than during the first three months of 2000.
  The investments are made to support theCompany's
  businesses in order to facilitate the introduction of new products and services,
  enhance responsiveness to competitive challenges and increase the operating
  efficiency and productivity of its networks. Substantial amounts of additional
  capital will be needed for the remaining build-out of both the PCS and CLEC/LD
  networks. The budgeted capital requirements for 2001 for Conestoga Wireless
  and CEI Networks are $6.1 million and $7.9 million respectively. The capital
  required over the next several years to complete the current phases of the Conestoga
  Wireless and CEI Networks systems and to maintain state of the art telephone
  facilities could require additional funding from (1) internal sources, (2) long-term
  debt (the $50 million line of credit facility), or (3) the issuance of additional
  common stock or a combination of the three.

Cash
  Flows Used in Financing Activities

As
  in prior years, dividend payments are a significant use of capital resources.
  In the first quarter of 2001 the Company paid common stock dividends totaling
  $1.654 million, or $0.21 per common share. During the first three months of
  2001, 1,955 shares of preferred stock were redeemed for cash.

During
  the first quarter of 2001, the Company paid $250 thousand on principal of long-term
  debt in accordance with its long-term debt obligations.

The
  lines of credit available to the Company, in addition to the $50 million line
  mentioned above, now total $20 million. The Company did not borrow against its
  lines of credit during the first three months of 2001 accordingly there was
  no balance of short-term debt outstanding as of March 31, 2001.

Equity
  Investments

The
  Company continues to invest in the future of the telecommunications industry
  through ownership of publicly traded stock of other telecommunication companies.
  Management views thisinvestment
  as a source of future liquidity. During 2000 the Company sold a portion of its
  investment portfolio and will most likely sell the balance during this year.
  There was no sale of these securities during the first three months of 2001.
  The remaining portfolio had an estimated market value of $491 thousand on March
  31, 2001.

The
  Company's long-term debt obligations are unsecured, but impose certain financial
  covenants upon the company including, but not limited to, restrictions upon
  types of investments, the amount of dividends paid, and the incurrence of additional
  debt by the Company and its subsidiaries. The Company is currently in compliance
  with all loan covenants.

OTHER FACTORS:

PCS SERVICE:

Conestoga
  Wireless holds licenses to provide wireless services known as Personal Communication
  Services ("PCS") in the C and Dblock
  radio spectrums. The Basic Trading Areas in which Conestoga Wireless holds licenses
  are Reading, Pottsville, Sunbury, Williamsport, and State College, covering
  ten counties in Pennsylvania.

Conestoga
  Wireless is the provider of the Company's digital wireless telecommunications
  services. It began commercial operation in May 1998. By March 31, 2001 it had
  127 base stations in service, covering more than 70% of the population in its
  service area. Conestoga Wireless plans to put an additional 24 base stations
  into service during 2001, to augment coverage in those markets. The capital
  required to add these additional base stations will be funded by the tower acquisition
  agreement with Mountain Union Telecom LLP entered into during the first quarter
  2001. CWC has 8 retail locations.





Regulated
  Industry

CTT
  and BVT are both regulated by the Pennsylvania Public Utility Commission (PUC)
  and the Federal Communications Commission (FCC). An amendment to the Pennsylvania
  Public Utility Act passed in 1993, provides for streamlined rate regulation
  and a method for determining rates other than the historic method of rate of
  return regulation for the state jurisdiction. This new regulation referred to
  as Chapter 30, provides a price stability mechanism in which a telephone company's
  annual revenues from non-competitive services may be permitted to change in
  line with the Gross Domestic Product Price Index, minus a productivity offset,
  with no limitation on earnings by the regulated company. In order for the Company
  to avail itself of the procedures permitted by Chapter 30, CTT and BVT must
  commit to providing universal broadband services by 2015. Both Companies filed
  Chapter 30 Plans in July 1998 and approval was received in January 2001. The
  interstate jurisdiction remains subject to rate of return regulation.

The
  telecommunication industry continues to undergo fundamental changes, which may
  have a significant impact on financial performance. The Federal Telecommunications
  Act of 1996, creates a regulatory environment that encourages competition. As
  rural companies, CTT and BVT are exempt from many of the most onerous aspects
  of competition unless prospective competitors can pass a public interest standard
  and agree to offer service throughout the telephone companies' territories.
  In addition, in March 1998 CTT and BVT received approval by the Pennsylvania
  PUC of a petition that has significantly strengthened the companies' competitive
  position relative to non-facilities based competition. However, facilities based
  competition is not precluded.

Forward-Looking
  Statements

Information
  contained in this Management's Discussion and Analysis and elsewhere in this
  quarterly report with respect to expected financial results and future events
  and trends is forward-looking, based on our estimates and assumptions and subject
  to risks and uncertainties. For those statements, we claim the protection of
  the safe harbor for forward-looking statements contained in the Private Securities
  Litigation Reform Act of 1995.

The
  following important factors could affect the future results of our company and
  could cause those results to differ materially from those expressed in the forward-looking
  statements: (i) changes in economic and market conditions; (ii) effects of state
  and federal regulation; (iii) the impact of new technologies. You should notplace undue reliance
  on these forward-looking statements, which are applicable only as of the date
  hereof. We have no obligation torevise
  or update these forward-looking statements to reflect events or circumstances
  that arise after the date hereof or to reflect the occurrence of unanticipated
  events.



ITEM 3. QUANTITATIVE
  and QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

The
  Company does not invest funds in derivative financial instruments or other market
  risk sensitive instruments for any purpose. Furthermore, management believes
  that the market risk of its fixed-rate debt is immaterial to the Company's financial
  statement as a whole.









PART II. OTHER INFORMATION

ITEM 1Legal
  Proceedings

None

ITEM 2Changes
  in Securities and Use of Proceeds

None

ITEM 3Default
  upon Senior Securities

None

ITEM 4SUBMISSION
  OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5Other
  Information

None



ITEM 6EXHIBITS
  AND REPORTS ON FORM 8-K

None























CONESTOGA ENTERPRISES, INC.







SIGNATURES

Pursuant
  to the requirements of the Securities Exchange Act of 1934, the registrant has
  duly caused this report to be signed on its behalf by the undersigned thereunto
  duly authorized.

|DATE
      May 15, 2001 | \s\
      Albert H KramerAlbert
      H KramerPresident                                                     
|----------------------- | ------------------------------------------------------------------------------------------------------------
|                        |                                                                                                             
|DATE
      May 15, 2001 | \s\
      Donald R BreitensteinDonald
      R Breitenstein Sr. Vice President/
      Chief Financial Officer