FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
(Mark One)

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

For the quarterly period ended                       September 30, 1996

                                       OR

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

For the transition period from _____________________ to _____________________

Commission file number 0-24900


                             ITI Technologies, Inc.
             (Exact name of registrant as specified in its charter)

           Delaware                                         06-1340453
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

               2266 North Second Street, North St. Paul, MN 55109
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (612) 777-2690
              (Registrant's telephone number, including area code)

                                 Not applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

         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  _____

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

         As of October 15, 1996, there were 9,033,162 shares of common stock
outstanding.



                             ITI TECHNOLOGIES, INC.

                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 1996


                                                    INDEX                PAGE

PART I --     FINANCIAL INFORMATION

              Item 1 --         Financial Statements                       3

              Item 2 --         Management's Discussion and Analysis       8
                                of Financial Condition and Results
                                of Operations

PART II       OTHER INFORMATION

              Item 5 --         Other Information                         11

              Item 6 --         Exhibits and Reports on Form 8-K          11

              Signatures                                                  12




                                                      PART I
                                               FINANCIAL INFORMATION

Item 1.       Financial Statements

<TABLE>
<CAPTION>

                             ITI TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

                                              FOR THE THREE           FOR THE NINE
                                               MONTHS ENDED           MONTHS ENDED
                                               SEPTEMBER 30,          SEPTEMBER 30,
                                             -------------------   --------------------
                                               1995       1996       1995        1996
                                             --------   --------   --------    --------
                                                 (UNAUDITED)           (UNAUDITED)
<S>                                          <C>        <C>        <C>         <C>     
Net sales ................................   $ 20,698   $ 24,441   $ 57,674    $ 69,869
Cost of goods sold .......................     10,908     12,525     30,810      36,282
                                             --------   --------   --------    --------
Gross profit .............................      9,790     11,916     26,864      33,587
Operating expenses:
     Marketing, general and administrative      3,277      4,065      9,783      11,020
     Research and development ............      1,298      1,574      3,720       4,649
     Amortization of intangible assets ...        228        228        684         684
                                             --------   --------   --------    --------
Operating income .........................      4,987      6,049     12,677      17,234
Other income (expense):
     Interest, net .......................         56        215        (94)        535
     Other, net ..........................          5          6          8           2
                                             --------   --------   --------    --------
Income before income tax expense .........      5,048      6,270     12,591      17,771

Income tax expense .......................      1,893      2,336      4,709       6,629
                                             --------   --------   --------    --------
Net income ...............................   $  3,155   $  3,934   $  7,882    $ 11,142
                                             ========   ========   ========    ========
Primary earnings per share ...............   $   0.34   $   0.41   $   0.86    $   1.17
                                             ========   ========   ========    ========
Weighted average shares outstanding ......      9,387      9,604      9,170       9,510
                                             ========   ========   ========    ========

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.


<TABLE>
<CAPTION>
                             ITI TECHNOLOGIES, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                       DECEMBER 31,  SEPTEMBER 31,
                                                          1995          1996
                                                        --------      --------
ASSETS:                                                               (UNAUDITED)
<S>                                                     <C>            <C>     
Current assets:
  Cash and cash equivalents .........................   $  9,937       $ 17,617
  Accounts receivable ...............................     13,344         14,271
  Inventories .......................................     14,477         18,312
  Deferred income taxes .............................      1,839          1,839
  Other current assets ..............................      1,494          1,179
                                                        --------       --------
    Total current assets ............................     41,091         53,218
                                                                    
Property and equipment, net .........................      5,095          7,266
Excess of cost over net assets acquired .............     24,058         23,563
Other intangible assets .............................      9,833         10,471
                                                        --------       --------
    Total assets ....................................   $ 80,077       $ 94,518
                                                        ========       ========
                                                                    
LIABILITIES AND STOCKHOLDERS' EQUITY                                
                                                                    
Current liabilities:                                                
  Accounts payable ..................................   $  4,099       $  3,987
  Accrued wages .....................................      1,026          2,084
  Income taxes payable ..............................       --            1,537
  Other accrued expenses ............................      1,100          1,344
                                                        --------       --------
    Total current liabilities .......................      6,225          8,952
                                                                    
Income taxes ........................................      3,761          3,761
                                                        --------       --------
    Total liabilities ...............................      9,986         12,713
                                                        --------       --------
                                                                    
Commitments                                                         
Stockholders' equity:                                               
  Common stock ($.01 par value; authorized 15,000                   
  shares; issued and outstanding 8,915 shares                       
  at December 31, 1995 and 9,032 at Sept. 30, 1996) .         89             90
  Additional paid-in capital ........................     70,603         71,174
  Retained earnings (accumulated deficit) ...........       (601)        10,541
                                                        --------       --------
    Total stockholders' equity ......................     70,091         81,805
                                                        --------       --------
    Total liabilities and stockholders' equity ......   $ 80,077       $ 94,518
                                                        ========       ========
                                                                 

</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.



                             ITI TECHNOLOGIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)


                                                         FOR THE NINE
                                                         MONTHS ENDED
                                                         SEPTEMBER 30,
                                                    ----------------------
                                                      1995          1996
                                                    --------      --------
OPERATING ACTIVITIES:
Net income ....................................     $  7,882      $ 11,142
Adjustments to reconcile net income to cash
provided from operating activities:
  Amortization of intangible assets ...........          743           855
  Depreciation and amortization ...............          563           834
  Provision for bad debt expense ..............          254           100
  Deferred income taxes .......................          772          --
  Changes in operating assets and liabilities:
   Accounts receivable ........................       (2,607)       (1,027)
   Inventories ................................       (1,082)       (3,835)
   Other current assets .......................         (922)          315
   Accounts payable ...........................       (1,604)         (112)
   Income taxes payable .......................         --           1,537
   Accrued expenses ...........................          549         1,302
                                                    --------      --------

Net cash provided from operating activities ...        4,548        11,111
                                                    --------      --------

INVESTING ACTIVITIES:
Additions to property and equipment ...........       (1,689)       (3,005)
Additions to other intangible assets ..........         --            (998)
                                                    --------      --------
Net cash used by investing activities .........       (1,689)       (4,003)
                                                    --------      --------

FINANCING ACTIVITIES:
Payments of revolving credit agreement ........       (4,500)         --
 Proceeds from issuance of common stock .......        8,744          --
 Proceeds from exercise of common stock options         --             572
                                                    --------      --------

Net cash provided from financing activities ...        4,244           572
                                                    --------      --------

NET INCREASE IN CASH
  AND CASH EQUIVALENTS ........................        7,103         7,680

CASH AND CASH EQUIVALENTS
  AT BEGINNING OF PERIOD ......................          227         9,937
                                                    --------      --------

CASH AND CASH EQUIVALENTS
  AT END OF PERIOD ............................     $  7,330      $ 17,617
                                                    ========      ========


The accompanying notes are an integral part of the consolidated financial
statements.


NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.       The unaudited consolidated statements of operations for the three and
         nine month periods ended September 30, 1996 and 1995, reflect, in the
         opinion of management of ITI Technologies, Inc. (the "Company"), all
         adjustments necessary for a fair statement of the results of operations
         for the interim periods. The results of operations for any interim
         period are not necessarily indicative of results for the full year. The
         consolidated balance sheet data as of December 31, 1995 were derived
         from audited consolidated financial statements but do not include all
         disclosures required by generally accepted accounting principles. The
         unaudited consolidated financial statements should be read in
         conjunction with the financial statements and notes thereto
         incorporated in the Company's Annual Report on Form 10-K for the year
         ended December 31, 1995.

2.       The unaudited consolidated financial statements include the accounts of
         the Company and its wholly-owned subsidiaries. All significant
         intercompany accounts and transactions have been eliminated.

3.       At December 31, 1995, and continuing into 1996, the Company had an
         unsecured $15.0 million bank revolving credit facility which provided
         for interest calculated, at the Company's option, at LIBOR plus 1.0% or
         a commercial bank's base rate and required a commitment fee of 0.25%
         per annum on the unused portion of the revolving credit commitment.
         During the third quarter, in consideration of its cash position, the
         Company voluntarily decided to terminate this facility. No amounts were
         outstanding under this facility at December 31, 1995, or at any time
         during 1996.

4.       Other Financial Statement Data (in thousands):


                                               December 31,  September 30,
                                                   1995          1996
                                                 --------      --------
                                                               (Unaudited)
Accounts receivable:
   Accounts receivable .....................     $ 14,144      $ 15,171
   Allowance for doubtful accounts .........         (800)         (900)
                                                 --------      --------
      Total ................................     $ 13,344      $ 14,271
                                                 ========      ========
Inventories:
   Raw materials ...........................     $  7,072      $  8,274
   Allowance for obsolescence ..............       (1,300)       (1,300)
                                                 --------      --------
                                                    5,772         6,974
   Work-in-process .........................        4,065         4,836
   Finished goods ..........................        4,640         6,502
                                                 --------      --------
      Total ................................     $ 14,477      $ 18,312
                                                 ========      ========

Property and equipment, net:
   Machinery and equipment .................     $  5,685      $  7,760
   Furniture and fixtures ..................        2,012         2,654
   Leasehold improvements ..................          433           666
                                                 --------      --------
                                                    8,130        11,080
   Accumulated depreciation and amortization       (3,035)       (3,814)
                                                 --------      --------
      Total ................................     $  5,095      $  7,266
                                                 ========      ========

Other intangible assets:
   Trademarks and trade names ..............     $ 10,079      $ 10,079
   Technology and patents ..................          367         1,343
   All other ...............................          669           579
                                                 --------      --------
                                                   11,115        12,001
   Accumulated amortization ................       (1,282)       (1,530)
                                                 --------      --------
      Total ................................     $  9,833      $ 10,471
                                                 ========      ========

Other accrued expenses:
   Warranty ................................     $    400      $    400
   Professional fees .......................          495           472
   All other ...............................          205           472
                                                 --------      --------
      Total ................................     $  1,100      $  1,344
                                                 ========      ========


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

RESULTS OF OPERATIONS:

         NET SALES. Net sales increased by $3.7 million, or 18.1%, from $20.7
     million for the three months ended September 30, 1995 to $24.4 million for
     the three months ended September 30, 1996. Net sales increased by $12.2
     million, or 21.1%, from $57.7 million for the first nine months of 1995 to
     $69.9 million for the nine months ended September 30, 1996. The increase in
     net sales is primarily attributable to volume increases, as prices remained
     relatively stable over these periods. The $3.7 million increase in sales
     volume for the third quarter is primarily attributable to increases in net
     sales to the Company's ten largest customers.

         GROSS PROFIT. Gross profit increased from $9.8 million for the third
     quarter of 1995 to $11.9 million for the third quarter of 1996 and
     increased as a percentage of net sales from 47.3% to 48.8%. Gross profit
     increased from $26.9 million for the first nine months of 1995 to $33.6
     million for the first nine months of 1996 and increased as a percentage of
     net sales from 46.6% to 48.1%. These increases were primarily due to cost
     reduction programs as well as volume-related efficiencies in all phases of
     the manufacturing process.

         MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES. Marketing, general and
     administrative expenses increased from $3.3 million for the third quarter
     of 1995 to $4.1 million for the third quarter of 1996, and increased from
     $9.8 million for the first nine months of 1995 to $11.0 million for the
     first nine months of 1996. The dollar increases for both periods are
     primarily due to increased employment costs. As a percentage of net sales,
     marketing, general and administrative expenses for the quarter increased
     from 15.8% in 1995 to 16.6% in 1996 due to increased employment costs and
     costs associated with introducing several new products during the quarter.
     As a percentage of net sales, these expenses have decreased from 17.0% in
     1995 to 15.8% in 1996 for the first nine months of the year, as fixed
     expenses were spread over the increased sales volume.

         RESEARCH AND DEVELOPMENT EXPENSE. Research and development expense
     increased from $1.3 million for the third quarter of 1995 to $1.6 million
     for the third quarter of 1996, and increased from $3.7 million for the
     first nine months of 1995 to $4.6 million for the first nine months of
     1996. The increases are primarily due to the Company's continued emphasis
     on research and new product development. New products introduced in the
     third quarter include the high-end Ultragard control panel and the long
     life door/window sensor.

         AMORTIZATION OF INTANGIBLE ASSETS. Amortization of intangible assets
     was $228,000 for the third quarter of both 1995 and 1996, and $684,000 for
     the first nine months of both 1995 and 1996.

         NET INTEREST INCOME (EXPENSE). Net interest income improved from
     $56,000 for the third quarter of 1995 to $215,000 for the third quarter of
     1996. During the first nine months of 1995, net interest expense totaled
     $94,000 compared to net interest income of $535,000 for the first nine
     months of 1996. The reduction of interest expense is due to the payment in
     full of the Company's then existing revolving credit facility in 1995.
     Interest income is the result of investing unused cash in high quality
     short-term investments.

         INCOME TAX EXPENSE. Income tax expense increased from $1.9 million for
     the third quarter of 1995 to $2.3 million for the third quarter of 1996,
     and from $4.7 million for the first nine months of 1995 to $6.6 million for
     the first nine months of 1996. The Company's effective tax rates for these
     periods vary from the federal statutory rate primarily due to state income
     taxes and the non-deductibility for income tax purposes of the amortization
     of excess of cost over net assets acquired.

LIQUIDITY AND CAPITAL RESOURCES

         Since the Company's initial public offering in November 1994, the
     Company has funded its operations primarily with cash from operations. For
     the first nine months of 1996, the Company generated net cash from
     operating activities of $11.1 million. Net cash from operating activities
     resulted primarily from $11.1 million of net income and $1.7 million of
     depreciation and amortization charges. This amount was offset by $1.8
     million of net cash used by changes in operating assets and liabilities, in
     support of the Company's revenue growth.

         For the first nine months of 1996, net cash invested in purchases of
     property and equipment was $3.0 million. For the year ended December 31,
     1996, the Company expects that purchases of property and equipment will be
     approximately $3.5 million.

         For the first nine months of 1996, the Company incurred $932,000 of
     costs in its action for patent infringement against Pittway Corporation and
     its subsidiary, Ademco Distributions, Inc. Costs of this action are being
     capitalized as a patent asset associated with the related technology.

         For the first nine months of 1996, net cash provided by financing
     activities of $572,000 resulted from the exercise of employee stock
     options.

         A substantial amount of the Company's working capital is invested in
     accounts receivable and inventories. The Company periodically reviews
     accounts receivable for noncollectibility and inventories for obsolescence
     and establishes allowances it believes are appropriate. In addition, the
     Company periodically assesses the recoverability of intangible assets based
     on undiscounted cash flows.

         During the third quarter, in consideration of its cash position, the
     Company voluntarily decided to terminate its unsecured $15.0 million bank
     revolving credit facility which required a commitment fee of 0.25% per
     annum on the unused portion of the revolving credit commitment. No amounts
     were outstanding under this facility at December 31, 1995 or at any time
     during 1996.

         The Company believes that cash flows from operations and current funds
     held will be adequate to fund its working capital and capital expenditure
     requirements at least through the end of 1996.

EFFECT OF INFLATION AND FOREIGN CURRENCY TRANSACTIONS

         The Company believes that inflation and foreign currency fluctuations
     have not had a significant effect on its operations.


                           PART II - OTHER INFORMATION

Item 5.       Other Information.

              None.

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

(a)           The following exhibits are filed as part of this Quarterly Report 
              on Form 10-Q:

              11.          Statement re computation of per share earnings.

              27.          Financial data schedule.

(b)           No current reports on Form 8-K were filed during the quarter ended
              September 30, 1996 or during the period from September 30, 1996 to
              the date of this Quarterly Report on Form 10-Q.


                                   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.


Dated:  November 5, 1996                   ITI TECHNOLOGIES, INC.



                                           By    /s/ Jack A. Reichert
                                                  Jack A. Reichert
                                                  Vice President of Finance
                                                  (Chief Accounting Officer)