FORM 10-Q
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549


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

For the Quarterly Period ended September 30, 2000

                                       OR

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

For the transition period from ____________________ to _________________________

Commission File Number 0-5896

                                  JACO ELECTRONICS, INC.
                                  -----------------------
                   (Exact name of registrant as specified in its charter)


               NEW YORK                               11-1978958
               --------                               ----------
         (State or other jurisdiction of    (I.R.S. Employer Identification No.)
         incorporation or organization)


                         145 OSER AVENUE, HAUPPAUGE, NEW YORK 11788
                         ------------------------------------------
                 (Address of principal executive office)    (Zip Code)



Registrant's telephone number, including area code:   (631)  273-5500

Indicated  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 report),  and (2) has been subject to such
filing requirements for the past 90 days.



                YES X                                NO __
                    -



Number of Shares of Registrant's Common Stock Outstanding as of November 6, 2000
- 5,633,959 (Excluding 618,300 Shares of Treasury Stock).


<PAGE>

<TABLE>


FORM 10-Q                                             September 30, 2000
Page  2


PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS


                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

                                        September 30,     June 30,
                                           2000             2000
                                       --------------    ----------
ASSETS

Current Assets

<S>                                       <C>               <C>
      Cash                            $    985,334   $    617,603
      Marketable securities                879,026        880,954
      Accounts receivable - net         52,598,027     42,179,468
      Inventories                       61,212,582     53,415,793
      Advance to supplier                6,539,961
      Prepaid expenses and other         1,289,787        887,804
      Deferred income taxes              2,077,000      1,975,000
                                      ------------   ------------


            Total current assets       125,581,717     99,956,622


Property, plant and equipment - net      7,581,348      6,926,734

Excess of cost over net
  assets acquired - net                 16,387,588     16,600,432

Other assets                             2,823,250      2,845,305
                                      ------------   ------------


                                      $152,373,903   $126,329,093
                                      ============   =============






           See   accompanying   notes  to   condensed   consolidated   financial
statements.

</TABLE>



                                       2
<PAGE>


<TABLE>

FORM 10-Q                                                 September 30, 2000
Page 3



                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


                                                                       September 30,        June 30,
                                                                          2000                2000
                                                                     --------------         ---------

LIABILITIES & SHAREHOLDERS' EQUITY

Current Liabilities


<S>                                                                      <C>             <C>
      Accounts payable and accrued expenses                              $ 45,415,387    $  39,190,011
      Current maturities of long term debt and
        capitalized lease obligations                                       4,479,261          807,444
              Income taxes payable                                          2,938,392        1,575,319
                                                                        -------------    -------------


      Total current liabilities                                            52,833,040       41,572,774

Long term debt and capitalized lease obligations                           51,037,360       40,940,877

Deferred income taxes                                                         212,000          225,000

Deferred compensation                                                         812,500          800,000


SHAREHOLDERS' EQUITY


      Preferred stock - authorized, 100,000 shares,
        $10 par value; none issued
      Common stock - authorized 10,000,000 shares,
        $.10 par value; issued 6,252,259  shares
         and 5,633,959 shares outstanding                                     625,226          625,226
      Additional paid-in capital - net                                     23,940,051       23,906,301
      Retained earnings                                                    24,954,069       20,296,761
      Accumulated other comprehensive income                                  164,172          166,669
      Treasury stock                                                       (2,204,515)      (2,204,515)
                                                                        -------------    -------------

      Total shareholders' equity                                           47,479,003       42,790,442
                                                                        -------------    -------------


                                                                        $ 152,373,903    $ 126,329,093
                                                                        =============    =============




           See   accompanying   notes  to   condensed   consolidated   financial
statements.

</TABLE>



                                       3
<PAGE>


<TABLE>


FORM 10-Q                                             September 30, 2000
Page 4



                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)



                                                               2000          1999
                                                          -----------   -----------


<S>                                                       <C>           <C>
NET SALES                                                 $94,158,828   $42,017,363


COST AND EXPENSES

Cost of goods sold                                         73,541,170    34,081,758
                                                          -----------   -----------

      Gross profit                                         20,617,658     7,935,605

Selling, general and administrative expenses               11,834,056     7,248,597
                                                          -----------   -----------

      Operating profit                                      8,783,602       687,008

Interest expense                                              888,735       322,933
                                                          -----------   -----------

      Earnings before income taxes                          7,894,867       364,075

Income tax provision                                        3,237,000       150,000
                                                          -----------   -----------


      NET EARNINGS                                        $ 4,657,867   $   214,075
                                                          ===========   ===========

Net earnings per common share:

Basic                                                     $      0.83   $      0.04
                                                          ===========   ===========
Diluted                                                   $      0.75   $      0.04
                                                          ===========   ===========

Weighted average common shares outstanding:

      Basic                                                 5,633,959     5,480,282
                                                          ===========   ===========
      Diluted                                               6,234,768     5,564,175
                                                          ===========   ===========




           See   accompanying   notes  to   condensed   consolidated   financial
statements.
</TABLE>



                                       4
<PAGE>


<TABLE>

FORM 10-Q                                                                                                     September 30, 2000
Page 5



                                          JACO ELECTRONICS, INC. AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENT OF CHANGES
                                                   IN SHAREHOLDERS' EQUITY
                                        FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
                                                       (UNAUDITED)




                                                                                                       Accumulated
                                                                    Additional                            other
                                                                      paid-in          Retained       comprehensive      Treasury
                                        Shares       Amount           capital          earnings          income             stock
                                   --------------- -------------- ----------------  ---------------- ---------------- --------------


<S>             <C>                     <C>             <C>          <C>               <C>                 <C>         <C>
Balance at July 1, 2000                 6,252,259       $625,226     $ 24,041,301      $ 20,296,761        $ 166,669   $ (2,204,515)

Net earnings                                                                              4,657,867

Unrealized loss on marketable
  securities - net                                                                                            (2,497)

Comprehensive income

Payment of fractional shares                                                                   (559)

Deferred compensation
                                   --------------- -------------- ----------------  ---------------- ---------------- --------------

Balance at September 30, 2000           6,252,259       $625,226     $ 24,041,301      $ 24,954,069        $ 164,172   $ (2,204,515)
                                   =============== ============== ================  ================ ================ ==============



                                                            Total
                                       Deferred         shareholders'
                                     compensation          equity
                                   ---------------     --------------


<S>             <C>                    <C>             <C>
Balance at July 1, 2000                $ (135,000)     $42,790,442
                                                       -----------
Net earnings                                             4,657,867

Unrealized loss on marketable
  securities - net                                         (2,497)
                                                        ----------
Comprehensive income                                     4,655,370
                                                        ----------
Payment of fractional shares                                 (559)

Deferred compensation                   33,750             33,750
                                   ---------------  --------------

Balance at September 30, 2000        $   (101,250)   $ 47,479,003
                                   =============== ==============


     See accompanying notes to condensed consolidated financial statements.

</TABLE>



                                       5
<PAGE>


<TABLE>

FORM 10-Q                                                                     September 30, 2000
Page 6


                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)

                                                                2000                 1999
                                                           ------------------   -----------------

Cash flows from operating activities
<S>                                                               <C>                   <C>
      Net earnings                                              $  4,657,867    $    214,075

Adjustments to reconcile net earnings to net
     cash provided by (used in) operating activities
          Depreciation  and amortization                             735,220         438,686
          Deferred compensation                                       46,250          46,250
          Deferred income tax benefit                               (113,600)       (110,000)
          Provision for doubtful accounts                            360,703         119,950
          Changes in operating assets and liabilities,
          Increase in operating assets - net                     (25,517,995)     (2,251,239)
          Increase in operating liabilities - net                  7,588,449       1,912,628
                                                                ------------    ------------

          Net cash (used in) provided by operating activities    (12,243,106)        370,350
                                                                ------------    ------------


Cash flows from investing activities
          Capital expenditures                                    (1,133,573)       (112,242)
          Increase in marketable securities                           (1,969)         (1,864)
          (Increase) decrease in other assets                        (21,362)         22,995
                                                                ------------    ------------


         Net cash used in investing activities                    (1,156,904)        (91,111)
                                                                ------------    ------------


Cash flows from financing activities
        Borrowings under line of credit                           87,922,848      12,795,589
        Payments under line of credit                            (73,943,121)    (12,860,157)
        Principal payments under equipment financing
         and term loans                                             (211,427)       (200,740)
        Payment of fractional shares                                    (559)
                                                                ------------    ------------

       Net cash provided by (used in) financing activities        13,767,741        (265,308)
                                                                ------------    ------------

       NET INCREASE IN CASH                                          367,731          13,931
                                                                ------------    ------------

Cash at beginning of period                                          617,603         922,247
                                                                ------------    ------------

Cash at end of period                                           $    985,334    $    936,178
                                                                ============    ============

Supplemental schedule of non-cash financing and
    investing activities:
        Equipment under capital leases                                          $    126,229


   See accompanying notes to condensed consolidated financial statements.

</TABLE>



                                       6
<PAGE>


FORM 10-Q                                             September 30, 2000
Page 7


                     JACO ELECTRONICS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE A - BASIS OF PRESENTATION

1) The accompanying  condensed  consolidated  financial  statements  reflect all
adjustments,  consisting only of normal recurring accrual adjustments, which are
in  the  opinion  of  management,  necessary  for a  fair  presentation  of  the
consolidated  financial  position and the results of  operations  at and for the
periods presented.  Such financial statements do not include all the information
or footnotes necessary for a complete  presentation.  Therefore,  they should be
read in conjunction with the Company's audited consolidated financial statements
for the year ended June 30, 2000 and the notes thereto included in the Company's
annual report on Form 10-K.  The results of operations  for the interim  periods
are not necessarily indicative of the results for the entire year.

2) The Company has a $60,000,000 term loan and revolving line of credit facility
with its banks,  which is based principally on eligible accounts  receivable and
inventories as defined in the loan  agreement.  At September 30, 2000 the unused
portion of the line was  $6,177,864.  The  agreement was amended to (i) increase
the amount  available under the revolving line of credit to $60,000,000  through
January 31, 2001 at which point it will revert back to $50,000,000,  (ii) extend
the maturity  date to September  14, 2002,  (iii) change the interest  rate to a
rate based on the average  30-day  LIBOR plus 1-3/4%  through the quarter  ended
September  30, 2000 at that point the rate  converts to 30-day  LIBOR plus 1% to
2-1/4% depending on the Company's performance for the immediately preceding four
fiscal  quarters  measured  by a certain  financial  ratio,  and (iv) change the
requirements of certain financial covenants. The applicable interest rate may be
adjusted  quarterly and  borrowings  under this facility are  collateralized  by
substantially all of the assets of the Company.

3) The Board of  Directors of the Company had  authorized  the purchase of up to
975,000 shares of its outstanding common stock under a stock repurchase program.
The purchases were made by the Company from time to time on the open market. The
Company had made  purchases of 618,300  shares of its common stock from July 31,
1996 through  September 13, 2000 for aggregate  consideration of $2,204,515.  On
September 14, 2000, the Board of Directors  passed a resolution to terminate the
stock repurchase program.

4) For interim financial reporting  purposes,  the Company uses the gross profit
method for computing inventories, which consists of goods held for resale.

5) On June 6, 2000,  the  Company  acquired  all of the  issued and  outstanding
shares  of  common  stock,  no  par  value,  of  Interface   Electronics   Corp.
("Interface"),  a distributor  of electronic  parts,  components  and equipment,
located in Massachusetts.  The purchase price was $15,400,000 payable in cash at
the closing, (June 6, 2000) plus a deferred payment of up to $3,960,000, payable
approximately one year from the anniversary of the closing. This payment will be
made provided that certain conditions, as defined in the purchase agreement, are
met. On the second  anniversary of the closing date a deferred  payment of up to
$2,640,000  shall be paid  provided that certain  conditions,  as defined in the
purchase loan agreement, are met. When this contingency is resolved, the Company
shall  record the current  fair value of the  consideration  paid as  additional
goodwill which will be amortized over the remaining life of the asset.





                                       7
<PAGE>




FORM 10-Q                                             September 30, 2000
Page 8

      The acquisition has been accounted for as a purchase and the operations of
Interface  have been included in the Company's  Statement of Earnings  since the
date of acquisition, June 6, 2000. Included in other assets are the costs of the
identifiable intangible assets acquired, principally an employment agreement and
a franchise  agreement which are being  amortized on a straight-line  basis over
five and  fifteen  years,  respectively.  The excess of the  purchase  price and
related  expenses  over the net  tangible  and  identifiable  intangible  assets
acquired  amounted to  approximately  $13,048,000  and is being  amortized  on a
straight-line basis over twenty years.

      Summarized  below are the unaudited pro forma results of operations of the
Company as if Interface has been acquired at the beginning of the fiscal periods
presented:

                                              Three months ended
                                                 September 30,

                                            2000             1999
                                        ----------       --------

         Net sales                     $94,158,828      $50,175,194
         Net earnings (loss)             4,657,867         (547,229)

         Net earnings (loss) per
         common share:
         Basic                                $0.83           $(0.10)
         Diluted                              $0.75           $(0.10)

      The pro forma financial  information  presented above for the three months
ended September 30, 1999 is not necessarily  indicative of either the results of
operations  that would have  occurred  had the  acquisition  taken  place at the
beginning  of the  periods  presented  or of  future  operating  results  of the
combined companies.


6) On February 25, 2000,  the Company  purchased  the  operating  assets of PGI,
Industries,  Inc.,  ("PGI") an exporter  of  electronic  components,  located in
Ronkonkoma,  New York. The purchase price was  $1,200,000  paid in cash,  plus a
deferred  payment of $100,000  payable  over the next two years based on certain
conditions,  as defined in the  purchase  agreement.  When this  contingency  is
resolved,  the Company shall record the current fair value of the  consideration
issued as additional  costs of the acquired  enterprise.  These additional costs
shall be amortized over the remaining  life of the asset.  The  acquisition  has
been accounted for as a purchase and the operations of PGI have been included in
the Company's Statement of Earnings since the date of acquisition,  February 25,
2000.  The  excess  of the  purchase  price  over the fair  value of the  assets
acquired,  approximately  $210,000,  is being amortized on a straight-line basis
over twenty years. Pro forma results of operations are not material.

7) On June 26, 2000,  the Company  announced a 3-for-2  stock split which was in
the form of a 50% common stock dividend payable on July 24, 2000 to shareholders
of record on July 10, 2000.  All  references  to the number of weighted  average
common shares  outstanding  and earnings per share have been restated to reflect
the 3-for-2 stock split.





                                       8
<PAGE>






FORM 10-Q                                             September 30, 2000
Page 9




8) The number of shares used in the  Company's  basic and diluted  earnings  per
share computations are as follows:


                                           Three Months Ended
                                              September 30,
                                      ------------------------------
                                         2000              1999
                                      ------------      ------------

Weighted average common shares
  outstanding net of treasury shares,
  for basic earnings per share          5,633,959         5,480,282

Common stock equivalents
for stock options                         600,809            83,893
                                      ------------      ------------

Weighted average common shares
  outstanding for diluted earnings
per share                               6,234,768         5,564,175
                                      ============      ============



      Excluded  from the  calculation  of  earnings  per share are  options  and
warrants to purchase  435,444  shares for the three months ended  September  30,
1999, as their inclusion would have been antidilutive.


9) The Company has two reportable  segments:  electronics parts distribution and
contract  manufacturing.  The Company's  primary business  activity is conducted
with small and  medium  sized  manufacturers,  located  in North  America,  that
produce  electronic  equipment  used in a  variety  of  industries.  Information
pertaining to the Company's  operations  in different  geographic  areas for the
three months ended September 30, 2000 and 1999 is not considered material to the
financial statements.

The Company's chief operating decision maker utilizes net sales and net earnings
information in assessing  performance and making overall operating decisions and
resource allocations.  The accounting policies of the operating segments are the
same as those  described  in the  summary  of  significant  accounting  policies
included in the Company's annual report to shareholders.  Information  about the
Company's segments is as follows:



                                       9
<PAGE>




FORM 10-Q                                             September 30, 2000
Page 10

                                                     Three Months Ended,
                                                         September 30,
                                                 ---------------------------
                                                     2000         1999
                                                    ------       ------
                                                       (in thousands)
   Net sales from external customers
      Electronics components distribution          $87,767      $39,224
      Contract manufacturing                         6,392        2,793
                                                   -------      -------

                                                   $94,159      $42,017
                                                    ======       ======

   Intersegment net sales
      Electronics components distribution        $      128   $      68
      Contract manufacturing
                                                     -----        -----

                                                 $      128   $      68
                                                  =========    ========

   Operating profit
      Electronics components distribution        $    8,259    $    582
      Contract manufacturing                           525          105
                                                 ---------    ---------

                                                 $    8,784    $    687
                                                  =========     =======

   Interest expense
      Electronics components distribution         $    752     $    192
      Contract manufacturing                           137          131
                                                  --------     --------

                                                  $    889     $    323
                                                   =======      =======
   Income tax provision (benefit)
      Electronics components distribution        $    3,078    $    161
      Contract manufacturing                           159          (11)
                                                   -------      --------

                                                 $    3,237    $    150
                                                  =========     =======

   Identifiable assets
      Electronics components distribution        $  138,719   $  64,699
      Contract manufacturing                         13,655       10,224
                                                 ----------   ----------

                                                 $  152,374   $  74,923
                                                  =========    ========

   Capital expenditures
      Electronics components distribution        $      333  $       66
      Contract manufacturing                            801          46
                                                 ----------   ---------

                                                 $      1,134 $      112
                                                  ===========  =========

   Depreciation and amortization
      Electronics components distribution        $      536   $      288
      Contract manufacturing                            199          151
                                                 ----------   ----------

                                                 $      735   $      439
                                                  =========    =========


                                       10
<PAGE>


FORM 10-Q                                             September 30, 2000
Page 11


                          JACO ELECTRONICS, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:  Statements  in this  filing,  and  elsewhere,  which look forward in time
involve  risks  and  uncertainties  which  may  effect  the  actual  results  of
operations. The following important factors, among others, have affected and, in
the future,  could affect the Company's actual results:  dependence on a limited
number of suppliers for products  which  generate a  significant  portion of the
Company's  sales, the effect upon the Company of increases in tariffs or duties,
changes in trade treaties,  strikes or delays in air or sea  transportation  and
possible future United States  legislation with respect to pricing and/or import
quotas on  products  imported  from  foreign  countries,  and  general  economic
downturns in the  electronics  distribution  industry  which may have an adverse
economic  effect upon  manufacturers,  end-users of  electronic  components  and
electronic component distributors.

GENERAL

      Jaco is a  distributor  of  electronic  components,  provider  of contract
manufacturing  and value-added  services.  Products  distributed by Jaco include
semiconductors,  capacitors,  resistors,  electromechanical  devices, flat panel
displays and monitors, and power supplies used in the assembly and manufacturing
of electronic equipment.
      The   Company's   customers   are   primarily   small  and  medium   sized
manufacturers.  The  trend  for  these  customers  has  been  to  shift  certain
manufacturing  functions to third parties (outsourcing).  The Company intends to
seek to  capitalize  on this trend toward  outsourcing  by  increasing  sales of
products  enhanced  by  value-added  services.  Value-added  services  currently
provided by Jaco consist of automated  inventory  management  services,  kitting
(e.g.  supplying sets of specified quantities of products to a customer that are
prepackaged for ease of feeding the customer's  production  lines), and contract
manufacturing through Nexus Custom Electronics,  Inc., a wholly owned subsidiary
of the  Company.  The  Company  is also  expanding  in the  flat  panel  display
value-added  market  which  includes  full system  integration,  kitting and the
implementation of touch technologies.



                                       11
<PAGE>



FORM 10-Q                                             September 30, 2000
Page 12


Results of Operations

The  following  table sets forth  certain  items in the  Company's  statement of
earnings as a percentage of net sales for the periods shown:


                                         Three Months Ended
                                            September 30,
                                   -------------------------------

                                     2000                 1999
                                   ---------            ---------

Net sales                              100.0%               100.0%
Cost of goods sold                      78.1                 81.1
                                   ---------            ---------
Gross profit                            21.9                 18.9
Selling, general and
  administrative expenses               12.6                 17.3
                                   ---------            ---------
Operating profit                         9.3                  1.6
Interest expense                         0.9                  0.7
                                   ---------            ---------
Earnings before income taxes             8.4                  0.9
Income tax provision                     3.5                  0.4
                                   ---------            ---------
NET EARNINGS                            4.9%                  0.5%
                                   ========             ==========

COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2000 ("FISCAL 2001") WITH
THREE MONTHS ENDED SEPTEMBER 30, 1999 ("FISCAL 2000")


               Our net  sales  for the first  three  months of fiscal  2001 were
$94.2  million,  an increase of $52.2 million,  or 124.1%,  as compared to $42.0
million  reported for the first three months of fiscal 2000. The increase in net
sales was  principally  the result of a continued  strong demand for  components
throughout the electronics industry.  The Company is benefiting from substantial
investments  made in sales personnel and  infrastructure.  The Company added new
customers and expanded our relationships  with existing customers as a result of
the  value-added  services  offered  to  assist  customers  in  procurement  and
inventory   management.   Net  sales  includes  the   acquisition  of  Interface
Electronics Corp. ("Interface"), which was completed during June 2000.
          Our gross  profit  was $20.6  million  for the first  three  months of
fiscal 2001, an increase of $12.7 million,  or 159.8%,  compared to $7.9 million
for the first three months of fiscal 2000.  Gross profit margins as a percentage
of net sales were 21.9% for the quarter  compared to 18.9% for the same  quarter
last fiscal year. The strong demand for  components  was primarily  attributable
for the increase in gross profit margin as a percentage of net sales. The higher
gross profit percentage plus the strong sales growth resulted in the increase in
gross profit.



                                       12
<PAGE>


FORM 10-Q                                             September 30, 2000
Page 13


      Our  selling,  general and  administrative  ("SG&A")  expenses  were $11.8
million for the first three months of fiscal 2001,  an increase of $4.6 million,
or 63.3%,  compared to $7.2 million for the same quarter last fiscal year.  As a
percentage of net sales,  SG&A  expenses  decreased to 12.6% for the first three
months of fiscal 2001  compared to 17.3% for the  comparable  period last fiscal
year. The increase in spending is primarily  attributable to expenses  necessary
to support the growth in sales.  These  expenses  include  additional  sales and
marketing   personnel,   investments  in  our  infrastructure,   variable  costs
associated with our increase in sales and the additional  costs  associated with
the acquisition of Interface. The decrease as a percentage of net sales reflects
operating efficiencies realized with higher revenue levels.

     Our  operating  profit for the first  three  months of fiscal 2001 was $8.8
million as compared to $0.7  million for the first three  months of fiscal 2000.
As a percentage of net sales, operating profit increased to 9.3% for the current
quarter, compared to 1.6% for the same quarter last fiscal year.

     Our interest  expense  increased to $0.9 million for the first three months
of fiscal 2001, as compared to $0.3 million for the first three months of fiscal
2000.  The  increase  was  primarily  due  to  the   additional   borrowings  of
approximately  $15  million to acquire  Interface  during the fourth  quarter of
fiscal year ended June 30, 2000 and the  additional  borrowings  required due to
the  increase in accounts  receivable  and  inventory  necessary  to support the
growth in sales.

     Our net  earnings  for the first  three  months  of  fiscal  2001 were $4.7
million,  or $0.75  per share  diluted,  as  compared  to net  earnings  of $0.2
million,  or $0.04 per share  diluted for the first three months of fiscal 2000.
Dilutive  earnings per share includes the dilutive  effect of outstanding  stock
options.  The increase in net earnings was  attributable  to the increase in net
sales, the increase in gross profit margins,  and the reduction in SG&A expenses
as it relates to a percentage of net sales.  The Company also benefited from the
acquisition  of  Interface  as well as strong  demand  during  the  quarter  for
components throughout the electronics industry.


LIQUIDITY AND CAPITAL RESOURCES

     Our agreement with our banks, as amended on September 28, 2000,  expires on
September 14, 2002.  Our agreement  provides us with a $60 million term loan and
revolving  line of  credit  facility  based  principally  on  eligible  accounts
receivable and inventories as defined in the agreement. On February 1, 2001, the
revolving line of credit reduces to $50 million. The interest rate of the credit
facility  was based on the  average  30-day  LIBOR rate plus 1.75%  through  the
quarter ending  September 30, 2000.  After September 30, 2000, the rate converts
to the average 30-day LIBOR rate plus  1.0%-2.25%  depending on our  performance
for the  immediately  preceding  four  fiscal  quarters  measured  by a  certain
financial ratio, and may be adjusted  quarterly.  The outstanding balance on the
revolving  line of credit  facility  was $53.7  million at  September  30, 2000.
Borrowings under this facility are  collateralized  by substantially  all of our
assets. The agreement  contains  provisions for maintenance of certain financial
ratios,  all of which we were in  compliance  with at September  30,  2000,  and
prohibits  the payment of cash  dividends.

     For the first  three  months  of  fiscal 2001, our cash  used in  operating
activities was approximately  $12.2 million, as compared to net cash provided by
operating  activities of $0.4 million for the same period last fiscal year.  The
increase in net cash used is primarily  attributable  to an increase in accounts
receivable,  inventory and an advance to supplier.  This was partially offset by
an increase in accounts  payable and accrued  expenses  and net earnings for the
quarter.  The increase in accounts  receivable was the result of the increase in
net sales  during the quarter.  The increase in inventory  and an advance to our
supplier,  which  amounted to  approximately  $15  million,  was the result of a
significant purchase order at the end of the quarter which is expected to result
in  shipments  during the next two  quarters.  Net cash  provided  by  financing
activities  was $13.8  million  for the  first  three  months of fiscal  2001 as
compared  to net cash  used in  financing  activities  of $0.3  million  for the
comparable  period last fiscal year. The increase is primarily  attributable  to
the increase in net borrowings under the line of credit of  approximately  $14.0
million  required  to fund the  increase  in  inventory  and the  advance to the
supplier described above.




                                       13
<PAGE>



FORM 10-Q                                             September 30, 2000
Page 14


      Our cash expenditures may vary significantly from current levels, based on
a number of factors, including, but not limited to future acquisitions, if any.
            For the first  three  months of fiscal  2001 and  fiscal  2000,  our
inventory turnover was 5.1x and 4.1x, respectively. The average days outstanding
of our accounts  receivable at September 30, 2000 was 46 days, as compared to 53
days at September 30, 1999.
      We believe that cash flow from  operations and funds  available  under our
credit  facility  will be  sufficient to fund our capital needs for at least the
next twelve months.

Inflation

      Inflation  has not had a significant  impact on the  Company's  operations
during the last three fiscal years.

Quantitative and Qualitative Disclosure about Market Risk.

     We are exposed to interest rate changes with respect to our credit facility
which bears  interest at the higher of the prime rate or the federal  funds rate
plus 0.5%,  or at our option,  at a rate equal to the average  30-day LIBOR rate
plus 1.0% to 2.25% depending on our  performance  for the immediately  preceding
four fiscal quarters  measured by a certain financial ratio, and may be adjusted
quarterly. At September 30, 2000, $53.7 million was outstanding under the credit
facility.  Changes in the LIBOR interest rate during the fiscal year will have a
positive or negative effect on our interest  expense.  Each 1.0%  fluctuation in
the LIBOR  interest  rate will increase or decrease  interest  expense for us by
approximately  $0.5 million  based on  outstanding  borrowings  at September 30,
2000.  The impact of interest rate  fluctuations  on other floating rate debt is
not material.


                                       14
<PAGE>




FORM 10-Q                                              September 30, 2000
Page 15


PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

                  Nothing to Report

Item 2.     Changes in Securities and Use of Proceeds

                  Nothing to Report

Item 3.     Defaults Upon Senior Securities

                  Nothing to Report

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

                  Nothing to Report

Item 5.     Other Information

                   Nothing to Report

Item 6.     Exhibits and Reports on Form 8-K

a)    Exhibits

                    27.1      Financial Data Schedule

                    99.8.8    Amendment to Second Restated
                              and Amended Loan and Security Agreement
                              dated September 28, 2000

b)    Reports on Form 8-K

                    1) On  October  20,  2000,  a  Current  Report  on Form 8-K,
               Amendment No. 2, was filed to include revised  audited  financial
               statements of Interface  Electronics Corp. as of and for the year
               ended  December  31,  1999,  unaudited  statements  of  Interface
               Electronics  Corp.  for the nine months  ended March 31, 2000 and
               related proforma information.

                    2) On November 13,  2000,  a Current  Report on Form 8-K was
               filed to include under Item 5 the  declaration of a three-for-two
               stock split in the form of a 50% stock  dividend  with respect to
               the common stock of the Comapny.




                                       15
<PAGE>






                                S I G N A T U R E




      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.


                                          JACO ELECTRONICS, INC.
                                                 (Registrant)



                                    BY: /s/  Jeffrey D. Gash
                                             ------------------------
                                         Jeffrey D. Gash, Vice President/Finance
                                          (Principal Financial Officer)









DATED: November 14, 2000