SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. - 20549
_________________________
FORM 10-Q

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

For the Quarterly Period Ended September 28, 2001

Commission File No. 0-12588
_________________________

                    SALIENT 3 COMMUNICATIONS, INC.
	(Exact name of registrant as specified in its charter)

	Delaware		          23-2280922
(State of Incorporation)	(IRS Employer Identification No.)

	P.O. Box 1498, Reading, Pennsylvania		  19603
(Mailing address of principal executive offices)	(Zip Code)

(610) 856-5500
______________________________________________________________________________
(Registrant's telephone number, including area code)

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

				Yes  X   	No


                                               Class A         Class B
                                               -------         -------
Number of shares of each class of
common stock outstanding as of
September 28, 2001 (excluding 2,770,476
Class A treasury shares):                    5,939,993          274,831




SALIENT 3 COMMUNICATIONS, INC. AND SUBSIDIARIES
INDEX

Part I.  Financial Information	Pages
Item 1.

 Statements of Net Assets in Liquidation (Liquidation Basis)
  at September 28, 2001 (unaudited) and December 29, 2000

 Statements of Changes in Net Assets in Liquidation
  (Liquidation Basis) for the nine months ended September 28,
  2001 and six months ended September 29, 2000 (unaudited)

 Consolidated Condensed Statement of Operations (Going-
  Concern Basis) for the three months ended March 31, 2000

 Consolidated Condensed Statement of Cash Flows (Going-
  Concern Basis) for the three months ended March 31, 2000

 Notes to Financial Statements

Item 2.

 Management's Discussion and Analysis of Financial
  Condition and Results of Operations

Item 3.

 Quantitative and Qualitative Disclosures About Market Risk


Part II.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

Signatures




Part I. Financial Information

 Salient 3 Communications, Inc. and Subsidiaries
 Statements of Net Assets in Liquidation (Liquidation Basis)
 September 28, 2001 (Unaudited) and December 29, 2000
 (000's except for share and per share information)


                                                   September 28,   December 29,
                                                      2001            2000
                                                   -------------   ------------
 ASSETS

 Cash and cash equivalents                       $    11,062       $    18,426

 Investments in liquidation                           13,573            14,837

 Income tax refunds receivable                         7,150             3,980

 Other assets                                          3,269             4,198
                                                      ------            ------
         Total Assets                                 35,054            41,441
                                                      ------            ------



 LIABILITIES

 Accrued and other liabilities                   $    13,808       $    20,661
                                                      ------            ------


         Net assets in liquidation               $    21,246       $    20,780
                                                      ======            ======

         Number of common shares outstanding       6,214,824         6,214,824
                                                   =========         =========

         Net assets in liquidation               $      3.42       $      3.34
           per outstanding share                        ====              ====



 The accompanying notes are an integral part of these financial statements.


Salient 3 Communications, Inc. and Subsidiaries
Statements of Changes In Net Assets In Liquidation (Liquidation Basis)
Nine Months Ended September 28, 2001 and Six Months Ended September 29, 2000
(Unaudited)
(000's)

                                                  Nine Months      Six Months
                                                     Ended            Ended
                                                 Sept. 28, 2001  Sept. 29, 2000
                                                 --------------  --------------

Net assets in liquidation, beginning of period      $   20,780     $    93,985
                                                        ------          ------
Changes in estimated liquidation values
  of assets and liabilities:
  Investments in subsidiaries                           (2,192)         (1,758)
  Other assets                                             171           2,716
  Accrued and other liabilities                           (341)            515
  Income taxes                                           2,828             (38)
                                                        ------          ------
  Net changes in estimated liquidation values              466           1,435
                                                        ------          ------

Liquidating distribution to stockholders                   -           (74,582)
                                                        ------          ------
Net assets in liquidation, end of period            $   21,246     $    20,838
                                                        ======          ======

Supplemental Cash Information:
Changes in cash and cash equivalents
  Exercise of stock options                                -               588
  Net proceeds (payments) related to
   sales of subsidiaries                                  (928)        136,835
  Cash receipts for other assets                         1,100           4,602
  Payment of outstanding debt,
    including accrued interest                             -           (18,861)
  Payment of accrued liabilities                        (7,195)         (8,042)
  Payment of income taxes                                 (341)         (2,238)
  Liquidating distribution to stockholders                 -           (74,582)
                                                        ------          ------
Net changes in cash and cash equivalents            $   (7,364)    $    38,302
                                                        ======          ======


 The accompanying notes are an integral part of these financial statements.


 Salient 3 Communications, Inc. and Subsidiaries
 Consolidated Condensed Statement of Operations (Going-Concern Basis)
 Three Months Ended March 31, 2000
 (000's except for share and per share information)



 Sales                                          $    25,015
 Cost of goods sold                                  14,668
                                                     ------
 Gross profit                                        10,347

 Selling, general and administration                  9,616
 Research and development                             2,161
 Goodwill amortization                                  507
                                                     ------
 Operating loss                                      (1,937)
                                                     ------
 Interest and other income                               91
 Interest expense                                       329
                                                     ------
 Pre-tax loss                                        (2,175)
                                                     ------
 Benefit for taxes on loss                             (827)
                                                     ------

 Net loss                                       $    (1,348)
                                                     ======

 Net loss per share of common
   stock (basic and diluted)                    $     (0.23)


 Basic weighted average shares
   outstanding                                    5,989,073


 The accompanying notes are an integral part of this financial statement.


 Salient 3 Communications, Inc. and Subsidiaries
 Consolidated Condensed Statement of Cash Flows (Going-Concern Basis)
 Three Months Ended March 31, 2000
 (000's)


 Cash flows from operating activities:

 Net loss                                                        $(1,348)
 Adjustments to reconcile net loss to net
  cash provided by operating activities:
     Depreciation and amortization                                 2,026
     Reserve provisions                                              711
     Changes in current assets and current liabilities:
      Accounts receivable and unbilled revenue                     3,696
      Inventories                                                 (1,196)
      Other current assets                                          (843)
      Accounts payable and salaries and wages                     (2,142)
      Other accrued liabilities                                     (572)
      Income taxes, currently payable                                (89)
     Other, net                                                       47
                                                                   -----
  Net cash provided by operating activities                          290
                                                                   -----
 Cash flows from investing activities:

 Payments for acquisition, net of cash acquired                     (351)
 Payments for property, plant and equipment                         (601)
 Software development costs                                       (1,475)
                                                                   -----
  Net cash used for investing activities                          (2,427)
                                                                   -----
 Cash flows from financing activities:

 Payments of long-term debt                                         (183)
 Borrowings under note payable                                     2,995
 Issuance of treasury stock in connection
   with stock purchase plan                                           32
 Payments to acquire treasury stock                                 (103)
 Other, net                                                         (260)
                                                                   -----
  Net cash provided by financing activities                        2,481
                                                                   -----
 Net increase in cash and cash equivalents                           344

 Cash and cash equivalents at beginning of period                  1,687
                                                                   -----
 Cash and cash equivalents at end of period                      $ 2,031
                                                                   =====
 Supplemental cash flow disclosures:

 Interest paid                                                   $   321
                                                                   =====
 Income taxes paid, net of refunds received                      $   150
                                                                   =====


 The accompanying notes are an integral part of this financial statement.


SALIENT 3 COMMUNICATIONS, INC AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 28, 2001
(UNAUDITED)
(000's except for share and per share information)

1.  GENERAL

The interim financial information furnished herein reflects all adjustments
which are, in the opinion of management, necessary for a fair presentation of
such financial information for the interim periods.  Such adjustments are of a
normal recurring nature.  The accompanying financial statements are presented
in accordance with the requirements of Form 10-Q and consequently do not
include all of the disclosures normally required by generally accepted
accounting principles or those normally made in the Company's annual Form 10-K
filing.  Accordingly, the reader of this Form 10-Q should refer to the
Company's annual report on Form 10-K for the year ended December 29, 2000 for
further information.


LIQUIDATION BASIS STATEMENTS

2.  PLAN OF DISSOLUTION AND LIQUIDATION AND BASIS OF ACCOUNTING

On April 17, 2000, the Board of Directors of Salient 3 Communications, Inc.
(the Company) adopted a Plan of Dissolution and Liquidation (the Plan).  Under
the Plan, the Company will be liquidated by (i) the sale of its non-cash
assets, (ii) the payment of or providing for all of its claims, obligations
and expenses, (iii) the pro rata distribution of assets, primarily cash, to
the stockholders, and (iv) if required, the distribution of assets to one or
more liquidating trusts established for the benefit of the stockholders.  The
Plan was approved by stockholders on July 21, 2000.

On August 11, 2000, the Company filed a Certificate of Dissolution with the
State of Delaware.  Under Delaware law, the Company will continue to exist for
a period of three years for the purpose of winding up its affairs.  The Board
of Directors and officers of the Company will continue to oversee the
liquidation and dissolution.

Prior to June 30, 2000, seven stockholders, who together control more than 51%
of the issued and outstanding Class B common stock, had agreed to vote their
shares in favor of the Plan and in favor of the sales of SAFCO Technologies,
Inc. (SAFCO) and GAI-Tronics Corporation (GTC).  As a result, the Company
adopted the liquidation basis of accounting for the second quarter of 2000.
Under the liquidation basis of accounting, assets are stated at their
estimated net realizable values and liabilities are stated at their
anticipated settlement amounts.

The valuation of assets and liabilities at their estimated net realizable
values and anticipated settlement amounts necessarily requires many estimates
and assumptions and there are substantial uncertainties in carrying out the
provisions of the Plan.  The actual value of any liquidating distributions
will depend upon a variety of factors including, but not limited to, (i) the
actual proceeds realizable from the sale of the Company's subsidiaries and
other assets, (ii) the ultimate settlement amounts of its liabilities and
obligations, including indemnifications provided in connection with subsidiary
sale transactions, (iii) actual costs incurred in connection with carrying out
the Plan, including administrative costs during the liquidation period, and
(iv) the actual timing of distributions.  An initial liquidating distribution
of $12.00 per share was paid on September 8, 2000.

The valuations presented in the Statement of Net Assets in Liquidation
represent estimates, based on present facts and circumstances, of the net
realizable values of assets and the anticipated settlement amounts for
liabilities, including the costs associated with carrying out the provisions
of the Plan, based on the assumptions set forth in the accompanying notes.
The actual values and costs are expected to differ from the amounts shown
herein and could be higher or lower than the amounts recorded.  Such
differences may be material.  Accordingly, it is not possible to predict with
certainty the aggregate net values ultimately distributable to stockholders
and no assurance can be given that the amount to be received in liquidation
will equal or exceed the price or prices at which the Class A common stock has
generally traded or is expected to trade in the future.

The changes in estimated liquidation values of assets and liabilities in the
Statement of Changes in Net Assets in Liquidation are the result of changes in
the actual proceeds on the sales of assets and settlements made on outstanding
obligations as well as changes in management estimates during the reporting
period.

3.  INVESTMENTS IN LIQUIDATION

Investments in liquidation include the estimated net realizable values of
subsidiary sale proceeds collectible after September 28, 2001 and December 29,
2000, less related unpaid costs of the sales, and the estimated net realizable
value of the building occupied by XEL.

On July 25, 2000, the Company completed the sale of SAFCO to Agilent
Technologies, Inc. for $121,426 in cash, after consideration of certain
closing balance sheet adjustments.  The purchase price included $11,000 which
has been placed into escrow for certain expenses and possible indemnification
claims.  The Company has reached agreement with the buyer for release from the
escrow account during the fourth quarter of 2001 of approximately $8,765 plus
accrued interest.  In addition, approximately $735 will be distributed to the
buyer and $1,500 will remain in the account pending resolution of a specific
claim.

On July 26, 2000, the Company completed the sale of GTC to Hubbell
Incorporated for cash of $36,246, after consideration of certain closing
balance sheet adjustments.

The Company provided certain indemnifications to the buyers of SAFCO and GTC
under the representations and warranties sections of the purchase agreements.
During the third quarter of 2001, both Agilent and Hubbell submitted
notification of indemnification claims to the Company.  All of the claims
presented by Agilent, except one noted above, have been resolved.
Furthermore, the Company believes that the one claim filed by Hubbell, when
resolved, will not have a material effect on the net assets in liquidation.
As of September 28, 2001, it is not possible to predict the ultimate liability
of the Company in connection with these indemnification claims.  The Company
has purchased certain insurance to minimize its exposure on some, but not all,
of the areas for which they are indemnifying the buyers.

On December 29, 2000, the Company completed the sale of XEL Communications,
Inc. (XEL) to a company controlled by XEL's president, for $4,900 in the form
of a promissory note bearing interest payable monthly at 8%, with the
principal due after 24 months.  In connection with the sale, the Company
loaned XEL $359 under a working capital line of credit which expired on March
31, 2001.  The working capital loan, plus interest at 5% per annum, is due
December 29, 2002.  In March 2001, XEL obtained a $1,000 bank line of credit
and the Company provided a guaranty for a maximum of $500 of XEL debt.  The
guaranty expired May 31, 2001.  As of May 31, 2001, no amounts were borrowed
under the bank line of credit.  If XEL is resold to another party prior to
December 30, 2002, the Company would receive full payment on the note and
working capital loan and 70% of all proceeds in excess of $5,000.  If XEL is
resold after December 29, 2002 but prior to December 30, 2003, the Company
would receive 50% of all proceeds in excess of $5,000.  If there is a default
in payment of the principal or interest on the promissory note, the Company
has the right to retake control of XEL.  The note is valued at $1,900 in the
statement of net assets in liquidation based on the estimated realizable
values of XEL's net assets.  The sale of XEL excluded the building it occupies
in Aurora, Colorado.  An unrelated third party has signed a letter of intent
to purchase this building at the value included in the statement of net assets
in liquidation.  The buyer has a 60-day due diligence period before closing on
the sale.

4.  INCOME TAXES

All income tax accounts have been restated to reflect the liquidation basis of
accounting.  The estimated amount of income tax refunds receivable reflects
federal and state income taxes, at statutory rates, which would become
refundable if the assets are realized and liabilities settled at the amounts
shown.  The refunds result from overpayment of estimated taxes for the year
2000 and anticipated carrybacks of tax losses.  Future tax losses will arise
from tax deductible costs of carrying out the plan of liquidation and settling
other accrued liabilities.  The estimate is subject to significant variation
if, among other things, the actual values of assets sold vary from current
estimates, the amounts or timing of settlement of liabilities differ from
current estimates, or there are potential adjustments related to the sales
transactions.

5.  ACCRUED AND OTHER LIABILITIES

Accrued and other liabilities include estimates of costs to be incurred in
carrying out the Plan, provisions for known liabilities and provisions for
certain asserted and unasserted claims at September 28, 2001.  The accrued
costs include salaries and related expenses of officers and employees assigned
to effect the sales and carry out the Plan and legal and accounting fees
expected to be incurred during the period of liquidation.  Accrued liabilities
also include the estimated future distributions to holders of limited stock
appreciation rights.

The actual costs incurred could vary significantly from the related accrued
expenses due to uncertainty related to the length of time required to complete
the Plan and the outcome of certain contingencies.

6.  OPTIONS AND WARRANTS

In April 2000, the Board of Directors authorized immediate vesting of all
outstanding restricted stock, and, effective with the first subsidiary sale,
vesting of stock options granted under the 1989 Stock Option Plan and the 1996
Long Term Incentive Plan and extension of the exercise period to the record
date of the initial liquidating distribution.  The Board also added a
provision to convert all unexercised options at the record date of the initial
liquidating distribution into Limited Stock Appreciation Rights (LSAR's).  In
addition, all warrant holders were given the opportunity to convert their
warrants into LSAR's.  These rights entitle the holder to receive cash
payments for each share equal to the difference between the aggregate per
share liquidating distribution payable to stockholders upon liquidation and
the per share exercise price applicable to each converted option or warrant.
In August, 2000, 1,097,200 options and 705,555 warrants were converted into
LSAR's.  Holders of LSAR's were paid $1,866 in connection with the initial
liquidating distribution on September 8, 2000.  The estimated remaining
liability for settlement of the LSAR's at September 28, 2001 is $3,137 and is
included in accrued and other liabilities in the statement of net assets in
liquidation.

7.  CONTINGENCIES

The Company was named a defendant in a complaint filed in Delaware Chancery
Court on August 29, 2000, and amended on February 26, 2001, by a group of
former employees and current Class A stockholders, challenging the
compensation packages granted by the Company to its senior management in
connection with the dissolution of the Company.  On November 1, 2001, the
Delaware Chancery Court granted the Company's motion to dismiss the complaint.

Before distributing assets to its stockholders, the Company is required by
Delaware law to make provision for all known claims and obligations and any
unasserted claims that are reasonably likely to arise after the certificate of
dissolution became effective.  The accrual for asserted and unasserted claims
represents management's judgment as to the estimated amounts required to
settle such claims, should they arise and should they have merit.  Ultimate
settlement amounts for such claims are expected to differ from estimates
recorded as of September 28, 2001.  Accordingly, it is not possible to predict
with certainty the amount required for such claims.  However, management
believes that the outcome will not have a material adverse effect on the
Company's net assets in liquidation.


GOING-CONCERN BASIS STATEMENTS

8.  EARNINGS PER SHARE

Net loss per share of common stock was determined using the average number of
Class A and Class B shares outstanding.  No preferred stock was outstanding as
of March 31, 2000.

Dilutive shares outstanding were determined on the assumption that all
outstanding options, warrants and shares of restricted stock with a strike
price below the average stock price for the period would be exercised and the
related shares issued.  Dilutive shares outstanding for the first quarter of
2000 were 6,083,780. Due to the reported loss for the quarter ended March 31,
2000, these additional shares had an anti-dilutive effect on the Company's
earnings per share calculation.

9.  SPECIAL ADJUSTMENTS

In connection with the Company's actions to sell its subsidiaries, various
members of management and key employees were offered incentives to continue
employment through the completion of the sale process.  Portions of these
incentives were guaranteed to the employees subject to continued employment
through December 15, 2000, and the cost would be recognized over the related
service period.  Other incentives, including sale bonuses and severance, are
dependent on completion of sale transactions and will be recognized if and
when there is a triggering event.

In the first quarter of 2000, the Company accrued for retention bonuses of
$266 and severance costs of $100.  The Company also eliminated reserves of
$326 due to collection of a note receivable and receipt of credits from an
insurance company in connection with its conversion to a stock company.  The
net effect of these adjustments was a $40 increase in selling, general and
administration expense.

10.  SOFTWARE DEVELOPMENT COSTS

The Company capitalized costs associated with the development of software for
external use in accordance with Statement of Financial Accounting Standards
No. 86 "Accounting for Cost of Computer Software to be Sold, Leased, or
Otherwise Marketed."  Costs were being amortized in relation to revenue from
the products, but no less than on a straight line basis over 2 to 3 years.
Amortization expense for capitalized software development costs was $435 in
the quarter ended March 31, 2000.

11.  SEGMENT INFORMATION

The Company had three reportable segments: Industrial, Access Products and
Wireless.  The Industrial Segment developed, assembled and marketed
communication systems for industrial operations.  Industrial communication
products were designed to operate under extraordinary plant conditions and
provide emergency notification.  In addition, the segment included land mobile
radio communications devices.  The Access Products Segment designed and
marketed voice and data transmission system products.  The access products
provided access to telecommunications services and automated monitoring and
maintenance of telecommunications network performance.  The Wireless Segment's
products and services focused on the measurement and analysis of signal
strength, data communications and radio frequency transmitted between the
wireless phone and cellsites.  The Wireless Segment also provided radio
frequency engineering design services.

Each reportable segment operated as a separate, standalone business unit with
its own management.

The Company evaluated segment performance based on profit or loss from
continuing operations before income tax, goodwill amortization and corporate
overhead allocation.  Profit or loss was determined in accordance with
generally accepted accounting principles described in the summary of
significant accounting policies.  Intersegment sales were not significant.

                                  Three Months Ended
                                      March 31, 2000
        --------------------------------------------
        Sales
        -----
        Industrial                          $ 13,614
        Access Products                        3,392
        Wireless                               8,009
                                              ------
                                              25,015
                                              ------
        Segment Profit (Loss)
        ---------------------
        Industrial                               (24)
        Access Products                         (612)
        Wireless                                 214

        General interest expense                (294)
        General corporate expenses            (1,043)
        Goodwill amortization                   (507)
        Interest income and other                 91
                                            --------
        Pre-tax loss                        $ (2,175)
        =============================================



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(000's except for share and per share information)

LIQUIDATION BASIS

Introduction

On April 17, 2000, the Company's Board of Directors adopted a Plan of
Dissolution and Liquidation ("the Plan").  Under the Plan, the Company will be
liquidated by (i) the sale of its non-cash assets, (ii) the payment of or
providing for all of its claims, obligations and expenses, (iii) the pro rata
distribution of assets, primarily cash, to the stockholders, and (iv) if
required, the distribution of assets to one or more liquidating trusts
established for the benefit of the stockholders.  The Plan was approved by
stockholders on July 21, 2000.

On August 11, 2000, the Company filed a Certificate of Dissolution with the
State of Delaware.  Under Delaware law, the Company will continue to exist for
a period of three years for the purpose of winding up its affairs.  The Board
of Directors and officers of the Company will continue to oversee the
liquidation and dissolution.

The Company adopted the liquidation basis of accounting for the second quarter
of 2000.  Under the liquidation basis of accounting, assets are stated at
their estimated net realizable values and liabilities are stated at their
anticipated settlement amounts.

The valuation of assets and liabilities at their estimated net realizable
values and anticipated settlement amounts necessarily requires many estimates
and assumptions and there are substantial uncertainties in carrying out the
provisions of the Plan.  The actual value of any liquidating distributions
will depend upon a variety of factors including, but not limited to, (i) the
actual proceeds realizable from the sale of the Company's subsidiaries and
other assets, (ii) the ultimate settlement amounts of its liabilities and
obligations, including indemnifications provided in connection with subsidiary
sale transactions, (iii) actual costs incurred in connection with carrying out
the Plan, including administrative costs during the liquidation period, and
(iv) the actual timing of distributions.  An initial liquidating distribution
of $12.00 per share was paid on September 8, 2000 to holders of Class A (non-
voting) and Class B (voting) common stock.

Sale of Assets

On July 25, 2000, the Company completed the sale of SAFCO to Agilent
Technologies, Inc. for $121,426 in cash, after consideration of certain
closing balance sheet adjustments.  The purchase price included $11,000 which
has been placed into escrow for certain expenses and possible indemnification
claims.  The Company has reached agreement with the buyer for release from the
escrow account during the fourth quarter of 2001 of approximately $8,765 plus
accrued interest.  In addition, approximately $735 will be distributed to the
buyer and $1,500 will remain in the account pending resolution of a specific
claim.

On July 26, 2000, the Company completed the sale of GTC to Hubbell
Incorporated for cash of $36,246, after consideration of certain closing
balance sheet adjustments.

The Company is providing certain indemnifications to the buyers of SAFCO and
GTC under the representations and warranties sections of the purchase
agreements.  During the third quarter of 2001, both Agilent and Hubbell
submitted notification of indemnification claims to the Company.  All of the
claims presented by Agilent, except one noted above, have been resolved.
Furthermore, the Company believes that the one claim filed by Hubbell, when
resolved, will not have a material effect on the net assets in liquidation.
As of September 28, 2001, it is not possible to predict the ultimate liability
of the Company in connection with these indemnification claims.  The Company
has purchased certain insurance to minimize its exposure on some, but not all,
of the areas for which they are indemnifying the buyers.

On December 29, 2000, the Company completed the sale of XEL Communications,
Inc. (XEL) to a company controlled by XEL's president, for $4,900 in the form
of a promissory note bearing interest payable monthly at 8%, with the
principal due after 24 months.  In connection with the sale, the Company
loaned XEL $359 under a working capital line of credit which expired on March
31, 2001.  The loan, plus interest at 5%, is due 24 months after the sale of
XEL.  If XEL is resold to another party within 24 months, the Company would
receive full payment on the note and working capital loan and 70% of all
proceeds in excess of $5,000.  If XEL is resold after 24 months but within 36
months, the Company would receive 50% of all proceeds over $5,000.  If there
is a default in payment of principal or interest on the promissory note, the
Company has the right to retake control of XEL.  The sale of XEL excluded the
building it occupies in Aurora, Colorado.  An unrelated third party has signed
a letter of intent to purchase this building at the value included in the
statement of net assets in liquidation.  The buyer has a 60-day due diligence
period before closing on the sale.

Liquidity and Capital Resources

On September 28, 2001, the Company had cash and cash equivalents of $11,062.
The future cash needs of the Company will be dependent on the continuing
implementation of the Plan.  The Company believes that its cash and cash
equivalents, its collection of deferred payments on sales of subsidiaries and
its conversion of other assets to cash will be sufficient to fund its working
capital requirements through the completion of the Plan.

Pursuant to the Plan, after payment or provision for payment of the Company's
indebtedness and other obligations, the cash proceeds of any asset sales,
together with other available cash, will be distributed from time to time pro
rata to the holders of the common stock.  The record dates with respect to
each distribution will be selected by the Board of Directors.  An initial
liquidating distribution of $12.00 per share was paid on September 8, 2000.
The Company expects to make its next cash distribution to stockholders as soon
as possible after the expected SAFCO escrow proceeds are received.

Before distributing assets to its stockholders, the Company is required by
Delaware law to make provision for all known claims and obligations and any
unasserted claims that are reasonably likely to arise after the certificate of
dissolution became effective.  The accrual for asserted and unasserted claims
represents management's judgment as to the estimated amounts required to
settle such claims, should they arise and should they have merit.  Ultimate
settlement amounts for such claims are expected to differ from estimates
recorded as of September 28, 2001.  Accordingly, it is not possible to predict
with certainty the amount required for such claims.

Other

In April 2000, the Board of Directors authorized immediate vesting of all
outstanding restricted stock, and, effective with the first subsidiary sale,
vesting of stock options granted under the 1989 Stock Option Plan and the 1996
Long Term Incentive Plan and extension of the exercise period to the record
date of the initial liquidating dividend.  The Board also added a provision to
convert all unexercised options at the record date of the initial liquidating
dividend into Limited Stock Appreciation Rights.  These rights entitle the
holder to receive cash payments for each share equal to the difference between
the aggregate per share liquidating distribution payable to stockholders upon
liquidation and the per share exercise price applicable to each converted
option.  In August, 2000, 1,097,200 options and 705,555 warrants were
converted into LSAR's.  Holders of LSAR's were paid $1,866 in connection with
the initial liquidating distribution on September 8, 2000.  The estimated
remaining liability for settlement of the LSAR's at September 28, 2001 is
$3,137 and is included in accrued and other liabilities in the statement of
net assets in liquidation.


FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company,
including statements regarding the timing and outcome of the sale of the
Company's assets, its dissolution and liquidation and the expected
distribution therefrom.  Such statements are only predictions and involve
risks and uncertainties, and actual events or performance may differ
materially from that expressed in any such forward-looking statements.
Potential risks and uncertainties include, without limitation: ultimate values
realizable for unsold assets, adjustments to subsidiary sale prices,
collection of deferred payments on sales of assets, post-closing
indemnification obligations relating to subsidiary sales, costs and expenses
relating to the dissolution, including income taxes, and the nature and amount
of any unknown contingent liabilities.  Further information on factors that
could affect the Company's future financial performance can be found in the
Company's other filings with the Securities and Exchange Commission.  Words
such as "estimates", "positioned", "yields", "should generate", "appears",
"viewed", "could", "would position", "expected", "does not expect" and "should
allow" indicate the presence of forward-looking statements.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company's only financial instruments with market risk exposure are short-
term cash investments which total $11,109 at September 28, 2001.  Based on
this balance, a change of one percent in the interest rate would cause a
change in interest income for the period of approximately $111.  This interest
amount, less a related tax effect, would have no effect on the net assets in
liquidation per outstanding share since interest income on cash investments is
not accrued in the statement of net assets in liquidation.

These financial instruments are non-trading (not entered into for trading
purposes) and carry interest at a market rate.  The Company's objective in
maintaining these variable rate investments is the flexibility obtained in
having cash available for payment of accrued liabilities and distributions to
stockholders without penalties.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

        (a)  Exhibits

             None.


        (b)  Reports on Form 8-K

             None.


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.
                                        Salient 3 Communications, Inc.

                                        /s/Paul H. Snyder
                                        -------------------------
                                        Paul H. Snyder
                                        Senior Vice President and
                                        Chief Financial Officer

Date:  November 9, 2001