UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

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

 For the quarterly period ended April 30, 2005

                                       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 0-944

                              POSSIS MEDICAL, INC.
             (exact name of registrant as specified in its charter)

         Minnesota                                         41-0783184
----------------------------------------            ----------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation organization)                            Identification No.)

  9055 Evergreen Blvd NW   Minnesota MN                    55433-8003
----------------------------------------            ----------------------------
(Address of principal executive offices)                   (Zip Code)

                                  783-780-4555
--------------------------------------------------------------------------------
(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 short  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 |_|

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|

The number of shares  outstanding  of the  Registrant's  Common Stock,  $.40 par
value, as of May 28, 2005 was 17,280,663.


<PAGE>


                              POSSIS MEDICAL, INC.

                                      INDEX

                                                                            PAGE
                                                                            ----

PART I.   FINANCIAL INFORMATION

 ITEM 1.  Financial Statements

          Consolidated Balance Sheets, April 30, 2005
          and July 31, 2004................................................  3

          Consolidated Statements of Income and Comprehensive Income for
          the three and nine months ended April 30, 2005 and 2004..........  4

          Consolidated Statements of Cash Flows for the
          nine months ended April 30, 2005 and 2004 .......................  5

          Notes to Consolidated Financial Statements.......................  6

 ITEM 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations.............................. 11

 ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk ...... 18

 ITEM 4.  Controls and Procedures.......................................... 18

PART II.  OTHER INFORMATION

 ITEM 1.  Legal Proceedings................................................ 19

 ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds...... 19

 ITEM 5.  Other Information................................................ 20

 ITEM 6.  Exhibits......................................................... 21

          SIGNATURES....................................................... 22


                                       2


<PAGE>


PART 1   FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                           April 30, 2005      July 31, 2004
                                                                           --------------      ---------------
ASSETS

CURRENT ASSETS:
<S>                                                                        <C>                 <C>
     Cash and cash equivalents......................................       $    3,203,322      $    8,411,784
     Marketable securities..........................................           39,017,483          39,759,403
Trade receivables (less allowance for doubtful
          accounts and returns of $632,000 and
          $536,000, respectively)...................................            7,655,043          10,232,180
     Inventories....................................................            6,123,597           5,389,653
     Prepaid expenses and other assets..............................              671,407             958,616
     Deferred tax asset.............................................              890,000             890,000
                                                                            -------------       -------------

               Total current assets.................................           57,560,852          65,641,636
PROPERTY AND EQUIPMENT, net.........................................            5,063,387           5,073,775
DEFERRED TAX ASSET..................................................           12,371,596          15,103,949
OTHER  ASSET........................................................              421,421             201,341
                                                                           --------------      --------------

TOTAL ASSETS........................................................       $   75,417,256      $   86,020,701
                                                                           ==============      ==============


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Trade accounts payable.........................................       $    1,438,776      $    1,791,694
     Accrued salaries, wages, and commissions.......................            2,313,249           4,228,804
     Other liabilities..............................................            2,410,531           2,222,465
                                                                           ---------------     --------------
              Total current liabilities.............................            6,162,556           8,242,963
OTHER LIABILITIES...................................................              421,421             160,536

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
     Common stock-authorized, 100,000,000 shares
          of $0.40 par value each; issued and outstanding,
              17,280,663 and 18,254,942 shares, respectively........            6,912,265           7,301,977
Additional paid-in capital..........................................           75,167,465          88,434,540
Unearned compensation...............................................              (24,000)            (15,000)
Accumulated other comprehensive loss................................             (132,000)           (136,000)
Retained deficit....................................................          (13,090,451)        (17,968,315)
                                                                           --------------      --------------
          Total shareholders' equity................................           68,833,279          77,617,202
                                                                           --------------      --------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..........................       $   75,417,256      $   86,020,701
                                                                           ==============      ==============

</TABLE>

See notes to consolidated financial statements.


                                       3


<PAGE>

                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
           FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2005 AND 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                    Three Months Ended                    Nine Months Ended
                                             April 30, 2005     April 30, 2004     April 30, 2005     April 30, 2004
                                             --------------   ----------------   ----------------   ----------------
<S>                                            <C>                <C>                <C>                <C>
Product sales                                  $15,101,977        $19,329,399        $48,772,849        $52,380,364
Cost of sales and other expenses:
   Cost of medical products                      4,155,261          4,781,377         12,743,018         12,567,753
   Selling, general and administrative           6,858,222          7,379,482         21,126,743         20,753,549
   Research and development                      2,589,657          2,408,544          7,631,492          6,514,655
                                             --------------   ----------------   ----------------   ----------------
       Total cost of sales and other expenses   13,603,140         14,569,403         41,501,253         39,835,957
                                             --------------   ----------------   ----------------   ----------------
Operating income
                                                 1,498,837          4,759,996          7,271,596         12,544,407
   Interest income                                 320,095            197,748            913,228            518,670
   Loss on sale of securities                     (121,105)               --            (101,074)           (34,033)
                                             --------------   ---------------    ----------------   ----------------

Income before income taxes                       1,697,827          4,957,744          8,083,750         13,029,044
Provision for income taxes                         682,000          1,862,051          3,205,886          4,887,951
                                             --------------   ----------------   ----------------   ----------------

Net Income                                       1,015,827          3,095,693          4,877,864          8,141,093

Other comprehensive income (loss), net of
 tax:
        Unrealized gain (loss) on securities         9,000           (155,000)             4,000             (4,000)
                                             --------------   ----------------   ----------------   ----------------

Comprehensive income                            $1,024,827         $2,940,693         $4,881,864         $8,137,093
                                             ==============   ================   ================   ================

Weighted average number of common shares
 outstanding:
       Basic                                    17,405,676         18,002,188         17,722,145         17,850,256
       Diluted                                  17,871,140         19,791,622         18,470,555         19,397,477

Net income per common share:
       Basic                                         $0.06              $0.17              $0.28              $0.46
                                             ==============   ================   ================   ================
       Diluted                                       $0.06              $0.16              $0.26              $0.42
                                             ==============   ================   ================   ================


</TABLE>

See notes to consolidated financial statements.


                                       4


<PAGE>


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE NINE MONTHS ENDED APRIL 30, 2005 AND 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                     2005               2004
                                                                               ---------------    -----------------
 OPERATING ACTIVITIES:
<S>                                                                                 <C>                  <C>
  Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        $4,877,864           $8,141,093
 Adjustments to reconcile net income to net cash provided by operating
      activities:
  Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         1,729,323            1,304,988
 Loss (gain) on asset disposal . . . . . . . . . . . . . . . . . .  . . . .             24,454              (52,318)
  Stock compensation expense . . . . . . . . . . . . . . . . . . . . . . .             150,000              132,646
  Loss on sale of marketable securities  . . . . . . . . . . . . . . . . . .           118,585               34,033
  Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         2,732,776            4,631,030
   Decrease (increase) in trade receivables  . . . . . . . . . . . . . . . .         2,577,137           (1,941,302)
   Increase in inventories  . . . . . . . . . . . . . . . . . . . . . . .  .        (1,182,302)          (1,452,352)
       Decrease (increase) in prepaid expenses and other assets . . . .. . .            67,129              (80,645)
   (Decrease) increase in trade accounts payable . . . . . . . . . . . . . .          (352,918)           1,047,049
   (Decrease) in accrued and other liabilities . . . . . . . . . . . . . . .        (1,466,604)            (187,502)
                                                                               ---------------    -----------------
        Net cash provided by operating activities  . . . . . . . . . . . . .         9,275,444           11,576,720

 INVESTING ACTIVITIES:
   Additions to property and equipment . . . . . . . . . . . . . . . . . . .        (1,303,891)          (2,087,502)
   Proceeds from sale of fixed assets  . . . . . . . . . . . . . . . . . . .             8,860               55,110
   Proceeds from sale of marketable securities . . . . . . . . . . . . . . .        49,395,440           17,004,534
   Purchase of marketable securities . . . . . . . . . . . . . . . . . . . .       (48,768,528)         (24,503,052)
                                                                               ---------------    -----------------
        Net cash used in investing activities  . . . . . . . . . . . . . . .          (668,119)          (9,530,910)

 FINANCING ACTIVITIES:
         Proceeds from issuance and exercise of options and warrants . . . .           925,241            5,538,948
 Repurchase of common stock            . . . . . . . . . . . . . . . . . . .       (14,741,028)          (5,020,016)
                                                                               ---------------    -----------------
       Net cash (used in) provided by financing activities . . . . . . . . .       (13,815,787)             518,932
                                                                               ---------------    -----------------

                         (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS  .        (5,208,462)           2,564,742
                         CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD. .         8,411,784            4,782,942
                                                                               ---------------    -----------------
                   CASH AND CASH EQUIVALENTS AT END OF PERIOD  . . . . . . .        $3,203,322           $7,347,684
                                                                               ===============    =================

 SUPPLEMENTAL CASH FLOW DISCLOSURE:
  Cash paid for income taxes . . . . . . . . . . . . . . . . . . . . . . . .        $  593,600           $  153,900
  Issuance of restricted stock . . . . . . . . . . . . . . . . . . . . . . .            36,000               36,000
  Inventory transferred to property and equipment  . . . . . . . . . . . . .            39,358                    -

</TABLE>

See notes to consolidated financial statements.


                                       5


<PAGE>


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. BASIS OF PRESENTATION

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared in accordance with accounting principles generally accepted in the
     United  States of America for interim  financial  information  and with the
     instructions  to Form 10-Q and Article 10 of Regulation  S-X.  Accordingly,
     they do not  include  all of the  information  and  footnotes  required  by
     accounting  principles  generally  accepted in the United States of America
     for  complete  financial  statements.  In the  opinion of  management,  all
     adjustments  (consisting of normal recurring accruals) considered necessary
     for a fair presentation have been included.  The accompanying  consolidated
     financial  statements  and  notes  should be read in  conjunction  with the
     audited financial statements and accompanying notes thereto included in the
     Company's fiscal 2004 Annual Report on Form 10-K.

2. STOCK OPTIONS

     Pursuant to  Statement of Financial  Accounting  Standards  (SFAS) No. 123,
     Accounting  for  Stock-Based  Compensation,  we apply the  recognition  and
     measurement principles of Accounting Principles Board (APB) Opinion No. 25,
     Accounting  for Stock Issued to  Employees,  to our stock options and other
     stock-based compensation plans.

     In accordance with APB Opinion No. 25,  compensation cost for stock options
     is recognized  in income based on the excess,  if any, of the quoted market
     price of the stock at the grant date of the award or other measurement date
     over the amount an  employee  must pay to acquire the stock.  The  exercise
     price for stock options  granted to employees  equals the fair market value
     of  our  common  stock  at the  date  of  grant,  thereby  resulting  in no
     recognition of compensation expense.

     The following  table  illustrates the effect on net income and earnings per
     share if we had applied the fair value  recognition  provisions of SFAS No.
     123 to stock-based employee compensation.

<TABLE>
<CAPTION>


                                                   Three Months Ended               Nine Months Ended
                                              -----------------------------     --------------------------
                                                  April 30,      April 30,       April 30,     April 30,
                                                    2005           2004            2005          2004
                                              ---------------   -----------     -----------  ------------
<S>                                               <C>           <C>             <C>          <C>
Net Income - as reported......................    $1,015,827    $3,095,693      $4,877,864   $8,141,0933
      Less estimated stock-based
       Employee compensation determined under
        fair value based method, net of tax...      (671,000)   (1,495,000)     (1,959,000)  (2,796,0000)
                                              ---------------   -----------     -----------  ------------
                        Net income - pro forma      $344,827    $1,600,693      $2,918,864   $5,345,0933
                                              ===============   ===========     ===========  ============
Earnings per share:
     Basic - as reported......................         $0.06         $0.17           $0.28        $0.466
     Less estimated stock-based
       Employee compensation determined under
        fair value based method, net of tax...         (0.04)        (0.08)          (0.12)        (0.16)
                                              ---------------   -----------     -----------  ------------
     Basic - pro forma........................         $0.02         $0.09           $0.16         $0.30
                                              ===============   ===========     ===========  ============

     Diluted - as reported....................         $0.06         $0.16           $0.26         $0.42
     Less estimated stock-based
       Employee compensation determined under
        fair value based method, net of tax...         (0.04)        (0.08)          (0.10)        (0.14)
                                              ---------------   -----------     -----------  ------------
     Diluted - pro forma......................         $0.02         $0.08           $0.16         $0.28
                                              ===============   ===========     ===========  ============
Weighted average common shares outstanding
       Basic..................................    17,405,676    18,002,188      17,722,145    17,850,256
       Diluted................................    17,871,140    19,791,622      18,470,555    19,397,477

</TABLE>

                                       6


<PAGE>


We  estimated  the fair values  using the  Black-Scholes  option-pricing  model,
modified for dividends and using the following assumptions:


                                                     2005                2004
                                                 -------------     -------------
  Risk-free rate................................     4.1-4.5%          3.9-4.6%
  Expected dividend yield.......................           0%                0%
  Expected stock price volatility...............       54-68%            58-64%
  Expected option term..........................     10 Years          10 years
  Fair value per option.........................  $6.04-19.88      $11.38-20.22


For purposes of determining the pro forma amounts,  the fair value of options is
amortized to expense over the option-vesting period in determining the pro forma
impact. The option-vesting period is six months to four years.

Beginning with our fiscal year 2006, in accordance with SFAS 123(R), the Company
will be required to recognize the  compensation  costs  relating to  share-based
transactions in the consolidated statement of operations. See note 4.

3.   INTERIM FINANCIAL STATEMENTS

     Operating results for the three and nine month periods ended April 30, 2005
     are not necessarily  indicative of the results that may be expected for the
     year ending July 31, 2005.

4.   RECENT ACCOUNTING PRONOUNCEMENTS

     In November  2003 and March 2004,  the  Emerging  Issues Task Force  (EITF)
     reached  a   consensus   on  EITF   Issue  No.   03-1,   "The   Meaning  of
     Other-Than-Temporary    Impairment   and   Its   Application   to   Certain
     Investments."  The  consensus  reached  requires  companies  to  apply  new
     guidance for  evaluating  whether an investment  is  other-than-temporarily
     impaired and also requires quantitative and qualitative  disclosure of debt
     and   equity    securities,    classified    as    available-for-sale    or
     held-to-maturity,  that are determined to be only  temporarily  impaired at
     the balance sheet date. The Company  incorporated the required  disclosures
     for investments  accounted for under SFAS No. 115,  "Accounting for Certain
     Investments  in Debt and  Equity  Securities,"  as  required  in the fourth


                                       7


<PAGE>


     quarter  of  fiscal  year  2004.  In  September  2004,  the  consensus  was
     indefinitely  delayed as it relates to the  measurement  and recognition of
     impairment  losses for all  securities in the scope of paragraphs  10-20 of
     EITF 03-1. The disclosures prescribed by EITF No. 03-1 and guidance related
     to impairment  measurement prior to the issuance of this consensus continue
     to remain in effect.  Adoption is not expected to have a material impact on
     the Company's consolidated earnings, financial position or cash flows.

     In December 2004, the Financial  Accounting  Standards  Board (FASB) issued
     Statement  of  Financial  Accounting  Standards  No.  123  (revised  2004),
     "Share-Based  Payment" (FAS No.  123(R)),  which amends FASB Statement Nos.
     123 and 95. FAS No. 123(R)  requires all companies to measure  compensation
     expense for all share-based  payments (including employee stock options) at
     fair value and  recognize  the  expense  over the related  service  period.
     Additionally,  excess tax benefits,  as defined in FAS No. 123(R),  will be
     recognized as an addition to paid-in capital and will be reclassified  from
     operating cash flows to financing cash flows in the Consolidated Statements
     of Cash Flows.  In April 2005,  the  effective  date of FAS No.  123(R) was
     delayed until the first quarter of fiscal 2006. We are currently evaluating
     the effect that FAS No. 123(R) will have on our financial position, results
     of operations and operating cash flows. See the "Stock-Based  Compensation"
     discussion  in Note 2, which  includes the pro forma impact of  recognizing
     stock-based  compensation  under SFAS No. 123, on the  Company's net income
     and income  per common  share for the three  months and nine  months  ended
     April 30, 2005 and 2004.

     In April  2005,  the FASB issued FIN No. 47 to clarify the scope and timing
     of liability  recognition  for  conditional  asset  retirement  obligations
     pursuant to SFAS No. 143 - "Accounting for Asset  Retirement  Obligations".
     The interpretation requires that a liability be recorded for the fair value
     of an asset  retirement  obligation,  if the fair value is estimable,  even
     when the  obligation  is  dependent on a future  event.  FIN No. 47 further
     clarified that uncertainty  surrounding the timing and method of settlement
     of  the  obligation   should  be  factored  into  the  measurement  of  the
     conditional  asset  retirement  obligation  rather  than  affect  whether a
     liability should be recognized.  Implementation is required to be effective
     no  later  than  the end of  fiscal  years  ending  after  Dec.  15,  2005.
     Additionally, FIN No. 47 will permit but not require restatement of interim
     financial information during any period of adoption.  Both recognition of a
     cumulative  change in accounting  and  disclosure of the liability on a pro
     forma basis are required for transition purposes. The Company is evaluating
     the impact of FIN No. 47,  however,  it is not  expected to have a material
     impact on results of operations or financial position.

5.   MARKETABLE SECURITIES

     During the quarter  ended April 30, 2005,  the Company  invested its excess
     cash  and  cash  equivalents  in  a  professionally  managed  portfolio  of
     marketable  securities.  All  securities in this  portfolio as of April 30,
     2005 were classified as available-for-sale  and consisted primarily of U.S.
     government  securities and corporate bonds.  These investments are reported
     at fair value.

     For the three and nine months ended April 30, 2005, the unrealized gain,
     net of taxes, on these investments of approximately $9,000 and $4,000,
     respectively, is included within other comprehensive income (loss). For the
     three and nine months ended April 30, 2004, the unrealized loss, net of
     taxes, on these investments, of approximately $155,000 and $4,000,
     respectively, is included within other comprehensive income (loss).


                                       8


<PAGE>


     The net unrealized  loss included in  shareholders'  equity as of April 30,
     2005 was  $132,000,  net of tax and the net  unrealized  loss  included  in
     shareholders' equity as of April 30, 2004 was $104,000, net of tax.

6.   INVENTORIES

     Inventories  are  stated at the lower of cost (on the  first-in,  first-out
     basis) or market. Inventory balances were as follows:


                                         April 30,            July 31,
                                           2005                 2004
                                      --------------       ---------------
         Finished goods..........     $    2,510,575       $     2,018,152
         Work-in-process.........          1,174,439             1,260,449
         Raw materials...........          2,438,583             2,111,052
                                      --------------       ---------------
                                      $    6,123,597       $     5,389,653
                                      ==============       ===============

7.   PROPERTY AND EQUIPMENT

     Property is carried at cost and depreciated using the straight-line  method
     over  the  estimated  useful  lives of the  various  assets.  Property  and
     equipment balances and corresponding lives were as follows:

                                        April 30,     July 31,
                                          2005          2004           Life
                                       -----------    -----------   -----------
      Leasehold improvements......... $  2,223,769   $  2,189,955     10 years
      Equipment......................   10,275,336      9,525,117  3 to 10 years
      Assets in construction.........      515,934        526,793        N/A
                                       -----------    -----------
                                        13,015,039     12,241,865
      Less accumulated depreciation..    7,951,652      7,168,090
                                       -----------    ----------

      Property and equipment - net... $  5,063,387   $  5,073,775
                                      ============   ============

8.   SEGMENT AND GEOGRAPHIC INFORMATION AND CONCENTRATION OF CREDIT RISK

     The Company's operations are in one business segment: the design,
     manufacture and distribution of cardiovascular medical devices. The Company
     evaluates revenue performance based on the worldwide revenues of each major
     product line and profitability based on an enterprise-wide basis due to
     shared infrastructures to make operating and strategic decisions.

     Total  revenues  from sales in the United  States  and  outside  the United
     States are as follows:

<TABLE>
<CAPTION>

                                         Three Months Ended                      Nine Months Ended
                                 April 30, 2005    April 30, 2004       April 30, 2005       April 30, 2004
                              ------------------ ------------------- --------------------- ------------------

<S>                              <C>                <C>                 <C>                    <C>
      United States. . . . .     $ 14,689,690      $ 18,898,765         $ 47,505,552          $ 51,217,024
      Non-United States. . .          412,287           430,634            1,267,297             1,163,340
                              ------------------ ------------------- --------------------- ------------------
      Total Revenues . . . .     $ 15,101,977      $ 19,329,399         $ 48,772,849          $ 52,380,364
                              ================== =================== ===================== ==================

</TABLE>

                                       9


<PAGE>


9.   NET INCOME PER COMMON SHARE

     Basic  income per common  share is computed by dividing  net income for the
     period by the weighted average number of common shares  outstanding  during
     the period.  Diluted  income per share is computed using the treasury stock
     method by  dividing  net income by the  weighted  average  number of common
     shares  plus the  dilutive  effect  of  outstanding  stock  options,  stock
     warrants and shares issuable under the employee stock purchase plan.

10.  COMMON STOCK

     During the nine months ended April 30, 2005, stock options for the purchase
     of 97,787  shares of the  Company's  common stock were  exercised at prices
     between  $3.88 and $16.66 per share  resulting  in  proceeds  of  $494,000.
     During the nine months ended April 30, 2004, stock options and warrants for
     the purchase of 526,535 shares of the Company's common stock were exercised
     at prices  between  $2.22 and $20.60 per share  resulting  in  proceeds  of
     $5,165,000.

     During the nine months  ended April 30, 2005 and 2004,  the Company  issued
     37,580 and 24,612 shares in  connection  with its employee  stock  purchase
     plan.

     During the nine months  ended April 30, 2005 and 2004,  the Company  issued
     2,754 and 1,884 shares of  restricted  stock to the outside  members of the
     Board of Directors.  Board of Directors  compensation  expense  included in
     Selling,  General & Administrative  Expense was $27,000 and $27,000 for the
     nine months ended April 30, 2005 and 2004, respectively.

     During the nine  months  ended  April 30,  2005,  the  Company  repurchased
     1,112,400  shares in the public  market at stock prices  between  $9.35 and
     $18.34 per share for  $14,741,000.  During the nine months  ended April 30,
     2004, the Company  repurchased 243,400 shares in the public market at stock
     prices between $15.65 and $27.78 per share for $5,020,000.

11.  ACCRUED WARRANTY COSTS

     The Company  estimates  the amount of warranty  claims on sold product that
     may be incurred based on current and historical  data. The actual  warranty
     expense  could  differ  from the  estimates  made by the  Company  based on
     product  performance.  The  following  table  presents  the  changes in the
     Company's product warranty liability:


           Accrued warranty costs at July 31, 2004.......   $   293,500
           Payments made for warranty costs..............       (337,700)
           Provision for warranty costs..................       188,500
                                                            -----------
           Accrued warranty costs at April 30, 2005......   $   146,500
                                                            ===========


                                       10


<PAGE>


12.  SUBSEQUENT EVENT

     The  Company is aware of a  shareholder  lawsuit  filed June 3, 2005 in the
     federal courts of the State of Minnesota alleging that Possis Medical, Inc.
     and named individual  officers  violated  federal  securities laws during a
     period  beginning in 2002.  The  Complaint  seeks class  action  status and
     unspecified  damages.  At this time the  Company has not been served with a
     copy of the complaint.  Possis Medical believes that the allegations of the
     lawsuit are without merit and intends to contest the lawsuit vigorously.

     We do not believe  that the amount of any  potential  liability  associated
     with  these  matters  can be  estimated  at this time,  but an  unfavorable
     resolution of these  matters is possible and could have a material  adverse
     effect on our results of operations, financial condition or cash flows.


ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS

Our Business

Possis  Medical Inc.  develops,  manufactures,  and markets  pioneering  medical
devices for mechanical  thrombectomy  in native  coronary  arteries and coronary
bypass grafts,  leg arteries and in kidney dialysis  access grafts.  Our primary
product, the AngioJet(R) RheolyticTM  Thrombectomy System (AngioJet System) uses
miniaturized waterjet technology,  which enables  interventional  cardiologists,
interventional  radiologists,   vascular  surgeons,  and  other  specialists  to
rapidly, safely and effectively remove blood clots throughout the body.


The proprietary AngioJet System consists of a drive unit (capital equipment),  a
disposable  pump set that  delivers  pressurized  saline  to a  catheter,  and a
variety of disposable  catheters that are  specifically  designed for particular
clinical  indications.  The  AngioJet  coronary  catheter is a Class III medical
device and is marketed in the U.S. under an approved PMA. The AngioJet av-access
and peripheral  arterial catheters are Class II devices are marketed in the U.S.
under cleared 510(k) submissions.

The  Company  expects  U.S.  AngioJet  System  sales to grow  primarily  through
obtaining  additional FDA approved  product uses,  introduction  of new catheter
models  for  existing  indications,   introduction  of  AngioJet  System-related
products, more face-time selling to existing accounts, peer-to-peer selling, and
the publication of clinical performance and cost-effectiveness data.

Critical Accounting Policies

The consolidated  financial  statements  include accounts of the Company and all
wholly-owned subsidiaries. The preparation of financial statements in conformity
with accounting  principles  generally  accepted in the United States of America
requires  management to make estimates and assumptions in certain  circumstances
that  affect  amounts  reported  in  the  accompanying   consolidated  financial
statements  and related  footnotes.  In preparing  these  financial  statements,
management has made its best estimates and judgments of certain amounts included
in the  financial  statements,  giving due  consideration  to  materiality.  The
Company's  most  critical   accounting   policies  are  those  described  below.
Application of these accounting  policies  involves the exercise of judgment and
use of assumptions as to future  uncertainties and, as a result,  actual results
could differ from these estimates.


                                       11


<PAGE>


Revenue Recognition

Revenues  associated  with AngioJet  drive units that are maintained at customer
locations  are  recognized,  and title and risk of loss on those  drive units is
transferred  to the customer,  when the Company  receives a valid purchase order
from the customer.  Revenue is not  recognized for AngioJet drive units that are
maintained at customer locations as evaluation drive units. The Company does not
lease AngioJet drive units.  Revenues  associated with products that are shipped
to customers from the Company's facilities are recognized, and title and risk of
loss are  transferred  to the customer,  when a valid purchase order is received
and the products are received at the customer's location. Provisions for returns
are  recorded in the same period the related  revenues are  recognized.  Revenue
recognition  for drive unit extended  warranties is amortized on a straight-line
basis over the life of the warranty period.

Allowance for Returns

Accounts  receivable  are reduced by an allowance for items that may be returned
in the  future.  The  allowance  requires us to make  estimates  at the time the
account  receivable is recorded  concerning  the  likelihood  for returns in the
future.  The  estimate  is based  upon  historical  product  return  experience,
customer   complaint  rates,   information   received  from  our  customers  and
assumptions  that  are  believed  to  be  reasonable  under  the  circumstances.
Management,  on a quarterly  basis,  evaluates the adequacy of the allowance for
returns.  Management  believes  the  amount  of the  allowance  for  returns  is
appropriate;  however,  actual  returns  incurred could differ from the original
estimate, requiring adjustments to the allowance.

Allowance for Doubtful Accounts

Substantially  all of  the  Company's  receivables  are  due  from  health  care
facilities  located in the United States.  The estimated  allowance for doubtful
accounts is based upon the age of the  outstanding  receivables  and the payment
history and creditworthiness of each customer. Management, on a quarterly basis,
evaluates  the  adequacy of the  allowance  for  doubtful  accounts.  Management
believes  the amount of the  allowance  for  doubtful  accounts is  appropriate;
however,  nonpayment  of  accounts  could  differ  from the  original  estimate,
requiring adjustments to the allowance.

Inventories

Inventories are valued at the lower of cost or market. In order to determine the
market  value  of  inventory  on a  quarterly  basis,  management  assesses  the
inventory  quantities  on hand to  estimated  future  usage  and sales  and,  if
necessary,  sets up a  obsolescence  reserve  for  inventory  deemed  excess  or
obsolete  to  estimated  market  value.  Management  believes  the amount of the
reserve for inventory  obsolescence  is  appropriate;  however,  actual obsolete
inventory could differ from the original estimate,  requiring adjustments to the
reserve.

Warranty Reserve

The Company  provides a one-year  limited  warranty on its AngioJet System drive
unit and a limited warranty on AngioJet System disposable products.  The Company
establishes  a warranty  reserve at the time  products are sold,  which is based
upon historical  frequency of claims relating to the Company's  products and the
cost to replace  disposable  products and to repair drive units under  warranty.
Management,  on a  quarterly  basis,  evaluates  the  adequacy  of the  warranty
reserve.  Management believes the amount of the warranty reserve is appropriate,
given our historical  experience;  however,  actual claims incurred could differ
from the original estimate, requiring adjustments to the reserve.


                                       12


<PAGE>


Results of Operations

Three and Nine Month Periods Ended April 30, 2005 and 2004

Summary

Total  product  sales for the  three  months  ended  April  30,  2005  decreased
$4,227,000 or 22%, to  $15,102,000  compared to  $19,329,000  for the comparable
period in fiscal 2004.  Total  product sales for the nine months ended April 30,
2005 decreased $3,607,000, or 7%, to $48,773,000 compared to $52,380,000 for the
comparable  period in fiscal  2004.

The Company recorded net income for the quarter ended April 30, 2005 of
$1,016,000, or $0.06 per diluted share, compared to net income of $3,096,000, or
$0.16 per diluted share, in the comparable quarter in 2004. For the nine months
ended April 30, 2005, the Company recorded net income of $4,878,000 or $0.26 per
diluted share, compared to net income of $8,141,000, or $0.42 per diluted share,
in the same period in 2004.

Revenue

U.S.  product  sales for the three months ended April 30, 2005  decreased 22% to
$14,690,000 from $18,888,000 for the same period in 2004. U.S. product sales for
the  nine  months  ended  April  30,  2005  decreased  7%  to  $47,506,000  from
$51,199,000 for the same period in 2004. The main factor in the revenue decrease
during  both  periods  is the  negative  impact  from  the  results  of the AiMI
post-marketing study.

As of April 30, 2005,  the Company had a total of 1,461  domestic drive units in
the field,  compared to 1,255 drive units at April 30, 2004,  and 1,422 units as
of January 31, 2005.  During the three month  period  ended April 30, 2005,  the
Company's  catheter sales decreased  approximately  14% to approximately  11,600
catheters versus  approximately  13,500 catheters in the same prior year period.
During the nine month period ended April 30, 2005, the Company's  catheter sales
decreased   approximately   3%  to   approximately   36,600   catheters   versus
approximately  37,800  catheters  in the same prior  year  period.  The  average
catheter utilization rate per installed domestic drive unit was 7.8 in the third
quarter  of  fiscal  2005,  compared  to a rate of 10.8 in the same  prior  year
period,  and compared to a rate of 8.3 in the second quarter of fiscal 2005. The
Company sold 50 and 165 drive units during the three and nine months ended April
30, 2005,  respectively,  compared to 88 and 194 drive units in the same periods
in the prior year, respectively.

Foreign  product sales for the three months ended April 30, 2005 decreased 4% to
$412,000  from $431,000 for the same period in 2004.  Foreign  product sales for
the nine months ended April 30, 2005 increased 9% to $1,267,000  from $1,163,000
for the  same  period  in 2004.  The  Company  has  recently  hired  an  outside
consultant to expand product  penetration in Germany.  Limited foreign sales are
primarily due to cost  constraints  in overseas  markets.


                                       13


<PAGE>


Cost of Medical Products

Cost of medical  products  decreased  $626,000 to $4,155,000 in the  three-month
period  ended  April 30,  2005 over the same period in the  previous  year.  The
decrease was  primarily  due to the  reduction in AngioJet  System  product unit
sales offset by higher production overhead on lower units produced combined with
an increase in overhead costs.  Cost of medical products  increased  $175,000 to
$12,743,000 for the nine-month  period ended April 30, 2005 over the same period
in the previous year. This increase is primarily due to the increase in overhead
offset by the reduction in AngioJet System product unit sales.

Gross profit  decreased by $3,601,000 to  $10,947,000,  or 72% of product sales,
for the three months ended April 30, 2005,  from  $14,548,000  or 75% of product
sales in the same  period  in the  previous  year.  Gross  profit  decreased  by
$3,783,000 to  $36,030,000,  or 74% of product sales,  for the nine months ended
April 30, 2005,  from  $39,813,000  or 76% of product  sales for the nine months
ended April 30, 2004.  The decrease in the gross profit margin for the three and
nine months  ending April 30, 2005 was  primarily  due to lower revenue and to a
shift to products  carrying a lower  gross  profit  margin  compared to the same
periods in the  previous  year.  The Company  believes  that gross  margins as a
percent  of sales will be in the lower to mid  seventies  for the  remainder  of
fiscal 2005.

Selling, General and Administrative Expense

Selling,  general and administrative expense decreased $521,000 to $6,858,000 or
45% of product sales,  for the three months ended April 30, 2005 from $7,379,000
or 38% of product  sales for the three  months  ended April 30,  2004.  Selling,
general and  administrative  expense increased $373,000 to $21,127,000 or 43% of
product sales for the nine months ended April 30, 2005,  compared to $20,475,000
or 40% of product  sales for the nine months ended April 30,  2004.

The primary  factors in the changes in the  expense for the three  months  ended
April 30, 2005 were the reduction in incentives of $267,000, reduced commissions
of $176,000, decrease in sales materials of $237,000, decrease in contract labor
of $143,000  decrease in sales demos of $121,000,  a decrease in patent attorney
fees of $103,000 a decrease in supplies of $100,000. These decreases were offset
by  $218,000  of  additional  expenses  associated  with the growth in the sales
force,   increased   medical   insurance   expense  of  $315,000  and  increased
Sarbanes-Oxley related professional fees of $217,000.

The primary factors for the expense increase for the nine months ended April 30,
2005 were the $841,000  additional  expenses  associated  with the growth in the
sales force,  increased employee medical benefit costs of $739,000,  increase in
professional  fees of $319,000,  increase in  executive  benefit plan expense of
$180,000, increase in depreciation of $290,000, and an increase in building rent
and  operating  costs of  $176,000.  This  increase  was  partially  offset by a
reduction in expenses  associated with marketing clinical trials of $562,000,  a
reduction of  incentives  of $482,000,  a decrease in sales  materials and sales
demos of $339,000,  a decrease in outside services of $301,000 and a decrease in
contract labor of $218,000.

Research and Development Expense

Research and development  expense  increased  $181,000 to $2,590,000,  or 17% of
product sales in the three months ended April 30, 2005,  from  $2,409,000 or 13%
of  product  sales in the three  months  ended  April  30,  2004.  Research  and
development expense increased $1,117,000 to $7,631,000,  or 16% of product sales
in the nine months ended April 30, 2005, from $6,515,000 or 12% of product sales
in the nine months ended April 30, 2004.  The increases  were largely due to the
timing of  expenses  incurred  for various  research  and  development  projects
including  the new drive  unit,  an  associated  project to combine the pump and
catheter,  6 French peripheral catheter and projects relating to the improvement
of the rapid exchange  catheter and the distal occlusion  guidewires.  We expect
research and development  expense to remain relatively stable for the balance of
the fiscal year.


                                       14


<PAGE>


Interest Income

Interest income  increased  $122,000 in the three months ended April 30, 2005 to
$320,000,  when compared to the same period in the prior year.  Interest  income
increased $395,000 in the nine months ended April 30, 2005, when compared to the
same period in the prior year. The increase was due to the recent  interest rate
increases  and the  increase in the amount of cash  available  for  investments.
Excess cash is invested in an enhanced cash  management  portfolio of marketable
securities.  The Company  expects  interest income to increase in fiscal 2005 as
compared to fiscal 2004 as cash is generated from operations.

Loss On Sale of Securities

Loss on sales of  securities  was  $121,000 in the three  months ended April 30,
2005.  There was no loss on sale of securities  for the three months ended April
30, 2004.  Loss on sale of  securities  for the nine months ended April 30, 2005
and 2004 was  $101,000  and  $34,000,  respectively.  The losses were due to the
recent  interest  rate  increases  that  reduced  the fair  market  value of the
investments in marketable  securities.  Future gain (loss) on sale of securities
is dependent on interest rate fluctuations.

Provision For Income Taxes

The Company recorded a provision for income taxes of $682,000 and $1,862,000 for
the three  months  ended  April 30,  2005 and 2004,  respectively.  The  Company
recorded a provision for income taxes of $3,206,000  and $4,888,000 for the nine
months ended April 30, 2005 and 2004, respectively.

During the second quarter of fiscal 2005 the Company  determined it had nexus in
states in which it had not previously  filed corporate state income tax returns.
The Company  will file the  appropriate  corporate  state  income tax returns in
these states,  including  returns for prior years to obtain the  appropriate net
operating loss  carry-forwards.  The Company expensed an additional  $165,000 of
corporate  state  income  tax  expense  relating  to the  filing of these  state
corporate  income tax returns  during the nine months ended April 30, 2005.  For
the remainder of fiscal 2005,  the  corporate  income tax rate is expected to be
approximately 40.2%.

The  Company  became  profitable  in the third  quarter  of fiscal  2001 and has
maintained  profitability  since that time. In fiscal 2004 and 2003, the Company
increased its deferred tax asset by an  additional  $2,578,000  and  $2,777,000,
respectively.  These  increases  were related to tax benefits from  disqualified
stock  options  that are  recorded  directly in the  Consolidated  Statement  of
Changes in Shareholders'  Equity.  Management  believes the remaining  valuation
allowance  is  necessary  as it is more  likely  than not that  $690,000  of the
deferred tax asset will not be realizable  due to the expiration of research and
development tax credits.


                                       15


<PAGE>


Liquidity and Capital Resources

The  Company's  cash,  cash  equivalents  and  marketable   securities   totaled
approximately $42,221,000 at April 30, 2005 versus $48,171,000 at July 31, 2004.

The $5,950,000 net decrease in cash, cash equivalents and marketable  securities
in the most recent nine-month period was primarily due to the use of $14,741,000
of cash to  repurchase  common  stock  offset by net cash  provided by operating
activities  of  $9,275,000.  Net  cash  provided  by  operating  activities  was
primarily due to net income of $4,878,000,  depreciation of $1,729,000, non-cash
stock compensation  expense of $150,000, a decrease in the deferred tax asset of
$2,577,000 and a decrease in accounts  receivable of  $2,733,000.  This net cash
provided  by  operating  activities  was  partially  offset  by an  increase  in
inventory  of  $1,182,000,  a decrease  in accounts  payable of  $353,000  and a
decrease in accrued and other liabilities of $1,467,000.  Depreciation  includes
company-owned  drive  units  at  customer  locations,  as well as  property  and
equipment.  The decrease in the deferred tax asset was due to the utilization of
the net  operating  loss  carryforwards  to offset  current taxes  payable.  The
decrease in accounts receivable was due to the reduced revenue in the second and
third  quarter of fiscal  2005  compared  to the first  quarter of fiscal  2005.
Inventory  increased to meet the anticipated  increase in demand of the AngioJet
System. This demand was less than expected due to the AiMI post-marketing  study
results.  The decrease in accounts  payable and accrued  liabilities were due to
the timing of  payments.  This  decrease  included  the  payment of fiscal  2004
corporate incentives in September 2004.

Cash provided in investing  activities was $668,000  including net proceeds from
sales of  marketable  securities  of $627,000 and the purchase of  $1,304,000 of
property and equipment.  Net cash used in financing  activities was $13,816,000,
which resulted from the repurchase of 1,112,400 shares of the Company's stock in
open market transactions for $14,741,000,  offset partially by the cash received
in connection with the exercise of stock options of $925,000.

The Company  expects its cash on hand and funds from operations to be sufficient
to cover both  short-term and long-term  operating  requirements  of its current
AngioJet  business and the  repurchase  of its common stock as authorized by the
Board of Directors.


Off-Balance Sheet Obligations

The Company does not have any material off-balance-sheet arrangements.

Outlook

The Company expects overall revenue from the AngioJet  System,  primarily in the
United States, will be approximately $65 million in fiscal 2005. Gross margin as
a  percent  of  sales  for  fiscal  2005  is  expected  to be in the  low to mid
seventies.  The Company expects selling,  general and administrative expenses to
be slightly higher in the fourth quarter of fiscal 2005 as compared to the third
quarter of fiscal 2005. Research and development expenditures are expected to be
consistent  with the levels during the first three  quarters of fiscal 2005. The
Company  expects net income per diluted  share for the full year in the range of
$0.32 to $0.35.

For the  2006  fiscal  year,  the  Company  has  preliminary  indicated  that it
anticipates  sales in the range of $69-$74  million,  with gross  margins in the
mid-70s, as a percent of sales. Selling, General and Administrative and Research


                                       16


<PAGE>


and  Development  expense  levels are dependent  upon  clinical  trials that are
planned for fiscal 2006.  Preliminary  estimates  for diluted EPS in fiscal 2006
are in the range of  $0.40-$0.50  per share.  The EPS  guidance  for fiscal 2006
excludes the impact of implementing FAS No. 123(R), which requires all companies
to measure compensation expense for all share-based payments (including employee
stock options) at fair value and recognize the expense over the related  service
period.

Forward-Looking Statements

Certain  statements  made in  Management's  Discussion and Analysis of Financial
Condition  and  Results of  Operations  and  elsewhere  in this Form  10-Q,  and
particularly  the  statements  made  in the  section  captioned  "Outlook,"  are
"forward-looking  statements"  as defined in the Private  Securities  Litigation
Reform  Act of 1995.  These  forward-looking  statements  relate to among  other
things,  financial  projections  such  as  anticipated  gross  margins,  overall
revenue,  expected expense levels,  anticipated revenue increases and investment
levels.

Forward-looking  statements  in this  10-Q are  based on the  Company's  current
expectations  and  assumptions and entail various risks and  uncertainties  that
could cause actual  results to differ  materially  from those  expressed in such
forward-looking  statements.  Factors  that  could  affect  the  realization  of
forward-looking statements include:

     o    changes in clinical and market acceptance of our products;
     o    changes in the health care industry  generally,  such as  restrictions
          imposed  on  sales  time  at  interventional  labs;  consolidation  of
          industry  participants,  cost  containment  and trends toward  managed
          care;
     o    changes in supplier requirements by group purchasing organizations;
     o    unanticipated costs or other difficulties and uncertainties associated
          with  lengthy  and  costly  new  product  development  and  regulatory
          clearance processes;
     o    changes in governmental laws and regulations;
     o    changes in reimbursement;
     o    the  development  of new  competitive  products  such  as  inexpensive
          aspiration  devices,   combined   aspiration/occlusion   products  and
          compounds that may make our products obsolete;
     o    sudden restrictions in supply of key materials;
     o    the   effectiveness   of  our   sales   and   marketing   efforts   in
          re-establishing coronary product usage,
     o    our ability to effectively manage new product development timelines,
     o    our ability to effectively manage marketing and investigational device
          exempt  clinical  trials
     o    our ability to generate  suitable  clinical  registry  data to support
          growing use of the AngioJet in coronary applications,
     o    our the ability to obtain additional  regulatory approvals on a timely
          basis;
     o    our ability to obtain regulatory clearance in new foreign markets and
     o    our ability to retain and motivate skilled  employees,  especially for
          sales positions.

Undue reliance should not be placed on forward-looking  statements,  which speak
only as of the date made. Any or all  forward-looking  statements in this report
and in any other  public  statements  we make may turn out to be  inaccurate  or
false. They can be affected by inaccurate  assumptions we might make or by known
or unknown  risks and  uncertainties.  Except as required by federal  securities
laws,  we undertake no  obligation to update any  forward-looking  statement.  A
discussion of these and other  factors that could impact our future  results are
set forth in the risk  factors  included in Exhibit 99.1 to the  Company's  Form
10-K for the year ended July 31, 2004 as filed with the  Securities and Exchange
Commission.


                                       17


<PAGE>


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company invests its excess cash in a professionally  managed,  institutional
fixed  income  portfolio  of short  duration.  The market risk on a  diversified
portfolio of relatively short duration is minimal, while enhancing returns above
money market levels.

The product  sales for the  Company's  foreign  subsidiary  are in U.S.  Dollars
("USD")  except for product  sales in Germany,  which are in Euro's.  The German
product sales were minimal during the third  quarter.  The Company has a foreign
bank  account in which the German  product  sales  receipts  are  deposited  and
immediately  transferred to the operating bank account in the United States. The
balance in the German bank account was zero as of April 30, 2005.

ITEM 4.   CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures
------------------------------------------------

Under the supervision and with the  participation  of our management,  including
our Chief  Executive  Officer and Chief  Financial  Officer,  we  evaluated  the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures (as defined in Rule 13a-15(e) under the Exchange Act. Based upon that
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that,  as of the end of the  period  covered  by  this  report,  our  disclosure
controls and procedures were effective in ensuring that information  required to
be  disclosed  by us in the reports we file or submit  under the Exchange Act is
recorded, processed,  summarized and reported, within the time periods specified
in  applicable  rules and forms and that such  information  is  accumulated  and
communicated to our management,  including our Chief Executive Officer and Chief
Financial Officer,  in a manner that allows timely decisions  regarding required
disclosure.

Changes in internal control over financial reporting
----------------------------------------------------

During the fiscal quarter ended April 30, 2005,  there has been no change in our
internal  control over financial  reporting (as defined in Rule 13a-15(f)  under
the  Exchange  Act) that has  materially  affected,  or is likely to  materially
affect, our internal control over financial reporting.


                                       18


<PAGE>


PART II.  OTHER INFORMATION

ITEM. 1    LEGAL PROCEEDINGS

The Company is aware of a shareholder  lawsuit filed June 3, 2005 in the federal
courts of the State of Minnesota  alleging that Possis  Medical,  Inc. and named
individual  officers violated federal  securities laws during a period beginning
in 2002. The Complaint  seeks class action status and  unspecified  damages.  At
this time the Company has not been served with a copy of the  complaint.  Possis
Medical  believes  that the  allegations  of the lawsuit  are without  merit and
intends to contest the lawsuit vigorously.

We do not believe that the amount of any  potential  liability  associated  with
these matters can be estimated at this time,  but an  unfavorable  resolution of
these  matters  is  possible  and could have a  material  adverse  effect on our
results of operations, financial condition or cash flows.



ITEM. 2    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)  Company Repurchases of Equity Securities

<TABLE>
<CAPTION>

----------------------- ---------------------- ----------------------- -------------------------- --------------------------
                                                                                                   (d) Maximum Number (or
                                                                         (c) Total Number of         Approximate Dollar
                                                                       Shares Purchased as Part     Value) of Shares that
                         (a) Total Number of     (b) Average Price      of Publicly Announced     May Yet Be Purchased Under
        Period             Shares Purchased (1)   Paid per Share          Plans or Programs        the Plans or Programs (1)
----------------------- ---------------------- ----------------------- -------------------------- --------------------------
<S>                            <C>                     <C>                      <C>                      <C>
  February 1, 2005 to             -                      -                         -                          -
   February 28, 2005
----------------------- ---------------------- ----------------------- -------------------------- --------------------------
  March 1, 2005 to                -                      -                         -                          -
   March 31, 2005
----------------------- ---------------------- ----------------------- -------------------------- --------------------------
  April 1, 2005 to
   April 30, 2005              172,000                 $9.42                    172,000                  $13,380,000
----------------------- ---------------------- ----------------------- -------------------------- --------------------------
         Total                 172,000                 $9.42                    172,000                  $13,380,000
----------------------- ---------------------- ----------------------- -------------------------- --------------------------

</TABLE>


(1)  The Company  repurchased an aggregate of 172,000 shares of its common stock
     pursuant to the repurchase  program that it publicly  announced on February
     23, 2005  providing  for the  repurchase  of shares having a value of up to
     $15,000,000 through December 2006. The shares were purchased in open market
     transactions.


                                       19


<PAGE>


ITEM 5.           CHANGE IN CONTROL TERMINATION PAY PLAN

On September 15, 1999, the Board of Directors approved a Change in Control
Termination Pay Plan (the Plan) that provides, at the discretion of the Board,
salary and benefits continuation payments to executive officers and selected key
management and technical personnel in the event they are terminated within
twenty-four months of a change in control. Since its inception, the Board of
Directors has committed to a three-year salary and benefits continuation for the
Chief Executive Officer and two-year salary and benefits continuations for other
executive officers. Additional key management and technical personnel are
entitled to salary and benefits continuation ranging in duration from six to
twenty-four months. The Board of Directors also approved, in 2001, additional
payments upon a change in control notwithstanding employment status following a
change in control pursuant to Section 4.3 of the Plan entitled, "Cash
Transaction Bonus." This provision provides that these payments are to be
awarded if the Company achieves "substantial growth" as determined by the Board
based on the value of the Possis at the time of the change in control and the
Board's assessment of performance and growth. The amount of the pool available
for such payments was limited, in aggregate, to between five-eighths of one
percent (.625%) and a maximum of four percent (4%) of the value of the Company
at the time of the change in control. By action on June 6, 2005, the Board of
Directors approved an amendment to the Cash Transaction Bonus such that the
amount of funds available for payment under Section 4.3 of the Plan is
determined based on the extent that the value of the Company, as determined at
the time of the change in control transaction is greater than a baseline amount
equal to the 30 day trailing closing stock price average multiplied by the
number of issued and outstanding shares on the date of public disclosure of
change in control discussions (the "Transaction Premium"). The applicable
Transaction Premium and Bonus Percentages are as follows:

Transaction Premium       Bonus Percentage
11-20%                         2.0%
21-30%                         2.5%
31-40%                         3.0%
41-50%                         3.5%
50+%                           4.0%

Allocation of the Cash Transaction Bonus is subject to amendment at the
discretion of the Board of Directors based on changes in each recipient's job
responsibilities, employment status or other reasonable circumstances. Current
allocations are as follows:
Robert G. Dutcher, Chairman, President and Chief Executive Officer - 30%
Irving R. Colacci, Vice President and General Counsel - 10%
James D. Gustafson, Vice President, Research, Development and Engineering  - 10%
Shawn F. McCarrey, Vice President, Worldwide Sales and Marketing - 10%
Robert J. Scott, Vice President, Manufacturing Operations and IT - 10%
Unallocated at this time - 30%


                                       20


<PAGE>


ITEM 6.      EXHIBITS

Exhibits

         Certain of the following exhibits are incorporated by reference from
prior filings. The form with which each exhibit was filed and the date of filing
are indicated below.

 Exhibit                                 Description
--------------------------------------------------------------------------------

  31.1    Certification  of the Chief Executive  Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.

  31.2    Certification  of the Chief Financial  Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.

  32.1    Certification  of the Chief Executive  Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.

  32.2    Certification  of the Chief Financial  Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.


                                       21


<PAGE>


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.


                                                         POSSIS MEDICAL, INC.


DATE: May 28, 2005                                   BY:
                                                         -----------------------
                                                         ROBERT G. DUTCHER
                                                         Chairman, President and
                                                         Chief Executive Officer





DATE: May 28, 2005                                   BY:
                                                        ------------------------
                                                   JULES L. FISHER
                                                   Vice President of Finance and
                                                   Chief Financial Officer


                                       22


<PAGE>


                                  EXHIBIT INDEX

     Certain of the following exhibits are incorporated by reference from prior
filings. The form with which each exhibit was filed and the date of filing are
indicated below.

 Exhibit                                 Description
--------------------------------------------------------------------------------

  31.1    Certification  of the Chief Executive  Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.

  31.2    Certification  of the Chief Financial  Officer pursuant to Section 302
          of the Sarbanes-Oxley Act of 2002.

  32.1    Certification  of the Chief Executive  Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.

  32.2    Certification  of the Chief Financial  Officer pursuant to Section 906
          of the Sarbanes-Oxley Act of 2002.


                                       23