_______________________________________________

                       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 January 31, 2001


     Commission File Number 001-12567

                              POSSIS MEDICAL, INC.

                             9055 Evergreen Blvd NW

                        Minneapolis, Minnesota 55433-8003

                                 (763) 780-4555


     A Minnesota Corporation                 IRS Employer ID No. 41-0783184
                        _________________________________

     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___

     The number of shares outstanding of the Registrant's Common Stock, $.40 par
value, as of March 5, 2001 was 16,748,584.


                        ________________________________

<PAGE>








                              POSSIS MEDICAL, INC.

                                      INDEX


                                                                        PAGE


PART I.     FINANCIAL INFORMATION

   ITEM 1.  Financial Statements

            Consolidated Balance Sheets, January 31, 2001
            and July 31, 2000........................................     3

            Consolidated Statements of Operations for three
            months and six months ended January 31, 2001 and 2000....     4

            Consolidated Statements of Cash Flows for
            six months ended January 31, 2001 and 2000...............     5

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

   ITEM 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations......................     7

   ITEM 3.  Quantitative and Qualitative Disclosure on Market Risks..    12

PART II.    OTHER INFORMATION

   ITEM 4.  Submission of Matters to a Vote of Security-Holders......    13

   ITEM 6.  Exhibits and Reports on Form 8-K.........................    14

            SIGNATURES...............................................    15

<PAGE>


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                  January 31, 2001 July 31, 2000
<S>                                                 <C>            <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents....................... $ 1,920,040     $ 4,053,429
   Marketable securities...........................   5,961,150       8,917,251
   Receivables:
      Trade (less allowance for doubtful accounts
      and returnsof $868,000 and $672,000, ........   3,912,259       2,940,497
      respectively)
   Inventories:
      Parts........................................   1,569,346       1,441,137
      Work-in-process..............................   1,424,210       1,551,524
      Finished goods...............................   1,948,858       2,107,677
   Prepaid expenses and other assets...............     127,830         278,491

      Total current assets.........................  16,863,693      21,290,006
PROPERTY:
   Leasehold improvements..........................   1,454,833       1,363,902
   Machinery and equipment.........................   6,449,206       5,688,540
   Assets in construction..........................     398,126         305,474

                                                      8,302,165       7,357,916

   Less accumulated depreciation...................   4,165,382       3,643,976
     Property - net................................   4,136,783       3,713,940

TOTAL ASSETS....................................... $21,000,476     $25,003,946

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Trade accounts payable.......................... $ 1,691,077     $ 1,916,063
   Accrued salaries, wages, and commissions........   1,112,871       1,603,061
   Current portion of long-term debt...............     191,872         179,949
   Other liabilities...............................   1,084,625         802,989
Total current liabilities..........................   4,080,445       4,502,062

LONG-TERM DEBT.....................................      26,726           7,279

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Common stock-authorized, 100,000,000 shares
       of $ .40 par value each; issued and
       outstanding, 16,748,289 and 16,700,942
       shares, respectively........................   6,699,316       6,680,377
    Additional paid-in capital.....................  74,906,466      74,581,145
    Unearned compensation..........................        --           (24,809)
Retained deficit................................... (64,712,477)    (60,742,108)
Total shareholders' equity.........................  16,893,305      20,494,605
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY......... $21,000,476     $25,003,946

<FN>

See notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>



                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                         For Three Months Ended                     For Six Months Ended
                                                     Jan. 31 2001       Jan. 31, 2000         Jan. 31, 2001      Jan. 31, 2000

<S>                                                  <C>                 <C>                   <C>                <C>
Product sales..................................      $ 6,912,017         $ 5,155,291           $13,457,127        $ 9,638,481
Cost of sales and other expenses:
  Cost of medical products.....................        2,918,671           2,577,822             6,000,717          4,676,217
Selling, general and administrative............        4,469,410           3,640,864             8,985,641          7,452,418
Research and development.......................        1,241,348           1,359,831             2,728,855          2,622,058
Interest.......................................            2,471               2,290                 4,670              4,606
  Total cost of sales and other expenses.......        8,631,900           7,580,807            17,719,883         14,755,299

Operating loss.................................       (1,719,883)         (2,425,516)           (4,262,756)        (5,116,818)
Interest income................................          121,474              75,684               292,387            175,006
Net loss.......................................      $(1,598,409)        $(2,349,832)          $(3,970,369)       $(4,941,812)

Weighted average number of common
     shares outstanding........................       16,713,696          15,039,839            16,707,111         15,022,825
Basic and dilutive net loss per common share...            $(.10)              $(.16)                $(.24)             $(.33)

<FN>

See notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JANUARY 31, 2001 AND 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                                         2001           2000
<S>                                                  <C>            <C>
OPERATING ACTIVITIES:
Net loss ............................................$(3,970,369)   $(4,941,812)
Adjustments to reconcile net loss to net
  cash used in operating activities:
     Gain on asset disposal..........................     (1,402)        (5,972)
     Depreciation....................................    916,965        521,316
Amortization ........................................       --           36,000
Stock compensation to employees and stock options
  issued to non-employees............................    120,059        127,037
     Increase in receivables.........................   (971,762)       (35,099)
     Increase in inventories.........................   (163,076)      (700,378)
     Decrease in other assets........................    150,661         37,038
(Decrease) increase in trade accounts payable........   (224,986)       995,031
Decrease in accrued and other liabilities............   (153,511)      (198,903)
Net cash used in operating activities................ (4,297,421)    (4,165,742)

INVESTING ACTIVITIES:
Purchase of marketable securities....................(11,288,899)          --
Proceeds from maturity of marketable securities...... 14,245,000           --
Additions to plant and equipment..................... (1,018,808)      (466,740)
Proceeds from the disposal of assets.................      1,402          5,972
Net cash provided (used) by investing activities.....  1,938,695       (460,768)

FINANCING ACTIVITIES:
Proceeds from issuance of stock and exercise
  of stock options...................................    193,967        373,258
Proceeds from notes payable..........................     36,504           --
Repayment of long-term debt..........................     (5,134)        (2,444)
Net cash provided by financing activities............    225,337        370,814

DECREASE IN CASH AND CASH EQUIVALENTS ............... (2,133,389)    (4,255,696)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.....  4,053,429      9,151,004
CASH AND CASH EQUIVALENTS AT END OF PERIOD...........$ 1,920,040    $ 4,895,308

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid........................................$       733    $       669
Accrued payroll taxes related to restricted stock....     55,043         24,881
Issuance of restricted stock.........................       --           32,250
Inventory transferred to fixed assets................       --           23,179

<FN>

See notes to consolidated financial statements.

</FN>
</TABLE>

<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 generally accepted accounting principles 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 generally  accepted  accounting  principles  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 notes
thereto included in the Company's 2000 Annual Report.


2.       INTERIM FINANCIAL STATEMENTS

     Operating  results for the three and six month  periods  ended  January 31,
2001 are not necessarily  indicative of the results that may be expected for the
year ending July 31, 2001.


3.       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  and vascular  medical devices.
Possis  Medical,  Inc.  evaluates  revenue  performance  based on the  worldwide
revenues   of  each  major   product   line  and   profitability   based  on  an
enterprise-wise  basis  due to  shared  infrastructures  to make  operating  and
strategic decisions.

     Total  revenues by United States and  non-United  States for the six months
ended January 31, 2001 and 2000 are as follows: 2001 2000

       United States....................     $13,213,982      $9,469,896
       Non-United States................         243,145         168,585
       Total revenues...................     $13,457,127      $9,638,481


4.       EARNINGS (LOSS) PER SHARE

     The  Company's  outstanding  stock  options  and  stock  warrants  were not
included in the  computation  of earnings  per share since the impact would have
been anti-dilutive because of the net loss.

<PAGE>


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

Forward-Looking Statements

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations  contain  certain  "forward-looking  statements"  as  defined  in the
Private  Securities  Litigation  Reform Act of 1995. Such  statements  relate to
future events and financial  performance,  including  statements relating to the
Company's  ability to establish an adequate  recurring  revenue stream from U.S.
AngioJet(R)  System  disposable  sales,  the ability to  maintain  manufacturing
yields at acceptable levels, changes in the Company's marketing strategies,  the
ability to grow sales while  maintaining  the  Company's  current  level of U.S.
sales force,  the ability to achieve growing  acceptance of the AngioJet System,
the ability to control  expenses in order to become  profitable,  the ability to
develop new  products,  the ability to raise  additional  capital on  acceptable
terms, the results of clinical trials and  physician-directed  studies,  and the
ability  to  achieve  levels of  interest  income and  interest  expense.  These
statements involve risks and uncertainties, and consequently, actual results may
vary materially from those projected in the  forward-looking  statements.  It is
not possible to foresee or identify all factors  affecting the Company's  future
results, and investors therefore should not consider any list of such factors to
be an exhaustive  statement of all risks and  uncertainties.  Although it is not
possible to create a  comprehensive  list of all factors  that may cause  actual
results to differ from the Company's forward-looking  statements,  these factors
include  trends toward managed health care,  health care cost  containment,  the
trend  of  consolidation  in  the  medical  device  industry,  difficulties  and
uncertainties associated with the lengthy and costly new product development and
regulatory clearance  processes,  changes in government laws and regulations and
the enforcement there of that may be adverse to the Company,  the development of
new  products  by  competitors  that  may make our  products  obsolete,  product
recalls,  and economic factors over which the Company has no control,  including
changes in inflation and interest rates.  These and other risk factors set forth
in the  risk  factors  included  in  Exhibit  99 to the  Company's  registration
statement  on Form S-3 dated  April 17, 2000 are filed with the  Securities  and
Exchange Commission.

<PAGE>

Results of Operations

Three and Six Month Periods Ended January 31, 2001 and 2000

     Total  product  sales for the three and six months  ended  January 31, 2001
were $6,912,000 and $13,457,000,  respectively.  The Company recorded a net loss
for the quarter ended January 31, 2001 of $1,598,000, or $.10 per diluted share.
This compared to a net loss of $2,350,000,  or $.16 per diluted  share,  for the
quarter ended January 31, 2000.  The net loss for the six months ending  January
31, 2001 and 2000 was $3,970,000 and $4,942,000,  respectively. This resulted in
a net loss per diluted share of $.24 and $.33, respectively. The Company markets
the AngioJet(R)  Rheolytic(TM)  Thrombectomy System (AngioJet System) worldwide.
The AngioJet  System consists of a drive unit (capital) which powers a family of
disposable catheters,  each aimed at a specific indication.  The main factors in
the  revenue  increase  were  increased  sales  resulting  from the  April  2000
clearances  to commence  U.S.  marketing  of the AngioJet  System with  labeling
claims for the  Company's  LF140  catheter  for  removal  of blood  clots in leg
(peripheral)  arteries  and the  clearance to market its new Xpeedior 60 and 100
catheters for removal of blood clots from dialysis  access grafts.  In addition,
the Company commenced U.S. marketing of its Xpeedior 100 catheter for removal of
blood clots in leg arteries in May 2000.  The Xpeedior  catheters  are the first
catheters  marketed by the Company based upon its  proprietary  Cross-Stream(TM)
Technology. This exclusive technology platform intensifies the action at the tip
of the  catheter,  which doubles the clot removal rate and triples the treatable
vessel size compared to other available  mechanical  thrombectomy devices on the
market today.  In addition,  Cross-Stream  Technology has been able to deal more
effectively  with "mural  thrombus,"  the older,  more  organized  material that
adheres to vessel walls and can complicate patient results.

Revenue - AngioJet System

     AngioJet System revenue for the three and six months ended January 31, 2001
was $6,912,000 and  $13,382,000,  respectively.  This was an increase of 40% and
48%, respectively, over the same periods for the Company's prior fiscal year. As
of January 31, 2001,  the Company had a total of 582 domestic drive units in the
field, compared to 394 drive units at the end of the same prior year period, and
compared to 541 units as of end of the first  quarter.  During the three and six
month periods ended January 31, 2001, the Company sold  approximately  6,000 and
11,400 catheters and pump sets,  respectively,  versus  approximately  3,900 and
7,100  compared  to in the  same  prior  year  periods.  This was an 54% and 61%
increase, respectively, in unit catheter sales from the same prior year periods.
The main factors in the revenue increase were increased sales resulting from the
April 2000  clearances  to commence U.S.  marketing of the AngioJet  System with
labeling  claims for the Company's  LF140 catheter for removal of blood clots in
leg  (peripheral)  arteries and the  clearance to market its new Xpeedior 60 and
100  catheters  for  removal of blood  clots from  dialysis  access  grafts.  In
addition,  the Company commenced U.S. marketing of its Xpeedior 100 catheter for
removal  of blood  clots in leg  arteries  in May  2000.  The  average  catheter
utilization  rate per  installed  domestic  drive  unit  was 10.4 in the  second
quarter,  compared to a rate of 9.9 in the same prior year period, and to a rate
of 10.1 in the first  quarter of fiscal  2001.  The Company sold 43 and 85 drive
units,  respectively,  during the three and six months  ended  January 31, 2001.
This compared to 41 and 73 drive units, respectively, in the same periods in the
prior year.

<PAGE>

     The Company employs a variety of flexible drive unit  acquisition  programs
including  outright  purchase and various  evaluation  programs.  The purchasing
cycle for the  AngioJet  System drive unit varies  depending  on the  customer's
budget cycle.  The Company has signed  contracts  with four national  purchasing
groups in order to  accelerate  orders and increase  market  penetration.  These
purchasing   groups   acquire   drive  units  for  their  member   hospitals  at
pre-negotiated discounts.

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

     In  October  1999,   the  Company   received  full  FDA  approval  for  its
Investigational  Device Exemption (IDE) application for the clinical trial (Time
1) of the AngioJet System in the treatment of acute ischemic  stroke.  The first
patient was enrolled in May 2000. After the first five patients had been treated
in the  TIME 1  clinical  trial  for  ischemic  stroke,  a  planned  review  was
conducted.  This review  concluded  that the AngioJet  NV150  neurocatheter  can
access the middle  cerebral artery where most ischemic  strokes occur,  and that
the device can effectively remove clot from this territory. The review suggested
changes  to  the  protocol  covering  a  variety  of  areas,  including  patient
selection,  exclusion  criteria,  and specifications for physician  technique in
deploying and moving the device in the cerebral vasculature. Physician reviewers
also suggested  changes to the device to improve the  trackability,  flexibility
and efficacy  profile.  Patient  enrollment in TIME 1 will continue  after these
enhancements  are in  place  and  following  FDA and IRB  approvals,  which  are
anticipated during the fiscal fourth quarter.

     Foreign  sales of the AngioJet  System for the three and six month  periods
ended January 31, 2001 were $108,000 and $243,000,  respectively.  This compared
to foreign sales of the AngioJet  System of $91,000 and $169,000,  respectively,
for the same periods the previous  year.  The limited  foreign  sales are due to
cost constraints in overseas  markets.  In foreign markets:  where public sector
funds are more  crucial for  hospital  operation,  Euro  devaluations  generated
higher public sector  deficits,  which, in turn,  forced  reductions in hospital
procedure and equipment budgets. In Japan, the coronary AngioJet System clinical
study was  completed  in April 1998 and a  regulatory  filing was  completed  in
November  1999 with the  Japanese  Ministry  of  Health  and  Welfare.  Japanese
approval for coronary  use of the  AngioJet  System is expected in  mid-calendar
2001.

     The Company  believes  that the  treatment of blood clots in the  coronary,
peripheral,   and  neuro  blood  vessels  are  significant  worldwide  marketing
opportunities for the AngioJet System.

Revenue - Vascular Grafts

     Vascular graft sales were $0 and $75,000 for the three and six months ended
January 31, 2001.  This  compared to $233,000 and $614,000 for the three and six
months ended January 31, 2000.  All of the vascular  graft sales in the 2000 and
1999 periods were  Perma-Seal(R)  Dialysis Access Grafts.  In September 1998 the
Company  received FDA  marketing  approval for its  Perma-Seal  Dialysis  Access
Graft. In December 1998, the Company entered into an exclusive  worldwide supply
and  distribution  agreement  for its  Perma-Seal  Dialysis  Access  Graft.  The
distributor  failed to comply  with  contractually  obligated  levels of product
purchases and failed to comply with payment  schedules,  placing the distributor
in  non-compliance  of the  distribution  agreement  and in November  2000,  the
distributor  indicated  its desire to terminate the  distribution  agreement and
return unsold product. This dispute is in early stages of litigation. Because of
this dispute and the absence of an additional  distributor for this product,  no
additional  sales of  Perma-Seal  Dialysis  Access Grafts are expected in fiscal
2001.

<PAGE>

     In April 1998, the Company  received  Humanitarian  Device  Exemption (HDE)
approval from the FDA,  allowing U.S.  marketing of the  Perma-Flow(R)  Coronary
Bypass  Graft for  patients  who require  coronary  bypass  surgery but who have
inadequate blood vessels for use in the surgery.

     In February 1999,  the Company  received  510(k)  clearance from the FDA to
market three expanded  polytetrafluoroethylene  (ePTFE) synthetic grafts.  ePTFE
synthetic  grafts are the most  commonly  used  synthetic  grafts in  peripheral
vessel bypass  procedures.

     After a strategic  review of the Company's market  opportunities  given its
limited capital,  the Company decided to focus on growth  opportunities  for the
AngioJet  System.   Therefore,  the  Company  has  put  vascular  graft  product
development   on  hold  while  it  pursues  the  sale  of  the  vascular   graft
technologies.

Cost of Medical Products

     Cost of medical products increased $341,000 and $1,325,000 in the three and
six month periods ended January 31, 2001, respectively, over the same periods in
the previous  year. The increase is primarily due to the  significant  growth in
the U.S.  AngioJet System product sales.  Medical product gross margins improved
by  $1,416,000  and  $2,494,000  for the three and six months ended  January 31,
2001, respectively, over the same periods in the previous year. This resulted in
gross margins of 58% and 55%,  respectively,  for the three and six months ended
January 31, 2001 compared to 50% and 51% gross  margins,  respectively,  for the
three and six month periods ending  January 31, 2000.  The  improvement in gross
margins  driven by volume  increases in the quarter  ended  January 31, 2001 was
offset by an unfavorable mix of higher margin coronary catheters relative to the
lower margin AV access  catheters  The Company  believes that gross margins will
improve as product  sales and related  volumes  continue to grow, as product and
process  improvements  are made and the  effect of the  January  2001  workforce
reduction is realized.

Selling, General and Administrative Expense

     Selling,  general and administrative  expenses for the three and six months
ended January 31, 2001 increased $829,000 and $1,533,000, respectively, compared
to the same prior year  periods.  The primary  factors are  increased  sales and
marketing  expenses  related  to  the  establishment  of  a  U.S.  direct  sales
organization  to  sell  the  AngioJet  System,  increased  expenses  related  to
marketing the AngioJet product in the United States, an increase in computer and
software  depreciation  and the costs  related  to the  workforce  reduction  in
January 2001. The Company expects that the current level of the U.S. sales force
will be able to grow  sales and  service  the  customer  base for the  Company's
AngioJet System through fiscal 2001.

Research and Development Expense

     Research and development expense decreased 9% and increased 4% in the three
and six months ended January 31, 2001, respectively, from last year. The changes
in the research and  development  expenses  are due to the  differing  stages of
development of new AngioJet System applications at the end of each quarter.  The
Company  believes that  research and  development  expenses for AngioJet  System
applications  will  increase as the Company  completes  the  development  of its
current products and invests in development of new AngioJet System  thrombectomy
applications and new high-pressure waterjet technology-based products.

<PAGE>

Interest Income and Expense

     Interest income  increased  $46,000 and $117,000 in the three and six month
periods ended January 31, 2001,  respectively,  over the prior year periods. The
increase  was  due to the  gross  proceeds  of $15  million  received  from  the
Company's private placement offering in March 2000. The Company expects interest
income to decrease  during the  remainder of fiscal 2001 as the  Company's  cash
reserves are used to fund the Company's operations.

     Interest  expense was $2,000 and $5,000 for the three and six month periods
ending January 31, 2001 and 2000,  respectively.  The Company  expects  interest
expense to stay at low levels in fiscal 2001  unless a line of credit  through a
bank is  obtained.  If a line of credit is  obtained,  the amount of increase in
interest  expense will depend upon how much is borrowed,  the interest rate, and
the length of time the borrowing is outstanding.


Liquidity and Capital Resources

     The Company's cash,  cash  equivalents  and marketable  securities  totaled
approximately  $7.9 million at January 31, 2001 versus $13.0 million at July 31,
2000.

     Net cash,  cash  equivalents  and marketable  securities  usage for the six
months ended January 31, 2001 averaged  $900,000 per month. The $5.1 million net
decrease in cash, cash equivalents, and marketable securities in the most recent
six  month  period  was due to the net  loss of $4.0  million,  an  increase  of
$972,000 in accounts  receivable,  an  increase  of  $163,000  in  inventory,  a
$225,000  reduction  in  accounts  payable,  and  capital  expenditures  of $1.0
million, partially offset by the combined effect of non-cash charges, a decrease
in other  assets,  proceeds  from  issuance  of stock and  proceeds  from  notes
payable, totaling $1.4 million. The $972,000 increase in accounts receivable was
due to the  increase  in revenue for the six months  ending  January 31, 2001 as
compared to fiscal 2000. The $360,000  reduction in accounts  payable was due to
payment of software and computer invoices that were included in accounts payable
at the end of fiscal 2000.

     The Company believes that product sales of the AngioJet  System,  primarily
in the United States,  will yield  meaningful  sales growth going  forward.  The
Company  expects the current level of the U.S.  sales force will be able to grow
sales and service the customer base for the Company's  AngioJet  System  through
fiscal 2001.  Research  and  development  expenditures  are expected to increase
slightly from the fiscal 2001 level as the Company  completes the development of
its  current  products  and  invests  in  development  of  new  AngioJet  System
thrombectomy   applications  and  new,  miniaturized  waterjet  technology-based
products.  The  Company  expects  to  report a loss for  fiscal  2001,  which is
expected to be less than the fiscal 2000 loss. In addition,  the Company expects
that increasing  working capital  investments in trade receivables and inventory
will be required to support growing  product sales.  The Company has no plans to
raise  additional  outside  capital  in fiscal  2001,  although  there can be no
assurance  that  additional  capital  will not be  required  during  that  time.
Subsequent to fiscal 2001 the Company  expects that its  operations  will become
profitable  and that no  additional  outside  capital will be needed to fund its
current operations.  However, debt financing and additional outside capital will
be considered,  if the terms are favorable, in order to facilitate the growth of
the Company.

<PAGE>

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  Company  invests  its  excess  cash  in  money  market  mutual  funds,
commercial paper and other liquid, short maturity and low-risk investments.

     The product sales for the Company's foreign  subsidiary are in U.S. Dollars
("USD").  At the end of January  2001,  the amount of  currency  held in foreign
exchange was approximately  $1,000 USD. The market risk on the Company's foreign
subsidiary operations is minimal.

     At January  31,  2001,  all of the  Company's  outstanding  long-term  debt
carries  interest at a fixed rate.  There is no material market risk relating to
the Company's long-term debt.

<PAGE>

Part II.     OTHER INFORMATION

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

     a. The 2000 annual meeting of shareholders of Possis Medical, Inc. was held
on December 13, 2000.

     b. By the following vote,  management's  nominees were elected as directors
of the  Corporation  for one year or until  their  successors  are  elected  and
qualified:

                                             FOR              AGAINST

        Dean Belbas                       13,688,297           774,038
        Robert G. Dutcher                 13,739,005           703,330
        William C. Mattison, Jr.          13,932,855           509,480
        Seymour J. Mansfield              13,663,810           778,525
        Whitney A. McFarlin               13,385,932         1,056,403
        Donald C. Wegmiller               13,671,788           770,547
        Rodney A. Young                   13,377,512         1,064,823

     d. By a vote of 14,257,329 in the affirmative,  108,836 in the negative and
76,170  abstaining,  the  appointment  of Deloitte & Touche LLP as the Company's
certified public accountants was ratified.

<PAGE>

 ITEM 6.     Exhibits and Reports on Form 8-K

     (a)  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 on the following pages.

Exhibit   Form           Date Filed                     Description

  3.1     10-K        Fiscal year ended         Articles of incorporation as
                      July 31, 1994             amended and restated to date.

  3.2     10-K        Fiscal year ended         Bylaws as amended and
                      July 31, 1999             restated to date.



     (b) Reports on Form 8-K

     Possis Medical,  Inc. filed no reports on Form 8-K during the quarter ended
January 31, 2001.

<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:  March 14, 2001           BY:      /s/
                                   ROBERT G. DUTCHER
                                   President and Chief Executive Officer



DATE:  March 14, 2001           BY:      /s/
                                   EAPEN CHACKO
                                   Vice President of Finance and
                                   Chief Financial Officer