_______________________________________________

                       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 April 30, 2001


                          Commission File Number 0-944

                              POSSIS MEDICAL, INC.

                          9055 Evergreen Boulevard N.W.

                        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 June 4, 2001 was 16,783,981.

                        ________________________________

<PAGE>




                              POSSIS MEDICAL, INC.

                                      INDEX

                                                                          PAGE


PART I.   FINANCIAL INFORMATION

 ITEM 1.  Financial Statements

          Consolidated Balance Sheets, April 30, 2001
            and July 31, 2000...........................................    3

          Consolidated Statements of Operations for the three
            months and nine months ended April 30, 2001 and 2000........    4

          Consolidated Statements of Cash Flows for the
            nine months ended April 30, 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 Disclosures
            About Market Risk...........................................   12



PART II.  OTHER INFORMATION

 ITEM 6.  Exhibits and Reports on Form 8-K..............................   13

 SIGNATURES.............................................................   14

<PAGE>



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

<TABLE>
<CAPTION>

                                                 April 30, 2001   July 31, 2000

<S>                                              <C>               <C>

ASSETS
CURRENT ASSETS:
  Cash and cash equivalents....................   $ 5,464,776      $ 4,053,429
  Marketable securities........................     2,258,096        8,917,251
  Receivables:
    Trade (less allowance for doubtful
      accounts and returns of $848,000
      and $672,000, respectively)..............     3,935,362        2,940,497
  Inventories:
  Parts........................................       861,720        1,441,137
  Work-in-process..............................     1,813,780        1,551,524
  Finished goods...............................     2,053,981        2,107,677
  Prepaid expenses and other assets............        71,894          278,491
Total current assets...........................    16,459,609       21,290,006

PROPERTY:
  Leasehold improvements.......................     1,454,833        1,363,902
  Machinery and equipment......................     6,478,849        5,688,540
  Assets in construction.......................       442,117          305,474
                                                    8,375,799        7,357,916
  Less accumulated depreciation                     4,408,655        3,643,976
    Property - net.............................     3,967,144        3,713,940

TOTAL ASSETS                                      $20,426,753      $25,003,946

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
  Trade accounts payable.......................   $    950,901     $  1,916,063
  Accrued salaries, wages, and commissions.....      1,272,925        1,603,061
  Current portion of long-term debt............        101,982          179,949
  Other liabilities............................      1,143,765          802,989
Total current liabilities......................      3,469,573        4,502,062

LONG-TERM DEBT.................................         26,173            7,279
OTHER LIABIALITIES.............................          4,200             --

COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
  Common stock-authorized, 100,000,000
    shares of $ .40 par value each; issued
    and outstanding, 16,754,106 and 16,700,942
    shares, respectively.......................      6,701,642        6,680,377
  Additional paid-in capital...................     74,932,516       74,581,145
  Unearned compensation........................        (23,600)         (24,809)
  Retained deficit.............................    (64,683,751)     (60,742,108)
Total shareholders' equity.....................     16,926,807       20,494,605

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.....    $20,426,753      $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 Nine Months Ended
                                                                April 30, 2001   April 30, 2000     April 30, 2001   April 30, 2000

<S>                                                               <C>              <C>               <C>              <C>

Product sales.............................................         $7,374,418      $ 4,472,184       $20,831,545      $14,110,664

Cost of sales and other expenses:
  Cost of medical products................................          2,508,998        2,167,251         8,510,364        6,843,468
  Selling, general and administrative.....................          3,905,729        4,092,624        12,888,529       11,545,041
  Research and development................................          1,036,258        1,294,618         3,767,303        3,916,676
  Interest................................................              2,040            2,265             6,710            6,871
    Total cost of sales and other expenses................          7,453,025        7,556,758        25,172,906       22,312,056

Operating loss............................................            (78,607)      (3,084,574)       (4,341,361)      (8,201,392)
  Interest income.........................................            107,333          178,342           399,718          353,348
Net income (loss).........................................         $   28,726      $(2,906,232)      $(3,941,643)     $(7,848,044)

Income (loss) per common share:
    Basic.................................................             $.00           $(.18)            $(.24)           $(.51)
    Diluted...............................................             $.00           $(.18)            $(.24)           $(.51)

Weighted average number of common shares
  outstanding:
    Basic.................................................         16,749,538       16,057,405        16,720,968       15,362,701
    Diluted...............................................         16,841,733       16,347,027        16,780,377       15,594,713



<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE NINE MONTHS ENDED APRIL 30, 2001 AND 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                         2001          2000
<S>                                                 <C>           <C>

OPERATING ACTIVITIES:
Net loss ........................................... $(3,941,643) $ (7,848,044)

Adjustments to reconcile net loss to net
 cash used in operating activities:
  Loss (gain) on asset disposal ....................       8,564        (4,718)
  Depreciation......................................   1,398,840       820,734
  Amortization  ....................................        --          54,000
  Stock compensation expense........................     130,359       169,663
  Expense reimbursement from city government........    (101,938)         --
  (Increase) decrease in receivables................    (994,865)      833,063
  Increase in inventories...........................    (106,143)   (1,043,931)
  Decrease in other assets..........................     206,597       112,127
  (Decrease) increase in trade accounts payable.....    (965,162)      145,479
  Increase in accrued and other current liabilities.      75,921       197,947

   Net cash used in operating activities............  (4,289,470)   (6,563,680)

INVESTING ACTIVITIES:
Purchase of marketable securities................... (13,585,845)  (17,116,761)
Proceeds from maturity of marketable securities.....  20,245,000     3,015,000
Additions to plant and equipment....................  (1,185,010)     (780,457)
Proceeds from the disposal of assets................       1,402         6,222
Net cash provided by (used in) investing activities.   5,475,547   (14,875,996)


FINANCING ACTIVITIES:
Proceeds from issuance of stock and exercise
 of options.........................................     196,843    14,495,589
Proceeds from notes payable.........................      36,504          --
Repayment of long-term debt.........................      (8,077)       (3,705)
Net cash provided by financing activities...........     225,270    14,491,884

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ...   1,411,347    (6,947,792)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD....   4,053,429     9,151,004
CASH AND CASH EQUIVALENTS AT END OF  PERIOD......... $ 5,464,776  $  2,203,212

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid....................................... $     1,132  $        965
Issuance of restricted stock........................      23,900        59,000
Accrued payroll taxes related to restricted stock...      46,643        15,881
Inventory transferred to fixed assets...............        --          23,280


<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>



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

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  nine-month  periods  ended April 30,
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 nine months
ended April 30, 2001 and 2000 are as follows:

                                                 2001             2000

      United States.....................     $20,521,680      $13,837,129
      Non-United States.................         309,865          273,535
      Total revenues....................     $20,831,545      $14,110,664


4.   INCOME (LOSS) PER SHARE

     The  Company  has  included   stock  options  and  stock  warrants  in  the
computation  of diluted income (loss) per common share only for the three months
ended April 30, 2001 because all other periods would be anti-dilutive due to the
net losses.  The treasury  stock method is used in computing the diluted  income
(loss) per common share.

<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  contains  certain  "forward-looking  statements"  as  defined in the
Private  Securities  Litigation  Reform Act of 1995. These statements  relate to
future  events  and   financial   performance,   including  the   submission  of
applications to the FDA, anticipated FDA approvals, the timing of FDA approvals,
revenue and expense levels,  profitability and future capital requirements,  and
the timing and method of raising additional capital.  Forward-looking statements
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those suggested in the  Forward-looking  Statement.  These risks
and  uncertainties  include the Company's  ability to meet its timetable for FDA
submissions,  the review time and process at the FDA, anticipated  reimbursement
for the use of the  Company's  products  by its  customers,  results of clinical
trials, changes in the Company's marketing strategies,  the Company's ability to
establish  product  distribution  channels,  changes in  manufacturing  methods,
market  acceptance  of the  AngioJet  System,  changes  in the levels of capital
expenditures  by hospitals,  the levels of sales of the Company's  products that
can be achieved,  the Company's  ability to raise  additional  capital and other
risks set forth in the  cautionary  statements  included  in  Exhibit  99 to the
Company's  registration  statement on Form S-3 dated April 17, 2000,  filed with
the Securities and Exchange Commission.


Results of Operations

Three and Nine Month Periods Ended April 30, 2001 and 2000

     Total product sales for the three and nine months ended April 30, 2001 were
$7,374,000 and $20,832,000,  respectively. The Company recorded a net profit for
the quarter ended April 30, 2001 of $29,000, or $.00 per share. This compared to
a net loss of  $2,906,000,  or $.18 per share,  for the quarter  ended April 31,
2000.  The net loss for the  nine  months  ending  April  30,  2001 and 2000 was
$3,942,000 and $7,848,000,  respectively.  This resulted in a net loss per share
of $.24 and $.51, 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 the  Company's new Xpeedior 60 catheter for removal of blood
clots from dialysis  access  grafts.  In addition,  the Company  commenced  U.S.
marketing of the AngioJet System with labeling claims for removal of blood clots
in leg  (peripheral)  arteries  for the  Xpeedior 100 in May 2000 and XMI 135 in
March 2001.  The  Xpeedior  catheters  are the first  catheters  marketed by the
Company based upon its proprietary  Cross-Stream(R)  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.

<PAGE>

Revenue - AngioJet System

     AngioJet  System revenue for the three and nine months ended April 30, 2001
was $7,374,000 and  $20,757,000,  respectively.  This was an increase of 74% and
57%, respectively, over the same periods for the Company's prior fiscal year. As
of April 30, 2001,  the Company had a total of 615  domestic  drive units in the
field, compared to 427 drive units at the end of the same prior year period, and
582 units as of end of the second  quarter.  During  the  three- and  nine-month
periods ended April 30, 2001,  the Company sold  approximately  6,300 and 17,800
catheters, respectively, versus approximately 3,600 and 10,700, respectively, in
the same prior year periods. This was a 75% and 66% 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 catheter for removal of blood
clots from dialysis  access  grafts.  In addition,  the Company  commenced  U.S.
marketing of the AngioJet System with labeling claims for removal of blood clots
in leg  (peripheral)  arteries  for the  Xpeedior 100 in May 2000 and XMI 135 in
March 2001. The average catheter  utilization rate per installed  domestic drive
unit was 10.4 in the third quarter,  compared to a rate of 8.3 in the same prior
year  period,  and  compared  to a rate of 10.4 in the second  quarter of fiscal
2001.  The Company  sold 38 and 123 drive units during the three and nine months
ended April 30, 2001. This compared to 25 and 98 drive units,  respectively,  in
the same periods in the prior year.

     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 purchasing  groups in
order to accelerate orders and increase marketing penetration.  These purchasing
groups  acquire  drive  units  for  their  member  hospitals  at  pre-negotiated
discounts.  The large  purchasing  groups  received a modest  discount  on their
purchases  from the Company.  This discount has been offset with the increase of
sales with the large  purchasing  groups.  There has been no  material  negative
effect on the Company's margins due to these discounts.

     The  Company  expects  U.S.  AngioJet  System  sales  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.  In May 2001,  the FDA  approved the re-start of patient
enrollment in the TIME 1 clinical trial. TIME 1 will enroll up to 30 patients at
up to eight  centers  in the U.S.  to  determine  safety of the  device for this
indication.

<PAGE>

     Foreign sales of the AngioJet System for the three- and nine-month  periods
ended April 30, 2001 were $67,000 and $310,000,  respectively.  This compared to
foreign sales of the AngioJet System of $105,000 and $274,000, 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 (MHW).  Currently,  the Company
is responding to questions from MHW.

     The Company  believes  that the  treatment  of blood clots in the  coronary
vessels,  peripheral  arteries,  and neuro  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 nine  months
ended April 30, 2001.  This  compared to $234,000 and $848,000 for the three and
nine months  ended April 30, 2000.  All of the vascular  graft sales in the 2001
and 2000 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.  This put 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.  The Company has settled all outstanding  litigation with
the Perma-Seal  distributor,  and has terminated the distribution  relationship.
The settlement had no impact on the financial statements as the related accounts
receivable  balances had been  appropriately  written down in prior periods.  No
additional sales of Perma-Seal Dialysis Access Grafts are expected.

     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 of their own 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 all
vascular graft product development and  commercialization  efforts on hold while
it pursues the sale of the vascular graft technologies.

<PAGE>

Cost of Medical Products

     Cost of medical products increased $342,000 and $1,667,000 in the three and
nine month periods ended April 30, 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 $2,560,000 and $5,054,000 for the three and nine months ended April 30, 2001,
respectively, over the same periods in the previous year. This resulted in gross
margins of 66% and 59%, respectively,  for the three and nine months ended April
30,  2001.  This  compares  to 52%  gross  margins  for each of the  three-  and
nine-month  periods ending April 30, 2000. The  improvement in gross margins was
driven by  higher  volumes  of  Xpeedior  catheters  and an  improvement  in the
coronary  product  catheter mix in the quarter ended April 30, 2001. The Company
believes  that gross  margins  will  continue  to  improve as product  sales and
related  volumes  continue to grow and as product and process  improvements  are
made.


Selling, General and Administrative Expense

     Selling,  general and  administrative  expense  decreased  $187,000 for the
three months ended April 30, 2001 and increased  $1,343,000  for the nine months
ended April 30, 2001,  respectively,  compared to the same year-ago periods. The
primary  factors in the expense  decrease  for the three  months ended April 30,
2001 were the cost savings  related to the work force  reduction in January 2001
and a reduction in sales product  demonstrations and samples.  In addition,  the
Company was able to offset  depreciation  expense by achieving minimum headcount
employment  objectives  with a city  government.  These expense  reductions were
offset by an increase in  commission  expense due to increased  AngioJet  System
product sales and an increase in computer and software depreciation. The primary
factors for the expense  increase  for the nine months ended April 30, 2001 were
increased sales and marketing  expenses  related to the  establishment of a U.S.
direct sales  organization  to sell the AngioJet  System,  increased  commission
expense due to increased AngioJet System product sales, increased marketing fees
for the  national  purchasing  contracts,  and  increased  computer and software
depreciation.  These  expense  increases  were offset by the  reduction in costs
related to the work force  reduction  in January  2001 and a reduction  in sales
product  demonstrations  and samples.  The Company expects that the current 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  20% and  increased 4% in the
three and nine months ended April 30, 2001,  respectively,  when compared to the
same  periods  in the prior  year.  These  differences  are due to the timing of
outlays in different stages of development of new AngioJet System  applications.
The Company  believes that research and development  expense for AngioJet System
applications  will  increase as the Company  completes  the  development  of its
current  products  and  invests  in  the  development  of  new  AngioJet  System
thrombectomy applications and related products.


Interest Income and Expense

     Interest income decreased  $71,000 in the three months ended April 30, 2001
and  increased  $46,000 in the nine months ended April 30,  2001,  respectively,
when compared to the same periods in the prior year. The changes were due to the
gross proceeds of $15 million  received from the private  placement  offering in
March 2000 offset by the use of cash to fund  operations.  The  Company  expects
interest  income to decrease during the remainder of fiscal 2001 due to expected
decline in market interest rates.

     Interest  expense  was $2,000  and  $7,000  for the  three- and  nine-month
periods  ending  April 30,  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 were  obtained,  the amount of
increase in interest  expense will be dependent upon how much was borrowed,  the
interest rate, and the length of time the borrowing was outstanding.

<PAGE>

Liquidity and Capital Resources

     The Company's cash,  cash  equivalents  and marketable  securities  totaled
approximately  $7.7 million at April 30, 2001 versus  $13.0  million at July 31,
2000.

     Net cash,  cash  equivalents and marketable  securities  usage for the nine
months ended April 30, 2001 averaged  approximately $600,000 per month. The $5.3
million net decrease in cash, cash equivalents and marketable  securities in the
most recent nine-month period was primarily due to the net loss of $3.9 million,
an increase of $995,000 in accounts receivable, a $965,000 reduction in accounts
payable,  and capital  expenditures  of $1.2  million,  partially  offset by the
combined effect of non-cash charges,  a decrease in other assets, an increase in
accrued  liabilities,  proceeds  from  issuance of stock and proceeds from notes
payable totaling $2.0 million.  The $995,000 increase in accounts receivable was
due to the  increase  in revenue for the nine  months  ending  April 30, 2001 as
compared to the same period in fiscal 2000.  The $965,000  reduction in accounts
payable was due to timing of year-end  payables,  especially  for  software  and
computer upgrades.

     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 that the current U.S. sales force will be able to grow sales and
service the customer base for the Company's  AngioJet System through fiscal year
2001.  Research and development  expenditures are expected to increase  slightly
from the fiscal 2000 level as the Company completes  development of projects and
invests in  development of new AngioJet  System  thrombectomy  applications  and
related 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 equity capital in fiscal 2001, although there can be no
assurance that additional  capital will not be required during that time. In the
2002 fiscal year,  the Company  expects  revenues in the range of $39 million to
$44  million,   with  full-year   gross  margins  between  65%  and  75%,  as  a
percent-of-sales. The Company expects basic earnings per share for the full year
in the range of $0.20 to $0.25. The quarterly revenue  progression  should build
from a seasonal low in the first  quarter and build  steadily  through the year,
with the profile being affected by the timing of new product introductions.

<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  Company  invests  its excess  cash in money  market  mutual  funds and
commercial paper. The market risk on such investments is minimal.

     The product sales for the Company's foreign  subsidiary are in U.S. Dollars
("USD").  At the end of April  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 April 30, 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 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 below.

  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
April 30, 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:      June 14, 2001             BY:  /s/ Robert G. Dutcher
                                        ROBERT G. DUTCHER
                                        President and Chief Executive Officer



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


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