SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

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

|For Quarter Ended June 30, 2001 | Commission File Number 0-7475
|------------------------------- | -----------------------------

PHOTO CONTROL CORPORATION(Exact Name of Registrant as Specified in its
Charter)

|Minnesota                       | 41-0831186         
|------------------------------- | -------------------
|(State or Other Jurisdiction of | (I.R.S. Employer   
|Incorporation or Organization)  | Identification No.)

|4800 Quebec Avenue North, Minneapolis, Minnesota | 55428     
|------------------------------------------------ | ----------
|(Address of Principal Executive Offices)         | (Zip Code)

Registrants Telephone Number (763) 537-3601

| |                                                                                    
| | -----------------------------------------------------------------------------------
| | (Former name,
former address, and former fiscal year if changes since last report.)

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 twelve 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

Indicate the number of shares outstanding of each of the issuers
classes of common stock, as of the close of the period covered by this report.

|Class                        | Outstanding at July 13, 2001
|---------------------------- | ----------------------------
|Common Stock, par value $.08 | 1,604,163 Shares            

1

PHOTO CONTROL CORPORATIONINDEX

|PART I | Page Number
|------ | -----------

| | Item 1: | Financial Information
| | ------- | ---------------------

| |  |  | Balance Sheet 
    June 30, 2001 and December 31, 2000 | 3
| |  |  | ------------------------------------------------------- | -

| |  |  | Statement of Operations 
     Six Months and Three Months Ended
     June 30, 2001 and 2000 | 4
| |  |  | -------------------------------------------------------------------------------------------- | -

| |  |  | Statement of Cash Flows 
    Six Months Ended June 30, 2001 and 2000 | 5
| |  |  | --------------------------------------------------------------------- | -

| |  |  | Notes to Financial Statements | 6
| |  |  | ----------------------------- | -

| | Item 2: |  | Managements Discussion and Analysis
    of Financial Condition and Results of
    Operations | 7
| | ------- |  | --------------------------------------------------------------------------------------------- | -

|PART II | 
|------- | 

| | Item 2: |  | Changes in Securities | 9
| | ------- |  | --------------------- | -

| | Item 4: |  | Results of Vote of Security Holders | 9
| | ------- |  | ----------------------------------- | -

| | Item 6: |  | Exhibits and Reports on Form 8-K | 9
| | ------- |  | -------------------------------- | -

2

PHOTO CONTROL CORPORATIONBALANCE SHEET(Unaudited)

|                                      | June 302001 | December 312000
|------------------------------------- | ----------- | ---------------
|ASSETS                                |             |                
|Current Assets                        |             |                
|Cash                                  |             |                
|Accounts Receivable                   |             |                
|Inventories                           |             |                
|Prepaid Expenses                      |             |                
|                                     
|Total Current Assets                  |             |                
|                                     
|                                      |             |                
|Other Assets                          |             |                
|Patent Right, Net of Amortization     |             |                
|Cash Value of Life Insurance          |             |                
|Deferred Income Taxes                 |             |                
|                                     
|Total Other Assets                    |             |                
|                                     
|                                      |             |                
|Plant and Equipment                   |             |                
|Land and Building                     |             |                
|Machinery and Equipment               |             |                
|Accumulated Depreciation              |             |                
|                                     
|Total Plant and Equipment             |             |                
|                                     
|                                      |             |                
|                                     
|                                      |             |                
|LIABILITIES AND STOCKHOLDERS EQUITY  |             |                
|                                      |             |                
|Current Liabilities                   |             |                
|Current Portion of Purchase Contract  |             |                
|Accounts Payable                      |             |                
|Accrued Payroll and Employee Benefits |             |                
|Accrued Expenses                      |             |                
|Accrued Income Taxes                  |             |                
|                                     
|Total Current Liabilities             |             |                
|                                     
|                                      |             |                
|Other Accrued Expense                 |             |                
|Deferred Compensation                 |             |                
|Amount Due On Purchase Contract       |             |                
|                                     
|                                      |             |                
|                                     
|                                      |             |                
|Stockholders Equity                  |             |                
|Common Stock                          |             |                
|Additional Paid-In Capital            |             |                
|Retained Earnings                     |             |                
|                                     
|Total Stockholders Equity            |             |                
|                                     
|                                      |             |                
|                                      |             |                
|                                     

See accompanying notes to financial statements.

3

PHOTO CONTROL CORPORATIONSTATEMENT OF OPERATIONS(Unaudited)

|                            | Three MonthsEnded June 30 | Six MonthsEnded June 30
|--------------------------- | ------------------------- | -----------------------
|
|                            |                           |                        
|Net Sales                   |                           |                        
|Cost of Sales               |                           |                        
|                           
|Gross Profit                |                           |                        
|                            |                           |                        
|Expenses                    |                           |                        
|Marketing & Administrative  |                           |                        
|Research, Development & Eng |                           |                        
|                           
|                            |                           |                        
|Total Expenses              |                           |                        
|                           
|                            |                           |                        
|Income Before Income Taxes  |                           |                        
|                            |                           |                        
|Income Tax                  |                           |                        
|                           
|                            |                           |                        
|Net Income                  |                           |                        
|                           
|Net Income Per Common       |                           |                        
|Share  Basic               |                           |                        
|                           
|                            |                           |                        
|Net Income Per Common       |                           |                        
|Share  Diluted             |                           |                        
|                           

See accompanying notes to financial statements.

4

PHOTO CONTROL CORPORATIONSTATEMENT OF CASH FLOWS(Unaudited)

|                                          | Six MonthsEnded June 30
|----------------------------------------- | -----------------------
|
|Cash flows from operating activities:     |                        
|Net from operations                       |                        
|Items not affecting cash-                 |                        
|Depreciation                              |                        
|Deferred compensation                     |                        
|Loss on sale of equipment                 |                        
|Amortization                              |                        
|Payment of deferred compensation          |                        
|Change in:                                |                        
|Receivables                               |                        
|Inventories                               |                        
|Prepaid Expenses                          |                        
|Accounts Payable                          |                        
|Accrued Expenses                          |                        
|Accrued Income Taxes                      |                        
|                                         
|                                          |                        
|Net cash provided by operating activities |                        
|                                         
|                                          |                        
|Cash flows from investing activities:     |                        
|Additions to plant and equipment          |                        
|Additions to cash value of life insurance |                        
|Proceeds from sale of equipment           |                        
|Proceeds from life insurance              |                        
|                                         
|Net cash provided by(used in)             |                        
|investing activities                      |                        
|                                         
|                                          |                        
|Cash flow from financing activities:      |                        
|Payment on purchase contract              |                        
|                                         
|                                          |                        
|Change in cash and cash equivalent        |                        
|Beginning cash and cash equivalent        |                        
|                                         
|                                          |                        
|Ending cash and cash equivalent           |                        
|                                         

See Accompanying notes to financial statements

5

PHOTO CONTROL CORPORATIONNOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001(Unaudited)

NOTE 1

| | Notes to
financial statements presented herein do not include all the footnotes normally presented
in the Companys annual report to stockholders.
| | --------------------------------------------------------------------------------------------------------------------------------------------------

| | The accompanying
financial statements reflect, in the opinion of management, all normal and recurring
adjustments necessary to a fair presentation of financial position, results of
operations, and cash flows for the interim periods. The results for interim periods are
not necessarily indicative of results to be expected for the year.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 2

| | Inventories are
analyzed as follows:
| | ------------------------------------

|                         | June 302001 | December 312000
|------------------------ | ----------- | ---------------
|                         |             |                
|Raw Materials            |             |                
|                         |             |                
|Work in Progress         |             |                
|                         |             |                
|Finished Goods           |             |                
|                         |             |                
|Reserve for Obsolescence |             |                
|                        
|                         |             |                
|                         |             |                
|                        

NOTE 3

| | Net Income
per common share is computed based on the weighted average number of common shares
outstanding during the period when computing the basic earnings per share. When dilutive,
stock options are included as equivalents using the Treasury Stock method when computing
the diluted earnings per share.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6

PHOTO CONTROL CORPORATIONMANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION

RESULTS OF OPERATIONS

Sales for the second quarter ended June 30, 2001 were
$3,159,000, an decrease of 15.0% from the same quarter in the prior year. Sales
for the six months ended June 30, 2001 were $6,253,000, an increase of 7.3% over
the same period in the prior year. Lighting sales increased $436,000 for the
second quarter and $460,000 for the year to date period, as compared to the same
periods in the prior year. An increase in orders from large customers accounted
for the sales increases in the lighting product line. The camera product line
accounts for an decrease in sales of $1,315,000 for the second quarter and
$573,000 for the year to date period, as compared to the same periods in the
prior year. The decrease in camera product line sales is attributable to a
decrease in sales as compared to last year under the $6,200,000 camera contract.
Shipment under this contract began in December of 1999 and will be completed in
July 2001. Sales of the third product line, printers, decreased by $82,000 for
the second quarter and decreased $119,000 for the year to date period, as
compared to the same periods in the prior year. The sales trend for the printer
line continues to decline because the optical photographic printer market
continues to experience consolidation and excess capacity. Two new product
lines, Lindahl shades and BookEndz docking stations, acquired in the fourth
quarter of 2000, provided $401,000 of sales in the second quarter and $658,000
for the six months in 2001.

The gross profit margin for the second quarter of 2001 decreased
to 29.9% from 30.3% in the second quarter of 2000. The gross profit margin for
the six months ended June 30, 2001 increased to 33.4% from 28.3% in the prior
year period. Gross margin varies depending upon the product mix of sales.
Management expects that the margins for the year 2001 will be approximately 30%.

Marketing and administrative expenses increased as a percentage
of sales to 14.0% for the second quarter of 2001 from 13.3% for the second
quarter of 2000 and decreased to 15.0% for the first six months of 2001 from
16.5% for the same period in 2000. Marketing and administrative expenses
decreased $55,000 for the second quarter of 2001 as compared to the second
quarter of 2000 and decreased $25,000 for the first six months of 2001 compared
to the same period in 2000. Research, development and engineering expense
increased by $82,000 for the second quarter of 2001 compared to the second
quarter of 2000 and increased by $148,000 for the first six months of 2001
compared to the same period of 2000. The decrease in the marketing and
administrative expense reflects decreased compensation as a result of fewer
sales staff. The engineering expense increase reflects additional staff and
increased product development activity.

7

LIQUIDITY & CAPITAL RESOURCES

Cash increased by $1,289,000 to $2,543,000 since December 31,
2000. Operations for the six months ended June 30, 2001 resulted in $991,000 of
positive cash flow.

At June 30, 2001 there is no borrowing under the line of credit.
The Company can borrow up to $1,000,000 under its line of credit. The line is
unsecured, at the prime rate of interest and renewed annually in May.

The Company believes that its cash flow from future operations
and available borrowing capacity will be sufficient to finance operations and
capital requirements.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Statements included or incorporated by reference in this
Quarterly Report on Form 10-Q which are not historical in nature are identified
as forward looking statements for the purposes of the safe harbor
provided by Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The Company cautions
readers that forward looking statements, including without limitation, those
relating to the Companys future business prospects, revenues, working
capital, liquidity, capital needs, interest costs, and income, are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those indicated in the forward looking statements. The risks and
uncertainties include, but are not limited to, economic conditions, product
demand and industry capacity, competitive products and pricing, manufacturing
efficiencies, new product development and market acceptance, the regulatory and
trade environment, and other risks indicated in filings with the Securities and
Exchange Commission.

8

ITEM 2.    Changes in Securities

|                  | Common Stock |  | 
|----------------- | ------------ |  | 
|
|Balance at        |              |  | 
|December 31, 2000 |              |  | 
|Net Income        |              |  | 
|                 
|Balance at        |              | 
|June 30, 2001     |              |  | 
|                 

ITEM 4.    Results of Vote of Security Holders

At the annual meeting of stockholders held on May 17, 2001 the
following matters were approved by the Companys stockholders:

| | 1. | Set
the number of directors at six (6). The voting results were: 1,401,796 For, 18,038
Against and 10,444 Abstained.
| | -- | --------------------------------------------------------------------------------------------------------------------

| | 2. | Elected
Mr. Curtis R. Jackels to the Board of Directors for a three-year term or until the
election and qualification of a respective successor.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The voting
results were as follows:
| |  | -----------------------------------

|                  | FOR       | TO WITHHOLD AUTHORITY
|----------------- | --------- | ---------------------
|Curtis R. Jackels | 1,412,652 | 17,626               

| |  | Messrs. James
R. Loomis, John R. Helmen and Scott S. Meyers are directors of the Company whose terms of
office continued after the annual meeting of stockholders.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 6.     Exhibit and Reports on Form 8-K

|A. | Exhibits
 None
|-- | ---------------

|B. | Reports
on Form 8-K  None
|-- | --------------------------

PHOTO CONTROL CORPORATION(Registrant)

|7/27/01 | /S/ J. R. Helmen                     
|------- | -------------------------------------
|Date    | J. R. Helmen, Chairman               
|       
|7/27/01 | /S/ C. R. Jackels                    
|Date    | C. R. Jackels, President, CEO and CFO

9