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 January 31, 2001

                                       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 0-21695

                          Manchester Technologies, Inc.
             (Exact name of registrant as specified in its charter)

         New York                                          11-2312854
(State or other jurisdiction of                         (I.R.S. Employer
Incorporation or organization)                          Identification Number)

                                 160 Oser Avenue
                            Hauppauge, New York 11788
              (Address of registrant's principal executive offices)

                                 (631) 435-1199
              (Registrant's telephone number, including area code)

                         Manchester Equipment Co., Inc.
          (Former name or former address, if changed 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 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.

                                                      [X] Yes [ ] No

Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.

     There were 8,013,850 outstanding shares of COMMON STOCK at March 12, 2001.



<PAGE>


                 MANCHESTER TECHNOLOGIES, INC. AND SUBSIDIARIES


                                Table of Contents


PART I.     FINANCIAL INFORMATION                                          Page
-------     ---------------------

Item 1.     Condensed Consolidated Balance Sheets
                   January 31, 2001  (unaudited) and July 31, 2000            3


            Condensed Consolidated Statements of Income
                   Three months and six months ended
                    January 31, 2001 and 2000 (unaudited)                     4

            Condensed Consolidated Statements of Cash Flows
                   Six months ended January 31, 2001 and 2000 (unaudited)     5

            Notes to Condensed Consolidated Financial Statements              6

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


PART II.    OTHER INFORMATION

Item 4.     Submission of Matters to a Vote of Security Holders               13

Item 6.     Exhibits and Reports                                              13




<PAGE>


Part I - FINANCIAL INFORMATION

ITEM 1.            Financial Statements

                 Manchester Technologies, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
                     (in thousands except per share amounts)
<TABLE>
<CAPTION>

                                                           January 31,  July 31,
                                                               2001      2000
                                                             Unaudited   -------
                                                             ---------

<S>                                                         <C>         <C>
Assets:
  Cash and cash equivalents                                  $11,913    $16,156
  Accounts receivable, net                                    31,510     36,024
  Inventory                                                    7,835      6,797
  Deferred income taxes                                          579        579
  Prepaid income taxes                                           261        635
  Prepaid expenses and other current assets                      568        538
                                                                 ---        ---

         Total current assets                                 52,666     60,729

Property and equipment, net                                    6,435      6,329
Goodwill, net                                                  6,339      6,534
Deferred income taxes                                            673        673
Other assets                                                     318        308
                                                                 ---        ---

                                                             $66,431    $74,573
                                                              ======     ======


Liabilities
  Accounts payable and accrued expenses                      $21,302    $29,312
  Notes payable                                                    -         18
  Deferred service contract revenue                              721        946
                                                                 ---        ---

         Total current liabilities                            22,023     30,276

 Deferred compensation payable                                    34         34
                                                                  --    -------
         Total liabilities                                    22,057     30,310
                                                              ------     ------

Shareholders' equity:
  Preferred stock, $.01 par value; 5,000
   shares authorized, none issued                                  -          -
  Common stock, $.01 par value; 25,000 shares
   authorized, 8,014 and 8,159 issued and outstanding             80         82
  Additional paid-in capital                                  18,836     19,402
  Deferred compensation                                          (48)       (65)
  Retained earnings                                           25,506     24,844
                                                              ------     ------

         Total shareholders' equity                           44,374     44,263
                                                              ------     ------

                                                             $66,431    $74,573
                                                             =======    =======
</TABLE>

See notes to condensed consolidated financial statements.


<PAGE>



                 Manchester Technologies, Inc. and Subsidiaries
                   Condensed Consolidated Statements of Income
                    (in thousands, except per share amounts)
                                    Unaudited
<TABLE>
<CAPTION>

                                       Three months ended    Six months ended
                                            January 31,          January 31,
                                         2001      2000       2001      2000
                                         ----      ----       ----      ----
<S>                                  <C>        <C>        <C>        <C>
Revenue
   Products                          $68,947    $68,916    $148,462   $132,364
   Services                            1,941      1,931       3,568    __3,843
                                       -----      -----       -----    --------
                                      70,888     70,847     152,030    136,207
                                      ------     ------     -------    -------

Cost of revenue
   Products                           60,762     60,691     131,043    114,978
   Services                            1,209      1,186       2,313      2,516
                                       -----      -----       -----      -----
                                      61,971     61,877     133,356    117,494
                                      ------      ------    -------    -------

       Gross profit                    8,917      8,970      18,674     18,713

Selling, general and
    administrative expenses            8,973      7,727      17,858     15,746
                                       -----      -----      ------     ------

       Income (loss) from operations     (56)     1,243         816      2,967

Interest expense                           -         (1)          -         (2)
Interest income                           95        153         291        271
                                          --        ---         ---        ---

       Income  before income taxes        39      1,395       1,107      3,236

Provision for income taxes                15        570         445      1,325
                                          --        ---         ---      -----

       Net income                        $24       $825        $662     $1,911
                                          ==        ===         ===      =====

Net Income per share
   Basic                               $0.00      $0.10       $0.08      $0.24
                                        ====      =====        ====       ====
   Diluted                             $0.00      $0.10       $0.08      $0.24
                                       =====      =====        ====       ====

Weighted average
  shares outstanding
     Basic                             8,014      8,042       8,074      8,058
                                       =====      =====       =====      =====
      Diluted                          8,014      8,069       8,118      8,072
                                       =====      =====       =====      =====

</TABLE>



See notes to condensed consolidated financial statements.


<PAGE>


                 Manchester Technologies, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                 (in thousands)
<TABLE>
<CAPTION>

                                                       For the six months ended
                                                                 January 31,
                                                             2001         2000
                                                         (Unaudited)
                                                         -----------      ----
         <S>                                                  <C>        <C>
Cash flows from operating activities:

         Net income                                           $662       $1,911

  Adjustments to reconcile net income to net cash
   from operating activities:
         Depreciation and amortization                       1,035          939
         Increase (decrease) in allowance
          for doubtful accounts                                225          (99)
         Non cash compensation and commission expense           17           14
  Change in assets and liabilities:
         Decrease in accounts receivable                     4,289        1,658
         Increase in inventory                              (1,038)      (1,778)
         Decrease in prepaid income taxes                      374            -
         Increase in prepaid expenses and
             other current assets                              (30)        (147)
         (Increase) decrease in other assets                   (10)          81
         Increase (decrease) in accounts payable and
             accrued expenses                               (8,010)       3,545
         Increase (decrease) in deferred service
             contract revenue                                 (225)          14
         Decrease  in income taxes  payable                      -         (157)
                                                             ------        ----
         Net cash provided by (used in)
          operating activities                              (2,711)       5,981
                                                            ------        -----


Cash flows from investing activities:
         Capital expenditures                                 (946)        (796)
                                                              ----         ----


              Net cash used in investing activities           (946)        (796)
                                                              -----         ---

Cash flows from financing activities:
       Payments on notes payable                               (18)           -
       Payments on capital lease obligation                      -          (58)
       Purchase and retirement of common stock                 (574)       (133)
       Issuance of common stock upon exercise of options          6           -
                                                               ----        ----
              Net cash used in financing activities            (586)       (191)
                                                               ----         ---


      Net increase (decrease) in cash and cash equivalents   (4,243)      4,994
       Cash and cash equivalents at beginning of period      16,156       5,749
                                                             ------       -----
         Cash and cash equivalents at end of period         $11,913     $10,743
                                                            =======     =======
</TABLE>

      See notes to condensed consolidated financial statements.


<PAGE>


                 Manchester Technologies, Inc. and Subsidiaries
         Notes to Unaudited Condensed Consolidated Financial Statements

   1.    Organization and Basis of Presentation

          Manchester  Technologies,  Inc.,  formerly  Manchester  Equipment Co.,
     Inc.,  ("Manchester,"  "we,"  "us," or the  "Company")  is a  single-source
     solutions  provider  specializing  in hardware  and  software  procurement,
     custom networking,  storage, enterprise and Internet solutions.  Manchester
     engineers   provide   answers  to   companies'   MIS  needs  by   combining
     comprehensive  analysis,  design and  integration  services with a complete
     line of  competitively  price products and peripherals  from the industry's
     leading vendors.


          Sales of  hardware,  software  and  networking  products  comprise the
     majority of the Company's revenue.  The Company has entered into agreements
     with  certain  suppliers  and  manufacturers  that may  provide the Company
     favorable  pricing and price protection in the event the vendor reduces its
     prices.


          In the opinion of the Company,  the accompanying  unaudited  Condensed
     Consolidated  Financial  Statements contain all adjustments  (consisting of
     only  normal  and  recurring  accruals)  necessary  to  present  fairly the
     financial position of the Company as of January 31, 2001 and the results of
     operations for the three and six months ended January 31, 2001 and 2000 and
     cash flows for the six months ended January 31, 2001 and 2000. Although the
     Company  believes  that the  disclosures  herein are  adequate  to make the
     information not misleading,  these financial  statements  should be read in
     conjunction with the audited financial statements and the notes thereto for
     the year ended July 31, 2000,  included in the  Company's  Annual Report on
     Form 10-K as filed with the Securities and Exchange Commission.

   2.    Net Income Per Share

          Basic net income per share has been computed by dividing net income by
     the  weighted  average  number of common  shares  outstanding.  Diluted net
     income per share has been  computed by dividing  net income by the weighted
     average number of common shares  outstanding,  plus the assumed exercise of
     dilutive  stock  options and warrants,  less the number of treasury  shares
     assumed to be  purchased  from the  proceeds  of such  exercises  using the
     average market price of the Company's  common stock during each  respective
     period. Stock options and warrants  representing 899,000 and 140,000 shares
     for the three months ended January 2001 and 2000, respectively, 554,000 and
     487,000  shares  for the  six  months  ended  January  31,  2001  and  2000
     respectively,  are excluded from the  calculation of diluted net income per
     share when the result would be antidilutive. The following table reconciles
     the denominators of the basic and diluted per share computations.  For each
     period, the numerator is the net income as reported.
<TABLE>
<CAPTION>

                                                       (shares in thousands)
                             Three months ended January 31,                  Six months ended January 31,,
                                2001               2000                      2001                   2000
                                ----               ----                      ----                   ----
                                   Per share              Per share                 Per share             Per share
                   Shares           amount      Shares    amount        Shares      amount       Shares amount
                   ------           ------      ------    ------        ------      ------       ------ ------
        <S>             <C>          <C>        <C>        <C>          <C>          <C>          <C>      <C>
         Basic           8,014        $0.00      8,042      $0.10        8,074        $0.08        8,058    $0.24
                                      =====                 =====                     =====                 =====

         Effect of
          dilutive
           options           -                       27                     44                        14
                           ---                     ----                     --                      ----

         Diluted         8,014        $0.00      8,069      $0.10        8,118        $0.08        8,072    $0.24
                         =====        =====      =====      =====        =====        =====        =====    =====

</TABLE>
<PAGE>


3. Acquisition of Texport Technology Group, Inc. and Learning  Technology Group,
   LLC.

          On  March  22,  2000,  the  Company  acquired  all of the  outstanding
     ownership  interests of Texport  Technology  Group,  Inc.  ("Texport")  and
     Learning  Technology  Group,  LLC ("LTG"),  affiliated  entities engaged in
     reselling  and  providing  of  microcomputer  services and  peripherals  to
     companies in the greater Rochester,  New York area. The acquisition,  which
     has been  accounted for as a purchase,  consisted of a cash payment of $0.4
     million plus potential future contingent payments. Contingent payment of up
     to  $750,000  will be payable on each of March 22, 2001 and 2002 based upon
     achieving  certain agreed upon increases in revenue and pretax earnings for
     each of the next two,  one-year periods from the date of closing.  The cash
     payment was made from the  Company's  cash  balances.  The  selling  owners
     received  employment  agreements  that also  provided  for the  issuance of
     10,000  shares  of  common  stock.  The  fair  value of the  common  stock,
     amounting to $61,250,  was recorded as deferred  compensation  and is being
     expensed  over  the  three-year  vesting  period.  In  connection  with the
     acquisition, the Company assumed approximately $648,000 of bank debt, which
     was subsequently repaid.

          Operating  results of Texport and LTG are  included  in the  condensed
     consolidated  statements  of  income  from  the  date of  acquisition.  The
     estimated  fair value of assets and  liabilities  acquired was $1.6 million
     and $2.2 million,  respectively. The excess of the aggregate purchase price
     over the estimated fair value of the net assets acquired was  approximately
     $995,000,  which is being amortized on a straight-line basis over 20 years.
     The pro forma results of  operations,  assuming the  acquisition  had taken
     place  August 1, 1999,  for  Texport and LTG for the quarter and six months
     ended  January  31, 2000 have not been  reflected  as they are deemed to be
     immaterial.

4. Statement of Cash Flow Information

      Supplemental disclosure of cash flow information:
<TABLE>
<CAPTION>

                                                 Six months ended January 31,
                                                 2001                2000
                                                 ----                ----
                                                    (in thousands)
     <S>                                              <C>           <C>
      Cash paid for income taxes                       $93           $1,429
                                                       ====          =======

</TABLE>


<PAGE>



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


     The following discussion and analysis of financial condition and results of
operations  of the  Company  should be read in  conjunction  with the  condensed
consolidated  financial  statements and notes thereto included elsewhere in this
Quarterly Report on Form 10-Q and with the Company's Annual Report on Form 10-K.
This discussion and analysis contains certain forward-looking  statements within
the meaning of the  Securities  Act of 1933, as amended,  and Section 21E of the
Securities Exchange Act of 1934, as amended, which are not historical facts, and
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially  from the results  anticipated in those  forward-looking  statements.
These risks and uncertainties  include,  but are not limited to, those set forth
below,  those set forth in the Company's Annual Report on Form 10-K for the year
ended July 31, 2000,  and those set forth in the  Company's  other  filings from
time to time with the Securities and Exchange Commission.


General

     We are a  single-source  solutions  provider  specializing  in hardware and
software  procurement,  custom  networking,  storage  enterprises  and  Internet
solutions.  Our engineers  provide  answers to companies' MIS needs by combining
comprehensive analysis,  design and integration services with a complete line of
competitively  priced  products  and  peripherals  from the  industry's  leading
vendors.  To date,  most of our revenue has been derived from product sales.  We
generally do not develop or sell software  products.  However,  certain computer
hardware products sold by us are loaded with packaged software products.

     The computer  industry is characterized by a number of potentially  adverse
business  conditions,   including  pricing  pressures,   evolving   distribution
channels,  market  consolidation and a decline in the rate of growth in sales of
personal   computers.   Heightened  price  competition  among  various  hardware
manufacturers  may result in reduced per unit revenue and declining gross profit
margins.  As a result of the intense price competition  within our industry,  we
have experienced  increasing  pressure on our gross profit and operating margins
with respect to our sale of products.  Our inability to compete  successfully on
the  pricing of  products  sold,  or a  continuing  decline in gross  margins on
products  sold due to adverse  industry  conditions or  competition,  may have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

     We have recently  experienced a reduction in demand for computer  products.
We believe  that this  reduction  coincides  with  overall slow down in economic
activity being  experienced in the U.S. We cannot predict when the economic slow
down  will end or if the end of the slow  down will  result  in an  increase  in
demand for computer products.  A continued slow down, or an end to the slow down
without an increase in such demand,  could have a material adverse impact on our
financial condition and results of operations.

     An integral  part of our strategy is to increase our  value-added  services
revenue.  These services  generally  provide higher operating margins than those
associated  with the sale of products.  This  strategy  requires us, among other
things,  to  attract  and  retain  highly  skilled  technical   employees  in  a
competitive   labor   market,   provide   additional   training   to  our  sales
representatives  and enhance our existing service  management  system. We cannot
predict  whether we will be  successful  in  increasing  our focus on  providing
value-added  services,  and the  failure  to do so may have a  material  adverse
effect on our business, results of operations and financial condition.

     Our  strategy  also  includes  expanding  our  presence  in  the  New  York
metropolitan  area by increasing the sales and service  capabilities  in our New
York City office and enlarging our sales,  service and training  capabilities at
our Long Island  headquarters as well as expanding  geographically  into growing
business centers in the eastern half of the United States.  We cannot assure you
that the expansion of our New York  metropolitan  area  operations will increase
profits generated by such operations, that the opening of new offices will prove
profitable, or that these expansion plans will not substantially increase future
<PAGE>

capital expenditures or other expenditures. The failure of this component of our
strategy may materially adversely affect our business, results of operations and
financial condition.

     To date,  our success has been based  primarily  upon sales in the New York
Metropolitan   area.  Our  strategy,   encompassing  the  expansion  of  service
offerings,  the  expansion  of  existing  offices and the  establishment  of new
regional  offices,  has  challenged  and will  continue to challenge  our senior
management and infrastructure. We cannot predict our ability to respond to these
challenges.  If we fail to effectively manage our planned growth, there may be a
material  adverse  effect on our business,  results of operations  and financial
condition.

     In  addition,  the success of our  strategy  depends in large part upon our
ability to attract  and retain  highly  skilled  technical  personnel  and sales
representatives,   including  independent  sales  representatives,   in  a  very
competitive  labor  market.  Our ability to grow our service  offerings has been
somewhat limited by a shortage of qualified personnel,  and we cannot assure you
that  we will  be  able  to  attract  and  retain  such  skilled  personnel  and
representatives.  The loss of a  significant  number of our  existing  technical
personnel or sales representatives, difficulty in hiring or retaining additional
technical personnel or sales  representatives,  or reclassification of our sales
representatives as employees may have a material adverse effect on our business,
results of operations and financial condition.

     The computer industry is characterized by intense competition.  We directly
compete  with local,  regional  and national  systems  integrators,  value-added
resellers and distributors as well as with certain computer  manufacturers  that
market  through direct sales forces and/or the Internet.  The computer  industry
has recently  experienced a significant amount of consolidation  through mergers
and  acquisitions,   and  manufacturers  of  personal   computers  may  increase
competition by offering a range of services in addition to their current product
and service offerings.  In the future, we may face further  competition from new
market  entrants  and  possible  alliances  between  existing  competitors.   In
addition,  certain  suppliers and  manufacturers may choose, or may have already
chosen,  to market  products  directly to end users through a direct sales force
and/or the Internet rather than or in addition to channel distribution,  and may
also  choose to market  services,  such as repair  and  configuration  services,
directly  to end  users.  Some  of our  competitors  have or may  have,  greater
financial,  marketing  and other  resources,  and may  offer a broader  range of
products and  services,  than us. As a result,  they may be able to respond more
quickly to new or emerging  technologies  or changes in  customer  requirements,
benefit from greater purchasing  economies,  offer more aggressive  hardware and
service  pricing or devote greater  resources to the promotion of their products
and  services.  We may not be able to compete  successfully  in the future  with
these or other current or potential competitors.

     Our business is dependent upon our relationships  with major  manufacturers
and  distributors  in the  computer  industry.  Many aspects of our business are
affected  by our  relationships  with  major  manufacturers,  including  product
availability,  pricing and  related  terms,  and  reseller  authorizations.  The
increasing demand for personal computers and ancillary equipment has resulted in
significant  products  shortages from time to time,  because  manufacturers have
been unable to produce sufficient quantities of certain products to meet demand.
We cannot predict that  manufacturers  will maintain an adequate supply of these
products to satisfy all the orders of our customers or that,  during  periods of
increased demand,  manufacturers will provide products to us, even if available,
or at discounts previously offered to us. In addition, we cannot assure you that
the pricing and related terms offered by major  manufacturers will not adversely
change in the future. Our failure to obtain an adequate supply of products,  the
loss of a major manufacturer, the deterioration of our relationship with a major
manufacturer  or our inability in the future to develop new  relationships  with
other  manufacturers  may  have a  material  adverse  effect  on  our  business,
financial condition and results of operations.

     Certain   manufacturers   offer  market  development   funds,   cooperative
advertising and other promotional programs to systems integrators,  distributors
and computer  resellers.  We rely on these funds for some of our advertising and
promotional  campaigns.  In recent years,  manufacturers  have generally reduced
their level of support with respect to these programs,  which has required us to
<PAGE>

increase  spending of our own funds to obtain the same level of advertising  and
promotion.  If manufacturers continue to reduce their level of support for these
programs, or discontinue them altogether,  we would have to further increase our
advertising and promotion spending,  which may have a material adverse effect on
our business, financial condition and results of operations.

     Our  profitability  has been  affected  by our  ability  to  obtain  volume
discounts from certain  manufacturers,  which has been dependent,  in part, upon
our  ability  to sell  large  quantities  of  products  to  computer  resellers,
including value added resellers. Our sales to resellers have been made at profit
margins   generally  less  favorable  than  our  sales  directly  to  commercial
customers.  Our  inability to sell  products to computer  resellers  and thereby
obtain the desired volume discounts from manufacturers or to expand our sales to
commercial  customers  sufficiently  to  offset  our  need to rely on  sales  to
computer resellers may have a material adverse effect on our business, financial
conditions and results of operations.

     The markets for our  products and  services  are  characterized  by rapidly
changing  technology  and  frequent  introduction  of new  hardware and software
products  and  services.  This may render many  existing  products  and services
noncompetitive,  less profitable or obsolete.  Our continued success will depend
on our ability to keep pace with the technological  developments of new products
and services and to address increasingly  sophisticated  customer  requirements.
Our  success  will also  depend  upon our  abilities  to address  the  technical
requirements  of  our  customers   arising  from  new  generations  of  computer
technologies,  to obtain these new products from present or future suppliers and
vendors at reasonable  costs,  to educate and train our employees as well as our
customers  with  respect to these new  products  or  services  and to  integrate
effectively  and efficiently  these new products into both our internal  systems
and  systems  developed  for  our  customers.   We  may  not  be  successful  in
identifying,  developing  and  marketing  product  and service  developments  or
enhancements in response to these technological  changes. Our failure to respond
effectively to these technological changes may have a material adverse effect on
our business, financial condition and results of operations.

     Rapid  product  improvement  and  technological   change  characterize  the
computer  industry.  This results in  relatively  short  product life cycles and
rapid product obsolescence,  which can place inventory at considerable valuation
risk.  Certain of our suppliers provide limited price protection to us, which is
intended to reduce the risk of inventory  devaluation due to price reductions on
current  products.  Certain of our suppliers also provide stock  balancing to us
pursuant  to which we are able to return  unsold  inventory  to a supplier  as a
partial credit against payment for new products. There are often restrictions on
the  dollar  amount of  inventory  that we can  return  at any one  time.  Price
protection  and stock  balancing may not be available to us in the future,  and,
even if available,  these measures may not provide complete  protection  against
the  risk of  excess  or  obsolete  inventories.  During  fiscal  2000,  certain
manufacturers  reduced the period for which they provide  price  protection  and
stock  balancing  rights.  Although  we  maintain  a  sophisticated  proprietary
inventory  management  system,  we cannot  assure you that we will  continue  to
successfully   manage  our  existing  and  future  inventory.   Our  failure  to
successfully  manage our current or future inventory may have a material adverse
effect on our business, financial conditions and results of operations.

     Our strategy envisions that part of our future growth will come from making
acquisitions  consistent  with our strategy.  There can be no assurance  that we
will be able to identify suitable  acquisition  candidates and, once identified,
to  negotiate  successfully  their  acquisition  at a  price  or  on  terms  and
conditions  favorable to us, or to integrate  the  operations  of such  acquired
businesses  with  our  operations.  Certain  of  these  acquisitions  may  be of
significant  size  and may  include  assets  that  are  outside  our  geographic
territories or are ancillary to our core business strategy.

     Our quarterly  revenue and operating  results have varied  significantly in
the past and are expected to continue to do so in the future.  Quarterly revenue
and  operating  results  generally  fluctuate  as a result of the demand for our
products  and  services,   the   introduction   of  new  hardware  and  software
technologies with improved features,  the introduction of new services by us and
our  competitors,  changes in the level of our operating  expenses,  competitive
conditions and economic conditions.  In particular, we have increased certain of
<PAGE>

our fixed operating expenses,  including a significant increase in personnel, as
part of our strategy to increase our focus on providing systems  integration and
other  higher  margin and value added  services.  As a result,  we believe  that
period-to-period  comparisons of our operating results should not be relied upon
as an  indication  of  future  performance.  In  addition,  the  results  of any
quarterly period are not necessarily  indicative of results to be expected for a
full fiscal year.

     As a result of the rapid  changes  that are taking  place in  computer  and
networking technologies, product life cycles are short. Accordingly, our product
offerings change  constantly.  Prices of products change,  with generally higher
prices  early in the life cycle of the product and lower  prices near the end of
the product's life cycle. The computer  industry has experienced  rapid declines
in average selling prices of personal computers. In some instances, we have been
able to offset these price declines with  increases in units shipped.  There can
be no assurance that average  selling prices will not decline or that we will be
able to offset  declines  in average  selling  prices  with  increases  in units
shipped.

     Most of the personal  computers we sell utilize operating systems developed
by Microsoft Corporation.  The United States Department of Justice has brought a
successful   antitrust   action  against   Microsoft,   which  could  delay  the
introduction   and   distribution   of   Microsoft   products.   The   potential
unavailability of Microsoft products could have a material adverse effect on our
business, results of operations and financial condition.

     We lease  certain  warehouses  and offices from  entities that are owned or
controlled by our majority shareholder.  Each of the leases with related parties
has been amended  effective with the closing of our initial  public  offering in
December 1996 to reduce the rent payable under that lease to then current market
rates.

      Results of Operations

     The  following  table sets forth,  for the periods  indicated,  information
derived from our  Condensed  Consolidated  Statements  of Income  expressed as a
percentage of related revenue or total revenue.
<TABLE>
<CAPTION>

                                               Percentage of Revenue
                                          Three Months Ended   Six Months Ended
                                                January 31,    January 31,
                                            2001      2000      2001    2000
                                            ----      -----     ----    -----
           <S>                             <C>       <C>       <C>       <C>
           Product sales                    97.3%     97.3%     97.7%     97.2%
           Services                          2.7       2.7       2.3       2.8
                                             ---       ---       ---      ----
                Total revenue              100.0     100.0     100.0     100.0
                                           -----     -----     -----     -----

           Cost of product sales            88.1      88.1      88.3      86.9
           Cost of services                 62.3      61.4      64.8      65.5
                                            ----      ----      ----      ----

                Cost of revenue             87.4      87.3      87.7      86.3
                                           -----      ----      ----      ----

           Product gross profit             11.9      11.9      11.7      13.1
           Services gross profit            37.7      38.6      35.2      34.5
                                            ----      ----      ----      ----

                Gross profit                12.6      12.7      12.3      13.7

           Selling, general and
              administrative expenses       12.7      10.9      11.8      11.5
                                            ----      ----      ----      ----
           Income (loss) from operations    (0.1)      1.8       0.5       2.2
           Interest and other income, net     0.1       0.2      0.2       0.2
                                             ---       ---       ---       ---
           Income before income taxes        0.0       2.0       0.7       2.4
           Provision for income taxes        0.0       0.8       0.3       1.0
                                             ---       ---       ---       ---
           Net income                        0.0%      1.2%      0.4%      1.4%
                                             ===       ===       ===       ===
</TABLE>
<PAGE>


Three Months Ended  January 31, 2001  Compared to Three Months Ended January 31,
2000


     Revenue. The Company's revenue increased $41,000 or 0.1% from $70.8 million
for the three  months  ended  January  31,  2000 to $70.9  million for the three
months  ended  January  31,  2001.  Product  revenue  increased  by $31,000  due
primarily to increases in shipments of computers and  displays,  offset by lower
per unit prices for computers.  Service revenue  increased $10,000 to $1,941,000
from $1,931,000 in the same quarter last year.


     Gross Profit.  Cost of revenue  includes the direct costs of products sold,
freight and the personnel costs  associated with providing  technical  services,
offset in part by certain market  development  funds provided by  manufacturers.
All other  operating costs are included in selling,  general and  administrative
expenses.  Gross  profit  decreased  $53,000 or 0.6% from $9.0  million  for the
second  quarter  of  fiscal  2000 to $8.9  million  for the most  recent  fiscal
quarter. Gross profit from the sale of products decreased by $40,000 while gross
profit from the sale of  services  decreased  by  $13,000.  The changes in gross
profit  primarily  result  from the  changes in revenue  discussed  above.  As a
percentage of revenue,  gross profit decreased to 12.6% in the second quarter of
fiscal 2001 as compared to 12.7% in fiscal 2000 reflecting continued pressure on
margins both for computer products and displays.  Competitive pressures, changes
in types of  products  or  services  sold and  product  availability  result  in
fluctuations in gross profit.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative expenses increased $1.2 million or 16.1% from $7.7 million in the
second  quarter of fiscal 2000 to $9.0  million in the second  quarter of fiscal
2001.  This increase is principally a result of higher payroll and related costs
associated particularly with higher volume being experienced at our Electrograph
division  as  well  as the  payroll  and  overhead  costs  associated  with  our
Rochester, NY office which was acquired in March 2000 through the acquisition of
Texport  Technology  Group,  Inc.  (Texport) and Learning  Technology Group, LLC
(LTG). In addition,  the Company has incurred higher bad debt expense as well as
marketing and related costs in connection with its effort to launch new products
and improve brand recognition.

     Interest  Income.  Interest  income  decreased  from $153,000 in the second
quarter  of 2000 to  $95,000  in the  second  quarter  of 2001 due to lower cash
balances  available for  investment as well as lower  interest rates received on
investments.

     Provision for Income Taxes.  The effective income tax rate decreased to 38%
in the  current  period  compared  to 41% of  pre-tax  income in the prior  year
period.

Six Months Ended January 31, 2001 Compared to Six Months Ended January 31, 2000

     Revenue.  The  Company's  revenue  increased by $15.8 million or 11.6% from
$136.2  million for the six months ended January 31, 2000 to $152.0  million for
the six  months  ended  January  31,  2001.  Revenue  from the sale of  products
increased  by  $16.1  million  (12.2%)  while  revenue  from  service  offerings
decreased  by $275,000  (7.2 %) The  increases  in product  revenue were largely
attributable  to growth in shipments  of  computers,  displays  and  peripherals
partially offset by lower average selling prices for computers.

     Gross Profit.Gross  profit decreased by $39,000 (0.2%) to $18.7 million for
the first six months of fiscal 2001 from $18.7 million in the comparable  period
a year ago.  Gross profit from product sales  increased by 0.2%  ($33,000)  from
$17.4  million  in the first six months of fiscal  2000 to $17.4  million in the
most recent six month period.  Service offerings generated $1.3 million of gross
profit in the  first  six  months of both  fiscal  2001 and 2000.  Gross  margin
percentages  declined  in the  recent  period  due  to  generally  lower  vendor
incentives  on  computer  and  display  products  and  the  highly   competitive
marketplace for computer products.
<PAGE>

     Selling,   General  and  Administrative   Expenses.   Selling  general  and
administrative  expenses  increased by $2.1 million or 13.4% from $15.7  million
for the first  six  months of  fiscal  2000 to $17.9  million  for the first six
months of fiscal 2001.  The increase is principally  due to higher  salaries and
personnel costs, as well as higher bad debt expenses

     Interest  Income.  Interest  income  increased  due to higher cash balances
available for investment.

     Provision  for  Income  Taxes.  The  effective  income  tax rate  decreased
slightly  to 40.2% for the first six  months of fiscal  2001 from  40.9% for the
first six months of fiscal 2000.

Liquidity and Capital Resources

     The Company's  primary sources of financing have been internally  generated
working   capital  from   operations   and  a  line  of  credit  from  financial
institutions.

     For  the six  months  ended  January  31,  2001,  cash  used  by  operating
activities was $2.7 million  consisting  primarily of a decrease of $8.0 million
in accounts  payable and accrued  expenses  and an increase in inventory of $1.0
million.  These uses of cash were  partially  offset by a decrease  in  accounts
receivable  ($4.3 million) as well as net income ($0.7 million) and depreciation
and amortization ($1.0 million).  The Company also spent approximately  $900,000
in capital  expenditures  and  $600,000 for the  repurchase  of its common stock
during the six months ended January 31, 2001. The Company's accounts  receivable
and accounts payable and accrued expenses  balances as well as its investment in
inventory  can  fluctuate  significantly  from one period to the next due to the
receipt  of  large  customer   orders  or  payments  or  variations  in  product
availability and vendor shipping patterns at any particular date. Generally, the
Company's  experience is that  increases in accounts  receivable,  inventory and
accounts  payable and accrued  expenses will coincide with growth in revenue and
increased operating levels


     The Company has available a line of credit with financial  institutions  in
the aggregate amount of $15.0 million.  No amounts were  outstanding  under this
line as of January 31, 2001.

     The  Company   believes  that  its  current   balances  in  cash  and  cash
equivalents,  expected cash flows from operations and available borrowings under
the line of credit will be adequate to support current  operating levels for the
foreseeable  future,  specifically  through at least the end of fiscal 2001. The
Company currently has no material commitments for capital  expenditures.  Future
capital  requirements  of the  Company  include  those for the growth of working
capital  items such as accounts  receivable  and  inventory  and the purchase of
equipment  and  expansion of  facilities,  the possible  opening of new offices,
potential  acquisitions,  and expansion of the Company's  service and e-commerce
capabilities.



<PAGE>


PART II - OTHER INFORMATION

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

     At our  Annual  Meeting  of  Shareholders  held on January  17,  2001,  the
following proposals were adopted by the margins indicated:

     (1)  Elect  six  Directors  to serve  until  the  2002  Annual  Meeting  of
     Shareholders;
<TABLE>
<CAPTION>

                                                                                         Broker
             Nominee                        For            Withheld         Abstain      Non-votes
             --------------                 ---            --------         -------      ---------
<S>                                      <C>                <C>            <C>            <C>
          Barry R. Steinberg             7,142,664          684,715        35,800          0
          Joel G. Stemple                7,142,664          684,715        35,800          0
          Joel Rothlein                  7,142,664          684,715        35,800          0
          Bert Rudofsky                  7,142,664          684,715        35,800          0
          Michael E. Russell             7,142,664          684,715        35,800          0
          Julian Sandler                 7,142,664          684,715        35,800          0


(2)  Vote on an amendment of our Certificate of Incorporation to change our name
     to "Manchester Technologies, Inc."

                                                                      Broker
                       For        Against             Abstain         Non-votes
                       ---        -------             -------         ---------
                    7,790,579    35,800              1,000            0

(3)  Vote on an  amendment  to our  Amended  and  Restated  1996  Incentive  and
     Non-Incentive  Stock Option Plan to increase the number of shares of Common
     Stock  reserved  for  issuance  under the Plan from  1,100,000 to 2,600,000
     shares.

                                                                     Broker
                   For           Against            Abstain          Non-votes
                   ---           -------            -------          ---------
                  5,583,121      849,482             9,200          1,385,576

(4)  Vote on a proposal to approve the Company's Executive Incentive Bonus Plan.

                                                                   Broker
                  For           Against             Abstain        Non-votes
                  ---           -------             -------        ---------
                 6,238,764      195,108              7,931         1,385,576

(5)  Vote on the  ratification of the  reappointment  of KPMG LLP as independent
     auditors of the Company for the year
           ending July 31, 2001.

                                                                    Broker
                 For            Against            Abstain          Non-votes
                 ---            -------            -------          ---------
                7,792,083        33,165              2,131            0

</TABLE>

     No other  items  were voted on at the Annual  Meeting  of  Shareholders  or
during the quarter ended January 31, 2001.

<PAGE>

      Item 6.     Exhibits and Reports

      (a)     Exhibits
              --------

                None.


      (b)     Reports on Form 8-K
              -------------------

      A Form 8-K was filed with the SEC on February 6, 2001 reporting that the
      Company had completed the change of its name to "Manchester Technologies,
      Inc."


<PAGE>





                          MANCHESTER TECHNOLOGIES, INC.

                                   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.



                                          MANCHESTER TECHNOLOGIES., INC.
                                          ------------------------------
                                          (Registrant)


DATE:   March    14, 2001                  ss/  Barry Steinberg
                                          ----------------------
                                          Barry Steinberg
                                          President and Chief Executive Officer



DATE:   March   14, 2001                  ss/ Joseph Looney
                                          ------------------------------------

                                          Joseph Looney
                                          Vice President of Finance and
                                          Chief Financial Officer


<PAGE>