SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



(Check One)

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

For the quarterly period ended  March 31, 2000
                                --------------

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from ________________ to ________________

Commission file number  0-16577
                       --------


                             CYBEROPTICS CORPORATION
                             -----------------------
             (Exact name of registrant as specified in its charter)

Minnesota                                                    41-1472057
---------                                                    ----------
(State or other jurisdiction                                 (IRS Employer
of incorporation or organization)                            Identification No.)

              5900 Golden Hills Drive, Minneapolis, Minnesota 55416
              -----------------------------------------------------
                    (Address of principal executive offices)

                                 (763) 542-5000
                                 --------------
                           (Issuer's telephone number)

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 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 latest practicable date.

At May 9, 2000, 5,104,568 shares of the issuer's Common Stock, no par value,
were outstanding.

<PAGE>


PART I. FINANCIAL INFORMATION


ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS


                             CYBEROPTICS CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                  MARCH 31, 2000    DEC. 31, 1999
                                                                      (UNAUDITED)
--------------------------------------------------------------------------------------------------
<S>                                                                       <C>             <C>
ASSETS
Cash and cash equivalents                                                $ 9,550          $10,196
Marketable securities                                                     12,745            8,509
Accounts receivable, net                                                   6,597            7,762
Inventories                                                                5,365            4,997
Other current assets                                                       1,728            1,756
--------------------------------------------------------------------------------------------------
                    Total current assets                                  35,985           33,220
Marketable securities                                                      4,730            4,396
Equipment and leasehold improvements, net                                  3,050            2,705
Intangible and other assets, net                                          10,622           11,143
--------------------------------------------------------------------------------------------------
                    Total assets                                         $54,387          $51,464
==================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable                                                         $ 1,966          $ 1,886
Income taxes payable                                                       1,345              879
Accrued expenses                                                           2,398            2,195
--------------------------------------------------------------------------------------------------
                    Total current liabilities                              5,709            4,960
Commitments and contingencies
Stockholders' equity:
      Preferred stock, no par value, 5,000 shares
        authorized, none outstanding
      Common stock, no par value, 25,000 shares
       authorized, 5,091 and 5,018 shares issued
       and outstanding, respectively                                      34,503           33,479
      Retained earnings                                                   14,362           13,029
      Accumulated other comprehensive income (loss)                         (187)              (4)
--------------------------------------------------------------------------------------------------
                    Total stockholders' equity                            48,678           46,504
--------------------------------------------------------------------------------------------------
                    Total liabilities and stockholders' equity           $54,387          $51,464
==================================================================================================
</TABLE>

SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


                                       -2-
<PAGE>


                              CYBEROPTICS CORPORATION
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (Unaudited)
                      (In thousands, except per share amounts)


                                                    THREE MONTHS ENDED MARCH 31,
                                                          2000          1999
------------------------------------------------------------------------------
Revenues                                                $13,509        $7,705
Cost of revenues                                          5,195         3,537
------------------------------------------------------------------------------
     Gross margin                                         8,314         4,168
Research and development expenses                         2,396         1,752
Selling, general and administrative expenses              3,620         2,164
Amortization of goodwill and other intangibles              426
------------------------------------------------------------------------------
     Income from operations                               1,872           252
Interest income and other                                   341           530
------------------------------------------------------------------------------
     Income before income taxes                           2,213           782
Provision for income taxes                                  880           230
------------------------------------------------------------------------------
     Net income                                         $ 1,333        $  552
==============================================================================
Net income per share - Basic                            $  0.26        $ 0.11
Net income per share - Diluted                          $  0.24        $ 0.11
==============================================================================
Weighted average shares outstanding - Basic               5,049         4,955
Weighted average shares outstanding - Diluted             5,550         5,039
==============================================================================

SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


                                       -3-
<PAGE>


                             CYBEROPTICS CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)


                                                    THREE MONTHS ENDED MARCH 31,
                                                               2000        1999
--------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
        Net income                                           $ 1,333    $   552
        Adjustments to reconcile net income to
          net cash provided by operating activities:
          Depreciation and amortization                          789        302
          Provision for doubtful accounts                         10
          Provision for losses on inventories                    155         80
          Amortization of restricted stock                        10         10
          Changes in operating assets and
             liabilities:
             Accounts receivable                               1,155        413
             Inventories                                        (523)       413
             Other current assets                                (19)        85
             Accounts payable                                     80        265
             Income taxes payable                                466        178
             Accrued expenses                                    203         86
--------------------------------------------------------------------------------
                 Net cash provided
                   by operating activities                     3,659      2,384

CASH FLOWS FROM INVESTING ACTIVITIES:
        Sales and maturities of marketable securities                    11,001
        Purchases of marketable securities                    (4,577)
        Purchases of businesses and technology, net of
             cash acquired                                                 (736)
        Additions to equipment and leasehold improvements       (682)      (250)
        Additions to patents                                     (60)        (7)
--------------------------------------------------------------------------------
                 Net cash provided (used) by
                  investing activities                        (5,319)    10,008

CASH FLOWS FROM FINANCING ACTIVITIES:
        Proceeds from exercise of stock options                1,014        119
--------------------------------------------------------------------------------
             Net cash used in financing activities             1,014        119

Increase (decrease) in cash and cash equivalents                (646)    12,511
Cash and cash equivalents - beginning of period               10,196      4,963
--------------------------------------------------------------------------------
Cash and cash equivalents - end of period                    $ 9,550    $17,474
================================================================================

SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


                                       -4-
<PAGE>


                             CYBEROPTICS CORPORATION

               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2000


1. INTERIM REPORTING:

The interim consolidated financial statements presented herein as of March 31,
2000, and for the three month periods ended March 31, 2000 and 1999, are
unaudited; however, in the opinion of management, the interim consolidated
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of financial position,
results of operations and cash flows for the periods presented.

The results of operations for the three month period ended March 31, 2000, do
not necessarily indicate the results to be expected for the full year. The
December 31, 1999, consolidated balance sheet data was derived from audited
consolidated financial statements, but does not include all disclosures required
by generally accepted accounting principles. These unaudited interim
consolidated financial statements should be read in conjunction with the
Company's consolidated financial statements and notes thereto, contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999.


2. PRO-FORMA INFORMATION:

The following table presents unaudited pro forma consolidated results of
operations as if the acquisitions of Kestra Limited (Kestra), acquired on April
6, 1999, and certain assets and liabilities of HAMA Laboratories, Inc. (HAMA),
acquired on May 5, 1999, had occurred as of the beginning of 1999. The unaudited
pro forma consolidated results of operations for the three months ended March
31, 1999 include adjustments for additional amortization of identifiable
intangibles and goodwill, the reduction of historical HAMA compensation expense
for executives to reflect contractual changes to the Company's compensation
structure, the reduction of interest income due to the cash used for the
acquisitions and the related tax impacts of these adjustments. The unaudited pro
forma consolidated results of operations are presented for illustrative purposes
only and are not necessarily indicative of the combined financial results that
actually would have resulted had the acquisitions, in fact, occurred on those
dates (In thousands):

                                             Pro Forma

                                         Three Months Ended

                                             March 31,
                                             ---------

                                                1999
                                                ----

Revenue                                        $8,204

Net loss                                       $ (368)

Net loss per share - Basic                     $(0.07)

Net loss per share - Diluted                   $(0.07)


                                       -5-
<PAGE>


3. INVENTORIES (IN THOUSANDS):

                                        March 31,      Dec. 31,
                                           2000          1999
                                       (unaudited)
                                       ------------------------

         Raw materials                  $3,209          $3,076

         Work in process                 1,141             912

         Finished goods                  1,471           1,009
                                       ------------------------
                 Total inventories      $5,365          $4,997
                                       ========================


4. NET INCOME (LOSS) PER SHARE:

Basic net income per share has been computed using the weighted average number
of shares outstanding. The diluted net income per share includes the effect of
common stock equivalents for each period. The number of shares utilized in the
denominator of the diluted net income per share computation has been increased
by 501,000 and 84,000 shares at March 31, 2000 and 1999, respectively. Options
to purchase 467,000 shares of common stock at a weighted average price of $15.20
were outstanding at March 31, 1999 but were not included in the computation of
diluted net income per share as the options exercise price was greater than the
average market price of the common shares. At March 31, 2000 all options were
included in the computation of diluted net income per share, as the average
market price exceeded the option exercise price on all outstanding options.


5. COMPREHENSIVE INCOME (LOSS):

Statement of Financial Accounting Standards No. 130 requires that unrealized
gains and losses on the Company's available-for-sale marketable securities and
certain foreign currency translation adjustments be included as a component of
other comprehensive income.

During the three months ended March 31, 2000 and 1999, total comprehensive
income amounted to $1,150,000 and $427,000, respectively. Accumulated other
comprehensive income at March 31, 2000 and December 31, 1999 was ($187,000) and
($4,000), respectively.


                                       -6-
<PAGE>


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

The following is management's discussion and analysis of certain significant
factors which have affected the Company's results and financial position during
the periods included in the accompanying financial statements. This discussion
should be read in conjunction with the interim consolidated financial statements
and associated notes.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. The following Management's Discussion
and Analysis contains "forward looking statements" within the meaning of federal
securities laws which represent management's expectations or beliefs relating to
future events, including statements regarding trends in the industries in which
the Company functions, levels of orders, research and development expenses,
taxation levels, the sufficiency of cash to meet operating and capital expenses
and the ability to continue to price foreign transactions in U.S. currency.
These and other forward looking statements made by the Company, must be
evaluated in the context of a number of factors that may affect the Company's
financial condition and results of operations, including the following:

        --  The cyclical nature of capital expenditures in the electronics
            industry;

        --  The dependence of such operations on orders of one sensor product
            line from several large OEM's of component placement machines in
            the surface mount industry;

        --  The dependence of such operations on orders from two OEM customers;

        --  The significant proportion of the Company's revenue that is derived
            from export sales;

        --  The dependence of the Company's manufacturing on outside contractors
            and suppliers, many of which require significant lead time;

        --  The ability of the Company to produce products that do not
            experience significant quality errors;

        --  The degree to which the Company is successful in protecting its
            technology and enforcing its technology rights in the United States
            and other countries;

        --  The dependence of the Company's operations on several key personnel;

        --  The ability of the Company to effectively integrate the operations
            of Kestra and HAMA so as to effectively introduce new products and
            the ability to effectively introduce other significant new product
            introductions planned for 2000;

        --  The speed of changes in technology in the microelectronics
            manufacturing industry from which most of the Company's sales are
            derived;

        --  Competition for the functions that the Company's products perform by
            larger "vision" companies and by other optical sensor companies;

        --  The ability of the Company to successfully develop in-process
            technology acquired from Kestra and HAMA into viable products.


                                      -7-
<PAGE>


GENERAL BUSINESS OVERVIEW:

CyberOptics Corporation designs and manufactures intelligent sensors and systems
for high-precision, non-contact dimensional measurement and process control.
Utilizing proprietary laser, machine vision and optics technology combined with
advanced software and electronics, the Company's products enable manufacturers
to increase operating efficiencies, product yields and quality by measuring the
characteristics and placement of components both during and after the
manufacturing processes. The Company sells its products worldwide through a
combination of direct sales staff and independent distributors and
representatives.

Revenues increased 75% to $13.5 million during the three month period ended
March 31, 2000 compared to $7.7 million for the same period in 1999. This
revenue growth was primarily the result of increased demand for capital
equipment in the SMT assembly market, the primary market served by the Company's
inspection system and OEM sensor products. Strengthening of demand in the SMT
market began in the second half of 1999, following a slowdown that began in
early 1998. In addition, revenues from semiconductor product resulting from the
acquisition of certain assets of HAMA Laboratories in May of 1999 contributed
$1.3 million to the increase in first quarter revenues.

Primarily as the result of revenue growth, operating income increased to $1.9
million during the three month period ended March 31, 2000 compared to $252,000
for the same period in 1999. Operating income was partially offset during the
three month period ended March 31, 2000 by losses generated by CyberOptics Ltd.
(formerly Kestra Ltd.), which recorded no revenue in the first quarter of 2000.

The Company anticipates strong demand for its products in both the SMT and
semiconductor capital equipment markets to continue throughout 2000. In
addition, new SMT systems, OEM sensors and semiconductor products are planned to
be introduced in 2000 which will increase the Company's market penetration.
Consequently, management expects revenue and operating income to continue to
significantly exceed the levels reported in comparable quarters in 1999.

RESULTS OF OPERATIONS

REVENUES

The table below sets forth revenues by product group for the three month periods
ended March 31:

                                     Three months ended
                                         March 31,
                                    2000           1999
                                    ----           ----

OEM Sensors                       $ 9,543        $ 5,577
SMT Systems                         2,390          1,529
Industrial Measurement
    & Semiconductor                 1,576            599

                                  -------        -------
    Total                         $13,509        $ 7,705


                                      -8-
<PAGE>


Revenues from the OEM sensor product group increased 71% during the three months
ended March 31, 2000 compared to the same period in 1999. Revenues from OEM
sensors increased primarily due to growth in worldwide demand for SMT production
equipment, and the resulting increase in revenue from the Company's two largest
OEM customers. The increase in revenues during 2000 from one of the Company's
largest customers is due in part to a recovery in the Asian economy that began
in the second half of 1999. The Company's two largest OEM customers accounted
for approximately 56% of total revenues for the three months ended March 31,
2000, and 46% of revenues for the comparable period in 1999.

SMT system product group revenues increased 56% during the three month period
ended March 31, 2000 from the comparable period in 1999. SMT systems revenues
reflect sales of the Company's SE 200 and LSM 300 products. Increased SMT system
revenue levels are primarily the result of strong demand for the SE 200 and LSM
300 products from electronic manufacturing services (EMS) customers. As a result
of industry consolidation, EMS companies are becoming a larger proportion of
worldwide electronic assemble capacity. Growing revenues are a reflection of
efforts to increase the number of EMS company's that purchase Cyberoptics
inspection products.

Industrial measurement and semiconductor product group revenues increased 163%
during the three month period ended March 31, 2000 from the comparable period in
1999 due primarily to $1.3 million of revenue generated by HAMA. First quarter
1999 revenues do not reflect sales of HAMA as it was acquired in May 1999.
HAMA's revenues during the first quarter of 2000 increased significantly over
the $789,000 level in the fourth quarter of 1999 and reflect a growing
semiconductor capital equipment market and increased acceptance of its products
by semiconductor capital equipment manufacturers. The Company has substantially
exited the industrial measurement market.

International revenues comprised approximately 78% and 77% of total revenues
during the three month periods ended March 31, 2000 and 1999, respectively. The
international markets in Western Europe, Japan and the rest of Asia account for
a significant portion of the production capability of capital equipment for the
manufacture of electronics, the primary market for the Company's OEM sensors and
SMT systems product lines. Revenues generated from products used primarily for
SMT production (revenues from OEM sensors and SMT systems) were approximately
88% and 92% of revenues for the three month periods ended March 31, 2000 and
1999, respectively.

GROSS MARGIN

Gross margin for the three months ended March 31, 2000 increased as a percent of
revenues to 62% compared to 54% during the same period in 1999. Gross margin is
highly dependent on the level of revenues over which to spread the fixed
component of cost of sales and the related realization of manufacturing
efficiencies. During 2000, gross margin was positively impacted by higher
revenue levels, lower warranty costs and by the acquisition of HAMA, which has
products that carry higher gross margins than the Company's pre-acquisition
products.


                                       -9-
<PAGE>


RESEARCH AND DEVELOPMENT

Research and development expenses increased 37% to $2.4 million during the three
month period ended March 31, 2000 compared to the same period in 1999. As a
percentage of revenue, research and development expenses decreased to 18% during
2000 from 23% during the comparable period in 1999. Increased research and
development expense in 2000 was primarily due to the acquisition of Kestra and
HAMA in the second quarter of 1999 and increased development spending required
to complete new SMT systems products scheduled for commercial introduction later
in 2000. Customer funded research and development is recognized as a reduction
of research and development expense. During the thee months ended March 31,
2000, customer funded research and development recognized as a reduction of
research and development expense totaled $97,000. There was not customer funded
research and development during the first quarter of 1999.

Research and development expenses during the first quarter of 2000 were
primarily focused on completion of the new high speed solder paste inspection
system, the SE 300 and development work on the in-process products acquired from
Kestra. In addition, research and development expenses in 2000 include
development of next generation LaserAlign and semiconductor wafer mapping
sensors.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses increased 67% to $3.6 million
during the three month period ended March 31, 2000 compared to $2.2 million
during the comparable period in 1999. As a percentage of revenue, selling,
general and administrative expenses decreased slightly to 27% in 2000 from 28%
in 1999. Increased selling, general and administrative expenses in 2000 are
primarily the result of personnel and marketing investments made to develop the
end-user SMT systems sales and service channel and the acquisition of Kestra and
HAMA and the costs associated with operating two subsidiary facilities.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT

On April 6, 1999, the Company completed the acquisition of Kestra. At the time
of the acquisition, Kestra had under development technologies for application in
the pre-oven and post-oven reflow stages of electronic circuit board production,
and Company recorded a $6.5 million charge to operations for the estimated fair
value of the acquired in-process research and development. The Company
commercially introduced the pre-oven system in the fourth quarter of 1999, and
is currently performing technical evaluations for potential customers. The
Company is continuing development of the acquired in-process post-reflow
technology and currently believes that a related product may be introduced in
2001. Schedule delays in the introduction of the post-reflow product are the
result of resource constraints resulting from introduction efforts on the
pre-oven system and are not expected to cause any significant changes in total
research and development costs to complete development or to cause any
significant changes in expected revenues from the pre-oven system of the later
post-reflow product. However, these expectations are subject to change, given
uncertainties of the development process and potential changes in market
expectations.


                                      -10-
<PAGE>


On May 5, 1999, the Company acquired substantially all of the operating assets
and assumed certain liabilities of HAMA through HAMA Sensors, Inc., a newly
formed, wholly-owned subsidiary of the Company. At the time of the acquisition,
HAMA had under development technology to develop laser-based proximity sensors
for robotic semiconductor wafer handling, which can potentially be used in a
vacuum environment, and laser micrometers that will potentially determine the
orientation and alignment of semiconductor wafers during the production process
and other potential applications. The Company recorded a $771,000 charge to
operations for the estimated fair value of the acquired in-process research and
development. Development has been completed on the vacuum sensor and the custom
kit micrometer and these products were introduced during the fourth quarter of
1999. In addition, the mini laser micrometer is planned to be introduced in the
second quarter of 2000. The Company has temporarily put on hold development of
the acquired in-process technologies related to the six-inch micrometer due to
manufacturability issues. These factors could impact the product development and
release schedule.

AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS

Amortization of acquired intangible assets was approximately $426,000 for three
month period ended March 31, 2000. The amortization is attributable to
identifiable intangible assets and goodwill resulting from the Company's
acquisition of certain technology and other assets of Electronic Packaging
Company (EPC) during the first quarter of 1999 and the Company's acquisition of
Kestra and HAMA during the second quarter of 1999. Amortization of these
intangible assets is expected to remain constant at approximately $426,000 per
quarter over the remaining life of the intangible assets and goodwill.

PROVISION FOR INCOME TAXES AND EFFECTIVE INCOME TAX RATE

The Company recorded a tax provision of $880,000 for the three month period
ended March 31, 2000. The tax provision during 2000 reflects both the
non-deductible goodwill amortization from the intangible assets related to the
Kestra acquisition and valuation allowances established to eliminate the future
tax benefit of net operating loss carryforwards generated by Kestra following
the acquisition due to uncertainty about realization. These items were offset
somewhat in 2000 by benefits from the Company's foreign sales corporation and
research and development tax credits. During the three month period ended March
31, 1999 the Company's effective tax rate was approximately 29%. Benefits from
the Company's foreign sales corporation and the research and development tax
credit were primarily responsible for reducing the effective tax rate below the
statutory federal level.

ORDER RATE AND BACKLOG

CyberOptics' order rate totaled $12.4 million during the three month period
ended March 31, 2000 compared to $6.7 million during the same period in 1999.
Backlog totaled $10.3 million and $4.7 million at March 31, 2000 and 1999,
respectively. The scheduled shipment of the March 31, 2000 backlog is as follows
(in thousands):


                 2nd Quarter 2000                   $ 9,403
                 3rd  Quarter 2000 and after            864
                                                    -------

                     Total backlog                  $10,267


                                      -11-
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and marketable securities increased $3.9 million to
$27.0 million as of March 31, 2000 from $23.1million as of December 31, 1999,
primarily due to $3.7 million of cash generated from operations and $1.0 million
of cash provided by the exercise of stock options. Increases in cash were
partially offset by $742,000 of cash used to purchase fixed assets and other
intangibles.

The Company generated $3.7 million of cash from operations during the first
three months of 2000, primarily due to net income of $1.3 million, including
$964,000 of non-cash expenses for depreciation and amortization, provision for
inventory obsolescence and other non-cash items. The cash generated from
operations also included a decrease in accounts receivable of $1.2 million and
an increase in income taxes payable and accrued expenses of $669,000. The
decrease in accounts receivable is primarily due to management initiatives in
2000 focused on accounts receivable reduction. The increase in accrued expenses
is primarily due to increased activity levels related to revenue growth, and
increased taxes payable are the result of timing of quarterly tax payments.
These items were offset somewhat by increased inventory related to increased
revenue and the planned introduction of new products later in 2000. During 1999,
the Company generated $2.4 million of cash from operations, primarily due to net
income of $552,000 million, including $382,000 million of non-cash expenses and
a decrease of $826,000 in accounts receivable and inventory.

The Company used $5.3 million of cash in investing activities during the three
month period ended March 31, 2000 compared to the $10.0 million provided during
the same period in 1999. The majority of the change in cash from investing
activities is due to changes in the level of investment in marketable securities
resulting from the purchases and maturities of those securities, which used $4.6
million of cash in 2000 and provided $11.0 million in 1999. Cash provided in
1999 was primarily used to fund the acquisitions of Kestra and HAMA. The Company
used approximately $742,000 and $993,000 of cash for the purchase of fixed
assets, the acquisition of certain technology and other intangible assets during
the three months ended March 31, 2000 and 1999, respectively.

The Company generated $1.0 million of cash from financing activities during the
three months ended March 31, 2000 and $119,000 in the same period during 1999.
Cash generated represents cash from stock option exercises.

As of March 31, 2000, the Company has no material capital commitments except for
the funding of working capital requirements of Kestra during its product
development and early product introduction period. The Company believes working
capital and anticipated funds from operations will be adequate for anticipated
operating needs.

OTHER FACTORS

Changes in revenues have resulted primarily from changes in the level of unit
shipments and new product introductions. The Company believes that inflation has
not had any significant effect on operations. All of the Company's international
export sales are negotiated, invoiced and paid in U.S. dollars. Accordingly,
although currency fluctuations do not effect the Company's revenue and income
per unit, they can influence the price competitiveness of the Company's products
relative to other technologies and the willingness of existing and potential
customers to purchase units.

As a result of the Kestra acquisition the Company has an operating unit located
in the UK. The Company does not believe that currency fluctuations will have a
material impact on its consolidated financial statements.

RECENT ACCOUNTING DEVELOPMENTS

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements." The SAB
summarizes certain of the SEC's views regarding revenue recognition. The
provisions of SAB No. 101 are effective for the year beginning January 1, 2000.
The Company is currently analyzing the effect of the guidance outlined in SAB
101 and the potential impact on its consolidated financial statements.


                                      -12-
<PAGE>


PART II. OTHER INFORMATION



ITEM 6 - EXHIBITS AND REPORTS ON 8-K

a.   Exhibits

         Exhibit 27--Financial Data Schedule (For EDGAR filing only)

b.   Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter ended March 31,
         2000, or during the period from March 31, 2000 to the date of this
         quarterly report on Form 10-Q.


                                      -13-
<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.



                                                         CyberOptics Corporation



                                                             /s/ Steven M. Quist
                                                             -------------------
                                                      Steven M. Quist, President
                                                (Principal Executive Officer and
                                                        Duly Authorized Officer)




                                                       /s/ Richard G. Ballintine
                                                       -------------------------
                                 Richard G. Ballintine, Vice President - Finance
                                               (Principal Accounting Officer and
                                                        Duly Authorized Officer)



Dated: May 12, 2000


                                      -14-