<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A


[X]  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934

     For the quarterly period ended June 30, 2000

[ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

COMMISSION FILE NO. 1-11602


                           SI DIAMOND TECHNOLOGY, INC.
          (Exact name of Small Business Issuer as specified in charter)

                       TEXAS                                    76-0273345
                     (State of                                (IRS Employer
                  Incorporation)                          Identification Number)

          3006 Longhorn Blvd., Suite 107
                   AUSTIN, TEXAS                                  78758
      (Address of principal executive office)                   (Zip Code)

Registrant's telephone number, including area code:  (512) 339-5020


     Indicate by check mark whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                            Yes [X] No [ ]

     As of August 9, 2000, the registrant had 58,342,004 shares of common stock,
par value $.001 per share, issued and outstanding.

     Transitional Small Business Disclosure Format.

                            Yes [ ] No [X]


<PAGE>   2

                           SI DIAMOND TECHNOLOGY, INC.
                                      INDEX


<TABLE>
<CAPTION>
Part I  Financial Information                                                                       PAGE
                                                                                                    ----
<S>                                                                                                 <C>
         Item 1.  Consolidated Financial Statements

              Consolidated Balance Sheets--June 30, 2000 and December 31, 1999....................    3

              Consolidated Statements of Operations--Three Months and Six Months Ended
                June 30, 2000 and 1999............................................................    4

              Consolidated Statements of Cash Flows--Six Months Ended
                June 30, 2000 and 1999............................................................    5

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

         Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations...........................................................    9

Part II  Other Information

         Item 1.  Legal proceedings...............................................................   13

         Item 5.  Other Information...............................................................   14

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

Signatures      ..................................................................................   15
</TABLE>


                                       2
<PAGE>   3

                  SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         (UNAUDITED)
                                      ASSETS                                               JUNE 30,      DECEMBER 31,
                                                                                             2000            1999
                                                                                        -------------   --------------
<S>                                                                                     <C>             <C>
Current assets:
   Cash and cash equivalents..........................................................  $   1,526,403   $      348,832
   Marketable securities..............................................................        204,366          719,376
   Accounts receivable, trade.........................................................        286,876          314,518
   Notes receivable...................................................................             --           60,000
   Inventory..........................................................................        245,061          167,775
   Prepaid expenses and other current assets..........................................         44,457           52,312
                                                                                        -------------   --------------

     Total current assets.............................................................      2,307,163        1,662,813

   Property, plant and equipment, net.................................................      2,119,705        1,437,246
   Intangible assets, net.............................................................        729,612          836,021
   Other assets.......................................................................          7,250            7,250
                                                                                        -------------   --------------
     Total assets.....................................................................  $   5,163,730   $    3,943,330
                                                                                        =============   ==============

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable...................................................................  $     853,472   $      751,225
   Current portion of long-term debt..................................................          5,693            5,473
   Obligations under capital lease....................................................         21,657           31,432
   Notes payable......................................................................        700,000          250,000
   Accrued liabilities................................................................        480,855          723,842
   Customer deposits..................................................................        222,506          256,947
                                                                                        -------------   --------------
     Total current liabilities........................................................      2,284,183        2,018,919
Notes payable, long-term..............................................................         18,719           21,623
                                                                                        -------------   --------------
Total Liabilities.....................................................................      2,302,902        2,040,542

Commitments and contingencies.........................................................             --               --

Minority interest in subsidiary.......................................................             --          22,547

Stockholders' equity :
   Preferred stock, $1.00 par value, 2,000,000 shares authorized;
     Series G convertible, 900 and 1,100 shares issued and outstanding at
     June 30, 2000 and December 31, 1999, respectively................................            900            1,100
   Common stock, $.001 par value, 120,000,000 shares authorized,
     58,101,840 and 53,906,719 shares issued and outstanding at
     June 30, 2000 and December 31, 1999, respectively................................         58,101           53,906
Additional paid-in capital............................................................     59,796,375       55,410,993
Accumulated deficit...................................................................    (56,994,548)     (53,585,758)
                                                                                        -------------   --------------
     Total stockholders' equity ......................................................      2,860,828        1,880,241
                                                                                        -------------    -------------
     Total liabilities and stockholders' equity                                         $   5,163,730   $    3,943,330
                                                                                        =============   ==============
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


                                       3
<PAGE>   4

                  SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                     For the Three Months Ended         For the Six Months Ended
                                                                              June 30,                          June 30,
                                                                  ------------------------------    ------------------------------
                                                                       2000              1999            2000              1999
                                                                  ------------      ------------    ------------      ------------
<S>                                                               <C>               <C>             <C>               <C>
         Revenues
             License fees and royalties                                 25,500            63,250          25,500         5,695,406
             Other                                                     607,190            79,130       1,520,964           104,091
                                                                  ------------      ------------    ------------      ------------
                Total Revenues                                         632,690           142,380       1,546,464         5,799,497
                                                                  ------------      ------------    ------------      ------------

         Cost of sales                                                 456,667            80,660       1,120,758           100,091
         Selling, general and administrative expenses                  964,684           574,348       2,511,838         1,795,636
         Research and development                                      480,134           378,549         845,101           759,398
                                                                  ------------      ------------    ------------      ------------

              Operating costs and expenses                           1,901,485         1,033,557       4,477,697         2,655,125

         Income (loss) from operations                              (1,268,795)         (891,177)     (2,931,233)        3,144,372

         Other income (expense), net
                  Selling, general and administrative expenses            --                --          (486,000)             --
                  Other                                               (312,809)           83,539         (14,104)          (25,470)
                                                                  ------------      ------------    ------------      ------------

         Income (loss) before taxes and
                  minority interest in subsidiary earnings          (1,581,604)         (807,638)     (3,431,337)        3,118,902

         Minority interest in subsidiary earnings                         --                --            22,547              --
                                                                  ------------      ------------    ------------      ------------

         Income (loss) before taxes                                 (1,581,604)         (807,638)     (3,408,790)        3,118,902

         Provision for taxes                                              --                --              --             555,556
                                                                  ------------      ------------    ------------      ------------
         Net Income  (loss)                                         (1,581,604)         (807,638)     (3,408,790)        2,563,346

         Less preferred stock dividend                                 (22,500)          (38,750)        (50,000)          (77,695)
                                                                  ------------      ------------    ------------      ------------

         Net income (loss) applicable to common shareholders      $ (1,604,104)     $   (846,388)   $ (3,458,790)     $  2,485,651
                                                                  ============      ============    ============      ============

         Earnings (loss) per share

              Basic                                               $      (0.03)     $      (0.02)   $      (0.06)     $       0.05
                                                                  ============      ============    ============      ============
              Diluted                                             $      (0.03)     $      (0.02)   $      (0.06)     $       0.05
                                                                  ============      ============    ============      ============

         Weighted average shares outstanding

              Basic                                                 55,778,265        50,773,826      55,610,804        49,294,145
                                                                  ============      ============    ============      ============
              Diluted                                               55,778,265        50,773,826      55,610,804        55,569,195
                                                                  ============      ============    ============      ============
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


                                       4
<PAGE>   5

                  SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       FOR  THE SIX MONTHS ENDED
                                                                                                   JUNE 30,
                                                                                          2000              1999
                                                                                      -----------       -----------
<S>                                                                                   <C>               <C>
         Cash flows from operating activities:
              Net income (loss) ................................................      $(3,408,790)      $ 2,563,346
                Adjustments to reconcile net income (loss) to net
                  cash provided by (used in) operating activities:
                Minority interest in subsidiary earnings .......................          (22,547)             --
                Depreciation and amortization expense ..........................          729,716            46,279
                Net realized and unrealized gain (loss) on marketable securities           (9,950)             --
                Interest paid in common stock ..................................            7,669            44,852
                Common shares issued for services ..............................          675,000              --
                Changes in assets and liabilities:
                  Accounts receivable, trade ...................................           27,642            78,230
                  Notes receivable .............................................           60,000              --
                  Inventory ....................................................          (77,286)            3,200
                  Prepaid expenses and other current assets ....................            7,855          (310,275)
                  Accounts payable and accrued liabilities .....................           84,260          (493,012)
                  Customer deposits and other current liabilities ..............          (34,441)          140,073
                                                                                      -----------       -----------
                       Total adjustments .......................................        1,447,918          (490,653)
                                                                                      -----------       -----------
                Net cash provided by (used in) operating activities ............       (1,960,872)        2,072,693
                                                                                      -----------       -----------
         Cash flows from investing activities:
                Capital expenditures ...........................................         (805,766)          (42,500)
                Proceeds from the sale of marketable securities ................        2,196,331              --
                Purchase of marketable securities ..............................       (1,671,371)             --
                Decrease in deposits and other assets ..........................             --               2,900
                                                                                      -----------       -----------
                  Net cash used in investing activities ........................         (280,806)          (39,600)
                                                                                      -----------       -----------
         Cash flows from financing activities:
                Repayment of notes payable .....................................          (37,459)         (410,000)
                Proceeds from notes payable ....................................          375,000           250,000
                Proceeds of stock issuance, net of costs .......................        3,081,708           517,893
                                                                                      -----------       -----------
                  Net cash provided by financing activities ....................        3,419,249           357,893
                                                                                      -----------       -----------
         Net increase in cash and cash equivalents .............................        1,177,571         2,390,986
         Cash and cash equivalents, beginning of period ........................          348,832             2,636
                                                                                      -----------       -----------
         Cash and cash equivalents, end of the period ..........................      $ 1,526,403       $ 2,393,622
                                                                                      ===========       ===========
</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.


                                       5
<PAGE>   6

                  SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   Basis of Presentation

     The accompanying unaudited consolidated financial statements of SI Diamond
Technology, Inc. and Subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in compliance with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments consisting only of normal recurring adjustments
considered necessary for a fair presentation, have been included. All
significant intercompany transactions and balances have been eliminated in
consolidation. Operating results for the three and six months ended June 30,
2000 are not necessarily indicative of the results that may be expected for the
full year ending December 31, 2000. For further information, refer to the
financial statements and footnotes thereto for the year ended December 31, 1999,
included in the Company's 1999 Annual Report on Form 10-KSB. The balance sheet
information for December 31, 1999 has been derived from the audited financial
statements at that date.


2.   Supplemental Cash Flow Information

     Cash paid for interest for the six months ended June 30, 2000 and 1999 was
approximately $10,145 and $19,173, respectively. Cash paid for foreign taxes was
$555,556 in 1999. No cash was paid for foreign taxes in 2000. In the six months
ended June 30, 2000, the Company also had non-cash transactions related to the
issuance of its common stock in exchange for the minority interest in its FEPET
subsidiary and the conversion of debt to equity. These transactions are
described in greater detail in Note 3.


3.   Stockholders' Equity

     In the six months ended June 30, 2000, the Company issued a total of
2,000,000 restricted shares of its common stock for a total of $2,300,000 in
cash in a series of exempt offerings under Regulation D of the Securities Act of
1933. The Company also received $406,708 and issued 1,002,747 shares as the
result of the exercise of options and received $375,000 and issued 375,000
shares as the result of the exercise of warrants during the quarter.

     In March 2000, a total of 200 shares of the Company's Series G preferred
shares were converted into 255,000 shares of its common stock.

      As described in greater detail in Note 4, a total of 62,374 shares of
the Company's common stock were issued in February 2000 in connection with a
convertible note payable in the amount of $125,000 issued by the Company in
September 1999 related to the purchase of the assets of Sign Builders of
America, Inc.

      In January 2000, the Company issued a total of 300,000 shares valued at
$675,000 to C&A Services LLC ("C&A"), a Texas limited liability company, in
connection with a marketing, consulting and advisory services agreement
described in greater detail in Note 12 to the financial statements included in
the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1999.

     In February 2000, the Company issued 200,000 shares of its common stock,
valued at $500,000 at the time, to Nomura Trading Co., Ltd. in exchange for
Nomura's 5% minority interest in the Company's FEPET subsidiary. As a result of
this transaction, the Company recorded goodwill of $486,000, which approximated
the amount of the market value of the common shares issued in excess of the book
value of the subsidiary's stock acquired. This goodwill was written off in its
entirety.


                                       6
<PAGE>   7

                  SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

4.   Notes Payable

     At December 31, 1999, the Company had a note payable in the amount of
$250,000 due to a shareholder of the Company. The note arose in connection with
the Company's purchase of the assets of Sign Builders of America, Inc. in
September 1999. The note was payable in two equal installments due March 1, 2000
and September 1, 2000. The note and related interest is convertible into shares
of common stock of the Company at the option of the note holder at a rate of
$2.127 per share. In February 2000, the note holder elected to convert the
installment due March 1, 2000 into shares of the Company's common stock. The
note holder received a total of 62,374 shares of the Company's common stock in
lieu of a principal payment of $125,000 and related interest of $7,669.

     As described in greater detail in Note 5, the Company issued three notes
payable totaling $225,000 in connection with a settlement agreement in the
Semi-Alloys lawsuit.


5.   Contingencies

Customer Claim at Plasmatron Coatings and Systems, Inc.

     On May 20, 1996, Semi-Alloys Company, a former customer of Plasmatron,
filed a complaint with the Supreme Court of the State of New York, County of
Westchester. The complaint named Plasmatron, the Company and Westchester Fire
Insurance Company as defendants. Semi-Alloys claimed a breach of contract
related to $1 million of coating equipment that Plasmatron delivered in 1993,
prior to the Company's ownership of Plasmatron. Semi-Alloys claimed the
equipment did not perform as required under the contract. Semi-Alloys sought to
recover compensatory, consequential and incidental damages. In January 2000, the
Company agreed to participate in a settlement agreement between the plaintiff
and the other defendant; notwithstanding our denial of any liability to the
plaintiff. The Company agreed to pay a total of $450,000, of which $225,000 was
paid at signing. The Company signed three notes payable for the balance of the
settlement. These notes, in the amount of $25,000, $100,000, and $100,000, are
due in three months, nine months, and eighteen months, respectively and bear
interest at a rate of 10% per annum. The first note in the amount of $25,000 was
paid when due in April 2000. In exchange for this settlement, and upon complete
payment of the notes, the Company will receive a complete release from further
liability from both the plaintiff and the co-defendant. The entire amount of
this settlement was included in accrued liabilities at December 31, 1999.

     On April 30, 1998, Universal Bonding Company, managing general agent for
Westchester Fire Insurance Company filed a complaint with the Superior Court of
New Jersey, Atlantic County. The Complaint named Richland Glass Company, Inc.,
Robert Williams, Joan Williams, Bawa Singh, Narinder Singh, Gaylord Evey and
Doris Evey, all guarantors under the bond, as defendants. All defendants were
former owners, or associated with former owners, of Plasmatron. Defendant
Gaylord Evey filed an answer with the court naming Plasmatron, the Company,
Nicholas Rettino, and the Rettino Insurance agency as third party defendants and
asking for indemnification by the third party defendants. A separate
indemnification claim filed by Richland Glass against the same third party
defendants was consolidated with this case. The amount of this claim is to be
determined at trial; however, any potential amounts due by the Company are
dependent upon Westchester collecting from other guarantors on the bond, and
those guarantors succeeding in obtaining a judgement against the Company.
Westchester has released its claims against the Company. The Company considers
this case to be without merit and expects to have the case ultimately resolved
in its favor.

Outlook

      We anticipate that losses will continue as we fund the development of our
CFE technology and accelerate installations of our electronic billboard and
related electronic display products. We expect the magnitude of the losses to
decrease. We expect to reach break-even on a monthly operating basis in 2001.
There can be no assurance that we will be profitable in the future. Full
commercial development of our technology and electronic billboard and related
electronic display will require additional funds that may not be available at
terms acceptable to us.


                                       7
<PAGE>   8

                  SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

5.   Contingencies (continued)


     The Company has developed a plan to allow it to maintain operations until
the Company is able to sustain itself on its own revenue. The plan is primarily
dependent on raising funds through the licensing of its technology and through
strategic partners and debt offerings. The Company is also concentrating on
raising revenue by installing its electronic billboard and related display
products at customer sites. Management believes that it has the ability to
continue to raise additional funding, if necessary, to enable it to continue
operations until its plan can be completed. At the present time the Company has
existing cash available to sustain it for a period of approximately two months
from the date of this report at current spending levels and based on current
spending plans.

     This plan is based on current development plans, current operating plans,
the current regulatory environment, historical experience in the development of
electronic products and general economic conditions. Changes could occur which
would cause certain assumptions on which this plan is based to be no longer
valid. The Company's plan is primarily dependent on increasing revenues and
raising additional funds through strategic partners and additional debt
offerings. If adequate funds are not available from operations, or additional
sources of financing, the Company may have to eliminate, or reduce
substantially, expenditures for research and development, testing and production
of its products, or obtain funds through arrangements with other entities that
may require the Company to relinquish rights to certain of its technologies or
products. Such results would materially and adversely affect the Company.

6.   Related Party Transactions

     As described in greater detail in Item 12 of the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999, the Company's
subsidiary, Electronic Billboard Technology, Inc. has entered into a Patent
Assignment and Royalty Agreement with Advanced Technology Incubator, Inc.,
("ATI"). ATI is owned by Dr. Zvi Yaniv, SI Diamond's President and Chief
Operating Officer. The assignment is conditioned on an initial payment of
$200,000 to ATI. The initial payment was originally due February 15, 1999, but
the time for payment has been extended for an indefinite time period. A total of
$62,500 has been paid for this extension. SI Diamond can complete the assignment
of the patent at any time by paying the remaining $137,500 to ATI.

7.   Income Taxes

     As discussed in more detail in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1999, the Company had a net operating
loss carryforward of approximately $51 million available to it for federal
income tax purposes. A portion of that net operating loss carryforward was used
to offset the taxable income for the six month period ended June 30, 1999. If
this net operating loss carryforward had not been available, the Company would
have recorded $900,000 in income tax for the six month period ended June 30,
1999. As a result of the net loss, no income taxes were recorded for the period
ended June 30, 2000.

8.   Subsequent Events

     In July 2000, we completed the acquisition of certain patents related to
the use of carbon nanotubes for field emission applications. We issued 240,164
shares of our common stock, valued at $250,000 in exchange for these patents.


                                       8
<PAGE>   9

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

     SIX MONTHS ENDED JUNE 30, 2000 AND 1999

                                    OVERVIEW

     During the six months ended June 30, 2000, the Company's primary revenues
     were earned as a result of the construction of signs at our Sign Builders
     of America, Inc. ("SBOA") subsidiary and reimbursed research expenditures
     at our Field Emission Picture Element Technologies, Inc. ("FEPET")
     subsidiary. We continued to incur substantial expenses in support of the
     development of our proprietary Carbon Based Field Emission ("CFE")
     Technology and in the development of our electronic display products. As
     more fully discussed in the our Annual Report on Form 10-KSB for the year
     ended December 31, 1999, we expect to incur additional research and
     development expenses throughout 2000 in developing our CFE technology. Our
     Electonic Billboard Technology, Inc. ("EBT") subsidiary began receiving
     advertising revenue related to its electronic billboard product in the
     quarter ending June 2000. We also expect monthly advertising revenues to
     consistently increase for the balance of the year as additional billboards
     are installed at customer locations.

                               RECENT DEVELOPMENTS

     In January 2000, EBT signed an agreement with Eckerd Corporation, a
     subsidiary of JCPenney to install two electronic billboards at Eckerd
     locations as part of a pilot program. Under this arrangement, EBT will sell
     advertising on these boards and share a portion of the advertising revenue
     with Eckerd. The first of these billboards was installed in March 2000 and
     the pilot program is currently underway.

     In April 2000, EBT signed a license agreement with Cinemark USA, Inc.
     whereby EBT will install its electronic billboard product at selected
     Cinemark locations throughout the United States. Initially five locations
     have been jointly selected by EBT and Cinemark. When the billboards are
     installed, EBT will sell advertising on the boards and share a portion of
     the revenues with Cinemark.

     In May 2000, FEPET signed a license agreement related to carbon nanotubes
     for field emission applications that will be a significant addition to our
     intellectual property portfolio. The transaction was completed in July 2000
     when approximately 240,000 shares of common stock valued at $250,000 were
     issued to the licensor of the patent.

     On July 1, 2000 EBT took over operation of a billboard located in a prime
location along Interstate Highway 35 in Austin, Texas. If EBT obtains the
necessary approvals, it will install an electronic billboard at that location.

                              RESULTS OF OPERATIONS

     Our revenues for the second quarter ended June 30, 2000 totaled $632,690
     compared to $142,380 for the second quarter of 1999. We earned $1,546,464
     in revenues during the six month period ended June 30, 2000, (the "2000
     Period") as compared with $5,799,497 during the six month period ended June
     30, 1999 (the "1999 Period"). During the 2000 Period, we had revenues of
     $1,162,142 from SBOA, $330,329 from FEPET, and $53,993 in revenues from
     EBT. The FEPET revenues in the 2000 Period were all the result of
     reimbursed research expenditures under two government programs. In the 1999
     Period, FEPET had revenues of $5,648,426, of which $5,555,556 was from
     licensing certain of its patents and patent applications to Canon, Inc. The
     SBOA revenues in the 2000 period were all from the sale of signs designed,
     manufactured, or installed by SBOA. There were no SBOA revenues in the 1999
     Period since we purchased SBOA in September 1999. During the 2000 period,
     EBT received $25,500 in royalties under its now terminated agreement with
     Texas Digital Systems, Inc. ("TDS"), $27,413 in revenue from miscellaneous
     product sales, and $1,080 of advertising revenue related to its recently
     installed electronic billboard. During the 1999 Period, EBT had revenue of
     $151,071, virtually all of which was related to the TDS agreement.


                                       9
<PAGE>   10

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS (CONT.)


     We had a revenue backlog of $240,020 as of June 30, 2000. This backlog
     consists of $220,000 of contracts in process at SBOA and $20,020 of
     advertising commitments at EBT. EBT had no backlog at June 30, 1999. The
     entire backlog of $144,843 at June 30, 1999 was related to research
     contracts in process at FEPET at that time. FEPET had no backlog at June
     30, 2000. We had contract research revenues of $330,329 in the 2000 period
     and no contract research revenues in the 1999 period. We have no current
     backlog of anticipated future revenues from governmental research
     contracts. We intend to apply for research contracts related to our core
     technology research, however we will continue to fund this research
     regardless of the availability of any reimbursement for these costs. Our
     ability to perform continued research should not require significant
     additional personnel.

     For the 2000 Period, our cost of sales were $1,120,758, or a gross margin
     of 28%, as compared with $100,091 or a gross margin of 98%, for the 1999
     Period. This decreased margin resulted from a combination of factors.
     First, substantially all of the Company's revenue in the 1999 Period
     resulted from royalty agreements that have minimal ongoing costs associated
     with the agreement. The revenue in the 2000 period was primarily from the
     construction of signs, which have normal margins in the 40% range and the
     reimbursement of research costs, which have no margin. We expect our future
     margins to increase substantially from the 28% margin in this quarter as
     EBT begins to generate advertising revenue from its electronic billboards
     and as FEPET enters into additional license or royalty agreements.

     Our selling, general, and administrative expenses were $2,511,838 for the
     2000 Period, compared with $1,795,636 for the 1999 Period. The primary
     reason for the increase was selling, general, and administrative expenses
     associated with SBOA during the 2000 Period. Since SBOA was not acquired
     until September 1999, there were no selling, general, and administrative
     expenses associated with SBOA during the 1999 period. We incurred research
     and development expenses of $845,101 for the 2000 Period. This was slightly
     higher than the $759,398 incurred in the 1999 Period and results from a
     higher level of research activity. We expect to continue to incur expense
     throughout the remainder of 2000 in support of additional research and
     development activities related to the commercial development of our CFE
     technology and our electronic billboard technology.

     Our other expense of $14,104 in the 2000 Period was primarily the result of
     net realized and unrealized gains and losses on our marketable securities
     portfolio, including the gain recognized on the sale of Diamond.com LLC.
     Our other expense in the 1999 Period was primarily the result of interest
     expense.

                         LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 2000, the Company had cash and cash equivalents in the amount
     of $1,526,403 as compared with cash and cash equivalents of $348,832 at
     December 31, 1999. This increase in cash is primarily the result of
     proceeds from the issuance of our common stock, offset by cash used in
     operating activities. Based on the developmental stages of the Company's
     CFE technology and electronic billboard product, additional debt, equity,
     sale of product distribution or technology rights, or other financing will
     be required in the future. Although we expect to obtain acceptable
     financing for our future operations, there can be no absolute assurance
     that any of these financing alternatives can be arranged on commercially
     acceptable terms.

      As described in greater detail in the notes to the financial statements,
     the Company received proceeds of $3,081,708 from the issuance of common
     stock and $375,000 from the issuance of notes payable during the six months
     ended June 30, 2000. The Company also repaid $37,459 of notes payable
     during this period. This resulted in net cash provided by financing
     activities of $3,419,249 for the 2000 Period. Cash provided by financing
     activities was $357,893 for the 1999 Period.


                                       10
<PAGE>   11

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS (CONT.)


     Cash used in operating activities was $1,960,872 for the 2000 Period
     compared to cash provided by operating activities of $2,072,693 for the
     1999 Period. The decrease in the cash provided by operating activities was
     primarily the result of the patent license agreement signed during the 1999
     Period. No revenue from patent license agreements was included in the 2000
     Period.

     Cash used in investing activities during the 2000 Period was $280,806 as
     compared with cash used in investing activities of $39,600 for the 1999
     Period. The cash used in the 2000 Period resulted from capital expenditures
     related to electronic billboards, partially offset by net proceeds from the
     sale of marketable securities. The cash used in investing activities in the
     1999 period was the result of the acquisition of minor amounts of capital
     equipment.

     The principal source of our liquidity has been the funds received from our
     initial public offering and from subsequent foreign and exempt offerings of
     common stock or debt instruments. We may receive additional funds from the
     exercise of warrants or stock options, although there can be no assurance
     that such warrants or options will be exercised. When we need additional
     funds, we may seek to sell additional debt or equity securities, or sell or
     license certain technology rights. We may seek to increase our liquidity
     through bank borrowings or other financing. While we expect to be able to
     finance our future operations, there can be no absolute assurance that any
     of these financing alternatives can be arranged on commercially acceptable
     terms. We believe that our success in reaching profitability will be
     dependent upon the viability of our products and their acceptance in the
     marketplace, the acceptance of our technology by potential licensees, and
     our ability to obtain additional financing in the future. WallaceSanders &
     Company, independent auditors of the Company, expressed uncertainty as to
     the ability of the Company to continue as a going concern based on
     accumulated losses from operations. See "Independent Auditors' Report."
     included in the Company's 1999 Annual Report on Form 10-KSB. We have
     received similar opinions from our auditors in each year since 1995.

     We expect to continue to incur substantial expenses for research and
     development ("R&D"), product testing, and product marketing. Further, we
     believe that certain products that may be developed by potential licensees
     of our technology may not be available for commercial sale or routine use
     for a period of one to two years. While we would likely receive initial
     license payments, ongoing royalty streams related to those licenses will
     not be available until potential licensees have introduced products using
     our technology. Our electronic billboard product is available for
     installation and is being installed in certain locations at the present
     time. Our business model calls for us to install electronic billboards and
     generate revenues from the sale of advertising. As a result we must incur
     the cost of installing the billboards and recover that cost through the
     advertising revenues generated by the billboards. Therefore, it is
     anticipated that the commercialization of our existing and proposed
     products will require additional capital in excess of our current funding.

     The combined effect of the foregoing may prevent us from achieving
     sustained profitability for an extended period of time. Because the timing
     and receipt of revenues from the sale of products will be tied to the
     achievement of certain product development, testing and marketing
     objectives which cannot be predicted with certainty, there may be
     substantial fluctuations in our results of operations. We expect, however,
     to be operating at break even on a monthly basis in 2001. If revenues do
     not increase as rapidly as anticipated, or if product development, testing,
     and marketing require more funding than anticipated, we may be required to
     curtail our expansion or seek additional financing from other sources.


                                       11
<PAGE>   12

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS (CONT.)


                                     OUTLOOK

     We anticipate that losses will continue in 2000 as we continue to fund the
     development of our CFE technology and begin installations of our electronic
     billboard and related electronic display products. We expect the magnitude
     of the losses, if they continue, to decrease. We expect to reach break-even
     on a monthly operating basis in 2001. There can be no assurance that we
     will be profitable in the future. Full commercial development of our
     technology and electronic billboard and related electronic display will
     require additional funds that may not be available at terms acceptable to
     us.

     We developed a plan to allow ourselves to maintain operations until we are
     able to sustain ourselves on our own revenue. However, at current spending
     levels, existing resources (including commitments) are only available to
     allow us to operate for a period of approximately two months from the date
     of this report. Our plan is primarily dependent on raising funds through
     the licensing of our technology and through additional debt and equity
     offerings. We are also concentrating on raising revenue by seeking
     customers for our electronic billboard product, which is currently
     available for installation. We believe that we have the ability to continue
     to raise short term funding, if necessary, to enable us to continue
     operations until our plan can be completed.

     This plan is based on current development plans, current operating plans,
     the current regulatory environment, historical experience in the
     development of electronic products and general economic conditions. Changes
     could occur which would cause certain assumptions on which this plan is
     based to be no longer valid. Our plan is primarily dependent on increasing
     revenues and raising funds through additional debt and equity offerings.
     Although we do not expect funding our operations to be a problem, if
     adequate funds are not available from operations, or additional sources of
     financing, we may have to eliminate, or reduce substantially, expenditures
     for research and development, testing and production of our products, or
     obtain funds through arrangements with other entities that may require us
     to relinquish rights to certain of our technologies or products. Such
     results may materially and adversely affect us.


                                       12
<PAGE>   13

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 20, 1996, Semi-Alloys Company, a former customer of Plasmatron, filed a
complaint with the Supreme Court of the State of New York, County of
Westchester. The complaint names Plasmatron, the Company and Westchester Fire
Insurance Company as defendants. Semi-Alloys claims a breach of contract related
to $1 million of coating equipment that Plasmatron delivered in 1993, prior to
the Company's ownership of Plasmatron. Semi-Alloys claims the equipment does not
perform as required under the contract. Semi-Alloys sought to recover
compensatory, consequential and incidental damages. In January 2000, the Company
agreed to participate in a settlement agreement between the plaintiff and the
other defendant; notwithstanding our denial of any liability to the plaintiff.
The Company agreed to pay a total of $450,000, of which $225,000 was due at
signing. The Company signed three notes payable for the balance of the
settlement. These notes, in the amount of $25,000, $100,000, and $100,000, are
due in three months, nine months, and eighteen months, respectively and bear
interest at a rate of 10% per annum. The first note in the amount of $25,000 was
paid when due in April 2000. In exchange for this settlement, and upon payment
of the notes, the Company will receive a complete release from further liability
from both the plaintiff and the co-defendant. The entire amount of this
settlement is included in accrued liabilities at December 31, 1999.

     On April 30, 1998, Universal Bonding Company, managing general agent for
Westchester Fire Insurance Company filed a complaint with the Superior Court of
New Jersey, Atlantic County. The Complaint named Richland Glass Company, Inc.,
Robert Williams, Joan Williams, Bawa Singh, Narinder Singh, Gaylord Evey and
Doris Evey, all guarantors under the bond, as defendants. All defendants were
former owners, or associated with former owners, of Plasmatron. Defendant
Gaylord Evey filed an answer with the court naming Plasmatron, the Company,
Nicholas Rettino, and the Rettino Insurance agency as third party defendants and
asking for indemnification by the third party defendants. A separate
indemnification claim filed by Richland Glass against the same third party
defendants was consolidated with this case. The amount of this claim is to be
determined at trial; however, any potential amounts due by the Company are
dependent upon Westchester collecting from other guarantors on the bond, and
those guarantors succeeding in obtaining a judgement against the Company.
Westchester has released its claims against the Company. The Company considers
this case to be without merit and expects to have the case ultimately resolved
in its favor.


                                       13
<PAGE>   14

ITEM 5.   OTHER INFORMATION

CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this report are forward-looking statements concerning the
future operations of the Company. The Company is including the following
cautionary statement in this Quarterly Report on Form 10-QSB to make applicable
and take advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 for any forward-looking statement made by, or on
behalf of, the Company. The factors identified in this cautionary statement are
important factors (but not necessarily all important factors) that could cause
actual results to differ materially from those expressed in any forward-looking
statement made by, or on behalf of, the Company.

     Where any such forward-looking statement includes a statement of the
assumptions or basis underlying such forward-looking statement, the Company
cautions that, while it believes such assumptions or basis to be reasonable and
makes them in good faith, assumed facts or basis almost always vary from actual
results, and the differences between assumed facts or basis and actual results
can be material, depending upon the circumstances. Where in any forward-looking
statement, the Company or its management expresses an expectation or belief as
to future results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis, but there can be no assurance that the
statement or expectation or belief will result or be achieved or accomplished.

     Important factors that could cause the Company's actual results to differ
from results in forward-looking statements are incorporated herein by reference
from pages ii-vii of the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1999. The Company undertakes no obligation to publicly
update any forward-looking statements, whether as a result of new information,
future events, or otherwise. You are advised, however, to consult any further
disclaimers the Company may make on related subjects in our 10-QSB, 8-K, and
10KSB reports to the SEC


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits:  See Index to Exhibits on page 16 for a descriptive response
         to this item.

     (b) Reports on Form 8-K:

         (1)   Current Report on Form 8-K (Item 5) dated as of April 28, 2000.


                                       14
<PAGE>   15

                                   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.


                                     SI DIAMOND TECHNOLOGY, INC.
                                     (Registrant)



Date:    November 10, 2000                     /s/ Marc W. Eller
                                     ----------------------------------------
                                     Marc W. Eller
                                     Chairman and Chief Executive Officer
                                     (Principal Executive Officer)



Date:    November 10, 2000                    /s/ Tracy Vaught
                                     ----------------------------------------
                                     Tracy Vaught
                                     Chief Financial Officer
                                     (Principal Financial Officer and Principal
                                     Accounting Officer)


                                       15
<PAGE>   16

                                INDEX TO EXHIBITS


The following documents are filed as part of this Report:

   Exhibit


       11         Computation of (Loss) Per Common Share

       13         Forward-Looking Statements and Important Factors Affecting
                  Future Results (pages ii - vii of the Company's Annual Report
                  on Form 10-KSB for the fiscal year ended December 31, 1999,
                  incorporated by reference into the Quarterly Report on Form
                  10-QSB for the fiscal quarter ended March 31, 2000).

       27         Financial Data Schedule


                                       16