| ý | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|--------|-----------------------------------------------------------------------------------|

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

| TEXAS                           | 76-0273345                           |
|---------------------------------|--------------------------------------|
| (State or other jurisdiction of | (I.R.S. Employer Identification No.) |
| incorporation or organization)  |                                 |
|                            |                                 |

| 3006 Longhorn Blvd., Suite 107           |       |
|------------------------------------------|------------|
| Austin, Texas                            | 78758      |
| (Address of principal executive offices) | (Zip Code) |

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

|   | x |   Yes |   | o |   No |
|--------|---|-----------------|--------|---|----------------|

|   | o |   Yes |   | o |   No |
|--------|---|------------|--------|---|-----------|

|   | o |   Yes |   | x |   No |
|--------|---|------------|--------|---|-----------|

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| Part I.  Financial Information | Page                                                                                                           |
|-------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                           |   |   |
|                                | Item 1.  Financial Statements                                                                             |   |   |
|                                |                                                                                                           |   |   |   |
|                                |                                                                                                           | Consolidated Balance Sheets--March 31, 2011 and December 31, 2010 |   | 3 |
|                                |                                                                                                           |   |   |   |
|                                |                                                                                                           | Consolidated Statements of Operations--Three Months Ended March 31, 2011 and 2010 |   | 4 |
|                                |                                                                                                           |   |   |   |
|                                |                                                                                                           | Consolidated Statements of Cash Flows--Three Months Ended March 31, 2011 and 2010 |   | 5 |
|                                |                                                                                                           |   |   |   |
|                                |                                                                                                           | Notes to Consolidated Financial Statements |   | 6 |
|                                |                                                                                                           |   |   |
|                                | Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 8 |
|                                |                                                                                                           |   |   |
|                                | Item 3.  Quantitative and Qualitative Disclosures about Market Risk                                  |   | 12 |
|                                |                                                                                                           |   |   |
|                                | Item 4. Controls and Procedures                                                                                |   | 12 |
|                                |                                                                                                           |   |
| Part II.  Other Information    |                                                                                                           |   |
|                                |                                                                                                           |   |   |
|                                | Item 1. Legal Proceedings                                                                                      |   | 13 |
|                                |                                                                                                           |   |   |
|                                | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                            |   | 13 |
|                                |                                                                                                           |   |   |
|                                | Item 6.  Exhibits                                                                                         |   | 13 |
|                                |                                                                                                           |   |   |
| Signatures                          |                                                                                                           |   | 14 |

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| ASSETS                                                                                                                                                                                  |   | (Unaudited)March 31,2011 |         |   | December 31,2010 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------------|--------|------------------|--------|
| Current assets:                                                                                                                                                                         |   |                     |         |   |             |   |
| Cash and cash equivalents                                                                                                                                                               |   | $                        | 4,566,011    |   |             | $      | 2,732,570 |   |
| Accounts receivable, trade – net of allowance for doubtful accounts                                                                                                               |   |                     | 1,102,178    |   |             |   | 757,507 |   |
| Prepaid expenses and other current assets                                                                                                                                               |   |                     | 178,492      |   |             |   | 116,784 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Total current assets                                                                                                                                                                    |   |                     | 5,846,681    |   |             |   | 3,606,861 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Property and equipment, net                                                                                                                                                             |   |                     | 208,914      |   |             |   | 215,289 |   |
| Other assets                                                                                                                                                                            |   |                     | 22,233       |   |             |   | 22,233 |   |
| Total assets                                                                                                                                                                            |   | $                        | 6,077,828    |   |             | $      | 3,844,383 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                              |   |                     |         |   |             |   |   |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Current liabilities:                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Accounts payable                                                                                                                                                                        |   | $                        | 548,050      |   |             | $      | 545,973 |   |
| Obligations under capital lease                                                                                                                                                         |   |                     | 13,365       |   |             |   | 17,317 |   |
| Accrued liabilities                                                                                                                                                                     |   |                     | 304,321      |   |             |   | 566,623 |   |
| Deposits and deferred revenue                                                                                                                                                           |   |                     | 526,910      |   |             |   | 320,000 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
|                 Total current liabilities                                                                    |   |                     | 1,392,646    |   |             |   | 1,449,913 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Obligations under capital lease, long-term                                                                                                                                              |   |                     | 11,836       |   |             |   | 13,819 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Convertible notes payable                                                                                                                                                               |   |                     | 1,346,782    |   |             |   | 1,570,571 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Total liabilities                                                                                                                                                                       |   |                     | 2,751,264    |   |             |   | 3,034,303 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Commitments and contingencies                                                                                                                                                           |   |                     | –      |   |             |   | – |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Stockholders' equity:                                                                                                                                                                   |   |                     |         |   |             |   |   |   |
| Preferred stock, $1.00 par value, 2,000,000 shares authorized; No shares issued and outstanding                                                                                    |   |                     | –      |   |             |   | – |   |
| Common stock, $.00l par value, 160,000,000 shares authorized, 118,640,825 and 109,967,628 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively |   |                     | 118,641      |   |             |   | 109,968 |   |
| Additional paid-in capital                                                                                                                                                              |   |                     | 114,107,725  |   |             |   | 110,986,117 |   |
| Accumulated deficit                                                                                                                                                                     |   |                     | (110,899,802 | )      |             |   | (110,286,005 | ) |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Total stockholders' equity                                                                                                                                                              |   |                     | 3,326,564    |   |             |   | 810,080 |   |
|                                                                                                                                                                                    |   |                     |         |   |             |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                                              |   | $                        | 6,077,828    |   |             | $      | 3,844,383 |   |

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|                                                   |   | For  the Three Months EndedMarch 31, |        |
|--------------------------------------------------------|--------|-------------------------------------------|-------------|
|                                                   |   | 2011                                      |        |   | 2010 |
| Revenues                                               |   |                                      |        |   |   |
| Government contracts                                   |   | $                                         | 1,251,092   |   |   | $ | 620,793 |   |
| Contract research                                      |   |                                      | 548,790     |   |   |   | 379,711 |   |
| Other                                                  |   |                                      | 137,099     |   |   |   | 9,132 |   |
| Total revenues                                         |   |                                      | 1,936,981   |   |   |   | 1,009,636 |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Research and development                               |   |                                      | 1,601,734   |   |   |   | 977,680 |   |
| Selling, general and administrative expenses           |   |                                      | 817,555     |   |   |   | 555,499 |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Operating costs and expenses                           |   |                                      | 2,419,289   |   |   |   | 1,533,179 |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Gain on sale of intellectual property and other assets |   |                                      | –     |   |   |   | 2,732 |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Loss from operations                                   |   |                                      | (482,308    | ) |   |   | (520,811 | ) |
|                                                   |   |                                      |        |   |   |   |   |   |
| Other income (expense), net                            |   |                                      |        |   |   |   |   |   |
| Interest expense                                       |   |                                      | (132,431    | ) |   |   | (49,391 | ) |
| Interest income                                        |   |                                      | 942         |   |   |   | 262 |   |
|                                                   |   |                                      |        |   |   |   |   |   |
|  Loss before taxes                                |   |                                      | (613,797    | ) |   |   | (569,940 | ) |
|                                                   |   |                                      |        |   |   |   |   |   |
|  Provision for taxes                              |   |                                      | –     |   |   |   | – |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Net loss                                               |   | $                                         | (613,797    | ) |   | $ | (569,940 | ) |
| Loss per share                                         |   |                                      |        |   |   |   |   |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Basic and Diluted                                 |   | $                                         | (0.01       | ) |   | $ | (0.01 | ) |
| Weighted average shares outstanding                    |   |                                      |        |   |   |   |   |   |
|                                                   |   |                                      |        |   |   |   |   |   |
| Basic and Diluted                                 |   |                                      | 110,759,903 |   |   |   | 107,861,704 |   |

----

|                                                                                | For the Three Months EndedMarch 31, |   |
|-------------------------------------------------------------------------------------|------------------------------------------|--------|
|                                                                                | 2011                                     |   |   | 2010 |   |
| Cash flows from operating activities:                                               |                                     |   |   |   |   |   |
| Net loss                                                                            |                                     | $      | (613,797 | ) |   | $ | (569,940 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:         |                                     |   |   |   |   |   |   |   |
| Depreciation and amortization expense                                               |                                     |   | 14,883 |   |   |   | 16,216 |   |
| Amortization of discount on debt                                                    |                                     |   | 93,211 |   |   |   | 28,730 |   |
| Stock based compensation expense                                                    |                                     |   | 196,360 |   |   |   | 22,799 |   |
| Changes in assets and liabilities:                                                  |                                     |   |   |   |   |   |   |   |
| Accounts receivable, trade                                                          |                                     |   | (344,671 | ) |   |   | (64,314 | ) |
| Prepaid expenses and other assets                                                   |                                     |   | (61,708 | ) |   |   | (45,738 | ) |
| Accounts payable and accrued liabilities                                            |                                     |   | (169,618 | ) |   |   | 149,676 |   |
| Deposits and deferred revenue                                                       |                                     |   | 206,910 |   |   |   | 31,818 |   |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Total adjustments                                                                   |                                     |   | (64,633 | ) |   |   | 139,187 |   |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Net cash used in operating activities                                               |                                     |   | (678,430 | ) |   |   | (430,753 | ) |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                               |                                     |   |   |   |   |   |   |   |
| Capital expenditures                                                                |                                     |   | (8,508 | ) |   |   | (4,675 | ) |
|        Net cash used in investing activities     |                                     |   | (8,508 | ) |   |   | (4,675 | ) |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                               |                                     |   |   |   |   |   |   |   |
| Proceeds from issuance of common stock                                              |                                     |   | 2,526,314 |   |   |   | 200,000 |   |
| Proceeds from long-term debt                                                        |                                     |   | – |   |   |   | 1,680,000 |   |
| Repayment of capital lease obligations                                              |                                     |   | (5,935 | ) |   |   | (5,226 | ) |
|                                                                                |                                     |   |   |   |   |   |   |   |
|        Net cash provided by financing activities |                                     |   | 2,520,379 |   |   |   | 1,874,774 |   |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Net increase in cash and cash equivalents                                           |                                     |   | 1,833,441 |   |   |   | 1,439,346 |   |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                      |                                     |   | 2,732,570 |   |   |   | 286,971 |   |
|                                                                                |                                     |   |   |   |   |   |   |   |
| Cash and cash equivalents, end of period                                            |                                     | $      | 4,566,011 |   |   | $ | 1,726,317 |   |

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|                                                 | APPLIED NANOTECH HOLDINGS, INC.(Registrant)                                                                                                                                                                                                                                                                                                                                                                          |
|------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Date:     May 2, 2011  |                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                 |      /s/ Douglas P. Baker                                  Douglas P. BakerChief Executive Officer, Chief Financial Officer(Principal Executive Officer, Principal FinancialOfficer, and Principal Accounting Officer) |

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| Exhibit |                                                     |
|---------|----------------------------------------------------------|
|    |                                                     |
| 11      | Computation of (Loss) Per Common Share                   |
|    |                                                     |
| 31.1    | Rule 13a-14(a)/15d-14(a) Certificate of Douglas P. Baker |
|    |                                                     |
| 32.1    | Section 1350 Certificate of Douglas P. Baker             |

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