U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  FORM 10 - QSB


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

                   For the Quarterly Period Ended May 31, 2001

                         Commission file number 0-10783


                             BSD MEDICAL CORPORATION


         DELAWARE                                     75-1590407
 -------------------------------            ------------------------------------
  (State of Incorporation)                  (IRS Employer Identification Number)


      2188 West 2200 South
      Salt Lake City, Utah                                     84119
 ---------------------------------------                     -------------
 (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number:  (801) 972-5555


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


          Class                                 Outstanding as of May 31, 2001
  ----------------------------                  ------------------------------
  Common stock, $.01 Par Value                           17,602,619



Transitional Small Business Disclosure Format (Check one):  Yes [  ]   No [X]



<PAGE>

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                             BSD MEDICAL CORPORATION
                             Condensed Balance Sheet
                                   (Unaudited)
<TABLE>
<CAPTION>


                              Assets                                               May 31,
                              ------                                                2001
                                                                             -------------------
<S>                                                                         <C>
Current assets:
    Cash and cash equivalents                                               $          323,079
    Cash, restricted                                                                   100,000
    Receivables                                                                        697,128
    Inventories                                                                        951,427
    Prepaid Expenses                                                                     6,586
    Deposits                                                                            12,644
                                                                             -------------------
           Total current assets                                                      2,090,864
                                                                             -------------------

Property and equipment, net                                                            158,776
Long-term trade receivables                                                             14,570
Patent, net                                                                             12,631
                                                                             -------------------
                                                                            $        2,276,841
                                                                             -------------------
               Liabilities and Stockholders' Equity
               ------------------------------------

Current liabilities:
    Accounts payable                                                                   100,435
    Accrued expenses                                                                   357,097
    Customer Deposits                                                                  844,308
    Current portion on deferred gain on sale - leaseback                                61,416
    Current portion of deferred revenue                                                 56,736
                                                                             -------------------
           Total current liabilities                                                 1,419,992
                                                                             -------------------

Deferred revenue                                                                             -
Deferred gain on sale-leaseback                                                         30,629
                                                                             -------------------
           Total liabilities                                                         1,450,621
                                                                             -------------------

Stockholders' equity:
    Common stock, $.01 par value; authorized 20,000,000 shares;
      issued and outstanding 17,602,619, shares                                        176,026
    Additional paid-in capital                                                      20,810,773
    Accumulated deficit                                                            (20,135,248)
    Deferred compensation                                                              (25,097)
    Less 24,331 shares of  treasury stock, at cost                                        (234)
                                                                             -------------------

           Net stockholders' equity                                                    826,220
                                                                             -------------------

                                                                            $        2,276,841
                                                                             ===================
</TABLE>

See accompanying notes to financial statements

                                       2
<PAGE>


                             BSD MEDICAL CORPORATION

                       Condensed Statements of Operations
                                   (Unaudited)
                   Periods ended May 31, 2001 and May 31, 2000

<TABLE>
<CAPTION>

                                                                      Three Months                       Nine Months
                                                                         Ended:                             Ended:
                                                             -------------------------------    -------------------------------
                                                                May 31,          May 31,           May 31,          May 31,
                                                                  2001             2000              2001             2000
                                                             --------------   --------------    --------------   --------------

<S>                                                         <C>               <C>              <C>               <C>
Sales                                                       $   1,058,028          830,978     $   1,194,901          999,228
Grant and license revenue                                               -           34,099            28,110          166,674
                                                             --------------   --------------    --------------   --------------

           Total revenues                                       1,058,028          865,077         1,223,011        1,165,902
                                                             --------------   --------------    --------------   --------------
Costs and expenses:
    Cost of product sales                                         444,974          294,598           532,502          384,374
    Research and development                                      146,285          175,871           452,172          446,951
    Selling, general, and administrative                          202,883          309,164           680,483          871,870
                                                             --------------   --------------    --------------   --------------

           Total costs and expenses                               794,142          779,633         1,665,157        1,703,195
                                                             --------------   --------------    --------------   --------------

           Operating income (loss)                                263,886           85,444          (442,146)        (537,293)

Other income (expense):
    Equity Earnings in TherMatrx, Inc.                                  0         (149,188)                0         (358,726)
    Interest income                                                 3,235            8,255            18,005           40,856
    Interest expense                                                    0             (121)                0             (640)
                                                             --------------   --------------    --------------   --------------

           Total other income  (expense)                            3,235         (141,054)           18,005         (318,510)
                                                             --------------   --------------    --------------   --------------

           Net income (loss)                                $     267,121          (55,610)    $    (424,141)        (855,803)
                                                             ==============   ==============    ==============   ==============

Net income (loss) per common and common equivalent share,
   basic and diluted                                        $         .01            (.00)     $       (.02)            (.05)
                                                             --------------   --------------    --------------   --------------
Weighted average number of shares outstanding:
                                                             --------------   --------------    --------------   --------------

Basic                                                          17,596,000       17,322,000        17,525,000       16,909,000

Diluted                                                        18,283,000       17,322,000        17,525,000       16,909,000
                                                                        -                                                   -

</TABLE>

See accompanying notes to financial statements.

                                       3
<PAGE>


                             BSD MEDICAL CORPORATION

                 Condensed Statements of Cash Flows (Unaudited)
                Nine Months ended May 31, 2001, and May 31, 2000


<TABLE>
<CAPTION>
                                                                                     May 31,          May 31,
                                                                                      2001             2000
                                                                                 --------------   --------------
<S>                                                                             <C>               <C>

Cash flows from operating activities:
    Net loss                                                                    $   (424,141)        (855,803)
    Adjustments to reconcile net loss to net cash used in operating
      activities:
       Depreciation and amortization                                                  27,586           16,857
       Loss from equity investment                                                         -          358,726
       Deferred compensation                                                           3,800          151,880
       Issuance of stock to Directors                                                 24,001           12,000
       Deferred gain on sale of asset                                                (46,062)         (46,062)
       (Increase) decrease in:
           Receivables                                                              (344,155)        (380,161)
           Inventories                                                               (46,325)        (450,827)
           Prepaid expenses and deposits                                              31,216            6,855
       Increase (decrease) in:
           Accounts payable                                                           38,898           10,947
           Accrued expenses                                                           45,353           38,431
           Customer deposits                                                         463,491          (13,205)
           Deferred income                                                            10,712          (58,774)
                                                                                 --------------   --------------
              Net cash used in operating activities                                 (215,626)      (1,209,136)
                                                                                 --------------   --------------

Cash flows from investing activities:
    Purchase of property and equipment                                               (99,165)         (17,038)
    Purchase of patent license                                                             -          (13,928)
                                                                                 --------------   --------------
              Net cash used in investing activities                                  (99,165)         (30,966)
                                                                                 --------------   --------------

Cash flows from financing activities:
    Proceeds from issuance of common stock                                             6,376           18,680
    Principal payments on long-term debt obligation                                        -          (24,207)
                                                                                ---------------   --------------

              Net cash provided by (used in) financing activities                      6,376           (5,527)
                                                                                ---------------   --------------

Decrease in cash and cash equivalents                                           $    (308,415)      (1,245,629)
Cash and cash equivalents, beginning of period                                        731,494        1,689,029
                                                                                 --------------   --------------
Cash and cash equivalents, end of period                                        $     423,079          443,400
                                                                                 ==============   ==============

Supplemental Disclosure of Cash Flow Information
------------------------------------------------
    Cash paid for interest during period                                        $           0     $        640

</TABLE>

During the nine months  ending May 31,  2001 there were 37,757  shares of common
stock  issued to employees for  stock  options   exercised  using  the  cashless
method.

                                       4
<PAGE>

                             BSD MEDICAL CORPORATION
                     Notes to Condensed Financial Statements

Note 1.    Basis of Presentation

     The Condensed Balance Sheet as of May 31, 2001; the Condensed Statements of
Operations  for the three and nine months  ended May 31, 2001 and May 31,  2000;
and the Condensed Statements of Cash Flow for the nine months ended May 31, 2001
and May 31,  2000,  have been  prepared by the  Company  without  audit.  In the
opinion of management,  all adjustments to the books and accounts (which include
only normal  recurring  adjustments)  necessary to present  fairly the financial
position,  results of  operations,  and  changes in  financial  position  of the
Company as of May 31, 2001 have been made.  Because the method of accounting for
the Company's investment in Thermatrx was changed from a consolidation method to
an equity method during the fiscal year ended August 31, 2000,  the results from
Thermatrx,  Inc. are not reported on the May 31, 2001 financial  statements.  At
August 31,  2000,  the  Company no longer  recorded  the  equity  investment  in
Thermatrx,  as the  investment was reduced to less than zero. The Company has no
anticipated liabilities in association with this investment.

     Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting  principles generally accepted
in the United States of America have been  condensed or omitted.  The results of
operations  for the  three and nine  month  periods  ended May 31,  2001 are not
necessarily indicative of the results to be expected for the full year.


Note 2.    Net Income (Loss) Per Common Share

     Net income (loss) per common share for the quarters ended May 31, 2001, and
May 31, 2000,  are based on the weighted  average  number of shares  outstanding
during the  respective  periods.  Diluted  earnings per share are based upon the
weighted  average  shares plus common  stock   equivalents.  When  common  stock
equivalents are anti dilutive they are not included.


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

Liquidity and Capital Resources
-------------------------------

     Total assets increased from $2,154,413 at August 31, 2000, to $2,276,841 at
May 21,  2001,  an increase of $122,428 or 5.68%.  Receivables  (including  long
term) increased by $344,155 an increase of 93.64%,  due to increased sales while
total inventories increased by $46,325, an increase of 5.12%, resulting from the
purchase  of  materials  for future  shipment.  Restricted  cash  consists  of a
certificate  of deposit used as security for a customer's  loan that will become
unrestricted  in  portion  or  in  total  based  on  the  customer  and  company
performance.

     Total current liabilities increased by $571,540, an increase of 67.36%. The
increase  was  primarily  caused by  increases  in customer  deposits for future
sales, and accrued expenses. Customer deposits increased from $380,817 at August
31,  2000,  to $844,308 at May 31, 2001,  an increase of  $463,491,  or 121.71%.
Customer  deposits  consist of advance  payments on ordered  product  sales.  We
anticipate such sales to be completed in 4th quarter of 2001 and the 1st quarter
of 2002.



                                       5
<PAGE>

     Fluctuations in Operating Results
     ---------------------------------

     The Company's  sales and operating  results  historically  have varied (and
will likely continue to vary) on a  quarter-to-quarter  and a year to year basis
due to cyclical needs for research equipment as the sales are as yet principally
limited to research centers  involved in clinical trials with the BSD-2000,  the
relatively  large per unit sales prices of the Company's  products;  the typical
fluctuations   in  the  mix  of  orders  for   different   systems   and  system
configurations;  and other factors.  For these and other reasons, the results of
operations  for a particular  fiscal period may not be indicative of results for
any other period.


Results of Operations:
---------------------

Nine Months ended May 31, 2001
Product sales for the nine months ended May 31, 2001  increased by $195,673,  or
19.58% as  compared  to the nine months  ended May 31,  2000.  Grant and License
revenue  consisting  of fees paid to the Company for the use of certain  patents
based on certain  reported  sales of the  Licensee,  decreased  from $166,674 to
$28,110  primarily  due to a  reduction  in sales  applicable  to the  licensing
agreement.  Selling,  General and Administrative  Expenses were $680,483 for the
nine months ended May 31, 2001, a decrease of $191,387 or 21.95%, as compared to
$871,870  for the nine months  ended May 31, 2000 due to changes in the cycle of
promotional expenses.  Total Costs and Expenses decreased by $38,038, a decrease
of 2.23%, primarily due to the aforementioned  decrease in Selling,  General and
Administrative expense. The Net Loss for the nine months ending May 31, 2001 was
$424,141, as compared with a Net Loss of $855,803 for the nine months ending May
31, 2000.

     Research and Development  Expenses increased to $452,172 in the nine months
ended May 31, 2001 as compared  to  $446,951  for the nine months  ended May 31,
2000, an increase of $5,221 or 1.17% to support completion of new products under
development.


Three Months ended May 31, 2001
Product  Sales for the three  months  ended May 31,  2001,  were  $1,058,028  as
compared  to  $830,978  for the three  months  ended May 31, 2000 an increase of
$227,050 or  27.32%.Included in product sales are sales of $109,436 to Thermatrx
of which BSD has an equity  investment.  Grant and License revenue consisting of
fees  paid to the  Company  for the use of  certain  patents  based  on  certain
reported  sales of the Licensee  decreased from $34,099 to $0 due to a reduction
in  sales  applicable  to  the  licensing   agreement.   Selling,   General  and
Administrative  Expenses  decreased  from $309,164 in the three months ended May
31, 2000 to  $202,883  in the three  months  ended May 31,  2001,  a decrease of
$106,281 or 34.38%, due to changes in the cycle of promotional  expenses.  Total
Costs and Expenses increased by $14,509, an increase of 1.86%,  primarily due to
higher cost of good sold.  Net Income for the three months  ending May 31, 2001,
was  $267,120,  as compared to a Net Loss of $55,610 for the three months ending
May 31, 2001

     Research  and  Development  Expenses  decreased  to $146,285  for the three
months  ended May 31,  2001,  as compared to $175,871 for the three months ended
May 31, 2000, a decrease of $29,586 or 16.82%



                                       6
<PAGE>


     FORWARD  OUTLOOK  AND RISKS.  From time to time,  the  Company  may publish
forward-looking  statements  relating to such matters as  anticipated  financial
performance,  business  prospects,   technological  development,  new  products,
research and development  activities and similar matters. The Private Securities
Litigation  Reform  Act of  1995  provides  a safe  harbor  for  forward-looking
statements.  In order to comply with the terms of the safe  harbor,  the Company
notes that a variety of factors  could cause the  Company's  actual  results and
experience  to  differ   materially  from  the  anticipated   results  or  other
expectations expressed in any of the Company's forward-looking statements.

     This  form  10-QSB   contains  and   incorporates   by  reference   certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange  Act with  respect to results of  operations
and  businesses  of the  Company.  All  statements,  other  than  statements  of
historical facts, included in this Form 10-QSB, including those regarding market
trends, the Company's  financial position,  business strategy,  projected costs,
and  plans  and   objectives   of   management   for  future   operations,   are
forward-looking  statements.  These forward-looking  statements are based on the
Company's  current   expectations.   Although  the  Company  believes  that  the
expectations reflected in such forward-looking statements are reasonable;  there
can be no assurance that such expectations will prove to be correct.


     CHANGING  REGULATORY  ENVIRONMENT.  The  Company's  business  is subject to
extensive  federal,  state  and  local  regulation.   Political,   economic  and
regulatory  influences  are  subjecting  the health care  industry in the United
States to  fundamental  change.  See  "Government  Regulation"  in the Company's
fiscal 1998 10-KSB.


PART II - OTHER INFORMATION

Item 6.       Exhibits and reports on Form 8-K

(a)   Exhibits

     The following exhibit is filed as part of this report:

     None.

b) Reports on Form 8-K - During the  quarter,  no reports on Form 8-K were filed
by the Company.



                                       7
<PAGE>



SIGNATURE


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, BSD
Medical Corporation, the registrant, has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                                  BSD MEDICAL CORPORATION



Date:   July 13, 2001                              /s/ Hyrum A. Mead
     ----------------                             ------------------------------
                                                   Hyrum A. Mead
                                                   President




                                       8
<PAGE>