<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2000 or

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

For the transition period from _______________________ to ______________________

                              0-16594
Commission file number  ________________________________________________________

                        MEDICAL TECHNOLOGY SYSTEMS, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


           DELAWARE                                               59-2740462
--------------------------------                            --------------------
(State or other jurisdiction of                               (I.R.S.) Employer
 Incorporation or Organization)                              Identification No.)


              12920 Automobile Boulevard, Clearwater, Florida 33762
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                  727-576-6311
--------------------------------------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if changed since last report)


     Indicate by check mark  whether the  registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No ______


                     APPLICABLE ONLY TO ISSUERS INVOLVED IN

                        BANKRUPTCY PROCEEDINGS DURING THE

                              PRECEDING FIVE YEARS

     Indicate by check mark whether the  Registrant  has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes X  No ______

                                      10Q-1

<PAGE>


                                        i

                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES

                                      Index

                                                                            Page

Part I - Financial Information

Item 1.     Financial Statements

          Condensed Consolidated Balance Sheets -
              September 30, 2000 and March 31, 2000.....................       1

          Condensed Consolidated Statements of Operations -
              Three Months and Six Months Ended September 30, 2000 and 1999.   2

          Condensed Consolidated Statements of Changes in Stockholders'
              Equity (Deficit) - Six Months Ended September 30, 2000....       3

          Condensed Consolidated Statements of Cash Flow -
              Six Months Ended September 30, 2000 and 1999..............       4

          Notes to Condensed Consolidated Financial Statements..........   5 - 9

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations....................... 10 - 12


Part II - Other Information

Item 6.   Exhibits......................................................      13


          Signature.....................................................      13



<PAGE>
                                       1


Item 1.  Financial Statements


                    PART 1 - FINANCIAL INFORMATION

            MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In Thousands)


                                     ASSETS

<TABLE>
<CAPTION>
                                                                         September 30,                March 31,
                                                                             2000                       2000
                                                                       -----------------          -----------------
                                                                         (Unaudited)
<S>                                                                    <C>                         <C>
Current Assets:
     Cash                                                               $            43            $           172
     Accounts Receivable, Net                                                     2,740                      2,601
     Inventories                                                                  1,879                      2,030
     Prepaids and Other                                                             146                         86
                                                                       -----------------          -----------------
     Total Current Assets                                                         4,808                      4,889

Property and Equipment, Net                                                       1,919                      1,904
Other Assets, Net                                                                 1,462                      1,073
                                                                       -----------------          -----------------

Total Assets                                                            $         8,189            $         7,866
                                                                       =================          =================


            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
     Current Maturities of Long-Term Debt                               $           919            $         1,052
     Accounts Payable and Accrued Liabilities                                     2,329                      2,135
                                                                       -----------------          -----------------
     Total Current Liabilities                                                    3,248                      3,187

Net Liabilities of Discontinued Operations                                          558                        605
Long-Term Debt, Less Current Maturities                                          12,512                     13,111
                                                                       -----------------          -----------------
Total Liabilities                                                                16,318                     16,903
                                                                       -----------------          -----------------
Stockholders' Equity (Deficit):
     Voting Preferred Stock                                                           1                          1
     Common Stock                                                                    65                         65
     Capital In Excess of Par Value                                               8,691                      8,646
     Accumulated Deficit                                                        (16,558)                   (17,421)
     Less:  Treasury Stock                                                         (328)                      (328)
                                                                       -----------------          -----------------
     Total Stockholders' Equity (Deficit)                                        (8,129)                    (9,037)
                                                                       -----------------          -----------------
     Total Liabilities and Stockholders' Equity (Deficit)               $         8,189            $         7,866
                                                                       =================          =================
</TABLE>

The accompanying notes are an integral part of these financial statements.


<PAGE>
                                       2


                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (In Thousands; Except Earnings Per Share Amounts)

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                Three Months Ended                      Six Months Ended
                                                                   September 30,                          September 30,
                                                         ---------------------------------      --------------------------------
                                                              2000               1999                2000              1999
                                                         ---------------    --------------      --------------    --------------
<S>                                                      <C>                <C>                 <C>               <C>
Revenue:
      Net Sales                                          $        4,850     $       4,231       $       9,529     $       8,070

Costs and Expenses:
      Cost of Sales                                               2,719             2,167               5,412             4,247
      Selling, General and Administrative                         1,199             1,099               2,323             2,175
      Research and Development                                       25                52                  52               135
      Depreciation and Amortization                                 187               255                 380               509
      Interest, Net                                                 253               296                 521               591
                                                         ---------------    --------------      --------------    --------------
 Total Costs and Expenses                                          4,383             3,869               8,688             7,657
                                                         ---------------    --------------      --------------    --------------

Income from Continuing Operations Before
  Discontinued Operations and Extraordinary Gain                    467               362                 841               413

Income (Loss) from Operations of
    Discontinued Operations, Net of Income Tax                       (7)             (572)                  1            (1,097)

Gain on Forgiveness of Debt of
    Discontinued Operations                                           0                 0                  21                 0

Gain on Disposal of Discontinued Operations,
    Net of Income Tax                                                 0                 0                   0             1,822
                                                         ---------------    --------------      --------------    --------------

Net Income (Loss)                                        $          460     $        (210)      $         863     $       1,138
                                                         ===============    ==============      ==============    ==============

Earnings per Basic and Diluted Common Share:
      Income from Continuing Operations                  $         0.07     $        0.06       $        0.13     $        0.07
      Income (Loss) from Discontinued Operations                   0.00             (0.09)               0.00              0.11
                                                         ---------------    --------------      --------------    --------------

Net Income (Loss) per Basic and
   Diluted Common Share                                  $         0.07     $       (0.03)      $        0.13     $        0.18
                                                         ===============    ==============      ==============    ==============

Weighted average Common Shares Outstanding -
  Basic and Diluted                                           6,542,621         6,406,191           6,542,621         6,406,191
                                                         ===============    ==============      ==============    ==============
</TABLE>


The accompanying notes are an integral part of these financial statements.

<PAGE>
                                       3



                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                       SIX MONTHS ENDED SEPTEMBER 30, 2000
                                 (In Thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                           COMMON STOCK
                                      --------------------------------------------------------------------------------------
                                         Number         .01         Capital in     Retained        Treasury
                                           of           Par         Excess of      Earnings          Stock          Total
                                         Shares        Value        Par Value      (Deficit)
                                      -----------   -----------    -----------   ------------    ------------    -----------
<S>                                    <C>           <C>            <C>           <C>             <C>             <C>
Balance, March 31, 2000                6,542,621     $      65      $    8,646    $  (17,421)     $     (328)     $  (9,038)

Issuance of Stock Options                                                   45                                           45

Net Income for Six Months
   Ended September 30, 2000                                                              863                            863
                                      --------------------------------------------------------------------------------------

Balance, September 30, 2000            6,542,621     $      65      $    8,691    $   16,558)     $     (328)     $  (8,130)
                                      ===========   ============   ============  ============    ============    ===========


                                                                        VOTING PREFERRED STOCK
                                      --------------------------------------------------------------------------------------
                                        Number        $.0001
                                          of            Par
                                        Shares         Value
                                      -----------   -----------

Balance, March 31, 2000                6,500,000     $       1                                                    $       1
                                      -----------   -----------                                                  -----------

Balance September 30, 2000             6,500,000     $       1                                                    $       1
                                      -----------   -----------                                                  -----------

Total Stockholders' Equity                                                                                       -----------
   (Deficit), September 30, 2000                                                                                  $  (8,129)
                                                                                                                 ===========
</TABLE>


The accompanying notes are an integral part of these financial statements.

<PAGE>
                                       4


                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                          Six Months Ended
                                                                                            September 30,
                                                                               --------------------------------------
                                                                                   1999                     2000
                                                                               -------------           --------------
<S>                                                                            <C>                     <C>
Operating Activities
    Net Income (Loss) from Continuing Operations                               $        841            $         413
                                                                               -------------           --------------
    Adjustments to Reconcile Net Income (Loss) to Net Cash
          Provided (Used) by Operating Activities:
       Depreciation and Amortization                                                    380                      509
       Non-Cash Deferred Compensation                                                    15                        0
       (Increase) Decrease in:
         Accounts Receivable                                                           (139)                     (75)
         Inventories                                                                    151                      (44)
         Prepaids and Other                                                             (30)                    (166)
       Increase (Decrease) in:
         Accounts Payable and Other Accrued Liabilities                                 194                       86
                                                                               -------------           --------------
    Total Adjustments                                                                   571                      310
                                                                               -------------           --------------
    Net Cash Provided by Continuing Operations                                        1,412                      723
                                                                               -------------           --------------

Investing Activities
    Expended for Property and Equipment                                                (389)                    (201)
    Expended for Product Development                                                   (325)                     (39)
    Expended for Patents and Other Assets                                               (70)                     (68)
                                                                               -------------           --------------
    Net Cash (Used) by Investing Activities of Continuing Operations                   (784)                    (308)
                                                                               -------------           --------------

Financing Activities
    Payments on Notes Payable and Long-Term Debt                                       (732)                    (407)
    Advances to Affiliates - Discontinued Operations                                    (25)                    (213)
                                                                               -------------           --------------
    Net Cash (Used) by Financing Activities of Continuing Operations                   (757)                    (620)
                                                                               -------------           --------------

Net (Decrease) in Cash - Continuing Operations                                         (129)                    (205)
Cash at Beginning of Period - Continuing Operations                                     172                      205
                                                                               -------------           --------------
Cash at End of Period - Continuing Operations                                  $         43            $           0
                                                                               =============           ==============
</TABLE>


The accompanying notes are an integral part of these financial statements.


<PAGE>
                                       5



                MEDICAL TECHNOLOGY SYSTEMS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000


NOTE A - BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation  S-X.  Accordingly,  they do not include all of the information
and notes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the six-month  period ended September 30,
2000 are not necessarily  indicative of the results that may be expected for the
year ended  March 31,  2001.  The  unaudited  condensed  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes thereto  included in the  Company's  annual report on Form
10-K for the year ended March 31, 2000.

     The consolidated  financial  statements include the accounts of the Company
and its subsidiaries,  MTS Packaging Systems,  Inc. ("MTS  Packaging"),  Medical
Technology   Laboratories,   Inc.  ("MTL")  and  LifeServ   Technologies,   Inc.
("LifeServ").   MTL  and  LifeServ  represent   discontinued   operations,   and
accordingly,  the discontinued segments' net liabilities are shown as one amount
under the captions "Net Liabilities of Discontinued  Operations" for fiscal 2001
and fiscal  2000.  The results of  operations  of the  discontinued  segment for
fiscal 2001 and fiscal 2000 has been  excluded  from the  components  of "Income
(Loss)  from  Continuing  Operations"  and shown  under the  caption  "Loss from
Operations of Discontinued Operations" in the Statements of Operations.

NOTE B - INVENTORIES

         The components of inventory consist of the following:
<TABLE>
<CAPTION>
                                                                   September 30,           March 31,
                                                                        2000                  2000
                                                                  -----------------     -----------------
                                                                              (In Thousands)
               <S>                                                <C>                   <C>
               Raw Materials                                      $          933        $          967
               Finished Goods and Work in Progress                           986                 1,103
               Less:  Inventory Valuation Allowance                          (40)                 (40)
                                                                  ----------------      ----------------
                                                                  $        1,879        $        2,030
                                                                  ================      ================
</TABLE>

     Inventories  are  stated  at the  lower of cost  (first-in,  first-out)  or
market.


NOTE C - EARNINGS PER SHARE

     Net income per common share is computed by dividing net income by the basic
and diluted weighted average number of shares of common stock  outstanding.  For
diluted weighted average shares outstanding, the Company used the Treasury stock
method to  calculate  the common  stock  equivalents  that stock  options  would
represent.  The effect of all  options  and  warrants  were not  included in the
calculation of net income per diluted common share as the effect would have been
anti-dilutive.



<PAGE>
                                       6


NOTE D - DISCONTINUED OPERATIONS

     During fiscal year 2000, the Company implemented a strategy of focusing its
resources on its core  business,  MTS  Packaging,  and  divesting  the other two
business  segments it  historically  operated.  The Company  sold the  principal
assets of its Health Care Information  Systems business,  LifeServ,  in May 1999
and its Clinical Laboratory Services business,  MTL, in January 2000. During the
first  quarter of fiscal 2000,  the  operations of the  discontinued  operations
resulted in a loss of $524,000.  The sale of the assets of LifeServ  occurred in
the first  quarter of fiscal  2000 and  resulted  in a gain on  disposal of $1.8
million.

     The sale of MTL did not occur until the fourth  quarter of fiscal 2000.  As
part of that sale, the Company  retained  certain assets and liabilities of MTL.
The assets are  primarily  comprised  of  accounts  receivable  that the Company
continues  to attempt to  collect.  The  operations  of MTL during the first six
months of fiscal  2001 were  primarily  confined to the  collection  of accounts
receivable.   The  Company  estimated  the  realizable  value  of  the  accounts
receivable  at the end of fiscal  2000 to be  $1,000,000.  Since the date of the
sale, approximately $374,000 of accounts receivable were collected. In addition,
the Company  determined that $184,000 of accounts  receivable were uncollectible
and recorded a charge for that amount.

     The  carrying  value  of the  net  assets  of  discontinued  operations  at
September 30, 2000 and March 31, 2000 is comprised of the following.

<TABLE>
<CAPTION>
                                                             Total Discontinued Operations
                                                        -------------------------------------
                                                        September 30,             March 31,
                                                             2000                   2000
                                                        --------------          -------------
         <S>                                             <C>                    <C>
         Current Assets                                  $      549             $    1,078
         Other Assets                                             0                      0
                                                        -------------           ------------
         Total Assets                                    $      549             $    1,078
                                                        -------------           ------------
         Current Liabilities                             $      991             $    1,567
         Long-Term Liabilities                                  116                    116
                                                        -------------           ------------
         Total Liabilities                               $    1,107             $    1,683
                                                        -------------           ------------
         Net Liabilities of
             Discontinued Operations                     $      558             $      605
                                                        =============           ============
</TABLE>


<PAGE>
                                       7



NOTE E - LONG-TERM DEBT

     Long-term debt related to continuing operations consists of the following:


<TABLE>
<CAPTION>
                                                                                    September 30,       March 31,
                                                                                         2000             2000
                                                                                    -------------    --------------
                                                                                             (In Thousands)
<S>                                                                                 <C>              <C>
  Bank Term Loan;  payable in  installments  of interest  at 7.5% and  principal
    monthly for ten years ending  September 1, 2006,  with a lump sum payment of
    approximately $7.7 million on that date secured by all tangible and

    intangible assets of the Company.                                                $  12,833       $    13,376

  Unsecured Notes Payable plus interest at 18% through December 2000.                       51               150

  Unsecured Notes Payable due March 2001 plus interest at 13%.                              83               142

  Unsecured Note Payable plus interest at 3%, payable in monthly  installments
    of $2,394 through September 2006.                                                      158               169

  Unsecured  Note  Payable  under  settlement  agreement  with  State of Florida
    Department of Revenue, payable in monthly installments of $2,500-$3,500

    over a period of four to eight years.                                                  242               260

   Other Notes and  Agreements;  interest and  principal  payable  monthly and
    annually at various amounts through March 2001.                                         64                66
                                                                                    ------------     -------------
  Total Long -Term Debt                                                                 13,431            14,163
  Less Current Portion                                                                    (919)           (1,052)
                                                                                    ------------     -------------
  LONG-TERM DEBT DUE AFTER 1 YEAR                                                    $  12,512        $   13,111
                                                                                    ============     =============
</TABLE>


     The  bank  notes  payable  are  collateralized  by the  Company's  accounts
receivables, inventory, equipment and intangibles.

     On July 6, 2000,  the Company and its lender  entered  into an amendment to
their loan  agreement  that included a waiver of certain  defaults that may have
occurred up to and including that date. In addition,  the amendment provided for
an increase in the monthly principal payments, a modification of the excess cash
flow  payment  formula  and  a  one-time  principal  payment  of  $200,000  that
represented  the excess cash flow  payments  that were due and  payable  through
March 31, 2000.

     In August  1998,  the Company  borrowed  $150,000  from three  individuals,
including  $100,000  from the Chairman and C.E.O.  to support the  operations of
Medical Technology Laboratories, Inc. ("MTL"). The terms and conditions of these
obligations  provided for repayment  within six months from the  borrowing  date
including interest payable at 12% per annum. In addition,  the notes provide the
lenders with  warrants to purchase  88,500 shares of common stock of the Company
at $.75 per share for a period of ten (10) years. The fair value assigned to the
warrants is insignificant.  The obligations  matured without repayment,  and the
Company and its lenders agreed to a repayment schedule with monthly installments
commencing in March 2000 and ending in December 2000  including  interest at the
default rate of 18%.


<PAGE>
                                       8


     In October  1998,  the Company  borrowed  $200,000  from an  individual  to
support the  operations  of MTL.  The terms and  conditions  of this  obligation
included repayment on September 1, 1999 including interest at 12% per annum. The
notes  provide the lenders with  warrants to purchase  118,000  shares of common
stock of the Company at $.75 per share for a period of ten (10) years.  The fair
value assigned to the warrants is insignificant.  The obligation matured without
repayment,  and the Company and the lender  agreed to a repayment  schedule with
monthly  installments  commencing  in October 1999 and ending in September  2001
including  interest  at 13%.  In the  event  that the  Company  defaults  on its
obligations  under the  promissory  note,  the  lender is  entitled  to  receive
warrants to purchase up to 800,000 and 18,000 shares of common stock at $.05 and
$.75 per share,  respectively,  for a period of ten (10) years. In addition, the
note is secured by 290,313  shares of the Company's  common stock  controlled by
the Chairman and C.E.O.

NOTE F - CONTINGENCIES

     On November 19, 1998,  MTL received a refund  request in the amount of $1.8
million from Medicare Program Safeguards ("MPS"). The request followed a federal
agency on site review in May 1997 of MTL's Medicare  billing  practices in 1996.
MTL has  conducted  an internal  review of the billing  procedures,  records and
services in question and disputes MPS's findings and determination.  On December
17, 1998, MTL responded to the MPS  determination  and  subsequently  received a
response from MPS in which MPS informed MTL that recoupment of the refund amount
would be stayed while MPS reviewed  MTL's  response.  Although MTL believes that
MPS's  determination and the request for refund are without merit,  there can be
no  assurance  that this matter will be resolved  over the near term or that the
ultimate  outcome of the matter will not result in a  recoupment  effort by HCFA
directed at the  proceeds of the  collection  of  accounts  receivable  that MTL
retained as part of the sale of the  business.  The State of Florida  Agency for
Health Care Administration ("AHCA") also conducted an on site review in May 1997
and  requested a refund of  $104,000.  MTL has been in  discussions  regarding a
resolution  of this amount with AHCA,  and in October  2000 reached a settlement
agreement.  The  agreement  provides  for  the  payment  of  $25,000  to AHCA in
twenty-four  (24)  monthly  installments  of  $1,041.67  plus  interest  at  the
statutory interest rate beginning in December 2000.

         Certain  creditors of LifeServ  and MTL have  commenced  legal  actions
against  the Company  seeking  payment of  liabilities  assumed by the buyers of
LifeServ and MTL. The Company  intends to  vigorously  defend these  actions and
seek appropriate remedies from the buyers.

     The Company is involved in certain  claims and other legal actions  arising
in the  ordinary  course of  business.  There can be no  assurances  that  these
matters will be resolved on terms  acceptable to the Company.  In the opinion of
management,  based  upon  advice  of  counsel  and  consideration  of all  facts
available at this time, the ultimate  disposition of these matters will not have
a material  adverse effect on the financial  position,  results of operations or
liquidity of the Company.

NOTE G - RECAPITALIZATION PLAN

     On July 27, 2000, the Board of Directors approved a  recapitalization  plan
for the Company.  The plan  includes the exchange of 4,000,000  shares of common
stock for 6,500,000  shares of voting  preferred  stock and also a reverse stock
split of 1 share of common  stock  for 2.5  shares  of  common  stock  after the
exchange of common stock for  preferred  stock.  The  recapitalization  plan was
ratified subject to shareholder  approval. If the recapitalization plan had been
completed at the beginning of the six-month period ended September 30, 2000, the
number of shares  outstanding  for  purposes of  calculating  earnings per share
would have been  4,217,000  and the earnings per basic and diluted  common share
for  continuing  operations  for the six months  ended  September  30,  2000 and
September 30, 1999 would have been $.20 and $.10 respectively.  The earnings per
basic and diluted  common share for  discontinued  operations for the six months
ended  September  30, 2000 and  September 30, 1999 would have been $.01 and $.17
respectively.

<PAGE>
                                       9


NOTE H - OTHER

     In June 2000, the Company  entered into a one-year  agreement with National
Securities Corporation  ("National") for investment banking services. As part of
the compensation for services to be provided, the Company will issue to National
200,000  warrants  to  purchase  shares of common  stock at $.34 per  share.  In
addition, the Company will issue to National 100,000 warrants to purchase shares
of common stock at $.34 per share if the Company's  common stock qualifies for a
listing on an exchange. The Company has estimated the fair value of the warrants
to be  approximately  $45,000 and will  amortize  this cost over the term of the
agreement.

NOTE I - INCOME TAXES

     At September 30, 2000, the Company had deferred tax assets from  continuing
and discontinued operations of approximately  $6,000,000.  A tax benefit has not
been  recorded  for these  assets,  however,  the Company  intends to review its
current and  forecasted  operating  results during the second half of the fiscal
year in order to determine  whether all or a portion of the tax benefits  should
be recorded.



<PAGE>
                                       10



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

     This Form 10-Q contains  forward-looking  statements  within the meaning of
that term in Section  27A of the  Securities  Act of 1933 and Section 21E of the
Securities  Exchange  Act of 1934.  Additional  written or oral  forward-looking
statements  may be made by the Company  from time to time,  in filings  with the
Securities and Exchange  Commission or otherwise.  Statements  contained  herein
that are not historical  facts are  forward-looking  statements made pursuant to
the safe harbor  provisions  described  above.  Forward-looking  statements  may
include,  but are not limited to,  projections  of  revenues,  income or losses,
capital  expenditures,  plans for future  operations,  the elimination of losses
under certain  programs,  financing  needs or plans,  compliance  with financial
covenants  in loan  agreements,  plans for sale of assets or  businesses,  plans
relating to products or services of the  Company,  assessments  of  materiality,
predictions of future events and the effects of pending and possible litigation,
as well as assumptions relating to the foregoing. In addition, when used in this
discussion, the words "anticipates",  "estimates", "expects", "intends", "plans"
and  variations  thereof  and  similar  expressions  are  intended  to  identify
forward-looking statements.

     Forward-looking   statements   are   inherently   subject   to  risks   and
uncertainties,  some of which can be  predicted or  quantified  based on current
expectations.  Consequently,  future  events and  actual  results  could  differ
materially  from  those  set  forth  in,  contemplated  by,  or  underlying  the
forward-looking  statements  contained  herein.  Statements in Quarterly Report,
particularly  in "Item 2.  Management's  Discussion  and  Analysis of  Financial
Condition  and  Results  of  Operations"  and  Notes to  Condensed  Consolidated
Financial Statements,  describe factors,  among others, that could contribute to
or cause such differences.  Other factors that could contribute to or cause such
differences  include,  but  are  not  limited  to,  unanticipated  increases  in
operating costs, labor disputes,  capital  requirements,  increases in borrowing
costs, product demand, pricing, market acceptance,  intellectual property rights
and  litigation,  risks in product  and  technology  development  and other risk
factors detailed in the Company's Securities and Exchange Commission filings.

     Readers are  cautioned not to place undue  reliance on any  forward-looking
statements contained herein, which speak only as of the date hereof. The Company
undertakes  no  obligation  to publicly  release the result of any  revisions of
these  forward-looking  statements  that  may  be  made  to  reflect  events  or
circumstances  after the date hereof or to reflect the  occurrence of unexpected
events.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2000 and 1999
----------------------------------------------

     Net sales for the three months ended  September 30, 2000 increased 15.5% to
$4.8 million from $4.2 million  during the same period the prior year. Net Sales
increased primarily as a result of an increase in the amount of disposable punch
cards sold to new and existing  customers.  In addition,  the development of new
markets for the Company's disposable products has contributed to the increase in
net sales. Prices charged for disposable  products decreased  approximately 1.1%
during the second  quarter of fiscal 2001 primarily as a result of the fact that
more disposable  products were sold to larger national customers that have lower
pricing structures because of the volume of product they purchase. The volume of
disposable  cards is  anticipated  to  continue  to grow as a result of  reduced
medication  dispensing  cycles. The reduced cycles implemented by pharmacies has
resulted  from  reductions  in  reimbursements   introduced  with  the  Medicare
Prospective Payment System.

     Cost of sales for the three months ended September 30, 2000 increased 22.7%
to $2.7 million from $2.2 million during the same period the prior year. Cost of
sales as a  percentage  of sales  increased  to 56.1% from 51.2% during the same
period the prior year.  The increase is primarily due to increased  material and
shipping  costs as well as  increased  labor  costs.  In  addition,  the Company
offered  certain  discounts to new  customers  as a way of  obtaining  long-term
commitments for purchase of disposables.


<PAGE>
                                       11


     Selling,  general and  administration  expenses  for the three months ended
September  30, 2000  increased  9.1% to $1,199,000  from  $1,099,000 in the same
period  during the prior  year  primarily  due to  increases  in  selling  costs
associated with increased revenue.

     Research and development expenses for three months ended September 30, 2000
decreased  51.9% to $25,000 from $52,000  during the same period the prior year.
The  decrease  resulted  primarily  from the fact that the Company  directed its
development  resources  to the  completion  of new  products  during  the second
quarter  of  fiscal  2001  compared  to the same  period  the  prior  year  when
development resources were directed more towards researching new products.

     Depreciation and amortization expenses for the three months ended September
30, 2000  decreased  26.7% to $187,000 from $255,000  during the same period the
prior  year.   This  decrease  is  a  result  of  older  assets  becoming  fully
depreciated.

     Interest  expense for the three months ended  September 30, 2000  decreased
14.5% to $253,000  from  $296,000  during the same  period the prior  year.  The
decrease  results  from a decrease  in debt that has  resulted  from the regular
monthly  amortization  of principal and the sale of MTL in the fourth quarter of
fiscal year 2000.

Six Months Ended September 30, 2000 and 1999
--------------------------------------------

     Net sales for the six months ended  September 30, 2000  increased  17.3% to
$9.5 million from $8.1 million  during the same period the prior year. Net Sales
increased primarily as a result of an increase in the amount of disposable punch
cards sold to new and existing  customers.  In addition,  the development of new
markets for the Company's disposable products has contributed to the increase in
net sales. Prices charged for disposable  products decreased  approximately 1.1%
during the six months ended September 30, 2000 primarily as a result of the fact
that more disposable  products were sold to larger national  customers that have
lower pricing  structures  because of the volume of product they  purchase.  The
volume of  disposable  cards is  anticipated  to continue to grow as a result of
reduced  medication   dispensing  cycles.  The  reduced  cycles  implemented  by
pharmacies has resulted from  reductions in  reimbursements  introduced with the
Medicare Prospective Payment System beginning in July 1999.

     Cost of sales for the six months ended  September 30, 2000 increased  28.6%
to $5.4 million from $4.2 million during the same period the prior year. Cost of
sales as a  percentage  of sales  increased  to 56.8% from 52.6% during the same
period the prior year.  The increase is primarily due to increased  material and
shipping  costs as well as  increased  labor  costs.  In  addition,  the Company
offered  certain  discounts to new  customers  as a way of  obtaining  long-term
commitments for purchase of disposables.

     Selling,  general  and  administration  expenses  for the six months  ended
September 30, 2000  increased  4.5% to $2.3 million from 2.2 million in the same
period  during the prior  year  primarily  due to  increases  in  selling  costs
associated with increased revenue.

     Research and  development  expenses for six months ended September 30, 2000
decreased  6l.5% to $52,000 from $135,000 during the same period the prior year.
The  decrease  resulted  primarily  from the fact that the Company  directed its
development  resources to the  completion  of new products  during the first six
months  of  fiscal  2001  compared  to the  same  period  the  prior  year  when
development resources were directed more towards researching new products.

     Depreciation and  amortization  expenses for the six months ended September
30, 2000 decreased  25.3% to $380,000 from $509,000  during the same period the
prior  year.   This  decrease  is  a  result  of  older  assets  becoming  fully
depreciated.

<PAGE>
                                       12


     Interest  expense for the six months  ended  September  30, 2000  decreased
11.8% to $521,000  from  $591,000  during the same  period the prior  year.  The
decrease  results  from a decrease  in debt that has  resulted  from the regular
monthly  amortization  of principal and the sale of MTL in the fourth quarter of
fiscal year 2000.

LIQUIDITY AND CAPITAL RESOURCES

     During the six months ended  September 30, 2000, the Company had net income
from  continuing  operations of $841,000  compared to net income from continuing
operations of $413,000 the prior year. Cash provided by operating  activities of
continuing  operations was $1,412,000  during the six months ended September 30,
2000  compared to $723,000  provided in the prior year.  The Company had working
capital of $1,560,000  at September  30, 2000.  The increase in cash provided by
operating  activities  of  continuing  operations  during the six  months  ended
September  30, 2000 compared to the same period the prior year was primarily due
to increases in profitability.

     Investing  activities  used $784,000  during six months ended September 30,
2000  compared to $308,000  during the same period the prior year.  The increase
resulted  primarily  from an increase in the level of spending  that the Company
has dedicated to capital  equipment and increased  expenditures  for new product
development.

     Financing  activities  used $757,000  during the six months ended September
30,  2000  compared  to  $620,000  during the same  period the prior  year.  The
increase  results  primarily  from the fact  that the  Company  made a  $200,000
principal  payment  in July  2000 to its  lender  pursuant  to the  terms of its
modified loan agreement.

     The Company's  short-term and long-term liquidity is primarily dependent on
its  ability to generate  cash flow from  operations.  Inventory  levels are not
expected  to change  significantly  based upon the  Company's  current  level of
operation.  Increases  in  revenue  have  generally  resulted  in  corresponding
increases in accounts  receivable.  Cash flow from  operations is anticipated to
support an increase in accounts receivable.

     The Company has several new product development  projects underway that are
expected to be funded by cash flow from operations. These projects are monitored
on a regular basis to attempt to ensure that the  anticipated  costs  associated
with them do not exceed the  Company's  ability to fund them from cash flow from
operations.

     In July 2000,  the  Company  entered  into an  agreement  to  purchase  new
production equipment that will significantly increase its manufacturing capacity
for disposable  cards. The equipment,  which will cost  approximately  $600,000,
will be installed in November 2000. The Company has negotiated  extended payment
terms with the vendor through April 2001.


     The Company believes that cash generated from operations will be sufficient
to meet its capital expenditures,  product development and working capital needs
for at least the next twelve months.



<PAGE>
                                       13


PART II - OTHER INFORMATION

Item 6.  Exhibits

         A.    Exhibits

               Form of Warrant dated  September 24, 1999 between Andrew G. Burch
               and Medical Technology Systems, Inc.

               Form of Warrant  dated  September  24,  1999  between IFM Venture
               Group and Medical Technology Systems, Inc.

               Form of Warrant  dated May 31, 2000 between  National  Securities
               Corporation and Medical Technology Systems, Inc.


Signature

     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.

                              MEDICAL TECHNOLOGY SYSTEMS, INC.



Date: November 7, 2000        By:  /s/ Michael P. Conroy
----------------------             ---------------------------------------------
                                   Michael P. Conroy
                                   Vice President & Chief Financial Officer
                                   (Principal Financial Officer)


                              By:  /s/ Mark J. Connolly
                                   ---------------------------------------------
                                   Mark J. Connolly
                                   Controller
                                   (Principal Accounting Officer and Controller)