UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                           -------------------------

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
(Mark  One)

[x]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934.

For  the  fiscal  year  ended  June  30,  2000

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

For  the  transition  period  from  to

                        Commission file number 000-16061
                                               ---------

                            Criticare Systems, Inc.
                -------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


        Delaware                                      39-1501563
-------------------------                     -----------------------------
(State  or  Other  Jurisdiction  of       (I.R.S.  Employer Identification  No.)
Incorporation  or  Organization)

             20925 Crossroads Circle, Waukesha, Wisconsin     53186
             --------------------------------------------     -----
             (Address of Principal Executive Offices)     (Zip Code)

        Registrant's telephone number, including area code:  262-798-8282
                                                             ------------

           Securities registered pursuant to Section 12(b) of the Act:

                                                    Name  of  Each  Exchange  on
     Title  of  Each  Class                                Which  Registered
     ----------------------                          --------------------------
                NA                                               NA
           -------------                                    -------------
                           [COVER PAGE 1 OF 2 PAGES.]

<PAGE>
           Securities registered pursuant to Section 12(g) of the Act:

                       Voting Common Stock, $.04 Par Value
                (together with associated Preferred Stock Purchase Rights)
      --------------------------------------------------------------------
                                (Title of class)

     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  by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  registrant's  knowledge, in definitive proxy or information statements
incorporated  by reference in Part III of this Form 10-K or any amendment to the
Form  10-K.  [  ]

     The aggregate market value of the voting common stock held by nonaffiliates
of  the  registrant  as  of  August  31, 2000 was $25,055,976.  Shares of voting
common stock held by any executive officer or director of the Registrant and any
person  who beneficially owns 10% or more of the outstanding voting common stock
have  been  excluded from this computation because such persons may be deemed to
be  affiliates.  This  determination  of  affiliate  status  is not a conclusive
determination  for  other  purposes.

     On  August  31,  2000,  there  were  outstanding  8,976,251  shares  of the
registrant's  $.04  par  value  voting  common  stock.

DOCUMENTS  INCORPORATED  BY  REFERENCE

     Portions  of the Proxy Statement for the Annual Meeting of the Stockholders
of  the  Registrant  to  be held November 17, 2000 are incorporated by reference
into  Part  III  of  this  report.

                           [COVER PAGE 2 OF 2 PAGES.]


<PAGE>
                                     PART I
                                     ------

Item  1.     BUSINESS.
-------      --------

     Criticare  Systems,  Inc.  (the  "Company"  or  "Criticare")  designs,
manufactures  and markets vital signs and gas monitoring instruments and related
noninvasive  sensors  used  to monitor patients in many healthcare environments.
Since  a  patient's  oxygen, anesthetic gas and carbon dioxide levels can change
dramatically  within  minutes,  causing severe side effects or death, continuous
monitoring  of  these  parameters  is  increasing.  The  Company's  monitoring
equipment  improves  patient  safety  by  delivering accurate, comprehensive and
instantaneous patient information to the clinician.  The Company's products also
allow  hospitals  to  contain  costs  primarily  by  substituting cost-effective
reusable  pulse  oximetry sensors for disposable sensors, controlling the use of
costly  anesthetics  and  increasing  personnel  productivity.

     To  meet  the needs of end-users in a wide variety of patient environments,
the  Company has developed a broad line of patient monitors which combine one or
more  of  its  patented or other proprietary technologies, for monitoring oxygen
saturation,  carbon  dioxide  and  anesthetic  agents,  with standard monitoring
technologies  that  provide  electrocardiogram ("ECG"), invasive and noninvasive
blood pressures, temperature, heart rate and respiration rate.  In addition, the
Company's  VitalView  telemetry  system  allows one nurse to monitor up to eight
patients  simultaneously  from  a  convenient  central  location.  This  allows
hospitals  to  move  out  of the intensive care unit those patients that require
continuous monitoring, but do not need all of an intensive care unit's extensive
and  costly  personnel  and  equipment  resources.

     The  Company  was  incorporated  under the laws of the State of Delaware in
October  1984.

Products
--------

     Criticare  markets a broad range of vital signs and gas monitoring products
designed  to  address  the  needs of a variety of end-users in different patient
environments.  Criticare's  monitors  display  information  graphically  and
numerically.  All  Criticare  monitors incorporate adjustable visual and audible
alarms to provide reliable patient-specific warnings of critical conditions, and
most  of  the Company's monitors record up to 60 hours of trend data.  Criticare
monitors  are  available with printer capability to provide permanent records of
patient  data.

     Model  8100  Vital  Signs  Monitor.  The full-featured CSI 8100 Vital Signs
     ----------------------------------
Monitor provides maximum flexibility for hospital, transport and outpatient care
settings.  The  unit's  custom  configurations  include  ECG,  ComfortCuff(TM)
noninvasive  blood  pressure, DOX(TM) digital oximetry, heart rate, temperature,
respiration  and nurse call interface.  Optional features include CO2 and CO2/O2
monitoring  and  an  integrated

<PAGE>
printer.  The  8100 is well suited for busy departments that require basic vital
signs  monitoring  to  conscious  sedation.

     Model  503,  503DX,  504  and  504DX.  Criticare's  complete  line of pulse
     ------------------------------------
oximeters  meets  the  needs  of  virtually  all  clinical environments:  adult,
pediatric  and  neonatal intensive care units, operating rooms, emergency rooms,
nursing  homes,  physicians'  offices  and  ambulances.  The line is designed to
provide  accuracy  and  convenience  at  a  competitive  cost  to  the end-user.

     Model  506DX  and  507E  Patient Monitors.  The 507E series is comprised of
     -----------------------------------------
small,  compact, portable, full-featured vital signs monitors configured to meet
specific  clinical  needs.  The  507E  series  is  well-suited  for  dental  and
physician  offices.  The  506DX  is  ideal  for  patient  ward  monitoring  of
noninvasive blood pressure.  The 507E series combines ECG, oxygen saturation and
noninvasive  blood  pressure  for  a  complete vital signs monitor for physician
office  and  hospital  applications.  The  507E  series is an effective low-cost
monitoring  system  for  the  emergency  room  or  the  recovery  room.

     Scholar(R).  The Scholar monitor series specifically addresses the needs of
     ----------
small  hospitals  with broad clinical needs (the monitoring of ECG, blood oxygen
saturation,  noninvasive  blood  pressure,  temperature  and  invasive  blood
pressure).  Scholar  offers  all  the primary features a hospital needs with the
capability  of  adding more features if desired.  Scholar monitors are available
with  printer  and  recorder  capability  and  can  transmit data to Criticare's
VitalView  Central  Stations.

     Model  1100  Anesthesia  Monitor.  The  Model 1100 monitor provides patient
     --------------------------------
monitoring  for  a  wide variety of cardio-pulmonary parameters in an integrated
system.  The  Model 1100 is able to monitor two ECG waveforms, noninvasive blood
pressure,  three types of invasive blood pressure, respiration rate, heart rate,
temperature,  oxygen  saturation,  inspired/expired  oxygen,  carbon dioxide and
anesthetic  gases.  The  Model  1100  uses  the Company's proprietary disposable
respiratory  secretion  filter  system.

     Model  602-3B,  602-6B,  602-11  and  602-13  Gas Monitors.  The 602 series
     ----------------------------------------------------------
provides  monitoring  of  carbon  dioxide,  pulse oximetry and anesthetic agents
using  Criticare's  proprietary  infrared  technology.  The  602  IQ  series  of
operating  room monitors provides automatic identification and quantification of
all  five  approved  anesthetic  agents.

     Model  4400  Series  Blood  Pressure,  Pulse  Oximetry  and  Temperature
     ------------------------------------------------------------------------
Combination  Monitor.  The 4400 series monitor was developed in conjunction with
--------------------
Alaris  Medical ("Alaris") and incorporates Criticare's oximetry and noninvasive
blood  pressure technology with Alaris's temperature technology.  Alaris has the
rights  to  market  the Model 4400 monitor to hospitals in the United States and
Canada.  Criticare has rights to market the product to the alternate care market
and  to  international  markets.


                                        2
<PAGE>
     Model  602-14  POET(TM)  LT  Monitor.  The hand-held POET LT provides small
     ------------------------------------
hospitals  and alternate care environments with compact, portable carbon dioxide
monitoring.  The  POET  LT series is an effective, low-cost functioning solution
for  these  environments.

     VitalView(TM).  The  VitalView  central  station  makes it possible for one
     -------------
nurse  or technician to monitor numerous patients simultaneously.  The VitalView
can  receive,  display  and store data from a wide variety of Criticare monitors
including  the  Scholar,  507E  and  MPT.

     MPT(TM).  The  MPT  (Multiple  Parameter  Telemetry)  monitor  allows  the
     -------
transmission  of vital signs (ECG, blood oxygen saturation and noninvasive blood
pressure)  on a real time basis to a VitalView central station while the patient
is  ambulatory.  In  today's healthcare environment, hospitals benefit by moving
patients from expensive critical care departments as quickly as possible to less
expensive  general  nursing  floors.  MPT,  because  of  its complete monitoring
capability  and  its lower cost, allows the patient to be ambulatory while still
being  monitored  for  all  vital  signs.

     Pulse  Oximetry  Sensors.  Criticare  has designed proprietary, noninvasive
     ------------------------
sensors that can be used on any patient, from a premature infant to a full-grown
adult.  Criticare's  line  of  reusable  pulse  oximetry  sensors  offers  users
significant  cost savings compared to disposables.  Criticare's reusable sensors
generally  last  longer  than  the  one-year  warranty period and are easily and
inexpensively  cleaned  between  uses.  Criticare's  reusable  sensors include a
finger  sensor  for  routine  applications  and a multisite sensor for increased
placement  flexibility.  The  multisite sensor is fully immersible, allowing for
sterilization  between  patients.  The  Company also sells a range of disposable
sensors  designed for single use in cases where the facility would prefer to use
a  patient  charge  disposable  product.

     Water  Chek/Chek-Mate  Filter  System.  The  Company's patented, disposable
     -------------------------------------
Water  Chek  system  separates  a patient's respiratory secretions from a breath
sample  before  it  enters  the  gas  monitor(s)  for  analysis.  The  Company's
proprietary,  disposable  Chek-Mate filter enhances the removal of moisture from
the  sample,  while  preventing  cross-contamination.  This  system  allows  the
monitor to operate effectively regardless of humidity or patient condition.  The
self-sealing  feature  also  protects  the  healthcare  provider  from potential
contamination.

Marketing  and  Sales
---------------------

     Domestic  Sales.  At  August  31,  2000, the Company's domestic sales force
     ---------------
consisted  of  eight employees and 104 independent dealers.  The Company's sales
force  and  independent  dealers market the Company's products to many different
types  of  medical  facilities such as hospitals, surgery centers, nursing homes
and  physician  offices.  The  Company sells its higher-end monitors (MPT, Vital
View  Central  Station  and

                                        3
<PAGE>
anesthetic  agent monitors) principally to hospitals whereas the vital signs and
pulse  oximeters  are  sold  primarily  for  nonhospital  settings.

     International  Sales.  One  of the Company's principal marketing strategies
     --------------------
has been to target international markets, particularly Europe, Latin America and
the  Pacific  Rim  countries.  During  fiscal 2000, Criticare sold its products,
principally  to  hospitals,  in  over  70  countries through over 70 independent
dealers.  Most  of  the  Company's  international  order  processing, invoicing,
collection  and  customer  service  functions  are  handled  directly  from  the
Company's  headquarters  in  Waukesha, Wisconsin.  Criticare believes demand for
the  Company's  products  in  international  markets is primarily driven by cost
containment concerns, and increased interest in using quality patient monitoring
products  for  improved  patient  management.

          In  fiscal  2000,  41% of Criticare's net sales, or $11.0 million, was
attributable  to  international sales, of which approximately 49% was from sales
in  Europe  and the Middle East, 24% was from sales to Pacific Rim countries and
27% was from sales to Canada and Central and South America.  In fiscal 1999, 37%
of  Criticare's  net  sales  was attributable to international sales.  In fiscal
1998,  46%  of  Criticare's net sales was attributable to exports.  There are no
material  identifiable  assets  of  the Company located in foreign markets.  The
Company  sells  its  products  in  United  States  dollars and is not subject to
significant  currency  risks;  however,  an  increase in the value of the United
States  dollar  relative to foreign currencies could make the Company's products
less  price  competitive in those markets.  In addition, significant devaluation
of  certain  foreign  currencies  could  adversely  affect the collectibility of
accounts  receivable  from  international  customers.  The Company analyzes this
risk  before  making  shipments  to  countries  it  views  as  unstable.

     Clinical  Support.  At  August  31,  2000,  Criticare employed one clinical
     -----------------
support  specialist  to  provide  customer  training and education, primarily to
domestic  hospitals.  The  clinical  support  specialist  also  assists  in  the
periodic  training  and  education  of the direct sales force.  In addition, the
direct  sales  force  maintains  contact  with end-users and provides additional
training  and  updates.  Clinical  support in foreign markets is provided by the
Company's  clinical  support  staff  and  direct  sales  force.

     Warranty  and  Service.  Criticare  believes that customer service is a key
     ----------------------
element  of  its  marketing program.  Criticare's monitors are warranted against
defects  for one year and its reusable sensors are warranted for six months.  If
a  problem  develops  with a Criticare product while under warranty, the Company
typically  provides  a replacement unit until the product can be repaired at the
Company's  facility.  At  August  31,  2000,  the Company had a customer service
staff  of  16  people  at  its Waukesha, Wisconsin facility.  The Company offers
extended  warranties  and  service  contracts  on  all  of  its  monitors.


                                        4
<PAGE>
Manufacturing
-------------

     The  Company  continually  strives  to implement manufacturing efficiencies
while  maintaining product quality and reliability.  The Company's oximeters and
sensors  are assembled from off-the-shelf components and other parts produced to
the  Company's  specifications, such as printed circuit board assemblies, custom
transformers  and  sensor  cable/connector  subassemblies.  However,  Criticare
produces  certain  important components in-house.  All electronic components are
subjected  to  a  24-hour  high-temperature burn-in to eliminate early component
failure.  Some  subassembly  is  performed by subcontractors, but final assembly
and  quality control are performed at Criticare's facility.  Criticare maintains
test  and  inspection  procedures  to  minimize errors and enhance the operating
reliability  of  its  products.  Final  test procedures on fully assembled units
include  an  operational  test  and  a  continuous  72-hour  burn-in  procedure.

     Certain  of Criticare's products incorporate components currently purchased
from  single sources.  While the Company believes these components are available
from  alternate  sources on reasonable terms, an interruption in the delivery of
these or other components could have an adverse effect on the Company.  In order
to  reduce the risk of supply interruption, the Company maintains inventories of
certain  components.

     The  ISO  9000  series  of  quality  management and assurance standards was
developed  by  the  International  Organization  for  Standardization  (ISO) and
published  in  1987.  In  1993  the  EC (European Community) was formed with the
signing  of  the  Maastricht  Treaty  by 12 European countries.  One of the many
standards  adopted by this group is the ISO 9000 international quality assurance
and  quality  management  series  under the designation EN2 9000.  Based on this
action  by the EC and specific requirements from European customers, the Company
believes  ISO  9000  registration  will  be  required to compete in EC and other
international  markets as an indication of compliance with international quality
management  and  assurance  standards.  In  July  1994  the  Food  and  Drug
Administration  (FDA)  announced  its  intention  of  harmonizing  the  ISO 9000
standards  with  its  Medical  Device  Good  Manufacturing Practices (GMP).  The
Company  has  achieved  certification  under ISO's standards 9001 and 9002.  See
"Regulation."

Research,  Development  and  Engineering
----------------------------------------

     Criticare  has  focused  its  research,  development  and  engineering
expenditures  on  products  designed  to  meet  identified  market demands.  The
Company  seeks  to  apply  its  expertise  in  gas monitoring and related sensor
technology  to develop new products and adapt existing products for new markets.
At  August  31,  2000,  the  Company  had  an in-house research, development and
engineering  staff  of  20  people.  The  Company's  research,  development  and
engineering  expenditures  were  $2.9  million  in  fiscal 2000, $3.0 million in
fiscal  1999  and  $3.3  million  in  fiscal  1998.


                                        5
<PAGE>
Competition
-----------

     The  markets  for  the  Company's products are highly competitive.  Many of
Criticare's  competitors,  including  its principal competitors described below,
have  greater  financial  resources,  more  established  brand  identities  and
reputations,  longer  histories in the medical equipment industry and larger and
more  experienced  sales  forces  than  Criticare.  In  these  respects,  such
competitors have a competitive advantage over the Company.  The Company competes
primarily  on  the  basis  of  product  features,  the  quality and value of its
products  (i.e., their relative price compared to performance features provided)
and  the effectiveness of its sales and marketing efforts.  The Company believes
that  its  principal  competitive  advantages  are provided by its focus on cost
containment  and  its patented and other proprietary technology and software for
noninvasive,  continuous  monitoring of oxygen, anesthetic gases, carbon dioxide
and noninvasive blood pressure, its cost-efficient manufacturing, the efficiency
and  speed  of  its  research  and  development  efforts  and  its  established
international  presence.

     The  principal  competing  manufacturers  of  pulse  oximeters  are Nellcor
Puritan  Bennett, a unit of Mallinckrodt Inc., and Datex/Ohmeda, a United States
subsidiary of Instrumentarium OY, a Finnish company.  The Company estimates that
Nellcor has captured a majority of the worldwide pulse oximeter market, and that
Datex/Ohmeda  and  the  Company  have  each captured significant portions of the
worldwide  pulse  oximeter  market.  In  addition,  there are approximately four
other  companies  which  compete in the market for pulse oximeters.  The Company
also  indirectly competes with manufacturers of numerous other medical equipment
products  for  limited  customer  funds.

     The Company believes that the worldwide anesthetic agent and carbon dioxide
monitor markets are comparatively fragmented, with Datex/Ohmeda as the principal
competitor.  The  Company's  principal  competitors  in the domestic gas monitor
market  include  Datex/Ohmeda and Hewlett-Packard Company.  The market for vital
signs  monitors  includes  competitors  such as Hewlett-Packard Company, Siemens
A.G.,  Datex/Ohmeda  and SpaceLabs, Inc., a subsidiary of Westmark International
Incorporated.

     The  Company  believes  that  its  principal  competitors in Western Europe
include  Datex/Ohmeda  and  that  the  Company  has  a significant share of this
market.  In the Pacific Rim countries, the Company believes that Datex/Ohmeda is
the  leading  competitor.

Regulation
----------

     As a manufacturer of medical diagnostic equipment, the Company is regulated
by  the  FDA  and  similar  foreign  governmental  agencies.  In  producing  its
products,  the  Company must comply with a variety of regulations, including the
good manufacturing practices regulations of the FDA.  In addition, it is subject
to  periodic  inspections  by  this

                                        6
<PAGE>
agency.  If  the  FDA  believes  that  its  legal  requirements  have  not  been
fulfilled,  it has extensive enforcement powers, including the ability to ban or
recall  products  from the market and to prohibit the operation of manufacturing
facilities.  The  Company  believes  its  products  comply  with  applicable FDA
regulations  in  all  material  respects.  In addition, the Company received ISO
9002 certification on April 29, 1993 and ISO 9001 certification on July 8, 1994.

     Under  the  Federal  Food,  Drug  and Cosmetic Act, as amended, all medical
devices  are  classified  as  Class I, Class II or Class III, depending upon the
level  of  regulatory control to which they will be subject.  Class III devices,
which  are the most highly controlled devices, are subject to premarket approval
by  the  FDA  prior  to  commercial  distribution  in  the  United  States.

     The  Company's  current  products  have  not  been  subject  to  the  FDA's
comprehensive  premarket  approval  requirements,  but  are generally subject to
premarket  notification  requirements.  If  a  new  device  is  substantially
equivalent to a device that did not require premarket approval, premarket review
is satisfied through a procedure known as a "510(k) submission," under which the
applicant  provides  product  information  supporting  its  claim of substantial
equivalence.  The  FDA  may also require that it be provided with clinical trial
results  showing  the  device's  safety  and  efficacy.

     The Company believes that the products it is currently developing generally
will be eligible for the 510(k) submission procedure and, therefore, will not be
subject  to  lengthy premarket approval procedures.  However, these products are
still  being developed and there can be no assurance that the FDA will determine
that  the  products  may  be  marketed  without  premarket  approval.

     Criticare  seeks, where appropriate, to comply with the safety standards of
Underwriters'  Laboratories  and  the  Canadian  Standards  Association  and the
standards  of  the European Community.  To date, the Company has not experienced
significant regulatory expense or delay in the foreign markets in which it sells
its  products.  Industry and professional groups such as the American Society of
Anesthesiologists,  to  the  extent  they  have  the  power  to  mandate certain
practices or procedures as part of their profession's standard of care, are also
a  source  of  indirect  regulation  of  the  Company's  business.

Patents  and  Trademarks
------------------------

     The  Company  believes  one  of  its  principal  competitive  advantages is
provided  by  its patented and other proprietary technology including its sensor
technology,  infrared  specific  anesthetic gas monitoring technology, UltraSync
signal  processing  software and disposable respiratory secretion filter system.
None  of  the  Company's U.S. patents expire before 2004.  Criticare also has 13
foreign  patent  applications  pending.  There  is no assurance that any patents
held  or  secured  by  the  Company  will  provide  any  protection  or

                                        7
<PAGE>
commercial  or  competitive  benefit to the Company.  There is also no assurance
that  the Company's products will not infringe upon patents held by others.  The
Company  is  the  owner  of  United  States  trademark registrations for "POET,"
"Scholar,"  "MPT,"  "REMOTEVIEW"  and  "MICROVIEW."

     The  Company  also  relies  upon trade secret protection for certain of its
proprietary  technology.  Although  the  Company  requires  its employees having
access  to  its  proprietary  information to sign confidentiality agreements, no
assurance  can be given that such agreements can be effectively enforced or that
others  will  not  independently  develop  substantially  equivalent proprietary
information and techniques or otherwise gain access to or disclose the Company's
trade  secrets.

Employees
---------

     At  August  31,  2000  Criticare  had  104  employees;  including  44  in
manufacturing and operations, six in quality control, 21 in sales and marketing,
13  in  administration  and  20  in  research,  development  and  engineering.

     Many  of the Company's technical employees are highly skilled.  The Company
believes  that  its continued success depends in part on its ability to continue
to attract qualified management, marketing and technical personnel.  None of the
Company's  employees  are  subject  to  a  collective bargaining agreement.  The
Company  believes  that  its  relations  with  its  employees  are  good.

Backlog
-------

     Criticare's  backlog on June 30, 2000 and 1999 was approximately $1,833,000
and $1,836,000, respectively.  The backlog at these dates consisted primarily of
products for which the sales order specified a delayed delivery date.  Criticare
generally delivers its products out of inventory when specified by the customer.
The  Company  does not believe that its backlog at any date is indicative of its
future  sales.

Item  2.     PROPERTIES.
-------      ----------

     In  November  1992, the Company purchased a new 60,000 square foot facility
for  approximately  $4.5  million.  The  Company's  mortgage  calls  for monthly
installments  of  principal  and  interest  of approximately $28,000 and a final
"balloon"  payment  of  approximately  $3.0  million in April 2004.  The Company
believes  this  facility  will  be  adequate  for  the  foreseeable  future.

Item  3.     LEGAL  PROCEEDINGS.
-------      ------------------

     In the normal course of business Criticare may be involved in various legal
proceedings  from  time  to  time.  Criticare  does  not believe it is currently
involved  in  any

                                        8
<PAGE>
claim  or action the ultimate disposition of which would have a material adverse
effect  on  Criticare.

Item  4.     SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.
-------      -----------------------------------------------------------

     No  matters  were submitted to a vote of security holders during the fourth
quarter  of  the  fiscal  year  ended  June  30,  2000.


                                        9
<PAGE>
                                     PART II
                                     -------

Item  5.     MARKET  FOR  REGISTRANT'S  COMMON  EQUITY  AND  RELATED STOCKHOLDER
-------      -------------------------------------------------------------------
MATTERS.
-------

The  Company's  common  stock  is  traded  on the Nasdaq National Market (Symbol
CXIM).  As  of  June 30, 2000, there were approximately 286 holders of record of
the  common stock.  The Company has never paid dividends on its common stock and
has  no  plans  to  pay  cash  dividends  in  the  foreseeable  future.
<TABLE>
<CAPTION>

                       Year Ended June 30,

                      2000               1999
                     -------           --------
<S>              <C>      <C>       <C>       <C>
Quarter Ended:.  High     Low       High      Low
September 30. .  $ 2-7/8  $  1-7/8  $2-15/16  $  1-1/4
December 31(1).  $ 2-3/4  $      2  $  2-3/4  $  1-5/8
March 31. . . .  $5-1/16  $  2-1/4  $  2-1/8  $ 1-7/16
June 30 . . . .  $3-7/16  $1-31/32  $  3-3/8  $1-11/16
<FN>

(1)     Trading  of the Company's common stock on the Nasdaq National Market was
suspended from October 6, 1999 until December 13, 1999 due to the delayed filing
of  the  Company's  1999  Annual  Report  on  Form  10-K  with  the  SEC.
</TABLE>

Item  6.     SELECTED  FINANCIAL  DATA.
-------      -------------------------

     The  following table sets forth selected financial data with respect to the
Company  for  each  of  the  periods  indicated.
<TABLE>
<CAPTION>

                                                         Years Ended June 30,
                                                         --------------------
                                    2000          1999          1998          1997          1996
                                ------------  ------------  ------------  ------------  ------------
<S>                             <C>           <C>           <C>           <C>           <C>
Net sales. . . . . . . . . . .  $27,154,236   $28,512,507   $27,908,364   $26,235,355   $31,528,266
Loss before income
  taxes and extraordinary gain     (186,388)   (4,388,171)     (499,276)   (2,749,435)   (4,280,989)
Net loss . . . . . . . . . . .     (186,388)   (4,388,171)     (499,276)   (2,179,489)   (4,330,989)
Net loss per common share-
  basic and diluted. . . . . .  $     (0.02)  $     (0.51)  $     (0.06)  $     (0.30)  $     (0.63)
Average shares outstanding . .    8,694,918     8,581,863     8,309,240     7,267,184     6,913,557
Stockholders' equity . . . . .  $18,798,952   $12,711,709   $17,282,997   $14,227,135   $13,917,549
Long-term obligations. . . . .    3,552,474     4,014,356     3,165,258     5,110,934     4,669,975
Working capital. . . . . . . .   16,257,780    10,340,014    13,716,891    12,053,165    10,282,033
Total assets . . . . . . . . .   27,210,867    24,041,987    24,726,819    25,145,066    27,075,922
</TABLE>


                                       10
<PAGE>
Item  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
-------      -------------------------------------------------------------------
RESULTS  OF  OPERATION.
----------------------

RESULTS  OF  OPERATIONS

     The  following  table  sets forth, for the periods indicated, certain items
from  the  Company's  Consolidated  Statements  of  Operations  expressed  as
percentages  of  net  sales.
<TABLE>
<CAPTION>

                                      PERCENTAGE  OF  NET  SALES
                                        YEARS  ENDED  JUNE  30,
                                        -----------------------
                                        2000    1999     1998
                                       ------  -------  ------
<S>                                    <C>     <C>      <C>
Net sales . . . . . . . . . . . . . .  100.0%   100.0%  100.0%
Cost of goods sold. . . . . . . . . .   60.6     54.5    53.3
Gross profit. . . . . . . . . . . . .   39.4     45.5    46.7

Operating expenses:
Marketing . . . . . . . . . . . . . .   29.5     31.4    26.7
Research, development and engineering   10.5     10.4    11.7
Administrative. . . . . . . . . . . .    8.6     14.6     7.2
Severance pay . . . . . . . . . . . .     --      2.8      --
Total . . . . . . . . . . . . . . . .   48.6     59.2    45.6

Income (loss) from operations . . . .   (9.2)   (13.7)    1.1
Interest expense. . . . . . . . . . .   (1.0)    (1.5)   (2.9)
Interest income . . . . . . . . . . .    0.3      0.3     0.4
Equity in loss of investments . . . .     --     (0.5)   (0.4)
Gain on sale of stock . . . . . . . .    9.2       --      --
Loss before income taxes. . . . . . .   (0.7)   (15.4)   (1.8)
Income tax provision. . . . . . . . .     --       --      --
Net loss. . . . . . . . . . . . . . .  (0.7)%  (15.4)%  (1.8)%
</TABLE>

FISCAL  YEAR  ENDED  JUNE  30,  2000  COMPARED  TO  JUNE  30,  1999

     For  the  twelve  months  ended  June  30,  2000,  international sales rose
approximately $600,000, but were offset by a decrease in total domestic sales of
approximately  $2,000,000.  The  net  result was a decline in net sales of 4.8%,
from  $28,512,507  to  $27,154,236,  which  resulted  primarily  from decreasing
product  prices.

     The  gross  profit percentage declined from 45.5% in 1999 to 39.4% in 2000.
This  decrease  is  due  primarily  to  continued price erosion on products in a
portion  of  the  Company's  older  product  line.

     Total  operating  expenses  were  reduced by $3,700,000, which represents a
21.7%  cost  reduction  during  fiscal 2000.  Marketing expenses were lowered by
approximately  $900,000  due to a variety of factors.  These include a reduction
in  service  labor  and  materials,  a  decrease  in  payroll and related travel
expenses  due  to a reduction in direct sales people as more dealers were added,
and  a  decrease in commissions associated with the lower sales.  Offsetting the
$1,800,000  of  reductions  was  a $900,000 increase in the reserve for doubtful
accounts  related  to  the  receivable  balances  of  certain  international

                                       11
<PAGE>
customers.  Research  and development expenses decreased approximately $100,000,
as  the design phase of the 8100 product was completed and production commenced.
Administration  expenses  decreased  approximately  $2,000,000.  The majority of
this  reduction  is  due  to the non-reoccurring litigation and settlement costs
associated with a lawsuit in the prior year.  In addition, $810,000 of severance
costs  were  recorded  in  1999.

     Interest  expense was reduced $170,000 from 1999 levels due to the mortgage
that  was refinanced in March 1999.  However, the more significant change is the
$2,500,000 gain recorded on the private placement sale of 500,000 Immtech shares
in  fiscal  2000.

FISCAL  YEAR  ENDED  JUNE  30,  1999  COMPARED  TO  JUNE  30,  1998

     Net  sales  for  the  twelve  months  ended June 30, 1999 increased 2.2% to
$28,512,507  from $27,908,364. The sales increase is attributable to an increase
in  OEM  sales  partially  offset  by  a  decrease  in  international  sales.

     The  gross profit percentage decreased from 46.7% in 1998 to 45.5% in 1999.
The  primary  reason  for  the  decrease  in gross profit is the increase in OEM
sales.  OEM  sales  typically  have  a  lower gross profit than sales to non-OEM
customers.

     Operating  expenses  of  $16,871,981 represent a 32.5% increase from fiscal
1998  levels.  Marketing  expenses  increased  approximately  $1,486,000  when
compared  to  1998  levels.  This  increase  is  due  primarily  to  increased
promotional  activities  throughout  the  world.  Engineering expenses decreased
approximately  $316,000  when compared to 1998 levels; however, when considering
the  one-time  $900,000 charge in 1998 (discussed in footnote 8 of the financial
statements)  engineering  expenses  increased  approximately  $584,000.  This
increase  is  due  to  expanded  research and development efforts related to new
product  introductions.  Administrative  expenses  increased  approximately
$2,159,000.  This  entire increase is attributable to the settlement and related
legal  costs  related  to  litigation  with a former dealer that represented the
Company's  products.  The  Company  also  recorded  approximately  $810,000  of
severance  costs  related  primarily to costs associated with the resignation of
the  two  co-founders  of  the  Company.

     Interest  expense  decreased as no purchase discount related to convertible
debentures  was recorded in 1999.  All debentures were converted to common stock
during  1998.


                                       12
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     In  fiscal  2000,  the  Company  generated  $2,500,000  through the private
placement  sale of Immtech stock and $499,581 from the exercise of stock options
and  employee  stock  purchases  from the treasury.  The Company used $73,925 to
retire long-term debt, $595,412 for capital expenditures, and $4,726,492 to fund
operations.  These  sources  and uses of cash resulted in net negative cash flow
of  $2,396,248  for  the  2000  fiscal  year.

     In  fiscal  1999, the Company generated $315,577 from operating activities,
$256,413  from  the  mortgage  refinancing discussed below, and $10,313 from the
exercise  of  stock  options.  The  Company  used  $92,776 for the retirement of
long-term  debt,  $515,017  for  capital  expenditures,  and  $193,430  for  the
repurchase  of  Company  stock.  These  sources and uses of cash resulted in net
negative  cash  flow  of  $218,920  for  the  1999  fiscal  year.

     In  March  1999,  the Company refinanced its mortgage note on the Company's
office  and  manufacturing facility. The new mortgage note requires monthly debt
service  payments of approximately $28,000 with a final payment of approximately
$3,000,000  due  in  December  2002.

     The  Company expects its continued programs to increase accounts receivable
collections,  decrease  inventory  levels,  reduce  product  development tooling
requirements  and  stabilize  sales  demonstration  equipment levels will have a
positive  effect on cash flow activities in the next fiscal year.  Consequently,
the  Company  believes its research and development activities and other capital
and liquidity requirements for at least the next twelve months will be satisfied
by  cash generated from operations and other borrowings.  There are currently no
significant  capital  expenditures planned for fiscal 2001.  During fiscal 2000,
the  Company  also  had  access  to  a  commercial  bank line of credit of up to
$4,000,000.  At  June 30, 2000, there were no borrowings outstanding on the line
of  credit.  The  Company  violated  a covenant related to maintaining a certain
tangible  net worth amount and achieving certain income levels.  The bank waived
compliance  with  this  covenant  subsequent  to year end.  This line expires in
November  2001.

FORWARD-LOOKING  STATEMENTS

     A  number  of  the  matters and subject areas discussed herein that are not
historical  or  current  facts  deal  with  potential  future  circumstances and
developments.  These  include anticipated product introductions, expected future
financial  results,  liquidity  needs,  financing  ability,  management's or the
Company's expectations and beliefs and similar matters discussed in Management's
Discussion  and  Analysis  or elsewhere herein.  The discussions of such matters
and  subject  areas  are  qualified  by  the  inherent  risk  and  uncertainties
surrounding  future  expectations generally, and also may materially differ from
the  Company's  actual  future  experience.


                                       13
<PAGE>
     The Company's business, operations and financial performance are subject to
certain  risks  and  uncertainties which could result in material differences in
actual  results  from management's or the Company's current expectations.  These
risks  and  uncertainties  include,  but  are  not  limited to, general economic
conditions,  demand  for  the  Company's  products,  costs  of  operations,  the
development  of  new  products,  the  reliance  on  single sources of supply for
certain components in the Company's products, government regulation, health care
cost containment programs, the effectiveness of the Company's programs to manage
working  capital  and  reduce  costs,  and competition in the Company's markets.

Item  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK.
--------      ----------------------------------------------------------------

     The  Company  did not hold any market risk sensitive instruments during the
period  covered  by  this  report.


                                       14
<PAGE>
Item  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.
-------      -----------------------------------------------

FINANCIAL  STATEMENTS

                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>

ASSETS                                                         2000         1999
                                                            -----------  -----------
<S>                                                         <C>          <C>
CURRENT ASSETS (Note 5):
Cash and cash equivalents (Note 1) . . . . . . . . . . . .  $   114,830  $ 2,511,078
Accounts receivable, less allowance for doubtful accounts
  of $1,300,000 and $375,000, respectively . . . . . . . .    6,782,765    6,358,487
Investments (Notes 1, 3 and 5) . . . . . . . . . . . . . .    5,704,675            -
Other receivables. . . . . . . . . . . . . . . . . . . . .      116,773       83,106
Inventories (Notes 1 and 2). . . . . . . . . . . . . . . .    8,178,326    8,510,975
Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      219,852      192,290
                                                            -----------  -----------
Total current assets . . . . . . . . . . . . . . . . . . .   21,117,221   17,655,936

PROPERTY, PLANT AND EQUIPMENT (Notes 1 and 5):
Land . . . . . . . . . . . . . . . . . . . . . . . . . . .      925,000      925,000
Building . . . . . . . . . . . . . . . . . . . . . . . . .    3,600,000    3,600,000
Machinery and equipment. . . . . . . . . . . . . . . . . .    2,009,312    2,051,442
Furniture and fixtures . . . . . . . . . . . . . . . . . .      763,282      819,579
Demonstration and loaner monitors. . . . . . . . . . . . .    1,407,587    1,416,893
Production tooling . . . . . . . . . . . . . . . . . . . .    2,651,145    2,158,378
                                                            -----------  -----------
Property, plant and equipment - cost . . . . . . . . . . .   11,356,326   10,971,292
Less accumulated depreciation. . . . . . . . . . . . . . .    5,367,670    4,697,232
                                                            -----------  -----------
Property, plant and equipment - net. . . . . . . . . . . .    5,988,656    6,274,060

OTHER ASSETS (Notes 1 and 5):
License rights and patents - net . . . . . . . . . . . . .      104,990      111,991
                                                            -----------  -----------
Total other assets . . . . . . . . . . . . . . . . . . . .      104,990      111,991
TOTAL. . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,210,867  $24,041,987
                                                            ===========  ===========
</TABLE>

See  notes  to  consolidated  financial  statements.


                                       15
<PAGE>
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                         2000          1999
                                                                         ------------  ------------
<S>                                                                      <C>           <C>
CURRENT LIABILITIES:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,635,344   $ 3,078,020
Accrued liabilities:
  Compensation and commissions. . . . . . . . . . . . . . . . . . . . .    1,243,839     1,446,614
  Product warranties (Note 1) . . . . . . . . . . . . . . . . . . . . .      325,000       325,000
  Lawsuit settlement. . . . . . . . . . . . . . . . . . . . . . . . . .            -     1,600,000
  Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . .            -       380,000
  Other (Note 7). . . . . . . . . . . . . . . . . . . . . . . . . . . .      574,826       412,395
Current maturities of long-term debt (Note 5) . . . . . . . . . . . . .       80,432        73,893
                                                                         ------------  ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . .    4,859,441     7,315,922

LONG-TERM DEBT, less current maturities (Note 5). . . . . . . . . . . .    3,283,892     3,364,356

OTHER LONG-TERM OBLIGATIONS (Note 12) . . . . . . . . . . . . . . . . .      268,582       650,000

CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (Notes 5, 6 and 8):
Preferred stock - $.04 par value, 500,000 shares authorized,
  no shares issued or outstanding . . . . . . . . . . . . . . . . . . .            -             -
Common stock - $.04 par value, 15,000,000 shares authorized,
  8,976,251 and 8,706,151 shares issued and outstanding, respectively .      359,050       348,246
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . .   18,478,040    17,960,363
Common stock held in treasury (81,122 and 103,840 shares, respectively)     (151,111)     (193,430)
Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . .   (5,591,702)   (5,403,470)
Accumulated comprehensive income. . . . . . . . . . . . . . . . . . . .    5,704,675             -
                                                                         ------------  ------------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . .   18,798,952    12,711,709
                                                                         ------------  ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,210,867   $24,041,987
                                                                         ============  ============
</TABLE>

See  notes  to  consolidated  financial  statements.

                                       16
<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED JUNE 30, 2000, 1999 AND 1998
<TABLE>
<CAPTION>

                                                    2000          1999          1998
                                                ------------  ------------  ------------
<S>                                             <C>           <C>           <C>
NET SALES (NOTE 10). . . . . . . . . . . . . .  $27,154,236   $28,512,507   $27,908,364

COST OF GOODS SOLD . . . . . . . . . . . . . .   16,462,477    15,528,314    14,870,453
                                                ------------  ------------  ------------

GROSS PROFIT . . . . . . . . . . . . . . . . .   10,691,759    12,984,193    13,037,911

OPERATING EXPENSES:
Marketing (Note 1) . . . . . . . . . . . . . .    8,014,129     8,941,036     7,454,619
Research, development and engineering (Note 8)    2,861,733     2,963,134     3,278,714
Administrative (Note 7). . . . . . . . . . . .    2,333,445     4,157,811     1,998,362
Severance pay (Note 12). . . . . . . . . . . .            -       810,000             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .   13,209,307    16,871,981    12,731,695

INCOME (LOSS) FROM OPERATIONS. . . . . . . . .   (2,517,548)   (3,887,788)      306,216

OTHER INCOME (EXPENSE):
Interest expense (Note 5 and 6). . . . . . . .     (259,280)     (432,477)     (797,376)
Interest income. . . . . . . . . . . . . . . .       90,440        82,094       111,884
Equity in loss of investments (Notes 1 and 3).            -      (150,000)     (120,000)
Gain on sale of stock. . . . . . . . . . . . .    2,500,000             -             -
                                                ------------  ------------  ------------
Total. . . . . . . . . . . . . . . . . . . . .    2,331,160      (500,383)     (805,492)

LOSS BEFORE INCOME TAXES . . . . . . . . . . .     (186,388)   (4,388,171)     (499,276)

INCOME TAX PROVISION (NOTES 1 AND 4) . . . . .            -             -             -
                                                ------------  ------------  ------------

NET LOSS . . . . . . . . . . . . . . . . . . .  $  (186,388)  $(4,388,171)  $  (499,276)
                                                ============  ============  ============

NET LOSS PER COMMON SHARE
Basic. . . . . . . . . . . . . . . . . . . . .  $     (0.02)  $     (0.51)  $     (0.06)
Diluted. . . . . . . . . . . . . . . . . . . .  $     (0.02)  $     (0.51)  $     (0.06)

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING (NOTE 8):
Basic. . . . . . . . . . . . . . . . . . . . .    8,694,918     8,581,863     8,309,240
Diluted. . . . . . . . . . . . . . . . . . . .    8,694,918     8,581,863     8,309,240
</TABLE>

See  notes  to  consolidated  financial  statements.

                                       17
<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED JUNE 30, 2000, 1999 AND 1998

<TABLE>
<CAPTION>

                                                                                                Retained
                                                          Additional    Common Stock            Earnings     Accumulated
                                         Common Stock      Paid-In        Treasury            (Accumulated  Comprehensive
                                       Shares     Amount   Capital        Shares     Cost       Deficit)     Income/Loss
<S>                                  <C>        <C>       <C>           <C>       <C>         <C>           <C>
BALANCE, JUNE 30, 1997. . . . . . .  7,796,465  $311,859  $14,469,406                         $  (516,023)  $    (38,107)
Net loss. . . . . . . . . . . . . .                                                              (499,276)
Foreign currency translation. . . .                                                                               38,107
Comprehensive income/(loss) . . . .
Issuance of common stock. . . . . .     20,425       817      119,183
Exercise of options and warrants. .    126,500     5,060      271,371
Convertible debentures converted
  to common stock, net of $100,822
  of unamortized issuance costs . .    407,761    16,310    2,181,225
Commitment to issue common
  stock for patented technology . .                           900,000
Issuance of warrants for services .                            23,065

BALANCE, JUNE 30, 1998. . . . . . .  8,351,151   334,046   17,964,250                          (1,015,299)
Net loss. . . . . . . . . . . . . .                                                            (4,388,171)
Comprehensive income/(loss) . . . .
Issuance of common stock for
  patented technology . . . . . . .    350,000    14,000      (14,000)
Exercise of options and warrants. .      5,000       200       10,113
Common stock repurchased. . . . . .                                     103,840    (193,430)

BALANCE, JUNE 30, 1999. . . . . . .  8,706,151   348,246   17,960,363   103,840    (193,430)   (5,403,470)             0

Net loss. . . . . . . . . . . . . .                                                              (186,388)
Unrealized gain on investment . . .                                                                            5,704,675
Comprehensive income/loss . . . . .
Common stock issued in settlement
  of lawsuit. . . . . . . . . . . .     30,000     1,200       68,175
Exercise of options . . . . . . . .    240,100     9,604      448,746
Employee common stock
  purchased from treasury . . . . .                               756   (22,718)     42,319        (1,844)

BALANCE, JUNE 30, 2000. . . . . . .  8,976,251  $359,050  $18,478,040    81,122   $(151,111)  $(5,591,702)  $  5,704,675


                                         Total
                                     Stockholders'
                                        Equity
<S>                                  <C>
BALANCE, JUNE 30, 1997. . . . . . .  $14,227,135
Net loss. . . . . . . . . . . . . .     (499,276)
Foreign currency translation. . . .       38,107
Comprehensive income/(loss) . . . .     (461,169)
Issuance of common stock. . . . . .      120,000
Exercise of options and warrants. .      276,431
Convertible debentures converted
  to common stock, net of $100,822
  of unamortized issuance costs . .    2,197,535
Commitment to issue common
  stock for patented technology . .      900,000
Issuance of warrants for services .       23,065

BALANCE, JUNE 30, 1998. . . . . . .   17,282,997
Net loss. . . . . . . . . . . . . .   (4,388,171)
Comprehensive income/(loss) . . . .   (4,388,171)
Issuance of common stock for
  patented technology . . . . . . .            -
Exercise of options and warrants. .       10,313
Common stock repurchased. . . . . .     (193,430)

BALANCE, JUNE 30, 1999. . . . . . .   12,711,709

Net loss. . . . . . . . . . . . . .     (186,388)
Unrealized gain on investment . . .    5,704,675
Comprehensive income/loss . . . . .    5,518,287
Common stock issued . . . . . . . .       69,375
Exercise of options . . . . . . . .      458,350
Employee common stock
  purchased from treasury . . . . .       41,231

BALANCE, JUNE 30, 2000. . . . . . .  $18,798,952

</TABLE>

See  notes  to  consolidated  financial  statements.


                                       18

<PAGE>
                    CRITICARE SYSTEMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED JUNE 30, 2000, 1999 AND 1998
<TABLE>
<CAPTION>

                                                                      2000          1999         1998
                                                                  ------------  ------------  -----------
<S>                                                               <C>           <C>           <C>
OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  (186,388)  $(4,388,171)  $ (499,276)
Adjustments to reconcile net loss to net cash
  (used in) provided by operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . . . . . . .      871,510       486,610      721,476
    Amortization . . . . . . . . . . . . . . . . . . . . . . . .        7,001         7,002       21,440
    Interest and discount accrued on convertible debentures. . .            -             -      462,034
    Provision for doubtful accounts. . . . . . . . . . . . . . .      925,000       380,004       99,000
    Expense related to equity in loss of investments . . . . . .            -             -      120,000
    Expense related to issuance of warrants for services . . . .            -             -       23,065
    Expense related to commitment to issue common stock
      for patented technology. . . . . . . . . . . . . . . . . .            -             -      900,000
    Gain on sale of Immtech stock. . . . . . . . . . . . . . . .   (2,500,000)            -            -
    Litigation settled with common stock . . . . . . . . . . . .       69,375             -            -
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . . . . . . .   (1,349,278)      183,222      161,524
      Other receivables. . . . . . . . . . . . . . . . . . . . .      (33,667)      239,870      (86,121)
      Inventories. . . . . . . . . . . . . . . . . . . . . . . .      341,955      (461,786)      46,207
      Prepaid expenses . . . . . . . . . . . . . . . . . . . . .      (27,562)      146,007      (68,677)
      Accounts payable . . . . . . . . . . . . . . . . . . . . .     (442,676)      772,299     (768,284)
      Accrued liabilities. . . . . . . . . . . . . . . . . . . .   (2,401,762)    2,950,520     (683,954)
                                                                  ------------  ------------  -----------
Net cash (used in) provided by  operating activities . . . . . .   (4,726,492)      315,577      448,434

INVESTING ACTIVITIES:
Purchases of property, plant and equipment, net. . . . . . . . .     (595,412)     (515,017)    (287,205)
Purchase of license rights . . . . . . . . . . . . . . . . . . .            -             -       (1,080)
Advances to Immtech International, Inc.. . . . . . . . . . . . .            -             -     (120,000)
Proceeds from Sale of Immtech Stock. . . . . . . . . . . . . . .    2,500,000             -            -
                                                                  ------------  ------------  -----------
Net cash provide by (used in) investing activities . . . . . . .    1,904,588      (515,017)    (408,285)

FINANCING ACTIVITIES:
Net proceeds from mortgage refinancing . . . . . . . . . . . . .            -       256,413            -
Repurchase of Company stock. . . . . . . . . . . . . . . . . . .            -      (193,430)           -
Principal payments on long-term debt . . . . . . . . . . . . . .      (73,925)      (92,776)    (147,441)
Proceeds from issuance of common stock . . . . . . . . . . . . .      499,581        10,313      396,431
                                                                  ------------  ------------  -----------
Net cash provided by (used in) financing activities. . . . . . .      425,656       (19,480)     248,990

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS . . . . . .   (2,396,248)     (218,920)     289,139
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . . . . . . .    2,511,078     2,729,998    2,440,859
CASH AND CASH EQUIVALENTS, END OF YEAR . . . . . . . . . . . . .  $   114,830   $ 2,511,078   $2,729,998

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
  Income taxes paid-net. . . . . . . . . . . . . . . . . . . . .  $     7,535   $     8,010   $    8,525
  Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .      259,590       437,401      335,342
Noncash investing and financing activities:
  Common stock issued upon conversion of convertible debentures,
    net of $100,822 of unamortized issuance costs. . . . . . . .            -             -    2,197,535
  Issuance of warrants for services. . . . . . . . . . . . . . .            -             -       23,065
  Commitment to issue common stock for patented technology . . .            -             -      900,000
  Litigation settled with common stock . . . . . . . . . . . . .       69,375             -            -
  Cost of fixed asset disposals. . . . . . . . . . . . . . . . .      201,072             -            -
  Unrealized gain on investment in Immtech . . . . . . . . . . .    5,704,675             -            -
</TABLE>


See  notes  to  consolidated  financial  statements.

                                       19
<PAGE>
NOTES  TO  FINANCIAL  STATEMENTS

CRITICARE  SYSTEMS,  INC.  AND  SUBSIDIARIES
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
YEARS  ENDED  JUNE  30,  2000,  1999  AND  1998

1.   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include
the  accounts  of  Criticare  Systems, Inc. (the "Company") and its wholly owned
subsidiaries:  Criticare  International  GmbH  Marketing  Services  ("Criticare
International"),  CSI  Trading,  Inc.  ("CSI  Trading"), Criticare Service GmbH,
Criticare  Biomedical,  Inc.  ("Criticare Biomedical"), Sleep Care, Inc. ("Sleep
Care"),  Criticare  (FSC),  Inc.  and CSI International Corp. (DISC).  Criticare
International  was  liquidated during fiscal 1998.  CSI Trading was incorporated
in  November 1996 to assist with European marketing activities.  All significant
intercompany  accounts  and  transactions  have  been  eliminated.

     CASH  EQUIVALENTS  -  The  Company considers all investments with purchased
maturities  of  less  than  three  months  to  be  cash  equivalents.

     INVENTORIES  -  Inventories are stated at the lower of cost or market, with
cost  determined  on  the  first-in,  first-out  method.

     INVESTMENTS  -  The  Company  accounts  for  its  investment  in  Intercare
Technologies,  Inc.  ("Intercare")  on  the  cost  method  and  accounts for its
investment  in  the  Blatz  House  Offices  Limited  Partnership  (the  "Blatz
Partnership")  on  the  equity  method.  In  fiscal  2000,  the  Company  ceased
accounting  for  its  investment in Immtech International, Inc ("Immtech") under
the equity method and recorded the asset on the balance sheet at its fair market
value  in  accordance  with SFAS No. 115, "Accounting for Certain Investments in
Debt  and  Equity  Securities"  (see  Note  3).

     PROPERTY,  PLANT  AND EQUIPMENT - Property, plant and equipment is recorded
at  cost.  Each  member  of  the  Company's  sales  force  is  provided  with
demonstration monitors to assist them in their sales efforts.  Also, the Company
has loaner monitors which are used to temporarily replace a customer's unit when
it  is  being repaired or upgraded.  Depreciation is provided over the estimated
useful  lives  of  the assets.  The building is being depreciated over 40 years,
and  the remaining assets are being depreciated over three to seven years, using
primarily  the  straight-line  method.

     LICENSE  RIGHTS AND PATENTS - License rights and patents are amortized over
the  estimated  useful  lives  of  the  related  agreements  using primarily the
straight-line  method.  Approximately  $7,000  of  amortization  was  charged to
operations  in  each  of

                                       20
<PAGE>
the  fiscal  years ended June 30, 2000, 1999 and 1998.  Accumulated amortization
approximated  $92,000  and  $85,000  at  June  30,  2000 and 1999, respectively.

     CONVERTIBLE DEBENTURE ISSUANCE COSTS - Convertible debenture issuance costs
were  amortized over the two-year term of the debentures.  Approximately $15,000
of  amortization  was  charged  to  operations  in 1998.  The pro rata amount of
unamortized  debenture issuance costs were charged to additional paid-in-capital
upon  conversion  of  the  debentures  to  common  stock.  Unamortized debenture
issuance costs charged to additional paid-in capital amounted to $100,822 during
1998.  (See  Note  6.)

     REVENUE  RECOGNITION  -  Revenues  and  the  costs  of  products  sold  are
recognized  as  the  related  products  are  shipped  or installed, if there are
significant  installation  costs.

     PRODUCT WARRANTIES - Estimated costs for product warranties are accrued for
and  charged  to  operations  as  the  related  products  are  shipped.

     MARKETING EXPENSES -  Marketing expenses include all of the Company's sales
related costs.  The amount incurred in fiscal 2000 includes a $900,000 charge to
bad  debt  expense  related  to  the  accounts  receivable  balance  of  certain
international  customers.  Total  bad debt expense was $1,160,614, $380,004, and
$99,000  for  the  years  ended  June  30,  2000,  1999  and 1998, respectively.

     RESEARCH  AND  DEVELOPMENT  EXPENSES  -  Research and development costs are
charged  to  operations  as  incurred.  Such  expenses  approximated $2,696,000,
$2,798,000 and $3,156,000 in 2000, 1999 and 1998, respectively.  The 1998 amount
includes  $900,000  related  to  certain  acquired patented technology which was
charged  to  operations as in-process research and development costs at the time
of  the  acquisition.  (See  Note  8.)

     INCOME  TAXES  -  The  Company accounts for income taxes using an asset and
liability  approach.  Deferred  income  tax  assets and liabilities are computed
annually for differences between the financial statement and tax bases of assets
and  liabilities that will result in taxable or deductible amounts in the future
based  on  enacted  tax  laws  and  rates applicable to the periods in which the
differences  are  expected  to  affect  taxable  income.

     FOREIGN  CURRENCY  TRANSLATION  -  The  effects of unrealized exchange rate
fluctuations  from  translating  foreign  currency  assets  and liabilities into
United  States  dollars are accumulated as cumulative translation adjustments in
stockholders'  equity.

     NET  INCOME  (LOSS)  PER  COMMON  SHARE  - Basic income (loss) per share is
computed  using  the weighted average number of common shares outstanding during
the  periods.  Diluted  income  per share is computed using the weighted average
number  of  common  and dilutive common equivalent shares outstanding during the
periods.

                                       21
<PAGE>

     FAIR  VALUE  OF  FINANCIAL STATEMENTS - The Company's financial instruments
under  Statement  of Financial Accounting Standards ("SFAS") No. 107 "Disclosure
About  Fair Value of Financial Instruments," includes cash, accounts receivable,
accounts  payable,  borrowings under line of credit facility and long-term debt.
The  Company  believes  that  the  carrying  amounts  of  these  accounts  are a
reasonable estimate of their fair value because of the short-term nature of such
instruments  or,  in  the  case  of  long-term  debt  because  of interest rates
available  to  the  Company  for  similar  obligations.

     COMPREHENSIVE  INCOME  -  In  1999,  the  Company  adopted  SFAS  No.  130,
"Reporting  Comprehensive  Income."  This  statement  establishes  rules for the
reporting  of  comprehensive  income  and  its components.  Comprehensive income
consists  of net income, foreign currency translation adjustments and unrealized
gains  on  investments,  and  is  presented  in  the  Consolidated  Statement of
Stockholders'  Equity.  The  adoption  of  SFAS  130  had  no  impact  on  total
stockholders' equity.  Prior year financial statements have been reclassified to
conform  to  the  SFAS  130  requirements.

     APPROVED ACCOUNTING STANDARDS - Statement of Financial Accounting Standards
No. 133 "Accounting for Derivative Instruments and Hedging Activities" (SFAS No.
133)  issued  by  the  FASB  is  effective  for financial statements with fiscal
quarters  of  fiscal  years  beginning  after  June 15, 2000.  SFAS 133 requires
companies to recognize all derivatives contracts as either assets or liabilities
in  the  balance sheet and to measure them at fair value.  If certain conditions
are  met,  a derivative may be specifically designated as a hedge, the objective
of  which  is  to  match  the  timing of gain or loss recognition on the hedging
derivative  with  the  recognition  of  (i) the changes in the fair value of the
hedged  asset or liability that are attributable to the hedged risk or (ii)  the
earnings  effect  of  the  hedged  forecasted transaction.  For a derivative not
designated  as a hedging instrument, the gain or loss is recognized in income in
the  period  of  change.

     Historically, the Company has not entered into derivatives contracts either
to  hedge  existing risks or for speculative purposes.  Accordingly, the Company
does not expect adoption of the new standard to affect its financial statements.

     In  1999  the  Securities  and  Exchange Commission issued Staff Accounting
Bulletin  No.  101  "Revenue  Recognition in Financial Statements" (SAB No. 101)
dealing  with  revenue  recognition  which is effective in the fourth quarter of
fiscal  2000.  The Company does not expect its adoption of SAB No. 101 to have a
material  effect  on  the  Company's  financial  statements.

     In  March 2000, the FASB issued FASB interpretation No. 44, "Accounting for
Certain  Transactions Involving Stock Compensation ("FIN 44") which is effective
July  1,  2000.  This interpretation clarifies the application of APB Opinion 25
for  certain  issues related to stock issued to employees.  The Company believes
its  existing stock based compensation policies and procedures are in compliance
with FIN 44 and, therefore, that the adoption of FIN 44 will not have a material
effect  on  the  Company's  financial  statements.

     USE  OF  ESTIMATES  - The preparation of financial statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements  and  the  reported  amounts of revenues and expenses
during  the reporting period.  Actual results could differ from those estimates.

                                       22
<PAGE>
2.   INVENTORIES

     Inventories  consist  of  the  following  as  of  June  30:
<TABLE>
<CAPTION>

                                    2000        1999
<S>                              <C>         <C>
Component parts . . . . . . . .  $3,721,474  $3,790,728
Work in process . . . . . . . .   1,169,609   1,261,709
Finished units. . . . . . . . .   3,687,243   4,018,142
                                 ----------  ----------
Total inventories . . . . . . .   8,578,326   9,070,579
Less:  reserve for obsolescence     400,000     559,604
                                 ----------  ----------
Net inventory . . . . . . . . .  $8,178,326  $8,510,975
</TABLE>

3.   INVESTMENTS

     IMMTECH  INTERNATIONAL,  INC.  -  The  Company owns common stock of Immtech
International,  Inc.  ("Immtech").  Immtech  is  a  biopharmaceutical  company
focusing on the discovery and commercialization of therapeutics for treatment of
patients  afflicted  with opportunistic infectious diseases, cancer or comprised
immune  systems.  Immtech has two independent programs for developing drugs: one
based  on  a  technology  for  the design of a class of pharmaceutical compounds
referred  to  as  dications.  The  second  is  based  on  developing a series of
biological  proteins  that  work in conjunction with the immune system.  Immtech
has  no  products  currently  for sale, and none are expected to be commercially
available  for  several  years.  Immtech  has  a  March  31  fiscal  year  end.

     During  the  first  and  second quarters of fiscal 2000, the Company sold a
portion  of  its  Immtech  stock in a Private Placement.  The proceeds from this
sale  were  $2,500,000.

     As  a  result,  the  Company  owns  less  than  20% of Immtech's issued and
outstanding  common  stock  as  of June 30, 2000.  Therefore, in accordance with
SFAS  No.  115,  "Accounting  for  Certain  Investments  in  Debt  and  Equity
Securities,"  the Company ceased accounting for the Immtech investment under the
equity  method  and  recorded  the asset on the balance sheet at the fair market
value  of  $5,704,675.  An  unrealized  gain was also recorded as a component of
stockholder's  equity.  The Company held 456,374 shares of Immtech common stock,
which  was  trading  at  $12.50  per  share,  on  June  30,  2000.

     The  following  is a summary of the Company's investment in and advances to
Immtech  as  of  June  30,  1999:
<TABLE>
<CAPTION>

                                       1999
<S>                                <C>
Investment in Immtech . . . . . .  $ 2,736,000
Advances to Immtech . . . . . . .      863,940
                                   ------------
Total . . . . . . . . . . . . . .    3,599,940
Less investment losses recognized   (3,599,940)
                                   ------------
Net investment. . . . . . . . . .  $         0
</TABLE>

                                       23
<PAGE>
     During  July  1998,  the Company purchased certain intangible assets and an
additional  172,414 shares of Immtech stock for $150,000.  These intangibles and
shares of stock were subsequently sold to a related party as part of a severance
agreement  for  $150,000  (see  Note  12).

     The  Company  has recognized investment losses related to the investment in
Immtech  of  $150,000  and  $120,000  in  1999  and  1998,  respectively.

     During  April 1999, Immtech completed an Initial Public Offering ("IPO") of
its  stock.  As  part  of  this  IPO, the Company was required to sign a lock-up
agreement  by  which  it was agreed that no shares owned by the Company could be
sold  in  the  public  market until the Immtech stock traded at $20 (200% of its
initial IPO price ($10)) for 20 consecutive trading days and one year has passed
from  the  date  of the IPO.  As of June 30, 2000, these lock up provisions have
been  satisfied.

     The  following  is summarized financial information for Immtech at June 30,
1999  and  for  the  twelve  months  then  ended.
<TABLE>
<CAPTION>

                                                   1999
<S>                                            <C>
Current assets. . . . . . . . . . . . . . . .  $ 8,541,000
Noncurrent assets . . . . . . . . . . . . . .       68,000
Current liabilities . . . . . . . . . . . . .      253,000
Noncurrent liabilities. . . . . . . . . . . .            -
Redeemable preferred stock. . . . . . . . . .            -
Common stockholders' equity (deficit) . . . .    8,356,000
Revenues. . . . . . . . . . . . . . . . . . .      136,000
Net loss. . . . . . . . . . . . . . . . . . .   (8,341,000)
Net loss attributable to common stockholders.   (4,657,000)
</TABLE>

     BLATZ  PARTNERSHIP  -  The  Company  was the sole limited partner in a real
estate  limited  partnership  which  owns  the  Blatz Phase II Commercial Office
Buildings  located  in  Milwaukee,  Wisconsin.  Under  terms  of the Partnership
Agreement (the "Agreement"), profits and losses (other than those resulting from
a sale or refinancing of the Project) were allocated 40% to the general partners
and  60%  to  the  Company.  This  investment  was  sold  during  1999.

4.   INCOME  TAXES

     The Company accounts for income taxes using an asset and liability approach
which  generally  requires  the  recognition  of  deferred income tax assets and
liabilities  based on the expected future income tax consequences of events that
have  previously  been  recognized  in the Company's financial statements or tax
returns.  In  addition, a valuation allowance is recognized if it is more likely
than not that some or all of the deferred income tax asset will not be realized.
A  valuation  allowance  is  used  to offset the related net deferred income tax
assets  due  to uncertainties of realizing the benefits of certain net operating
loss  and  tax  credit  carryforwards.


                                       24
<PAGE>
     Significant  components  of  the  Company's  deferred income tax assets and
deferred  income  tax  liabilities  are  as  follows:
<TABLE>
<CAPTION>

                                                           JUNE 30,      JUNE 30,      JUNE 30,
                                                             2000          1999          1998
<S>                                                      <C>           <C>           <C>
Deferred income tax assets:
  Accounts receivable and sales allowances. . . . . . .  $   533,000   $   170,000   $   156,000
  Inventory allowances. . . . . . . . . . . . . . . . .      191,000       254,000       110,000
  Product warranties. . . . . . . . . . . . . . . . . .      128,000       128,000       128,000
  Other accrued liabilities . . . . . . . . . . . . . .      246,000       392,000        86,000
  Severance pay accrual . . . . . . . . . . . . . . . .      145,000       279,000             -
  Lawsuit settlement. . . . . . . . . . . . . . . . . .            -       626,000             -
  Federal net operating loss carryforwards. . . . . . .    3,320,000     2,014,000     1,870,000
  State net operating loss carryforwards. . . . . . . .      483,000       291,000       270,000
  Federal tax credit carryforwards. . . . . . . . . . .      152,000       152,000       152,000
  Investment losses not deducted. . . . . . . . . . . .      709,000     1,532,000     1,481,000
                                                         ------------  ------------  ------------
  Total deferred income tax assets. . . . . . . . . . .    5,907,000     5,838,000     4,253,000

Deferred income tax liabilities:
  Excess of tax over book depreciation and amortization     (616,000)     (620,000)     (596,000)
  Prepaid expenses. . . . . . . . . . . . . . . . . . .      (13,000)       (7,000)       (3,000)
  Unrealized gain on investments. . . . . . . . . . . .   (2,237,000)            -             -
                                                         ------------  ------------  ------------
  Total deferred income tax liabilities . . . . . . . .   (2,866,000)     (627,000)     (599,000)

  Valuation allowance . . . . . . . . . . . . . . . . .   (3,041,000)   (5,211,000)   (3,654,000)

  Net deferred income taxes recognized in the
    consolidated balance sheets . . . . . . . . . . . .  $         0   $         0   $         0
</TABLE>

     At  June 30, 2000, the Company had federal net operating loss carryforwards
of  approximately  $9,765,000  which  expire  in 2008 through 2020.  At June 30,
2000,  the  Company  had available for federal income tax purposes approximately
$41,000  of  alternative  minimum  tax  credit carryforwards which carry forward
indefinitely and approximately $111,000 tax credit carryforwards which expire in
the  years  2007 through 2009.  The Company also has approximately $9,667,000 of
state  net  operating  loss  carryforwards,  which  expire in 2002 through 2015,
available  to  offset  certain  future  state  taxable  income.

     The  income  tax  provision  consists  of  the  following:
<TABLE>
<CAPTION>

                              2000   1999   1998
<S>                           <C>    <C>    <C>
Current
  Federal. . . . . . . . . .  $   0  $   0  $   0
  State. . . . . . . . . . .      0      0      0
  Total income tax provision  $   0  $   0  $   0
</TABLE>


                                       25
<PAGE>
     A reconciliation of the provision for income taxes (benefit) at the federal
statutory  income  tax  rate  to  the  effective  income  tax  rate  follows:
<TABLE>
<CAPTION>



                                                2000     1999     1998
<S>                                            <C>      <C>      <C>
Federal statutory income tax rate . . . . . .  (34.0)%  (34.0)%  (34.0)%
Losses for which no benefit was provided. . .   35.3     29.3     30.9
Non-deductible losses of subsidiaries . . . .   27.6      3.2        -
Other-net (principally stock options in 2000)  (28.9)     1.5      3.1
Effective income tax rate . . . . . . . . . .      0%       0%       0%
</TABLE>



5.     LINE  OF  CREDIT  FACILITY  AND  LONG-TERM  DEBT
<TABLE>
<CAPTION>

                                                                 2000        1999
<S>                                                           <C>         <C>
Long-term debt consists of the following:

  Mortgage note, 7.5% due in monthly installments of $27,793
    with a final payment of $3,048,253 due in April 1, 2004,
    collateralized by real estate with a carrying value of
    approximately $3,844,000 at June 30, 2000. . . . . . . .  $3,364,324  $3,438,249
  Less current maturities. . . . . . . . . . . . . . . . . .      80,432      73,893
  Long-term debt . . . . . . . . . . . . . . . . . . . . . .  $3,283,892  $3,364,356
</TABLE>

     Aggregate  annual  principal payments required under terms of the long-term
debt  agreements  are  as  follows:
<TABLE>
<CAPTION>

<S>                    <C>
YEARS ENDING JUNE 30,  PRINCIPAL PAYMENTS
2001. . . . . . . . .  $            80,432
2002. . . . . . . . .               86,766
2003. . . . . . . . .               93,599
2004. . . . . . . . .            3,103,526
2005. . . . . . . . .                    0
                       -------------------
Total . . . . . . . .  $         3,364,324
</TABLE>

     At  June  30,  2000,  the  Company  had  a $4,000,000 demand line of credit
facility  with  a  commercial  bank  to  meet  its  short-term  borrowing needs.
Borrowings against the line were payable on demand with interest payable monthly
at the bank's reference rate, plus .25% (9.75% as of June 30, 2000).  As of June
30,  2000, there were no borrowings against the line.  Borrowings under the line
of  credit  facility  are  collateralized  by  substantially  all  assets of the
Company.  The  credit  facility  has  covenants  which require minimum levels of
tangible  net  worth  and income levels.  The Company was not in compliance with
these covenants at June 30, 2000.  This non-compliance was waived by the lending
institution.


                                       26
<PAGE>
     In  March  1999,  the Company refinanced its mortgage note on the Company's
office and manufacturing facility.  The Company incurred a prepayment penalty of
approximately  $120,000,  which  was  recorded  as  interest  expense.

6.   CONVERTIBLE  DEBENTURES

     In  February 1997, the Company issued $2,500,000 of convertible debentures.
The  debentures  had  a  two year term to maturity with a stated annual interest
rate of 8%, payable in shares of common stock at the conversion date or maturity
date.  The  holders of the debentures had the option to convert up to $1,250,000
of  the debentures and accrued interest to common stock of the Company sixty-one
(61)  days after the February 1997 closing date at a conversion price equal to a
20%  discount  from  the average closing bid price of the Company's common stock
for  the  five  days  preceding  the  conversion  date.  Debentures  aggregating
$550,000  were  converted  under  the  20%  discount  conversion  feature.  The
remaining  debentures and accrued interest were converted to common stock of the
Company  at  a conversion price equal to a 25% discount from the average closing
bid  price  of  the  Company's  common  stock  for  the  five days preceding the
conversion  date.  For  the  year  ended June 30, 1998, $1,650,000 of debentures
were  converted  to  407,761  shares of common stock with a fair market value of
$2,298,357  as  of  the  conversion  date.

7.   CONTINGENCIES

     From  time  to  time,  various  lawsuits  arise out of the normal course of
business.  These  proceedings  are  handled  by  outside  counsel.  Currently
management  is not aware of any claim or action pending against the Company that
would  have  a  material  adverse  effect  on  the  Company.

     The  Company  has  received  two  grants  from  the  State of Wisconsin for
research  and development of certain products.  The grants are to be repaid only
upon  successful  completion and marketing of the related product.  Repayment of
these  grants  is  to be made on a sales by unit basis.  Repayments approximated
$182,000  in  1999  and  constituted full repayment of one of these grants.  The
repayments  are  charged to expense as the related products are sold.  Since the
second  grant  did  not  result  in the successful completion and marketing of a
product,  the  Company  does  not have to repay the grant.  The Company has been
awarded  a  third grant from the State of Wisconsin for an amount up to $100,000
which  requires  repayment of the grant amount plus interest at 8%, plus payment
of  a  royalty  in  the  amount  of 1% of net sales of the related product for a
five-year  period,  as defined.  No funds have been received under this grant at
June  30,  2000.


                                       27
<PAGE>
8.   STOCKHOLDERS'  EQUITY

     STOCK  OPTIONS  -  In  December 1992, the Board of Directors approved a new
Employee  Stock  Option  Plan  and Non-Employee Stock Option Plan.  No new stock
options  can  be  granted  under the Employee Stock Option Plan and Non-Employee
Stock  Option  Plan  which  existed prior to the approval of the new plans.  The
Board  of  Directors  has  authorized  in  connection  with  these new plans the
issuance  of 1,720,000 reserved shares of common stock of which 139,350 reserved
shares  of  common  stock  remain  available for future issuance under the stock
option  plans  at June 30, 2000.  The Board of Directors increased the number of
reserved  shares for issuance under the Plans from 1,220,000 to 1,720,000 during
1999.  The  activity  during  1998,  1999  and  2000  for  the  above  plans are
summarized  as  follows:
<TABLE>
<CAPTION>

                                                NUMBER OF   STOCK OPTIONS  WEIGHTED AVG.
                                                 SHARES      PRICE RANGE   EXERCISE PRICE
<S>                                            <C>          <C>            <C>
Outstanding at July 1, 1997 . . . . . . . . .   1,044,400       1.88-5.25            2.40
  Granted . . . . . . . . . . . . . . . . . .      60,000       3.00-3.25            3.13
  Cancelled . . . . . . . . . . . . . . . . .    (179,200)      2.00-5.25            2.38
  Exercised . . . . . . . . . . . . . . . . .     (85,500)      2.00-2.75            2.27
                                               -----------
Outstanding at June 30, 1998. . . . . . . . .     839,700       1.88-3.63            2.50
  Granted . . . . . . . . . . . . . . . . . .     993,700       1.50-1.88            1.74
  Cancelled . . . . . . . . . . . . . . . . .    (636,800)      1.69-3.00            2.06
  Exercised . . . . . . . . . . . . . . . . .      (5,000)           2.06            2.06
                                               -----------
Outstanding at June 30, 1999. . . . . . . . .   1,191,600       1.50-3.00            1.83
  Granted . . . . . . . . . . . . . . . . . .     489,100       2.00-2.25            2.24
  Cancelled . . . . . . . . . . . . . . . . .    (287,700)      1.63-3.63            1.99
  Exercised . . . . . . . . . . . . . . . . .    (240,100)      1.50-2.75            1.91
                                               -----------
Outstanding at June 30, 2000. . . . . . . . .   1,152,900       1.50-2.75            1.96

Exercisable at June 30, 2000. . . . . . . . .     502,500       1.50-2.75            1.98

Weighted average fair market value of options
granted during the fiscal year ended June 30,
2000. . . . . . . . . . . . . . . . . . . . .  $     0.38
</TABLE>

     The  following table summarizes information about stock options outstanding
as  of  June  30,  2000:
<TABLE>
<CAPTION>

                              OPTIONS OUTSTANDING                                       OPTIONS EXERCISABLE
                                           Weighted Average
                            Shares            Remaining          Weighted            Shares
Range of                  Outstanding        Contractual     Average Exercise     Exercisable     Weighted Average
Exercise Prices        at June 30, 2000       Life-Years           Price        at June 30, 2000   Exercise Price
<S>                   <C>                  <C>               <C>                <C>               <C>
1.50-1.875. . . . .              622,400              2.71  $            1.71           284,000  $            1.76
2.00-3.00. . . . . .              530,500              3.39               2.25           218,500               2.28
1.50-3.00. . . . . .            1,152,900              3.02               1.96           502,500               1.98
</TABLE>

                                       28
<PAGE>
     Outstanding  options  have  fixed  terms  and are exercisable over a period
determined by the Compensation Committee of the Company's Board of Directors but
no  longer  than  five  years  after  the  date  of  grant.

     The  Company  has  adopted  the disclosure-only provisions of SFAS No. 123,
"Accounting  for  Stock-Based  Compensation,"  but applies Accounting Principles
Board  Opinion  No.  25,  "Accounting for Stock Issued to Employees" and related
interpretations  in  accounting  for  its plans.   If the Company had elected to
recognize  compensation cost for the options granted during the years ended June
30,  2000, 1999 and 1998, consistent with the method prescribed by SFAS No. 123,
net loss and net loss per share would have been changed to the pro forma amounts
indicated  below:
<TABLE>
<CAPTION>

                                                       YEARS  ENDED  JUNE  30,
                                                    2000         1999         1998
<S>                                              <C>         <C>           <C>
Net income (loss)-as reported . . . . . . . . .  $(186,388)  $(4,388,171)  $(499,276)
Net income (loss)-pro forma . . . . . . . . . .  $(365,626)  $(4,555,200)  $(779,276)
Net income (loss) per common share-as reported.  $   (0.02)  $     (0.51)  $   (0.06)
Net income (loss) per common share-pro forma. .  $   (0.04)  $     (0.53)  $   (0.09)
Assumptions used:
  Expected volatility . . . . . . . . . . . . .         23%           15%         14%
  Risk-free interest rate . . . . . . . . . . .          6%            5%          5%
  Expected option life (in years) . . . . . . .          4             3           3
</TABLE>

     The  fair value of stock options used to compute pro forma net loss and net
loss per common share is the estimated present value at the grant date using the
Black-Scholes  option-pricing  model.

     STOCK  WARRANTS  -  In  September  1995,  the  Company  executed  a warrant
agreement with a consultant.  The warrant agreement provided for the issuance of
warrants  to  purchase  up to 150,000 shares of the common stock of the Company,
exercisable  at  a  price of $2.00 per share.  The warrant was exercisable as to
37,500  shares  upon execution of the agreement and the warrants to purchase the
remaining  112,500  shares  were  to  become  exercisable if certain performance
parameters  were achieved by September 1996.  Such parameters were not met as of
such  date.  In January 1997, the agreement was extended and the parameters were
changed.  By June 30, 1997, warrants to purchase the remaining 112,500 shares of
common  stock  at  a  price  of $2.00 per share became exercisable.  The warrant
holder exercised rights and purchased 41,000 shares of common stock at $2.00 per
share  during  the year ended June 30, 1998.  Warrants to purchase 15,000 shares
of  common stock at $2.00 per share were exercisable as of June 30, 2000.   Such
warrants  expire  in  September  2000.

     In February 1998, the Company executed a similar warrant agreement with the
consultant.  The  warrant  agreement  provides  for  the issuance of warrants to
purchase  up  to  150,000  shares of common stock at a price of $3.00 per share.
The  warrant  is exercisable as to 30,000 shares upon execution of the agreement
and  the  warrants  to

                                       29
<PAGE>
purchase the remaining 120,000 shares will be exercisable if certain performance
parameters  are  achieved  by  February 1999.  No such parameters were achieved.
During  the  year ended June 30, 1998, the Company recognized $23,065 of expense
related  to the value of the services performed under the agreement.  As of June
30,  2000,  30,000  warrants were exercisable.  Such warrants expire in February
2003.

     COMMITMENT  TO  ISSUE  SHARES  OF COMMON STOCK - In April 1998, the Company
agreed  to and accepted the patent rights assigned to them by a third party with
respect  to certain technology related to the transmission of clinical data.  In
consideration  for the patent, the Company has agreed to provide the third party
with  400,000  shares  of common stock payable over a four-year time period with
additional consideration of up to 112,000 shares contingent upon the achievement
of  certain  sales  levels.  The  Company  recorded  a  charge  to operations of
$900,000  in  fiscal 1998 with respect to the value of the in-process technology
which  was expensed as research and development costs.  The 400,000 shares to be
issued  have  been considered to be outstanding shares for purposes of computing
basic  and  diluted  income  (loss)  per common share in 1998.  During 1999, the
Company  renegotiated  the  agreement  and issued the third party 350,000 shares
instead of the 400,000 shares payable over four years and the 112,000 contingent
shares.

     PREFERRED  STOCK - The Company's Board of  Directors  has  the authority to
determine  the  relative  rights  and preferences of any series it may establish
with  respect  to  the  500,000  shares  of  $.04 par value authorized preferred
shares.  No  preferred  stock  is  issued  or  outstanding.

     On  March  27,  1997,  the  Board  of  Directors  of the Company declared a
dividend  of one preferred share purchase right (a "Right") for each outstanding
share  of  common stock of the Company.  The dividend was made on April 24, 1997
to  the  stockholders  of  record  on  that  date  to  purchase  Preferred Stock
("Preferred")  upon  the  occurrence  of  certain  events.  The  Rights  will be
exercisable  the  tenth business day after a person or group acquires 20% of the
Company's  common  stock,  or  makes  an  offer  to  acquire  30% or more of the
Company's  common  stock.  When  exercisable,  each right entitles the holder to
purchase  for  $25, subject to adjustment, one-hundredth of a share of Preferred
for  each share of common stock owned.  Each share of Preferred will be entitled
to a minimum preferential quarterly dividend of $25 per share, but not less than
an  aggregate  dividend of 100 times the common stock dividend.  Each share will
have  100  votes,  voting  together  with the common stock.  In the event of any
merger, each share of Preferred will be entitled to receive 100 times the amount
received  per  share  of  common  stock.  The  Rights  expire  on April 1, 2007.

9.   EMPLOYEE  BENEFIT  PLAN

     The  Company  has  a  401(k) plan which covers substantially all employees.
Company  contributions  to the plan are discretionary and determined annually by
the  Company's

                                       30
<PAGE>
Board  of  Directors.  The  Company's  contributions were approximately $77,000,
$84,000,  and  $77,000  in  2000,  1999  and  1998,  respectively.

10.  BUSINESS  AND  CREDIT  CONCENTRATIONS

     The  Company  is  a manufacturer of medical monitors and telemetry products
whose  customers  include hospitals and alternative health care sites throughout
the  world.  Although  the  Company's products are sold primarily to health care
providers,  concentrations  of  credit  risk  with  respect  to  trade  accounts
receivable  are limited due to the Company's large number of customers and their
geographic  dispersion.  The  Company  currently  coordinates  substantially all
international  sales  and  distribution  activities.  Such  activities  were
previously  provided  by  the  Company  with  the  assistance  of  Criticare
International.  Identifiable  assets  located  outside  of the United States are
insignificant  in  relation  to the Company's total assets.  Net export sales by
geographic  area  are  as  follows:
<TABLE>
<CAPTION>

                                         2000         1999         1998
<S>                                   <C>          <C>          <C>
Europe and Middle East . . . . . . .  $ 5,437,000  $ 4,635,000  $ 5,464,000
Pacific Rim. . . . . . . . . . . . .    2,662,000    2,243,000    3,895,000
Canada and Central and South America    3,035,000    3,634,000    3,414,000
                                      -----------  -----------  -----------
Export net sales . . . . . . . . . .  $11,134,000  $10,512,000  $12,773,000
U.S. net sales . . . . . . . . . . .   16,020,000   18,001,000   15,135,000
                                      -----------  -----------  -----------
Total net sales. . . . . . . . . . .   27,154,000   28,513,000   27,908,000
</TABLE>

11.  SIGNIFICANT  CUSTOMER

     During 1999, a customer entered into  an OEM agreement with the Company and
purchased  approximately  $4,360,000 of the Company's products.  This represents
approximately  15% of the Company's total sales.  This customer had a receivable
balance of $448,546 on June 30, 1999, which represents 7% of the Company's total
receivables as of this date.  During 2000, purchases approximated $1,988,000 and
a  receivable  balance of $944,326, which represented 14% of accounts receivable
on  June  30,  2000.

12.  SEVERANCE  PAY

     During  November  1998,  the  two  co-founders of the Company resigned from
their  positions.  The  Company  has  provided  each of these individuals with a
severance  agreement,  which  includes  a  portion  of  their  salary and fringe
benefits  for  a  period  which  approximates  three  years.


                                       31
<PAGE>
INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors  of  Criticare  Systems,  Inc.:

We  have  audited  the  accompanying  consolidated  balance  sheets of Criticare
Systems,  Inc.  and  subsidiaries  as of June 30, 2000 and 1999, and the related
consolidated  statements  of operations, stockholders' equity and cash flows for
the  years then ended.  These financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audit.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that  we  plan  and perform the audits to
obtain  reasonable  assurance about whether the financial statements are free of
material  misstatement.  An  audit includes examining, on a test basis, evidence
supporting  the  amounts  and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by  management,  as  well  as  evaluating  the overall financial statement
presentation.  We  believe  that  our  audits provide a reasonable basis for our
opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Criticare Systems,
Inc.  at  June  30, 2000 and 1999 and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted accounting
principles.


/s/  BDO  Seidman,  LLP
Milwaukee,  Wisconsin
August  15,  2000

                                       32
<PAGE>


INDEPENDENT  AUDITORS'  REPORT

To  the  Stockholders  and  Directors  of  Criticare  Systems,  Inc.:

We  have  audited  the  accompanying  consolidated  statements  of  operations,
stockholders'  equity and cash flows of Criticare Systems, Inc. and subsidiaries
for  the  year  ended  June  30,  1998.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audit  provides  a
reasonable  basis  for  our  opinion.

In  our  opinion,  such  consolidated financial statements of Criticare Systems,
Inc.  and  subsidiaries present fairly, in all material respects, the results of
their  operations  and  their  cash  flows  for  the year ended June 30, 1998 in
conformity with accounting principles generally accepted in the United States of
America.

/s/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
August  20,  1998


                                       33
<PAGE>
QUARTERLY  RESULTS

     The  following  table  contains  quarterly  information, which includes all
adjustments,  consisting  only of normal recurring adjustments, that the Company
considers  necessary  for  a  fair presentation.  The Company recorded a gain of
$2,500,000  in  the  quarter  ended  September  30,  1999 related to the sale of
Immtech  stock  and  a  charge  of approximately $1,800,000 for settlement costs
related  to  a  lawsuit  that  was  resolved in the quarter ended June 30, 1999.
These  items  were  unusual,  nonrecurring  adjustments.
<TABLE>
<CAPTION>

                                                       QUARTERS ENDED
                      JUNE 30,    MARCH 31,    DEC. 31,   SEPT. 30,    JUNE 30,    MARCH 31,    DEC. 31,    SEPT. 30,
                        2000        2000         1999        1999        1999        1999         1998        1998
                                           (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                  <C>         <C>          <C>         <C>         <C>         <C>          <C>         <C>
Net sales . . . . .  $   7,519   $    6,131   $   6,901   $    6,603  $   7,223   $    7,276   $   7,290   $    6,724
Gross profit. . . .      2,326        2,235       3,142        2,989      2,784        3,379       3,562        3,259
Income (loss) from
  operations. . . .     (1,317)      (1,143)       (215)         157     (2,308)        (486)       (880)        (214)
Net income (loss) .     (1,367)      (1,197)        489        1,880     (2,340)        (681)       (947)        (420)
Net income (loss)
  per common
  share-Basic . . .      (0.16)       (0.14)       0.06         0.22       (.27)        (.08)       (.11)        (.05)
          -Diluted.      (0.16)       (0.14)       0.06         0.21       (.27)        (.08)       (.11)        (.05)
</TABLE>

     The  Company typically receives a substantial volume of its quarterly sales
orders  at  or  near  the  end of each quarter.  In anticipation of meeting this
expected  demand, the Company usually builds a significant inventory of finished
products throughout each quarter.  If the expected volume of sales orders is not
received  during  the  quarter,  or is received too late to allow the Company to
ship  the  products  ordered during the quarter, the Company's quarterly results
and  stock  of  finished  inventory  can  be  significantly  affected.


Item  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
-------      -------------------------------------------------------------------
FINANCIAL  DISCLOSURE.
---------------------

     The Company's change in accountants for the 1999 fiscal year was previously
reported  in the Company's Current Report on Form 8-K filed on October 13, 1999,
as  amended  on  October  25, 1999, and the Company's Current Report on Form 8-K
filed  on  November  5,  1999.

                                       34
<PAGE>
PART  III
---------

Item  10.     DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT.
--------      --------------------------------------------------------

     Information  regarding  the executive officers and directors of the Company
is  incorporated  herein  by  reference  to  the discussions under "Nominees for
Election  as  Director,"  "Other Directors," "Section 16(a) Beneficial Ownership
Reporting  Compliance" and "Executive Officers" in the Company's Proxy Statement
for  the  2000  Annual Meeting of Stockholders (the "Criticare Proxy Statement")
which  will  be  filed  on  or  before  October  28,  2000.

Item  11.     EXECUTIVE  COMPENSATION.
--------      -----------------------

     Incorporated  herein  by  reference  to  the  discussion  under  "Executive
Compensation"  in  the  Criticare  Proxy  Statement.

Item  12.     SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------      -----------------------------------------------------------------

     Incorporated  herein  by  reference  to  the  discussion  under  "Security
Ownership"  in  the  Criticare  Proxy  Statement.

Item  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.
--------      --------------------------------------------------

     Incorporated  herein  by  reference  to  the  discussion  under "Employment
Agreements  and  Severance  Arrangements"  in  the  Criticare  Proxy  Statement.

                                     PART IV
                                     -------

Item  14.     EXHIBITS,  FINANCIAL  STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
--------      -----------------------------------------------------------------

(a)     The  following  documents  are  filed  as  part  of  this  report:

     1.     Financial  Statements.  The  following  consolidated  financial
            ---------------------
statements  of  the  Company  are  included  in  Item  8  of  this  report.

          Consolidated  Balance  Sheets  -  as  of  June  30,  2000  and  1999.

          Consolidated  Statements  of Operations - for the years ended June 30,
2000,  1999  and  1998.

          Consolidated  Statements of Stockholders' Equity - for the years ended
June  30,  2000,  1999  and  1998.


                                       35
<PAGE>
          Consolidated  Statements  of Cash Flows - for the years ended June 30,
2000,  1999  and  1998.

          Notes  to  consolidated  financial  statements.

     2.     Financial  Statement  Schedules:
            -------------------------------

          Independent  Auditors'  Report.

          Financial  Statement Schedule for the years ending June 30, 2000, 1999
and  1998:

Schedule
Number     Description                       Page
------     -----------                       ----

VIII     Valuation  and  Qualifying          21
         Accounts  and  Reserves

     All  other  schedules  for  which  provision  is  made  in  the  applicable
accounting  regulations  of  the  Securities  and  Exchange  Commission  are not
required  under  the  related  instructions,  are  inapplicable  or the required
information is shown in the financial statements or notes thereto, and therefore
have  been  omitted.

     3.     Exhibits:
            --------

          3.1     Restated  Certificate  of  Incorporation  of  the  Company
(incorporated  by  reference  to  the  Registration  Statement  on  Form  S-1,
Registration  No.  33-13050).

          3.2     By-Laws  of  the  Company  (incorporated  by  reference to the
Registration  Statement  filed  on  Form  S-1,  Registration  No.  33-13050).

          4.1     Specimen  Common  Stock certificate (incorporated by reference
to  the  Registration  Statement  filed on Form S-1, Registration No. 33-13050).

          4.2     Specimen  Convertible  Debenture (incorporated by reference to
the  Registration  Statement  filed  on  Form  S-3,  Registration No. 33-25153).

          10.1     Blatz  House  Offices  Limited  Partnership  Agreement
(incorporated  by  reference  to the Company's Quarterly Report on Form 10-Q for
the  quarter  ended  December  31,  1987).

          10.2     Rights  Agreement (incorporated by reference to the Company's
Current  Report  on  Form  8-K  filed  on  April  18,  1997).


                                       36
<PAGE>
          10.3     Assignment  of  Rights to Patent Applications, Patents and/or
Inventions,  effective  November  3,  1998,  between  the  Company  and  TeleMed
Technologies  International,  Inc.  (incorporated  by reference to the Company's
Quarterly  Report  on  Form  10-Q  for  the  quarter  ended  March  31,  1999).

          10.4     Registration Agreement, dated as of November 3, 1998, between
the  Company  and  TeleMed  Technologies  International,  Inc.  (incorporated by
reference  to  the Company's Quarterly Report on Form 10-Q for the quarter ended
March  31,  1999).

          10.5*     1999 Employee Stock Purchase Plan (incorporated by reference
to  the  Company's Annual Report on Form 10-K for the year ended June 30, 1999).

          10.6*     1992  Employee  Stock Option Plan (incorporated by reference
to the Company's Registration Statement on Form S-8, Registration No. 33-60644).

          10.7*     1992  Nonemployee  Stock  Option  Plan  (incorporated  by
reference  to the Company's Registration Statement on Form S-8, Registration No.
33-60214).

          10.8*     1987  Employee  Stock Option Plan (incorporated by reference
to the Company's Registration Statement on Form S-8, Registration No. 33-33497).

          10.9*     1987  Nonemployee  Stock  Option  Plan  (incorporated  by
reference  to the Company's Registration Statement on Form S-8, Registration No.
33-40038).

          10.10*     Form  of Executive Officer and Director Indemnity Agreement
(incorporated  by reference to the Company's Registration Statement on Form S-1,
Registration  No.  33-13050).

          10.11*     Employment  Agreement  of  Gerhard  J.  Von  der  Ruhr
(incorporated  by  reference  to  the  Registration Statement filed on Form S-1,
Registration  No.  33-13050).

          10.12*     Employment  Agreement  of  N.C. Joseph Lai (incorporated by
reference  to  the  Registration  Statement  filed on Form S-1, Registration No.
33-13050).

          10.13*     Amendment  to  Employment  Agreement  of Gerhard J. Von der
Ruhr  (incorporated by reference to the Company's Annual Report on Form 10-K for
the  year  ended  June  30,  1997).

          10.14*     Amendment  to  Employment  Agreement  of  N.C.  Joseph  Lai
(incorporated  by  reference to the Company's Annual Report on Form 10-K for the
year  ended  June  30,  1997).


                                       37
<PAGE>
          10.15*     Severance  Agreement,  dated  as  of  November 16, 1998, of
Gerhard  J.  Von  der Ruhr (incorporated by reference to the Company's Quarterly
Report  on  Form  10-Q  for  the  quarter  ended  March  31,  1999).

          10.16*     Severance Agreement, dated as of November 16, 1998, of N.C.
Joseph  Lai (incorporated by reference to the Company's Quarterly Report on Form
10-Q  for  the  quarter  ended  March  31,  1999).

          10.17*     Employment  Agreement  of  Emil  H. Soika, (incorporated by
reference  to  the  Company's Annual Report on Form 10-K for the year ended June
30,  1999).

          10.18*     Employment Agreement of Stephen D. Okland, (incorporated by
reference  to  the  Company's Annual Report on Form 10-K for the year ended June
30,  1999).

          10.19*     Employment  Agreement  of  Drew  M.  Diaz, (incorporated by
reference  to  the  Company's Annual Report on Form 10-K for the year ended June
30,  1999).

          21     Subsidiaries (incorporated by reference to the Company's Annual
Report  on  Form  10-K  for  the  year  ended  June  30,  1999).

          23.1     Consent  of  BDO  Seidman,  LLP

          23.2     Consent  of  Deloitte  &  Touche  LLP

          24     Power  of  Attorney (incorporated by reference to the signature
page  hereof).

          27     Financial  Data  Schedule.

__________________
*  Management  contract  or  compensatory  plan  or  arrangement.

(b)     Reports  on  Form  8-K.

     The  Company filed no reports on Form 8-K during the quarter ended June 30,
2000.

(c)     Exhibits.

     The  response to this portion of Item 14 is submitted as a separate section
of  this  report.

(d)     Financial  Statement  Schedules.

     The  response to this portion of Item 14 is submitted as a separate section
of  this  report.

                                       38
<PAGE>
                                   SIGNATURES


     Pursuant  to  the  requirements  of  Section  13 or 15(d) 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.

                              CRITICARE  SYSTEMS,  INC.

                              By /s/ Emil H. Soika
                                ----------------------------------
                                   Emil  H.  Soika,  President
                                   and  Chief  Executive  Officer

                              Date:  September  28,  2000


                                POWER OF ATTORNEY

KNOW  ALL  MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes  and appoints Emil H. Soika and Mark S. Ruehle, and each of them, as
his  true  and  lawful  attorneys-in-fact  and  agents,  with  full  power  of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any  and  all  capacities, to sign any and all amendments to this Report on Form
10-K  and  to  file  the  same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said  attorneys-in-fact and agents, and each of them full power and authority to
do  and  perform each and every act and thing requisite and necessary to be done
in  connection  therewith,  as  fully to all intents and purposes as he might or
could  do  in  person,  hereby  ratifying  and  confirming  all  that  said
attorneys-in-fact  and  agents,  or  any  of them, or their or his substitute or
substitutes,  may  lawfully  do  or  cause  to  be  done  by  virtue  hereof.

     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by  the  following  persons  on  behalf of the
registrant  and  in  the  capacities  and  on  the  dates  indicated.
<TABLE>
<CAPTION>

Signature                               Title                         Date
----------------------  -------------------------------------  ------------------
<S>                     <C>                                    <C>
/s/ Emil H. Soika       President, Chief Executive Officer     September 28, 2000
----------------------  and Director (Principal Executive
Emil H. Soika           Officer)

/s/ Mark S. Ruehle      Vice President-Finance and Secretary   September 28, 2000
----------------------  (Principal Financial and Accounting
Mark S. Ruehle          Officer)

/s/ Karsten Houm        Chairman of the Board and Director     September 28, 2000
----------------------
Karsten Houm

/s/ Milton Datsopoulos  Director                               September 28, 2000
----------------------
Milton Datsopoulos

/s/ N.C. Joseph Lai     Director                               September 28, 2000
----------------------
N.C. Joseph Lai, Ph.D.
</TABLE>


                                       39
<PAGE>
INDEPENDENT  AUDITORS'  REPORT

To  the  Board  of  Directors  and  Stockholders  of
  Criticare  Systems,  Inc.:

The  audits  referred  to  in  our  report dated August 15, 2000 relating to the
consolidated financial statements of Criticare Systems, Inc., which is contained
in  Item  8  of  this  Form  10-K  (incorporated  in  Item 8 of the Form 10-K by
reference to the annual report to stockholders for the year ended June 30, 2000)
included  the  audit  of  the  financial  statement schedules listed in Item 14.
These  financial  statement  schedules  are  the responsibility of the Company's
management.  Our  responsibility  is  to  express  an opinion on these financial
statement  schedules  based  upon  our  audits.

In  our  opinion  such  financial  statement  schedules  present  fairly, in all
material  respects,  the  information  set  forth  therein.



/s/  BDO  Seidman,  LLP
Milwaukee, Wisconsin
August 15,  2000

                                       40
<PAGE>
INDEPENDENT  AUDITORS'  REPORT

To  the  Board  of  Directors  and  Stockholders  of
  Criticare  Systems,  Inc.:

We have audited the consolidated financial statements of Criticare Systems, Inc.
and  subsidiaries  for  the year ended June 30, 1998, and have issued our report
thereon  dated  August  20, 1998; such report is included elsewhere in this Form
10-K.  Our  audit  also  included  the consolidated financial statement schedule
information  for the year ended June 30, 1998, of Criticare Systems, Inc. listed
in  Item  14.  This consolidated financial statement schedule information is the
responsibility of the Company's management.  Our responsibility is to express an
opinion  based  on  our  audit.  In  our  opinion,  such  consolidated financial
statement  schedule,  when  considered  in  relation  to  the basic consolidated
financial  statements taken as a whole, presents fairly in all material respects
the  information  set  forth  therein.



/s/  Deloitte  &  Touche  LLP
Milwaukee,  Wisconsin
August  20,  1998


                                       41
<PAGE>
                                   SCHEDULE II

                             CRITICARE SYSTEMS, INC.

                        VALUATION AND QUALIFYING ACCOUNTS
                FOR THE YEARS ENDED JUNE 30, 2000, 1999 AND 1998

<TABLE>
<CAPTION>

            Column A              Column B     Column C     Column D     Column E
            ---------            -----------  -----------  -----------  -----------
                                 Balance at   Charged to                Balance at
                                  Beginning    Costs and                  End of
Description                       of Period    Expenses    Deductions     Period
-----------                      -----------  -----------  -----------  -----------
<S>                              <C>          <C>          <C>          <C>
YEAR ENDED JUNE 30, 1998:

Allowance for doubtful accounts

Reserve for sales returns and .  $   467,000  $    99,000  $   266,000  $   300,000
  allowances
                                 $   140,000  $ 1,357,917  $ 1,397,917  $   100,000
YEAR ENDED JUNE 30, 1999:

Allowance for doubtful accounts

Reserve for sales returns and .  $   300,000  $   380,004  $   305,004  $   375,000
  allowances
                                 $   100,000  $   760,194  $   800,194  $    60,000
YEAR ENDED JUNE 30, 2000:

Allowance for doubtful accounts

Reserve for sales returns and .  $   375,000  $ 1,160,614  $   235,614  $ 1,300,000
  allowances
                                 $    60,000  $   554,101  $   554,101  $    60,000
</TABLE>




                                       42