SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q


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


 For the Quarter Ended August 31, 2000           Commission File Number 0-17249



                               AURA SYSTEMS, INC.
             (Exact name of Registrant as specified in its charter)

            Delaware                                     95-4106894
  (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)

                                2335 Alaska Ave.
                          El Segundo, California 90245
                    (Address of principal executive offices)

Registrant's telephone number, including area code:           (310) 643-5300

Former name, former address and former fiscal year, if changed since last
report: None


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

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

     Class                                    Outstanding at October 12, 2000

Common Stock, par value                            280,588,674 Shares
  $.005 per share





<PAGE>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES

                                      INDEX

<TABLE>
<CAPTION>


                                                                                                      Page No.

PART I.       FINANCIAL INFORMATION
<S>      <C>         <C>                                                                               <C>

         ITEM 1.     Financial Statements

                     Statement Regarding Financial Information                                            2

                     Condensed Consolidated Balance Sheets as of August 31, 2000                          3
                     and February 29, 2000

                     Condensed Consolidated Statement of Operations for the Three Months and Six          4
                     Months Ended August 31, 2000 and 1999

                     Condensed Consolidated Statements of Cash Flows for the Six Months Ended             5
                     August 31, 2000 and 1999

                     Notes to Condensed Consolidated Financial Statements                                 6

         ITEM 2.     Management's Discussion and Analysis of Financial Condition and Results of           7
                     Operations


PART II. OTHER INFORMATION

         ITEM 1.      Legal Proceedings                                                                   9

         ITEM 2.      Changes in Securities                                                               9

         ITEM 6.      Exhibits and Reports on Form 8-K                                                    9


SIGNATURES                                                                                                10

</TABLE>



<PAGE>


                                                                   1

                       AURA SYSTEMS, INC. AND SUBSIDIARIES

                          QUARTER ENDED AUGUST 31, 2000

                          PART I. FINANCIAL INFORMATION



The  financial  statements  included  herein have been prepared by Aura Systems,
Inc. (the  "Company"),  without audit,  pursuant to the rules and regulations of
the Securities and Exchange  Commission (the "SEC").  As contemplated by the SEC
under Rule 10-01 of Regulation S-X, the  accompanying  financial  statements and
footnotes  have been  condensed  and  therefore  do not contain all  disclosures
required by  generally  accepted  accounting  principles.  However,  the Company
believes that the disclosures are adequate to make the information presented not
misleading.  These financial  statements  should be read in conjunction with the
financial  statements and notes thereto  included in the Company's Form 10-K for
the year ended February 29, 2000 as filed with the SEC (file number 0-17249).




<PAGE>

<TABLE>
<CAPTION>

                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                                                                              August 31,               February 29,
Assets                                                                          2000                      2000*
------                                                                      -------------            ---------------
<S>                                                                         <C>                        <C>
Current assets:
Cash and equivalents                                                          $       558,891              $    260,437
Receivables-net                                                                       330,693                 2,459,200
Inventories                                                                         9,846,519                11,189,227
Notes receivable                                                                    2,535,732                 3,557,007
Other current assets                                                                  757,589                   360,177
                                                                              ---------------           ---------------

       Total current assets                                                        14,029,424                17,826,048
                                                                                   ----------                ----------

Property and equipment, at cost                                                    41,112,318                42,219,417
Less accumulated depreciation
     and amortization                                                             (17,799,788)              (15,184,362)
                                                                              ----------------          ----------------

Net property and equipment                                                         23,312,530                27,035,055

Long-Term investments                                                               2,123,835                 2,123,835
Long-Term receivables                                                               3,845,810                 1,250,000
Patents and trademarks- net                                                         4,492,031                 4,615,769
Other assets                                                                        3,272,471                 3,271,831
                                                                              ---------------           ---------------
      Total                                                                   $    51,076,101           $    56,122,538
                                                                              ===============           ===============

Liabilities and Stockholder's Equity

Current liabilities:
Notes payable                                                                 $     8,745,615           $     9,899,531
Accounts payable                                                                    4,161,928                 4,216,004
Accrued expenses                                                                    1,362,760                 1,634,300
Convertible note-unsecured                                                            125,000                 1,250,000
                                                                              ---------------            --------------

Total current liabilities                                                          14,395,303                16,999,835
                                                                                   ----------                ----------

Notes payable and other liabilities                                                36,222,161                37,606,695
                                                                              ---------------           ---------------

COMMITMENTS AND CONTINGENCIES
Stockholders' equity
   Common  stock par value  $.005  per  share and  additional  paid in
capital.  Issued and outstanding  261,296,741  and 196,975,392  shares
respectively.                                                                     251,608,081               234,196,092
   Common stock not issued                                                                  -                 9,132,774
   Cumulative currency translation adjustment (CTA)                                  (365,932)                 (365,932)
   Accumulated deficit                                                           (250,783,512)             (241,446,926)
                                                                                 -------------          ----------------

       Total stockholders' equity                                                     458,637                 1,516,008
                                                                              ---------------           ---------------
       Total                                                                  $    51,076,101           $    56,122,538
                                                                              ===============           ===============
</TABLE>


   See accompanying notes to condensed consolidated financial statements.

*Amounts at February 29, 2000 have been derived from audited financial
 statements

<PAGE>

<TABLE>
<CAPTION>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               THREE AND SIX MONTHS ENDED AUGUST 31, 1999 AND 1998
                                   (Unaudited)


                                                        Three Months                         Six Months

                                                       2000               1999               2000              1999
                                                       ----               ----               ----              ----
<S>                                                     <C>                <C>                 <C>               <C>

Net Revenues                                              $ 386,885         $2,644,388          $ 768,406          $5,225,081

     Cost of goods and overhead                           2,556,062          3,622,715          5,070,419           8,268,383
                                                          ---------          ---------          ---------           ---------

Gross Profit                                             (2,169,177)         (978,327)         (4,302,013)         (3,043,302)

Expenses

     Selling, general and administrative                   3,642,773         2,522,474           5,536,478           5,801,765
     Research and development                                 53,903           128,494              85,951             244,621
                                                           ---------    --------------         -----------     ---------------

     Total costs and expenses                              3,696,676         2,650,968           5,622,429           6,046,386
                                                           ---------    --------------           ---------      --------------

 Loss from operations                                     (5,865,853)      (3,629,295)          (9,924,442)         (9,089,688)

Other (income) and expense

    (Gain) loss on sale of subsidiary                              -                 -          (1,756,746)          (877,512)
     Loss on disposition of assets                                 -         1,405,049                   -          1,405,049
     Other (income)                                         (891,227)         (110,701)        (1,454,628)            (22,659)
     Legal settlements and costs                           1,254,685           201,376          1,564,496             219,511
     Interest expense-net                                    497,009           774,350          1,059,022           1,572,172
                                                             -------      ------------          ---------       -------------

Net loss                                                 $(6,726,320)   $   (5,899,369)        $(9,336,586)  $     (11,386,249)
                                                         ============    ==============        ============        ============

Net loss per common
share-basic                                          $         (.03)    $         (.06)    $         (.04)     $         (.11)
                                                      ==============     ==============     ==============      ==============

Weighted average shares used to
compute net loss  per share                          250,037,915           107,822,043      243,572,557           107,804,271
                                                   ==============     ================   ===============     ================


</TABLE>


See accompanying notes to condensed consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED AUGUST 31, 2000 AND 1999
                                   (Unaudited)
                                                                          2000                         1999
                                                                      -----------                -------------
<S>                                                                   <C>                        <C>
Net cash (used) in operations                                           $(5,820,796)              $(6,074,253)
                                                                        ------------                ------------

Cash flows from investing activities:

Proceeds from sale of subsidiary and assets                                  64,311                 1,000,000
Additions to property and equipment                                          (5,918)                  (70,704)
Note receivable                                                           1,261,395                 1,329,204
                                                                       --------------         ---------------

Net cash provided by (used) in investing
         Activities                                                       1,319,788                 2,258,000
                                                                       --------------            --------------

Cash flows from financing activities:

Net proceeds (repayment) from short-term
     borrowing                                                             (200,000)                      __-
Repayment of debt                                                        (1,154,138)                  (15,757)
Net proceeds from sale of stock                                           6,153,600
Proceeds from exercise of warrants                                                -                     9,300
                                                                     ----------------        ----------------

Net cash provided (used) by financing activities:
                                                                          4,799,462                    (6,457)
                                                                       --------------            ---------------

Net increase (decrease) in cash                                             298,454                (3,822,210)

Cash and cash equivalents at beginning of year                              260,437                 3,822,210
                                                                              -------         ---------------

Cash and cash equivalents at end of period                                 $558,891          $              0
                                                                           ========           ================

Supplemental  disclosures of cash flow  information  Cash paid during the period
       for:
              Interest                                                $     997,108          $        145,188
              Income Tax                                                          0                         0

                                                                   ================            ==============
</TABLE>

Supplemental disclosure of noncash investing and financing activities:

In the six months  ended  August 31,  2000,  $1,125,000  of notes  payable  plus
accrued  interest of  $10,602.75  was  converted  into  3,542,411  shares of the
Company's  common stock.  The Company also issued 3,246,724 shares of its common
stock to satisfy  liabilities in the amount of  $990,012.41.  Effective March 1,
2000, the Company sold the assets of its Ceramics subsidiary for $3.5 million in
the form of a note  receivable of $2.5 million,  a cash down payment of $64,311,
included above,  and the payment of $800,000 to third parties in satisfaction of
liabilities and an additional $100,000 payment on June 1, 2000.

In the six months ended August 31, 1999 the Company sold its MYS  subsidiary for
$4.2 million in the form of a note  receivable in the amount of $3.2 million and
a cash down  payment  of $1  million.  The  Company  also sold the assets of its
AuraSound  subsidiary  for a note  receivable  of $2 million.  The Company  also
satisfied a liability of $20,000 through the exercise of 40,000 warrants.

  See accompanying notes to condensed consolidated financial statements.


<PAGE>


                               AURA SYSTEMS, INC.
                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                                   (Unaudited)


1)       Management Opinion

         The condensed consolidated financial statements include the accounts of
Aura Systems,  Inc. ("the Company") and subsidiaries from the effective dates of
acquisition.  All material inter-company balances and inter-company transactions
have been eliminated.

         In the opinion of management,  the accompanying  condensed consolidated
financial   statements  reflect  all  adjustments  (which  include  only  normal
recurring  adjustments) and  reclassifications  for  comparability  necessary to
present  fairly the  financial  position and results of operations as of and for
the three and six months ended August 31, 2000.

2)       Capital

         In the six months ended August 31,  2000,  18,936,315  shares of common
stock of the Company were sold for net proceeds of $6,153,600. In the six months
ended August 31, 1999, warrants to purchase 70,000 shares of common stock of the
Company were exercised.


3)       Contingencies

         The Company is engaged in various legal actions See the Company's  Form
10-K, Item 3 - Legal Proceedings,  for the year ended February 29, 2000 as filed
with the SEC (file number  0-17249) for a description of the legal  actions.  To
the extent that judgment has been rendered,  appropriate provision has been made
in the financial statements.



<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         This Report may contain forward-looking  statements which involve risks
and  uncertainties.  The Company's actual results may differ materially from the
results  discussed in such  statements.  Certain factors could also cause actual
results  to differ  materially  from  those  discussed  in such  forward-looking
statements,  including  factors  discussed  in the  Company's  Form 10-K for the
period ended February 29, 2000, and factors discussed in this Report.

         Results of Operations

         Revenue  for the three and six month  periods  ended  August  31,  2000
decreased  by  $2,257,503  and  $4,456,675  to $386,885  and  $768,406  from the
corresponding  periods in the prior year.  The  decrease in revenue is primarily
attributable to the sale of the Company's  wholly owned subsidiary Aura Ceramics
and the discontinuation of the AuraSound business.

         Cost of goods and  overhead  for the three and six months  ended August
31,  2000  decreased  by  $1,066,653  and  $3,197,964  in  comparison  with  the
corresponding  periods  in the prior year as a result of the  decrease  in sales
discussed above.

         Selling,  general  and  administrative  costs  increased  for the three
months and decreased for the six months by $1,120,299 and $265,287 respectively,
due primarily to the reserving of $1.3 million of  receivables  associated  with
lines of business the Company is no longer engaged in. While the Company intends
to continue its collection efforts on these receivables, the Company has elected
to fully reserve for the balance of these receivables.

         Included  in cost of  goods  and  overhead  and  selling,  general  and
administrative  costs for the three and six months  ended  August 31,  2000,  is
depreciation and amortization of $1.7 million and $3.3 million, respectively.

         Research  and  development  costs for the three  and six  months  ended
August 31, 2000  decreased by $74,591 and  $158,670 as the Company  continued to
focus its reduced resources on marketing and sales of the Company's product, the
AuraGen.

         Legal  costs and settlements  for the three and six months ended August
31, 2000 increased to $1,254,685 and $1,564,496,  respectively from $201,376 and
$219,511 in the prior year like periods. These costs can vary substantially from
quarter to quarter depending on when settlements are arrived at and the level of
ongoing  legal  activity  associated  with the  litigation  that the  Company is
involved in.

     Net  interest  expense  decreased  by $277,341 to $479,009  and $513,150 to
$1,059,022 in the three and six months ended August 31, 2000.

         Liquidity and Capital Resources

         At August 31,  2000,  the Company had cash of $558,891 as compared to a
cash  balance of $260,437 at February  29,  2000.  Accounts  payable and accrued
expenses decreased by $325,616 from February 29, 2000.  Inventories decreased by
$1,342,708, and accounts receivable decreased by $2,128,507.

         Cash flows used in  operations  decreased  by $253,457  compared to the
prior year six months.  Working  capital  was a negative  $365,879 at August 31,
2000 compared to $826,213 at the Fiscal year ended  February 29, 2000,  with the
current ratio declining to .97:1 from 1.05:1 at February 29, 2000.

         In the six months  ended  August 31,  2000,  the Company  received  net
proceeds  of  $6,153,600  from the sale of its common  stock.  In the six months
ended August 31, 1999, the Company received proceeds of $9,300 from the exercise
of warrants.

         In the past the Company's cash flow  generated from  operations has not
been sufficient to completely fund its working capital needs.  Accordingly,  the
Company has also relied  upon  external  sources of  financing  to maintain  its
liquidity.  In order to finance its existing operations it will be necessary for
the Company to obtain  additional  working  capital from external  sources.  The
Company is presently seeking additional sources of financing, including bank and
equity financing.  No assurances can be provided that these funding sources will
be  available  at the times and in the amounts  required.  The  inability of the
Company to obtain  sufficient  working  capital at the times and in the  amounts
required  would have a material  adverse  effect on the  Company's  business and
operations.

         For additional information regarding the Company's financial condition,
see the Company's  Form 10-K,  Item  7-Management's  Discussion  and Analysis of
Financial  Condition and Results of Operations  for the year ended  February 29,
2000 as filed with the SEC (file number 0-17249).

         Forward Looking Statements

         The Company wishes to caution readers that important  factors,  in some
cases,  have  affected,  and in the future could affect,  the  Company's  actual
results and could cause the Company's actual consolidated  results for the third
quarter of Fiscal 2001, and beyond, to differ materially from those expressed in
any forward-looking statements made by, or on behalf of the Company.

         Such factors  include,  but are not limited to, the following risks and
contingencies:  changed business  conditions in the automotive  industry and the
overall  economy;   increased   marketing  and  manufacturing   competition  and
accompanying  prices  pressures;  contingencies in initiating  production at new
factories along with their potential  underutilization,  resulting in production
inefficiencies  and higher  costs and  start-up  expenses  and;  inefficiencies,
delays  and  increased  depreciation  costs  in  connection  with  the  start of
production in new plants and expansions.

         Relating  to the  above  are  potential  difficulties  or delays in the
development,  production,  testing and marketing of products, including, but not
limited to, a failure to ship new products and  technologies  when  anticipated.
There might exist a difficulty in obtaining raw materials,  supplies,  power and
natural  resources and any other items needed for the  production of Company and
another products,  creating capacity  constraints limiting the amounts of orders
for certain  products and thereby  causing  effects on the Company's  ability to
ship its  products.  Manufacturing  economies  may fail to develop when planned,
products  may be  defective  and/or  customers  may fail to  accept  them in the
consumer marketplace.

         In addition to the above,  risks and  contingencies may exist as to the
amount and rate of growth in the Company's  selling,  general and administrative
expenses,  and the impact of unusual items resulting from the Company's  ongoing
evaluation  of its business  strategies,  asset  valuations  and  organizational
structures.  Furthermore,  any  financing or other  financial  incentives by the
Company  under or  related to major  infrastructure  contracts  could  result in
increased  bad debt or other  expenses or  fluctuation  of profit  margins  from
period to period.  The focus by some of the  Company's  businesses  on any large
system order could entail fluctuating results from quarter to quarter.

         The effects of, and changes in,  trade,  monetary and fiscal  policies,
laws and  regulations,  other  activities of  governments,  agencies and similar
organizations,  and social and economic  conditions,  such as trade restrictions
impose  yet other  constraints  on any  company  statements.  The cost and other
effects of legal and administrative cases and proceedings present another factor
which may or may not have an impact.


<PAGE>


PART II - OTHER INFORMATION

ITEM 1        Legal Proceedings

              For information regarding pending legal proceedings, see Note 3 to
              the  Company's   Condensed   Consolidated   Financial   Statements
              appearing elsewhere herein.

ITEM 2        Changes in Securities

              Private Placement of Units

                      Subsequent to the end of Fiscal 2000 the Company conducted
              a private offering to a group of accredited investors for the sale
              of  approximately  27 million shares of Common Stock with one-half
              warrant to purchase a share of Common Stock at $0.48 per share for
              each share sold,  for total gross proceeds of  approximately  $6.2
              million.  The  offering was exempt from  registration  pursuant to
              Section 4(2) of the  Securities  Act of 1933 as the offering was a
              private placement to a limited number of accredited investors.

              Common Stock Private Placement

                      Subsequent to the end of Fiscal 2000 the Company conducted
              a private offering to a group of accredited investors for the sale
              of 2,175,000  shares of Common  Stock for total gross  proceeds of
              approximately   $1.6   million.   The  offering  was  exempt  from
              registration  pursuant to Section  4(2) of the  Securities  Act of
              1933 as the offering was a private  placement to a limited  number
              of accredited investors.

                      Private Placement for Debt Conversion

                      Subsequent to the end of Fiscal 2000 the Company conducted
              a private offering to a group of accredited  investors whereby the
              Company  converted  or  exchanged  approximately  $5.2  million of
              outstanding  indebtedness for 5,809,427 shares of Common Stock The
              offering was exempt from registration  pursuant to Section 4(2) of
              the Securities Act of 1933 as the offering was a private placement
              to a limited number of accredited investors.

                      Settlement of Court-Approved Class Action

                      Subsequent  to the end of Fiscal 2000 the  Company  issued
              14,687,972  shares  of  Common  Stock and  3,500,000  warrants  to
              purchase   Common   Stock  at  $2.25   per  share  as  part  of  a
              court-approved  settlement of a class action  lawsuit  against the
              Company.  The  offering was exempt from  registration  pursuant to
              Section 3(a)(10) of the Securities Act of 1933 as the offering was
              the same as the terms  that  were  approved  by the U.S.  District
              Court  after a duly  noticed  hearing as to the  fairness  of such
              settlement.

ITEM 6        Exhibits and Reports on Form 8-K

              a)  Exhibits:
              See Exhibit Index

              b)  Reports On Form 8-K:

              On  August  30,  2000,  the  Company  filed a  report  on Form 8-K
              regarding   the   resignation   of   the   Company's   Independent
              Accountants.



<PAGE>




                                   SIGNATURES




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







                                            AURA SYSTEMS, INC.
                                               (Registrant)






Date:     October 16, 2000               By:  /s/Steven C. Veen
      ------------------------------          ---------------------------------
                                                     Steven C. Veen
                                                   Senior Vice President
                                                  Chief Financial Officer
                                    (Principal Financial and Accounting Officer)






<PAGE>





                                INDEX TO EXHIBITS


          Exhibit                                                   Sequential
          Number                                                     Page No.

           EX-27             Financial Data Schedule