<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended                 January 31, 2001
                               ------------------------------------------------

                                       OR

[ ]  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 0-20488

                                 PMR CORPORATION
                                 ---------------
             (Exact Name of Registrant as Specified in Its Charter)

           Delaware                                        23-2491707
-------------------------------                ---------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
Incorporation or Organization)

501 Washington Street, 5th Floor San Diego, California                92103
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                           (Zip Code)

                                  619-610-4001
--------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)


--------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)

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

        As of January 31, 2001, PMR Corporation had 7,255,017 shares of common
stock outstanding.

<PAGE>   2

                                 PMR CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
PART I                       FINANCIAL INFORMATION                      Page
<S>                   <C>                                               <C>
         Item 1.      Financial Statements
                      Condensed Consolidated Balance
                         Sheets as of January 31, 2001
                         (Unaudited) and April 30, 2000                   1
                      Condensed Consolidated Statements
                         of Operations for the three and
                         nine months ended January 31,
                         2001 and 2000 (Unaudited)                        2
                      Condensed Consolidated Statements
                         of Cash Flows for the nine
                         months ended January 31, 2001
                         and 2000 (Unaudited)                             3
                      Notes to Condensed Consolidated
                         Financial Statements (Unaudited)                 4
         Item 2.      Management's Discussion and
                         Analysis of Financial Condition
                         and Results of Operations                        8
         Item 3.      Quantitative and Qualitative
                         Disclosures about Market Risks                  18

PART II                 OTHER INFORMATION

         Item 1.      Legal Proceedings                                  19
         Item 2.      Changes in Securities and Use of
                         Proceeds                                        19
         Item 3.      Defaults Upon Senior Securities                    19
         Item 4.      Submission of Matters to a Vote of
                         Security Holders                                19
         Item 5.      Other Information                                  19
         Item 6.      Exhibits and Reports on Form 8-K                   19
</TABLE>

<PAGE>   3

                         PART I - FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS

                                 PMR CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                            JANUARY 31,         APRIL 30,
                                                                               2001               2000
                                                                            ------------      ------------
                                                                             Unaudited
<S>                                                                         <C>               <C>
ASSETS
Current assets:
   Cash and cash equivalents                                                $ 11,309,435      $  9,192,254
   Short-term investments, available for sale                                  6,994,169        18,579,754
   Accounts receivable, net of allowance for doubtful accounts
             of $5,338,000 in 2001 and $6,623,000 in 2000                      1,387,447         5,087,162
   Prepaid expenses and other current assets                                     737,685         1,245,162
   Income taxes receivable                                                       929,305                --
                                                                            ------------      ------------
Total current assets                                                          21,358,041        34,104,332

Furniture and office equipment, net of accumulated depreciation
   of $2,042,000 in 2001 and $1,770,000 in 2000                                1,601,616         2,170,829
Long-term accounts and notes receivables, net of allowance for doubtful
   accounts of $520,000 in 2001 and 2000                                       1,668,805         2,578,728
Capitalized software development                                               1,034,978         1,572,288
Other assets                                                                     228,382           309,385
                                                                            ------------      ------------
Total assets                                                                $ 25,891,822      $ 40,735,562
                                                                            ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                         $    677,432      $    863,395
   Accrued expenses                                                            1,207,481         1,395,246
   Accrued compensation and employee benefits                                    901,629           835,866
   Advances from case management agencies                                      1,603,567         1,084,196
                                                                            ------------      ------------
Total current liabilities                                                      4,390,109         4,178,703

Note payable                                                                     108,719           196,127
Contract settlement reserve                                                    4,199,146         5,313,055
Other long-term liabilities                                                       32,015            45,973

Stockholders' equity:
   Common Stock, $.01 par value, authorized shares - 19,000,000;
         issued and outstanding shares - 7,255,017 in 2001 and
         7,058,017 in 2000                                                        72,550            70,580
   Additional paid-in capital                                                 31,236,415        37,995,983
   Notes receivable from employees and officers                                 (539,260)         (332,000)
   Accumulated other comprehensive income (loss)                                  43,709          (154,274)
   Accumulated deficit                                                       (13,624,081)       (6,578,585)
   Treasury stock, 10,000 shares of common stock at cost                         (27,500)               --
                                                                            ------------      ------------
Total stockholders' equity                                                    17,161,833        31,001,704
                                                                            ------------      ------------
Total liabilities and stockholders' equity                                  $ 25,891,822      $ 40,735,562
                                                                            ============      ============
</TABLE>


See notes to condensed consolidated financial statements



                                       1
<PAGE>   4

                                 PMR CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED


<TABLE>
<CAPTION>
                                                               Three months ended January 31,      Nine months ended January 31,
                                                               ------------------------------      ------------------------------
                                                                   2001              2000              2001              2000
                                                               ------------      ------------      ------------      ------------
<S>                                                            <C>               <C>               <C>               <C>
Revenue                                                        $  4,099,796      $  9,946,482        13,544,880      $ 35,276,294
                                                               ------------      ------------      ------------      ------------

Expenses:
       Direct operating expenses                                  3,734,957         8,684,306        12,022,764        28,203,894
       Research and development                                     379,247                --           662,840                --
       Marketing, general and administrative                      2,474,909         2,667,116         6,454,851         7,382,677
       Provision for doubtful accounts                              166,407         3,404,231           552,263         4,839,670
       Depreciation and amortization                                198,454           243,672           660,504           767,075
       Software development amortization                          1,034,978                --         1,724,964                --
       Special charge                                               273,148           347,379           483,673         1,030,140
                                                               ------------      ------------      ------------      ------------
            Total expenses                                        8,262,100        15,346,704        22,561,859        42,223,456
                                                               ------------      ------------      ------------      ------------

Interest expense                                                     (4,871)           (7,019)          (16,320)          (22,519)
Other income - interest                                             368,463           406,551         1,058,498         1,172,492
                                                               ------------      ------------      ------------      ------------

Loss from continuing operations before income taxes              (3,798,712)       (5,000,690)       (7,974,801)       (5,797,189)
Income tax benefit                                                 (929,305)       (2,050,000)         (929,305)       (2,377,000)
                                                               ------------      ------------      ------------      ------------
Net loss from continuing operations                              (2,869,407)       (2,950,690)       (7,045,496)       (3,420,189)

Results from discontinued operation - Stadt Solutions, LLC               --         1,077,367                --           392,011
                                                               ------------      ------------      ------------      ------------

Net loss                                                       $ (2,869,407)     $ (1,873,323)     $ (7,045,496)     $ (3,028,178)
                                                               ============      ============      ============      ============

  Loss per common share from continuing operations:
       Basic                                                   $      (0.40)     $      (0.47)     $      (0.99)     $      (0.53)
                                                               ============      ============      ============      ============
       Diluted                                                 $      (0.40)     $      (0.47)     $      (0.99)     $      (0.53)
                                                               ============      ============      ============      ============

  Earnings per common share from discontinued operation:
       Basic                                                   $         --      $       0.17      $         --      $       0.06
                                                               ============      ============      ============      ============
       Diluted                                                 $         --      $       0.17      $         --      $       0.06
                                                               ============      ============      ============      ============

  Loss per common share:
       Basic                                                   $      (0.40)     $      (0.30)     $      (0.99)     $      (0.47)
                                                               ============      ============      ============      ============
       Diluted                                                 $      (0.40)     $      (0.30)     $      (0.99)     $      (0.47)
                                                               ============      ============      ============      ============

  Shares used in computing earnings (loss) per share:
       Basic                                                      7,152,702         6,320,234         7,085,593         6,473,732
                                                               ============      ============      ============      ============
       Diluted                                                    7,152,702         6,320,234         7,085,593         6,473,732
                                                               ============      ============      ============      ============


Dividend declared per share of common stock outstanding
of 7,255,017 shares on December 29, 2000 and
7,053,689 shares on January 26, 2000                           $       1.00      $       1.50      $       1.00      $       1.50
                                                               ============      ============      ============      ============
</TABLE>


See notes to condensed consolidated financial statements



                                       2
<PAGE>   5

                                 PMR CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                                   NINE MONTHS ENDED JANUARY 31,
                                                                  ------------------------------
                                                                      2001              2000
                                                                  ------------      ------------
<S>                                                               <C>               <C>
OPERATING ACTIVITIES
Net loss                                                          $ (7,045,496)     $ (3,028,178)
Adjustments to reconcile net loss to net cash (used in)
  provided by operating activities:
  Stock compensation expense                                            72,097                --
  Special charge                                                       483,673         1,030,140
  Depreciation and amortization                                      2,385,468           864,429
  Provision for doubtful accounts                                      552,263         4,839,670
  Loss applicable to minority interest                                      --        (1,921,057)
  Deferred income taxes net of valuation allowance                          --           258,563
  Changes in operating assets and liabilities:
    Accounts and notes receivables                                   4,057,375         8,939,209
    Prepaid expenses and other assets                                 (421,011)         (403,124)
    Accounts payable and accrued expenses                             (655,395)       (1,683,058)
    Accrued compensation and employee benefits                          65,763          (242,339)
    Advances from case management agencies                             519,371           844,466
    Payable to related party                                                --        (2,860,444)
    Contract settlement reserve                                     (1,113,909)         (829,636)
    Deferred rent expense                                              (13,958)           (5,599)
                                                                  ------------      ------------
Net cash (used in) provided by operating activities                 (1,113,759)        5,803,042
                                                                  ------------      ------------

INVESTING ACTIVITIES
  Proceeds from the sale and maturity of short-term investments     13,981,098        13,915,425
  Purchases of short-term investments                               (2,197,530)       (5,075,002)
  Software development costs                                        (1,187,654)               --
  Purchases of furniture and office equipment                         (213,111)         (194,266)
                                                                  ------------      ------------
  Net cash provided by investing activities                         10,382,803         8,646,157
                                                                  ------------      ------------

FINANCING ACTIVITIES
  Proceeds from sale of common stock                                   218,062           542,694
  Payments on note payable to bank                                     (87,408)          (72,704)
  Acquisition of treasury stock                                        (27,500)       (1,786,406)
  Cash dividend paid                                                (7,255,017)      (10,580,534)
                                                                  ------------      ------------
  Net cash used in financing activities                             (7,151,863)      (11,896,950)
                                                                  ------------      ------------

Net increase in cash and cash equivalents                            2,117,181         2,552,249
Cash and cash equivalents at beginning of period                     9,192,254         5,248,846
                                                                  ------------      ------------
Cash and cash equivalents at end of period                        $ 11,309,435      $  7,801,095
                                                                  ============      ============
</TABLE>


See notes to condensed consolidated financial statements



                                       3
<PAGE>   6

PMR CORPORATION

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                                January 31, 2001

NOTE A - BASIS OF PRESENTATION

        The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for audited financial
statements. The condensed consolidated balance sheet at April 30, 2000 has been
derived from the audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation of the financial position of PMR Corporation ("PMR" or the
"Company") have been included. Operating results for the three and nine months
ended January 31, 2001, are not necessarily indicative of the results that may
be expected for the year ending April 30, 2001. For further information, refer
to the financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended April 30, 2000.



                                       4
<PAGE>   7

NOTE B - EARNINGS PER SHARE

        Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings
per Share, requires dual presentation of basic and diluted earnings per share by
entities with complex capital structures. Basic earnings per share includes no
dilution and is computed by dividing net loss by the weighted average number of
common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution of securities that could share in the earnings of the
entity. The Company has calculated its earnings per share in accordance with
SFAS No. 128 for all periods presented.

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                        Nine Months Ended
                                                           January 31,
                                                  ----------------------------
                                                     2001             2000
                                                  -----------      -----------
<S>                                               <C>              <C>
Numerator :
Net loss available to common stockholders         $(7,045,496)     $(3,028,178)
                                                  ===========      ===========

Denominator:
Weighted average shares outstanding for basic
  earnings per share                                7,085,593        6,473,732
                                                  -----------      -----------
Effects of dilutive securities:
  Employee stock options and warrants                      --               --
                                                  -----------      -----------
Dilutive potential common shares                           --               --
                                                  -----------      -----------
Shares used in computing diluted loss per
  common share                                      7,085,593        6,473,732
                                                  ===========      ===========

Loss per common share, basic                      $     (0.99)     $     (0.47)
                                                  ===========      ===========
Loss per common share, diluted                    $     (0.99)     $     (0.47)
                                                  ===========      ===========
</TABLE>

No potential common shares were included in the computation of diluted earnings
per share because the inclusion thereof would have had an antidilutive effect.



                                       5
<PAGE>   8

NOTE C - DISCLOSURES ABOUT REPORTABLE SEGMENTS

        In accordance with the criteria of SFAS No. 131, Disclosures About
Segments of an Enterprise and Related Information, the Company determined that
it operates in three reportable segments: Outpatient Programs, Case Management
Programs, and Health Information Business. The Company's reportable segments are
strategic business units that offer different services to a variety of inpatient
and outpatient recipients and healthcare industry participants. Activities
classified as "Other" in the following schedule relate primarily to unallocated
home office items, and activity from the Company's chemical dependency and other
programs that were terminated in fiscal year 2000.

A summary of segment activity is as follows:

<TABLE>
<CAPTION>
                                                     Nine months ended January 31,
                          -----------------------------------------------------------------------------------
                                               Case            Health
                           Outpatient       Management       Information
                            Programs         Programs          Business           Other             Total
                          ------------     ------------      ------------      ------------      ------------
<S>                       <C>              <C>               <C>               <C>               <C>
2001
Revenues from
  continuing operations   $  2,774,635     $ 10,770,245      $         --      $         --      $ 13,544,880
Income (loss) from
  continuing operations
  before income taxes        1,279,681           (3,743)       (5,489,075)       (3,761,664)       (7,974,801)

2000
Revenues from
  continuing operations   $ 23,410,785     $ 10,597,684      $         --      $  1,267,825      $ 35,276,294
Income (loss) from
  continuing operations
  before income taxes        4,365,145          826,210                --       (10,988,544)       (5,797,189)
</TABLE>



                                       6
<PAGE>   9

NOTE D - DISCONTINUED OPERATION

        During the fiscal year ended April 30, 2000, the Company sold
substantially all of its interest in Stadt Solutions LLC ("Stadt Solutions"), a
company formed in 1998 with Stadt Holdings. Net results of operation for the
discontinued operation have been reported as a separate component of the
Condensed Consolidated Statement of Operations for the three and nine months
ended January 31, 2000.

NOTE E - NOTES RECEIVABLE FROM EMPLOYEES AND OFFICERS

        In December 2000, the Company loaned approximately $400,000 pursuant to
promissory notes to certain employees and officers of the Company for the
purchase of stock through the exercise of stock options. In addition, the
Company loaned approximately $1.3 million additional funds to other employees
and officers in January 2000 for the purchase of stock through the exercise of
stock options. For purposes of this discussion, the sum of $1.7 million
($400,000 plus $1.3 million) shall be referred to as the "Stock Notes".

        The Company also received, in January 2000, promissory notes in the
amount of $451,000 from certain officers for loans related to tax liabilities
(the "Tax Notes").

        The Stock Notes are with recourse and the Tax Notes are without
recourse. Both the Stock Notes and the Tax Notes are secured by stock under
respective pledge agreements. As of January 31, 2001, after repayments from
certain employees and officers, $539,000 is owed under the Stock Notes and
$451,000 under the Tax Notes. $312,000 of the Stock Notes and all of the Tax
Notes bear interest of 6.21% and are due on December 31, 2004. The rest of the
Stock Notes are due on December 31, 2005 which bear interest of 5.87% per annum.



                                       7
<PAGE>   10

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

        When used in this Quarterly Report on Form 10-Q and in other public
statements by the Company and Company's officers, the words "may", "will",
"expect", "anticipate", "continue", "forecast", "estimate", "project", "intend",
and similar expressions are intended to identify forward-looking statements
regarding events and financial trends that may affect the Company's future
operating results and financial position. Forward-looking statements in this
document include discussions regarding (i) future sources of revenue; (ii) the
future financial impact from the expansion of the Company's Health Information
business, including associated research and development costs; (iii) the timing
of technical feasibility of the InfoScriber software; (iv) the anticipated
amount of capital expenditures for the development of the InfoScriber medication
management system; (v) forecasted cash flows for fiscal year 2001; (vi)
potential indemnification obligations and uncollectable accounts; (vii) the
adequacy of contract settlement reserves; and (viii) the sufficiency of the
Company's financial resources. Such statements are subject to risks and
uncertainties that could cause the Company's actual results and financial
position to differ materially. Please carefully review and consider the various
disclosures advising interested parties of factors that affect the Company,
including those discussed below and in the Company's Annual Report on Form 10-K
for the fiscal year ended April 30, 2000 and the Company's other periodic
reports and filings with the Securities and Exchange Commission. The Company
expressly disclaims any obligation or undertaking to release publicly the
results of any revision of forward-looking statements to reflect trends or
circumstances after the date they are made or to reflect the occurrence of
unanticipated events.

OVERVIEW

        Over the past twelve years, PMR Corporation and its subsidiaries ("PMR,"
the "Company" or "we") has been a leader in the development and management of
specialized mental health care programs and disease management services designed
to treat individuals diagnosed with a serious mental illness ("SMI"), primarily
schizophrenia and bipolar disorder (i.e., manic-depressive illness).

        On February 15, 2001, the Company announced its intention to explore
strategic alternatives to maximize shareholder value. The Company has retained
SunTrust Equitable Securities to assist the Company in evaluating the sale or
merger of its health service operations, or the sale, merger, or strategic
financing of its wholly-owned subsidiary, InfoScriber(R) Corporation
("InfoScriber"). The Company has also engaged the firm of McGettigan, Wick & Co.
to assist in an advisory role. A principal of McGettigan, Wick & Co. serves on
the Company's Board of Directors.

        We currently manage, administer or provide consulting services to three
outpatient programs (the "Outpatient Programs"). In addition, we have service
contracts with two case management agencies (the "Case Management Programs"). We
refer to these programs, collectively, in this document as "Health Services
Programs".



                                       8
<PAGE>   11

        During the fiscal year ended April 30, 2000, we began to implement a
changed business strategy. We focused on maximizing cash flow in the Health
Services Programs and reducing the number of Outpatient Programs managed by us,
hence minimizing our exposure to the changing regulatory environment. The
Outpatient Programs are heavily dependent on reimbursement by Medicare and
Medicaid. We significantly reduced our presence in Outpatient Programs. The
reduction in these services was the result of a management decision predicated
on existing and proposed regulatory changes that (i) increased obstacles to the
marketability of our services and (ii) increased the costs of regulatory
compliance.

        In addition, in September 1999, we organized InfoScriber(R) Corporation
("InfoScriber"), a wholly-owned subsidiary, which has a business plan to become
a leading provider of strategic health information for pharmaceutical companies,
medical device companies, managed care organizations and healthcare providers.
We believe that InfoScriber is developing a unique and valuable information
asset for healthcare industry participants, namely, a "practice-based",
real-time, longitudinal database for researching, analyzing and understanding
physician prescribing patterns. This database is driven by a proprietary,
web-based medication management system, which captures critical disease-specific
information at the point of prescribing. In addition to providing a core data
set that we believe is generally unavailable from current sources, the system
also incorporates a proprietary ability to capture information related to the
underlying rationale for medication decisions. InfoScriber has continued the
expansion of its panel of practicing psychiatrists (the "Clinical Pharmacology
Network," or "CPN"), which is intended to be nationally representative of the
U.S. population of prescribing psychiatrists. We intend to establish additional
panels in the future to gather data from other therapeutic areas. We believe
that, through the panels of physician users, InfoScriber will be able to capture
data that is representative of prescribing patterns, which can be used for
general analysis and business decision making. We refer to the business of
InfoScriber in this document as the "Health Information" business.


SOURCES OF REVENUE

        InfoScriber. InfoScriber has generated no revenues to date. We intend to
enter into commercial agreements with pharmaceutical companies, managed care and
other health care organizations, researchers and government agencies relating to
the InfoScriber data. In addition, we expect to generate user fees from certain
participating providers, including physicians, psychiatric practices and
community mental health organizations. Should we be unable to enter into
sufficient commercial and participation agreements for our InfoScriber system,
it could have a material adverse effect on our business, financial condition and
results of operation in the future. See "--Liquidity and Capital Resources."

        Case Management Programs. For its Case Management Programs in Tennessee,
the Company receives a monthly case rate fee from the managed care consortium
responsible for managing the Tennessee TennCare Partners State Medical Managed
Care Program ("TennCare"). Revenue under the TennCare program is recognized in
the period in which the related service is to be provided and may fluctuate
based on rates set by the managed care consortium as well as the level of
patient enrollment.



                                       9
<PAGE>   12

        Outpatient Programs. We continue to manage or administer certain
Outpatient Programs under agreements with acute care hospitals. We do not,
however, currently intend to devote resources to develop additional Outpatient
Programs. We expect that revenues from Outpatient Programs will continue to
decrease during the remainder of fiscal year 2001 due to the termination of
additional contracts and the restructuring of remaining contracts.

        Revenue under an Outpatient Program is recognized at estimated net
realizable amounts when services are rendered based upon contractual
arrangements with providers. Under the terms of some of our terminated or
expired contracts, as well as one of our current contracts, we are required to
indemnify the providers for some or all of our fees if the fees are disallowed
by Medicare or its fiscal intermediaries, or if the claims associated with our
fees for services rendered to patients are denied. In some instances, we are
required to indemnify the hospital for certain of the hospital's direct costs if
the claims associated with our fees for services rendered to patients are
denied. As of January 31, 2001, we had recorded $4.2 million in contract
settlement reserves to provide for an estimate of possible amounts ultimately
owed to our provider customers resulting from disallowance of costs by Medicare
and Medicare cost report settlement adjustments. Such reserves are classified as
long-term liabilities because ultimate determination of substantially all of the
potential contract disallowances is not anticipated to occur during the current
fiscal year.


RESULTS OF OPERATIONS - QUARTER ENDED JANUARY 31, 2001 COMPARED TO QUARTER ENDED
JANUARY 31, 2000

        Revenue - Revenues from continuing operations decreased from $9.9
million for the quarter ended January 31, 2000 to $4.1 million for the quarter
ended January 31, 2001, a decrease of $5.8 million, or (58.8%). The Outpatient
Programs recorded revenues of $564,000 for the quarter ended January 31, 2001, a
decrease of approximately $5.2 million or (90.2%) as compared to $5.7 million
for the quarter ended January 31, 2000. This decrease was primarily the result
of the Company's changed business strategy and the associated reduction in the
Company's Outpatient Programs. The Company terminated contracts related to
approximately twenty Outpatient Program locations since January 31, 2000.
Revenues from the Company's Case Management Programs decreased from $3.9 million
for the quarter ended January 31, 2000 to $3.5 million for the quarter ended
January 31, 2001, a decrease of $410,000 or (10.4%). The decrease was primarily
due to a decrease in patient enrollment.

        Direct Operating Expenses - Direct operating expenses consist of costs
incurred at the program sites and costs associated with the field management
responsible for administering the programs. Direct operating expenses from
continuing operations were $3.7 million in the third quarter of fiscal year
2001, compared to $8.7 million a year ago, a decrease of 57.0%. As a percentage
of revenues, direct operating expenses were 91.1% for the quarter ended January
31, 2001, as compared to 87.3% for the quarter ended January 31, 2000.
Deterioration in the overall expense ratio for continuing operations was
primarily due to the decrease in the Outpatient Program business, which
historically has had a lower expense ratio than the other business segments, as
well as the expansion of the Health Information business.



                                       10
<PAGE>   13

        Research and Development - The Company incurred, in the third quarter of
fiscal year 2001, $379,000 in research and development costs related to the
development of Version 2 of its InfoScriber medication management system.
Additional research and development costs are anticipated to be incurred by the
Company in the future until technical feasibility is attained for Version 2 of
the software, which is expected shortly after April 2001.

        Marketing, General and Administrative - Marketing, general and
administrative expenses from continuing operations were $2.5 million for the
quarter ended January 31, 2001 versus $2.7 million for the quarter ended January
31, 2000. As a percentage of total revenues, marketing, general and
administrative expenses were 60.4% for the quarter ended January 31, 2001, as
compared to 26.8% for the quarter ended January 31, 2000. The increase in
marketing, general and administrative expenses as a percentage of revenues was
due primarily to the reduction in revenues from terminating contracts related to
approximately twenty Outpatient Program locations between January 31, 2000 and
January 31, 2001, as well as costs related to expanding and administering the
Health Information business.

        Provision for Doubtful Accounts - Expenses from continuing operations
related to the provision for doubtful accounts decreased from $3.4 million for
the quarter ended January 31, 2000 to $166,000 for the quarter ended January 31,
2001, a decrease of approximately $3.2 million or (95.1%). The decrease was
primarily due to fewer programs in fiscal year 2001 and $3.0 million in
additional reserves taken in the quarter ended January 31, 2000 to write down
accounts receivables related to terminated or expired contracts. Excluding this
$3 million reserve, the provision for doubtful accounts as a percentage of
revenues was 4.1% for both quarters ended January 31, 2001 and 2000. The Company
expects the allowance for doubtful accounts to fluctuate based on the amount of
claims under review in its Outpatient Programs and the number of programs that
the Company manages or administers.

        Depreciation and Amortization - Depreciation and amortization expenses
decreased from $244,000 for the quarter ended January 31, 2000 to $198,000 for
the quarter ended January 31, 2001, a decrease of $45,000 or (18.6%). The
decrease was due primarily to disposal and write-off of assets as a result of
contract terminations or expirations.

        Software Development Amortization - The Company commenced amortization
of its capitalized costs for Version 1 of the InfoScriber medication management
system on September 1, 2000. The software was commercially released in August
2000. Research and development efforts for Version 2 are underway. The Company
anticipates Version 2 will reach technical feasibility and replace Version 1
shortly after April 2001. Accordingly, the Company began amortizing the $2.8
million of capitalized costs in September 2000 and will continue through April
2001. The amortization expense for the quarter ended January 31, 2001 was
approximately $1.0 million.

        Special Charge - During the quarter ended January 31, 2001, the Company
recorded special charges totaling $273,000. These charges were primarily related
to severance costs for marketing and administrative personnel terminated during
the period. For the same period in the preceding year, the Company incurred a
charge of $347,000 related to contract terminations or expirations.



                                       11
<PAGE>   14

        Net Interest Income - Interest income, net of interest expense,
decreased from $400,000 for the quarter ended January 31, 2000 to $364,000 for
the quarter ended January 31, 2001, a decrease of $36,000 or (9.0%). The
decrease was primarily due to lower cash, cash equivalents, and short-term
investments at January 31, 2001 versus January 31, 2000. The reduction in these
interest bearing assets was primarily a result of cash dividends, totaling an
aggregate of $17.9 million, paid in January 2000 and December 2000, partially
offset by cash provided by operations during fiscal year 2000.

        Loss from Continuing Operations Before Income Taxes - The Company
recognized a loss from continuing operations before income taxes of $3.8 million
during the quarter ended January 31, 2001 versus $5.0 million for the same
period in the preceding year, a $1.2 million decrease or (24.0%). The decrease
was primarily due to the $3.0 million in additional reserves taken in the third
quarter of the prior fiscal year, partially offset by (i) lower margins due to
significantly reduced number of Outpatient Program locations, (ii) marketing and
administrative expenses related to the Health Information business, and (iii)
$1.0 million in amortization expense for the InfoScriber medication management
system during the quarter ended January 31, 2001.

        Income Tax Benefit - The Company is anticipating refunds from the
Internal Revenue Service and various State tax authorities for the sum of
$929,000 associated with the Company's fiscal year ended April 30, 2000 income
tax returns. The Company has treated the entire amount of this anticipated
refund as an income tax benefit during the third quarter of the current fiscal
year because the Company had previously recognized a valuation allowance against
all of its deferred tax assets in fiscal year 2000. The valuation allowance was
originally established because realization of the deferred tax assets was
uncertain in light of the changes in the Company's core business and associated
business risks, including an unproven history of earnings in the new business
segment.

        Discontinued Operation - During the fiscal year ended April 30, 2000,
the Company sold substantially all of its interest in Stadt Solutions LLC
("Stadt Solutions"), a company formed in 1998 with Stadt Holdings. Net results
of operation for the discontinued operation have been reported as a separate
component of the Condensed Consolidated Statement of Operations for the quarter
ended January 31, 2000. The net gain from discontinued operation was $1.1
million for the quarter ended January 31, 2000.


RESULTS OF OPERATIONS - NINE MONTHS ENDED JANUARY 31, 2001 COMPARED TO NINE
MONTHS ENDED JANUARY 31, 2000

        Revenue - Revenues from continuing operations decreased from $35.3
million for the nine months ended January 31, 2000 to $13.5 million for the nine
months ended January 31, 2001, a decrease of $21.7 million or (61.6%). The
Outpatient Programs recorded revenues of $2.8 million for the nine months ended
January 31, 2001, a decrease of $20.6 million or (88.1%) as compared to $23.4
million for the nine months ended January 31, 2000. This decrease was primarily
the result of the Company's changed business strategy and the associated
reduction in the Company's Outpatient Programs. Revenues from the Company's Case
Management



                                       12
<PAGE>   15

Programs remained relatively flat at $10.8 million for the nine months ended
January 31, 2001 versus $10.6 million for the same period a year ago.

        Direct Operating Expenses - Direct operating expenses consist of costs
incurred at the program sites and costs associated with the field management
responsible for administering the programs. Direct operating expenses from
continuing operations were $12.0 million in the first nine months of fiscal year
2001, compared to $28.2 million a year ago, a decrease of 57.4%. As a percentage
of revenues, direct operating expenses were 88.8% for the nine months ended
January 31, 2001, as compared to 80.0% for the nine months ended January 31,
2000. Deterioration in the overall expense ratio for continuing operations was
primarily due to the decrease in the Outpatient Program business, which
historically has had a lower expense ratio than the other business segments, as
well as the expansion of the Health Information business.

        Research and Development - The Company incurred, in the first nine
months of fiscal year 2001, $663,000 in research and development costs related
to the development of Version 2 of its InfoScriber medication management system.
Additional research and development costs are anticipated to be incurred by the
Company in the future until technical feasibility is attained for Version 2 of
the software, which is expected shortly after April 2001.

        Marketing, General and Administrative - Marketing, general and
administrative expenses from continuing operations were $6.5 million for the
nine months ended January 31, 2001 versus $7.4 million for the nine months ended
January 31, 2000. As a percentage of total revenues, marketing, general and
administrative expenses were 47.7% for the nine months ended January 31, 2001,
as compared to 20.9% for the nine months ended January 31, 2000. The increase in
marketing, general and administrative expenses as a percentage of revenues was
due primarily to the reduction in revenues from terminating contracts related to
approximately twenty Outpatient Program locations between January 31, 2000 and
January 31, 2001, as well as costs related to expanding and administering the
Health Information business.

        Provision for Doubtful Accounts - Expenses from continuing operations
related to the provision for doubtful accounts decreased from $4.8 million for
the nine months ended January 31, 2000 to $552,000 for the nine months ended
January 31, 2001, a decrease of approximately $4.3 million or (88.6%). The
decrease was primarily due to fewer programs in fiscal year 2001 and $3.0
million in additional reserves taken in the quarter ended January 31, 2000 to
write down the accounts receivables related to terminated or expired contracts.
Excluding this $3 million reserve, the provision for doubtful accounts as a
percentage of revenues was 4.1% for the nine months ended January 31, 2001, as
compared to 5.2% for the nine months ended January 31, 2000. The Company expects
the allowance for doubtful accounts to fluctuate based on the amount of claims
under review in its Outpatient Programs and the number of programs that the
Company manages or administers.

        Depreciation and Amortization - Depreciation and amortization expenses
decreased from $767,000 for the nine months ended January 31, 2000 to $661,000
for the nine months ended January 31, 2001, a decrease of $106,000 or (13.9%).
The decrease was due primarily to disposal and write-off of assets as a result
of contract terminations or expirations.



                                       13
<PAGE>   16

        Software Development Amortization - The Company commenced amortization
of its capitalized costs for Version 1 of the InfoScriber medication management
system on September 1, 2000. The software was commercially released in August
2000. Research and development efforts for Version 2 are underway. The Company
anticipates Version 2 will reach technical feasibility and replace Version 1
shortly after April 2001. Accordingly, the Company began amortizing the $2.8
million of capitalized costs in September 2000 and will continue through April
2001. The amortization expense for the nine months ended January 31, 2001 was
$1.7 million.

        Special Charge - Special charges related to contract terminations or
expirations and restructuring costs decreased from $1.0 million in the nine
months ended January 31, 2000 to $484,000 during the same period in fiscal year
2001, a decrease of $546,000 or (53.0%). The decrease in special charges
resulted primarily from the reduced number of contract terminations or
expirations between the first nine months of fiscal years 2000 and 2001.

        Net Interest Income - Interest income, net of interest expense,
decreased from $1.1 million for the nine months ended January 31, 2000 to $1.0
million for the nine months ended January 31, 2001, a decrease of approximately
$108,000 or (9.4%). The decrease was primarily due to lower cash, cash
equivalents, and short-term investments at January 31, 2001 versus January 31,
2000. The reduction in these interest bearing assets was primarily a result of
cash dividends, totaling an aggregate of $17.9 million, paid in January 2000 and
December 2000 partially offset by cash provided by operations during fiscal year
2000.

        Loss from Continuing Operations Before Income Taxes - The Company
recognized a loss from continuing operations before income taxes of $8.0 million
during the nine months ended January 31, 2001 versus a loss of $5.8 million for
the same period in the preceding year, a $2.2 million increase. The increase in
loss was primarily due to the closure of approximately twenty Outpatient Program
site locations since January 31, 2000, marketing and administrative expenses
related to the Health Information business, and $1.7 million in amortization
expense for the InfoScriber medication management system.

        Discontinued Operation - During the fiscal year ended April 30, 2000,
the Company sold substantially all of its interest in Stadt Solutions, a company
formed in 1998 with Stadt Holdings. Net results of operation for the
discontinued operation have been reported as a separate component of the
Condensed Consolidated Statement of Operations for the nine months ended January
31, 2000. The net gain from discontinued operations was $392,000 for the nine
months ended January 31, 2000.


LIQUIDITY AND CAPITAL RESOURCES

        For the nine months ended January 31, 2001, net cash used in operating
activities was $1.1 million versus $5.8 million in cash provided by operating
activities during the same period in the prior year. Cash provided by operating
activities in the first nine months of the prior fiscal year included receipt of
a tax refund of $2.2 million from the IRS and $3.3 million in proceeds from the
sale of substantially all of the Company's interest in Stadt Solutions. The net
cash used



                                       14
<PAGE>   17

in operating activities for the nine months ended January 31, 2001 included
payments that were previously reserved of approximately $1.3 million related to
certain terminated Outpatient Programs. Excluding these items, net cash provided
by operating activities slightly decreased from $300,000 for the nine months
ended January 31, 2000 to $200,000 for the nine months ended January 31, 2001.

        Working capital as of January 31, 2001 was approximately $17.0 million,
a decrease of $13.0 million, as compared to working capital at April 30, 2000.
Cash, cash equivalents and short-term investments totaled $18.3 million as of
January 31, 2001, a decrease of $9.5 million as compared to April 30, 2000. The
decrease in working capital, cash and cash equivalents, and short-term
investments was primarily due to the $7.3 million cash dividend paid in December
2000, previously reserved payments of approximately $1.3 million related to
certain terminated Outpatient Programs, and the continued investment in the
Health Information business. Excluding the dividend payment, the decrease in
cash, cash equivalents and short-term investments from April 30, 2000 to
December 31, 2001 was $2.2 million for the first nine months of fiscal year
2001.

        Working capital is anticipated to be utilized during fiscal year 2001 to
continue the development of InfoScriber and, as a result, the Company has
forecasted a net cash outflow exceeding $1.7 million for the remainder of the
current fiscal year. Actual cash usage may fluctuate and vary from this
projection depending upon the success of InfoScriber or further changes in the
Company's Outpatient Programs and Case Management Programs.

        As of January 31, 2001, the Company had capitalized $2.8 million of
development costs related to Version 1 of the InfoScriber medication management
system, including $1.2 million capitalized during the nine months ended January
31, 2001. The Company currently anticipates additional software development
expenditures in fiscal year 2001 in excess of $200,000, including costs
associated with the development of Version 2. Amortization of the capitalized
software costs commenced on September 1, 2000.

        Currently, the Company is evaluating strategic alternatives, including
the sale or merger of its health service operations, or the sale, merger or
strategic financing of InfoScriber. The Company may use working capital and, if
necessary, incur indebtedness in connection with such transactions, if any, or
other possible selective acquisitions.

        Additionally, the Company has continued to repurchase shares of its
common stock. These shares will be used for corporate purposes, including
issuance under PMR's stock compensation plans. During the nine months ended
January 31, 2001, the Company repurchased 10,000 shares of its common stock at
an average price of $2.75 per share, or $27,500 in open market transactions. All
shares repurchased are held in treasury.

        Working capital may also be used, from time to time, to pay dividends to
the Company's shareholders. After evaluating its cash needs, the Company paid a
special dividend of $1.00 per share on December 29, 2000 on 7,255,017 shares of
record as of December 21, 2000.



                                       15
<PAGE>   18

        In connection with our Outpatient Programs, we maintain reserves to
cover the potential impact of two significant uncertainties: (i) the Company may
have an obligation to indemnify certain providers for some portions of its
management fee which may be subject to disallowance upon audit of a provider's
cost report by fiscal intermediaries; and (ii) the Company may not receive full
payment of the management fees owed by a provider during the periodic review of
the provider's claims by the fiscal intermediaries.

        From time to time, we recognize charges to operations as a result of
particular uncertainties associated with the health care reimbursement rules as
they apply to the Outpatient Programs. During the first nine months of fiscal
year 2001, a portion of the Company's revenue was derived from the management of
the Outpatient Programs. Since substantially all of the patients of the
Outpatient Programs are eligible for Medicare, collection of a significant
component of the Company's management fees is dependent upon reimbursement of
claims submitted to fiscal intermediaries by the hospitals or community mental
health centers on whose behalf these programs are managed. Certain of our
contracts with providers contain warranty obligations that require us to
indemnify such providers for the portion of our management fees disallowed for
reimbursement by Medicare's fiscal intermediaries. As of January 31, 2001, we
had recorded $4.2 million in contract settlement reserves to provide for such
indemnity obligations. These reserves have been classified as non-current
because the ultimate determination of substantially all of the potential
contract disallowances is not anticipated to occur during fiscal year 2001.
Although we believe that our potential liability to satisfy such requirements
has been adequately reserved in the financial statements, there can be no
assurance that the amount of fees disallowed will not be greater than the amount
of such reserves. Also, the obligation to pay such amounts, if and when they
become due, could have a material adverse effect on our short-term liquidity.
Certain factors are, in management's view, likely to lessen the impact of any
such effect, including the expectations that (i) if claims arise, they will
arise on a periodic basis over several years and (ii) any disallowance may be
offset against obligations already owed by the provider to us.

        In addition, we have been advised by the Health Care Financing
Administration that certain program-related costs are not allowable for
reimbursement. Thus, we may be responsible for reimbursement of the amounts
previously paid to us that are disallowed pursuant to obligations that exist
with certain providers. Although we believe that the potential liability to
satisfy such requirements has been adequately reserved in the financial
statements, there can be no assurance that such reserves will be adequate. The
obligation to pay the amounts so reserved, if and when they become due, could
have a material adverse effect upon our cash flows and liquidity and, if greater
amounts became due, on our business, financial condition, and results of
operations.

        Previously, the Company had a credit agreement with a bank permitting
borrowings for working capital needs of up to a specified level. The Company did
not pursue renewal of this agreement and it expired on October 31, 2000.

        The Company's Health Information business is anticipated to require
continued investments of cash throughout fiscal year 2001 and into fiscal year
2002 during its development. Although, the Company is evaluating strategic
alternatives, there can be no assurance that the



                                       16
<PAGE>   19

Company will be able to effect a sale, merger, or other transaction related to
this business segment.

        Management believes that the Company has the financial resources needed
to meet its business requirements throughout fiscal year 2001, including capital
expenditures for the development of InfoScriber and working capital
requirements. The Company will continue to evaluate the allocation of its
financial resources including, but not limited to, the sale, merger, or
strategic financing of its InfoScriber subsidiary, sale or merger of its health
service operations, dividend distributions, and funding of on-going working
capital requirements. The Company may also, from time to time, use working
capital, issue debt or equity securities, or a combination thereof, to finance
other selective acquisitions of assets or businesses or for general corporate
purposes. The Company's ability to effect any such issuance will be dependent on
its results of operations, its financial condition, current market conditions
and other factors beyond its control.


IMPACT OF INFLATION

        A substantial portion of the Company's revenue is subject to
reimbursement rates that are regulated by the federal and state governments and
that do not automatically adjust for inflation. As a result, increased operating
costs due to inflation, such as labor and supply costs, without a corresponding
increase in reimbursement rates, may adversely affect the Company's earnings in
the future.



                                       17
<PAGE>   20

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS


        The information included in this Item 3 is considered to constitute
"forward-looking statements" for purposes of the statutory safe harbor provided
in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended.

INTEREST RATE SENSITIVITY

        The Company's financial instruments include an equipment note payable
and investments in debt securities, including U.S. Treasury securities,
commercial paper and certificates of deposit. The equipment note payable, due in
November 2002, has an effective interest rate of 8.36% and there was
approximately $215,000 outstanding under this note at January 31, 2001.

        At January 31, 2001, the fair market value of the investment in debt
securities was approximately $7.0 million, which includes an unrealized gain of
approximately $44,000. These securities bear interest rates ranging from 5.27%
to 7.55% and are generally short-term and readily marketable.

        We do not and have not used derivative financial instruments for any
purpose, including hedging or mitigating interest rate risk, and we believe the
increase in the fair value of our investments in debt securities due to interest
rate sensitivity is temporary in nature. This determination was based on the
marketability of the instruments, our ability to retain our investment in the
instruments, past market movements and reasonably possible, near-term market
movements. Therefore, we do not believe that potential, near-term gains or
losses in future earnings, fair values, or cash flows from changes in interest
rates are likely to be material.

EXCHANGE RATE SENSITIVITY

        We do not currently have financial instruments that are sensitive to
foreign currency exchange rates.



                                       18
<PAGE>   21

        PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

        From time to time, the Company has been involved in routine litigation
incidental to the conduct of its business. There are currently no material
pending litigation proceedings to which the Company is a party.

Item 2 - Changes in Securities and Use of Proceeds

        None

Item 3 - Defaults upon Senior Securities

        None

Item 4 - Submission of Matters to a Vote of Security Holders

        None

Item 5 - Other Information

        As of January 31, 2001, of the 7,255,017 shares of the Company's common
stock outstanding, 1,325,421 were held by institutional shareholders and
1,901,311 were held by officers and directors.

Item 6 - Exhibits and Reports on Form 8-K

(a)     Exhibits

(b)     Reports on Form 8-K

        On December 20, 2000, the Company filed a Form 8-K announcing the
        declaration of a special dividend of $1.00 per share, payable on
        December 29, 2000 to its shareholders of record as of December 21, 2000.



                                       19
<PAGE>   22

                                   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.

Dated: March 13, 2001
                                 PMR CORPORATION


                                 BY: /s/ Jean Dunn
                                    --------------------------------------------
                                     L. JEAN DUNN
                                     Chief Financial Officer
                                     (Duly  Authorized   Officer  and
                                     Principal Financial Officer)


                                 BY: /s/  Reggie Roman
                                    --------------------------------------------
                                     REGGIE ROMAN
                                     Vice President Finance & Strategic Planning
                                     (Principal Accounting Officer)



                                       20