On September 1, 2000, the Company paid a cash dividend of $.05 per share on all outstanding shares of its common stock to shareholders of record on August 18, 2000. Dividends of $.05 per share on all outstanding shares of common stock were paid on July 5, 2000 to shareholders of record on June 23, 2000, and April 3, 2000 to shareholders of record on March 17, 2000. Approximately 87% of the outstanding common stock of the Company is beneficially owned by Scientific Technology Incorporated, a California corporation under common control with the Company. Dividends paid to Scientific Technology Incorporated were applied to the Payable to Parent account.

For the three months ended September 30, 2000 and 1999, there is no difference between net income and comprehensive income.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities," which establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. Management does not expect the adoption of SFAS 133 to have a material effect on the Company's operations or financial position. The Company is required to adopt SFAS 133 in the first quarter of fiscal 2001.

In December 1999, the SEC issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. Management does not expect the adoption of SAB 101 to have a material effect on the Company's operations or financial position. The Company is required to adopt SAB 101 in the fourth quarter of fiscal 2000 and will do so in that period.

On March 16, 2000, the Company acquired substantially all of the assets and liabilities of PSI-Tronix, Inc. ("PSI- Tronix") for a cash purchase price of $8,703. Of the total purchase price, $4,222 was allocated to goodwill, $1,500 was allocated to technology and $1,101 was allocated to customer lists. The Company is generally amortizing the intangible assets it acquired in the transaction using the straight-line method over five to twenty years. The transaction was accounted for using the purchase method of accounting. The operations and financial position of PSI-Tronix were accounted for in the consolidated financial statements of the Company beginning in March 2000. PSI-Tronix designs, develops and manufactures pressure transducers, digital pressure gauges, displacement and velocity transducers, and pressure comparators, for use in a variety of factory, aerospace, medical and semiconductor oil and gas markets and applications. Additional information for this acquisition is included in the Company's amended Form 8K/A, filed on May 30, 2000.

The following unaudited pro-forma consolidated amounts give effect to this acquisition as if it had occurred on January 1, 1999 by consolidating the results of operations of PSI-Tronix with the results of the Company for the nine months ended September 30, 2000 and 1999.

                                           2000           1999
                                       -------------  -------------
    Sales                             $      45,231  $      42,081
                                       =============  =============

    Net income                        $       4,727  $       4,486
                                       =============  =============

    Net income per common share,
      basic and diluted               $        0.49  $        0.46
                                       =============  =============
    Shares used to compute net
      income per common share:
         Basic                                9,640          9,652
                                       =============  =============
         Diluted                              9,667          9,678
                                       =============  =============

This interim report on Form 10-Q contains trend analysis and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. Such statements include expectations, beliefs, intentions or strategies regarding future operating results, future expenditures, future cash requirements, and future industry conditions that involve risks and uncertainties. The Company's actual results could differ materially from those projected in such forward-looking statements as a result of many factors, including, without limitation, those set forth under this section, the section entitled "Business Factors" below and elsewhere in this report on Form 10-Q.

(Amounts in thousands except percentages)

Scientific Technologies Incorporated designs, manufactures and distributes automation safeguarding and specialty sensor products for the industrial control market. The Company's products include safety light guards, profiling scanners, factory automation sensors, controls, components, microcomputers, fiber optics, power monitoring devices, safety mats, pressure, displacement and velocity transducers, digital pressure gauges and comparators and other electronic equipment supplied to industrial automation, commercial and defense customers.

Sales for the three months ended September 30, 2000 increased 17% to $14,992 from $12,804 in the third quarter of 1999. For the nine months ended September 30, 2000 sales increased 20% to $43,691 from $36,378 in the comparable period in 1999. Third quarter and nine-month sales were positively impacted by the acquisition of PSI-Tronix in March 2000, by the growth of the Company's automation safety products, and to a lesser extent, by the effect of increased pricing of certain the Company's safety products and sensors.

Gross margin as a percentage of sales was 50% during the third quarter of 2000 and 1999 Gross margin for the nine-month period ended September 30, 2000 was 52% of sales compared to 50% for the same period in 1999. This was primarily the result of economies of scale associated with the higher sales levels and price increases mentioned above, and of a shift in the mix of sales to products with a relatively lower cost of sales.

Selling, general and administrative expenses increased 17% to $3,776 in the third quarter of 2000 from $3,231 in the third quarter of 1999. For the nine months ended September 30, 2000, selling general and administrative expenses rose 22% to $11,682 from $9,545 in the comparable 1999 period. These increases were due to expenses incurred by the PSI-Tronix business the Company acquired, as well as higher expenses associated with the increased levels of revenue. Selling, general and administrative expenses remained constant at 25% of sales for the three months ended September 30, 2000 and 1999 and increased to 27% of sales in the nine months ended September 30, 2000 compared to 26% in the same 1999 period, again primarily the result of PSI- Tronix related expenses.

Reflecting the Company's continuing commitment to new product development, third quarter 2000 research and development expenses increased 2% to $1,195 from $1,169 in the comparable period in 1999. For the nine months ended September 30, 2000, research and development expenses grew 13% to $3,920 from $3,465 in the first nine months of 1999. Research and development expenses were 8% of sales for the three months ended September 30, 2000 compared to 9% for the comparable 1999 quarter. Research and development expenses were 9% for the first nine months of 2000 compared to 10% of sales for the first nine months of 1999. The Company anticipates that it will continue to make substantial investments in research and development in future quarters.

At September 30, 2000 the Company's working capital was $18,388, a 19% reduction from the $22,712 reported at December 31, 1999. This decline was primarily the result of the acquisition of PSI-Tronix in March of 2000, reduced short-term investments, increased accrued expenses and an increase to Payable to Parent account, which reduction was partially offset by positive cash flows from operations resulting in higher accounts receivable and inventories and a lower accounts payable.

Available bank borrowings were $6,100,000, all of which were unused at September 30, 2000. The Company believes that cash from operations, together with its cash resources and available bank borrowings, will be sufficient to fund its working capital requirements for the next twelve months.

Because of the variety of factors and uncertainties affecting the Company's operating results, past financial performance and historic trends may not be a reliable indicator of future performance. These factors, as well as other factors affecting the Company's operating performance, may result in significant volatility in the Company's common stock price. Among the factors which could affect future results are:

The Company has experienced fluctuations in annual and quarterly operating results and anticipates that these fluctuations will continue in the foreseeable future. These fluctuations are caused by a number of factors, including the level and timing of customer orders, the mix of products sold, fluctuations in sales of complementary third party products with which STI products are sold, the timing of operating expenditures and general economic conditions in the U.S. and abroad, particularly in Asia and Europe.

The Company maintains an inventory of components and parts for its manufacturing activities. There are many sources for most of the components needed; however STI purchases some products, components and sub- assemblies from sole sources, which may be the only available supplier or may enable the Company to obtain pricing or supply efficiencies. In the event of supply interruptions from these vendors, the Company believes it could obtain most of these sole source components from alternate suppliers, but this would require the Company to transfer tooling or designs or redesign its products to facilitate use of alternate-source components. STI could incur delays in production by switching to an alternate source, which could have an adverse effect on the its business, financial condition and results of operations.

The industrial manufacturing equipment industry can be subject to seasonality. This is also true with respect to European markets where business activity typically declines due to vacations taken in the summer months. This seasonality could adversely affect our operating results, which could cause our stock price to decline.

The market for industrial sensors is highly competitive. Many of the Company's competitors have substantially greater name recognition and technical, marketing and financial resources than the Company. Competitive pressures could reduce market acceptance of the Company's products and result in price reductions and increases in expenses.

The Company's future success will depend on its ability to enhance its current products, develop new products and respond to emerging industry standards, all on a timely and cost-effective basis. The Company cannot assure you that it will continue to be able to timely develop products and product enhancements that meet the rapid evolving needs of its customers. The introduction of new products also requires the Company to devote substantial resources in order to manage the transition from older products in order to minimize disruption of customer orders, avoid excessive levels of older product inventories and ensure that adequate supplies of new products can be delivered to meet customer demands. The Company may be unable to generate significant revenue to offset any new product related expenditures, which would adversely affect the Company's operating results.

A majority of the Company's products are sold through third party distributors, systems integrators and original equipment manufacturers. These resellers are not required to offer the Company's products exclusively and there can be no assurance that any of the Company's resellers will continue to offer the Company's products.

The Company's international sales may be disrupted by currency fluctuations or other international events beyond the Company's control, including political or regulatory changes and changes in general economic conditions.

The Company relies on a combination of patent, trademark and trade secret laws and contractual restrictions to establish and protect certain proprietary rights in its products and services. There can be no assurance that the Company's patents, trademarks, or contractual arrangements or other steps taken by the Company to protect its intellectual property will prove sufficient to prevent misappropriation of the Company's technology or defer independent third party development of similar technologies. Moreover, there can be no assurance that the technology licenses granted to the Company from its Parent will continue to be available on satisfactory terms or at all. The loss of any of the Company's proprietary technology could require the Company to obtain technology of lower quality or performance standards or at greater cost, which could materially adversely affect the Company's business, results of operations and financial condition. Furthermore, the laws of certain foreign countries may not protect the Company's products, services or intellectual property rights to the same extent as do the laws of the United States.

The Company may acquire or make investments in complementary businesses, technologies, services or products if appropriate opportunities arise. From time to time, the Company has discussions and negotiations with other companies regarding acquiring or investing in such companies' businesses, products, services or technologies, and the Company regularly engages in such discussions and negotiations in the ordinary course of its business. For example, on March 16, 2000, the Company completed the acquisition of substantially all of the assets and liabilities of PSI-Tronix, Inc. There can be no assurance that the Company will be able to identify future suitable acquisition or investment candidates, or if it does identify suitable candidates, that it will be able to make such acquisitions or investments on commercially acceptable terms or at all. If the Company acquires or invests in another company, it could have difficulty in assimilating that company's personnel, operations, technology and software or integrating the acquired products, services or technologies in its operations. Further, any such acquisition could cause the Company to assume unanticipated liabilities of the acquired company. In addition, the key personnel of the acquired company may decide not to work for the Company. These difficulties could disrupt the Company's ongoing business, distract its management and employees, increase its expenses and adversely affect its result of operations. Furthermore, the Company may incur indebtedness or issue equity securities to pay for any future acquisitions. The issuance of equity securities would be dilutive to the Company's existing shareholders.

Items 1 - 4 and 5 are not applicable for this reporting period.

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

Exhibit Number	Description
Exhibit 3.1 -	Articles of Incorporation, as amended, are incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1988, Exhibit 3.1.
Exhibit 3.3 -	By-Laws are incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1985, Exhibit 3.
Exhibit 4.1 -	1997 Employee Stock Purchase Plan is incorporated by reference to the Registrant's Registration Statement on Form S-8 dated October 2, 1998.
Exhibit 4.2 -	1997 Stock Plan is incorporated by reference to the Registrant's Registration Statement on Form S-8 dated October 2, 1998.
Exhibit 10.1 -	Lease agreement dated February 21, 1995 for 6550 Dumbarton Circle, Fremont, California 94555, is incorporated by reference to the Registrant's Form 10-KSB for the year ended December 31, 1994, Exhibit 10.4.
Exhibit 10.2 -	Bank agreement dated November 29, 1994 with Bank of The West is incorporated by reference to the Registrant's Form 10-KSB for the year ended December 31, 1994, Exhibit 10.3.
Exhibit 10.3 -	Amendment dated May 31, 1999 to Bank Agreement dated November 29, 1994 is incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1999, Exhibit 10.3.
Exhibit 10.4 -	Lease agreement dated November 21, 1995 is incorporated by reference to the Registrant's Form 10-KSB for the year ended December 31, 1995, Exhibit 10.4.
Exhibit 10.5 -	Agreement dated January 1, 1997 with Scientific Technology Inc. for the purchase of the level sensor product line.
Exhibit 21.1 -	Subsidiaries of the Registrant is incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1999, Exhibit 21.1.
Exhibit 23.1 -	Consent of Independent Accountants is incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1999, Exhibit 23.1.
Exhibit 24.1 -	Power of Attorney is incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 1999, Exhibit 24.1.
Exhibit 27.0 -	Financial Data Schedule.

(b) No reports on Form 8-K were filed during the third quarter of 2000.

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.

	SCIENTIFIC TECHNOLOGIES INCORPORATED

	(Registrant)

Date: November 13, 2000

	By:	/s/Joseph J. Lazzara

	Joseph J. Lazzara
	President and Chief Executive Officer (Principal Executive and Financial officer)

Date: November 13, 2000

	By:	/s/ Richard O. Faria

	Richard O. Faria
	Vice-President, Finance & Administration (Principal Accounting Officer)