<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>capital10k33101body.txt
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                   ------------------------------------------

                                    FORM 10-K

           (Mark One)
           [ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the Fiscal Year Ended March 31, 2001          Commission File Number: 814-61

                          CAPITAL SOUTHWEST CORPORATION
             (Exact name of registrant as specified in its charter)

                Texas                                        75-1072796
   (State or other Jurisdiction of                        (I.R.S. Employer
   Incorporation or Organization)                      Identification Number)

               12900 Preston Road, Suite 700, Dallas, Texas 75230
           (Address of principal executive offices including zip code)

                                 (972) 233-8242
               (Registrant's telephone number including area code)

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

                                      None

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

                          Common Stock, $1.00 par value

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

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

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of May 1, 2001 was $115,062,421, based on the last sale price of
such stock as quoted by Nasdaq on such date (officers, directors and 5%
shareholders are considered affiliates for purposes of this calculation).

The  number  of  shares  of  common  stock  outstanding  as of May 15,  2001 was
3,815,051.

   Documents Incorporated by Reference                 Part of Form 10-K
   -----------------------------------                 -----------------

(1)  Annual Report to Shareholders for                 Parts I and II; and
       the Year Ended March 31, 2001              Part IV, Item 14(a)(1) and (2)

(2)  Proxy Statement for Annual Meeting of                  Part III
     Shareholders to be held July 16, 2001


<PAGE>

                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----
PART I
         Item 1.  Business....................................................1
         Item 2.  Properties..................................................1
         Item 3.  Legal Proceedings...........................................1
         Item 4.  Submission of Matters to a Vote of Security Holders.........1

PART II
         Item 5.  Market for Registrant's Common Equity and Related
                    Stockholder Matters.......................................2
         Item 6.  Selected Financial Data.....................................2
         Item 7.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations.......................2
         Item 7A. Quantitative and Qualitative Disclosure About
                    Market Risk...............................................2
         Item 8.  Financial Statements and Supplementary Data.................2
         Item 9.  Changes in and Disagreements With Accountants on
                    Accounting and Financial Disclosure.......................3

PART III
         Item 10. Directors and Executive Officers of the Registrant..........3
         Item 11. Executive Compensation......................................4
         Item 12. Security Ownership of Certain Beneficial Owners
                    and Management............................................4
         Item 13. Certain Relationships and Related Transactions..............4

PART IV
         Item 14. Exhibits, Financial Statement Schedules, and
                    Reports on Form 8-K ......................................4

Signatures ...................................................................5

Exhibit Index ................................................................6


<PAGE>

                                     PART I

Item 1.  Business

         Capital Southwest  Corporation (the "Company") was organized as a Texas
corporation on April 19, 1961.  Until September 1969, the Company  operated as a
licensee  under the Small  Business  Investment  Act of 1958. At that time,  the
Company  transferred to its wholly-owned  subsidiary,  Capital Southwest Venture
Corporation ("CSVC"),  certain of its assets and its license as a small business
investment company ("SBIC").  CSVC is a closed-end,  non-diversified  investment
company of the management  type registered  under the Investment  Company Act of
1940 (the "1940 Act").  Prior to March 30, 1988, the Company was registered as a
closed-end, non-diversified investment company under the 1940 Act. On that date,
the  Company  elected to become a business  development  company  subject to the
provisions  of  Sections  55 through 65 of the 1940 Act, as amended by the Small
Business Incentive Act of 1980.

         The Company is a venture capital  investment company whose objective is
to achieve  capital  appreciation  through  long-term  investments in businesses
believed to have  favorable  growth  potential.  The Company's  investments  are
focused on early-stage financings, expansion financings,  management buyouts and
recapitalizations  in a broad range of industry  segments.  The  portfolio  is a
composite  of  companies  in which the Company has major  interests as well as a
number  of  developing  companies  and  marketable   securities  of  established
publicly-owned  companies.  The Company makes available  significant  managerial
assistance  to the  companies  in which it invests and believes  that  providing
material  assistance  to such  investee  companies  is critical to its  business
development activities.

         The twelve  largest  investments  of the Company had a combined cost of
$50,379,546 and a value of $274,620,768,  representing 86.9% of the value of the
Company's  consolidated  investment portfolio at March 31, 2001. For a narrative
description of the twelve largest investments, see "Twelve Largest Investments -
March  31,  2001"  on  pages 7  through  9 of the  Company's  Annual  Report  to
Shareholders  for the Year Ended March 31, 2001 (the "2001 Annual Report") which
is herein incorporated by reference. Certain of the information presented on the
twelve largest investments has been obtained from the respective  companies and,
in  certain  cases,  from  public  filings  of  such  companies.  The  financial
information  presented  on  each  of  the  respective  companies  is  from  such
companies' financial statements, which in some instances is unaudited.

         The Company  competes  for  attractive  investment  opportunities  with
venture capital  partnerships and  corporations,  venture capital  affiliates of
industrial and financial companies, SBICs and wealthy individuals.

         The number of persons  employed  by the  Company at March 31,  2001 was
seven.

Item 2.       Properties

         The Company  maintains its offices at 12900  Preston  Road,  Suite 700,
Dallas,  Texas,  75230, where it rents approximately 3,700 square feet of office
space  pursuant to a lease  agreement  expiring in  February  2003.  The Company
believes  that its offices are adequate to meet its current and expected  future
needs.

Item 3.       Legal Proceedings

         The Company has no material pending legal  proceedings to which it is a
party or to which any of its property is subject.

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

         No matters  were  submitted  to a vote of security  holders  during the
quarter ended March 31, 2001.



                                       1
<PAGE>

                                     PART II

Item 5.       Market  for  Registrant's  Common  Equity  and Related Stockholder
              Matters

         Information  set forth under the captions  "Shareholder  Information  -
Shareholders,  Market Prices and Dividends" on page 32 of the 2001 Annual Report
is herein incorporated by reference.


Item 6.       Selected Financial Data

         "Selected  Consolidated  Financial  Data" on page 31 of the 2001 Annual
Report is herein incorporated by reference.


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

         Pages 28  through 30 of the  Company's  2001  Annual  Report are herein
incorporated by reference.

Item 7A.      Quantitative and Qualitative Disclosure About Market Risk

         The Company is subject to financial market risks,  including changes in
marketable equity security prices. The Company does not use derivative financial
instruments  to  mitigate  any of  these  risks.  The  return  on the  Company's
investments is not materially affected by foreign currency fluctuations.

         The Company's investment in portfolio securities consists of fixed rate
debt securities which totaled $12,432,971 at March 31, 2001, equivalent to 3.94%
of the value of the Company's  total  investments.  Since these debt  securities
usually have  relatively  high fixed rates of interest,  minor changes in market
yields of publicly-traded debt securities have little or no effect on the values
of debt securities in the Company's  portfolio and no effect on interest income.
On the other hand,  significant  changes in the market yields of publicly-traded
debt  securities may have a material  effect on the values of debt securities in
our portfolio.  The Company's  investments in debt securities are generally held
to maturity  and their fair values are  determined  on the basis of the terms of
the debt security and the financial condition of the issuer.

         A portion of the Company's  investment  portfolio  consists of debt and
equity securities of private  companies.  The Company  anticipates  little or no
effect on the values of these  investments  from modest changes in public market
equity valuations. Should significant changes in market valuations of comparable
publicly-owned  companies  occur,  there  would  be a  corresponding  effect  on
valuations of private companies, which would affect the value and the amount and
timing of proceeds eventually realized from these investments.  A portion of the
Company's  investment  portfolio  also consists of restricted  common stocks and
warrants to purchase common stocks of publicly-owned  companies. The fair values
of these restricted securities are influenced by the nature of applicable resale
restrictions, the underlying earnings and financial condition of the issuer, and
the market valuations of comparable  publicly-owned  companies. A portion of the
Company's investment portfolio also consists of unrestricted,  freely marketable
common stocks of publicly-owned  companies.  These freely marketable investments
are  directly  exposed to equity  price  risks,  in that a change in an issuer's
public market equity price would result in an identical change in the fair value
of the Company's investment in such security.

Item 8.       Financial Statements and Supplementary Data

         Pages 10  through 27 of the  Company's  2001  Annual  Report are herein
incorporated  by  reference.  See also Item 14 of this  Form  10-K -  "Exhibits,
Financial Statement Schedules, and Reports on Form 8-K".


                                       2
<PAGE>
<TABLE>
<CAPTION>

         Selected Quarterly Financial Data (Unaudited)
         ---------------------------------

         The   following   presents  a  summary  of  the   unaudited   quarterly
consolidated financial information for the years ended March 31, 2001 and 2000.

                                                    First      Second       Third      Fourth
                                                   Quarter     Quarter     Quarter     Quarter      Total
                                                  --------    --------    --------    --------    --------
                                                          (In thousands, except per share amounts)
<S>                                               <C>         <C>         <C>         <C>         <C>
2001
----
    Net investment income                         $     25    $    987    $    434    $    277    $  1,723
    Net realized gain (loss) on investments          1,442        --          (768)     (3,905)     (3,231)
    Net increase (decrease) in unrealized
        appreciation of investments                 (1,463)     (2,678)     (9,821)      7,492      (6,470)
    Net increase (decrease) in net assets from
       operations                                        4      (1,691)    (10,155)      3,864      (7,978)
    Net increase (decrease) in net assets from
       operations per share                           --         (0.44)      (2.66)       1.01       (2.09)

2000
----
    Net investment income                         $    547    $    723    $    121    $    272    $  1,663
    Net realized gain on investments                 5,090         910          16           4       6,020
    Net increase (decrease)  in unrealized
       appreciation of investments                     239     (25,423)      3,976      (3,542)    (24,750)
    Net increase (decrease) in net assets
       from operations                               5,876     (23,790)      4,113      (3,266)    (17,067)
    Net increase (decrease)in net assets from
       operations per share                           1.54       (6.23)       1.08       (0.86)      (4.47)

</TABLE>

Item 9.       Changes in and Disagreements with Accountants  on  Accounting  and
              Financial Disclosure

         Not applicable.

                                    PART III

Item 10.      Directors and Executive Officers of the Registrant

         The information set forth under the caption  "Election of Directors" in
the Company's  definitive  Proxy Statement for Annual Meeting of Shareholders to
be held July 16, 2001,  filed  pursuant to Regulation  14A under the  Securities
Exchange Act of 1934, on or about June 8, 2001 (the "2001 Proxy  Statement")  is
herein incorporated by reference.

Executive Officers of the Registrant

         The officers of the Company,  together  with the offices in the Company
presently held by them, their business experience during the last five years and
their ages are as follows:

     Patrick  F.  Hamner,  age  45,  has served as Vice President of the Company
           since 1986 and was an investment associate with the Company from 1982
           to 1986.

     Gary  L. Martin, age 54, has been a director of the Company since July 1988
           and has  served as Vice  President  of the  Company  since  1984.  He
           previously served as Vice President of the Company from 1978 to 1980.
           Since  1980,  Mr.  Martin has  served as  President  of The  Whitmore
           Manufacturing Company, a wholly-owned subsidiary of the Company.

     Tim Smith,  age  40,  has  served  as  Vice  President and Secretary of the
           Company  since 1993,  Treasurer of the Company since January 1990 and
           was an  investment  associate  with the  Company  from  July  1989 to
           January 1990.

     William R. Thomas, age 72, has served as Chairman of the Board of Directors
           of the Company since 1982 and President of the Company since 1980. In
           addition,  he has been a director of the  Company  since 1972 and was
           previously Senior Vice President of the Company from 1969 to 1980.


                                       3
<PAGE>

         No family relationship exists between any of the above-listed officers,
and there are no  arrangements  or  understandings  between  any of them and any
other person  pursuant to which they were  selected as an officer.  All officers
are elected to hold office for one year,  subject to earlier  termination by the
Company's board of directors.

Item 11.      Executive Compensation

         The information set forth under the caption  "Compensation of Directors
and Executive  Officers" in the 2001 Proxy  Statement is herein  incorporated by
reference.

Item 12.      Security Ownership of Certain Beneficial Owners and Management

         The  information  set forth  under the  captions  "Stock  Ownership  of
Certain  Beneficial  Owners"  and  "Election  of  Directors"  in the 2001  Proxy
Statement is herein incorporated by reference.

Item 13.      Certain Relationships and Related Transactions

         There were no relationships or transactions  within the meaning of this
item during the fiscal year ended March 31, 2001 or proposed for the fiscal year
ending March 31, 2002.

                                     PART IV

Item 14.      Exhibits, Financial Statement Schedules, and Reports on Form 8-K

    (a)(1) The following financial statements included in pages 10 through 27 of
the Company's 2001 Annual Report are herein incorporated by reference:

         (A) Portfolio of Investments - March 31, 2001
             Consolidated  Statements  of  Financial  Condition - March 31, 2001
              and 2000
             Consolidated Statements of Operations - Years Ended March 31, 2001,
              2000 and 1999
             Consolidated Statements of Changes  in  Net  Assets -  Years  Ended
              March 31, 2001, 2000 and 1999
             Consolidated Statements of Cash Flows - Years Ended March 31, 2001,
              2000 and 1999

         (B) Notes to Consolidated Financial Statements

         (C) Notes to Portfolio of Investments

         (D) Selected Per Share Data and Ratios

         (E) Independent Auditors' Report

   (a)(2)  All  schedules  are  omitted  because  they are not applicable or not
required, or the information is otherwise supplied.

   (a)(3)  See the Exhibit Index on page 6.

   (b) The Company filed no reports on Form 8-K during the three months ended
March 31, 2001.



                                       4
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                CAPITAL SOUTHWEST CORPORATION

                                                By:   /s/ William R. Thomas
                                                   -----------------------------
                                                   (William R. Thomas, President
                                                    and Chairman of the Board)

Date:  June 15, 2001

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the date indicated.

          Signature                      Title                         Date
          ---------                      -----                         ----


  /s/ William R. Thomas
---------------------------     President and Chairman             June 15, 2001
     (William R. Thomas)        of the Board and Director


   /s/ Gary L. Martin
---------------------------     Director                           June 15, 2001
      (Gary L. Martin)


 /s/ Graeme W. Henderson
---------------------------     Director                           June 15, 2001
    (Graeme W. Henderson)


    /s/ James M. Nolan
---------------------------     Director                           June 15, 2001
       (James M. Nolan)


    /s/ John H. Wilson
---------------------------     Director                           June 15, 2001
       (John H. Wilson)


       /s/ Tim Smith
---------------------------    Vice President and                  June 15, 2001
          (Tim Smith)          Secretary-Treasurer
                               (Financial and Accounting Officer)





                                       5
<PAGE>

                                  EXHIBIT INDEX


         The following  exhibits are filed with this report or are  incorporated
herein by reference to a prior filing,  in accordance with Rule 12b-32 under the
Securities  Exchange Act of 1934.  (Asterisk  denotes  exhibits  filed with this
report.)


    Exhibit No.                               Description
    -----------                               -----------

       3.1(a)              Articles of  Incorporation  and Articles of Amendment
                           to  Articles  of  Incorporation,  dated June 25, 1969
                           (filed as Exhibit 1(a) and 1(b) to Amendment No. 3 to
                           Form N-2 for the fiscal year ended March 31, 1979).

       3.1(b)              Articles of Amendment  to Articles of  Incorporation,
                           dated  July 20,  1987  (filed as an  exhibit  to Form
                           N-SAR for the six month  period ended  September  30,
                           1987).

       3.2                 By-Laws of the Company,  as amended (filed as Exhibit
                           2 to Amendment No. 11 to Form N-2 for the fiscal year
                           ended March 31, 1987).

       4.1                 Specimen  of  Common  Stock  certificate   (filed  as
                           Exhibit  4 to  Amendment  No.  3 to Form  N-2 for the
                           fiscal year ended March 31, 1979).

       4.2                 Subordinated  debenture  of  CSVC  guaranteed  by the
                           Small Business  Administration  (filed as Exhibit 4.3
                           to Form  10-K for the  fiscal  year  ended  March 31,
                           1993).

      10.1                 The  RectorSeal   Corporation   and  Jet-Lube,   Inc.
                           Employee Stock Ownership Plan as revised and restated
                           effective  April 1, 1989  (filed as  Exhibit  10.1 to
                           Form 10-K for the fiscal year ended March 31, 1996).

      10.2                 Amendment  No. I to The  RectorSeal  Corporation  and
                           Jet-Lube,  Inc.  Employee  Stock  Ownership  Plan  as
                           revised and restated effective April 1, 1989.

      10.3                 Retirement  Plan for  Employees of Capital  Southwest
                           Corporation   and  Its   Affiliates  as  amended  and
                           restated  effective  April 1, 1989  (filed as Exhibit
                           10.3 to Form 10-K for the fiscal year ended March 31,
                           1995).

      10.4                 Amendments  One  and  Two  to  Retirement   Plan  for
                           Employees of Capital  Southwest  Corporation  and Its
                           Affiliates as amended and restated effective April 1,
                           1989.

      10.5                 Capital  Southwest  Corporation  and  Its  Affiliates
                           Restoration  of  Retirement  Income  Plan for certain
                           highly-compensated   superseded   plan   participants
                           effective  April 1, 1993  (filed as  Exhibit  10.4 to
                           Form 10-K for the fiscal year ended March 31, 1995).

      10.6                 Amendment One to Capital  Southwest  Corporation  and
                           Its Affiliates  Restoration of Retirement Income Plan
                           for  certain   highly-compensated   superceded   plan
                           participants effective April 1, 1993.


                                       6
<PAGE>

      10.7                 Capital  Southwest   Corporation   Retirement  Income
                           Restoration  Plan as amended and  restated  effective
                           April 1, 1989 (filed as Exhibit 10.5 to Form 10-K for
                           the fiscal year ended March 31, 1995).

      10.8                 Form of  Indemnification  Agreement  which  has  been
                           established with all directors and executive officers
                           of the  Company  (filed as  Exhibit  10.9 to Form 8-K
                           dated February 10, 1994).

      10.9                 Capital  Southwest  Corporation  1984 Incentive Stock
                           Option Plan as amended  and  restated as of April 20,
                           1987  (filed  as  Exhibit  10.10 to Form 10-K for the
                           fiscal year ended March 31, 1990).

      10.10                Capital Southwest Corporation 1999 Stock Option Plan.


    Exhibit No.                               Description
    -----------                               -----------

      13.  *               Annual  Report to  Shareholders  for the fiscal  year
                           ended March 31, 2001.

      21.                  List of subsidiaries of the Company.

      23.  *               Independent Auditors' Consent.



                                       7
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